Development Study of Cost of Ownership Model in Heavy Equipment Business in Indonesia

Abstract

In general, few people have comprehensively researched the cost of machine ownership. This research will present a new model to calculate the cost of machine ownership that is influenced by several critical factors such as Initial Cost, Maintenance Cost, and Operating Cost. The financial literacy gap in this sector causes many heavy equipment owners to be unaware of their business income potential. The methodology used is mathematical modeling that combines several methods to create a new model of heavy equipment ownership cost analysis. The main result of this research shows that the developed model provides a new perspective in calculating the cost of ownership. The model shows that the machine has the most optimal value if the cost is paid in installments. In addition, the model considers external factors such as changes in primary energy prices and fluctuations in backup power generation costs, thus providing a more accurate picture of costs. The implications of this research are that it makes it easier for machine owners to calculate ownership costs, improve operational efficiency, and support better investment decisions.