CHAPTER I

INTRODUCTION

1.1 Problem Description

The growth of the industry in the world not only in large-scale industry, but small-scale
industries also increased quite rapidly there is a 55 million of SME(Small Medium
Enterprise) in Indonesia . (Kominfo, 2015) According to Presidential Decree No. 99 In
1998, SMEs are small-scale economic activities of the people in which the type of business
field is heterogeneous and need to be protected by the government to prevent unfair
competition. SMEs are one important part of the economy of a country or region, as well
as SME's in Indonesia has a very important role to increase economy rate.
With the increasing number of SMEs that exist today lead to increased competition
between business units. Each these business units are maintain or increase market share in
order to provide the best for consumers. The number of competitors is getting much impact
to the similar industry. Provides more opportunity for consumers to choose products that
can meet consumer expectations. Companies are always trying to meet consumer desires
usually always producing the product on time, the cost is low in the field of supply and
delivery of products and manage carefully and flexibly.
To be able to give the best to the consumer, the business units should consider the
desire of consumers. Costumer need. There are a lot of considerations that are owned by
consumers when buying a product, one consideration is the quality of the product. Each
consumer would want the products purchased are of good quality. At the present time a
parameter of quality determint of whether or not the resulting product is no longer
producers but consumers. Consumer is the end user who has a voice that is free to say the
quality of goods produced or not. Of course, this assessment is not just nonsense, but this
opinion comes from the consumer's experience when using the purchased product. The
views of consumers about the quality of the products is always changing, therefore,
producers should be cautious in reading the desires of consumers over time, so that when
it happens. the company must immediately adjust the strategies.
 There are many factors that can determine the future of selling in retail shop is
qualified or not, one of factor is the inventory. When talking about the inventory is closely
related to asset. you could say that the asset of retail shop that determines of how much
item that can be stocked. Therefore how many quantity that item can be sell. Inventory also
holds very important role in ensuring the availability of item or the product that that
consumers need. In the industrial world there's usually had very big inventory to stock their
product. Therefore it is very important for every business unit that to have good inventory
control, because if one business unit havent any inventory once it will greatly impact on
the sustainability of selling activities and credibility of the business unit. When one
business unit had no inventory there is many problem that can occur, such as the out of the
stock produt, consumer unstatisfication, and many other problems.
Electricity shop Cebongan is a small and medium enterprises engaged in the retail
shop that sell the electricity product. Products are electricity equipment such us lamp, cable,
fan, etc. The inventory of the shop is already good therefore we conclude that there is
another factor that had an impact to inventory. So to find another factor that have impact
toward inventory we use AHP so that it can obtain the best alternative.
The objective itself we want conduct a research regarding that what is a solution to
increase Demand and flow the inventories. To get the method that can be used to increase
demand. The demand mean that the willingness of consumer to pay a product. How
costumer can buy product at certain condition and also the flow of inventory. Its mean that
how the inventory can be stabilized. Stabilized mean that inventory can carry product stock.
So the stock cant be empty.
The method of research is using Analytical hierarchy process (AHP) is a method
that is used to model the decision-making that can describe a problem that has a lot of good
issues criteria (multiple criteria) or a problem that has many factors (multifactorial) into a
hierarchy. Thomas L.Saaty. by classifying the criteria that have sub-criteria and the criteria
that relate directly to the problem of inventory we can make a comparison or consideration
and evaluation (comparative judgments) then we can prioritize the criteria of the inventory
problem that has a value (value), the largest, so that we can determine the best
recommendation of the problem as the best alternative.
 So first we find the goal is solution to increase Demand and flow the inventories.
Then find the criteria and sub criteria. After that find an alternative that can be answer of
the problem. Then make a questionnaire to be given to expert. Then after we got the data.
We make a matric and analysis the data. So the data can give an alternative.
1.1 Problem Formulation
Problem formulation in this module consist of:
1. What is criteria, sub-criteria and alternative solution that affect decision making
of inventor solution to increase demand and flow the inventories?
2. How is analysis result and recommendation after selecting an alternative using
AHP method?
1.3 Research Objective
The research objective of this research is:
1. To know the criteria, sub-criteria, and alternative solutions to the problems that
affecting the decision-making of inventor solution to increase demand and flow the
inventories.
2. To know the results of the analysis and recommendations of solutions to
problems using AHP.
 CHAPTER II
LITERATURE REVIEW

2.1 Deductive study

Problem that how to increase demand and the flow of inventory can be determine using
Analytical Hierarchy Process (AHP). Using this metod we must find what is criteria and
sucriteria that needed and alternative solution that will be used to determine what is the
crucial factor that had biggest impact how to increase demand a the flow of inventory. To
find the criteria, sub-criteria and alternative solution so we conduct interview to expert and
giving questionnaire weighing every criteria or sub-criteria. The data that get will be
processes using AHP method.
AHP was developed by Thomas L. Saaty. He is a professor of mathematics in
University of Pittsburgh (Thomas L. Saaty, 2001). AHP is a method used to solve a
complex problems / complex in unstructured situations into component parts or variables
arranged in a hierarchical arrangement. AHP also be interpreted as a decision-making
model to multi-factor problem or a problem with complex multi-criteria into a hierarchy
arrangement, according to Saaty (1993). AHP combines considerations and personal
judgment in a logical way and influenced the imagination, experience and knowledge to
draw up a hierarchy from a problem based on logic, intuition and experience to give
consideration.
Hierarchy itself is defined as a representation of a complex problem in a multi-level
structure where the first level is a goal, followed by level factors, criteria, sub-criteria, and
so on down to the last level of the alternatives. With hierarchies, complex problems can be
broken down into their groups were then organized into a hierarchical form so that the
problem would appear more structured and systematic (AHP Module practicum datamining,
2016).
AHP is widely used for decision making in solving the problems in terms of
planning, determination of alternative, prioritization, selection policies, resource allocation,
determining needs, forecasting results, result planning, system planning, performance
measurement, optimization and solving conflicts (Aditya, W, 2005). According to (Aditya,
W, 2005) the procedure in AHP method consists of several steps:
1. Define the problem and determine the desired solution.
In this stage we are trying to determine the problem that we will solve in a clear, detailed
and easy to understand. Of the problem we are trying to determine who might be a suitable
solution for the problem. The solution of the problem may amount to more than one. The
solutions we will develop further in the next stage.
2. Develop a hierarchy of problems faced.
Preparation of hierarchy is by determining the purpose which is the target system as a whole
at the top level. The next level consists of criteria to assess or consider alternatives that
exist and determine alternatives. Each criterion can have any criteria and sub-criteria below
can have an intensity value of each.
3. Determine the priority elements.
A. Makes pairwise comparisons
That compares elements in pairs according to the criteria given. Used for pairwise
comparison matrix form. Matrix is a simple, well-established that offers a framework to
examine consistency, obtain additional information by making all comparisons are possible
by analyzing the sensitivity of overall priorities for change considerations. To initiate the
process comparisons in pairs, starting from the top level of the hierarchy to select criteria.
As example C, then from below the level of taken elements that will be compared, for
example, A1, A2, A3, A4, and then the order of elements in a matrix like this:
Table 2.1 Matrix of pairwise comparisons
C A1 A2 A3 A4
A1 1
A2 1
A3 1
A4 1
 B. Filling pairwise comparison matrices
To fill the pair wise comparison matches by using numbers to relative importance of one
element against the other element is in the form of a scale of importance of one element
against the other element is in the form of a scale of 1 to 9. The scale of defined and
explained the values of one to 9 for consideration in pairwise comparison elements on each
level of hierarchy to a criteria at a higher level. According to Saaty (1988), paired
comparison scale below:
Table 2.2 Grading scale pairwise comparisons
The intensity of
Explanation
interest
1 Both element is important
Element one is little bit important than
3
other element.
Element one is important than the other
5
element.
Element one is more important than the
7
other element.
Element one is absolutely important than
9
other element.
Values between two values adjacent
2,4,6,8
considerations.
If the element I got one point compared to
Other wise element J, then J has a value otherwise
compared with I ().

In this AHP, alternative assessment needs to be done with the direct method (direct),
a method that is used to enter quantitative data. Usually these values come from a previous
analysis or of experience and understanding of the details of the decision problem. If the
decision makers have experience or a greater understanding of issues facing decision, then
he can directly insert the weighting of each alternative.
 a. Synthesis
Considerations on pairwise comparisons were synthesized to obtain overall priorities with
the following steps:
1) Add up the values of each column in the matrix.
2) Divide each column with a total value of the column in the question to obtain a
normalization matrix.
3) Add up the values of each matrix and dividing by the number of elements to obtain
an average value.
4) Measure consistency
In making the decision, it is important to know how well the consistency is there,
because we do not want decisions based on consideration with a low consistency. Due to
the low consistency, consideration would appear to be a random and inaccurate.
Consistency is important to obtain valid results in the real world.
b. Logical consistency
Some elements are grouped logically and consistently warned according to a logical
criterion. Weighting matrix obtained from the pairwise comparison should relate to the
cardinal and ordinal. The relationship can be characterized as follows (Suryadi & Ramdhani,
1998):
Cardinal Relations : Aij . Ajk = Aik
Ordinal Relation : Ai>Aj, Aj>Ak maka Ai>Ak
The relationship above can be seen from the following two things:
1. With a view preferences multiplicative, for example, when the grape more better four
times that of mango and mango twice better than the grapes three eight times that of
bananas.
2. By viewing transitive preferences, example grape better than the mango and banana
better then mango better than the grape better than a banana. On the real situation there
will be some deviations from the relationship, so that the matrix is not consistently
perfect. This occurs because of inconsistencies in a person's preference.
 According to (Aditya, W, 2005) Calculation of logical consistency is done by
following these steps:
1) Multiply the value in the first column with the relative priority of the first element,
the value of the second column with the relative priority of the second, and so on.
2) Summing up the results of multiplication of each row.
3) Divide the above results with many existing elements, the result is called the eigen
value (maks)
4) Calculating consistency index using formula CI = (maks)/(n-1)
Therefore
CI : consistency index
maks : eigen value
n : number of element
5) Calculating consistency ratio (CR) using formula :
CR = CI/RC
Therefore:
CR : consistency ratio
CI : consistency index
RC : random consistency
Random matrix with scale value 1 - 9 as well as opposite of random consistency
(RC). Based on calculations using the Saaty 500 samples, if 1/9, 1/8.1, 2....9 will be
obtained an average consistency for different matrix as in the table below:
Table 2.3 Random index value
N 1 2 3 4 5 6 7 8 9 1
0
R 0 0 0 0 1 1 1 1 1 1
I . . . . . . . .
5 9 1 2 3 4 4 4
8 0 2 4 2 1 5 9
2.2 Inductive study
2.2.1. Multi-Criteria inventory classification using Fuzzy Analytical Hierarchy Process
(FAHP) method. (Kiris, 2013)
In this journal Safak Kiris from Dumlupinar University Turkey conduct research multi
criteria inventory classification using Fuzzy Analytical Hierarchy Process (FAHP) method
toward ABC classification to construct best option inventory control in the firm.
Large amounts of data have to be processed and analyzed in inventorymanagement
by enterprises.Therefore, classifying the inventory items based on their importance is a
usefulmtool to control the inventory more efficiently. In this study, the fuzzy Analytic
Hierarchy Process approach is used to analyze and to solve a multi-criteria inventory
classification problem. The fuzzy AHP approach has been applied to different kinds of
MCDM problems in the literature, but not to multi-criteria inventory classification
problems. The determination of the criteria weights and evaluation of the inventory items
are not easytasks. Therefore the concept of fuzziness supports decision makers to make
more flexibledecisions in vagueness environments.
The proposed approach takes into account the price, the criticality, the storage
ability, the procurement process and the maintenance with their sub-criteria. The
interdependencies between criteria are also considered within the proposed approach. The
weights of the criteria and sub-criteria are determined by using Mikhailovs (2000, 2003)
model. In addition the consistency values are derived from the model, so the results may
be more reliable. After determining the weights of the criteria and evaluating the inventory
items based on the related criteria, the SAW method is applied to calculate the scores of
the items. Finally, the classification is implemented.
A real example was investigated in a construction firm for the management of the
engineering vehicles items. Inventory management was required to prevent the disruption
of the scheduled jobs. If the items of the engineering vehicles were absent or defective, the
construction processes could not be continued. Therefore, the inventory items had to be
tracked in a proper way. It was shown that the proposed approach is useful and effective to
classify the inventory items of the construction firms. In addition, decision making with a
large number of the inventory items can be easier and faster by using a decision support
system. In this case, a proper decision support system can be designed to determine the
weights, to evaluate and to classify the inventory items.

2.2.2. An Application Analytic Hierarrchy Proces (AHP) in a Real World Problem on Store
Location Selection. (Eylem Koc, 2015)
In this journal conduct Eylem Koc and Hasan Arda Burhan research An Application
Analytic Hierarchy Process (AHP) in a Real World Problem on Store Location Selection.
That they thing that opening a new business store has a strong influence on both financial
and corporation appearance. (Eylem Koc, 2015)
Methodology itself they use AHP method in Carglass Turkey is an auto glass
company which serves more than 110.000 customers every year in 12 branches and 198
franchises. The company is owned by Belron Inc. which operates in 28 countries and serves
8 million clients and has other brands such as, Carglass Europe, OBrien Australia and
Safelite USA.
After deciding opening a new store, Carglass Turkey executives faced a location
selection problem recently. As a strategically important decision, there were both tangible
and intangible criteria that should be counted in. Therefore in order to solve this problem,
AHP method was accepted as the methodology. In the first step alternatives, main and sub-
criteria was determined. During these steps, a strict collaboration was carried out with a
team consists of Carglass executives. After several interviews, three location alternatives
were determined and these were renamed as L1, L2 and L3 because of companys
confidentiality policy.
In accordance with the varying advantages of these locations, more than 40 criteria
was presented and five of them; sectoral factors, environmental factors, investment cost,
labor potential, regional potential were chosen as the main criteria.
Location selection is a very critical decision for the companies in nowadays vying
environment. The right decision will bring about many advantages to the companies
irrespective of their business line. In a location selection problem each criterias effect may
differ and also these effects may contravene with each other. Therefore these problems
present a complex structure that consists of tangible and intangible factors and thereby it
can be said that AHP is a convenient method in order to solve these kinds of problems. In
this study Carglass Turkeys location selection problem is handled. Firstly the alternatives,
main and sub-criteria were defined. The problem was modelled as it was shown in Figure
1 and pairwise comparison matrices were obtained accordingly. The inconsistency ratios
were calculated and after ensuring consistency for all matrices the relative weights were
acquired. In Table 3, the numbers points out that the regional potential is the most important
main criteria among others. Similarly the number of cars in the region which is a sub-
criteria of regional potential has the highest relative importance. Consequently the
importance levels of alternatives were calculated and in accordance with Table 5, L1 region
was selected as the best location for this problem. These outcomes were presented as a
report to the Carglass Turkey administration and considered as feasible by the company.
As this study was performed in one particular business line, the criteria were
specified in accordance with the auto glass sector, therefore this situation can be seen as a
limitation in this study. But the hierarchical model which was established for this problem
may provide an insight regarding location selection problems. Also as an example of a
feasible solution to a real-world location selection problem, this study may guide
companies and researchers whom may work on a similar problem in the future

2.2.3. A Study on the Comparison of AHP and Fuzzy AHP Evaluations of Private Technical
Institutions in India. (Debmally Chatterjee, 2013)
The numbers of private technical institutions in India are increasing rapidly in the recent
decade. Today there are thousands of private self-financed technical institutions most of
which are compromising with their quality of education. Analytical hierarchy process
(AHP) and its fuzzy extension (FAHP) are two of the efficient tools by which one can
evaluate such institutions. There are ample numbers of studies in literature that discussed
the efficiencies of the AHPand FAHP separately. This present piece of work makes an
attempt to study and quantify the difference, if any in the applications of AHP and FAHP
on the evaluation of self-financed private technical institutions in India. (Debmally
Chatterjee, 2013).
Methodology they used is first is to select of respondent of the study using twelve
expert were selected from academia having more that fifteen year experience in the
engineering field. Second they identification of factor and sub factor for the evaluation.
Third they identification of alternative study. Fourth construction of the detail hierarchy of
the problem. And last generation of factors weights and score for alternative.
After get the result they compare the result between AHP and FAHP. They compare
first, comparison between factor weights. Second comparison between the sub factor
weights. And last comparison between FAHP and AHP alternative score.
They conclude that though a number of researchers talked about fuzzy analytical
hierarchy process and its application in different fields of study, there is no empirical
evidence in the earlier literature that agrees with the fact that FAHP provides better results
than the classical AHP.
In this present study an attempt has been made to capture the difference in results
obtained by using AHP and FAHP models respectively on the evaluation of private self-
financed technical institutions in India. The result of this comparative study shows that
there exists some differences in weights generated through non-fuzzy and fuzzy processes
corresponding to some individual sub factors, but in case of the weights corresponding to
the factors and sub factors in aggregate there is hardly any difference. Moreover the overall
scores of the alternatives also indicate convergence with respect to the non-fuzzy and fuzzy
evaluations.
Furthermore this study provides empirical evidence on the convergence of the
results of AHP and FAHP methods in factor weight generations as well as alternative score
generations. This can be seen from the SPSS outputs corresponding to the comparative
studies. The point to be noted here is that careful and consistent pairwise comparisons can
result in equally good outcomes irrespective of whether fuzzy mathematics is embedded
with AHP or not.
 CHAPTER III
RESEARCH METHOD

3.1 Object of the Research

The research of data analysis and decision making by using Analytical Hierarchy Process
(AHP) was being conducted at electronical store, TOKO Cebongan in Letkol Subadri Street,
4.5 KM, Sleman Yogyakarta. This store is a retail enterprise in electronical sector. The
main objective that is being researched is a way to improve the demand and flow the
inventory depends on the condition of the store.
3.2 Collecting Data Method
Collecting data method which is being used to define the way to improve the demand and
flow the inventory by AHP method is journal review, observation, interview and
questionnaire toward the expert in this scope, which is the owner of the store, Krisnita Catur
Putri. The observation was being conducted to obtain suitable problem within the store.
The interview was being conducted in order to validity the problem to the expert whether
the problem is correct or not. The questionnaire is being used to obtain the valid and
objective data and information regarding the criteria, sub criteria, and the alternative
solution. Those data will be analyzed using AHP method to obtain the suitable way to
improve the demand and flow the inventory. In the other hand, journal review is being used
to determine the criteria and sub criteria based on the similar research.
3.3 Types of Data
3.3.1 Primary Data
The primary data is being obtained by direct observation, interview, and, questionnaire
toward the owner of TOKO Cebongan.
3.3.2 Secondary Data
The secondary data is being obtained from literature such as journal, while determining the
weighing for pairwise comparison.
3.4 Flowchart
Here is the flowchart of the research using AHP method.
Picture 3.1 AHP Flowchart
 Observation
The observation is being conducted in order to find the problem within the research area.
Find Criteria and Sub Criteria
Criteria and sub criteria findings should be proceed and decided in order to make hierarchy
of the problem.
Find Alternatives
Alternatives are decided with consideration of the criteria and sub criteria which have been
validated by the expert.
Data Collection
Data collection is being conducted using questionnaire.
Consistency Test
Consistency test is being conducted to analyze whether the respondent is consistence and
the data is valid or not. If the data is valid then it can be used to obtain the result analysis.
In the other hand if the data is not valid, then the researcher should redo the research starts
from the criteria.
Result Analysis
The analysis to obtain the suitable solution for the research case based on the alternatives.
Recommendation
Recommendation is given to the store and further research based on the research case.
 CHAPTER IV
RESULT AND DISCUSSION

4.1 Criteria and Sub Criteria AHP Model

1. Number of collection per month
Number of collection per month shows the monthly cycle time matrix which can be used
to analyze at which level of supply chain provides product to the customer. The number of
collection per month also affected by marketing, quality of the product, asset, cost, and
support service, while the number of collection will result in decision of optimization way
toward management, inventory cash flow, product variety, and also marketing. (Nganga,
2013)
2. Marketing and innovation
The ability to respond to external influences and to respond to marketplace changes to gain
or maintain competitive advantage.
Flexibility and adaptability
The retailer should has flexibility and adaptability in order to meet the marketplace. The
flexibility and adaptability can be analyzed and processed through the goods, the marketing,
and the management. (Nzuza)
Strong marketing image and good marketing technique
Strong marketing image and good marketing technique can affect and also can be affected
by the inventory, marketplace, labor, services, and management. High or low variety of
product with optimized capacity will make improve the marketing in order to avoid dead
stock. Good marketing technique and skilled labor are also needed in order to avoid out of
stock that will result is losses. (Nganga, 2013)
Ability to offer new and innovative product
Ability to offer new and innovative product is being implemented to meet the market
demand and as a respond of the decrease of certain product demand. The ability to offer
new and innovative product also make the retailer to be able to survive among the
competitors within the marketplace. (Nganga, 2013)
 3. Product and quality
Product and quality will show the ability to perform tasks as the expectation quality of the
product. (Nganga, 2013)
Quality relative to competitors
The quality of the products that the retailer sell at least relative or better quality than the
competitors. The quality relative to competitors because the competitors also meet the
demand of the customer in marketplace. (Nganga, 2013)
Variety of good
Higher variety or lower variety of good still make the retailer manage these goods to have
competitive and better quality. The variety of good also affect the capacity utilization,
marketing focus, inventory cash flow, and management of the good. (Nganga, 2013)
Quantity of good can be delivered on time
When quantity of good can be delivered on time as from the retailer view point, it can avoid
the out stock order which may result in losses. In the other hand, in the view point of
customer quality of good which can be delivered on time will increase the retailer-customer
relationship, which may result in repetition payment. (Nganga, 2013)
4. Asset
The ability to efficiently utilize assets. Assets management strategies in a supply chain
include inventory reduction and insourcing vs. outsourcing. (Nganga, 2013)
Skilled labor
Skilled labor is one of the main asset. The important of the existence of skilled labor is very
high. Skilled labor is needed to optimize the system, improve the marketing strategies,
communicate efficiently, and manage inventories to avoid dead stock and stock out.
If staff involved in stock control is not qualified and competent, then there will be
ineffectiveness in inventory control. Bailey and Farmer (1982) says that for Stock control
function to achieve a superior performance, its necessary to recruit, train and develop
personnel with the capacity and motivation to do better job. Carter and price (1993) indicate
that training of staff is vital if full use is to be made of their abilities and talents. Coe (1989)
says that its important to ensure that sufficient number of the appropriate caliber is
available to the organization in pursuit of its objectives. Incompetent employees can render
stock control virtually ineffective. (Eylem Koc, 2015)
Capacity utilization
Capacity utilization is needed to effectively maintain, manage, and circulate the inventory.
Working with re-order point, in-progress stock, current stock, and avoid dead stock.
Capacity utilization is affected and affecting the marketing, product variety, control of
inventory, and management. Perfect capacity utilization creates optimized and effective
usage and control of the capacity, which maintain the retailer to be able to hold the
inventory in the lowest possible cost. (Nzuza)
Inventory days of supply
Inventory days of supply is being obtained by analyzing the demand of the customer within
marketplace. The retailer is able to know when the product should be supplied within
certain period. It makes the marketing, the product variety controller, the inventory
controller, the management and the cost provider are ready to support the supply. (Nzuza)
5. Cost
The cost of operating the supply chain processes. This includes labor, ordering, holding,
management, and transportation. A typical cost metric is the cost of goods sold. (Eylem
Koc, 2015)
Frequent price fluctuation
Frequent price fluctuation will affect the costing because, the retailer needs to manage the
price of its goods by strong management, strategic marketing, product variety, and
inventory control. The retailer needs to stabilize the price in order to meet the customer
satisfaction.
Ability to reach the target price of customer
Ability to reach the target price of customer needs a strong management and market
competition. The target price of customer usually meet within the certain product variety
which is not costly and has better performance. The higher amount of the product supplied
makes the customer can easily get the product with low reasonable pricing. The reason is
the marketing, a way to make the repetition buying by the customer.
 Cost of operations and supply chain process
Cost of operation and supply chain process strongly affecting every sector. It relates with
the strategy within the marketing, inventory, and management system. If the operation and
supply chain process is too costly, the retailer might consider to reduce the product variety
or rapidly increase the marketing to minimize the holding cost and the maintenance cost.
6. Support services
Services reflect on the retailers capabilities to add value to its primary service of product
selling. Roughly, support services can be divided into, firstly, services prior to product
delivery in terms of provision of information, referring to all communicational efforts
from retailer towards the customer and supplier, and secondly, (post-delivery) after sales
service (Choi and Hartley, 1996). In addition, due to the importance for the product type
as electronic products, the ability to return/sell back product items in case of
disappointing sales numbers. (Fahim)
After sale service
After sale service occurs between retailer to customer and supplier to retailer. After sale
service is like delivery, maintenance service, guarantee, and etc. After sale service is
necessary in order to maintain the trust and good feedback from the customer.
Provision of information
Provision of information is all communication from retailer towards customer and supplier.
The communication is about information giving, as in view point of the customer, the
customer can get an exact product like what the customer want. In the other hand, in view
point of the supplier, the supplier will know what kind of the product that the market is
demanded.
Ability to return or sell back
Ability to return or sell back will mostly happen when there is a disappointing sales
numbers. This should be provided by the retailer directed towards the customer. The retailer
will easily improve the marketing and forecast the inventory cash flow by the feedback of
the customer.
4.2 Alternative Solution
Based on the observation and interview with the expert, the alternatives can be obtained
which are 4 alternatives, create strong management and organization, forecast and control
inventory cash flow, reduce product variety with respect to capacity, and improve
marketing and capacity utilization. These 4 alternatives will be valued based on the criteria
and sub criteria before. Here is the explanation for the alternatives (Fahim):
1. Create strong management and organization
Creating strong management and organization will be able to manage all problem in every
sector because of the foundation of the organization. The function of the strong
management within the organization is having the strong internal support and only needs
to defense the organization or the process within it from the external factor such as
competitors.
2. Forecast and control inventory cash flow
Through forecast and inventory cash flow, it can be used to predict the next inventory
supply based on the demand analysis. The retailer can decide with product should be
eliminated and which product that has a high flow of inventories and demand.
3. Reduce product variety with respect to capacity
Reducing product variety makes the retailer can be focused on the profitable product based
on the market demand. The less interest product will be minimized or even eliminated, and
the capacity of the minimized product will be allocated into another potential product.
4. Improve marketing and capacity utilization
Improving marketing and optimizing capacity utilization can be used in order to manage
and void dead stock. The marketing has a high effect on the demand of the product, while
the capacity utilization can be optimized by analyzing the demand after and before
marketing incentives.
4.3 Structure of AHP Model
Goal: Solution to increase demand and flow the inventories
Criteria, sub criteria, and alternatives: Shown in the picture
Picture 4.1 AHP hierarchy
4.4 Pairwise Comparison
Here are the annotation for the tables bellow:
C1 : Number of Collection per Month
C2 : Marketing and Innovation
C3 : Product and Quality
C4 : Asset
C5 : Cost
C6 : Support Services
SC1 : Flexibility and adaptability
SC2 : Strong marketing image and good marketing technique
SC3 : Ability to offer new and innovative product
SC4 : Quality relative to competitors
SC5 : Variety of good
SC6 : Quantity of good can be delivered on time
SC7 : Skilled labor
SC8 : Capacity utilization
SC9 : Inventory days of supply
SC10 : Frequent price fluctuation
SC11 : Ability to reach the target price of customer
SC12 : Cost of operations and supply chain process
SC13 : After sale service
SC14 : Provision of information
SC15 : Ability to return or sell back
A1 : Create strong management and organization
A2 : Forecast and control inventory cash flow
A3 : Reduce product variety with respect to capacity
A4 : Improve marketing and capacity utilization
 Table 4.1 Pairwise Comparisons for the Criteria
Criteria C1 C2 C3 C4 C5 C6
C1 1 3 3 4 8 1
C2 0.33 1 0.33 2 3 0.33
C3 0.33 3 1 2 5 0.5
C4 0.25 0.5 0.5 1 3 0.25
C5 0.13 0.33 0.2 0.33 1 0.2
C6 1 3 2 4 5 1
Total 3.04 10.83 7.03 13.33 25.00 3.28
In pairwise comparison table above we do a pairwise comparisons for each criteria.
The results of pairwise comparisons for this criteria is to provide information regarding the
order of importance that should be considered when increasing demand and improve
inventory flow. The criteria that must be considered first when increasing the demand and
improve inventory flow is cost, because the cost will affect a cash flow. The second criteria
is the criteria that must be considered is an asset, next is marketing and innovation criteria,
product and quality, number of collection per month and last is support service.
Table 4.2 Pairwise Comparisons for the Sub Criteria Marketing and Innovation
Sub Criteria- C2 SC1 SC2 SC3
SC1 1 3 2
SC2 0.33 1 0.33
SC3 0.5 2 1
Total 1.8333 6 3.5
In pairwise comparison table above we do a pairwise comparisons for each sub-
criteria the marketing and innovation. Results of pairwise comparisons for each sub-
criterion marketing and innovation is to provide information about the order of importance
that should be considered when increasing demand and improve inventory flow. Each sub-
criteria marketing and innovation that must be considered first is strong marketing image
and good marketing technique, then ability to offer new product and innovative products
and the last is flexibility and adaptability.
 Table 4.3 Pairwise Comparisons for the Sub Criteria Product and Quality
Sub Criteria- C3 SC4 SC5 SC6
SC4 1 3 2
SC5 0.33 1 0.33
SC6 0.5 3 1
Total 1.8333 7 3.333
In pairwise comparison table above we do a pairwise comparisons for each sub-
criteria the Product and Quality. Results of pairwise comparisons for each sub-criterion
Product and Quality is to provide information about the order of importance that should be
considered when increasing demand and improve inventory flow. Each sub-criteria product
and quality that must be considered first is variety of good, then quantity of good can be
delivered on time and the last is quality relative to competitors.
Table 4.4 Pairwise Comparisons for the Sub Criteria Asset
Sub Criteria- C4 SC7 SC8 SC9
SC7 1 3 4
SC8 0.33 1 2
SC9 0.25 0.5 1
Total 1.5833 4.5 7
In pairwise comparison table above we do a pairwise comparisons for each sub-
criteria Asset. Results of pairwise comparisons for each sub-criterion Asset is to provide
information about the order of importance that should be considered when increasing
demand and improve inventory flow. Each sub-criteria Asset that must be considered first
is inventory days of supply, then capacity utilization and the last is skilled labor.
Table 4.5 Pairwise Comparisons for the Sub Criteria Cost
Sub Criteria- C5 SC10 SC11 SC12
SC10 1 4 0.33
SC11 0.25 1 0.33
SC12 2 3 1
Total 3.25 8 1.667
 In pairwise comparison table above we do a pairwise comparisons for each sub-
criteria Cost. Results of pairwise comparisons for each sub-criterion cost is to provide
information about the order of importance that should be considered when increasing
demand and improve inventory flow. Each sub-criteria cost that must be considered first is
ability to reach the target price of customer, then frequent price fluctuation and the last is
cost of operations and supply chain process.
Table 4.6 Pairwise Comparisons for the Sub Criteria Support Services
Sub Criteria- C6 SC13 SC14 SC15
SC13 1 5 2
SC14 0.2 1 0.25
SC15 0.5 4 1
Total 1.7 10 3.25
In pairwise comparison table above we do a pairwise comparisons for each sub-
criteria Support Services. Results of pairwise comparisons for each sub-criterion Support
Services is to provide information about the order of importance that should be considered
when increasing demand and improve inventory flow. Each sub-criteria support services
that must be considered first is provision of information, then ability to return or sell back
and the last is after sale service.
Table 4.7 Pairwise Comparison of Alternative Based Criteria Number of Collection
Alternative C1 A1 A2 A3 A4
A1 1 2 0.33 3
A2 0.5 1 0.33 1
A3 3 3 1 3
A4 0.33 1 0.33 8
Total 4.833333 7 2 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on criteria number of collection. The first results obtained improve marketing and
capacity utilization because has most impact to the number of collection comes out next is
Reduce product variety with respect to capacity, create strong management and
organization and last reduce product variety with respect to capacity
Table 4.8 Pairwise Comparison of Alternative Based Criteria Marketing and Innovation
Alternative C2 A1 A2 A3 A4
A1 1 1 0.33 2
A2 1 1 0.25 0.5
A3 3 4 1 3
A4 0.5 2 0.33 1
Total 5.5 8 1.916667 6.5
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on criteria marketing and innovation. The first results obtained Improve marketing
and capacity utilization because has most impact to the marketing and innovation comes
out next is Reduce product variety with respect to capacity, create strong management and
organization and last reduce product variety with respect to capacity
Table 4.9 Pairwise Comparison of Alternative Based Criteria Product and Quality
Alternative C3 A1 A2 A3 A4
A1 1 1 0.5 2
A2 1 1 0.5 3
A3 2 2 1 2
A4 0.5 0.33 0.5 1
Total 4.5 4.33333 2.5 4.5
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on criteria product and quality. The first results obtained Improve marketing and
capacity utilization and create strong management and organization because has most
impact to the product and quality comes out next is forecast and control inventory cash
flow and last is reduce product variety with respect to capacity.
 Table 4.10 Pairwise Comparison of Alternative Based Criteria Asset
Alternative C4 A1 A2 A3 A4
A1 1 3 0.5 3
A2 0.33 1 0.5 2
A3 2 2 1 3
A4 0.33 0.5 0.33 1
Total 3.66667 6.5 2.33333 9
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on criteria asset. The first results obtained Improve marketing capacity utilization
because has most impact to the asset comes out next is forecast and control inventory cash
flow, then create strong management and organization and last is reduce product variety
with respect to capacity.
Table 4.11 Pairwise Comparison of Alternative Based Criteria Cost
Alternative C5 A1 A2 A3 A4
A1 1 3 0.5 3
A2 0.33 1 0.33 2
A3 2 3 1 3
A4 0.33 0.5 0.33 1
Total 3.66667 7.5 2.16667 3.66667
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on criteria cost. The first results obtained Improve marketing capacity utilization
because has most impact to the cost comes out next is forecast and control inventory cash
flow and create strong management and organization and last is reduce product variety with
respect to capacity.
 Table 4.12 Pairwise Comparison of Alternative Based Criteria Support Services
Alternative C6 A1 A2 A3 A4
A1 1 2 0.5 2
A2 0.5 1 0.33 1
A3 2 3 1 3
A4 0.5 1 0.33 1
Total 4 7 2.16667 7
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on criteria support services. The first results obtained Improve marketing capacity
utilization and forecast and control inventory cash flow because has most impact to the
support services comes out next is create strong management and organization and last is
reduce product variety with respect to capacity.
Table 4.13 Pairwise Comparison of Alternative Based Sub Criteria Flexibility and
Adaptability
Alternative A1 A2 A3 A4
SC1
A1 1 1 0.5 2
A2 1 1 0.25 2
A3 2 4 1 3
A4 0.5 0.5 0.33 1
Total 4.5 6.5 2.083333 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria flexibility and adaptability. The first results obtained improve
marketing capacity utilization because has most impact to the flexibility and adaptability
comes out next is and forecast and control inventory cash flow, then create strong
management and organization and last is reduce product variety with respect to capacity.
 Table 4.14 Pairwise Comparison of Alternative Based Sub Criteria Strong Marketing
Image and Good Marketing Technique
Alternative A1 A2 A3 A4
SC2
A1 1 2 0.33 3
A2 0.25 1 0.25 1
A3 4 3 1 3
A4 0.33 1 0.33 1
Total 5.58333 7 1.916667 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria strong marketing image and good marketing technique. The first
results obtained Improve marketing capacity utilization because has most impact to Strong
marketing image and good marketing technique comes out next is and forecast and control
inventory cash flow, then create strong management and organization and last is reduce
product variety with respect to capacity.

Table 4.15 Pairwise Comparison of Alternative Based Sub Criteria Ability to Offer New
and Innovative Product
Alternative A1 A2 A3 A4
SC3
A1 1 3 0.5 2
A2 0.33 1 0.33 2
A3 2 3 1 3
A4 0.5 0.5 0.33 1
Total 3.83333 7.5 2.166667 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria ability to offer new and innovative product. The first results obtained
Improve marketing capacity utilization because has most impact to the ability to offer new
and innovative product comes out next is and forecast and control inventory cash flow, then
create strong management and organization and last is reduce product variety with respect
to capacity.
Table 4.16 Pairwise Comparison of Alternative Based Sub Criteria Quality Relative to
Competitors
Alternative A1 A2 A3 A4
SC4
A1 1 1 0.33 1
A2 1 1 0.33 2
A3 3 3 1 3
A4 1 0.5 0.33 1
Total 6 5.5 2 7
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria quality relative to competitors. The first results obtained Improve
marketing capacity utilization because has most impact quality relative to competitors
comes out next, create strong management and organization, then is forecast and control
inventory cash flow and last is reduce product variety with respect to capacity.
Table 4.17 Pairwise Comparison of Alternative Based Sub Criteria Variety of Good
Alternative A1 A2 A3 A4
SC5
A1 1 2 0.33 2
A2 0.5 1 0.33 1
A3 3 3 1 2
A4 0.5 1 0.5 1
Total 5 7 2.166667 6
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria variety of good. The first results obtained create strong management
and organization because has most impact to variety of good comes out next, improve
marketing capacity utilization, then is forecast and control inventory cash flow and last is
reduce product variety with respect to capacity.
Table 4.18 Pairwise Comparison of Alternative Based Sub Criteria Quantity of Good Can
Be Delivered on Time
Alternative A1 A2 A3 A4
SC6
A1 1 2 0.33 3
A2 0.5 1 0.33 1
A3 3 3 1 3
A4 0.33 1 0.33 1
Total 4.83333 7 2 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria quantity of good can be delivered on time. The first results obtained
improve marketing capacity utilization because has most impact to quantity of good can be
delivered on time comes out next is and forecast and control inventory cash flow, then
create strong management and organization and last is reduce product variety with respect
to capacity.
Table 4.19 Pairwise Comparison of Alternative Based Sub Criteria Skilled Labor
Alternative A1 A2 A3 A4
SC7
A1 1 1 0.33 3
A2 1 1 0.33 1
A3 3 3 1 3
A4 0.33 1 0.33 1
Total 5.33333 6 2 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria skilled labor can be delivered on time. The first results obtained
improve marketing capacity utilization because has most impact to skilled labor can be
delivered on time comes out next is and forecast and control inventory cash flow, then
create strong management and organization and last is reduce product variety with respect
to capacity.
Table 4.20 Pairwise Comparison of Alternative Based Sub Criteria Capacity Utilization
Alternative A1 A2 A3 A4
SC8
A1 1 1 0.5 3
A2 1 1 0.33 2
A3 2 3 1 3
A4 0.33 0.5 0.33 1
Total 4.33333 5.5 2.166667 9
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria capacity utilization. The first results obtained improve marketing
capacity utilization because has most impact to capacity utilization comes out next is and
forecast and control inventory cash flow, then create strong management and organization
and last is reduce product variety with respect to capacity.
Table 4.21 Pairwise Comparison of Alternative Based Sub Criteria Frequent price
Fluctuation
Alternative A1 A2 A3 A4
SC9
A1 1 2 0.5 3
A2 0.5 1 0.33 1
A3 2 3 1 3
A4 0.33 1 0.33 1
Total 3.83333 7 2.166667 8
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria frequent price fluctuation. The first results obtained improve
marketing capacity utilization because has most impact to frequent price fluctuation comes
out next is and forecast and control inventory cash flow, then create strong management
and organization and last is reduce product variety with respect to capacity.
Table 4.22 Pairwise Comparison of Alternative Based Sub Criteria Frequent Price
Fluctuation
Alternative SC10 A1 A2 A3 A4
A1 1 3 0.33 2
A2 0.33 1 0.33 0.5
A3 3 3 1 3
A4 0.5 2 0.33 1
TOTAL 4.833333333 9 2 6.5
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria frequent price fluctuation. The first results obtained forecast and
control inventory cash flow because has most impact to frequent price fluctuation comes
out next is improve marketing and capacity utilization and then create strong management
and organization and last is reduce product variety with respect to capacity.
Table 4.23 Pairwise Comparison of Alternative Based Sub Criteria Ability to Reach
Customer Target Price.
Alternative SC11 A1 A2 A3 A4
A1 1 1 0.33 2
A2 1 1 0.33 1
A3 3 3 1 2
A4 0.5 1 0.5 1
TOTAL 5.5 6 2.166666667 6
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria ability to reach customer target price. The first results obtained
forecast and control inventory cash flow and improve marketing and capacity utilization
because have most impact to ability to reach customer target price, comes out next is
creating strong management and organization and last is reduce product variety with
respect to capacity.
Table 4.24 Pairwise Comparison of Alternative Based Sub Criteria Cost of Operation and
Supply Chain
Alternative SC12 A1 A2 A3 A4
A1 1 2 0.33 2
A2 0.5 1 0.33 1
A3 3 3 1 2
A4 0.5 1 0.5 1
TOTAL 5 7 2.166666667 6
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria cost of operation and supply chain. The first results obtained forecast
and control inventory cash flow because has most impact to cost of operation and supply
chain, comes out next is improve marketing and capacity utilization and then create strong
management and organization and last is reduce product variety with respect to capacity.
Table 4.25 Pairwise Comparison of Alternative Based Sub Criteria after Sale Service
Alternative SC13 A1 A2 A3 A4
A1 1 1 0.33 2
A2 1 1 0.5 1
A3 3 2 1 3
A4 0.5 1 0.33 1
TOTAL 5.5 5 2.166666667 7
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria after sale service. The first results obtained reduce product variety
with respect to capacity because has most impact to after sale service, comes out next is
create strong management and organization and then forecast and control inventory cash
flow and last is improve marketing and capacity utilization.
 Table 4.26 Pairwise Comparison of Alternative Based Sub Criteria Provision of
Information
Alternative SC14 A1 A2 A3 A4
A1 1 1 0.33 2
A2 1 1 0.33 1
A3 3 3 1 3
A4 0.5 1 0.33 1
TOTAL 5.5 6 2 7
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria provision of information. The first results obtained reduce product
variety with respect to capacity because has most impact to provision of information, comes
out next is forecast and control inventory cash flow and then create strong management and
organization and last is improve marketing and capacity utilization.
Table 4.27 Pairwise Comparison of Alternative Based Sub Criteria Ability to Return or
Sell Back
Alternative SC15 A1 A2 A3 A4
A1 1 2 0.33 2
A2 0.5 1 0.5 1
A3 3 2 1 2
A4 0.5 1 0.5 1
TOTAL 5 6 2.3333333 6
In choosing alternatives that will provide the answer to increasing demand and
improve inventory flow. The sequence of pairwise comparisons for selecting alternatives
based on sub criteria ability to return or sell back. The first results obtained forecast and
control inventory cash flow and reduce product variety with respect to capacity because
have most impact to ability to return or sell back, comes out next is creating strong
management and organization and last is improve marketing and capacity utilization.
4.5 Consistency Test
Consistency test is being done in order to obtain the weighted value of criteria and sub
criteria and also to know whether the data of the respondent is consistent or not. The data
will be considered as consistent data when the value of consistency result is less or equal
to 0.1.
Table 4.28 Consistency Test of Critera
M E.
Pairwise Variable CI IR CR Result
Mult Value Max
Criteria-Criteria
C1 2.050 6.285
C2 0.634 6.123
C3 1.078 6.271
Criteria C4 0.481 6.137 6.194 0.039 0.58 0.067 CONSISTENT
C5 0.230 6.099
C6 1.765 6.249
Total 6.237 37.164
 Table 4.29 Consistency Test of Sub Criteria

Pairwis Variabl M Eugen

CI IR CR Result
e e Mult Value Max

Sub Criteria-Sub Criteria

SC1 1.625 3.015
SC2 0.492 3.004 CONSISTEN
C2 3.009 0.005 0.58 0.008
SC3 0.894 3.008 T

Total 3.011 9.028

SC4 1.617 3.082
SC5 0.428 3.021 CONSISTEN
C3 3.054 0.027 0.58 0.046
SC6 1.021 3.058 T

Total 3.065 9.161

SC7 1.891 3.034
SC8 0.722 3.014 CONSISTEN
C4 3.018 0.009 0.58 0.016
SC9 0.413 3.007 T

Total 3.025 9.055

SC10 1.049 3.122
SC11 0.395 2.946 CONSISTEN
C5 3.031 0.015 0.58 0.027
SC12 1.604 3.025 T

Total 3.047 9.093

SC13 1.727 3.041
SC14 0.295 3.007 CONSISTEN
C6 3.025 0.012 0.58 0.021
SC15 1.011 3.026 T

Total 3.033 9.074

 Table 4.30.1 Consistency Test of Alternative-Criteria
Pairwis M Eugen
Variable CI IR CR Result
e Mult Value Max
Alternative-Criteria
A1 1.066 4.121
A2 0.550 4.089
0.5 CONSISTEN
C1 A2 2.038 4.236 4.118 0.039 0.068
8 T
A4 0.507 4.027
TOTAL 4.160 16.474
A1 0.829 4.206
A2 0.536 4.170
0.5 CONSISTEN
C2 A2 2.114 4.168 4.171 0.057 0.098
8 T
A4 0.692 4.139
TOTAL 4.171 16.683
A1 0.934 4.136
A2 1.062 4.132
0.5 CONSISTEN
C3 A2 1.611 4.141 4.119 0.040 0.068
8 T
A4 0.521 4.064
TOTAL 4.128 16.475
A1 1.350 4.211
A2 0.690 4.051
0.5 CONSISTEN
C4 A2 1.702 4.215 4.143 0.048 0.082
8 T
A4 0.432 4.097
TOTAL 4.173 16.574
 Table 4.31.2 Consistency Test of Alternative-Criteria
Pairwis M Eugen
Variable CI IR CR Result
e Mult Value Max
Alternative-Criteria
A1 1.294 4.185
A2 0.609 4.061
0.5 CONSISTEN
C5 A2 1.821 4.185 4.122 0.041 0.070
8 T
A4 0.429 4.059
TOTAL 4.153 16.489
A1 1.055 4.010
A2 0.565 4.006
0.5 CONSISTEN
C6 A2 1.828 4.020 4.010 0.003 0.006
8 T
A4 0.565 4.006
TOTAL 4.013 16.041
 Table 4.32.1 Consistency Test of Alternative-Sub Criteria
Pairwis M Eugen
Variable CI IR CR Result
e Mult Value Max
Alternative- Sub Criteria
A1 0.879 4.059
A2 0.759 4.071
0.5 CONSISTEN
SC1 A2 2.013 4.204 4.097 0.032 0.032
8 T
A4 0.479 4.053
TOTAL 4.130 16.387
A1 1.021 4.030
A2 0.427 3.856
0.5 CONSISTEN
SC2 A2 2.233 4.374 4.043 0.014 0.014
8 T
A4 0.491 3.915
TOTAL 4.172 16.174
A1 1.211 4.244
A2 0.636 4.074
0.5 CONSISTEN
SC3 A2 1.835 4.176 4.145 0.048 0.048
8 T
A4 0.486 4.086
TOTAL 4.169 16.580
A1 0.671 4.079
A2 0.813 4.059
0.5 CONSISTEN
SC4 A2 2.013 4.079 4.061 0.020 0.035
8 T
A4 0.571 4.027
TOTAL 4.068 16.244
 Table 4.32.2 Consistency Test of Alternative-Sub Criteria
Pairwis M Eugen
Variable CI IR CR Result
e Mult Value Max
Alternative- Sub Criteria
A1 0.997 4.099
A2 0.574 4.079
0.5 CONSISTEN
SC5 A2 1.928 4.230 4.118 0.039 0.068
8 T
A4 0.650 4.064
TOTAL 4.150 16.471
A1 1.066 4.121
A2 0.550 4.089
0.5 CONSISTEN
SC6 A2 2.038 4.236 4.118 0.039 0.068
8 T
A4 0.507 4.027
TOTAL 4.160 16.474
A1 0.938 4.186
A2 0.677 4.194
0.5 CONSISTEN
SC7 A2 2.031 4.194 4.157 0.052 0.090
8 T
A4 0.528 4.053
TOTAL 4.174 16.626
A1 0.991 4.059
A2 0.808 4.098
0.5 CONSISTEN
SC8 A2 1.855 4.118 4.081 0.027 0.047
8 T
A4 0.438 4.051
TOTAL 4.092 16.326
 Table 4.32.3 Consistency Test of Alternative-Sub Criteria
Pairwis M Eugen
Variable CI IR CR Result
e Mult Value Max
Alternative- Sub Criteria
A1 1.169 4.058
A2 0.558 4.044
0.5 CONSISTEN
SC9 A2 1.818 4.071 4.046 0.015 0.026
8 T
A4 0.510 4.012
TOTAL 4.056 16.184
A1 1.054 4.156
A2 0.431 4.068
0.5 CONSISTEN
SC10 A2 2.042 4.264 4.143 0.048 0.082
8 T
A4 0.660 4.084
TOTAL 4.187 16.573
A1 0.857 4.102
A2 0.693 4.145
0.5 CONSISTEN
SC11 A2 1.916 4.165 4.119 0.040 0.068
8 T
A4 0.666 4.064
TOTAL 4.132 16.476
A1 0.997 4.099
A2 0.574 4.079
0.5 CONSISTEN
SC12 A2 1.928 4.230 4.118 0.039 0.068
8 T
A4 0.650 4.064
TOTAL 4.150 16.471
 Table 4.32.4 Consistency Test of Alternative-Sub Criteria
Pairwis M Eugen
Variable CI IR CR Result
e Mult Value Max
Alternative- Sub Criteria
A1 0.841 4.095
A2 0.771 4.080
0.5 CONSISTEN
SC13 A2 1.893 4.126 4.082 0.027 0.047
8 T
A4 0.591 4.026
TOTAL 4.096 16.327
A1 0.813 4.059
A2 0.671 4.079
0.5 CONSISTEN
SC14 A2 2.013 4.079 4.061 0.020 0.035
8 T
A4 0.571 4.027
TOTAL 4.068 16.244
A1 1.041 4.126
A2 0.662 4.088
0.5 CONSISTEN
SC15 A2 1.829 4.315 4.154 0.051 0.089
8 T
A4 0.662 4.088
TOTAL 4.194 16.617
4.6 Analysis of Result
Table 4.33 Alternative Weight
ATTRIBUTE
C1 C2 C3 C4 C5 C6
0.103 0.172 0.078 0.038 0.282

ATT S S S S S S AL
S S S S S S S S S
RIB C C C C C C T.
C C C C C C C C C
UTE 1 1 1 1 1 1 WE
0.3 1 2 3 4 5 6 7 8 9
WEI 0 1 2 3 4 5 IG
26
GHT 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. HT
5 1 2 5 1 3 6 2 1 3 1 5 5 0 3
3 6 9 2 4 3 2 3 3 3 3 3 6 9 3
9 4 7 5 2 4 3 9 7 6 4 0 8 8 4
ALTERNATIVE
0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
0.2 2 2 2 1 2 2 2 2 2 2 2 2 2 2 2 0.23
A1
59 1 5 8 6 4 5 2 4 8 5 0 4 0 0 5 5
7 3 5 5 3 9 4 4 8 4 9 3 5 0 2
0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
0.1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 1 0.15
A2
34 8 1 5 0 4 3 6 9 3 0 6 4 8 6 6 8
7 1 6 0 1 4 1 7 8 6 7 1 9 5 2
0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
0.4 4 5 4 4 4 4 4 4 4 4 4 4 4 4 4 0.47
A3
81 7 1 4 9 5 8 8 5 4 7 6 5 5 9 2 1
9 0 0 4 6 1 4 0 7 9 0 6 9 4 4
0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
0.1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0.13
A4
26 1 2 1 4 6 2 3 0 2 6 6 6 4 4 6 6
8 5 9 2 0 6 0 8 7 2 4 0 7 2 2
TOTAL 1
Based on the calculation of AHP with the sigma of multiplication of eugen vector for each
criteria, sub criteria, and alternative will result in the values of alternative weight evaluation
for each alternatives. The values of alternative weight evaluations are 0.235 for A1 (create
strong management and organization), 0.158 for A2 (forecast and control inventory cash
flow), 0.471 for A3 (reduce product variety with respect to capacity), and 0.136 for A4
(improve marketing and capacity utilization).
The best and suitable alternative is the third alternative which is reducing product
variety with respect to capacity. Reducing product variety is the best choice because the
store is having so many collection per month, good marketing and innovation, product and
quality is general, the asset is already fixed asset, the cost is linearly increasing with the
consideration of market price, and the services is in a good state. The problem here is that
the store only consider about adding so many variations of product without considering the
asset that is already fixed. The asset itself is including the capacity. That is why the store
has to reduce the variations of product with respect to the available capacity.
 CHAPTER V
CONCLUSION AND RECOMMENDATION

5.1 Conclusion
Factors that affecting the demand and flow of inventories within the TOKO
Cebongan are number of collection per month, marketing and innovation, product
and quality, asset, cost, and support services. In addition that of the criteria is the
existence of sub criteria. Sub criteria of marketing and innovation are flexibility and
adaptability, strong marketing image and good marketing technique, ability to offer
new and innovative product. Sub criteria of product and quality are quality relative
to competitors, variety of goods, and quantity of good can be delivered on time. Sub
criteria of Asset are skilled labor, capacity utilization, and inventory days of supply.
Sub criteria of cost are frequent price fluctuation, ability to reach the target price of
customer, and cost operations and supply chain process. The last sub criteria is
coming from support services which are after sale services, provision of information,
ability to return or sell back.
Based on the calculation of AHP method, the best and suitable decision making in
the case of increasing demand and flow the inventory is reducing variety of product
with respect to capacity with the highest alternative weight, 0.471. This result can
be implemented because it fulfills the criteria and sub criteria rather than the other
alternatives.
5.2 Recommendation
The criteria and sub criteria should be validated by the expert which is the owner of
TOKO Cebongan, in order to be able to be implemented in the store. Based on the
research result the owner of TOKO Cebongan is recommended to reduce the variety
of product with respect to the capacity.
As for the further research of system research, it can use AHP. Based on the
previous similar research only use FAHP and FANP. However, while deciding the
hierarchy the researcher should be able to see the case from the experts point of
view.
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 ATTACHMENT

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