Alternative Contract Strategy 9

Oct 13, 2025 by recoveryshake.com 46 views

Introduction

Procurement of raw materials plays a crucial role in the management chain management of a company, as it can significantly affect other supply chain functions. PKS Goragahana, one of the oil palm processing units managed by PT. Hutahaean, is facing obstacles in the production process, namely line stop. This is caused by the stock of fresh fruit bunches (FFB) that are projected not fulfilled according to plan. The procurement of FFB in PKS Goragahana is carried out through two channels: internal (from company-owned gardens) and external (from community gardens and supplier agents). The company obtains external FFB from two supplier agents who are bound by contracts. Further investigations revealed that the two supplier agents took longer to meet the order of external FFB because the procurement contract only lasts for 1 week.

Problem Statement

The current procurement contract strategy of PKS Goragahana is not efficient, resulting in stock deficiency and line stop. The company needs to find an alternative optimal FFB procurement contract strategy to increase the efficiency of FFB procurement and reduce the risk of stock deficiency. This study aims to design a new FFB procurement contract strategy using Monte Carlo simulation and Cost-Benefit Analysis method.

Methodology

This research uses Monte Carlo simulation and Cost-Benefit Analysis method to design a new FFB procurement contract strategy. Monte Carlo simulation allows researchers to determine the possibility of different results based on various variables, such as FFB prices, transportation costs, and delivery time. The Cost-Benefit Analysis method helps in evaluating the costs and benefits of each alternative contract strategy, so that the most profitable strategy can be chosen.

Alternative Contract Strategy 9

After conducting the Monte Carlo simulation and Cost-Benefit Analysis, this research results in the best procurement contract strategy recommendation, which is Alternative 9. This alternative has a contract period of 18 weeks and procurement frequency 3 times. The net present value (NPV) of this alternative is Rp 232,343.50/ton TBS.

Benefits of Alternative Contract Strategy 9

The benefits of Alternative Contract Strategy 9 are:

Increasing supply stability: A longer contract period (18 weeks) allows supplier agents to plan and regulate the supply of FFB more effectively, thus minimizing the risk of stock deficiency.
Procurement efficiency:* Procurement frequency 3 times in 18 weeks allows companies to manage FFB stock more efficiently and reduce storage costs.
Price stability: Long-term contract helps stabilize the purchase price of FFB and minimize unexpected price fluctuations.
Improving the quality of FFB:* With a longer contract period, supplier agents can focus on better FFB quality, which ultimately improves the quality of the final product.

Deeper Analysis

Monte Carlo simulation allows researchers to determine the possibility of different results based on various variables, such as FFB prices, transportation costs, and delivery time. The Cost-Benefit Analysis method helps in evaluating the costs and benefits of each alternative contract strategy, so that the most profitable strategy can be chosen.

Conclusion

This study provides Concrete solutions for PKS Goragahana to improve the efficiency of the FFB procurement process. Application of the right contract strategy will Increase supply stability, reduce costs, and improve product quality.

Recommendations

Based on the results of this study, the following recommendations are made:

PKS Goragahana should adopt Alternative Contract Strategy 9 to increase the efficiency of FFB procurement and reduce the risk of stock deficiency.
The company should negotiate with supplier agents to extend the contract period to 18 weeks and increase the procurement frequency to 3 times.
The company should monitor the FFB prices, transportation costs, and delivery time to ensure that the contract strategy is effective.

Limitations

This study has some limitations:

The study only considers two supplier agents and does not take into account other potential suppliers.
The study assumes that the FFB prices, transportation costs, and delivery time are constant, which may not be the case in reality.
The study does not consider other factors that may affect the FFB procurement process, such as weather conditions and market demand.

Future Research Directions

Future research directions include:

Conducting a more comprehensive study that considers other potential suppliers and factors that may affect the FFB procurement process.
Developing a more sophisticated model that takes into account the uncertainty of FFB prices, transportation costs, and delivery time.
Conducting a case study of other companies in the oil palm industry to compare their FFB procurement strategies and identify best practices.

Conclusion

In conclusion, this study provides a new FFB procurement contract strategy for PKS Goragahana using Monte Carlo simulation and Cost-Benefit Analysis method. The results show that Alternative Contract Strategy 9 is the most optimal choice with a net present value (NPV) of Rp 232,343.50/ton TBS. This study provides Concrete solutions for PKS Goragahana to improve the efficiency of the FFB procurement process and reduce the risk of stock deficiency.

Introduction

In our previous article, we discussed the design of FFB procurement contract strategies in Goragahana PKS using Monte Carlo simulation and Cost-Benefit Analysis method. In this article, we will answer some frequently asked questions (FAQs) related to this topic.

Q: What is the main objective of this study?

A: The main objective of this study is to design a new FFB procurement contract strategy for PKS Goragahana using Monte Carlo simulation and Cost-Benefit Analysis method to increase the efficiency of FFB procurement and reduce the risk of stock deficiency.

Q: What are the benefits of Alternative Contract Strategy 9?

A: The benefits of Alternative Contract Strategy 9 are:

Increasing supply stability: A longer contract period (18 weeks) allows supplier agents to plan and regulate the supply of FFB more effectively, thus minimizing the risk of stock deficiency.
Procurement efficiency:* Procurement frequency 3 times in 18 weeks allows companies to manage FFB stock more efficiently and reduce storage costs.
Price stability: Long-term contract helps stabilize the purchase price of FFB and minimize unexpected price fluctuations.
Improving the quality of FFB:* With a longer contract period, supplier agents can focus on better FFB quality, which ultimately improves the quality of the final product.

Q: What are the limitations of this study?

A: This study has some limitations:

The study only considers two supplier agents and does not take into account other potential suppliers.
The study assumes that the FFB prices, transportation costs, and delivery time are constant, which may not be the case in reality.
The study does not consider other factors that may affect the FFB procurement process, such as weather conditions and market demand.

Q: What are the future research directions?

A: Future research directions include:

Conducting a more comprehensive study that considers other potential suppliers and factors that may affect the FFB procurement process.
Developing a more sophisticated model that takes into account the uncertainty of FFB prices, transportation costs, and delivery time.
Conducting a case study of other companies in the oil palm industry to compare their FFB procurement strategies and identify best practices.

Q: How can PKS Goragahana implement Alternative Contract Strategy 9?

A: PKS Goragahana can implement Alternative Contract Strategy 9 by:

Negotiating with supplier agents to extend the contract period to 18 weeks and increase the procurement frequency to 3 times.
Monitoring the FFB prices, transportation costs, and delivery time to ensure that the contract strategy is effective.
Implementing a more efficient inventory management system to reduce storage costs.

Q: What are the potential risks of implementing Alternative Contract Strategy 9?

A: The potential risks of implementing Alternative Contract Strategy 9 include:

Supplier agents may not be able to meet the increased procurement frequency, leading to stock deficiency.
FFB prices, transportation costs, and delivery time may fluctuate, affecting the contract strategy.
Other factors, such as weather conditions and market demand, may affect the FFB procurement process.

Conclusion

In conclusion, this Q&A article provides answers to some frequently asked questions related to the design of FFB procurement contract strategies in Goragahana PKS using Monte Carlo simulation and Cost-Benefit Analysis method. We hope that this article will provide valuable insights for PKS Goragahana and other companies in the oil palm industry.