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AN INVESTIGATION OF THE RELATIONSHIP BETWEEN FACILITY LOCATION DECISIONS, SERVICE LEVEL AND DISTRIBUTION COSTS: A PROPOSED MODEL FOR INDONESIAN LPG SUPPLY CHAIN

International Journal of Business and Society

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Title AN INVESTIGATION OF THE RELATIONSHIP BETWEEN FACILITY LOCATION DECISIONS, SERVICE LEVEL AND DISTRIBUTION COSTS: A PROPOSED MODEL FOR INDONESIAN LPG SUPPLY CHAIN
 
Creator Masudin, Ilyas
 
Description This paper proposes models of Indonesian multi-echelon LPG distribution system by opening new facilities (new echelon) taking into account the current facilities and investigates the implications of the proposed models to distribution components such as transportation, inventory and shortage decisions. The objectives are to determine the optimum location and allocation of LPG facilities and investigate the relation between distribution costs such as transportation, inventory cost and location decisions in Indonesian multi-echelon LPG supply chain. Capacitated fixed-charged facility location-allocation problem is used to determine the optimal solution of the proposed model. The output of the optimal solutions reported that the costs associated to the proposed distribution are lower than the associated costs in the existing distribution system. It is noted that there is US$ 106.57 million saving per year of total cost by applying the proposed distribution system. In the sensitivity analysis, it is indicated that the trade-offs between facility locations and distribution costs are exist. Results report that as the number of facility increases, total transportation and inventory cost also increase.Keywords: Facility Location; Allocation; Inventory; Transportation.
 
Publisher Faculty of Economics and Business, UNIMAS
 
Date 2017-11-29
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://publisher.unimas.my/ojs/index.php/IJBS/article/view/558
 
Source International Journal of Business and Society; Vol 16 No 1 (2015): International Journal of Business and Society
1511-6670
 
Language eng
 
Relation http://publisher.unimas.my/ojs/index.php/IJBS/article/view/558/500
 
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