Feasibility Analysis of Electroplating Facilities for Caliper Assy Manufacturing Using Investment Methods at PT. XYZ

DOI

10.2991/978-94-6463-618-5_17How to use a DOI?

Keywords

Investment Feasibility; NPV ; IRR; PP

Abstract

This research was initiated after a fire incident at PT. XYZ’s electroplating facility, disrupting its operations and those of its client, PT. ADM. As a long-term plan, PT. XYZ aims to rebuild the facility, but for now, they are outsourcing the electroplating process. This temporary solution, however, has led to lower profits compared to in-house operations, prompting the need to assess whether rebuilding the facility or continuing to outsource is the better option to restore profitability. The goal of this study is to evaluate the investment value and benefits of PT. XYZ constructing a new electroplating facility compared to outsourcing the process. The analysis uses investment criteria such as Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP). The study compares an in-house investment of IDR 15.95 billion with outsourcing costs of IDR 1.15 billion. The results show that in-house investment is more feasible, with a positive NPV of IDR 4.73 billion, an IRR of 18.23%, and a PP of 3 years and 4.5 months, all of which meet the project’s criteria. In contrast, outsourcing results in a negative NPV of -IDR 128.56 million, an IRR of 4.63%, and a PP of 4 years and 10 months, making it a less attractive option.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Riki Ridwan Margana
AU  - Muhammad Lamarera Gaharu
PY  - 2024
DA  - 2024/12/29
TI  - Feasibility Analysis of Electroplating Facilities for Caliper Assy Manufacturing Using Investment Methods at PT. XYZ
BT  - Proceedings of the Widyatama International Conference on Engineering 2024 (WICOENG 2024)
PB  - Atlantis Press
SP  - 157
EP  - 168
SN  - 2352-5401
UR  - https://doi.org/10.2991/978-94-6463-618-5_17
DO  - 10.2991/978-94-6463-618-5_17
ID  - Margana2024
ER  -