The impact of operational and transportation expenses on salt farmers-net sales

Abstract

Madura Island is one of the biggest salt producers in Indonesia. Some issues faced by small salt farmers include a lack of warehouse management, volatile salt prices, and poor financial management. This study examined the impact of operational and transportation costs on the net sales of smallholder salt farmers. A multiple linear regression analysis was performed to validate the model. A uniform sample of 150 salt farmers in Sumenep Regency was chosen for the research. The results showed that the inventory turnover ratio and transportation costs significantly affected net sales. Meanwhile, net sales were not significantly affected by the average collection period, inventory conversion period, working capital efficiency, return on investment, or debt turnover ratio. Salt farmers are advised to adopt geomembrane technology to increase profits and improve salt quality. They must focus not only on salt standardization to enable large-scale production but also on collaborating with various organizations to integrate farmland.