Product Design

UNIVERSITAS INDONESIA
INDIGENOUS FAST FOOD
Revisied Assignment 4
GROUP 17
GROUP PERSONNEL:
FAJAR NUR HIDAYATI (1106015573)
FARHA KAMILAH (1106002476)
MONICA WINATA (1106020390)
SARASWATI ANDANI SATYAWARDHANI (1106006511)
WINARNO HATMOJO WICAKSONO (1106055192)
CHEMICAL ENGINEERING DEPARTMENT

ENGINEERING FACULTY
UNIVERSITAS INDONESIA
DEPOK 2014
EXECUTIVE SUMMARY
The plant of Sayummy chicken satay which located in Jalan Raya Bogor
will start its production on 2015. The initial production capacity will be 5180
packaged per day, which weighed 200 gram per packaged. The production
process will be in batch system, operating in 8 hours a day. Sayummy chicken
satay will be distributed to 4 main locations in Indonesia, such as Jabodetabek,
Bandung, Surabaya, and Semarang. The supply chain system planned to use
distribution center in each location to help in distributing our product to retailers.
By this intention, there is a need of doing an economical anaysis so the
intention of this product manufactured can be achieved.To determine whether this
product manufacture is going to be successful or not, an accurate economical
analysis need to be done. In this analysis, all costs involved in all phases of this
product manufacture are calculated considerably to the determination of the cost
of product. The applied tax cost and prediction profit of the product sale will also
be included in the determination of the product cost. All of the costs involved in
this calculation are divided into two different categories of cost component. While
the cost component is the aspect that has influences to the product cost, the two
main cost components here are fixed cost and variable cost. Fixed cost is the cost
that will not change and will not be influenced by the total production; almost be
the same amount in years, such as marketing expenses (advertisements and
promotions), administration cost, indirect labor salary, taxes, insurance,
depreciation, and others. Meanwhile, the variable cost is the cost that always
preferably change influenced by the material requirements and total production,
such as material cost, direct labor salary, and others.
The calculation of this economical analysis is directly purposed to
determine the rate of return of the product sale. The rate of return calculated will
be used to determine the payback period of the product sale. This analysis is also
needed to consider when the production will need to be evaluated due to the profit
received. The evaluation is also considered by the usage time period of the
manufacture instruments and equipments. In fact, this evaluation will bring more
profit of the product sale and a better way to increase the efficiency
ii
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iii
of the cost flow (increase the amount of input flow and decrease the amount of
output flow).
To make sure that this project is profitable enough and attract the investors to
loan the money for this project, we analyze the profitability by calculate the rate of
investment (ROI), payback period, breakeven point (BEP), internal rate of return
(IRR), and also net present value (NPV). The number of these elements should
complete the requirements. The percentage of ROI should be high at least 30%, the
payback period should be less than 5 years, the IRR will be better if its percentage
bigger than the loan interest, and the NPV should be more than 0. After calculating
each element, we obtain that the results are ROI 71%; payback period 2,02 years;
IRR 20%, and NPV costs Rp 26.609.675.100.
Univesitas Indonesia
LIST OF CONTENT
EXECUTIVE SUMMARY............................................................................................
ii
LIST OF CONTENT......................................................................................................
iv
LIST OF FIGURE..........................................................................................................
vi
LIST OF TABLE............................................................................................................
vii
CHAPTER I MARKET AND COST ANALYSIS.....................................................
1
1.1 Total Capital Investment...........................................................................................
1
1.1.1 Fixed Capital...................................................................................................
2
1.1.1.1 Equipment Cost...................................................................................
3
1.1.1.2 Plant Building Cost and Site Cost.......................................................
12
1.1.1.3 Supporting Equipment Cost................................................................
15
1.1.1.4 Market Research Cost.........................................................................
16
1.1.1.5 Another Expenses................................................................................
17
1.1.2 Working Capital...............................................................................................
23
1.2 Operational Cost.......................................................................................................
24
1.2.1 Direct Production Cost....................................................................................
25
1.2.1.1 Raw Material Cost...............................................................................
25
1.2.1.2 Operating Labor Cost..........................................................................
27
1.2.1.3 Waste Treatment Cost..........................................................................
28
iv
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1.2.2 Fixed Operation Cost.......................................................................................

28
1.2.2.1 Utility Cost..........................................................................................
28
1.2.2.2 Insurance Cost.....................................................................................
29
1.2.2.3 Administration Cost.............................................................................
29
1.2.2.4 Distribution Cost.................................................................................
31
1.2.2.5 Marketing Cost....................................................................................
32
1.3 Product Costing........................................................................................................
33
1.3.1 Product Costing per Unit.................................................................................
33
1.3.2 Cash Flow........................................................................................................
35
1.3.3 Cost Breakdown..............................................................................................
43
1.4 Profitability Analysis................................................................................................
44
1.4.1 Rate of Investment...........................................................................................
44
1.4.2 Payback Period................................................................................................
45
1.4.3 Break Even Point.............................................................................................
46
1.4.4 Internal Rate of Return....................................................................................
47
1.4.5 Net Present Value............................................................................................
47
1.5 Sensitivity Analysis..................................................................................................
48
1.5.1 Fluctuation of Selling Price.............................................................................
48
1.5.2 Fluctuation of Raw Material Cost...................................................................
49
v
1.5.3 Fluctuation of Operating Labor Salary............................................................

49
1.5.4 Graphical Analysis..........................................................................................
52
CHAPTER II CONCLUSION....................................................................................
55
REFERENCES.............................................................................................................
56
LIST OF FIGURE
Fig.1.1 Marshall and Swift Annual Index Graph.......................................................
8
Fig 1.2 Bare Module Factor.......................................................................................
10
Fig 1.3 First Floor of Plant.........................................................................................
14
Fig 1.4 Location of Each Equipment in Processing Plant.........................................
14
Fig 1.5 Second Floor of Plant....................................................................................
15
Fig 1.6 Logo of Sayummy.........................................................................................
21
Fig 1.7 BPOM Fare for Meat Packaged Product.......................................................
22
vi
Fig 1.8 Mitsubishi L-300...........................................................................................

31
Fig 1.9 Graphic of BTCF...........................................................................................
42
Fig 110 Graphic of ATCF...........................................................................................
42
Fig 1.11 Cost Breakdown...........................................................................................
44
Fig 1.12 Payback Period Graph.................................................................................
46
Fig 1.13 NPV Alteration Based on Fluctuation.........................................................
52
Fig 1.14 Payback Period Alteration Based on Fluctuation........................................
53
Fig 1.15 IRR Alteration Based on Fluctuation...........................................................
54
LIST OF TABLE
Table 1.1 Annual Index of Chemical Equipment Price Change per Year 2012
........................................................................................................................................
8......................................................................................................................................
........................................................................................................................................
........................................................................................................................................
Table 1.2 Extrapolated Annual of Chemical Equipment Price Change per Year
by 2015........................................................................................................9
Table 1.3 Extrapolated price of main equipment in 2015..............................................9
Table 1.4 Total Bare Module Cost Calculation..............................................................11
Table 1.5 Detail Area of Production Facility.................................................................
12
vii
Table 1.6 Detail Area of Each Sector.............................................................................

13
Table 1.7 Plant Building and Site Cost..........................................................................
13
Table 1.8 Offsite Facility Cost.......................................................................................
16
Table 1.9 Market Research Cost....................................................................................
17
Table 1.10 Patent Fee Details........................................................................................
18
Table 1.11 Brand Fee Details.........................................................................................
22
Table 1.12 Other Cost....................................................................................................
23
Table 1.13 Total Permanent Investment Cost and Fixed Capital...................................
23
Table 1.14 Total Capital Investment..............................................................................
24
Table 1.15 Maintanance Cost.........................................................................................
26
Table 1.16 List of Raw Material Price...........................................................................
26
Table 1.17 Packaging Order Capacity...........................................................................
28
Table 1.18 Details of Personel Direct Labor..................................................................
29
Table 1.19 Calculation of Utilities Cost.........................................................................
30
Table 1.20 Calculation of Administrative Cost..............................................................
30
Table 1.21 Details General Expenses............................................................................
31
Table 1.22 Dimension of Mitsubishi L-300...................................................................
32
Table 1.23 Total Distribution Cost.................................................................................
32
Table 1.24 Sayummy Electronic Media Advertising Cost.............................................
33
Table 1.25 Sayummy Online Media Advertising Cost..................................................
33
Table 1.26 Company Profile Website............................................................................
35
Table 1.27 Product Forecasting.....................................................................................
36
Table 1.28 Machine Depreciation for 10 years..............................................................
37
Table 1.29 Income Tax...................................................................................................
39
viii
Table 1.30 Supporting Equipment Depreciation............................................................

43
Table 1.31 List of Expenditures and its Cost.................................................................
49
Table 1.32 Sensitivity of IRR, NPV, and Payback Period to Fluctuation of
Product
Selling
Price
................................................................................................................
50
Table 1.33 Sensitivity of IRR,NPV,andPBP to Fluctuation of Raw Material Price......
51
ix
CHAPTER I
MARKET AND COST ANALYSIS
PT Sayummy Indonesia Sejahtera is an industrial factory that focus on food
industry. Sayummy is a chicken satay packaged which has one month expiring date
anduse galangal as its natural preservative, also using vacuum package to make our
product stay away from unwanted air and microbial contamination. The
consideration of using galangal as natural preservative is because galangal
contain1,8-cineole, 4-allyphenyl acetate and -bisabolene.These constituents have
an antibacterial activity againts Staphylococcus aureus. Staphylococcus aureus
contaminatefood which are high protein, such as meat, fish, dairy, and poultry. So,
this is the best inovative in preservation method to collaborate the using of galangal
and vacuum package to make long shel-life food product. Sayummy was serving
without skewer,this is to minimize contamination between meat and other
constituents.Sayummy also doesnt use MSG but use natural spices.
The plant of Sayummy chicken satay which located in Jalan Raya Bogor will
start its production on 2015. The initial production capacity will be 5180 packaged
per day, which weighed 200 gram per packaged. The production process will be in
batch system, operating in 8 hours a day. Sayummy chicken satay will be distributed
to 4 main locations in Indonesia, such as Jabodetabek, Bandung, Surabaya, and
Semarang. The supply chain system planned to use distribution center in each
location to help in distributing our product to retailers.
By this intention, there is a need of doing an economical anaysis so the
intention of this product manufactured can be achieved.To determine whether this
product manufacture is going to be successful or not, an accurate economical
analysis need to be done. In this analysis, all costs involved in all phases of this
product manufacture are calculated considerably to the determination of the cost of
product. The applied tax cost and prediction profit of the product sale will also be
included in the determination of the product cost. All of the costs involved in this
calculation are divided into two different categories of cost component. While the
cost component is the aspect that has influences to the product cost, the two main
cost components here are fixed cost and variable cost. Fixed cost is the cost that will
1Universitas Indonesia
2
not change and will not be influenced by the total production; almost be the same
amount in years, such as marketing expenses (advertisements and promotions),
administration cost, indirect labor salary, taxes, insurance, depreciation, and others.
Meanwhile, the variable cost is the cost that always preferably change influenced by
the material requirements and total production, such as material cost, direct labor
salary, and others.
The calculation of this economical analysis is directly purposed to determine
the rate of return of the product sale. The rate of return calculated will be used to
determine the payback period of the product sale. This analysis is also needed to
consider when the production will need to be evaluated due to the profit received.
The evaluation is also considered by the usage time period of the manufacture
instruments and equipments. In fact, this evaluation will bring more profit in the
product sale and a better way to increase the efficiency of the cost flow (increase the
amount of input flow and decrease the amount of output flow).
1.1
Total Capital Investment (CTCI)

Sayummy factory located in Jalan raya Bogor KM 41,2Cibinong, Bogor,
West Java 16916. It consists of both production factory and office where all the
production processes, administration and marketing take place. The land area is
2000m2wide while the building area is 800 m 2. Facility buildings consist of
production area, quality control, warehouse, office, mosque, toilet, canteen, parking
area, and security area. Production rate is maintained to produce 497,38ton/year or
5180package/day. Therefore we have to perform economy analysis accurately in
order to decide product selling price and company profit.
Capital cost, or Total Capital Investment (CTCI), is the total fund needed for
the first investment of company design, manufacture, and production. Total capital
investment is the sum of fixed capital dan working capital.
Main assumptions for total capital investment analysis are:
1. Factory construction will begin in 2015.
2. It takes approximately 1 year to complete factory construction process and starts
operate in 2016.
3. Rate of exchange: 1 US$ = Rp 11.528,00 (Monday, 12 May 2014)
4. For determining the selling price, we use these assumptions :
Factory will be operated for 10 years
Ayear = 335 day for effective working (7 hours perday)
3
5. Calculation of depreciation will use straight line method for building and
declining balance method for non building assets.
6. Calculation method for total capital investment are stated below
Eq. 1. 1
CTCI = Total Capital Investment

CWC= Working Capital
CTPI = Total Permanent Investment
1.1.1 Fixed Capital / Total Permanent Investment (CTPI)
1.1.1.1 Equipment Cost
Fixed capital is a mandatory one-time investment made at the introductory
phase of a business establishment. Fixed capital is not alike working capital, which
is required on a continuous basis to operate (run) the ordinary course of production
and distribution of goods and services. Fixed capital is a permanent investment made
to meet the longer-term needs (requirements) of the business activities. Thus, fixed
capital has a permanent existence in the business. The meaning of fixed capital can
be easily grasped from these points:
1. Fixed capital is a compulsory initial investment made in the business.
2. It helps to lay down the basic infrastructure on which business is supposed to
stand and flourish in a long run.
3. It is a part of total capital invested in the business.
4. It has a permanent existence in the business to meet its long-term needs.
5. It is used for purchasing fixed assets like land, building, plant, machinery,
etc.
6. It is also used for purchasing intangible assets like patents, copyrights,
goodwill, etc.
7. It is required for promoting the business.
8. It is also required for expansion, modernization and diversification of
business.
9. Fixed capital gets depreciated as an asset is used over time with few
exceptions like in case of land.
10. Fixed capital requirement is estimated by the promoters of business. This
estimation must be made as accurately as possible. To achieve this, the
promoters seek professional help and take advice from experts such as
engineers, architects, etc.
It is usually present in the form of fixed assets like land, building, plant, machinery,
etc. Common examples of fixed capital investments are as follows:
Plant and machinery.
Factory's land and its buildings.
Company's headquarter (HQ), administrative areas, regional and local

offices, and their premises.
Computing and communication
infrastructure that mostly includes
workstations, servers, data-storage facilities, local-area networks, the

internet, telephones, fax, so on.
Patents, copyrights, goodwill, etc., also gets covered under fixed capital.
The fixed capital investment is the total cost of designing, constructing, and
installing a plant and the associated modifications needed to prepare the plant site.
The fixed capital investment is made up of:
The inside battery limits (ISBL) investmentthe cost of the plant itself;
The modifications and improvements that must be made to the site
infrastructure, known as offsite or OSBL investment;

Engineering and construction costs;
Contingency charges.
ISBL Plant Costs

The ISBL plant cost includes the cost of procuring and installing all the
process equipment that makes up the new plant. The direct field costs include:
1. All the major process equipment, such as vessels, reactors, columns, furnaces,
heat exchangers, coolers, pumps, compressors, motors, fans, turbines, filters,
centrifuges, dryers, etc., including field fabrication and testing if necessary;
2. Bulk items, such as piping, valves, wiring, instruments, structures, insulation,
paint, lube oils, solvents, catalysts, etc.;
3. Civil works such as roads, foundations, piling, buildings, sewers, ditches,
embankments, etc.;
4. Installation labor and supervision.
In addition to the direct field costs there will be indirect field costs,
including:
1. Construction costs such as construction equipment rental, temporary
construction (rigging, trailers, etc.), temporary water and power, construction
workshops, etc.;
5
2. Field expenses and services such as field canteens, specialists costs, overtime
pay, and adverse weather costs;
3. Construction insurance;
4. Labor benefits and burdens (Social Security, workers compensation, etc.);
5. Miscellaneous overhead items such as agents fees, legal costs, import duties,
special freight costs, local taxes, patent fees or royalties, corporate overheads,
etc.
In the early stages of a project, it is important to define the ISBL scope
carefully, as other project costs are often estimated from ISBL cost. The overall
project economics can be badly miscalculated if the ISBL scope is poorly defined.
Offsite Costs
Offsite cost or OSBL investment includes the costs of the additions that must
be made to the site infrastructure to accommodate adding a new plant or increasing
the capacity of an existing plant. Offsite investments may include:
Electric main substations, transformers, switchgear, and power lines;

Power generation plants, turbine engines, standby generators;
Boilers, steam mains, condensate lines, boiler feed water treatment plant,
supply pumps;
Cooling towers, circulation pumps, cooling water mains, cooling water
treatment;
Water pipes, water demineralization, waste-water treatment plant, site
drainage, and sewers;

Air separation plants to provide site nitrogen for inert gas, nitrogen lines;
Dryers and blowers for instrument air, instrument air lines;
Pipe bridges, feed and product pipelines;
Tanker farms, loading facilities, conveyors, docks, warehouses, railroads, lift
trucks;
Laboratories, analytical equipment, offices, canteens, changing rooms,
central control rooms;

Workshops and maintenance facilities;
Emergency services, firefighting equipment, fire hydrants, medical facilities,
etc.;
Site security, fencing, gatehouses, and landscaping.
Offsite investments often involve interactions with utility companies such as
electricity or water suppliers. They may be subject to equal or greater scrutiny than
6
ISBL investments because of their impact on the local community through water
consumption and discharge, traffic, etc.
Engineering Costs
The engineering costs, sometimes referred to as home office costs or
contractorcharges, include the costs of detailed design and other engineering services
requiredto carry out the project:
Detailed design engineering of process equipment, piping systems, control

systems and offsites, plant layout, drafting, cost engineering, scale models,
and civil engineering;

Procurement of main plant items and bulks;
Construction supervision and services;
Administrative charges, including engineering
supervision,
project
management, expediting, inspection, travel and living expenses, and home
office overheads;
Bonding;
Contractors profit.
Contingency Charges
Contingency charges are extra costs added into the project budget to allow
for variationfrom the cost estimate. All cost estimates are uncertain and the
finalinstalled cost of many items is not known until installation has been
successfullycompleted. Apart from errors in the cost estimate, contingency costs also
help cover:
Changes in project scope;

Changes in prices (e.g., prices of steel, copper, catalyst, etc.);
Currency fluctuations;
Labor disputes;
Subcontractor problems; and
Other unexpected problems.
Fixed capital recovered after several years by using depreciation (D) which
depreciation value (D) were regulated by government and depend on tax. Fixed
capital obtained by the following equation:
Eq. 1. 2
Total Bare Module Cost

Estimate cost of each piece ofequipment:
specific equipment type

materials of construction
operating pressure
Direct, indirect, engineering, and contingency costs are expressed as functions

(multipliers) of purchased equipment cost at base conditions (
), which is at 1 bar
and CS (carbon steel).

Total Bare Module Cost (CTBM):
Eq. 1. 3
FBM
= bare module factor
Fp
= pressure factor (=1 for 1 bar)
FM
=material of construction factor (=1 for CS)

The bare-module factors used can be seen in reference. Before further
calculation, because the cost of equipments from reference of last year (2012), so we
use the comparison of extrapolated annual cost index from last year and this year
when purchasing will occur. The calculation was corrected with Marshall and Swift
index in Table 1.1 below.Index of equipment costat year 2001-2015.
Table 1.5Annual Index of Chemical Equipment Price Change per Year 2012
Year Index
2001 1093,9
2002 1104,2
2003 1123,6
2004 1178,5
2005 1244,5
2006 1302,3
2007 1373,3
2008 1449,3
2009 1511,9
2010 1525,95
2011
1540
2012 1554,05
(Source: index of Economic Freedom. http://www.heritage.org/index/explore)
The graphalso showed in Figure 1.1 below:
Figure 1.1 Marshall and Swift Annual index graph

(source : private source)
Based on this annual index of chemical equipment price change per year, we
can extrapolate all prices up to the year of 2015. From the Table 1.1 above, we can
calculate the trend line equation. By using the trend line of annual index: y= 49.485x
- 97958; the extrapolated price can be calculated as shown in table below:
From those index we can estimate machine cost in 2015 using :
Eq. 1. 4
Table 1. 6Extrapolated Annual of Chemical Equipment Price Change per Year by 2015
Year Index
2013 1568,1
2014 1582,15
2015 1596,2
(Source : private source)
So that, we can estimate all of the chemical equipment prices that is listed in
year 2013 and extrapolate them up to the year of 2015. The extrapolated price is
shown in table below :
Table 1. 7Extrapolated price of main equipment in 2015
N
o
Equipment
Qty
Capacity
(Kg/h)
FOB Price
in 2014
FOB Price
in 2015
1 Weigher Nagata A500W
1000
2 Air Bubble Vegetable and Meat Washer

Type
3 Meatand Vegetables Cutter Machine Type
vc-65ms
4 Square forming machine
600
1500
2100
5 Tumbler
1600
6 Seasoning Mixer Type YA-900
800
7 Jacketed kettle cooker
600
8 Drying Oven
1200
9 Vacuum packaging
1000
1 Food Conveyor belts for sauce

0
1 Stainless stell
1
1 Automatic Carton Filling Type LB-450-3
2
25
25
1440
(Rp)
(Rp)
5.894.48
9
35.355.1
43
29.472.4
43
6.831.71
2
5.224.48
2
15.114.4
51
65.821.7
90
4.397.09
2
17.192.2
59
31.830.2
39
11.297.7
70
83.505.2
56
6.000.00
0
35.988.0
00
30.000.0
00
6.954.00
0
5.318.00
0
15.385.0
00
67.000.0
00
4.475.80
0
17.500.0
00
32.400.0
00
11.500.0
00
85.000.0
00
In the Guthrie method, TCI calculation is conducted by adding some costs

that is estimated using bare module cost. In the table below, we can see the bare
module factor for each equipments used from literature. The bare module factors
included FOB purchase, equipment instruments and installations (piping, concrete,
steel, controllers, electrical, insulation, and paint), direct labor for installation
(material erection and equipment setting), and also indirect module expenses
(freight, insurance, taxes, construction overhead, and contractor engineering
expenses). Then, this factor will be multiplied by the cost of each equipment. As for
the equipments that have no bare module factor in the table, we would use the
average value of the all bare module factor. This case might happen because the
equipments we used are chemical equipments in batch mode operation that is
specifically used.
10
Figure 1. 2Bare Module Factor

(Source: Seader et al., 2004.)
Total bare module cost than will be depreciated. The depreciation will be
conducted in the main equipment costs using declining balance method of
depreciation within 10 years of recovery period. The recovery period of 10 years had
been taken due to the regulation ofDecree of the Finance Minister No.
520/KMK.04/2000 and year of evaluation chose in Sayummy factory.
Table 1. 8Total Bare Module Cost Calculation
Equipment
Weigher
Nagata
A500W
Air Bubble
Vegetable
and Meat
Washer Type
Capa
city
(Kg/
h)
Qty
1000
600
FOB Price
in 2015 (Rp)
Equipment
Assumption in
Module
Module
Factors
Total Bare
Module Cost
(Rp)
6.000.000
Module factors
average
2.279
13.674.000
35.988.000
Blower (centrifugal)
3.200
115.161.600
11
Meatand
Vegetables
Cutter
Machine
Type vc-65ms
Square
forming
machine
Tumbler
Seasoning
Mixer Type
YA-900
Jacketed
kettle cooker
Drying Oven
Vacuum
packaging
Food
Conveyor
belts for
sauce
Stainless stell
Automatic
Carton
Filling Type
LB-450-3
1500
30.000.000
Flakers
2.050
61.500.000
2100
6.954.000
Pumps and Drivers
3.300
45.896.400
1600
5.318.000
Horizontal pressure
vessels
3.050
16.219.900
800
15.385.000
Agitator
2.560
78.771.200
600
67.000.000
Agitator
2.560
171.520.000
1200
4.475.800
2.060
9.220.148
1000
17.500.000
Dryers
Module factors
average
2.279
39.882.500
25
32.400.000
Evaporators
1.610
52.164.000
25
11.500.000
Rp119,264.23
2.450
28.175.000
1440
85.000.000
Module factors
average
2.279
193.715.000
1.1.1.2 Plant Building Cost and Site Cost

To determine the plant area for office, production facility, storage,
warehouse, other facility, we use method of industry management. We can predict
building cost from required plant area. Our plant will be built in Jalan Raya Bogor
KM 41.2 West Java, Indonesia. The steps for determine plant area will explain
below. First steps is determine production facility area. In this step, we calculate area
of each equipment that we used in process production.
Furthermore, multiply area with the 200% allowance for provided area that
use for transport the raw material and product. Detail about total area, production
facility and required operator for two line equipment alternate will describe in table
below.
Table 1. 9Detail area of production facility
Equipment
Area (m2)
12
Weigher
23,6
Meat Washer
32,6
Mince meat machine
43,1
Tumbler
11,0
Spice grinder
5,8
Jacketed kettle cooker

Oven
Vacuum packaging
Food Conveyor belts for sauce
Labbeling Machine
Carton Erector Machine
12,8
26,7
134,0
6,7
17,9
20,0
TOTAL
68
(Source: private source)
Production facility area does not include area for office building, storage
room, and other plant facility for the worker such as canteen, mosque, parking area,
and toilet. Based on the literature, total area is at least multiply five times with
production facility. Multiplier factor include loading and loading materials, parking
area, product storage, personnel service room, production service, and production
facility. Total area for each sector will describe in table below.
Table 1. 10Detail area of each sector
Site
Area (m2)
Loading and Unloading material
325
Parking area
300
Raw Material Storage
607
Product Storage
Personnel Service
Production Service
425
100
100
Total
1857

13
After we know the total area that the plant needed, we can calculate building
cost in Jalan Raya Bogor KM 41.2 Cibinong, West Java in 2014 that we listed below.
We rent the land for 10 years plant that has 2000 m 2 wide area, with cost of land area
Rp 1.000.000.000 / 1000 m2 and will we paid in first year.
Table 1. 11Plant Building and Site Cost
Component
Land area (2000 m2)
Building area (800 m2)
Foundation
Contractors
Land development
Information /1000 m
Rp 1.000.000.000
Rp 1.000.000.000
10% from land cost
10% form land cost
5% from land cost
Total
Price (Rp)
2.000.000.000
800.000.000
200.000.000
200.000.000
100.000.000
3.300.000.000
Sayummy chicken satay factory layout that made on land area 2500 m 2 , the
factory layout will be on scale 1:200 .
Figure 1. 3 1st Floor

(Source: Private Source)
14
Figure 1. 4Location of Equipment in processing plant

Information:
1: Grilling Machine (Oven)
2: Jacketed kettle cooker
3: Crushing Spices machine and Tumbling Machine
4: Chopping and Forming Machine
5: storage of chicken meat
6: Unit of packaging machine
7: Crushing Spices Machine
8: Cooker for spices
9: Storage of spices
Figure 1. 52nd Floor

15
1.1.1.4 Supporting Equipment / Offsite Facilities Cost
Offsite facilities cost consists of water installation cost, electricity installation
cost, telephone installation cost, and another supporting equipment costs that
required to facilitate the production process. The main supporting equipment is
working equipment which will be estimated based on the amount of the workers that
need the equipments. In addition, transportation vehicles also included in supporting
equipments that are needed to transport the product to their distribution areas. These
are the detailed price and needs for supporting equipments.Total offsite facilities cost
can be seen on the table below:
Table 1. 12Offsite facility Cost
OFFSITE FACILITY
Installation
Cost (Rp)
PAM (Water) Installation

Hydrant
PLN (Electricity) Installation
Telephone
Network
Total
10.000.000
15.000.000
45.000.000
8.000.000
5.000.000
83.000.000

Table 1.8 Offsite facility Cost (Continued)
No
Equipment
Qty
1
2
3
4
5
6
7
8
9
10
11
12
Faximile
Computer
Printer+Fotocopy+Scanner
Central AC LG LT-C186ELE1
Dispenser
Microwave
Office Desk
Office Chair
Cupboard
Sofa
Meeting's Desk and Chair
Receptionist Desk
1
5
3
3
2
2
20
25
10
2
3
1
Life time
(Year)
10
10
10
10
10
10
10
10
10
10
10
10
Price for Each (Rp)
Total Cost (Rp)
900.000
7.000.000
3.450.000
9.752.000
300.000
1.200.000
300.000
175.000
800.000
4.500.000
2.000.000
1.500.000
900.000
35.000.000
10.350.000
29.256.000
600.000
2.400.000
6.000.000
4.375.000
8.000.000
9.000.000
6.000.000
1.500.000
16
13
14
15
16
Samsung 22" UA22H5000 Full

HD LED TV-Hitam
White Board
FIRMAN 4 Stroke Genset
[FPG4000E3]
Distribution's car (Colt Diesel
FE 71)
10
2.002.500
4.005.000
10
100.000
300.000
10
5.793.000
11.586.000
10
167.000.000
334.000.000
Total Supporting Equipment Cost (Rp)

Total Offsite Facility Cost (Rp)
463.272.000
546.272.000
1.1.1.5 Market Research Cost

One cost that is still need to be calculated is the market research cost. This
cost is used to make a research from the consumer. Analysis and evaluations from
the consumer are the most important thing to improve the product convenience. This
systematical method will collect the information from the consumers that can be
used to design marketing strategy. Those informations are needed to answer the
question of what is the needs of the consumers, how is those needs can give benefits
to the consumer as they wanted, what criteria is the product and brand the consumers
want, and and what might be their reactions to the price, promotion, and costumer
services? It is a great responsibility of the producer to find those needs.
In the application, market research could be done by conducting a survey,
questionnaire distribution, or hire a consultant service. This method of market
research also needs some amount of money, as for the Carafresco factory, the market
research cost is equal to Rp25.000.000,-. The table below shows the detailed cost of
market research.
Table 1. 13 Market Research Cost
Activity
No
1
2
3
Survey
Online questionnaire (own web development)
Consultant service(1st and 2nd years)
Total Market Research Cost
Cost
Rp 5.000.000
Rp 100.000.000
Rp 105.000.000
(Source : private cost)
1.1.1.6 Other Expenses

Besides those cost, thee are some investation costs that support the plant
development, such as licensing cost, patent, and product soft launching.
17
Patent is a set of exclusive rights granted by a sovereign state to an inventor
or their assignee for a limited period of time, in exchange for the public disclosure of
the invention. Based on Indonesian law, the meaning of inventor and invention
stated above is:
a)
Invention is an inventors idea that implemented into a specific problem

solving activities in the field of technology, which can be a product or process,
or the refinement and development of products or processes. (UU number 14 of
2001, article 1, paragraph 2)
b)
Inventor is a person or several persons who carry out ideas together which
implemented into the activities that produce an invention. (UU number 14 of
2001, article 1, paragraph 3)
Patents that will be registered by PT. Sayummy Indonesia Sejahtera for Sayummy
Chicken Satay includes 3 claims, which are:
1. Overall Sayummy composition
2. Active agent specification: Galangal extract
3. Chicken Satay Packaged
Cost of patent registration and maintenance are regulated in PPnumber 38 of
2009. So, based on that law, the cost that charged to PT. Sayummy Indonesia
Sejahtera for Sayummy Chicken Satay are:
Table 1. 14Patent Free Details
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Non-Tax Revenue
Unit
Patent request
Per request
Additional cost per claim
Per request
Announcement acceleration
Per request
that held as soon as 6 months
Request for letter of priority
Per request
right evidence
Substantive inspection
Per request
Cost for publishing
Per certificate
certificates
Admission for liceso thense
Per request
agreement registration
Request for compulsory
Per request
licensing
Request for general list
Per request
excerpts of patents
Request for copies of patent
Per sheet
documents
Cost for patent search that has been announced
Cost
Rp 575.000
Rp 40.000
Rp200.000
Qty.
1
3
1
Total
Rp 575.000
Rp 120.000
Rp 200.000
Rp 250.000
Rp 250.000
Rp 2.000.000
Rp 250.000
1
1
Rp 2.000.000
Rp 250.000
Rp 1.000.000
Rp 1.000.000
Rp 3.000.000
Rp 3.000.000
Rp 100.000
Rp 100.000
Rp 5.000
60
Rp 300.000
18
a) Domestic
Per subject
b) Overseas
Per subject
Annual cost for patent maintenance:
1st year from the date of patent acceptance
c) Basic cost
Per patent
d) Cost per claim
Per claim
2nd year from the date of patent acceptance
e) Basic cost
Per patent
f) Cost per claim
Per claim
Rp 250.000
Rp 100
1
1
Rp 250.000
Rp 972.285
Rp 750.000
Rp 750.000
Rp 750.000
Rp 50.000
1
3
Rp 750.000
Rp 150.000
3rd year from the date of patent acceptance

g) Basic cost
Per patent
h) Cost per claim
Per claim
Rp 750.000
Rp 50.000
1
3
Rp 750.000
Rp150.000
4th year from the date of patent acceptance

i) Basic cost
Per patent
j) Cost per claim
Per claim
Rp 1.000.000
Rp 100.000
1
3
Rp 1.000.000
Rp300.000
(Source: Peraturan Pemerintah Republik Indonesia No. 38 of 2009 (http://hukum.unsrat.ac.id/pp))

Table 1.10 Patent Free Details (Continued)
No.
Non-Tax Revenue
Unit
th
5 year from the date of patent acceptance
k) Basic cost
Per patent
l) Cost per claim
Per claim
Cost
Qty.
Total
Rp 1.000.000
Rp 100.000
1
3
Rp 1.000.000
Rp300.000
Rp 1.500.000
Rp 150.000
1
3
Rp 1.500.000
Rp 450.000
o) Basic cost
Per patent
p) Cost per claim
Per claim
th
Rp 2.000.000
Rp 200.000
1
3
Rp 2.000.000
Rp 600.000
q) Basic cost
Per patent
r) Cost per claim
Per claim
th
Rp 2.000.000
Rp 200.000
1
3
Rp 2.000.000
Rp 600.000
s) Basic cost
Per patent
t) Cost per claim
Per claim
Rp 2.500.000
Rp 250.000
1
3
Rp 2.500.000
Rp 750.000
1
3
Rp 3.500.000
Rp 750.000

m) Basic cost
Per patent
n) Cost per claim
Per claim
u) Basic cost
Per patent
v) Cost per claim
Per claim
th
w) Basic cost
Per patent
x) Cost per claim
Per claim
Rp 3.500.000
Rp 250.000
Rp 5.000.000
Rp 250.000
Rp
5.000.000
Rp 750.000
th
19
y) Basic cost
Per patent
z) Cost per claim

Per claim
Rp 5.000.000
Rp 250.000
Rp
5.000.000
Rp 750.000
th
aa) Basic cost
Per patent
Rp 5.000.000
bb) Cost per claim
Per claim
Rp 250.000
Rp
5.000.000
Rp 750.000
Table 1.10 Patent Free Details (Continued)
Non-Tax Revenue
Unit
cc) Basic cost
Per patent
Cost
Qty.
Total
Rp 5.000.000
dd) Cost per claim

Per claim
Rp 250.000
Rp 5.000.000
ff) Cost per claim

Per claim
gg) Basic cost
Per patent
Rp 250.000
Rp 5.000.000
hh) Cost per claim

Per claim
ii) Basic cost
Per patent
Rp 250.000
Rp 5.000.000
Rp 250.000
Rp 5.000.000
Rp
5.000.000
ll) Cost per claim

Per claim
mm)
Basic cost
Per patent
Rp 250.000
Rp 750.000
Rp 5.000.000
nn) Cost per claim

Per claim
oo) Basic cost
Per patent
Rp 250.000
Rp
5.000.000
Rp 750.000
Rp 5.000.000
Rp 250.000
Rp
5.000.000
Rp 750.000
th
ee) Basic cost
jj) Cost per claim
Per patent
Per claim

kk) Basic cost
Per patent
Rp
5.000.000
Rp 750.000
Rp
5.000.000
Rp 750.000
Rp
5.000.000
Rp 750.000
th
pp) Cost per claim
Per claim
Rp
5.000.000
Rp 750.000
20
13.
Cost for patent

application
administration
through Patent
Cooperation Treaty
(PCT)
Rp
1.000.000
Per request
Rp 1.000.000
All costs, except number 12, (which is equal to Rp13.017.285) are paid in
year zero, while the annual costs (number 12) is paid every year as operating
costs.Cash flow that are consist of these patent registration cost will be further
discussed in sub chapter economic analysis.
Patent is valid for 20 years. Because of Sayummy factory life time is ten
years, the annual cost for the 10th year to the 20th year will be paid out at once in the
10th year.
The American Marketing Association (AMA) defines a brand as a name,
term, sign, symbol or design, or a combination of them intended to identify the
goods and services of one seller or group of sellers and to differentiate them from
those of other sellers. Therefore it makes sense to understand that branding is not
about getting your target market to choose you over the competition, but it is about
getting your prospects to see you as the only one that provides a solution to their
problem. Indonesia, the right of brand is protected by UU No. 15 of 2001. Brand
protection is valid for ten years and be retroactive from the date of receipt brand, and
can be extended as long as the brand continued to be used in trade.
Sayummy will register Sayummy as Chicken Satay packaged with the
following logo:
Figure 1. 6Logo of Sayummy
21
The following table is describing about the detail of brand cost for
Sayummy based on law that applicable in Indonesia:
Table 1. 15 Brand Fee Details
No
1.
Non-Tax Revenue
Request for trademark
registration
Unit
Cost
Total
Per request
Rp 600.000
Rp 600.000
2.
Brand license publishing costs
Per certificate
Rp 100.000
Rp 100.000
3.
License agreement registration
Per request
Rp 500.000
Rp 500.000
Rp 150.000
Rp 150.000
Rp 200.000
Rp 200.000
Rp 200.000
Rp 200.000
Per request
Rp 250.000
Rp 250.000
Individual
Rp 5.000.000
4.
5.
6.
Request for official excerpt

and written statement about
the brand:
a. Official excerpt request for
brand registration
b. Request for written statement
about the general brand list
c. Request for written statement
about the similarity of a brand
with the registered brand
Cost for proof of
prioritytrademark application
copy
Registration of Intellectual
Property Rights
Per request
Rp 5.000.000
All prices will be paid at the beginning, i.e in year zero. Cash flow containing
the brand registration cost will be explained in the economic analysis subchapter.
For the clinical performance test, Sayummy use BPOM fare for Indonesian
food in modern food forms, which equal to Rp500.000
TARIF ATAS JENIS PENERIMAAN BUKAN PAJAK YANG BERLAKU
PADA BADAN PENGAWAS OBAT DAN MAKANAN
22
Figure 1. 7BPOM fare for processed meat product in Food Packaged Form
(Source : bpkp.go.id, 2014)
Table 1. 16Other Cost
No
1
Components
Patent (3 years)
Licensing
Brand
Clinical Performance Test
Publication
Product Soft Launching (50 places Entertainment
in Jabodetabek)
Accommodation
Equipment
Total Other Cost
Price (Rp)
10.000.000
5.000.000
500.000
10.000.000
100.000.000
50.000.000
50.000.000
225.500.000
From all of the calculations that have been conducted, we can conclude that
the Total Fixed Cost is total cost of several cost, there are main process equipment
cost, plant building and site cost, supporting equipment cost, distribution facilities
cost, market research cost, and other cost. Total Fixed Cost is equal to
Rp5.119.671.000.The total segmentation of Total Permanent Investment cost or
fixed cost can be shown in table below.
Table 1. 17Total Permanent Investment Cost and Fixed Capital
Cost Segmentation
Main Process Equipment cost
Plant Building and Site Cost
Supporting Equipment Cost
Distribution facilities Cost
Market Research Cost
Other Cost
Fixed Capital
Price (Rp)
825.899.000
3.300.000.000
463.272.000
200.000.000
105.000.000
225.500.000
5.119.671.000
1.1.2
Working Capital (CWC)

23
Working capital is a capital cost that is used in the first year of factorys
operation (in the beginning months of production process until the incomes
obtained). Working capital involves the cost, such as starting-up production
(manufacturing cost in the beginning months), raw material and another material in
inventory, final product inventory, claims, money for monthly operation expenditure,
for example : salary for workers, raw materials purchasing, debt, and taxes. Working
capital is usually recovered in the end of the project. Working capital (CWC) can be
estimated with this equation below :
Eq. 1. 5
Where :
WC
=Working Capital
= 0.05 (for singgle product)
FC
=Fixed Capital
Working capital costthat will be obtained is.

After working capital has been obtained, total capital investment (CTCI) can
be calculated by this equation:
After that, we cancalculate thevalue of TotalCapitalInvestment(TCI), as

follows:
Table 1. 18Total Capital Investment
Cost Segmentation
Main Process Equipment cost
Plant Building and Site Cost
Supporting Equipment Cost
Distribution facilities Cost
Market Research Cost
Other Cost
Fixed Capital
Working Capital
Capex (Rounded)
Price (Rp)
825.899.000
3.300.000.000
463.272.000
200.000.000
105.000.000
225.500.000
5.119.671.000
255.983.000
5.375.655.000
Thenwe will have thatCapex value is equal to Rp5.375.655.000.
24
1.2
Total Operating Cost (TOC)

Total operating cost is the cost spent to processing the desired product until
the product arrives to consumers. Operating cost is categorized into manufacturing

cost and general expenses. Manufacturing cost is the cost within the manufacture
process and separated into cost that vary within the production capacity and cost that
is fixed and charges each year. Manufacturing cost includes direct production cost,
fixed charges, and plant overhead cost. While the general expenses is spent out from
the manufacture process. General expenses consist of administrative cost,
distribution and marketing cost, research and development cost, and financing
(interest cost). The calculation is done in annual basis because by calculate per year,
the profile of variation per day is smoothed out and plant on stream time is
considered, permits more rapid calculation of operating factor, and easy to calculate
large expenses.
1.2.1 Direct Production Cost
Direct production cost directly related to the production process and varies
when the production capacity is altered. Direct production cost consists of raw
material cost, operating cost (direct labor wages), and waste treatment cost.
1.2.1.1. Raw Material Cost
Direct production cost is a cost that contact with production of Sayummy.
Direct material cost include the cost of Chicken meat, Spices, Peanut, HDPE plastic,
Vacuum plastic and cardboard for package.
Raw material cost calculated based on
production capacity and sell price. Summary of raw material cost shown as table
below with total annual cost Rp 2.551.217.419,61.
25
Table 1. 15List of Raw Material Price (including delivery cost)
Material
Order per
Year (kg)
Chicken meat
(boneless)
Red Onion
Lime
Galangal
Brown Sugar
Kemiri
Bay
Salt
White onion
Peanut
Red Chili
Lime leaf
70703.37926
3448.650556
11801.15508
50455.38984
3651.161964
3606.142663
483.3937852
633.5941292
3137.833327
33252.25591
11801.15508
1077.928545
Total
Sum of
material
Needs per
Day (kg)
286.4
Price per kg (Rp)
Total Order Cost

(Rp)
20.000,00
1.414.067.585,20
16.06
45.79
229.1
16.06
16.06
2.28
2.79
16.06
171.7
16.06
2.28
18.000,00
5.000,00
4.000,00
8.000,00
7.000,00
5.000,00
9.000,00
10.000,00
14.000,00
20.000.00
14.000.00
62.075.710,01
59.005.775,40
201.821.559,37
29.209.295,71
25.242.998,64
2.416.968,93
5.702.347,16
31.378.333,27
465.531.582,74
236.023.101,60
15.090.999,63
2.547.566.257,65
Besides raw materials for processing Sayummy we calculated raw

material for packaging product. Summary of raw material for packaging cost
shown as table below with total annual cost Rp 170.915.000.
Table 1. 16Packaging Order Capacity
Raw material
amount
per day
(pcs)
HDPE Plastic
Vacuum Plastic
Paper box
5180
5180
172
amount
per year
(pcs)
Safety
stock
per
year
(pcs)
1243200 124320
1243200 124320
41280
4128
Order
size
per
year
Price
per pcs
(Rp)
129500
129500
4300
250
1
1.500
Total
price per year

(Rp)
32.375.000
116.550.000
5.590.000
154.515.000
26
1.2.1.2 Operating Labor
Operating labor cost is the wages paid for the workers related to
the production process, such as operators who operate and monitoring
the equipment due to the processing period, warehouseman who
responsible of reporting and monitoring the raw material and product
amount in the inventory and help the processing as well, and the last is
the factory worker who do simple works, such as moving materials from
one place to another. While for the technicians wages, workers who
responsible in maintaining the equipment, are covered in the
maintenance costing, because in the details of the maintenance cost is
included cost for the maintenance workers. The wages value varies from
one profession to another, increasing from factory worker to operator.
The wages for operators iare higher because they required specific skill
to deal with plant equipments. The minimum payment is determined by
the data of UMN (National minimum wage) 2014 from www.bbc.co.uk.
The minimum payment value is Rp 2.200.000,00. UMN is one of
government policy that regulates the minimum payment which a worker
deserve as the payment of their works. Need to notice that the minimum
payment is based on monthly wages with 8 hours of work each day (one
shift). The total wages paid by the company is multiplied by the amount
of shifts prevailed. The personnels of workers placed in the plant is vary
according to the importance of the process and the vulnerability of the
process. The main process that requires more consideration is the main
cooking process because the amount of product manufactured is many
and the equipments used is integrated and complicated.
27
Table 1. 17Details of Personel of Direct Labor in Each Process per Shift
Qualification
Amount
Salary/Month Salary/Year
Total Salary/Year
Supervisor
Process
(Person)
2
3
(Rp)
3.500.000,00
3.000.000,00
(Rp)
(Rp)
42.600.000,00
84.000.000,00
36.000.000,00
108.000.000,00
Operator
Maintenanc
4.000.000,00
48.000.000,00
96.000.000,00
e Engineer
Labor
2.200.000,00
26.400.000,00
132.000.000,00
Total
12
420.000.000,00
1.2.1.3 Cost for waste treatment

Waste from processing Sayummy is solid waste and liquid waste. For
waste treatment we decided to using waste treatment system which running from
waste treatment services. So we are selling Rp 100.000.000 for their services per
year (include liquid and solid waste).
1.2.2 Fixed Operation Cost
Fixed operation cost related to the expense which are related to the
operation of a device, component, piece of equipment of facility. Fixed operation
cost consists of Utilities cost, insurance, General Expenses, Distribution cost, and
Marketing cost.
1.2.2.1 Utilities Cost
The utilities required for the production process is process water to wash
the material and soak the main material of Sayummy, then electricity and fuel
used for equipments. The water used is demineralized water because the waters
sanitation need to be consider as this is processing utility for food product. While
for the electricity cost, is derived from the newest PLN electricity charge in 2014.
The cost for each kWh spent is Rp 320,00. From the previous chapter, we
calculated amount of electricity for equipment and for other operational (include
electricity for office and the other) is 36.396 kWh for a year. The requirement of
28
utilities is obtained from the mass balance which is made in previous chapter. The
calculation can be seen in below table.
Table 1. 18Calculation of Utiiities Cost
Comodity
Electriciy
Process Water
Total needed
(in1 years)
Amount Unit
36.396 kWh
378701 Liter
Cost per unit (Rp)
Total Cost
(Rp)
Cost
Unit
320 Rp/kWh
1,00 Rp/liter
Total
11.646.720
198.700.800
210.347.520
(Source : private cost)
1.2.2.2. Insurance
Insurance is a cost paid by the insurance company to cooperate with
company. Insurance paid include costs of buildings and equipment owned
insurance company (the insurance company's assets) and employee insurance.
Insurance of buildings and equipment amounted to 2% of Fixed Capital and
obtained cost per year is Rp 511.967.174,8 Thus, the total cost of insurance per
year is Rp 102.393.434,96.
1.2.2.3 General Expenses
General expenses is the cost that related to the routine expenses in office.
These expenses support the operational activity in our chicken satay plant.This
cost is non-manufacturing cost spent periodically to maintain the supporting
administration of manufacturing process. Include in this are administrative cost,
distribution and marketing cost.
1.2.2.3.1 Administrative Cost
The cost included in administrative cost is administrators wages, and
cost for supplying needs for other facilities. The calculation can be seen in table
below
Table 1. 19Calculation of Administrative Cost (Indirect Labor Wages)
Division
Personels
Wages per
month (Rp)
President Director
15.000.000
Total
Wages per
month (Rp)
15.000.000
29
Secretary of President Director
Vice President Director
General Manager
Finance and Accounting
HRD
Logistic-Expedition
Purchasing
QC
Security
Total
1
1
3
1
2
1
1
2
3
16
4.000.000
12.000.000
4.200.000
2.200.000
2.200.000
2.200.000
2.200.000
2.200.000
2.200.000
Total
4.000.000
12.000.000
12.600.000
22.000.000
44.000.000
22.000.000
22.000.000
44.000.000
66.000.000
65.600.000
Total per annum 787.200.000
Besides the labor who operates the equipment directly, there are workers
who coordinate them to keep the performance of the process well. They are
managers that responsible to report all result to the main office to be analyzed.
Besides manager, it is needed a quality control. Some personels of quality control
division will be required to survey and take samples from the manufacturing plant
and analyze it.
Table 1. 20Details General Expenses
Jenis Biaya
telephone
Faximile
Internet
Total General and Administrative Expenses (Rp)
Total Biaya per Tahun (Rp)
Rp
10.000.000
3.600.000
6.000.000
19.600.000
1.2.2.3.2 Distribution
To distribute the product to various retails seller it will need costs. The
product delivered to distribution center. Then distribution center of the retails will
distribute to retails outlet with their own discretion. Selection of Sayummy
distribution to a distribution center (DC) based on the minimum cost required
30
between taking transportation or by using forwarding services. Having calculated
turn out cheaper to use own transportation.
Products will distribute by truck box. As our distribution centers are
located near each other, and all of them are located in Java Island, we only need to
deliver the product by land. The truck box we used is Mitsubishi L-300 which has
dimension as follows.
Table 1. 19 Dimension of Mitsubishi L-300
Outer Size
Transportation
Mitsubishi L 300
Inner Size
2560
1720
1410
2460
1620
1300
(Source : mitsubishi.com, 2014)
Figure 1. 8 Mitsubishi L-300

(Source :mitsubishi.com, 2014)
Here is a breakdown of the cost of plant to the DC. Since the price of 1 L
fuel is Rp 6.500,00 and from 1 L fuel can take 9 km of the distances. The details
of distribution cost will be described below:
Table 1. 22Total Distribution Cost
Location factory
Raya bogor
Jabodetabek
Bandung
Semarang
cost
(40 km)
(162 km)
(402.31 km)
Fuel
28000
117000
290557
Driver
50000
70000
90000
Tol, etc
70000
100000
Total cost distribution from factory to DC for a year
Surabaya
(654.7
km)
472838
120000
150000
total cost
per tahun
(Rp)
218014800
79200000
76800000
374.014.800
31
In figure above, we can see total cost distribution from factory to Dc for a
year is Rp 374.014.800,00.
1.2.2.3.3 Marketing Cost
Marketing inform the public consumer about the product or services in a
way that is innovative, informative, and creative. One of the biggest parts of
marketing is finding a way to gain and keep customers. The marketing of a
Sayummy has a purpose to helps consumers recognize products, choose between
products,
it
also
notifies
the
consumer
in
terms
of
new
additions/products/promotions. Marketing cost is consists of several promotion

activities such as advertisement cost and website making cost.
Table 1. 20 Sayummy Electronic Media Advertising Cost
Radio
Type
TV
Adlibs
Period Time
Prambors
Prime
Adlibs
Jakarta
Time
Lesmana
FM
Bogor
Prime
Adlibs
Time
18.0020.00
06.0009.00
16.0024.00
07.0010.00
16.0018.00
Price
per
Duration
duration
(Rp)
Ad
Cost per
amount/
year (Rp)
year
60s
375.000
40
15.000.000
60 s
225.000
15
3.375.000
60 s
225.000
15
3.375.000
60 s
200.000
10
2.000.000
60 s
200.000
10
2.000.000
32
Total Sayummy Electronic Media Advertising Cost (Rp)
25.750.000
Table 1. 24Sayummy Online Media Advertisement
Cost Breakdown
Web Designer Fee
Maintenance
Domain Registration
Amount
1
6
2
Total (Rp)
Price (Rp)
3.000.000
200.000
125.000
Total Price (Rp)

3.000.000
1.200.000
250.000
4.450.000

Table 1. 25Company Profile Website Cost)
Web Adress
Google AdSense
LINE
http://www.iklan-
Size (pixel)
-
Length of Time
30 days
30 days
Price
Free
Free
Free
gratis.com
Total
Marketing Cost Total = Rp 25.750.000+ Rp 4.400.000= Rp 30.200.000

1.3 Product Costing
1.3.1 Price per Unit Product
To determine how much the cost that we will spend during the production,
we can calculate by Cost of Goods Manufactured method or CoGM. This method
is based on the amount of work in process completed, includes costs of direct
materials during production process and direct labor and overhead. To calculate
with this method, direct materials, direct labor, and overhead have to input to the
production process. So, to compute the cost of goods manufactured we have to
involve direct materials, direct labor, and overhead beside all the product costs.
Generally, that explanation can be written in equation below.
Eq. 1. 6
Where the beginning is the inventory cost and inputs is consist of direct
materials, direct labor, and overhead costs. While ending and outputs is the ending
inventory and outputs cost of our product during a year, respectively. So the
equation above can be defined to,
33
Eq. 1. 7
After we obtain the result from CoGM method, then we can define product
cost per unit with Cost of Goods Sold or CoGS method. Before define product
cost per unit, we have to calculate number of units sold and cost of goods sold
first. As for the equation of number of unit sold is
Eq. 1. 8
Where amount of first inventory is the amount of our product that

produced and the inputs inventory is the amount of product that produced in
certain period, example when Idul Fitri day. While amount of finished goods is the
ending inventory of our product. As the result, we obtain outputs of amount of
packages that have to be sold.After that, we calculate cost of goods sold with
equation.
Eq. 1. 9
Now the next step is calculating product cost per unit by dividing
expecting sales revenue with sales volume per pack, with gross value per pack as
the result. After that we take 10% of that value to obtain Sayummys price per
pack. From the calculation, we get Rp 24,419.83 as our products price plus PPN
10% per unit or Rp 25,000.00 per unit. Here the summary of the calculation. As
for we take 12% from Sayummys price as our company profit.
34
Table 1.26Product Forecasting
Price per Year (Rp)

Sales Volume per pack
1,243,200
Operational Cost
Capital Investment
(CAPEX)
Total Cost (CoGS)
Expected
Expected Sales
Revenue
Gross Value per Pack
Net Value (PPN 10%)
8,779,905,481
15,560,113,294
24,340,018,775
3,651,002,816
27,991,021,591
22,515.30
24,766.83
1.3.2 Cash Flow

1.3.2.1 Interest
For our finance capital, we loan from two banks; PT Bank BNI Syariah
and PT Bank CIMB Niaga which has rate of interest in the amount of 12.5% and
12% respectively. As for the total loan is Rp 381,222,775.7 which will be paid in
the end of every year in ten years ahead. For tax income, we have 25% of its rate
and will be paid every year.
1.3.2.2 Tax
Based on the amount of income tax, our company has to pay to the
government in the amount of 25% of the net profit of the company. Since the
amount of our company income will be different each year, the amount of tax also
different each year. The prediction of tax amount will be explained on the table
below:
Table 1.27 Income Tax

35
Year
0
1
2
3
4
5
6
7
8
9
10
Income Tax (Rp)

0
0
4,327,187,290
95,0949,853
1,4814,712,416
20,058,474,979
25,302,237,542
30,546,000,105
35,789,762,668
41,033,525,231
46,539,742,293
1.3.2.3 Depreciation and Salvage Value

For depreciation calculation, we use declining balance method which is
accelerated depreciation in which the amount of depreciation that is charged to an
asset declines over time. In other words, more depreciation is charged during the
beginning of the life time and less is charged during the end. As for our company
use a linear depreciation as much as 15% per year, which use in calculation of
main equipment process and supporting equipment process. The depreciation of
our product is written down below.
36
Table 1.28 Machine depreciation for 10 years
Ye
ar
Depresia
si Rate
per Year
0.15
0.15
0.15
0.15
0.15
0.15
Weigher
Nagata
A500W
Rp
75,041,05
6
Rp
63,784,89
7
Rp
54,217,16
3
Rp
46,084,58
8
Rp
39,171,90
0
Rp
33,296,11
5
Rp
28,301,69
8
Air
Bubble
Vegetab
le and
Meat
Washer
Type
Rp
114,813,
173
Rp
97,591,1
97
Rp
82,952,5
17
Rp
70,509,6
40
Rp
59,933,1
94
Rp
50,943,2
15
Rp
43,301,7
33
Meat and
Vegetables
Cutter
Machine
Type vc65ms
Squar
e
formin
g
machi
ne
Rp
Rp 90,750,
91,101,177 540
Rp
Rp 77,137,
77,436,001 959
Rp
Rp 65,567,
65,820,601 266
Rp
Rp 55,732,
55,947,511 176
Rp
Rp 47,372,
47,555,384 349
Rp
Rp 40,266,
40,422,076 497
Rp
Rp 34,226,
34,358,765 522
Tumb
ler
Season
ing
Mixer
Type
YA900
Jackete
d kettle
cooker
Dryin
g
Oven
Vacuum
Packagi
ng
Food
Conveyor
belts for
sauce
Stainless
steel
Rp
9,336,
004
Rp
7,935,
604
Rp
6,745,
263
Rp
5,733,
474
Rp
4,873,
453
Rp
4,142,
435
Rp
3,521,
069
Rp
137,57
1,293
Rp
116,93
5,599
Rp
99,395,
259
Rp
84,485,
970
Rp
71,813,
075
Rp
61,041,
114
Rp
51,884,
947
Rp
734,068,
256
Rp
623,958,
017
Rp
530,364,
315
Rp
450,809,
668
Rp
383,188,
217
Rp
325,709,
985
Rp
276,853,
487
Rp
94,21
1,183
Rp
80,07
9,506
Rp
68,06
7,580
Rp
57,85
7,443
Rp
49,17
8,826
Rp
41,80
2,002
Rp
35,53
1,702
Rp
1,498,43
5,829
Rp
1,273,67
0,454
Rp
1,082,61
9,886
Rp
920,226,
903
Rp
782,192,
868
Rp
664,863,
938
Rp
565,134,
347
Rp
105,057,4
78
Rp
89,298,85
6
Rp
75,904,02
8
Rp
64,518,42
4
Rp
54,840,66
0
Rp
46,614,56
1
Rp
39,622,37
7
Rp
37,520,5
28
Rp
31,892,4
49
Rp
27,108,5
81
Rp
23,042,2
94
Rp
19,585,9
50
Rp
16,648,0
58
Rp
14,150,8
49
Automa
tic
Carton
Filling
Type
LB-4503
Rp
339,918,
501
Rp
288,930,
726
Rp
245,591,
117
Rp
208,752,
449
Rp
177,439,
582
Rp
150,823,
645
Rp
128,200,
098
37
Table 1.28 Machine depreciation for 10 years
Ye
ar
8
9
10
Air
Bubble
Depresia Weigher Vegetab
si Rate
Nagata
le and
per Year
A500W
Meat
Washer
Type
Rp
Rp
20,447,97 31,285,5
0.15 7
02
Rp
Rp
17,380,78 26,592,6
0.15 0
77
Rp
Rp
14,773,66 22,603,7
0.15 3
75
Automa
tic
Food
Jackete Dryin Vacuum
Carton
Tumb
Conveyor Stainless
d kettle
g
Packagi
Filling
ler
belts for
steel
cooker
Oven
ng
Type
sauce
LB-4503
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp 24,728, 2,543, 37,486, 200,026, 25,67 408,309, 28,627,16 10,223,9 92,624,5
24,824,208 662
973
874
644
1,655 566
7
88
71
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp 21,019, 2,162, 31,863, 170,022, 21,82 347,063, 24,333,09 8,690,39 78,730.8
21,100,576 363
377
843
648
0,907 131
2
0
85
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp 17,866, 1,838, 27,084, 144,519, 18,54 295,003, 20,683,12 7,386,83 66,921,2
17,935,490 459
020
266
251
7,771 661
8
2
52
Total
Rp
Salvage
655,163,
value
568
Meat and
Vegetables
Cutter
Machine
Type vc65ms
Squar
e
formin
g
machi
ne
Season
ing
Mixer
Type
YA900
38
Table 1.29Supporting equipment depreciation
Supporti
N
ng
o Equipme
nt
1 Faximile
2 Computer
Printer+F
3 otocopy+
Scanner
4
Central
AC
5 Dispenser
6
Microwav
e
Office
Desk
Office
Chair
Price
Rp
2,700,000
Rp
120,000,0
00
Rp
18,000,00
0
Rp
66,500,00
0
Rp
1,500,000
Rp
4,500,000
Rp
30,000,00
0
Rp
8,750,000
0,15
Rp
2,295,00
0
Rp
102,000,
000
Rp
15,300,0
00
Rp
56,525,0
00
Rp
1,275,00
0
Rp
3,825,00
0
Rp
25,500,0
00
Rp
7,437,50
0
0,15
0,15
Rp
1,658,1
38
Rp
73,695,
000
Rp
11,054,
250
Rp
40,839,
313
Rp
921,18
8
Rp
2,763,5
63
Rp
18,423,
750
Rp
5,373,5
94
0,15
Rp
1,409,
417
Rp
62,64
0,750
Rp
9,396,
113
Rp
34,71
3,416
Rp
783,0
09
Rp
2,349,
028
Rp
15,66
0,188
Rp
4,567,
555
Rp
1,950,750
Rp
86,700,000
Rp
13,005,000
Rp
48,046,250
Rp
1,083,750
Rp
3,251,250
Rp
21,675,000
Rp
6,321,875
Year/Depreciation Rate
5
6
7
0,15
Rp
1,198,0
04
Rp
53,244,
638
Rp
7,986,6
96
Rp
29,506,
403
Rp
665,55
8
Rp
1,996,6
74
Rp
13,311,
159
Rp
3,882,4
21
0,15
Rp
1,018,30
4
Rp
45,257,9
42
Rp
6,788,69
1
Rp
25,080,4
43
Rp
565,724
Rp
1,697,17
3
Rp
11,314,4
85
Rp
3,300,05
8
0,15
Rp
865,5
58
Rp
38,46
9,251
Rp
5,770,
388
Rp
21,31
8,376
Rp
480,8
66
Rp
1,442,
597
Rp
9,617,
313
Rp
2,805,
050
10
0,15
0,15
0,15
Salvage
Value
Rp
735,724
Rp
32,698,8
63
Rp
4,904,82
9
Rp
18,120,6
20
Rp
Rp
625,366
531,561
Rp
Rp
27,794,03 23,624,9
4
29
Rp
Rp
3,543,73
4,169,105 9
Rp
Rp
15,402,52 13,092,1
7
48
Rp
408,736
Rp
1,226,20
7
Rp
8,174,71
6
Rp
2,384,29
2
Rp
Rp
Rp
347,425
295,312
295,312
Rp
1,042,276
Rp
885,935
Rp
Rp 5,906,23
6,948,508 2
Rp
Rp
1,722,65
2,026,648 1
Rp
531,561
Rp
23,624,9
29
Rp
3,543,73
9
Rp
13,092,1
48
Rp
885,935
Rp
5,906,23
2
Rp
1,722,65
1
39
N
o
Supportin
g
Equipmen
t
Cupboard
1
0
Locker
1
1
Sofa
1
2
Meeting's
Desk and
Chair
1
3
Receptionis
t Desk
1
4
Guest
room's
desk and
chair
1
5
White
Board
Table 1.29Supporting equipment depreciation(Continued)

Price
10
0,15
Rp
37,931,250.
00
Rp
3,142,875.0
0
Rp1,007,53
4.00
Rp
6,812,263
Rp
5,790,424
Rp
4,921,860
Rp
1,634,943
Rp
1,389,702
Rp
1,181,246
Rp
2,200,000
Rp
1,870,000
Rp
1,589,500
Rp
976,152
Rp
829,729
0,15
Rp
16,830,
297.00
Rp
1,394,5
10.00
Rp
8,014,,
427
Rp
1,923,4
63
Rp
705,27
0
0,15
Rp
10,335,90
6.00
Rp
856,404.0
0
Rp
4,335,000
0,15
Rp
23,294,
529.00
Rp
1,930,1
18.00
Rp
11.092,
633
Rp
2.662.2
32
0,15
Rp
12,159,890.
00
Rp
5,100,000
0,15
Rp
27,405,
328.00
Rp
2,270,7
27.00
Rp
13,050,
156
Rp
3,132,0
38
Rp
1,148,4
14
0,15
Rp
14,305,75
3.00
Rp
1,185,334
.00
Rp
6,000,000
0,15
Rp
32,241,
563.00
Rp
2,671,4
44.00
Rp
15,353,
125
Rp
3,684,7
50
Rp
1,351,0
75
0,15
Rp
19,800,35
0.00
Rp
1,640,600
.00
Rp
25,000,000
0,15
Rp
44,625,00
0.00
Rp
3,697,500
.00
Rp
21,250,00
0
Rp
599,479
509,557
Rp
4,000,000
Rp
3,400,000
Rp
2,890,000
Rp
2,456,5
00
Rp
1,774,8
21
Rp
1,508,598
Rp
1,360,000
Rp
212,500,0
00
Rp
1,156,000
Rp
2,088,0
25
Rp
835,21
0
Rp
130,50
1,56
Rp
709,929
Rp
110,926
,328
Rp
603,439
Rp
94,287,37
9
Rp
52,500,00.0
0
Rp
4,350,000.0
0
Rp
1,600,000
Rp
1 Generator
250,000,00
6 set
0
Rp
18,062,500
Rp
180,625,000
Rp
982,600
Rp
153,531
,250
Rp
9,428,738
Rp
2,262897
Rp
1,282,3
08
Rp
512,92
3
Rp
80,144,
272
Rp
1,089,962
Rp
435,985
Rp
68,122,63
1
Salvage
Value
Rp
10,335,9
06.00
Rp
856,404.
00
Rp
10,335,9
06
Rp
Rp
433,124
Rp
856,404
Rp
4,921,86
0
Rp
Rp
787,498
Rp
1,181,24
6
Rp
Rp
314,999
Rp
49,218,60
1
926,468
370,587
Rp
57,904,237
Rp
433,124
Rp
787,498
40
Supporti
N
ng
o Equipm
ent
1 Office's
7 car
Distribu
1
tion's
8
car
Table 1.29Supporting equipment depreciation (Continued)

Price
10
0,15
0,15
0,15
0,15
0,15
0,15
0,15
0,15
0,15
0,15
Rp
Rp
Rp
Rp
Rp 367,2
703,500,0 597,975, 508,278,75 432,03 31,39
00
000
0
6,938
7
Rp
Rp
Rp
Rp
Rp 367,2
703,500,0 597,975, 508,278,75 432,03 31,39
00
000
0
6,938
7
Total
Rp
Depreciati
Rp
Rp
Rp 300,6
on
per 300,690, 300,690,00 300,69 90,00
Year
000
0
0,000
0
Rp
Rp
Rp 225,5
312,14 265,324, 25,98
6,687
684
2
Rp
Rp
Rp 225,5
312,14 265,324, 25,98
6,687
684
2
Rp
Rp
Rp 300,6
300,69 300,690, 90,00
0,000
000
0
Total Salvage value
Salvage
Value
Rp
Rp
Rp
Rp
191,697, 162,942,5 138,501, 138,501,
084
22
143
,143
Rp
Rp
Rp
Rp
191,697, 162,942,5 138,501, 138,501,
084
22
143
143
Rp
Rp
Rp
300,690, 300,690,0 300,690,
000
00
000
Rp
394,654,
431
41
After calculating depreciation, we can make a before and after tax cash flow. Both
before tax and after tax cash flow, it is representing the income and outcome in one
graphic. For income graphic it is represented in up bar and on the contrary for outcome
graphic represented in the down bar.
Fig 1.9Graphic of before tax cash flow (BTCF)

Fig 1.10Graphic of after tax cash flow (ATCF)

(Source: Private source)
42
1.3.3 Cost Breakdown

In order to know the percentage of each expenses, we do the cost breakdown step
by represented them in a pie chart. By making that pie chart, we can know which the
biggest percentage that we use from expenses. As for list of total cost of our
expenditures and its pie chart represented in table and chart below.
Table 1.30List of expenditures and its costs
List of Expenditures
Raw Material and Delivery
Cost
Packaging Order
Direct Labor
Utilities Cost
Administration Cost
General Expenses
Distribution Cost
Marketing Cost
Advertisement
Waste Treatment
Maintenance
Other
Total
Cost (Rp)
Percentage (%)
3,788,022,091
33.02
170,915,000
858,000,000
2,026,828,590
1,512,000,000
24,000,000
374,014,800
10,750,000
26,125,000
140,000,000
1,100,392,502
1,438,664,068
11,469,712,051
1.5
7.5
17.67
13.2
0.21
3.26
0.093
0.22
1.22
9.6
12.54
100
43
Fig 1.11Cost breakdown

From the table and pie chart above, we can conclude that the highest amount of
percentage of expenditure is raw material and delivery cost, which has Rp
3,788,022,091.00 cost or equal to 33% of total expenditure costs. Whereas for the
fewest amount of percentage of expenditure is marketing cost which has Rp
10,750,000.00 or 0.093%.
1.4 Profitability Analysis
1.4.1
Rate of Return / Rate of Investment

Rate of Return (ROI) is the annual profit generated by one unit of capital
invested. The formula for calculating ROI is as follows
Eq. 1. 10
Annual net profit net profit used is obtained either before or after taxes. Annual
Net Profit used is in after tax of Rp 3.820.438.484,- and invested capital of
Rp5.375.655.000,-. Then, entered into the formula.
% ROI =
x 100% = 71%
so the ROI obtained from this plant was 71 %. The ROI calculation explained
can be seen that the construction of Sayummy chicken satay plant is attractive to
investors because its rate of investment high enough.
1.4.2
Payback Period
Payback Period is the duration (in years) of an investment will be returned. Here
is the formula for calculating payback period taking into account the Time Value
of Money
Eq. 1. 11
From the previous calculation, we will obtain
If the payback period is less than a predetermined period, the project is

acceptable. If the payback period exceeds the predetermined period, the project
is rejected. Payback Period can also be seen from the plot the graph between the
44
net profit by the time (years) to obtain the payback period for this plant is 2,02
years of work (2 years and 5 working days).
Figure 1.12Payback period graph

From that time period can be concluded that the project can still be run due
to payback period takes less than 5 years.
1.4.3
Break EvenPoint
Break even point (BEP) is an analysis to determine and find the amount of
goods or services to be sold to consumers at a given price to cover the costs
incurred and the profit / profit. Calculation to find the BEP is
Eq. 1. 12
the total fixed cost is the fixed cost values tend to be stable and not influenced
by the amount of production and the variable cost is the variable cost of the
value depends on the amount of goods produced.
45
In this case the BEP previously seen from the graph, the graph payback period to
obtain the BEP occurred on day 125 when total production reached 647.670
units of product.
1.4.5
Internal Rate of Return (IRR)

Internal Rate of Return (IRR) is a measure of the maximum interest rate paid on
a project and still break even at the end of the project life. In other words, the
IRR is the interest rate when NPV = 0 so that the formula used to calculate the
IRR is
Eq. 1. 13
with the value of r is the IRR.

We calculate the IRR by using Microsoft Excel using the formula which
is =IRR(12,25%,[value 1,value 2,etc.]).Value 1, value 2 etc. will be the amount
after tax cash flow in each year.
For this calculation, we did not use usual MARR as our basic interest
calculation. We use MARR by calculated the WACC that is 12,25% obtained by
using the interest loan data from each bank.The bank we used to loan are BNI
syariah which is 12% and CIMB Niaga which is 12.5%. Our IRRis bigger than
either MARR, which is 20 %. In order to get this IRR we use the price Rp
18.500,- per package, whereas the unit price is Rp 18.193,-
1.4.6
Net Present Value (NPV)

Net Present Value (NPV) shows the net benefits gained by a project over
the life of the project at a certain interest rate. 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, the
interest rate used is the interest rate on the bank loan for start-up capital, 12.25%
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.
46
Cash flow in year and drawn into present value with a reasonable interest
rate by using the following formula:
Eq. 1. 14
We use Microsoft Excell by typing this formula to obtain NPV, which is

=NPV(12,25%,[value 1, value 2, etc.]. Value 1, value 2 etc. will be the after
tax cash flow in each year.
After projecting the value of profit each year to present value, all the
values are summed and with the profit rate of 12.25% MARR, NPV of Rp
26.609.675.100 is obtained. In other words, this project is very advantageous to
be implemented.
1.5 Sensitivity Analysis
Financial
situationoftheplantmustbeexperiencinginstability.
Thisinstabilityhappens due to many aspects that influence spesifically in price.

We know that the price of every element in industry processing will face its up
and down. This situation can make the possibilities to get more advantages or
may also obtain disadvantages. The main factors that our team will discuss
consist of 3 points. These factorsincludechanges inselling prices, changes
inoperatingcost, andchangesin raw material costs. Threeof these factorsare
variables
thatchangeaccording
to
thefluctuatingeconomic
circumstances
inIndonesiansociety. Toanticipate the disadvantages of fluctuation price impact,

we need to conductsensitivity analysis onthe changes thatarehappening.
Parametersused in thesensitivityanalysisareNPV, IRR, andPayback Period.
1.5.1
Fluctuation of Selling Price

The price of our product will not be fixed in entire 10 years, it would be
increased or may be decreased depends on many aspects, such as the price of raw
materials, the expenses for operational process (fuel price, electricity price, and
minimum salary required by government), and also the level of demand by the
consumers.
Sensitivity analysiswas conducted onthe increaseanddecrease inthe selling
priceofthe product. We need to calculate each condition by assuming the deviation
of selling price from 10%-50%. In this part, the changeable parameter will be the
47
income. After that we have to calculate one by one the after tax cash flow by the
change of selling price, then we will get 11 variations of IRR, NPV, and payback
period due to the conditions applied.
Table 1.31Sensitivity of IRR, NPV, and Payback Period to Fluctuation of Product Selling Price
Fluctuation Selling Price

NPV
-50%
Rp12,210 (Rp176,194,161,519.94)
-40%
Rp14,651 (Rp118,529,565,618.79)
-30%
Rp17,093 (Rp60,864,969,717.64)
-20%
Rp19,535
(Rp3,200,373,816.49)
-10%
Rp21,977
Rp54,464,222,084.66
0%
Rp24,419 Rp132,672,029,415.33
10%
Rp26,861 Rp169,793,413,886.95
20%
Rp29,303 Rp227,458,009,788.10
30%
Rp31,745 Rp285,122,605,689.25
40%
Rp34,187 Rp342,378,040,963.97
50%
Rp36,629 Rp400,042,636,865.12
IRR
Payback Period (Years)
9.66%
10.35
12.33%
8.11
15.88%
6.30
20.35%
4.91
29.33%
3.41
41.58%
2.41
49.59%
2.02
61.66%
1.62
73.36%
1.36
84.81%
1.18
96.12%
1.04
1.5.2
Fluctuation of Raw Material Price

One thing that should be considered is the raw material prices, this aspect is the
most unstable price in operating costs. Since our product is food, we need to make
sure that the raw material especially the spices and meat should be fresh all the time.
So we can not keep them in a long time. Due to this condition, we have to analyze the
possibilities if there is any change in raw material price.
Sensitivity analysiswas conductedby changing the percentage of raw material
prices that may be lower or higher, we assume the percentage range from 10%-50%
both for decreasing and increasing..The increasein operating coststhatsupport the
activities ofthe production will impact on theNPV. NPVwill be smallerwith
increasingoperationalcosts.
It
alsorelatestothe
IRRvaluegets
smallerwith
increasingoperational costs. IRRisthe lowervaluemeansthatthereturnswould be lower.It

isalsoevident from thepayback period that will be takes longer time.
Table 1.32 Sensitivity of IRR, NPV, and Payback Period to Fluctuation of Raw Material Price
Fluctuation
Operational
Cost NPV
IRR
Payback
(Material
Cost
(Years)
Deviation)
-50%
Rp7,187,227,004 Rp148,105,120,913.81
44.91%
-40%
Rp7,566,029,214 Rp140,909,860,328.21
43.33%
Period
2.23
2.31
48
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Rp7,944,831,423
Rp8,323,633,632
Rp8,702,435,841
Rp9,081,238,050
Rp9,460,040,259
Rp9,838,842,468
Rp10,217,644,677
Rp10,596,446,886
Rp10,975,249,096
Rp133,714,599,742.61
Rp126,519,339,157.01
Rp119,324,078,571.41
Rp111,719,657,359.38
Rp104,933,557,400.20
Rp97,738,296,814.60
Rp90,543,036,229.00
Rp83,347,775,643.40
Rp76,152,515,057.80
41.74%
40.14%
38.53%
41.58%
35.25%
33.58%
31.90%
30.19%
28.46%
2.40
2.49
2.60
2.41
2.84
2.98
3.14
3.31
3.51
1.5.3
Fluctuation of Operating Labor Salary

The labor operating cost also impact in all over operating cost. The increasing of
labor operating cost usually happens frequently and cant be avoided. We have to
anticipate the disadvantages by calculating the possibilities if this aspect changes in its
price. Sensitivity analysiswas conductedby changing the percentage of operating labor
salary that may be lower or higher, we assume the percentage range from 10%-50%
both for decreasing and increasing..The increasein operating coststhatsupport the
activities ofthe production will impact on theNPV. NPV will be smaller with increasing
operational costs. It also relates to the IRR value gets smaller with increasing
operational costs. IRR isthe lower value means that the returns would be lower.It is also
influences from the payback period that will be takes longer time.
Table 1.33 Sensitivity of IRR, NPV, and Payback Period to Fluctuation of Operating Labor
Salary
Fluctua
Operational Cost NPV
tion
(Labor
IRR
Cost
Payback Period
(Years)
Deviation)
-50% Rp8,995,438,050
Rp120,277,574,030.
38.74%
2.58
-40% Rp8,909,638,050
29
Rp118,647,822,821.
38.37%
2.61
-30% Rp8,823,838,050
39
Rp117,018,071,612.
38.00%
2.63
-20% Rp8,738,038,050
50
Rp115,388,320,403.
37.64%
2.66
49
-10% Rp8,652,238,050
60
Rp113,758,569,194.
37.27%
2.68
0% Rp9,081,238,050
70
Rp112,128,817,985.
36.89%
2.71
10% Rp9,167,038,050
80
Rp110,499,066,776.
36.52%
2.74
20% Rp9,252,838,050
91
Rp108,869,315,568.
36.15%
2.77
30% Rp9,338,638,050
01
Rp107,239,564,359.
35.78%
2.80
40% Rp9,424,438,050
11
Rp105,609,813,150.
35.40%
2.82
50% Rp9,510,238,050
22
Rp103,980,061,941.
35.03%
2.85
32
1.5.4
Graphical Analysis
Fig 1.13Graph Showing Effect of Altered Factor to NPV

50
Generally, the higher the product cost, the NPV will be higher because the
income will be greater than if the product is sold cheaper. While if the raw material cost
increase, the NPV will lower because the expense on operating cost will be higher so
that the NPV will be decrease as well. Then, for increased distribution cost will have the
same effect as increase in raw material cost, because it is both expense element of cash
flow.
Comparing these three factors to the deviation of NPV, product cost can alter
NPV in big order of magnitude because by increasing the selling price by 10%, the
product will take a folded effect of increase of profit, so the NPV is increased by several
times as well. Effecting not so much, raw material has a great portion in manufacturing
cost but not effecting the NPV as significant as the elling price so that the profile cant
be observed from the graph (showing a linear straight line with almost no fluctuation).
While distribution cost has very small value compared to the total operating cost.
Observation of production selling price is plotted until -10% of origin price, cant be
lower than -10% because it will be unprofit.
Fig 1.14Graph Showing Effect of Altered Factor to Payback Period
51
Generally, the incease product cost will decrease payback period because the
bigger profit will cover the payment of investment loan. The increase of payback period
when the raw material is more expensive is less rapid because the increase in price will
be limited by the period of payment of loan. The lower magnitude of increase is seen in
the altered operating cost (raw material and distribution). The profile is almost straight
because the payback period is the same from each fluctuation, since the payback period
cant be observed more detail because it is served in graph.
Fig 1.15Graph Showing Effect of Altered Factor to IRR

Increasing selling price will increase the IRR which means the business will get
the return of the investment in the beginning faster. Raw material cost increase will
lower the IRR because the weight on operating cost is escalated. With same selling
price, the rate of return will be smaller and cause a longer payback period. Small value
as distribution cost wont effect much but generally will decrease the IRR because it is
52
one of operating cost component. The details for each of NPV, payback period, and IRR
sensitivity for the fluctuation of three factors can be seen in graphs below.
CHAPTER II
CONCLUSION
From the calculation of total capital investment, we obtain that the total
amount of capital investment we have to spend to develop sayummy
chicken satay plant is Rp 15,560,113,294. We will obtain the money from
bank loan.
We also need to consider the operational cost in sayummy chicken satay
production, the elements we have to calculate such as the distribution cost,
the salary for workers, waste treatment cost influence the amount of
money we have to spend, total operational cost we obtained is Rp
9,081,238,050.
After obtain the total capital expenditure we can estimate the profit we
want to get, our team decide to get 15% profit, so we sell the product in Rp
25.000,- each package to reach our profit target.

To make sure that this project is profitable enough and attract the investors
to loan the money for this project, we analyze the profitability by calculate
the rate of investment (ROI), payback period, breakeven point (BEP),
internal rate of return (IRR), and also net present value (NPV). The
number of these elements should complete the requirements. The
percentage of ROI should be high at least 30%, the payback period should
be less than 5 years, the IRR will be better if its percentage bigger than the
loan interest, and the NPV should be more than 0. After calculating each
element, we obtain that the results are ROI 63,5%; payback period 2,41
years;IRR 41,5%, and NPV costs Rp 85,669,923,015.

To anticipate the fluctuative situation, such as the fluctuation of raw
material price, the selling price, and also the operational cost, we also do
the sensitivity analysis to estimate the alteration of NPV, IRR, and
payback period value.
REFERENCES
Anonim. Factory Overhead.
http://www.accountingtools.com/definition-factory-overhead (Accessed in
Wednesday, April 30 at 5.29 PM)
Holtzman, Mark P. How to Determine Cost of Goods Manufactured.
http://www.dummies.com/how-to/content/how-to-determine-cost-ofgoods-manufactured.html (Accessed in Tuesday, April 29 2014 at 10.03
PM)
Holtzman, Mark P. How to Determine Cost of Goods Manufactured.
http://www.dummies.com/how-to/content/how-to-compute-cost-of-goodssold.html (Accessed in Tuesday, April 29 2014 at 10.40 PM)
Seider W.D., Seader J.D., Lewin D.R., Widagdo S. 2009. Product and Process
Design Principles. Synthesis, Analysis and Evaluation. USA: Wiley and
Sons Inc
Wesselingh, J.A. et al. (2007) Design and Development of biological, Chemical,
Food and Pharmaceutical Products. England: Wiley.
Wheeler, Tommy L, et.al. 2010. Warner-Bratzler Shear Force Protocol. USA:
USDA-ARS U.S Meat Animal Research Center

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UNIVERSITAS INDONESIA

INDIGENOUS FAST FOOD

CHEMICAL ENGINEERING DEPARTMENT

1.2.2 Fixed Operation Cost.......................................................................................

1.5.3 Fluctuation of Operating Labor Salary............................................................

Fig 1.8 Mitsubishi L-300...........................................................................................

Table 1.6 Detail Area of Each Sector.............................................................................

Table 1.30 Supporting Equipment Depreciation............................................................

Total Capital Investment (CTCI)

CTCI = Total Capital Investment

Plant and machinery.

Factory's land and its buildings.

Company's headquarter (HQ), administrative areas, regional and local

Computing and communication

infrastructure that mostly includes

workstations, servers, data-storage facilities, local-area networks, the

infrastructure, known as offsite or OSBL investment;

ISBL Plant Costs

Electric main substations, transformers, switchgear, and power lines;

drainage, and sewers;

central control rooms;

Detailed design engineering of process equipment, piping systems, control

and civil engineering;

management, expediting, inspection, travel and living expenses, and home

Changes in project scope;

Total Bare Module Cost

specific equipment type

Direct, indirect, engineering, and contingency costs are expressed as functions

and CS (carbon steel).

= bare module factor

= pressure factor (=1 for 1 bar)

=material of construction factor (=1 for CS)

The graphalso showed in Figure 1.1 below:

Figure 1.1 Marshall and Swift Annual index graph

1 Weigher Nagata A500W

2 Air Bubble Vegetable and Meat Washer

6 Seasoning Mixer Type YA-900

7 Jacketed kettle cooker

1 Food Conveyor belts for sauce

(Source : private source)

In the Guthrie method, TCI calculation is conducted by adding some costs

Figure 1. 2Bare Module Factor

Pumps and Drivers

(Source : private source)

1.1.1.2 Plant Building Cost and Site Cost

Mince meat machine

Jacketed kettle cooker

(Source: private source)

Loading and Unloading material

Raw Material Storage

(Source : private source)

(Source : private source)

Figure 1. 3 1st Floor

Figure 1. 4Location of Equipment in processing plant

Figure 1. 52nd Floor

Table 1. 12Offsite facility Cost

PAM (Water) Installation

(Source : private source)

Price for Each (Rp)

Total Cost (Rp)

Samsung 22" UA22H5000 Full

Total Supporting Equipment Cost (Rp)

(Source : private source)