Utilization of Supply Chain and Benefit-Cost Analysis to Determining Warehousing Area in Penajam Paser Utara Regency

Abstract

The retail trade sector is currently booming and seizes unlimited opportunities and intersects with other sectors that can cause multi-fliyer effects to improve the regional economy, especially in the Expansion Regency. However, due to limited infrastructure and inefficient distribution, the price of goods is expensive. Although local governments have initiated through regulations and policies, they are not yet in synchronize to support the needs of the retail industry and consumers. From the preliminary study, Penajam Paser Utara (PPU) as a new expansion district needs to build facilities and infrastructure such as warehouses for retail products. This study aims to determine the feasibility of warehousing development with supply chain management analysis (SCM) and Benefits-Cost Ratio (BC). The results of the SCM analysis show that the vehicle operating costs for alternative location 1 is Rp.77,356 per km per unit; alternative location 2 is Rp.120,810 per km per unit; and alternative 3 is Rp.116,016 per km per unit. If the investment value is Rp.53,558,320,000 with an interest rate of 10.05%, then the value is equal to Rp.58,220,669,253 in the 40th year; BC=1.07; and EIRR=10.7%. The development of warehousing will provide benefits to local governments, communities, and business actors, including reducing the risk of damage to goods, reducing operational costs, transportation time, reducing road pressure/load, and providing input for local revenue in the management of warehousing services. This study also recommends the calculation results of SCM and financial confirmation, for the construction of retail warehousing around the Buluminung Industrial Estate which is placed between the port and the central business district. The Buluminung Industrial Estate has been designated by the local government as an industrial area supporting the PPU district's economy. The recommendation also states that the financial and economic perspective strongly supports the need to immediately build a retail warehouse.