Determining the best alternative to build and operate a new coal crushing facilities: Analytical hierarchy process approach

https://doi.org/10.35912/jomabs.v2i1.2393
Published: Sep 26, 2024

Abstract:

Purpose: This study examines the increase in national coal production in Indonesia and its impact on PT. KLM is one of the largest coal producers in Indonesia. With rising production and shifting global market needs, this study aims to analyze the necessity of building a new Coal Crushing Facility next to the South Pinang Extension #2 area, including evaluating costs and the best strategies for its implementation.

Research Methodology: The research methodology involved analyzing problem trees and stakeholders to uncover business complexities and identify the root causes of issues. Qualitative data were collected through semi-structured interviews. All alternatives were evaluated using Value-Focused Thinking (VFT), and the Analytic Hierarchy Process (AHP) method was employed to determine the best alternative assisted by the Super Decision application.

Results: Based on interviews conducted with subject matter experts (SMEs) and analysis, three funding solutions were identified: 1. owned by self-financing, and (2) Own by Leasing 3. Rental Scheme.

Conclusions: The study concludes that building a new Coal Crushing Facility at South Pinang Extension is necessary to support rising production, with three viable financing alternatives self-financing, leasing, and rental identified through systematic analysis to ensure efficiency and competitiveness.

Limitations: The limitations of this study are that it was sourced from an internal company and data were gathered from outside the company. An alternative option was developed based on extensive collaborative discussions and interview sessions with subject matter experts within the company.

Contribution: This study provides valuable guidelines for selecting alternative financing to build and operate new coal-crushing facilities at South Pinang Extension #2.

Keywords:
1. Alternative
2. Analytic Hierarchy Process (AHP)
3. Crusher
4. Economic Evaluation
5. Life of Mine (LOM)
6. Super Decision Application
Authors:
1 . Kondar Paido Simatupang
Institut Teknologi Bandung, Indonesia
2 . Meditya Wasesa
Institut Teknologi Bandung, Indonesia
View PDF
How to Cite
Simatupang, K. P., & Wasesa, M. (2024). Determining the best alternative to build and operate a new coal crushing facilities: Analytical hierarchy process approach. Journal of Multidisciplinary Academic Business Studies, 2(1), 1–20. https://doi.org/10.35912/jomabs.v2i1.2393
Download Citation
  1. Endnote/Zotero/Mendeley (RIS)
  2. BibTeX

Downloads

Download data is not yet available.
Issue & Section
Vol. 2 No. 1 (2024): November
Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

    Astriani, M., & Siallagan, M. P. (2024). Applying AHP to Select the Best Vendor for Bio-Efficacy Trials. Jurnal Bisnis dan Pemasaran Digital, 4(1), 57-76. doi:https://doi.org/10.35912/jbpd.v4i1.4525

    Baron, J. V. (2023). Blackboard System and Students' Academic Performance: An Experimental Study in the Philippines. Journal of Social, Humanity, and Education, 3(3), 173-184. doi:https://doi.org/10.35912/jshe.v3i3.1186

    Françozo, R. V., & Belderrain, M. C. N. (2022). A problem structuring method framework for value-focused thinking. EURO Journal on Decision Processes, 10, 100014.

    Gonçalves, A. C., Costoya, X., Nieto, R., & Liberato, M. L. (2024). Extreme weather events on energy systems: a comprehensive review on impacts, mitigation, and adaptation measures. Sustainable Energy Research, 11(1), 4. doi:https://doi.org/10.1186/s40807-023-00097-6

    Hossain, A., Khatun, M., & Shanjabin, S. (2024). Impact of Person-job Fit and Person-organization Fit on Employee Engagement: Moderating Role of Supervisor Support. Annals of Human Resource Management Research, 3(2), 97-114. doi:https://doi.org/10.35912/ahrmr.v3i2.1885

    Keeney, R. L. (1996). Value-Focused Thinking: A Path to Creative Decisionmaking. London: Harvard University Press.

    Krejci, J., & Stoklasa, J. (2018). Aggregation in the Analytic Hierarchy Process: Why Weighted Geometric Mean Should Be Used Instead of Weighted Arithmetic Mean. Expert Systems with Applications, 114, 97-106. doi:https://doi.org/10.1016/j.eswa.2018.06.060

    Loewen, B. (2022). Coal, green growth and crises: Exploring three European Union policy responses to regional energy transitions. Energy Research & Social Science, 93, 102849. doi:https://doi.org/10.1016/j.erss.2022.102849

    Mabhanda, W. (2022). The Role of Green Innovation in Promoting Sustainable Economic Development in Gweru, Zimbabwe. Journal of Sustainable Tourism and Entrepreneurship, 4(2), 87-103. doi:https://doi.org/10.35912/joste.v4i3.1871

    Nachbagauer, A. (2021). Managing complexity in projects: Extending the Cynefin framework. Project Leadership and Society, 2, 100017. doi:https://doi.org/10.1016/j.plas.2021.100017

    Nasir, M., Bakker, L., & van Meijl, T. (2023). Environmental management of coal mining areas in Indonesia: The complexity of supervision. Society & Natural Resources, 36(5), 534-553. doi:https://doi.org/10.1080/08941920.2023.2180818

    Que, S., Wang, L., Awuah-Offei, K., Yang, W., & Jiang, H. (2019). Corporate social responsibility: Understanding the mining stakeholder with a case study. Sustainability, 11(8), 2407. doi:https://doi.org/10.3390/su11082407

    Russo, R. d. F., & Camanho, R. (2015). Criteria in AHP: A systematic review of literature. Procedia Computer Science, 55, 1123-1132.

    Saaty, R. W. (1987). The analytic hierarchy process—what it is and how it is used. Mathematical modelling, 9(3-5), 161-176.

    Saaty, T. L. (1990). How to make a decision: the analytic hierarchy process. European journal of operational research, 48(1), 9-26.

    Setiawan, A., Puteri, M. K., & Pasalli, Y. R. (2023). Peramalan Puncak Produksi dan Umur Cadangan Batubara di Indonesia. Jurnal Teknologi Mineral Dan Batubara, 19(2), 83-93. doi:https://doi.org/10.30556/jtmb.Vol19.No2.2023.1302

    Snowden, D. (2021). Cynefin: weaving sense-making into the fabric of our world: Cognitive Edge-The Cynefin Company.

    Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of business research, 104, 333-339. doi:https://doi.org/10.1016/j.jbusres.2019.07.039

    Sulaiman, E., Fitralisma, G., Fata, M. A., & Nawawi, R. (2024). Empowering Local Communities Engagement: Rural Tourism and Business Innovation for SDGs Desa. Journal of Sustainable Tourism and Entrepreneurship, 5(1), 31-44. doi:https://doi.org/10.35912/joste.v5i1.1968

    Widodo, N. P., Sulistianto, B., & Ihsan, A. (2018). Analysis of explosion risk factor potential on coal reclaim tunnel facilities by modified analytical hierarchy process. International Journal of Coal Science & Technology, 5(3), 339-357. doi:https://doi.org/10.1007/s40789-018-0219-0

    Xiao, Y., & Watson, M. (2019). Guidance on conducting a systematic literature review. Journal of planning education and research, 39(1), 93-112. doi:https://doi.org/10.1177/0739456X17723971

    Yaschenko, S., Polyakov, V., & Sabitova, T. (2021). Organizational structures of mining companies: composition and development. Paper presented at the SHS Web of Conferences.

  1. Astriani, M., & Siallagan, M. P. (2024). Applying AHP to Select the Best Vendor for Bio-Efficacy Trials. Jurnal Bisnis dan Pemasaran Digital, 4(1), 57-76. doi:https://doi.org/10.35912/jbpd.v4i1.4525
  2. Baron, J. V. (2023). Blackboard System and Students' Academic Performance: An Experimental Study in the Philippines. Journal of Social, Humanity, and Education, 3(3), 173-184. doi:https://doi.org/10.35912/jshe.v3i3.1186
  3. Françozo, R. V., & Belderrain, M. C. N. (2022). A problem structuring method framework for value-focused thinking. EURO Journal on Decision Processes, 10, 100014.
  4. Gonçalves, A. C., Costoya, X., Nieto, R., & Liberato, M. L. (2024). Extreme weather events on energy systems: a comprehensive review on impacts, mitigation, and adaptation measures. Sustainable Energy Research, 11(1), 4. doi:https://doi.org/10.1186/s40807-023-00097-6
  5. Hossain, A., Khatun, M., & Shanjabin, S. (2024). Impact of Person-job Fit and Person-organization Fit on Employee Engagement: Moderating Role of Supervisor Support. Annals of Human Resource Management Research, 3(2), 97-114. doi:https://doi.org/10.35912/ahrmr.v3i2.1885
  6. Keeney, R. L. (1996). Value-Focused Thinking: A Path to Creative Decisionmaking. London: Harvard University Press.
  7. Krejci, J., & Stoklasa, J. (2018). Aggregation in the Analytic Hierarchy Process: Why Weighted Geometric Mean Should Be Used Instead of Weighted Arithmetic Mean. Expert Systems with Applications, 114, 97-106. doi:https://doi.org/10.1016/j.eswa.2018.06.060
  8. Loewen, B. (2022). Coal, green growth and crises: Exploring three European Union policy responses to regional energy transitions. Energy Research & Social Science, 93, 102849. doi:https://doi.org/10.1016/j.erss.2022.102849
  9. Mabhanda, W. (2022). The Role of Green Innovation in Promoting Sustainable Economic Development in Gweru, Zimbabwe. Journal of Sustainable Tourism and Entrepreneurship, 4(2), 87-103. doi:https://doi.org/10.35912/joste.v4i3.1871
  10. Nachbagauer, A. (2021). Managing complexity in projects: Extending the Cynefin framework. Project Leadership and Society, 2, 100017. doi:https://doi.org/10.1016/j.plas.2021.100017
  11. Nasir, M., Bakker, L., & van Meijl, T. (2023). Environmental management of coal mining areas in Indonesia: The complexity of supervision. Society & Natural Resources, 36(5), 534-553. doi:https://doi.org/10.1080/08941920.2023.2180818
  12. Que, S., Wang, L., Awuah-Offei, K., Yang, W., & Jiang, H. (2019). Corporate social responsibility: Understanding the mining stakeholder with a case study. Sustainability, 11(8), 2407. doi:https://doi.org/10.3390/su11082407
  13. Russo, R. d. F., & Camanho, R. (2015). Criteria in AHP: A systematic review of literature. Procedia Computer Science, 55, 1123-1132.
  14. Saaty, R. W. (1987). The analytic hierarchy process—what it is and how it is used. Mathematical modelling, 9(3-5), 161-176.
  15. Saaty, T. L. (1990). How to make a decision: the analytic hierarchy process. European journal of operational research, 48(1), 9-26.
  16. Setiawan, A., Puteri, M. K., & Pasalli, Y. R. (2023). Peramalan Puncak Produksi dan Umur Cadangan Batubara di Indonesia. Jurnal Teknologi Mineral Dan Batubara, 19(2), 83-93. doi:https://doi.org/10.30556/jtmb.Vol19.No2.2023.1302
  17. Snowden, D. (2021). Cynefin: weaving sense-making into the fabric of our world: Cognitive Edge-The Cynefin Company.
  18. Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of business research, 104, 333-339. doi:https://doi.org/10.1016/j.jbusres.2019.07.039
  19. Sulaiman, E., Fitralisma, G., Fata, M. A., & Nawawi, R. (2024). Empowering Local Communities Engagement: Rural Tourism and Business Innovation for SDGs Desa. Journal of Sustainable Tourism and Entrepreneurship, 5(1), 31-44. doi:https://doi.org/10.35912/joste.v5i1.1968
  20. Widodo, N. P., Sulistianto, B., & Ihsan, A. (2018). Analysis of explosion risk factor potential on coal reclaim tunnel facilities by modified analytical hierarchy process. International Journal of Coal Science & Technology, 5(3), 339-357. doi:https://doi.org/10.1007/s40789-018-0219-0
  21. Xiao, Y., & Watson, M. (2019). Guidance on conducting a systematic literature review. Journal of planning education and research, 39(1), 93-112. doi:https://doi.org/10.1177/0739456X17723971
  22. Yaschenko, S., Polyakov, V., & Sabitova, T. (2021). Organizational structures of mining companies: composition and development. Paper presented at the SHS Web of Conferences.