The development of the upstream and downstream model in small and medium enterprises using the BCG, EOQ, and AHP integration

The number of leather-producing countries is relatively small compared to the total number of countries worldwide. Although Indonesia is not among the top 10 producers, it is a country involved in the production of leather and leather products. However, the management of the leather and leather products industry in Indonesia has yet to be fully integrated, which leads to suboptimal outcomes in terms of incurred costs and obtained profits. Literature on the Boston Consulting Group (BCG) method, the Economic Order Quantity (EOQ) method, and the Analytical Hierarchy Process (AHP) method also reveals a lack of integration both upstream and downstream. This study aims to develop an integrated upstream and downstream model for leather craft Small and Medium Enterprises (SMEs) through the combination of the BCG, EOQ, and AHP methods. Through calculations using the BCG method, it has been determined that in the star quadrant—where the product serves as the primary income source and is in high market demand—sales of leather bags in 2023 totaled 14,524 units. It has been calculated that producing one leather sling bag requires approximately 4 square feet of leather, which results in a total need of 58,096 square feet of leather raw materials for these sales. Subsequently, the EOQ method has been applied to determine an economic order size of 2,110.457 square feet. Finally, the selection of leather raw material suppliers has been carried out using the AHP method, with the following priority rankings: Dtm stores as priority 1, Lmn stores as priority 2, Klmt stores as priority 3, M3 Stores as priority 4, and Ak Stores as priority 5.