Integrated Supply Chain Model of Distribution Regionalization and Network Optimization of White Crystal Sugar Traditional Market

White sugar is a strategic commodity that is distributed within traditional market in Indonesia. We propose an integrated supply chain model of regionalization distribution and network optimization of traditional market white crystal sugar commodity. The supply chain total cost is defined as the performance criteria for the developed Mixed-Integer Linear Programming (MILP) model. From the experimental result, our proposed model successfully reduces the total supply chain costs by 31% compared with the existing condition of the traditional market distribution network after considering 11% increase of warehouse capacity This even lower or more competitive than the existing modern markets distribution network From the sensitivity analysis, it is found that fixed cost and the increase of demand are insensitive to model solution. On the other hand, handling cost and the decrease of demand are sensitive with moderate degree of influence, to change the decision to close existing facilities, where transportation cost is sensitive with moderate degree of influence, to change the decision to open a new facility. On extreme condition, the increase in warehouse capacity is very sensitive, to change the decision to close existing facilities. With a 67% increase in distributor warehouse capacity, it will dramatically eliminate sub distributors in all regions.