Analyzed Factor

Raw Materials Price

In industry, the price of raw materials is not constant and can
be changed unexpectedly. The changes of raw materials price is caused
some change in factory either directly or indirectly. To predict these
changes, we need sensitivity analysis about raw materials price.
Raw materials influence the operation cost, so indirectly
influence NPV too. The deviation of raw materials price is making the
NPV decrease along with the increases of deviation because if the raw
materials price increases, the outcome of the factory is increase.
Because of that the net present value of the factory is decrease.
Besides that, the payback period changes too because of raw
materials deviation. The deviation of raw materials caused the payback
period longer than before along with the increase in raw materials
price. These reason is caused by the increase in raw material prices is
influence the operation cost and if the other cost and income is
constant, the profit we have for payback is decrease and so the payback
period is longer than before deviation.
Table 10. 1 Raw Materials Price
Deviation Price NPV PBP IRR
-30% Rp 12,963,556,405.80 43769722820 2.649515099 59%
-20% Rp 14,815,493,035.20 35228022624 2.998491663 47%
-10% Rp 16,667,429,664.60 26686322429 3.453343127 35%
0% Rp 18,519,366,294 18144622234 4.070866854 23%
10% Rp 20,371,302,923.40 9602922039 4.957332639 10%

Distribution Expenses
Beside the raw material price, we will analyze the influence of
distribution price to the parameter that we will analyze. Distribution
price is the same with the raw materials. It cannot be always the same
price. We know that distribution price is affected by fuel price and this
fuel price is not always constant. So, we decide to see the influence of
distribution price in our economic. Due to deviation in distribution
price, the operational cost is changes too and it affects the NPV
indirectly similar to the raw material prices. The NPV is decrease
along with the increases of deviation because if the distribution price
increases, the outcome of the factory is increase.

Table 10. 2 Distribution Price
Deviation Price NPV PBP IRR
-30% Rp 1,198,281,302.40 20513268456 3.878540785 26%
-20% Rp 1,369,464,345.60 19723719715 3.940597978 25%
-10% Rp 1,540,647,388.80 18934170975 4.00467331 24%
0% Rp 1,711,830,432.00 18144622234 4.070866854 23%
10% Rp 1,883,013,475.20 17355073493 4.139285411 22%
20% Rp 2,054,196,518.40 16565524753 4.210043085 21%
30% Rp 2,225,379,561.60 15775976012 4.28326192 19%

The effect of increases in distribution price, the payback is
changes too and if we assume the other value, such as direct labor,
indirect labor, etc. are constants, the payback period will increase
along with the increase in distribution price. It caused by the outcome
or operation cost will increase if the distribution price is increase.
Therefore, the profit we will get is decrease and it affect to the payback
period which is increase.
Selling Price
Selling price is the only factor that not influenced directly with
operating cost or the other cost, but we cannot decide the selling price
randomly because if we decide the selling price randomly without
consider IRR, profit, etc. the factory will not working or the investor
will not invest in our product.
Table 10. 3 Selling Price
Deviation Price NPV PBP IRR
-30% 21,700 -27418491247 - -
-20% 24,800 -12230786754 - -
-10% 27,900 2956917740 5.937284088 -2%
0% 31,000 18144622234 4.070866854 23%
10% 34,100 33332326728 3.19921314 42%
20% 37,200 48520031222 2.694379667 59%
30% 40,300 63707735715 2.365064614 76%

If we assume the other value is constant, the increase in selling
price will increase the profit that will the factory get. Hence, the
payback will decrease, NPV increase, IRR increase.


X.16.6.2.Chart Analysis
The chart for these analysis is shown in the appendices. As we
can see from the figure in appendices, the most sensitive factor for the
NPV is selling price and raw materials price due to when the selling
price increase, we will get the highest profit from the selling the
product and so the NPV is increase along with the increase in selling
price. For the raw materials price, if we see in the cost breakdown pie
chart, the raw materials is take the biggest part in the cost
breakdown/direct material. Hence the raw materials price are also
sensitive to the NPV, but the raw materials have opposite effect with
the selling price.
For the Payback period, the most sensitive factor is selling
price because if we get higher profit along with the increase in selling
price, the payback period also reduced. And for the raw materials price
are also sensitive, but less sensitive than selling price.
The factors that sensitive in the ROI are the same with the first
two factors. The reason is still the same which is the increase in selling
price will increase the ROI and the increase in raw materials price will
reduce the ROI. This reason is also applied to the IRR analysis which
means the selling price have the opposite effect with the raw materials
price.
Overall, the most sensitive factor in this analysis is raw
materials price and selling price. For the distribution price is not
sensitive if we compare with these two factors because the distribution
is contribute less cost than the other two. And in the cost breakdown
pie chart we also know that distribution price has small percentage in
total.