IDEAS home Printed from https://ideas.repec.org/a/ags/ijofsd/346015.html
   My bibliography  Save this article

A Profit Analysis of Indonesia’s Cananga Essential Oil Production Using System Dynamics

Author

Listed:
  • Widiaswanti, Ernaning
  • Pratikto, Pratikto
  • Cahyani, Chandrawati
  • Tama, Ishardita Pambudi

Abstract

Cananga essential oil is a type of oil extracted by distillation from freshly-picked cananga flowers. Cananga oil is of a high economic value for its use as fragrances and flavors. In Indonesia, cananga essential oil is majorly produced by small and medium distillers. The most prominent barrier to cananga essential oil production in Indonesia is the fluctuation in its price. This price fluctuation is responsible for the decrease in profits earned by distillers. The aim of this research was to develop a system dynamics model to maximize profits in the cananga essential oil production in Indonesia. A system dynamics approach was employed to figure out the effect of some variables on cananga essential oil production in relation to profits and the interaction of such variables with each other. The scenarios examined in this system dynamics model include to increase the number of distillers, to decrease the fuel expenses, and a combination of both. This research assumed that a change in parameter will be able to increase profits from the cananga essential oil production in Indonesia over the next five years. The results show that increasing the number of distillers and decreasing the fuel expenses have been able to increase cananga essential oil production average by 20% and profits by 62%.

Suggested Citation

  • Widiaswanti, Ernaning & Pratikto, Pratikto & Cahyani, Chandrawati & Tama, Ishardita Pambudi, 2020. "A Profit Analysis of Indonesia’s Cananga Essential Oil Production Using System Dynamics," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 11(04), December.
    • Handle: RePEc:ags:ijofsd:346015
    DOI: 10.22004/ag.econ.346015
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/346015/files/A%20PROFIT%20ANALYSIS%20OF%20INDONESIA%E2%80%99S%20CANANGA.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.346015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Melanie Fritz & Gerhard Schiefer, 2008. "Innovation and system dynamics in food networks," Agribusiness, John Wiley & Sons, Ltd., vol. 24(3), pages 301-305.
    2. Jiao Yan & Chunlai Chen & Biliang Hu, 2018. "Farm size and production efficiency in Chinese agriculture: output and profit," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 11(1), pages 20-38, September.
    3. Miller, Craig & Newell, Barry, 2013. "Framing integrated research to address a dynamically complex issue: The red headed cockchafer challenge," Agricultural Systems, Elsevier, vol. 117(C), pages 13-18.
    4. Jiao Yan & Chunlai Chen & Biliang Hu, 2018. "Farm size and production efficiency in Chinese agriculture: output and profit," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 11(1), pages 20-38, September.
    5. Tsaiyu Chang & Daisuke Takahashi & Chih-Kuan Yang, 2017. "Profit efficiency analysis of rice production in Taiwan," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 9(1), pages 32-47, February.
    6. Jammernegg, Werner & Reiner, Gerald, 2007. "Performance improvement of supply chain processes by coordinated inventory and capacity management," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 183-190, July.
    7. Tsaiyu Chang & Daisuke Takahashi & Chih-Kuan Yang, 2017. "Profit efficiency analysis of rice production in Taiwan," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 9(1), pages 32-47, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jian Liu & Chao Zhang & Ruifa Hu & Xiaoke Zhu & Jinyang Cai, 2019. "Aging of Agricultural Labor Force and Technical Efficiency in Tea Production: Evidence from Meitan County, China," Sustainability, MDPI, vol. 11(22), pages 1-16, November.
    2. Rodica Chetroiu & Ana Elena Cișmileanu & Elena Cofas & Ionut Laurentiu Petre & Steliana Rodino & Vili Dragomir & Ancuța Marin & Petruța Antoneta Turek-Rahoveanu, 2022. "Assessment of the Relations for Determining the Profitability of Dairy Farms, A Premise of Their Economic Sustainability," Sustainability, MDPI, vol. 14(12), pages 1-17, June.
    3. Bethlehem Tamiru Gizaw & Alev Taskin Gumus, 2016. "Humanitarian Relief Supply Chain Performance Evaluation: A Literature Review," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 8(2), pages 105-120, April.
    4. Seuring, Stefan, 2009. "The product-relationship-matrix as framework for strategic supply chain design based on operations theory," International Journal of Production Economics, Elsevier, vol. 120(1), pages 221-232, July.
    5. Hung-Lung Lin & Yu-Yu Ma, 2021. "A New Method of Storage Management Based on ABC Classification: A Case Study in Chinese Supermarkets’ Distribution Center," SAGE Open, , vol. 11(2), pages 21582440211, June.
    6. Li, Xin & Lian, Zhaotong & Choong, Kwee Keong & Liu, Xiaoming, 2016. "A quantity-flexibility contract with coordination," International Journal of Production Economics, Elsevier, vol. 179(C), pages 273-284.
    7. Widiaswanti, Ernaning & Yunitarini, Rika & Pratikto, Pratikto, 2024. "System dynamics modeling for evaluating the profits of the upstream supply chain of Citronella Oil," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 15(02), June.
    8. Jianxu Liu & Changrui Dong & Shutong Liu & Sanzidur Rahman & Songsak Sriboonchitta, 2020. "Sources of Total-Factor Productivity and Efficiency Changes in China’s Agriculture," Agriculture, MDPI, vol. 10(7), pages 1-18, July.
    9. Engblom, Janne & Solakivi, Tomi & Töyli, Juuso & Ojala, Lauri, 2012. "Multiple-method analysis of logistics costs," International Journal of Production Economics, Elsevier, vol. 137(1), pages 29-35.
    10. Alexandra Birkmaier & Adhurim Imeri & Gerald Reiner, 2024. "Improving supply chain planning for perishable food: data-driven implications for waste prevention," Journal of Business Economics, Springer, vol. 94(6), pages 1-36, August.
    11. Haiyan Yu & Wenjie Zhang & Shuai Pang, 2022. "Exploring the Role of Land Transfer and Social Capital in Improving Agricultural Income under the Background of Rural Revitalization," IJERPH, MDPI, vol. 19(24), pages 1-17, December.
    12. Robert Yawson & Jennifer Kuzma, 2010. "Systems Mapping of Consumer Acceptance of Agrifood Nanotechnology," Journal of Consumer Policy, Springer, vol. 33(4), pages 299-322, December.
    13. Boehlje, Michael & Roucan-Kane, Maud & Broring, Stefanie, 2011. "Future Agribusiness Challenges: Strategic Uncertainty, Innovation and Structural Change," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(5), pages 1-29, December.
    14. Karim, M.A. & Smith, A.J.R. & Halgamuge, S.K. & Islam, M.M., 2008. "A comparative study of manufacturing practices and performance variables," International Journal of Production Economics, Elsevier, vol. 112(2), pages 841-859, April.
    15. Brandenburg, Marcus, 2017. "A hybrid approach to configure eco-efficient supply chains under consideration of performance and risk aspects," Omega, Elsevier, vol. 70(C), pages 58-76.
    16. Bożena Kusz & Dariusz Kusz & Iwona Bąk & Maciej Oesterreich & Ludwik Wicki & Grzegorz Zimon, 2022. "Selected Economic Determinants of Labor Profitability in Family Farms in Poland in Relation to Economic Size," Sustainability, MDPI, vol. 14(21), pages 1-25, October.
    17. Siyu Yang & Wei Li, 2022. "The Impact of Socialized Agricultural Machinery Services on Land Productivity: Evidence from China," Agriculture, MDPI, vol. 12(12), pages 1-18, December.
    18. Francesco Galati & Barbara Bigliardi & Alberto Petroni, 2016. "Open Innovation In Food Firms: Implementation Strategies, Drivers And Enabling Factors," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-24, April.
    19. Nascimento, Leandro da Silva & Zawislak, Paulo Antônio, 2023. "Towards a theory of Capability-Based Transactions: Bounded innovation capabilities, commercialization, cooperation, and complementarity," Technology in Society, Elsevier, vol. 75(C).
    20. Yao Wei & Fanglei Zhong & Xijing Luo & Penglong Wang & Xiaoyu Song, 2021. "Ways to Improve the Productivity of Oasis Agriculture: Increasing the Scale of Household Production and Human Capital? A Case Study on Seed Maize Production in Northwest China," Agriculture, MDPI, vol. 11(12), pages 1-18, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ijofsd:346015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/centmde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.