Multi Criteria Decision Making for Selecting Cost Reduction Project to Substitute the Compression Cost in PLN Muara Karang
| Main Authors: | Ranudigdo, Rahmat; School of Business and Management, Institut Teknologi Bandung, Sunitiyoso, Yos; School of Business and Management, Institut Teknologi Bandung |
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| Format: | Article info application/pdf eJournal |
| Bahasa: | eng |
| Terbitan: |
Proceedings of International Conference on Management in Emerging Markets (ICMEM) SBM ITB
, 2022
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| Online Access: |
https://journal.sbm.itb.ac.id/index.php/ProceedingSBMITB/article/view/4669 https://journal.sbm.itb.ac.id/index.php/ProceedingSBMITB/article/view/4669/1727 |
Daftar Isi:
- There is a potential decrease in profits of PT. Perusahaan Gas Negara Tbk (PGN) after the company carried out the government's assignment to implement ministerial decree No.89 and No.91. One of the root causes required strategic decision making in the form of selecting a cost reduction project to substitute the Compressor fee. To overcome this problem, it is necessary to apply Multi-Criteria Decision Making (MCDM) in project selection. The Analytic Hierarchy Process (AHP) approach was chosen in project selection by looking at the benefits of AHP compared to other methods. AHP is done by applying pairwise comparisons to give weight to the 10 selected sub-criteria. The next process is continued by quantifying alternative parameters. The last step is to calculate the priority index by multiplying each sub-criteria weight by the respective rating for each alternative. Taking into account the results of the calculation for the six alternatives, it is recommended that PGN carry out a negotiation process (alternative #5 and Alternative #6) that provides the greatest benefit and zero Capex. However, alternative #1 (extend the pipeline 3 km) must also be started in parallel so that if the negotiation fails, PGN still get Incremental profit from cost reduction. Keywords: Analytic Hierarchy Process (AHP), MCDM, Project Selection, Cost Reduction