Determinants of Production in the Bread and Cake Industry in Banyumas District

Abstract

The industrial sector is a pertinent driving force for economic development in developing countries, including Indonesia. Therefore, the industrial sector more than other industries must be prepared to become a leading sector. One of the industrial sectors growing in the Banyumas district is the food industry, especially cakes and bread. This research aims to analyze the effect of capital, labor, and raw material on the production of the food items and identify the independent variables that influence the production the most. The population of this study is 108 bread and cake business units. The sampling technique used is Stratified Random Sampling based on the number of workers. The data analysis technique used is multiple linear regression which refers to the Cobb-Douglas production function using natural logarithms. The results show that capital, labor, and raw materials partially have a positive and significant effect on production; capital, labor, and raw materials simultaneously have a substantial impact on production; the most influential variable on production is the raw material. The research implies that the bakery industry in Banyumas Regency should use a combination of production factors such as capital, labor, and raw materials optimally to increase production. Furthermore, it is hoped that the Banyumas Regency Government and financial institutions can increase the ease of access to capital to support business development. To increase labor productivity, the government and companies can facilitate to improve their knowledge and skills. Keywords: capital, labor, raw materials, production