FEASIBILITY STUDY OF EXPANSION PLANNING OF SAKILA ADVERTISING – JEMBER UNDER UNCERTAINTY CONDITION USING NPV SIMULATION APPROACH AND MODIFIED IRR METHOD

Abstract

CV Sakila Advertising- Jember is a company which operates in the field of service to serve consumer’s need (for both private institute and government institute and also others). This company serves expecially in the field of printing which has been built since 2001. In last recent years, the trends of demand from various market segments are good enough, so existing production capacity goes falling short. Expansion in the form of production capacity improvement represents one of company efforts to cover the significance and not sporadic and instant demand growth. The expansion choice considered by CV Sakila Advertising is new machine investment with estimated cost of Rp. 918.500.000,-. The selection decision for this investment alternatives require complicated consideration, subject to various possible conditions in the future which will happen. The development of investment of feasibility models have fast enough, depends on factors or variables change possibilities which considered at the time of expansion decision is made. For that reason, a study has to conduct using the investment feasibility models: (1) net present value method (NPV), (2) internal rate of return method (IRR), (3) rate of rereturn method (RoR), (4) pay back period method, and (5) profitability index method (PI). Investment feasibility conclude that the new machine investment alternative, yielding NPV¥ = Rp. 79.080.121, 00, IRR=27, 8%, Payback period = 3 years+3 months+10 days, and profitability Index= 1, 81. This result concludes that the investment proposal is suitable to be doneis fea. Hereafter, subject to uncertainty condition in the future, hence through a 100 times of Morte Carlo simulation to that investment feasibility of NPV¥ is calculated ( 50,80%). Suggestions which can be recommended are: (1) although the new machine investment alternative is feasible categorized, but the opportunity to achieve such as these which calculated at deterministic condition cause company have to take care, especially in raw material management. (2) In this research, competitor factor is not concluded to income component because this factor influences the service income. (3) The seasonal frequency toward many kinds of things also influences the company’s profit. (4) The fluctuation of uncertain price and the condition of global economics which goes falling short have the effect to the decreasing of material price which influence the sell value of product in market.