Distribution Cost Optimization Using Average Opportunity Cost Method and Average Total Opportunity Cost Method

Every company carries out distribution activities to distribute goods to consumers. PT Petrokimia Gresik is one of the providers of organic fertilizer called petragonik fertilizer. They must ensure that distribution from source to destinations does not occur scarcity of organic fertilizers. Selection of inappropriate distribution channels, very high transportation costs and to meet the number of different requests for each detination are factors that can hinder the process of distributing goods. The main aim of this research is to help PT Petrokimia Gresik in solving cost optimization problems related to the distribution of goods. The methods used in this research are Average Opportunity Cost Method (AOCM) and Average Total Opportunity Cost Method (ATOCM), then continued using Modified Distribution (MODI) for optimization test. Based on the research results, it is found that the initial cost of distribution using AOCM is smaller than ATOCM. So for the case of PT Petrokimia Gresik, the AOCM method is better than ATOCM. While the optimization test results get the minimum distribution cost of IDR194.350.000.