Key Components for Calculating the K Index in Smallholders Fresh Fruit Bunch Decision-Making

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PALMOILMAGAZINE, ACEH – The crude palm oil (CPO) industry serves as a vital economic cornerstone for numerous palm oil-producing nations across the globe. Within this industry, the Performance Index (P index) stands as a pivotal factor in evaluating a company’s success.

The P index is composed of several essential components that provide insights into critical aspects of palm oil production and distribution.

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Prof. Ponten Marulitua Naibaho, Management Advisor of Palm Oil Mill said, in the 4th Andalas Forum in Banda Aceh, at least, there are six aspects to calculate main components to get P index, in calculating smallholders’ fresh fruit bunch (FFB). The first, marketing cost (Rp/kg CPO, Rp/kg kernel); the components would be calculated and handled in the port, tanks costs in port, ship survey cost, and certification cost.

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The second, transportation cost from mill to shore tank that covers land transportation, and management in tank location. The third, cultivation cost that covers the process from FFB acceptance until the process to produce CPO, including the tool and workers’ costs.

The fourth, depreciation cost that covers tools depreciation and mill’s facilities which are the significant aspects to maintain production infrastructures. The fifth, indirect operational cost that covers indirect spent which has something to do with daily production, such as administration and management costs.

The sixth, yield. Prof. Naibaho told that yield in mill is the ration between numbers of palm oil produced and FFB numbers that have been processed. The higher yield is the more efficient would be in the production. (T2)

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