Decision making in the warehouse expansion strategy at PT Dwitama Global Persada

Abstract

The increasing trend of online shopping has made the third party logistic company (PT Dwitama Global Persada) need to expand its capacity. This study aims to determine how much warehouse capacity should be increased based on demand forecasting, what alternatives can be applied to warehouse expansion, and how to make the decisions. There are two different options, namely renting a new warehouse or adding multi-tier mezzanine to the current warehouse floor. Decision making is achieved after calculating the demand forecast using the Holt method until April 2022, showing need to increase space capacity by 20%. Determination of annual costs based on service life and operational costs, followed by AWA annual worth analysis to compare the two options. The result showing that the multi-tiers floor option is more economical 12,6% compared to renting a new warehouse.