Tk22 Report Assignment 4

UNIVERSITAS INDONESIA
BURN TREATMENT MEDICINE
Report Assignment 4
GROUP 22
GROUP PERSONNEL:
ADINDA SOFURA AZHARIYAH (1306370505)
AULIA RAHMI (1306370631)
DAVID LAZUARDI (1306409330)
NADIA HUDA (1306370474)
RADEN RIDZKI ADITYA K (1306370530)
CHEMICAL ENGINEERING DEPARTMENT

ENGINEERING FACULTY
MAY, 2016
EXECUTIVE SUMMARY
We have learnt about how to manufacture our product, burn wound

medicine, with such processes, equipment and also the raw material which needs
lots of money. In this section, we learn every little thing about economical aspect
of our product. Before we go into the cost, we learn the supply chain first . We
decided to distribute our product to several big city in Java island with the
consideration of population and its ease of distribution. For the distribution, we
use land transportation.
After we got all information from previous chapter, we start calculation for
the economic analysis of our burn wound medicine product. The analysis start
from zero, it is from preparing the site, all the permission, the patents, building up
the plant, buying all the raw materials and equipment needed for the process.
After calculating every value of each item, we got the Fixed Capital Investment
Cost. When calculating this capital investment needed, we also trying to know the
salvage value of each equipment were using and buying at our zero year at the
end of our period of business.
After that, we also have to know from the start if our business will be
profitable or not. So we calculate the operation cost that is manufacturing cost and
general expenses. Manufacturing costs including cost of raw material,
depreciation cost, earning tax cost, insurance cost, and plant overhead cost. The
general expenses will include the administrative cost like wages and facility cost,
distribution cost, marketing cost, research and development cost, and financial
interest. This financial interest cost will depend on our decision at first about the
capital investment source (bank and investor).
After knowing all the cost for every aspect of this business, we can do the
economic analysis. This analysis will give us the minimum price for the product
depends on all the outcome, cashflow analysis, and cost breakdown.
After calculating the cash flow, we need to calculate the IRR, Payback
period and the NPV to know the profitability of our factory. We should get the
short payback period and a profitable NPV and IRR. On our factory, we get 32%
for IRR and 2.68 years for the payback period. After that, we move to sensitivity
ii
analysis to know the variable that effect the IRR, NPV and the payback period of
our factory.
iii
LIST OF CONTENTS
EXECUTIVE SUMMARY................................................................................... ii
LIST OF CONTENTS ......................................................................................... iv
TABLE OF FIGURES ......................................................................................... vi
LIST OF TABLE ................................................................................................ vii
CHAPTER 1 ...........................................................................................................1
SUPPLY CHAIN ....................................................................................................1
1.1. Raw Material Suppy .............................................................................. 1
1.1.1. Plant Location ................................................................................... 1
1.1.2. Raw Material Location ..................................................................... 4
1.2. Product Inventory ................................................................................ 22
1.2.1. Cycle inventory ............................................................................... 22
1.2.2. Safety inventory .............................................................................. 22
1.2.1. Raw Material and Product Fluctuation in Plant .............................. 24
1.3. Product Distribution Chain ................................................................. 27
1.3.1. Proportion of product distribution................................................... 27
1.3.2. Product Distribution Chain ............................................................. 30
1.4. Transportation Route .......................................................................... 31
1.5. Marketing .............................................................................................. 32
1.5.1. Target Market .................................................................................. 32
1.5.2. Market Segmentation ...................................................................... 32
CHAPTER 2 PRODUCTION COST .................................................................35
2.1. Total Capital Investment ..................................................................... 35
2.1.1. Fixed Capital Investment Cost ........................................................ 35
2.1.2. Working Capital Investment Cost ................................................... 46
2.2. Depreciation .......................................................................................... 46
2.3. Operation Cost...................................................................................... 47
2.3.1. Manufacturing Cost ........................................................................ 47
2.3.2. General Expenses ............................................................................ 58
2.4. Economic Analysis................................................................................ 64
2.4.1. Product Price Determination ........................................................... 64
iv
2.4.2. Cash Flow Analysis ........................................................................ 65
2.4.3. Cost Breakdown .............................................................................. 67
2.5. Profitability Analysis............................................................................ 67
2.5.1. Payback Period ................................................................................ 67
2.5.2. Breakeven Point .............................................................................. 70
2.5.3. Internal Rate of Return .................................................................... 70
2.5.4. Net Present Value ........................................................................... 71
2.6. Sensitivity Analysis ............................................................................... 72
2.6.1. Fluctuation of Raw Material ........................................................... 72
2.6.2. Fluctuation of Selling Product Price ............................................... 73
2.6.3. Fluctuation of Utilities Cost ............................................................ 74
2.6.4. Fluctuation Graphics ....................................................................... 75
CONCLUSION ....................................................................................................78
REFERENCES .....................................................................................................79
v
TABLE OF FIGURES
Figure 1. 1. Route material from Kencana Cilebut, Bogor to Pakuan Regency,

Bogor....................................................................................................................... 2
Figure 1. 2. Route material from Kencana Cilebut, Bogor to Tol Door ................ 3
Figure 1. 3. Route material from Kencana Cilebut, Bogor to Pelabuhan Merak .. 3
Figure 1. 4. Graphic of Inventory of Raw Material, Aloe Vera ............................ 25
Figure 1. 5. Graphic of Chemical Material Inventory........................................... 25
Figure 1. 6. Graphic of Inventory of Product in Plant .......................................... 26
Figure 1. 7. Distribution Route ............................................................................ 31
Figure 1. 8. Distribution Schematic for Transportation on Land .......................... 31
Figure 2. 1. Cash Flow Before Tax and After Tax ............................................... 65
Figure 2. 2. Cost Breakdown ................................................................................ 67
Figure 2. 3. Payback Period .................................................................................. 69
Figure 2. 4. NPV Spider Graph ............................................................................. 75
Figure 2. 5. Payback Period Spider Graph ............................................................ 76
Figure 2. 6. IRR Spider Graph .............................................................................. 77
vi
LIST OF TABLE
Table 1. 1. Supplier of Raw Material& Packaging ................................................. 5

Table 1. 2. Price of Raw Material from 1st Alternative of Supplier ....................... 8
Table 1. 3. Price of Raw Material from 2nd Alternative of Supplier ..................... 8
Table 1. 4. Price of Raw Material from 3rd Alternative of Supplier ...................... 9
Table 1. 5. Price of Packaging from 1st Alternative of Supplier ......................... 10
Table 1. 6. Price of Packaging from 2nd Alternative of Supplier ......................... 11
Table 1. 7. Distribution Cost of Raw Material Alternatives ................................. 11
Table 1. 8. Distribution Cost of Packaging Alternatives ...................................... 12
Table 1. 9. First Order Amount of Raw Material ................................................. 16
Table 1. 10. First Order Amount of Packaging ..................................................... 16
Table 1. 11. Regular Order Amount of Raw Material .......................................... 17
Table 1. 12. Regular Order Amount of Packaging ............................................... 18
Table 1. 13. Raw material order scheduling (detailed each week ) ...................... 18
Table 1. 14. Raw material order scheduling (detailed each week ) (Contd) ....... 19
Table 1. 17. Raw material inventory (detailed each week ) .................................. 22
Table 1. 18. List of Wholesaler Location ............................................................. 28
Table 1. 19. List of major pharmaceutical merchant/PBF (Pedagang Besar
Farmasi) ................................................................................................................ 30
Table 2. 1. Fixed capital component ..................................................................... 36
Table 2. 2. Marshall and Swift Chemical Equipment Index ................................. 37
Table 2. 3. Total Equipment Cost in 2017 ............................................................ 38
Table 2. 4. Total Bare Module Cost Calculation .................................................. 39
Table 2. 5. Site Cost Calculation .......................................................................... 40
Table 2. 6. Building Cost Calculation ................................................................... 40
Table 2. 7. Plant Utilities Installation Cost ........................................................... 41
Table 2. 8. Market Research Investment Cost Breakdown ................................... 42
Table 2. 9. Patent Cost .......................................................................................... 42
vii
Table 2. 10. Brand Cost ........................................................................................ 43
Table 2. 11. Product Distribution Facilities Investment Cost Breakdown............ 43
Table 2. 12. Supporting Facilities Investment Cost .............................................. 44
Table 2. 13. Total Capital Investment ................................................................... 45
Table 2. 14. Total depreciation ............................................................................. 47
Table 2. 15. Annual Raw Material Cost Breakdown ............................................ 49
Table 2. 16. Annual Raw Material Cost Breakdown ............................................ 53
Table 2. 17. Total Utilities Cost of Main Equipments .......................................... 54
Table 2. 18. Total Utilities Cost of Supporting Equipments ................................. 54
Table 2. 19. Total Utilities Cost of Water Consumtions....................................... 55
Table 2. 20. Total Patent Cost ............................................................................... 56
Table 2. 21. Annual Insurance Cost Breakdown .................................................. 58
Table 2. 22. Executive Salaries and Clerical Wages Cost .................................... 58
Table 2. 23. Communication Cost ........................................................................ 59
Table 2. 24. Fuel Cost Distribution ....................................................................... 59
Table 2. 25. Driver Cost Distribution ................................................................... 60
Table 2. 26. Toll Cost Distribution ....................................................................... 60
Table 2. 27. Media Mass Annual Cost .................................................................. 61
Table 2. 28. Social Media Annual Cost ............................................................... 61
Table 2. 29. Loan Calculation for Bank ................................................................ 63
Table 2. 30. Calculation of minimum Price per Unit ............................................ 64
Table 2. 31. Cash Flow (in million rupiahs) ......................................................... 66
Table 2. 32. Calculation of Payback Period .......................................................... 68
Table 2. 33. Calculation of Breakeven Point ........................................................ 70
Table 2. 34. Sensitivity of Raw Material Fluctuation ........................................... 72
Table 2. 35. Sensitivity of Product Price Fluctuation ........................................... 73
Table 2. 36. Sensitivity of Operating Labor Fluctuation ...................................... 74
viii
CHAPTER 1
SUPPLY CHAIN
Pharmaceutical products are products that are very sensitive and fulfilled
by the rules. Its vulnerable to the environment and the little changes on product
quality can negatively impact its efficacy or even turn the nature into a "poison".
Therefore, WHO issued drug distribution standards set out in the WHO Technical
Series no.937 GDP annex 5 2006. Properly, entire distribution companies that
serve the pharmaceutical product comply with those standards. In Indonesia, the
new standards began to be implemented in 2008, and now many distribution
companies start to use these standards.
Besides GDP, drug distribution rules also stipulated in the Cara Distribusi
Obat yang Benar (CDOB) issued by BPOM. And during this time the CDOB who
became the benchmark for pharmaceutical distribution company in Indonesia.
However BPOM currently also being upgraded and classify their implementation
in pharmaceutical distribution companies in Indonesia.
In contrast to the general concept of supply chain is promoting
responsiveness and efficiency. At the forefront of pharmaceutical distribution is
supposed to "Quality" and Responsiveness. Quality is an absolute must, because
this is a product that has the function of medicine to "cure", imagine if the quality
is damaged. Besides reducing the efficacy of the drugs can be damaged even toxic
to the body.
1.1. Raw Material Suppy

The location of the plant is determined according to the distance to the
consumer. However, it should be reconsidered on the raw material supplier of the
process, which are: price, distance, and also security that is provided in the goods
needed by the plant to operate. Therefore, we reconsider the relocation of the
plant.
1.1.1. Plant Location
To decide the location of our product plant, we need some parameters to be made,
which are:
1
2
a. The location isclose from the source of raw materials and human resources.
Kencana Cilebutis located in Bogor, West Java. The major raw material of
the product is Aloe Vera and chemical compound additiion such as, Na CMC,
Tween 80, Propylene Glycol, and Sorbitol. The Aloe Vera s source as
majorcomponent is located inPakuan Regency, Bogor (Figure 1.1), West Java.
And the chemical compound additions source is from Jakarta and West Java area.
Those raw material is located in the plant surrounding. So, it does not have to get
more budget to distribute the raw material. And also near from the human resorces
because of the location is located in a big islands inhabitants.
Figure 1. 1. Route material from Kencana Cilebut, Bogor to Pakuan Regency,

Bogor
b. The location is near the market target which has a good marketing prospect.
Kencana Cilebut, Bogor, West Java is also profoundly near with the
marketing target. The java islands inhabitant is the biggest inhabitant on the
entire Indonesia island. So, without any additional effort, the product can be
delivered in the plant surrounding, to the Javas island inhabitant.
c. The location in an area whichthe land is a wide area and ready to be used.
It will ease to gain the plant permit and bargain to people surround our
plant. The location from Kencana Cilebut, Bogors wide is about 8.500 m2. This
plant is located in the industrial area, which is far from the inhabitabts activity.
2
3
d. The location is contain of a reachable accommodation lines, such as has

appropiate road for product distribution, near the airport or other terminal
point transportation.
The location of the plant is in Bogor, West Java. This location is very
strategic because the distance toeither the harbor or tol is near the plant area. The
distance of the plant to Tol Jagorawi, which the distance among them is 52,9 km.
Figure 1. 2. Route material from Kencana Cilebut, Bogor to Tol Door
Figure 1. 3. Route material from Kencana Cilebut, Bogor to Pelabuhan Merak

4
e. The location is contain of utilities, such as electricity, telecommunications,

and water
The utilities of the plant area is also available. Because of the location that
is in a developing city, so the electricity distribution and telecommunication are
available. And the water to support the process is come from Citarum, Cibeet, dan
Sungai Cilamaya.
From the considerations that mentioned before, the location that we
choose for our plant is in Kencana Cilebut, Bogor located in West Java.
1.1.2. Raw Material Location
To determine of raw materials location for the our herbal burn treatment
medicine product, there are some factor that influence it, they are (1) the assembly
process for composition of burn treatment medicine product, (2) the packaging of
the product, and (3) the distribution, either the raw material & packaging
distribution itself. Here we only determine single plant location which is in
Kencana Cilebut, Bogor, West Java.The suppliers that are near enough and has
the ability to fulfill our requirements will be shown in Table 1.1. The results
shown are graded and the two shown is the final alternatives that have been
selected from many possibilities.
5
Table 1. 1. Supplier of Raw Material& Packaging
Needed
Component Amount per 1st supplier 2nd supplier 3rd supplier
day (kg)
Perumahan Pakuan Regency Kec. Desa Winong, Kecamatan
Aloe Vera 25,017 Rancabungur, Bogor
Dramaga Bogor Bogor, Bogor Gebang, Kabupaten Purworejo.
Jln KH. Soleh Iskandar. Sekolah
Phy Edumedia, Jl. Gajayana,
CV Harum Kimia, Jl Balap Sepeda Bina Insani, No.13-14. Sukadamai,
Sorbitol 0,546 Ketawanggede, Kec. Lowokwaru,
1A 13210 Jakarta Kecamatan Tanah Sareal. Bogor,
Kota Malang, Jawa Timur
Indonesia 16165
Lansida Group, Jl. Karanglo,
Propylene CV Harum Kimia, Jl Balap Sepeda PT Clorogreen, GGV Kav 7 Pasir
1,821 Bumen KG III No. 519
Glycol 1A 13210 Jakarta Impun, Bandung
Yogyakarta
PT Insoclay Acidatama Indonesia,
Phy Edumedia, Jl. Gajayana,
CV Harum Kimia, Jl Balap Sepeda Ruko Villa Pamulang Blok C1
Tween 80 0,364 Ketawanggede, Kec. Lowokwaru,
1A 13210 Jakarta No2-3 Pondok Benda, Tanggerang
Kota Malang, Jawa Timur
Selatan, Banten
5
6
Table 1.1. Supplier of Raw Material& Packaging (Contd)

Needed
Component Amount per 1st supplier 2nd supplier 3rd supplier
day (kg)
CV. Ratu Aroma, Perum Griya
CV. Eteris Nusantara, Dusun
Permata Cisoka Blok A2 Mahayani Studio,Pakuwon-
Jasmine Oil 0,036 Playen, Kecamatan Playen
No.13,Cisoka Tangerang, Banten Surabaya.
Wonosari, Yogyakarta, Solo
15730
Alfa Kima, Komplek Ruko Cimone
CV Pharmalab, JL. Terusan
Mas, Jl Gatot Subroto Blok C No7, Jl HOS Cokroaminoto No 53,
NaCMC 0,874 Cipamokolan - Rancacili No 7,
Cimone, Karawaci, Tangerang, Ciledug, Tangerang
Bandung, Jawa Barat
Banten
PT Tigamutiara Jl Pegangsaan Dua Cetak Dus Kemasan, Jll Pagarsih
Carton (1 pc)
1202 7A, Kelapa Gading, Jakarta Utara No37A Bandung
Raja Kardus,Bintaro Sector 3A KartonBox, Jl. Manukan Kulon
Box (144 pcs)
9 Tangerang 15225 60A, Surabaya 60185
PET 1202 Shanghai, China Shanghai, China
7
1.1.2.1. Alternative Scenario and Modelling

From our location above, it should be determined which supplier we must
finally choose to proceed with. Previously, it is explained that in order to
determine the supplier we should consider the cost, location, and also the
availability of the raw materials. The main priority is not to have as many
alternatives as possible, but to have the safety and availability and the distance
that can be provided by the supplier, whereas when calculating the price of raw
materials differ greatly from another supplier, than the supplier can be changed.
From the results of the three raw material alternative scenario and two packaging
alternative scenario, we obtained the following results in the Table 1.2 until Table
1.7. Table 1.1 until Table 1.5 explain about the price of each alternatives and
Table 1.6 and Table 1.7 explain about the distribution cost of raw material and
packaging supplier.
7
8
Table 1. 2. Price of Raw Material from 1st Alternative of Supplier

Needed Amount (kg) Price
Component 1st supplier
A week A month Nominal Per Unit
Aloe Vera 50,03 200,14 Perumahan Pakuan Regency (Bogor) Rp 6.000,00 kg
Sorbitol 1,09 4,37 CV Harum Kimia (Jakarta) Rp 45.000,00 kg
Propilen Glikol 3,64 14,57 CV Harum Kimia (Jakarta) Rp 70.000,00 kg
Tween 80 0,73 2,91 CV Harum Kimia (Jakarta) Rp 152.000,00 kg
Jasmine Oil 0,07 0,29 CV. Ratu Aroma (Tangerang) Rp 220.000,00 200 gr
NaCMC 1,75 6,99 Alfa Kimia (Tangerang) Rp 50.000,00 kg
Total Cost Rp 543.000,00
Table 1. 3. Price of Raw Material from 2nd Alternative of Supplier

Component 2nd supplier
Aloe Vera 50,03 200,14 Rancabungur (Bogor) Rp 6.000,00 kg
Sorbitol 1,09 4,37 Jln KH. Soleh Iskandar (Bogor) Rp 50.000,00 kg
Propilen Glikol 3,64 14,57 PT Clorogreen (Bandung) Rp 85.000,00 kg
8
9
Table 1.3. Price of Raw Material from 2nd Alternative of Supplier (Contd)
PT Insoclay Acidatama Indonesia
Tween 80 0,73 2,91 Rp 288.600,00 kg
(Tangerang)
Jasmine Oil 0,07 0,29 CV. Eteris Nusantara (Yogyakarta) Rp 210.000,00 200 gr
NaCMC 1,75 6,99 CV Pharmalab (Bandung) Rp 120.000,00 kg
Table 1. 4. Price of Raw Material from 3rd Alternative of Supplier

Component 3rd supplier Per
A week A month Nominal
Unit
Aloe Vera 50,03 200,14 Desa Winong (Purworejo) Rp 6.000,00 kg
Sorbitol 1,09 4,37 Phy Edumedia (Malang) Rp 45.500,00 kg
Propilen Glikol 3,64 14,57 Lansida Group (Yogyakarta) Rp 95.000,00 kg
Tween 80 0,73 2,91 Phy Edumedia (Malang) Rp 208.000,00 kg
Jasmine Oil 0,07 0,29 Mahayani Studio (Surabaya) Rp 200.000,00 200 gr
10
Table 1.4. Price of Raw Material from 3rd Alternative of Supplier (Contd)
Component 3rd supplier Per
A week A month Nominal
Unit
NaCMC 1,75 6,99 Jl HOS Cokroaminoto (Tangerang) Rp 198.000,00 kg
Table 1. 5. Price of Packaging from 1st Alternative of Supplier

Component 1st supplier
Carton (pc) 2404 9616 PT Tigamutiara (Jakarta) Rp 500,00
Box (144 pcs) 18 72 Raja Kardus (Tangerang) Rp 2.500,00 piece
PET 2404 9616 Shanghai (China) Rp 540,00
11
Table 1. 6. Price of Packaging from 2nd Alternative of Supplier

Carton (pc) 2404 9616 Cetak Dus Kemasan (Bandung) Rp 500,00
Box (144 pcs) 18 72 KartonBox (Surabaya) Rp 3.325,00 piece
PET 2404 9616 Shanghai (China) Rp 675,00
Table 1. 7. Distribution Cost of Raw Material Alternatives

Amount
1st supplier 2nd supplier 3rd supplier
Needed
Component
Distance Distance Distance
A month (kg) Fuel Cost (Monthly) Fuel Cost (Monthly) Fuel Cost (Monthly)
(km) (km) (km)
Aloe Vera 200,1 10,7 Rp 11.523,08 14 Rp 15.076,92 500 Rp 269.230,77
Sorbitol 4,4 56,8 3,4 Rp 1.830,77 890 Rp 479.230,77
Propilen
14,6 56,8 Rp 30.584,62 192 Rp 103.384,62 564 Rp 303.692,31
Glikol
Tween 80 2,9 56,8 30,8 Rp 16.584,62 890 Rp 479.230,77
12
Table 1.7. Distribution Cost of Raw Material Alternatives (Contd)

Amount
1st supplier 2nd supplier 3rd supplier
Needed
Component
Distance Distance Distance
A month (kg) Fuel Cost (Monthly) Fuel Cost (Monthly)
(km) (km) (km)
Jasmine Oil 0,3 112 Rp 60.307,69 580 Rp 312.307,69 805 Rp 433.461,54
NaCMC 7,0 52,3 Rp 28.161,54 201 Rp 108.230,77 66,4 Rp 35.753,85
Total Cost One Way Rp 130.576,92 Rp 557.415,38 Rp 2.000.600,00
Total Cost Back & Forth Rp 261.153,85 Rp 1.114.830,77 Rp 4.001.200,00
Table 1. 8. Distribution Cost of Packaging Alternatives
Amount
1st supplier 2nd supplier
Needed
Component
A month Distance Distance
Fuel Cost (Monthly) Fuel Cost (Annual) Fuel Cost (Monthly) Fuel Cost (Annual)
(kg) (km) (km)
Carton (pc) 9616 65,1 Rp 35.054 Rp 18.875.148 184 Rp 99.077 Rp 53.349.112
Box
72 37,3 Rp 20.085 Rp 10.814.793 796 Rp 428.615 Rp 230.792.899
(144 pcs)
13
Table 1.8. Distribution Cost of Packaging Alternatives (Contd)

Amount
1st supplier 2nd supplier
Needed
Component
A month Distance Distance
Fuel Cost (Monthly) Fuel Cost (Annual) Fuel Cost (Monthly) Fuel Cost (Annual)
(kg) (km) (km)
165 Rp 88.846 Rp 47.840.237 165 Rp 88.846 Rp 47.840.237
PET 9616 From From
Rp 5.715.000 Rp 68.580.000 Rp 5.715.000 Rp 68.580.000
China China
Total Cost One Way Rp 143.985 Rp 77.530.178 Rp 616.538 Rp 331.982.249
Total Cost Back & Forth Rp 287.969 Rp 155.060.355 Rp 1.233.077 Rp 663.964.497
14
The selection is done by price of each material and its distribution cost.From
the Table 1.2 until Table 1.7, the value of distribution cost for the first among the
second and third alternative is differ greatl, about Rp. 200.000. And material price
for the first among the second and third alternatives is different Rp. 9.500. From
the distribution cost of raw material, the 1st between the 2nd and 3rd alternative is
also differ greatly.That is happening too on the packaging distribution cost
between the 1st and 2nd alternative.So, we will choose the first alternative. From
the alternatives above, then we made models that will help the selection of the
alternatives.The first supplier is much nearer and the product price is also
competitive.
After we choose one alternative groups of suppliers, we should gather
information more deeply about those corporation and try to make a good
relationship to ensure they can support our production process as we have
expected. We have focused our raw material supply from this group of supplier.
1.1.2.2. Raw Material Supply Chain

The raw material needed to make burn treatment medicine is from local
distributor and also international supplier. The needed material will be transported
by pick up car, Gran Max. And the PET which come from China will be
transported twice, first by shipping service to Pelabuhan Merak and then will be
transported by pick up truck too to the plant location. The shipment of all raw
material for Alumed production to our factory will be made once in a month,
except Aloe Vera which is twice a month (Table 1.8 until Table 1.12). First reason
is becauseAloe Vera can not be in storage for a long time. For long lasting
material like chemical compound, PET, carton package,it doesnt matter to keep it
in long time interval. Second reason is because the item we need is relatively not
huge (only 6 item) so the storage relatively will not be complicated. Third reason
is to prevent shortage of raw material in our inventory.
The shipment of each raw material will be made to arrive in our factory in
different time interval. The consideration in deciding time for order and receive is,
(1) storage capacity of raw materials, (2) time needed and distribution cost, and
(3) the endurance of the raw material, which material that can decay rapidly and
Universitas Indonesia
15
which is not. Beside that, we differ the amount of ordered material into two, first
order and regular order. The first order is needed because we have to stock the
material 10% for the reserve at the beginning.
16
Table 1. 9. First Order Amount of Raw Material

Amount Item Purchased A Month (kg)
Minimum Order Frequency
Component Needed Supplier
Amount of Order (a month) Exact Approachment
A month (kg)
Perumahan Pakuan Regency
Aloe Vera 200,1 1 kg 2
(Bogor) 220,15 222
Sorbitol 4,4 CV Harum Kimia (Jakarta) 1 kg 1 4,81 5
Propilen Glikol 14,6 CV Harum Kimia (Jakarta) 1 kg 1 16,03 17
Tween 80 2,9 CV Harum Kimia (Jakarta) 1 kg 1 3,21 4
Jasmine Oil 0,3 CV. Ratu Aroma (Tangerang) 200 g 1 0,32 0,6
NaCMC 7,0 Alfa Kimia (Tangerang) 1 kg 1 7,69 8
Table 1. 10. First Order Amount of Packaging

Amount
Minimum Order Item Purchased (piece)
Amount of Order Frequency
A month (kg) Exact Approachment Unit
Carton (1 pc) 9616 PT Tigamutiara (Jakarta) 20 Once/month 10577,6 10580 Per month
Box (144 pcs) 72 Raja Kardus (Tangerang) 5 Once/month 79,2 80 Per month
17
Table 1.10. First Order Amount of Packaging (Contd)

Amount
Minimum Order Item Purchased (piece)
Amount of Order Frequency
A month (kg) Exact Approachment Unit
PET 9616 Shanghai (China) 500 Twice/year 63465,6 63500 Per 6 month
Table 1. 11. Regular Order Amount of Raw Material

Amount Minimum Order
Item Purchased
Component Needed Supplier Amount of Frequency
A Month (kg)
A month (kg) Order (a month)
Aloe Vera 200,1 Perumahan Pakuan Regency (Bogor) 1 kg 2 202
Sorbitol 4,4 CV Harum Kimia (Jakarta) 1 kg 1 5
Propilen Glikol 14,6 CV Harum Kimia (Jakarta) 1 kg 1 15
Tween 80 2,9 CV Harum Kimia (Jakarta) 1 kg 1 3
Jasmine Oil 0,3 CV. Ratu Aroma (Tangerang) 200 g 1 0,4
NaCMC 7,0 Alfa Kimia (Tangerang) 1 kg 1 8
18
Table 1. 12. Regular Order Amount of Packaging

Amount Minimum
Order Item Purchased (piece)
Component Needed Supplier Amount of
Frequency
A month (kg) Order Amount Approachment Unit
Carton (1 pc) 9616 PT Tigamutiara (Jakarta) 20 Once/month 9620 9620 Per month
Box (144 pcs) 72 Raja Kardus (Tangerang) 5 Once/month 72 75 Per month
PET 9616 Shanghai (China) 500 Twice/year 63465,6 63500 Per 6 month
Table 1. 13. Raw material order scheduling (detailed each week )

Month-0 Month-1 Month-2 Month-3 Month-4 Month-5 Month-6
Component Schedule
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Order
Aloe Vera
Receive
Order
Sorbitol
Receive
Propylene Order
Glycol Receive
19
Table 1. 14. Raw material order scheduling (detailed each week ) (Contd)
Month-0 Month-1 Month-2 Month-3 Month-4 Month-5 Month-6
Component Schedule
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Order
Tween 80
Receive
Order
Jasmine Oil
Receive
Order
Na CMC
Receive
Order
Carton
Receive
Order
Box
Receive
Order
PET
Receive
20
Month-7 Month-8 Month-9 Month-10 Month-11 Month-12
Component Schedule
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Order
Aloe Vera
Receive
Order
Sorbitol
Receive
Propylene Order
Glycol Receive
Order
Tween 80
Receive
Order
Jasmine Oil
Receive
Order
Na CMC
Receive
Order
Carton
Receive
21
Month-7 Month-8 Month-9 Month-10 Month-11 Month-12
Component Schedule
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Order
Box
Receive
Order
PET
Receive
22
1.2. Product Inventory

Storageforraw materialis placedin acontainer or drum thatis storedin thewarehouse
that mustbe kept dry, coolandwell ventilated. Containerthat
containstherawmaterialshould betightly closed, away fromheat, sources of
ignition, andstrongoxidizingagents. There aretwotypes ofinventory, namely:
1.2.1. Cycle inventory
Cycleinventoryisthe number ofinventorytomeetdemandin the periodbetween
thepurchase ofthe product. In other words, the inventory cycle is the same
asregularproductioncapacity, which is2602packages ofburn treatment
medicineperday.
1.2.2. Safety inventory
Safetyinventoryisinventorythat is storedas abufferagainstdemand uncertainty and
excessive raw material and packaging process. For the safety inventory,
rawmaterials and packagingwhich arre ordered in the beginning month is 10%
excess for reserve . Than, in the following month, the regular order will applied.
We store raw material and product with inventory method. Two types of
inventory method that we use are cycle inventory and safety inventory. We supply
raw material each month and twice a month for Aloe Vera and distribute our
product from strorage each week. We prefer to distribute each week because we
operate effectively just in 2 beginning days/week. It means, so much time will the
product storaged if the product distributor schedule is not weekly. In Table 2.1,
showed inventory of all raw material that we used. Our raw material is supplied
from Java and one of the packaging comes from Shanghai, China. But the raw
material itself will not influenced by the distance to China, because just the
packaging that comes from China and the order frequency is twice in a year.
Table 1. 17. Raw material inventory (detailed each week )

Aloe Propylene Tween Jasmine
Week Sorbitol NaCMC
Vera Glycol 80 Oil
0 0 0 0 0 0 0
1 111,000 5,000 17,000 4,000 0,600 8,000
2 60,966 3,907 13,358 3,272 0,527 6,252
23
Table 1.17. Raw material inventory (detailed each week ) (Contd)

Week Sorbitol NaCMC
Vera Glycol 80 Oil
3 121,932 2,815 9,715 2,543 0,454 4,503
4 71,898 1,722 6,073 1,815 0,382 2,755
5 122,864 5,629 17,000 4,000 0,709 9,007
6 72,830 4,537 13,358 3,272 0,636 7,258
7 123,796 3,444 9,715 2,543 0,563 5,510
8 73,762 2,351 6,073 1,815 0,490 3,762
9 124,728 6,258 17,000 4,000 0,818 10,013
10 74,694 5,166 13,358 3,272 0,745 8,265
11 125,660 4,073 9,715 2,543 0,672 6,517
12 75,626 2,980 6,073 1,815 0,599 4,768
13 126,592 6,888 17,000 4,000 0,926 11,020
14 76,558 5,795 13,358 3,272 0,854 9,272
15 127,524 4,702 9,715 2,543 0,781 7,524
16 77,490 3,610 6,073 1,815 0,708 5,775
17 128,456 7,517 17,000 4,000 1,035 12,027
18 78,422 6,424 13,358 3,272 0,962 10,279
19 129,388 5,331 9,715 2,543 0,890 8,530
20 79,354 4,239 6,073 1,815 0,817 6,782
21 130,320 8,146 17,000 4,000 1,144 13,034
22 80,286 7,053 13,358 3,272 1,071 11,285
23 131,252 5,961 9,715 2,543 0,998 9,537
24 81,218 4,868 6,073 1,815 0,926 7,789
25 132,184 8,775 17,000 4,000 1,253 14,040
26 82,150 7,683 13,358 3,272 1,180 12,292
27 133,116 6,590 9,715 2,543 1,107 10,544
28 83,082 5,497 6,073 1,815 1,034 8,795
29 134,048 9,404 17,000 4,000 1,362 15,047
30 84,014 8,312 13,358 3,272 1,289 13,299
24
Table 1.17. Raw material inventory (detailed each week ) (Contd)

Week Sorbitol NaCMC
Vera Glycol 80 Oil
31 134,980 7,219 9,715 2,543 1,216 11,550
32 84,946 6,126 6,073 1,815 1,143 9,802
33 135,912 10,034 17,000 4,000 1,470 16,054
34 85,878 8,941 13,358 3,272 1,398 14,305
35 136,844 7,848 9,715 2,543 1,325 12,557
36 86,810 6,756 6,073 1,815 1,252 10,809
37 137,776 10,663 17,000 4,000 1,579 17,060
38 87,742 9,570 13,358 3,272 1,506 15,312
39 138,708 8,477 9,715 2,543 1,434 13,564
40 88,674 7,385 6,073 1,815 1,361 11,816
41 139,640 11,292 17,000 4,000 1,688 18,067
42 89,606 10,199 13,358 3,272 1,615 16,319
43 140,572 9,107 9,715 2,543 1,542 14,571
44 90,538 8,014 6,073 1,815 1,470 12,822
45 141,504 11,921 17,000 4,000 1,797 19,074
46 91,470 10,829 13,358 3,272 1,724 17,326
47 142,436 9,736 9,715 2,543 1,651 15,577
48 92,402 8,643 6,073 1,815 1,578 13,829
*unit in kilogram (kg)
(Source: http://indonesian.alibaba.com/product-gs/cosmetic-plastic-tubes-with-caps-packaging-
60458579084.html)
1.2.3. Raw Material and Product Fluctuation in Plant

Fluctuation of raw material and packaging in factory is important to be
estimated because we can foresee to meet the demand in a range of time. This
fluctuation projection is done with few assumptions:
1. Product transportation to wholesaler is done every 7 days.
2. No shipping in the first week to stock products in plant
25
Figure 1.4 and Figure 1.5 will be shown below have the interval of 48weeks.
The process will keep on going as every 48weeks passed.
Aloe Vera Inventory

160
140
120
100
kg
80
60
40
20
0
0 10 20 30 40
Week
Figure 1. 4. Graphic of Inventory of Raw Material, Aloe Vera
Chemical Material Inventory

25
20
15 Sorbitol
kg
Propylene Glycol
10 Tween 80
Jasmine Oil
5
NaCMC
0
0 10 20 30 40 50 60
Week
Figure 1. 5. Graphic of Chemical Material Inventory
From the Figure 1.4 and Figure 1.5, we can see how many stocks of raw
material is kept in storage every day in a monts interval. However, if fluctuative
demand is happening, then the graphic will have lower material in the safety
26
inventory because it is used for production to fulfill demand of the market. If the
safety inventory runs out, then the safety inventory will be restocked depending
on the cycle of the material, generally will be 30 days.The Figure 1.6 shown the
product stock everyday in 30 days.
Inventory of Product A Month

12000
10000
8000
Piece
6000
4000
2000
0
0 5 10 15 20 25 30
Day
Figure 1. 6. Graphic of Inventory of Product in Plant
From the Figure 1.6,we can see how many stocks of product is kept in
storage every day in a monts interval. However, if fluctuative demand is
happening, then the graphic will have lower product in the safety inventory
because it is used for production to fulfill demand of the market. If the safety
inventory runs out, then the safety inventory will be restocked depending on the
cycle of the material, generally will be 30 days.
This table below showed percentage of our distribution centre, For Java we
distribute 70% of all our product, Sumatra 20% and Bali 10%. We distribute our
product each weeks, and we store our product so we can safe a few of our product
depend on uncertainty demand.
27
1.3. Product Distribution Chain

Pharmaceutical products are products that are very sensitive and fulfilled
by the rules. Its vulnerable to the environment and the little changes on product
quality can negatively impact its efficacy or even turn the nature into a "poison".
Therefore, WHO issued drug distribution standards set out in the WHO Technical
Series no.937 GDP annex 5 2006. Properly, entire distribution companies that
serve the pharmaceutical product comply with those standards. In Indonesia, the
new standards began to be implemented in 2008, and now many distribution
companies start to use these standards.
Besides GDP, drug distribution rules also stipulated in the Cara Distribusi
Obat yang Benar (CDOB) issued by BPOM. And during this time the CDOB who
became the benchmark for pharmaceutical distribution company in Indonesia.
However BPOM currently also being upgraded and classify their implementation
in pharmaceutical distribution companies in Indonesia.
The next process after the product had been made and packaged is the
distribution of the product to major pharmaceutical merchant/PBF (Pedagang
Besar Farmasi) which has a role as wholesaler that can distribute to the another
wholesaler like Century, Guardian and other pharmacy. Burn wound medicines
which have been packed in box will be processed to the stage of distribution to
major pharmaceutical merchant. At this stage, product distribution will be
explained in the manner of time and product delivery process results in the
production of plant storage plant to be accepted by consumers. The things that
need to be considered in this stage that the process runs smoothly distribution
locations include stores/outlets that sell products to the manufacturing site,
transportation capital, as well as the time distribution of these products.
1.3.1. Proportion of product distribution
Location of product distribution is determined based on the target area of
marketing. We decide that this burn wound medicine product will be distributed
to some big cities in Java such as Jabodetabek, Bandung, Yogyakarta, Semarang,
Surabaya,. This decision is taken based on the fact that Java is the island with the
highest population density in Indonesia. Besides that, Java is quite near to each
other compared to another island in Indonesia.
28
Consumers targets are people with 3 up to 70 years old with all economic
levels. Selection of target consumers with 3-70 years old was conducted because
this product is able to use for all ages. Consumer segmentation is more in urban
areas or big cities in Indonesia. In the big cities, the deployment and delivery of
information received so as to facilitate faster deployment process (sales) of this
product.
Category of regions, that were selected to distribute products, are made as
following:
Region 1 : DKI Jakarta, Bogor, Depok, Tangerang, Bekasi, and other
nearest regions of them all
Region 2 : West Java Province (Bandung, Tasikmalaya, Cirebon)
Region 3 : Center Java Province (Jogjakarta, Semarang, Solo, Magelang)
Region 4 : East Java Province (Surabaya, Malang, Madiun, Jember)
The distribution of our products will be conducted by cooperating with
some wholesaler in each targeted regions. Wholesaler is a corporation that sells a
great amount of products with varieties of form and quality of products.
Wholesaler which is selected is based on their strategic location and also their
level of availability and reachability for consumers.
Every wholesaler company spread their franchise to most cities in
Indonesia to give accessibility of daily needs product to the entire people in this
country. There are many wholesaler companies which are competing each other to
serve product distribution service to consumers. For bigger wholesaler like
Watson, Century or Guardian is purposed to big groceries and all economics level.
After map distribution of our products, we present the list of wholesaler location
in each area we selected shown in this table below.
Table 1. 18. List of Wholesaler Location
Region Wholesaler Location
Alam Sutera, Tangerang
Ciputat, Tangerang
Jabodetabek
Century Kelapa Gading, Jakarta Utara
(Region 1)
Pasar Rebo, Jakarta Timur
Bekasi, Bekasi
29
Table 1.18. List of Wholesaler Location (Contd)

Citra Garden, West Jakarta
Gunung Sahari, Centre Jakarta
Plaza Semanggi Mall, South Jakarta
Watson BSD City, Tangerang
Margo City Mall , Depok
Serang, Banten
Cibubur
Blok M Square, Jakarta
Alam Sutera, Tangerang
Pasar Minggu, Jakarta
TangCity Mall, Tangerang
Guardian
ITC BSD, Tangerang
Bekasi Square Mall, Bekasi
ITC Depok, Depok
CBD Ciledug, Banten
Gayamsari, Semarang
Solo, Surakarta
Century
Sleman, Jogjakarta
Gedengan, Sidoarjo
Istana Plaza, Bandung
West Java,
Mayasari Plaza, Tasikmalaya
Center Java,
Anjasmaro, Semarang
East Java
Watson Palur Plaza, Solo
(Region 2,
Tlogosari, Semarang
3, and 4)
Uripsumohardjo, Jogjakarta
Kedungsari, Surabaya
Sukajadi, Bandung
Guardian Kiara Condong, Bandung
Maguwoharjo, Jogjakarta
30
Table 1.18. List of Wholesaler Location (Contd)

Armada Town Square, Magelang
Guardian
ITC Surabaya, Surabaya
Besides wholesaler, we also distribute our product to major

pharmaceutical merchant/PBF (Pedagang Besar Farmasi) which has a role as
distributor not only for the big wholesaler such as Century, Watson and Guardian,
but also small domestic pharmacy. This strategy can expand the distribution of
our products to housing pharmacy so that our product can be spread anywhere.
After map distribution of our products, we present the list of major
pharmaceutical merchant/PBF (Pedagang Besar Farmasi) location in each area
we selected which shown in this table below.
Table 1. 19. List of major pharmaceutical merchant/PBF (Pedagang Besar
Farmasi)
Region Name of PBF Location

Jabodetabek Kompl Marinatama Blok A 12a Jl.
Inter Pharmacy, PT
(Region 1) Gunung Sahari Raya No 2
West Java
Kimia Farma Jl. Pajajaran No. 21 Bandung
(Region 2)
Central Java
Kimia Farma, PT Jl. Tentara Pelajar 16 A Semarang
(Region 3)
East Java
Kimia Farma, PT Jl. Krembangan Barat No. 67 Surabaya
(Region 4)
Also we will supply our products to warehouse where they can supply
them such that the distributor can distribute them to the pharmacy where they
need to supply it. The only warehouse available is DC Hero Supermarket which
located at Jl. Indofarma Rt. 01/07, Sukadanau, Cibitung, Bekasi Cikarang Barat.,
Jawa Barat.
1.3.2. Product Distribution Chain
Every product which has been manufactured was saved in a storage system
to be sent or distributed to consumers. Every medicines product was packaged in
31
one tube and one carton so its safety will guaranteed while distributing. Besides
that, one small carton of package is packaged again in a big carton which contains
144 small cartons of burn wound medicine products. The distribution chain
depends on plant location. The established products were distributed to major
pharmaceutical merchant/PBF (Pedagang Besar Farmasi) which has been chosen
before with route shown in this figure below:
Figure 1. 7. Distribution Route

(Source : maps.google.com)
1.4. Transportation Route

For distribution using land route, we consider using a pickup which is the
most effective because of its flexibility to the destination or the location of the
intended target and also the efficiency. The entire product distribution done by
sending GranMax Minibus. The entire distribution explained in this figure below
Figure 1. 8. Distribution Schematic for Transportation on Land

(Source : Authors Picture)
32
1.5. Marketing
The American Marketing Association defined marketing as the process of
planning and executing the conception, pricing, promotion, and distribution of
ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives. Marketing concept is based on three fundamental
beliefs: all planning and operations should be customer oriented; all marketing
activities in an organization should be coordinated; and customer oriented,
coordinated marketing is essential to achieve the organizations performance
objectives. Our marketing objectives are to introduce our product, increase
awareness to our product, and sell our product to consumer.
1.5.1. Target Market
A target market consists of a group of customers (people or organizations)
at whom the seller directs a marketing product (Stanton et al., 1991). We will
have multiple target markets. Our target market is people with burning injuries
within first and second degree.
1.5.2. Market Segmentation
Market segmentation is the process of dividing the total heterogeneous
market for a good or service into several segments, each of which tends to be
homogeneous in all significant aspects (Stanton et al., 1991). Segmentation used
as an attempt to fit the product to the market. Consumer market may be
segmented on the basis of geographic, demographic, psychographic, and behavior
toward product characteristics. This basis sometimes interrelated. For example,
income depends to some degree on age, education, and occupation.
1.5.2.1. Geographic Segmentation
Geographic segmentation can be grouped to region, city or Metropolitan
Statistical Area (MSA), urban-rural, and climate. We decide to sell our products
in Java, especially in big city such as Jakarta. The rationale of this decision is
based on number of populations, plant location, supply chain, etc.
1.5.2.2. Demographic Segmentation
Demographic segmentation is grouped by age, gender, family life cycle,
income, occupation, education, religion, and ethnic background. We decide to
33
target our product mainly to people ages above 3 and occupation which can lead
to burning injuries with middle income and lower income.
1.5.2.3. Psychographic Segmentation
Psychographic segmentation is grouped by social class, personality, and
life-style. Our products is suitable for any social class because basically burning
wound medicines is used by any people to eliminate infection and prevent
inflammation on the burning injuries, but we mainly target people who have
burning injuries.
1.5.2.4. Behaviour Segmentation
Behavior toward product is groped by benefits desired and usage rate.
Benefit desired is basically same with needs of consumer that we have explained
in assignment 1, for example effective in caring burning injuries, affordable price,
and transparent color. Burning injuries can be classified as first and second degree
which can be explained by how severe the burning is. Marketing Integration;
Marketing program will be used to achieve objective of our marketing as stated in
previous part. We will use marketing mix, which is the combination of four
primary elements that comprise a companys marketing program. The four
elements are:
A. Product
The name of our product is Alumed, which is burn wound medicine
packaged in small tube. Our product is very effective in curing middle ear
infection. On the location these products have been used, there will be no fungal
for three months. Our product is easy to use, safe for human and environment, and
has a good texture for skin-contact. Based on many benefits desired from
consumer that we can fulfill from our product, we confident that our product can
compete with other burn wound medicine products.
B. Price
We decide the price of our product is 30000 IDR. This decision is based
on raw material cost, salary cost, and other price-related factors. We confident
that our product price is affordable and reasonable compare to other products.
34
C. Distribution
Our product will be distributed to drugstore. The wholesaler to distribute
of our product will be Century, Guardian and Watson. And also we distribute to
major pharmaceutical merchant/PBF (Pedagang Besar Farmasi).
D. Promotion
We needs to inform and persuade the market about our burn wound
medicine product. Advertising, personal selling, sales promotion, and publicity
will be our major promotional activity. The media of our promotion will be
television, radio, magazine, newspaper, product website, and any other media.
CHAPTER 2
PRODUCTION COST
2.1. Total Capital Investment

The initial investment cost is known as Total Capital Investment (TCI).
Total Capital Investment (TCI) of a chemical plant includes purchase of the land,
building, offsite, supporting facilities, utilities installation, market research,
licensing, and contractors fee. There are two type of cost to calculate Total
Capital Investment, Fixed Capital Cost (FC) and Working Capital Cost (FW).
Fixed Capital Cost (FC) is the cost needed for manufacturing the plant. On the
other hand, Working Capital Cost (FW) is cost needed for operating the plant
before the company gets an income. TCI calculation determines the feasibility of
development of a plant and to identify whether it will give a sufficient positive
marginal value. The equation to calculate Total Capital Investment is shown
below.
CTCI = CFC + CWC
Fc = Fixed Capital Cost
Fw = Working Capital (Before Getting Income)
We made some assumptions and consideration for determining the TCI. There
are:
- The factory will be built by the begin of June 2016.
- The building process will be conducted through 1 year and will start to
operate in July 2017.
2.1.1. Fixed Capital Investment Cost
The total amount of money necessary to put a project into operation is
known as "Capital investment costs". This investment can be made through in-
house capital, credit from national and international financing agencies, and from
suppliers. Fixed Capital is the amount of money necessary to completely construct
a processing plant with auxiliary services, and to bring it to the point of start-up
production. It is basically the total value of all the assets of the plant. Fixed assets
can be tangible or intangible. Tangible assets comprise machinery (including the
cost of assembly), buildings, auxiliary installations, etc., and the intangible assets
35
36
include patents, technical knowledge, administration expenses, operation,

start-up costs, etc. The amount of this capital varies within very wide limits,
depending on the market for which the products are intended, the
characteristics of the process and the conditions established by the source
and availability of raw materials. Fixed capital is usually divided into the
components:
Table 2. 1. Fixed capital component
A. Direct Costs B. Indirect Costs
1. PurchasedeEquipment 1. Engineering and Supervision
2. Purchased-equipment installation 2. Construction expenses
3. Instrumentation and Control 3. Contractor fees
4. Piping, valves, and insulation 4. Contingencies
5. Electrical equipment
6. Buildings
7. Yard improvements
8. Service facilities
9. Land
(Source: Keekonomian Proyek Powerp Point by Muharam, Yuswan)
In the planning to operate our Burn Treatment Medicine product,
firstly of course we must construct the factory and also provide some other
types of facilities and equipments that will support and complete the
factorys operation for 10 years ahead. All factories have more or less the
same requirements to its facilities and equipments. Firstly, of course the
instruments and equipments which are essential to the production must be
bought. And then, all supporting facilities and equipments (excluding the
office building, because we assume that the office is merged with the
factory production site) must be provided so that the workforce (from the
labors to the managers) can work optimally and in a decent way. Also, when
we want to start a production in our factory, we feel that market research is
pretty important to measure the condition of the public market regarding our
product(s) type an how they response to our product(s). We are also not
forgetting about the distribution of our product later on; in which it will
37
involve some trucks and also buildings. And last but not least we have the
costs that must be paid before the first operation year of our factory.
All those cost stated in the previous paragraph are called investments.
We invests in the facilities, the equipments, the market research, the
buildings, the patent and so on; all to ensure the smooth operation of our
factory in ten years consecutively; and get a high payback later on.
However, that payback must also be ensured in profitability analysis; which
will take place also in this chapter of Production Costing. This investment is
the root and the beginning of the economic analysis. So in conclusion, we
must always make some investments before we can run a factory.
2.1.1.1. Direct Cost
Direct cost is the cost that directly involved with the production
process. Things that were categorized as direct costs are purchased
equipment, purchased-equipment installation, instrumentation and control,
piping, valves and insulation, electrical equipment, buildings, yard
improvements, service facility, and land.
A. Production Equipment
Equipment cost is cost needed to buy main equipment for the
manufacturing process of the product. For this product, we will use Guthrie
method to calculate the equipment cost. By using Guthrie methode, we can
estimate the labor for erection and setting equipment.
Before we use Guthrie method, we should estimate the price of
equipment in the time we buy it because we will buy the equipment in 2017.
The estimation is conducted by using Marshall and Swift Chemical
Equipment Index. We only have the index data until 2013, so we must
extrapolate it first to obtain the index data for 2017. Marshall and Swift
Chemical Equipment Index data and its results from extrapolation is shown
in Table 2.2.
Table 2. 2. Marshall and Swift Chemical Equipment Index
Year Cost Index
2003 1123.6
2004 1178.50
38
Table 2.2. Marshall and Swift Chemical Equipment Index (Condt)

Year Cost Index
2005 1244.5
2006 1302.3
2007 1373.3
2008 1449.3
2009 1468.6
2010 1457.4
2011 1565.64
2012 1618.88
2013 1672.12
2014 1725.36
2015 1778.6
2016 1831.84
Forecasting
2017 1885.08
(Source: Preliminary Chemical Engineering Plant Design, 2014)
After we know the index data, we can calculate the estimated price
for equipment. The 2016 index is 1831.84 and the 2017 index is 1885.08.
The price is calculated by using the equation below.
2017
2017 = 2016
2016
1885.08
2016 = 2016
1831.84
Equipment cost in 2017 and results from this calculation are shown in Table
2.3.
Table 2. 3. Total Equipment Cost in 2017
Equipment Price in 2016 (Rp) Price in 2017 (Rp)
Digital Scale 1,486,663.00 1,529,870.89

Knifes 25,000.00 25,726.59
Mixer 73,031,643.00 75,154,210.84
39
Table 2.3. Total Equipment Cost in 2017 (Contd)

Equipment Price in 2016 (Rp) Price in 2017 (Rp)
Tube Filling Machine 66,665,000.00 68,602,529.81
Cooler 4,053,323.00 4,171,127.46
Shrink Packaging
99,999,750.00 102,906,110.10
Machine
Sterilization machine
13,362,500 13,750,863.34
for package
Stainless Steal Bucket 1,400,000 1,440,689.14
And now we can go forward to calculate Bare Module Cost. Then,

we can process the 2017 prices to calculate the Total Bare Module Cost;
which is the total price of all equipments used in the factory production
process. This is done by choosing the appropriate Total Module Factor
(TMF) for each equipment and multiplying by the quantity we want to
order. The Total Modul Factor is used to estimate the total investment of
each equipment based on their materials, erection and setting method, site
preparation, auxiliaries and other expenses made include shipping cost and
tax. The table 2.4 show calculation of TBM.
Bare module Cost = Quantity Price in 2017 FBM
Table 2. 4. Total Bare Module Cost Calculation
Equipment Price 2017 (Rp) Quantity FBM BM Cost (Rp)
Digital Scale 1,529,870.89 1.00 1.00 1,529,870.89
Knifes 25,726.59 7.00 1.00 180,086.14
Mixer 75,154,210.84 2.00 1.80 270,555,159.03
Tube Filling
68,602,529.81 1.00 1.20 82,323,035.77
Machine
Cooler 4,171,127.46 3.00 2.17 27,154,039.75
Shrink Packaging
102,906,110.10 1.00 1.00 102,906,110.10
Machine
Sterilization machine
13,750,863.34 1.00 1.40 19,251,208.68
for package
40
Table 2.4. Total Bare Module Cost Calculation (Contd)

Equipment Price 2017 (Rp) Quantity FBM BM Cost (Rp)
Stainless Steal Drum 1,440,689.14 3.00 1.00 4,322,067.43
Total Bare Modul Cost 08,221,577.78
B. Land Cost
Land cost is cost that we paid for bought the land. For this activity,
we use Our location plant in Cilebut, Bogor. Cost for bought the land is Rp
850,000/m2. Our land has 825 m2 area, so we paid Rp 701,250,000 for land
cost. Tabble 2.5. show the calculation of land cost.
Table 2. 5. Site Cost Calculation
Cost/m2 (Rp) Land area (m2) Land Cost (Rp)
850,000 825 701,250,000
C. Build Cost
The type of our factory is grass root plant, which means we build the
entire factory in an empty land with total area of the plant is 825 m2.
Building cost is cost needed to make the office and plant building,
foundation of the buildings, roads, and paving. The costs data are obtained
in rupiahs per m2. Price per m2 for plant building is cheaper than office
building because the plant is more simple than the office building. The
calculation of building cost is shown in Table 2.6. The prices data is
obtained from CV. Berkah Abadi, Hery Asphalt Hotmix, Taman Indo and
Indonusa Conblock.
Table 2. 6. Building Cost Calculation
Price
Description Area (m2) Total Price (Rp)
(Rp per m2)
Plant and office
building 3000000 510 1,530,000,000
Road 75000 125 9,375,000
Conblock 75000 103 7,725,000
41
Table 2.6. Building Cost Calculation (Contd)

Price
Description Area (m2) Total Price (Rp)
(Rp per m2)
Garden 30000 87 2,610,000
Foundation 15% Building Cost 229,500,000
TOTAL 1,779,210,000
D. Plant Utilities
The table below shown the amount of plant utilities installation cost
in our factory. It include electricity, water, telecommunication (phone, fax
and internet) and fire safety system installation. Those costs are specified in
table 2.7 as a separated installation fee in Indonesia. This will be added later
on in determining the total Fixed Capital cost.
Table 2. 7. Plant Utilities Installation Cost
Installation Cost (Rp)
Water Installation 35,000,000
Electricity Installation 53,625,000
Internet Installation 300,000
Hydrants Installation 20,000,000
Telephone Installation 500,000
TOTAL 109,425,000
E. Market Research Investment Cost

The essential need to do market research is based on the experiences
by other industries; whose products are not selling after they invest so much
money. This could lead to a catastrophic economic deficit throughout the
plants operation. Therefore, a market research must be conducted to raise
the probability of the products being a selling product in the market. The
market research activities majorly consist of two elements, which
are:Surveying to analyze market preference and Market Research
Consultant Service to have a good analytical report of public market and
how we produce efficiently and get a good + fast payback. Table 2.8 is
42
listed those activities and their cost regarding market research to the public
for our products:
Table 2. 8. Market Research Investment Cost Breakdown
Market Research Activities Price (Rp)
Surveying 5,000,000
MR Consultant Service 20,000,000
TOTAL 25,000,000
F. Patent Investment Costs

Licensing is important because we need to protect our product.
Patent is one way to protect our products from being coppied by other
company. A patent is an exclusive right that is given by a state to an
inventor for his invention in the field of technology. For a given period, we
can implement our own invention or other parties can implement it too.
Our goal for the patent of our product is to get an exclusive right for
the product that we have designed. These exclusive rights are rights that are
given only to the patent holder for a certain period of time to use own patent
and prohibit others to use it without the consent of the patent holder. To
obtain a patent, there are some procedures that we have to do in accordance
with law No.14 of 2001 about Patent (UUP). Based on the rules, the given
patent in Indonesia is considered to be the novelty, inventive step and
capable in industrial application. The calculation of patent cost is shown in
Table 2.9.
Table 2. 9. Patent Cost
Non-Tax Revenue Unit Cost (Rp) Qty Total Price (Rp)
Patent Request per request 450,000 1 450,000
Claim Cost per claim 50,000 1 50,000
Request for Priority
per request 250,000 1 250,000
Right Letter
Patent Research Costs
per subject 250,000 1 750,000
(a) Local
43
Table 2.9. Patent Cost (Contd)

Non-Tax Revenue Unit Cost (Rp) Qty Total Price (Rp)
(b) Global per subject 1,350,000 1,350,000
TOTAL 2,350,000
In Indonesia, the brand is protected by UU No. 15 year 2001. Brand

protection is valid for ten years and can be retroactive from the date of
receipt brand, and can be extended as long as the brand continued to be used
in trade. Table 2.10 is describing the detail of brand cost for Hi Dry Air
Dehumidifier based on law that is used in Indonesia:
Table 2. 10. Brand Cost
Cost Total Price
Non-Tax Revenue Unit Qty
(Rp) (Rp)
Brand request per request 6,000,000 1 1,000,000
Recording of a license agreement per item 500,000 1 500,000
The cost of a copy of evidence
per request 300,000 1 300,000
priority trademark application
TOTAL 1,400,000
G. Distribution Facilities Investment Cost

As we discussed about whether to buy for ourselves the Distribution
Centers or we rent them for 10 years; we decided to go for the last one. And
also we of course must invest to the vehicles that we will use for
distribution. We use pick up as our vehicle to distribute the product. The
following table 2.11 shows the breakdown of the investment for product
distribution.
Table 2. 11. Product Distribution Facilities Investment Cost Breakdown
Investment In Quantity Price (Rp) Total Price (Rp)

Distribution Pick Up 2 115,000,000 230,000,000
TOTAL DISTRIBUTION FACILITIES COST 230,000,000
44
H. Supporting Facilities Investment Cost

As mentioned before that a plant and its operation office must
provide a decent facilities for its workforce so that they can work optimally
and be as productive as possible. This includes all sorts of facilities that
essential to an office, enhance the comfort of their work hours and also the
facilities that maintain their health; plus any other types of facilities we feel
necessary to be in our plant and site. The following table 2.12 is the list and
the quantity, plus the total investment of those facilities.
Table 2. 12. Supporting Facilities Investment Cost
Equipments Quantity Price (Rp) Total Price (Rp)
Sofa 1 3,000,000 3,000,000
Computer 4 6,000,000 24,000,000
Receptionist Desk 1 1,100,000 1,100,000
Central Air Conditioner 2 2,000,000 4,000,000
Dispenser 3 350,000 1,050,000
Fax Machine 1 1,000,000 1,000,000
Office Desks 4 350,000 1,400,000
Office Chairs 4 175,000 700,000
Locker 5 200,000 1,000,000
Director Desk and Chairs 1 1,150,000 1,150,000
Meeting Desk and Chairs 1 1,300,000 1,300,000
Cupboards 3 550,000 1,650,000
Photocopy Machine,
Scanner and Printer 1 1,325,000 1,325,000
White Board 1 300,000 300,000
Office Car 1 75,000,000 75,000,000
Projector and Screen 1 1,045,000 1,045,000
Telephone 4 200,000 800,000
Fire Extinguisher 2 325,000 650,000
Fire alarm 4 150,000 600,000
CCTV 9 1,000,000 9,000,000
45
Table 2. 12. Supporting Facilities Investment Cost (contd)

Equipments Quantity Price (Rp) Total Price (Rp)
Lamp 37 37,000 1,369,000
Janitor Set 2 500,000 1,000,000
Trashbin 7 35,000 245,000
Toilet Set 2 2,430,000 4,860,000
Pantry Set 1 3,000,000 3,000,000
Plastic Drum 1 160,000 160,000
TOTAL SUPPORTING FACILITIES COST 140,704,000
2.1.1.2. Indirect Cost

Indirect cost is the cost that is not directly involved with the
production process. Things that were categorized as indirect costs are
engineering and supervision cost, construction expenses, contractors fees,
and contingency. Our products indirect cost is for pay the contractors fee.
We assume that the contractors fee is 3% of building cost. The calculation
is done as shown in equation below.
= 3%
= 0.03 1,779,210,000
= 53,376,300
We can conclude from those 8 types of investment done for our 10-years
factory; the breakdown of the Total Capital Investment can be made as
below.
Table 2. 13. Total Capital Investment
Cost breakdown Cost (Rp)
BM cost 508,221,577.78
Land cost 701,250,000.00
Build cost 1,779,210,000.00
Plant utilities 109,425,000.00
Market research 25,000,000.00
Patent request 2,350,000.00
46
Table 2.13. Total Capital Investment (Contd)

Cost breakdown Cost (Rp)
Brand Request 1,400,000.00
Distribution facilities 230,000,000.00
Supporting facilities 202,704,000.00
Contractors fee 53,376,300.00
Total Fixed Capital Investment 3,550,936,877.78
2.1.2. Working Capital Investment Cost

Working capital investment is cost needed to starts the production. It
includes all costs needed for production process until it gets income. The
working capital for a chemical plant consists of the total amount of money
invested in raw materials and supplies carried in stock, accounts receivable,
cash kept on hand for monthly payment of operating expenses, such as
salaries, and payable taxes. Working capital can be calculated by operational
cost for a month. Operational cost for a month is Rp
Until this point, we can calculate the Total Capital Investment (TCI)
of the product. The calculation is done as follows.
CTCI = CFC + CWC
TCI = Rp 3,550,936,877.78 + Rp 297,009,118.94
TCI = Rp 3,797,945,996.72
So we get Rp 3,797,945,996.72 for Total Capital Investment.
2.2. Depreciation
In this section also we want to add some additional information
regarding the equipments that will be used in the economic analysis later on
(in the cash flow analysis section). All kinds of equipments, buildings and
facilities will have their economic values depreciated throughout the years
of operation as they are being used frequently. This must be noted in
making economical decision to know accurately the salvage values of our
assets in the end year of our factory age. In calculating the depreciation of
47
our assets, we use Declining Balance (DB) method with f=10% for firs and
secondary equipments and f=3% for building.
Table 2. 14. Total depreciation
Year Total Depreciation (Rp)
2017 133,792,558
2018 123,626,302
2019 114,380,282
2020 105,965,365
2021 98,301,247
2022 91,315,568
2023 84,943,124
2024 79,125,150
2025 73,808,684
2026 68,945,983
TOTAL
974,204,264
DEPRECIATION
2.3. Operation Cost

2.3.1. Manufacturing Cost
2.3.1.1. Direct Production Cost
Direct production costs is an element of the manufacturing cost,
which is the main contributor of the annual operating cost factory and
directly related to the cost of the change or falter during the next 10 years of
operation. To make it simple, this kind of cost will be easily affected by
changes in the operating year. For economic analysis, we used the four
elements of direct product costs, the annual cost of raw materials, annual
operating cost of labor, the annual utility costs, and maintenance costs. In
the operation of the plant for producing 1202 pcs Alumed per day, direct
production costs must be calculated.
First, the raw material cost, this cost is calculated based on the
supply chain analysis and the mass balances in the previous chapters. The
total units of raw materials are calculated based on the needs of each
48
material for the annual production, duration of the delivery from the
supplier, and also the minimum amount to be kept in the storage for the
production continuity. For the first year purchasing, we bought more than
we needed to keep it as stocks for production continuity in case there are
problems with the supplier. For the total of the raw material costs are IDR
392.105.000 per year. As we can see in the table 2.15, we bought the raw
materials more than the amount needed. The reason are the material itself
sometimes quite hard to received and usually suppliers sell the raw materials
in the definite amount like kilograms, etc. So, we have to rounded up the
amount of raw material needed so we can purchase it at the suppliers.
49
Table 2. 15. Annual Raw Material Cost Breakdown

Need Need Amount Need Amount
Need Amount
Amount Regular Regular Price Total Cost
Material Supplier Location First Order
First Order Order Order (Rp/kg) (Rp/year)
(kg/year)
(kg/month) (kg/month) (kg/year)
Rancabungur, 14,544,000.
Aloe Vera Bogor 222 2664 202 2424 6,000
Bogor 00
CV Harum
Kimia, Jl
2,700,000.0
Sorbitol Balap Sepeda Jakarta 5 60 5 60 45,000
0
1A 13210
Jakarta
CV Harum
Kimia, Jl
Propilen 12,600,000.
Balap Sepeda Jakarta 17 204 15 180 70,000
Glikol 00
1A 13210
Jakarta
50
Table 2.15. Annual Raw Material Cost Breakdown (Contd)

Need Amount
(kg/year)
CV Harum
Kimia, Jl
5,472,000.0
Tween 80 Balap Sepeda Jakarta 4 48 3 36 152,000
0
1A 13210
Jakarta
CV. Ratu
Aroma,
Perum Griya
Permata
Jasmine 5,280,000.0
Cisoka Blok Tangerang 0.6 7.2 0.4 4.8 220,000
Oil 0
A2
No.13,Cisoka
Tangerang,
Banten 15730
51

Need Amount
(kg/year)
Alfa Kima,
Komplek
Ruko Cimone 4,800,000.0
NaCMC Tangerang 8 96 8 96 50,000
Mas, Jl Gatot 0
Subroto Blok
C No
Total Cost per Year (Rp) 45,396,000
Need
Need Need
Need Amount Amount
Packaging Amount Amount Price Total Cost
Supplier Location First Order Regular
Material First Order Regular (Rp/pcs) (Rp/year)
(pcs/month) Order
(pcs/year) Order
(pcs/year)
PT
Carton (1
Tigamuti Jakarta 10580 126,960.00 9,620.00 115,440.00 500 57,720,000
pcs)
ara
52

Need
Need Need
Need Amount Amount
Packaging Amount Amount Price Total Cost
Supplier Location First Order Regular
Material First Order Regular (Rp/pcs) (Rp/year)
(pcs/month) Order
(pcs/year) Order
(pcs/year)
Box (144 Raja
Tangerang 80 960.00 75.00 900.00 2,500 2,250,000
pcs) Kardus
PET Shanghai China 63500 127000 63500 127,000.00 540 68,580,000
Total Cost Packaging Material per Year (Rp) 128,550,000

TOTAL COST RAW MATERIAL 2,037,804,106.51
53
After the raw materials, we moved to labor costs annual operational. This
element is also important because of the labor needed to operate in each plant to
help run the plant and control all production equipment to work properly. The
workforce will be divided into five groups with various types of the job
description, the Operator Labor team A and team B, Technician Mechanical and
process engineering, Electrical Technician, the owner of the warehouse. Operator
required to maintain continuity of the production process, there will be 2 team
operators in the production room for every 7 hours (total working time), each of it
located in process equipment. For team A they are located in preparation room,
agitating, mixer, filling tube and shrink packaging machine. For team B, they
located in washing and stripping room, cartooning room and cleaning sections.
This process doesnt need conveyor to moving the material in each process. So we
used this 2 team operators and placed them in each process. The amount of wages
subject to the difficulties job description and skills necessary for each job. In the
table 2.16 , it is labor costs in operation for all workers directly employed in the
production area.
Table 2. 16. Annual Raw Material Cost Breakdown
Direct Labour Cost
Salary per person
Position No. of employees Total (Rp)
(Rp/year)
Operating
4,000,000 9 36,000,000
labour
Total Salary per Year (Rp) 36,000,000
Next we are going to annual utilities cost. These utilities means for what
are used by the factory for its two production lines. They are generally water and
electricity. Based on Table 2.17 , total utilities cost of main equipment is
54
Table 2. 17. Total Utilities Cost of Main Equipments

Power Power
Working
Energy output output
No. of hour per Total Cost
Equipment Consumpti per per
Unit day (Rp)
on (kW) day year
(hour)
(kWh) (kWh)
Mixer 2 0.5 1.33 0.67 64.00 180,372.48
Tube Filling
1 0.22 1 0.22 21.12 29,761.46
Machine
2,588.1
Cooler 1 0.32 24 7.68 3,647,131.55
6
Shrink
Packaging 1 0.75 0.67 0.5 48.00 67,639.68
Machine
Sterilization
machine for 1 9 0.67 6 576.00 811,676.16
package
Total Utilies Cost of Main Equipment (Rp) 3,924,905.16
Besides main equipments, there are supporting equipment that has total
cost utilities on Table 2.18.
Table 2. 18. Total Utilities Cost of Supporting Equipments
Worki
Power
Energy ng Power
No. output
Consum hour output Total Cost
Equipment of per
ption per per day (Rp/year)
Unit year
(kW) day (kWh)
(kWh)
(hour)
Computers 4 1 7 28 6,720 8,064,000
Central Air
1 1.16 7 8.12 1,948 2,338,560
Conditioner
55
Table 2.18. Total Utilities Cost of Supporting Equipments (Contd)

Worki
Power
Energy ng Power
No. output
Consum hour output Total Cost
Equipment of per
ption per per day (Rp/year)
Unit year
(kW) day (kWh)
(kWh)
(hour)
Dispenser 3 0.5 24 36 8,640 10,368,000.
Fax Machine 1 0.01 7 0.07 16.80 20,160.00
Photocopy
Machine, Scanner 1 0.5 24 12 2,880 3,456,000
and Printer
Projector and
1 0.26 1 0.26 62.40 74,880
Screen
CCTV 9 0.0192 24 4.1472 1,393 1,672,151
Neon Lamps 37 0.008 24 7.104 2,386 2,864,332
UV Light
3 0.015 0.5 0.0225 5.40 6,480.00
Desinfection
Total Utilities Cost of Supporting Equipment (Rp) 28,864,563
The last utilities is water consumtion, on table 2.19. we can see water
consumtion is affected by employee and production. The amount of water
consumption in production is based on washing aloe vera, and washing the
equipments.
Table 2. 19. Total Utilities Cost of Water Consumtions
Consumption
Water Needs Total Cost (Rp/year)
(m3/day)
Employee (15) 0.225 81,000.00
Production 0.45 64,800.00
Total Cost per Year 145,800.00
56
This total cost utility is calculated by production of water and electricity

which is used per year only for production machines. The total for utilities cost is
Rp 32,935,269.00
The next cost of the direct costs is the cost of maintenance. Maintenance is
extremely important to prevent the failure of production at the plant, and also
helps to extend the life of equipment as long as possible. The cost of the
maintenance costs can we get by calculated the main equipment with 10%. The
cost of maintenance is Rp 35,411,333.18
The final cost of the direct costs is the cost of patent. Based on HAKI we
can get basic cost per patent and cost per claim. We have 4 claims in our product,
the name and logo, packaging, ingredients and compositions of ingredients. On
table 2.20. total patent cost our product is Rp 18,700,000 and the average total
cost per year is Rp 1,870,000.00
Table 2. 20. Total Patent Cost
Non Tax
Unit Cost (Rp) Qty Total (Rp)
Revenue
1st year from the date of patent acceptance
Basic cost Per patent 550,000 1 550,000
Cost per claim Per Claim 50,000 4 200,000
2nd year from the date of patent acceptance
3rd year from the date of patent acceptance
4th year from the date of patent acceptance
57
Table 2.20. Total Patent Cost (Contd)

Non Tax
Unit Cost (Rp) Qty Total (Rp)
Revenue
Basic cost Per patent 1,650,000 1 1,650,000
Total 18,700,000
AVERAGE TOTAL COST PER YEAR 1,870,000.00
2.3.1.2. Fixed Cost

Different with direct production cost, fixed cost is a type of operation cost
which is not easily shaken by any changers. They tend to be constant and
controlled by the director.
Insurance Cost
Insurance is one of the important aspect that we will need to spend our
money at all cost. It is because insurance help us to keep their responsibility to
help us keep save our factory when they are an accident in the production process.
Insurance in this plant is for their employees with using BPJS insurance.
Therefore, the annual insurance cost will be paid by us. For the workforces Life
58
Insurance for the labor we choose the amount of 2% from their salary, So the
breakdown of the Insurance cost can be seen on table 2.21.
Table 2. 21. Annual Insurance Cost Breakdown
Insurance Specification Total Cost (Rp/year)
Worker Insurance 2% from salary

10,872,000.00
2.3.2. General Expenses

2.3.2.1. Administrative Cost
Other than the production workers, a factory will also need employees to run the
marketing process and administrative. Those employees consists of leaders to
staffs that works together to maximize the selling of the products. All employees
of course will get the benefits from the profit of the factorys selling. The most
beneficial thing of all is the salaries and wages. Like other companies and
factories, the salaries and wages will depend with their job titles. The breakdown
and details of the executive salaries and clerical wages cost annually can be seen
on table 2.22. Since our factory is UKM, we only have small amount of
employees. The total of our indirect workers are 6 people.
Table 2. 22. Executive Salaries and Clerical Wages Cost
Executive Salaries and Clerical Wages Cost
Salary per
No. of Total
Department Position person
employees (Rp/yr)
(Rp/month)
President Director 15,000,000 1 180,000,000
Secretary of
5,000,000 1 60,000,000
Stakeholder President Director
Finance Accounting
7,000,000 1 84,000,000
Manager
General Marketing 8,000,000 1 96,000,000
Support and Security 3,800,000 1 45,600,000
Service Cleaning Service 3,500,000 1 42,000,000
Total Salary per Year 507,600,000
59
The company also need to connect to suppliers to get the raw materials and also
to connect to the distributor, consumer, government, and other third parties.
Therefore the company will have to pay the communication cost annually. The
communication cost consists of mails, telephones and facsimile and internet.
Table 2.23 is the calculation for communication cost
Table 2. 23. Communication Cost
COST FOR COMMUNICATION
Communication type Total Cost (Rp/year)
Telephone & Facsimile 1,200,000
Internet 3,180,000
Total Cost per year (Rp) 4,380,000
2.3.2.2. Distribution and Marketing Cost

Product Distribution Cost
In the distribution of the our product to the spreading market, a good and
efficient supply chain is crucial. In this manner, the product will be distributed to
four Distribution centers in Indonesia. They will be in Jabodetabek (near
Cilembut, Bogor, West Java); Bandung (West Java); Semarang (Central Java);
and Surabaya (East Java). This leads to the variation of the distribution cost as
well. First, there are some costs that must be kept in mind; such as fuel, driver
and toll expenses. Table 2.24, Table 2.25, and Table 2.26 are the cost of fuel,
driver and toll for back and forth distribution to 2 regions with 2 pick up.
Distributions is not only dirtributed the produtct but also the waste.
Table 2. 24. Fuel Cost Distribution
COST FOR FUEL
fuel
Distance Fuel Cost Cost (per cost (per
Rute comsumtion
(km) (Rp/L) week) year)
(km/l)
Bogor-
1358 13.00 7,000.00
Surabaya 731,230.77 35,099,076.92
60
Table 2.24. Fuel Cost Distribution

COST FOR FUEL
fuel
Distance Fuel Cost Cost (per cost (per
Rute comsumtion
(km) (Rp/L) week) year)
(km/l)
Bogor-
Jakarta-
bekasi- 611 13.00 7,000.00
329,000.00 15,792,000.00
Tangerang
-Bandung
Bogor -
Jakarta
(Waste 100 13.00 7,000.00
53,846.15 2,584,615.38
Distributi
on)
Total Cost 53,475,692.31
Table 2. 25. Driver Cost Distribution

COST FOR DRIVER
Driver Cost Driver (Rp/month) Total Cost Driver (Rp/Year)
A 3000000 36000000
B 1000000 12000000
Total cost driver (Rp/year) 48000000
Table 2. 26. Toll Cost Distribution

Cost Toll
Toll Cost (Rp/week) cost (Rp/year)
rute 1 500000 48000000
61
Table 2.26. Toll Cost Distribution (Contd)

Cost Toll
Toll Cost (Rp/week) cost (Rp/year)
rute 2 dan rute 3 150000 14400000
Total cost toll 62400000
The total for distribution cost is Rp 163,875,692.31

Product Marketing
Cost Aside from the distribution of the product to the client, it is essential
also to market and advertise the product to the public. We need a good and
efficient marketing strategy to raise the products popularity among potential
consumers. We will apply marketing method in order to increase the name of
our product, Alumed. We will use media mass and social media. Based on
Table 2.27 the cost for maketing our prodct is:
Table 2. 27. Media Mass Annual Cost
COST FOR MEDIA MASS MARKETING
Printed cost
Quantity Dimension Total Cost (Rp/year)
Media (Rp/year)
brosure 7500 100 A3 750,000.00
Table 2. 28. Social Media Annual Cost

COST FOR SOCIAL MEDIA MARKETING
Frequency Total Cost
Web Address Cost(Rp/year)
(times/year) (Rp/year)
Google Adense 12 Free -
iklan-gratis.com 12 Free -
Website
- 800000 800000
Development
62
Financial Interest
Di ka ainu ada wacc nya din, itu adit yang ngitung
In this financial interest section, will be selected the source of funding for the
capital loans. This source of funding comes from bank (BNI) that has interest rate
10.3 %. Because our total capital investment is only 3,797,945,997 thats why we
only use bank to be our source of funding, if the capital investment above
4,000,000,000 we must use the investor. Table 2.29 shown us the calculation
process of loans and returns every year from the first year up to the fifth year for
bank.
63
Table 2. 29. Loan Calculation for Bank

Year Initial Loan Loan Interest Payment Total Payment Loan after Payment
0 3,797,945,997 3,797,945,997
1 3,797,945,997 391,188,438 759,589,199 1,150,777,637 3,038,356,797
2 3,038,356,797 312,950,750 759,589,199 1,072,539,949 2,278,767,598
3 2,278,767,598 234,713,063 759,589,199 994,302,262 1,519,178,399
4 1,519,178,399 156,475,375 759,589,199 916,064,574 759,589,199
5 759,589,199 78,237,688 759,589,199 837,826,887 -
64
2.4. Economic Analysis

2.4.1. Product Price Determination
We determine the product price firstly based on the minimum product
price. The total outcome of our manufacture can be calculated in the cash flow
analysis which is shown in the next section. The total outcome which we had
calculated is added by interests of loans from bank and investor. Next, the
calculation our production capacity for a full 10 years of operation will be
conducted here. Our burn treatment medicine product will compete in the market
of consumer in Indonesia for a next years which we also know that there are some
product which nearly has the same type as function like our product. Therefore,
we should analyze the market demand in the early years from our product
releasing. We know the minimum price of our each product unit because the total
selling income we get is used to pay back the total outcome plus loan interest. The
minimum price per unit can be determined by this formula below:

+
=
( )
The table 2.30 show the calculation of minimum price per unit
Table 2. 30. Calculation of minimum Price per Unit
TOTAL OUTCOME Rp 32,407,299,874

Interest Rp 1.173.565.313
TO + Interest Rp 33,580,865,187
10 years Prod. Capacity 2.884.800
Minimum Price per Unit Rp 11.640
From the calculation above, we get the minimum price per unit of Alumed
burn medicine product is Rp 11.640. It means that minimum we must sell Alumed
burn medicine product Rp 11.640 to avoid the financial loss or deficit. From the
minimum price above, we can determine how much the profit we want get. Here,
we decided to have profit margin approximately 70% of minimum price. So we
sold our product Rp 20.000 to wholesaler.
65
2.4.2. Cash Flow Analysis

This is the annual cash flow content of income flow and expenses flow.
The source of income flow is from income from product sellings before and after
tax and also salvage value in the last year period. We assume that on the first,
second, and third year of production, our product only sold about 70% , 80% and
90% of total production. For the rest of the year, the amount of our product that
sold is equal to total production.
After we calculated the income and expenses flow of our manufacture, we
know that our first income could be obtained from a year operation. Figure 2.1
show cash flow of our product and table 2.31 is the specific cash flow.
Rp5,000,000,000
Rp4,000,000,000
Rp3,000,000,000
Rp2,000,000,000
Rp1,000,000,000 BTCF
ATCF
Rp-
Rp(1,000,000,000)
Rp(2,000,000,000)
Rp(3,000,000,000)
Rp(4,000,000,000)
Figure 2. 1. Cash Flow Before Tax and After Tax

(Source: Authors Personal Data)
66
Table 2. 31. Cash Flow (in million rupiahs)

Income Earnings
Year
Total
Salvage Before Tax Earning
Product Total Outcome Deprecia Financial Taxable Earnings BTCF ATCF
Value and s After
Sold Income s tion Interest Income Tax
Depreciation Tax
2016 3797.9 3797.9 (3797.9) (3797.9) (3797,945) (3,797,94)

2017 4038.72 4038.72 2829.06 - 1209.65 370.64 391,18 1971,48 - 1980.72 1209,654 1971,48
2018 4615.68 4615.68 2864.476 - 1751.203 315.04 312,95 2379,19 (713,76) 1671.9 1751,2 1665,44
2019 5192.64 5192.64 2864.476 - 2328.16 267.78 234,71 2830,66 (849,19) 1987.93 2328,16 1981,46
2020 5769.6 5769.6 2864.476 - 2905.12 227.62 156,47 3289,21 (986,76) 2308.92 2905,12 2302,45
2021 5769.6 5769.6 2864.476 - 2905.12 193.47 78,237 3176,84 (953,05) 2230.25 2905,12 2223,78
2022 5769.6 5769.6 2864.476 - 2905.12 164.45 - 3069,57 (920,87) 2155.17 2905,12 2148,7
2023 5769.6 5769.6 2864.476 - 2905.12 139.78 - 3044,91 (913,47) 2137.9 2905,12 2131,44
2024 5769.6 5769.6 2864.476 - 2905.12 118.82 - 3023,94 (907,18) 2123.23 2905,12 2116,76
2025 5769.6 5769.6 2864.476 - 2905.12 100.99 - 3006,12 (901,83) 2110.75 2905,12 2104,28
2026 5769.6 5769.6 2864.476 139.9 2905.12 85.85 - 2990,96 (897,29) 2100.15 2905,12 2093,67
TOTA
54234.24 58032.2 32407.29 - - - - - (8043,43) - - -
L
67
2.4.3. Cost Breakdown

Cost breakdown aims to determine the percentage of each expenditure
made. By using the cost breakdown diagram, companies can determine which
variables are most widely affected production expenditure. The cost breakdown
diagram is shown in figure 2.2 below.
0.19% 5.36%
0.59%
1.04%
Raw Material
Operating Labor
Factory Over Head
25.03% Maintanance
Marketing and Advertising
66.61% Distribution
Plant overhead
1.18%
Figure 2. 2. Cost Breakdown

From the cost breakdown above, we can see that the variable are most
widely affected production expenditure is raw materials.As we can see the ra
materials is 66.61% of total operating cost. The second biggest variable is factory
over head with 25.03%. This is consist of utilities, depreciation, insurance,
executive salary, and patent.
2.5. Profitability Analysis
2.5.1. Payback Period
Payback Period is the length d of time that a project requires to recover the
money invested in it. Payback period indicates how long it will take before a
project can be a turnover, the amount of accumulated net profit for the process
production (already reduced annual operating costs) exactly equal to the sum of
all costs incurred for the initial investment of the plant. Below this is the formula
for counting the Payback period.
68
The Payback Period Formula :

Depreciable FCI + Interest on TCI during estimated service life
PBP =
(avg. profityr + avg. depreciationyr)as constant annuity
Where FCI is fixed capital investment and TCI is total capital investment.
As our estimated service life, we choose ten years because it is long enough and
most used in economic analysis for device products service life, in this case is
our burn treatment medicine product. So we will estimate payback period of our
product by using ten years as estimated service life.
If the payback period is less than the specified period, then the project is
feasible. But if the payback period is more than the specified period, then the
project is not feasible enough to be conducted. This specified period is defined in
a meeting between investors and directors. Paypack period is shown in the figure
below which is crafted by the function of time (years) to define the present worth
of our factory. The present worth assess the present value of all future values
consists of all the cash flows in year 1 up to 10. We dragged and processes to be
an equivalent in year 0 and added the fixed capital investment on the year 1. The
calculation of payback period is shown in table 2.32 and the graphic is shown in
figure 2.3
Table 2. 32. Calculation of Payback Period
Year ATCF PW Total PW

0 (3,797,945,996.72) (3,797,945,996.72) (3,797,945,996.72)
1 1,971,482,086.51 1,692,985,905.12 (2,104,960,091.60)
2 1,665,438,068.21 1,228,144,596.24 (876,815,495.37)
3 1,981,464,170.76 1,254,780,454.44 377,964,959.08
4 2,302,452,200.74 1,252,081,652.05 1,630,046,611.13
5 2,223,785,869.04 1,038,473,699.07 2,668,520,310.20
6 2,148,704,529.90 861,667,558.45 3,530,187,868.66
7 2,131,436,815.71 733,999,920.47 4,264,187,789.12
8 2,116,759,258.65 625,972,890.20 4,890,160,679.32
9 2,104,283,335.14 534,378,258.10 5,424,538,937.42
10 2,093,678,800.17 456,578,152.94 5,881,117,090.36
69
From calculation by using Microsoft Excel, we got 2.69 years as our

payback period. The calculation of payback period can be seen in Table where
the chosen values that will be calculated are the third and fourth row. We can see
that, the total PW value reach the positive value after 2.69 years of production. It
means that the day before 982th, the result of Alumed burn medicine marketing
are used to pay our first cost of investment. Here is the calculation of payback
period.
PBP2 0(876,815,495.37)
= 377,964,959.08 (876,815,495.37)
32
PBP = 2.69 years = 982 days
8,000,000,000.00
6,000,000,000.00
4,000,000,000.00
Total PW
2,000,000,000.00
-
0 2 4 6 8 10 12
(2,000,000,000.00)
(4,000,000,000.00)
(6,000,000,000.00)
years
Figure 2. 3. Payback Period
From the calculation and graphic above, we can conclude that our burn
treatment medicine product can be run because it has payback period is less than 3
years. Three years is short enough to recover the cost of investment. So, in other
word the project is acceptable
70
2.5.2. Breakeven Point

Break Even Point (BEP) is the point at which total cost and total revenue
are equal. Its an analysis to define and find amount of goods or services that must
be sold to the consumer with certain price to cover the costs that emerge and to
get profit. The calculation for determining BEP is :
fixed cost
QBE =
revenue per unit variable cost per unit
Fixed costs are the expense that tend to always be stable and not
influenced by the volume of production per year. Revenue per unit is the selling
price set by the factory owner in order to get profit. Variable costs per unit are the
expense that is influenced by the volume of production per year. Table 2.33 show
the calculation of breakeven point.
Table 2. 33. Calculation of Breakeven Point
Product
Product
Products Products Sold
Year Days Sold
/ day Sold (%)
(units)
Cumulative
(units)
1 240 1202 70% 201936 201936

2 240 1202 80.00% 230784 432,720
2.69 165 1202 90% 178497 611,217
3 240 1202 100.00% 259632 692,352
We assume that the product is 90% sold begin in 3 years under some
consideration. So, from the calculation above we can see that the product sold in
2.69th years is 611,217units. In the other word, the break even point of this project
is in 611,217units of product that has been sold
2.5.3. Internal Rate of Return
Internal Rate of Return (IRR) is a rate of return used in capital budgeting
to measure and compare the profitability of investment. The internal rate of return
on an investment or project is the "annualized effective compounded return rate"
or rate of return that makes the net present value (NPV) of all cash flows from a
particular investment equal to zero.
71
IRR calculations are commonly used to evaluate the desirability of

investments or projects. The higher a project's IRR, the more desirable it is to
undertake the project The calculation of IRR is done by using Microsoft Excel
where it already has the function to calculate the IRR in economic analysis. We
have 23.661% as our IRR.
The IRR value must be compared with the MARR of this project to
analyze the feasibility or profitability of this project. A project is feasible if IRR
value greater than MARR value. As we know, the MARR value has been
calculated before by using WACC formula. The formula of WACC is
Where
Re : Cost of equity
Rd : Cost of Debt
From the data, we can calculate the value of WACC, and we get 16.45%
WACC. And this value is used for value of MARR. So, the MARR is 16.45%.
As we can see from the explanation above, the IRR value is greater than
MARR value. So, the production of burn treatment medicine product is feasible
and acceptable because it can give the profit from its marketing and has IRR value
greater than MARR.
2.5.4. Net Present Value
Net Present Value (NPV) is the present value of the cash flows at the
required rate of return of project that compared to initial investment. It shows the
net benefits received by a project over the life of the project at a certain interest
rate. NPV also can be defined as the current value of cashflow caused by
investation.
A project will be stated legally done if NPV > 0 which means the project is
beneficial and if NPV < 0 then this will be stated as legally not done since it gives
no benefits and not feasible to be conducted. Cash flow in the year of n will be
taken to the present with normal interest by following this formula:
72
From the calculation using Microsoft Excel which it already has the function
to calculate the NPV of a projects economic analysis, so we got the Rp
Rp2,162,737,445.19 as projects NPV value. It shows that the project (burn
treatment medicine product) is feasible because its value greater than 0. The
project (burn treatment medicine product) is feasible if its net present value
greater than 0.
2.6. Sensitivity Analysis
Sensitivity analysis is a technique used to determine how different values
of an independent variable will impact a particular dependent variable under a
given set of assumptions. This technique is used within specific boundaries that
will depend on one or more input variables, such as the effect that changes in
interest rates will have on a bond's price.
Those changes consist of the selling price fluctuations, changes in raw
material cos and changes on utilities cost. We choose this parameter because these
parameters are likely to be changed in a production period. Parameter used in the
sensitivity analysis are IRR, NPV and Payback Period (PP).
2.6.1. Fluctuation of Raw Material
This analysis sensitivity is to analyze the fluctuation of the raw materials
cost based in table below. It is important to have the fluctuation of raw materials
cost analyzed. The changes of IRR, NPV and PP are the effect the changes of raw
material costs this product. Below are the table 2.34 of flunctuation raw material
cost.
Table 2. 34. Sensitivity of Raw Material Fluctuation
Raw Material Price Fluctuation

Change Raw Material Price IRR NPV PP (years)
-50% Rp 1.018.902.053 35.37% Rp 5,815,464,068 1.7
-30% Rp 1.426.462.875 30.72% Rp 4,354,373,419 2.02
-20% Rp 1.630.243.285 28.39% Rp 3,623,828,094 2.225
0% Rp 2.037.804.107 23.66% Rp 2,162,737,445 2.69
20% Rp 2.445.364.928 18.82% Rp 701,646,796 3.33
30% Rp 2.649.145.338 16.35% Rp (28,898,528) 3.719
50% Rp 3.056.706.160 11.22% Rp (1,489,989,178) 4.86
73
The conclusion from the table above is:

If the raw material is increasing, the NPV will be smaller and so does the IRR.
Because of this condition, it will make the payback period becomes longer.
Its matched since the raw materials cost takes much of the outcomes percentages
in the whole operating cost per year. So, it takes much longer time in order to
have the profit that can fill the total operating cost. The raw material cost have
highest percentage of the operating cost of the factory which is about 66,61%. So
the fluctuation of the raw material can get big impact of our profit.
2.6.2. Fluctuation of Selling Product Price
This analysis sensitivity is to analyze the fluctuation of the selling product
price based in table 2.35 below. It is important to have the fluctuation of the
selling product price analyzed.
Table 2. 35. Sensitivity of Product Price Fluctuation
Product Price Fluctuation

Change Product Price per Unit IRR NPV PP (years)
- - -
-50% Rp 10.000
3.00% Rp (3,307,939,996) 8.18
-30% Rp 14.000
10.95% Rp (1,506,467,092) 4.66
-20% Rp 16.000
23.66% Rp 2,162,737,445 2.69
0% Rp 20.000
34.88% Rp 5,831,941,982 1.83
20% Rp 24.000
40.22% Rp 7,666,544,251 1.55
30% Rp 26.000
50.62% Rp 11,335,748,788 1.15
50% Rp 30.000

If the product price is increasing, the NPV will be increasing and so does the IRR.
Because of this condition, the PP will becomes shorter. This happen because by
increasing the selling product price, the profit of the factory will be higher, so that
the income will be much bigger. With bigger income, we will have short payback
period and high profit. But if the product price is decreasing, the NPV will be
smaller or can be negative, so the IRR will be smaller than MARR and the
product is not acceptable.
74
2.6.3. Fluctuation of Operating Labour Cost

This analysis sensitivity is to analyze the fluctuation of the operating labor
based in table 2.36 below. It is important to have the fluctuation of the operating
labor analyzed.
Table 2. 36. Sensitivity of Operating Labor Fluctuation
Operating Labour Fluctuation

Change OL Wage IRR NPV PP (years)
-50% Rp 18.000.000 23.87% Rp 2,227,266,787 2.675
-30% Rp 25.200.000 23.78% Rp 2,201,455,050 2.684
-20% Rp 28.800.000 23.74% Rp 2,188,549,182 2.689
0% Rp 36.000.000 23.66% Rp 2,162,737,445 2.69
20% Rp 43.200.000 23.56% Rp 2,136,925,708 2.708
30% Rp 46.800.000 23.53% Rp 2,124,019,840 2.71
50% Rp 54.000.000 23.45% Rp 2,098,208,103 2.72

If the operating labour is increasing, the NPV will be lower and so does the IRR.
Because of this condition, the PP will becomes longer. The payback period will be
longer too because of the increasing of operating labour. But the fluctuation of
operating labour does not get any significant changes, because operating labour
have low percentage of the operating cost that explain in the section before. The
operating labour give 1.18% of operating cost of the factory.
75
2.6.4. Fluctuation Graphics

Net Present Value
-50%
1.2E+10
1E+10
8E+09
50% 6E+09 -30%
4E+09
2E+09
0
NPV Raw
-2E+09
-4E+09 NPV Price
NPV Operating
30% -20%
20% 0%
Figure 2. 4. NPV Spider Graph

From the spider chart in the figure 2.4 above, it can be seen the variable
that is really effect the changes of the NPV based on the changes of the fluctuative
variable. For example, for the percentage of changes 20%, variable that effect net
present value is product pricing. But If Raw material cost changes -20% until -
50% it effect net present value. So that, it can be concluded that raw material cost
and product pricing are the varibale that really effect the NPV. Operating labour
does not give any effect if it change.
76
Payback Period
-50%
10
8
50% -30%
6
2 PP Raw
0 PP Price
PP Operating
30% -20%
20% 0%
Figure 2. 5. Payback Period Spider Graph

that is really effect the changes of the payback period based on the changes of the
fluctuative variable. For example, for the percentage of changes -30%, variable
that effect net present value is selling product price. It happens for three of the
percentage of changes. So that, it can be concluded that selling product price is the
varibale that really effect the payback period. Operating labour does not give any
effect if it change.
77
IRR
-50%
60.00%
50.00%
50% 40.00% -30%
30.00%
20.00%
10.00% IRR Raw
0.00% IRR Price
IRR Operating
30% -20%
20% 0%
Figure 2. 6. IRR Spider Graph

that is really effect the changes of the IRR based on the changes of the fluctuative
variable. For example, for the percentage of changes 20%, 30%, and 50%,
variable that effect net present value is product price.But -20%,-30%, and -50% of
the changes is affected by raw material cost. It can be concluded product price and
raw material cost is the varibale that really effect the Interest Rate of Return.
Operating labour does not give any effect if it change.
CONCLUSION
1. Our product will be distributed to 4 regions in Java Island with some routes.
2. We use land transportation for inter-island distribution.
3. With the storage capacity, we can storage our product for about 2 days before
distribution.
4. The fixed capital investment for our Burn Treatment Medicine factory will be
Rp 3,797,945,996.72
5. The total of operating cost in our product is Rp 2,971,004,627.33
6. Our factory has payback period for about 2 years 8 months and selling for
about 611,217 packages.
7. The interest rate of return of our burn treatment medicine project is about
23.66% which is higher than the MARR that is 16.45%.
8. Net present value for our factory is Rp 2,162,737,445
9. By doing the sensitivity analysis, we know that raw material cost are the
varibale that really effect the NPV, selling prices for payback period and raw
material cost for IRR.
78
REFERENCES
BPJS Ketenagakerjaan. (2014). Biaya Asuransi Ketenagakerjaan. [Online]

Available at : http://www.bpjsketenagakerjaan.go.id/
Cussler&Moggridge. 2001. Chemical Product Design 2nd Edition. Cambridge:
Cambridge University Press
Direktorat Jendral Kekayaan Inteeektual. (2016). Tarif Biaya Permohonan Merek.
[Online] Available at: http://www.dgip.go.id/merek/tarif-biaya-merek
Direktorat Jendral Kekayaan Intelektual. (2016). Tarif Biaya Permohonan Paten.
[Online] Available at: http://www.dgip.go.id/tarif-biaya-permohonan-paten
Ditjen POM. 1979. Farmakope Indonesia Edisi III. Jakarta: Depkes RI
Howard, C. Ansel. 1989.Pengantar Bentuk Sediaan Farmasi Edisi IV. Jakarta: UI
Press
Elvi, 2015. Tanah Dijual: Jual Cepat Tanah Di Cilebut.
http://rumahdijual.com/bogor/716531-jual-cepat-tanah-di-cilebut-
bogor.html. Diakses pada 9 Mei 2016
Instaforex. (2014) Suku Bunga Kredit dan Pinjaman. [Online] Available at :
http://www.seputarforex.com/data/bunga_kredit_pinjaman/
Martin. 1971.Dispensing of Medication. Pensilvania:Marck Publishing Company
Seider W.D, Seader J.D, Lewin, Widagdo. 2009. Product and Process
Design Principles. Synthesis, Analysis and Evaluation. USA: Wiley and
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Wesselingh J.A., Kiil, S. and Vigild M.E. 2007.Design and Development of
Biological, Chemical, Food and Pharmaceutical Products. New York: John
Wiley & Sons, Ltd.
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UNIVERSITAS INDONESIA

BURN TREATMENT MEDICINE

CHEMICAL ENGINEERING DEPARTMENT

We have learnt about how to manufacture our product, burn wound

Figure 1. 1. Route material from Kencana Cilebut, Bogor to Pakuan Regency,

Table 1. 1. Supplier of Raw Material& Packaging ................................................. 5

1.1. Raw Material Suppy

Figure 1. 1. Route material from Kencana Cilebut, Bogor to Pakuan Regency,

d. The location is contain of a reachable accommodation lines, such as has

Figure 1. 2. Route material from Kencana Cilebut, Bogor to Tol Door

Figure 1. 3. Route material from Kencana Cilebut, Bogor to Pelabuhan Merak

e. The location is contain of utilities, such as electricity, telecommunications,

Table 1. 1. Supplier of Raw Material& Packaging

Table 1.1. Supplier of Raw Material& Packaging (Contd)

1.1.2.1. Alternative Scenario and Modelling

Table 1. 2. Price of Raw Material from 1st Alternative of Supplier

Table 1. 3. Price of Raw Material from 2nd Alternative of Supplier

Table 1. 4. Price of Raw Material from 3rd Alternative of Supplier

Table 1. 5. Price of Packaging from 1st Alternative of Supplier

Table 1. 6. Price of Packaging from 2nd Alternative of Supplier

Table 1. 7. Distribution Cost of Raw Material Alternatives

Table 1.7. Distribution Cost of Raw Material Alternatives (Contd)

Table 1. 8. Distribution Cost of Packaging Alternatives

Table 1.8. Distribution Cost of Packaging Alternatives (Contd)

1.1.2.2. Raw Material Supply Chain

Table 1. 9. First Order Amount of Raw Material

Table 1. 10. First Order Amount of Packaging

Table 1.10. First Order Amount of Packaging (Contd)

Table 1. 11. Regular Order Amount of Raw Material

Table 1. 12. Regular Order Amount of Packaging

Table 1. 13. Raw material order scheduling (detailed each week )

1.2. Product Inventory

Table 1. 17. Raw material inventory (detailed each week )

Table 1.17. Raw material inventory (detailed each week ) (Contd)

Table 1.17. Raw material inventory (detailed each week ) (Contd)

1.2.3. Raw Material and Product Fluctuation in Plant

Aloe Vera Inventory

Figure 1. 4. Graphic of Inventory of Raw Material, Aloe Vera

Chemical Material Inventory

Figure 1. 5. Graphic of Chemical Material Inventory

Inventory of Product A Month

Figure 1. 6. Graphic of Inventory of Product in Plant

1.3. Product Distribution Chain

Table 1.18. List of Wholesaler Location (Contd)

Table 1.18. List of Wholesaler Location (Contd)

Besides wholesaler, we also distribute our product to major

Region Name of PBF Location

Figure 1. 7. Distribution Route

1.4. Transportation Route

Figure 1. 8. Distribution Schematic for Transportation on Land

2.1. Total Capital Investment

include patents, technical knowledge, administration expenses, operation,

Table 2.2. Marshall and Swift Chemical Equipment Index (Condt)

Equipment Price in 2016 (Rp) Price in 2017 (Rp)

Digital Scale 1,486,663.00 1,529,870.89

Table 2.3. Total Equipment Cost in 2017 (Contd)

And now we can go forward to calculate Bare Module Cost. Then,

Table 2.4. Total Bare Module Cost Calculation (Contd)

Table 2.6. Building Cost Calculation (Contd)

E. Market Research Investment Cost

Market Research Activities Price (Rp)

F. Patent Investment Costs

Table 2.9. Patent Cost (Contd)

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