Inventory policy decisions at each tier in the supply chain of fresh vegetables is considered significantly regarding to the short period shelf life (perishable) factor and cost efficiency of the product distribution. The object of this study is suppliers of fresh vegetable and its supply chain in the Yogyakarta Province, Indonesia. The evaluation of the importance factors of supply chain performance is analyzed based on the combination of methods Analytical Hierarchy Process (AHP) and the Supply Chain Operations Reference (SCOR). The result shows that the most influencing factory to the supply chain performance is factor of attribute costs (31.04%) with a sub-attribute product guarantee fee (48.90%). Meanwhile, the most preferred alternatives is modern market as weighted at 34.6%, followed by regular-restaurants (32.5%), and franchise-restaurants (18.4%), and traditional markets (15.4%) is the least preferred. In case of inventory management, there are two types of inventory: inventory speculation for non-unique products, and inventory postponement for unique products of fresh vegetables.

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Specific material handling and treatment for specific agriculture products is required. Enhancing the productivity, competitiveness and efficiency of agriculture value chain is a priority for Indonesia to achieve competitiveness. This chapter discusses the overview of agriculture value chain in Indonesia and provides case studies related to supply chain risk management and logistics cost. Then, the author may propose recommendations to optimize the agricultural value chain. Each agriculture commodity probably has different type of tier, type of supply chain risks, issues and activities which leads to the different proportion of logistics and distribution cost in each tier. The results showed differences in strategy either speculation or postponement for inventory management to improve the value of horticulture along supply chain, while in aquaculture research also shows the same differences. Moreover, the value chain analysis helps to identify the value created by each stakeholder. In the value chain of catchment fish, ship owner plays the dominant role in the whole income distribution, while in the aquaculture, spreader get the highest profit margin. Trader gives the highest value added during transportation but earns the lowest profit. The value chain analysis of fresh vegetables shows the highest portion of traders in the whole inventory cost.

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