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Title: Integrated Model of Distribution Regionalization System and Subsidized Cost in Order to Reach Urea Fertilizer's Maximum Price in Indonesia
Authors: Agustina, Yosi 
Bahagia, Nur 
Issue Date: 2007
Publisher: University of the Thai Chamber of Commerce
Source: Yosi Agustina, Nur Bahagia (2007) Integrated Model of Distribution Regionalization System and Subsidized Cost in Order to Reach Urea Fertilizer's Maximum Price in Indonesia.
Conference: Proceedings of the 2nd International Conference on Operations and Supply Chain Management 
Abstract: Fertilizer is one of the important commodities in Indonesia on farming productivity. In 2001, Indonesia’s government transformed the fertilizer’s industry from a regulated industry to an open industry that caused the misleading of fertilizer’s distribution and pricing. The latest policy in 2006 contained the guiding principle for procurement and distribution and the amount of subsidy of fertilizer commodity for each appointed manufacturer. The arrangement process of work regions is called regionalization and the amount of subsidy is called subsidized cost.We purpose an integrated model of regionalization which adapts characteristics of fertilizer’s procurement and distribution (distribution pattern, demand fluctuation) to organize the responsibility area of fertilizer’s manufacturer and a subsidized cost model that will result the optimal amount of cost subsidy from government to the manufacturers to guarantee the same fertilizer’s maximum pricing until its end user. The references models are from Nur Bahagia and Sofitra (2001), which have developed an optimization model for single manufacturer, single warehouse, and multi retailers and Vidal and Goetschalckx (2001), which have developed a global supply chain model with transfer pricing and transportation cost allocation. The logistics total cost will become the performance criteria for this developed model. Solution for this model uses MILP.
Rights: This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
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