The Simulation of Investment Cost and Operational Cost to Improve the Financial Performance of Agroindustry SME Units of Cocoa in North Lombok Regency, Indonesia

Investment and operational costs are key determinants of the financial feasibility of a cocoa processing business unit; therefore, it is necessary to conduct simulations to assess the cocoa processing business's resilience to potential future cost increases. This research aims to fill the research gap by presenting a comprehensive model of investment and operational cost simulation. The simulation model is specifically designed to align with the socio-economic and operational characteristics of cocoa agro-industry SMEs in North Lombok Regency. This research is designed based on dynamic modeling, which functions as a simulation tool to estimate the behavior of cost components over time. Through analysis of financial feasibility using a dynamic model, the interaction and causal links among financial variables in the cocoa agro-industry subsystem can be considered feasible for sustainable implementation. The results of the study show that the cocoa agro-industry business is feasible to be carried out at an interest rate of 12% per year, but it is sensitive to an increase in investment costs and operational costs of 10%, so there is a risk if there is an increase in investment costs and operational costs in the future. Therefore, it is necessary to avoid unnecessary cost components while maintaining production capacity and securing efficient input prices.

cocoa, financial, investment cost, operational cost, simulation

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