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Decision-Making Model in Selecting Strategy for Food Supply in Livestock Business using Analytical Hierarchy Process (AHP)

Hernowo, Ayu Agustine and Lestari, Yuliani Dwi (2021) Decision-Making Model in Selecting Strategy for Food Supply in Livestock Business using Analytical Hierarchy Process (AHP). In: The 3rd International Conference on Business and Banking Innovations, 6 & 7 March 2021, Surabaya.

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Abstract

In the beef cattle business, it is known that the feed is one of the success factor and it is contributed 50.20% of the total cost. Based on the number of feed cost contribution of the total cost in the livestock business, the internal management should find the most effective and efficient feed supply to be applied. Based on Stevenson 2005 it is known that the supply strategy consist of two, which are outsource and insource. In this study an analysis will be carried out to consider whether the outsource or insource method is more profitable for the company as a future strategy for fulfilling the feed. This research was conducted using the AHP (Analytical Hierarchy Process) method with BOCR analysis (Benefit, Opportunity, Cost, Risk) to determine the consideration in the selection of feed supply process, the weight of each criterion at strategy in the feed supply process, and the order of priority for the strategy. BOCR was used as a criterion in pairwise comparisons. Each criterion (B, O, C, R) consists of 13 sub-criteria or called factors that developed from the literature and internal company considerations. Benefit criteria is consist of 4 sub-criteria which include enhancing organizational learning, focus on core competencies, increase organizational movement, and improve asset utilization. Cost criteria are consist of 3 sub-criteria, including capital expenditure, operational expenditure, and cash flow. Opportunity criteria are consist of 2 sub-criteria, namely easiness to control and create alternative revenue. Risk criteria consist of 4 sub-criteria, including customer complaint issue, government issue, employee issue, and operational risk. Based on the AHP analysis with the BOCR method, this research resulted that the highest priority is Cost (0.57407), and the second is Benefit (0.28208). Risk priority is in the third priority (0.09152), and the last one is Opportunity priority (0.05233). While in terms of alternative, the second priority is Outsourcing (0.26321), and finally, the first priority is Insourcing, which get the highest weight (0.73679). Keywords: Analytical Hierarchy Process, BOCR, Feed Supply Strategy, Insourcing, Outsourcing

Item Type: Conference or Workshop Item (Paper)
Subjects: 600 - TECHNOLOGY > 658 - GENERAL MANAGEMENT > 658.562 - QUALITY CONTROL
Divisions: ICOBBI (International Conference of Business and Banking Innovations)
Depositing User: Perpustakaan Universitas Hayam Wuruk Perbanas Surabaya
Date Deposited: 10 Aug 2021 19:59
Last Modified: 10 Aug 2021 19:59
URI: http://eprints.perbanas.ac.id/id/eprint/5850

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