Using System Dynamics to Understand the Effect of Product Price Discount Policy of EPM Company Logistic

10 Pages Posted: 3 Jan 2016

See all articles by Maulia Gama

Maulia Gama

University of Indonesia (UI) - Department of Management

Athor Subroto

School of Strategic and Global Studies; Departement of Management

Date Written: December 30, 2015

Abstract

This study aims to understand the impact of product price discount program taken by PTK toward PT EPM logistic performance as their logistical subsidiary. Product named MBF is being used in this research as it represents the characteristics of discounted products in the company. Using actual sale, sale forecast, inventory product 2013-2014 datas, and system dynamics approach, we intend to show that price discount policy causes fluctuation of sales and inventory level which in turn affect the company's profits. Research concludes that the coordination between marketing and logistics company in prder to respond the price discount prolicy provides a /- 3,5% higher profit for the company along with 7,69% reduction in transportation cost and 20% stock out reduction.

Keywords: price discount, inventory, logistic, pharmacy, simulation, system dynamics

Suggested Citation

Gama, Maulia and Subroto, Athor, Using System Dynamics to Understand the Effect of Product Price Discount Policy of EPM Company Logistic (December 30, 2015). Available at SSRN: https://ssrn.com/abstract=2710089 or http://dx.doi.org/10.2139/ssrn.2710089

Maulia Gama

University of Indonesia (UI) - Department of Management ( email )

Campus UI Depok
Depok, West Java 16424
Indonesia

Athor Subroto (Contact Author)

School of Strategic and Global Studies ( email )

Gedung SKSG & SIL (Pascasarjana)
Jalan Salemba Raya No. 4
Jakarta, Jakarta 10430
Indonesia
+62213900538 (Phone)
+62213100059 (Fax)

HOME PAGE: http://sksg.ui.ac.id/

Departement of Management ( email )

Depok, West Java 16424
Indonesia
62 21 7272425 (Phone)
62 21 7863556 (Fax)

HOME PAGE: http://www.feb.ui.ac.id/

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