Strategic Decision-Making in the Biodiesel Supply Management using Analytic Hierarchy Process at an Indonesian Fuel Distribution Company
DOI:
https://doi.org/10.24256/kharaj.v8i3.11887Keywords:
Analytic Hierarchy Process, biodiesel, supply chain resilience, supply management, strategic decision-makingAbstract
Indonesia's biodiesel blending mandate requires a national fuel distribution company to maintain supply continuity across a geographically dispersed, maritime-dependent distribution network while complying with fixed delivery-point and volume-allocation rules established by the government. Rigid allocation regulations frequently cause localized stockouts that interrupt blending operations and expose the company to compliance penalties. This study develops a strategic decision-support model to prioritize biodiesel supply-management alternatives under these operational and regulatory constraints. A quantitative Analytic Hierarchy Process (AHP) was applied to pairwise-comparison judgments collected from 15 internal and external expert stakeholders, comprising senior management, supply schedulers, fuel terminal managers, biodiesel producers, and government representatives. Individual judgments were aggregated using the weighted geometric mean and evaluated through consistency ratios, all of which were below the 0.10 threshold. Supply Disruption Resilience emerged as the dominant decision criterion (0.5322), followed by Infrastructure Readiness (0.3195) and Regulation and Mandate Compliance (0.1483). The highest-ranked alternative was the Integrated Buffer Stock and Inventory Resilience Package (0.4828), ahead of the Supply and Logistics Resilience Package (0.3393) and the Regulatory Governance and Coordination Package (0.1780). The findings indicate that proactive inventory visibility, early-warning signals, buffer-stock policy, and replenishment scheduling should form the core of the company's biodiesel supply strategy, supported by logistics contingency arrangements and formal regulatory coordination. The study provides a transparent and auditable prioritization framework for sustaining blending compliance while reducing stockout risk under the B40–B50 transition.
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