quality cost report and productivity analysis in pt …

QUALITY COST REPORT AND PRODUCTIVITY ANALYSIS

IN PT LCG TELECOMMUNICATION AND TECHNOLOGY

SKRIPSI

Presented in partial fulfillment of the requirements for

The Bachelor’s Degree in Accounting

By

Monica Yulita

008201500019

FACULTY OF BUSINESS

ACCOUNTING STUDY PROGRAM

PRESIDENT UNIVERSITY

CIKARANG, BEKASI

2019

15%SIMILARITY INDEX

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Quality Cost Report and Productivity Analysis in PT LCGTelecommunication and TechnologyORIGINALITY REPORT

PRIMARY SOURCES

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Mitra, . "Introduction to Quality Control and theTotal Quality System", Fundamentals ofQuality Control and ImprovementMitra/Fundamentals, 2012.Publicat ion

v

DECLARATION OF ORIGINALITY

I hereby declare that the thesis entitled:



It is true of my own work or not plagiarism of the work of other. If in the future

proved that this scientific work is not my own work or plagiarism of the work of

others then I am willing to accept sanctions in accordance with applicable laws

and regulations.

Cikarang, 31 January 2019

Monica Yulita

vi

ACKNOWLEDGEMENT

First of all, researcher wants to give thanks to God Almighty for the good

health and wellbeing which allows researcher to complete this research.

Researcher wishes to express her sincere gratitude to Mrs. Andi Ina Yustina, Head

of the Accounting Study Program, for providing many helps and encouragement.

Researcher is also very grateful and indebted to Mrs. Monika Kussetya Ciptani as

the researcher’s thesis advisor for sharing expertise and giving valuable guidance

and encouragement. Next, researcher wants to take this opportunity to express

sincere thank you to all of the Department faculty members for their help and

support. Researcher also wants to thank researcher’s parents for the unceasing

support and attention. Most of all, researcher is grateful to the people in PT LCG

for without their contribution this research will not come to fruition. And finally,

researcher expresses her sincere gratitude to the researcher’s friends who directly

or indirectly have lent their hands in this venture.

viii

LIST OF FIGURES

Figure 1 Quality Cost Report ............................................................................... 11

Figure 2 Organization Chart ................................................................................. 19

Figure 3 Prevention Cost of PT LCG Jan - July ................................................... 22

Figure 4 Appraisal Cost of PT LCG Jan - July .................................................... 23

Figure 5 Internal Failure Cost of PT LCG Jan - July ........................................... 23

Figure 6 External Failure Cost of PT LCG Jan - July .......................................... 24

Figure 7 The Trends of Quality Costs' Categorization in Percentage .................. 26

Figure 8 Financial Productivity Measurement .................................................... 27

ix

LIST OF TABLES

Table 1 Partial VS Total Productivity Measurement .......................................... 13

Table 2 Quality Cost Report Period Jan – Jul 2018 ............................................ 25

Table 3 Profit-Linked Productivity Measurement .............................................. 28

Table 4 Profit-Linked Costs ................................................................................ 29

Table 5 Price-Recovery Components .................................................................. 30

Table 6 Good Quality Ratios and QPR ............................................................... 30

x



ABSTRACTS

The current competitive business environment force companies to increase

their competitive advantage. One way to do this is by improving quality. To

improve quality while also removing unnecessary costs, company must keep track

of its quality costs. However, due to lack of knowledge and resources, many small

to medium sized enterprises (SMEs) weren’t able to enforce this kind of quality

management. Thus, this research aims to analyze a small company’s quality cost

and its productivity using quality cost report.

This qualitative study on PT LCG Telecommunication and Technology

will use vertical, horizontal, and discourse analysis in addition to using quality –

productivity ratio calculation. The result of this study highlights the bad focus and

attention on quality in the production process of the company. In addition, the

results also indicated that the quality cost that can be found in Quality Cost Report

Analysis affect productivity by affecting how many good quality product can be

produced. Therefore, it is suggested that the company should adopt quality cost

report.

Although there are time constraints and some difficulties in gathering data,

it is hoped that this research can be used by the company to increase the product

quality and productivity by decreasing quality cost as well as used by future

researcher as a basis for generalization to SMEs manufacturing companies in

Indonesia.

Keywords: quality, quality cost, quality cost report, productivity

xi



INTISARI

Lingkungan bisnis yang kompetitif saat ini memaksa perusahaan untuk

berusaha meningkatkan keunggulan kompetitif mereka. Salah satu cara untuk

melakukan hal ini yakni dengan meningkatkan kualitas. Untuk meningkatkan

kualitas sembari menghilangkan biaya yang tidak diperlukan, perusahaan harus

mengawasi biaya kualitasnya. Tetapi, oleh karena kekurangan pengetahuan dan

sumber daya, banyak perusahaan kecil hingga menengah tidak mampu

melaksanakan pengelolaan kualitas seperti ini.

Studi kualitatif pada PT LCG Telecommunication and Technology ini

akan menggunakan teknik analisis vertikal, horizontal, dan wacana di samping

menggunakan hitungan rasio kualitas – produktivitas. Hasil dari studi ini

menunjukkan jeleknya fokus dan perhatian terhadap kualitas dalam proses

produksi di perusahaan. Selain daripada itu, hasil studi juga menunjukkan bahwa

biaya kualitas yang dapat ditemukan di analisa laporan biaya kualitas

mempengaruhi produktivitas dengan mempengaruhi jumlah produk berkualitas

baik yang dapat diproduksi. Oleh karena itu, disarankan agar perusahaan

mengadopsi laporan biaya kualitas.

Meski terdapat kendala waktu dan beberapa kesulitan dalam

mengumpulkan data, diharapkan agar penelitian ini dapat digunakan oleh

perusahaan untuk meningkatkan kualitas produk dan produktivitas dengan

mengurangi biaya kualitas maupun digunakan oleh peneliti masa depan sebagai

dasar untuk generalisasi ke perusahaan manufaktur kecil hingga menengah di

Indonesia.

Keywords: kualitas, biaya kualitas, laporan biaya kualitas, produktivitas

xii

TABLE OF CONTENTS

Page cover------------------------------------------------------------------------------------- 0

Plagiarism check result ---------------------------------------------------------------------- i

Declaration of originality ------------------------------------------------------------------- v

Acknowledgement -------------------------------------------------------------------------- vi

Panel of examiners approval ------------------------------------------------------------- vii

List of figures ------------------------------------------------------------------------------ viii

List of tables --------------------------------------------------------------------------------- ix

Abstracts -------------------------------------------------------------------------------------- x

Intisari ---------------------------------------------------------------------------------------- xi

Table of contents --------------------------------------------------------------------------- xii

CHAPTER I: INTRODUCTION ---------------------------------------------------------- 1

I.1. Research background ------------------------------------------------------------------- 1

I.2. Research problem ----------------------------------------------------------------------- 2

I.2.1. Problem formulation --------------------------------------------------------------- 3

I.2.2. Research questions ----------------------------------------------------------------- 3

I.3. Research objectives --------------------------------------------------------------------- 4

xiii

I.4. Research scope and limitation --------------------------------------------------------- 4

I.5. Research benefits ------------------------------------------------------------------------ 4

I.5.1. For PT LCG Telecommunication and Technology ---------------------------- 5

I.5.2. For Future Researcher ------------------------------------------------------------- 5

CHAPTER II: LITERATURE REVIEW ------------------------------------------------ 6

II.1. Quality ----------------------------------------------------------------------------------- 6

II.2. Total Quality Management ----------------------------------------------------------- 7

II.3. Quality Cost ----------------------------------------------------------------------------- 8

II.4. Quality Cost Report ------------------------------------------------------------------ 10

II.5. Productivity --------------------------------------------------------------------------- 12

II.6. Relationship between quality, quality cost, and productivity ------------------ 14

CHAPTER III: RESEARCH METHODOLOGY------------------------------------- 16

III.1. Research method -------------------------------------------------------------------- 16

III.2. Technic data analysis --------------------------------------------------------------- 16

III.3. Company profile -------------------------------------------------------------------- 18

III.3.1. History --------------------------------------------------------------------------- 18

III.3.2. Vision, Mission, and Objective ----------------------------------------------- 18

xiv

III.3.2.1. Vision ------------------------------------------------------------------------ 18

III.3.2.2. Mission ---------------------------------------------------------------------- 18

III.3.2.3. Objective -------------------------------------------------------------------- 18

III.3.3. Organization Chart ------------------------------------------------------------- 18

III.3.3.1. Operation Management Team -------------------------------------------- 19

III.3.3.2. Local Support Team ------------------------------------------------------- 19

III.3.4. Core Organization Activities-------------------------------------------------- 20

III.3.5. Product and Services ----------------------------------------------------------- 20

CHAPTER IV: RESULT ANALYSIS, DISCUSSION, AND IMPLICATION - 22

IV.1. Quality Cost Analysis ------------------------------------------------------------ 22

IV.2. Productivity Analysis ------------------------------------------------------------ 27

IV.3. Relationship between Total Quality Cost and Financial Productivity ---- 30

CHAPTER V: CONCLUSION, LIMITATIONS, AND SUGGESTIONS ------- 32

V.1.Conclusion --------------------------------------------------------------------------- 32

V.2.Limitations -------------------------------------------------------------------------- 32

V.3.Suggestions -------------------------------------------------------------------------- 33

V.3.1. For PT LCG Telecommunication and Technology ---------------------- 33

xv

V.3.2. For Future Research ---------------------------------------------------------- 34

References ---------------------------------------------------------------------------------- 35

Appendix A: Quality Cost Data--------------------------------------------------------- xvi

Appendix B: Data of Unit Produced -------------------------------------------------- xvii

Appendix C: Profit ----------------------------------------------------------------------- xviii

Appendix D: Research Verification ---------------------------------------------------- xix

1

CHAPTER I

INTRODUCTION

I.1. Research background

The current competition in the business environment is very high. This

condition will force companies to increase their competitive advantage.

Quality, as one of the key success factors in achieving competitiveness, is a

very important aspect that cannot be ignored by any companies

(Schiffauerova & Thomson, 2006; Superville & Gupta, 2001). This is

especially true since customers will continue to expect better quality

products with lower selling price (Tiwari, Turner, & Sackett, 2007). One

way to improve product quality while reducing unnecessary production costs

is by keeping track of quality costs in the company.

Previous researches have already emphasized the importance of

quality, specifically quality cost, in a company’s long-term profit plan.

Quality costing is especially important during economic turbulence, when

many companies try to increase their profits by cutting their overall costs

(Cheah, Shahbudin, & Taib, 2011; Douglas, 2009; Young, 2009). But

cutting costs is always risky and might adversely affect the long-term

sustainability plan of the company itself (Warren, 2009). A better solution is

to focus on reducing one type of costs and improving its turn over against

sales income, for example by implementing quality improvement programs

like quality cost system (Cheah et al., 2011). Finding and removing poor

quality costs might be a better program compared to other cost cutting

2

practices, especially considering its contribution to the company’s long-term

sustainability plan (Cheah et al., 2011).

Reporting quality cost not only reduce costs but also improve quality

where both may lead to improvement in productivity. According to (Noh,

2014), productivity is the relationship between a given amount of output and

the amount of input needed to produce it. This statement means that cost

reduction, in terms of reducing input price, will increase productivity in

terms of efficiency (King, 2015). While quality improvement, in terms of

reducing input time, could improve productivity in terms of effectiveness

(King, 2015). Therefore, it is important for companies to understand,

calculate, and report their cost of quality in producing their product.

Analysing quality cost report and productivity will give some benefits

for a company. Using quality cost report, company know how much quality

cost made in one period for each category, and from that information,

identify the relative importance of the quality problems faced by the firm

and see whether the quality costs are poorly distributed as generally, quality

costs should be distributed more toward prevention and appraisal activities

and less toward failures (Ahmed, n.d.). Whereas analysis of productivity

allows company to pinpoint areas that cause productivity loss and thus need

improvement. Moreover, this analysis provides baseline indicators that will

be used to determine possible productivity improvement objectives and

potential cost savings (Industrial Timestudy Institute Inc., n.d.).

I.2. Research problem

3

I.2.1. Problem formulation

Due to lack of knowledge and resources, many small to medium

sized enterprises (SMEs) weren’t able to enforce this kind of quality

management (Desai, 2008). One such company in Indonesia is the

company being studied – PT LCG Telecommunication and Technology.

PT LCG was a company under Lava group that focused on

manufacturing the product that is mobile phone and also selling the

product. The company did not have the authority to determine the

products’ pricing and had to follow the selling price set by the group’s

management because of the centralized system. Consequently, PT LCG

cannot analyze the profit/loss resulted from the sales and analyze the

cost being used in producing the product, including quality cost. Having

analyzed the phenomenon, researcher try to analyze the quality cost

incurred and also the productivity of the production process in PT LCG.

Based on these reasons, researcher is interested to do a research

titled “QUALITY COST REPORT AND PRODUCTIVITY

ANALYSIS IN PT LCG TELECOMMUNICATION AND

TECHNOLOGY”. Using Quality Cost Report, researcher try to

examine the behavior of each component of quality cost and analyze the

effect to the company’s productivity.

I.2.2. Research Question

Based on the research background above, the research questions

are formulated as follows:

4

a) How to analyze the quality cost incurred in the company?

b) How does the company’s productivity using Quality Cost Report

Analysis?

I.3. Research objectives

The objectives of this study are as follows:

a) To analyze the quality cost incurred in the company.

b) To analyze the company’s productivity using Quality Cost

Report.

I.4. Research scope and limitation

This research will filter raw data from the company and differentiate

them into four types of quality cost. Then based on the total cost (both total

of each of the four types of quality cost as well as total of quality cost itself)

and some other necessary data, the company’s productivity will be

calculated.

The data gathered will only start from January 2018 until July 2018

because the company is a new company which have only started operating

around April 2017. Moreover, there were a lot of change of workers and bad

internal controls (still often revised) during the early operations which

results in some unavailable data. Thus researcher decide to collect data

starting from January 2018 when the workers are more stable and the

system (internal control) is much better. And researcher decide to limit it to

July because researcher started to collect data during August 2018.

I.5. Research benefits

5

I.5.1. For PT LCG Telecommunication and Technology

This research can be considered to increase the quality of products

and to decrease the cost of quality in PT LCG Telecommunication and

Technology.

I.5.2. For Future Research

This research can be used as a reference for future research in term

of generalizing the research object to SMEs manufacturing companies in

Indonesia.

6

CHAPTER II

LITERATURE REVIEW

II.1. Quality

There are many definitions of quality. Some are objective while others

are subjective, but there are three definitions of quality by Deming, Juran,

and Crosby which are widely used. According to these experts, quality can

be defined as freedom from variation; fitness for use; and conformance to

requirements respectively (Chandrupatla, 2009). The underlying philosophy

for all definitions are the same – conformance of performance to customer

expectations (Lin & Johnson, 2004). This definition can be simplified as

“satisfying or meeting the customer’s needs” (Wiley, 2007) or further

explained by American Society for Quality (ASQ) as set of characteristics

and features in goods and services, based on the degree they conform to

requirements and satisfy customers (Chandrupatla, 2009). Based on this

definition, strategy for quality (quality management), which includes

checking product conformity to design and investigating customers’

feedback of the product, is needed (Al-Dujaili, 2013).

In order to raise awareness of quality management and recognize

companies that have successfully implemented quality management

systems, the U.S. Congress has established the Malcolm Baldridge National

Quality Award (MBNQA). Following this award’s criteria, specifically the

Malcolm Baldridge Criteria for Performance Excellence, Indonesia

established Indonesia Quality Award (IQA). By participating in IQA – no

7

matter whether the company will receive an award or not – the company or

organization can already receive benefit in the form of score and feedback

that can be used as the basis for further improvement.

Before talking about further improvement, there needs to be a premise

for companies to objectively document their quality practices around the

world and this premise is the universal standards (Wiley, 2007) which is

made by the International Organization for Standardization (ISO). The

standards of quality management follow ISO 9000 family which addresses

various aspects of quality management and provide guidance and tools for

companies and organizations who want to ensure that their products and

services consistently meet customer expectations and quality is continously

improved (ISO, 2015). Nonetheless, just following and using ISO 9000 is

not enough to remain competitive and improve quality system (Magd &

Curry, 2003). This is where Total Quality Management comes to practice.

II.2. Total Quality Management

Total Quality Management (TQM) is an effort by the whole organization

to improve quality of products and services in order to satisfy customers

(Wikipedia, Last edit: 29 September 2018). Murray (2018) defined it as the

management of initiatives and procedures that are aimed at achieving the

delivery of quality products and services.

Sharma and Kodali (2008) had said that in this era of global competition,

an organization needs to implement the concept of TQM which provides a

means to accomplish small strategy that will lead to the fulfillment of

8

corporate strategy. Moreover, they also said that TQM philosophy would not

only increase commitment to quality by the company, but also if applied

correctly would amplify the company’s competitive position.

The key concepts of the TQM philosophy can be divided into 4:

a) Customer oriented/based/focus

b) Continous improvement

c) Conducted throughout the organization

d) Comes from systematic analysis and improvement of work

processes

These philosophies ensure “effective efficiency” by encouraging

companies to analyze and improve their input (employees work processes)

and output (products and services) only according to customers’ preferences

which have been proven by several studies to be able to let the companies

achieve greater effective productivity in the long run (Khan, 2003).

II.3. Quality Cost

Quality costs have many definitions, but it has been traditionally defined

as the sum of conformance and non-conformance costs (Schiffauerova &

Thomson, 2006; Uyar, 2008). Quality cost, also known as Cost of Quality

(COQ), refers to the costs that are incurred to prevent, detect, and remove

defects from products(Accounting for management, n.d.).

Commonly, quality costs are classified as prevention, appraisal, internal

failure, and external failure costs (P-A-F categorization) (Uyar, 2008). The

prevention cost and appraisal cost, categorized as cost of conformance, are

9

costs necessary for achieving high quality while the internal failure cost and

external failure cost, categorized as cost of non conformance, are the cost

consequences of poor quality (Wiley, 2007).

Prevention costs are all costs incurred to prevent poor quality in products

and services that occur in the planning, implementing, and maintaining

phase of quality management system (Mitra, 2008) with the purpose of

reducing the number of defects (Sabyasachi, 2017).

Appraisal costs or inspection costs are those associated with measuring,

evaluating, or auditing products or services to determine their degree of

conformance to the specified standards (Mitra, 2008). How well the

appraisal or inspection activities are carried out will affect the level of

internal failure costs and external failure costs. The more effective the

activities, the higher chance of detecting defects internally, increasing

internal failure costs and decreasing external failure costs.

Internal failure costs are costs incurred when products or services fail to

meet quality requirements before they are shipped to the customer (Mitra,

2008). These costs include rejected products also known as “scrap”,

defective products rework, and downtime caused by quality problems

(Sabyasachi, 2017).

External failure costs are costs incurred when products do not perform

satisfactorily after ownership is transferred to the customer or when services

offered are nonconforming (Mitra, 2008). These costs include warranty,

10

repairs and replacements, product recalls, and lost sales from bad reputation

(Sabyasachi, 2017).

Specifically, quality cost can be classified as observable and hidden.

Observable COQ are those available from an organization’s accounting

record while Hidden COQ are those unavailable (Hansen & Mowen, 2007).

Hidden quality costs include, but are not limited to, reviews (e.g. customer

requirements review), audits (e.g. customer audits), errors or mistakes (e.g.

engineering mistakes or billing errors), warranty claims, and complaints

assistance (customer service) (A, Basak, & Viswanadhan, 2015). Hidden

quality costs don’t have exact amount like observable costs and thus can

only be estimated. Hansen and Mowen (2007) suggested three method to

estimate these costs: (1) the multiplier method which assumes that the total

failure cost is simply some multiple of measured failure costs, (2) the market

research method (example by doing customer surveys and interviews), and

(3) the Taguchi quality loss function which assumes that any variation from

the target value of a quality characteristic causes hidden quality costs.

II.4. Quality Cost Report

Quality cost report (QCR) is essential to an organization if it is serious

about improving and controlling quality costs (Hansen, Mowen, & Guan,

2009). This is because QCR contained a detailed listing of actual quality

costs by category that reveals the magnitude of the costs in each category

which allows the assessment of financial impact and the relative importance

of each category (Hansen, Mowen, & Guan, 2009). Moreover, it also

11

contained quality costs as a percentage of sales which made the assessment

of the financial importance of quality costs easier (Hansen, Mowen, &

Guan, 2009).

Source: (Hansen & Mowen, 2007)

FIGURE 1 QUALITY COST REPORT

The main objective for making quality cost report is to improve and

facilitate managerial planning, control, and decision making, but there are

also other important uses, for instance, for strategic pricing and profitability

analysis of a new product design (Hansen & Mowen, 2007). Although

reducing quality cost alone is not enough and other productivity gains are

also needed, the use of quality cost report in total quality control program is

very important when deciding to reduce sales price. When analyzing

whether a new product will be more profitable or not it is important to

12

identify and report quality costs separately. This is because quality cost

estimation for the new product cannot be based on the current product only

and needs to take into account the new product’s estimated performance.

Research by (Daengs GS, Mahjudin, & Solikhah, 2015) shows how

quality cost report can be used to improve product quality. The result of this

research had proven that the quality cost report can be used as baseline for

quality improvement plan and also for evaluating how succesful the quality

improvement process is after it is implemented. In line with this, research by

(Starcevic, Mijoc, & Mijoc, 2015) has shown that companies achieve higher

quality of products in terms of performance and reliability when they

quantify their quality costs, that can be done using quality cost report.

II.5. Productivity

Productivity describes the effectiveness of productive effort measured by

the rate of output per unit of input. When no more of any one input is used

than necessary to produce the output if any mix of inputs will produce a

given output and when the least costly mix is chosen, total productive

efficiency is achieved (Hansen & Mowen, 2007). According to Hansen and

Mowen (2007), there are two types of productivity efficiency. First is

technical efficiency where the relative proportions of the inputs are held

constant. Second is input trade-off efficiency where more costly inputs are

traded for less costly ones.

There are two types of productivity measurement: partial and total; and

two ways of measurement: actual and prospective. Actual productivity

13

measurement’s objective is to assess, monitor, and control changes while

prospective measurement is forward looking and serves as an input for

strategic decision making. If only one input is being measured, the measure

is called partial productivity measurement while if all inputs are measured at

once, the measure is called total productivity measurement. There are

advantages and disadvantages for both partial and total productivity

measures.

Table 1 Partial VS Total Productivity Measurement

Partial Productivity Measurement

Total Productivity

Measurement

Advantages

• Allow focus on a particular input

• Easy to interpret and use by all

within the organization

• Provide feedbacks that are easy to

relate, understand, and thus accepted

• Short-term (one year) productivity

trend can be tracked

• More accurate

representation of total

picture of the company

• Easily related to total costs

• Considers all quantifiable

outputs and inputs

Disadvantages

• Doesn’t reflect overall performance

• Management may identify wrong

areas of improvements

• Difficult to obtain data

• Requirement of special

data collection system

Source: (Hansen & Mowen, 2007) and (Banga, n.d.)

(Hansen, Mowen, & Guan, 2009) stated that there are two commonly

used approaches to measure total productivity measurement. First is profile

14

measurement that provides a series or vector of separate and distinct partial

operational measures which can be compared over time to provide

information about productivity changes. Second is profit-linked productivity

measurement that measures the amount of profit change attributable to

productivity change.

Normally, the result from profit-linked measure is not equal to the total

profit change. Thus, there is a difference between total profit change and

profit-linked productivity change that is known as price-recovery

component. Assuming no productivity change, this component measures the

ability of revenue changes to cover changes in the cost of inputs. (Hansen,

Mowen, & Guan, 2009)

II.6. Relationship between Quality, Quality Cost, and Productivity

According to Mitra (2008), increase in product quality has a positive

effect on productivity in the form of lower total costs and higher available

capacity of the entire production line. Although initial quality and

productivity improvements can’t be clearly seen as it may lead to higher

prevention and appraisal costs while lowering internal and external costs at

the same time, prevention and appraisal costs are usually reduced in the long

run (Mitra, 2008) as many of those costs are usually one time costs (such as

employees training).

Previous researches have also proven this theory. Research by (Al-

Dujaili, 2013) shows that improving quality has a fundamental role in

increasing productivity. In his research regarding the relation between types

15

of quality costs and its impact on productivity and costs in manufacturing

industries in Iraq, he found that there was technological obsolence that led to

an increase in internal failure costs and also found that there was a weakness

in the maintenance and protection programmes for prevention costs that

affect quality and productivity. (Kumari, Anuradha, & Sharma, 2013) have

also explained in their research in manufacturing companies in India that

better quality resulted from decrease in cost of poor quality will reduce total

cost of productivity, meaning a better productivity.

16

CHAPTER III

METHODOLOGY

III.1. Research Method

This is a qualitative research with PT LCG Telecommunication and

Technology as the research subject. The data collected are primary data.

The participant observation method is used in gathering the needed

information for this study. This method enables the researcher to gather the

needed documents and reports, and better understand and interpret the

meaning of the findings from observations and interviews conducted.

Specifically, the researcher participated as an intern in the finance and

accounting department which enables the researcher to gather information

not only from the surroundings (data/documents), but also from interviews

with employees in the finance, human resources, production, and quality

control departments.

III.2. Technic Data Analysis

The vertical analysis and horizontal analysis technique will be used in

analyzing the gathered data while also using discourse analysis method to

filter unnecessary information from the raw data. The vertical analysis is a

method of financial statement analysis in which each line item is listed as a

percentage of a base figure within the statement (Investopedia, Updated on

2018) where the line items in this research refer to the four types of quality

cost that can be stated as a percentage of total quality cost. On the other

hand, the horizontal analysis is used in financial statement analysis to

17

compare data over a number of accounting periods (Investopedia, Updated

on 2018) which in this context would be 7 months period starting from

January 2018 until July 2018. And discourse analysis is an approach to

analyze the meaning behind a given text and how people interpret it based

on their experiences (Diako, 2012).

To gather the data for this research, researcher starts by doing

observation of the company. After having observed the working mechanism

in the company, researcher starts to do interview with employees who

knows where the data researcher needs is stored. From the interview

results, researcher will filter the unnecessary data before calculating it.

Then, using the calculated data, quality cost report was made. The report

will then be analyzed and the result will be used to analyze the productivity.

Additionally, to measure the relationship between quality and its costs

with productivity, the quality – productivity ratio by Adam, Hershauer, &

Ruch (2011) will be used. This Equation (1) is calculated as follows:

𝑄𝑃𝑅 =𝐺𝑜𝑜𝑑 𝑞𝑢𝑎𝑙𝑖𝑡𝑦 𝑢𝑛𝑖𝑡𝑠

(𝐼𝑛𝑝𝑢𝑡 𝑢𝑛𝑖𝑡𝑠)(𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡) + (𝑅𝑒𝑤𝑜𝑟𝑘𝑒𝑑 𝑢𝑛𝑖𝑡𝑠)(𝑅𝑒𝑤𝑜𝑟𝑘 𝑐𝑜𝑠𝑡)× 100

where the quantifier represents the good quality products produced and the

denominator represents the total cost for production including the cost for

rework.

While to measure productivity, two types of measurement will be used.

First is profit-linked measurement that is equal to total PQ cost minus total

current cost (Equation (2)) where PQ represents productivity-neutral

quantity of input and is calculated by dividing current-period output with

18

base-period productivity ratio (Equation (3)). Second is price-recovery

component that is the change in revenue (profit change) less a change in the

cost of inputs (profit-linked productivity change) (Equation (4)).

III.3. Company Profile

III.3.1. History

PT. LCG Telecommunication and Technology is a joint venture

established in Indonesia at December 2016 by two shareholders, one is

a Chinese business man, Mr. Cao Chao who is a professional and

expert man in EMS/OEM/ODM industry, and the other one is the CEO

of Jakarta’s biggest logistics company, PT. GPI Logistics. The

company has 4.000 m2 work place in Jababeka Industry Park which

consists of 8 assembly lines, 4 packing lines, and up to 2.000 m2

warehouse.

III.3.2. Vision, Mission, and Objective

III.3.2.1. Vision

To Be a Healthy Company with People’s Respects.

III.3.2.2. Mission

Providing Better Service to Clients, To Staff, To Society.

III.3.2.3. Objective

To build the company to be the best manufacturer in

Indonesia with the best price, the best quality, and the best

service to all clients.

III.3.3. Organization Chart

19

Figure 2 Organization Chart

III.3.3.1. Operation Management Team

The operation management team came from a Chinese

Manufacture Industry with excellent experience and mobile

phone business sense.

III.3.3.2. Local Support Team

PT. GPI Logistics, the biggest logistics company in Jakarta,

as the local support team has a very good reputation and

relationship with the local government.

PT. GPI was founded in Jakarta in 1981 by Mr. Sumadi

Kusuma and Mr. Husaini Sanny. The formation of the GPI

Group is a milestone of success in providing the most complete

and integrated logistic service supported by first-class air, sea

and ground as well as innovative system.

20

Today, GPI Group has a team of more than 1,700 dedicated

and experienced staff working in more than 20 office locations

spread throughout Indonesia and overseas and covering more

than a 1000 service location throughout the world supported by

sophisticated information technology/systems and world class

partners.

Born with the instinct and business vision, Mr. Sumadi

Kusuma, CEO of GPI Group, is among the few people who took

the initiative to open a business relationship with the People’s

Republic of China when Indonesia did not open diplomatic

relations with the country yet at the time.

III.3.4. Core Organization Activities

There are four core activities in the company which are (1)

Manufacture as its main business, the company produce handphone,

ensure best quality, best delivery and best service based on clients’

request; (2) Act as local supply chain, LCG develop and share

Indonesia’s best local supply resources to customers; (3) Support

clients to do Indonesia local licenses or certifications (3G and 4G)

including but not limited to TKDN, POSTEL, and TPP; and (4)

Providing better custom clearance and local/international logistics

service to clients.

III.3.5. Product and Services

21

PT. LCG is an expert manufacturer located in Indonesia,

assembling mobile phone and providing related OEM/EMS services as

its main service. And also providing following services:

1) TKDN solution & fulfillment; supporting clients in procuring

certification required for imported 4G mobile phones set by the

local government.

2) Postel & TPP certification; supporting clients in fulfilling the

local government’s rules concerning imported 3G and 4G

mobile phones.

3) Local supplier chain support; developing and sharing

Indonesia’s best local supply resources to customers.

4) Logistics service from China to Indonesia; providing better

custom clearance and international logistics service to clients.

5) Indonesia local logistics services; providing better custom

clearance and local logistics service to clients.

22

CHAPTER IV

RESULT ANALYSIS, DISCUSSION, AND IMPLICATION

IV.1. Quality Cost Analysis

Quality costs are categorized into prevention, appraisal, internal and

external failure costs. The quality costs in this company can be further

categorized into quality planning, quality training, and quality engineering

for prevention costs, verification and consumable materials for tests for

appraisal costs, rework and scrap for internal failure costs, and warranty

claims and repairs for external failure costs.

Figure 3 Prevention Cost of PT LCG Jan - July

The Figure above shows that the company’s prevention cost has an

overall trend of going up. Even if it didn’t go up every month and had a

quite sharp decline in July, it is still higher by quite a lot compared to the

base month.

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

January February March April May June July

23

Figure 4 Appraisal Cost of PT LCG Jan - July

Similar to the prevention cost, the appraisal cost also has an overall

going up trend as shown in Figure 4. Although every 2 – 3 months there is a

decline, it didn’t decrease by too much and is always higher than the

previous decline (March compared to January and June compared to March).

Figure 5 Internal Failure Cost of PT LCG Jan - July

On the other hand, in Figure 5, the internal failure cost can be seen to

have an overall upward trend from January to April before going downward

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000


-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000


24

until June and upward again in July. This means that there was a high

number of bad quality products found during the after production stage in

January to April before the number starts to lessen in May and June and

finally increase again in July.

Figure 6 External Failure Cost of PT LCG Jan - July

Figure 6 shows that the external failure cost is similar to the internal

failure cost in terms of having fluctuating results. However, the external

failure is associated with customers that is outside the scope of PT LCG. As

a result, it is quite hard to determine the exact cause for the high external

failure cost. Especially in April where there is a steep incline. But researcher

speculates that this is caused by the new customers introduced to PT LCG

by the top management in April.

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000


25

Tab

le 2

Qu

ali

ty C

ost

Rep

ort

Peri

od

Jan

– J

ul

2018

So

urc

e: p

roce

ssed

in

tern

al d

ata

January

Febru

ary

Marc

hA

pril

May

June

July

Pre

vention C

osts

:

Qualit

y P

lannin

g31,1

40,4

17

47,8

12,9

16

48,3

00,4

17

46,6

42,9

17

56,6

37,7

48

59,2

31,2

51

21,7

31,2

51

Qualit

y T

rain

ing

-

-

-

-

-

-

20,0

00,0

00

Qualit

y E

ngin

eering

135,4

17

135,4

16

135,4

17

135,4

17

406,2

48

406,2

51

406,2

51

Tota

l P

reve

ntion C

ost

31,2

75,8

34

47,9

48,3

32

48,4

35,8

34

46,7

78,3

34

57,0

43,9

96

59,6

37,5

02

42,1

37,5

02

Sale

s P

erc

enta

ge

0.3

5%

0.3

9%

0.4

4%

0.4

5%

0.8

1%

0.5

9%

1.3

7%

Appra

isal C

osts

:

Verific

ation

20,0

18,5

67

33,6

07,5

12

25,4

01,2

10

31,7

47,8

11

41,7

75,5

32

32,0

24,2

82

35,9

33,3

22

Consum

able

mate

rials

for

tests

-

-

-

-

-

200,0

00

-

Tota

l A

ppra

isal C

ost

20,0

18,5

67

33,6

07,5

12

25,4

01,2

10

31,7

47,8

11

41,7

75,5

32

32,2

24,2

82

35,9

33,3

22

Sale

s P

erc

enta

ge

0.2

2%

0.2

8%

0.2

3%

0.3

1%

0.6

0%

0.3

2%

1.1

7%

Inte

rnal F

ailu

re C

osts

:

Rew

ork

1,5

62,8

12

2,5

93,9

46

2,4

16,7

20

2,9

16,1

75

1,0

79,4

68

596,1

24

1,9

01,1

53

Scra

p213,9

79

181,1

92

226,8

31

363,1

17

371,5

67

128,9

39

309,9

21

Tota

l In

tern

al F

ailu

re C

ost

1,7

76,7

91

2,7

75,1

38

2,6

43,5

51

3,2

79,2

92

1,4

51,0

35

725,0

63

2,2

11,0

74

Sale

s P

erc

enta

ge

0.0

2%

0.0

2%

0.0

2%

0.0

3%

0.0

2%

0.0

1%

0.0

7%

Exte

rnal F

ailu

re C

osts

:

Warr

anty

Cla

ims

72,2

43,8

80

19,6

19,3

26

30,8

64,0

77

211,6

41,4

83

131,5

90,8

94

36,5

81,9

71

64,2

69,1

04

Repairs

12,2

99,0

15

-

-

-

12,2

14,2

18

15,7

29,4

94

26,6

95,0

29

Tota

l E

xte

rnal F

ailu

re C

ost

84,5

42,8

95

19,6

19,3

26

30,8

64,0

77

211,6

41,4

83

143,8

05,1

12

52,3

11,4

65

90,9

64,1

33

Sale

s P

erc

enta

ge

0.9

4%

0.1

6%

0.2

8%

2.0

5%

2.0

5%

0.5

2%

2.9

5%

TO

TA

L Q

UA

LIT

Y C

OS

T137,6

14,0

87

103,9

50,3

08

107,3

44,6

72

293,4

46,9

20

244,0

75,6

75

144,8

98,3

12

171,2

46,0

31

TO

TA

L S

ALE

S P

ER

CE

NTA

GE

1.5

3%

0.8

6%

0.9

8%

2.8

4%

3.4

8%

1.4

4%

5.5

6%

PT L

CG

TE

LE

CO

MM

UN

ICA

TIO

N A

ND

TE

CH

NO

LO

GY

Qualit

y C

ost

Report

for

the Y

ear

Ended J

uly

31,

2018

26

From table 2, it can be seen that the quality cost in April, May, and July

have exceeded the maximum amount – based on rule of thumb – 2.5%

(Hansen & Mowen, 2007). Especially in July where it exceeded by a lot

compared to previous months which can be attributed two reasons. First is

that there is quality training cost in this month where there aren’t any in

other months. The second reason, that also applies to the other two months,

is caused by the high external failure costs.

Figure 7 The Trends of Quality Costs' Categorization in Percentage

With the help of Figure 7, it can be seen that except for February, the

external failure cost is the highest or at least second highest in contributing

to the total quality cost. This shows that most of the time the huge amount of

quality cost is incurred after the selling stage. Although the company has

paid some attention to prevention and appraisal costs, the same can’t be said

for internal failure costs.

23%

46% 45%

16%

23%

41%

25%

15%

32%

24%

11%

17%22% 21%

1% 3% 2% 1% 1% 1% 1%

61%

19%

29%

72%

59%

36%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%


Prevention Appraisal Internal Failure External Failure

27

IV.2. Productivity Analysis

As previously stated, productivity can be divided into two types: partial

and total. Partial productivity measurement can be further divided into two

types: financial productivity measure where both input and output are

expressed in money terms (in this case Rupiah) and operational productivity

measure where both input and output are expressed in physical quantities.

This research will use the financial productivity measure.

Figure 8 Financial Productivity Measurement

Figure 8 shows the financial productivity calculation results that used

raw materials as the input and total cost of goods manufactured as the

output. As can be seen above, the relative ratio is around 13,500 with the

highest ratio in July and the lowest in February at 13,892 and 13,372

respectively. Although the ratio keeps going up and down, the higher

13,762

13,372

13,825

13,605

13,859

13,690

13,892


28

amount every time the ratio increase means that the productivity is getting

better.

Total productivity measurement can also be divided into two

approaches: profile productivity measurement and profit-linked productivity

measurement. The profile productivity measurement will be used to

calculate the base productivity ratio that will be used to calculate the profit-

linked measurement. The profit-linked measurement will then be linked with

price-recovery component to be further analyzed. Below is the table that

shows profit-linked productivity measurement of PT LCG.

Table 3 Profit-Linked Productivity Measurement

Source: Result of Equation (2) & (3)

Table 3 shows that the productivity changes have unfavorable results

where profits decreased at the lowest in March and the highest in April.

Except for June where the profits increased more than 2 billion. The reason

for this condition can be better seen from table 4 below.

Month Total PQ Cost Total Current Cost Profit- Linked Effect

January Base Base Base

February 56,673,196,970 58,445,659,099 (1,772,462,129)

March 45,001,351,586 45,552,656,107 (551,304,521)

April 99,230,006,070 103,638,932,006 (4,408,925,936)

May 38,927,105,664 41,229,546,730 (2,302,441,066)

June 17,466,825,044 14,782,483,060 2,684,341,985

July 30,968,142,160 34,219,946,667 (3,251,804,506)

* Base Labor Productivity Ratio = 35.72; Base Raw Materials Productivity Ratio = 0.17

29

Table 4 Profit-Linked Costs

Source: processed internal data

From February until April, the changes in labor brought increases in

profit while the changes in raw materials create decreases in profit. This

means that there is an increase in materials usage as a result of the

productivity changes.

In contrast, in May and July the changes in both labor and raw materials

caused decreases in profit. This means that the workers weren’t very

proficient in their work – might be caused by new employees that aren’t

used to their new work place yet as based on researchers observation there

were changes in employees during those two months. Correspondingly, the

increase in profit caused by changes in raw materials in June might be proof

that those new employees are getting used to their work, although the

decrease in profit caused by changes in labor might mean that not all of

them are used to it.

Cost of Labor Cost of Raw

Materials Cost of Labor

Cost of Raw

Materials

January Base Base Base Base

February 9,641,346 56,663,555,624 5,520,000 58,440,139,099

March 6,256,797 44,995,094,789 6,240,000 45,546,416,107

April 15,218,713 99,214,787,356 5,760,000 103,633,172,006

May 5,286,783 38,921,818,881 6,000,000 41,223,546,730

June 2,651,370 17,464,173,674 4,080,000 14,778,403,060

July 4,112,689 30,964,029,471 6,240,000 34,213,706,667

Month

PQ Cost Current Cost

30

Table 5 Price – Recovery Components

Source: Results from Equation (4)

Table 5 indicates that except for June, the increase in revenues was

sufficient to recover the increase in cost of inputs. This means that there was

an increase in productivity in July as an improvement in productivity can be

used to offset price-recovery losses (Hansen, Mowen, & Guan, 2009).

IV.3. Relationship between Total Quality Cost and Financial Productivity

As mentioned before, improving quality cost is one way to improve

productivity. Table 6 below highlights the level of good quality focus and

the relationship between quality and productivity using the results from

Equation (1).

Table 6 Good Quality Ratios and QPR

Source: Results of Equation (1)

Month Revenues Cost of Inputs Profit Change Price-Recovery

January 8,994,530,000 7,195,624,000 1,798,906,000 Base

February 12,140,155,000 9,712,124,000 2,428,031,000 4,200,493,129

March 10,971,160,000 8,776,928,000 2,194,232,000 2,745,536,521

April 10,332,225,000 8,265,780,000 2,066,445,000 6,475,370,936

May 7,019,415,000 5,615,532,000 1,403,883,000 3,706,324,066

June 10,047,145,000 8,037,716,000 2,009,429,000 (674,912,985)

July 3,080,265,000 2,464,212,000 616,053,000 3,867,857,506

Month

Ratio of good

quality to

quantity*

Ratio of good

quality costs QPR

January 97.7% 37% 0.010%

February 97.8% 78% 0.012%

March 97.5% 69% 0.010%

April 98.6% 27% 0.011%

May 96.7% 40% 0.010%

June 96.6% 63% 0.011%

July 95.8% 46% 0.009%

* Good Quality (Preventive + Appraisal)/Units Produced

Total good quality costs/Total quality costs

31

The ratio for the level of good quality products are not only lower than

the acceptable level which is 99.6% (Al-Dujaili, 2013), but also fluctuates

which strengthen the analysis from table 2 results that there is a lack of

focus and attention to quality as the external failure costs are high.

The results for QPR when comparing with base month – January –

indicates a positive relationship between quality and its costs with

productivity, except for July where it seems there is a negative relationship.

In contrast, when comparing with the second month – February – the

results indicate a negative relationship for all of the other months. This is

possibly caused by high number of good quality unit produced as a result of

higher quality costs. On the other hand, there seems to be more bad quality

products produced in July when compared to the unit produced which

results in lower QPR.

32

CHAPTER V

CONCLUSION, LIMITATIONS, AND SUGGESTIONS

V.1. Conclusion

This research analyzed the quality cost in the company as well as

evaluating the relationship between quality, quality cost, and productivity

using the quality cost report. As previously discussed in Chapter IV, the

results from the analysis highlight the bad focus on product quality in the

production process which results in many returned products. Particularly the

internal failure cost that is negligible compared to other costs. Although the

company has paid some attention to prevention costs and appraisal costs as

can be seen from the ranged from 16%-46% and 11%-32% respectively, the

total combined percentage of these costs didn’t always exceed the total

percentage for failure costs which means there is room for improvements.

The overall productivity is good as can be inferred from the upward trend

of the financial productivity measurement. And despite the negative

outcome from the profit-linked productivity measurement, the price-

recovery components show positive results. This prove that the company’s

productivity is well enough. In addition, the quality cost found in QCR

analysis affect productivity by affecting how many good quality product can

be produced as can be seen from the QPR. Especially for good quality costs

that affects the production process.

V.2. Limitations

33

This research is not perfect and has many limitations. The first limitations

are regarding the collection of the data. The researcher as an intern doesn’t

fully understand the accounting system being applied in the company

(especially regarding account name) and because of the frequent changes

made to this system there is concern that the data collected might include

irrelevant data or relevant data not included. Moreover, the employee who

works the longest that the researcher can ask also doesn’t start working from

the beginning of the company’s establishment. Another limitation is the time

limit imposed by the university which didn’t let the researcher to have

enough time to gather a longer research data. In addition, although the

company the researcher chose as subject of the study provides generous data

source for an in-depth study, it does not allow generalization to the larger

population in the same industry as one company cannot possibly represents

the diversity that is found in other company.

V.3. Suggestions

V.3.1. For PT LCG Telecommunication and Technology

Based on the problems stated in V.1, the researcher suggests that the

company should adopt the Quality Cost Report. By using the quality

cost report, the cost of quality will be easier to manage as the costs are

clearly divided. Not to mention using quality cost report will also help

in implementing TQM. The conformity/good quality costs in QCR can

be considered as the cost of employees work process and the non-

conformity/bad quality costs as the cost of producing products based

34

on customers’ preferences. Following this line of thought, the

company can then use QCR to better control the participation of every

employee in quality management.

V.3.2. For Future Research

This research only used one company in Indonesia as the sample,

thus future research can try to use more sample in order to generalize

the research. Since this research used a small manufacturing company

as its sample, it is not recommended for future research to generalize it

to other sectors and to big companies.

35

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xvi

APPENDIX A: QUALITY COST DATA

Document Date Document Header Text Val.in rep.cur.

1/4/2018 Finished Product 23,860,479

1/5/2018 Lava Iris60&Iris80 Nov17 73,528,000

1/5/2018 Pantry Expense Jan 18 2,000,000

1/5/2018 Catering DEC 2017 288,000

1/11/2018 DN DOADAP 60,682,416

1/29/2018 Lava Iris 60 & Iris 80 85,637,500

1/31/2018 Accrue Design Fee Jan 18 31,005,000

1/31/2018 Salary Jan 2018 17,730,567

2/1/2018 Actual salary daily worke 3,420,000

2/1/2018 Adjust Salary Jan 2018 5,452

2/2/2018 Pantry Expense Feb 18 1,000,000

2/2/2018 DN DOADAP -109,151,924

2/6/2018 Actual salary daily worke 720,000

2/9/2018 Finished Product 22,534,714

2/12/2018 Catering Jan 2018 504,000

2/14/2018 DN DOADAP 106,236,536

2/28/2018 Accrue Design Fee Feb 18 47,677,500

2/28/2018 Salary Feb 2018 27,958,060

2/28/2018 Raw materials 2,593,946

3/6/2018 DN DOADAP 30,864,077

3/12/2018 Catering FEB 2018 408,000

3/15/2018 Pantry Expense Mar 18 2,000,000

3/29/2018 Accrue Design Fee Mar 18 48,165,000

3/31/2018 Salary Mar 2018 22,993,210

4/5/2018 DN DOADAP 211,641,483

4/10/2018 Pantry Expense APR 18 2,000,000

4/11/2018 Catering MAR 2018 488,000

4/30/2018 Accrue Design Fee Apr 18 46,507,500

4/30/2018 Salary April 2018 32,093,144

5/4/2018 DN DOADAP 131,590,894

5/10/2018 Pantry Expense MAY 18 2,000,000

5/16/2018 Catering APR 2018 840,000

5/31/2018 Accrue Design Fee May 18 56,231,500

5/31/2018 Salary May 2018 38,935,532

5/31/2018 Iris 80 11,693,774

5/31/2018 Iris 50 54,126

5/31/2018 Iris 60 466,318

6/5/2018 Reimburse Jason sim card 200,000

6/7/2018 Pantry Expense JUN 18 2,000,000

6/9/2018 DN DOADAP 36,581,971

6/21/2018 Catering MAY 2018 950,000

6/28/2018 Reimburse food for employ 46,943

6/30/2018 Accrue TSM June 18 58,825,000

6/30/2018 Salary June 2018 29,027,339

6/30/2018 Iris 80 15,612,324

6/30/2018 Iris 50 117,170

7/6/2018 Agent fee Iris 50 8,000,000

7/6/2018 Pantry Expense JUL 18 2,000,000

7/6/2018 Catering JUN 2018 690,000

7/6/2018 DN DOADAP 64,269,104

7/17/2018 Training TKDN kemenprin 20,000,000

7/31/2018 Accrue Design Fee JUL 18 104,650,000

7/31/2018 Salary July 2018 33,243,322

7/31/2018 Iris 60 7,766,893

7/31/2018 Iris 50 2,610,089

7/31/2018 Iris 80 16,318,047

xvii

APPENDIX B: DATA OF UNIT PRODUCED

LAVASKD40001227 &

SKD40001228

IRIS 50 IDR SKD-finished unit blue &

gold 550

LAVASKD40001239 &

SKD40001240

IRIS 60 IDR SKD-finished unit Black

& Gold 2,980

LAVASKD40001248 &

SKD40001249


& Gold 3,900

LAVASKD40001227 &

SKD40001228


gold 6,550

LAVASKD40001239 &

SKD40001240


& Gold 4,930

LAVASKD40001248 &

SKD40001249


& Gold -

LAVASKD40001227 &

SKD40001228


gold -

LAVASKD40001239 &

SKD40001240


& Gold 2,500

LAVASKD40001248 &

SKD40001249


& Gold 4,950

LAVASKD40001227 &

SKD40001228


gold 5,900

LAVASKD40001239 &

SKD40001240


& Gold 5,649

LAVASKD40001248 &

SKD40001249


& Gold 6,572

LAVASKD40001227 &

SKD40001228


gold -

LAVASKD40001239 &

SKD40001240


& Gold 1,044

LAVASKD40001248 &

SKD40001249


& Gold 5,251

LAVASKD40001227 &

SKD40001228


gold -

LAVASKD40001239 &

SKD40001240


& Gold 2,957

LAVASKD40001248 &

SKD40001249


& Gold 200

LAVASKD40001227 &

SKD40001228


gold -

LAVASKD40001239 &

SKD40001240


& Gold -

LAVASKD40001248 &

SKD40001249


& Gold 4,897

June

July

LCG SAP Shipment Data——Jan-July/2018

January

February

March

April

May

xviii

APPENDIX C: PROFIT

Jan Feb Mar Apr May Jun Jul

Sales 8,994,530,000 12,140,155,000 10,971,160,000 10,332,225,000 7,019,415,000 10,047,145,000 3,080,265,000

COGS 7,195,624,000 9,712,124,000 8,776,928,000 8,265,780,000 5,615,532,000 8,037,716,000 2,464,212,000

Gross Profit 1,798,906,000 2,428,031,000 2,194,232,000 2,066,445,000 1,403,883,000 2,009,429,000 616,053,000

PT LCG TELECOMMUNICATION AND TECHNOLOGY

Partial Income Statement

for the Year Ended July 31, 2018

xix

APPENDIX D: RESEARCH VERIFICATION

quality cost report and productivity analysis in pt …

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