Multi-Echelon Production System Planning: Case Study at a Steel Company in Indonesia

Abstract:

This paper discusses mathematical modeling process of “make or buy” decision based on a real case in a steel company in Indonesia. The company has a multi-echelon production system that consists of many plants. The plants are connected by a given predecessor-successor relation [4,8]. Each plant needs materials that can be obtained through two alternatives, namely produced internally or imported from supplier [6,10]. The objective of the model discussed in this paper is to determine optimum number of produced material and imported material that can maximize profit gained by the company. To validate the developed model, real data is collected and the model is run using Lingo software.

• Periodical: Advanced Materials Research (Volume 980)
• Pages: 237-242
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.980.237
• Online since: June 2014
• Authors: Rajesri Govindaraju*, Rizka Aisha Rahmi Hariadi
• Keywords: Make or Buy Decision, Multi-Echelon Production System, Production Planning

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