An Integrated Business Model Based on Linear Programming for Carrageenan Production Chain in Coastal Village

Abstract

The blue economy concept is a development program that harmonizes economic growth, social equity, and a sustainable environment. In coastal villages, economic growth could be promoted by selecting a high-value and competitive local-based product, selecting a clean production process with renewable energy, proper waste management, and involving people who live in the coastal area. The research is carried out in Padike village, Talango district, Poteran island, Sumenep, East of Java supported by the vocational high school in Padike and the University of Wiraraja, Sumenep as a partnership institution, and involving people living in Poteran island. An integrated business model based on linear programming was designed to perform a carrageenan production chain that consists of modern seaweed cultivation farming, a high-quality seaweed drying dome, a clean carrageenan processing shop with zero waste management, and clean renewable energy. The model developed based on linear programming was run into 2 different scenarios. The first scenario focuses on the optimization in each production station and the second scenario focuses on the carrageenan production itself. From the different scenarios, we obtained that the second scenario resulted in an appealing opportunity. As a result, an integrated business model for managing the carrageenan production chain has been initiated, and as a practical example of the blue economy model which ensures the proper balance between economic growth, social equity, and a sustainable environment.