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A Buffer Stock Model to Ensure Price Stabilization and Availability of Seasonal Staple Food under Free Trade Considerations
Wahyudi Sutopo1, Senator Nur Bahagia2, Andi Cakravastia2 & T.M.A. Arisamadhi2
1Department of Industrial Engineering, Sebelas Maret University,
Surakarta 57126, Indonesia
2Department of Industrial Engineering, Bandung Institute of Technology (ITB), Bandung 40132, Indonesia
Email: sutopo@uns.ac.id
Abstract. The price volatility and scarcity have been became a great problem in the distribution system of seasonal staple food produced by agro industry. It has salient supply disparity during the harvest and planting season. This condition could cause disadvantages to the stakeholders such as producer, wholesaler, consumer, and government. This paper proposes a buffer stock model under free trade considerations to substitute quantitative restrictions and tariffs by indirect market intervention instrument. The instrument was developed through buffer stock scheme in accordance with warehouse receipt system (WRS) and collateral management system. The public service institution for staple food buffer stock (BLUPP) is proposed as wholesaler’s competitor with main responsibility to ensure price stabilization and availability of staple food. Multi criteria decision making is formulated as single objective a mixed integer non linear programming (MINLP). The result shows that the proposed model can be applied to solve the distribution problem and can give more promising outcome than its counterpart, the direct market intervention instrument.
Keywords: BLUPP; buffer stocks; indirect market intervention; MINLP; price stabilization; staple food availability; warehouse receipt system.
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