Simulating Fleet Procurement in an Indonesian Logistics Company

Abstract

Capacity Management – such as fleeting becomes one of the critical decisions for the logistic company. Despite its role to ensure the availability of fleet as needed with an effective and efficient process, a good capacity management can improve service level and lead to competitive advantage. However, due to its capital-intensive characteristic, the decision between buying and renting a fleet becomes an important consideration. Therefore, this study presents a comprehensive decision-making methodology in capacity management, particularly on fleet procurement by incorporating several techniques (i.e., Demand forecasting, Demand-capacity analysis, Analytic Hierarchy Process with BOCR model, Urgent-Important Eisenhower Matrix, and Simulation). A numerical example is performed to an Indonesian logistic company. It reveals that a combination of owned-fleet and rented-fleet becomes the most appropriate strategy. In general, this study has contributed to strengthening existing literature and providing a comprehensive methodology in capacity management.

Keywords

• Capacity Management
• Decision Making
• Logistic
• Fleet Procurement
• Simulation