EVALUATING THE ROLE OF LABOR PRODUCTIVITY IN ENHANCING OVERHEAD COST EFFICIENCY AND PRICE RESPONSIVENESS: A QUANTITATIVE-DESCRIPTIVE CASE STUDY OF PT PROTEINMAGG MAGPRO INDUSTRI IN INDONESIA’S PET FOOD INDUSTRY
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This study investigates the role of labor productivity in improving overhead cost efficiency and enabling price responsiveness in a price-sensitive industry. Focusing on PT ProteinMagg Magpro Industri, a startup in Indonesia’s insect-based pet food sector, the research adopts a quantitative-descriptive method using SEM-PLS to examine the relationships among labor productivity, overhead cost efficiency, and pricing flexibility. The analysis is based on 36 months of internal operational and financial data, including output volumes, labor hours, and overhead components. Results indicate that higher labor productivity positively impacts overhead cost efficiency, which in turn significantly improves the company's ability to respond to market-driven pricing. These findings highlight that internal efficiency is not only an operational concern but a strategic necessity, particularly for startups with limited resources. The study offers practical implications for productivity-driven cost management and contributes to the broader discourse on strategic cost control in emerging manufacturing firms.
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