Is it okay to erect a statue of Ksitigarbha in the cemetery?

It is possible, but generally not done.

Ksitigarbha Bodhisattva has great vows and great compassion, and vows to save all sentient beings in hell. But the cemetery is not hell.

Furthermore, the purpose of erecting Ksitigarbha Bodhisattva is to ask people to worship him to form a bond and eliminate sins. Are people willing to go to the cemetery to worship the image of Ksitigarbha Bodhisattva?