- Problem Evaluation
Kediri is a city in east java; My Company has a Fuel Terminal in this city but was closed on 2009. Kediri consumes fuel almost 4% around east java region. And from the fuel consume forecast it will be growing up 3% each year.
Phenomena appear in Indonesia and Kediri also, which non subsidiary fuel consumption rise significantly and lead in the market. It is very different condition than few years ago. In this unpredictable situation, we need to prepare the facility of non-subsidiary fuel to catch the opportunity.
- Development of feasible alternatives
There are three alternative Fuel Terminals as supply point to supply Kediri area to catch the opportunity:
- Existing pattern; Surabaya, Malang, and Madiun Fuel Terminal as supply point to supply Kediri area
- Shortcut pattern; Tuban Fuel Terminal as supply point to supply Kediri area. Tuban regularly also supply to Fuel Terminal in Surabaya, Malang, and Madiun
- New pattern; Kediri Fuel Terminal as supply point to supply Kediri area. In this alternative we will reopen the Kediri Fuel Terminal.
Multi Attribute Decision Making Method will use in choosing the best alternative pattern to supply Kediri area not only at economic aspect but also other aspect that influence customer satisfaction such as delivery time, transport loss, operational flexibility, and etc.
- Development the outcome for each alternative
In this part (2st part) I will use method that tension not only on economic criteria but also other criteria that is AHP Method.
AHP is multi-objective decision analysis tool first proposes by Saaty. It is designed when either subjective or objective measures are being evaluated in terms of a set of alternatives based upon multiple criteria, organized in hierarchical structure. At the top level, the criteria are evaluated or weighted, and at the bottom level the alternatives are measured against each criterion. The decision maker assesses their evaluation by making pairwise comparisons in which every pair is subjectively or objectively compared. The subjective method involves a 9 point scale that we present later.
The AHP converts these evaluations to numerical values that can be processed and compared over the entire range of the problem. A numerical weight or priority is derived for each element of the hierarchy, allowing diverse and often incommensurable elements to be compared to one another in a rational and consistent way. This capability distinguishes the AHP from other decision making techniques.
- Selection of criteria
Decision rule of AHP method is grading the alternative based on AHP score. The higher score alternative is better alternative. So in this evaluation I will choose the alternative with highest score. Beside that In pairwise comparison step the most important is consistency ratio which should be 10% or less.
- Analysis and comparison of the alternative
First we must determine the criteria that can influence customer satisfaction and operational excellent. We determine that criteria using brainstorming technique among our expert to get better result. We got four criteria that are:
- Delivery Time
- Transport Loss
- Operational Flexibility
- Economical Factor
Economical factor contain two method B-C ratio and ERR. This is the advantage of AHP, we can compare not only on economic factor but also other factor that important to us or our customer.
Figure 1. AHP hierarchy in choosing best pattern in supply Kediri area
We also used brainstorming technique when make pairwise comparison for each criteria again alternative and between all criteria.
Table 1. Pairwise comparison for delivery time
Table 2. Pairwise comparison for transport loss
Table 3. Pairwise comparison for operational flexibility
Table 4. Pairwise comparison for economical factor
Table 5. Pairwise comparison for all criteria
Table 6. AHP result
All pairwise comparison in this model has consistency ratio no more than 10%, so all judgment is consistent and appropriate.
- Alternative selection
New Pattern alternative has biggest weighted score than the other so it preferred to be used.
- Performance monitoring & Post Evaluation Result
Different form the first part, the second part (AHP method) show new pattern alternative is preferred to be used. In this part we use not only economic but also operational and customer satisfaction, so it is more comprehensive and must be better advise to use.
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