Integrated Supply Chain Network Model for Allocating LPG in a Closed Distribution System
Automation, Control and Intelligent Systems
Volume 3, Issue 5, October 2015, Pages: 95-99
Received: Nov. 30, 2015; Published: Dec. 1, 2015
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Authors
Amelia Santoso, Industrial Engineering Department, University of Surabaya, Surabaya, Indonesia
Dina Natalia Prayogo, Industrial Engineering Department, University of Surabaya, Surabaya, Indonesia
Joniarto Parung, Industrial Engineering Department, University of Surabaya, Surabaya, Indonesia
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Abstract
This paper proposes a model of integrated supply chain network for allocating subsidized Liquefied Petroleum Gas (LPG) in a closed distribution system. Subsidized LPG is selected as a case study due to its specific product in Indonesia. Since 2007, the Indonesian government makes policy, namely energy conversion from kerosene to LPG. The main purpose of converting kerosene to LPG is to reduce subsidies on fuel oil. The distribution system consists of several filling stations, distributors and retailers. Currently, the distribution of subsidized LPG, does not flow smoothly because there will be a shortage or excess tubes in retailers mainly because it uses a closed distribution system. A closed distribution means that people who are eligible to buy subsidized LPG will be given a card for identifying them as a legal receiver of the LPG. The model is developed using mathematical approach with reference to previous transshipment study. Based on the developed model and by using a numerical example as a case study, the allocation of LPG from filling station to the distributors and from the distributor to the retailers with minimum distribution costs can be determined. LPG in some specific retailers is supplied by only one distributor which is authorized to distribute subsidized LPG on the retailers. However, this model has limitations to arrange the route filling and distribution route.
Keywords
Supply Chain Network, Subsidized LPG, Closed Distribution System
To cite this article
Amelia Santoso, Dina Natalia Prayogo, Joniarto Parung, Integrated Supply Chain Network Model for Allocating LPG in a Closed Distribution System, Automation, Control and Intelligent Systems. Vol. 3, No. 5, 2015, pp. 95-99. doi: 10.11648/j.acis.20150305.16
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