In order to ensure the
delivery of the subsidized fertilizer to the farmer in “6 precision-goals”, i.e., quantity precision, type precision,
time precision, place precision, quality precision and price precision in
accordance to regulated Highest Retail Sale Price, the government has regulated
the distribution system of subsidized fertilizer from the plant to the farmers
by form of regulation issued by Indonesian Ministry of Trading. The purpose of this research is to evaluate the existing distribution system of subsidized
fertilizer which is managed by one of the Public Service Obligation State-Owned
The evaluation is carried out by comparing the cost of the existing
distribution system with the proposed distribution system. Cost optimization of the proposed
system makes use of Mixed Integer Linier Programing (MILP).
Optimization is performed by restructuring the cluster and distribution warehouse,
allowing through trips from plant directly to distributor’s warehouse, and
skipping the producer’s warehouse storing. The proposed cluster
restructuring can reduce the existing cost to 94% - 98%, while through trips can
reduce the total cost to 61% - 72%. In case where through trips is allowed and
producer’s warehouse is in operation and functioned as a buffer, the total cost
is reduced to 64% - 78% from the existing cost. Based on the optimization
result, it is concluded that the existing subsidized fertilizer
distribution system could be improved by allowing through trips, while existing
producer’s warehouse is still in operation as the buffer warehouse to ensure that the
minimum stock is fulfilled. It is noted, however, that this system requires adequate information technology concurrently.
Cite this paper
N. Yusuf, S. Soehodho and T. Susanti, "Study on the Evaluation of the Subsidized Fertilizer Distribution System," Journal of Transportation Technologies
, Vol. 4 No. 1, 2014, pp. 101-106. doi: 10.4236/jtts.2014.41010
 D. J. Bowersox, D. J. Closs and M. B. Cooper, “Supply Chain Logistics Management,” McGraw-Hill, New York, 2007.
 K. S. Hindi, T. Basta and K. Pienkosz, “Efficient Solution of a Multi-Commodity, Two-Stage Distribution Problem with Constraints on Assignment of Customers to Distribution Centres,” International Transactions in Operational Research, Vol. 5, No. 6, 1998, pp. 519-527. http://dx.doi.org/10.1111/j.1475-3995.1998.tb00134.x
 Y. C. Tsao and J. C. Lu, “A Supply Chain Network Design Considering Transportation Cost Discounts,” Transportation Research Part E, Vol. 48, No. 2, 2012, pp. 401-414. http://dx.doi.org/10.1016/j.tre.2011.10.004
 W. Wisetjindawata, K. Yamamotoa and F. Marchalb, “A Commodity Distribution Model for a Multi-Agent Freight System,” Procedia-Social and Behavioral Sciences, Vol. 39, 2012, pp. 534-542.
 Y. R. Perdana, “Logistics Information System for Supply Chain of Agricultural Commodity,” Procedia-Social and Behavioral Sciences, Vol. 65, 2012, pp. 608-613.
 V. Martinez, P. Gupta, Y. Tse and J. Kittiakarasakun, “Electronic versus Open Outcry Trading in Agricultural Commodities Futures Markets,” Review on Financial Economics, Vol. 20, No. 1, 2011, pp. 28-36. http://dx.doi.org/10.1016/j.rfe.2010.09.001
 Nahry, “Pengembangan Model Optimasi Sistem Distribusi Komoditasuntuk Meningkatkan Efisiensi Sistem Distribusi,” BUMN-PSO, Fakultas Teknik Universitas Indonesia, Disertasi, 2010.
 R. K. Ahuja, T. L. Magnanti and J. B. dan Olin, “Network Flows,” Prentice Hall, Upper Saddle River, 1993.
 M. S. Daskin, “Network and Discrete Location. Models, Algorithms, and Application,” John Wiley & Sons, Inc., Toronto, 1995. http://dx.doi.org/10.1002/9781118032343