Penulis: Aliasuddin-Universitas Syiah Kuala [ 25/6/2007 ]

The study on optimal product and return to scale is very important because the result of the study can be used by industrial sector to evaluate their potency in the global market. According to this reason, this study is conducted. The objective of the study is to evaluate the optimal product and the optimal use of inputs of the large and medium scale industries. This study uses data of 44 groups of large and medium scale industries in the Province of Nangroe Aceh Darussalam. The study utilizes the ray ? homothetic production function as method of analysis. Here, there are three inputs are used in the model of production function, without capital because the data are not available.
The result show that the optimal product is not achieved by the industries. The use of inputs also is not optimal. Based on this, the industries should reorganize the use of inputs to obtain the optimality conditions both product and input use. 

Keywords : optimal product, return to scale, industry