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Research Article | Volume 4 Issue 3 (Issue May, 2023)
Optimal Sales Composition and Profit for Pt Kaseindo in the Liquid Caustic Soda Market: A Monte Carlo Simulation Approach
Under a Creative Commons license
Open Access
June 26, 2023
This research investigates the optimal sales composition and profit for PT Kaseindo (KI), an Indonesian manufacturer of Liquid Caustic Soda (LCS), amidst increasing competition and constant production capacity. Factors like customer demand, selling price, logistic costs, and competition shape sales allocation decisions, affecting overall profitability. The study employs a modified Monte Carlo simulation approach in Excel to predict sales allocation to eleven customer segments from four industrial categories of LCS users (Rayon, Alumina, Nickel, and General Market/GM) across two scenarios (optimistic and pessimistic) for the period 2023-2027. These scenarios consider market dynamics like economic crises and growing LCS demand, with sensitivity factors derived from past customer operation rates.Simulations reveal differing allocation priorities between scenarios. GM as the most profitable sector receives the most allocation in optimistic conditions, but the least in pessimistic ones due to high sensitivity and competition factor with domestic competitors. However, in the other sector like Alumina, the allocation increases in the pessimistic scenario as the customers have low sensitivity factors and are not affected by competition with domestic competitors. In Rayon and Nickel sectors which have similar sensitivity factors, the allocation difference between two scenarios found to be more significant in the Nickel sector, as Nickel customers are not intervened by domestic competitors. Overall, more allocation implies more profit except for the Rayon sector. Profit resulted from the simulation shows increasing trends over the years in line with the demand growth, except in some years due to intensifying competition as domestic competitors expand their capacity.
Sales composition
Optimal profit
Monte Carlo simulation
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