Ebitda Gain Optimization Using Strategy Allowcation Of Market Share Distribution In Xyz Company: A Case Study In Indonesia
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 8
Abstract
2016 became a turning point for the last 15 years of cement industry in Indonesia. Demands declining based on limitation of the economic growth and also increasing of the cement supply related the new entrance that already began to start their full production capacity, making selling price become harder because of its intense competition. Although PT. XYZ as one of the dominant player for this business and still dominate their market share entire Indonesia, this condition made decreasing its market share that of course certain declining profit. Earning before interest, taxes, depreciation and amortization (EBITDA), as a benchmark of the company profit compared to other companies in similar industries also show us that PT. XYZ got its decreasing significantly. Highest rate of achievement that reached by 2012 for 35% EBITDA margin, decrease significantly to 19.4% in 2017. Its condition affected by an external factor and internal factor. For the external factor, decreasing selling price as well as decreasing market share were the dominant factors. While internal factor is more dominated by higher cost for raw material and fuel. This research focuses on the problem that affected by an external factor that is decreasing of market share. This research has aim to maksimizing EBITDA using linear programming model. As the decision variable used is total volume that sold by each production unit in a certain sales area wich means know its market share position. And for constraints there are production capacity for each production unit and also range of the minimum and maximum target of market share for each sales area. Simulation of the over capacity and shortage market condition will also tested using this model to gain insight. This model can achieved higher EBITDA than real condition in Desember 2017, that is Rp 462.954.808.834,- or increase significantly 10.54% than normal condition. This model also tested with normal, shortage and over capacity condition and can be concluded that this model gave higher EBITDA with such condition. Basically by this research we expected to provide additional concept according to optimization. And also provide consideration to PT. XYZ management as the decision makers for knowing best market shares allocation to get an optimum EBITDA.
Authors and Affiliations
Fredy Agung Prabowo, Ahmad Rusdiansyah
Keywords
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- EP ID EP412349
- DOI 10.9790/487X-2008042831.
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