Comparison of Data Inquiry and Cost Structure Methods to Arrange Owner Estimate (Case Study of Carbon Steel Pipe Procurement at PT XYZ)

Harummi Amarilies, Gitiza Erwitie, Alifiana Permata Sari


In material sourcing, one of the procurement processes that should be completed before evaluating and selecting the vendor is making an Owner Estimate (OE). The most common way to arrange an OE is by making Data Inquiry, where the arranger asks for a certain product’s price from a list of providers or vendors. However, this method does not describe in detail how the price of the product is constructed, so the company, which is doing the procurement process, tends to set a higher OE. To reduce this risk, another method to determine OE is introduced. This method applies a Cost Structure method to calculate production and transportation costs, the expenses a vendor should cover when manufacturing the products. Using a total of 20 scenarios that varied the percentage of profits, the increase in carbon steel plate costs, and the overhead costs, using Cost Structure Method can lower the Owner Estimate between 0.51% to 24.46%. The last scenario with 20% increase in profit, 20% increase in carbon steel plate cost and 20% increase in the overhead cost resulted to -2.55% reduce of Owner Estimate. This new method is proven effective as an alternative way to arrange OE for similar material.


procurement, material sourcing, Owner’s Estimate, data inquiry, cost structure

Full Text:



C. Niezen and W. Weller, "Procurement as Strategy," Harvard Business Review, September 2006.

D. J. Frayer, J. M. Whipple and P. J. Daugherty, "Creating Value Through Procurement and Sourcing Efforts in Integrated Supply Chains," Michigan State University, 2016.

C. G. Lee, "Purchasing and Sourcing," in Logistics Engineering Handbook, First ed., G. D. Taylor, Ed., Florida, CRC Press, 2008, pp. 115-129.

R. A. Parisher and R. A. Rhea, "Steel Pipe," in Pipe Drafting and Design, Third ed., Gulf Professional Publishing, 2012, pp. 4-12.

M. Stewart, "Material Requirements: Piping Materials," in Surface Production Operation, Gulf Professional Publishing, 2016, pp. 159-192.

R. Ulrich, G. Thoma, D. Nutter and J. Wilson, "Tilepipe Greenhouse Gas Emission From Tank Trucks Transporting Raw Milk From Farms to Processing Plants," International Dairy Journal, vol. 31, pp. S50-S56, 2013.

Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah, "Materi VI - Persiapan Pengadaan Barang/Jasa Pemerintah," in Buku Informasi Pengadaan Barang/Jasa, Jakarta, Pusdiklat Kompetensi LKPP, 2018, pp. 1-29.

M. Christopher, Logistics and Supply Chain Management, Fifth ed., Pearson, 2016.

Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi, Pedoman Pelaksanaan Pengadaan Barang dan Jasa (Revisi 4), Jakarta: SKK Migas, 2017.

U. Weigel and M. Ruecker, The Strategic Procurement Practice Guide, Springer, 2017.

M. E. Smith, L. Buddress and A. Raedels, "The Strategic Use of Supplier Price and Cost Analysis," in 91 Annual International Supply Management Conference, Florida, 2006.

P. D. Kimmel, J. J. Weygant and D. E. Kieso, Accounting, Tools for Business Decision Making, Fifth ed., Wisconsin: Wiley, 2013.

Sholiq, A. P. Subriadi, F. A. Muqtadiroh and R. S. Dewi, "A Model of Owner Estimate Cost for Software Development Project in Indonesia," Journal of Software Evolution and Process, pp. 1-19, 2019.



  • There are currently no refbacks.

Copyright (c) 2022 Jurnal Logistik Indonesia

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

View My Stats


Jurnal Logistik Indonesia

ISSN 2579-8952 (media cetak), 2621-6442 (media online)

Email : [email protected]/[email protected]