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UNIVERSITAS INDONESIA

SOLAR POWERED DEHUMIDIFIER

Report Assignment 4
GROUP 13
GROUP PERSONNEL:
AZKA PRATAMA
(0906635482)
DIDIK SUDARSONO
(1206242555)
NADHILAH REYSELIANI
(1206261270)
PANDU ERVAN N
(1206240726)
RAHGANDA
(1206261182)
RATU BILQIS CHAIRUNNISA (1206237826)

CHEMICAL ENGINEERING DEPARTMENT


ENGINEERING FACULTY
UNIVERSITAS INDONESIA
DEPOK
MAY 2015

EXECUTIVE SUMMARY

Humidity is one of the factors that can risk human health. In fact, based on
data from BMKG, the humidity in Indonesia reaches 60-90%. Consequently, we
need a tool that can decrease humidity in the air or is called dehumidifier. This
dehumidifier is a small scale for usage in the house.
After we have determined all components need in the manufacturing
process of product, we build a plant to produce the dehumidifier. We choose
Cilincing as the location of the plant. The plant will has total area of 2000 m2.
In order to operate the plant and produce dehumidifier properly, we have
to know raw material supply. We determine location of supplier to supply raw
material. Two materials import from China and seventeen materials from local
supplier. We choose two suppliers for each of raw material to make alternative
scenario and modeling and select the first supplier priority based on the distance
and the time needed for the delivery. After that, we determine regular order,
interval of order, first time order, and scheduling for each of raw material.
Besides we determine the raw material supply, we have to determine
product distribution location. We divide distribution location in 5 region, that is
region 1 (Jakarta, Bogor, Depok, Tangerang, Bekasi and Serang), region 2
(Bandung, Cimahi and Tasikmalaya), region 3 (Semarang), region 4 (Yogyakarta
and Solo), and region 5 (Surabaya, Gresik and Sidoarjo). Afterwards, we
determine distribution pathways and transportation method that we use to
distributing the product. Next, we consider inventory that consist of raw material
inventory and product inventory. We place inventory in our plant.
After that, we determine market segmentation. Market segmentation is the
grouping people into a segment that have potential to buy our product. Next, we
make marketing mix that contains strategy to organize marketing.
After that, we calculate total capital investment. Total capital investment is
required for any industrial process. Total capital investment cost consists of fixed
capital cost and working capital cost. We use Guthrie Method which is acceptable
for product design to calculate total capital investment. The total capital
investment for our plant is Rp 6.223.394.935.
ii

After that, we calculate operational cost. Operational cost is annual cost


associated with the running the operation of tools, components, or facilities used
in the manufacture of the product. Operational divided into two categories consist
of the cost of manufacturing and general expenses. The total annual operating cost
for our product is Rp39.080.231.544.
Afterwards, we need to determine product price. We use our cash flow that
is consisting before tax cash flow and after tax cash flow to choose appropriate
price. Cash flow is made with life expectancy is 10 years. The price of the product
is Rp7.250.000.
After that, we make profitability analysis to see potential value of product.
In this step, we use five profitability analyses, that is rate of return, payback
period, break event point, internal rate of return, net present value, and sensitivity
analysis. The ROI is 45,66%, payback period is 3,65 years, IRR is 24%, BEP is
30921 units, and NPV is Rp 17.951.231.341. We also consider sensitivity cost so
we use sensitivity analysis. The most sensitivity component is Product Price and
Raw Material Cost. All of profitability analysis that we get is shows that our plant
is profitable, acceptable, and can be implemented.

iii

Comment [NR1]:

LIST OF CONTENT
EXECUTIVE SUMMARY ................................................................................. ii
LIST OF CONTENT .......................................................................................... iv
LIST OF FIGURES ............................................................................................ vi
LIST OF TABLES .............................................................................................. 1
CHAPTER 1 ........................................................................................................ 1
SUPPLY CHAIN ................................................................................................. 1
1.1. Plant Location ........................................................................................... 2
1.2. Raw Material Supply ................................................................................. 6
1.1.1. Raw Material Location .............................................................................. 6
1.1.2. Alternative Scenarios and Modeling ......................................................... 9
1.1.3. Raw Material Supply Chain ...................................................................... 11
1.3. Product Distribution .................................................................................. 18
1.2.1. Product Distribution Location ................................................................... 18
1.2.2. Product Distribution Chain........................................................................ 25
1.2.3. Distribution Pathways ............................................................................... 25
1.2.4. Transportation Method .............................................................................. 26
1.3. Inventory ................................................................................................... 28
1.3.1. Inventory Raw Material ............................................................................ 28
1.3.2. Inventory Product ...................................................................................... 33
CHAPTER 2 ........................................................................................................ 38
MARKETING ..................................................................................................... 38
2.1. Market Segmentation ................................................................................ 38
2.2. Market Mix ................................................................................................ 39
CHAPTER 3 ........................................................................................................ 43
PRODUCT COSTING ....................................................................................... 43
3.1. Total Capital Investment ........................................................................... 43
3.1.1. Fixed Capital Investment .......................................................................... 43
3.1.2. Working Capital Investment ..................................................................... 51
3.2. Operational Cost ........................................................................................ 51
3.2.2. General Expenses ...................................................................................... 75
3.3. Economic Analysis .................................................................................... 82
3.3.1. Product Pricing per Unit ............................................................................ 82
3.3.2. Cash Flow .................................................................................................. 82
3.3.3. Cost Breakdown ........................................................................................ 87
CHAPTER 4 ........................................................................................................ 89
PROFITABILITY ANALYSIS ......................................................................... 89
4.1. Rate of Return ........................................................................................... 89
4.2. Payback Period .......................................................................................... 89
4.3. Break Even Point ....................................................................................... 91
4.4. Internal Rate of Return .............................................................................. 91
4.5. Net Present Value ...................................................................................... 92
4.6. Sensitivity Analysis ................................................................................... 92
4.6.1. Selling Price Fluctuation ........................................................................... 93
4.6.2. Operational Cost Changes ......................................................................... 93
iv

4.6.3. Raw Material Cost Changes ...................................................................... 96


CHAPTER 3 ........................................................................................................ 97
CONCLUSION.................................................................................................... 97
REFERENCES .................................................................................................... 99

LIST OF FIGURES

Figure 1.1 Satellite View of Our Plant Location................................................... 4


Figure 1.2 Street View of Our Plant Location ...................................................... 4
Figure 1.3 Route from Jalan Kompleks PT. Koma to Halim Perdana Kusuma
Airport ................................................................................................................... 5
Figure 1.4 Route from Jalan Kompleks PT. Koma to Tanjung Priok Port ........... 5
Figure 1.5 Scheduling of Raw Material ................................................................ 15
Figure 1.6 Indonesias Population Is Growing and Becoming More Affluent
............................................................................................................................... 19
Figure 1.7 The MAC population of Java and Sumatra Dominates ....................... 19
Figure 1.8 Product Distribution Chain .................................................................. 25
Figure 1.9 Distribution Pathway ........................................................................... 26
Figure 1.10 Graphic of Inventory of Raw Material in Plant ................................. 32
Figure 1.11 Fluctuation of Our Plant Storage ....................................................... 35
Figure 3.1 Bare-module Factor ............................................................................. 45
Figure 3.2 Cash Flow Diagram ............................................................................. 84
Figure 3.3 Cost Breakdown Diagram.................................................................... 87
Figure 4.1 Graph of CCF vs Year For Payback Period Calculation ..................... 88
Figure 4.2 The Influence of Fluctuations of Product Price, Raw Material Price and
Labor Cost on IRR ................................................................................................ 92
Figure 4.3 The Influence of Fluctuations of Product Price, Raw Material Price
And Labor Cost on Payback Period ...................................................................... 93
Figure 4.4 The Influence of Fluctuations of Product Price, Raw Material Price and
Labor Cost on NPV ............................................................................................... 93

vi

LIST OF TABLES

Table 1.1 Raw Material Supplier .......................................................................... 7


Table 1.2 Raw Material Distribution Model ......................................................... 9
Table 1.3 Priority Level for Raw Material Suppliers ............................................ 10
Table 1.4 Raw Material Order .............................................................................. 13
Table 1.5 Name of Wholesaler and Locations Selected ....................................... 21
Table 1.6 Product Distribution for Each Region ................................................... 24
Table 1.7 Distribution Cost of Truck due to the Distance .................................... 27
Table 1.8 Raw Material Inventory for 60 Days .................................................... 30
Table 1.9 Storage Planning ................................................................................... 34
Table 1.10 Total Stock for 6 Months .................................................................... 36
Table 3.1 Marshall and Swift Chemical Equipment Index ................................... 43
Table 3.2 Total Equipment Cost in 2016 .............................................................. 44
Table 3.3 Total Bare Module Cost calculation ..................................................... 45
Table 3.4 Building Cost Calculation ..................................................................... 46
Table 3.5 Supporting Facilities Cost ..................................................................... 46
Table 3.6 Utilities Installation Cost ...................................................................... 47
Table 3.7 Market Research Cost ........................................................................... 48
Table 3.8 Patent Cost ............................................................................................ 49
Table 3.9 Brand Cost............................................................................................. 49
Table 3.10 Total Fixed Capital Investment ........................................................... 50
Table 3.11 Raw Materials Details ......................................................................... 52
Table 3.12 Raw Material Cost .............................................................................. 53
Table 3.13 Process Equipment Electricity Price ................................................... 56
Table 3.14 Supporting Equipment Electricity Price ............................................. 57
Table 3.15 Water Cost........................................................................................... 57
Table 3.16 Direct Labor Salary ............................................................................. 59
Table 3.17 Maintenance Cost ................................................................................ 59
Table 3.18 Patent and Brand ................................................................................. 60
Table 3.19 Patent and Brand ................................................................................. 61
Table 3.20 Depreciation of Main Equipment Value Year 1-5 .............................. 62
Table 3.21 Depreciation of Main Equipment Value Year 6-10 ............................ 63
Table 3.22 Depreciation of Supporting Equipment Value Year 1-5 ..................... 64
Table 3.23 Depreciation of Supporting Equipment Value Year 1-6 ..................... 66
Table 3.24 Depreciation of Building Value Year 1-5 ........................................... 68
Table 3.25 Depreciation of Building Value Year 6-10 ......................................... 69
Table 3.26 Total Depreciation............................................................................... 69
Table 3.27 Cost for Building Tax ......................................................................... 70
Table 3.28 Total Fixed Charge.............................................................................. 71
Table 3.29 Direct Labor Salary Tax ...................................................................... 71
1

Table 3.30 Indirect Labor Salary Tax (1) ............................................................. 72


Table 3.31 Indirect Labor Salary Tax (2).............................................................. 72
Table 3.32 Indirect Labor Salary Tax (3) ............................................................. 73
Table 3.32 Indirect Labor Salary Tax (4) ............................................................. 74
Table 3.33 Executive Salary and Clerical Wage ................................................... 75
Table 3.34 Communication Cost........................................................................... 77
Table 3.35 Office Maintenance Cost .................................................................... 77
Table 3.36 Total Advertising Online .................................................................... 78
Table 4.1 Amount of Sold Product on Day 1333 ................................................. 90
Table 4.2 Fluctuation of Product Price ................................................................. 92
Table 4.3 Fluctuation of Labor Cost ..................................................................... 93
Table 4.4 Fluctuation of Raw Material Price ........................................................ 95

CHAPTER 1
SUPPLY CHAIN

If we have the plant and also the product, we need to talk about our products
marketing system. Products marketing system also called supply chain. Supply
chain management is detail process includes how raw material is bought and
brought to the plant and how the product is distributed to distributors and
customers. This supply chain needs integrated strategy because it can help to
increase the profitability of the product. We must identify each part of supply
chain and manage it well to achieve supply chain efficiently. Each part of supply
chain is:

Planning
This part contains plan movement of the supply chain from bring the raw

material from suppliers until the product is distributed to distributors and


customers. The planning also will be used to monitor flow of supply chain
whether it is profitability or not.

Suppliers
Suppliers have very important role to supply of raw materials. A company

must choose supplier that has shortest time and lowest cost in supply of raw
material to achieve supply chain efficiently.

Production
In this section, raw materials that have arrived will be used to produce

product. Production process must have good management so the production of


product running on time. On time production process prevent disturbance of
distribution product to distributors and costumer.

Distribution
This part is the core of the supply chain section. This part describe how can

the product reach customers include the time to deliver the product to distributors,
the used vehicle, and location of the distribution.

1.1. Plant Location


The main reason determining plant location becomes very important are to
maximize operating economy and to maximize effectiveness. To achieve the
target we need to find the best plant location by some considerations. Once a
mistake is made in locating a plant, it becomes extremely difficult and costly to
fix it.
Considerations of selecting plant location are listed below:
1.

Law and Order Situation


Location of plant should has good law and order stability from the
government to prevent unexpected problem such as the land permission and
status of the business.

2.

Availability of Infrastructure Facilities.


A plant needs so many facilities and utilities to support its operation.
Therefore, adequate facilities will be needed. The facilities that is really
crucial are :

3.

Transportation access.

Banking and insurance service

Fuel supply

Supply of electricity and water

Availability of Labors.
A manufacture will need many labors to operate all the process until
production. Therefore, access to workforce to be employed is a must. Easy
access to labors from our plant will be considered.

4.

Access to Raw Materials.


As the source of our production, supplier should be accessible. Good access
means that it needs to be close and having accessible transportation mode.

5.

Access to Market.
Every business unit depends on market for selling its goods. Ability to reach
the market needed to be increased to as optimum as possible. It is important
in the business to reach the market in time and available at the low price
which depends on transportation cost. Therefore in selecting a plant
location, this factor is very important.

6.

Safety Requirements.
Plant location must meet all the essential safety requirements. Due to air,
water and sound pollution, some company have bad effect on

people

around. Not only effect to people, effect to our environment is also essential
to be considered.
After some general consideration factor mentioned above, we try to make it
specific to our product. Criteria below are listed as our next characteristic of plant
location. They are:
1.

Industrial area. In Indonesia there is a centered area which called industrial


area. Industrial areas usually have characteristics of wide area and wellinfrastructure. Industrial area is usually have some additional featured that
have been set for industrial importance like electricity source, land
preparation, telecommunications, and source of water. Another advantage is
availability of labors that usually not a matter in an industrial area.

2.

Smooth accommodation line. The location needed to be easy to access by


transportation mode.

3.

Close from ports and airports. This condition will make transportation
easier, faster and cheaper.

4.

Close to source of raw materials and labors.


Based on the criteria mentioned above, we chose Cilincing, North Jakarta as

the location of our plant.

Figure 1.1. Satellite View of Our Plant Location


(Source: https://www.google.co.id/maps, 2015)

Figure 1.2. Street View of Our Plant Location


(Source: https://www.google.co.id/maps, 2015)

The details of location are explained below:


a.

The location is quite close from Halim Perdana Kusuma Airport. It is 26,8
km apart or could be reached for 50 minutes using car or truck. This
condition clearly support the ideal condition for a plant location selected. It
will be easy to distribute our product to Java island as our market target with
this plant that close to airport.

Figure 1.3. Route from Jalan Kompleks PT. Koma to Halim Perdana Kusuma Airport
(Source: https://www.google.co.id/maps, 2015)

b.

The location is close to Tanjung Priok Port. It is 11,6 km apart from the
location of the plant. It is an advantage because it will be easy to distribute
the product to other places by ship if we want to sell the products to other
places.

Figure 1.4. Route from Jalan Kompleks PT. Koma to Tanjung Priok Port.
(Source: https://www.google.co.id/maps, 2015)

c.

The location of plant is in the middle of an industrial area and far from the
housing unit. So the plant will not interfere the people who live around
there.

d.

It is located exactly in the wayside of Timor Street. In such way, we can


assume that the access to this location is easy.

1.2. Raw Material Supply


Distribution of raw materials is one of the essential things that need to be
considered. Raw materials are very important in manufacturing process because it
is the core to produce the products. In this chapter, we will discussed all the things
that are related to how our plant get the raw materials, which consists of how long
the times which are needed for the raw material arrival, distance between the plant
with raw material suppliers, and the amount of raw materials that could be
delivered from the specified time. Availability of raw materials can be affecting
the production of product.
1.1.1. Raw Material Location
To produce a product, adequate of raw materials are needed. The raw
materials must be easy obtained based on strategic location supplier. The location
of the supplier should be near with the plant. It is will affect the supply time and
distribution cost of the supply chain process. If the material doesnt exist in
nearby plant location, we could be taken from outside the plant location. We
import two raw materials from China,that is rotor cassette and solar panel
photovoltaic. We choose to import because the price and availability in Indonesia
is not good. The production process has to be processed in continuity. We make
two alternatives for raw materials suppliers to maintain supply of raw materials if
the first supplier is not able to supply raw materials to our plant. The supplier
selection is based on availability of raw materials, the specification of raw
materials, credibility of suppliers, the distance, and the time needed for the
delivery. Here are the suppliers that we choose:

Table 1.1. Raw Material Supplier

Raw Material

Rotor Cassette

Plant Daily
Consumption

Unit

Supplier I

Supplier II

Jiangyin SAT Air Treatment Equipment

Hangzhou Peritech Dehumidifying

Co.,Ltd

Equipment Co., Ltd


Zhejiang Perlight Solar Co., Ltd

20

Piece

20

Piece

Hefei Bluesun Solar Energy Tech. Co

20

Piece

PT. Yuasa Battery : Tangerang

Aluminum Plate

Piece

Cast Iron

90

Sheet

Flange

20

Piece

Screw and Nuts

240

Piece

Fan

40

Piece

Solar
Photovoltaic
Solar Panel
Battery

PT. Mitra Jaya Makmur Abadi : Jakarta


Pusat

PT. Century Batteries Indonesia : Jakarta


Timur
PT. Surya Logam : Jakarta Barat

PT. Mitra Jaya Makmur Abadi : Jakarta

PT. Sinarindo Megah Perkasa : Jakarta

Pusat

Barat

PT. Mitra Jaya Makmur Abadi : Jakarta

PT. Alfa Teknik Mandiri Makmur :

Pusat

Jakarta Barat

PT. Mitra Jaya Makmur Abadi : Jakarta


Pusat
PT. Multi Teknik Internusa : Tangerang
Selatan

PT Tiga Sinar Mandiri : Jakarta Timur

Solusi Fan Indonesia : Surabaya

Table 1.1. Raw Material Supplier (Contd)

Raw Material

Plant Daily
Consumption

Unit

Supplier I

Supplier II

Motor Fan

20

Piece

Cipta Lestari Teknik : Jakarta Utara

Victoria Jaya : Jakarta Utara

Humidistat

20

Piece

Cipta Lestari Teknik : Jakarta Utara

CV. Java Indotecth : Bekasi

Heater

20

Piece

PT. Indoasia Thrivetama : Jakarta Barat

PT. Hade Permata Electric : Tangerang

Thermocouple

20

Piece

PT. Hade Permata Electric : Cipondoh,

PT. Sinar Inti Indopratama : Jakarta

Tangerang

Barat

Hose

40

Piece

Raja selang : Bekasi

PT. Suplindo Prima Solusi : Jakarta Barat

Filter

40

Piece

Anekafilter : Bekasi

PT. Farrindo Nusantara Industri : Bekasi

20

Piece

PT. Cipta Mitra Selaras : Jakarta Selatan

PT. Korsse Indonesia : Jakarta Barat

Power Button

20

Sheet

PT. Fortindo Sukses Mandiri : Jakarta

Schneider Electric Indonesia : Jakarta

Barat

Selatan

Indicator Lamp

20

Piece

PT. Fortindo Sukses Mandiri : Jakarta

Schneider Electric Indonesia : Jakarta

Barat

Selatan

Styrofoam

80

Piece

PT. Vovovom : Jakarta Barat

PT. Maxfos Prima : Tangerang

20

Piece

PT. Makmur Rekasantika : Bandung

Fiberglass
Insulation

Corrugated
Carton Box

Jasa Putra Carton


Industries : Jakarta

1.1.2. Alternative Scenarios and Modeling


We make two alternatives for raw materials suppliers to maintain supply
of raw materials if the first supplier is not able to supply raw materials to our
plant. In this section, we will create models that will be used to choose the most
effective preference of suppliers. We make several criteria to select first supplier
priority, that is the supplier credibility, the time needed to deliver to our plant
location, the distance needed to arrive at our plant location, and effectiveness in
delivery. Here is the Table 1.2. of modeling location suppliers:

Table 1.2. Raw Material Distribution Model

Supplier 1
Raw Material

Supplier 2

Distance

Time

Distance

Time

(km)

(minute)

(km)

(minute)

Rotor Cassette

4397

21600

4463

21600

Solar Photovoltaic

6089

25920

4451

21600

Solar Panel Battery

52.5

85

50.6

79

Aluminum Plate

19.1

51

22.6

55

Cast Iron

19.1

51

29.9

76

Flange

19.1

51

35

80

Screw and Nuts

19.1

51

22.8

55

Fan

58.3

98

755.2

910

Motor Fan

22.3

54

18.8

49

Humidistat

23.9

58

34.8

80

Heater

33.9

79

42.2

96

Thermocouple

42.2

101

29.4

76

Hose

17.5

38

19.2

51

Filter

48.9

103

44.7

99

Fiberglass Insulation

47.9

102

18.8

53

Power Button

20.4

52

43.8

97

Indicator Lamp

20.4

52

43.8

97

Styrofoam

42.6

96

59.8

102

10

Table 1.2. Raw Material Distribution Model (Contd)

Supplier 1
Raw Material

Corrugated Carton Box

Supplier 2

Distance

Time

Distance

Time

(km)

(minute)

(km)

(minute)

149

152

31.4

78

From the locations, distance, and distribution duration in this Table 1.2,
we will make the raw materials delivery scenario. We must decide first supplier
priority to supply all of the raw materials. We will contact these suppliers and
require to sending the raw materials needed. To keep supply of raw materials if
the first supplier is not able to supply raw materials, we need the second supplier
to send the raw materials needed. The second supplier will be used as back up
supplier for the raw materials. Here is the Table 1.3 of the scenario for the
suppliers:

Table 1.3. Priority Level for Raw Material Suppliers

Raw Material

Rotor Cassette

Solar Photovoltaic

First Priority Supplier


Jiangyin SAT Air Treatment
Equipment Co.,Ltd

Tech. Co

Indonesia

Screw and Nuts

Co., Ltd

Ltd

Battery

Flange

Dehumidifying Equipment

Hefei Bluesun Solar Energy

PT. Century Batteries

Cast Iron

Hangzhou Peritech

Zhejiang Perlight Solar Co.,

Solar Panel

Aluminum Plate

Second Priority Supplier

PT. Mitra Jaya Makmur


Abadi

PT. Yuasa Battery

PT. Surya Logam

PT. Mitra Jaya Makmur

PT. Sinarindo Megah

Abadi

Perkasa

PT. Mitra Jaya Makmur

PT. Alfa Teknik Mandiri

Abadi

Makmur

PT. Mitra Jaya Makmur


Abadi

PT Tiga Sinar Mandiri

11

Table 1.3. Priority Level for Raw Material Suppliers (Contd)

Raw Material

First Priority Supplier

Second Priority Supplier

Fan

PT. Multi Teknik Internusa

Solusi Fan Indonesia

Motor Fan

Victoria Jaya

Cipta Lestari Teknik

Humidistat

Cipta Lestari Teknik Utara

CV. Java Indotecth

Heater

PT. Indoasia Thrivetama

PT. Hade Permata Electric

Thermocouple

PT.Sinar Inti Indopratama :

PT. Hade Permata Electric

Hose

Raja selang

PT. Suplindo Prima Solusi

PT. Farrindo Nusantara

Filter

Industri

Fiberglass

Anekafilter

PT. Korsse Indonesia

Cipta Mitra Selaras

Power Button

PT. Fortindo Sukses Mandiri

Schneider Electric Indonesia

Indicator Lamp

PT. Fortindo Sukses Mandiri

Schneider Electric Indonesia

Styrofoam

PT. Vovovom

PT. Maxfos Prima

Corrugated Carton

Jasa Putra Carton

Box

Industries

Insulation

PT. Makmur Rekasantika

1.1.3. Raw Material Supply Chain


The raw materials will be delivered from local suppliers and overseas
suppliers. The overseas supplier is used to import rotor cassette and solar panel
photovoltaic. All of local suppliers are located in Java Island. We choose the first
local supplier that located in Jakarta so the suppliers locations are near with the
plant. With the near distance, the raw materials are easy to deliver. We contact the
suppliers to inform amount of raw materials that are ordered and ask about the
time range of distribution. It is important to maintain of supply chain raw
materials. We make contract with suppliers as a form of professionalism and
responsibility. For the overseas suppliers, the delivery of raw material will be
carried by sea transportation. For the local suppliers, the delivery of raw materials
will be carried by land transportation, such as box truck.

12

The time needed to deliver the raw material to the plant assumes a normal
day without any problems on the trip. To anticipate delay delivery of raw
material, we order raw material with the safety inventory in the first order.
Amount of order raw materials are adjusted with the our product capacity. Interval
of order raw materials is frequented. For main local raw material, ordering is done
in a half month to prevent excessive stocks that may cause destruction of raw
material.

For packaging raw material, such as corrugated carton box and

Styrofoam, we order in a one month because the price of packaging materials


more cheap if the amount order is much. For overseas raw material, we also order
in a one month. We choose this interval to decrease shipping material cost. The
first suppliers already meet the criteria that we specify, that is availability of raw
materials, the specification of raw materials, credibility of suppliers, the distance,
and the time needed for the delivery.

13

Table 1.4. Raw Material Order

Material

Rotor
Cassette
Solar

Daily
Consumption

Unit

20

Piece

20

Piece

Sheet

Cast Iron

90

Piece

Flange

20

Piece

240

Piece

Battery
Aluminum
Plate

Screw and
Nuts

Interval of

Minimum

Total order

First Time

Time (Day)

order (day)

Selling (Unit)

(unit)

Order (Unit)

Treatment Equipment

15

30

100

850

935

15

30

100

850

935

15

50

300

330

15

25

75

85

15

25

1350

1485

15

25

300

330

15

25

3600

3960

Co.,Ltd
Piece

Solar Panel

Delivery

Jiangyin SAT Air

20

Photovoltaic

First Supplier

Zhejiang Perlight Solar


Co., Ltd
PT. Century Batteries
Indonesia
PT. Mitra Jaya
Makmur Abadi
PT. Mitra Jaya
Makmur Abadi
PT. Mitra Jaya
Makmur Abadi
PT. Mitra Jaya
Makmur Abadi

14

Table 1.4. Raw Material Order (Contd)

Material

Daily
Consumption

Unit

First Supplier
PT. Multi Teknik

Delivery

Interval of

Minimum

Total order

First Time

Time (Day)

order (day)

Selling (Unit)

(unit)

Order (Unit)

15

20

600

660

Fan

40

Piece

Motor Fan

20

Piece

Victoria Jaya

15

20

300

330

Humidistat

20

Piece

Cipta Lestari Teknik

15

50

300

330

Heater

20

Piece

15

50

300

330

Thermocouple

20

Piece

15

50

300

330

Hose

40

Piece

15

100

600

660

Filter

40

Piece

15

10

600

660

20

Sheet

15

25

300

330

20

Piece

15

25

300

330

Fiberglass
Insulation
Power Button

Internusa

PT. Indoasia
Thrivetama
PT.Sinar Inti
Indopratama
Raja selang
PT. Farrindo Nusantara
Industri
PT. Korsse Indonesia :
PT. Fortindo Sukses
Mandiri

15

Table 1.4. Raw Material Order (Contd)

Material
Indicator
Lamp
Styrofoam
Corrugated
Carton Box

Daily
Consumption

Unit

20

Piece

80

Piece

20

Piece

First Supplier
PT. Fortindo Sukses
Mandiri
PT. Vovovom
Jasa Putra Carton
Industries

Delivery

Interval of

Minimum

Total order

First Time

Time (Day)

order (day)

Selling (Unit)

(unit)

Order (Unit)

15

25

300

330

30

200

2400

2640

30

200

600

660

On Table 1.4. scheduling below, we assume in the first week the raw material have been ordered and arrive in the first day when the plant
has operated. Here is the scheduling of raw material:

15

Figure 1.5. Scheduling of Raw Material

16

Figure 1.6. Scheduling of Raw Material (Contd)

17

Figure 1.7. Scheduling of Raw Material (Contd)

18

1.2. Product Distribution


In this section, we explain about the distribution of Hi Dry Air Dehumidifier
to our customers. The explanation consists of product distribution location,
product distribution chain, distribution pathway, and the transportation method.
1.2.1. Product Distribution Location
Indonesia is a country with a tropical climate that causes the relative
humidity in Indonesia to be high at around 70-90%. According to ASHRAE
(American Society of Heating, Refrigeration, and Air-Conditioning Engineers),
ideal indoor relative humidity is not more than 55%. Therefore, the high relative
humidity in Indonesia is not in accordance with the standards and causes a variety
of problems in terms of comfort and health. In addition, the humidity in each
region in Indonesia varies depending on the condition of the area. The relative
humidity in large cities tends to be higher than in other regions. This is because
the use of motor vehicles is increasing in large cities and it leads an increase in
CO2 emissions and cause temperature increase in large cities. If the temperature
increases, more water will evaporate into the atmosphere which causes an increase
in relative humidity in the city. The increases in relative humidity can decrease the
quality of the air.
The main target of our customer is the upper-middle class customers in
major cities in Indonesia. We are targeting the upper middle class consumers
because the price per unit of our product is quite expensive. In addition, we
choose major cities in Java as a target distribution of our products. This is
because, Java has a higher population and higher population growth than others
major islands in Indonesia. High population growth indicates that economic
growth in Java increase every year.
From BCG population and household expenditure database in 2012,
Middle-class and Affluent Consumer (MAC) is represent about 30 percent of the
Indonesian population, or 74 million people, and that group will grow far larger in
the coming decade, in both absolute and percentage terms. About 8-9 million
people currently enter the Middle-class and Affluent Consumer segment each

19

year, and by 2020, this group will reach a total of 141 million people, or 53
percent of the population. (See Figure 1.6).

Figure 1.8. Indonesias Population Is Growing and Becoming More Affluent


(Source: www.bcgperspectives.com, 2012)

About half of the countrys MAC population currently resides in the five
most-populous provinces in Java, and this concentration will likely remain in the
coming years. Furthermore, we chose the distribution in Java because the MAC
population is large enough that 24 million people and also rapid growth rate MAC
which is about 96% by 2020. The increase in the MAC in every region in
Indonesia can be shown in Figure 1.7.

Figure 1.9. The MAC population of Java and Sumatra Dominates


(Source: www.bcgperspectives.com, 2012)

20

The MAC population is becoming more dispersed. Currently there are 12


cities with more than 1 million MACs and another 13 with more than 500,000
MACs. In Figure 1.8, we can see that the BCG analysis showing information
about MAC populations in Indonesia. Java is developing rapidly in terms of MAC
population and began to spread to other cities around it. It certainly give benefits
to our products marketing to be developed.

Figure 1.10. Population Growing and the Spread of Middle Class


(Source: www.bcgperspectives.com, 2015)

The distribution of our product in Java is easier because many wholesaler


and retailer located here. Our marketing strategy is to distribute our product to
Retailer and Wholesaler. In addition, we will save shipping costs because the
distance of plant and location of distribution product is close. Regions that
became our main target are Jabodetabek (Jakarta, Bogor, Depok, Tangerang,
Bekasi), West Java, Centre Java, East Java and Yogyakarta.
Category of regions, that were selected to distribute products are made as
following:
Region 1 covers an area of Jakarta, Bogor, Depok, Tangerang, Bekasi
and Serang
Region 2 covers an area of Bandung, Cimahi and Tasikmalaya in West
Java province.
Region 3 covers an area of Semarang in Central Java province.

21

Region 4 covers an area of Yogyakarta and Solo.


Region 5 covers an area of Surabaya, Gresik and Sidoarjo in East Java
province.
Our product marketing is done through wholesalers and retailers in each
region. In this case, the wholesaler can also serve as retailer. Product distribution
directly through wholesalers and retailers can reduce costs to make branch store
(warehouse) in each distribution area. Costs to build the branch stores include the
cost of the investment, cost of operations, and maintenance costs for employees,
electricity, and so on. Distribution of products through a wholesaler can expand
the network of product distribution area to customers.
Wholesale is a company that sells a large number of products with
variations in the shape and quality of the product. In this case, we choose
wholesaler such as Hypermart, Giant, and Ace Hardware that there are well
known in big cities in Java. In addition, Hypermart, Giant, and Ace Hardware also
can play a direct role as a retailer that can be consumed by customer such as
electronic equipment. The selection of such wholesalers is due to Hypermart,
Giant and Ace Hardware have a strategic location and also the level of availability
to consumers. The upper-middle class society tend to buy the product through
Hypermart or Giant because that products are sold at Hypermart, Giant or Ace
Hardware more secure in terms of the quality of products. In addition, based on
our benchmark, these wholesalers only sell two types dehumidifier such as
dehumidifier with refrigerant system and dehumidifier with silica gel. Because of
our product competitor is not much, we can take this opportunity by taking buyer
in these wholesale. The detail of retailer and wholesaler that we choose to sell our
products is shown in Table 1.5.

Table 1.5. Name of Wholesaler and Locations Selected

Region
Region 1
(Jabodetabek
and Serang)

Wholesaler
Hypermart

Store

City

Hypermart Kemang Village

Jakarta

Hypermart Exion Hall

Jakarta

Hypermart Tang City Mall

Tangerang

22

Table 1.52. Name of Wholesaler and Locations Selected (Contd)

Region

Wholesaler

Store

City

Hypermart Grandmall Bekasi

Bekasi

Hypermart Karawaci

Tangerang

Supermall

Giant

Ace Hardware

Hypermart ITC Depok

Depok

Hypermart Cinere

Jakarta

Hypermart Gading Serpong

Tangerang

Hypermart Mega Kemayoran

Jakarta

Hypermart Exion Hall

Jakarta

Hypermart Lippo Cikarang

Bekasi

Hypermart Puri Indah

Jakarta

Giant Plaza Semanggi

Jakarta

Giant Margo City Mall

Depok

Giant Plaza Semanggi Mall

Jakarta

Giant BSD City

Tangerang

Giant Serang

Serang

Bay Walk

Jakarta

Cempaka Putih

Jakarta

Kelapa gading

Jakarta

Kuningan City

Jakarta

Paramount Serpong

Tangerang

Supermall Karawaci

Tangerang

Living World

Tangerang

Grand Galaxy Park

Bekasi

Lippo Cikarang

Bekasi

Summarecon Bekasi

Bekasi

Margo City

Depok

Cibinong City Mall

Bogor

23

Table 1.5. Name of Wholesaler and Locations Selected (Contd)

Region

Wholesaler

Hypermart

Region 2
(Bandung,
Cimahi and

Giant

Tasikmalaya)

Ace Hardware

Hypermart

Region 3
(Semarang)

Giant

Ace Hardware

Hypermart
Region 4
(Yogyakarta
and Solo)

Giant

Ace Hardware

Store

City

Hypermart Bip

Bandung

Hypermart MTC

Bandung

Hypermart Miko

Bandung

Giant Istana Plaza

Bandung

Giant Premier Plaza

Bandung

Giant Cimahi Mall

Cimahi

Giant Mayasari Plaza

Tasikmalaya

Living Plaza Dago

Bandung

Plaza IBCC

Bandung

Living Plaza Tasikmalaya

Tasikmalaya

Hypermart Javamall

Semarang

Hypermart Paragon

Semarang

Giant Supermarket Candi

Semarang

Giant Supermarket

Semarang

Anjasmoro
Giant Supermarket Tlogosari

Semarang

Living Plaza Semarang

Semarang

Hypermart Jogya Saphir

Yogyakarta

Hypermart Yogya City Mall

Yogyakarta

Hypermart Hartono Mall

Solo

Hypermart Solo Grand Mall

Solo

Giant Urip Sumoharjo

Yogyakarta

Giant Ring Road Utara

Yogyakarta

Giant Palur Plaza

Solo

Solo Paragon

Solo

Plaza Ambarrukmo

Yogyakarta

24

Table 1.5. Name of Wholesaler and Locations Selected (Contd)

Region

Wholesaler

Store

Hypermart

Region 5
(Surabaya,

Giant

Gresik, and
Sidoarjo)

Ace Hardware

City

Hypermart East Cost

Surabaya

Hypermart Royal Plaza

Surabaya

Hypermart Ciputra World

Surabaya

Giant Rajawali

Surabaya

Giant Kedungsari

Surabaya

Giant Maspion

Surabaya

Giant Mulyosari

Surabaya

Giant Gresik

Gresik

Giant Sidoarjo Sun City

Sidoarjo

Grand City Surabaya

Surabaya

Mal Galaxy

Surabaya

Supermal Pakuwon

Surabaya

In one day of production, we produce 20 units of Hi Dry Air. Based on our


consideration, the distribution of our products is done once a month to the areas
targeted. For inventory, we take 10 % of production every month, so the products
that we distribute to wholesalers around 540 pieces per month. However, in the
first year, we only produce 60% from the normal production capacity because our
products are still new. Table 1.6. shows the percentage distribution for each
region:

Table 1.6. Product Distribution for Each Region

Region 1

Percentage of
Distribution
50 %

Product Distribution
(Unit)
270

Region 2

15 %

80

Region 3

10 %

54

Region 4

12,5 %

68

Region 5

12,5 %

68

Total

100%

540

Targeted Regions

25

From the Table 1.6, we can conclude that the largest number of distribution
focused in Jabodetabek region. Jabodetabek region as our main target because a
declining in the air quality by the high relative humidity in the Jabodetabek
region. In addition, the need for dehumdifier in the Greater Jakarta area is also
quite large.
1.2.2. Product Distribution Chain
After our product is manufactured, the product will be stored in the storage
facility and then it will be distributed to wholesalers and retailers in the target area
that have been determined before. The wholesaler and retailer will directly sold
the product to customers. In the supply chain, we do not need to have the
distribution center or warehouse because our production is only distributed to
Java. The product distribution chain is shown in Figure 1.8.

Figure 1.8. Product Distribution Chain

On the other hand, wholesalers we that have been selected have their own
distribution centers. So, we just need to distribute our products from our storage
facility to the retailer.
1.2.3. Distribution Pathways
Picture 1.9. shows that the distribution pathway is directly distributed to
wholesalers without distribution center or warehouse.

26

Figure 1.9. Distribution Pathway


(Source: google map, 2015)

The distribution pathway of our product is use only one type of


transportation method which is land transportation. This is because our plant
location and the retailers are in the same island. The type of transports that we use
is medium trucks. This is because the type of transport such as trucks
comparatively faster and more flexible in reaching wholesalers and retailers in the
distribution area locations that have been determined before. For more details on
selecting types of transport will be discussed at next section.
1.2.4. Transportation Method
For land transportation, there are two alternatives which are truck or train.
However, the use of this train is limited for the locations that are only connected
by rail and station. Based on that consideration, the use of the train is not flexible
in achieving the target location on the wholesale or retailer. The use of trucks to
distribute products dehumidifier is considered more effective and flexible because
it is not restricted by any factor and also can achieve the target distribution
product location on the wholesale or retailer. In addition, the use of the truck is
also considered relatively fast in the distribution of our products. In this case,
there are 2 options in the provision of transportation such as using of private
trucks or using a rental truck. The use of private trucks or rental trucks need to
consider the effectiveness of pathway that is used for delivery process of product
by truck.
We decided to rent a truck for distribution of the product at the beginning of
our factory production. This is because the distribution process is done within

27

once a month every distribution. Using truck can accommodate 50 units Hi Dry
Air in the shipping process. Therefore, truck type that is used for shipping process
is double engkel that has large storage unit (420 x 190 x 200 cm) and able to
withstand loads up to 4 tons. In addition, we need 5 trucks in our product
distribution process which is the first truck distribute to Jakarta and Bekasi in
region 1, the second truck distribute to Depok and Bogor in region 1, the third
truck distribute to Tangerang and Serang in region 1, the fouth truck distribute in
region 2 and 4 as simultaneous, and the fifth truck distribute areas 3 and 5 as
simultaneous. The cost to rent a day is cheaper than buying a five trucks at once.
In this case, we use a truck to distribute our products to the region 2
(Bandung) and region 4 (Yogyakarta) that is shown in Figure 1.9. Because of the
region has the same distribution pathway, which is south pathway of Java. In
addition, the truck is also used to distribute the products to region 3 (Semarang)
and region 5 (Surabaya) because it has the same distribution pathway, which is
north pathway of Java. It aims to save on total cost of the distribution of our
products.
These trucks that we use in the product distribution can be estimated
through Google Maps. The time is spent to product distribution can be found by
the distance column obtained from each location using Google Maps. The time
needed to deliver products from varies pathways of distribution is used to estimate
the distribution cost. For cost estimating, we determined assuming the cost of
renting a truck and calculate the fuel cost of each city. Table 1.7 shows that the
distribution cost is high enough for Surabaya region and the distribution cost in
Bekasi is too low due to distance.

Table 1.7. Distribution Cost of Truck due to the Distance

Region

Region 1

Distribution pathway

Distance

Time Spent

Cilincing-Jakarta-Bekasi

22,4 km

54 min

Cilincing - Depok-Bogor

71,7 km

1 hour 17
min

Cost of rent the


truck (Rp)

800.000
950.000

28

Table 1.7. Distribution Cost of Truck due to the Distance (Contd)

Region

Distribution pathway

Distance

Cilincing Tangerang-

111 km

Serang
Region 2

Cilincing - Bandung

152 km

Region 3

Cilincing - Semarang

477 km

Region 4

Region 5

Bandung YogyakartaSolo
Semarang Surabaya-

402 km

311 km

Sidoarjo

Time Spent

2 hour 5
min
3 hour 30
min
9 hour 15
min
9 hour 42
min
6 hour 31
min

Total

Cost of rent the


truck (Rp)

1.200.000

1.850.000

3.400.000

2.500.000

1.800.000
12.300.000

1.3. Inventory
1.3.1. Inventory Raw Material
Inventory of raw material is the thing that to be considered. Inventory will
be used to maintain supply of raw material so the production of product can
running smooth. Here is three types of inventory:
a.

Cycle Inventory
Cycle inventory is a number of raw materials supplies needed to fulfill the

demand between the purchase of the product. The inventory cycle is same as
regular production capacity of our plant which is 20 unit per day.
b.

Safety Inventory
Safety inventory is an inventory that is generally stored as a buffer to

support uncertain demand. For the safety inventory, raw materials for our plant
ordered to exceed 10% for the first time. If the supply of raw materials are
delayed, raw material still exist about 10% of raw materials that can be used until
the supply of raw materials arrived
c.

Seasonal Inventory

29

Seasonal inventory is an inventory will be used to anticipate increase of


demand at specific time. The increasing demand of our product may happen when
the hot season because relative humidity in the room will be increase.
Table 1.8 shows the amount of raw material that is exist as the safety
inventory of our factory. For the first day, raw materials for our plant ordered to
exceed 10% of regular order.

30

Raw Material

Table 1.8. Raw Material Inventory for 60 Days


Days

Unit

12

15

18

21

24

27

30

Rotor Cassette

935

895

835

765

705

645

585

525

465

405

345

Piece

Solar Photovoltaic

935

895

835

765

705

645

585

525

465

405

345

Piece

Solar Panel Battery

330

290

230

170

110

350

290

230

170

110

350

Piece

Aluminum Plate

85

75

60

45

30

90

75

60

45

30

90

Sheet

Cast Iron

1485

1305

1035

765

495

1575

1305

1035

765

495

1575

Piece

Flange

330

290

230

170

110

350

290

230

170

110

350

Piece

Screw and Nuts

3960

3480

2760

2040

1320

4200

3480

2760

2040

1320

4200

Piece

Fan

660

580

460

340

220

700

580

460

340

220

700

Piece

Motor Fan

330

290

230

170

110

350

290

230

170

110

350

Piece

Humidistat

330

290

230

170

110

350

290

230

170

110

350

Piece

Heater

330

290

230

170

110

350

290

230

170

110

350

Piece

Termocouple

330

290

230

170

110

350

290

230

170

110

350

Piece

Hose

660

580

460

340

220

700

580

460

340

220

700

Piece

Filter

660

580

460

340

220

700

580

460

340

220

700

Piece

Fiberglass Insulation

330

290

230

170

110

350

290

230

170

110

350

Sheet

Power Button

330

290

230

170

110

350

290

230

170

110

350

Piece

Indicator Lamp

330

290

230

170

110

350

290

230

170

110

350

Piece

Styrofoam

2640

2480

2240

2000

1760

1520

1280

1040

800

560

2720

Piece

Corrugated Carton Box

660

620

560

500

440

380

320

260

200

140

680

Piece

31

Raw Material

Table 1.83. Raw Material Inventory for 60 Days (Contd)


Days

Unit

33

36

39

42

45

48

51

54

57

60

Rotor Cassette

285

225

165

105

895

835

775

715

655

595

Piece

Solar Photovoltaic

285

225

165

105

895

835

775

715

655

595

Piece

Solar Panel Battery

290

230

170

110

350

290

230

170

110

350

Piece

Aluminum Plate

75

60

45

30

90

75

60

45

30

90

Sheet

Cast Iron

1305

1035

765

495

1575

1305

1035

765

495

1575

Piece

Flange

290

230

170

110

350

290

230

170

110

350

Piece

Screw and Nuts

3480

2760

2040

1320

4200

3480

2760

2040

1320

4200

Piece

Fan

580

460

340

220

700

580

460

340

220

700

Piece

Motor Fan

290

230

170

110

350

290

230

170

110

350

Piece

Humidistat

290

230

170

110

350

290

230

170

110

350

Piece

Heater

290

230

170

110

350

290

230

170

110

350

Piece

Termocouple

290

230

170

110

350

290

230

170

110

350

Piece

Hose

580

460

340

220

700

580

460

340

220

700

Piece

Filter

580

460

340

220

700

580

460

340

220

700

Piece

Fiberglass Insulation

290

230

170

110

350

290

230

170

110

350

Sheet

Power Button

290

230

170

110

350

290

230

170

110

350

Piece

Indicator Lamp

290

230

170

110

350

290

230

170

110

350

Piece

Styrofoam

2480

2240

2000

1760

1520

1280

1040

800

560

2720

Piece

Corrugated Carton Box

620

560

500

440

380

320

260

200

140

680

Piece

32

4500
Rotor Cassete
4000

Solar Panel Battery


Motor Fan

3500

Hose
Aluminum Plate

3000

Solar Photovoltaic
Cast Iron

2500
Days

Flange
Screw and Nuts

2000

Fan
Humidistat

1500

Heater
Termocouple

1000

Filter
Fiberglass Insulation

500

Power Button
Indicator Lamp

10

20

30

40

50

Amount of Raw Material


Figure 1.10. Graphic of Inventory of Raw Material in Plant

60

70

Styrofoam

33

Figure 1.10 describes about raw material inventory of our plant. Rotor
cassete and solar photovoltaic have a same graphic. We import these materials
from China in one month. Number of order for these materials more than the
regular production product. We do it because the delivery time of this materials
are 15 days. For main local raw material, ordering is done in a half month to
prevent excessive stocks that may cause damage of raw material. For packaging
raw material, such as corrugated carton box and Styrofoam, we order in a one
month because the price of packaging materials more cheap if the amount order is
much.
1.3.2. Inventory Product
Inventory which is part of the supply chain should have to be regulated so
the production runs optimally. Inventory is used to anticipate the needs of the real
condition (demand) in market that is fluctuation. It is known form previous
assignment, the demand of our products is very fluctuate which could cause a
problem for our production process. If demand decreases, we must keep
production by storing the products in the storage facilities to meet a demand that
maybe suddenly increase sometime. However, if demand increases, we cannot
increase production capacity spontaneously. Therefore, we need to store the
product for about 10% of the production capacity in one month (540 unit
dehumidifier) of our plant to cover the increased demand.
For inventory, we take 10% of production every month. We save 60 unit
product of dehumidifier for inventory in our plant. So, the products that we
deliver to wholesalers are around 540 pieces per month. The goal of increased
production in the first year was to cover the increase in demand that may occur
suddenly. In other words, the production rate is about 600 units /month and the
storage is 60units/month, while the rest will be sold. We provide a central
repository near the plant as a temporary storage facility before the product is
distributed to wholesalers and retailers spread over region 1, 2, 3, 4 and 5.
Moreover, additional production can also be used as inventory when the
supplier cannot provide the raw material at the specified time so it will not make
the production process inhibited. It explains that our inventory type is safety

34

inventory. Safety inventory method is used as a buffer for uncertain product


demand or unexpected events that could lead to the distribution of products are
hampered. This fluctuation is used for checking the safe inventory of our product.
This Table 1.9.

shows that the amount of our product fluctuation in the

warehouse and each regions.

Table 1.9. Storage Planning

Region

Region

Region

Region

Region

20

40

60

80

100

120

140

160

180

10

200

11

220

12

240

13

260

14

280

15

300

16

320

17

340

18

360

19

380

20

400

21

420

22

440

Day

Products in Plant Storage

35

23

460

Table 1.9. Storage Planning (Contd)

Region

Region

Region

Region

Region

480

25

500

26

520

27

540

28

560

29

580

30

600

80

270

80

100

54

68

68

Day

Products in Plant Storage

24

Information:
Stock remaining
Time of Arrival at every Regions

After the table that we made above, we can make the graph which shows the
fluctuation of our plant storage in 6 months.

36

900
800

Unit of Dehumidifier

700
600
500
400
300
200
100
0
0

20

40

60

80

100

120

140

160

Time (days)
Figure 1.11. Fluctuation of Our Plant Storage

From the Figure 1.11 we can infer that in the beginning of the production
time, it will rise to the highest point of production. After reaches it is highest
point, products will gradually decrease to make a stable fluctuations for a set
period of time. This is because the distribution to each region as shown in the
Table 1.9. It is set that their amount will be enough for the distribution of products
to the wholesaler in each region. So this graph will show clearly about the
distribution. Figure 1.11 . also indicates the number of 60 inventory units every
month. For every month, the inventory of our products that are in storage facility
is about 60 units. As have been explained earlier that the purpose of this inventory
is to anticipate an increase in demand and constraints in the supply of raw
materials so that the product can meet the market without constraint. Table 1.10.
is shown the inventory of our dehumidifier product in plant storage

Table 1.10. Total Stock for 6 Months

Number of Month

Total Stock (End of the month)

60

120

180

37

240

300

360

38

CHAPTER 2
MARKETING

2.1. Market Segmentation


Market segmentation is the grouping people into a segment that have
potential to buy our product. The defined segment comes from our analysis of the
product and fit into the needs, behavior and purchasing power of group of people.
Market segmentation divides the market based on geographic, demographic,
psychographic, and behavior.
a.

Geography Segmentation
Based on geography segmentation, the market is divided by location of
people living. We projected to sell the product in Java. The reason of this
decision is the number of people who afford buying the product economically
in Java counted high. Viewed from the needs, people in Java Island are living
in humid condition indeed (around 70-85 %). The ease of distribution is also
a consideration for the geography segmentation.

b.

Demographic Segmentation
In the demographic segmentation, we define our market based on age, gender,
income level, occupation, education level, religion, and race or ethnicity. The
targets of our product are families, single living men, single living women
and intended for people with middle upper economic class. After considering
many factors said above, then we did not find any specific target based on
religion, ethnicity and gender. We found the specific segment by age and
income level and occupation. Level of education is quite impactful. People
with higher education level concerns on their health that they will buy our
product. People with higher education level also pay attention to the solar
power used. They know it is very beneficial for energy security, earth
sustainability, electricity bill saving, and utilization of resources.

c.

Psychographic and Behavior Segmentation


Psychographic segmentation is based on social class characteristics, lifestyle,
and personality. In terms of functional, our products are targeted family or
single living people with economic class around middle upper level. If we

39

refer to the psychographic segmentation, it is not much affecting our market


segmentation. The same condition goes to behavior segmentation that does
not much affecting the overall segmentation that we predict above. Behavior
segmentation itself is talking about level of knowledge, attitudes, people
reaction to the product.
2.2. Market Mix
To make our product bought by the customers, we need strategy. The strategy
must fit the characteristic of the consumers and gain strong position in the market.
Based on one of the most prominent method to organize a strategy of marketing,
marketing mix, we must take care of four important aspects and define those
aspects very clearly. Marketing mix is also known as the 4Ps, which consists of
products (goods or services), price, place (distribution) and promotion.

Product
Hi Dry Air is an electric dehumidifier which utilizes solar energy to power
the device to decrease the humidity of air. The decreasing of air humidity is
aimed to produce a more quality air. Its electricity source from solar has made
it special and reduce burden of electricity bill in the house. The device has
ability to absorb water vapor until humidity lowered to normal condition
which is safe to human health.

Price
We set the price of our product to Rp7.250.000,00 per unit. The estimation of
the price has included affordability of targeted consumers and comparation
with competitors.

Place
The distribution of our product will be flowed through wholesalers,
contractor and sales engineers to potential consumers such as offices, hotel,
mall and another type of buildings.

Promotion.
Promotion has its communication tools which should be integrated together
with the same consistent message. The strategy we arrange for promotion is
divided into two categories, which are below the line and above the line.

40

Promotion below the line means the activity is off-air and it is conducted on
air for above the line promotion. Our communication plan is to promote the
product through brochures, visiting wholesaler, buildings and offices,
conducting grand launching and exhibition in mall, shopping center and
special events. For above the line strategy, we are going to have
advertisement on TV, website, social media, and printed media.
(a) Advertisement
Our product will be advertised through printed media, online media,
social media, and TV. For the printed media, we targeted to advertise on
prominent newspaper in Indonesia like Kompas and Seputar Indonesia. We
also plan to advertise on some prominent online mass media like detik.com
and goggle ad sense.
For the social media, we are going to introduce our product through a
LINE account, Instagram account, and Facebook account. Other than that we
projected to advertise on TV as we know the consumer of television program
in Indonesia is quite high and it will become really potential way of
communication through the prime time. Moreover, we could also advertise
effectively through billboard.
(b) Brand Ambassador
In order to create a strong image on the market, we need to drive
consumers opinion by giving them a suitable role model that used our
product and felt the positive effect of our product. The testimony of the brand
ambassador will be shown through advertisement we broadcast to strengthen
our image.
(c) Website
Nowadays, website is very essential to sustainability of information
distributed by a company to its mass consumers. Website becomes a place
where people get to know a institution or a company holistically and really
close. We know too that access of people to internet is really easy even in the
childhood age. Our website will contain information about the company, its
profile, its goal, cooperation with the company that could be build and so on.
Related to the product, we can give information about the benefits of product,

41

guide of usage, location of sale, technology used in the product and so on. We
certainly have to put a contact that could serve any customers or potential
consumers any time.
(d) Brochure
In very fast pace life we face today, consumers do not always have time
to access to many promotion site we explain above, then we need to spread
awareness through a direct summarized information packaged in a brochure
to consumers. We could put the brochures in the shopping mall where people
are intending to buy a product that will be used in their home. The brochure
has to be interesting by quality color and simple but elegant design.
(e) Visiting Program
Visiting program is one of our way to make our product close to people.
We come to the consumers, speak with them and introduce our product, give
a chance to try our product until people have many knowledge about strength
and weakness and they can have a trial on our product. We could also go to
some crowd center to give demonstration to people about using the device
and give all relevant information to the public.
(f) Visiting wholesaler
Wholesaler is one of very important stakeholder in our marketing and
distribution strategy. Supplying our product to wholesaler enables them to
know our new launched product and to buy our product to be distributed to
the next shop. This job is handled by Sales Engineer with brochure and other
supplies needed. Our first visit will be very important and have to be
impressive to build trust with the wholesaler. After building a cooperation
with them, we are going to maintain the relation by checking the wholesaler
regularly as the same thing we have to do with our consumers.
(g) Grand Launching and Sustainability Campaign.
For the very first launching to the public, we are planning a big events
which is the information spread over the island to touch consumer with
information of our dehumidifier. Along with grand launching of our product,
we also conduct a campaign of keeping the earth and energy sustainable by
using alternative energy. It will be very suitable since we offered a solar

42

powered product. In this grand launching, we also guide the people about all
details that needed to know by consumers.

43

CHAPTER 3
PRODUCT COSTING

3.1. Total Capital Investment


The initial investment cost is known as Total Capital Investment (TCI). Total
Capital Investment (TCI) of a chemical plant includes purchase of the land, building,
offsite, supporting facilities, utilities installation, market research, licensing, and
contractors fee. There are two type of cost to calculate Total Capital Investment, Fixed
Capital Cost (FC) and Working Capital Cost (FW). Fixed Capital Cost (FC) is the cost
needed for manufacturing the plant. On the other hand, Working Capital Cost (FW) is
cost needed for operating the plant before the company gets an income. TCI calculation
determines the feasibility of development of a plant and to identify whether it will give
a sufficient positive marginal value. The equation to calculate Total Capital Investment
is shown below.
(

Fc = Fixed Capital Cost


Fw = Working Capital (Before Getting Income)
We made some assumptions and consideration for determining the TCI. There are:
-

The factory will be built by the end of August 2015.

The building process will be conducted through 1 year and will start to operate
in September 2016.

Depreciation will be conducted using declining method.

3.1.1. Fixed Capital Investment


Fixed Capital Invesment is the cost needed for manufacturing the plant. Fixed
Capital is divided into two types of cost, there are direct cost and indirect cost.
3.1.1.1. Direct Cost
Direct cost is the cost that directly involved with the production process. Things
that were categorized as direct costs are purchased equipment, purchased-equipment

44

installation, instrumentation and control, piping, valves and insulation, electrical


equipment, buildings, yard improvements, service facility, and land.
a. Equipment Cost
Equipment cost is cost needed to buy main equipment for the manufacturing
process of the product. For this product, we will use Guthrie method to calculate the
equipment cost. By using Guthrie methode, we can estimate the labor for erection and
setting equipment.
Before we use Guthrie method, we should estimate the price of equipment in the
time we buy it because we will buy the equipment in 2016.The estimation is conducted
by using Marshall and Swift Chemical Equipment Index. We only have the index data
until 2013, so we must extrapolate it first to obtain the index data for 2016. Marshall
and Swift Chemical Equipment Index data and its results from extrapolation is shown in
Table 3.1.
Table 3.1. Marshall and Swift Chemical Equipment Index

Year

Cost Index

2003

1.123,60

2004

1.178,50

2005

1.244,50

2006

1.302,30

2007

1.373,30

2008

1.449,30

2009

1.468,60

2010

1.457,40

2011

1.565,64

2012

1.618,88

2013

1.672,12

2014

1.725,16

2015

1.778,55

Forecasting
2016

1.831,94

2017

1.885,33

(Source: Preliminary Chemical Engineering Plant Design, 2014)

45

After we know the index data, we can calculate the estimated price for equipment. The
price is calculated by using the equation below.

Equipment cost in 2015 and results from this calculation are shown in Table 3.2.

Table 3.2. Total Equipment Cost in 2016


(in Thousand)

Price per
piece in 2015
(Rp)
2.000

Price per
piece in 2016
(Rp)
2.060

4.120

200

206

1.030

123,6
82
154
123.602
4.120

370
164
154
247.204
8.240
261.284

Equipment

Qty

Electric Welding
Electrical
Screwdriver
Drilling Machine
hygrometer
sound level meter
cutting machine
strapler

3
2
1
2
2

Supplier

120
80
150
120.000
4.000
TOTAL

Price (Rp)

The price in 2016 is used to calculate all total bare module cost which will be the
real equipment cost for Total Capital Investment calculation. The total bare module cost
is cost for installation and other requirements until we can use the equipment for
manufacturing the product. The costs for installation of the equipments until they are
able to work are estimated by Bare-module Factor (FBM) shown in Table 3.3. The bare
module factor that we use for our equipments are 1 because the it do not need cost for
settings or installments. The Bare Module Cost is calculated by using the equation
below. The results of Total Bare Module Cost calculation is shown in Table 3.4.

46

Figure 3.1. Bare-module Factor


(Source: Chemical Engineering Handbook 8th Edition (Perry, 2006))

Table 3.3. Total Bare Module Cost calculation

Equipment
Welding Machine
Electrical
Screwdriver
Drilling Machine
Hygrometer
Sound Level Meter
Cutting Machine
Strapler

Price per
piece in
2015 (Rp)
2.000.000

Price per
piece in
2016 (Rp)
2.060.038

200.000
120.000
80.000
150.000
120.000.000
4.000.000
TOTAL

206.004
123.602
82.402
154.503
123.602.260
4.120.075

Quantity
(unit)
2
5
3
2
1
2
2

FBM

BM Cost

4.120.075

1
1
1
1
1
1

1.030.019
370.807
164.803
154.503
247.204.521
8.240.151
261.284.878

b. Building Cost
The type of our factory is grass root plant, which means we build the entire
factory in an empty land with total area of the plant is 1900 m2. Building cost is cost
needed to make the office and plant building, foundation of the buildings, roads, and
paving. The costs data are obtained in rupiahs per m2. Price per m2 for plant building is
cheaper than office building because the plant is more simple than the office building.

47

The calculation of building cost is shown in Table 3.4. The prices data is obtained from
CV. Berkah Abadi, Hery Asphalt Hotmix, and Indonusa Conblock.

Table 3.4. Building Cost Calculation

Description
Plant building
Office
building
Road
Conblock
Foundation

Price
(Rp per m2)
2.500.000

Area
Total Price
(m2)
(Rp)
768 1.920.000.000

3.000.000
304
912.000.000
75.000
422
31.650.000
75.000
406
30.450.000
15% building cost
424.800.000
TOTAL
3.318.900.000

c. Supporting Facilities Cost


Supporting facilities investment cost is cost for providing equipment in office
and other area outside the battery limit. Battery limit is area that used for manufacturing
process of the product. There will be many people work in office so we need
equipments to provide their work. The calculation of supporting facilities cost is shown
in Table 3.5.

Table 3.5. Supporting Facilities Cost

Equipment

Quantity

Price per Unit

Total Price

Sofa

4.125.000

8.250.000

Computer

15

4.250.000

63.750.000

Receptionist Desk

2.485.000

2.485.000

Split Air Conditioner

17.400.000

34.800.000

Dispenser

100.000

200.000

Fax Machine

1.300.000

2.600.000

Office Desks

10

600.000

6.000.000

Office Chairs

10

780.000

7.800.000

Genset

216.000.000

216.000.000

Locker (2 pintu)

1.150.000

4.600.000

Director Desk and Chair

10.400.000

10.400.000

48

Table 3.5. Supporting Facilities Cost (Contd)

Equipment

Quantity

Price per Unit

Total Price

Meeting Desk and Chairs

8.700.000

8.700.000

Cupboards

770.000

3.850.000

Photocopy Machine, Scanner and Printer

25.000.000

25.000.000

White Board

400.000

400.000

Office Car

180.000.000

180.000.000

Projector and screen

4.880.000

4.880.000

CCTV

15

1.250.000

18.750.000

Janitor Set

5.000.000

5.000.000

Toilet Set

2.430.000

9.720.000

Trashbin (10 Liter)

10

35.000

350.000

Absence machine

2.150.000

4.300.000

Pantry Set

3.000.000

3.000.000

Telephone

22

285.000

6.270.000

Lamp

66

20.000

1.320.000

Wastafel

800.000

3.200.000

Spigot

7.000

42.000

Safety Google

50.000

400.000

Safety Glove

5.000

40.000

493.372.000

632.107.000

TOTAL

d. Utilities Installation Cost


Utilities installation cost is cost to provide utilities for plant and office. Utilities
needed for plant is electricity while utilities for office include water, telephone, internet,
and hydrants. The details about utilities installation cost is shown in Table 3.6.

Table 3.6. Utilities Installation Cost

Installation
Water Installation
Telephone Installation
Electricity Installation
Internet Installation

Price (Rp)
1.166.500
175.000
63.937.500
75.000

49

Table 3.6. Utilities Installation Cost (Contd)

Installation
Hydrants Installation
TOTAL

Price (Rp)
78.235.000
143.589.000

e. Market Research Cost


Market research is activity that directly connected with the potential costumers
for determining the specifications of our product and also the capacity. This analysis is
very important to improve product innovation and markets need. This cost is not only
for doing a survey, but also consulting with consultant company. Results from the
research will be used to design marketing strategy. The calculation of market research
cost shown in Table 3.7.

Table 3.7. Market Research Cost

Activities
Survey
Consultant Service
TOTAL

Price
5.000.000
20.000.000
25.000.000

f. Patent and Brand Cost


Licensing is important because we need to protect our product. Patent is one
way to protect our products from being coppied by other company. A patent is an
exclusive right that is given by a state to an inventor for his invention in the field of
technology. For a given period, we can implement our own invention or other parties
can implement it too.
Our goal for the patent of our product is to get an exclusive right for the product
that we have designed. These exclusive rights are rights that are given only to the patent
holder for a certain period of time to use own patent and prohibit others to use it without
the consent of the patent holder. To obtain a patent, there are some procedures that we
have to do in accordance with law No.14 of 2001 about Patent (UUP). Based on the
rules, the given patent in Indonesia is considered to be the novelty, inventive step and
capable in industrial application. The calculation of patent cost is shown in Table 3.8.

50

Table 3.8. Patent Cost

Non-Tax Revenue

Unit

Cost (Rp)

Qty

Patent Request
Claim Cost
Request for Priority Right Letter
Patent Research Costs
(a) Local
(b) Global
TOTAL

per request
per claim
per request

750.000
50.000
250.000

1
1
1

per subject
per subject

250.000
1.200.000

1
1

Total Price
(Rp)
750.000
50.000
250.000
250.000
1.200.000
2.500.000

In Indonesia, the brand is protected by UU No. 15 year 2001. Brand protection is


valid for ten years and can be retroactive from the date of receipt brand, and can be
extended as long as the brand continued to be used in trade. Table 3.10 is describing the
detail of brand cost for Hi Dry Air Dehumidifier based on law that is used in Indonesia:

Table 3.9. Brand Cost

Non-Tax Revenue

Unit

Brand request
per request
Recording of a license
agreement
per item
The cost of a copy of evidence
priority trademark application
per request
TOTAL

Cost (Rp)

Qty

Total Price (Rp)

1.000.000

1.000.000

500.000

500.000

300.000

300.000
1.800.000

3.1.1.2. Indirect Cost


Indirect cost is the cost that is not directly involved with the production process.
Things that were categorized as indirect costs are engineering and supervision cost,
construction expenses, contractors fees, and contingency. Our products indirect cost is
for (bayar) the contractors fee. We assume that the contractors fee is 3% of building
cost. The calculation is done as shown in equation below.

Until this step, we can calculate the total fixed capital investment as shown in Table
3.10 below.

51

Table 3.60. Total Fixed Capital Investment

Type

Description
TBM

261.284.878

Building Cost

Direct

Cost (Rp)

3.318.900.000

Support Facility Cost

632.107.000

Utility Cost

143.589.000

Market Research Cost

25.000.000

Patent Request

2.500.000

Band Request

1.800.000

Indirect Contractor fee

99.567.000

TOTAL

4.484.747.878

3.1.2. Working Capital Investment


Working capital investment is cost needed to starts the production. It includes all
costs needed for production process until it gets income. The working capital for a
chemical plant consists of the total amount of money invested in raw materials and
supplies carried in stock, accounts receivable, cash kept on hand for monthly payment
of operating expenses, such as salaries, and payable taxes. To make the calculation
easier, we assume that the working capital investment is 17.6% of fixed capital
investment.

Until this point, we can calculate the Total Capital Investment (TCI) of the
product. The calculation is done as follows.
(

3.2. Operational Cost


Operational costs are the costs associated with the running the operation of tools,
components, or facilities used in the manufacture of the product. Operational costs are
usually paid annually. Operational fee is divided into two categories consist of the cost
of manufacturing and general expenses.

52

3.2.1. Manufacturing Cost


3.2.1.1. Direct Production Cost
3.2.1.1.1.

Raw Material Cost

Raw material cost is the cost to buy the raw materials needed to make Hi Dry Air
Dehumidifier. Calculation of raw materials has been associated with raw material
supply chain, so it can be determined the amount of raw material to be purchased every
order. The calculation of this raw material also includes the cost of packaging of our
products. For first order, we bought 10% more than usual purchases. Excess raw
material is used for the safety stock in inventory. For the next purchase, we order raw
material with a normal amount. The calculation of raw material cost is shown in Table
3.11

53

Table 3.71. Raw Materials Details

Raw Materials

Interval of
Order (Day)

Delivery

Selling

Number

Time (Day) Packaging of Order

Unit

Number of Initial Order


(Safety Inventory)

Unit

Solar Cell

30

15

100

850

pcs

935

pcs

Rotor Cassette

30

15

100

850

pcs

935

pcs

Aluminum Plate

15

25

75

sheet

82.5

sheet

Cast Iron

15

25

1350

pcs

1485

pcs

Fan

15

20

600

pcs

660

pcs

Motor

15

20

300

pcs

330

pcs

Humidistat

15

50

300

pcs

330

pcs

Styrofoam

30

200

2400

pcs

2640

pcs

Corrugated Carton Box

30

200

600

pcs

660

pcs

Filter

15

10

600

pcs

660

pcs

Heater

15

50

300

pcs

330

pcs

Power Button

15

25

300

pcs

330

pcs

Hose

15

100

600

pcs

660

pcs

Thermocouple

15

50

300

pcs

330

pcs

Indicator Lamp

15

25

300

pcs

330

pcs

Solar Panel Battery

15

100

300

pcs

330

pcs

54

Table 3.81. Raw Materials Details (Contd)

Interval of

Raw Materials

Order (Day)

Flange
Fiberglass Duct Board
Insulation
Screw and Nuts

Delivery

Selling

Number

Time (Day) Packaging of Order

Unit

Number of Initial Order


(Safety Inventory)

Unit

15

25

300

pcs

330

pcs

15

25

300

sheet

330

sheet

15

15

3600

pcs

3960

pcs

Table 3.12. Raw Material Cost


(in Thousand)

Raw

Total

Unit

Price/Unit

Cost/Purchased

Raw Material

Safety Inventory

First Purchase

First Purchase

Materials

Purchased

Sale

Sale (Rp)

(Rp)

Cost/year (Rp)

(First Purchase)

Cost (Rp)

Cost/year (Rp)

850

100

2,000

1,700,000

18,700,000

935

1,870,000

20,570,000

850

100

1,300

1,105,000

12,155,000

935

1,215,500

13,370,500

75

25

350

26,250

577,500

82.5

28,875

635,250

Cast Iron

1350

25

8.64

11,664

256,608

1485

12,830.4

282,268.8

Fan

600

20

35

21,000

462,000

660

23,100

508,200

Motor

300

20

60

18,000

396,000

330

19,800

435,600

Humidistat

300

50

60

18,000

396,000

330

19,800

435,600

Solar Cell
Rotor
Cassette
Aluminum
Plate

55

Table 3.92. Raw Material Cost (Contd)


(in Thousand)

Raw

Total

Unit

Price/Unit

Cost/Purchased

Raw Material

Safety Inventory

First Purchase

First Purchase

Materials

Purchased

Sale

Sale (Rp)

(Rp)

Cost/year (Rp)

(First Purchase)

Cost (Rp)

Cost/year (Rp)

2400

200

15

36,000

396,000

2640

39,600

435,600

600

200

11.55

6,930

76,230

660

7,623

83,853

Filter

600

10

60

36,000

792,000

660

39,600

871,200

Heater

300

50

100

30,000

660,000

330

33,000

726,000

Power Button

300

25

12

3,600

79,200

330

3,960

87,120

Hose

600

100

15.360

9,216

202,752

660

10,137.6

223,027.2

Thermocouple

300

50

10

3,000

66,000

3630

36,300

798,600

300

25

9.600

2,880

63,360

330

3,168

69,696

300

50

120

36,000

792,000

330

39,600

871,200

300

25

50

15,000

330,000

330

16,500

363,000

300

25

18

5,400

118,800

330

5,940

130,680

Styrofoam
Corrugated
Carton Box

Indicator
Lamp
Solar Panel
Battery
Flange
Fiberglass
Duct Board
Insulation

56

Table 3.12. Raw Material Cost (Contd)


(in Thousand)

Raw

Total

Unit

Price/Unit

Cost/Purchased

Raw Material

Safety Inventory

First Purchase

First Purchase

Materials

Purchased

Sale

Sale (Rp)

(Rp)

Cost/year (Rp)

(First Purchase)

Cost (Rp)

Cost/year (Rp)

3600

25

1.100

3,960

87,120

3960

4,356

95,832

Screw and
Nuts

Total Cost

36,606,570

40,993,227

Based on table 3.12, the raw material cost to produce Hi Dry Air is Rp36,606,570,000.00 every year but for the first raw material purchase
is Rp40,993,227,000.

57

Comment [NR2]:

3.2.1.1.2.

Utilities

Utilities cost is cost incurred for production purposes such as water,


electricity, steam, and compressed air. Utilities that we use in our plant are
electricity and water.
a.

Electricity
To calculate the cost of electricity used each year, we need to know the

power of electronic equipment used in the factory and the electrical cost in
Indonesia. Based on data from Perusahaan Listrik Negara, the electrical cost for
small-scale industry with 3500 Watt to 14000 Watt power limit is Rp1,112. So
based on this data, the calculation of the cost of the electricity required is shown
in Table 3.13and Table 3.14.

Table 3.103. Process Equipment Electricity Price


(in thousand)

Power

Time

Total Power

Total Power

Total

(kWh)

(hour)

per Day (kWh)

per Year

Cost

3.52

1.5

10.56

3484.8

3,875.097

0.5

10

3300

3,669.6

Drilling Machine

0.6

7.2

2376

2,642.1

Hygrometer

0.016

0.032

10.56

11.742

0.032

0.032

10.56

1.742

1.5

2970

3,302.64

36.824

12151.92

13,512.9

Equipment
Electric Welding
Electrical
Screwdriver

Sound Level
Meter
Cutting Machine

Qty

Total

58

Table 3.114. Supporting Equipment Electricity Price


(in million)

Equipment

Qty

Power

Time Total Power per Total Power

Total

(kWh)

(h)

Day (kWh)

per Year

Cost

Computers

15

9.5

142.5

47025

52.292

Facsimiles Machine

0.018

24

0.864

315.36

0.351

0.5

95

47.5

15675

17.43

0.5

9.5

9.5

3135

3.486

16

0.036

13

7.488

2733.12

3.039

Neon Lamps

50

0.036

9.5

17.1

5643

6.275

Air Conditioner

0.8

9.5

68.4

22572

25.100

Projector

0.18

0.5

0.09

29.7

33.026

296.466

98231.94

109.233

Photocopy, scanner,
and printer machine
Dispenser
Neon
Lamps(Outdoor)

Total

So, the electricity cost needed to run the plant Hi Dry Water is Rp122,746,852.32
per year.
b.

Water
Water is one of the components that should be available in our factory.

Water in our factory are not used for the Hi Dry Air production process, but to
meet the basic needs of the workers. Therefore, we need to calculate the water as
part of the utility. If we assume that every worker needs water at 50 liters per day,
so the number of workers in charge each day we multiply by 50. By Koran Tempo
article 2015 water tariff in Jakarta is at Rp7,200. Here is the calculation.
Table 3.15. Water Cost

Total Labors

17

Needs (L/d)

850

Needs (m3/d)

0.85

Cost per m3 (Rp)

7,200.00

Cost per Day (Rp)

6,120.00

Cost per Year (Rp)

2,019,600.00

59

Based on the calculation above, the costs for clean water each year is
Rp2,019,600. Therefore, based on water and electricity cost, it can be concluded
that in order to run the plant required Hi Dry Water utility costs Rp
124,766,452.32 per year.
3.2.1.1.3.

Direct Labor Salary

In determining the salary of labors, it must be known in advance the number


of workers who will be working in our factory. It can be seen from the hours of
operation and number of shifts from our factory. Our factory operates from 08.00
to 17.30, which means that our factory operates for 9 hours and 30 minutes
including one hour break. Our factory implements shift where there are 2 shifts.
Shift we divide the working time from Monday-Thursday and Thursday-Sunday.
Workers in our factory is divided into two types, namely direct labor and indirect
labor. At this section we will discuss direct labor, while indirect labor cost will be
discussed in next section.
Direct labor is a person who directly involved in production process from
raw materials into finished products. Total direct labors in Hi Dry Air factories are
34 workers. The wages of these labors is adapted from government policy.
Government implements certain amount of minimum wage for each different area.
Because of our factory operates in Jakarta, according to data from the Ministry of
Labor in 2015 the minimum labor wage is Rp2,700,000 with an increase of 10.6%
from the previous year. It is assumed that the same increase, the minimum wage
in 2016 (the year the operation of the factory) amounted to Rp2,986,200. In the
determination of salary every year, we calculate there are 13 months in a year,
where such costs are included allowances. The amount of the minimum wage we
make reference in determining the salaries of our labors following is a list of
direct labor payroll at our factory.

60

Table 3.16. Direct Labor Salary

Workers

Salary per Month per

Total Gross Salary

(Person)

Person (Rp)

(Rp)

3,100,000

24,800,000

16

3,500,000

56,000,000

3,200,000

19,200,000

Packaging Labor

3,000,000

12,000,000

TOTAL

34

Annual Salary

112,000,000

Direct Labor
Case and frame Maker
Product Assembly
Labor
Product Testing
Controller

Annual Salary (13 Months' Salary)

1,638,000,000

The number of workers above is a combination of two existing shifts, which


means that in one shift there are 17 workers. The direct cost needed annually is
Rp1,638,000,000.
3.2.1.1.4.

Maintenance Cost

Maintenance costs are costs incurred for wages or salaries of technicians


and spare parts costs of the equipment used. Maintenance costs are 10% of Bare
module cost, so the calculation is as follows.

Table 3.17. Maintenance Cost

Maintenance
Main equipment
Total Maintenance Cost

Cost per Year


216,284,878.00
21,628,487.80

So, maintenance costs to be incurred each year is Rp21,628,487.80.


3.2.1.1.5.

Patent and Brand

There are costs that must be paid every year to take care of patents that have
been registered previously. based on data from the Direktorat Jenderal Hak
Kekayaan Intelektual Kementerian Hukum dan HAM Indonesia, details of costs to
be incurred general industry annually with an estimated our factory operated for
10 years is as follows.

61

Table 3.18. Patent and Brand

Year
1

10

Non Tax Revenue

Unit

Cost

Qty

Total

Basic Cost

Per patent

700,000.00

700,000.00

Cost per Claim

Per claim

50,000.00

50,000.00

Basic Cost

Per patent

700,000.00

700,000.00

Cost per Claim

Per claim

50,000.00

50,000.00

Basic Cost

Per patent

700,000.00

700,000.00

Cost per Claim

Per claim

50,000.00

50,000.00

Basic Cost

Per patent

1,000,000.00

1,000,000.00

Cost per Claim

Per claim

100,000.00

100,000.00

Basic Cost

Per patent

1,000,000.00

1,000,000.00

Cost per Claim

Per claim

100,000.00

100,000.00

Basic Cost

Per patent

1,500,000.00

1,500,000.00

Cost per Claim

Per claim

150,000.00

150,000.00

Basic Cost

Per patent

2,000,000.00

2,000,000.00

Cost per Claim

Per claim

200,000.00

200,000.00

Basic Cost

Per patent

2,000,000.00

2,000,000.00

Cost per Claim

Per claim

200,000.00

200,000.00

Basic Cost

Per patent

2,500,000.00

2,500,000.00

Cost per Claim

Per claim

250,000.00

250,000.00

Basic Cost

Per patent

3,500,000.00

3,500,000.00

Cost per Claim

Per claim

250,000.00

250,000.00

The total average patent cost per each year is Rp850,000,3.2.1.2. Plant Overhead Cost
The plant overhead costs are costs consist of health and safety protection
and packaging. Our packaging cost has already included in the calculation of cost
of raw material. The cost of health and safety that is needed in our factory is as
follows.

62

Table 3.19. Plant Overhead Cost

Equipment
Hydrant
First Aid
Kit

Total Price

Qty

Price per Unit

Total Price per Unit

10

1,200,000.00

12,000,000.00

12,000,000.00

100,000.00

200,000.00

600,000.00

Estimation per Year

Total

12,600,000.00

For safety equipment such as safety gloves and goggles, we only bought once at
the beginning of operation of the plant where such costs have been incorporated
into capital cost. The calculation above are based on the life of the hydrants per
unit equal to 1 year and first aid kit will be purchased every 4 months. Therefore,
costs incurred for the safety and health protection annually amounted to
Rp12,600,000.
3.2.1.3. Fixed Charge
3.2.1.3.1.

Depreciation

Depreciation is the deduction for exhaustion, wear and tear and normal
absolescence of equipment used in the trade or bussiness (Perry, 2013). Things
that were depreciated are main equipment, supporting equipment, and building.
The method that we use for calculating the depreciation is declining balance
methode. First, we assume the percentage factor. The factors are 11% for main
equipment, 10% for supporting equipment, and 3% for building. Then the
depreciation calculation is done for each thing by using the equation below.
( )

( )

The salvage value is calculated by the equation below.


( )

Table 3.XX shows the calculation of the main equipments depreciation.


Table 3.XX shows the calculation of the supporting equipments depreciation.
Table 3.XX shows the calculation of the buildings depreciation. The total
depreciation is shown in Table 3.20.

63

Equipment

Welder
Machine
Electrical
Screwdriver
Drilling
Machine
Hygrometer
Sound Level
Meter
Cutting
Machine
Stapler
TOTAL

Table 3.120. Depreciation of Main Equipment Value Year 1-5


Year 1
Year 2
Year 3

Initial Value

Salvage

Salvage

Year 4
Salvage

Year 5
Salvage

Salvage

Year-1

Depreciation

4,120,075

453,208

3,666,867

403,355

3,263,511

358,986

2,904,525

319,498

2,585,027

284,353

2,300,674

1,030,019

113,302

916,717

100,839

815,878

89,747

726,131

79,874

646,257

71,088

575,169

370,807

40,789

330,018

36,302

293,716

32,309

261,407

28,755

232,653

25,592

207,061

164,803

18,128

146,675

16,134

130,540

14,359

116,181

12,780

103,401

11,374

92,027

154,503

16,995

137,508

15,126

122,382

13,462

108,920

11,981

96,939

10,663

86,275

247,204,521

27,192,497

220,012,024

24,201,323

195,810,701

21,539,177

174,271,524

19,169,868

155,101,656

17,061,182

138,040,474

8,240,151

906,417

7,333,734

806,711

6,527,024

717,973

5,809,051

638,996

5,170,055

568,706

4,601,349

261,284,879

28,741,337

232,543,542

25,579,790

206,963,753

22,766,013

184,197,740

20,261,751

163,935,988

18,032,959

145,903,030

Value

Depreciation

Value

Depreciation

Value

Depreciation

Value

Depreciation

Value

64

Equipment

Year 6

Initial Value

Table 3.131. Depreciation of Main Equipment Value Year 6-10


Year 7
Year 8
Salvage

Salvage

Year 9

Salvage

Year 10
Salvage

Salvage

Year-5

Depreciation

2,300,674

253,074

2,047,600

225,236

1,822,364

200,460

1,621,904

178,409

1,443,495

158,784

1,284,710

575,169

63,269

511,900

56,309

455,591

50,115

405,476

44,602

360,874

39,696

321,178

207,061

22,777

184,284

20,271

164,013

18,041

145,971

16,057

129,915

14,291

115,624

92,027

10,123

81,904

9,009

72,895

8,018

64,876

7,136

57,740

6,351

51,388

86,275

9,490

76,785

8,446

68,339

7,517

60,821

6,690

54,131

5,954

48,177

138,040,474

15,184,452

122,856,022

13,514,162

109,341,860

12,027,605

97,314,255

10,704,568

86,609,687

9,527,066

77,082,621

Strapler

4,601,349

506,148

4,095,201

450,472

3,644,729

400,920

3,243,809

356,819

2,886,990

317,569

2,569,421

TOTAL

145,903,030

16,049,333

129,853,696

14,283,907

115,569,790

12,712,677

102,857,113

11,314,282

91,542,831

10,069,711

81,473,119

Welder
Machine
Electrical
Screwdriver
Drilling
Machine
Hygrometer

Value

Depreciation

Value

Depreciation

Value

Depreciation

Value

Depreciation

Value

Sound
Level
Meter
Cutting
Machine

65

Equipment

Initial
Value
Year-1

Table 3.142. Depreciation of Supporting Equipment Value Year 1-5


Year 2
Year 3
Salvage
Salvage
Salvage
Depreciation
Depreciation
Value
Value
Value
7,425,000
742,500
6,682,500
668,250
6,014,250

Year 1

Year 4

Year 5

Sofa

8,250,000

825,000

601,425

Salvage
Value
5,412,825

541,283

Salvage
Value
4,871,543

Computer
Receptionist
Desk
Split Air
Conditioner
Dispenser
Fax
Machine
Office
Desks
Office
Chairs
Genset
Locker (2
pintu)
Director
Desk and
Chair
Meeting
Desk and
Chairs
Cupboards
Photocopy
Machine,
Scanner and
Printer
White
Board
Office Car

63,750,000

6,375,000

57,375,000

5,737,500

51,637,500

5,163,750

46,473,750

4,647,375

41,826,375

4,182,638

37,643,738

2,485,000

248,500

2,236,500

223,650

2,012,850

201,285

1,811,565

181,157

1,630,409

163,041

1,467,368

34,800,000

3,480,000

31,320,000

3,132,000

28,188,000

2,818,800

25,369,200

2,536,920

22,832,280

2,283,228

20,549,052

200,000

20,000

180,000

18,000

162,000

16,200

145,800

14,580

131,220

13,122

118,098

2,600,000

260,000

2,340,000

234,000

2,106,000

210,600

1,895,400

189,540

1,705,860

170,586

1,535,274

6,000,000

600,000

5,400,000

540,000

4,860,000

486,000

4,374,000

437,400

3,936,600

393,660

3,542,940

7,800,000

780,000

7,020,000

702,000

6,318,000

631,800

5,686,200

568,620

5,117,580

511,758

4,605,822

216,000,000

21,600,000

194,400,000

19,440,000

174,960,000

17,496,000

157,464,000

15,746,400

141,717,600

14,171,760

127,545,840

4,600,000

460,000

4,140,000

414,000

3,726,000

372,600

3,353,400

335,340

3,018,060

301,806

2,716,254

10,400,000

1,040,000

9,360,000

936,000

8,424,000

842,400

7,581,600

758,160

6,823,440

682,344

6,141,096

8,700,000

870,000

7,830,000

783,000

7,047,000

704,700

6,342,300

634,230

5,708,070

570,807

5,137,263

3,850,000

385,000

3,465,000

346,500

3,118,500

311,850

2,806,650

280,665

2,525,985

252,599

2,273,387

25,000,000

2,500,000

22,500,000

2,250,000

20,250,000

2,025,000

18,225,000

1,822,500

16,402,500

1,640,250

14,762,250

400,000

40,000

360,000

36,000

324,000

32,400

291,600

29,160

262,440

26,244

236,196

180,000,000

18,000,000

162,000,000

16,200,000

145,800,000

14,580,000

131,220,000

13,122,000

118,098,000

11,809,800

106,288,200

Depreciation

Depreciation

Depreciation

66

Table 3.22. Depreciation of Supporting Equipment Value Year 1-5 (Contd)


Year 1
Year 2
Year 3
Salvage
Salvage
Salvage
Depreciation
Depreciation
Depreciation
Value
Value
Value
500,000
4,500,000
450,000
4,050,000
405,000
3,645,000

Year 4

Year 5

Equipment

Initial
Value
Year-1

Janitor Set

5,000,000

364,500

Salvage
Value
3,280,500

328,050

Salvage
Value
2,952,450

Toilet Set
Trashbin
(10 Liter)
Absence
machine
Pantry Set

9,720,000

972,000

8,748,000

874,800

7,873,200

787,320

7,085,880

708,588

6,377,292

637,729

5,739,563

350,000

35,000

315,000

31,500

283,500

28,350

255,150

25,515

229,635

22,964

206,672

4,300,000

430,000

3,870,000

387,000

3,483,000

348,300

3,134,700

313,470

2,821,230

282,123

2,539,107

3,000,000

300,000

2,700,000

270,000

2,430,000

243,000

2,187,000

218,700

1,968,300

196,830

1,771,470

Telephone

6,270,000

627,000

5,643,000

564,300

5,078,700

507,870

4,570,830

457,083

4,113,747

411,375

3,702,372

Lamp

1,320,000

132,000

1,188,000

118,800

1,069,200

106,920

962,280

96,228

866,052

86,605

779,447

Wastafel

3,200,000

320,000

2,880,000

288,000

2,592,000

259,200

2,332,800

233,280

2,099,520

209,952

1,889,568

Spigot
Safety
Google
Safety
Glove
TOTAL

42,000

4,200

37,800

3,780

34,020

3,402

30,618

3,062

27,556

2,756

24,801

400,000

40,000

360,000

36,000

324,000

32,400

291,600

29,160

262,440

26,244

236,196

40,000

4,000

36,000

3,600

32,400

3,240

29,160

2,916

26,244

2,624

23,620

632,107,000

63,210,700

568,896,300

56,889,630

512,006,670

51,200,667

460,806,003

46,080,600

414,725,403

41,472,540

373,252,862

Depreciation

Depreciation

67

Equipment

Year 6

Nilai Awal
Tahun ke-5

Depresiasi

Table 3.215. Depreciation of Supporting Equipment Value Year 6-10


Year 7
Year 8

Salvage
Value

Depresiasi

Salvage
Value

Depresiasi

Salvage
Value

Year 9
Depresiasi

Year 10

Salvage
Value

Depresiasi

Salvage
Value

Sofa

4,871,543

487,154

4,384,388

438,439

3,945,949

394,595

3,551,354

355,135

3,196,219

319,622

2,876,597

Computer

37,643,738

3,764,374

33,879,364

3,387,936

30,491,427

3,049,143

27,442,285

2,744,228

24,698,056

2,469,806

22,228,251

1,467,368

146,737

1,320,631

132,063

1,188,568

118,857

1,069,711

106,971

962,740

96,274

866,466

20,549,052

2,054,905

18,494,147

1,849,415

16,644,732

1,664,473

14,980,259

1,498,026

13,482,233

1,348,223

12,134,010

118,098

11,810

106,288

10,629

95,659

9,566

86,093

8,609

77,484

7,748

69,736

1,535,274

153,527

1,381,747

138,175

1,243,572

124,357

1,119,215

111,921

1,007,293

100,729

906,564

3,542,940

354,294

3,188,646

318,865

2,869,781

286,978

2,582,803

258,280

2,324,523

232,452

2,092,071

4,605,822

460,582

4,145,240

414,524

3,730,716

373,072

3,357,644

335,764

3,021,880

302,188

2,719,692

127,545,840

12,754,584

114,791,256

11,479,126

103,312,130

10,331,213

92,980,917

9,298,092

83,682,826

8,368,283

75,314,543

2,716,254

271,625

2,444,629

244,463

2,200,166

220,017

1,980,149

198,015

1,782,134

178,213

1,603,921

6,141,096

614,110

5,526,986

552,699

4,974,288

497,429

4,476,859

447,686

4,029,173

402,917

3,626,256

Receptionist
Desk
Split Air
Conditioner
Dispenser
Fax
Machine
Office
Desks
Office
Chairs
Genset
Locker (2
pintu)
Director
Desk and
Chair

68

Equipment

Table 3.23. Depreciation of Supporting Equipment Value Year 1-5 (Contd)


Year 6
Year 7
Year 8

Nilai Awal

Salvage

Salvage

Salvage

Year 9

Year 10

Salvage

Salvage

Tahun ke-5

Depresiasi

5,137,263

513,726

4,623,537

462,354

4,161,183

416,118

3,745,065

374,506

3,370,558

337,056

3,033,502

2,273,387

227,339

2,046,048

204,605

1,841,443

184,144

1,657,299

165,730

1,491,569

149,157

1,342,412

14,762,250

1,476,225

13,286,025

1,328,603

11,957,423

1,195,742

10,761,680

1,076,168

9,685,512

968,551

8,716,961

236,196

23,620

212,576

21,258

191,319

19,132

172,187

17,219

154,968

15,497

139,471

106,288,200

10,628,820

95,659,380

9,565,938

86,093,442

8,609,344

77,484,098

7,748,410

69,735,688

6,973,569

62,762,119

2,881,591

288,159

2,593,432

259,343

2,334,089

233,409

2,100,680

210,068

1,890,612

189,061

1,701,551

CCTV

11,071,688

1,107,169

9,964,519

996,452

8,968,067

896,807

8,071,260

807,126

7,264,134

726,413

6,537,721

Janitor Set

2,952,450

295,245

2,657,205

265,721

2,391,485

239,148

2,152,336

215,234

1,937,102

193,710

1,743,392

Toilet Set

5,739,563

573,956

5,165,607

516,561

4,649,046

464,905

4,184,141

418,414

3,765,727

376,573

3,389,154

206,672

20,667

186,004

18,600

167,404

16,740

150,664

15,066

135,597

13,560

122,037

2,539,107

253,911

2,285,196

228,520

2,056,677

205,668

1,851,009

185,101

1,665,908

166,591

1,499,317

Value

Depresiasi

Value

Depresiasi

Value

Depresiasi

Value

Depresiasi

Value

Meeting
Desk and
Chairs
Cupboards
Photocopy
Machine,
Scanner and
Printer
White
Board
Office Car
Projector
and screen

Trashbin
(10 Liter)
Absence
machine

69

Equipment

Table 3.23 Depreciation of Supporting Equipment Value Year 1-5 (Contd)


Year 6
Year 7
Year 8

Nilai Awal

Salvage

Salvage

Salvage

Year 9

Year 10

Salvage

Salvage

Tahun ke-5

Depresiasi

Pantry Set

1,771,470

177,147

1,594,323

159,432

1,434,891

143,489

1,291,402

129,140

1,162,261

116,226

1,046,035

Telephone

3,702,372

370,237

3,332,135

333,214

2,998,922

299,892

2,699,029

269,903

2,429,126

242,913

2,186,214

779,447

77,945

701,502

70,150

631,352

63,135

568,217

56,822

511,395

51,140

460,256

1,889,568

188,957

1,700,611

170,061

1,530,550

153,055

1,377,495

137,750

1,239,746

123,975

1,115,771

24,801

2,480

22,321

2,232

20,088

2,009

18,080

1,808

16,272

1,627

14,644

236,196

23,620

212,576

21,258

191,319

19,132

172,187

17,219

154,968

15,497

139,471

23,620

2,362

21,258

2,126

19,132

1,913

17,219

1,722

15,497

1,550

13,947

373,252,862

37,325,286

335,927,576

33,592,758

302,334,819

30,233,482

272,101,337

27,210,134

244,891,203

24,489,120

220,402,083

Lamp
Wastafel
Spigot
Safety
Google
Safety
Glove
TOTAL

Description

Plant building
Office building
Road
Conblock
TOTAL

Nilai Awal

Value

Depresiasi

Value

Depresiasi

Value

Depresiasi

Table 3.24. Depreciation of Building Value Year 1-5 (in thousand Rupiah)
Year 1
Year 2
Year 3
Salvage

Salvage

Salvage

Depresiasi

Value

Year 4

Value

Year 5

Salvage

Salvage

Tahun ke-1

Depresiasi

1,920,000

57,600

1,862,400

55,872

1,806,528

54,195

1,752,332

52,569

1,699,762

50,992

1,648,769

912,000

27,360

884,640

26,539

858,100

25,743

832,357

24,970

807,387

24,221

783,165

31,650

949

30,700

921

29,779

893

28,886

866

28,019

840

27,178

30,450
3,436,009

913
141,013

Value

29,536
3,294,995

Depresiasi

886
132,990

Value

28,650
3,162,005

Depresiasi

859
125,586

Value

27,790
3,036,419

Depresiasi

833
118,746

Value

26,957
2,917,672

Depresiasi

808
112,418

Value

26,148
2,485,262

70

Description

Plant building
Office building

Nilai Awal

Table 3.25. Depreciation of Building Value Year 6-10 (in thousand Rupiah)
Year 6
Year 7
Year 8
Salvage

Salvage

Salvage

Year 9

Year 10

Salvage

Salvage

Tahun ke-5

Depresiasi

1,648,769

49,463

1,599,306

47,979

1,551,327

46,539

1,504,787

45,143

1,459,643

43,789

1,415,854

Value

Depresiasi

Value

Depresiasi

Value

Depresiasi

Value

Depresiasi

Value

783,165

23,494

759,670

22,790

736,880

22,106

714,773

21,443

693,330

20,799

672,530

Road

27,178

815

26,363

790

25,572

767

24,805

744

24,061

721

23,339

Conblock

26,148

784

25,363

760

24,603

738

23,864

715

23,149

694

22,454

TOTAL

2,485,262

74,557

2,410,704

72,321

2,338,383

70,151

2,268,231

68,046

Table 3.26. Total Depreciation

Depreciation

Cost (Rp)

Equipment Depreciation

179,811,760

Supporting Equipment Depreciation

411,704,917

Building Depreciation

981,838,315

TOTAL

1,573,354,992

2,200,184

66,005

2,134,179

71

3.2.1.3.2.

Land Rent

Our factory is built in a rented empty land in Cilincing which has an area of 1900
2

m . We did not buy the land because the cost is too big to afford by our small scale
factory. The cost for land rent is Rp 237,750,000.00 per year.
3.2.1.3.3.

Insurance

Insurance is needed to prevent bankrupty if there are some incidential accidents


happen to the workers in our factory. The insurance is 0,89% from salaray per person as
stated in the UU No. 36 Year 2008. Total insurance for our employee is Rp
2,395,880.00.
3.2.1.3.4.

Building Tax

Building tax is not only for the building but also the land. The value is calculated
by using methode that is ruled in goverments law. Table 3.27 show us the calculation
of building tax in Indonesia.

Table 3.27. Cost for Building Tax

tim
NJOP Earth

Area (m2)

Cost per
m2 (Rp)

Cost (Rp)

1900

3,375,000

6,412,500,000

Office

304

3,625,000

1,102,000,000

Plant

768

3,100,000

2,380,800,000

NJOP Building

Total NJOP

9,895,300,000

NJOPTKP

12,000,000

NJOP for PBB

9,883,300,000

NJKP

3,953,320,000
Debted PBB

19,766,600

Until this point, we can calculate the total fixed charge in operating cost without
depreciation value. The total fixed charge is shown on Table 3.28.

72

Table 3.2816. Total Fixed Charge

Description
Land Rent

237,500,000

Insurance

2,395,880

Building Tax

19,766,000

Salary Tax

111,483,212

TOTAL

3.2.1.3.5.

Cost

371,145,092

Salary Tax

Every person who works need to pay the salary tax that is suitable with their salary.
The rate of the tax vary with the sum of the salaray in a year. The calculation of salary
tax in Indonesia is stated in the UU No. 36 Year 2008. Table 3.29 shows the calculation
of salary tax for our employee.

Table 3.29. Direct Labor Salary Tax


Cost (Rp)
Description

Case and
frame
Maker

Salary
Insurance
Bruto Income
Minus
Position Cost
Net Income per
Month
Net Income per
Year
Untaxable
Income
Taxable Income

3,100,000

Assembly
Labor
3,500,000

Product
Testing
Controller
3,200,000

Packaging

Office

Cleaning

Labor

Boy/Gril

Service

3,000,000

3,000,000

3,000,000

27,590

31,150

28,480

26,700

26,700

26,700

3,127,590

3,531,150

3,228,480

3,026,700

3,026,700

3,026,700

156,380

176,558

161,424

151,335

151,335

151,335

2,971,211

3,354,593

3,067,056

2,875,365

2,875,365

2,875,365

35,654,526

40,255,110

36,804,672

34,504,380

34,504,380

34,504,380

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

9,319,526

13,920,110

10,469,672

8,169,380

8,169,380

8,169,380

73

Description
Salary Tax per
year per person
Total Salary
Tax

Table 3.29. Direct Labor Salary Tax (Contd)


Cost (Rp)
Case and
Product
Assembly
Packaging
frame
Testing
Labor
Labor
Maker
Controller

Office
Boy/Gril

Cleaning
Service

465,976

696,006

523,484

408,469

408,469

408,469

3,727,810

11,136,088

3,140,902

1,633,876

16,338,760

1,225,407

Table 3.30. Indirect Labor Salary Tax (1)


Cost (Rp)
Description

Salary

Receptionist

Head of

Security

Security

Supply

Customer

Chain

Service

Manager

Executive

Advertising
Manager

3,000,000

3,000,000

3,200,000

6,000,000

5,000,000

6,000,000

26,700

26,700

28,480

53,400

44,500

53,400

3,026,700

3,026,700

3,228,480

6,053,400

5,044,500

6,053,400

151,335

151,335

161,424

302,670

252,225

302,670

2,875,365

2,875,365

3,067,056

5,750,730

4,792,275

5,750,730

Net Income per Year

34,504,380

34,504,380

36,804,672

69,008,760

57,507,300

69,008,760

Untaxable Income

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

Taxable Income

8,169,380

8,169,380

10,469,672

42,673,760

31,172,300

42,673,760

408,469

408,469

523,484

2,133,688

1,558,615

2,133,688

408,469

1,225,407

523,484

2,133,688

1,558,615

2,133,688

Insurance
Bruto Income
Minus
Position Cost
Net Income per
Month

Salary Tax per year


per person
Total Salary Tax

Table 3.31. Indirect Labor Salary Tax (2)


Cost (Rp)

Description

Salary
Insurance
Bruto Income

Marketing

RnD

Executive

Manager

Product
Distribution
Supervisor

Product
Planning and

Operational

Supply

Development

Coordinator

Coordinator

Manager

7,000,000

6,000,000

6,000,000

7,000,000

5,500,000

5,000,000

62,300

53,400

53,400

62,300

48,950

44,500

7,062,300

6,053,400

6,053,400

7,062,300

5,548,950

5,044,500

74

Table 3.31. Indirect Labor Salary Tax (2) (Contd)


Cost (Rp)

Description

Marketing

RnD

Executive

Manager

Product
Distribution
Supervisor

Product
Planning and

Operational

Supply

Development

Coordinator

Coordinator

Manager

Net Income per Year

80,510,220

69,008,760

69,008,760

80,510,220

63,258,030

57,507,300

Untaxable Income

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

Taxable Income

54,175,220

42,673,760

42,673,760

54,175,220

36,923,030

31,172,300

2,708,761

2,133,688

2,133,688

2,708,761

1,846,152

1,558,615

2,708,761

2,133,688

2,133,688

2,708,761

1,846,152

1,558,615

Salary Tax per year


per person
Total Salary Tax

Table 3.32. Indirect Labor Salary Tax (3)


Cost (Rp)
Description

Process and

HR and

Facility

Production

HSE

Training

Legal

Engineer

Manager

Manager

Coordinator

Manager

7,000,000

8,000,000

6,000,000

6,000,000

10,000,000

62,300

71,200

53,400

53,400

89,000

7,062,300

8,071,200

6,053,400

6,053,400

10,089,000

353,115

403,560

302,670

302,670

504,450

Net Income per Month

6,709,185

7,667,640

5,750,730

5,750,730

9,584,550

Net Income per Year

80,510,220

92,011,680

69,008,760

69,008,760

115,014,600

Untaxable Income

26,335,000

26,335,000

26,335,000

26,335,000

26,335,000

Taxable Income

54,175,220

65,676,680

42,673,760

42,673,760

88,679,600

Salary Tax per year per person

3,126,283

4,851,502

2,133,688

2,133,688

8,301,940

Total Salary Tax

3,126,283

4,851,502

2,133,688

2,133,688

3,126,283

Salary
Insurance
Bruto Income
Minus Position Cost

Description
Salary
Insurance
Bruto Income
Minus Position Cost

Table 3.33. Indirect Labor Salary Tax (4)


Cost (Rp)
HR and
Accounting
Finance
Legal
Supervisor
Manager
Manager
10,000,000
5,000,000
8,000,000

Secretary
of President
Director
3,500,000

President
Director
20,000,000

89,000

44,500

71,200

31,150

178,000

10,089,000

5,044,500

8,071,200

3,531,150

20,178,000

504,450

252,225

403,560

176,558

1,008,900

75

Description
Untaxable Income

Table 3.3217. Indirect Labor Salary Tax (4) (Contd)


Cost (Rp)
HR and
Secretary
Accounting
Finance
Legal
of President
Supervisor
Manager
Manager
Director
26,335,000 26,335,000 26,335,000 26,335,000

President
Director
26,335,000

Taxable Income
Salary Tax per year per
person

88,679,600

31,172,300

65,676,680

13,920,110

203,694,200

8,301,940

1,558,615

4,851,502

696,006

25,554,130

Total Salary Tax

8,301,940

1,558,615

4,851,502

696,006

25,554,130

3.2.2. General Expenses


3.2.2.1. Administrative Cost
3.2.2.1.1.

Executive Salary and Clerical Wage

Indirect labor is a worker that does not directly involved in the production of Hi
Dry Air Dehumidifier, but it allows to make production processes running efficiently.
Indirect labors tasked to run the company are structurally and administratively. The
number of indirect labor in our factory is 27 persons. That amount is divided into
several departments in accordance with the corporate structure.

76

Table 3.3318. Executive Salary and Clerical Wage

Department

Position

Salary/month/person
(Rp)

Amount

Total Monthly Salary

Total Annual Salary

(Rp)

(Rp)

President Director

20.0

20.0

260.0

Secretary of President Director

3.5

3.5

45.5

Finance Manager

8.0

8.0

104.0

Accounting Supervisor

5.0

5.0

65.0

HRD and Legal

HR and Legal Manager

10.0

10.0

130.0

Department

Training Coordinator

6.0

6.0

78.0

HSE Department

HSE Manager

6.0

6.0

78.0

Production Manager

8.0

8.0

104.0

Process and Facility Engineer

7.0

7.0

91.0

Supply Coordinator

5.0

5.0

65.0

Operational Coordinator

5.5

5.5

71.5

Stakeholder

Finance Department

Production Department

77

Table 3.197. Executive Salary and Clerical Wage(Contd)

Department

Position
Product Planning and

(Rp)

(Rp)
91.0

6.0

6.0

78.0

6.0

6.0

78.0

Marketing Executive

7.0

7.0

91.0

Advertising Manager

6.0

6.0

78.0

Customer Service Executive

5.0

5.0

65.0

Supply Chain Manager

6.0

6.0

78.0

Head of Security

3.2

3.2

41.6

Security

3.0

9.0

117.0

Receptionist

3.0

3.0

39.0

Cleaning Service

3.0

9.0

117.0

Office Boy/Girl

3.0

6.0

78.0

142.2

28

157.2

2,043.6

Development Department

Supervisor
Research and Development
Manager

Clerical

Total Annual Salary

7.0

Product Distribution

Supply Chain Department

Total Monthly Salary

Product Planning and

Department

(Rp)

Amount

7.0

Development Manager

Sales and Marketing

Salary/month/person

Total

78

3.2.2.1.2.

Communication Cost

The communications cost is one of the components in general expenses.


This calculation is useful for determining the cost of supporting offices in
communicating with outside parties such as suppliers or our retailers. Detail of the
cost of communication is as follows.
Table 3.320. Communication Cost
(in Thousand)

Communication Cost
Mail

1,800

Telephone and Facsimile

12,000

Internet

12,000

Annual Communication Cost

25,800

Based on the above calculation, communication cost required annually by our


factory is Rp25,800,000.
3.2.2.1.3.

Office Maintenance

Accidents or disasters may occurs in the middle of our factory operations.


The disaster can damage out plant building. Therefore, it is necessary for the
calculation of maintenance office. Office maintenance is a cost incurred for
building maintenance during operation. The calculation is carried out as follows.

Table 3.35. Office Maintenance Cost

Type of Cost
Supporting Facilities
Maintenance
Factory and Building

Amount
3% of Supporting Facilities Cost
1% of Cost of Csite, DC, and
Cbuilding
Total

Cost/year (Rp)
18,630,000.00

41,000,000.00
59,630,000.00

Based on the above calculation, the annual cost required for the maintenance of
our offices amounted to Rp59,360,000.

79

3.2.2.2. Marketing Cost


By the marketing strategy that was defined above, we can estimate the
marketing cost. The marketing cost estimation for all marketing tools that we plan
is explained below.
a. Advertisement
For expansion of Hi Dry Air product marketing, we create promotion
through advertisement. The advertisements are conducted on printed media, and
online media. For the printed media, we advertise in Harian Kompas, Seputar
Indonesia, and Media Indonesia as the biggest newspaper that read daily by
people. For online media advertising, we use Google ad sense, social media
including Facebook Fanspage, and Twitter, and detik.com as a portal that have
many visitors every hour. Below are attached the cost estimation for both
advertisement on printed media and online media on table xx and table xx.
Besides printed media and online media, we also need billboard to expose
our product to people in big city. Billboard is one of effective media and suitable
for our market segmented that is middle and high class society that usually
populated in big city. Here we defined the location of installation of billboard is in
Jakarta and Bandung where both of them are big city with big population of
middle and high class society. The cost of installation one billboard based on
literature is Rp20,000,000.00. So the total of two billboard installation is
Rp40,000,000.00.

Table 3.36. Total Advertising Online

No

Web Address

Time

Price/month

Price/Year
(Rp)

Google Adsense

30

Free

Free

Social Media

30

Free

Free

www.detik.com

30

2,000,000

60,000,000

Total Advertising Online

60,000,000

80

Table 3.37. Table Cost of Printed Media Advertisement

Printed
Media

Kompas

Seputar
Indonesi
a

Type

Dimension

Cost per

Time

(mmk)

Dimension (Rp)

(day/year)

Total Cost (Rp)

202,500,000

Display Full

500.00

Color

90,000

(after discount
25%)
168,000,000

Display Full

500.00

Color

80,000

(after
discount30%)
370,500,000

Total Cost (Rp)

b. Grand Launching and Sustainability Campaign


Grand launching will be conducted in some department stores like Giant or
Carrefour to introduce the product of Hi Dry Air to the public and we will also
have a brand ambassador which is a role model for public that also bring the
image of sustainability and saving energy campaign . There will be some like talk
show to introduce the product with an expert about air quality and saving energy
campaign and the guest as well to entertain the audience. The cost of grand
launching and sustainability campaign can be seen from the Table 3.38 below.

Table 3.38. Cost of Grand Launching


(In thousand rupiahs)

Type

Cost (Rp)

Publication of Grand Launching

15,000,000

Renting Venue and Decoration

10,000,000

Crew of Grand Launching

60,000,000

Brand Ambassador

50,000,000

Expert

10,000,000

Logistic (Including brochures

10,000,000

and doorprize)
Total Cost of Grand Launching

150,000,000

81

After the grand launching, we will also employ the brand ambassador to promote
our product in her daily private activity altogether with the positive sustainability
and saving energy campaign.
c. Visiting Program
For our visiting program to office and building to introduce our product we
give our sales engineer operational cost Rp5,000,000 per two month to be utilized.
Then, it is meant that the expenses for visiting program are Rp30,000,000.
d. Website
Beside of marketing advertising with printed media and online media, our
product also promoted by creating and developing website. Total cost of the
creating and developing website per year is Rp 2,200,000. The detail of total cost
website development are explained in Table 3.39 below.

Table 3.39. Total Cost Creating and developing website

No

Types

Cost (Rp)

Creating Website Cost

2,000,000

Design Website Cost

1,000,000

Annual Cost

1,200,000

TOTAL

e.

4,200,000

Total Marketing Cost


After calculating all factors and sum them up we get the annual marketing

cost explained by Table 3.40.

Table 3.40. Annual Marketing Cost

Marketing Types

Cost (Rp)

Advertisement on printed media

370,500,000

Advertisement via online media

60,000,000

Billboard

40,000,000

82

Table 3.40. Annual Marketing Cost (Contd)

Marketing Types
Grand Launching and Sustainability
Campaign

Cost (Rp)
150,000,000

Visiting Program

30,000,00

Website

4,200,000

Annual Marketing Cost

654,700,000

The total annual marketing cost is Rp 654,700,000. For a new brand


product, it is a proper amount of marketing cost.
3.3. Economic Analysis
3.3.1. Product Pricing per Unit
Product pricing is done by analysing the costs needed for production, the
profit that we want and production capacity of the product. The total outcome plus
interest of our production is sum of depreciation, loan interest, operating expenses
and maintenance expenses for 10 years. The value is Rp383,486,021,410.00. Our
total production capacity for 10 years is 59070 unit. The minimum price is
calculated as below.

The minimum price value has not include our profit, so we make the product price
become Rp7,250,000.00 so we can get the profit.
3.3.2. Cash Flow
3.3.2.1. Loan and Interest
Source of money to build and operate our factory for the first time is loan
from Bank and investor. We borrow 35% of the total capital investment money
from bank and the remaining 65% from the investor. We choose to borrow the
money from Mandiri Bank because the interest rate is only 10.5%, slightly lower

83

than other banks, while the interest for the investor is 13%. We assume that we
can borrow the money for 5 years with annual payment per year. The payment
will be given to the bank and investor starts from the end of the first year. The
loan interest and payment is calculated with the equations below and the table that
shows the calculation is Table 3.41 and 3.42.

Table 3.41. Loan from Bank

Loan
Interest

Payment

Total
Payment

Loan after
Payment

Year

Initial Loan

2,178,188,227

2,178,188,227 228,709,764 435,637,645 664,347,409 1,742,550,582

1,742,550,582 182,967,811 435,637,645 618,605,457 1,306,912,936

1,306,912,936 137,225,858 435,637,645 572,863,504

2,178,188,227

871,275,291

871,275,291

91,483,906 435,637,645 527,121,551

435,637,645

435,637,645

45,741,953 435,637,645 481,379,598

Table 3.42. Loan from Investor

Loan
Interest

Payment

Total
Payment

Loan after
Payment

Year

Initial Loan

4,045,206,708

4,045,206,708 525,876,872 809,041,342 1,334,918,214 3,236,165,366

3,236,165,366 420,701,498 809,041,342 1,229,742,839 2,427,124,025

2,427,124,025 315,526,123 809,041,342 1,124,567,465 1,618,082,683

1,618,082,683 210,350,749 809,041,342 1,019,392,090 809,041,342

809,041,342

4,045,206,708

105,175,374 809,041,342 914,216,716

84

Table 3.43. Total Loan Interest per Year

Year

Loan Interest

754,586,636

603,669,309

452,751,982

301,834,654

150,917,327

TOTAL

2,263,759,908

3.3.2.2. Before and After Tax Cash Flow


Cash flow consist of income and outcome cash flow. The source of
income are revenue, before tax income, after tax income, and salvage value.
Meanwhile, the source of outcome are investment, operation cost, loan payment,
and interest payment. We assume that on the first year of the production, our
product only sold 55% in the market. On the second year, the product is assumed
to be sold 70%. On the third year, it is only sold 80%. On the fourth year, the
product is sold 90%. Finally, on the fifth year and more, the product is sold 100%.
We use this assumption because our product is new in Indonesian market and will
take time for consumer to receive our product. The first years production is only
60% of total production capacity because we want to know wether the market is
accepting our product or not and evaluate it. The cash flow diagram is shown in
Figure 3.2 below and the calculation is shown in Table 3.44.

85

10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000

BTCF
ATCF

(2,000,000,000)

(4,000,000,000)
(6,000,000,000)
(8,000,000,000)
Figure 3.2. Cash Flow Diagram

10

11

86

Year

Volume
Sold

Product
Price

Revenue

Operating
Expenses

Table 3.44. Cash Flow


(prices are in million rupiahs)
Maintenance
Cash
Loan
Depreciation
Cost
Expenses Interest

All
Expenses

Gross
Profit

6,223

BTCF

ATCF

Cash
Flow

Cummulative
Cash Flow

(6,223)

(6,223)

(6,223)

(6,223)

2016

2017

3630

7.250

26,317

27,195

81,258,487

232.966

27,276

754.586

28,264

(958.996)

(1,191)

(835)

(602)

(6,826)

2018

4620

7.250

33,495

39,071

81,258,487

215.459

39,152

603.669

39,971

(5,657)

(5,872)

(4,350)

(4,135)

(4,738)

2019

5280

7.250

38,280

39,071

81,258,487

199.553

39,152

452.751

39,804

(872.490)

(1,072)

(754)

(554)

(4,689)

2020

5940

7.250

43,065

39,071

81,258,487

185.088

39,152

301.834

39,639

3,912

3,727

2,841

3,026

2,472

2021

6600

7.250

47,850

39,071

81,258,487

171.923

39,152

150.917

39,475

8,697

8,525

6,437

6,609

9,636

2022

6600

7.250

47,850

39,071

81,258,487

127.932

39,152

39,280

8,697

8,569

6,459

6,587

13,196

2023

6600

7.250

47,850

39,071

81,258,487

120.197

39,152

39,272

8,697

8,577

6,463

6,583

13,170

2024

6600

7.250

47,850

39,071

81,258,487

113.097

39,152

39,265

8,697

8,584

6,466

6,579

13,162

2025

6600

7.250

47,850

39,071

81,258,487

106.571

39,152

39,259

8,697

8,590

6,469

6,576

13,156

2026
TOTAL

6600
59070

7.250
72.500

47,850
428,257

39,071
378,836

81,258,487
812,584,870

100.564
1,573

39,152
379,648

39,253
383,486

8,697
48,608

8,596
40,811

6,472
29,446

6,573
31,019

13,149
37,593

2,263

87

The feasibility of the plant production is analyzed by using IRR and NPV. Before
calculating those values, we need to determine the MARR with WACC (Weighted
Average Cost Capital) method. The WACC equation is shown below.
(

Information: Re is cost of equity


Rd is cost of debt
E/V is % financing for equity
D/V is % financing for debt
Tc = corporate tax rate
The data for calculation of WACC is found on the internet. The calculation is
done as follows.
(

Based on calculation, we get the WACC which has a value of 20%. This
value is the MARR value. If we compare the MARR with the bank deposit
interest, the value of our MARR is higher. It means that our product is more
attractive for investor than the bank deposit, so they will be investing their money
on out plant.
3.3.3. Cost Breakdown
Cost breakdownaims to determine the percentage of each expenditure
made. By using the cost breakdown diagram, companies can determine which
variables are most widely affected production expenditure. The data for cost
breakdown calculation is shown in table 3.45 and the diagram is shown in Figure
3.3.
Table 3.45. Cost Breakdown

Outcome
Marketing and Advertising
Direct Material
Direct Labor
Manufacturing Cost
Distribution
Plant Overhead Cost
TOTAL

Cost
654,700,000
36,210,570,000
1,638,000,000
2,715,896,883
214,800,000
12,600,000
41,446,566,883

%
1.58%
87.37%
3.95%
6.55%
0.52%
0.03%
100.00%

88

0% 0%
4%

2%

7%
Marketing and Advertising
Direct Material
Direct Labor
Manufacturing Cost
Distribution
Plant Overhead Cost
87%

Figure 3.3. Cost Breakdown Diagram

Based on the diagram below, we know that raw material is the biggest
variable that determine the products price. The raw material is 87% of total
operating cost. The second biggest variable is manufacturing cost which covers
7% of total operating cost. It means, if we want to to change or modify the
minimum price per unit, we must modified or compress the raw materials and
manufacturing cost.

89

CHAPTER 4
PROFITABILITY ANALYSIS

4.1. Rate of Return


Rate of return is a profit on an investment over a period of time, expressed
as a proportion of the original investment. The time period is typically a year, in
which case the rate of return is referred to annual return. Rate of return is stated as
gain or loss on an investment over a specified period, expressed as a percentage
increase over the initial investment cost. In other definition, rate of return is the
annual profit generated by one unit of capital invested. The formula for
calculating ROI is as follows:
(

Annual net profit is obtained either before or after taxes. Annual net profit
that we choose is annual net after tax. We choose it because annual net profit after
tax is the profit that we get without spend additional money. The annual net profit
after tax is Rp2,841,838,185 and invested capital or also called total capital
investment (TCI) is Ro6,223,394,935. The calculation is shown by equation
below:
(

ROI obtained from this plant was 45.66 %. From ROI calculation, we can see that
Hi Dry Air plant is attractive to investors because it has rate of return value that is
high enough.
4.2. Payback Period
Payback Period is a minimum time for recovery initial capital investment.
In simple definition, payback period is the duration an investment will be returned
in years. We use interpolation formula to get our payback period.

90

If the payback period is less than a pre-determined period, the project is


acceptable. If the payback period exceeds the predetermined period, the project is
rejected. Typically, the pre-determined period of payback period in the project is
less than five years.
(

)
(

Cummulative Cash Flow

Graph of Cummulative Cash Flow vs Year


16,000,000,000
14,000,000,000
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
(2,000,000,000) 0
(4,000,000,000)
(6,000,000,000)
(8,000,000,000)

10

Year

Figure 4.1. Graph of CCF vs Year For Payback Period Calculation

Based on calculation and graphic above, we can conclude that our


dehumidifier project can be run because it has payback period is less than 5 years
so our project is acceptable.

91

4.3. Break Even Point


Breakeven point is an analysis to determine and find the goods or services to
be sold to consumers at a certain price to cover the costs incurred and to earn a
profit. Calculations to determine the BEP is as follows.
BEP= Total Fixed Cost/(Price per unit variable cost per unit)
Total fixed cost is the cost that is definitely worth to be stable and not
affected by the number of production or cost variables. Variable costs are costs
that depend on the level of production of goods. In this case the BEP can be seen
from the previous graph, where the payback period appears on day 1333 or 3.65
years. Based on the assumption in cash flow calculation, we have a certain
percentage of products that have been sold every year. Tabel 4.1 shows the
calculation of products that have been sold every year based on those
assumptions.

Table 4.1. Amount of Sold Product on Day 1333

Percentage of Product that Have

Amount of Product that Have

been Sold

been Sold

55%

3630

70%

4620

80%

5280

0.65 (3+0.65)

90%

3861

Year

Total

30921

Basically this analysis is the same with the payback period, but in this
calculation the main object of analysis is the amount of goods to gain a profit.
From this BEP, is shown that we have to produce and sell the most 30921 units to
recover investors money who incurred with interest.
4.4. Internal Rate of Return
Internal rate of return (IRR) is the maximum interest rate is paid on a project
and still breaks even at the end of the project life. This means that IRR is the
interest rate when NPV = 0. The following is the calculation formula.

92

where r expressed IRR. By using Ms. Excel, the IRR obtained from Hi Dry Air is
24%. The IIR will be used for comparation working capital with the minimum
probability. High IIR will attract investors of course, so the 24% IIR is high
enough to attract investors.
4.5. Net Present Value
Net Present Value (NPV) shows the net benefits received by a project over
the life of the project at a certain interest rate. NPV is used to assess the
profitability of a plant in the long term. NPV can also be interpreted as the present
value of the cash flows generated by the investment. In calculating the NPV is
necessary to determine the relevant interest rate. In this calculation, we use
MARR 20%. This value is calculated from WACC from the previous chapter.
Cash flow in yearn drawn into present value with a reasonable interest rate by
using the following formula:

A project as feasible if the NPV>0, which means the project is profitable or


provide benefits if implemented. If NPV<0, the project is not eligible to run
because it does not generate profit. From the calculation using Microsoft Excel
which it already has the function to calculate the NPV of a projects economic
analysis, so we got the Rp 17.951.231.341 as projects NPV value. It shows that
the project (solar powered dehumidifier manufacturing) is feasible because its
value greater than 0.
4.6. Sensitivity Analysis
Sensitivity analysis is an analysis that examines the effect of the instability
of the components that affect the plant profit as selling prices of product,
operating costs, cost of raw material and others against the parameters of
profitability such as NPV, IRR and payback period. The purpose of this sensitivity
analysis is to look at the feasibility of a project. Instability of the components that

93

affect the profit of this factory caused by various factors. We can predict the loss
suffered as a result of changes in these components so that we can avoid these
components change. Therefore, we will use a sensitivity analysis to analyze
changes in cash flow caused by changes in the components that affect profit. In
this case, the components that affect our profit analysis, namely fluctuation in
selling prices of products, fluctuation in operating costs and fluctuation in raw
material costs. Profitability parameter that is used in the sensitivity analysis is
NPV, IRR, and Payback Period.
4.6.1. Selling Price Fluctuation
The sensitivity analysis is done with a decrease and increase in the selling
price of product. As we know that the selling price of products is one of the
important variables that can affect the stability of production because these
variables will determine the revenue and profit to be earned by the industry. Table
4.2 shows the calculation of economic feasibility parameters to the decline in
product prices.

Table 4.2. Fluctuation of Product Price

Deviation

Product Price

IRR

NPV

PP (year)

-15%

Rp 6.162.500

-19%

Rp (9.930.116.315)

5,20034

-10%

Rp 6.525.000

-1%

Rp (636.333.763)

4,56501

-5%

Rp 6.887.500

12%

Rp 8.657.448.789

4,08694

0%

Rp 7.250.000

24%

Rp 17.951.231.341

3,65669

5%

Rp 7.612.500

36%

Rp 27.231.194.883

3,26749

10%

Rp 7.975.000

48%

Rp 36.538.796.445

2,27594

15%

Rp 8.337.500

61%

Rp 45.819.759.987

1,66082

4.6.2. Operational Cost Changes


A sensitivity analysis was conducted by change in direct labor wages. We
chose direct labor as direct labor wages is one of the variables that are always
increasing. Changes in the variable labor costs are one of the variables that affect
the cost of production in the factory so that it can be used to analyze the stability
of the project. Table 4.3 show the calculation of economic feasibility parameters
to changes in operating costs, namely labor cost changes.

94

Table 4.3. Fluctuation of Labor Cost

Deviation

Labor Cost

IRR

NPV

PP (year)

-15%

Rp 1.245.250.000

25%

Rp 18.774.473.529

3,61067

-10%

Rp 1.318.500.000

25%

Rp 18.488.340.716

3,62602

-5%

Rp 1.391.750.000

24%

Rp 18.202.207.904

3,64135

0%

Rp 1.465.000.000

24%

Rp 17.951.231.341

3,65669

5%

Rp 1.538.250.000

24%

Rp 17.629.942.279

3,67204

10%

Rp 1.611.500.000

23%

Rp 17.343.809.466

3,68738

15%

Rp 1.684.750.000

23%

Rp 17.059.629.779

3,70261

Then, we analyze the sensitivity of the variables such as Fluctuation in


selling prices of products, Fluctuation in operating costs and Fluctuation in raw
material costs against the economic profitability. so, we made a graph as follow:

Deviation Vs IRR
70%
60%
50%
40%

IRR

30%
20%
10%
0%
-20%

-15%

-10%

-5%

-10%

0%

5%

10%

15%

20%

-20%
-30%

Deviation

Product Price

Raw Material Price

Labor Cost

Figure 4.2. The Influence of Fluctuations of Product Price, Raw Material Price and Labor Cost on
IRR

95

Deviation Vs Payback Period


6

Payback Period

5
4
3
2
1
0
-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Deviation
Product Price

Raw Material Price

Labor Cost

Figure 4.3. The Influence of Fluctuations of Product Price, Raw Material Price And Labor Cost on
Payback Period

Deviation Vs NPV
Rp50,000,000,000
Rp40,000,000,000
Rp30,000,000,000

NPV

Rp20,000,000,000

-20%

Rp10,000,000,000

-15%

Rp-10%
-5%
0%
Rp(10,000,000,000)

5%

10%

15%

20%

Rp(20,000,000,000)

Deviation

Product Price

Raw Material Price

Labor Cost

Figure 4.4. The Influence of Fluctuations of Product Price, Raw Material Price and Labor Cost on
NPV

Based on Figure 4.2-4.4, we analyze that fluctuation in product prices and raw
material prices will change significantly the parameter of economic profitability
such as IRR, NVP and payback period. In addition, we also analyzed the changes
in labor costs does not change significantly parameter of economic profitability.
From the results, we concluded that the fluctuations of product prices and raw

96

material price are very sensitive to changes in the profitability parameters.


Therefore, we need to keep product prices and raw material prices remain constant
so we can keep our plant do not suffer losses due to declining product prices and
an increase in raw material prices.
4.6.3. Raw Material Cost Changes
A sensitivity analysis was conducted by a decrease and increase in raw
material prices. The cost of raw materials may fluctuate, considering the price of
raw materials is determined by suppliers and distribution of raw materials also
tend to change due to changes in fuel oil. Table 4.4 shows the calculation of
economic feasibility parameters to changes in raw material prices.

Table 4.4. Fluctuation of Raw Material Price

Deviation

Raw Material Price

IRR

NPV

PP (year)

-15%

Rp 30.778.984.500

48%

Rp 39.168.362.201

2,1631

-10%

Rp 32.589.513.000

41%

Rp 32.095.985.247

2,73593

-5%

Rp 34.400.041.500

32%

Rp 25.023.608.294

3,27752

0%

Rp 36.210.570.000

24%

Rp 17.951.231.341

3,65669

5%

Rp 38.021.098.500

15%

Rp 10.878.854.388

4,03586

10%

Rp 39.831.627.000

6%

Rp 3.806.477.435

4,41497

15%

Rp 41.642.155.500

-5%

Rp (3.265.899.518)

4,79081

97

CHAPTER 3
CONCLUSION

In this chapter, we can take some conclusions as follows:

Based on criteria and considerations in selecting, we choose Cilincing, North


Jakarta as our plant location.

The raw materials will be delivered from local overseas suppliers. All of local
suppliers are located in Java and the overseas supplier is used to import rotor
cassette and solar panel photovoltaic.

The selection of first supplier is reconsideration by various criteria such as


availability of raw materials, raw material specifications, supplier credibility,
distance, and time required for shipment.

Distribution of our products only in Java with 5 regions, which are regions 1
(Jabodetabek and Attack), region 2 (Bandung, Cimahi and Tasikmalaya),
region 3 (Semarang), region 4 (Solo and Yogyakarta) and region 5 (Surabaya,
Gresik and Sidoarjo).

We distribute our product directly to wholesalers or retailers such as


Hypermart, Giant, and Ace hardware.

Distribution of our product is done once a month with the delivery of product
as many as 540 units of dehumidifier.

Inventory of product distribution is done by saving 10% of the production


capacity for one month.

We promote our product dehumidifier through brochures, website, visiting


wholesaler, buildings and offices, conducting grand launching and exhibition
in mall, shopping center and special events.

The total capital investment (TCI) for our product is Rp. 6,223,394,935. In
this case, the bulding cost is the most cost that contribute to the calculation of
TCI is about 3,318,900,000.

TCI is indeed the most contributed thing that effecting the total capital
investment for our product, with Fixed capital Rp 2.642.047.848,64 and
working capital Rp 132.102.392,43.

98

Operational cost of our company is Rp 39,080,231,544 per year with the most
contributed cost is raw material cost Rp.36,606,570,000 per year.

The price of our product is Rp 7,250,000, we estimate of our product price


with analysis profitability.

Raw material cost to produce Hi Dry Air is Rp36,606,570,000.00 every year

The results of profitability analysis explain that our plant is feasible and
acceptable because this has met the criteria and obtain the desired value by
analysis using IRR, NPV and PBP.

IRR (Internal Rate of Return) = 24% (greater than MARR, 20 %)

PBP (Payback Period)

= 3,65 years

NPV (Net Present Value)

= Rp 17,951,231,341 (greater than 0)

In analysis of sensitivity, fluctuations of product prices and raw material price


are very sensitive to changes in the profitability parameters such as NPV, IRR
and payback period.

99

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Rastogi, Vaishali. Eddy Tamboto. 2013. Indonesias Rising Middle-Class and
Affluent Consumers. [ONLINE] Available at:
https://www.bcgperspectives.com/content/articles/center_consumer_custo
mer_insight_consumer_products_indonesias_rising_middle_class_affluent
_consumers/ (Accessed 30 April 2015)
Anonim. 2014. Informasi Gas Rumah Kaca. [ONLINE] Available at:
http://www.bmg.go.id/BMKG_Pusat/Kualitas_Udara/Informasi_Gas_Rum
ah_Kaca.bmkg (Accessed 28 April 2015)
Anonim.2013. Sewa Mobil Box Double Engkel. [ONLINE] Available at:
https://rentalmobilboxjakarta.wordpress.com/2013/12/09/sewa-mobil-boxdouble-engkel/ (Accessed 29 April 2015)