CASH MANAGEMENT OPTIMIZATION TO MINIMIZE IDLE CASH: A MILLER–ORR MODEL APPROACH IN THE WORK ACCIDENT BENEFIT (JKK) PROGRAM OF BPJS KETENAGAKERJAAN

Abstract

This study aims to analyze the effectiveness of cash management in minimizing idle cash in the Work Accident Benefit (JKK) Program of BPJS Ketenagakerjaan through a conceptual approach based on the Miller–Orr model. Cash management in public fund institutions faces a fundamental challenge in balancing liquidity requirements for benefit payments and optimizing fund utilization to generate returns. In practice, conservative cash holding policies may lead to idle cash, resulting in opportunity costs. This research adopts a qualitative approach using an exploratory case study design, relying on literature analysis and comparison of previous research findings. The Miller–Orr model is applied conceptually to illustrate the mechanism for determining optimal cash balances under stochastic cash flow conditions. The expected results indicate the potential existence of excess cash balances beyond optimal levels, as evidenced in prior studies. This suggests that stochastic-based cash management models have the potential to improve efficiency by balancing liquidity and profitability. This study contributes theoretically to the development of cash management literature in the social security sector and provides practical insights for formulating more adaptive and data-driven cash management policies.