Cost and Revenue Optimization of Rattan Industry Management in Palu Town, Central Sulawesi

Abstract

Rattan industry production of Central Sulawesi reaches 60 percents of national production in Indonesia. Rattan is easy to be cultivated, harvested, transported, stored, easy to sell and easy to get cash. The rattan products have some advantages compared with other forestry industrial raw materials, since the products relatively have cheaper cost, strong, durable, beautiful, comfortable in use, light, portable and have art sense as well. The research objectives are to analyze various models of Rattan products that are produced, in order to be discovered what management strategy is, how much the minimal supposed optimum cost that has to spent by the rattan industry, how much the maximal supposed optimum revenue received by the industry, how much the residual value (slack), the advantages value (surplus) for production inputs that are used at the moment of cost and optimal revenue and to analyze how much the sensitivities value of production input and production without reducing optimum cost and revenue. The research is conducted at CV. Kencana Sakti Rattan Industry Company in Palu Town, Central Sulawesi.

Analysis instrument applied in the research are Linear Programming, with LINGO software. The result shows that strategy applied by the company is by keeping the production of Batang Rattan with the import qualification AB and Lambang Rattan with the import qualification AB as well, because both of the two models products bring on optimal value. There are 11 variables of problems that appear in production process with different unit\percentages variable value but experienced residue in almost every input. The highest revenue optimization is 7.402.828.000 rupiahs. By the fact, it is recommended that the use of production facility must be more streamlined in order to get optimum product result, especially those which is dealing with labor cost.