Zulfikar Luthfi Sutarto (1), Rizki Revianto Putera (2)
General Background: Reliable electricity distribution depends on the availability of Main Distribution Materials. Specific Background: Centralized procurement provides cost control but has longer lead time, while decentralized procurement offers faster responses with higher inventory costs. Knowledge Gap: The cost–service trade-off under uncertain demand has not been fully evaluated. Aims: This study compares centralized and decentralized periodic review policies using Monte Carlo simulation based on SAP ERP demand data from 2022–2024 over 300 weeks. Results: Centralized procurement is more cost-efficient in aggregate but has higher stockout risk and lower responsiveness, whereas decentralized procurement improves service level, shortens lead time, and reduces stockout frequency despite higher holding costs. Novelty: The study integrates validated normal demand distribution with Monte Carlo simulation to assess procurement policy performance. Implications: A hybrid policy is recommended, with centralized control for slow-moving materials and decentralized control for critical or fast-moving materials.
Highlights:
Keywords: Supply Chain, Centralized, Decentralized, Main Distribution Materials, Monte Carlo Simulation.
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