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Gasoline Policy Simulation to Increase Responsiveness Using System Dynamics: A Case Study of Indonesia’s Gasoline Downstream Supply Chain

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Listed:
  • Sylvia Mardiana

    (Faculty of Administrative Science, Universitas Indonesia, Indonesia.)

Abstract

In the supply chain, inventory planning plays a crucial role in achieving a balance between supply and demand. This study aims to investigate a supply chain policy that can achieve an impressive level of responsiveness, reaching close to 100%. Additionally, by focusing on the supply chain of RON 92 gasoline in Indonesia, the research aims to identify the key factors influencing responsiveness instability. To achieve these objectives, a simulation model was used to analyze the inventory policy, considering various factors such as demand, production, safety stock coverage, transportation delays, production capacity, and importation due to insufficient production capacity. The results showed that forecasting accuracy is the main determinant of the responsiveness rate. Moreover, maintaining a minimum inventory level of 28 days yielded an impressive 99% responsiveness rate, provided that the deviation in demand does not exceed 5% of the forecast. The analytical tool used in the system dynamics framework was a simulation, which significantly contributed to the research findings. However, it is important to note that this research has limitations, specifically in its inability to analyze crude oil supply. Therefore, further research is necessary to thoroughly examine this aspect and gain a more comprehensive understanding of the overall supply chain dynamics.

Suggested Citation

  • Sylvia Mardiana, 2023. "Gasoline Policy Simulation to Increase Responsiveness Using System Dynamics: A Case Study of Indonesia’s Gasoline Downstream Supply Chain," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 109-118, November.
    • Handle: RePEc:eco:journ2:2023-06-13
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    More about this item

    Keywords

    Policy Simulation; Inventory; Responsiveness; System Dynamics; Petroleum Supply Chain;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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