INTRODUCTION
In carrying out its work, the
contractor refers to the technical specifications and technical drawings
provided by the employer (Clough et al., 2015). Howerver, the fact is that there are still frequent
improvements from the results of the work that has been done, for example,
after the concrete casting work is completed, but within a few days it looks
like a crack on the concrete, then it must be repaired in the way agreed with
the employer.
In making a budget plan for
construction costs, each quality of the stages of work refers to the technical
specifications issued by the employer (Swantari & Habibie, 2015). The most
significant is uncertainty regarding the expected duration and cost of project
activities (Eldosouky et al., 2014). This means that
the contractor has considered the quality costs to meet the required quality
standards of work results.
One of the important parameters
in project control is the costs, especially those related to quality costs (Wicaksono & Sunarko, 2019). The cost of
quality can be interpreted as (1) prevention costs are costs associated with
conformance to prevent product damage, (2) assessment costs are costs
associated with conformance to determine whether a product complies with
quality requirements, (3) internal failure costs are costs associated with
errors and nonconformance that occur at the time of working on the product or
before it is handed over to the customer, and (4) external failure costs are
costs associated with errors and nonconformance that occur at the time the
product is already handed over to the customer (Rizka, 2019).
Increasing product quality can
certainly reduce the rate of return of returned products from customers so it
will therefore have an impact on reducing warranty and repair costs (Mulyana, 2020). Increasing
product quality can also reduce production costs through the reduction or
elimination of internal failure costs which have the largest share compared to
assessment and prevention costs in production costs (Balouchi et al., 2019). Quality products
will lead to low inventory in the warehouse, be it the inventory of raw
materials, spare parts, and finished products (Ditkaew, 2018). Because the
company can work on the production process according to a predetermined
schedule, inventory turnover becomes smoother and of course, profit revenue
will be realized more quickly.
An increase in sales usually
occurs as the speed at which companies respond, an increase or decrease in
selling prices, and an increase in their reputation for a quality product (Muchram et al., 2019). Similarly,
quality improvements can lower costs as companies increase productivity and
lower rework, scraps, and warranty costs.
Table 1
Related Previous Study
|
No
|
Researcher's Name and Years
|
Research Title
|
Research Methods
|
Research Variables
|
Research Results
|
|
1
|
(Shrouty & Tiwari, 2017)
|
Analysis of Cost of Poor
Quality(COPQ) and its Calculation: Steel Industri, 2017
|
�Quantitative
|
Cost of poor quality and calculation of COPQ
|
Three
main criteria for account COPQ
i.e. Mapping products, processes, and cost
|
|
�
2
|
� (Owusu, 2020)
|
Assessment of �Cost of Quality and its Effects on Manufacturing Performance: A Case Study
of Special Ice
Company Limited, Ghana
|
�Qualitative
|
Cost of quality (X), manufacturing performance (Y)
|
The
cost of quality elements such as external failure costs has a variable significant impact
on the performance of manufacturing enterprises
|
|
�
3
|
(Dinaroe et al., 2018)
|
Cost
of Quality �Analysis of �Tailor�s Industry in �Aceh
|
�Qualitative
|
Cost of �����quality
|
Not
all quality costs are carried out at industrial tailor companies in Aceh
|
|
�
4
|
(Fujianugrah & Annisa, 2020)
|
Effect of �Prevention Cost and �Appraisal Cost on Sales �Growth
|
�Quantitative
|
Independent variables: prevention
costs and valuation costs, dependent variables: sales growth
|
Variable
cost prevention and valuation costs partially and simultaneously affect sales
growth
|
|
�
5
|
(Tresnawati et al., 2017)
|
The Effect of Efficiency and �Quality Cost on Profitability
|
�Quantitative
|
Independent
variables: quality cost efficiency, dependent variables� profitability
|
The
cost of quality has a significant effect on the level of profitability
|
Table 2
Work quality standards
|
���������
���������� No
|
Project
|
Identity
|
Period
|
%
|
|
�
Prevention cost
|
Assess-ment cost
|
� Internal
failure cost
|
� External
failure cost
|
Total
|
|
����� 1
|
Accessibility dan Ducting Utility
BSH
|
Access
|
2015 - 2016
|
0,08%
|
0,37%
|
0,35%
|
0,35%
|
1,15%
|
|
����� 2
|
Structure of Automated People Mover
System (APMS)
|
APMS
|
2016 - 2018
|
0,32%
|
0,78%
|
0,57%
|
0,57%
|
2,23%
|
|
����� 3
|
Extension and widening of Banyuwangi Airport
|
Banyuwangi
|
2018 - 2019
|
0,73%
|
0,90%
|
0,54%
|
0,54%
|
2,71%
|
|
����� 4
|
Construction of Bogor toll road gates
|
GTBG
|
2018 - 2020
|
0,38%
|
0,13%
|
0,74%
|
0,53%
|
1,78%
|
|
����� 5
|
Accessibility of BSH
|
Access
|
2020 - 2021
|
0,20%
|
0,38%
|
1,12%
|
0,34%
|
2,03%
|
Based on the Table 2,
there is a percentage of Prevention Costs, Assessment Costs, Internal Failure
Costs, and External Failure Costs against the total value of projects whose
value is not too large. From the description above, the author is interested in
examining the effect of quality cost variables on the profit of construction
company projects with the title "The
Effect of Prevention Costs, Assessment Costs, Internal Failure Costs, and
External Failure Costs on the Profitability of Construction Company Projects".
The objectives of
this study are: (1) to find out the effect of preventive costs on the
profitability of construction company projects, (2) to find out the effect of
the cost of the assessment on the profitability of the construction company's
project, (3) to find out the effect of internal failure costs on the
profitability of construction company projects, (4) to find out the influence
of external failure costs on the profitability of construction company projects,
and (4) to find out the effect of prevention cost, assessment cost, internal
failure cost, and external failure cost together on the profitability of
construction company projects.
METHOD
Quantitative
methods and statistical analysis were applied for this research (Creswell, 2017). The population in
this study were employees assigned to the construction company PT. Wijaya Karya (Persero) Tbk. The number
of variables in this study is 5 (4 independent variables and 1 dependent
variable), then the total sample is at least 5 x 10 = 50. In this study, the
authors took the number of samples adjusting the number of employees placed in
the project at least 50 people. The group that the authors took in this study
were employees of construction companies placed in projects that occupied
managerial positions.
In this study, the
authors used questionnaires to obtain data related to the thoughts, feelings,
attitudes, beliefs, values, perceptions, personalities, and behaviors of the
respondents. The measurement scale uses the Likert Scale and is made in the
form of a checklist, where respondents are asked to determine one of the five
answer choices as follows:
|
� SS
|
=
|
Strongly Agree
|
Given score 5
|
|
� S
|
=
|
Agree
|
Given score 4
|
|
� RG
|
=
|
Hesitantly
|
Given score 3
|
|
� TS
|
=
|
Disagree
|
Given Score 2
|
|
� STS
|
=
|
Strongly Disagree
|
Given Score 1
|
The analysis method used in this study is multiple regression linear
analysis with the following formula:
Y = a + b1X1 + b2X2 + b3X3 + b4X4
��������������������. (3.1)
|
Y
|
=
|
Profitability
|
|
a
|
=
|
Constant
|
|
b1 � b4
|
=
|
regression coefficient
|
|
X1
|
=
|
Prevention costs
|
|
X2
|
=
|
Assessment fee
|
|
X3
|
=
|
Internal failure costs
|
|
X4
|
=
|
External failure costs
|
For the correlation test using the formula 4
predictors as follows:
Ry(1,2,3) = b1∑ X1Y + b2∑X2Y + b3∑X3Y + b4∑X4Y� ����������������. (3.2)
∑Y2
Determination Coefficient = R2
F = R2 (N �
m � 1) ������������������������������ (3.3)
m (1
� R2)
m = predictors number
Calculations of regression analysis, correlation test, and significance
test will be carried out using the SPSS computer program.
RESULTS AND DISCUSSION
Descriptive statistical tests are used to analyze
data by describing the data that has been collected from respondents, as it is
without intending to make generally accepted conclusions. The data used for
descriptive analysis in this study are variables of prevention costs, assessment
costs, internal failure costs, external failure costs, and profitability. Based
on 50 questionnaires that have been filled out by respondents, the following
results can be obtained:
Table
3
Variable
cost data analysis
|
Variable
|
Total
|
Min-Max
|
����� Mean
|
Median
|
Deviation standard
|
95% CI
Mean
|
|
Prevention Costs
|
50
|
15-30
|
27,82
|
29
|
2,826
|
27,02-28,62
|
|
Assessment Costs
|
50
|
20-35
|
31,50
|
32
|
3,190
|
30,59-32,41
|
|
Internal Failure Costs
|
50
|
21-44
|
36,62
|
37
|
4,861
|
35,24-38,00
|
|
External Failure Costs
|
50
|
14-30
|
22,90
|
22
|
3,861
|
21,80-24,00
|
|
Profitability
|
50
|
12-30
|
27,28
|
28
|
3,411
|
26,31-28,25
|
Based on Table 3 the description of the variable
can be described as follows:
a)
The
average respondent score for the Preventive Cost variable was 27.82. With a
standard deviation of 2,826 and a Confidence Interval (CI) of 95%, it is
believed that the average score on the Preventive Cost variable is at an
interval of 27.02 � 28.62.
b)
The
average respondent's score for the Cost of Assessment variable was 31.50. With
a standard deviation of 3,190 and a Confidence Interval (CI) of 95%, it is
believed that the average score on the Variable Cost of Assessment is at an
interval of 30.59 � 32.41.
c)
The
average respondent score for the Internal Cost of Failure variable was 36.62.
With a standard deviation of 4,861 and a Confidence Interval (CI) of 95%, it is
believed that the average score on the Internal Failure Cost variable is at an
interval of 35.24 � 38.00.
d)
The
average respondent's score for the External Failure Cost variable was 22.29.
With a standard deviation of 3,861 and a Confidence Interval (CI) of 95%, it is
believed that the average score on the External Failure Cost variable is at an
interval of 21.80 � 24.00.
e)
The
average respondent score for the Profitability variable was 27.28. With a
standard deviation of 3,411 and a Confidence Interval (CI) of 95%, it is
believed that the average score on the Profitability variable is at an interval
of 26.31 � 28.25.
Based on the results of the analysis using SPSS,
the researcher will then discuss the analysis that has been carried out. This
study was conducted to determine the effect of prevention costs, assessment
costs, internal failure costs, and external failure costs on the profitability
of construction company projects. To find out its effect, a hypothesis test is
carried out, including the following:
1)
First
hypothesis testing (H1)
It is known that
the calculated t value for the (partial) effect of X1 on Y is 3.064 > 1.679
or the Sig value of 0.004 < 0.05, so it can be concluded that H1 is accepted
and H0 is rejected which means there is a positive and significant influence of
Prevention Costs (X1) on Profitability (Y).
2)
Second
hypothesis testing (H2)
It is known that
the calculated t value for the (partial) effect of X2 on Y is 2.706 > 1.679
or the Sig value of 0.010 < 0.05, so it can be concluded that H2 is accepted
and H0 is rejected which means that there is a positive and significant
influence of Valuation Cost (X2) on Profitability (Y).
3)
Third
hypothesis testing (H3)
It is known that
the calculated t value for the (partial) effect of X3 on Y is 2.070 > 1.679
or the Sig value of 0.044 < 0.05, so it can be concluded that H3 is accepted
and H0 is rejected which means there is a positive and significant influence of
Internal Failure Cost (X3) on Profitability (Y).
4)
Fourth
hypothesis testing (H4)
It is known that
the calculated t value for the (partial) effect of X4 on Y is 2.028 > 1.679
or the Sig value of 0.049 < 0.05, so it can be concluded that H4 is accepted
and H0 is rejected which means that there is a positive and significant
influence of External Failure Costs (X4) on Profitability (Y).
5)
Fifth
hypothesis testing (H5)
It
is known that the calculated F value for the effect of (Simultaneous) X1, X2,
X3, and X4 on Y is 24.344 > 2.574 or a significant 0.000 < 0.05, so it
can be concluded that H5 is accepted and H0 is rejected which means there is a
positive and significant influence of Prevention Failure Cost (X1), Assessment
Cost (X2), Internal Failure Cost (X3) and External Failure Cost (X4)
simultaneously (together) on Profitability (Y).
CONCLUSION
Based on the
results of the research that has been discussed, prevention Costs have a
positive and significant effect on the profitability of construction company
projects, meaning that the better the prevention cost budget, the better the
profit obtained by construction company projects
Cost Assessment has
a positive and significant effect on the profitability of construction company
projects, meaning that the better the prevention cost budget, the better the
profit obtained by construction company projects.
Internal Failure
Costs have a positive and significant effect on the profitability of
construction company projects, meaning that the better the internal failure
cost budget, the better the profit obtained by construction company projects.
External Failure
Costs have a positive and significant effect on the profitability of
construction company projects, meaning that the better the external failure
cost budget, the better the profit obtained by the construction company's
projects.
Prevention Costs,
Assessment Costs, Internal Failure Costs, and External Failure Costs
simultaneously (together) have a positive effect and are significant to the
profitability of construction company projects, and the magnitude of the influence
is indicated by the value of R Square of 68.4 %.
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THE EFFECT OF PREVENTION ASPECTS,
ASSESSMENT ASPECTS, INTERNAL FAILURE ASPECTS, AND EXTERNAL FAILURE ASPECTS ON
THE BENEFITS OF CONSTRUCTION COMPANY PROJECTS