OPTIMIZATION MODEL DESIGN OF SCRAPPING COST FOR ASSET MANAGEMENT BASED ON COST AVOIDANCE AT PT. XYZ WAREHOUSE

Ari Ilya Sariu, Purnawan Purnawan, Saskia Kanisaa Puspanikan

Abstract


This research aims to design a cost optimization model for asset scrapping by incorporating scrapping cost and using a cost avoidance approach to improve financial efficiency and sustainability in asset management at PT. XYZ Warehouse. The study was motivated by significant discrepancies found between the Net Book Value (NBV), scrapping cost, and acquisition cost of scrapped assets, particularly antennas, which contributed to substantial financial losses. A quantitative method was employed, focusing on a purposive sample of 10,753 antenna assets. Secondary data were drawn from SAP reports, depreciation logs, internal asset records, and detailed scrapping cost data. The model was developed using Life Cycle Costing (LCC) and regression analysis with SPSS to identify cost drivers, including scrapping cost, and simulate optimization scenarios. Validation by expert practitioners in logistics ensured relevance and applicability. The model recommended scrapping decisions based on NBV thresholds, accumulated depreciation, scrapping cost, and asset lifespan. Simulation results indicated that cost savings of up to IDR 36 million per batch could be achieved, demonstrating the potential of cost avoidance strategies, including careful management of scrapping cost, to optimize warehouse operations, reduce financial waste, and support more sustainable asset disposal practices.   The impact of this research is to provide companies with an evidence-based framework that can be adapted across sectors to strengthen cost control, support better budgeting practices, and promote more sustainable asset management policies.

Keywords


Asset Management; Cost Avoidance; Life Cycle Costing; Net Book Value; Scrapping Cost; Scrapping Optimization

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DOI: https://doi.org/10.17509/mimbardik.v10i3.88415

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