product design

UNIVERSITAS INDONESIA

INDIGENOUS FAST FOODRevisied Assignment 4GROUP 17GROUP 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

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.

LIST OF CONTENTEXECUTIVE SUMMARYiiLIST OF CONTENTivLIST OF FIGUREviLIST OF TABLEviiCHAPTER I MARKET AND COST ANALYSIS11.1 Total Capital Investment1

1.1.1 Fixed Capital2

1.1.1.1 Equipment Cost3

1.1.1.2 Plant Building Cost and Site Cost12

1.1.1.3 Supporting Equipment Cost15

1.1.1.4 Market Research Cost16

1.1.1.5 Another Expenses17

1.1.2 Working Capital231.2 Operational Cost24

1.2.1 Direct Production Cost25

1.2.1.1 Raw Material Cost25

1.2.1.2 Operating Labor Cost27

1.2.1.3 Waste Treatment Cost28

1.2.2 Fixed Operation Cost28

1.2.2.1 Utility Cost28

1.2.2.2 Insurance Cost29

1.2.2.3 Administration Cost29

1.2.2.4 Distribution Cost31

1.2.2.5 Marketing Cost321.3 Product Costing33

1.3.1 Product Costing per Unit33

1.3.2 Cash Flow35

1.3.3 Cost Breakdown431.4 Profitability Analysis44

1.4.1 Rate of Investment44

1.4.2 Payback Period45

1.4.3 Break Even Point46

1.4.4 Internal Rate of Return47

1.4.5 Net Present Value471.5 Sensitivity Analysis48

1.5.1 Fluctuation of Selling Price48

1.5.2 Fluctuation of Raw Material Cost49

1.5.3 Fluctuation of Operating Labor Salary49

1.5.4 Graphical Analysis52CHAPTER II CONCLUSION55REFERENCES56LIST OF FIGUREFig.1.1 Marshall and Swift Annual Index Graph8Fig 1.2 Bare Module Factor10Fig 1.3 First Floor of Plant14Fig 1.4 Location of Each Equipment in Processing Plant14Fig 1.5 Second Floor of Plant15Fig 1.6 Logo of Sayummy21Fig 1.7 BPOM Fare for Meat Packaged Product22Fig 1.8 Mitsubishi L-30031Fig 1.9 Graphic of BTCF42Fig 110 Graphic of ATCF42Fig 1.11 Cost Breakdown44Fig 1.12 Payback Period Graph46Fig 1.13 NPV Alteration Based on Fluctuation52Fig 1.14 Payback Period Alteration Based on Fluctuation53Fig 1.15 IRR Alteration Based on Fluctuation54LIST OF TABLETable 1.1 Annual Index of Chemical Equipment Price Change per Year 20128

Table 1.2 Extrapolated Annual of Chemical Equipment Price Change per Year by 20159Table 1.3 Extrapolated price of main equipment in 20159Table 1.4 Total Bare Module Cost Calculation11Table 1.5 Detail Area of Production Facility12Table 1.6 Detail Area of Each Sector13Table 1.7 Plant Building and Site Cost13

Table 1.8 Offsite Facility Cost16Table 1.9 Market Research Cost17Table 1.10 Patent Fee Details18Table 1.11 Brand Fee Details22Table 1.12 Other Cost23Table 1.13 Total Permanent Investment Cost and Fixed Capital23Table 1.14 Total Capital Investment24Table 1.15 Maintanance Cost26Table 1.16 List of Raw Material Price26Table 1.17 Packaging Order Capacity28Table 1.18 Details of Personel Direct Labor29Table 1.19 Calculation of Utilities Cost30Table 1.20 Calculation of Administrative Cost30Table 1.21 Details General Expenses31Table 1.22 Dimension of Mitsubishi L-30032Table 1.23 Total Distribution Cost32Table 1.24 Sayummy Electronic Media Advertising Cost33Table 1.25 Sayummy Online Media Advertising Cost33Table 1.26 Company Profile Website35Table 1.27 Product Forecasting36Table 1.28 Machine Depreciation for 10 years37Table 1.29 Income Tax39Table 1.30 Supporting Equipment Depreciation43Table 1.31 List of Expenditures and its Cost49

Table 1.32 Sensitivity of IRR, NPV, and Payback Period to Fluctuation of Product Selling Price50Table 1.33 Sensitivity of IRR,NPV,andPBP to Fluctuation of Raw Material Price51CHAPTER I

MARKET AND COST ANALYSISPT 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

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 m2. 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)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. 1CTCI = Total Capital Investment

CWC= Working CapitalCTPI = Total Permanent Investment1.1.1 Fixed Capital / Total Permanent Investment (CTPI)1.1.1.1 Equipment CostFixed 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.;

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 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. 2Total 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 2012YearIndex

20011093,9

20021104,2

20031123,6

20041178,5

20051244,5

20061302,3

20071373,3

20081449,3

20091511,9

20101525,95

20111540

20121554,05

(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 2015YearIndex

20131568,1

20141582,15

20151596,2

(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 2015NoEquipmentQtyCapacity (Kg/h)FOB Price in 2014 (Rp)FOB Price in 2015 (Rp)

1Weigher Nagata A500W11000 5.894.489 6.000.000

2Air Bubble Vegetable and Meat Washer Type1600 35.355.143 35.988.000

3Meatand Vegetables Cutter Machine Type vc-65ms11500 29.472.443 30.000.000

4Square forming machine22100 6.831.712 6.954.000

5Tumbler11600 5.224.482 5.318.000

6Seasoning Mixer Type YA-9002800 15.114.451 15.385.000

7Jacketed kettle cooker1600 65.821.790 67.000.000

8Drying Oven11200 4.397.092 4.475.800

9Vacuum packaging11000 17.192.259 17.500.000

10Food Conveyor belts for sauce125 31.830.239 32.400.000

11Stainless stell125 11.297.770 11.500.000

12Automatic Carton Filling Type LB-450-311440 83.505.256 85.000.000

(Source : private source)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.

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 CalculationEquipmentCapacity

(Kg/h)QtyFOB Price in 2015 (Rp)Equipment Assumption in ModuleModule FactorsTotal Bare Module Cost (Rp)

Weigher Nagata A500W100016.000.000Module factors average2.27913.674.000

Air Bubble Vegetable and Meat Washer Type600135.988.000Blower (centrifugal)3.200115.161.600

Meatand Vegetables Cutter Machine Type vc-65ms1500130.000.000Flakers2.05061.500.000

Square forming machine210026.954.000Pumps and Drivers3.30045.896.400

Tumbler160015.318.000Horizontal pressure vessels3.05016.219.900

Seasoning Mixer Type YA-900800215.385.000Agitator2.56078.771.200

Jacketed kettle cooker600167.000.000Agitator2.560171.520.000

Drying Oven120014.475.800Dryers2.0609.220.148

Vacuum packaging1000117.500.000Module factors average2.27939.882.500

Food Conveyor belts for sauce25132.400.000Evaporators1.61052.164.000

Stainless stell25111.500.000Rp119,264.232.45028.175.000

Automatic Carton Filling Type LB-450-31440185.000.000Module factors average2.279193.715.000

(Source : private source)1.1.1.2 Plant Building Cost and Site CostTo 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 facilityEquipmentArea (m2)

Weigher23,6

Meat Washer32,6

Mince meat machine43,1

Tumbler11,0

Spice grinder5,8

Jacketed kettle cooker12,8

Oven26,7

Vacuum packaging134,0

Food Conveyor belts for sauce6,7

Labbeling Machine17,9

Carton Erector Machine20,0

TOTAL68

(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 sectorSiteArea (m2)

Loading and Unloading material325

Parking area300

Raw Material Storage607

Product Storage425

Personnel Service100

Production Service100

Total1857

(Source : private source)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 m2 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 CostComponentInformation /1000 mPrice (Rp)

Land area (2000 m2)Rp 1.000.000.000 2.000.000.000

Building area (800 m2)Rp 1.000.000.000 800.000.000

Foundation10% from land cost 200.000.000

Contractors10% form land cost 200.000.000

Land development5% from land cost 100.000.000

Total 3.300.000.000

(Source : private source)Sayummy chicken satay factory layout that made on land area 2500 m2 , the factory layout will be on scale 1:200 .

Figure 1. 3 1st Floor

(Source: Private Source)

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

Information:

1: Grilling Machine (Oven)

2: Jacketed kettle cooker3: 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(Source: Private Source)1.1.1.4Supporting Equipment / Offsite Facilities CostOffsite 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 CostOFFSITE FACILITY

InstallationCost (Rp)

PAM (Water) Installation 10.000.000

Hydrant 15.000.000

PLN (Electricity) Installation 45.000.000

Telephone 8.000.000

Network 5.000.000

Total 83.000.000

(Source : private source)Table 1.8 Offsite facility Cost (Continued)NoEquipmentQtyLife time (Year)Price for Each (Rp)Total Cost (Rp)

1Faximile110 900.000 900.000

2Computer510 7.000.000 35.000.000

3Printer+Fotocopy+Scanner310 3.450.000 10.350.000

4Central AC LG LT-C186ELE1310 9.752.000 29.256.000

5Dispenser210 300.000 600.000

6Microwave210 1.200.000 2.400.000

7Office Desk2010 300.000 6.000.000

8Office Chair2510 175.000 4.375.000

9Cupboard1010 800.000 8.000.000

10Sofa210 4.500.000 9.000.000

11Meeting's Desk and Chair310 2.000.000 6.000.000

12Receptionist Desk110 1.500.000 1.500.000

13Samsung 22" UA22H5000 Full HD LED TV-Hitam210 2.002.500 4.005.000

14White Board310 100.000 300.000

15FIRMAN 4 Stroke Genset [FPG4000E3]210 5.793.000 11.586.000

16Distribution's car (Colt Diesel FE 71)210 167.000.000 334.000.000

Total Supporting Equipment Cost (Rp)463.272.000

Total Offsite Facility Cost (Rp)546.272.000

(Source : private source)1.1.1.5 Market Research CostOne 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 CostNoActivityCost

1SurveyRp 5.000.000

2Online questionnaire (own web development)-

3Consultant service(1st and 2nd years)Rp 100.000.000

Total Market Research CostRp 105.000.000

(Source : private cost)1.1.1.6 Other ExpensesBesides those cost, thee are some investation costs that support the plant development, such as licensing cost, patent, and product soft launching.

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 composition2. Active agent specification: Galangal extract 3. Chicken Satay PackagedCost 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 DetailsNoNon-Tax RevenueUnitCostQty.Total

1.Patent requestPer request Rp 575.000 1Rp 575.000

2.Additional cost per claimPer request Rp 40.000 3Rp 120.000

3.Announcement acceleration that held as soon as 6 monthsPer request Rp200.000 1Rp 200.000

4.Request for letter of priority right evidencePer request Rp 250.000 1Rp 250.000

5.Substantive inspectionPer request Rp 2.000.000 1Rp 2.000.000

6.Cost for publishing certificatesPer certificate Rp 250.000 1Rp 250.000

7.Admission for liceso thense agreement registrationPer request Rp 1.000.000 1Rp 1.000.000

8.Request for compulsory licensingPer request Rp 3.000.000 1Rp 3.000.000

9.Request for general list excerpts of patentsPer request Rp 100.000 1Rp 100.000

10.Request for copies of patent documentsPer sheetRp 5.000 60Rp 300.000

11.Cost for patent search that has been announced

a) DomesticPer subject Rp 250.000 1Rp 250.000

b) OverseasPer subject Rp 100 1Rp 972.285

Annual cost for patent maintenance:

1st year from the date of patent acceptance

c) Basic cost

d) Cost per claimPer patent

Per claim Rp 750.000 1Rp 750.000

2nd year from the date of patent acceptance

e) Basic costPer patent Rp 750.000 1Rp 750.000

f) Cost per claimPer claim Rp 50.000 3Rp 150.000

3rd year from the date of patent acceptance

g) Basic costPer patent Rp 750.000 1Rp 750.000

h) Cost per claimPer claim Rp 50.000 3Rp150.000

4th year from the date of patent acceptance

i) Basic costPer patent Rp 1.000.000 1Rp 1.000.000

j) Cost per claimPer claim Rp 100.000 3Rp300.000

(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 RevenueUnitCostQty.Total


k) Basic costPer patent Rp 1.000.000 1Rp 1.000.000

l) Cost per claimPer claim Rp 100.000 3Rp300.000


m) Basic costPer patent Rp 1.500.000 1Rp 1.500.000

n) Cost per claimPer claim Rp 150.000 3Rp 450.000


o) Basic costPer patent Rp 2.000.000 1Rp 2.000.000

p) Cost per claimPer claim Rp 200.000 3Rp 600.000


q) Basic costPer patent Rp 2.000.000 1Rp 2.000.000

r) Cost per claimPer claim Rp 200.000 3Rp 600.000


s) Basic costPer patent Rp 2.500.000 1Rp 2.500.000

t) Cost per claimPer claim Rp 250.000 3Rp 750.000


u) Basic costPer patent Rp 3.500.000 1Rp 3.500.000

v) Cost per claimPer claim Rp 250.000 3Rp 750.000


w) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

x) Cost per claimPer claim Rp 250.000 3Rp 750.000


y) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

z) Cost per claimPer claim Rp 250.000 3Rp 750.000


aa) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

ab) Cost per claimPer claim Rp 250.000 3Rp 750.000

(Source: Peraturan Pemerintah Republik Indonesia No. 38 of 2009 (http://hukum.unsrat.ac.id/pp))

Table 1.10 Patent Free Details (Continued)Non-Tax RevenueUnitCostQty.Total


ac) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

ad) Cost per claimPer claim Rp 250.000 3Rp 750.000


ae) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

af) Cost per claimPer claim Rp 250.000 3Rp 750.000


ag) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

ah) Cost per claimPer claim Rp 250.000 3Rp 750.000


ai) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

aj) Cost per claimPer claim Rp 250.000 3Rp 750.000


ak) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

al) Cost per claimPer claim Rp 250.000 3Rp 750.000


am) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

an) Cost per claimPer claim Rp 250.000 3Rp 750.000


ao) Basic costPer patent Rp 5.000.000 1Rp 5.000.000

ap) Cost per claimPer claim Rp 250.000 3Rp 750.000

13.Cost for patent application administration through Patent Cooperation Treaty (PCT)Per request Rp 1.000.000 1 Rp 1.000.000

(Source: Peraturan Pemerintah Republik Indonesia No. 38 of 2009 (http://hukum.unsrat.ac.id/pp))

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 SayummyThe following table is describing about the detail of brand cost for Sayummy based on law that applicable in Indonesia:Table 1. 15 Brand Fee DetailsNoNon-Tax RevenueUnitCostTotal

1.Request for trademark registrationPer requestRp 600.000Rp 600.000

2.Brand license publishing costsPer certificateRp 100.000Rp 100.000

3.License agreement registrationPer requestRp 500.000Rp 500.000

4.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 Per requestRp 150.000

Rp 200.000

Rp 200.000Rp 150.000

Rp 200.000

Rp 200.000

5.Cost for proof of prioritytrademark application copyPer requestRp 250.000Rp 250.000

6.Registration of Intellectual Property RightsIndividualRp 5.000.000Rp 5.000.000

(Source: Peraturan Pemerintah Republik Indonesia No. 38 of 2009 (http://hukum.unsrat.ac.id/pp))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

Figure 1. 7BPOM fare for processed meat product in Food Packaged Form(Source : bpkp.go.id, 2014)Table 1. 16Other CostNoComponentsPrice (Rp)

1LicensingPatent (3 years)10.000.000

Brand5.000.000

Clinical Performance Test500.000

3Product Soft Launching (50 places in Jabodetabek)Publication 10.000.000

Entertainment100.000.000

Accommodation50.000.000

Equipment50.000.000

Total Other Cost225.500.000

(Source : private source)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 SegmentationPrice (Rp)

Main Process Equipment cost825.899.000

Plant Building and Site Cost 3.300.000.000

Supporting Equipment Cost463.272.000

Distribution facilities Cost200.000.000

Market Research Cost 105.000.000

Other Cost225.500.000

Fixed Capital5.119.671.000

(Source : private source)1.1.2 Working Capital (CWC)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. 5Where :

WC=Working Capitalk

= 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 InvestmentCost SegmentationPrice (Rp)

Main Process Equipment cost825.899.000

Plant Building and Site Cost3.300.000.000

Supporting Equipment Cost463.272.000

Distribution facilities Cost200.000.000

Market Research Cost 105.000.000

Other Cost225.500.000

Fixed Capital5.119.671.000

Working Capital255.983.000

Capex (Rounded)5.375.655.000

(Source : private source)Thenwe will have thatCapex value is equal to Rp5.375.655.000.1.2 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 CostDirect 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 CostDirect 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.Table 1. 15List of Raw Material Price (including delivery cost)

MaterialOrder per Year (kg)Sum of material Needs per Day (kg)Price per kg (Rp)Total Order Cost (Rp)

Chicken meat (boneless)70703.37926286.420.000,001.414.067.585,20

Red Onion3448.65055616.0618.000,0062.075.710,01

Lime11801.1550845.795.000,0059.005.775,40

Galangal50455.38984229.14.000,00201.821.559,37

Brown Sugar3651.16196416.068.000,0029.209.295,71

Kemiri3606.14266316.067.000,0025.242.998,64

Bay483.39378522.285.000,002.416.968,93

Salt633.59412922.799.000,005.702.347,16

White onion3137.83332716.0610.000,0031.378.333,27

Peanut33252.25591171.714.000,00465.531.582,74

Red Chili11801.1550816.0620.000.00236.023.101,60

Lime leaf1077.9285452.2814.000.0015.090.999,63

Total2.547.566.257,65

(Source : private source)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 CapacityRaw materialamount per day (pcs)amount per year (pcs)Safety stock per year (pcs)Order size per yearPrice per pcs (Rp)price per year (Rp)

HDPE Plastic51801243200124320129500250 32.375.000

Vacuum Plastic518012432001243201295001 116.550.000

Paper box17241280412843001.5005.590.000

Total 154.515.000


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.Table 1. 17Details of Personel of Direct Labor in Each Process per Shift

QualificationAmount (Person)Salary/Month (Rp)Salary/Year (Rp)Total Salary/Year (Rp)

Supervisor23.500.000,0042.600.000,0084.000.000,00

Process Operator33.000.000,0036.000.000,00108.000.000,00

Maintenance Engineer24.000.000,0048.000.000,0096.000.000,00

Labor52.200.000,0026.400.000,00132.000.000,00

Total12420.000.000,00

(Source : private source)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 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 CostComodityTotal needed

(in1 years)Cost per unit (Rp)Total Cost (Rp)

AmountUnitCostUnit

Electriciy36.396kWh320Rp/kWh11.646.720

Process Water378701Liter1,00Rp/liter198.700.800

Total210.347.520

(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 CostThe cost included in administrative cost is administrators wages, and cost for supplying needs for other facilities. The calculation can be seen in table belowTable 1. 19Calculation of Administrative Cost (Indirect Labor Wages)DivisionPersonelsWages per month (Rp)Total Wages per month (Rp)

President Director115.000.00015.000.000

Secretary of President Director14.000.0004.000.000

Vice President Director112.000.00012.000.000

General Manager34.200.00012.600.000

Finance and Accounting12.200.00022.000.000

HRD22.200.00044.000.000

Logistic-Expedition12.200.00022.000.000

Purchasing12.200.00022.000.000

QC22.200.00044.000.000

Security32.200.00066.000.000

Total16Total65.600.000

Total per annum787.200.000

(Source : private source)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 ExpensesJenis BiayaTotal Biaya per Tahun (Rp)

telephone10.000.000

Faximile3.600.000

Internet6.000.000

Total General and Administrative Expenses (Rp) Rp 19.600.000

(Source : private source)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 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

TransportationOuter SizeInner Size

LWHL W H

Mitsubishi L 300256017201410246016201300

(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 CostLocation factorycostJabodetabek (40 km)Bandung (162 km)Semarang (402.31 km)Surabaya (654.7 km)total cost per tahun (Rp)

Raya bogorFuel28000117000290557472838218014800

Driver50000700009000012000079200000

Tol, etc7000010000015000076800000

Total cost distribution from factory to DC for a year374.014.800

(Source : private source)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 CostRadioTypePeriodTimeDurationPrice per duration (Rp)Ad amount/ yearCost per year (Rp)

TVAdlibs18.00-20.0060s375.0004015.000.000

Prambors JakartaAdlibsPrime Time06.00-09.0060 s225.000153.375.000

16.00-24.0060 s225.000153.375.000

Lesmana FM BogorAdlibsPrime Time07.00-10.0060 s200.000102.000.000

16.00-18.0060 s200.000102.000.000

Total Sayummy Electronic Media Advertising Cost (Rp)25.750.000

Table 1. 24Sayummy Online Media Advertisement

Cost BreakdownAmountPrice (Rp)Total Price (Rp)

Web Designer Fee13.000.0003.000.000

Maintenance6200.0001.200.000

Domain Registration2125.000250.000

Total (Rp)4.450.000


Table 1. 25Company Profile Website Cost)

Web AdressSize (pixel)Length of TimePrice

Google AdSense--Free

LINE-30 daysFree

http://www.iklan-gratis.com-30 daysFree

Total0


Marketing Cost Total = Rp 25.750.000+ Rp 4.400.000= Rp 30.200.0001.3 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. 6Where 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,Eq. 1. 7After 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. 9Now 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.

Table 1.26Product Forecasting

Price per Year (Rp)

Sales Volume per pack1,243,200

Operational Cost8,779,905,481

Capital Investment (CAPEX)15,560,113,294

Total Cost (CoGS)24,340,018,775

Expected 3,651,002,816

Expected Sales Revenue27,991,021,591

Gross Value per Pack22,515.30

Net Value (PPN 10%)24,766.83

(Source: Private Source)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

YearIncome Tax (Rp)

00

10

24,327,187,290

395,0949,853

41,4814,712,416

520,058,474,979

625,302,237,542

730,546,000,105

835,789,762,668

941,033,525,231

1046,539,742,293

(Source: Private Source)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.

YearDepresiasi Rate per YearWeigher Nagata A500WAir Bubble Vegetable and Meat Washer TypeMeat and Vegetables Cutter Machine Type vc-65msSquare forming machineTumblerSeasoning Mixer Type YA-900Jacketed kettle cookerDrying OvenVacuum PackagingFood Conveyor belts for sauceStainless steelAutomatic Carton Filling Type LB-450-3

Rp 75,041,056 Rp 114,813,173 Rp 91,101,177 Rp 90,750,540 Rp 9,336,004 Rp 137,571,293 Rp 734,068,256 Rp 94,211,183 Rp 1,498,435,829 Rp 105,057,478 Rp 37,520,528 Rp 339,918,501

10.15 Rp 63,784,897 Rp 97,591,197 Rp 77,436,001 Rp 77,137,959 Rp 7,935,604 Rp 116,935,599 Rp 623,958,017 Rp 80,079,506 Rp 1,273,670,454 Rp 89,298,856 Rp 31,892,449 Rp 288,930,726

20.15 Rp 54,217,163 Rp 82,952,517 Rp 65,820,601 Rp 65,567,266 Rp 6,745,263 Rp 99,395,259 Rp 530,364,315 Rp 68,067,580 Rp 1,082,619,886 Rp 75,904,028 Rp 27,108,581 Rp 245,591,117

30.15 Rp 46,084,588 Rp 70,509,640 Rp 55,947,511 Rp 55,732,176 Rp 5,733,474 Rp 84,485,970 Rp 450,809,668 Rp 57,857,443 Rp 920,226,903 Rp 64,518,424 Rp 23,042,294 Rp 208,752,449




(Source: private source)YearDepresiasi Rate per YearWeigher Nagata A500WAir Bubble Vegetable and Meat Washer TypeMeat and Vegetables Cutter Machine Type vc-65msSquare forming machineTumblerSeasoning Mixer Type YA-900Jacketed kettle cookerDrying OvenVacuum PackagingFood Conveyor belts for sauceStainless steelAutomatic Carton Filling Type LB-450-3


90.15 Rp 17,380,780 Rp 26,592,677 Rp 21,100,576 Rp 21,019,363 Rp 2,162,377 Rp 31,863,843 Rp 170,022,648 Rp 21,820,907 Rp 347,063,131 Rp 24,333,092 Rp 8,690,390 Rp 78,730.885


Total Salvage value Rp 655,163,568


Table 1.29Supporting equipment depreciation

NoSupporting EquipmentPriceYear/Depreciation RateSalvage Value

12345678910

0,150,150,150,150,150,150,150,150,150,15

1Faximile Rp 2,700,000 Rp 2,295,000 Rp 1,950,750 Rp 1,658,138 Rp 1,409,417 Rp 1,198,004 Rp 1,018,304 Rp 865,558 Rp 735,724 Rp 625,366 Rp 531,561 Rp 531,561

2Computer Rp 120,000,000 Rp 102,000,000 Rp 86,700,000 Rp 73,695,000 Rp 62,640,750 Rp 53,244,638 Rp 45,257,942 Rp 38,469,251 Rp 32,698,863 Rp 27,794,034 Rp 23,624,929 Rp 23,624,929

3Printer+Fotocopy+Scanner Rp 18,000,000 Rp 15,300,000 Rp 13,005,000 Rp 11,054,250 Rp 9,396,113 Rp 7,986,696 Rp 6,788,691 Rp 5,770,388 Rp 4,904,829 Rp 4,169,105 Rp 3,543,739 Rp 3,543,739

4Central AC Rp 66,500,000 Rp 56,525,000 Rp 48,046,250 Rp 40,839,313 Rp 34,713,416 Rp 29,506,403 Rp 25,080,443 Rp 21,318,376 Rp 18,120,620 Rp 15,402,527 Rp 13,092,148 Rp 13,092,148

5DispenserRp 1,500,000 Rp 1,275,000 Rp 1,083,750 Rp 921,188 Rp 783,009 Rp 665,558 Rp 565,724 Rp 480,866 Rp 408,736 Rp 347,425 Rp 295,312 Rp 295,312

6Microwave Rp 4,500,000 Rp 3,825,000 Rp 3,251,250 Rp 2,763,563 Rp 2,349,028 Rp 1,996,674 Rp 1,697,173 Rp 1,442,597 Rp 1,226,207 Rp 1,042,276 Rp 885,935 Rp 885,935

7Office Desk Rp 30,000,000 Rp 25,500,000 Rp 21,675,000 Rp 18,423,750 Rp 15,660,188 Rp 13,311,159 Rp 11,314,485 Rp 9,617,313 Rp 8,174,716 Rp 6,948,508 Rp 5,906,232 Rp 5,906,232

8Office Chair Rp 8,750,000 Rp 7,437,500 Rp 6,321,875 Rp 5,373,594 Rp 4,567,555 Rp 3,882,421 Rp 3,300,058 Rp 2,805,050 Rp 2,384,292 Rp 2,026,648 Rp 1,722,651 Rp 1,722,651


Table 1.29Supporting equipment depreciation(Continued)NoSupporting EquipmentPriceYear/Depreciation RateSalvage Value

12345678910

0,150,150,150,150,150,150,150,150,150,15

9CupboardRp 52,500,00.00Rp 44,625,000.00Rp 37,931,250.00Rp 32,241,563.00Rp 27,405,328.00Rp 23,294,529.00Rp 19,800,350.00Rp 16,830,297.00Rp 14,305,753.00Rp 12,159,890.00Rp 10,335,906.00Rp 10,335,906.00

10LockerRp 4,350,000.00Rp 3,697,500.00Rp 3,142,875.00Rp 2,671,444.00Rp 2,270,727.00Rp 1,930,118.00Rp 1,640,600.00Rp 1,394,510.00Rp 1,185,334.00Rp1,007,534.00Rp 856,404.00Rp 856,404.00

11Sofa Rp 25,000,000 Rp 21,250,000 Rp 18,062,500 Rp 15,353,125 Rp 13,050,156 Rp 11.092,633 Rp 9,428,738 Rp 8,014,,427 Rp 6,812,263 Rp 5,790,424 Rp 4,921,860 Rp 10,335,906

12Meeting's Desk and ChairRp 6,000,000 Rp 5,100,000 Rp 4,335,000 Rp 3,684,750 Rp 3,132,038 Rp 2.662.232 Rp 2,262897 Rp 1,923,463 Rp 1,634,943 Rp 1,389,702 Rp 1,181,246 Rp 856,404

13Receptionist Desk Rp 2,200,000 Rp 1,870,000 Rp 1,589,500 Rp 1,351,075 Rp 1,148,414 Rp 976,152 Rp 829,729 Rp 705,270 Rp 599,479 Rp 509,557 Rp 433,124 Rp 4,921,860

14Guest room's desk and chairRp 4,000,000 Rp 3,400,000 Rp 2,890,000 Rp 2,456,500 Rp 2,088,025 Rp 1,774,821 Rp 1,508,598 Rp 1,282,308 Rp 1,089,962 Rp 926,468 Rp 787,498 Rp 1,181,246

15White Board Rp 1,600,000 Rp 1,360,000 Rp 1,156,000 Rp 982,600 Rp 835,210 Rp 709,929 Rp 603,439 Rp 512,923 Rp 435,985 Rp 370,587 Rp 314,999 Rp 433,124

16Generator set Rp 250,000,000 Rp 212,500,000 Rp 180,625,000 Rp 153,531,250 Rp 130,501,56 Rp 110,926,328 Rp 94,287,379 Rp 80,144,272 Rp 68,122,631 Rp 57,904,237 Rp 49,218,601 Rp 787,498


Table 1.29Supporting equipment depreciation (Continued)NoSupporting EquipmentPriceYear/Depreciation RateSalvage Value

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0,150,150,150,150,150,150,150,150,150,15

17Office's car Rp 703,500,000 Rp 597,975,000 Rp 508,278,750 Rp 432,036,938 Rp 367,231,397 Rp 312,146,687 Rp 265,324,684 Rp 225,525,982 Rp 191,697,084 Rp 162,942,522 Rp 138,501,143 Rp 138,501,,143

18Distribution's car Rp 703,500,000 Rp 597,975,000 Rp 508,278,750 Rp 432,036,938 Rp 367,231,397 Rp 312,146,687 Rp 265,324,684 Rp 225,525,982 Rp 191,697,084 Rp 162,942,522 Rp 138,501,143 Rp 138,501,143

Total Depreciation per Year Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000 Rp 300,690,000

Total Salvage value Rp 394,654,431


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)

(Source: private source)

Fig 1.10Graphic of after tax cash flow (ATCF)

(Source: Private source)

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 ExpendituresCost (Rp)Percentage (%)

Raw Material and Delivery Cost3,788,022,09133.02

Packaging Order170,915,0001.5

Direct Labor858,000,0007.5

Utilities Cost2,026,828,59017.67

Administration Cost1,512,000,00013.2

General Expenses24,000,0000.21

Distribution Cost374,014,8003.26

Marketing Cost10,750,0000.093

Advertisement26,125,0000.22

Waste Treatment140,000,0001.22

Maintenance1,100,392,5029.6

Other1,438,664,06812.54

Total11,469,712,051100


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. 10Annual 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. 11From 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 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(Source: Private Source)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 EvenPointBreak 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.

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. 13with 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

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