Smart Buffer Stock Solution
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.
? With the advent of econometric sophistication and the existence of good time-series data, it may not be difficult for policy makers to logically evaluate the norms for buffer grain stocks, both operational and strategic, to be held by central and state agencies at any point in time.
? The latter is supposed to include the existing TPDS- BPL beneficiaries, unless they are found to have crossed the poverty threshold.
? The existing system of negotiable warehouse receipts (NWRs) offers a unique, effective tool of insurance and credit to farmers, but a lot still remains to be done to improve stakeholder awareness regarding NRWs, improve the integration and acceptability of these receipts by banks, and its coverage.
? The price volatility of commodity has been greatly became a problem in the staple food distribution system.
? Based on supply-demand problem, the domestic supply is decreasing contrary to the increasing of the staple food consumption.
? Supply Chain Management (SCM) may be able to solve it because the problems above can be seen as an integration of key business processes from the integrated system point of views that include people (government, producer, wholesaler and consumer), material (staple food), equipment (distribution channel/infrastructure), and energy (financial and information).
? A strategic level of Supply Chain (SC) design problem is addressed, that is the decision on buffer stocks for stabilizing good’s price.
• The reduction of uncertainty on the supply side only by determining the buffer stocks schemes consist of time and amount of buffer’s procurement were proposed.
• It may also limit unwanted uses by being narrow enough to go unnoticed or too narrow for unintended purposes.
• The purpose of the study is to examine the relevance and effectiveness of such operations in the present policy environment and to advocate ways to reduce the levels of grain stocks, without making any compromises on the domestic food security front.
• The shift to direct cash transfer will help reduce the level of buffer stocks needed for both strategic and operational purposes to about one-third the present norm.
? It can be noted that the increasing of price function parameter will influence the performance criteria for each stakeholder.
? This situation are caused by several reasons such as a low level of sugarcane productivity per hectare, a low level of sugar mill/plant efficiency, and the price distortion in the global market.
? The buffer stocks schemes can be used by the government to support/stabilize the market price for both the producer and the consumer.
? The evaluation of the performance of the buffer stocking policy highlights gaps and inefficiencies at most levels.
|