MSc in Logistics and Supply Chain Management

2019-2020

Modelling Sustainable Food Supply Chains using System

Dynamics Simulation: Case Study Beef-Supply Chain in
Indonesia

By
Kanyapak Sonthimanotham
H00327504

Presented for the award of MSc.

Heriot-Watt University
 Acknowledgement

I would like to many thank my supervisor Dr. Dhanan Sarwo Utomo for their assistance
in providing supporting with the simulation design, advice the scope and guidelines of
this dissertation topic and support though writing my dissertation. I am very appreciated
with these supports and they are all useful not only in term of academic view. Also, I
would like to thank my parent for their love and support me all the time.

Declaration.

I declare that the thesis embodies the results of my own work and has been composed by
myself and meets the University policies on plagiarism and ethical research. Where
appropriate within the thesis I have made full acknowledgement to the work and ideas of
others or have made reference to work carried out in collaboration with other persons.

Signature of student ………………………… Date :…………….

Word count: …………

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Abstract

Purpose: The purpose of this paper is to study and illustrate the domestic beef supply
chain relationship between economic and environment viewpoint by using Indonesia as a
case study.

Design/methodology/approach: This is a quantitative research which adopt the system

dynamics modelling to simulate the beef supply chain in Indonesia based on the
commodity product cycle theory and the dataset can source from many public
organization with free to access license.

Findings: In this paper, it focusses on how the capacity of bouvine transportation,

capacity of beef transportation, the location of slaughterhouse, and Euro emission
standard impact to the total level of green gashouse (GHG) emission in transportation.

Research implications: This study associates to GHG emission in transportation which

evaluate from farm to the market in Indonesia. Also, the variables in this simulation
model involve with the economic constrains.

Limitations: Due to time constraints, the assumption can contribute to limit scenario and
the results are based on this case study context.

Keywords: Beef supply chain, GHG emission, Transportation

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 Contents

Acknowledgement .............................................................................................................. i
Abstract .............................................................................................................................. ii
Chapter 1 Introduction..................................................................................................... 1
1.1 Research background ................................................................................................ 1
1.2 Research aim and objectives ..................................................................................... 2
1.3 Dissertation structure................................................................................................. 3
Chapter 2 Literature review ............................................................................................ 5
2.1 Sustainable supply chain management ...................................................................... 5
2.3 Commodity production cycle .................................................................................... 6
2.4 Agri-food supply chain sustainability (ASCS).......................................................... 8
2.4.1 Definition ............................................................................................................ 8
2.4.2 ASCS previous studied approaches .................................................................... 8
Chapter 3 Research Methodology ................................................................................. 20
3.1 Research philosophy ............................................................................................... 20
3.2 Data collection......................................................................................................... 22
3.322 Data analysis approach ........................................................................................ 22
3.3.1 Feedback and causal loop diagrams (FCLD) ................................................... 23
3.3.2 Stock and flow diagrams (SFD) ....................................................................... 23
3.4 Ethical issue............................................................................................................. 24
Chapter 4 Data analysis.................................................................................................. 25
4.1 Description of beef supply chain in Indonesia ........................................................ 25
4.2 Statement of problem situation ............................................................................... 29
4.3 Feedback and causal loop diagram (FCLD) ............................................................ 30
4.4 Stock and flow diagrams (SFD) .............................................................................. 32
4.5 Simulation and validation........................................................................................ 36
5.1 Findings ................................................................................................................... 45
5.2 Findings in different scenarios ................................................................................ 49
5.2.1 Scenario 1: capacity and distance adjustment .................................................. 49
5.2.2 Scenario 2: distance number switching ............................................................ 51
 Contents

5.2.3 Scenario 3: Euro emission standard adoptation ................................................ 53

Chapter 6 Conclusion ..................................................................................................... 55
References ........................................................................................................................ 58
 Table of Contents

Table 1 ASCS examples studied approaches ..................................................................... 9

Table 2 Literature summary ............................................................................................. 16
Table 3 GDP per capita calculation.................................................................................. 26
Table 4 Total population in 2010-2017 (source: FAOSTAT, 2005)................................ 27
Table 5 Birth and death rate in Indonesia in 2010-2017 (source: World Bank, 2020) .... 28
Table 6 Beef balance in 2010-2017 (source: FAOSTAT, 2005) ..................................... 28
Table 7 The yield of beef consumption per head in kilogram (source: OECD, 2019) .... 29
Table 8 Abbreviation of variables .................................................................................... 36
Table 9 Summary of parameters in each scenario ............................................................ 45
 Table of Figures

Figure 1 Dynamic coweb model ((Meadows, 1969).......................................................... 7

Figure 2 System dynamics approach ............................................................................... 13
Figure 3 Research mapping method (source: O'Gorman and MacIntosh, 2016) ............. 21
Figure 4 The summary of data analysis and modelling process ...................................... 25
Figure 5 GDP per capita (source: World Bank, 2019) ..................................................... 26
Figure 6 Rural and urban population from 1990-2018 (source: FAOSTAT, 2020) ........ 27
Figure 7 Feedback and causal loop diagram .................................................................... 30
Figure 8 Stock and flow diagrams ................................................................................... 34
Figure 9 Total emission in the baseline scenario ............................................................. 46
Figure 10 Yearly emission values in the baseline scenario ............................................. 47
Figure 11 Bouvine transport to slaughterhouse in the baseline scenario ......................... 47
Figure 12 Beef transport to market in the baseline scenario ............................................ 48
Figure 13 Beef consumption in the baseline scenario...................................................... 48
Figure 14 Beef supply in the baseline scenario................................................................ 49
Figure 15 Total emission in scenario 1 ............................................................................ 50
Figure 16 Yearly emission values in scenario 1 .............................................................. 51
Figure 17 Yearly emission values in scenario 2 .............................................................. 52
Figure 18 Total Emission in scenario 2 ........................................................................... 52
Figure 19 Yearly emission values in scenario 3 .............................................................. 54
Figure 20 Total Emission in scenario 3 ........................................................................... 54
Chapter 1 Introduction
1.1 Research background

Regarding the impact of greenhouse gas (GHG) emission, they initiate to the climate
change that is very influential to the society (Singh et al., 2015) and business
activities (Tidy, Wang and Hall, 2016). The global economy sectors are found to be
the key contributor of GHG emissions production (World Resources Institute, 2020).
Eurostat (2019) depicts that this sector extremely associates to the human activities in
the relative consumption area such as transportation, manufacturing, agriculture and
livestock, and land use change and forestry. In particular, GHG emission in the
context of agriculture and livestock is able to produce at all process beginning with
farming, manufacturing, distribution, refrigeration, and the waste disposal stages
(Camanzi et al., 2017). With respect to the article in 2018, the consumption of fossil
energy and soil management are widely and strongly found in the general processes in
the livestock industry, feed production, feeding operation, and animal management
(Vitali et al., 2018). Additionally, this livestock industry is significant because there
are many smallholders who are found as a major participant to occur GHG emission
(Food and Agriculture Organization of the United Nations, 2017). The reason is
corresponding to the report of Food and Agriculture Organization of the United
Nations (2020) that they emphasise the behaviour of many smallholders limit to
educate in the sustainable knowledge and skills. According to the demand in animal
consumption, their trend look gradually increase and it is relative to the growth of
world population and income per capita (Vitali et al., 2018). Therefore, this demand
leads to increase the capacity in food production and distribution to fulfill the market
satisfaction (Soysal, Bloemhof-Ruwaard and van der Vorst, 2014). However, this
requirement negatively affects to the environment such as water pollution, GHG
emission contribution, air pollution, and soil erosion (Guoyao et al., 2014).

According to the BBC news in 2019, Ritchie (2019) reported that the meat producers
in Asia is the highest growth performance in 1961-2017 to feed beef to the world.
Likewise, the trading of animal protein in Asia is more popular for instance, the meat
trading between the Southeast Asian countries and China. Furthermore, it is able to
assume that the consumption of this product in Asia become the positive economic
growth signal and more industrialised. While smallholders are considered as a key

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party for this industry due to their high portion in the total industry’s share (Food and
Agriculture Organization of the United Nations, 2017).

In the case study in this paper, it focused on the beef supply chain in Indonesia
because this developing country is outstanding with high food demand and supply in
Southeast Asia due to a large number of population (Setiaji, Susila and Wahyudi,
2017). Regarding their main religion, Indonesian are Islamic and they primarily prefer
to choose beef as their main dish even if their price is higher than chicken by three
times (Scott et al., 2015). As following the industry situation, Indonesia is potentially
able to be a self-production although there is some demand that require to import beef
from foreign countries. This consumption demand can forecast to increase by 9% in
2022. While their limitation is to have a strong government intervention on markets
(Meat & Livestock Australia, 2018). According to the domestic supply side of this
industry, suppliers can divide to two classes in Indonesia (Lupita et al., 2017): 1)
small-scale farmers and breeders, this group mostly are the traditional producers with
lack of resources and agricultural knowledges although they can compete with lower
price. 2) modern suppliers, this group focuses on the beef quality and they can
complete with higher capitals investment in facilities, technology and system as a
result their product will sell in higher price. In fact, in most of Indonesian customers
perspective are considered a price as the first priority (Setiaji, Susila and Wahyudi,
2017). Scott et al. (2015) represent the domestic processes of beef supply chain in this
country that it initially starts from a farm for breeding and feeding by smallholders
then, they sell cows to brokers in the cattle market and the slaughterhouse next, they
will categorise beef grade after the slaughtering, and distributing to customers. In
aspect of Food and Agriculture Organization of the United Nations (1999), the
weaknesses of this industry in Indonesia are reported that local potential farmers are
insufficient knowledge and lack of opportunity to educate and improve their
performance and competition in macro scale thus, the government should be a key
player to support them.

1.2 Research aim and objectives

According to the GHG emission in the beef supply chain, this can occur at the farm,
marketplace, and logistics level, especially GHG emission during transportation from
upstream to downstream. (Singh et al., 2015). Therefore, they are related to the

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relationship of economic and environmental issue in the aspect of sustainable supply
chain management. It is better to balance these issues for the positive results.

This dissertation is purposed to study and illustrate the domestic beef supply chain
relationship between economic and environment viewpoint by using Indonesia as a
case study and using a system dynamic modelling to simulate the result which is able
to balance this relationship in the aspect of sustainable supply chain management. In
this simulation model bases on the commodity product cycle which demonstrate on
how demand and supply influence on the production and consumption, and how this
cycle impact to environment in term of GHG emission volume. The research
questions in this paper can be narrowed on three questions below

1) How does the capacity of bouvine and beef transportation impact to the level
of total GHG emission?
2) How does the location of slaughterhouse impact to the level of total GHG
emission?
3) How does the adaptation of Euro emission standard in this context impact to
the level of GHG emission?
1.3 Dissertation structure

This dissertation consists of five chapters. The outline of each chapter is as follows:

Chapter 1: Introduction

This chapter introduces the research background and the research questions with the
rational of research and the research aim and objectives.

Chapter 2: Literature review

This literature review is represented to the five relevant main studies including 1)
sustainable supply chain management which account into economy, society, and
environment aspect 2) GHG emission in the agri-food supply chain 3) commodity
production cycle bases on Meadows’s diagram (1969) 4) agri-food supply
sustainability (ASCS) consists of definition and ASCS previous studies approaches
and, 5) system dynamics (SD) in livestock which become the main tool for data
analysis.

Chapter 3: Research methodology

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This chapter describes the research philosophy, the research method, the data
collection, the data analysis approach, and the ethical issues. The methodology
discussion is focused on system dynamics modelling of commodity production cycle.

Chapter 4: Data analysis

In this chapter, they will explain the structure of data analysis including the problem
situation, feedback and causal loops diagrams, stock and flow diagrams, and
simulation and validation.

Chapter 5: Discussion

This chapter will illustrate the scenario analysis which depict to the critical
comparison of results among scenarios

Chapter 6: Conclusion

This chapter summarise in the research methodology, data collection, data analysis,
the research finding, and indict to the research limitation.

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Chapter 2 Literature review
Climate change, which caused by Greenhouse gases (GHG) emission, has negatively
impact the environment. This change force many companies and organisation to
engage in their environmental responsibility for sustainable development (Bermeo,
Rodríguez and Alvarez, 2018). For example, when a business poorly manages (i.e.
(the delivery is not tightly controlled) or they change some strategy changes due to a
signal of demand, these situations may lead to higher costs and GHG emission
(Taylor, 2016). With respect to the world economy, the agri-food supply chain is a
significant segment because it is profitable to all parties who supply raw materials and
proceed further activities (Siddh et al., 2017). The sectors in this supply chain can be
identified as farms, transforming sectors, and markets which involve among each step
with transportation, inventories and information (Taylor, 2016). However, this supply
chain dramatically change in the last decade, many literatures value on green practices
and consumer social responsibility (Siddh et al., 2017). The concept of sustainable
supply chain management, the GHG emission contribution, and the commodity
production cycle may serve as foundation to understand the relationship between
economic and environment practice. To outline the literatures in the agri-food supply
chain sustainability, this chapter reviews 1) sustainable supply chain management, 2)
GHG emission in the agri-food supply chain, 3) Commodity production cycle, 4) the
agri-food supply chain sustainability including definition, previous studied
approaches, and 5) system dynamics model in livestock industry which becomes the
case study in this dissertation.

2.1 Sustainable supply chain management

The concept of sustainable supply chain takes into account the economic aspects (the
business strategies, product flow, information flow, work structure, and organization
structure), the society (human right, job satisfaction, commitment from companies,
organisation’s image and reputation), and the environment (pollution and wastes)
(Morana, 2013). Sustainable supply chain management defined as the flow
management of material, information, and capital among industry roles with well
collaboration to achieve the common goals of economic, society, and environment,
that refer to take balance between production and consumption (Govindan, 2018). The
challenges from operation management perspective is to design and control the

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networks of warehousing, packaging, and shipping (Li et al., 2014) It is to be proper
in agricultural facilities management and strategies regulating.

2.2 GHG emission in the agri-food supply chain

The environmental impacts from human activities in a supply chain, include the
decrease in the quantity and quality of water, soil nutrient loss, pollution, and GHG
emission (Wu et al., 2014). In addition, Wunderlich and Martinez (2018) found that
food production, transportation, preparation, and wastes are generated through GHG
emission especially during the production process. When compared to other
commodity products, meat supply chain, especially beef, is the third highest GHG
emission contributor, due to the high environmental costs and resources per 1 kg. of
raw meat product (Wunderlich and Martinez, 2018). Whereas, Coˆte´ et al. (2008)
highlighted on the amount of GHG emission can significantly increase by a
transportation sector among multiple players in this supply chain (from farming to
markets). It is extremely affected by SMEs enterprisers and shipping companies
without full truck load. Because it can have more frequency to respond the customer
demand, boosting the pollution, and high diesel fuel consumption when multiple
dropping and trips. Therefore, it should minimise this emission with the sustainable
action plan with the correct environmental indicators. They lead to improve the
decision-making process in operation and strategies such eco-efficiency which
determine the environmental consequence from the value of product/ service, and the
reduction number of trip in shipping by trucks (Bermeo, Rodríguez and Alvarez,
2018).

2.3 Commodity production cycle

Beef is a commodity product. Goodman (1974) and Meadows (1969) defined the
characteristics of commodity product as a common item in the open market which
fixed costs are higher than variable costs. And the price is very competitive due to
undifferentiation and less volatility such as agriculture and livestock products (Nora,
2019). In a commodity market many sellers compete and compare among rivals on
price or quality while, their customers have more bargain power to move away or
select another product immediately when they see somewhat difference from their
habits (Patnaik, 2015) because many commodities indicate by the price dependent
preferences which refer to customers measure relative price as the quality (Jang and

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Lee, 2020). In the economics aspect, the demand uncertainty demand and economy
situation result to the price and the business cycle (Chevallier and Ielpo, 2013). Figure
1 illustrates the concept of commodity production cycle or dynamic coweb model
which explain the relationship between the production and consumption which are
influenced by the level of inventory and prices change. In this cycle when the
inventory is lower and the price increase, production capacity gradually produces to
fulfill stocks and the consumption decreases (Meadows, 1969). Conversely, when the
inventory drive over the desired level and the price will drop down, the production
will decrease their capacity and increase consumption. The commodity production
cycle is align to the market mechanism where more production is generated when the
demand or the trend of product’s price is increasing (Patnaik, 2015). On the other
hands, producers can decrease their production when the market price seems to be
lower or low demand, that reflects excess volume. It shows unsustainable commodity
production cycle due to poor business relationship and strategies among local
suppliers, they should maintain the balance processes of raw material availability and
the market demand (Nora, 2019). Otherwise, it is important to reinforce the need to
provide corresponding economic context with considering on weather, land
availability, productivity gains, producer age, capital requirements, and price volatility
(Tonsor and Schulz, 2015).

Figure 1 Dynamic coweb model ((Meadows, 1969)

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2.4 Agri-food supply chain sustainability (ASCS)
2.4.1 Definition
The concept of agri-food supply chain can traditionally imply to the economic
benefits and business management among the raw materials, agricultural production,
and product distribution (Jianli et al., 2018). This supply chain plays a significant role
to the economic growth whereas their challenges are the increasing awareness of
social welfare, food security,health, and environment (Gaitan-Cremaschi, Meuwissen
and Oude Lansink, 2017). Hongyong et al. (2018) suggest these complex challenges
include the demand and supply balancing, eco-friendly business processes of
development, and social welfare. Therefore, the sustainable development pays more
attention on the implementation that consider economy, environment, and society
(Morana, 2013).

ASCS refers to efficiency activities and logistics operation (i.e. order processing,
procurement, storage, transportation, information flow, handling, packaging) in
agriculture, livestock, and food industries from upstream to downstream in long term
development. These are done by adopting innovation technologies which concern on
eliminating waste, green operational practice, information traceability, and providing
quality products with enhancing customer satisfaction for better economic
performance and competitive advantage (Dinu, 2016). There are six streams in ASCS
studies namely: social sustainability in rural development, food wastes reduction, food
safety and quality, food traceability, environment sustainability, and global food
supply chain development (Jianli et al., 2018). To measure the possible sustainable
activities of the argi-food chain in the aspect of the environment, elements can be
based on the waste management, land used, deforestation, and pollution. These
measurements can be affected to improve activities such as green label, hygiene
production, the measurement of low or zero emission level on process, correctly and
continuous education people (e.g. farmers, employees, consumers) (Dinu, 2016).

2.4.2 ASCS previous studied approaches

There are two classical approaches in ASCS studies i.e., qualitative and quantitative.
Table 1 lists the examples of each approach. Additionally, it can summarise the study
theme as the improvement of sustainability, food quality and traceability, and food
waste under the economic condition.

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Table 1 ASCS examples studied approaches

Authors Year Product Approach Methodology Findings

Rueda, 2017 (Not Qualitative Case study To introduce
Garrett and specific) and analyse
Lambin seven case
studies from
private agri-
food
companies
under green
sourcing
Archontakis 2019 (Not Qualitative A Delphi To identify
and specific) study the factors
Anastasiadis could lead to
the
sustainable
business way
development
in both social
sustainability
and
technological
innovation
fields by the
Delphi
technique.
Belauda et 2019 Rice straw Quantitative Big data To assess
al. narrowed processes and
on panels of
agricultural technologies
waste on the
environmental
impacts and

9
 improve
agricultural
waste by big
data
Lutviana 2019 Rice Quantitative Data To assess the
Saputri et al. envelopment sustainable
analysis dimension
between
GMO and
non-GMO
products in
Indonesia
Verwaart 2015 Pork Quantitative Agent-based To simulate
and van den simulation production
Broek and
consumption
scenario and
identify long-
term
strategies
toward
sustainable
policy
Bala et al. 2017 Rice Quantitative System Food security
dynamics and climate
simulation change
impacts from
farmers to
consumers
and the
sustainable
policy
designing

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1) For qualitative approach, a case study paper illustrated each business green
practice and analyse how they decided to adopt the sustainable managing
strategies which help to effective promote and build up their competitiveness
as well as recover on environment and employment opportunity (Rueda,
Garrett and Lambin, 2017). On the other hands, the research questions in a
Delphi technique article with 12 experts in Greece conducted on how macro-
and micro-environment impact to the change of agricultural sector. They
investigated the factors which can implement technology and innovation to
develop a sustainable (medium to long term) strategy in the Southern
European regional agricultural sector. The factors in the viewpoint of social
sustainability were mainly highlighted on regulation, finance, and training and
education (Archontakis and Anastasiadis, 2019). The ASCS scope of later
article prefer to the social aspect rather than environment aspect.
2) In the recent year, the number of studies in ASCS with the quantitative
approach is increasing, they can summarise to four main characteristics: 1)
modelling type (mixed integer programming, analytical, simulation, linear
programming, multi objective programming, and goal programming) 2) non-
linear programming 3) solution approaches and 4) application area (Soysal et
al., 2012). Belauda et al. (2019) designed to assess and improve sustainability
management for the valorisation of agricultural waste with big data. The result
can illustrate as dynamic and in-depth data visualization and influence to a
decision-making step and the business model development base on economic,
environmental, and social areas. While, another article aimed to determine and
measure the performance of environment, social and economic dimension
between GMO and non-GMO products in Indonesia. In addition to the data
collection, there are a primary data that collected from questionnaires and
interviews of companies and farmers and a secondary data that was a case
study in online database. The result of non-GMO example (rice) was better
than GMO food in the indicators of finance and productivity with the method
(data envelopment analysis) (Lutviana Saputri et al., 2019).
3) For simulation, this method bases on the scenario to simulate and find the
suitable policy. There are various tools for representing such as agent-based

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 simulation which can examine four different assumption of the production
system and distribution to improve welfare of pork stakeholders and sustain
pork production that result to decide the potential policy and reflect to require
communication campaign and interaction with consumers (Verwaart and van
den Broek, 2015), and system dynamics model of rice supply chain in
Bangladesh, this paper presented the scenario by using system dynamics
model to develop the rice availability in the retail inventory and the optimally
sustainable policy development in price setting, price adjustment, and
collaboration among stakeholders that reflect to the rice productivity (Bala et
al., 2017). The result of system dynamics article might eliminate to damage
environment when the performance of a new policy in this scenario is well-
performed.
2.5 System dynamics (SD) in livestock

SD started to appear in 1958, when Forrester combined on non-linear dynamics and

feedback control theory (Forrester, 1958). This approach was developed further in
1969 and can be categorised into four hierarchical-levels described in figure 2
(Forrester, 1969). This figure illustrates from the base to the top structure including
(Lane, 2000a):

1) A basic structural system is about a system boundary which generated a

feedback loop
2) Stock variables are each main variable uses to explore accumulation processes
3) Flow variables are identified the connection of varibable’s activity
4) A system goal SD is the modelling approach to explore the idea behind the
action/ structure by using computer simulation, the study of behavioral
consequences base on the assumption.

However, Barnabè and Davidsen (2019) reviewed that the components of SD model
in the computer simulation constructed from stock (resource), narrow (process flow)
and other variables with inputting the mathematics data. The purpose of SD
simulation is to determine the potential role of behavioural operation research studies
(Sterman, 2000). This is because SD is able to design and simulate the complex
system in the computer environment hence it is effective to support the organisational
policy making (Sterman, 2000). In real world practice, SD is able to demonstrate the

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relationship of behaviour within the system structure as how the system working and
provides some answers for the real-world problem by engaging with the problems
owners, stakeholders and policymakers (Papachristos, 2019).

system
goal

flow variables

stock variables
system boundary with feedback
loops
Figure 2 System dynamics approach

As Meadows (1969) mentioned in the previous section, Olafsdottir et al. (2018)

agreed that a SD approach can explain the commodity product cycle by introducing
the relationship between market dynamics and the laws of supply and demand. When
compared to other dominant simulation techniques in quantitative researches, SD can
address the complex problem in national level, able to visualise the connection with
action and evolution, support the decision-making by simulating and evaluating the
policies (Rebs, Brandenburg and Seuring, 2019). Also, it is broadly to embrace in
other various subject areas and complex situation (Sterman, 2000). Some selected
previous livestock studies in SD approach, they can summarise with Table 2 and
compare literatures below.

This article (Dizyee, Bakera and Rich, 2017) associates to a beef export in Botswana,
Africa because this sector is important to employment opportunities in rural area and
the arid physical environment. In this paper, they studied the throughput of different
policy and capture feedbacks among production, market system, and the
environmental impacts by using SD simulation that properly offer to analyse the
entire quantitative data and address on the dynamic impact of policy. The results
represented that smallholders who are a major player have inefficient and insufficient
management such as lack of traceability system, quality control system, and land

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operation that influence to limit the potential of export commerce as a result, the
government should contribute the market liberalization and disease control. Whereas,
another beef paper from Indonesia in nine regions (Erma et al., 2016) which focus on
the elimination of beef importing. They introduced the weakness of the traditional
beef supply chain including high transportation costs because of the inappropriate
distance between production area and marketplace, lacking the bargain power, and
farmers insufficient working capital that they tend to sell crops. They are causes of
insufficient national demand fulfillment and result to require more importing. The
model development bases on the scenario of production, distribution, and
consumption that classifies as on farm (in production process) and off farm (in
commercial process). The data collection of beef demand in each region was followed
as population, income per head, and preferences. This simulation aimed to increase
50% of the original production volume by adding cows (less female cow slaughtering
and increasing productive pregnancy rate). In the female cows, it is as important as
female pig to increase the breeding to increase a number of meat production in the
future (Piewthongngam et al., 2014). The flow diagram was found that local supply
can completely cover demand in 2026 as 3.7% of growth rate per year. Although
these two articles have different aspects such as the consideration factors (Dizyee,
Bakera and Rich (2017) pointed out the environment sustainable and exporting with a
case study only region while, Erma et al. (2016) tried to limit the importing with a
case study in many regions and had no point on the environmental impact), it can
assume that smallholders or local suppliers are the key actors in this supply chain in
aspect of economy and environment, and they should be reinforced their techniques
and performance in the correctly sustainable way.

On the totally different case study, Arquitt, Xu and Johnstone (2005) interested in
shrimp industry in Thailand due to the highest growth export rate. Regarding the
process, mangrove is a key element for shrimp production in ecosystem by maintain
water cleanness and pollutive. However, the problem is the imbalance between
demand and supply: producers carried over a production capacity to respond a large
demand while, they increase the footprint in water quality with input more chemical
in mangrove and seawater, especially in Thailand. Although Thai official government
regulate the policy to control and protect the damage of water in shrimp farms, it was
not effective and slow to respond this issue. According the model structure, they

14
focused on the demand, the production, the inventory, and the ecological sector. The
model required to adjust price and inventory at the balance between demand and
supply, and the environmental impact. This simulation examined as five phrases for
comparing with historical data and behaviour. Therefore, this paper suggested and
tested the possible policy to held in the environment such as eco-taxes for a new farm,
technology for selection and breeding, and export tax with rebate policy to licensed
producers to improve mangrove deforestation. The results were better when apply
these policies at the earlier phrase although, it might not be sustainable due to the
corruption and poor incorporation from Thai government and producers. In another
case study in Thailand, this literature has different supply chain and scope which
consider the pork supply chain in only production part which influences to the
environmental changing (Piewthongngam et al., 2014). The upstream to downstream
process start from the breeding, fattening, slaughtering, pork processing (grading,
cataloging, and product transformation), and distribution to retailers. However,
problems were found during the physical flow such as the uncertainty demand affects
to the fluctuate inventories control and production, inflexibility in a production
process, and the environmental impact. It is important to adopt a new reversible
strategy or policy because they impact to the environment in farms. The main scope of
SD model focused on only the production part which aim to optimise the long term
strategy in implementation within the scope of three input categories in different pig
growth stages: the structure of the herd, fertility and fatality rates, and replacement
policies.

The study of poultry supply chain stages is generally similar to the beef and pork
supply chain processing that conduct of farming, slaughtering, and distribution to
consumption. Nevertheless, there was a frozen processing after slaughtering.
Regarding SD model, they simulated the French chicken supply chain suffering an
Avian Influenza crisis in 2005-2006 under the aspect of environment and this model
was not only a methodology but also a what-if analysis was examined the logistics
policy performance in crisis scenarios which can adjust the production, inventory, and
distribution. Using a what-if analysis to study the stability in different environment
while, using SD to analyse the behaviour of stability and the unexpected cost
variations from upstream to downstream which can provide the decision. Moreover,
the customer demand and production were fluctuated the stability and performance in

15
the supply chain control factors (lead time, ordering policies, and information sharing)
and environment factors. In the crisis case, the higher production was positively
resulted to improve the supply chain performance but, their inventories were sensitive
to change and control in the proper situation (Hoa Vo and Thiel, 2011).

In the conclusion, the most popular objective is to examine or demonstrate the

sustainable supply chain with many scenarios for regulating the suitable policies.
Although the consideration factors are broad to study, every article paid more
attention on the producers especially, local or smallholders than the consumption and
the environment.

Regarding some previous studies of the contribution of the environmental part in the
production or consumption process, they focused on animal welfare, land operation,
the quality and sufficiency of natural resources, and the knowledge or techniques in
farm operational management which damage the environment more than the
contribution of GHG emission especially, in the logistics and transportation.
Therefore, the previous studies are required to pay attention to GHG emission in the
consideration of logistics and transportation process.

16
Table 2 Literature summary

Consideration

Transportation

Environment
Consumers
Producers

Inventory
Retailers
Authors Year Meat Country Aim

Price
Others

To examine  Animal
and feedback welfare
the policy  The
Dizyee, Bakera change to availability
2017 Beef Africa / / / / /
and Rich support beef of sufficient
sector feed and
investment by water
government  Government
To
demonstrate
Arquitt, Xu and the dynamic
2005 Shrimp Thailand / / / / / Government
Johnstone commodity
system model
of boom and

16
 bust causes
and guide the
policy design
to develop the
sustainable
shrimp
industry
To contribute
the
sustainable
strategies for
exist supply
chain to fulfill
Erma et al. 2016 Beef Indonesia national / / / /
demand from
production to
consumers
with the
distributed
connection

17
 To study the
chicken
supply chain
in the crisis
situation
which
influence to
the strategies
Hoa Vo and and stable
2011 Chicken France / / / / /
Thiel performance
in different
environment
with
considering
demand,
production,
inventory, and
transportation
Piewthongngam To construct
2014 Pork Thailand / / Animal welfare
et al. the model that

18
can adopt and
enable to
make a
decision the
environmental
changing

19
Chapter 3 Research Methodology
3.1 Research philosophy
The Burrell and Morgan's social science research framework classifies the strands of
theory into ontology, epistemology, human nature, and methodology, with two
extremes of approaches including subjective and objective (Lane, 1999). The overall
description of each theoretical assumptions are:

1) Ontology seeks to answer what the world is and what it contains

2) Epistemology is the possible knowledge which can be communicated
3) Human nature is the implicit and explicit relationship between human and
environment
4) Methodology is the investigation of process or phenomenon and the
knowledge obtained

Figure 3 describes a research mapping method that is employed in this dissertation.

Their research paradigm begins with the ontology that divides to an objective (things
are realistic can be measured and taste within the principle of judgement rule) and
subjective (the results of the perceptions and interactions of living subjects or the
belief expression) (O'Gorman and MacIntosh, 2016). This study assumes that in terms
of ontology the beef supply chain in Indonesia is objective. Since the methodology
technique that is SD simulation based on the commodity production cycle (a single
and objective structure) the outputs can be measure as a number and graph. The next
step is epistemology, its contain four different categories: positivist, critical realist,
action research, and interpretivist (O'Gorman and MacIntosh, 2016). This research
position tends to adopt critical realism approach. Regarding the data is obtained from,
they relate to real world observation (Bhaskar, 1978). Also, a case study in this study
which is in the complex dynamic system can adjust with this analysis technique but
the explanation is adjusted according to the (Longhofer, Floersch and Hoy, 2013).
Oliver (2011), and Zachariadis, Scott and Barrett (2013) reveal that the critical
realism framework can explore beyond the theories surface with experience and event
supporting their action in the context of social science studying. In term of
methodology, this research conducts a beef supply chain case study in Indonesia with
gathering information from public sources before developing a simulation model. SD
model is a key technique to experiment and analyse the case study. In data analysis
section, SD modelling will be employed to analyse information by using equations to

20
model the structure so, it can refer to deductive approach which their beginning
process starts with a research question or hypothesis and they focus on the
relationship between variables and exploring existing phenomena (Cao, Simsek and
Zhang, 2010).

Figure 3 Research mapping method (source: O'Gorman and MacIntosh, 2016)

21
3.2 Data collection
With regard to data collection, this research use open source secondary data. There
were five types of statistic dataset for developing a case study and parameterising the
model of Indonesia. Firstly, Food and Agriculture Organization of the United Nations
(FAO) statistic dataset in 2010-2017 consisted of a total national population (both of
rural and urban population) and beef balance (a total of beef meat in domestic
production, import quantity, export quantity, losses portion, beef used as food, and
food supply quantity). FAO statistic that becomes the main database for this research,
comprises of specific information of food and agriculture from over 245 countries in
the United Nations members and they publish this data on their website for free
accessibility without commercial purpose (Food and Agriculture Organization of the
United Nations, 2020). Secondly, gross domestic product (GDP) per capita and yearly
inflation rate are obtained by World Bank and Indonesian Bank. Thirdly, a sustainable
food report provided by World Resource Institution and their contents explicated
about the demand of food consumption and the trend of GHG emission in an agri-
food supply chain. Next, the agriculture outlook in 2019 edition that is an online
report in part of meat consumption from 2010-2017 in Indonesia (Organisation for
Economic Co-operation and Development, 2019). This statistic sourced from the
Organisation for Economic Co-operation and Development (OECD) and the Food and
Agriculture Organization (FAO). Finally, the Indonesian statistics report in 2010-2011
was available at Animal Husbandry Statistics Division (Animal Husbandry Statistics
Division, 2011). This source used for the data to support the slaughterhouse capacity
and adjust to be an assumption. Moreover, there were other articles which are useful
information to back up some assumption. In this paper, the research strategy based on
a quantitative research therefore, these statistic information finding can provide the
relationship of events following critical realism approach (Zachariadis, Scott and
Barrett, 2013). These datasets were analysed and categorised before filling input in
the program.

3.3 Data analysis approach

According to the SD modelling approach, their structure based on the commodity
product cycle in the context of production, consumption, and transportation emission
in a beef supply chain. As an approach SD involves three parts: 1) information

22
gathering (feedback loops) 2) the hypothesis results (computer simulation) and 3) the
policies improvement or the judgment of decisions (mental models) (Lane, 2000b).
Consequently, this approach is implemented as a computer program, VENSIM PLE
(Ventana Systems) software package as following steps below:

1) To identify a problem
2) To gather the related data and organise them
3) To draw the relationship of variable and system construction with feedback
and causal loops diagrams
4) Transforming the above diagrams to be a stock and flow diagrams
5) Simulating and analyse scenario to improve policies.

Basically, a SD model employs the concept of the feedback and causal loop diagrams
before developing the stock and flow diagrams which then implemented as a
computer program.

3.3.1 Feedback and causal loop diagrams (FCLD)

The terminology refers to the actual causes and effects chain analysis in the format of
system structure (Kirkwood, 1998). According to the system thinking paradigm,
causal loop diagram describes feedback and cause-effect relationship in cyclical
manner (Horvat et al., 2019). Each variable connects by arrows with information
delivery as a positive (+) or negative (-) feedback to indicate their interdependency.
The positive feedback refers to the behaviour status of a variable is growing while
negative feedback is a slowdown status (Purwanto et al., 2019). The process in FCLD
running is to persistently repeat as a life cycle. And they are able to have more than
one cycle with some variable connection (Kang, Cho and Lee, 2019).

3.3.2 Stock and flow diagrams (SFD)

The stock and flow diagrams were developed from the feedback and causal loop
diagrams as a quantitative model to describe cause and effect relationships in a
complex system. The general approach is to collect and input data the simulation
model by using mathematical functions that relate each variable, then model
validation before developing a simulation model, and scenario analysis from output
data (Rasmy et al., 2010). This diagram consists of three components: stock
(variables), flow (an arrow which presents the relationship among stocks), and
information (quantitative details input which describes, control, and distributes the

23
stock’s characteristic). The classification of stocks in business activities consist of five
types: materials (all stock and flow of physical raw materials, products, processes, and
inventories), personnel (labour), capital equipment (i.e. warehouse space, machines,
tools, equipment for production and service), orders (orders for items, the decision
result from broad managers, land contracts), and money. While information means an
actual value of stocks, the activities of information can be influenced to the model
management such as the creation, controlling, and the distribution. Therefore, a flow
which is an arrow in this context means some way to deliver information of each
stock and link between different stocks (Kirkwood, 1998).

3.4 Ethical issue

According to university’s research regulation in the business and management filed,

ethics is involved with a seriously important behaviour because of the respect and
confidentiality of source of any evidence or information especially, if the evidence is
sensitive competition or commercial (Remenyi et al., 1998). Copyright, data
collection, participant’s personal information are examples of sensitive issue in
academic research (Bell, Bryman and Harley, 2019). Therefore, it comprises of three
aspects of ethical sense: evidence collection (permission and the verification of data
source), processing of evidence (relating to the presentation of personal bias,
prejudices, or opinions), and using the findings (the purposes of perpetrating a fraud)
(Remenyi et al., 1998). In this study, the rights of information gathering and the
copyright or license for information and database are the main issues. There is no
source of ethical issues from human participation due to the use of computer
modelling methodology and the public data sources. Although it is clearly a
quantitative research, which deal with a numerical accuracy, the license of data
collection and the ethical processing are still required since the standard of research
ethics is associated to the protection of rights of the research information sources
during and after publishing the research (O'Gorman and MacIntosh, 2016). To
maintain credibility and responsibility to the society, the policies and condition of
information access must be considered to assess its reliability and quality (Judd,
1995). All statistic sources are used for the academic purpose and they are correctly
and ethically accessed.

24
Chapter 4 Data analysis
This chapter discusses the structure of data analysis including the variables, the
correlation of model, and the model development. In this chapter, the data analysis
and modelling process is summarised in figure 4 and they describe the details below.
This chapter begins by describing beef the supply chain in Indonesia. It continues by
explaining the problem situation, feedback and causal loops diagrams, stock and flow
diagrams, and eventually simulation and validation. The scenario analysis will be
explained in the subsequent chapter.

Feedback
Statement Stock and Simulation
and causal Scenario
of problem flow and
loops analysis
situation diagrams validation
diagrams

Figure 4 The summary of data analysis and modelling process

4.1 Description of beef supply chain in Indonesia
The values of beef markets in Indonesia are significant with 670 million kg for
consumption, while the domestic production can reach at 440 million kg, and beef
price is twice more expensive than Australia (US$ 9.1) (Setiaji, Susila and Wahyudi,
2017). In terms of price, the World Bank data shows that Indonesia is relatively more
expensive when compared to other countries in Asia such as Thailand, Malaysia, and
it increases price more than 100% in 2010-2017 (Rakhmat, Zainul and Yusri, 2017).
Figure 5 and Table 3 show that between 2010 and 2017 the Gross Domestic Product
(GDP) per capita in Indonesia is growing (World Bank, 2019). While the trend of
Indonesian population in 2010-2017 are steadily grows as shown in figure 5 and the
GDP calculation in 2010-2017 as demonstrated in Table 3. It can be assumed that the
beef price, GDP per capita, and population have some relationships.
25
Figure 5 GDP per capita (source: World Bank, 2019)
Table 3 GDP per capita calculation

Gross Domestic Product (GDP) 2010-2017

GDP per
Yearly GDP per
Capita Exchange GDP per
Inflation Capita (Fixed
Year (Current $) Rate Capita
(Indonesian Price 2010
(World Bank (IDR/USD) (Current IDR)
Bank Data) IDR)
data)
2010 3,122.362815 9,086.05 28,369,944.66 6.96% 28,369,944.66
2011 3,643.043936 8,742.72 31,850,113.08 3.79% 30,642,993.80
2012 3,694.348946 9,370.12 34,616,492.95 4.30% 31,872,433.17
2013 3,623.911582 10,430.27 37,798,376.26 8.38% 31,885,672.69
2014 3,491.624791 11,849.58 41,374,287.29 8.36% 31,984,388.07
2015 3,331.695128 13,400.98 44,647,979.77 3.35% 33,358,859.29
2016 3,562.845756 13,308.66 47,416,702.80 3.02% 34,357,607.17
2017 3,836.913814 13,377.35 51,327,739.01 3.61% 35,848,886.68

According to Antara and Sumarniash (2019), this supply chain can be divided into
two sectors namely the beef production and consumption. The beef cattle production
involves smallholders and large holders farmers, slaughtering, and transportation.
Whereas the beef consumption involves the consumers population and beef price. The

26
numbers of Indonesian population which propositional to the customers in the market
impact to the level of future consumption and production rate. Food and Agriculture
Organization of the United Nations statistics or FAOSTAT illustrated the growth of
rural and urban population from 1990-2018 following figure 6 (Food and Agriculture
Organization of the United Nations, 2020). Regarding FAOSTAT data, it can
calculate total population in 2010-2017 following Table 4.

Figure 6 Rural and urban population from 1990-2018 (source: FAOSTAT, 2020)
Table 4 Total population in 2010-2017 (source: FAOSTAT, 2005)

Indonesia Population (1,000 people) 2010-2017

Year Rural Population Urban Population Total Population
2010 121471.143 121052.98 242524.123
2011 121392.687 124314.824 245707.511
2012 121265.363 127617.869 248883.232
2013 121087.842 130944.421 252032.263
2014 120843.234 134287.882 255131.116
2015 120527.352 137634.761 258162.113
2016 120142.531 140972.925 261115.456
2017 119696.518 144294.861 263991.379

With regards to the total population in 2010-2017, they also divide the birth rate and
the death rate as following table 5 which are sourced from World Bank (2020).

27
Table 5 Birth and death rate in Indonesia in 2010-2017 (source: World Bank, 2020)

Year Birth rate (per 1,000 people) Death rate (per 1,000 people)
2010 20.795 6.653
2011 20.526 6.579
2012 20.225 6.518
2013 19.893 6.471
2014 19.537 6.437
2015 19.165 6.419
2016 18.79 6.418
2017 18.422 6.433

According to FAOSTAT (2005) data, it can calculate the beef balance in 2010-2017
which include domestic production, importing, exporting, and the quantity of beef
used as food following table 6.

Table 6 Beef balance in 2010-2017 (source: FAOSTAT, 2005)

Domestic supply
Import Quantity

Export Quantity

quantity (1000
(1000 Tonnes)

(1000 Tonnes)

(1000 Tonnes)

(kg/capita/yr)
Losses (1000

Beef Used as

Food supply
Food (1000
Production
Domestic

quantity
Tonnes)

Tonnes)

Tonnes)
Year

2010 472 115 2 585 585 2.43

2011 521 83 3 601 601 2.46
2012 546 46 4 589 589 2.38
2013 586 63 2 647 647 2.59
2014 533 103 3 635 25 610 2.39
2015 542 69 2 611 25 586 2.27
2016 550 158 3 708 26 682 2.61
2017 564 202 1 766 27 739 2.79

Correspondingly, the yield of beef consumption per head in kilogram can be provided
by OECD (2019). This paper was sorting only Indonesia during 2010-2017. It can
illustrate as table 7.

28
Table 7 The yield of beef consumption per head in kilogram (source: OECD, 2019)

Year 2010 2011 2012 2013 2014 2015 2016 2017

Beef 1.702 1.721 1.661 1.687 1.737 1.671 1.901 1.89
yield
(head/kg.)

4.2 Statement of problem situation

Overall, the statement of problem situation conducted to the imbalance problem
between consumption and production (especially, smallholders who are the major
suppliers) in Indonesia that generate to the level of GHG emission from the
transportation. They can separate to two scenarios.

1) When the demand in the consumption is higher in a normal situation, it

increases the level of production. Unfortunately, the production cannot fulfill
this demand which generate to a higher price in the market following the
economic law then, it affects to a lower demand while increasing production
because consumers are not willing to buy at higher prices but producers are
happy to sell at these prices. This case impacts to minimise both a
transportation and the level of GHG emission
2) On the other hands, the production can be over fulfillment then, the price in
the market is cheaper due to an over stock. Although producers are not happy
with the selling price, consumers are happy to buy that leads to maximising
demand again. A transportation is more frequency which influence to the
higher level of GHG emission.

29
4.3 Feedback and causal loop diagram (FCLD)

Figure 7 Feedback and causal loop diagram

The causal model in figure 7 will be then transformed into stock and flow diagrams.
Overall, there are three major loops to describe the main feature of this model with the
positive (+) and negative (-) narrows for the connection. There are two reinforcing
loops which are a production loop and price loop, and one balancing loop which is a
consumption loop.

1) Consumption loop: the variables are consumption, population, consumption

per capita, expectation toward future consumption, import supply, beef meat
stock, inventory coverage, and beef price per kg. Overall, this loop is a
negative loop. According to the explanation, the impact of consumption
associated to beef meat stock in negative way. In this case, both the population
and the consumption per capita positively affected to increase the level of
consumption. For the source of the consumption per capita were caused by the
import supply, beef meat stock, inventory coverage, and beef price per kg. The
import supply positively impacted to beef meat stock then, the number of beef
meat stock increased and positively impacted to the inventory coverage. The
inventory coverage related to the beef price per kg. in the negative way when

30
 the level of inventory coverage was higher, price would decrease and another
way, the level of inventory coverage was lower, price would increase.
2) Price loop is belonging to a consumption loop and this is a negative loop. The
impact of consumption associated to expectation toward future consumption in
positive way. In this case, both the population and the consumption per capita
positively affected to increase the level of consumption. For the source of the
consumption per capita in this loop was negatively caused by beef price per kg
and inventory coverage. This inventory coverage was negatively caused by
expectation toward future consumption as well. The inventory coverage
related to the beef price per kg. in the negative way when the level of
inventory coverage was higher, price would decrease and another way, the
level of inventory coverage was lower, price would increase.
3) Production loop is negative loop and directly resulted to the total GHG
emission. Overall, the beef price per kg. resulted to the expectation toward
future price in the positive way. Then, the expectation toward future price
affected to the expectation toward future supply positively and they negatively
influenced to the production level adjustment. This relationship was
influenced by the expectation toward future consumption. According to the
imbalance between the initial inventory coverage and the expectation toward
future consumption, the beef price per kg. would raise and leaded to the
increasing level of production, the expectation toward future supply and price
in case of an insufficient production. On the other hands, the beef price per kg.
would drop down and leaded to the decreasing level of production, the
expectation toward future supply and price when the market was over
inventory. However, this situation requires to take long times for demand
fulfillment because of the production lead time. Therefore, the production
level adjustment positively influenced to the production level, they illustrated
a special narrow which called delay. It positively generates to rise both the
number of domestic supply and beef meat stock in the market. Otherwise, the
more domestic supply, the greater number of trip and total GHG emissions.
This is a positive connection in the model.

31
4.4 Stock and flow diagrams (SFD)
This model following figure 8 transformed FCLD which determined to the GHG
emission impact of transportation from the smallholders to the markets. Overall, most
of variable and flow are similar to FCLD while SFD provide the equation of each
variable that presented into the simulation and validation.

This SFD started from the original resource at the smallholder sector regarding
bouvine birth and fattening process. For the bouvine birth, it was determined by
bouvine birth rate and adult bouvine then, the result became young bouvine. After the
local holders got young bouvine, they proceed into fattening process complete. In this
step, it depended on the rearing time and initial bouvine population. When young
adult grew up to be adult bouvine and ready to slaughter, actual slaughtered bouvine
moved to beef slaughtered process. Actual bouvine slaughtered in this chain became
to beef supply.

These linear was carried by the beef supply, beef stock, and beef consumption. For
beef consumption, they influenced to the changes in expected consumption. Also, they
were impacted by beef consumption per capita and another linear which is total
population. This linear was balanced among total population which carried initial
population, birth that affected from birth rate, and death that influenced by death
rate. transportation which can divide two major sections: from the local farmers to the
slaughterhouse and from the slaughterhouse to the market. Then, beef stock influenced
to the inventory coverage, relative beef coverage, and beef price. Regarding the
inventory coverage, the change in expected consumption was leaded by the current
level of beef consumption and the forecasting level of expected consumption. Then,
the stock boxes name beef stock and expected consumption resulted to inventory
coverage. The variable inventory coverage and relative beef inventory coverage
which affected by desired inventory coverage, directed to the beef price then, beef
consumption per capita.

The changes in expected price was resulted by the beef price expected future price,
and expected future price time adjustment time because of the level of consumption
and production. The variable changes in expected price lead to expected future price.
As well as this variable expected future price impact to expected future supply of beef.
The variables initial beef stock and initial beef price are directly associated to

32
expected future supply of beef. Therefore, it can summarize that the expected future
supply of beef depends on the level of consumption, price, and inventory, those
variables in relating to supply, price, inventory, and demand are significantly
connecting.

Then, the number of beef yield per head and the expected future supply of beef
influenced to the variable beef should be slaughtered that connected to the stock beef
required. This stock related to actual bouvine slaughtered and the required changes in
slaughterhouse capacity. The changes in slaughterhouse capacity was influenced by
the required changes in slaughterhouse capacity and time to change slaughterhouse
capacity. The changes in slaughterhouse capacity lead to the slaughterhouse capacity
which can adjust their initial slaughterhouse capacity by the required changes in
slaughterhouse capacity and actual bouvine slaughtered.

In particular, this paper focusses on the impact of GHG emission in transportation

from smallholders to the market. In this SFD, it can divide by two main stages of
transportation: from the smallholders to slaughterhouse and from the slaughterhouse
to the market. Each stage of transportation generated to the numbers of trip based on
the supply side. Basically, when doing the calculation of total GHG emission, the
number of trips in each stage multiply by GHG emission per trip in each stage before
summing up with the additional GHG emission. Regarding a number of trip to
slaughterhouse, they were influenced by beef slaughtered and bouvine transport per
trip. Then, number of trip to slaughterhouse, average distance to slaughterhouse, and
average emission per km. generate to emission from bouvine transport. On another
hand, emission from beef transport was resulted by number of trip to market which
base on beef supply and beef transport per trip, average distance to market, and
average emission per km. refrigeration transport. Moreover, emission from both sides
combined with additional emission per year, will be the total emission.

33
Figure 8 Stock and flow diagrams

34
4.5 Simulation and validation
According to the purpose of this study, it emphasised on the reduction of total GHG
emission from transportation in Indonesian beef supply chain. Table 8 explains the
abbreviation of variables that are used in the simulation model.

Table 8 Abbreviation of variables

Symbol Definition Unit

ABS Actual Bovine
Slaughtered
AEY Additional Emission Per Kg CO2
Year
AB Adult Bouvine Head
ADM Average Distance to Km
Market
ADS Average Distance To Km
Slaughterhouse
AEK Average Emission Per Kg/Km
Km
AEKR Average Emission Per Kg/Km
Km Refrigeration
Transport
BC Beef Consumption Kg/Year
BCC Beef Consumption Per Kg/Year/Head
Capita
BP Beef Price IDR/Kg
BR Beef Required Head
BSl Beef Slaughtered Head/Year
BSt Beef Stock Kg
BSu Beef Supply Kg/Year

36
BSS Beef that Should Be Head/Year
Slaughtered
BTT Beef Transport Per Trip Kg/Trip
BYH Beef Yield Per Head Kg/Head
B Birth
BR Birth Rate
BB Bouvine Birth Head/Year
BBR Bouvine Birth Rate 1/Year
BoTT Bouvine Transport Per Head/Trip
Trip
CEC Change in Expected Kg/(Year*Year)
Consumption
CEP Changes in Expected IDR/Year
Price
CSC Changes in Kg/Year
Slaughterhouse Capacity
D Death
DR Death Rate
DIC Desired Inventory Year
Coverage
EBeT Emission From Beef Kg/Year
Transport
EBoT Emission From Bouvine Kg/Year
Transport
EC Expected Consumption Kg/Year
ECAT Expected Consumption Year
Adjustment Time
EFP Expected Future Price IDR/Kg
EFPAT Expected Future Price Year
Adjustment Time

37
EFSB Expected Future Supply
of Beef
FPC Fattening Process Head/Year
Complete
FT FINAL TIME Year
IBC Initial Beef Consumption Kg/People/Year
per capita
IBP Initial Beef Price IDR/Kg
IBS Initial Beef Stock Kg
IBoP Initial Bouvine Population Head
IP Initial Population People
ISC Initial Slaughterhouse Head
Capacity
IT INITIAL TIME Year
IC Inventory Coverage Year
NTM Number of Trip To Trip/Year
Market
NTS Number of Trip to Trip/Year
Slaughterhouse
RT Rearing Time Year
Relative Beef Inventory
Coverage
Required Changes in
Slaughterhouse Capacity
S SAVEPER Year
SC Slaughterhouse Capacity Head
TS TIME STEP Year
TCSC Time to Change Year
Slaughterhouse Capacity
TE Total GHG Emission Kg

38
 TP Total Population
YB Young Bouvine Head

In this paper, the initial time (IT) for the simulation was 0 year, time step (TS) was 1
year, saveper (S) is equal to TS, and final time (FT) was assumed to be 20 years. Bouvine
Birth Rate (BBR) was assumed to be 0.5 per one time a year then, it would be considered
into the Bouvine Birth (BB) formula.

𝐵𝐵 = 𝐴𝐵 ∗ 𝐵𝐵𝑅 (1)
(20) Bouvine Birth = Adult Bouvine*Bouvine Birth Rate

When the smallholders got Young Bouvine (𝑌𝐵 ), they would continue to fatten (FPC)
before transporting them to the slaughterhouse. During the FPC, Initial Bouvine
Population (IBoP) was assumed to be 4,720,000 heads which based on the bouvine
population in 2010 and Rearing Time (RT) was determined to 2 years. Regarding the
FPC formula, it can YB divide by RT.

𝑌𝐵 = 𝑌𝐵 + (𝐵𝐵 − 𝐹𝑃𝐶) ∗ 𝐼𝐵𝑜𝑃 (2)

(57) Young Bouvine= INTEG (Bouvine Birth-Fattening Process Complete, Initial
Bouvine Population)

FPC = (3)

(36) Fattening Process Complete = Young Bouvine/Rearing Time

When YB grew up to Adult Bouvine (𝐴𝐵 ), they would be selected as Actual Bouvine
Slaughtered (ABS) before transforming to beef at the slaughterhouse (BSl) the beef
volume that transport to the slaughterhouse (BTS) are considered by the expected future
supply (EFS) and slaughterhouse capacity (SC). While the value of ABS was equal to
BSl.

𝐴𝐵 = 𝐴𝐵 + (𝐹𝑃𝐶 − 𝐵𝑆𝑙) ∗ 𝛥𝑡 (4)

(03) Adult Bouvine= INTEG (Fattening Process Complete-Beef Slaughtered, 0)

ABS > (SC-(𝐴𝐵 − 𝐵𝑅)) (5)

39
(01) Actual Bovine Slaughtered=MIN (MIN (Adult Bouvine, Beef Required),
Slaughterhouse Capacity)

BSl = 𝐴𝐵𝑆 (6)

(12) Beef Slaughtered = Actual Bovine Slaughtered

According to the final raw beef as beef supply (BSu), they will transport and distribute to
the markets as beef stock (𝐵𝑆𝑡 ). Their volumes of BSu are considered by beef yield per
head (BYH) as well. BYH assumed to be 1.75 kg. per head based on the average of beef
consumption in 2010-2017.

BSu = ABS * BYH (7)

(14) Beef Supply = Actual Bovine Slaughtered*Beef Yield Per Head

For BSt, they influenced to the beef consumption (BC) and the inventory coverage (IC).
The initial beef stock (IBS) based on the domestic supply data in 2010, their value
assumed to be 585,000,000 kg.

𝐵𝑆𝑡 = 𝐵𝑆𝑡 + (𝐵𝑆 − 𝐵𝐶) ∗ 𝐼𝐵𝑆 (8)

(13) Beef Stock = INTEG (Beef Supply-Beef Consumption, Initial Beef Stock)

According to the beef consumption (BC), BSt impacted to BC and BC was connected by
beef consumption per capita (BCC) that their initial beef consumption per capita (IBCC)
assumed to be 2.43 kg./year/people in food supply quantity in 2010 and the linear model
of total population (TP) which their initial population (IP) was 242,524 people in 2010.

𝑇𝑃 = 𝑇𝑃 + (𝐵 − 𝐷) ∗ 𝐼𝑃 (9)
(56) Total Population= INTEG (Birth-Death, Initial Population)

BC = BCC * TP (10)
(08) Beef Consumption = Beef Consumption Per Capita*Total Population

Following TP linear, they consisted of birth (B) which their birth rate (BR) was 0.08
based on the average birth rate in 2010-2017, and death (D) which their death rate (DR)
was 0.03 based on the average death rate in 2010-2017.

B = BR * TP (11)

40
(18) Birth=Birth Rate*Total Population

D = DR * TP (12)
(26) Death= Death Rate*Total Population

According to the changes in expected consumption (CEC), they were influenced by BC

and expected consumption adjustment time (ECAT) which was 1 year. CEC generated to
the expected consumption (EC) which connected to IC.

CEC =
( ) (13)

(23) Changes in Expected Consumption=(Beef Consumption-Expected

Consumption)/Expected Consumption Adjustment Time

𝐸𝐶 = 𝐸𝐶 + (𝐶𝐸𝐶 − 𝐼𝐵𝐶𝐶) ∗ 𝐼𝑃 (14)

(31) Expected Consumption= INTEG (Changes in Expected Consumption, Initial Beef
Consumption per Capita*Initial Population)

Next step, the model started to calculate the amount of IC then, it influenced to the
relative beef inventory coverage (RBIC) and desired inventory coverage with 1 year.
RBIC was directly connected to beef price (BP).

IC = (15)

(45) Inventory Coverage= Beef Stock/Expected Consumption

RBIC = (16)

(49) Relative Beef Inventory Coverage=Inventory Coverage/Desired Inventory

Coverage

For BP, they calculated from the confidential value in Indonesian population as a scatter
graph which determined X = year (2010-2017) and Y = total population. It is similar to
the BCC calculation while Y = GDP per capita by World Bank in 2010-2017.

BP = (3,074.4 * RBIC) + 6,000,000 (17)

(10) Beef Price=(3074.4*Relative Beef Inventory Coverage)+ 6000000

BCC = (40.245 * BP) + 77,496 (18)

41
(09) Beef Consumption Per Capita=40.245*Beef Price+77496

This BP lead to BCC and the changes in expected price (CEP) which their expected
future price adjustment time (EFPAT) was 1 year. In the expected future price (EFP), this
stock related to CEP and the expected future supply of beef (EFSB).

CEP =
( ) (19)

(24) Changes in Expected Price=(Beef Price-Expected Future Price)/Expected Future

Price Adjustment Time

𝐸𝐹𝑃 = 𝐸𝐹𝑃 + (𝐶𝐸𝑃 − 𝐼𝐵𝑃) ∗ 𝛥𝑡 (20)

(33) Expected Future Price= INTEG (Changes in Expected Price, Initial Beef Price)

According to EFSB, they were influenced by EFP, the initial beef price based on
59,978.8 IDR/ kg. in 2010, and IBS. Moreover, EFSB impacted to the beef that should be
slaughtered (BSS). Otherwise, BYH and beef required (BR) affected to BSS. On another
hand, BSS directly generated to BR.

EFSB = ∗ 𝐼𝐵𝑆 (21)

(35) Expected Future Supply of Beef = (Expected Future Price/Initial Beef

Price)*Initial Beef Stock

BSS = − 𝐵𝑅 (22)

(15) Beef that Should Be Slaughtered = (Expected Future Supply of Beef/Beef Yield
Per Head)-Beef Required

𝐵𝑅 = 𝐵𝑅 + (𝐵𝑆𝑆 ∗ 𝛥𝑡) (23)

(11) Beef Required= INTEG (Beef that Should Be Slaughtered, 0)

In case of BR, they impacted to ABS and the variable called “required changes in
slaughterhouse capacity” (RCSC). This variable affected to the changes in slaughterhouse
capacity (CSC). However, CSC was influenced by time to change slaughterhouse
capacity (TCSC) which assumed to be 1 year.

RCSC = BR - SC (24)

42
(50) Required Changes in Slaughterhouse Capacity=Beef Required-Slaughterhouse
Capacity

CSC = ( ∗ 𝛥𝑡); RCSC > 0 (25)

(25) Changes in Slaughterhouse Capacity=IF THEN ELSE(Required Changes in

Slaughterhouse Capacity > 0, Required Changes in Slaughterhouse Capacity / Time to
Change Slaughterhouse Capacity, 0 )

Then, CSC generated to slaughterhouse capacity (SC) with their initial slaughterhouse
capacity assumed to be 100,000 heads/ year base on 1,324,154 heads in statistics
Indonesia report in 2010-2011 (Animal Husbandry Statistics Division, 2011). However,
SC influenced to RCSC and ABS.

𝑆𝐶 = 𝑆𝐶 + (𝐶𝑆𝐶 − 𝐼𝑆𝐶) ∗ 𝛥𝑡 (26)

(52) Slaughterhouse Capacity= INTEG (Changes in Slaughterhouse Capacity,Initial
Slaughterhouse Capacity)

In this study, the calculation of total GHG emission (TE) result in this supply chain can
be combined the additional emission per year (AEY) from two sections: 1) GHG
emission 1 is the transportation of live animals from the local farmers to the
slaughterhouse (emission from bouvine transport: EBoT) and 2) GHG emission 2 is the
transportation of refrigerated meat from the slaughterhouse to the market (emission from
beef transport: EBeT).

𝑇𝐸 = 𝑇𝐸 (𝐴𝐸𝑌 ∗ 𝛥𝑡) (27)

(55) Total Emission= INTEG (Additional Emission Per Year,0)

AEY = EBoT + EBeT (28)

(02) Additional Emission Per Year= Emission From Bouvine Transport+Emission
From Beef Transport

Regarding EBoT, they consisted of average emission per km. (AEK) which assumed to
be 1 kg/km, average distance to slaughterhouse (ADS) which assumed to be 650 km., and
number of trips to slaughterhouse (NTS) and BSl. NTS is influenced by bouvine transport

43
per trip (BoTT) and it assumed to be 11 head/ trip which based on a survey of numbers of
bouvine sold in Indonesian lowland site (Priyanti et al., 2012)

EBoT = ADS * AEK * NTS (29)

(30) Emission From Bouvine Transport = Average Distance To
Slaughterhouse*Average Emission Per Km*Number of Trip to Slaughterhouse

NTS = (30)

(47) Number of Trip to Slaughterhouse=Beef Slaugthered/Bouvine Transport Per Trip

Regarding EBeT, the vehicles that contain beef and carcass should be considered the
refrigerated storage. These refrigerated vehicles emit GHG emission with their
temperature control (Food and Agriculture Organization of the United Nations, 1991). In
addition, they consisted of average emission per km. refrigeration (AEKR) which
assumed to be 2 kg/km, average distance to market (ADM) which assumed to be 50 km.,
and number of trips to market (NTM) and BSu. NTM is influenced by beef transport per
trip (BTT) that assumed to be 5,500 kg. per trip.

EBeT = ADM * AEKR * NTM (31)

(29) Emission From Beef Transport=Average Distance to Market*Average Emission
Per Km Refrigeration Transport*Number of Trip To Market

NTM = (32)

(46) Number of Trip To Market=Beef Supply/Beef Transport Per Trip

44
Chapter 5 Discussion

As the research questions were mentioned in the introduction, this paper aim to adopt the
system dynamic modelling to simulate and study the relationship of processes in the
aspects of economic and environmental issue especially, they focus on the GHG emission
that occur during the transportation from farmland to the market. In this chapter, they
initially illustrate the baseline result then, they will demonstrate three scenario’s results.
These scenarios were adjusted some values in some variables which base on the
information in other case studies. It can summarise the parameters in each scenario as
following table 9 and they will explain details in the further section.

Table 9 Summary of parameters in each scenario

slaughterhouse to

GHG emission at

GHG emission at
Capacity of beef

slaughterhouse
Distance from

Distance from
transportation

transportation

transportation

transportation
market (km.)
Capacity of
bouvine

bouvine
farm to
(head)

Scenario (km.)
(kg.)

(kg.)

(kg.)
beef
Baseline 11 5,500 650 50 1 2
Scenario 1 72 19,815.1 138 562 1 2
Scenario 2 72 19,815.1 562 138 1 2
Scenario 3 72 19,815.1 138 562 0.0005 1.89575

5.1 Findings
According to table 9, it associated to three research questions and it mentioned the main
parameters on the capacity of bouvine transportation, capacity of beef transportation,
distance from farm to slaughterhouse, distance from slaughterhouse to market, GHG
emission at bouvine transportation, and GHG emission at beef transportation. The amount
of total emission produced the negative side to the global environment (Bismark and Li,
2018). Initially, this simulation found that the total emission in transportation from the
farmland to the market as following figure 9 demonstrated the trend of cumulative
emission rate in 20 years was gradually increase due to the high frequency of the number
of trips running to slaughterhouse and market. Regarding the transportation emission

45
level, the number of journeys and the number of kilometers traveled are significant
factors as sources of GHG emission from road vehicles (Marek and Paulina, 2019).

Total Emission in the baseline scenario

800000000
700000000
600000000
Emission (Kg.)

500000000
400000000
300000000
200000000
100000000
0
0 5 10 15 20 25
Year

Figure 9 Total emission in the baseline scenario

Furthermore, the yearly trend of emission value in the baseline scenario following figure
10 were comparing between emission from bouvine transport (influenced by the number
of trips to the slaughterhouse), emission from beef transport (influenced by the number of
trips to the market), and additional emission per year which regards to the combination of
emission from bouvine transport and from beef transport, were in the same level every
year. They rose up in the beginning especially, emission from bouvine transport and
additional emission per year, and progressively slop down. It can summarise that
emission from bouvine transport highly influences to the additional emission per year.

46
 Yearly emission values in the baseline
scenario
Emission From Bouvine Transport Emission From Beef Transport Additional Emission Per Year

250000000

200000000

150000000

100000000

50000000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Figure 10 Yearly emission values in the baseline scenario

These finding in figure 11-12 demonstrated the relationship between the number of trips
running and emission from transportation which were sharply raised up when there were
high rates of journeys.

Bouvine Transport to Slaughterhouse

250000000
Emission from bouvine transport

200000000

150000000

100000000

50000000

0
-50000 0 50000 100000 150000 200000 250000 300000 350000
-50000000
Number of trip to slaughterhouse

Figure 11 Bouvine transport to slaughterhouse in the baseline scenario

47
 Beef Transport to Market
120000

100000
Emission from beef transport

80000

60000

40000

20000

0
-200 0 200 400 600 800 1000 1200
-20000
Number of trip to market

Figure 12 Beef transport to market in the baseline scenario

Beef consumption
180000000000000

160000000000000

140000000000000
Beef consumption

120000000000000

100000000000000

80000000000000

60000000000000

40000000000000

20000000000000

0
242524
254650
267383
280752
294789
309529
325005
341256
358318
376234
395046
414798
435538
457315
480181
504190
529399
555869
583663
612846
643488

Total population

Figure 13 Beef consumption in the baseline scenario

However, there were several factors that associate with the results of this simulation, for
example, the number of populations influenced beef consumption which impacted high
transportation to the market following figure 13. On the other hand, beef supply was

48
relative to the beef price as following figure 14, the smallholders will decrease to supply
when the beef price goes down therefore, they might reduce the number of journeys to
the slaughterhouse.

Beef supply
7000000
6000000
5000000
Beef supply

4000000
3000000
2000000
1000000
0
9051790
5996930
5992510
5989780
5987190
5984720
5982370
5980130
5977990
5975960
5974020
5972180
5970420
5968740
5967150
5965630
5964190
5962810
5961500
5960250
5959060
Beef price

Figure 14 Beef supply in the baseline scenario

5.2 Findings in different scenarios

According to the scenario analysis in the chapter 4, this section aims to compare and
discuss new scenario which might impact to the better GHG emission in transportation.
And this finding can support the research questions by demonstrating three different
scenarios results.

5.2.1 Scenario 1: capacity and distance adjustment

According to table 9, this scenario adjusted numbers of capacity of bouvine
transportation, capacity of beef transportation, distance from farm to slaughterhouse, and
distance from slaughterhouse to market. This scenario based on the information from a
Mexico beef production article in 2016 (Huerta, Güereca and Lozano, 2016). This new
simulation was to adjust the number of bouvines in transportation to the slaughterhouse
from 11 to 72 heads, decline average distance from farmland to slaughterhouse from 138
to 650 km. which refers to this scenario moved the slaughterhouse to be closer with the

49
original sources and the new total distance from the slaughterhouse to the market would
assume to be 562 km. In the part of consumption, this assumption based on the average
weight of beef after slaughtering in Serbia which is 275.21 kg. (Milos et al., 2018)
therefore, the total of beef transportation to the market would assume to be 19,815.12 kg.

Total Emission in scenario 1

25000000

20000000

15000000

10000000

5000000

0
0 5 10 15 20 25

Figure 15 Total emission in scenario 1

According to figure 15, the total emission in this scenario looked better than the baseline
scenario although the trend looked similar. At the end of twenty years, the value was
outstanding to decrease which might refer to capacity of bouvine and beef transportation
and the location of slaughterhouse impact to the total level of GHG emission.

Following to figure 16, it can be found that the earlier stage has outstanding numbers of
additional emissions per year. While the results of additional emissions per year were
gradually decreased due to a lower number of trips running from farmland to the market.
Although this study adjusts to the distance from farmland to the slaughterhouse to be
shorter, their emission rate seems to be remarkable when compared to another distance.
However, their graph looks similar to the baseline scenario with a lower rate while there
are some different rates between emission from bouvine transport and the additional
emission per year, and they also regularly drop down afterward.

50
 Yearly emission values in scenario 1
Emission From Bouvine Transport Emission From Beef Transport
Additional Emission Per Year
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Figure 16 Yearly emission values in scenario 1

5.2.2 Scenario 2: distance number switching
With regard to table 9, this scenario adjusted on distance from farm to slaughterhouse and
distance from slaughterhouse to market. This scenario background, it would be similar to
the first scenario whereas, this assumption switched the distance number. For the distance
from farmland to the slaughterhouse, it assumed to be 562 km. and 138 km. for the
distance from the slaughterhouse to the market. Then, this paper will analyse and
compare the results.

51
 Yearly emission values in scenario 2
Emission From Bouvine Transport Emission From Beef Transport Additional Emission Per Year

30000000

25000000

20000000

15000000

10000000

5000000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Figure 17 Yearly emission values in scenario 2

According to figure 17, the sharp of this graph looks similar to the baseline scenario’s
graph with a lower rate whereas comparing to scenario 1, the values of this scenario still
be higher than the first scenario. For the total emission in figure 18, the result of this
scenario performed to be higher than both baseline scenario and the first scenario.

Total Emission in scenario 2

100000000
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
0 5 10 15 20 25

Figure 18 Total Emission in scenario 2

52
Therefore, it can summarise that when the distance is far from the slaughterhouse, the
possibility of emission rate from bouvine transport, and the additional emission per year
will be negatively influenced. Likewise, the location of slaughterhouse directly impacts to
the toal GHG emission. Moreover, it should balance the location and distance of the
slaughterhouse because if they are far from the marketplace, it will miss the opportunity
to respond to customers on the right time (Meijboom and Vos, 1997). In addition, the
scenario 1 is more suitable for these conditions.

5.2.3 Scenario 3: Euro emission standard adoptation

In this case, this paper will employ the same conditions in the scenario 1 with the
adjustment in the context of emission such as an average of emission per km., and an
average emission per km. of refrigeration transport. Regarding the European Union,
European emission standards (EURO), the vehicle emission standard can enforce to
reduce GHG emission from transportation and it is well-known as a transportation policy
for practice in European countries (Marek and Paulina, 2019). Consequently, this
scenario adjusted an average emission per km. from 1 kg. / km. to 0.0005 kg. / km. based
on the EURO 5 emission standard for diesel (RAC Motoring Services, 2020) and for
another emission rate, this paper based on the number that the cooling vehicle can save
emission (KRESS Fahrzeugbau GmbH, 2018). This can calculate by reducing from the
initial value that assumed to be 1.89575 kg. / km. As the result, this figure 19 can
certainly help to reduce number of emissions from the farm to the market.

53
 Yearly emission values in scenario 3
Emission From Bouvine Transport Emission From Beef Transport Additional Emission Per Year

350000

300000

250000

200000

150000

100000

50000

0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Figure 19 Yearly emission values in scenario 3

Otherwise, it is useful to adapt the emission standard to control emission rate in
transportation sector in Asia regarding the result of total emission in this context
following figure 20. This figure illustrates the lowest total emission value in this context
when adaptation result in Euro emission standard values, capacities of bouvine and beef
transportation, and the location of slaughterhouse.

Total Emission in scenario 3

1200000

1000000

800000

600000

400000

200000

0
0 5 10 15 20 25

Figure 20 Total Emission in scenario 3

54
Chapter 6 Conclusion
The aim of this dissertation has been learnt and clarified the relationship among actors
and processes in the beef supply chain in Indonesia. In particular, Indonesia is suitable for
this case study because there is a high demand in beef consumption because most of
consumers highly prefer to choose beef as a main dish. And the traditional small-scale
farmers and breeders who are one of key dominators to contribute GHG emission and
deforestation in the better way while efficient supply cattle and beef production to the
market. Correspondingly, three research questions focus on how these variables (capacity
of bouvine and beef transportation, location of slaughterhouse, and Euro emission
standard) influence on the total level of GHG emission. Their aspects not only focus on
economy issue but also, the GHG emission contribution within processes, especially
transportation. They can illustrate by SD simulation based on the commodity product
cycle. In this chapter, they will be summarised the quantitative method that used in this
paper, the data collection, the data analysis, and the findings.

With regards to the quantitative method, they use the model simulation as called SD
simulation in this paper. The objective of this simulation is to draw the relationship
between variables and processes as the national level then, analyse the scenario to
improve policies. The model structure in this study consisted of the commodity product
cycle in the context of production, consumption, and transportation emission in a beef
supply chain. The components of SD simulation involve with the FCLD and SFD.

According to this section, the implementation in this paper base on the case study in
Indonesian beef supply chain. The data are statistics data and sourced from the public
organisation database which were free to access. These data were the secondary data
from FAO, World bank, Indonesian Bank, World Resource Institution, OECD, and
Animal Husbandry Statistics Division. The copyright or license of information gathering
can be ethically ensure. Moreover, there are data from many articles to support
assumptions for different scenarios in the SD model.

In this section, their steps can be followed by 1) describing the problem situation, 2)
information gathering by FCLD, 3) transforming the simulation model, 4) simulation and
validation then, 5) the final step is the scenario analysis.

55
According to the first step which reveal to the beef supply chain situation in Indonesia,
the production sector involves with the smallholders in farm, slaughtering, and
transportation. Their production processes generally begin with breeding, feeding, cow
selling to brokers in the cattle market, slaughtering, product grade cataloging, and
distributing to customers. Their smallholders will supply bouvine and carcass to the
market depend on the beef price and demand. Whereas the beef consumption sector
involves the consumers population and beef price. Regarding the GDP per capita and
total population, the information in 2010-2017 showed the annual growth trend that
influence to higher beef supply and associate to the yield of beef consumption per head in
kilogram. The problem can be found about the imbalance problem between consumption
and production that generate to the level of GHG emission from the transportation. The
GHG emission in transportation can divide two phrases in this paper: emission of bouvine
transport from farm to the slaughterhouse and emission of beef transport from the
slaughterhouse to the market.

In this part, information gathering can illustrate by FCLD to understand the simulation
construction and the relationship of variable. There are two reinforcing loops which are a
production loop and price loop, and one balancing loop which is a consumption loop.

When FCLD transformed to be SFD to describe cause and effect relationships in a

complex system. This stage input the equation for calculate the total emission.

This part illustrated the formula of each variable and run the simulation to see the initial
result before adjust assumption for the next scenario to find better result. This paper set
up to test in the next twenty years.

After this result is initially appear, overall variables are connected and influenced by each
other. The total emission looks sharply increase although the number of bouvine or beef
in transport were not suitable for reaching the market much. However, the next scenarios
which their assumption base on other case study in different countries are better results
with the graph pattern lookes similar to the baseline scenario’s result.

There are several factors that influenced to the different results such as the number of
journeys, the number of distances, consumption rate, supply capacity, and emission rate.

56
There are three scenarios for testing in this paper. According to the scenario 1-2, this
study compares the assumption of the distance and the number of bouvine and beef
transport change. The scenario 1 assumes to be shorter for the distance from farm to the
slaughterhouse. For the scenario 2, they switch the distance in the first scenario. The
result shows that the additional emission in the scenario 1 looks better than the second
scenario. Therefore, the location of slaughterhouse directly impacts to the total of GHG
emission. While the capacity of bouvine and beef transportation indirectly to the level of
GHG emission, their volumes highly affect to the number of trips which direct to the
level of GHG emission. Then, the scenario 1 is transformed to be the scenario 3 by
adjusting the number emission rate bases on EURO emission standard. Their result in
emission value of each stage and the total emission are greater and Indonesia is
recommended to move their vehicle standard to be in higher rank of EURO standard. It is
able to conclude that EURO emission standard is highly influenced to the level of GHG
emission.

57
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