Determination of a Depot Location in Northern Sumatra Using the P-Median Approach

Abstract

Timely spare parts delivery is essential in automotive after-sales services, as delays in obtaining the required parts can extend vehicle downtime and affect service performance. In PT XYZ, spare parts for Northern Sumatra are still largely supplied from the Bekasi Part Center, resulting in delivery times of approximately five to nine days. The existing Palembang Depot has limited capability to accommodate the variety of spare parts required across the region. To improve delivery responsiveness, the company plans to establish one additional depot with a target of reducing delivery time by at least 30%. This study determines the optimal location for the proposed depot using a demand-weighted P-Median model. Fourteen dealers are considered both demand points and candidate locations, with the number of depots fixed at one ((p=1)). Dealer demand and inter-dealer travel time are incorporated to minimize the overall demand-weighted travel time. The solution is further verified through complete enumeration and examined through sensitivity analysis. The results identify Dealer C in Medan as the optimal location, producing an objective value of 97,312,319 minute-units. The demand-weighted average travel time decreases from 2,173.86 to 318.70 minutes per unit, equivalent to an 85.34% reduction. Even when Dealer C is excluded, the reduction remains 68.10%. These findings indicate that locating the depot in Medan can substantially improve distribution responsiveness and demonstrate how P-Median provides a practical, demand-based approach to support depot location decisions.