Optimal Profitability Analysis for Contractors Regarding Variations in Payment Systems and Scheduling

• Published in: JURNAL TEKNIK SIPIL CENDEKIA (JTSC) Vol. 5; no. 2; pp. 944 - 961
• Main Authors: Septya Putri, Andini, Dita Pahang Putra, I Nyoman
• Format: Journal Article
• Language: English
• Published: 26.07.2024
• ISSN: 2723-6552; 2723-3375
• DOI: 10.51988/jtsc.v5i2.213

Construction projects often face higher risks than other types of projects, primarily due to potential delays from inaccurate scheduling and cash flow issues. Therefore, effective scheduling and payment systems are crucial for contractors to reduce risks and achieve optimal profitability. This study aims to identify optimal cash flow and profitability for contractors through the analysis of various payment systems and the utilization of float time. The methods used include cash flow analysis and feasibility analysis using NPV, BCR, and ROI methods. This research explores eight different payment and scheduling approaches to evaluate their impact on project profitability. The results show that cash flow across all alternatives remains positive without experiencing a shortage of funds and indicate that the contractor's optimal profitability is achieved with application of alternative 5, featuring 0% float time and no advance payments. This alternative results in the highest profit, with an NPV of Rp 15,338,960,581, a BCR of 1.059, and an ROI of 5.90%. From these results, it can be concluded that not utilizing float time leads to the most optimal profitability for the contractor. Additionally, it can be said that the scheduling plan implemented by the contractor for the Twin Tower project is well-structured. However, for the payment system, it is recommended to adopt a no-advance payment approach. It is hoped that this study will help contractors optimize their profits in the competitive construction industry.