TK07 - Final Report FIX

UNIVERSITAS INDONESIA
HERBITES: JOINT HEALTH SUPPLEMENT WITH GLUCOSAMINE,

FLAVONOID, AND FUCOIDAN EXTRACT
BALI AND NUSA TENGGARA
Final Report
GROUP TK-07
GROUP PERSONNEL:
FREYA SURYADARMA 2106729682

NICKYTA TANRYAN 2106729915
FAATIH RIZKIA HUDAYA 2106707170
RHAISA SALMA FITRILIA 2106729902
VALENTINA FILICIANI LAMBA 2106638330
DEPARTMENT OF CHEMICAL ENGINEERING

FACULTY OF ENGINEERING
UNIVERSITAS INDONESIA
JUNE 2024
DEPOK
LIST OF GROUP MEMBER
Name : Faatih Rizkia Hudaya

NPM : 2106707170
Place/Date of Birth : Jakarta, 22nd February 2003
Address : Jl. Setu Babakan No.28, Srengseng Sawah, Jagakarsa
Name : Freya Suryadarma

NPM : 2106729682
Place/Date of Birth : Jakarta, 3rd July 2003
Address : Jl. Palem Indah II Blok F20, Taman Rempoa Indah
Name : Nickyta Tanryan

NPM : 2106729915
Place/Date of Birth : Muara Bungo, 26th March 2003
Address : Jl. H Amat No 15, Kukusan Teknik UI, Beji, Depok
Name : Rhaisa Salma Fitrilia

NPM : 2106729902
Place/Date of Birth : Bandung, 29th November 2003
Address : Jl. Kesatuan no 56, Kukusan, Beji, Depok
Name : Valentina Filiciani Lamba

NPM : 2106638330
Place/Date of Birth : Jakarta/ February 22nd, 2003
Address : Jl. Jatinegara Barat 4 No. 54D, Jatinegara, DKI Jakarta
ii Universitas Indonesia
FOREWORD
First and foremost, the writers would like to express gratitude to the Lord
for His Blessing and Guidance, which enabled us to complete the final report for
the Chemical Product Design 2024 course. Our gratitude extends to various parties
for the support provided in completing this report, including,
1. Lecturer of Chemical Product Design Course;
2. Assistant Lecturer of Chemical Product Design Course;
3. Member of Group TK-07;
4. Our families who have supported us both financially and morally;
5. Our colleagues from the Department of Chemical Engineering Class
of 2021; and
6. Other parties who have helped the TK-07 Group in completing the
Final Report, that cannot be mentioned one by one
We acknowledge that this report may contain potential errors. Therefore,
criticism and suggestions are greatly appreciated to ensure that our final report is of
higher quality.
Depok, 6th June 2024
Group TK-07
iii Universitas Indonesia

ABSTRACT
HERBITES: JOINT HEALTH SUPPLEMENT WITH GLUCOSAMINE,

FLAVONOID, AND FUCOIDAN EXTRACT FROM BALI AND NUSA
TENGGARA
Faatih Rizkia Hudaya, Freya Suryadarma, Rhaisa Salma Fitrilia, Nickyta Tanryan,
Valentina Filiciani Lamba
Chemical Engineering, Department of Chemical Engineering, Faculty of
Engineering, Universitas Indonesia, Depok, West Java, Indonesia
Joint problems often interfere with daily activities. For this reason, it is
important to always maintain joint health by consuming healthy food with
additional supplements. HERBITES is an additional supplement with abundant
benefits from natural ingredients. HERBITES contain glucosamine from lontar
seeds, flavonoids from moringa leaves, and fucoidan from brown algae. The plant
is in Jembrana, Bali, and it has an annual production of up to 165,212 bottles. For
profitability analysis, HERBITES has an ROI of 35.94%, an IRR of 29.88%, and a
payback period of 4 years. Therefore, HERBITES is profitable and attractive to
investors.
Keyword: Bali, HERBITES, Joint Health, Supplement, Natural Ingredients
iv Universitas Indonesia
EXECUTIVE SUMMARY
Maintaining healthy joints is essential for an active, fulfilling life.

HERBITES is a joint health supplement with natural ingredients such as lontar
seeds, kelor leaves, and brown seaweed, effectively providing extraordinary
benefits. This supplement is designed to support your body's natural ability to
maintain strong, flexible, and comfortable joints. After determining the final
composition of the product, the product manufacturing process, the location, and
the layout of the plant, the next step is to conduct an economic review of the entire
project to determine whether it is profitable or not. Moreover, it will be known
whether the plant can survive or not. Economic analysis is divided into analysis in
terms of supply chain, product costing, and profitability analysis.
The raw materials needed for HERBITES consist of lontar seeds, brown
algae, kelor leaves, xylitol, pectin, sodium benzoate, solvent for active ingredients
extraction, water, and orange flavor. As for the packaging, we use plastic bottles
and paper boxes. For the main raw materials, all of them are obtained from Bali and
Nusa Tenggara. The supporting raw materials are mostly supplied from Surabaya
and local suppliers located in Bali and Nusa Tenggara. To prevent unexpected
events, we looked for more than one supplier for each raw material. The main
suppliers are chosen with consideration such as best deal offerings, the distance,
and the supplier’s production capacity.
Our daily production is 1,270 bottles per day or 25,417 bottles per month
with an assumption of 130 days of operation per year. With this amount, we need a
fee of IDR 3,499,265,237.87 per year to buy raw materials including the shipping
cost that using third parties. Furthermore, our products are distributed to 3 major
provinces in Indonesia (Bali, Nusa Tenggara Barat, and Nusa Tenggara Timur). It
was chosen with the consideration that these provinces are provinces that are near
the production plant. Product distribution is carried out all in offline method. Our
product will be distributed to 5 retailers in Bali, 5 retailers in Nusa Tenggara Barat,
and 1 retailer in Nusa Tenggara Timur. The product distribution process costs
around IDR 303,230,256.00 per year using a pickup box and J&T Cargo. To
introduce our products to customers, we are improving our promotion strategy
through websites, advertising, campaigns, social media, and endorsement.
v Universitas Indonesia
To analyze the project’s economic feasibility, an estimate of capital
investment and operational costs were also calculated. Total capital investment
includes equipment purchase costs, patent registration fees, land and building rental
costs, utility installation costs, and working capital investment. Based on the
calculation, the total capital investment for this project is IDR 11,774,821,088. Next
is the calculation for operating costs including manufacturing costs, raw materials,
fixed costs, plant overhead, and other general expenses. The total operational cost
also considers other factors such as depreciation and maintenance costs. The
depreciation factor used is 10% for the cost of equipment and other supporting
facilities and 2.5% for the cost of building. With a factory lifetime of 15 years, we
get that our total average operational costs are IDR 9,797,880,040. With these
expenditure costs, our plan takes a loan of about 40% from banks, and 60% from
investors.
The economic aspects are evaluated further by making the project’s cash
flow by setting the annual revenue with the income and the capital investment,
operating expenses, and tax as the outcome. This cash flow can determine the
minimum price of the product when the NPV equals zero, which is IDR 59,211.
Using the profit margin, the final product price for HERBITES is IDR 89,900.
The profitability analysis is determined using the value of return on
investment (ROI), payback period (PBP), breakeven point (BEP), internal rate of
return (IRR), and net present value (NPV). The calculation results obtained are an
ROI of 35.94%. The payback period of this project is 3.26 years with the minimum
product that must be sold being 628,632 products. Based on these parameters,
therefore, this project can be deducted as an economically feasible and profitable
project.
Furthermore, we also calculate a sensitivity analysis to determine the impact
of percentage changes in relevant variables on the project’s profitability. In
sensitivity analysis, we have identified several cost components including product
price, labor cost, and raw material cost, as potential influencers on the project's
profitability.
vi Universitas Indonesia
LIST OF CONTENTS
LIST OF GROUP MEMBER .............................................................................. ii

FOREWORD ........................................................................................................ iii
ABSTRACT .......................................................................................................... iv
EXECUTIVE SUMMARY ................................................................................... v
LIST OF CONTENTS ........................................................................................ vii
LIST OF FIGURES ............................................................................................ xii
LIST OF TABLES ............................................................................................. xiv
CHAPTER 1 .......................................................................................................... 1
INTRODUCTION ................................................................................................. 1
1.1.Background of Ideas ......................................................................................... 1
1.2.Problem Identification ....................................................................................... 2
1.3.Problem Formulation ........................................................................................ 2
1.4.Problem Limitations .......................................................................................... 3
1.5.Objective ........................................................................................................... 3
1.6.Needs Identification .......................................................................................... 4
1.6.1 Interpretation of Customer Needs........................................................... 4
1.6.2 Category of Customer Needs and Needs Rank ...................................... 5
1.7.Benchmarking Existing Product ....................................................................... 6
1.8.Product Specification ...................................................................................... 10
1.9.General Concept .............................................................................................. 13
1.9.1 Existing Product Ideas Concept ........................................................ 13
1.9.2 New Concept ..................................................................................... 15
1.9.3 Concept Combination........................................................................ 20
1.10.Concept Selection.......................................................................................... 21
CHAPTER 2 ........................................................................................................ 24
REVIEW OF THE LITERATURE ................................................................... 24
2.1 General Review of Joint Health ...................................................................... 24
2.1.1 Joint Health ........................................................................................... 24
2.1.2 Degenerative Joint Disease ................................................................... 24
2.1.3 Inflammatory Joint Disease .................................................................. 25
2.2 General Review of Supplement ...................................................................... 26
2.2.1 Definition and Stages of Supplement Consumption ............................. 26
2.2.2 Classification of Supplements .............................................................. 27
2.2.3 Advantages and Limitations of Supplements ....................................... 29
vii Universitas Indonesia

2.2.4 Definition and Types of Joint Health Supplements .............................. 29
2.3 Existing Joint Health Supplement ................................................................... 30
2.4 Joint Health Supplement Ingredients .............................................................. 31
2.5 Regulations...................................................................................................... 32
CHAPTER 3 ........................................................................................................ 33
PRODUCT SPECIFICATION .......................................................................... 33
3.1 Product Ingredients ......................................................................................... 33
3.1.1 Product Composition ............................................................................ 33
3.1.2 Explanation of Each Ingredient ............................................................ 34
3.2 Final Product Specification ............................................................................. 40
3.2 Product Positioning ......................................................................................... 42
CHAPTER 4 ........................................................................................................ 45
PRODUCT ARCHITECTURE AND PROTOTYPE ...................................... 45
4.1 Product Prototype ............................................................................................ 45
4.2 Company Profile ............................................................................................. 45
4.3 Product Identity ............................................................................................... 46
4.3.1 Brand..................................................................................................... 46
4.3.2 Tagline .................................................................................................. 46
4.4 Product Packaging ........................................................................................... 47
4.4.1 Primary and Secondary Packaging ....................................................... 47
4.5 Instructions for Use ................................................................................ 49
CHAPTER 5 ........................................................................................................ 50
PRODUCT MANUFACTURING ..................................................................... 50
5.1 Market Analysis .............................................................................................. 50
5.1.1 Market Segmentation ............................................................................ 50
5.1.1.1 Demographic Segmentation...................................................... 50
5.1.1.2 Geographic Segmentation ......................................................... 51
5.1.1.3 Psychographic Segmentation .................................................... 51
5.1.2 Determining Product Demand .............................................................. 51
5.1.3 Determining Production Capacity ........................................................ 53
5.2 Production Process .......................................................................................... 54
5.2.1 Flow Diagram ....................................................................................... 55
5.2.1.1 Glucosamine Extraction............................................................ 55
5.2.1.2 Flavonoid Extraction................................................................. 57
5.2.1.3 Fucoidan Extraction .................................................................. 59
viii Universitas Indonesia

5.2.1.4 Chewy Gummies Production .................................................... 61
5.2.1.5 Overall Block Flow Diagram.................................................... 63
5.2.2 Process Description............................................................................... 64
5.2.2.1 Glucosamine Extraction............................................................ 64
5.2.2.2 Fucoidan Extraction .................................................................. 64
5.2.2.3 Flavonoid Extraction................................................................. 64
5.2.2.4 Chewy Gummy ......................................................................... 65
5.2.2.5 Waste Management................................................................... 66
5.2.3 Equipment Specification ....................................................................... 67
5.2.3.1 Washing Machine ..................................................................... 67
5.2.3.2 Peeling Machine........................................................................ 68
5.2.3.3 Blender ...................................................................................... 69
5.2.3.4 Extraction Vessel ...................................................................... 70
5.2.3.5 Filtration Machine..................................................................... 71
5.2.3.6 Tray Dryer................................................................................. 72
5.2.3.7 Evaporator................................................................................. 73
5.2.3.8 Centrifugal Machine ................................................................. 74
5.2.3.9 Freeze Dryer ............................................................................. 75
5.2.3.10 Mixing Machine ...................................................................... 76
5.2.3.11 High Viscosity Mixing ........................................................... 77
5.2.3.12 Cooling Conveyor ................................................................... 78
5.2.3.13 Gummy Maker ........................................................................ 79
5.2.3.14 Packaging Machine ................................................................. 80
5.2.3.15 Carton Folder and Packaging Machine ................................... 81
5.2.3.16 Storage Tank ........................................................................... 82
5.2.4 Mass and Energy Balance ..................................................................... 83
5.2.4.1 Mass Balance ............................................................................ 83
5.2.4.1 Energy Balance ......................................................................... 90
5.2.5 Manufacture Performance ..................................................................... 94
5.2.5.1 Manufacture Productivity ......................................................... 94
5.2.5.2 Energy Utilization ..................................................................... 94
5.2.6 Plant Scheduling ................................................................................... 94
5.2.7 Plant Location and Layout .................................................................... 95
5.2.7.1 Plant Location ........................................................................... 95
5.2.7.2 Plant Layout .............................................................................. 97
ix Universitas Indonesia
CHAPTER 6 ...................................................................................................... 102
SUPPLY CHAIN ............................................................................................... 102
6.1 Supply Chain Management ........................................................................... 102
6.2 Plant Location ............................................................................................... 103
6.2.1 Plant Accessibility .............................................................................. 103
6.2.2 Location Facility ................................................................................. 104
6.2.3 Site Economics ................................................................................... 105
6.3 Raw Material ................................................................................................. 106
6.3.1 Raw Material Supply and Location .................................................... 106
6.3.2 Order Capacity .................................................................................... 112
6.3.3 Raw Material Inventory ...................................................................... 117
6.4 Project Distribution and Inventory ................................................................ 125
6.4.1 Product Distribution Chain ................................................................. 125
6.4.2 Product Distribution Location ............................................................ 126
6.4.3 Distribution Pathway .......................................................................... 127
6.4.4 Product Inventory ............................................................................... 128
6.4.5 Transportation Method ....................................................................... 130
6.5 Product Marketing ......................................................................................... 131
6.5.1 Target Determination .......................................................................... 131
6.5.2 Market Segmentation .......................................................................... 131
6.5.3 Promotion Strategy ............................................................................. 134
CHAPTER 7 ...................................................................................................... 137
PRODUCT ECONOMICS ............................................................................... 137
7.1 Total Capital Investment ............................................................................... 137
7.1.1 Fixed Capital Investment .................................................................... 137
7.1.2 Working Capital Investment ............................................................... 149
7.1.3 Total Capital Investment..................................................................... 150
7.2 Operational Cost............................................................................................ 150
7.2.1 Manufacturing Cost ............................................................................ 151
7.2.2 Fixed Cost ........................................................................................... 164
7.2.4 General Expenses................................................................................ 172
7.2.5 Total Operational Cost ........................................................................ 182
7.3 Depreciation .................................................................................................. 186
7.4 Economic Analysis........................................................................................ 187
7.4.1 Determining MARR ........................................................................... 187
x Universitas Indonesia
7.4.2 Price for Product per Unit ................................................................... 188
7.4.3 Cash Flow ........................................................................................... 189
7.4.4 Cost Breakdown.................................................................................. 194
7.5 Profitability Analysis..................................................................................... 195
7.5.1 Return on Investment ...................................................................... 195
7.5.2 Payback Period ................................................................................ 196
7.5.3 Net Present Value............................................................................ 198
7.5.4 Break Even Point............................................................................. 199
7.5.5 Internal Rate of Return .................................................................... 200
7.6 Sensitivity Analysis ....................................................................................... 200
7.6.1 Changes in Product Selling Price ....................................................... 201
7.6.2 Changes in Raw Material Cost ........................................................... 201
7.6.3 Changes in Labor Cost........................................................................ 202
7.6.4 Sensitivity Graph ................................................................................ 203
CHAPTER 8 ...................................................................................................... 206
CONCLUSION AND RECOMMENDATION .............................................. 206
8.1 Conclusion ............................................................................................. 206
8.2 Recommendation ................................................................................... 208
REFERENCES .................................................................................................. 209
xi Universitas Indonesia
LIST OF FIGURES
Figure 1. 1 Existing Joint Health Supplement Concept ....................................... 13

Figure 1. 2 New Concept of Joint Supplement .................................................... 15
Figure 1. 3 Combined Concept of Joint Supplement ........................................... 20
Figure 3. 1 Chemical Structure of Glucosamine .................................................. 35
Figure 3. 2 Chemical Structure of Flavonoid ....................................................... 36
Figure 3. 3 Chemical Structure of Fucoidan ........................................................ 36
Figure 3. 4 Basic Structure of Fucoidan from Undaria pinnatifida ...................... 36
Figure 3. 5 Basic Structure of Xylitol .................................................................. 37
Figure 3. 6 Basic Structure of Pectin.................................................................... 38
Figure 3. 7 Chemical Structure of Water ............................................................. 40
Figure 3. 8 Product Positioning ........................................................................... 42
Figure 4. 1 Product Prototype .............................................................................. 45
Figure 4.2 Company Logo ................................................................................... 46
Figure 4.3 Primary Packaging of HERBITES ..................................................... 48
Figure 4.4 Secondary Packaging of HERBITES ................................................. 48
Figure 4.5 Instructions Used HERBITES ............................................................ 49
Figure 5. 1 Block Flow Diagram for Extraction of Glucosamine ........................ 55
Figure 5. 2 Process Flow Diagram for Extraction of Glucosamine ..................... 56
Figure 5. 3 Block Flow Diagram for Extraction of Flavonoid ............................. 57
Figure 5. 4 Process Flow Diagram for Extraction of Flavonoid .......................... 58
Figure 5. 5 Block Flow Diagram for Extraction of Fucoidan .............................. 59
Figure 5. 6 Process Flow Diagram for Extraction of Fucoidan .......................... 60
Figure 5. 7 Block Flow Diagram Manufacture of Chewy Gummy .................... 61
Figure 5. 8 Process Flow Diagram Manufacture of Chewy Gummy .................. 62
Figure 5. 9 Overall Block Flow Diagram............................................................. 63
Figure 5. 10 Washing Machine ............................................................................ 67
Figure 5. 11 Peeling Machine .............................................................................. 68
Figure 5. 12 Mixer Blender Machine ................................................................... 69
Figure 5. 13 Extraction Vessel ............................................................................. 70
Figure 5. 14 Filtration Machine........................................................................... 71
Figure 5. 15 Tray Dryer........................................................................................ 72
Figure 5. 16 Evaporator ........................................................................................ 73
Figure 5. 17 Centrifugal Machine ........................................................................ 74
Figure 5. 18 Freeze Dryer .................................................................................... 75
Figure 5. 19 Mixing Machine............................................................................... 76
Figure 5. 20 High Viscosity Mixing.................................................................... 77
Figure 5. 21 Cooling Conveyor ............................................................................ 78
Figure 5. 22 Gummy Maker ................................................................................. 79
Figure 5. 23 Packaging Machine .......................................................................... 80
Figure 5. 24 Carton Folder and Packaging Machine ............................................ 81
Figure 5. 25 Storage Tank .................................................................................... 82
Figure 5. 26 Plant Location on Jalan Raya Denpasar-Gilimanuk ........................ 96
Figure 5. 27 The Plot of the Land for the Plant Location .................................... 96
Figure 5. 28 Route Estimation for Raw Materials and Products .......................... 97
Figure 5. 29 Plant Layout ................................................................................... 101
Figure 6. 1 Raw Material End-Day Stock per Year ........................................... 118
xii Universitas Indonesia

Figure 6. 2 Packaging End-Day Stock per Year ................................................ 118
Figure 6. 3 Truck for Product Distribution ........................................................ 130
Figure 7. 1 Bare Module Factors........................................................................ 139
Figure 7. 2 Cash Flow ........................................................................................ 190
Figure 7. 3 Cumulative Cash Flow..................................................................... 190
Figure 7. 4 Cost Breakdown Pie Chart ............................................................... 195
Figure 7. 5 Payback Period Calculation ............................................................. 198
Figure 7. 6 IRR Sensitivity Graph...................................................................... 204
Figure 7. 7 NPV Sensitivity Graph .................................................................... 204
Figure 7. 8 PBP Sensitivity Graph ..................................................................... 205
xiii Universitas Indonesia

LIST OF TABLES
Table 1. 1 Problem Limitations for Joint Supplement Product .............................. 3

Table 1. 2 List of Needs ......................................................................................... 4
Table 1. 3 Grouping and Ranking Needs ............................................................... 5
Table 1. 4 Assessing Specifications Based on Competitors ................................... 6
Table 1. 5 The Specifications of the Product to be Made .................................... 11
Table 1. 6 Existing Concept Description of Joint Health Supplements ............... 14
Table 1. 7 New Concept Description of Joint Supplement .................................. 16
Table 1. 8 Criteria Rating ..................................................................................... 21
Table 1. 9 Rating for Scoring Matrix ................................................................... 22
Table 1. 10 Concept Scoring ................................................................................ 23
Table 2. 1 Classification of Supplement, Examples, and Contents ...................... 28
Table 5. 1 Demand Approximation of Joint Health Supplement in Indonesia .... 52
Table 5. 2 Production Capacity Calculation Summary ........................................ 54
Table 5. 3 Specification of Washing Machine ..................................................... 67
Table 5. 4 Specification of Peeling Machine........................................................ 68
Table 5. 5 Specification of Blender ...................................................................... 69
Table 5. 6 Extraction Vessel ................................................................................. 70
Table 5. 7 Filtration Machine ............................................................................... 71
Table 5. 8 Tray Dryer ........................................................................................... 72
Table 5. 9 Evaporator ........................................................................................... 73
Table 5. 10 Centrifugal Machine .......................................................................... 74
Table 5. 11 Freeze Dryer ...................................................................................... 75
Table 5. 12 Mixing Tank ..................................................................................... 76
Table 5. 13 High Viscosity Mixing ...................................................................... 77
Table 5. 14 Cooling Conveyor ............................................................................. 78
Table 5. 15 Gummy Maker ................................................................................. 79
Table 5. 16 Gummy to Bottle Packaging Machine .............................................. 80
Table 5. 17 Carton Packaging Machine .............................................................. 81
Table 5. 18 Storage Tank...................................................................................... 82
Table 5. 19 Mass Balance Calculation Basis and Information ............................. 83
Table 5. 20 Mass Balance Calculation for HERBITES Production ..................... 84
Table 5. 21 Energy Consumption Calculation ..................................................... 91
Table 5. 22 List of Rooms in the Plant ................................................................. 98
Table 6. 1 Raw Material Supplier A................................................................... 107
Table 6. 2 Raw Material Supplier B ................................................................... 109
Table 6. 3 Minimum Order for Supplier A and B .............................................. 113
Table 6. 4 Material Covered and Quantity of Order from Supplier A and B ..... 115
Table 6. 5 Total Raw Material and Delivery Cost.............................................. 116
Table 6. 6 Raw Material End-Day Stock............................................................ 119
Table 6. 7 Raw Material Schedule for January-June 2025 ................................. 121
Table 6. 8 Product Distribution Location ........................................................... 126
Table 6. 9 Product Distribution Pathway ........................................................... 127
Table 6. 10 Product Distribution Pathway (cont’d) ........................................... 128
Table 6. 11 Product Inventory ............................................................................ 129
Table 6. 12 HERBITES Transportation ............................................................ 130
xiv Universitas Indonesia

Table 6. 13 Market Segmentation ...................................................................... 134
Table 7. 1 Chemical Engineering Plant .............................................................. 138
Table 7. 2 Chemical Engineering Plant Cost Index ........................................... 138
Table 7. 3 Equipment Cost Calculation .............................................................. 140
Table 7. 4 Land and Building Cost Estimation .................................................. 142
Table 7. 5 Supporting Facilities Cost ................................................................. 143
Table 7. 6 Utilities Installation Cost Calculation ............................................... 145
Table 7. 7 Market Research Cost ....................................................................... 146
Table 7. 8 Brand Registration............................................................................. 147
Table 7. 9 Industrial Design Registration Cost .................................................. 147
Table 7. 10 BPOM Registration Cost ................................................................. 148
Table 7. 11 Halal MUI Registration Cost........................................................... 148
Table 7. 12 Indirect Cost Calculation ................................................................. 149
Table 7. 13 Total Capital Investment ................................................................. 149
Table 7. 14 Total Capital Investment ................................................................. 150
Table 7. 15 Raw Material Cost ........................................................................... 152
Table 7. 16 Direct Labor Salary ......................................................................... 153
Table 7. 17 Indirect Labor Salary ....................................................................... 154
Table 7. 18 Electricity Costs .............................................................................. 156
Table 7. 19 Water Consumption Cost ................................................................ 161
Table 7. 20 Maintenance Cost ............................................................................ 162
Table 7. 21 Halal MUI Annual Cost .................................................................. 163
Table 7. 22 BPOM Annual Cost......................................................................... 163
Table 7. 23 Total Annual Cost Registration ....................................................... 164
Table 7. 24 Cost of Property Tax ....................................................................... 164
Table 7. 25 Labour Net Income per Year ........................................................... 166
Table 7. 26 Annual Insurance Cost .................................................................... 171
Table 7. 27 Plant Overhead Cost ........................................................................ 172
Table 7. 28 Product Marketing Cost................................................................... 173
Table 7. 29 Distribution Costs ............................................................................ 175
Table 7. 30 Driver Cost ...................................................................................... 177
Table 7. 31 Capital Source ................................................................................. 178
Table 7. 32 Calculation of Loan Interest from Bank .......................................... 179
Table 7. 33 Calculation of Loan Interest from Investor ..................................... 180
Table 7. 34 Total Financial Interest Calculation ................................................ 181
Table 7. 35 Research and Development Cost..................................................... 182
Table 7. 36 Total Operational Cost from 2025 to 2030 ..................................... 183
Table 7. 39 Total Depreciation ........................................................................... 186
Table 7. 40 WACC/MARR Calculation............................................................. 188
Table 7. 41 Product Pricing per Unit Result....................................................... 189
Table 7. 42 Cash Flow ........................................................................................ 191
Table 7. 43 Cost Breakdown Calculation ........................................................... 194
Table 7. 44 Payback Period Calculation............................................................. 197
Table 7. 45 Break Even Point Calculation based on Payback Period ................ 199
Table 7. 46 Product Price Fluctuations............................................................... 201
Table 7. 47 Raw Materials Fluctuations ............................................................. 202
xv Universitas Indonesia
Table 7. 48 Labor Cost Fluctuations .................................................................. 203
xvi Universitas Indonesia

CHAPTER 1
INTRODUCTION
1.1. Background of Ideas

Indonesia is the second most biologically diverse country in the world
(Country Development Cooperation Strategy Report, 2019). The flora and fauna in
each region in Indonesia is unique and has properties that need to be explored, such
as in the field of medicine. Jamu is the Indonesian traditional herbal medicine that
has been practiced for many centuries in the Indonesian community to maintain
good health and to treat diseases. Although modern (conventional) medicine is
becoming increasingly important in Indonesia, jamu is still very popular in rural as
well as in urban areas (Elfahmi, 2014). Herbal medicine has a better view than
chemicals because it is considered more natural so it is hoped that it will not have
bad side effects for the body (Ali Karimi, 2015). With this meeting between the two
existing conditions, our group will bring forward a product idea, supplements for
health, using raw materials from Indonesia's natural wealth, especially in Bali and
Nusa Tenggara.
Joints are the points on our body where two or more bones join. Part of joints
are including knuckles, hips, knees, shoulders, and elbows. Joints are more than just
bones, it comprises the surrounding soft tissues, including ligaments, tendons, and
cartilage (P. J. Cope, 2019). The tough, pliable cartilage is what covers the ends of
bones at joints. Tendons are strong, pliable bands that enable joint movement by
joining muscles to bones. Ligaments maintain the stability of a joint by joining its
bones together during movement (Pallavi Juneja, 2023).
Among older adults, persistent musculoskeletal pain is highly prevalent,
with rates ranging from 40% to 60% (R. R. Redfield, 2018). Multisite pain
contributes to significant disability among older adults. Persistent pain is defined as
pain that extends beyond the usual period of healing, typically for longer than 3 to
6 months (A. M. Briggs, 2015). Musculoskeletal disorders are recognized as a
significant threat to maintaining health in older age and have been associated with
falls, frailty, depression, anxiety, sleep disturbance, reduced mobility, and impaired
cognitive function (T. P. Welsh, 2020).
1 Universitas Indonesia
2
Unfortunately, pain may be undertreated or inappropriately managed in

older adults for several reasons, including lack of identification of pain, false belief
that pain is part of the aging process, cognitive impairment with variable pain
presentations, patient underreporting, and limited time in clinical practice to address
pain among multiple comorbid conditions (J. Chodosh, 2001). This highlights the
importance of preventing and maintaining joint health as fast as needed.
1.2. Problem Identification

Firstly, to know the problem of the potential market nowadays, the writers
identified it by doing some analysis. The analysis included direct and indirect
marketplace analysis, such as interview and questionnaire approaches. From that
kind of analysis, the problems that refer to the background to create a new
innovative joint health supplement are:
1. Symptoms that most customers encounter in joint problems are tingling and
muscle stiffness.
2. Most customers encounter that the existing product is not effective in solving
their joint health problems.
3. Most customers are afraid to try to use the products as they may have some
drawbacks, including addiction to their lives and lack of information about the
products.
4. Most customers consume the supplement to solve their joint health problems
two or three times a week.
5. The existing joint health supplements are relatively expensive.
1.3. Problem Formulation

The problems that have been identified lead to several questions that need
to be answered in this product, which are as follows:
1. Why do symptoms of joint problems arise?
2. What causes the product to be ineffective?
3. What are the consumers’ needs regarding joint health supplements?
4. How does the customer consume the supplement?
5. What specifications of joint health supplement that can fulfill consumers’
needs?
Universitas Indonesia
3
1.4.Problem Limitations
In order to focus on the discussion joint supplement products, the author
will limit the scope of discussion of the product design as follows:
Table 1. 1 Problem Limitations for Joint Supplement Product
Problem Limitations
Product Description Joint supplements crafted from natural ingredients.

1. Affordable price
Key Business Goals
2. Establish Organics as a reputable health and
wellness brand
3. Provide consumers with a natural and
effective option for joint supplements.
Primary Market Adults experiencing symptoms of joint disorders
Obstacle 1. The formulation and advancement of the

product.
2. Skepticism about natural supplements'
efficacy
3. Existing products
Stakeholder Customers, Seller, Retailer, BPOM, and Government
(Source: Personal Data, 2024)
1.5. Objective
The main objective of this research is to create a joint health supplement for
health consumption. Through this research, all team members aim to gain expertise
in formulating supplements targeting cognitive function and joint health. Other
specific objectives in the completion of this report are:
1. Utilize the potential of indigenous herbs found in Indonesia, especially Bali and
Nusa Tenggara to create a joint supplement.
2. Designing a joint supplement with minimal or no side effects.
3. Prioritizing safety and satisfaction of joint consumers.
4
4. Identify and evaluate key ingredients that can support joint health and ensure
quality standards.
1.6. Needs Identification
1.6.1 Interpretation of Customer Needs

After getting input and insight from people with joint issues through market
research both direct and indirect here is the list of needs that has been analyzed to
categorize and understand customers' expectations for the product. The list of needs
is shown in table 2.2 below.
Table 1. 2 List of Needs
No Needs
1. Supplement for joint health that can preserve joint health
Supplement for joint health that can reduce the symptoms of joint health
2.
problem
3. Joint health supplement needs to be more effective
4. The product has a unique flavor
5. An easy to consume joint health supplement
6. Consumers’s experience and convenience in using the product
7. The product is in practical forms
8. The supplement contains natural ingredients to solve joint health problems
Joint health supplement in forms such as tablets, candies, beverages, and

9.
powders.
10. Product is safe to be used or consumed
11. The product can be consumed universally
12. The product is affordable.
5
1.6.2 Category of Customer Needs and Needs Rank

Once the customer needs are identified through market research, each
requirement must be allocated to a specific category and assigned a numerical
ranking using the following scale:
1. Undesirable
2. Not Important
3. Nice to have
4. Highly desirable
5. Essential
Table 1. 3 Grouping and Ranking Needs
Needs
Customer Needs Rank
No.
Product Performance
Supplement for joint health that can preserve joint health 5

1
Supplement for joint health that can reduce the symptoms of joint health
5
2 problem
Joint health supplement needs to be more effective 5

3
Product Perceptions
The product has a unique flavor 3

4
An easy to consume joint health supplement 4

5
Consumers’s experience and convenience in using the product 5

6
Product Properties
The product is in practical forms 2

7
The supplement contains natural ingredients to solve joint health

4
8 problems
Joint health supplement in forms such as tablets, candies, beverages, and

4
9 powders.
6
Table 1.3 Grouping and Ranking Needs (cont’d)
Regulation
Product is safe to be used or consumed

10 5
11 The product can be consumed universally 5

Retailing
12 The product is affordable. 4

1.7. Benchmarking Existing Product

Benchmarking is the process of comparing products, services,
processes, or performance metrics to other businesses to analyze what's effective in
their respective industries.
Table 1. 4 Assessing Specifications Based on Competitors
Score
NATUR Pharmeasy Grow

No Consumer needs Rank Specification Metric ELO Multivitamin Vitamin
Unit Omega-3 50+ Beyond
Fish Oil Omega 3
Supplem Fish Oil
ent
Product Performance
1. Supplement for 5 mg 1100 185 1400

joint health that
can preserve
joint health
Composition
2. Supplement for 5 mg 1100 185 1400
and active
joint health that
ingredients in
can reduce the
the
symptoms of
supplements
joint health
problem
7
Table 1.4 Assessing Specifications Based on Competitors (cont’d)
Score

ELO Multivitamin Vitamin
No Consumer needs Rank Specification Metric
Omega- 50+ Beyond
Unit
3 Fish Omega 3
Oil Fish Oil
Supple
ment
Product Performance
3. Joint health 5 Efficiency Dosage 1 1 tablet twice 2 Softgel

supplement Softgel a day with daily with
needs to be more with a water meal
effective meal
and a
full
glass of
water -
one
daily
Product Perception
4. The product has 3 Presence of Y/N Yes No Yes

a unique flavor additional
flavor
5. An easy to 4 Number of Steps 3 3 4

consume joint steps in
health product
supplement usage
6. Consumers’s 5 Number of Steps 3 3 4

experience and steps in
convenience in product
using the usage
product
8
Score

Fish Oil Omega 3
Supplem Fish Oil
ent
Product Properties
Product Inches 1.1 x around 0.5 - around

7. The product is 2 Dimensions 0.39 0.75 0.5 -0.65
in practical
Quantity per Amoun 60 60 60
forms
packaging t
8. The supplement 4 Presence of Y/N Yes Yes Yes

contains natural active
ingredients to natural
solve joint ingredients
health problems
Regulation
9. Joint health 4 Various Y/N NATUR Pharmeasy Grow

supplement in forms ELO Multivitamin Vitamin
forms such as Omega-3 50+ Beyond
tablets, candies, Fish Oil Omega 3
and beverages. Supplem Fish Oil
ent
10 The product 5 Halal Y/N No No No

. can be Certificati
consumed on by the
universally authorized
institution
9
Score

Fish Oil Omega 3
Supplem Fish Oil
ent
Regulation
9. Joint health 4 Various Y/N NATUR Pharmeasy Grow

supplement in forms ELO Multivitamin Vitamin
forms such as Omega-3 50+ Beyond
tablets, candies, Fish Oil Omega 3
and beverages. Supplem Fish Oil
ent
10. The product can 5 Halal Y/N No No No

be consumed Certification
universally by the
authorized
institution
10
Score

Fish Oil Omega 3
Supplem Fish Oil
ent
5 Percentage %mass - - -
11 The product can of Alcohol
be consumed
5 Food Y/N No No No
universally
allergen
labeling
5 Composition mg 0 160 0
of total
sugars
Retailing
12. Product is 4 Price IDR Rp. Rp. 106.769 Rp.

affordable 669.000 313.112
1.8. Product Specification

Benchmarking helps the proposed product to develop by measuring the
performance of existing products and determining the standards of our products to
meet expectations of the market. The results of benchmarking will help in designing
our products and understanding the current condition of the market. The
specifications of our products are shown in the table below.
11
Table 1. 5 The Specifications of the Product to be Made
No Consumer needs Rank Spesification Metric Own

Unit Value
Product Performance
1. Supplement for joint health that 5 mg 1500

can preserve joint health
Composition and active
ingredients in the
2. Supplement for joint health that 5 mg 1500
supplements
can reduce the symptoms of
joint health problem
3. Joint health supplement needs to 5 Efficiency Dosage Once

be more effective per day
Product Perception
4. The product has a unique flavor 3 Presence of additional Y/N Yes

flavor
5. An easy to consume joint health 4 Number of steps in Steps 3

supplement product usage
6. Consumers’s experience and 5 Number of steps in Steps 3

convenience in using the product usage
product
7. The product is in practical forms 2 Product Dimensions Inches around

0.5-0.6
Product Properties
8. The supplement contains natural 4 Presence of active Y/N Yes

ingredients to solve joint health natural ingredients
problems
12
Table 1.5 The Specifications of the Product to be Made (cont’d)
No Consumer needs Rank Spesification Metric Own

Unit Value
Product Properties
9. Joint health supplement in forms 4 Various forms Y/N Yes

such as tablets, candies,
beverages, and powders. Certification by the
National Food and
10. Product is safe to be used or 5 Y/N Yes
Drug Administration in
consumed
its country of origin
11. The product can be consumed 5 Halal Certification by Y/N Yes

universally the authorized
institution
5 Percentage of Alcohol %mass 0
5 Food allergen labeling Y/N Yes
5 Composition of total mg 150

sugars
Retailing
12. Product is affordable 4 Price IDR Rp.50.0

00-
Rp100.0
00
13
1.9. General Concept
1.9.1 Existing Product Ideas Concept

To generate the general concept of our product, we must examine the
concepts and ideas underlying the current products. These concepts are taken from
the existing joint health supplement, and we utilize them as a guide to create a high-
quality concept for our product. The Joint Health Supplement ideas now used are
shown in Figure 1.1 below.
Figure 1. 1 Existing Joint Health Supplement Concept

We develop a table that enumerates the salient features of the current notion
after constructing a concept tree for it. The concept tree's key characteristics for the
current joint health supplement are listed in Table 6.7 below.
14
Table 1. 6 Existing Concept Description of Joint Health Supplements
No Existing Brief Description Weakness

Concept
Madu Hitam is honey obtained from This honey tastes slightly
the nectar of mahogany flowers. The bitter, so some people do
Diamond product's main nutrient is antioxidant not like it.
1
Black Honey agents such as flavonoids and alkaloid.
It can consume directly or combined
with another type of drink
Keloreena is a capsule supplement Keloreena has a fairly
made from Moringa leaves that expensive price of IDR
focuses on body health, including 150,000. Based on
2 Keloreena joints. The product's main nutrient is market surveys,
antioxidants that can reduce uric acid consumers choose
levels. products with prices not
exceeding Rp. 50,000,-
Squalene is made from shark liver oil, Squalene tastes slightly
which contains a compound called fishy, so some
3 Squalene squalene, which acts as a lubricant for consumers do not like it.
joints. Apart from that, squalene
is quite expensive.
Multimedia is a supplement in the Multitea is an
form of jelly candy. Multimedia has international product
Multitea the active ingredient glucosamine, based in the United
4
Gummies which functions to maintain joint States, so it is expensive
health. and unsuitable for all
groups of society.
Nature Best is a chondroitin Nature Best is expensive
supplement that can work well because it is an
5 Nature Best
together with glucosamine. international product in
the United Kingdom.
15
1.9.2 New Concept

The new concept is created from consumer’s needs and the output of the
member team’s brainstorming. This brainstorming process uses a concept tree to
visualize the ideas developed by group members. The concept tree visualizes the
results of brainstorming the new concept of this product. In this case, the new
concept is focused on including a new substituent nutrients and benefits for joint
supplement. The new concepts are presented in the figure as shown below.
Figure 1. 2 New Concept of Joint Supplement
16
After creating a concept tree for the new idea, we use a table to brief
overview of the innovative joint supplement. The description of this supplement is
presented in the table below.
Table 1. 7 New Concept Description of Joint Supplement
No Concept Brief Description

Consumption Method
The supplement is orally ingested with water or a
suitable beverage. Once consumed, it travels through
1 Swallowed the digestive system for breakdown and absorption of
nutrients, providing convenient delivery of essential
compounds for overall health support.
The supplement is chewed before swallowing, helps
in breaking it down into smaller particles, facilitating
easier digestion and potentially improving nutrient
2 Chewed
absorption. This method is suitable for those who
prefer chewable supplements or experience digestive
discomfort with solid forms.
The supplement is mixed with a liquid such as water
or juice and consumed. This method allows for quick
ingestion and absorption of nutrients, offering
3 Drunk
convenience and ease of consumption for those who
prefer liquid supplements or have difficulty
swallowing solid forms.
Form
Soft Gel is made of a gelatin-based shell containing
1 Soft Gel the supplement in liquid form. Soft Gel offer easy
swallowing and rapid absorption of nutrients.
17
Table 1.7 New Concept Description of Joint Supplement (cont’d)

Capsules are small, sealed containers that hold active
ingredients in powder form. They are typically made of
2 Capsule
gelatin or vegetable cellulose and can be opened and
mixed with food or drink.
Tablets are solid forms of the supplement produced by
compressing active ingredients originating in powder
or granular form. They feature higher concentrations of
3 Tablet
active ingredients due to their compression
manufacturing process and are shaped into easy-to-
swallow forms.
Gummies are chewable supplements formulated with a
gelatin or pectin base. Gummies offer an enjoyable
alternative to supplement forms, appealing to both
4 Gummies adults and children. Gummies provide a convenient
way to incorporate essential nutrients into daily
routines, without the need for water or additional
preparations.
Syrup are liquid formulations containing concentrated
essential nutrients. They are sweetened and flavored,
5 Syrup
primarily utilized for supplements that necessitate
consumption in liquid form.
Powder are dehydrated forms of active ingredients that
dissolve easily in water or other liquids for
6 Powder consumption. They offer flexible seamless mixing with
beverages or foods, and are known for their enhanced
absorption into the body.
18

Effervescent are tablets that disintegrate easily
when they contact with water, resulting in a
7 Effervescent bubbly drink. They are often used for
supplements that require consumption in liquid
form, such as vitamin C or electrolytes.
Source
Lontar seeds are native to Bali and Nusa
Lontar Seeds (Borassus Tenggara. They thrive in dry coastal climates and
flabellifer L.) and are rich in antioxidant. Meanwhile brown algae
1
Brown Algae (Undaria have known benefits for joint health and
pinnatifida) inflammation reduction, making lontar seeds and
brown algae potentially valuable.
Kelor leaves originate from Bali, they are rich in
antioxidants which plays a crucial role in
2 Kelor Leaves
lowering levels of uric acid in the body, offering
potential benefits related to joint issues.
Soybeans are rich in antioxidants that play a vital
role in maintaining joint health. These
antioxidants work to shield the joints from
3 Soybean damage caused by free radicals, which are linked
to inflammation. Additionally, soybeans are a
source of dietary fiber, which can further help in
reducing inflammation.
19

Turmeric, especially its main component curcumin,
can help reduce inflammation in joints and improve
symptoms of arthritis because it has anti-
Clove Oil and Turmeric
inflammatory and antioxidant properties. On the
other hand, clove oil can be used as an anti-
inflammation agent and also has omega-3
Pineapple is a tropical fruit that contains a group of
Pineapple enzymes called bromelain, which has promising anti-
inflammatory and pain relief effects.
Main Nutrient
Antioxidants play a significant role in maintaining
joint health by neutralizing free radicals, which can
1 Antioxidant
cause oxidative damage to various macromolecules,
including cartilage and bone.
Omega-3 is thought to have immunomodulatory
properties and may limit inflammation by acting as
Omega 3 & precursors to lipid mediators of inflammation.
2
Curcumin Curcumin, on the other hand, has been shown to act
as a powerful anti-inflammatory agent in the body,
blocking inflammation.
Bromelain is a proteolytic enzyme that has anti-
inflammatory and analgesic properties, which can
3 Bromelain
help reduce inflammation, pain, and stiffness in the
joints.
20
1.9.3 Concept Combination

From the existing and new concepts, a new combination of those concepts
can be made and screened later. The combined concept is shown below.
Figure 1. 3 Combined Concept of Joint Supplement

21
1.10. Concept Selection

The next step is to conduct concept screening for concepts listed to obtain
concepts that are more suitable with our objectives and feasible to be manufactured.
There are 2 steps for the concept selection process. The first step is concept
screening, and the second step is concept scoring.
To conduct the concept screening, we will start by categorizing each concept
with the RVF method for concept selection. For this step, we will evaluate each
concept with RVF labels which are: R (Redundant), V (Vague), and F (Foolish).
The next step is concept scoring, more detailed and countable analysis of the
concepts that have been shortlisted to determine a single concept that makes the
desirable product.
The RVF selection procedure offered 22 from 105 concepts, however the
concept evaluation process offered only five. The selection matrix for concept
scoring is the next step to take. This metric contains concept ideas, criteria, and
weight factors which the product concept is assessed and scored. The estimation of
each concept total score is carried out by multiplying the weight by the rating of
each criterion and sorting the total score concept. After that, the concept will be
calculated based on the total score.
Following the concept ranking, the top five concepts with the highest scores
will be given a score in this selection process. The scoring parameter for each
criterion are as follows:
Table 1. 8 Criteria Rating
Relative Performance Rating

Worst 1
Bad 2
Moderate 3
Well-thought 4
Excellent 5
22
Table 1. 9 Rating for Scoring Matrix
Rating
Criteria
1 2 3 4 5
The main
The main The main The main The main
nutrients are
Main Nutrient nutrients are not nutrients are less nutrients are nutrients are
significantly
Relevance (A) relevant to joint relevant to joint relevant to joint more relevant to
relevant to joint
health health health joint health
health
The product's The product's The product's The product's The product's
price is higher price is higher price is higher price is higher price is between
Price (B)
than IDR than IDR than IDR than IDR IDR 50.000-
250.000 200.000 150.000 100.000 100.000
The product The product The product
The product The product
form is unable to form is slightly form is very easy
Ease of form is hard to form is easy to
swallow and the easy to swallow to swallow and
Consumption swallow and the swallow but the
product usage and the product the product
(C) product usage product usage
has more than usage has four usage has one to
has five steps has three steps
six steps steps two steps
The product The product The product
The product The product
Ease of manufacturing manufacturing manufacturing
manufacturing manufacturing
Manufacture method is very method is method is
method is easy to method is very
(D) difficult to difficult to moderately to
produce easy to produce
produce produce produce
The product
The product The product The product This product has
causes
Health and causes severe causes moderate causes minor no side effects
significant side
Safety (E) side effect and side effect and side effect and and gives no
effect and health
health issues. health issues. health issues. health issues
issues.
The availability The accessibility The materials The materials
The materials
of materials of materials required for required for
Ease to Access required for
required for required for production are production are
Material (F) production are
production is production is moderately plentiful and
easily accessible.
limited. restricted. accessible. readily available.
23
Table 1. 10 Concept Scoring
Concept
Selection
Weight 16 17 46 76 77
Criteria
R W R W R W R W R W
Main Nutrient
0,33333 5 1,667 4 1,333 5 1,667 5 1,6667 4 1,333
Relevance (A)
Price (B) 0,13333 4 0,533 4 0,533 4 0,533 4 0,5333 4 0,533
Ease of
Consumption 0,13333 4 0,533 3 0,4 5 0,667 5 0,6667 5 0,667
(C)
Ease of
Manufacture 0,06667 4 0,267 4 0,267 3 0,2 3 0,2 3 0,2
(D)
Health and
0,20000 5 1 5 1 5 1 5 1 5 1
Safety (E)
Ease to Access
0,13333 4 0,533 4 0,533 4 0,533 4 0,5333 5 0,667
Material (F)
Total 100% 4,533333333 4,0666667 4,6 4,6 4,4
Rank 2 4 1 1 3
The selection on which concept will be developed into the final product is the
final stage in the concept scoring process. The decision is determined by the concept
ranking scoring. The chosen concept that has highest rank is concept 46 “Chewed
Tablet Joint Supplement with Antioxidant from Lontar Seeds (Borassus flabellifer
L.) and Brown Algae (Undaria pinnatifida)” and 76 “Chewed Gummies Joint
Supplement with Antioxidant from Lontar Seeds (Borassus flabellifer L.) and
Brown Algae (Undaria pinnatifida)”. Ahead on choosing one of the concepts and
developing the chosen concept for the product, we conduct a survey to our targeted
consumer.
The survey was conducted to see consumer responses to the selected product
concept. The survey received 65 respondents with an age range of 25-65 years. The
survey results show the tendency of consumers to choose gummy products with a
preference for fruit flavors for IDR 50,000 – IDR 100,000. The survey also shows
that most consumers are interested in the product concept we offer.
CHAPTER 2
REVIEW OF THE LITERATURE
2.1 General Review of Joint Health
2.1.1 Joint Health

Joints are essential for all our complex movements and activities. Therefore,
all joint diseases have a significant impact on our functioning and quality of life
(Tang-Wu Lu, 2012). There are many different joint diseases, which can be divided
into degenerative and inflammatory joint diseases (Yeesuk Kim, 2017).
Rheumatoid Arthritis (RA) and related disorders are inflammatory joint diseases
caused by autoimmune processes. The immune system attacks healthy tissue. (Yen-
Ju Lin, 2020). Osteoarthritis, which is much more frequently found than
inflammatory joint diseases, is not caused by an autoimmune reaction. It is related
to aging, injury and a range of other factors and is often described as “wear and
tear” disease. However, in osteoarthritis the destruction of the cartilage layer of the
joint leads secondarily to inflammation, and many signs and symptoms of
osteoarthritis are related to this inflammation. Consequently, although their origin
is different, both types of joint disease have inflammation as a common factor
(Duarte, P., 2015).
Some joints are more prone to specific diseases. The small joints of hands
and feet are more often involved in RA, while OA is more prominent in hip, knee
and shoulder, although the basal joint of the thumb and great toe are also frequently
involved. The impact of joint disease is high, 40% of people over the age of 70
years suffer from OA of the knee, 80% of people with OA have some limitation of
movement and 25% cannot perform routine daily activities (Lidgren et al., 2014)
2.1.2 Degenerative Joint Disease

Osteoarthritis (OA) has a very high incidence worldwide, and it is strongly
associated with age (van Saase et al., 1989). Most of the patients with OA are aged
over 60. With the aging of the population, the disease has become a common joint
disease today. Heredity, hormones, diet, obesity, smoking, and drinking can lead to
OA (Felson et al., 1997). Its early symptoms mainly include pain and joint stiffness,
and later secondary changes such as muscle atrophy and joint contracture occur
25
(Bennell et al., 2012). Therefore, we advocate early intervention for patients with
OA to prevent further deterioration of the disease. However, the disease treatment
still encounters many shortcomings, and further research and exploration are
needed.
Currently, the treatment methods for OA include surgery, drug therapy, and
exercise therapy (Spahn et al., 2013). In recent years, the treatment of certain
diseases by exercise has received increasing research and attention. Exercise is an
economical and effective treatment (Ettinger et al., 1997). Proper exercise can
improve the physiological function of various organs of the body and improve the
overall morphology of the body (Benedetti et al., 2018). In addition, exercise can
also relieve pain (Belavy et al., 2021; Zheng et al., 2021; Peng et al., 2022; Wu et
al., 2022). For OA patients, ladder treatment is generally adopted, starting with
basic treatment. If it is ineffective, drug therapy or surgery can be used, and exercise
therapy is one of the basic treatment methods. The effects of different exercise types
on OA have been widely studied.
At present, the treatment of OA is usually symptomatic. Limited methods
are available for the treatment of OA according to its pathogenesis. Exercise can
alleviate OA at a molecular level. Only by clarifying the mechanism of exercise
treatment of OA and the influence of different exercise intensities on normal joints
and OA patients can we choose the appropriate exercise prescription to prevent and
treat OA. This review mainly expounds the mechanism that exercise alleviates the
pathological changes of OA by affecting the degradation of the ECM, apoptosis,
inflammatory response, autophagy, and changes of ncRNA, and summarizes the
effects of different exercise types on OA patients. Finally, it is found that different
exercise types, exercise intensity, exercise time, and exercise frequency have
different effects on OA patients. At the same time, suitable exercise prescriptions
are recommended for OA patients (Marwa Qadri, 2023).
2.1.3 Inflammatory Joint Disease

Inflammatory joint disease varies in many types. Rheumatoid arthritis (RA)
is a chronic autoimmune disease that causes pain, stiffness and swelling in multiple
joints, especially the hands (Gene Siew Ngian, 2010). The disease may also affect
other organ systems of the body. The cause of RA is still not clear. It is believed to
26
involve a combination of genetic and environmental factors. The incidence of RA

is 20–300 per 100000 subjects per year, whilst that of theGout is a disease caused
by an excess uric acid in the body. Urate crystals are deposited in some joints
leading to an inflammatory reaction. Gout most often affects the joint of the great
toe and is characterized by recurrent attacks of painful, red, tender, warm, and
swollen joints. It is more common in men, in whom it is the most common cause of
inflammatory arthritis and affects almost as many subjects as RA. Gout occurs
frequently in patients with metabolic syndromes (patients who also have diabetes,
hypertension, and obesity) (Nicola Dalbeth, 2021).
These are a variety of problems of the tendons, bursae, muscles, ligaments
and fascia that cause pain and dysfunction. The prevalence of soft tissue disorders
is difficult to determine due to the variety of conditions included. Tendinopathy is
a type of tendon disorder that can cause pain, swelling, and impaired function. The
pain is related to movement. Frequent locations are the shoulder (rotator cuff
tendinitis, biceps tendinitis), elbow (tennis elbow, golfer’s elbow), wrist, hip, knee
(jumper’s knee, popliteus tendinopathy), and ankle (Achilles tendinitis). It may be
rendered symptomatic by an injury or repetitive activity. Treatment may include
rest, NSAIDs, splinting, and physiotherapy. Tendinopathy occurs relatively
frequently. Older people are more commonly affected.
2.2 General Review of Supplement
2.2.1 Definition and Stages of Supplement Consumption

Nowadays, people utilize dietary supplements excessively to improve their
health and well-being. Dietary supplements are products containing nutrients sold
in various medicinal forms. Following the European Union law, as well as the
United States law, dietary supplements are products that are concentrated sources
of vitamins, minerals, or other substances with a nutritional or physiological effect
intended to supplement the regular diet (Wierzejska, 2021). Supplements are widely
used and generally taken to improve and maintain overall health. In particular,
supplements are intended for women to support bone integrity and prevent
osteoporosis. Supplements are divided into three categories based on Maslow’s
hierarchy of needs (Hun, 2024). It is said that people are motivated to consume
27
supplements with certain needs, and three different consumption stages may explain
customers’ behavior in purchasing supplements.
a. Supplements as Medicine
This is the first stage of consumption categorized by Maslow. In this stage,
customers see supplements as curative action in order to address particular health
diseases or deficiencies. They purchase the supplement based on the guidance of a
medical professional or test results to address certain health concerns. In this stage,
they see supplements as a necessity to try to improve their health.
b. Supplement as Prevention
In this stage, customers proactively maintain overall their general well-
being in order to make investments in their lifestyle demands. Though not
necessarily routine, purchase frequency rises as customers become more health-
conscious. Customers spend more money on a wider variety of supplements than
just vitamins and minerals, such as those that address energy, beauty, and sleep.
c. Personalized Supplement
In this stage, customers aim for peak potential and strive to reach their full
potential. They become more affluent and exposed to global trends. They try to
maintain physical and mental well-being in order to guarantee a higher standard of
living. Purchases are made frequently because they are aspirational and habitual.
Moreover, customers are more likely to buy a variety of supplement options based
on personal requirements and objectives.
2.2.2 Classification of Supplements

The most commonly used supplements are multivitamins, mineral
supplements, calcium supplements, and omega-3 fatty acids or fish oil (Bailey et
al., 2013). Supplements are packed in various packages, sizes, and types, depending
on how they are taken. Those can be found in many forms, such as tablets, capsules,
powders, oral ampoules, effervescent tablets, chocolates, and mastics, available in
syrup form or otherwise. More specifically, supplements can be taken in any of the
following forms:
28
1. Oral pills or powders for relatively quick absorption

2. Sublingual drops or oral disintegrated tablets for ease of intake and to limit the
damage of their active substance
3. Nose spray or drops to further improve their absorption
4. Injectables through intravenous and intramuscular injections for quick
absorption and action
5. Bone-anchored for slow and gradual absorption and prolonged action
Table 2. 1 Classification of Supplement, Examples, and Contents
Class Example Contents
Activator Amino acids Contains growth hormone

and other hormones
Carbohydrate Dextrose May contain vitamins and

electrolytes
Food and Foodstuff Fish oils, minerals and Contain garlic, kelp, royal
vitamins jelly, yeast
Herbs Ginseng, Fiber Contains amino acids,

other plant sources
Minerals Selenium, Contains only minerals

multimineral, tablets
Multivitamins and Vitamin D, calcium Contains both mineral and

multimineral supplement vitamins
Oil supplements Cod liver oil, primrose Contains oil base, with
oil vitamins, minerals
Vitamins Vitamin C, Vitamin B Contains only vitamins
29
2.2.3 Advantages and Limitations of Supplements

The advantages of the supplements are (Hassan et al., 2020):
1. High content of nutrients in small volumes
2. Special nutrient compositions
3. Lack of undesirable accompanying substances such as fats, cholesterol and
purines
4. Complete coverage of specialized sporting needs
The limitation of the supplements are (Hassan et al., 2020):
1. Users of dietary supplements often increase the dosage of frequency, thus, doses
become less and less effective
2. The duration of intake which is related to the fact that the human organism is
overloaded, owing the specific substances that supplement contains
3. The special chemical properties of some substances and their interactions with
other foods and substances
4. The person’s weight who takes those supplements
5. Age, as lots of supplements are not recommended for underaged persons or
elderly
6. The individual capacity, each person reacts differently in the face of various
substances
2.2.4 Definition and Types of Joint Health Supplements

It is essential to set up a self-care program that includes both physical
activity and nutritious food. Not many people talk about the significance of health
supplements, despite the regular recommendation for preventative measures like
exercise, massages, etc. Supplements for joint health are a great option to keep joint
health in check. Some benefits are provided by joint supplements, such as
(Quesnell, 2022):
a. Reduced joint pain

It is good for those who already experience chronic conditions such as
osteoarthritis, gout, etc. Over time, the supplements tend to lower pain levels and
offer some relief for the joints and bones. It also becomes an ideal choice for people
30
who are allergic to painkillers or some medication related to joint health that can
solve this problem.
b. Reduced inflammation
Inflammation is a common problem in joint disorders because of an
overactive immune system. People who have inflammation will feel severe pain
and discomfort. Thus, the supplement for joint health with some active ingredients.
The ingredients, such as glucosamine and chondroitin, promote water retention in
the body as it attracts water molecules and acts as a shock absorber to further reduce
swelling.
c. Improved collagen production
Collagen is an important ingredient that helps build connective tissue in the
body. Hence, it is why most of the joint supplements contain collagen. Collagen
can help restore the cartilage connective tissue providing your bones and joints.
2.3 Existing Joint Health Supplement

Nowadays, there are several types of joint health supplements on the market.
Usually, these products have differences in the active ingredients used in the
product but still have the same goal, namely brain and joint health. The following
are some examples of joint health supplements circulating on the Indonesian
market:
a. Madu Hitam
Madu Hitam is honey obtained from the nectar of mahogany flowers. Black
honey contains alkaloids which cause it to taste more bitter than regular honey. This
honey is claimed to be able to relieve joint pain because the antioxidant content in
it can neutralize purine substances that cause joint pain. Purine substances that have
been broken down can then be excreted through urine. One example of a product
that uses black honey is Diamond Black Honey.
b. Daun Kelor
Daun Kelor is a herbal plant that has many benefits for the human body.
One of them is the ability of Moringa leaves to reduce uric acid levels because they
contain antioxidants such as flavonoids and alkaloids. These two compounds can
31
also act as analgesic compounds that can relieve pain. One product that uses
Moringa leaves is Keloreena.
c. Minyak Hati Ikan Hiu
Shark liver contains an oil called squalene. Squalene can act as a
"lubricant" for joints and as an antioxidant, which can reduce uric acid levels. One
product that utilizes the squalene content in shark liver is Squalene.
d. Daun air (Bacopa Monnieri)
Daun air is a type of creeping herb that is usually found in wetlands.
Belonging to the Scrophulariaceae family, it is a key component in many Ayurvedic
medicines. Bacopa contains Bacoside-A(3-(α-L-arabinopyranosyl)-Oβ-D–
glucopyranoside-10, 20-dihydroxy-16-keto-dammar-24-ene), which is considered
an active compound in improving memory abilities. One product that uses the active
ingredients in bacopa leaves is Bacopa
2.4 Joint Health Supplement Ingredients

Joint health is vital for mobility and overall physical well-being, involving
structures like cartilage, ligaments, tendon and synovial fluid that support and
facilitate smooth joint movements. Maintaining good joint health is crucial for
preventing discomfort, stiffness, and mobility limitations associated with
conditions like osteoarthritis, rheumatoid arthritis, and other joint disorders. These
are several ingredients that are commonly found in joint health supplement:
a. Omega-3 Fatty Acid: Some joint health supplements contain omega-3 fatty acid
or well known as fish oil. This ingredient is commonly found in fish, chia seeds,
and walnuts. It is used for helps to decrease joint swelling and inflammation.
b. Vitamin D: Most joint health supplements have vitamin D, it is used for joint
health such as calcium absorption and to improve bone mineral density. This
ingredient is commonly found in mushrooms, fish, and vegetables.
c. Chondroitin: One of the main functions of this ingredient is for enhancing bone
adhesive substance which is found in human cartilage. It helps attract and retain
water and nutrients to keep human cartilage supple and healthy. Chondroitin
usually comes from animal joint cartilage.
d. Glucosamine: This ingredient is used as relievers of joint pain but also as
treatments to prevent joint disease. They are useful to make proteins that are
32
used to enhance many parts of joints, including ligaments, tendons, cartilage,

and synovial fluid. Glucosamine is usually found in shells of shellfish,
mushrooms, and bone marrow.
2.5 Regulations
To make dietary supplements the manufacturers need to follow several rules
in order to guarantee the production of products with real value. Some regulations
and standards are created by numerous regulatory authorities worldwide to
guarantee consumer safety and efficacy. Regulatory bodies might also take the
products’ ability to benefit customers into account.
One of the international regulations for dietary supplement is Dietary
Supplement Health and Education Act of 1994 (DSHEA). DSHEA includes a
regulatory framework for assuring the safety of dietary supplements (Center for
Food Safety and Applied Nutrition, 2024). Food and Drug Administration (FDA)
authority to establish regulations regarding dietary supplement manufacturing,
regulating health claims and labeling. Under the DSHEA 1994 (Djaoudene et al.,
2023)
The regulations of medicine/therapeutic goods in Indonesia are governed by
Law No. 36/2009 on Health and its implementing regulations and the Food and
Drugs Supervisory Agency (BPOM). Businesses that distribute food products in
Indonesia are also subject to Law Number 8/1999 on Consumer Protection Law and
Law Number 7/2014 on Trade Law. Businesses in Indonesia are typically required
by the Consumer Protection Law to act honestly and in accordance with legal
requirements. Mandatory national quality requirements for food goods and their
production processes may be imposed by the Trade Law.
For consumer goods in general, including food and drink, halal certification
is mandated by Law No. 33/2014 on Halal Assurance (Halal Law). Halal
certification was not required, but it is better for all food and beverage products to
undergo the halal certification procedure.
CHAPTER 3
PRODUCT SPECIFICATION
3.1 Product Ingredients
3.1.1 Product Composition

The composition and the ingredients of an herbal supplement for joint health
are given in this section. The ingredients are listed as follows in Table 3.1 measured
in weight percentage.
Table 3. 1 Product Composition and Ingredients
Potential
Ingredients %weight Minimum Purchase
Supplier
Kabupaten
Lontar Seed Glucosamine 1.86 Buleleng, 1.8 kg
Bali
Kabupaten
Moringa Oleifera
Flavonoid 23.19 Buleleng, 1 kg
leaves
Bali
Sangsit,
Brown Algae Sawan,
(Undaria Fucoidan 18.55 Buleleng 50 kg
pinnatifida) Regency,
Bali
Badung, Bali,
Xylitol 20.43 25 kg
Indonesia
Pectin 15.69 Surabaya 100 g
Orange flavoring 10.46 Surabaya 1L
Sodium Benzoat 0.56 Surabaya 1 kg
Water 9.27 - -
33
34
3.1.2 Explanation of Each Ingredient

Analyzing each material's properties comes next after the product composition
is listed. The purpose of the exercise was to ascertain each material's characteristics
and capabilities. As a result, we can think about the most effective method for
creating goods, keeping materials, and creating product packaging. Each material's
qualities are explained as follows.
a. Glucosamine
Glucosamine, an amino monosaccharide, plays a crucial role in the
structure and function of glycosaminoglycans (GAGs) in cartilage tissue
(Qingchi Wang, 2022). The Siwalan fruit, specifically from the Arecaceae
family, has been found to contain glucosamine as a potential metabolite with
anti-inflammatory properties (Ari Sartinah, 2022). Research has shown that
glucosamine can help reduce joint damage and pain in osteoarthritis (OA) by
inhibiting the degradation of GAGs and reducing the production of pro-
inflammatory cytokines. The Siwalan fruit's glucosamine content may
contribute to its traditional use in alleviating OA symptoms, such as pain and
inflammation, in male Wistar rats. This natural compound's ability to
modulate joint health by regulating the balance of GAGs and inflammatory
mediators makes it a promising component in the management of OA,
supporting the fruit's traditional use in folk medicine (Nam Xuan Vo, 2023).
Table 3. 2 Properties of Glucosamine
Properties Description/Values
Chemical name Glucosamine
Molecular formula C6H13O5NO5
Molecular weight 179.17
(Source: chemicalbook.com, 2024)
35
Figure 3. 1 Chemical Structure of Glucosamine

b. Flavonoid
The flavonoids present in the leaves of Moringa oleifera have been
found to play a crucial role in maintaining joint health by reducing
oxidative stress and inflammation (Marcela, 2017). These bioactive
compounds, known for their antioxidant properties, have been shown to
modulate the inflammatory response, thereby alleviating symptoms
associated with joint diseases such as arthritis. The flavonoids in Moringa
oleifera leaves, including quercetin and other flavanols, have been
identified as key components responsible for its anti-inflammatory
effects. By inhibiting the production of pro-inflammatory cytokines and
reducing oxidative stress, these flavonoids contribute to the plant's
potential to manage joint inflammation and promote overall joint health
(Jameel, 2022).
Table 3. 3 Properties of Flavonoid
Chemical name Flavonoid
Molecular formula C2H28O14
36
Figure 3. 2 Chemical Structure of Flavonoid

c. Fucoidan
Fucoidan is a kind of polysaccharide primarily found in brown
seaweed that has significant amounts of l-fucose and sulfate ester groups in
it. Numerous biological activities, such as those that are anti-inflammatory,
anti-cancer, anti-viral, antioxidant, anticoagulant, antithrombotic, anti-
angiogenic, and anti-Helicobacter pylori, have been demonstrated in
fundamental research.
Figure 3. 3 Chemical Structure of Fucoidan

Figure 3. 4 Basic Structure of Fucoidan from Undaria pinnatifida

(Source: ncbi.nlm.nih.gov, 2024)
37
Table 3. 4 Properties of Flavonoid
Chemical name Fucoidan
Molecular formula C7H14O7S
Molecular weight 242.247 g/mol
The polysaccharide was named “fucoidin” when it was first isolated

from marine brown algae by Kylin in 1913. Now it is named as “fucoidan”
according to IUPAC rules, but some also call it fucan, fucosan, or sulfated
fucan (Li et al., 2008). Lots of studies show that fucoidan presents
significant antioxidant activity in experiments in vitro. It is an excellent
natural antioxidant and has great potential for preventing free radical-
mediated diseases.
d. Xylitol
A natural sugar alcohol called xylitol can be found in many fruits
and vegetables as well as other plants (NCBI, n.d.). Sugar alcohols are a
chemical combination of alcohol and sugar molecules. It tastes sweet and
is frequently used in place of sugar. Since xylitol is a refined sweetener, it
doesn’t contain any vitamins, minerals, or protein. In that sense, it provides
only empty calories. Despite having the word "alcohol" in its name, this is
not the same alcohol that gets you wasted. For those who are addicted to
alcohol, sugar alcohols are safe.
Figure 3. 5 Basic Structure of Xylitol

(Source: ncbi.nlm.nih.gov, 2024)
38
Unlike sugar, xylitol has a sweet flavor but doesn't lead to tooth
decay (WebMD, n.d.). It works against some bacteria that cause ear
infections and lowers the amount of decay-causing germs in saliva. It is a
common ingredient in "sugar-free" candies, mints, and chewing gum.
Table 3. 5 Properties of Xylitol
Chemical name Xylitol/Ribitol/Adonitol
Molecular formula C5H12O5
Molecular weight 152.15/mol
e. Pectin
Pectin is an important polysaccharide with applications in foods,
pharmaceuticals, and several other industries. Fruits contain soluble fiber,
or carbohydrate, called pectin. It thickens food during heating or baking.
On occasion, it's also utilized to create medication. Apples and citrus peels,
which are both abundant sources of this fiber, are used to make the
majority of pectin products.
Figure 3. 6 Basic Structure of Pectin
(Source: Research Gate, 2024)
Pectin is an essentially linear polysaccharide. Like most other plant

polysaccharides, it is both polydisperse and polymolecular and its
composition varies with the source and the conditions applied during
isolation. Pectins are soluble in pure water. The most important use of
pectin is based on its ability to form gels. HM-pectin forms gels with sugar
and acid. The structure of pectin imposes some specific constraints.
39
f. Orange Flavoring
Orange flavor, also known as Natural Orange Flavor, medicinal
Orange Flavor, or Flavoring, refers to mixtures of recognized and precisely
defined chemical compounds with an olfactory and gustatory character
resembling orange peel, leaf, or juice that are intended for use as flavorings
in oral medicinal products (PharmaCentral, 2022). Many volatile chemical
molecules, including alcohols, aldehydes, terpenes, and esters, more than
40 of which have been mentioned in the literature, are responsible for the
scent.
Table 3. 6 Properties of Powdered Orange Flavor
Appearance Solid/powder
Colour Pale yellow to white
Odour Characteristic
Taste Characteristic
Extractable oil ≤ 10%
Particle size 0.85 mm ≤ 99.0 % passes
Water content 0.0 – 10 %
Flash point > 100 oC
(Source: pharmacentral.com, 2024)
g. Water
Water is a polar solvent that plays a crucial role in many
biological and chemical processes. Its unique properties make it an ideal
solvent for a wide range of substances, including both polar and non-polar
compounds. Water's high dielectric constant, which allows it to dissolve a
variety of ions and polar molecules, is a key factor in its solvent properties
(Kim Sharp, 2001). Additionally, water's high surface tension and
viscosity enable it to maintain a stable interface with other substances,
facilitating the dissolution of solids and the transport of nutrients and waste
products across cell membranes. Furthermore, water's ability to form
hydrogen bonds with itself and other molecules allows it to participate in
40
complex chemical reactions and biological processes, such as protein

folding and enzymatic activity. These solvent properties of water are
essential for the functioning of living organisms and are a fundamental
aspect of many chemical and biological processes (Dor Ben Amotz, 2008).
Figure 3. 7 Chemical Structure of Water

Table 3. 7 Properties of Water
Chemical name Water
Molecular formula H2O
3.2 Final Product Specification

The final specifications of our product are given in the table below.
Table 3. 8 Product Specification
Own Product
No Specifications Unit
Values
Product Performance
Supplement for joint health that can reduce Dosage of
1 Once per day
the symptoms of joint health problems Consumption
Dosage of
2 Supplement that can preserve joint health Once per day
Consumption
Product Ingredient
Glucosamine %weight 1.86
3 Main Composition Fucoidan %weight 18.55
Flavonoid %weight 23.19
Xylitol %weight 20.43
Pectin %weight 15.69
Orange
%weight 10.46
4 Other Composition Flavoring
Water %weight 9.27
Sodium
%weight 0.56
Benzoate
41
Table 3. 9 Product Specification (Cont’d)
Own Product
No Specifications Unit
Values
Product Perception
Chewy
5 Texture Organoleptic
Gummies
6 Scent Organoleptic Orange aroma
#FF861D
Organoleptic
7 Appearance
(Hex Color)
8 Flavor - Orange Flavor

9 Nutritional Information Yes/No Yes
Product Properties
10 Weight g 2
11 Form - Gummies
Round-shaped
12 Shape - with rounded
edges
13 Size cm 1.5-2
14 Shelf Life Month 12
8.45 (Height)
15 Bottle Packaging Dimension cm
4.6 (Diameter)
16 Steps to Consume Steps 1
Product Retailing
17 Price IDR 89,900
18 Type of Packaging - Bottle
19 Quantity per Package Amount 30
20 Consumption per day Amount 1
Products are
available in
some large and
small
21 Availability -
pharmacy
stores, and can
be purchased
online
Product Regulation
22 Halal Certification Y/N Yes
42
3.3 Product Positioning

Product Positioning is needed to understand the position of our product
when compared to other products already circulating on the market. We use the
perceptual mapping method to map our products. Product mapping is based on
the criteria set in the screening and scoring concept process. The products being
compared are those discussed in the previous assignment, and we also added
several other products for comparison. These products are Keloreena, which is
made from Moringa leaves, Multitea which is a supplement with glucosamine
and chondroitin compounds; Pharmeasy Multivitamin with multivitamins for
joints; and Hemaviton Joint Max, which is a local joint supplement product.
These products were chosen because they are suitable for active compounds,
have similar aims to ours, and are widely known as joint health supplements.
Figure 3. 8 Product Positioning

Our product's position compared to four similar products is shown in
Figure 3.8. The rating uses a scale of 1-5 with the same description as the
screening and scoring concept. Based on the Perceptual Map, our product has
very potential value by outperforming various joint supplement products in
various criteria, which will be explained below:
a. Main Nutrient Relevance
The most important criterion is the relevance of the main nutrients to
maintain joint health. The important nutrients to maintain joint health are
the content of glucosamine, chondroitin, omega 3, and antioxidants.
Based on Figure 4.12, every product including ours, except keloreena has
a score of 5 because the product focuses on maintaining healthy joints.
Hence, it has all the compounds needed to maintain healthy joints, while
43
keloreena is a supplement that focuses on health in general. Hence, the

content is not as complete as products that are specifically for joint health.
b. Price
Price will determine consumer decisions when purchasing a product.
Most health supplement products, especially those based abroad, have
high prices, so they score 1 for Multitea and Pharmeasy Multivitamin in
50+. Keloreena gets a score of 3 because it has a medium price compared
to other products. A score of 5 is given to Hemaviton Joint Care Max
because it has a cheap price. We target our products to have prices that
are acceptable to consumers according to surveys, so we give a score of
5 to our products.
c. Ease of Consumption
Sometimes, consumers will pay attention to the practical aspects of
having the product they want to consume. The more practical the
product is, the more interested consumers are in buying it. All
benchmark products score 3 because they are in capsule form, making
them difficult for some people to consume. For this reason, we give a
score of 4 to our product because it will be in gummy form and easy to
consume.
d. Ease of Manufacture
From a manufacturer's perspective, the ease of the manufacturing
process must be considered in product planning. Complex
manufacturing processes will increase production costs. All benchmark
products score 3 because they are in capsule form. Products in capsule
form require a granulation process and capsule shell formation. We
chose the gummies form for our product because it has a more
straightforward manufacturing process than capsule-shaped products,
and we gave it a score of 4.
e. Health and Safety
Health and safety aspects are crucial to consider as a health product.
This aspect will influence the level of consumer confidence in the
product. To uphold health and safety, we use natural ingredients so they
44
have no side effects. For this reason, our product scores 5, and so does
Keloreena. Pharmeasy, Multitea, and Hemaviton Joint Max scored 3
because they use synthetic chemical compounds in their active
compounds.
f. Ease to Access Material
Apart from the manufacturing process, the ease of obtaining raw
materials also influences production costs. With production bases in
Bali and Nusa Tenggara, our product and Keloreena scored 5 because
they contain ingredients widely found in these two provinces. In
comparison, the other three product benchmarks received a score of 3
because the basic ingredients are not easily found in these two
provinces.
CHAPTER 4
PRODUCT ARCHITECTURE AND PROTOTYPE
4.1 Product Prototype

Prototyping intends to develop a product model or design to be a final product
that fits into the customer's needs. Gummies are the form that is selected in our joint
health product for practical purposes. The joint health supplement will come in an
orange flavor. The prototype of our product can be seen in the figure below.
Figure 4. 1 Product Prototype
4.2 Company Profile

The name of the manufacturing company would be Seawalan Inc. With the
vision to provide innovative joint health supplements from herbal ingredients with
high value in products and services that empower people leading to a healthier joint.
Seawalan Inc. is set on producing the highest quality, non-harmful organic joint
supplement to improve health outcomes in the aspect of joint care. The company’s
mission is to create an innovative non-harmful organic joint supplement that is easy
to use and affordable, while still maintaining its high quality. Seawalan Inc. produces
its own goods and receives funding through bank loans and stock investors.
46
Figure 4.2 Company Logo

4.3 Product Identity
4.3.1 Brand
The brand name for our product is HERBITES, symbolizing the fusion of
herbal goodness and joint health benefits encapsulated in delightful gummy
candies. HERBITES comes with a fruity orange flavor which is carefully selected
to cater to the taste preferences of our target audience. HERBITES not only excel
in preventing joint health issues but also enhance overall joint well-being.
HERBITES is safe for adult consumption, ensuring a worry-free experience for our
customers.
4.3.2 Tagline
A tagline is a crucial phrase that identifies a brand and immediately connects
with customers. For HERBITES, our tagline is "Small Bites, Big Impact" which
effectively communicates the product's ability to address joint health issues in
Indonesia. Additionally, we want to highlight one of the key advantages of
HERBITES, which is its unique gummy supplement formula derived from Lontar
seeds, brown algae, and kelor leaves. These natural ingredients are not only
beneficial for joint health but also abundant in Bali, making it a culturally relevant
and authentic choice for customers.
47
4.4 Product Packaging

Packaging is critical to a product, as it contributes to efficient distribution,
makes storage easy, and can convey crucial handling information, while also
promoting our brand at the same time. Included in packaging are labels which are
just as important. To accommodate our product's form which is gummies and still
emphasize practicality, we chose a plastic bottle as our primary packaging, which
it will contain 30 gummies. Our secondary packaging is a cardboard box, in which
the products will be shipped and distributed in.
4.4.1 Primary and Secondary Packaging

As our primary packaging, we selected a plastic bottle containing 30 gummies.
Our product's brand and main label are put on the front of the box, as shown in the
figure below. The height of the plastic bottle is 8.45 cm and 4.6 cm for the diameter.
It will also be packaged in a box-shaped carton box. Each box contains one bottle
in a size of 100 ml. We used the Solid Bleach Sulfate (SBS) Board for this
packaging. It is a high-quality paperboard material with a smooth and refined
surface and a more premium and luxurious appearance than corrugated cardboard.
By using these specifications, we are sure that our product is practical, as an
additional measuring step will not be needed while maximizing the product's shelf
life to 12 months. Assuming the average usage is one gummy per day, our product
is estimated to last one month. Secondary packaging is used to store and keep the
product during distribution.
48
Figure 4.3 Primary Packaging of HERBITES

Figure 4.4 Secondary Packaging of HERBITES

49
4.5 Instructions for Use

Here’s a step-by-step procedure on how to consume joint health gummy
supplement:
Figure 4.5 Instructions Used HERBITES

1. Step 1: Open the bottle

First, twist the cap counterclockwise to open the bottle. While open the
bottle carefully lift the lid to avoid spilling the gummies.
2. Step 2: Take the desired number of gummy
Take one gummy and place the gummy in your hand or on a flat surface.
3. Step 3: Consume the gummy
Place the gummy in your mouth and chew slowly until they dissolve.
4. Step 4: Close the bottle
Replace the lid by twisting it clockwise to secure the bottle. And ensure
the lid is tightly closed to prevent spills.
CHAPTER 5
PRODUCT MANUFACTURING
5.1 Market Analysis

There are a few steps to determine product satisfaction of market demand
before product sales in the market. Market analysis plays an important role in the
manufacturing process, and it involves projecting the market target, determining
product demand, and estimating production capacity. After analyzing the market,
we will know if our product can provide potential profit for our company.
5.1.1 Market Segmentation
5.1.1.1 Demographic Segmentation

Demographic segmentation will divide customers into several groups based on
their characteristics. The characteristics used are age, gender, social class, and
income based on the customer's occupation. As the most common and frequently
used type of segmentation, this division will provide an overview of the product
specifications to be sold. We have created a segmentation based on the survey
created in the previous assignment. The survey produced demographic
segmentation as follows:
a. Gender : Male and Female
b. Age : ≥ 25 years old
c. Occupation : All types of occupation
d. Social Class : Middle to upper class
Joint problems generally affect older people over 45 years of age. In 2022, the
number of Indonesian people over 45 will be more than 78 million people or
approximately 25% of Indonesia's total population (BPS, 2022). This figure shows
an attractive number for becoming the target market for our product. However, our
survey shows that joint problems are already suffered by adults starting from 25
years old. That is why we limit the age of customers to 25 and more than to 25 years
old. We also found that the average income of Indonesian people is IDR 5,600,000
per month. This figure affects people's purchasing power for a product, including
our products.
51
5.1.1.2 Geographic Segmentation

Geographic segmentation is a method that classifies customers based on their
province, city, or state of residence. This segmentation will help determine the
central location for product sales, advertisement focus, and primary distribution.
Because we often use raw materials found in the provinces of Bali and Nusa
Tenggara, we will concentrate production and distribution on Bali. Based on the
infographic on the interactive map of the Dinas Kependudukan dan Pencatatan Sipil
(Dukcapil), in 2023, the island of Bali will have a population of up to 4,344,544
people. Bali is also synonymous with tourism, so it is an opportunity for our
products to act as souvenirs for tourists who go to Bali. Apart from that, Bali Island
can also be an export door for our products to become better known internationally.
We will also focus our distribution on Nusa Tenggara Island, which consists
of two islands, namely West Nusa Tenggara and East Nusa Tenggara. The two
islands have a population of up to 12.6 million people. Apart from that, Nusa
Tenggara Island also has quite worrying joint problems, with a prevalence of more
than 5% of the total 25,000 samples (Riskesdas, 2018). This condition can be an
opportunity to market our products.
5.1.1.3 Psychographic Segmentation

This segmentation will group consumers based on hobbies, lifestyle, and
activities. For this reason, we are targeting consumer groups who have activities
that are heavy enough to experience joint health problems potentially. Our products
can also be a solution for consumers who want to relieve pain due to arthritis with
the active compounds in our products, such as flavonoids and glucosamine.
5.1.2 Determining Product Demand

Before we determine the production capacity, the demand for the product
must be determined. The data used in this calculation is based on Indonesia,
especially Bali and Nusa Tenggara because our product sales will be centralized to
both islands. The method used to determine the demand for our joint health
supplement is by demand-driven method which estimates the demand for the product
based on the number of people who struggle to prevent joint health issues or have
shown and suffer from joint health issues. Also, the calculation will input the
52
economy strata from Indonesian citizens due to our product price. The demand
approximation of joint health supplements in Indonesia is shown in Table 5.1 down
below.
Table 5. 1 Demand Approximation of Joint Health Supplement in Indonesia
Parameter Amount
Population of Indonesia Citizen (25-39
65,778,509.00 people
years old)
Population of Indonesia Citizen (more
99,144,442.00 people
than 39 years old)
(2% x 65,778,509.00 people)
Population of Bali and Nusa Tenggara
+ (6% x 65,778,509.00 people) =
Citizen (25-39 years old)
5,262,280.72 people
(2% x 99,144,442.00 people)
Population of Bali and Nusa Tenggara
+ (6% x 99,144,442.00 people) =
Citizen (more than 39 years old)
7,931,555.36 people
Age 25-39: 21.7% x 5,262,280.72 =
Percentage of citizen with middle to 1,141,914.92 people
high and upper income Age >39: 21.7% x 7,931,555.36 =
1,721,147.513 people
Probability Number of Product 16% x 1,141,914.92 people =
Demand (25-39 years old) 182,706.39 people
Probability Number of Product 22.9% x 1,721,147.513 people =
Demand (more than 39 years old) 394,142.781 people
The demand for our product is calculated by dividing two segments of age.
The reason is that the buying characteristics of those two segments of the age range
are different from each other. So, the calculations will be conducted in that way to
make this calculation as near as possible to the real demand we are facing. The first
calculation that we are doing is summing the population from each age range. The
data is sourced from the BPS survey in 2022.
Because we are going to centralize our product sales in Bali and Nusa
Tenggara only, the next step is multiplying the total Indonesian population by the
percentage of Indonesian citizens in both islands, which is 2% for Bali and 6% for
53
Nusa Tenggara. The next step is inputting the economic dividen from our target
market, which is middle to upper and high income only. It is known that 53.6
million (20.5%) Indonesians belong to the middle-class group and there are 3.1
million (1.2%) who fall into the upper-class category (Bank Indonesia, 2020). So,
we are multiplying 21.7% by the population number in Bali and Nusa Tenggara.
The pooled global prevalence of knee OA was 16% in individuals aged 15
and over and was 22.9% in individuals aged 40 and over (Aiyong Cui, 2020).
According to this journal based on research conducted by Aiyong Cui in 2020, the
last step that we do to get our product demand approximation is by multiplying the
percentage of OA prevalence into our last calculation. So, the final result of our
product demand is that there are 182,706.39 people from the age range under 40
and 394,142.781 people over 39 years old that can be our potential customer and
demanding our product.
5.1.3 Determining Production Capacity

Production capacity is the maximum production output that can be produced
in business with the help of available resources during a unit of time. Production
capacity can be determined after discovering the characteristics of the market. For
this assignment, we decided the maximum production for our plant is the best
number that can be produced at a given time. This step is very important due to
efficiency, utilization, production cost, size of equipment, number of raw materials,
scheduling, and many more.
Based on the market analysis and the demand approximation done by the
authors, the next step, the authors take the probability data from journals that
probability of people buying the joint health supplement to know the production
capacity. It is stated from the data that 16% of people aged 25-39 will buy the
supplement and people who are older than 39 have a probability of around 34.5 %
buying the product (Yusof et al., 2023).
It is assumed that the factory runs 20 working days per week or 260 days
per year with 1 batch process a day. In the proposed product, there are 30 gummies
in one bottle, with a weight of around 2.156 grams, therefore, one bottle would weigh
around 64.7 grams. The complete calculation is described below.
54
Table 5. 2 Production Capacity Calculation Summary
Parameter Value Unit

Market Demand 165,212.281 bottle/year
Yearly Production Capacity 10674.45795 kg/year
Daily Production Capacity 41.0556075 kg/day
Production Capacity for Each Batch 13,767.690 bottle/batch
165,212.281 bottle/year
13,767.690 bottle/batch
Unit Production Capacity 635 bottle/day
19050 gummies/day
5.2 Production Process

In this section, group TK-07 will elaborate on the production process of
HERBITES including the illustration of our product’s block flow diagram (BFD),
process flow diagram (PFD), and the description of each process. The BFD and
PFD provide a visual representation of the overall system, illustrating the major
components and their interconnections. The streams depict the flow of materials
and their properties throughout the process. By examining the BFD and analyzing
the streams, we can get a comprehensive understanding of the process flow and
identify any potential bottlenecks or optimization opportunities. This information
serves valuable tool in enhancing efficiency, ensuring smooth operation, and
achieving desired outcomes in the extraction and final process.
55
5.2.1 Flow Diagram
5.2.1.1 Glucosamine Extraction
Figure 5. 1 Block Flow Diagram for Extraction of Glucosamine

56
Figure 5. 2 Process Flow Diagram for Extraction of Glucosamine

57
5.2.1.2 Flavonoid Extraction
Figure 5. 3 Block Flow Diagram for Extraction of Flavonoid

58
Figure 5. 4 Process Flow Diagram for Extraction of Flavonoid

59
5.2.1.3 Fucoidan Extraction
Figure 5. 5 Block Flow Diagram for Extraction of Fucoidan

60
Figure 5. 6 Process Flow Diagram for Extraction of Fucoidan

61
5.2.1.4 Chewy Gummies Production
Figure 5. 7 Block Flow Diagram Manufacture of Chewy Gummy

62
Figure 5. 8 Process Flow Diagram Manufacture of Chewy Gummy

63
5.2.1.5 Overall Block Flow Diagram
Figure 5. 9 Overall Block Flow Diagram

64
5.2.2 Process Description
5.2.2.1 Glucosamine Extraction

Borassus flabellifer L seeds are peeled and then washed with water to
remove impurities. Next, the Borassus flabellifer L seeds will be ground and mixed
with NH4Cl using a blender mixer. NH4Cl will act as a solvent for the glucosamine
contained in Borassus flabellifer L seeds. Once homogeneous, the mixture was then
extracted using a closed tank at a constant temperature of 55oC for 15 minutes. Next,
the mixture will be separated from the residue using membrane press filtration so
that glucosamine is obtained as the filtrate.
5.2.2.2 Fucoidan Extraction

The sporophyll of Undaria pinnatifida were rinsed with water to eliminate
dust and dirt, followed by a drying process until reaching a constant weight at 40°C.
The dried Undaria pinnatifida was ground into a fine powder using a grinding mill
to achieve smaller particles. Continued with the extraction process by using hot
water at 80°C overnight. The resulting extract of Undaria pinnatifida underwent
centrifugation dehydration, followed by the addition of 2% CaCl2 powder to
facilitate the separation of the alginate and fucoidan extract. Finally, a freeze dryer
was employed, with the supernatant treated with 70% ethanol to achieve a final
concentration. The fucoidan yield obtained from the Undaria pinnatifida was
determined to be 13%.
5.2.2.3 Flavonoid Extraction

The fresh leaves of Moringa oleifera is cleaned out first with tape water to
remove dust and dirt. The cleaned leaves then dried in an oven at 45°C until got to
a constant weight dry mass. The dry leaves are then powdered using the grinding
mill to a particle size of about 0.5 mm. The dried powdered leaves were extracted
with 50% ethanol by maceration with (1:5) dried powdered leaves to extraction
solvent ratio at 65°C for 24 h. At the end of the maceration period, the extracts were
filtered and then concentrated by an evaporator to about 20% of its original volume.
Thereafter, the concentrated extracts were dried in a drying oven at 45°C until we
65
got a constant weight of dry mass. The flavonoid yield obtained is 4.285 gr
flavonoid/100 gr Moringa oleifera leaves.
5.2.2.4 Chewy Gummy

The process begins with mixing water, glucosamine extract, fucoidan
extract, flavonoid extract, and xylitol in a Heated Jacket Mixer Tank. 287 liters of
water are added to the mixer, and then the temperature is set to 70°C. Once the
temperature is appropriate, 8.4 kg of xylitol is slowly added to the water. In the
mixer, the speed is set low to ensure the xylitol dissolves completely and does not
clump. After the xylitol has dissolved, extract powder consisting of glucosamine,
fucoidan, and flavonoids is added. Make sure the temperature remains 70°C as this
temperature is optimal for dissolving xylitol without making it melt.
After being thoroughly mixed, the mixture is transferred into a rotary
evaporator to remove its water content. During this stage, the temperature must be
maintained below 90-96°C to prevent altering the properties of the xylitol solution.
The equipment used is a rotary evaporator employing vacuum technology to create
low pressure within the evaporation chamber. As the pressure decreases, so does
the boiling point of water. Consequently, water can be evaporated at temperatures
lower than 100°C. It is assumed that approximately 281.18 liters of water evaporate
(condensate water), leaving only about 0.08 liters of water remaining when the
mixture exits the evaporator.
After exiting the evaporator with high viscosity, the mixture enters a cooling
conveyor to gradually decrease its temperature. Once cooled, the mixture is
transferred into the High Viscosity Liquid Mixing Tank. At this stage, 6.45 kg of
pectin, 4.3 kg of orange flavor, and 0.2 kg of sodium benzoate are evenly added.
The temperature within the tank is maintained within the range of 70-80°C, and the
agitation speed is set to moderate to ensure even mixing of the ingredients without
damaging the mixture's texture. Too low agitation speed can cause clumping, while
too high speed can result in a hardened texture. Then, this gummy-based mixture is
cooled once again through a cooler conveyor with a temperature of around 40-50°C
before proceeding to the former.
At the forming stage, the gummy base mixture is molded into the desired
shapes in the Gummy Bear and Jelly Candy Making Machine. Firstly, the mixture
66
is flowed into a hopper positioned above a nozzle, which is connected to molds with
the desired gummy shapes. Subsequently, air pressure or a pump is used to push the
gummy base mixture out of the nozzle. As the gummy base mixture exits the nozzle,
gummy shapes are formed on the molds. Then, a knife moves to cut the gummy
pieces to separate them from the molds. The gummies are then released from the
molds and fall onto a conveyor to be carried to the next stage.
The final stage in gummy production is packaging, where gummy bears are
placed into bottles. A Counter Package Counting Machine is used to count and
automatically insert the gummy bears into the bottles. In HERBITES, each bottle
contains 30 gummy bears. Afterward, the HERBITES bottles are packed into boxes
using the Carton Automatic Cardboard Box Sealer Boxes Adhesive Tape Sealing
Machine for distribution.
5.2.2.5 Waste Management

Waste management at a plant refers to the management and disposal of
waste produced during each process. Based on our manufacturing process, it can be
seen from the block flow diagram, that the major of Seawalan Inc. waste, is some
impurities from the washing process of lontar seeds, kelor leaves, and Sporophyll
of Undaria pinnatifida. Other waste is water and solvent used for the extraction
process. The author assumes that all our waste can’t be transported into the next
process. Some liquid waste from the manufacturing process can undergo processing
methods, such as settling, filtration, or biological treatment to clean up liquid waste
before it is disposed of or reused. The other option is that the waste can be delivered
to a third party to be processed into useful material.
67
5.2.3 Equipment Specification

5.2.3.1 Washing Machine
The washing machine from the supplier will be used as a washer for the
lontar seeds, brown algae, and kelor leaves. The machine is produced by Zhaoqing
Tengsheng Machinery Co,. Ltd with brand name Automatic Fruit Vegetable Ginger
Tomato Carrot Bubble Washing Cleaning Machine Spinach Parsley Lettuce
Washing Machine. The following table shows the specifications of the washing
machine.
Figure 5. 10 Washing Machine

(Source: Alibaba.com, 2024)
Table 5. 3 Specification of Washing Machine
Specification Information
Automatic Fruit Vegetable Ginger Tomato Carrot Bubble
Brand Name Washing Cleaning Machine Spinach Parsley Lettuce Washing
Machine
Price US$1.000,00
Washing lontar seeds, brown algae, and Moringa oilefera leaves
Function
before use in the process
Voltage 380 Volt
Power 2.2 kW
Dimension
3 m x 1 m x 1.3 m
(L x W x H)
Capacity 2000 kg/hour
Driven Type Automatic and Electric
Supplier Zhaoqing Tengsheng Machinery Co., Ltd
(Source: Alibaba, 2024)
68
5.2.3.2 Peeling Machine

This machine functions to remove the skin of palm seeds before entering
the washing stage. We chose a machine produced by Longyao Tongruida Special
Equipment Factory with a capacity of 1000 kg/hour and requires 1500 Watts of
power. The complete specifications of the products we chose can be seen in the
following table.
Figure 5. 11 Peeling Machine

Table 5. 4 Specification of Peeling Machine
Automatic Industrial Brush Potato Washing And Peeling
Brand Name
Washer And Peeler Machine
Price US$1.300,00
Function To peel lontar seed before processing
Voltage 220V
Power 1.5kW
Dimension
1.420 m x 0.820 m x 1 m
(L x W x H)
Supplier Longyao Tongruida Special Equipment Factory
69
5.2.3.3 Blender
This machine functions to crush the raw material to make the form of
powder. The machine is produced by Xinxiang Jubao Intelligent Manufacturing
Co., Ltd. with the brand name V Type Food Powder Machine Chemical Industry
Mixer blender machine. The following table shows the specification of the blender
machine.
Figure 5. 12 Mixer Blender Machine

Table 5. 5 Specification of Blender
V Type Food Powder Machine Chemical Industry Mixer
Brand Name
blender machine
Price US$2300,00
Function Crushing raw material
Voltage 380 Volt
Power 1.5 kW
Dimension
1.4 m x 1.45 m x 2.3 m
(L x W x H)
Driven Type Semi-Automatic and Electric
Supplier Xinxiang Jubao Intelligent Manufacturing Co., Ltd.
70
5.2.3.4 Extraction Vessel

The extraction vessel is used to extract the raw material such as fucoidan
and flavonoid at a specific temperature. The machine is produced by Hinok (wuxi)
Equipment Limited with the capacity of 200 kg/h. The following table shows the
specification of the extraction vessel.
Figure 5. 13 Extraction Vessel

Table 5. 6 Extraction Vessel
Double-Layer Jacket Electric Heating Mixing Tank Liquid Mixer
Brand Name
Agitator Mixing Stainless Steel Heating 300L Mixing Tank
Price US$580,00
Function Being a media of maceration or extraction process
Voltage 220 V/380 V
Power 1.1 kWh
Dimension
0.1 m x 0.1 m x 0.1 m
(L x W x H)
Capacity 200 kg/h
Driven Type Manual and Electric
Supplier Hinok (wuxi) Equipment Limited
71
5.2.3.5 Filtration Machine

The filtration machine functions to produce soaked lontar seeds and
flavonoid filtrate. The filtration machine is produced by Xinxiang Gaofu Machinery
Co., Ltd. with the capacity of 100 kg/h. The following table are the specifications
for the filtration machine.
Figure 5. 14 Filtration Machine

Table 5. 7 Filtration Machine
Food Grade Sieve Slurry Screen Yoghurt Filter Round
Brand Name
Vibrating Separator Machine
Price US$1.079,00
Function To produce soaked lontar seeds and flavonoid filtrate
Voltage 380 Volt
Power 2 kW
Dimension
0.5 m x 0.5 m x 1.08 m
(L x W x H)
Capacity 100 kg/h
Supplier Xinxiang Gaofu Machinery Co., Ltd.
72
5.2.3.6 Tray Dryer

This machine functions to dehydrate the raw material before entering the
extraction process. The machine is produced by Foshan Dalle Technology Co., Ltd.
with the capacity of 24 tray; 35 mm gap; 200 kg/hour. The complete specifications
of the machine we chose can be seen in the following table.
Figure 5. 15 Tray Dryer

Table 5. 8 Tray Dryer
24 trays Commercial food dehydrator machine fruit and
Brand Name
vegetable industrial beef jerky dryer dehydrator fruit
Price US$225,00
Function To dehydrate raw material
Voltage 230 Volt
Power 2 kW
Dimension
0.55 m x 0.47 m x 0.89 m
(L x W x H)
Capacity 24 tray; 35 mm gap, 200 kg/hour
Driven Type Electric
Supplier Foshan Dalle Technology Co., Ltd.
73
5.2.3.7 Evaporator
An evaporator is used to reduce the water content of the mixture. The
machine is chosen specifically for its capacity because of the mixture volume that
will be processed in it. This evaporator costs US$8000 and is produced by Shanghai
Ruiyuan Machinery Co., Ltd.
Figure 5. 16 Evaporator
Table 5. 9 Evaporator
Vacuum evaporating concentrator extraction concentration
Brand Name
tank
Price US$8000
Function To concentrating mixture
Voltage 380 Volt
Power 4.5 kW
Dimension
1.1 m x 0.69 m x 0.96 m
(L x W x H)
Capacity 100-10000L/h
Supplier Shanghai Ruiyuan Machinery Co., Ltd.
74
5.2.3.8 Centrifugal Machine

The centrifugal machine is used for separating the extract of Undaria
pinnatifida with the addition of 2% CaCl2 powder. The machine is produced by
Boxinda Washing Equipment Co., Ltd. with a capacity of 50 kg. The complete
specifications of the machine can be seen in the following table.
Figure 5. 17 Centrifugal Machine

Table 5. 10 Centrifugal Machine
Factory Direct Sale Industrial Centrifugal Dehydrator
Brand Name Industrial Centrifugal Dewatering Machine Commercial
Vegetable Dehydrator
Price US$984
Function To centrifuge and separate the extracted Undaria pinnatifida
Voltage 380 Volt
Power 1.5 kW
Dimension
1.1 m x 0.69 m x 0.96 m
(L x W x H)
Capacity 50 kg
Supplier Boxinda Washing Equipment Co., Ltd.
75
5.2.3.9 Freeze Dryer

The freeze dryer is used to obtain the crude fucoidan powder from Undaria
pinnatifida. We chose a machine produced by Zhengzhou Mingyi Instrument
Equipment Co., Ltd. with the brand name Commercial Lyophilizer Dry Machine
Vacuum Price Small Capacity Freeze Dryer. The following table shows the
specifications of the freeze dryer.
Figure 5. 18 Freeze Dryer

Table 5. 11 Freeze Dryer
Commercial Lyophilizer Dry Machine Vacuum Price Small
Brand Name
Capacity Freeze Dryer
Price US$1.459,00
Function To obtain crude fucoidan powder
Voltage 220 Volt
Power 0.75 kW
Dimension
0.4 m x 0.55 m x 0.7 m
(L x W x H)
Capacity 35 kg/h
Supplier Zhengzhou Mingyi Instrument Equipment Co., Ltd
76
5.2.3.10 Mixing Machine

The mixing machine from the supplier will be used as a mixer for the water,
xylitol, and extract powder consisting of glucosamine, fucoidan, and flavonoids.
We chose a machine produced by Jinan Rainbow Machinery Co., Ltd. with the
brand name Factory Price Stainless Steel Mixing Tank Liquid Chemical Food
Blending Heated Jacket Mixer Tank with Agitator Mixing Tank. The following
table shows the specifications of the mixing machine.
Figure 5. 19 Mixing Machine

Table 5. 12 Mixing Tank
Factory Price Stainless Steel Mixing Tank Liquid Chemical
Brand Name Food Blending Heated Jacket Mixer Tank With Agitator
Mixing Tank
Price US$2300,00
Function Mixing solution
Voltage Customize
Power 2.2 kW
Dimension
2.6 m x 1.5 m x 1.5 m
(L x W x H)
Capacity 20000 L
Supplier Jinan Rainbow Machinery Co., Ltd.
77
5.2.3.11 High Viscosity Mixing

The mixing machine from the supplier will be used as a mixer for the high-
viscosity solution after evaporation. We chose a machine produced by WENZHOU
LENO MACHINERY CO., LTD. with the brand name High Viscosity Liquid
Mixing Tank with Scraper Agitator. The following table shows the specifications
of the mixing machine.
Figure 5. 20 High Viscosity Mixing

(Source : Alibaba.com, 2024)
Table 5. 13 High Viscosity Mixing
Brand Name High Viscosity Liquid Mixing Tank with Scraper Agitator
Price US$1000,00
Function Mixing high viscosity solution
Voltage Customize
Power 0.55 kW
Dimension
0.8 m x 0.9 m
(D x H)
Capacity 500 L
Supplier WENZHOU LENO MACHINERY CO., LTD.
(Source : Alibaba, 2024)
78
5.2.3.12 Cooling Conveyor

The cooling machine from the supplier will be used to cool the solution and
enhance the texture. We chose a machine produced by Dongguan Xinshen
Automation Technology Co., Ltd. with the brand name China Factory motorized
food grade cooling fan high-temperature wire mesh belt stainless steel belt
Conveyor. The following table shows the specifications of the cooling machine.
Figure 5. 21 Cooling Conveyor

Table 5. 14 Cooling Conveyor
China factory Motorized food grade cooling fan high
Brand Name
temperature wire mesh belt stainless steel belt Conveyor
Price US$260,00
Function Transport and cooled candy gummy products
Voltage 110V/220V/380V/415V
Power 0.2 kW
Dimension
1 m x 0.15 m x 0.6 m
(L x W x H)
Capacity 50kg
Driven Type Electrical
Supplier Dongguan Xinshen Automation Technology Co., Ltd.
79
5.2.3.13 Gummy Maker

The gummy maker machine from the supplier will be used for making the
gummy base mixture is molded into the desired shapes. We chose a machine
produced by Shanghai Target Industry Co., Ltd with the brand name Mini Gummy
Bear and Jelly Candy making Machine Other Snack Machine. The following table
shows the specifications of the gummy maker machine.
Figure 5. 22 Gummy Maker

Table 5. 15 Gummy Maker
50KG Mini Gummy Bear and Jelly Candy making Machine
Brand Name
Other Snack Machine
Price US$2.800,00
Function Making different sizes and colors candies
Voltage 380 Volt
Power 2.5 kW
Dimension
0.8 m x 0.8 m x 1.95 m
(L x W x H)
Capacity 30-50kg/hour
Driven Type Semi-Automatic
Supplier Shanghai Target Industry Co., Ltd.
80
5.2.3.14 Packaging Machine

The packaging machine from the supplier will be used for placing gummy
into bottles (HERBITES). We chose a machine produced by Shenyang Darui
Technology Co., Ltd with brand name production line Counter package counting
machine equipment. The following table shows the specifications of the packaging
machine.
Figure 5. 23 Packaging Machine

Table 5. 16 Gummy to Bottle Packaging Machine
Low price customized production line Counter package
Brand Name
counting machine equipment
Price US$1.999,00
Function Fill in the Gummy into Bottle Packaging
Voltage 110/220 Volt
Power 0.35 kW
Dimension
0.427 m x 0.327 m x 0.525 m
(L x W x H)
Capacity 48000 pcs/h
Supplier Shenyang Darui Technology Co., Ltd
81
5.2.3.15 Carton Folder and Packaging Machine

The carton folder and packaging machine from the supplier will be used for
placing HERBITES into boxes for distribution. We chose a machine produced by
Ausim Automation Technology (Shanghai) Co., Ltd. with brand name Carton
Automatic Cardboard Box Sealer Boxes Adhesive Tape Sealing Machine China
Factory Supply Packaging Up-down Food Packing. The following table shows the
specifications of the carton folder and packaging machine.
Figure 5. 24 Carton Folder and Packaging Machine

(Source: alibaba.com, 2024)
Table 5. 17 Carton Packaging Machine
Carton Automatic Cardboard Box Sealer Boxes Adhesive Tape
Brand Name Sealing Machine China Factory Supply Packaging Up-down Food
Packing
Price US$617.50,00
Function Carton folding and sealing
Voltage 220 Volt
Power 0.2 kWh
Dimension
1.996 m x 1.040 m x 1.394 m
(L x W x H)
Capacity -
Supplier Ausim Automation Technology (Shanghai) Co., Ltd.
82
5.2.3.16 Storage Tank

The storage tank from the supplier will be used for storing the extracted
powder before it is further processed. We chose a machine produced by Gaoyou
Yuhang Chemical Machinery Factory with a brand name High quality square
stainless steel powder storage tank jacketed. The following table shows the
specifications of the storage tank.
Figure 5. 25 Storage Tank

Table 5. 18 Storage Tank
High quality square stainless steel powder storage tank
Brand Name
jacketed
Price US$571.00,00
Function Storing extract powder
Voltage -
Power -
Dimension
0.9 m x 1.7 m
(D x H)
Capacity 50L
Driven Type Manual
Supplier Gaoyou Yuhang Chemical Machinery Factory
83
5.2.4 Mass and Energy Balance

In this section, the authors will present the mass and energy balance for
making HERBITES.
5.2.4.1 Mass Balance

The mass balance also called a material balance, is an application of the
conservation of mass to the analysis of physical systems. Mass balance refers to the
systematic accounting of the input and output of mass in a system over a specified
period, taking into account any internal changes in mass due to chemical reactions,
phase changes, or other transformations.
Mass balance is calculated based on the daily production capacity of our
manufacturing process. The mass balance equation is conducted to discover
production capability when it is associated with raw material supply and product
distribution. Using this analysis, mass flows that were unknown or hard to identify
can be measured. Moreover, the supply chain can be evaluated carefully and
accurately. The input mass is referred to as raw materials and the output mass
consists of the final product which is HERBITES Gummies. The summary of
information needed to determine the mass balance is shown in Table 4.17.
Table 5. 19 Mass Balance Calculation Basis and Information
Indication of Value Unit

Measurement
Basis 1 Day
Daily Production 41.1 kg/batch
Capacity
Number of Batch per 1 batch/day
Day
Operating time 6.4 hour
The next step is calculating the mass of each ingredient as the input of the
process. To clarify the percentage composition of each ingredient from the final
product, the specific details will be presented in a table. The percentage composition
of each ingredient is the multiplied by production capacity per day to find the mass
of each ingredient. Then, the mass balance calculation proceeded on each unit of
84
equipment. The input of the process is based on the table above. The mass loss is
assumed to be 2% in the process, except for some processes that have proven data
from scientific journals about the mass loss. The mass balance calculation is
tabulated in the table below.
Table 5. 20 Mass Balance Calculation for HERBITES Production
No Process Component Input Output (kg/batch)

(kg/batch) Product Waste
Glucosamine Extraction
1 Peeling Lontar Seeds 7.05 6.906 0.141
2 Washing Water 34.53 0 34.53
Lontar Seeds 6.91 6.767 0.138
3 Mixer Lontar Seeds 6.77 6.632 0.135
4 Soaking and Lontar Seeds 6.63 0.796 5.836
Extraction NH4Cl 4.5 M 20.29 0 20.294
5 Filtration Soaked 0.80 0.78 0.016
Lontar Seeds
85
Table 5.20 Mass Balance Calculation for HERBITES Production (cont’d)
No Process Component Input Output

(kg/batch) (kg/batch)
Product Waste
Flavonoid Extraction
1 Washing Moringa Oleifera 226.73 226.73 0
Leaves
Water 1133.66 0.00 1133.664
2 Drying Cleaned Moringa 226.73 10.88 215.850
Oleifera Leaves
3 Grinding Dried Moringa 10.88 10.56 0.326
Oleifera Leaves
4 Maceration Moringa Oleifera 10.56 10.55 0.011
Powder
Ethanol 50% 52.78 52.73 0.053
5 Filtration Solvent with MOP 63.28 52.60 10.673

Extract
6 Evaporation Filtrate 52.60 10.52 42.083
7 Drying Concentrated Filtrate 10.52 9.72 0.805
86

Fucoidan Extraction
1 Washing Sporophyll of 67.40 66.08 1.322

Undaria pinnatifida
Water 330.41 0.00 330.409

2 Drying Sporophyll of 66.08 64.79 1.296
Undaria pinnatifida
3 Milling Dried 64.79 63.49 1.296

Undaria pinnatifida
4 Extraction Water 102.71 1.12 101.585

Milled 63.49 8.09 55.398
Undaria pinnatifida
5 Centrifugation Extracted Undaria 8.09 7.93 0.159

pinnatifida
Water 1.12 0.00 1.121

2 % CaCl2 Powder 0.549 0.00 0.549
6 Freeze Dryer 70% Ethanol 1.92 0.00 1.92

Extracted Undaria 7.93 7.78 0.156
pinnatifida
87

Gummy
1 Mixing Water 287.000 281.26 5.74
Glucosamine Extract 0.78 0.78 0
Fucoidan Extract 7.78 7.78 0
Flavonoid Extract 9.72 9.72 0
Sugar (Xylitol) 8.40 8.40 0
2 Evaporation Water 281.26 0.08 281.18
Condensate Water 281.18 0.00 281.18

Glucosamine Extract 0.78 0.76 0.0152
Fucoidan Extract 7.78 7.63 0.152

Flavonoid Extract 9.72 9.53 0.1906
3 Cooling Water 0.08 0.00 0.0762

Glucosamine Extract 0.76 0.76 0

88

(kg/batch)
Product Waste
Gummy
4 Mixing Water 3.89 3.81 0.076
Glucosamine 0.76 0.76 0
Extract

Pectin 6.45 6.45 0
Orange Flavor 4.3 4.3 0
Sodium Benzoat 0.23 0.23 0
5 Cooling Water 3.81 3.81 0
Extract

Pectin 6.45 6.45 0
Sodium Benzoat 0.23 0.23 0
89

Gummy
6 Forming Water 3.81 3.81 0
Extract
Fucoidan 7.63 7.63 0
Extract
Flavonoid 9.53 9.53 0
Extract
Pectin 6.45 6.45 0
Sodium 0.23 0.23 0
Benzoat
7 Packaging Water 3.81 3.81 0
Extract
Fucoidan 7.63 7.63 0
Extract
Flavonoid 9.53 9.53 0

Extract

Pectin 6.45 6.45 0
Sodium 0.23 0.23 0
Benzoat
Raw Material Consumed (kg/day) 2569.49
Product Produced (kg/day) 41.11
Waste Produced (kg/day) 2528.38
90
5.2.4.1 Energy Balance

After determining the mass balance, the next step is to determine the energy
balance of the production process. An energy balance helps in determining the
energy needed for various activities and operations, which are essential in
estimating the overall production cost. Moreover, this is important for determining
the energy required for each process. The basis of energy consumption is taken to
be per one-day operation. The information needed to calculate the energy balance
can be obtained from various sources, including data vendors who provide
information about the energy requirements of different equipment. This information
is usually provided in tables or charts that show the power consumption of each
device. By using those data, it is possible to estimate the energy consumption of
different equipment and processes.
Energy balance can be calculated by multiplying the working time of each
piece of equipment, the power of each piece of equipment, and the amount of each
piece of equipment used in the process. The calculation is made based on the
assumption that the power stated in every equipment specification is the actual
power consumed for this process in the form of electricity. This calculation also
helps us identify areas where energy consumption can be reduced to save costs and
promote environmental sustainability. It also can help in identifying areas where
improvements can be made to increase productivity and profitability.
The source of electricity used in this plant will be PLN. In this calculation,
we conducted a literature study to find the energy loss factor for each equipment.
The efficiency of the machines industry as its power drive is more than 75%.
Therefore, we assume that all of the equipment has 75% efficiency. The assumption
is made because, in the actual process, the consumed power is not fully used
because of energy losses in the process due to inefficiency. The calculation of
energy balance is shown in the table below.
91
Table 5. 21 Energy Consumption Calculation
No Equipment Number of Operation Power Energy Energy Supplied

Equipment Time (kW) Requiremen Losses Energy
(hour) t (kWh) (kWh) (kWh)
1 Peeling Machine 1 0.083 1.500 0.125 0.031 0.156

(Lontar)
2 Washing Machine 1 1.083 2.200 2.383 0.596 2.979

(Lontar+Kelor+Sea
weed)
3 Mixer Blender 1 0.083 1.500 0.125 0.031 0.156

(Lontar)
4 Soaking and 1 0.167 1.100 0.183 0.046 0.229
Extraction (Lontar)
5 Filtration (Lontar) 1 0.083 2.000 0.167 0.042 0.208
6 Washing Machine - - - - -
(Seaweed)
7 Tray Dryer 1 0.333 2.000 0.667 0.167 0.833

(Seaweed)
8 Mixer Blender 1 0.167 1.500 0.250 0.063 0.313
(Seaweed)
9 Extraction Vessel 1 7.000 1.100 7.700 1.925 9.625
(Seaweed)
10 Centrifugation 1 0.250 1.500 0.375 0.094 0.469

(Seaweed)
11 Freeze Dryer 1 0.333 0.750 0.250 0.063 0.313
(Seaweed)
12 Washing Machine 0 - - - - -
(Kelor)
13 Tray Dryer(Kelor) 1 1.167 2.000 2.333 0.583 2.917
14 Mixer Blender 1 0.083 1.500 0.125 0.031 0.156

(Kelor)
15 Maceration (Kelor) 1 24.000 1.100 26.400 6.600 33.000
16 Filtration (Kelor) 1 1.167 2.000 2.333 0.583 2.917
92
Table 5.21 Energy Consumption Calculation (cont’d)

Equipment Time (kW) Requirement Losses Energy
(hour) (kWh) (kWh) (kWh)
17 Evaporator 1 0.167 4.500 0.750 0.188 0.938

(Kelor)
18 Tray Dryer 1 0.250 4.000 1.000 0.250 1.250

(Kelor)
19 Heated 1 0.083 2.200 0.183 0.046 0.229

Jacked
Mixer
(Gummy)
20 Evaporator - - - - - -
(Gummy)
21 Cooling 1 0.583 0.200 0.117 0.029 0.146

Conveyor
(Gummy)
22 High 1 0.083 0.550 0.046 0.011 0.057

Viscosity
Liquid
Mixing Tank
(Gummy)
93
Table 5.21 Energy Consumption Calculation (cont’d)

Equipment Time (kW) Requirement Losses Energy
(hour) (kWh) (kWh) (kWh)
23 Cooling 1 0.833 0.200 0.167 0.042 0.208
Conveyor
(Gummy)
24 Forming 1 0.833 2.500 2.083 0.521 2.604
Gummy
Candy
Machine
(Gummy)
25 Candy 1 0.417 0.350 0.146 0.036 0.182
Gummy
Counting
Machine
(pcs/hour)
26 Carton 1 0.583 0.200 0.117 0.029 0.146
Folder
Packaging
Making
Total 23 39.833 36.450 48.025 12.006 60.031
94
5.2.5 Manufacture Performance

A manufacturing process performance is a measure of how well it is
operated. Mass balance, energy consumption calculations, and plant scheduling all
offer the data needed to determine performance.
5.2.5.1 Manufacture Productivity

Productivity is the value of the ratio between the final goods output and raw
material input of a process. This value is used to measure how well the company
uses its resources. The productivity calculation can be done by dividing the final
product generated and the raw material use based on mass balance. The calculation
is shown below.
𝑂𝑢𝑡𝑝𝑢𝑡
𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = = 0.01599
𝐼𝑛𝑝𝑢𝑡
Based on the calculation, it can be concluded that the productivity value is
0.01599 or 1.5%. The rest of the percentage is the amount of loss in mass which is
solvent from various processes.
5.2.5.2 Energy Utilization

Energy utilization refers to the measure of energy required to generate a
specific product. It involves dividing the total energy consumption by the quantity
of final goods produced in a particular batch. The output product is the addition of
the number of our products that are being produced, which is 635 bottles per day,
or 19.050 gummies per day (30 gummies per bottle)
𝐸𝑛𝑒𝑟𝑔𝑦 𝐶𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 48.025 𝑘𝑊ℎ
𝐸𝑛𝑒𝑟𝑔𝑦 𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 = =
𝑂𝑢𝑡𝑝𝑢𝑡 𝑃𝑟𝑜𝑑𝑢𝑐𝑡 635 𝑏𝑜𝑡𝑡𝑙𝑒/𝑏𝑎𝑡𝑐ℎ
Based on the calculation, it can be concluded that to produce one unit,
0.07557 kWh/bottle or 0.00251 kWh/gummy of electricity is needed.
5.2.6 Plant Scheduling

Plant scheduling is the process of arranging and controlling the process’s
time to optimize work and workloads in a manufacturing process. It is made to
count the operational processes of product manufacturing. Plant scheduling also can
be useful to determine the effectiveness of the process. Moreover, it also can help
reduce wasted time and energy. With the existence of plant scheduling, it is
95
expected that the process can run smoothly so that the plant can produce the
products according to the target production capacity.
HERBITES’s product manufacturing process is carried out as much as 1
batch per day. The process is divided into four main processes. The total process
operation time is 16 hours. However, this 16 hour is included in the time for doing
the extraction of fucoidan and not included the extraction of flavonoid (as it requires
around 24 hours to do the maceration process). Therefore, the workers will work
from 07.00 with 3 shifts in the time frame of 8 hours each day.
5.2.7 Plant Location and Layout
5.2.7.1 Plant Location

HERBITES plant location will be located on Jalan Raya Denpasar-
Gilimanuk, which is one of the main roads on the island of Bali. The land has a size
of around 260 m x 38 m. However, to support this plant, only 65 m x 38 m would
be used. This area provides safe manufacturing activities such as electricity, water,
human resources, access roads, and port access. The price of the land is quite
reasonable, it reaches Rp 400.000 per square metric
(https://www.olx.co.id/item/tanah-1-hektar-pinggir-jalan-utama-negara
pengambengan-iid-898015259 accessed May 5th, 2024). We assume that we will
rent the land, so the calculation of the land price will be based on a CAP rate that
can be calculated from the capitalization rate of the property. For the capitalization
rate of vacant land, the value is below the capitalization rate of houses, around 3%
(Aesia, 2023). This 2470 m2 area can be seen in Figure 5.26 below.
96
Figure 5. 26 Plant Location on Jalan Raya Denpasar-Gilimanuk
(Source: Google Maps, 2024)
Figure 5. 27 The Plot of the Land for the Plant Location
(Source: OLX, 2024)

First of all, this area is not an industrial complex, so the first step is to take
care of the registration and permit to build a plant here, also considering the effect
on social communities. The plant will not disturb the people who live around there,
and it will be easier to gain the plant permit and bargain with people surrounding
our plant. The location plant is also strategic because it is adjacent to the main roach
which will support easier access.
97
Secondly, the location is profoundly near to our marketing target, Bali and
Nusa Tenggara island. Without additional effort, the product can be delivered to the
plant surrounding. The location itself has direct access to Gilimanuk Port and Bali’s
Ngurah Rai International Airport. It is around 33.9 km apart or can be reached in
45 minutes to Gilimanuk Port. And around 106 km or around 2 hours and 49
minutes to Bali’s Ngurah Rai International Airport. It is an advantage because it
will be easy to distribute the product to other places by plane or ship, so we do not
need to worry about the accessibility to raw supply and market.
Figure 5. 28 Route Estimation for Raw Materials and Products
A) Transport to Gilimanuk Port and B) Transport to Ngurah Rai International Airport

(Source: Google Maps, 2024)
Other than that, selecting a location in an industrial area means that the
electrical and water facilities are guaranteed, so our plant will not have any
electrical issues with production. Lastly, professional human resources are the main
elements to monitor the entire system of the plant in ensuring production and
maintenance checks. As the location nears the local community, it can absorb
human resources from the surrounding area. If the hired labor is living near the plant
location, it will reduce costs to provide the labor with living or commuting facilities.
5.2.7.2 Plant Layout

Plant layout is defined as the technique of locating machines, processes, and
plant services within the factory to achieve the greatest possible output of high
quality at the lowest possible total cost of manufacturing. The plant layout was
made as a form of arrangement and detailed information about the planning and
layout of rooms and facilities in a plant. The main purpose of making a detailed
98
plant layout is to verify the availability of the proposed location in containing the
required space and equipment.
The factory is rectangular in shape with a length of 65 m and a width of 38
m, giving a total area of 2470 m2. The area includes roads, parking, main building,
and other utilities. In this plant, there will be the main building that consists of office
activity, production activity, mixing activity, packaging activity, research, and
development activity, and also storage for raw materials, finished products, as well
as rejected products. The finished layout that we made can be seen in Figure 5.4
below, and the list of room areas is listed down below
Table 5. 22 List of Rooms in the Plant
Section Length Width Area
Non Building Area

Security Post 1 3 3 9
Security Post 1 3 3 9
Parking Area 10 5 50
Green Area 12 11 132
Unloading Zone 5 10 50
Loading Zone 5 10 50
Total 300
99
Table 5.22 List of Rooms in the Plant (cont’d)

Building Area
Cafeteria 5 4 20
Break Room 5 4 20
Praying Room 5 3 15
Toilet 1 6 3 18
Function Hall 6 8 48
Medical Room 6 2 12
Locker Room 3 3 9
Office Main 6 3 18
Lobby
Toilet 2 3 3 9
RnD Laboratory 6 4 24
Office Room 5 8 40
Meeting Room 1 4 4 16
Meeting Room 2 3 4 12
Raw Material 5 8 40
Storage
Peeling and 5 2 10
Washing
Mixing 1 3 3 9
Drying 1 3 3 9
Maceration Room 8 7 56
Filtration Room 3 4 12
Evaporator 5 3 15
Drying 2 3 3 9
Maintenance 3 3 9
Room
Centrigugation 3 3 9
100
Table 5.22 List of Rooms in the Plant (cont’d)

Building Area
Freeze Dryer 3 3 9
Change Room 3 3 9
Toilet 3 4 3 12
Waste Treatment 5 4 20
Storage 3 3 9
Quality Control 3 3 9
Room 1
Mixing 2 3 3 9
Cooling 1 3 3 9
Mixing 3 3 3 9
Cooling 2 3 3 9
Forming 3 3 9
Packaging 3 6 18
Quality Control 3 3 9
Room 2
Rejected Product 4 4 16
Storage
Product Storage 8 4 32
Waste Treatment 5 4 20
Total 647
101
Figure 5. 29 Plant Layout
CHAPTER 6
SUPPLY CHAIN
6.1 Supply Chain Management

Supply chain management involves planning and overseeing all activities
related to sourcing and procurement, production, and logistics. It requires working
closely with different partners like suppliers, intermediaries, third-party service
providers, and customers. Essentially, it's about managing the flow of goods and
services within and between businesses.
The significance of supply chain management lies in its ability to help achieve
various organizational goals. For example, controlling manufacturing processes
effectively can improve product quality, reduce the risk of recalls and legal issues,
and build a strong consumer brand. Similarly, managing shipping methods
efficiently can enhance customer service by avoiding costly shortages or holding
excess inventory. Overall, supply chain management helps businesses increase their
profitability in various ways, especially for larger companies with operations in
multiple countries. When deciding on supply chain management strategies,
companies must consider and coordinate decisions across five key areas:
a. Production
Production is the supply chain's capability to create and maintain goods,
covering different sites such as factories and warehouses. A sufficient capacity in
the supply chain allows it to effectively adjust to shifting demands. Moreover,
aspects like how work is divided, ensuring high quality, and maintaining
equipment must be considered when planning a master production schedule. It is
crucial to decide on appropriate storage solutions, whether centralizing all
products in a single location or utilizing an off-site facility.
b. Inventory
Determining the right amount of inventory to keep at every stage of the
supply chain, including materials and products stored in facilities and the storage
facilities themselves, is vital. The key factor to consider is that while large storage
spaces can handle changes in demand well, they also come with high operating
expenses.

103
c. Location
Location refers to where supply chain facilities are situated physically. It's
important to evaluate the cost-effectiveness of deciding where to put production
and storage spaces. Should these facilities be concentrated in certain areas or
spread out for better coverage? This choice greatly affects how materials and
products move through the supply chain.
d. Transportation
Transportation involves the movement of inventory from one location
within the supply chain to another. This can be achieved through various means,
such as utilizing fast, yet expensive flights provided by a shipping service, opting
for a more cost-effective shipping service that takes a bit longer, or exploring
alternative shipping options. When considering transportation, it is important to
consider the operational and maintenance costs associated with each system.
e. Information
Information management involves figuring out how much data to collect
and how much information to share within the supply chain. Having accurate
information available is crucial for better coordination and decision-making.
When people have reliable information, they can make informed decisions about
planning production, deciding quantities, choosing the best locations, and
selecting the right transportation methods.
6.2 Plant Location
6.2.1 Plant Accessibility

Plant accessibility is an essential factor in establishing a plant. An ideal
plant must have good transportation access to facilitate the supply chain for
raw materials and products. This geographic shape supports minimizing the
impact of natural disasters and accessibility to supporting utilities such as
water, electricity, and telecommunication signals.
The factory is located on Jalan Raya Denpasar-Gilimanuk, which is one
of the main roads on the island of Bali. This road connects Denpasar City with
Gilimanuk Harbor in Jembrana Regency. The factory location is 33 km from
104
Gilimanuk Harbor and has a travel time of 1 hour using a four-wheeled vehicle.
Because the factory location is close to the main road, it can be passed by heavy
vehicles, including trucks that deliver products and raw materials. For air
access, the plant location is 105 km from I Gusti Ngurah Rai Airport at Badung
Regency and can be reached in 2 hours and 30 minutes based on Google Maps
calculations. With that, the accessibility of the plant facilitates the distribution
chain for products or raw materials from the factory to the factory.
Based on the map, the plant location is 10 km from the nearest beach, so
it is included in the tsunami-safe zone. Apart from that, the plant is located in
an open field, so there is no risk of landslides. For volcanic risks, the plant
location is 10 km from the foot of Mount Merbuk, which is one of the inactive
volcanoes at Jembrana Regency. The closest active volcano to the plant
location is Mount Agung, which is 143 km from the plant location, so the
factory location has a low risk of volcanoes. The factory location also has
access to water, electricity, and telecommunication signals, so there are no
problems with supporting the utilization.
6.2.2 Location Facility

Location facilities provide an overview regarding accessibility to
supporting utilities such as water, electricity, and telecommunications. Water
supply is an essential aspect of the continuity of the process. Many factory
processes involve using clean water, such as washing or extraction. Apart from
that, water supply is also needed to support plant facilities such as sanitation
needs. Since our plants mostly run automatically, electricity is needed as a
power supply to run the factory. According to the Government of Jembrana
Regency website, Jembrana Regency is supported by an electricity network
sourced from 5 main electricity networks, one of which comes from the
Gilimanuk PLTG, which is 32 km from the plant location and is capable of
producing up to 145 MW. Apart from that, the plant is located in Negara
Subdistrict, which has the most electricity substations in Jembrana Regency,
thus ensuring that the electricity supply is maintained. Jembrana Regency also
has a good signal network with 81 telecommunications towers and 158 BTS
towers and has entered the operational area for eight telecommunications
105
operators. This facility ensures that the signal and communication network at
Jembrana Regency can run very well.
6.2.3 Site Economics

When considering the economics of a site, there are three factors to
consider: the cost of establishment, the operational cost, and the cost of
distribution. Establishment cost refers to the expenses and assets required to set
up a production plant, including the cost of purchasing land or renting the land.
On the other hand, operational cost refers to the cost incurred because of the
carrier of the daily business. Cost includes the lease rate, tax bill, electricity
bill, water bill, equipment installation cost, and others. The total investment
cost is very important because it determines the number of investments the
authors have to make in the beginning. Lastly, distribution cost refers to the
expenses associated with delivering products from the plant to customers.
For the establishment cost, our plant located on Jalan Raya Denpasar-
Gilimanuk, with a rent price is Rp.400,000 per square metric. Our plant size is
38 m x 65 m = 2,470 square meters, so we need in total of Rp.988.000.000,00
for the establishment cost (rent price of the land used). This price is categorized
as very affordable, and this is possible because our site location is not in the
head or heart of Bali Province, also it is a former rice field. For the operational
cost, our factory location has easy access to water, electricity, and
telecommunication signals, so there are no problems with supporting the
utilization, which means that we can use the water and electricity supply
companies without the need to make our unit of water supply and electricity.
The cost of water supply from PAM is IDR 16,000/cubic meters for Chemical,
Medicine, and Cosmetics Plant and the cost of electricity from PLN is
Rp1,444.70 per kWh. Last, our plant also has a good line for distribution
matter, that is 1 hour for water transportation and 2.5 hours nearest the ground
line.
106
6.3 Raw Material
6.3.1 Raw Material Supply and Location

Managing the supply of raw materials is important for planning the
product’s manufacturing process, starting from the upstream to the internal
supply chain management. The raw material should be good quality, reachable,
easy to process and manufacture, and have a reasonable price to result in a
cheap high-quality product. Moreover, it is important to consider the supplier’s
location so that the material delivery will be cheaper and arrive faster if the
location is closer to the manufacturing plant.
It is also necessary to select at least two suppliers to meet the needs of
raw materials from the factory. The reason is if the first supplier is constrained
in meeting the needs of these raw materials, the second supplier can become a
reserve to meet the needs of these raw materials, or in another case, the first
supplier cannot fulfill some of the raw material needs. Proper supplier planning
serves to maintain the availability of raw materials in the factory to continue
the production process.
Raw materials needed for HERBITES are glucosamine extract from
lontar seeds, flavonoid extract from kelor leaves, fucoidan extract from brown
algae, xylitol, pectin, orange flavoring, water, and sodium benzoate. Moreover,
there are also some solvents used for the extraction process, such as NH4Cl,
water, CaCl2, and ethanol. Raw materials used to pack the HERBITES joint
supplement are plastic bottles (primary packaging) with box-shaped carton
boxes (secondary packaging). The supplier for all of the raw materials and the
comparison between suppliers are listed in the table below.
107
Table 6. 1 Raw Material Supplier A

Raw Supplier A Min
Materi Order
al Location Distance Supplier Travel Material U Transportat Price Unit Amo Unit Price U (kg)
(km) Company Time Needed n ion Fee/unit unt ni
(day) i (IDR/kg) t
t
Lontar Kabupaten 83 Den Bagus 1 14.1 k Rp1,500 Rp20,000 pack 1.8 kg/pack Rp11, k 1.8
Seeds Buleleng, g 111 g
Bali
Dried Sangsit, 97 Macro 1 134.80 k Rp1,500 Rp3,500 pack 50 kg/pack Rp70 k 50
Brown Sawan, Seaweed g g
Algae Buleleng
Regency,
Bali
81117
Kelor Kabupaten 83 Bagus 1 453.46 k Rp1,500 Rp6,000 pack 1 kg/pack Rp6,0 k 1
Leaves Buleleng, Sumertana g 00 g
Bali
Xylitol Badung, 83 Delta 1 16.80 k Rp1,500 Rp123 gram 1 g/pack Rp12 k 25
Bali, Laboratori g 3,000 g
Indonesia um
Pectin Surabaya, 331 Locavore 1 12.90 k Rp5,500 Rp29,000 pack 0.1 kg/pack Rp29 k 0.1
Indonesia Groceries g 0,000 g
Orange Surabaya, 331 Tobaking 1 8.60 k Rp5,500 Rp97,900 pack 1 kg/pack Rp97, k 1
Flavour Indonesia Murah g 900 g
ing Online
108
Table 6.1 Raw Material Supplier A (cont’d)

Raw Supplier A Min
Material Order
Location Dist Supplier Trav Material U Transportation Price Unit Amo Unit Price U
(kg)
anc Company el Needed n Fee/unit unt n
e Time i (IDR/kg) i
(km (day) t t
)
Sodium Surabaya, 331 Gudang Kimia 1 0.46 k Rp5,500 Rp19,000 gram 0.5 g/pack Rp38,00 k 1
Benzoat Indonesia Surabaya g 0 g
NH4Cl New Delhi, 853 Advance in 4 40.58 k Rp150,000 Rp115,050 pack 25 kg/pack Rp4,602 k 25
4.5 M India 2 Organic g g
2% Surabaya, 333 Nusa Indah 1 1.0980 k Rp5,500 Rp4,000 pack 25 kg/pack Rp160 k 1
CaCl2 Indonesia Mega g g
Powder
50% Denpasar, 96 ONEMED 1 105.5600 k Rp1,500 Rp40,000 pack 1 kg/pack Rp40,00 k 1
Ethanol Bali g 0 g
70% Denpasar, 96 ONEMED 1 4 k Rp1,500 Rp40,000 pack 1 kg/pack Rp40,00 k 1
Ethanol Bali g 0 g
Plastic Surabaya, 333 Botol Kahara 2 1270 p Rp5,500 Rp1,700 pcs 0.03 kg/bottle Rp1,700 p 5 pcs
Bottle Indonesia c c
s s
Paper Surabaya, 333 CV Prima 2 1,270 p Rp5,500 Rp123 pcs 0.03 kg/paper Rp123 p 1000 pcs
Box Indonesia Print c c
s s
Cardboar Surabaya, 333 PaperChocola 2 64 p Rp5,500 Rp1,250 pcs 0.3 kg/box Rp1,275 p 1 pcs
d box Indonesia c c
s s
(Source: Personal Data, 2024
109
Table 6. 2 Raw Material Supplier B

Raw Supplier B Min Order (kg)
Materi
Location Dista Supplier Travel Materi U Transport Price Uni Am Unit Price Unit
al
nce Company Time al n ation t oun
(km) (day) Needed i Fee/unit t
t (IDR/kg)
Lontar Kabupaten 160 Saefulloh 1 14.1 k Rp1,750 Rp25,000 pac 1.8 kg/pack Rp13,889 kg 1.8
Seeds Karangasem g k
Dried Kabupaten 223 PT. 1 134.80 k Rp1,750 Rp2,250 pac 25 kg/pack Rp90 kg 25
Brown Lombok RAZINDO g k
Algae Barat GLOBAL
NUSANT
ARA
Kelor Noelbaki, 1,709 Kebun 2 453.46 k Rp4,000 Rp5,000 pac Rp1 kg/pack Rp5,000 kg 1
Leaves Kec. Kupang Kelor g k
Tengah, Noelbaki
NTT
Xylitol Surabaya, 331 Mrsorgani 1 16.80 k Rp5,500 Rp189,900 pac 0.45 kg/pack Rp418,282 kg 0.454
Indonesia csurabaya g k 4
Pectin Surabaya, 331 Sobat 1 12.90 k Rp5,500 Rp25,000 pac 0.1 kg/pack Rp250,000 kg 0.1
Indonesia Kimia g k
110
Table 6.2 Raw Material Supplier B (cont’d)

Raw Supplier B Min
Materi Order
Location Dista Supplier Trav Materi U Transport Price U Amoun Unit Price Unit
al (kg)
nce Company el al n ation n t
(km) Time Needed i Fee/unit i
(day) t (IDR/kg) t
p
Orange
Gresik, Mohler_Indo k Rp11,5 a
Flavour 346 1 8.60 Rp7,800 0.1 kg/pack Rp115,000 kg 0.1
Indonesia nesia g 00 c
ing
k
g
Sodium
Kabupaten k Rp37,5 r
Benzoa 302 Soghiemart 1 0.46 Rp5,500 0.5 kg/pack Rp75,000 kg 1
Sidoarjo g 00 a
t
m
p
NH4Cl 5413. EVERCHE k Rp1,75 a
China 4 40.58 Rp150,000 1000 kg/pack Rp1,757 kg 1000
4.5 M 15 MICAL g 7,250 c
k
p
2% Tangerang
PT. Darnait k Rp1,23 a
CaCl2 Selatan, 1,134 4 1.0980 Rp7,500 25 kg/pack Rp49 kg 350
Esa Artha g 4 c
Powder Indonesia
k
p
70% Surabaya, k Rp145, a
333 ONEMED 2 4 Rp5,500 5 kg/pack Rp29,000 kg 5
Ethanol Indonesia g 000 c
k
111
Table 6.2 Raw Material Supplier B (cont’d)

Raw Supplier B Min
Materi Order
Location Dista Supplier Trav Materi U Transport Price U Amount Unit Price Unit
al (kg)
nce Company el al n ation n
(km) Time Needed i Fee/unit i
(day) t (IDR/kg) t
p
50% Surabaya, k Rp145, a kg/pa
333 ONEMED 2 106 Rp5,500 5 Rp29,000 kg 5
Ethanol Indonesia g 000 c ck
k
p p
Plastic Surabaya, OmegaBotol Rp1,80 kg/bo
333 2 1270 c Rp5,500 c 0.03 Rp1,800 pcs 10 pcs
Bottle Indonesia Plastik 0 ttle
s s
PT. Excel p p
Paper Surabaya, kg/pa
333 Media 2 1,270 c Rp5,500 Rp123 c 0.03 Rp123 pcs 1 pcs
Box Indonesia per
Indonesia s s
p p
Cardbo Surabaya, Sinar Terang Rp1,45 kg/bo
333 2 64 c Rp5,500 c 0.3 Rp1,450 pcs 1 pcs
ard box Indonesia Box 0 x
s s
112
6.3.2 Order Capacity

After obtaining supplier data on raw materials required for production,
the next step is to estimate the order capacity and determine the total quantity
of materials requested after the suppliers for the raw materials have been
chosen in the previous section. The minimum quantity to order for each
material from each supplier, how long it would take to deliver each material,
and the delivery cost should all be known by the manufacturer before
determining the total amount of raw materials that must be ordered. Two types
of suppliers are obtained, all raw materials are ordered from supplier A who is
the main supplier of raw materials. A list of supplier B is used as a backup if
supplier A has problems such as shortages and/or other forces major.
For this production process, we calculate the raw materials needed for
one year of production, which has 130 days of operating plant. Order
scheduling is important to maintain the raw materials inventory so that it does
not run out as it decreases over time. As the manufacturer, we should prepare
and order a large number of raw materials for the first order in the first year so
that it has raw material excesses in the first order of the production process,
which is known as safety inventory. We assume that the amount of safety
inventory is 10% larger than the normal order quantity of each material. This
safety inventory would help make sure that the plant is still running even if
there is something bad and unpredictable occurring. The number of orders in a
year is adjusted to the number of items in one order. Moreover, to save the raw
material storage space so that it will not be too full, we decided to make the
ordering time different for each material.
The table below shows the raw material prices per base, the needed
amount for production each year, the number of orders or purchases each year,
and the required amount for safety inventory, followed by the detailed
scheduling order of raw material supply.
113
Table 6. 3 Minimum Order for Supplier A and B
Supplier Company Minimum Order

Raw Material Material
Unit
Material Needed/Day Needed/Year
Supplier A Supplier B Supplier A Supplier B
Lontar Seeds Den Bagus Saefulloh 14.1 1833 1.8 1.8 kg
PT. RAZINDO
Dried Brown
Macro Seaweed GLOBAL 134.8 17524 50 25 kg
Algae
NUSANTARA
Kebun Kelor
Kelor Leaves Bagus Sumertana 453.46 58949.8 1 1 kg
Noelbaki
Xylitol Delta Laboratorium Mrsorganicsurabaya 16.8 2184 25 0.454 kg

Pectin Locavore Groceries Sobat Kimia 12.9 1677 0.1 0.1 kg
Orange Tobaking Murah
Mohler_Indonesia 8.6 1118 1 0.1 kg
Flavouring Online
Sodium Gudang Kimia
Soghiemart 0.46 59.8 1 1 kg
Benzoat Surabaya
NH4Cl 4.5 M Advance in Organic EVERCHEMICAL 40.58 5275.4 25 1000 kg
2 % CaCl2 PT. Darnait Esa

Nusa Indah Mega 1.098 142.74 1 350 kg
Powder Artha
114
Table 6.3 Minimum Order for Supplier A and B (cont’d)
Supplier Company Minimum Order

Raw Material Material
Unit
Material Needed/Day Needed/Year
Supplier A Supplier B Supplier A Supplier B
50% Ethanol ONEMED ONEMED 105.56 13722.8 1 5 kg

Plastic Bottle Botol Kahara OmegaBotolPlastik 1270 165100 5 10 pcs
Paper Box CV Prima Print PT. Excel Media 1270 165100 1000 1 pcs
Indonesia
Cardboard PaperChocola Sinar Terang Box 64 8320 1 1 pcs
box
115
Table 6. 4 Material Covered and Quantity of Order from Supplier A and B
Price/pack Material Covered Order/Year

Raw Material
Supplier A Supplier B Supplier A Supplier B Supplier A Supplier B
Lontar Seeds 20000 25000 1833 0 26 -

Dried Brown Algae 3500 2250 17524 0 26 -
Kelor Leaves 6000 5000 58949.8 0 26 -
Xylitol 123 189900 2184 0 2 -
Pectin 29000 25000 1677 0 2 -
Orange Flavouring 97900 11500 1118 0 1 -
Sodium Benzoat 19000 37500 59.8 0 1 -
NH4Cl 4.5 M 115050 1757250 5275.4 0 5 -
2 % CaCl2 Powder 4000 1234 142.74 0 1 -
50% Ethanol 40000 145000 13722.8 0 7 -
70% Ethanol 40000 145000 249.6000005 249.5999995 1 1
Plastic Bottle 1700 1800 165100 0 2 -
Paper Box 123 123 77550 87550 1 1
Cardboard box 1250 1450 8320 0 2 -

116
Table 6. 5 Total Raw Material and Delivery Cost
Minimum Safety Inventory

Pack per Order (pack) Amount Material per Order (kg) First Time Ordered from (kg)
(kg)
Raw Material
Supplier A Supplier B Supplier A Supplier B Supplier A Supplier B Supplier A Supplier B
Lontar Seeds 39.16666667 0 70.5 0 14.1 77.55 0

Dried Brown
13.48 0 674 0 134.8 741.4 0
Algae
Kelor Leaves 2267.3 0 2267.3 0 453.46 2494.03 0
Xylitol 1092 0 1092 0 218.4 1201.2 0
Pectin 8385 0 838.5 0 167.7 922.35 0
Orange Flavouring 1118 0 1118 0 223.6 1229.8 0
Sodium Benzoat 119.6 0 59.8 0 11.96 65.78 0
NH4Cl 4.5 M 42.2032 0 1055.08 0 211.016 1160.588 0

2 % CaCl2 Powder 5.7096 0 142.74 0 28.548 157.014 0
50% Ethanol 1960.4 0 1960.4 0 392.08 2156.44 0
70% Ethanol 249.6000005 49.9199999 249.6000005 249.5999995 99.84 274.5600006 49.9199999
Plastic Bottle 165100 0 82550 0 16510 90805 0
Paper Box 77550 87550 77550 87550 33020 85305 87550
Cardboard box 8320 0 4160 0 832 4576 0
117
6.3.3 Raw Material Inventory

The number of raw materials in the warehouse will decrease every day
due to the production process that runs every day. Also, each raw material has
a different amount, so it is important to record the amount of raw material each
week to monitor the amount of raw material inventory. For those reasons, to
ensure that the production process runs smoothly, inventory control and
inventory scheduling are needed, especially for raw materials that come outside
Bali and Nusa Tenggara, which require a longer delivery time.
The raw material quantities are decreasing by the time of the
manufacturing process; hence, the manufacturer should maintain an adequate
inventory of raw material availability. For that reason, the manufacturer should
provide large storage as the inventory helps the supply chain to respond to
fluctuating customer demand and will support it if there are unexpected
problems with shipping. The problem is that the manufacturer should keep the
cost of inventory effectively. To solve this problem, the inventory of raw
materials is decided by the fixed order quantity method in the raw material
order capacity section, and conditions are presented in Figures 1.1 and 1.2
below. There is also the scheduling time for the delivery of raw materials by
suppliers.
118
Raw Material End-Day Stock per Year

3000
Amount Raw Material
A
2500
B
2000
C
1500
D
1000 E
500 F
0 G
H
Days I
Figure 6. 1 Raw Material End-Day Stock per Year
Packaging End-Day Stock per Year

200,000
Amount Packaging
150,000
100,000 L
M
50,000 N
0
5 15 25 35 45 55 65 75 85 95 105 115 125
Days
Figure 6. 2 Packaging End-Day Stock per Year

119
Table 6. 6 Raw Material End-Day Stock
Raw Material-End Day Stock

Month Days
A B C D E F G H I J K
5 77.55 741.4 2494.03 1201.2 922.35 1229.8 65.78 1160.588 157.014 2156.44 324.48
10 77.55 741.4 2494.03 1117.2 857.85 1186.8 63.48 957.688 151.524 1628.64 305.28
JAN
15 77.55 741.4 2494.03 1033.2 793.35 1143.8 61.18 754.788 146.034 1100.84 286.08
20 77.55 741.4 2494.03 949.2 728.85 1100.8 58.88 551.888 140.544 573.04 266.88
25 77.55 741.4 2494.03 865.2 664.35 1057.8 56.58 1404.068 135.054 2005.64 247.68
30 77.55 741.4 2494.03 781.2 599.85 1014.8 54.28 1201.168 129.564 1477.84 228.48
FEB
35 77.55 741.4 2494.03 697.2 535.35 971.8 51.98 998.cH268 124.074 950.04 209.28
40 77.55 741.4 2494.03 613.2 470.85 928.8 49.68 795.368 118.584 422.24 190.08
45 77.55 741.4 2494.03 529.2 406.35 885.8 47.38 1647.548 113.094 1854.84 170.88
50 77.55 741.4 2494.03 445.2 341.85 842.8 45.08 1444.648 107.604 1327.04 151.68
MAR 55 77.55 741.4 2494.03 361.2 277.35 799.8 42.78 1241.748 102.114 799.24 132.48
60 77.55 741.4 2494.03 277.2 212.85 756.8 40.48 1038.848 96.624 271.44 113.28
65 77.55 741.4 2494.03 193.2 148.35 713.8 38.18 835.948 91.134 1704.04 94.08
120
Table 6.6 Raw Material End-Day Stock (cont’d)
Raw Material-End Day Stock

Month Days
A B C D E F G H I J K
70 77.55 741.4 2494.03 1201.2 922.35 670.8 35.88 1688.128 85.644 1176.24 574.08
75 77.55 741.4 2494.03 1117.2 857.85 627.8 33.58 1485.228 80.154 648.44 554.88
APR
80 77.55 741.4 2494.03 1033.2 793.35 584.8 31.28 1282.328 74.664 120.64 535.68
85 77.55 741.4 2494.03 949.2 728.85 541.8 28.98 1079.428 69.174 1553.24 516.48
90 77.55 741.4 2494.03 865.2 664.35 498.8 26.68 1931.608 63.684 1025.44 497.28
95 77.55 741.4 2494.03 781.2 599.85 455.8 24.38 1728.708 58.194 497.64 478.08
MAY
100 77.55 741.4 2494.03 697.2 535.35 412.8 22.08 1525.808 52.704 1930.24 458.88
105 77.55 741.4 2494.03 613.2 470.85 369.8 19.78 1322.908 47.214 1402.44 439.68
110 77.55 741.4 2494.03 529.2 406.35 326.8 17.48 1120.008 41.724 874.64 420.48
115 77.55 741.4 2494.03 445.2 341.85 283.8 15.18 917.108 36.234 346.84 401.28
JUN 120 77.55 741.4 2494.03 361.2 277.35 240.8 12.88 714.208 30.744 1779.44 382.08
125 77.55 741.4 2494.03 277.2 212.85 197.8 10.58 511.308 25.254 1251.64 362.88
130 77.55 741.4 2494.03 193.2 148.35 154.8 8.28 308.408 19.764 723.84 343.68
121
Table 6. 7 Raw Material Schedule for January-June 2025
Jan Feb Mar Apr May June

Shelf
Raw Total
Life Travel Time Schedu
Materi Order 0
(Yea (Days) le 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5
al /Year
r)
Order
Suppli A
1
er A Receive
Lontar A
1 26
Seeds
Order B
Suppli
1 Receive
er B
B
Order
Suppli A
1
Dried er A Receive
Brown 2 26 A
Algae Order B
Suppli
1 Receive
er B
B
Order
Suppli A
1
er A Receive
Kelor A
1 26
Leaves
Order B
Suppli
2 Receive
er B
B
122
Table 6.7 Raw Material Schedule for January-June 2025 (cont’d)

Shelf Jan Feb Mar Apr May June
Travel Total
Raw Life Schedul
Time Order/Ye 0
Material (Year e 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5
(Days) ar
)
Order A
Suppli
1 Receive
er A
A
Xylitol 2 2
Order B
Suppli
1 Receive
er B
B
Order A
Suppli
1 Receive
er A
A
Pectin 2 2
Order B
Suppli
1 Receive
er B
B
Order A
Suppli
1 Receive
Orange er A
A
Flavouri 0.25 1
ng Order B
Suppli
1 Receive
er B
B
123
Jan Feb Mar Apr May June

Shelf Travel
Total
Raw Material Life Time Schedule 0
Order/Year 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5
(Year) (Days)
Supplier Order A
4
A Receive A
NH4Cl 4.5 M 1 5
Supplier Order B
4
B Receive B
Supplier Order A
1
A Receive A
2 % CaCl2
2 1
Powder Order B
Supplier
4
B Receive B
Supplier Order A
1
A Receive A
50% Ethanol - 7
Supplier Order B
2
B Receive B
Supplier Order A
1
A Receive A
70% Ethanol - 2
Supplier Order B
2
B Receive B
124
Shelf Jan Feb Mar Apr May June

Raw Travel Total
Life Schedu
Materia Time Order/Ye 0
(Yea le
l (Days) ar 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5
r)
Order
Suppli A
2
er A Receive
Plastic A
- 2
Bottle
Order B
Suppli
2
er B Receive
B
Order
Suppli A
2
er A Receive
Paper A
- 2
Box
Order B
Suppli
2
er B Receive
B
Order
Suppli A
2
er A Receive
Cardboa A
- 2
rd box
Order B
Suppli
2
er B Receive
B
125
6.4 Project Distribution and Inventory

In this section, our group will elaborate on the product distribution chain,
product distribution location, product distribution pathway, product inventory, and
product marketing.
6.4.1 Product Distribution Chain

In addition to the supply chain that details the journey that raw materials,
components, and goods take before being formed into a product, a distribution
chain is also essential to ensure which parties will be the receiving end of the
product, and that the products can reach all the predetermined target market. A
distribution chain or distribution channel is the network of businesses or
intermediaries through which a good or service passes until it reaches the final
buyer or the end consumer. Distribution channels can include wholesalers,
retailers, distributors, and even the internet.
There are mainly 3 types of distribution chains that are direct, indirect,
and hybrid. A direct channel will allow the consumer to purchase directly from
the manufacturer. This direct, or short channel, may come with lower costs for
consumers as they are buying directly from the manufacturer. An indirect
channel allows the consumer to buy the goods from a wholesaler or retailer.
Indirect channels are typical for goods that are sold in traditional brick-and-
mortar stores. Last, hybrid distribution channels use both direct channels and
indirect channels. A product or service manufacturer may use both a retailer to
distribute a product or service and may also make sales directly with the
consumer.
After considering a few aspects, we decided that our distribution method
is going to be an indirect in which we create a distribution channel through
retailer. We chose this method to maximize our potential in the market. For
retailers we will be focusing only on some city in each region, Bali and Nusa
Tenggara.
126
6.4.2 Product Distribution Location

The product will be distributed to two provinces in Indonesia, which is
Bali and Nusa Tenggara. The chosen distribution locations are based on the
consideration of HERBITES plant location that will interfere with the
distribution cost. Also, the chosen distribution location is based on our raw
material sources.
The chosen region from each province is shown in the table below. The
chosen region is based on the nearest region to our plant also on the number of
the population since it will interfere with the distribution cost and our potential
buyers that we can seize. Area I in the table below is a region coming from
Bali, Area II is a region coming from West Nusa Tenggara, and Area III is from
East Nusa Tenggara.
Table 6. 8 Product Distribution Location
Product Product
Distribution Distribution
Percentage
Percentage per Delivery per Delivery
No City Region per Region
(%) Time Each Time Each
(%)
City Region
(Box/week) (Box/week)
1 Denpasar 9% 41.6
2 Tabanan 11% 49.9
AREA
3 Karangasem 7% 33.3 47% 208
1
4 Buleleng 5% 20.8
5 Gianyar 14% 62.4
Lombok
6 9% 41.6
Tengah
Lombok
7 9% 41.6
Utara
AREA
Lombok 42% 187
8 9% 41.6 II
Timur
Lombok
9 7% 31.2
Barat
10 Mataram 7% 31.2
AREA
11 Labuan Bajo 11% 49.4 11% 49
III
Total 100% 444.5 100% 444.5
127
6.4.3 Distribution Pathway

The selection of distribution pathways of HERBITES is adjusted to the
distance between each place. Areas that are close to each other will become a
route to make it more economical and save time. The regional division is as
follows:
a. Area I - Bali: Denpasar, Tabanan, Karangasem, Buleleng, and Gianyar
b. Area II - West Nusa Tenggara: Lombok Tengah, Lombok Utara, Lombok
Timur, Lombok Barat, Mataram
c. Area III - East Nusa Tenggara: Labuan Bajo
For Area I and II, our transportation will be using a rental truck that will
be driven by our driver. Meanwhile for Area III, we will use cargo to deliver
our product from plant to our Distribution Center at Labuan Bajo Nusa
Tenggara Timur. From the DC we will rent a truck and our driver will go to
give it to our retailer in Labuan Bajo.
Table 6. 9 Product Distribution Pathway
Total
Total
Travel Travel
Distance Distance
Area Origin Destination Time Time per
(km) per Area
(hours) Area
(km)
(hours)
Jembrana DC 1: Bali-
95 2.00
Plant Denpasar
DC 1: Bali-
Denpasar 5 0.17
Denpasar
Area I Denpasar Karangasem 67 379 0.83 8.63
Karangasem Buleleng 117 3.00
Buleleng Tabanan 64 2.00

Tabanan Gianyar 31 0.625
DC2: NTB-
Jembarana
Lombok 239 7.30
Plant
Tengah
DC2: NTB- Kabupaten
Lombok Lombok 27.3 0.44
Area II Tengah Tengah 501.7 14.30
Kabupaten
Lombok
Lombok 79 2.22
Utara
Tengah
Lombok
Lombok Utara 86.5 2.22
Timur
128
Table 6. 10 Product Distribution Pathway (cont’d)
Total
Total
Travel Travel
Distance Distance
Area Origin Destination Time Time per
(km) per Area
(hours) Area
(km)
(hours)
Lombok Lombok
61.6 2.00
Timur Barat
Lombok
Mataram 8.3 0.12
Barat
Jembrana DC3:NTT-
804 25.00
Plant Labuan Bajo
Area
25.5
III
DC3:NTT-
Labuan Bajo 10 0.50
Labuan Bajo
6.4.4 Product Inventory

Inventory refers to all the items, goods, merchandise, and materials held
by business for selling in the market to earn a profit. The objective in inventory
management is to ensure a continuous supply of materials and stock so that
production should not suffer at the times when customer demand is high and to
keep the cost as minimum as possible. It also allows companies to fulfil
customer orders quickly and efficiently thereby enhancing customer
satisfaction. Without adequate inventory, companies may face stockouts,
delayed deliveries, and dissatisfied customers.
The following assumptions were used to calculate HERBITES product
inventory:
1. Production is carried out with a capacity of 100%, which are up to 445
boxes in a week.
2. In this case, we will be sending out 95% of the production and the rest of
the 5% will be put in our storage as a safety stock following the rule of
thumb of safety stock to have 10-20% of the average production.
3. We are starting the distribution in the second week and continuously. to
next week
129
4. Each month consists of 4 weeks which is the mean number of the week in
a year.
Table 6. 11 Product Inventory
Total Product Product Distribution (box)
Month Days in Warehouse
(box) AREA 1 AREA 2 AREA 3
7 444.5 0 0 0
1 14 473 416 0 0
21 543 0 374 0
28 889 0 0 99
7 1334 0 0 0
14 1362 416 0 0
2
21 1432 0 374 0
28 1778 0 0 99
7 2223 0 0 0
14 2251 416 0 0
3
21 2321 0 374 0
28 2667 0 0 99
7 3112 0 0 0
14 3140 416 0 0
4
21 3210 0 374 0
28 3556 0 0 99
7 4001 0 0 0
14 4029 416 0 0
5
21 4099 0 374 0
28 4445 0 0 99
7 4890 0 0 0
14 4918 416 0 0
6
21 4988 0 374 0
28 5334 0 0 99
7 5334 0 0 0
14 4918 416 0 0
7
21 4544 0 374 0
28 4445 0 0 99
7 4445 0 0 0
14 4029 416 0 0
8
21 3655 0 374 0
28 3556 0 0 99
7 3556 0 0 0
14 3140 416 0 0
9
21 2766 0 374 0
28 2667 0 0 99
7 2667 0 0 0
14 2251 416 0 0
10
21 1877 0 374 0
28 1778 0 0 99
130
Table 6. 11Product Inventory (cont’d)
Total Product Product Distribution (box)

Month Days in Warehouse
(box) AREA 1 AREA 2 AREA 3
7 1778 0 0 0
14 1362 416 0 0
11
21 988 0 374 0
28 889 0 0 99
7 889 0 0 0
14 473 416 0 0
12
21 99 0 374 0
28 0 0 0 99
Total Product Sent 4990.340221 4491.306199 1186.353581
6.4.5 Transportation Method

The distribution of HERBITES will involve a third party, especially for
Area III. The third party used is a cargo service by J&T. We use this method to
consider effectiveness and mileage of our product distribution. Also, we need
to rent a truck for our product distribution. Here, we are using 3 trucks with the
renting price IDR 450,000,000 per day. Here is the picture of our truck and also
the simple properties of our truck.
Figure 6. 3 Truck for Product Distribution

(Source: oto.com)
Table 6. 12 HERBITES Transportation
Name Hino Dutro Cargo

Box Volume 1-2 Ton
Truck dimension 7185 mm x 1960 mm x 2155 mm
Price IDR450,000,000/day
131
6.5 Product Marketing

The next step to consider after considering the ability to produce the product is
to ensure that the product is known by many people and can reach the targeted
customers by implementing the best marketing strategies. Marketing strategies are
an important step in attracting market interest and willingness to buy the product.
Moreover, it also helps companies to convey the value of their products to
customers, attract new customers, retain them, encourage repeated purchases, and
build loyalty between the company and the customer. A good marketing strategy
will be beneficial towards the sales of the product and could give a developing and
profitable relationship with customers. To achieve this, it needs to combine
networks to promote the product.
6.5.1 Target Determination

Target determination in product marketing is the process of identifying
and defining the specific group of customers or market segment that a product
is intended to serve, by understanding the characteristics, needs, and
preferences of the target audience to tailor marketing strategies and effectively
promote the product. In a simple explanation, it is used to analyze and identify
the customers’ needs and desires based on market segmentation.
HERBITES was created to address current concerns about joint health
supplements that do not effectively solve joint health problems, have many side
effects, and are relatively expensive in the market. Therefore, our target is to
use natural-based ingredients that are efficient, do not have side effects in long-
term usage, and have additional benefits to general health with the presence of
some antioxidants in the product. These determinations will be analyzed based
on the market segmentation that is divided into four main types, which are
geographic, demographic, psychographic, and behavioral.
6.5.2 Market Segmentation

The division or grouping into market segments of potential customers
with similar characteristics indicating a common behavior of buyers is market
segmentation. This research is used to determine how the customers are divided
into smaller groups based on characteristics such as age, income, personality
132
traits, or behavior. In this market segmentation, we will divide it into four parts,
which are, geographic, demographic, psychographic, and behavioral. These
segments will affect consumer demand for our product.
Firstly, geographic segmentation is a type of market classification that
divides a market by targeting a specific geographical region, such as nations,
provinces, and cities. In terms of geographic segmentation, our primary target
market for the joint supplement product is in Indonesia, specifically in Bali and
Nusa Tenggara region since our plant is operated at Jembrana, Bali. Bali and
Nusa Tenggara are large cities and tourist destinations, which is certainly an
advantage because we can introduce the product and its uniqueness not only to
residents but also to tourists who are on vacation there. Offering products made
from typical ingredients from Bali and Nusa Tenggara, of course, is expected
to attract their attention. They are expected to be interested in trying and
increasing product engagement. This targeted approach allows us to focus our
marketing efforts and deliver our product with the potential for success.
Demographic segmentation plays a crucial role in understanding and
targeting specific consumer groups based on their age, gender, education,
employment, and income. In our market research, we conducted a survey to
identify the key demographic characteristics of our target customers. The
chosen age range is more than 25 years old reflecting the group that is more
likely to have joint health problems and care for their joint health, so they insist
on taking joint health supplements to solve their joint health problem and
reduce the pain. Our product is suitable for both men and women, as both
genders can drink joint health supplements to take care of their health. We
specifically focused on consumers with occupations involving physical
activities and the consumers who work and need to sit for a period long of time.
Based on the income, we targeted the medium-up section, as the upper middle
class tends to prioritize their health. Although our product may have a slightly
higher price compared to similar products, it is justified by the use of natural
ingredients that have fewer side effects and offer unique advantages. By
tailoring our marketing efforts to these specific demographic segments, we can
effectively meet the needs and preferences of our target audience.
133
Based on psychographic segmentation, we can divide the customer based

on distinct perceptions into groups based on their mindset. Those who are
aware of the need to maintain their joint health were chosen as the target
market. According to previous surveys, women dominate this category.
Lastly, behavioral segmentation is the grouping of consumers based on
their preferences for using and purchasing comparable items. It helps
businesses allocate resources effectively and identify high-value customer
segments. In our case, we conducted an initial survey to understand consumer
preferences for joint health supplements. Based on the survey result, we
targeted consumers who prefer joint health supplements with herbal
ingredients, tasty, and easy to consume. We also selected individuals with
active outdoor lifestyles, such as employees and tourists. This approach allows
us to focus on customers who are most likely to be interested in our joint health
supplement product. In short, for this product, the market segmentation is
explained in this table below.
134
Table 6. 13 Market Segmentation
Segmentation Description
Geographic Indonesia provinces specifically in Bali and Nusa Tenggara,
are located near the production plant and have tourism
potential.
Demographic All genders age more than 25 years with middle to upper
economic status and actively doing activities such as
employees.
Psychographic Aware of the need and willing to maintain their joint health
by consuming joint health supplement
Behavioral Consumers who prefer joint health supplements with active
ingredients from herbal, tasty, easy to consume, and have
fewer side effects.
6.5.3 Promotion Strategy

To effectively reach potential customers and establish a strong brand for
HERBITES, it is crucial to choose the right marketing strategy. This strategy
should adapt to various factors such as product pricing, technological
advancements, current trends, media platforms, brand identity, economic
conditions, and the presence of competitors. The authors prioritize investing in
specific marketing methods that align with these factors to achieve their
marketing goals.
a. Website
Websites play a crucial role in enhancing visibility on search engines
for targeted keywords relevant to the desired audience. By incorporating these
keywords effectively, the website can guide intended consumers to the
company's site, where they can access detailed information about the company
and its products. Furthermore, the website serves as a valuable resource for
customers to obtain contact details, facilitating further inquiries about products
and access to customer support services.
135
b. Advertising
In today's digital environment, advertising is a vital component of product
promotion. Beyond traditional platforms like newspapers and television,
social media has become a potent advertising medium. As people increasingly
rely on social media to stay connected and informed about current events,
utilizing social media as a primary advertising platform offers substantial
potential for effectively promoting products.
c. Campaign
To effectively reach and engage with our primary customer base, we plan
to conduct offline marketing campaigns directly in their local communities.
This initiative seeks to educate and empower adults about the importance of
maintaining healthy joints through a collaborative effort with local
pharmacies, fitness centers, medical professionals, community centers, and
volunteer groups. Through informative workshops, free consultations, social
media engagement, product demonstrations, fitness challenges, and
community events, we aim to highlight the significance of joint health and the
benefits of joint supplements. Our key messages emphasize the connection
between mobility and overall wellness, encouraging individuals to take
proactive steps toward supporting their joint health for a more active and
fulfilling lifestyle.
d. Social Media
Social media has become ingrained in daily life in our society. These
platforms provide opportunities to reach and engage with a wide audience, as
well as establish deeper connections with them. We can create and maintain
social media profiles on platforms like Facebook, Instagram, Twitter,
Linkedin, our YouTube. Through regular posting, responding to customer
inquiries, sharing updates, and running targeted ads, social media can be used
to build brand awareness and foster customer relationships.
e. Endorsement
Endorsement is a sort of marketing in which products are promoted with
the support of influencers, public figures, or industry experts to create brand
credibility and generate buzz. Influencers and public figures have a high level
136
of engagement with the public, allowing them to develop trends or habits

within societies. This will be a good strategy since most people who also might
be the product’s potential consumers tend to look up to these social media
influencers and follow what the influencers recommend or use.
CHAPTER 7
PRODUCT ECONOMICS
7.1 Total Capital Investment

In analyzing capital investment estimates, the calculation will be based on
the following assumptions:
7.1.1 Fixed Capital Investment

Fixed capital refers to the initial, long-term investment made when a
company is established, intended to support its operations indefinitely. Over time,
the value of this capital has recovered through depreciation. The fixed capital
investment represents the funds required for all the installed process equipment and
associated auxiliary components necessary to complete the production process.
7.1.1.1 Direct Cost
Direct costs refer to the expenses incurred specifically for the production of
goods. These costs encompass various elements such as equipment, utility
installations, labor expenses, electrical and piping systems, building and improving
service facilities, and land acquisition. The calculation of direct costs involves a
detailed breakdown into six subcategories: equipment costs, land and building
costs, supporting facilities, utility installation costs, and product licensing expenses.
A) Equipment Cost
Each piece of process equipment will have a varying value depending on
when it was purchased. The cost of the equipment must be estimated to forecast the
allocation for the acquisition of key production equipment. An index value should
be required to determine the direct cost of the required equipment to conduct a price
correction. Because the price of equipment fluctuates each year owing to changes
in the economy, this index value is required.

138
As a result, the values are connected to the annual cost index, which corrects
and aids in the equipment price forecast. The Chemical Engineering Plant Cost
Index (CEPCI) is used in the calculation.
Table 7. 12 Chemical Engineering Plant
CEPCI
Year CE Index
2013 567.3
2014 576.1
2015 556.8
2016 541.7
2017 567.5
2018 603.1
2019 607.5
2020 569.2
2021 591.7
2022 595.6
2023 599.6
From the values above, we need to extrapolate the unknown Chemical

Engineering Plant Cost Index (CEPCI) in the following years. Because the
construction, as well as the needed equipment, will be bought in the year 2024-
2025, the value should be extrapolated up to that year. The calculated extrapolation
values are shown in the table below.
Table 7. 23 Chemical Engineering Plant Cost Index
Year CE Index
2024 603.6144
2025 607.6025
To calculate the present cost of an equipment by using this equation.
Index Value at Present Time
Present Cost = Original x
Index Value at Original Time
139
Therefore, by knowing the equipment price before the construction, the

price in the year 2025 can be estimated by this equation:
M&S Index at 2025
Present Cost = Cost at 2024 x
M&S Index at 2023
All the prices written are based on what is shown on Alibaba’s website.
Those prices are still in the FOB (Free on Board) category. In the Guthrie method,
TCI calculation is conducted by adding some costs that are estimated using bare
module cost. The bare module factors include the FOB purchase, equipment
instruments, and installations, direct labor for installation, and indirect module
expenses (freight, insurance, taxes, construction overhead, and contractor
engineering expenses).
Figure 7. 1 Bare Module Factors
(Source: Seider, 2019)

The overall bare module cost can be calculated by multiplying each
equipment's price by the appropriate bare module factor. When some equipment
lacks an index mentioned in the literature, reference assumptions based on similar
qualities must be developed. The use of this bare module factor is not
recommended, as it is considered outdated and merely a generalization. However,
the bare module factor is commonly utilized in plant design due to its equipment
data. As a result, it is preferable for the current shipping cost, insurance, and
installation cost to be known.
140
Table 7. 3 Equipment Cost Calculation
Factor Bare FOB Price in 2024 FOB Price in 2025 Adjusted Cost
Equipment Quantity
Module (FBM) USD IDR USD IDR (IDR)
Washing Machine 1 1.73 $1,000.00 Rp15,950,000 $1,006.61 Rp16,055,382 Rp27,775,811
Peeling Machine 1 3.05 $1,300.00 Rp20,735,000 $1,308.59 Rp20,871,997 Rp63,659,590
Mixer Blender 3 4.16 $2,300.00 Rp36,685,000 $2,315.20 Rp36,927,379 Rp460,853,690
Extraction Vessel 4 1 $580.00 Rp9,251,000 $583.83 Rp9,312,122 Rp37,248,487
Filtration Machine 2 2.32 $1,080.00 Rp17,226,000 $1,087.14 Rp17,339,813 Rp80,456,731
Tray Dryer 2 2.06 $225.00 Rp3,588,750 $226.49 Rp3,612,461 Rp14,883,339
Evaporator 1 2.45 $8,000.00 Rp127,600,000 $8,052.86 Rp128,443,057 Rp314,685,491
Centrifugal Machine 1 2.03 $984.00 Rp15,694,800 $990.50 Rp15,798,496 Rp32,070,947
Freeze Dryer 1 2.06 $1,459.00 Rp23,271,050 $1,468.64 Rp23,424,803 Rp48,255,093
Mixing Machine 3 2.08 $2,300.00 Rp36,685,000 $2,315.20 Rp36,927,379 Rp230,426,845
High Viscosity Mixer 1 2.08 $1,000.00 Rp15,950,000 $1,006.61 Rp16,055,382 Rp33,395,195
Cooling Conveyor 2 1.61 $260.00 Rp4,147,000 $261.72 Rp4,174,399 Rp13,441,566
Gummy Maker 1 1.61 $2,800.00 Rp44,660,000 $2,818.50 Rp44,955,070 Rp72,377,663
Packaging Machine 1 1.61 $1,999.00 Rp31,884,050 $2,012.21 Rp32,094,709 Rp51,672,481
Storage Tank 3 1 $1,714.00 Rp27,338,300 $1,725.32 Rp27,518,925 Rp82,556,775
Total Bare Module Cost Rp1,563,759,704
141
B) Land and Building Cost

In setting up a plant, many government permits will be required. Local
government regulations are one of the most important factors because the
construction of a plant requires permits that go through many stages. Moreover, to
promote balanced regional development, the Government also offers several
incentives, concessions, and tax holidays for several years, to attract entrepreneurs
that can support the industry.
After considering these factors, the location of our plant will be located on
Jalan Raya Denpasar-Gilimanuk, which is one of the main roads on the island of
Bali. The land has a size of around 260 m x 38 m. However, to support this plant,
only 65 m x 38 m would be used. This area provides safe manufacturing activities
such as electricity, water, human resources, access roads, and port access. The price
of the land is quite reasonable, it reaches Rp 40.000.000 per hectare.
The buildings of our plant are rectangular in shape with a length of 65 m
and a width of 38 m, giving a total area of 2470 m2. The area includes roads, parking,
main building, and other utilities. In this plant, there will be the main building that
consists of office activity, production activity, mixing activity, packaging activity,
research, and development activity, and also storage for raw materials, finished
products, as well as rejected products. The calculation of the land and building cost
is summarized in the table below.
142
Table 7. 44 Land and Building Cost Estimation
Description Cost per 𝒎𝟐 Area/𝒎𝟐 Total Cost

(IDR/𝒎𝟐 ) (IDR)
Land 400,000 2470 988,000,000
Production area 4,500,000 984 4,428,000,000
Office area 2,500,000 132 330,000,000
Open area 200,000 1212 242,400,000
Supporting Area 1,500,000 142 213,000,000
Foundation 10% Land Cost 98,800,000
Land
5% Land Cost 49,400,000
development
Total 6,349,600,000
C) Supporting Facilities
Supporting Facilities are additional facilities to support non-process plant

activities. Our plant has an office, mosque, and cafeteria as supporting areas and
tables and chairs as supporting facilities. Equipment for supporting facilities will be
purchased only once at the start of plant manufacture; it will be an investment for
our project. The detailed cost data for all equipment for supporting facilities are
listed below.
143
Table 7. 5 Supporting Facilities Cost
Equipment Qty Price Per Unit (IDR) Total Cost (IDR)

General
Meeting Chair 8 390,000.00 Rp3,120,000
Meeting Desk 1 2,000,000.00 Rp2,000,000.00
Generator 2 Rp5,500,000.00 Rp11,000,000.00
Intercom 2 Rp1,275,500.00 Rp2,551,000.00
CCTV 4 Rp1,895,000.00 Rp7,580,000.00
FIre
6 Rp555,000.00 Rp3,330,000.00
Extinguisher
Fire Alarm 3 Rp598,000.00 Rp1,794,000.00
Fan 2 Rp1,085,000.00 Rp2,170,000.00
Neon Lamp 36 Rp95,000.00 Rp3,420,000.00
Office Area
Meeting Desk 1 Rp6,200,000.00 Rp6,200,000.00
Meeting Chair 8 Rp1,700,000.00 Rp13,600,000.00
Office Desk 18 Rp1,299,000.00 Rp23,382,000.00
Office Chair 18 Rp1,249,000.00 Rp22,482,000.00
Receptionist
1 Rp6,145,000.00 Rp6,145,000.00
Desk and Chair
Lobby Sofa 2 Rp3,874,000.00 Rp7,748,000.00
Computers 8 Rp2,249,000.00 Rp17,992,000.00
Rp
Projector Set 3 Rp3,134,247.00
1,044,749.00
Printer and Rp
1 Rp749,000.00
Scanner 749,000.00
Telephone 3 Rp229,900.00 Rp689,700.00
Air Conditioner 7 Rp2,524,300.00 Rp17,670,100.00
Internet Router 2 Rp429,000.00 Rp858,000.00
Rp900,000.00
Glassboard 3 Rp300,000.00
144
Table 7.5 Supporting Facilities Cost (cont’d)
Price Per Unit

Equipment Qty Total Cost (IDR)
(IDR)
Absence
2 Rp440,000.00 Rp880,000.00
Machine
Clock 4 Rp99,000.00 Rp396,000.00
Prayer Room
Prayer Carpet 4 Rp415,000 Rp1,660,000

Cafeteria
Canteen Table 4 Rp2,990,000.00 Rp11,960,000.00
Canteen Chair 16 Rp265,000.00 Rp4,240,000.00
Dispenser 3 Rp595,000.00 Rp1,785,000.00
Refrigerator 1 Rp2,045,000.00 Rp2,045,000.00
Microwave 1 Rp782,000.00 Rp782,000.00
Kitchen Set 1 Rp6,500,000.00 Rp6,500,000.00

Rest Room
Toilet Set 12 Rp1,090,000.00 Rp13,080,000.00
Wastafel 4 Rp250,000 Rp1,000,000
Hand Dryer 4 Rp385,000 Rp1,540,000

Plant Area
Product Shelf 20 Rp525,000 Rp10,500,000

Raw Material 20 Rp450,000 Rp9,000,000
Storage Shelf
Manual Forklift 3 Rp3,350,000 Rp10,050,000
Employee Shelf 4 Rp2,050,000.00 Rp8,200,000.00

Rp
Exhaust Fan 4 Rp2,952,000.00
738,000.00
Additional Facilities
Medbay 2 Rp1,500,000.00 Rp3,000,000.00
Facilities
First Aid Kit 2 Rp359,000.00 Rp718,000.00
145
D) Utility Installation Cost

Utility installation costs refer to the expenses involved in establishing the
necessary infrastructure for various services like electricity, water, gas,
telecommunications, and sewage. These expenses can differ depending on factors
such as location, distance from current utility lines, terrain, regulatory demands,
and the project's scale and complexity. Additionally, fire alarm systems and
hydrants are installed for administrative, safety, and operational needs.
The installation costs of utilities can be substantial, particularly for projects
located in remote areas or those that require extensive infrastructure. To ensure
these costs are within budget and align with the project's financial objectives, it is
crucial to conduct thorough planning, feasibility studies, and cost analysis to
identify potential issues and optimize the installation process to minimize costs
while meeting the project's needs. The calculation of utility installation is shown in
the table below.
Table 7. 6 Utilities Installation Cost Calculation
Installation Note Cost

Water Installation PDAM Bali Rp15,962,000
Electricity Installation PT PLN (Persero) Rp38,600,000
Telephone Installation Rp250,000
Indihome
Internet Installation
Fire Alarm System PT Totalfire Rp6,000,000
Indonesia
Hydrant PT Bromindo Rp25,000,000
Mekar Mitra.
Total Rp85,812,000
E) Market Research Cost

Market research costs are used to conduct research from consumers so that
the products manufactured can be sold well to consumers and profitably. Moreover,
by doing this market research, it will help us to achieve the maximum profit of the
project. To do this calculation, several costs must be incurred, and the estimate is
calculated from regulation of Peraturan Presiden No.12 Tahun 2021 about
146
Perubahan Peraturan Presiden No. 16 Tahun 2018 about Pengadaan Barang dan
Jasa Pemerintah. The calculations for market research are shown in the table below.
Table 7. 7 Market Research Cost
Service Cost (IDR)

Survey and Research IDR 10,000,000
Market and Research
Consultation Service IDR 25,000,000
Total IDR 35,000,000
F) Brand Cost
Brand, and industrial design costs need to be spent to protect intellectual
property, which is a company asset by Indonesian government regulations, namely
Peraturan Pemerintah No. 28 Tahun 2019 which regulates services and tariffs on
the type of non-tax revenue that applies to the Ministry of Law and Human Rights.
Another reason is that registering brand, will prohibit the other competitors from
using it without the consent of the Patent and Brand holder. The calculations are
listed in the following table.
147
Table 7. 8 Brand Registration
Brand Registration Cost

Item Unit Cost (IDR)
Request for Brand Registration (online) Per class 1,800,000
Lengthening Time of Brand Protection

Per class 2,250,000
(online)
License Agreement Administration Per registration number 500,000
Request for Official Excerpt of Brand

Per registration number 300,000
Registration
Request of Written Statement about

Per request per class 200,000
Object Classification
Request of Written Statement about

Per class 200,000
Similar Objects
Request for Proof or Brand Priority Per request per number 300,000
Total 5,550,000
(Source:dgip.go.id, n.d.)
Table 7. 9 Industrial Design Registration Cost
Industrial Design Cost

Industrial Design Registration
Per request 800,000
(online)
Industrial Design General List of
Per request 150,000
Quotes
Industrial Design Priority
Per request 150,000
Document
Industrial Design Copy of
Per list number 200,000
Document
Industrial Design Certificate Per registration
200,000
Publishing Cost number
Registration of Industrial Design Per registration
1,000,000
License Agreement number
Total 2,500,000
148
Table 7. 10 BPOM Registration Cost
BPOM Registration Cost

BPOM
Per request 2,000,000
Certification
Total 2,000,000
Table 7. 11 Halal MUI Registration Cost
Halal MUI Registration Cost

Halal MUI
Certification
Halal
Examination
Total 10,900,000
G) Indirect cost
Indirect cost, commonly referred to as overhead costs, encompass
expenditures essential for the smooth functioning of a business but aren’t directly
tied to a particular product, service, or project. These costs are crucial for overall
operations and include various elements necessary to initiate manufacturing
processes. Indirect cost may involve expenditures such as engineering and
supervision fees, contractor charges, and contingency funds. These expenses are
integral to laying the groundwork for manufacturing activities, ensuring that
operations run efficiently and effectively.
The contractor's fee represents the direct compensation provided to the
contractor for executing the construction plans. On the other hand, the contingency
fee covers unexpected expenses that need to be included in capital investments to
prepare for unforeseen situations. These expenses include auxiliary costs related to
technical operations, such as engineering and supervision. These outlays play a vital
role in facilitating the production or delivery of goods and services but are often
challenging to attribute directly to a specific cost entity. According to the Modular
Guthrie method, the combined contractor fee and contingency fee constitute 18%
149
of the direct expenses, while engineering and supervision costs make up 4% of the
equipment expenditure.
Table 7. 12 Indirect Cost Calculation
Description Cost
Engineering and
4% of Equipment Cost Rp625,503,881.7
Supervision
Contractor’s Fee and
18% of Direct Cost Rp1,489,566,555.22
Contingency
Total Indirect Cost Rp2,115,070,436.92
7.1.2 Working Capital Investment

Working capital is a financial metric which includes all costs required for
the production process until the company achieves the revenue. This consists of the
amount of money invested in raw materials and supplies, receivable accounts, cash
kept for monthly payment of operating expenses such as salaries, and payable taxes.
The amount of inventory of the raw material typically equals to one-month supply
of the raw materials. The calculation of working capital is shown in Table 7.13
Based on the calculation; the amount of working capital cost is IDR 1,156,498,888.
Table 7. 13 Total Capital Investment
Working Capital (1 Month Operation)
Expense type Cost (IDR)

Raw Material 583,210,873
Utility 10,342,452
Maintenance 23,613,998
Distribution 26,019,188
Marketing and Communication 3,007,179
Local Tax 20,393,304
Insurance 43,794,116
Salary 660,833,333
Research and development 284,674
Total Working Capital (CWC) [IDR] 1,371,499,118
150
7.1.3 Total Capital Investment

To calculate the total capital investment by cumulating working capital
and fixed capital like the formula below.
𝐶TCI = 𝐶FC + 𝐶WC
Where,
𝐶TCI = Cost of Total Capital Investment
𝐶FC = Cost of Fixed Capital
𝐶WC = Cost of Working Capital
Table 7. 14 Total Capital Investment
Description Cost (IDR)
Total Direct Cost 8,275,369,751

Total Indirect Cost 2,115,070,436
Total Fixed Capital 10,390,440,188
Total Working Capital 1,371,499,117
Total Capital Investment 11,761,939,305
7.2 Operational Cost

Operational cost refers to the expenses incurred by a business in its day-to-
day operations. These expenses include labor, energy, raw materials, spare parts,
and various miscellaneous expenditures. In addition to the costs directly associated
with the production process, operating costs also include indirect expenses such as
insurance and loan interest. Operational cost also encompasses various
expenditures necessary for running the business smoothly, maintaining its
infrastructure, and delivering goods or services to the customers. Operational costs
are ongoing and recurring expenses that are essential to keep the business
functioning efficiently. In addition, there are also fixed costs, plant overhead costs,
and general costs, consisting of local taxes, insurance, safety and protection,
executive salaries, marketing and communications, distribution, research and
development, and loan interest. The objective in determining operational costs is to
accurately calculate and analyze the expenses associated with running a business or
carrying out specific operations within an organization.
151
7.2.1 Manufacturing Cost

A) Raw Material
The cost of raw materials required to purchase materials for the production
process. During the production of HERBITES 14 raw materials must be purchased
from a supplier. The annual cost of the raw materials is shown in the following
Table 7.15 below.
152
Table 7. 15 Raw Material Cost
Price/Order (IDR/Pack) Delivery Cost/Order (IDR)

Total Raw Material Total Delivery Cost/Year
Raw Materials
Supplier A Supplier B Cost/Year (IDR/Year) Supplier A Supplier B (IDR/Year)
Lontar Seeds 979,166 0 15,458,333 105,750 0 2,749,500

Dried Brown Algae 47,180 0 1,226,680 1,011,000 0 26,286,000
Kelor Leaves 13,603,800 0 353,698,800 3,400,950 0 88,424,700
Xylitol 134,316 0 268,632 2,548,000 0 5,096,000
Pectin 243,165,000 0 486,330,000 1,956,500 0 3,913,000
Orange Flavoring 109,452,200 0 109,452,200 2,608,666 0 2,608,666
Sodium Benzoat 2,272,400 0 2,272,400 139,533 0 139,533
NH4Cl 4.5 M 4,855,478 0 24,277,390 158,262,000 0 791,310,000
2 % CaCl2 Powder 22,838 0 22,838 166,530 0 166,530
50% Ethanol 78,416,000 0 548,912,000 2,940,600 0 20,548,200
70% Ethanol 9,984,000 7,238,399 17,222,400 582,400 582,400 1,164,800
Plastic Bottle 280,670,000 0 561,340,000 9,706,666 0 385,233,333
Paper Box 9,538,650 10,768,650 20,307,300 180,950,000 204,283,333 385,233,333
Cardboard Box 10,400,000 0 20,800,000 9,706,666 0 19,413,333
Total (IDR) 2,171,588,974 11,327,676,263
Total Raw Material Cost + Delivery Cost/Year (IDR/Year) 3,499,265,237
153
B) Direct and Indirect Labor Salary

Labor salary refers to the payment for labor that works in the plant or dealing
with the production process. There are two types of labor salary: direct and indirect.
A direct labor salary is a cost for labor that is directly related to the manufacturing
process of HERBITES, whereas indirect labor salary refers to the cost of people
who are needed and involves supporting indirectly HERBITES production.
The calculation used in this section is made based on the Minimum Wage
Policy in Bali, with the value of IDR 2,813,672 for 8 hours of operation per day.
HERBITES production takes a whole hour per day, which means we need 3 shifts
of labor for a certain role, especially for direct labor. And for some other roles like
Security, we are also adjusting the labor amount with the amount of shift itself.
All calculations of direct labor salary are shown below.
Table 7. 16 Direct Labor Salary
Total Annual
Salary/Month
Position Amount Salary/Month Salary/Year
(IDR)
(IDR) Include RHA
Operator 20 4,500,000 67,500,000 1,170,000,000
IT Support 3 4,500,000 4,500,000 175,500,000
Control
3 4,500,000 9,000,000 175,500,000
Laboratory
Total
Direct 26 1,521,000,000 IDR/Year
Labor
Based on the calculation above the total cost for direct labor is
1,053,000,000 for 1 year including labor allowance. All calculations of indirect
labor salary are shown in the following table.
154
Table 7. 17 Indirect Labor Salary

Total Annual
Salary/Month
Position Amount Salary/Month Salary/Year
(IDR)
(IDR) Include RHA
Chief Executive Officer 1 Rp12,500,000 Rp12,500,000 Rp162,500,000
Chief Operating Officer 1 Rp9,500,000 Rp9,500,000 Rp123,500,000
Chief Financial Officer 1 Rp9,500,000 Rp9,500,000 Rp123,500,000
Production & QC Rp7,500,000 Rp7,500,000 Rp97,500,000
1
Manager
Head of Utilities 1 Rp8,500,000 Rp8,500,000 Rp110,500,000
Head of Maintenance 1 Rp8,500,000 Rp8,500,000 Rp110,500,000
Supply Chain Manager 1 Rp7,500,000 Rp7,500,000 Rp97,500,000
Supply Chain Staff 3 Rp5,500,000 Rp16,500,000 Rp214,500,000
Human Resources Rp7,500,000 Rp7,500,000 Rp97,500,000
1
Manager
Human Resources Staf 1 Rp4,500,000 Rp4,500,000 Rp58,500,000
Sales & Marketing Rp7,500,000 Rp7,500,000 Rp97,500,000
1
Manager
Sales & Marketing Staff 2 Rp5,000,000 Rp10,000,000 Rp130,000,000
Research & Development Rp5,500,000 Rp5,500,000 Rp71,500,000
1
Manager
Laborant 1 Rp5,500,000 Rp5,500,000 Rp71,500,000
Quality Control Rp4,500,000 Rp4,500,000 Rp58,500,000
1
Supervisor
Security 6 Rp3,500,000 Rp21,000,000 Rp273,000,000
Cleaning Service 3 Rp3,000,000 Rp9,000,000 Rp117,000,000
Driver 3 Rp3,000,000 Rp9,000,000 Rp117,000,000
Receptionist 1 Rp3,000,000 Rp3,000,000 Rp39,000,000
Packaging Staff 5 Rp3,000,000 Rp15,000,000 Rp195,000,000
Warehousemen 2 Rp3,000,000 Rp6,000,000 Rp78,000,000
Total Direct Labor 38 1,316,000,000 IDR/Year
Based on the calculation above the total cost for direct and indirect labor is
2,837,000,000 for 1 year.
C) Utility Cost
155
The expenses associated for essential services in residential and commercial

settings are collectively referred to as utilities costs. These services include the
supply of energy for powering appliances, water for various purposes, and internet
and telecommunications connectivity, which are vital for the daily functioning of
properties.
The actual costs of these services can fluctuate significantly based on
various factors such as the size of the property, energy efficiency, geographical
location, consumption patterns, and the rates charged by utility providers. It is
crucial to budget for utility costs as they are recurring expenses necessary for
maintaining a comfortable living or operational environment, ensuring the smooth
operation of businesses.
156
Table 7. 18 Electricity Costs
Main Equipment Electricity
Power Working Time/1 Working Time/ 2 Energy per Energy per Year Total Cost per
No Equipment Qty
(kW) Batch (Hour/Batch) Batch (Hour/Batch) Day (kWh) (kWh) Year (IDR)
Peeling
1 Machine 1 1.500 0.0833 0.17 0.25 32.50 36,229.05
(Lontar)
Washing
2 Machine 1 2.200 0.0833 0.17 0.37 47.67 53,135.94
(Lontar+Kelor)
Mixer Blender
3 1 1.500 0.0833 0.17 0.25 32.50 36,229.05
(Lontar)
Soaking and
4 1 1.100 0.1667 0.33 0.37 47.67 53,135.94
Extraction
Filtration
5 1 2.000 0.0833 0.17 0.33 43.33 48,305.40
(Lontar)
Mixer Blender
6 1 0 0.1667 0.33 0.00 0.00 0.00
(Seaweed)
Extraction
7 Vessel 2 2.000 7.0000 14.00 28.00 3,640.00 4,057,653.60
(Seaweed)
157
Table 7.18 Electricity Costs (cont’d)

Working Working Energy
Power Energy per Year Total Cost per
No Equipment Qty Time/1 Batch Time/ 2 Batch per Day
(kW) (kWh) Year (IDR)
(Hour/Batch) (Hour/Batch) (kWh)
8 Centrifugation 1 1.500 0.2500 0.50 0.75 97.50 108,687.15
(Seaweed)
9 Freezer Dryer 1 1.100 0.3333 0.67 0.73 95.33 106,271.88
(Seaweed)
10 Washing 1.500 0.7500 1.50 2.25 292.50 326,061.45
Machine
(Kelor)
11 Tray 1 0.750 1.1667 2.33 1.75 227.50 253,603.35
Dryer(Kelor)
12 Mixer Blender 1 0.00 0.0833 0.17 0.00 0.00 0.00
(Kelor)
13 Maceration 1 2.000 24.0000 48.00 96.00 12,480.00 13,911,955.20
(Kelor)
14 Filtration 1 1.500 1.1667 2.33 3.50 455.00 507,206.70
(Kelor)
15 Evaporator 1 1.100 0.0833 0.17 0.18 23.83 26,567.97
(Kelor)
16 Tray Dryer 2 1 2.000 0.2500 0.50 1.00 130.00 144,916.20
(Kelor)
158

Working Time/1 Working
Power Energy per Day Energy per Total Cost per
No Equipment Qty Batch Time/ 2 Batch
(kW) (kWh) Year (kWh) Year (IDR)
(Hour/Batch) (Hour/Batch)
Heated Jacked
17 1 4.500 0.0833 0.17 0.75 97.50 108,687.15
Mixer (Gummy)
Evaporator
18 4.000 0.0833 0.17 0.67 86.67 96,610.80
(Gummy)
Cooling Conveyor
19 1 2.200 0.5833 1.17 2.57 333.67 371,951.58
(Gummy)
High Viscosity
20 Liquid Mixing Tank 1 0.00 0.0833 0.17 0.00 0.00 0.00
(Gummy)
Cooling Conveyor 2
21 1 0.200 0.8333 1.67 0.33 43.33 48,305.40
(Gummy)
Forming Gummy
22 Candy Machine 1 0.550 0.8333 1.67 0.92 119.17 132,839.85
(Gummy)
Candy Gummy
Counting and
23 1 0.200 0.4167 0.83 0.17 21.67 24,152.70
Packaging Machine
(pcs/hour)
TOTAL 22 33.400 38.667 77.333 141.133 18347.333 20,452,506.36
159
Supporting Facilities Electricity

Working
Energy per Energy per
No Equipments Quantity Power (kW) Time per Day Total Cost per Year (IDR)
Day (kWh) Year (kWh)
(h)
1 Projector Set 3 0.0550 5 0.83 107.25 Rp119,555.9
2 Computer 8 0.4250 6 20.40 2,652.00 Rp2,956,290.5
Photocopy,
3 Printer, Fax, 1 0.0400 2 0.08 10.40 Rp11,593.3
and Scanner
Air
4 7 0.3900 10 27.30 3,549.00 Rp3,956,212.3
Conditioner
Attendance
5 2 0.0240 10 0.48 62.40 Rp69,559.8
Machine
6 Modem Router 2 0.0100 24 0.48 62.40 Rp69,559.8
7 LED lamp 50 0.0180 24 21.60 2,808.00 Rp3,130,189.9
CCTV Set
8 4 0.2000 24 19.20 2,496.00 Rp2,782,391.0
(5pcs)
9 Telephone 3 0.0050 3 0.05 5.85 Rp6,521.2
Water
10 3 0.4200 20 25.20 3,276.00 Rp3,651,888.2
Dispenser
11 Intercom 2 0.0023 24 0.11 14.35 Rp15,998.7
160
Supporting Facilities Electricity

No Equipments Quantity Power (kW) Working Energy per Energy per Total Cost per Year
Time per Day Day (kWh) Year (kWh) (IDR)
(h)
12 Fire Alarm 3 0.0011 10 0.03 4.21 Rp4,695.3
13 Fan 2 0.0200 24 0.96 124.80 Rp139,119.6
14 Exhaust Fan 4 0.1100 10 4.40 572.00 Rp637,631.3
TOTAL 94 1.72 196.00 121.11 15,744.66 17,551,206.75
Table 7.19 Generator Costs
Generator Fuel Working Total Solar

Equipments Quantity Total Cost/year
Consumption (L/h) Time/day (h) Fuel/year (L) Price (L)
Generator
1 7 0.024 42 15500 651000
Diesel
TOTAL 651000
161
Table 7. 19 Water Consumption Cost

Water Needs Quantity Needs per Day (m3) Needs per Year (m3) Total Cost per Year
Labors 50 0.1 13 13000000

Process 100 5 650 10400000
TOTAL 23400000
162
D) Maintenance
Maintenance is an essential activity aimed at maintaining the functionality
of factories, production facilities, and the equipment used in production. It involves
repairing, adjusting, or replacing certain components to ensure that production
capacity continues to meet desired levels. Maintenance can be categorized into three
main types: main maintenance, which makes up 5% of the cost of equipment;
maintenance of factories and office buildings, amounting to 1% of the cost of land
and buildings; and maintenance of facilities, representing 3% of the cost of
supporting facilities. The table below details the costs associated with factory
maintenance.
Table 7. 20 Maintenance Cost
Maintenance Maintenance
Type Cost (IDR)
Factor (%) Cost (IDR)
Supporting Facilities
(3% of supporting 248,803,047 3 7,464,091
facilities cost)
Plant and Office
Building (1% of 6,349,600,000 1 63,469,000
building cost)
Equipment (5% of
1,563,759,704 5 78,187,985
main equipment cost)
Total Maintenance Cost per Year 141,683,985
E) Brand Registration
The examination of the costs associated with maintaining MUI Halal
certification, which must be renewed periodically every few years, as well as the
renewal of certification from BPOM is crucial for our brand. This process involves
a thorough analysis of financial projections and budget allocations to ensure smooth
compliance with the Halal standards established by the Indonesian Council of
Ulama (MUI) and the regulatory requirements outlined by the National Agency of
Drug and Food Control (BPOM).
163
Table 7. 21 Halal MUI Annual Cost
Year Total Cost (IDR)
2025 -
2026 -
2027 -
2028 -
2029 2,400,000
2030 -
2031 -
2032 -
2033 2,400,000
2034 -
Total Annual Cost of Halal MUI 4,800,000
(Source: MUI, 2024)
Table 7. 22 BPOM Annual Cost
Year Total Cost (IDR)
2025 -
2026 -
2027 -
2028 -
2029 -
2030 100,000
2031 -
2032 -
2033 -
2034 -
Total Annual Cost of BPOM 100,000
(Source: BPOM, 2024)
164
Table 7. 23 Total Annual Cost Registration

Total Annual Cost of Halal MUI (IDR) 4,800,000
Total Annual Cost of BPOM (IDR) 100,000
Total Annual Cost (IDR) 4,900,000
7.2.2 Fixed Cost

A) Local Tax
Local tax consists of land and building taxes and salary taxes. NJOP or
Nilai Jual Objek Pajak of land proposed location in Bali is 400,000 per meter
square (OLX, 2024). NJOPTKP or NJOP Tidak Kena Pajak in Bali is IDR
2,000,000. NJKP or Nilai Jual Kena Pajak and PBB or Pajak Bumi and
Bangunan are determined by Indonesian government. NJKP as many as 40%
for NJOP equals or greater than one billion rupiahs and PBB as many as 0.5%
for NJOP equals or greater than ten billion rupiahs. The detailed calculation of
land and building taxes are shown in the table below.
Table 7. 24 Cost of Property Tax

Description Price per Area Area (m2) Total
NJOP Land 400,000.00 2,470.0 988,000,000.00
NJOP
2,000,000.00 947.0 1,894,000,000.00
Building
Total NJOP 2,882,000,000.00
NJOPTKP 15,000,000.00
NJOP for PBB 2,867,000,000.00
NJKP(40% NJOP for PBB) 1,146,800,000.00
PBB (0.5% NJKP) 5,734,000.00
Total Local Tax (IDR) 5,734,000
Everybody who works needs to pay the salary tax that is suitable to
their salary. The rate of the tax varies with the sum of the salary in a year.
Based on PKM No. 101 Tahun 2016 about Penyesuaian PTKP, it is stated
that the amount of non-taxable income for individual taxpayers who are not
married and have no children is still IDR 54,000,000 per year or IDR
4,500,000 per month (Fitriya, 2024). We assumed that all employees are
165
unmarried, have no children, and have status as permanent workers and

working for 12 months as the operational days of the plant is only 130 days.
And, the remain 130 days is targeted for distribution and marketing. The
total of salary tax is shown in the table below.
166
Table 7. 25 Labour Net Income per Year
Insurance
Insurance
Obligated Gross Net Income Non Taxable Taxable
Obligated Net Income
Salary/Month Amount to Income per Position per Income per Income Per Tax per Year
Position to per Year per
(IDR) Person Company Month per Cost (IDR) Month/Person Year per Year per (IDR)
Employee Person (IDR)
per Person Person (IDR) (IDR) Person (IDR) Person (IDR)
(IDR)
(IDR)
Chief 12,500,000.00 1 1,361,250.00 13,861,250.00 2,079,187.50 625,000.00 11,157,062.50 145,041,812.50 54,000,000.00 91,041,812.50 22,760,453.13
Executive
Officer
Chief 9,500,000.00 1 1,034,550.00 10,534,550.00 1,580,182.50 475,000.00 8,479,367.50 110,231,777.50 54,000,000.00 56,231,777.50 14,057,944.38
Operating
Officer
Chief 9,500,000.00 1 1,034,550.00 10,534,550.00 1,580,182.50 475,000.00 8,479,367.50 110,231,777.50 54,000,000.00 56,231,777.50 14,057,944.38
Financial
Officer
Production 7,500,000.00 1 816,750.00 8,316,750.00 1,247,512.50 375,000.00 6,694,237.50 87,025,087.50 54,000,000.00 33,025,087.50 8,256,271.88
& QC
Manager
167
Table 7.25 Labour Net Income per Year (cont’d)

Insurance
Insurance
(IDR)
(IDR)
Head of 8,500,000.00 1 925,650.00 9,425,650.00 1,413,847.50 425,000.00 7,586,802.50 98,628,432.50 54,000,000.00 44,628,432.50 11,157,108.13
Utilities
Head of 8,500,000.00 1 925,650.00 9,425,650.00 1,413,847.50 425,000.00 7,586,802.50 98,628,432.50 54,000,000.00 44,628,432.50 11,157,108.13
Maintenance
Supply 7,500,000.00 1 816,750.00 8,316,750.00 1,247,512.50 375,000.00 6,694,237.50 87,025,087.50 54,000,000.00 33,025,087.50 8,256,271.88
Chain
Manager
Supply 5,500,000.00 3 598,950.00 6,098,950.00 914,842.50 275,000.00 4,909,107.50 63,818,397.50 54,000,000.00 9,818,397.50 7,363,798.13
Chain Staff
Human 7,500,000.00 1 816,750.00 8,316,750.00 1,247,512.50 375,000.00 6,694,237.50 87,025,087.50 54,000,000.00 33,025,087.50 8,256,271.88
Resources
Manager
Human 4,500,000.00 1 490,050.00 4,990,050.00 748,507.50 225,000.00 4,016,542.50 52,215,052.50 54,000,000.00 -1,784,947.50 0.00
Resources
Staf
168

Insurance
Insurance
(IDR)
(IDR)
Head of 8,500,000.00 1 925,650.00 9,425,650.00 1,413,847.50 425,000.00 7,586,802.50 98,628,432.50 54,000,000.00 44,628,432.50 11,157,108.13
Utilities
Head of 8,500,000.00 1 925,650.00 9,425,650.00 1,413,847.50 425,000.00 7,586,802.50 98,628,432.50 54,000,000.00 44,628,432.50 11,157,108.13
Maintenance
Supply 7,500,000.00 1 816,750.00 8,316,750.00 1,247,512.50 375,000.00 6,694,237.50 87,025,087.50 54,000,000.00 33,025,087.50 8,256,271.88
Chain
Manager
Supply 5,500,000.00 3 598,950.00 6,098,950.00 914,842.50 275,000.00 4,909,107.50 63,818,397.50 54,000,000.00 9,818,397.50 7,363,798.13
Chain Staff
Human 7,500,000.00 1 816,750.00 8,316,750.00 1,247,512.50 375,000.00 6,694,237.50 87,025,087.50 54,000,000.00 33,025,087.50 8,256,271.88
Resources
Manager
Human 4,500,000.00 1 490,050.00 4,990,050.00 748,507.50 225,000.00 4,016,542.50 52,215,052.50 54,000,000.00 -1,784,947.50 0.00
Resources
Staf
169
Insurance
Gross Insurance
Obligated Net Income Non Taxable Taxable
Income per Obligated Net Income
Salary/Month Amount to Position per Income per Income Per Tax per Year
Position Month per to per Year per
(IDR) Person Company Cost (IDR) Month/Person Year per Year per (IDR)
Person Employee Person (IDR)
per Person (IDR) Person (IDR) Person (IDR)
(IDR) (IDR)
(IDR)
Sales & 7,500,000.00 1 816,750.00 8,316,750.00 1,247,512.50 375,000.00 6,694,237.50 87,025,087.50 54,000,000.00 33,025,087.50 8,256,271.88
Marketing
Manager
Sales & 5,000,000.00 1 544,500.00 5,544,500.00 831,675.00 250,000.00 4,462,825.00 58,016,725.00 54,000,000.00 4,016,725.00 1,004,181.25
Marketing
Staff
Research & 5,500,000.00 1 598,950.00 6,098,950.00 914,842.50 275,000.00 4,909,107.50 63,818,397.50 54,000,000.00 9,818,397.50 2,454,599.38
Development
Manager
Laborant 5,500,000.00 1 598,950.00 6,098,950.00 914,842.50 275,000.00 4,909,107.50 63,818,397.50 54,000,000.00 9,818,397.50 2,454,599.38
Quality 4,500,000.00 1 490,050.00 4,990,050.00 748,507.50 225,000.00 4,016,542.50 52,215,052.50 54,000,000.00 -1,784,947.50 0.00
Control
Supervisor
Total 119,492,823.75
170
B) Insurance
The insurance cost represents the monetary sum that the company is
required to pay to the insurance provider. Insurance is essential to protect the
company's both variable and fixed assets. This coverage encompasses safeguarding
plant costs and providing insurance for employees. Employee insurance data is
gathered from BPJS Kesehatan (Health Insurance) and Jamsostek Ketenagakerjaan
(Employment Social Security). The company is obligated to allocate employees'
salaries for various purposes, including 0.3% for death insurance (JK), 0.24% for
accident insurance (JKK), and 4% for health insurance (BPJS). In addition to
employee insurance, the company must also cover plant insurance, calculated at 1%
of the fixed capital investment. The computation for the insurance cost is detailed
below:
171
Table 7. 26 Annual Insurance Cost
Insurance Price of Salary Price of Insurance

Insurance Insurance Type Percentage (%) Source
Percentage (%) (IDR) (IDR)
Death Insurance
0.30
(JKM)
Labor Accidents
0.24 4.54 Labor Cost 3,965,000,000 180,011,000
Insurance Insurance (JKK)
Health Insurance
4
(BPJS)
Total
Plant Insurance 1 8,275,369,751 82,753,697
Fixed Cost
Total Insurance Cost per Year 262,764,697
172
7.2.3 Plant Overhead

Plant overhead cost refers to the safety-related expenses necessary for a
plant's operation. This includes safety equipment, basic equipment, and other items
that must be maintained, checked, or replaced periodically. To ensure plant and
personal safety, safety equipment must be prepared, maintained, checked, or
replaced within specified intervals. The calculation of plant overhead cost is shown
in the table below.
Table 7. 27 Plant Overhead Cost

Price per
Unit Total Price
Item Qty
(IDR/pcs (IDR)
or kg)
First Aid Kit 10 290,000 2,900,000
Fire Extinguisher 6 185,000 1,110,000
Latex Gloves 100 30,000 3,000,000
Mask 100 28,000 2,800,000
Hair Cap 40 44,000 1,760,000
Apron 40 100,000 4,000,000
Total Plant Overhead Cost (IDR) 15,570,000
7.2.4 General Expenses

General expenses are expenses related to the routine expenses of a plant
office that is needed to support the operational activity of the plant. The components
in general expenses are marketing and commercial cost, distribution cost, loan
interest, and research and development cost for 15 years of life expectancy. The
detail of each cost is explained further in this section below.
173
A) Marketing and Commercial Cost

Marketing cost is the cost that is used for marketing purposes. Product
marketing is done to introduce our product to catch the attention of potential
consumers. In this digital era, one of the best ways to get consumers’ attention is
by advertising through the internet. However, advertising through offline media and
direct marketing are also still important for the growth of the product. Therefore,
our group will conduct offline campaigns by retailers and wholesalers for the offline
and direct marketing. Meanwhile, for online media advertising, our group uses an
YouTube Ads every 3 months, Facebook and TikTok per mille, and also we will
develop HERBITES Website which need designing and setup cost also
maintenance cost. The details of marketing cost are shown in the table below.
Table 7. 28 Product Marketing Cost
Media Type Cost per Year (IDR)

Offline Campaign 60,000,000.00
YouTube Ads 21,700,000.00
Facebook 25,000,000.00
TikTok 67,500,000.00
Website 12.500,000
Total (IDR) 190,240,000
B) Product Distribution Cost

The distribution of our products involves the logistical process of
transporting them from our company to our wholesalers in various cities. This
direct-to-wholesaler approach ensures that our products reach their intended
destinations efficiently and effectively. To efficiently distribute products across
Bali and Nusa Tenggara, we have divided the region into three areas. Area I covers
the distribution route from the production site in Jembrana to Denpasar,
Karangasem, Buleleng, and Tabanan. Area II extends from Jembrana to West Nusa
Tenggara, including Lombok Tengah, Kabupaten Lombok Tengah, Lombok Utara,
Lombok Timur, and Lombok Barat. Area III spans from Jembrana to Komodo and
Manggarai Barat. The selection of these distribution pathways is based on the
shortest routes to minimize costs and maximize efficiency. For all areas, we will
174
utilize Truck Shipping Service to ensure timely and cost-effective delivery. The
detailed of distribution pathways, transportation requirements, and estimated times
to reach each destination are outlined in the table below.
175
Table 7. 29 Distribution Costs
Toll Total
Total Total Fuel
Traveltime Fuel Cost Service Cost Road Transportation
Area From To Distance Time Transportation Type Consumption
(hours) (IDR) (IDR) Cost Cost/month
(km) (hours) (L)
(IDR) (IDR/month)
Jembrana DC 1: Bali- Truck Shipping

95 2.00 9.50 64,600.00
Plant Denpasar Service
DC 1: Bali- Truck Shipping
Denpasar 5 0.17 0.50 3,400.00
Denpasar Service
Truck Shipping
Denpasar Karangasem 67 0.83 6.70 45,560.00
Area Service
8.000 1,800,000.00 0.00 2,057,720.00
I Truck Shipping
Karangasem Buleleng 117 3.00 11.70 79,560.00
Service
Truck Shipping
Buleleng Tabanan 64 2.00 6.40 43,520.00
Service
Truck Shipping
Tabanan Gianyar 31 0.625 3.10 21,080.00
Service
DC2: NTB-
Jembarana Truck Shipping
Lombok 239 7.50 23.90 162,520.00
Plant Service
Tengah
DC2: NTB- Kabupaten
Area Truck Shipping
Lombok Lombok 27.3 0.73 13.100 2.73 18,564.00 2,000,000.00 0.00 2,341,156.00
II Service
Tengah Tengah
Kabupaten
Truck Shipping
Lombok Lombok Utara 79 1.33 7.90 53,720.00
Service
Tengah
176
Table 7.29 Distribution Costs (cont’d)

Toll Total
Total Travel Total Fuel
Fuel Cost Service Cost Road Transportation
Area From To Distance time Time Transportation Type Consumption
(IDR) (IDR) Cost Cost/month
(km) (hours) (hours) (L)
(IDR) (IDR/month)
Lombok Truck Shipping
Lombok Utara 86.5 1.33 8.65 58,820.00
Timur Service
Lombok Truck Shipping
Lombok Barat 61.6 2.00 13.100 6.16 41,888.00 2,000,000.00 0.00 2,341,156.00
Timur Service
Truck Shipping
Lombok Barat Mataram 8.3 0.20 0.83 5,644.00
Service
DC3:Komodo,
Jembrana
Manggarai 804 25.00 JNT Cargo 80.40 0.00 10,000,000.00
Plant
Area Barat
26.567 0.00 20,870,312.00
III DC3:Komodo,
Truck Shipping
Manggarai Labuan Bajo 51.7 1.57 5.17 35,156.00 400,000.00
Service
Barat
Total Transportation Cost per Year (IDR) 303,230,256.00
177
Table 7. 30 Driver Cost
Number of Meal Cost Accommodation Total Cost

Area Services
Driver (IDR) Cost (IDR) (IDR)
2 times meal 50,000.00 - 200,000.00
I 1
- - - 0.00
3 times meal 75,000.00 - 300,000.00
II 1 night stay 1
- 250,000.00 250,000.00
accommodation
Total Driver Cost per Month (IDR) 750,000.00
Total Driver Cost per Year (IDR) 9,000,000.00
Table 7. 31 Distribution Cost
Distribution Cost
Total Transportation Cost per Year (IDR) 303,230,256.00
Total Driver Cost per Year (IDR) 9,000,000.00
Total Distribution Cost per Year (IDR) 312,230,256.00
178
C) Loan Interest
In order to initiate and establish the production of the product, we
necessitate financial assistance in the form of a loan from reputable institutions such
as banks and investors. It is known that capital investment is typically gained by
combining a bank and investor as the capital provider,
Moreover, a crucial task involves computing the loan amount and interest
rate to facilitate cash flow generation and ultimately determine the Minimum
Acceptable Rate of Return (MARR). Upon obtaining comprehensive data regarding
all operational expenditures, encompassing raw material costs, employee salaries,
maintenance expenses, taxes, and loan repayments, the cumulative total of these
elements can be calculated.
The bank chosen is Citibank with a 5.75% interest rate, the reasoning is that
the bank has a lower interest rate compared to other banks (Citibank, 2024). The
capital obtained from the investor is assumed to have interest paid periodically by
10%. The loan is paid within 15 years, with each year paying the same amount as
the first loan. This technique delivers a minor loan payment value.
Table 7. 32 Capital Source
Capital
Percentage Capital Share Interest Rate
Source
Citibank 40% Rp4,709,928,435.58 5.75%
Investor 60% Rp7,064,892,653.36 7.5%
179
Table 7. 33 Calculation of Loan Interest from Bank
Year Initial Loan Loan Interest Loan Payment Total Payment Loan After Payment
0 4,709,928,435.58 4,709,928,435.58
1 4,709,928,435.58 270,820,885.05 313,995,229.04 584,816,114.08 4,395,933,206.54
2 4,395,933,206.54 252,766,159.38 313,995,229.04 566,761,388.41 4,081,937,977.50
3 4,081,937,977.50 234,711,433.71 313,995,229.04 548,706,662.74 3,767,942,748.46
4 3,767,942,748.46 216,656,708.04 313,995,229.04 530,651,937.07 3,453,947,519.42
5 3,453,947,519.42 198,601,982.37 313,995,229.04 512,597,211.41 3,139,952,290.38
6 3,139,952,290.38 180,547,256.70 313,995,229.04 494,542,485.74 2,825,957,061.35
7 2,825,957,061.35 162,492,531.03 313,995,229.04 476,487,760.07 2,511,961,832.31
8 2,511,961,832.31 144,437,805.36 313,995,229.04 458,433,034.40 2,197,966,603.27
9 2,197,966,603.27 126,383,079.69 313,995,229.04 440,378,308.73 1,883,971,374.23
10 1,883,971,374.23 108,328,354.02 313,995,229.04 422,323,583.06 1,569,976,145.19
11 1,569,976,145.19 90,273,628.35 313,995,229.04 404,268,857.39 1,255,980,916.15
12 1,255,980,916.15 72,218,902.68 313,995,229.04 386,214,131.72 941,985,687.12
13 941,985,687.12 54,164,177.01 313,995,229.04 368,159,406.05 627,990,458.08
14 627,990,458.08 36,109,451.34 313,995,229.04 350,104,680.38 313,995,229.04
15 313,995,229.04 18,054,725.67 313,995,229.04 332,049,954.71 0.00
180
Table 7. 34 Calculation of Loan Interest from Investor
Year Initial Loan Loan Interest Loan Payment Total Payment Loan After Payment
0 7,064,892,653.36 7,064,892,653.36
1 7,064,892,653.36 529,866,949.00 470,992,843.56 1,000,859,792.56 6,593,899,809.81
2 6,593,899,809.81 494,542,485.74 470,992,843.56 965,535,329.29 6,122,906,966.25
3 6,122,906,966.25 459,218,022.47 470,992,843.56 930,210,866.03 5,651,914,122.69
4 5,651,914,122.69 423,893,559.20 470,992,843.56 894,886,402.76 5,180,921,279.13
5 5,180,921,279.13 388,569,095.93 470,992,843.56 859,561,939.49 4,709,928,435.58
6 4,709,928,435.58 353,244,632.67 470,992,843.56 824,237,476.23 4,238,935,592.02
7 4,238,935,592.02 317,920,169.40 470,992,843.56 788,913,012.96 3,767,942,748.46
8 3,767,942,748.46 282,595,706.13 470,992,843.56 753,588,549.69 3,296,949,904.90
9 3,296,949,904.90 247,271,242.87 470,992,843.56 718,264,086.43 2,825,957,061.35
10 2,825,957,061.35 211,946,779.60 470,992,843.56 682,939,623.16 2,354,964,217.79
11 2,354,964,217.79 176,622,316.33 470,992,843.56 647,615,159.89 1,883,971,374.23
12 1,883,971,374.23 141,297,853.07 470,992,843.56 612,290,696.62 1,412,978,530.67
13 1,412,978,530.67 105,973,389.80 470,992,843.56 576,966,233.36 941,985,687.12
14 941,985,687.12 70,648,926.53 470,992,843.56 541,641,770.09 470,992,843.56
15 470,992,843.56 35,324,463.27 470,992,843.56 506,317,306.82 0.00
181
Table 7. 35 Total Financial Interest Calculation
Year Interest
1 800,687,834.05
2 747,308,645.11
3 693,929,456.17
4 640,550,267.24
5 587,171,078.30
6 533,791,889.37
7 480,412,700.43
8 427,033,511.49
9 373,654,322.56
10 320,275,133.62
11 266,895,944.68
12 213,516,755.75
13 54,164,177.01
14 36,109,451.34
15 18,054,725.67
182
D) Research and Development Cost

Allocating funds for research and development is essential for evaluating
and enhancing our product based on market feedback and evolving needs.
According to Alexandra and Kim (2013), for small and medium-sized chemical
engineering businesses, research and development costs typically amount to less
than 0.5% of the total income generated in a year. The breakdown of these expenses
is outlined in the table below. As a new and small company offering only one
product, we have opted to allocate only 0.2% of our total income to the research
and development department. The calculation of research and development costs is
provided in the table below.
Table 7. 36 Research and Development Cost
Research and Development Factor 0.2%
Production Capacity 21,377
Price per Bottle (IDR) 89,900
Revenue per Year (IDR) 1,921,819,270
Research and Development Cost (IDR) 3,843,638
7.2.5 Total Operational Cost

In the table below, we can see the summary of the operational cost for 15
years for the calculation needed in cash flow. The operational cost (OPEX) will
exclude maintenance cost and depreciation.
183
Table 7. 37 Total Operational Cost from 2025 to 2030
Operating Cost (IDR) 2025 2026 2027 2028 2029 2030

Direct Raw Material 3,499,265,237.87 3,569,250,542.63 3,640,635,553.48 3,713,448,264.55 3,787,717,229.84 3,863,471,574.44
Production Labor Salary 3,965,000,000.00 4,044,300,000.00 4,125,186,000.00 4,207,689,720.00 4,291,843,514.40 4,377,680,384.69

Cost Utility 62,054,713.11 63,295,807.37 64,561,723.52 65,852,957.99 67,170,017.15 68,513,417.49
Local Tax 125,226,823.75 127,731,360.23 130,285,987.43 132,891,707.18 135,549,541.32 138,260,532.15

Fixed Cost
Insurance 262,764,697.51 268,019,991.46 273,380,391.29 278,847,999.12 284,424,959.10 290,113,458.28
Plant 15,570,000.00 15,881,400.00 16,199,028.00 16,523,008.56 16,853,468.73 17,190,538.11

Safety and Environmental
Overhead
Protection
Cost
Marketing and 190,240,000.00 194,044,800.00 197,925,696.00 201,884,209.92 205,921,894.12 210,040,332.00
Communication
General
Distribution 312,230,256.00 318,474,861.12 324,844,358.34 331,341,245.51 337,968,070.42 344,727,431.83
Expenses
Loan Interest 800,687,834.05 747,308,645.11 693,929,456.17 640,550,267.24 587,171,078.30 533,791,889.37
Research and Development 3,843,638.54 3,920,511.31 3,998,921.54 4,078,899.97 4,160,477.97 4,243,687.53
Total OPEX (Exclude Maintenance and 9,236,883,200.83 9,352,227,919.23 9,470,947,115.77 9,593,108,280.03 9,718,780,251.35
7,776,808,749
Depreciation)
Maintenance 141,683,985 141,683,985.21 144,517,664.92 147,408,018.21 150,356,178.58 153,363,302.15
Depreciation 222,981,899 222,981,899.70 212,311,334.73 202,417,135.63 173,098,228.89 184,683,213.02
184
Operating Cost (IDR) 2031 2032 2033 2034 2035 2036

Direct Raw Material 3,940,741,005.93 4,019,555,826.05 4,099,946,942.57 4,181,945,881.42 4,265,584,799.05 4,350,896,495.03
Production Labor Salary 4,465,233,992.38 4,554,538,672.23 4,645,629,445.67 4,738,542,034.59 4,833,312,875.28 4,929,979,132.78
Cost Utility 69,883,685.84 71,281,359.56 72,706,986.75 74,161,126.48 75,644,349.01 77,157,235.99
Local Tax 141,025,742.79 143,846,257.65 146,723,182.80 149,657,646.46 152,650,799.38 155,703,815.37
Fixed Cost
Insurance 295,915,727.45 301,834,042.00 307,870,722.84 314,028,137.29 320,308,700.04 326,714,874.04
Plant 17,534,348.87 17,885,035.85 18,242,736.56 18,607,591.29 18,979,743.12 19,359,337.98
Safety and Environmental
Overhead
Protection
Cost
Marketing and Communication 214,241,138.64 218,525,961.41 222,896,480.64 227,354,410.25 231,901,498.46 236,539,528.43
General Distribution 351,621,980.46 358,654,420.07 365,827,508.48 373,144,058.64 380,606,939.82 388,219,078.61
Expenses Loan Interest 480,412,700.43 427,033,511.49 373,654,322.56 320,275,133.62 266,895,944.68 213,516,755.75
Research and Development 4,328,561.28 4,415,132.50 4,503,435.15 4,593,503.86 4,685,373.93 4,779,081.41
Total OPEX (Exclude Maintenance and 9,980,938,884.07 10,117,570,218.80 10,258,001,764.01 10,402,309,523.91 10,550,571,022.78
8,344,806,466
Depreciation)
Maintenance 159,559,179 159,559,179.56 162,750,363.15 166,005,370.41 169,325,477.82 172,711,987.38
Depreciation 169,295,422 169,295,422.37 162,354,804.19 155,858,524.72 149,768,393.18 144,049,881.77
185

Operating Cost (IDR) 2037 2038 2039
Raw Material 4,437,914,424.93 4,526,672,713.43 4,617,206,167.70
Direct Production Cost Labor Salary 5,028,578,715.44 5,129,150,289.75 5,231,733,295.54
Utility 78,700,380.71 80,274,388.33 81,879,876.09
Local Tax 158,817,891.68 161,994,249.51 165,234,134.50
Fixed Cost
Insurance 333,249,171.52 339,914,154.95 346,712,438.05
Plant Overhead Cost Safety and Environmental Protection 19,746,524.74 20,141,455.24 20,544,284.34
Marketing and Communication 241,270,319.00 246,095,725.38 251,017,639.89
Distribution 395,983,460.19 403,903,129.39 411,981,191.98
General Expenses
Loan Interest 54,164,177.01 36,109,451.34 18,054,725.67
Research and Development 4,874,663.04 4,972,156.30 5,071,599.43
Total OPEX (Exclude Maintenance and Depreciation) 8,920,171,221 10,753,299,728.26 10,949,227,713.61
Maintenance 179,689,551 179,689,551.67 183,283,342.70
Depreciation 133,605,784 133,605,784.93 128,826,374.46
186
7.3 Depreciation
Depreciation is a reduction in the value of an asset that is calculated after the
asset is purchased. Depreciation occurs in the asset's lifetime value, if the asset has
exceeded its lifetime value, depreciation will not occur. Capital investment at the
beginning of the project will experience a fraction of its value and become a salvage
value at the end of the project. There are several methods that can be used to
calculate depreciation. The method used to estimate depreciation expense is Single
Declining Balance with the following general formula.
𝐵𝑉𝑛 = 𝐵 (1 − 𝑅)𝑁
where:
• BVn = Book value at n
• B = Initial value
• R = Depreciation rate
• N = Years elapsed
In a single declining balance, the variable stated for the calculation is the
depreciation rate, not the salvage value. In other words, the value of the rescue will
depend on the lifespan of the project. The depreciation rate for equipment is
estimated at 10% per year and for buildings is estimated at 2.5% per year. Based on
our calculation with the help of Ms. Excel, the total depreciation for a life
expectancy of 15 years is shown in the following table.
Table 7. 40 Total Depreciation
No Year Total Depreciation (IDR)
1 2025 Rp222,981,899.70
2 2026 Rp212,311,334.73
3 2027 Rp202,417,135.63
4 2028 Rp173,098,228.89
5 2029 Rp184,683,213.02
6 2030 Rp176,722,635.62
7 2031 Rp169,295,422.37
187
Table 7.39 Total Depreciation (cont’d)

No Year Total Depreciation (IDR)
8 2032 Rp162,354,804.19
9 2033 Rp155,858,524.72
10 2034 Rp149,768,393.18
11 2035 Rp144,049,881.77
12 2036 Rp138,671,763.30
13 2037 Rp133,605,784.93
14 2038 Rp128,826,374.46
15 2039 Rp124,310,375.83
The total depreciation for 15 years of the plant is 2,478,955,772 IDR.
Meanwhile, salvage value is the value of equipment, buildings, and supporting
facilities at the end of their life expectancy. The salvage values of every asset are
4,381,782,520 IDR.
7.4 Economic Analysis
7.4.1 Determining MARR
The Weighted Average Cost of Capital (WACC) is a financial metric used
to determine a company's cost of obtaining financing and acquiring assets. It does
this by comparing the proportions of debt and equity within the company's capital
structure. This ratio is highly comprehensive as it takes into account all sources of
capital. Additionally, it signifies the Minimum Acceptable Rate of Return (MARR),
which is the interest rate an investor is willing to accept on an investment to balance
the benefits and costs. WACC plays a crucial role in profitability analysis, where
MARR is calculated to be equal to WACC. Below is the formula used for this
calculation.
𝐸 𝐷
𝑊𝐴𝐶𝐶 = [ 𝑥 𝑅𝑒] + [ 𝑥 𝑅𝑑 𝑥 (1 − 𝑇𝑐)
𝐷+𝐸 𝐷+𝐸
Where,
Re = Cost of equity
Rd = Cost of debt
E/(D+E) = Financing for equity
D/(D+E) = Financing for debt
188
Tc = Income tax rate

For this project, the initial funding is obtained through a loan from a bank
and investors. Citibank has been selected to provide the loan at a bank interest
rate of 5.75% as of May 2024. The cost of equity refers to the return required
to compensate investors for the risks associated with investing in the project.
On the other hand, the cost of debt represents the effective interest rate that the
company must pay on its current debt. Other variables to consider include the
risk-free rate and market return, which are determined using market risk premia
for Indonesia up until March 2024. The estimated risk-free rate is 6.59%, and
the market return is 10.46%. The equity beta data is determined to be 1.2. The
calculation of the weighted average cost of capital (WACC) is presented in the
table below.
Table 7. 41 WACC/MARR Calculation

Equity (%)
Risk-free Rate 6.69
Beta Equity 1.2
Market Return 10.46
Cost of Equity 11.21
Rate of Equity (Investor) 60
Debt (%)
Bank Interest Rate 5.75%
Tax Rate 30.0%
Cost of Debt 4.03%
Rate of Debt 40%
WACC (%) 8.34
7.4.2 Price for Product per Unit

To determine the minimum price of our product, we need to find the
price of our product that makes the NPV equal to zero. To determine NPV,
first, we must calculate MARR. To obtain MARR, we need to calculate the
189
WACC first. The WACC that has been calculated will be increased to obtain
the value of MARR. The assumption that we used is that MARR equals WACC
x 1.5%.
The formula of NPV is as follows:
𝑛=𝑇
𝐶𝐹𝑛
𝑁𝑃𝑉 = ∑ − 𝑇𝐶𝐼
(1 + 𝑖)𝑛
𝑛=1
where:
• 𝐶𝐹𝑛 = net cashflow during the period t
• 𝑇𝐶𝐼 = total initial investment cost
• 𝑖 = discount rate
• 𝑛 = number of periods
Based on our calculations, when the NPV equals zero, the product price
is IDR 59,211.60. Thus, this price is the minimum selling price of our product.
Table 7. 42 Product Pricing per Unit Result
Minimum Price
Yearly Production Capacity 165,212
Profit Margin 1%
Product Price IDR 71,950
Adjusted Product Price IDR 89,900
Adjusted Profit Margin 28.85%
Therefore, the final selling price of HERBITES is IDR 89,900 per bottle.
7.4.3 Cash Flow

Cash flow refers to the movement of money into and out of a business
or investment over a specific period. This flow of money is crucial in
understanding a company's financial health, liquidity, and ability to meet its
financial obligations. The analysis of cash flow is vital for evaluating the
viability, profitability, and sustainability of a business or investment. Cash
inflows include receipts, revenues, incomes, and savings generated by business
activities, while cash outflows include costs, disbursements, expenses, and
taxes incurred during these activities. Understanding cash flow is essential for
190
making informed decisions about investments and ensuring the financial

stability of a business.
CASH FLOW
8.00
Cash Flow (Billion IDR)
3.00
-2.00 1 2 3 4 5 6 7 8 9 10 11 Gross Profit / Before Tax

Cash Flow
-7.00 After Tax Cash Flow
-12.00
-17.00
Figure 7. 2 Cash Flow

30,000,000,000
25,000,000,000
20,000,000,000
Cash Flow (IDR)
15,000,000,000
10,000,000,000
5,000,000,000
0
0 2 4 6 8 10 12
-5,000,000,000
-10,000,000,000
-15,000,000,000
Years
Figure 7. 3 Cumulative Cash Flow

191
Table 7. 43 Cash Flow
Product
Year % Capacity % Sold Unit Sold Revenue OPEX
Price (IDR)
0 2024 0% 0% 0 89,900 0 0
1 2025 90% 95% 141,256 89,900 12,698,937,774 9,236,883,201
2 2026 95% 100% 156,951 89,900 14,109,930,860 9,352,227,919
3 2027 100% 100% 165,212 89,900 14,852,558,800 9,470,947,116
4 2028 100% 100% 165,212 89,900 14,852,558,800 9,593,108,280
5 2029 100% 100% 165,212 89,900 14,852,558,800 9,718,780,251
6 2030 100% 100% 165,212 89,900 14,852,558,800 9,848,033,246
7 2031 100% 100% 165,212 89,900 14,852,558,800 9,980,938,884
8 2032 100% 100% 165,212 89,900 14,852,558,800 10,117,570,219
9 2033 100% 100% 165,212 89,900 14,852,558,800 10,258,001,764
10 2034 100% 100% 165,212 89,900 14,852,558,800 10,402,309,524
11 2035 100% 100% 165,212 89,900 14,852,558,800 10,550,571,023
12 2036 100% 100% 165,212 89,900 14,852,558,800 10,702,865,335
13 2037 100% 100% 165,212 89,900 14,852,558,800 10,753,299,728
14 2038 100% 95% 156,951 89,900 14,109,930,860 10,949,227,714
15 2039 95% 90% 141,256 89,900 12,698,937,774 11,149,435,353
192
Table 7.42 Cash Flow (cont’d)
Gross Profit / Before Tax Net Profit Before

Year Maintenance Cost Depreciation Cash Expenses All Expenses
Cash Flow Tax
0 2024 0 0 0 0 -11,774,821,089 -11,774,821,089
1 2025 141,683,985 222,981,900 9,378,567,186 9,601,549,086 3,320,370,588 3,097,388,688
2 2026 141,683,985 212,311,335 9,493,911,904 9,706,223,239 4,616,018,956 4,403,707,621
3 2027 141,683,985 202,417,136 9,612,631,101 9,815,048,237 5,239,927,699 5,037,510,563
4 2028 141,683,985 173,098,229 9,734,792,265 9,907,890,494 5,117,766,535 4,944,668,306
5 2029 141,683,985 184,683,213 9,860,464,237 10,045,147,450 4,992,094,563 4,807,411,350
6 2030 141,683,985 176,722,636 9,989,717,231 10,166,439,867 4,862,841,569 4,686,118,933
7 2031 141,683,985 169,295,422 10,122,622,869 10,291,918,292 4,729,935,931 4,560,640,508
8 2032 141,683,985 162,354,804 10,259,254,204 10,421,609,008 4,593,304,596 4,430,949,792
9 2033 141,683,985 155,858,525 10,399,685,749 10,555,544,274 4,452,873,051 4,297,014,526
10 2034 141,683,985 149,768,393 10,543,993,509 10,693,761,902 4,308,565,291 4,158,796,898
11 2035 141,683,985 144,049,882 10,692,255,008 10,836,304,890 4,160,303,792 4,016,253,910
12 2036 141,683,985 138,671,763 10,844,549,321 10,983,221,084 4,008,009,479 3,869,337,716
13 2037 141,683,985 133,605,785 10,894,983,713 11,028,589,498 3,957,575,087 3,823,969,302
14 2038 141,683,985 128,826,374 11,090,911,699 11,219,738,073 3,019,019,161 2,890,192,787
15 2039 141,683,985 124,310,376 11,291,119,338 11,415,429,714 1,407,818,436 1,283,508,060
193
Table 7.42 Cash Flow (cont’d)

After Tax Cash
Year Net Profit After Tax Cumulative Cash Flow NPV IRR
Flow
0 2024 0 -11,774,821,089 -11,774,821,089
1 2025 619,477,738 2,700,892,850 -9,073,928,239
2 2026 880,741,524 3,735,277,431 -5,338,650,807
3 2027 1,007,502,113 4,232,425,586 -1,106,225,221
4 2028 988,933,661 4,128,832,874 3,022,607,653
5 2029 961,482,270 4,030,612,293 7,053,219,946
6 2030 937,223,787 3,925,617,782 10,978,837,728
7 2031 912,128,102 3,817,807,829 14,796,645,557
10,475,028,658 29.88%
8 2032 886,189,958 3,707,114,638 18,503,760,195
9 2033 859,402,905 3,593,470,146 22,097,230,341
10 2034 831,759,380 3,476,805,911 25,574,036,252
11 2035 803,250,782 3,357,053,010 28,931,089,262
12 2036 773,867,543 3,234,141,936 32,165,231,198
13 2037 764,793,860 3,192,781,226 35,358,012,424
14 2038 578,038,557 2,440,980,604 37,798,993,028
15 2039 256,701,612 1,151,116,824 38,950,109,852
194
7.4.4 Cost Breakdown

To identify the primary cost driver, a cost breakdown analysis is conducted,
which involves categorizing various types of costs into a single pie chart. In
economic analysis, the term "cost breakdown" refers to the systematic process
of identifying the individual components contributing to the total cost of a
product, service, or package, with each element assigned a monetary value.
For companies, determining the cost breakdown is valuable as it enables
them to evaluate the proportions of each expense incurred during product
development and identify the most significant cost factor. Annual capital
investment can be calculated using the A/P factor for capital investment and
the A/F factor for salvage value. The calculation process is summarized in the
chart provided below.
Table 7. 44 Cost Breakdown Calculation
Cost Breakdown
Average Annual Cost Share
Component Share
(IDR) Percentage (%)
Capital Investment 1,493,529,695 12.84 11,547
Raw Material 4,034,283,511 34.68 31,191
Labor Salary 4,571,226,538 39.30 35,343
Utility 71,542,535 0.62 553
Local Tax 144,373,311 1.24 1,116
Insurance 302,939,964 2.60 2,342
Safety and Protection 17,950,567 0.15 139
Marketing and 219,326,642 1.89 1,696
Communication
Distribution 359,968,533 3.09 2,783
Loan Interest 412,903,726 3.55 3,192
Research and Development 4,431,310 0.04 34
Total 11,632,476,332 100 89,938
195
Figure 7. 4 Cost Breakdown Pie Chart

7.5 Profitability Analysis
7.5.1 Return on Investment

Return on investment or ROI is a performance indicator used to assess the
efficiency or profitability of an investment and to compare the efficiency of
different investments. ROI is calculated by dividing the return on investment by the
investment cost. Using this definition, ROI can also be defined as the annual profit
generated by the invested capital. The high ROI means the investment gains
favorably to investment cost. The following formula can be used to calculate return
on investment.
Annual Profit
ROI = 100% x
Total Capital Investment
Based on the information provided in the preceding chapter, the average

yearly net profit after tax amounts to IDR 4,232,425,586, while the total capital
investment (CAPEX) stands at IDR 11,774,821,088. Utilizing the provided formula
and assuming a plant lifespan of 15 years, the Return on Investment (ROI) can be
calculated as follows:
196
4,123,828,598
ROI = 100% x
11,546,939,076
According to the calculation above, the ROI for this project amounts to
35.94%. When comparing ROI to the Minimum Acceptable Rate of Return
(MARR), a project is deemed feasible and economically justified if the ROI equals
or exceeds the MARR. In this case, the MARR is set at 12.51%, which is based on
the project's Weighted Average Cost of Capital (WACC). Consequently, since the
ROI exceeds the MARR, it indicates that the project is both viable and profitable.
7.5.2 Payback Period

The payback period shows the time needed to return the original investment
by the annual earnings. Generally, a project will be better if it has a faster payback
197
period. The payback period will be considered by the board and investors when
deciding on the continuity of the project. There are no minimum criteria for the the
preference of the board and investor.
The payback period ignores the time value of money, so it will not be affected
by every rate and interest in capital budgeting. In this assignment, the author
evaluates the payback period using cumulative cash flow value. When the value
becomes positive, we have reached the payback period. The payback period will be
evaluated by calculating cumulative cash flow for the project's life span of 15 years,
as shown in the table below.
Table 7. 45 Payback Period Calculation
Cumulative Cash Payback
Year After Tax Cash Flow
Flow Period
0 -11,774,821,088.94 -11,774,821,088.94 0
1 2,700,892,850.31 -9,073,928,238.63 0
2 3,735,277,431.39 -5,338,650,807.24 0
3 4,232,425,586.34 -1,106,225,220.90 0
4 4,128,832,873.58 3,022,607,652.68 3.267926858
5 4,030,612,293.35 7,053,219,946.04 0
6 3,925,617,782.26 10,978,837,728.29 0
7 3,817,807,829.05 14,796,645,557.34 0
8 3,707,114,637.63 18,503,760,194.97 0
9 3,593,470,145.56 22,097,230,340.53 0
10 3,476,805,911.34 25,574,036,251.88 0
11 3,357,053,009.96 28,931,089,261.84 0
12 3,234,141,936.17 32,165,231,198.01 0
13 3,192,781,226.21 35,358,012,424.22 0
14 2,440,980,603.83 37,798,993,028.05 0
15 1,151,116,823.65 38,950,109,851.70 0

198
Figure 7. 5 Payback Period Calculation

As the above table and figure show, we can replace the capital investment
for just the first three months of the project.
7.5.3 Net Present Value

Net Present Value (NPV) is defined as the difference between the present
value of cash inflows and the present value of cash outflows over a period. NPV is
calculated to be used in capital budgeting and investment planning to analyze the
profitability of a projected investment or project. In the calculation of NPV, relevant
interest rates are also determined. In the NPV calculation, we also used MARR
which has a value of 12.51%. The calculation can be done by the equation below.
𝑛
𝑅𝑡
𝑁𝑃𝑉 = ∑
(1 + 𝑖)𝑡
𝑡=1
Rt means net cash inflows minus outflows during a single period t.

Meanwhile, i mean the interest rate used in the project, and t means a number of
periods of time. If the NPV obtained is greater than zero, that means the project is
profitable. If the project is executed when the NPV value is less than zero, that
means the project will never give profit until the end of its lifetime. And if NPV
equals zero, the project will not give any profit or loss. From the calculation, the
199
value of NPV obtained for a lifespan of 15 years is 10,475,028, it means that the
project is profitable.
7.5.4 Break Even Point

The break-even point (BEP) is a key financial metric that determines the
minimum sales volume or revenue required for a business to cover all its expenses
and costs, resulting in neither profit nor loss. This is essential for businesses to
understand, as it indicates the minimum sales volume or revenue required to cover
all expenses and maintain financial stability.
For a business to operate profitably, it is crucial to ensure that sales cover
both variable and fixed costs. If sales are insufficient to meet these costs, the
business will incur a loss. Conversely, if the sales revenue covers all costs, the
business will generate profits. There are several methods to calculate the break-even
point. One approach involves calculating the precise number of units sold to
generate enough revenue to cover all expenditures. Another method involves
dividing the company's total fixed expenses by its contribution margin ratio.
Additionally, the BEP can be determined by calculating the cumulative product
units produced before the payback period. The calculation of BEP is shown in the
table below.
Table 7. 46 Break Even Point Calculation based on Payback Period
Products % Sold Product
Years % Sold Cumulative
(Unit) Capacity (unit)
1.00 165,212.00 90% 95% 141,256.00 141,256.00
2.00 165,212.00 95% 100% 156,951.00 298,207.00
3.00 165,212.00 100% 100% 165,212.00 463,419.00
4.00 165,212.00 100% 100% 165,212.00 628,631.00
5.00 165,212.00 100% 100% 165,212.00 793,843.00
6.00 165,212.00 100% 100% 165,212.00 959,055.00
7.00 165,212.00 100% 100% 165,212.00 1,124,267.00
8.00 165,212.00 100% 100% 165,212.00 1,289,479.00
9.00 165,212.00 100% 100% 165,212.00 1,454,691.00
0.00 165,212.00 100% 100% 165,212.00 1,619,903.00
According to the break-even point calculation provided, with a payback
period of 3.25 years, the break-even point is attained when 507,684 units are
200
produced and sold. This means that the company must sell exactly 507,684 units to
cover all its costs without making a profit or a loss.
7.5.5 Internal Rate of Return

The internal rate of return (IRR) is the highest interest rate that can be paid
on a project while still achieving breakeven at the end of its lifespan. A discount rate
known as the internal rate of return (IRR) equalizes the net present value (NPV) of
all the cash flows from a project. In simpler, the IRR is the interest rate at which the
net present value (NPV) becomes zero. This standard suggests that a project will
only make a profit if the IRR is greater than the capital investment in the market.
The IRR can be determined by utilizing the following equation. The IRR and the
previously estimated MARR (Minimum Acceptable Rate of Return) must be
contrasted to assess the project’s viability. The project is deemed feasible if the IRR
number exceeds the MARR value (IRR>MARR).
𝑛=𝑡
𝐶𝐹𝑛
0= ∑ − 𝑇𝐶𝐼
(1 + 𝐼𝑅𝑅)𝑛
𝑛=1
Based on the observation, the IRR for our product is 29.88% with a product
price of IDR 89,900. Comparing the IRR and MARR values, we observe that the
IRR is higher than the MARR values as the MARR is 12.51%. As the IRR value is
higher than the MARR value, the project is considered viable. Consequently, we
can conclude that the production is a feasible and attractive project since it generates
profitability for the investors.
7.6 Sensitivity Analysis

A sensitivity analysis is performed to determine the impact of percentage
changes in relevant variables on the project’s profitability. This type on analysis
identifies which variables are most susceptible to change and require further
investigation. We can predict the loss caused by changes in these components using
this analysis. Because of that, we will perform a sensitivity analysis to examine the
change in cash flow caused by changes in the components that affect profit. In this
case, we investigated the relationship between changes in product selling prices, raw
material costs, and labour salary, and the parameters are NPV, IRR, and payback
201
periods. These criteria are considered because they are most likely to fluctuate in the
reality. The deviation used in this analysis in range of 5% from -15 % to 15%.
7.6.1 Changes in Product Selling Price

Firstly, we performed a sensitivity analysis based on the fluctuation
of the product selling prices. The product selling price is one of the most
important variables that can affect production stability, because these
variables determine the revenue and profit that the industry can earn. Lower
selling prices are frequently linked to a delay in payback. The sensitivity
based on the product’s selling price fluctuations can be seen in the table
below.
Table 7. 47 Product Price Fluctuations
Deviation NPV IRR PBP (years)

-15% Rp275,454,433.17 13.06% 5.704874678
-10% Rp3,687,878,734.79 19.26% 4.527197877
-5% Rp7,081,453,696.51 24.75% 3.784411231
0% Rp10,475,028,658.23 29.88% 3.267926858
5% Rp13,868,603,619.95 34.78% 2.883926524
10% Rp17,262,178,581.67 39.53% 2.589219546
15% Rp20,655,753,543.39 44.19% 2.35273165
Based on the table above, it is known that the higher the product
selling price generates the higher IRR, higher NPV, and shorter PBP
obtained at the end of analysis time. This means the higher profit is
generated and the product prices are very sensitive to this project. As the
competitiveness factor for the existing products should be considered, the
product price is IDR 89,900. That price is considered to the best standard to
provide economic feasibility, but it is still accepted in the market.
7.6.2 Changes in Raw Material Cost

The next, sensitivity analysis was performed primarily influenced by
the fluctuation of raw material costs. Raw material changes in an economic
way might also fluctuate in the future which will affect the overall
202
operational cost of the project because the raw materials account for a
significant portion of the operational cost. The cost of raw materials may
change depending on the price of raw materials determined by suppliers and
the distribution cost which is the transportation cost from fuel. In the end,
raw material costs will affect the IRR, NPV, and payback period of the
project. The effects of raw material price fluctuation can be seen in Table
3.3.
Table 7. 48 Raw Materials Fluctuations

-15% Rp13,136,074,528.88 33.68% 2.963121758
-10% Rp12,224,251,719.95 32.40% 3.058008818
-5% Rp11,530,294,499.56 31.21% 3.160336277
0% Rp10,400,606,102.10 29.81% 3.270038746
5% Rp9,270,917,704.63 28.36% 3.387943336
10% Rp8,141,160,974.09 26.87% 3.515005642
15% Rp6,995,601,327.61 25.31% 3.6523357
Based on the table above, it is known that the higher raw material
cost generates the lower IRR, lower NPV, and longer PBP obtained at the
end of analysis time. However, the differences in result parameters were not
significant, which means raw material costs do not have a great impact on
the profitability of this project.
7.6.3 Changes in Labor Cost

Thirdly, the sensitivity analysis based on labor cost was carried out
due to changes in the product’s operational costs. One of the factors that
affect the cost of manufacturing in the project and may be used to evaluate
the project’s stability is the cost of salaries. Although greater labor costs
(higher wages and benefits) benefit employees, they can also have a
negative impact on business revenues, the number of jobs available, and the
number of hours each employee works. The impact of lowering and
maximizing the worker salary on the profitability of production will
therefore be examined.
203
Table 7. 49 Labor Cost Fluctuations

-15% Rp12,632,852,350.16 33.14% 2.993539194
-10% Rp11,599,670,470.07 31.67% 3.10609462
-5% Rp10,566,488,589.98 30.19% 3.22798203
0% Rp10,404,515,299.84 29.81% 3.27003875
5% Rp8,500,124,829.80 27.15% 3.50421593
10% Rp7,466,942,949.71 25.59% 3.66157757
15% Rp6,433,761,069.62 23.99% 3.83426865
Based on the table above, it is known that the higher labor salary
made by the company generates a lower IRR, lower NPV, and longer PBP
obtained at the end of the analysis time. However, the differences in the
results of the parameters were also not significant. Hence, the labor costs
also do not have a great impact on the profitability of this project.
7.6.4 Sensitivity Graph

The sensitivity analysis from the preceding section is used to plot
the fluctuation visualization. Three graphs show the relationship between
the IRR, NPV, and payback period values as a function of cost changes
(product price, raw material price, and total salary). The chart below
represents the relationship between each component and the profitability
parameter.
A) Internal Rate of Return (IRR)
Based on the IRR sensitivity graph below, we can see that raw
material and labor costs do not influence the IRR significantly,
Meanwhile, product price has a significant influence on IRR, and the
increase in product price causes an increase in IRR.
204
Figure 7. 6 IRR Sensitivity Graph

B) Net Present Value (NPV)

Based on the net present value fluctuation graphic below, the
Based on the NPV sensitivity graph above, we can conclude that raw
material and labor costs do not influence the NPV significantly,
Meanwhile, product price has a significant influence on NPV, the
increase of product price causing an increase in NPV.
Figure 7. 7 9 NPV Sensitivity Graph

C) Payback Period (PBP)
Based on the Payback Period sensitivity graph below, we can see
that raw material and total salary do not influence the Payback Period
205
significantly, Meanwhile, product price has a significant influence on the

Payback Period, with the increase of product price causing a decline in
Payback Period.
Figure 7. 8 PBP Sensitivity Graph

CHAPTER 8
CONCLUSION AND RECOMMENDATION
8.1 Conclusion
Based on the whole design from needs to economic analysis, some
important conclusions are listed as follows:
1. The current joint health supplement is still not effective in overcoming jointh
health problems since it has side effect, not easy to consume, and quite
expensive.
2. In overcoming these problems, we developed a joint health supplement with
herbal ingredients which has no side effect, easy to consume in a form of
gummies, come with an affordable price.
3. Surveys are conducted to determine consumer demand for a product by
spreading questionnaires and interviewing people. The result shows that 81.5%
of 150 respondents are interested in buying our innovative joint health
supplement.
4. Concept generation is proceeded by observing existing concepts and
brainstroming new concepts. The authors use RVF method to shortlist the
concepts until 23 acceptable concepts remain out of 90 concepts. The concepts
are reduced even more in concept screening to gent only 5 concepts that will be
assessed futher.
5. The final concept is “Chewed gummy joint supplement with Antioxidant from
Lontar Seeds (Borassus flabellifer L.), Brown Algae (Undaria pinnatifida), and
Kelor Leaves (Moringa oleifera L.).”
6. The product is manufactured under batch process system that consists of several
process, which is, glucosamine extraction, flavonoid extraction, fucoidan
extraction, and gummy making process.
7. The production capacity of this joint health supplement is 635 bottles/batch or
around 41.11 kg of product per batch. There is 2 batch in a day. This calculation
is obtained from the calculation of product demand. The operational day of the
plant is 130 days.

207
8. In the calculation of the mass balance sheet, there is an assumption that the losses
for some processes are around 2%, which is going to be the waste.
9. The total energy needed in the calculation of energy balance for manufacturing
this product reaches 48.025 kWh.
10. The final product that will be marketed is called “HERBITES” with the tagline
“Small Bites, Big Impact”, produced by a company named Seawalan Inc. The
joint health supplement is packaged in a 100 mL plastic bottle for convenient
use.
11. The name of the manufacturing company would be Seawalan Inc. With the
vision to provide innovative joint health supplements from herbal ingredients
with high value in products and services that empower people leading to a
healthier joint. It is located in Jalan Raya Denpasar-Gilimanuk with a total area
of 2470 m2.
12. The raw material suppliers for HERBITES ranged from Bali, Nusa Tenggara,
Surabaya, and foreign (China) suppliers with the total cost including delivery is
IDR 3,499,265,237.
13. HERBITES is mainly targeted towards the Indonesian population living in Bali,
Nusa Tenggara Barat, and Nusa Tenggara Timur.
14. HERBITES will be marketed to the public via 3 distribution centers with 11 total
retailers.
15. The total capital investment of the company is IDR 11,546,939,076, with a fixed
capital of 1,774,821,088 and a working capital of IDR 1,384,280,901.
16. The operational cost of HERBITES is estimated to be IDR 9,236,883,200 per
month with raw materials as the largest portion of operational cost that takes up
to 35% of operational cost.
17. Using the minimum price of IDR 69,750 (NPV = 0), the designated final price
of HERBITES is IDR 89,900 with a profit margin of 28.85%
18. The WACC and MARR of the project are 8.34% and 12.51% respectively.
19. The return on investment (ROI) of the project reaches 35.94%, with a payback
period of 4 years and a breakeven point of 507,684 products. Meanwhile, the
NPV of the project is IDR 10,475,028,658 and the IRR reaches 29.88% meaning
that the project is profitable.
208
20. The most significant variable in determining the profitability and payback period
of the project is the product price.
8.2 Recommendation
Recommendation for the project is listed below:
1. Conduct additional research to make further innovations for the function of
HERBITES.
2. Increase product sales by improving marketing techniques and promotions.
3. To enhance profit, research to improve the most sensitive parameters, raw
material costs, and labor salary costs.
4. Consider distributing the product through online platforms. Also, develop a
better distribution strategy and broaden the distribution area outside of Bali and
Nusa Tenggara Island.
5. Continue maintaining the quality that has been owned by way of managing
production resources and human resources that are more effective and efficient
so that they can compete with other similar companies.
REFERENCES
Aesia, A. (2023) 7 cara menentukan Harga Sewa tanah, 7 Cara Menentukan Harga
Sewa Tanah. Available at: https://aesia.kemenkeu.go.id/berita-
properti/properti/7-cara-menentukan-harga-sewa-tanah-83.html (Accessed: 05
May 2024).
Biessels, G. J., & Despa, F. (2018). Cognitive decline and dementia in diabetes
mellitus: mechanisms and clinical implications. Nature reviews.
Endocrinology, 14(10), 591–604. https://doi.org/10.1038/s41574-018-0048-7
Blinkouskaya, Y., Caçoilo, A., Gollamudi, T., Jalalian, S., & Weickenmeier, J.
(2021). Brain aging mechanisms with mechanical manifestations. Mechanisms
of ageing and development, 200, 111575.
https://doi.org/10.1016/j.mad.2021.111575
Briggs AM, Cross MJ, Hoy DG, et al. Musculoskeletal health conditions represent
a global threat to healthy aging: a report for the 2015 World Health Organization
World Report on ageing and health. Gerontologist 2016;56:S243–55.
Bpjs-kesehatan.go.id. (2021) [online] Available at:
https://bpjskesehatan.go.id/bpjs/dmdocuments/d24f3714c050f7cab8f817c5f87
17c84.pdf [Accessed 23 May 2024].
Center for Food Safety and Applied Nutrition (2024) Dietary supplements, U.S.
Food and Drug Administration. Available at:
https://www.fda.gov/food/dietary-supplements (Accessed: 01 March 2024).
Clark K. L. (2007). Nutritional considerations in joint health. Clinics in sports
medicine, 26(1), 101–118. https://doi.org/10.1016/j.csm.2006.11.006
Chodosh, J., Ferrell, B. A., Shekelle, P. G., & Wenger, N. S. (2001). Quality
indicators for pain management in vulnerable elders. Annals of internal
medicine, 135(8 Pt 2), 731–735. https://doi.org/10.7326/0003-4819-135-
8_part_2-200110161-00012.
Citibank (2024) Informasi Suku Bunga Dasar Kredit - Citibank Indonesia,
Citibank. Available at: https://www.citibank.co.id/id/pinjaman/ready-
credit/informasi-lainnya/suku-bunga-dasar-kredit/ (Accessed: 22 May 2024).

210
Cope PJ, Ourradi K, Li Y, Sharif M. Models of osteoarthritis: the good, the bad and
the promising. Osteoarthritis Cartilage. 2019 Feb;27(2):230-239.
Deb, A., Thornton, J. D., Sambamoorthi, U., & Innes, K. (2017). Direct and indirect
cost of managing alzheimer's disease and related dementias in the United States.
Expert review of pharmacoeconomics & outcomes research, 17(2), 189–202.
https://doi.org/10.1080/14737167.2017.1313118
Djaoudene, O. et al. (2023) ‘A global overview of dietary supplements: Regulation,
market trends, usage during the COVID-19 pandemic, and health effects’,
Nutrients, 15(15), p. 3320. doi:10.3390/nu15153
Dgip.go.id. (2024). Beranda. [online] Available at: [Accessed 23 May 2024].
Farghali, M. et al. (2020) ‘Can brain health be supported by vitamin D-based
supplements? A critical review’, Brain Sciences, 10(9), p. 660.
doi:10.3390/brainsci10090660.
Falco-Walter J. (2020). Epilepsy-Definition, Classification, Pathophysiology, and
Epidemiology. Seminars in neurology, 40(6), 617–623.
https://doi.org/10.1055/s-0040-1718719
Fitriyani, A. et al. (2023) ‘The effect of alternative therapy for Moringa Leaf and
date palm juice on gout’, International Journal of Science and Society, 5(5), pp.
1138–1154. doi:10.54783/ijsoc.v5i5.921.
Forni, A. (2022) Brain health supplements: What you need to know, Nuvance
Health. Available at: https://www.nuvancehealth.org/health-tips-and-
news/brain-health-supplements-what-you-need-to-know (Accessed: 14
February 2024).
García-García, I., Donica, O., Cohen, A. A., Gonseth Nusslé, S., Heini, A., Nusslé,
S., Pichard, C., Rietschel, E., Tanackovic, G., Folli, S., & Draganski, B.
(2023). Maintaining brain health across the lifespan. Neuroscience and
biobehavioral reviews, 153, 105365.
https://doi.org/10.1016/j.neubiorev.2023.105365
GBD 2016 Neurology Collaborators (2019). Global, regional, and national burden
of neurological disorders, 1990-2016: a systematic analysis for the Global
Burden of Disease Study 2016. The Lancet. Neurology, 18(5), 459–480.
https://doi.org/10.1016/S1474-4422(18)30499-X.
211
Goetz C. G. (2011). The history of Parkinson's disease: early clinical descriptions

and neurological therapies. Cold Spring Harbor perspectives in medicine,
1(1), a008862.
Gorelick, P. B., Furie, K. L., Iadecola, C., Smith, E. E., Waddy, S. P., Lloyd-Jones,
D. M., Bae, H. J., Bauman, M. A., Dichgans, M., Duncan, P. W., Girgus, M.,
Howard, V. J., Lazar, R. M., Seshadri, S., Testai, F. D., van Gaal, S., Yaffe,
K., Wasiak, H., Zerna, C., & American Heart Association/American Stroke
Association (2017). Defining Optimal Brain Health in Adults: A Presidential
Advisory From the American Heart Association/American Stroke
Association. Stroke, 48(10), e284–e303.
https://doi.org/10.1161/STR.0000000000000148
Hassan, S. et al. (2020) ‘Dietary supplements: Types, health benefits, industry
and regulation’, Functional Foods and Nutraceuticals, pp. 23–38.
doi:10.1007/978-3-030-42319-3_3.
Heinzel, Sebastian et.al. (2014). A Neurodegenerative Vascular Burden Index and
the Impact on Cognition. Frontiers in aging neuroscience. 6. 161.
10.3389/fnagi.2014.00161.
Huang, J., Wu, H., Huang, H., Wu, W., Wu, B., & Wang, L. (2021). Clinical
characteristics and outcome of primary brain abscess: a retrospective analysis.
BMC infectious diseases, 21(1), 1245. https://doi.org/10.1186/s12879-021-
06947-2
Huang, Z.-R., Lin, Y.-K. and Fang, J.-Y. (2009) ‘Biological and pharmacological
activities of squalene and related compounds: Potential uses in cosmetic
dermatology’, Molecules, 14(1), pp. 540–554.
doi:10.3390/molecules14010540.
Hugo, J., & Ganguli, M. (2014). Dementia and cognitive impairment:
epidemiology, diagnosis, and treatment. Clinics in geriatric medicine, 30(3),
421–442. https://doi.org/10.1016/j.cger.2014.04.001.
Hun, L.H. (2024) Supplementing Indonesia’s Way to better health, DSG
Consumer Partners. Available at:
https://www.dsgcp.com/insights/supplementing-indonesias-way-to-better-
health (Accessed: 13 February 2024).
212
Ibrahim, N. ‘Izzah et al. (2020) ‘The efficacy of squalene in cardiovascular disease

risk-A systematic review’, Nutrients, 12(2). doi:10.3390/nu12020414.
Juneja, P., Munjal, A., & Hubbard, J. B. (2023). Anatomy, Joints. In StatPearls.
StatPearls Publishing
Karimi, A., Majlesi, M., & Rafieian-Kopaei, M. (2015). Herbal versus synthetic
drugs; beliefs and facts. Journal of nephropharmacology, 4(1), 27–30.
McKenzie, B. (no date) Food product and safety regulation: Indonesia: Asia Pacific
Food Law Guide: Baker mckenzie resource hub, Home. Available at:
https://resourcehub.bakermckenzie.com/pl-pl/resources/asia-pacific-food-
law-guide/asia-pacific/indonesia/topics/food-product-and-safety-regulation
(Accessed: 01 March 2024).
Northrop, A. (2024) Your guide to the best brain supplements, Forbes. Available
at: https://www.forbes.com/health/supplements/best-brain-supplements/
(Accessed: 15 February 2024)
Park, C.Y. (2019) ‘Vitamin D in the prevention and treatment of osteoarthritis:
From clinical interventions to cellular evidence’, Nutrients, 11(2), p. 243.
doi:10.3390/nu11020243.
Pekna, M., & Pekny, M. (2012). The neurobiology of brain injury. Cerebrum : the
Dana forum on brain science, 2012, 9
Peñalver, R. et al. (2022) ‘Nutritional and antioxidant properties of moringa oleifera
leaves in Functional Foods’, Foods, 11(8), p. 1107.
doi:10.3390/foods11081107.
Prati, C., Demougeot, C., Guillot, X., Godfrin-Valnet, M., & Wendling, D. (2014).
Endothelial dysfunction in joint disease. Joint bone spine, 81(5), 386–391.
https://doi.org/10.1016/j.jbspin.2014.01.014.
Quesnell, S. (2022) 6 supplements to improve joint health, St Paul
Rheumatology.
Available at: https://stpaulrheumatology.com/2022/02/blog-6-supplements-
to-improve-joint-
health/#:~:text=Joint%20supplements%20are%20great%20for,pain%20relie
vers%20such%20as%20NSAIDs. (Accessed: 12 February 2024).
213
Redfield RR,Mac Kenzie WR, Kent CK, et al. Prevalence of chronic pain and high-
impact chronic pain among adults—United States, 2016. Morb Mortal Wkly
Rep 2018;67(36):1–6.
Sherwood C. C. (2005). Comparative anatomy of the facial motor nucleus in
mammals, with an analysis of neuron numbers in primates. The anatomical
record. Part A, Discoveries in molecular, cellular, and evolutionary biology,
287(1), 1067–1079. https://doi.org/10.1002/ar.a.20259
Stiles, J., & Jernigan, T. L. (2010). The basics of brain development.
Neuropsychology review, 20(4), 327–348. https://doi.org/10.1007/s11065-
010-9148-4.
Vinod, A., Sharma, S. and Sharma, V. (2023) ‘Advancement in plant tissue culture-
based research for sustainable exploitation of well-known medicinal herb
bacopa monnieri’, Journal of Tropical Biodiversity and Biotechnology, 8(3).
doi:10.22146/jtbb.74937.
Walker, E.A. (2023) Bacopa monnieri, StatPearls [Internet]. Available at:
https://www.ncbi.nlm.nih.gov/books/NBK589635/#:~:text=The%20main%2
0indications%20for%20using,anxiety%20reduction%20with%20using%20B
acopa. (Accessed: 17 February 2024).
Welsh, T. P., Yang, A. E., & Makris, U. E. (2020). Musculoskeletal Pain in Older
Adults: A Clinical Review. The Medical clinics of North America, 104(5),
855–872. https://doi.org/10.1016/j.mcna.2020.05.002
Wierzejska, R.E. (2021) ‘Dietary supplements—for whom? the current state of
knowledge about the health effects of selected supplement use’, International
Journal of Environmental Research and Public Health, 18(17), p. 8897.
doi:10.3390/ijerph18178897.
WHO Global Health Ethics team. Ageing.
https://www.who.int/ethics/topics/ageing/en/. 2019
Zhu, X. et al. (2018) ‘Effectiveness and safety of glucosamine and chondroitin for
the treatment of osteoarthritis: A meta-analysis of randomized controlled
trials’, Journal of Orthopaedic Surgery and Research, 13(1).
doi:10.1186/s13018-018-0871-5.
214
Citibank (2024) Informasi Suku Bunga Dasar Kredit - Citibank Indonesia,

Citibank. Available at: https://www.citibank.co.id/id/pinjaman/ready-
credit/informasi-lainnya/suku-bunga-dasar-kredit/ (Accessed: 22 May 2024).
Fitriya (2024) PTKP Terbaru 2024 Dan Peraturan Penghasilan Tidak Kena Pajak,
Mekari Klikpajak. Available at: https://klikpajak.id/blog/pengertian-ptkp/
(Accessed: 23 May 2024).
Jogjakota, D. (2024) Sewa Truk Bali Murah Harga Terbaru, Dodolan. Available at:
https://dodolan.jogjakota.go.id/happy-group/sewa-truk-bali-murah-harga-
terbaru (Accessed: 22 May 2024).
J&T Cargo (no date) J&T Cargo - home, J&T Cargo - HOME. Available at:
https://www.jtcargo.id/ (Accessed: 22 May 2024).
Kementerian Energi dan Sumber Daya Mineral. (2023). Peraturan Menteri Energi
dan Sumber Daya Mineral. Nomor 28 Tahun 2016 tentang Tarif Tenaga Listrik
Yang Disediakan Oleh PT PLN (Persero). Jakarta
Listrik (no date) Portal Website Resmi Pemerintah Kabupaten Jembrana. Available
at: https://jembranakab.go.id/?module=listrik (Accessed: 11 May 2024).
Said, N.S.; Olawuyi, I.F.; Lee, W.Y. Pectin Hydrogels: Gel-Forming Behaviors,
Mechanisms, and Food Applications. Gels 2023, 9, 732.
https://doi.org/10.3390/gels9090732
Seider, Warren D, et al. (2019) Product and Process Design Principles: Synthesis,
Analysis, and Evaluation. New York, John Wiley & Sons Inc.
Sosialisasi Pra Pembuatan Cellplan Menara telekomunikasi di Kabupaten
Jembrana (no date) Portal Website Resmi Pemerintah Kabupaten Jembrana.
Available at:
https://jembranakab.go.id/index.php?module=detailberitaskpd&id=299&skp
d=inkom (Accessed: 11 May 2024).
Orange flavour excipient: Uses, suppliers, and specifications (2022)
PharmaCentral. Available at: https://pharmacentral.com/product/orange-
flavour-pharmaceutical-
grade/#:~:text=Orange%20Flavour%20(also%20referred%20to,oral%20phar
maceutical%20products%20as%20flavourings. (Accessed: 05 May 2024
215
OLX (2024). Available at: https://www.olx.co.id/item/tanah-1-hektar-pinggir-

jalan-utama-negara-pengambengan-iid-898015259 accessed May 5th,
2024).Rhein-Knudsen, N., Reyes-Weiss, D., & Horn, S. J. (2023).
Extraction of high purity fucoidans from brown seaweeds using cellulases
and alginate lyases. International Journal of Biological Macromolecules,
229, 199–209. https://doi.org/10.1016/j.ijbiomac.2022.12.261
Xylitol: Overview, uses, side effects, precautions, interactions, dosing and reviews
(no date) WebMD. Available at:
https://www.webmd.com/vitamins/ai/ingredientmono-996/xylitol (Accessed:
05 May 2024).
Xylitol (no date) National Center for Biotechnology Information. PubChem
Compound Database. Available at:
https://pubchem.ncbi.nlm.nih.gov/compound/6912 (Accessed: 05 May 2024).

TK07 - Final Report FIX

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

TK07 - Final Report FIX

Uploaded by

Copyright:

Available Formats

UNIVERSITAS INDONESIA

HERBITES: JOINT HEALTH SUPPLEMENT WITH GLUCOSAMINE,

FREYA SURYADARMA 2106729682

DEPARTMENT OF CHEMICAL ENGINEERING

Name : Faatih Rizkia Hudaya

Name : Freya Suryadarma

Name : Nickyta Tanryan

Name : Rhaisa Salma Fitrilia

Name : Valentina Filiciani Lamba

Depok, 6th June 2024

iii Universitas Indonesia

HERBITES: JOINT HEALTH SUPPLEMENT WITH GLUCOSAMINE,

Keyword: Bali, HERBITES, Joint Health, Supplement, Natural Ingredients

Maintaining healthy joints is essential for an active, fulfilling life.

LIST OF GROUP MEMBER .............................................................................. ii

vii Universitas Indonesia

viii Universitas Indonesia

Figure 1. 1 Existing Joint Health Supplement Concept ....................................... 13

xii Universitas Indonesia

xiii Universitas Indonesia

Table 1. 1 Problem Limitations for Joint Supplement Product .............................. 3

xiv Universitas Indonesia

xvi Universitas Indonesia

1.1. Background of Ideas

Unfortunately, pain may be undertreated or inappropriately managed in

1.2. Problem Identification

1.3. Problem Formulation

Product Description Joint supplements crafted from natural ingredients.

Primary Market Adults experiencing symptoms of joint disorders

Obstacle 1. The formulation and advancement of the

Stakeholder Customers, Seller, Retailer, BPOM, and Government

(Source: Personal Data, 2024)

1.6. Needs Identification

1.6.1 Interpretation of Customer Needs

1. Supplement for joint health that can preserve joint health

3. Joint health supplement needs to be more effective

4. The product has a unique flavor

5. An easy to consume joint health supplement

6. Consumers’s experience and convenience in using the product

7. The product is in practical forms

8. The supplement contains natural ingredients to solve joint health problems

Joint health supplement in forms such as tablets, candies, beverages, and

10. Product is safe to be used or consumed

11. The product can be consumed universally

12. The product is affordable.

(Source: Personal Data, 2024)

1.6.2 Category of Customer Needs and Needs Rank

Supplement for joint health that can preserve joint health 5

Joint health supplement needs to be more effective 5

The product has a unique flavor 3

An easy to consume joint health supplement 4

Consumers’s experience and convenience in using the product 5

The product is in practical forms 2

The supplement contains natural ingredients to solve joint health

Joint health supplement in forms such as tablets, candies, beverages, and

Table 1.3 Grouping and Ranking Needs (cont’d)

Product is safe to be used or consumed

11 The product can be consumed universally 5

12 The product is affordable. 4

1.7. Benchmarking Existing Product

NATUR Pharmeasy Grow

1. Supplement for 5 mg 1100 185 1400

Table 1.4 Assessing Specifications Based on Competitors (cont’d)