Yuliardhi, Aditya Candra (2026) Retain or Sell? An Occupancy-Based Financial Analysis of Crawler Crane and Excavator Ownership at Company ABC. Masters thesis, IPMI Institute.

Text Aditya Candra Yuliardhi.pdf Download (3MB)

Abstract

Company ABC, a specialist geotechnical contractor in Indonesia, owns a fleet of nine crawler cranes and twelve excavators. As the Indonesian project pipeline weakened from 2025, fleet occupancy declined from 73.5 per cent in 2024 to 35.6 per cent, creating a need for a structured financial basis to assess whether continued ownership of the existing fleet remains justified. This study develops a unit-level decision framework that identifies the minimum occupancy required for each machine to remain financially preferable to disposal and subsequent rental when required. An incremental cash-flow model is applied over a two-year horizon to all twenty-one units, comparing two mutually exclusive alternatives: retaining each machine or selling it and renting an equivalent machine when needed. Because operating contribution is assumed to be identical under both alternatives, the analysis focuses on the financial differences arising from rental costs avoided by ownership, ownership cash costs, the depreciation tax shield, and the capital opportunity cost of retaining the asset. Break-even occupancy is established by setting the incremental cash flow between the two alternatives to zero. Historical deployment records from January 2022 to June 2026 are used to establish actual occupancy, while the 2027 2028 project pipeline is evaluated under realistic and pessimistic demand scenarios. The results indicate break-even occupancy levels ranging from 13.4 to 25.2 per cent across the fleet, compared with historical occupancy of 65.9 per cent. Under the realistic scenario, retaining the fleet generates an incremental value of IDR 17,116 million compared with disposal, with all twenty-one units remaining above their respective break-even thresholds. Under the pessimistic scenario, retention generates an incremental value of IDR 5,425 million, with all twenty-one units likewise remaining above their thresholds. Sensitivity analysis identifies only one marginal exception: a mid-size crane becomes approximately IDR 0.4 million less attractive to retain when rental market prices are assumed to be 10 per cent below quotation. Rather than prescribing a single fleet action, the study provides Company ABC's management with a transparent and repeatable unit-level framework for evaluating fleet retention and potential divestment as demand conditions change. The findings also extend the Indonesian equipment-management literature by shifting the focus from the conventional pre-acquisition own-versus-rent decision towards the post-acquisition retain-or-divest decision for an existing equipment fleet.

Keywords: break-even occupancy; incremental cash flow; net present value; retain-or-sell decision.

Item Type:	Thesis (Masters)
Subjects:	H Social Sciences > H Social Sciences (General)
Divisions:	Thesis > Master of Business Administration
Depositing User:	sandra margaretha
Date Deposited:	05 Oct 2026 10:35
Last Modified:	05 Oct 2026 10:35
URI:	http://repository.ipmi.ac.id/id/eprint/3074

Actions (login required)

View Item