Operation Management - Plz Help - CiteHR
Prime Sponsor - FactoHR.com - Payroll Software with GPS Enabled Attendance, Travel, Performance Management, HRMS. Explore Features
A Manufacturer of motorcycles buys spark plugs at Rs.15 each. Now he wishes to manufacture the plugs in his own factory. The estimated cost for the manufacture of spark plugs is around Rs.50,000=00 and the variable cost comes to Rs.5 per spark plug. The Production Manager advises the Manufacturer that the factory should go for manufacturing instead of procuring them from the open market.
List out reasons for the decision of the Production Manager backed up by the necessary data.
Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
a) spark plug consumption unit 5000 both buy and production cost same .
Buy :- 5000*15 = 75000
Production :- 25000 ( 5000*5 ) +50000 = 75000
b) consumption less than 5000 buys is profitable.
Buys :- 4000*15 = 60000
Production :- 20000 ( 4000*5 ) + 50000 = 70000
c) consumption more than 5000 production is profitable.
Buys :- 6000*15 = 90000
Production :- 30000 ( 6000*5 ) + 50000 = 80000
Prime Sponsor - Talentedge.com "Interactive Anywhere Learning". Executive courses from top reputed institutes like IIM, XLRI, MICA. View Courses
This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2019 Cite.Co™