Activity-Based Costing of Conventional and Digital Direct-to-Market Chili Supply Chains: A Case Study from Central Java, Indonesia

Abstract

Price instability in Indonesia’s chili market remains a persistent challenge due to inefficient logistics in conventional supply chains, characterized by multiple intermediaries and fragmented distribution. This study quantifies and compares the logistics cost efficiency between conventional distribution and a digital cooperative-based Direct-to-Market (DTM) model in Central Java, Indonesia. Employing Activity-Based Costing (ABC), the study calculates per-kilogram logistics costs across six core activities and uses the Mann–Whitney U test to assess statistical differences. Data were collected from 80 farmer groups through structured surveys, cost documentation, and field observations. Results reveal that the DTM model significantly lowers logistics costs, particularly transportation and storage, while enhancing coordination via digital platforms. Statistical analysis confirms the cost difference is significant (p < 0.05), with the DTM scheme yielding higher farmer margins. The integration of ABC with nonparametric testing provides a novel analytical framework for mapping cost inefficiencies at the activity level, which is rarely applied in horticultural logistics research. These findings offer actionable insights for policymakers and agri-logistics actors to support digital transformation, improve farmer welfare, and enhance supply chain efficiency. The approach is adaptable to other perishable commodities, contributing to more inclusive, transparent, and resilient food distribution systems.