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Abstract

This paper aims to carry out a cost-benefit analysis of a new product development from a by-product. In this case, the by- product is organic broken-milled rice and the new product development is organic rice pudding. Data was obtained from multi supply chain of a primary data, for instance, farmers, retailer, and entrepreneurships on a rice supply chain and a secondary data from the published literature. The study found that the payback period (PB) of the investment is 2 years and 7 months (940 days) with the net present value (NPV) is 3,008,099 Thai Baht (assuming that the discount rate is 8%) and 22.73% of internal rate of return on investment (IRR). The results indicates that investment in the organic rice pudding product could be profitable in the long run.

Keywords: Cost benefit analysis, New product development, Organic broke-milled rice

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