An Optimization Model for Strategy Decision Support to Select Kind of CPO's Ship

Abstract

The selection of marine transport for the distribution of crude palm oil (CPO) is one of strategy that can be considered in reducing cost of transport. The cost of CPO's transport from one area to CPO's factory located at the port of destination may affect the level of CPO's prices and the number of demands. In order to maintain the availability of CPO a strategy is required to minimize the cost of transporting. In this study, the strategy used to select kind of charter ships as barge or chemical tanker. This study aims to determine an optimization model for strategy decision support in selecting kind of CPO's ship by minimizing costs of transport. The select of ship was done randomly, so that two-stage stochastic programming model was used to select the kind of ship. Model can help decision makers to select either barge or chemical tanker to distribute CPO.