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Redesign the Distribution Facilities and Routes to Ensure the Sustainability of Liquified Petroleum Gas Supply in North Sumatera
Liquified Petroleum Gas (LPG) demand in Indonesia increased for past several years. Since the Government policy regarding energy conversion from kerosene to LPG in year 2004, LPG demand was continually increased. Increased demand will caused the necessity of distribution facilities and routes adjustment to ensure the sustainability of LPG distribution. ABC Company is a LPG distribution company in North Sumatra Province. However, the company's warehouse has reached its maximum capacity. Beside that, the Company's distribution routes are not efficient. This can be seen from the farthest distribution point around 248 km from the warehouse which spend around 16 until 20 hours for reaching that distribution point for every single day. This situation may also disrupt the next distribution schedule. To ensure the continuity and sustainability of LPG distribution in North Sumatera, redesign of distribution facilities and routes is needed to increase the Company's distribution capacity and providing minimum costs. Determination of potential locations was done by using Multiple Center of Gravity Method, while for distribution routes selection was done by using Weighted Product Sum Model and Analytic Hierarchy Process. Determination of potential locations aims to define the location of additional warehouses according to coordinates, distance and frequency of distribution to those locations. Distribution routes selection was carried out to provide minimum distribution costs without ignoring other factors such as distribution road surface quality, road safety, convenience of reaching facilities and road crowdedness. The results shows that the potential location for additional warehouse are Siborongborong and Saribudolok. In addition, redesign of distribution routes are able to ensure the sustainability of LPG distribution in fulfilling future demand for next 10 (ten) years and after calculating the incremental cost by adding 2 (two) warehouses, overall distribution facilities and routes design may be able to reduce 18.22% of the Company's distribution costs, which saves around IDR 856,066 daily or IDR 295,342,770 annually.