Download - Roja Silks Ppt Qt
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ROJA SILKS
Rajat Aggarwal Shivangi Agarwal
Abhilasha KittyKanchan
JethwaniKomal MakhijaniRahul Verma
Kanchan Gupta
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Operations started in1996 Madras. Casual formals and Western wear for
children, men and women. Two manufacturing units in Trichy and
Salem. Big boom in 2002. Big competitor-Nandhini Silks, Aruna Silks.
Introduction
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Two options:-• Construction of a large plant to meet the
possible demand in future.• Construction of a small plant to meet a low
demand and expanding it when the demand increased.
Probabilities for low, medium, and high 0.3, 0.4, and 0.3 respectively.
Problems:
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If large plant:◦ Cost=12L◦ With low demand,0.3,10◦ With medium demand,0.4,16◦ With high demand,0.3,24
If small plant:◦ Only meet low demand,
cost=6,prob.=0.3,operating return=10◦ If expanded to medium demand,
cost=3,prob=0.4,operating return=14◦ If expanded to large demand, cost=5,prob.=0.3,
0.3,operating return=22
Market Research
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GM was wondering, which of the options he must
pursue???????
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1
SMALL2
3
LARGE
4 5
6
.3*10=3;=>3-6=-3
YES;22-5=17
NO;.3*10=3; =>3-6=-3
NO;.3*10=3; =>3-6=-3
YES;14-3=11
High=.3
Medium=.4
9.5
9.5-3
=6.5
High=>.3*24=7.2
Medium=>.4*16=6.4
LOW=>.3*10=3
16.6-1
2=4.6
Total=16.6
17
11
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Construction of a large plant is good. The large plant shows profit.(166000-
120000) =460000 The small plant when expanded to meet the
future demand gives a net profit of (95000-300000) =650000
Hence we conclude that the general manager should opt for setting of a small plant and then expand it when demand increases in the future.
Conclusion
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