1248 words - 5 pages

I/INTRODUCTIONThis report based on quantitative method of analysis to examine manufacturing figures and to find solutions to fulfil the contract at minimum cost.II/ANALYSED DETAILS1. Minimise the cost: How much to buy in - how much to produce?Both vats of type A and type B take 2 hours to dye a quantity of fibre that can eventually be turned sufficient fibre into yarn to make a metre of standard width cloth. We can choose between produce yarns using our available resources, which causes manufacturing cost be £15 per metre, or buy in from other factory with the cost of £21 per metre. Given that the amount produced must be equal or more than the amount bought in. After considering all the possible solutions we can do at the present situation and ignoring any future cost or quantity changes, to minimize cost as well as maximise profit, we should make 320 metres of vats either type A or B. The cost of produce this 320 metres is £4800. To maintain at least 500 metres per week we should buy in 180 metres which costs £3780. Total cost incurs is £8580 which is the minimum cost solved out by analysis technique.2. When requiring extra 700 hours use of Vats:In the future plan which we will spend extra 700 hours per week of the vats which could be either type A or B or a mixture. If we produce 320 metres, we use 640 hours per week of the vats, which means available capacity is 760 hours of vats type A and B. Requiring extra 700 hours use of the vats come into being still satisfies the available capacity hours of vats either type A or B or both. Because it takes 2 hours for one metre vat so 700 hours could make 350 metres. Therefore, it is necessary to buy in more capacity for both types of machines. Combed and carded machines has no available capacity to produce more than 320 metres so we need to buy more 1400 hours capacity from other division, also buy in more 1650 hours capacity of twisting machine to twist extra 330 metres of yarn, 20 metres is twisted by using 100 hours slack. Basically, when using extra 700 hours vats per week we can produce 670 metres which excess target 500 metres per week so it is not necessary to buy in 180 metres of yarn outside. In this case we can make more profit because 1 metre produced is £5 cheaper than 1 metre bought in.3. Should we buy spare carding and combing machine capacity from other division?When producing 320 metres, full capacity of carding and combing machine is used. Available capacity of twisting machine is 100 hours which can twist 20 metres yarn. Consequently, we can use full capacity of the second type of machine and buy in more capacity of the combed and carded machine. For 20 metres more yarn to be produced, we need to buy 80 hours capacity of carded and combed machine. The maximum value of buying in 1 more hour capacity of this machine is £1.5. It is worth acquiring extra hours if the cost to be paid for this is up to £120. For 20 metres more yarn we will use...

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