Track: Financial Engineering

Abstract

Micro, Small, and Medium-Sized Enterprises (MSMEs) are crucial to a nation's economic progress. Nonetheless, the Covid-19 epidemic has affected several economic sectors. Consequently, MSME businesses are required to design a company strategy or plan. MSME enterprises might use the method of calculating the Life Cycle Cost to include it in future decision-making. It is anticipated that entrepreneurs of MSME would avoid shutting their companies. This research focused on micro, small, and medium enterprises in Indonesia's food industry, particularly tofu producers. This research will analyze three machines used in the production process, namely a soybean grinding machine, a water steam machine, and water pump machines, using tofu producers from three distinct locations: Bekasi, Cikampek, and Karawang. The best Life Cycle Cost calculations were achieved for soybean grinding machines in Cikampek. This is because the employee costs in each region vary which affects the machine's maintenance expenses. Cikampek has lower earnings than employees in Bekasi and Karawang. Therefore, the value of the Equivalent Annual Cost (EAC) for the Cikarang life cycle cost is lower, with an EAC of Rp. 20,665,699.-, for a water steam machine in Cikampek, with an EAC of Rp. 97,153,664.-, and for water pump machines in Cikampek, with an EAC of Rp 12,474,800.-. It can be observed that varies in the pay of employees to operate the same equipment in various places influences the selection of the optimal Life Cycle Cost.