Track: Operations Management

Abstract

This study aims to calculate the value-added of processed cassava products and make efforts to increase value added product benefits as recommendations for improvement. The Analytical Hierarchy Process (AHP) and the Hayami method are integrated to find the best solution as several alternative strategies proposed to increase value added product. Data was collected through purposive sampling method which it interviewed four respondents to obtain data about Hayami's method and distributed questionnaires to five experts to fulfill the AHP analysis. This study was conducted in one of the business units that has the potential to drive the people's economy in West Sumatra Indonesia is processed cassava products. The cassava business unit in this case study has five types of 5 main products. The problem in this study is the existence of constraints on marketing and production, the uncertainty of raw material prices. There are still many expired products, and this business still uses simple equipment technology for product processing. This affects the level of value added and profit maximization received. This study found that the strategy in alternative one is the best alternative because it has the most significant evaluation weight value compared to the other alternatives. This strategy emphasizes that business units buy raw materials directly from farmers. The further study is suggested to adopt multiple case studies by selecting the same business unit clustering to obtain the main criteria for increasing value-added product of cassava processing business units.