Indonesian Maritime Logistics Network Optimization Using Mixed Integer Programming

Abstract

Some causes of the high logistic costs and significant disparity in Indonesia’s commodity price is the imbalanced distribution of the flow of goods between west and east regional of Indonesia and the slow development infrastructure. This issue can be happened because maritime transport infrastructure in Indonesia have not served effectively yet,. Therefore, the provider of shipping services should be able to design the Indonesian maritime logistics network that best suits with the current maritime conditions and provide the greatest benefits. This study aims to obtain a model of decision-making at all levels (strategic, tactical, operational) to determine the type of vessel, the shipping routes, and cargo allocation that gives the maximum profit. Main purpose from this study is to develop decision-making model for maritime logistics network design at all levels (strategic, tactical, operational) by using Mixed Integer Programming which can solve the combination of fleet-design, ship-scheduling, and cargo routing problems simultaneously.