Mixed Integer Linear Programming Model for Optimizing Batik Palembang Supply Chain Network

Abstract

The role of supply chain management or SCM (Supply Chain Management) is strategic for a company or industry in winning the competition. In order to face the competitive in the global market, businesses must improve the quality of the supplay chain operating performance, including the small and medium enteprises (SME) such as craftsmen Batik Palembang or Jumputan. We need to improve the performance of the supply chain, from raw materials up to the flow of product to the consumer. In this paper, we analyze and develop a mixed integer linear model to improve the performance of the craft industry supply chain network of batik Palembang. The concept of multi-product multi-multi-period facilities has been the author mentioned above, where the issue to be analyzed are arranged in the form of network flow problem with main purpose i.e. minimising total cost of supply chains. From our experiments we yield several managerial insights. First, networks with higher capacity can expect better reduction in total network cost. Second, networks with high fixed cost tend to increase the production level to maximum capacity. Keywords: Batik Palembang, Supply Chain Management, Mixed Integer Linear Programming, Network Optimisation