— Risk mitigation using risk sharing approach is a method to minimize risk on supply chain management. Profit distribution is a way to share the risk among the supply chain level which means, the level which has the lower risk supposed to distribute their profit to the others which have the higher risk. In this paper, pricing optimization is needed to maximize and to balance the profit of each level including their stakeholder. This paper focused on Balinese aromatherapy product supply chain risk modelling which has three objectives: (1) to identify and (2) to evaluate the risk along Balinese aromatherapy product supply chain; and (3) to build a supply chain risk management model for Balinese aromatherapy product by pricing optimization. The result of the identification step showed that the Balinese aromatherapy products supply chain consisted of 51 risk. Then the result of evaluation showed that third sphere has the highest risk proportion among the others. The performance of each DMU was obtained by using Data Envelopment Analysis (DEA) method and became inputs of risk sharing model. In risk sharing model, the optimum price on each DMU sphere based on their weight of risk and their performance were generated. The result showed that the price fluctuation among the DMU altered to a smooth form after the model was implemented and these fluctuation occurred as an implementation result of risk distribution along the chain. This information becomess useful for decision maker related to supplier selection and contract mechanism, especially to pricing mechanism.
— Aromatherapy product, pricing optimization, risk sharing model, supply chain risk management.
Ida Bagus Dharma Yoga Santosa is with the Graduate Program of Agro-industrial Technology, Bogor Agricultural University, Bogor, CO 16680 Indonesia (e-mail: yogasantosa@ apps.ipb.ac.id).
Taufik Djatna and Yandra Arkeman are with the Postgraduate Program of Agro-industrial Tehnology, Bogor Agricultural University, Bogor, CO 16680 Indonesia (e-mail: firstname.lastname@example.org, email@example.com).
Cite: Ida Bagus Dharma Yoga Santosa, Taufik Djatna, and Yandra Arkeman, " A Supply Chain Risk Management Modelling for Balinese Aromatherapy Product by Pricing Optimization," International Journal of Innovation, Management and Technology vol. 6, no. 2, pp. 118-121, 2015.