PLANT AND EQUIPMENT Currently Nature Bros Ltd Is working on a leased plant with

Plant and equipment currently nature bros ltd is

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PLANT AND EQUIPMENTCurrently Nature Bros. Ltd. Is working on a leased plant with a capacity of 300,000 units a month they need an additional investment of $15,000 for an automatic conveyer system and a big product mixer. Their main advantage is low cost of production. The company could meet thetarget of $4 million sales per year. They also need to purchase filling machinery with capability of filling two cans at once with over all speed of 75 cans per minutes that result in increase the capacity from 300,000 to 720,000 units a month and a seaming machine is also required to do so. That both would cost of $22,000 approximately. This investment of $37,000 would lead to increase the production of 300,000 per unit to 720,000 unit per month. Now company is working in a single shift the can have the opportunity to double the shift to double the production.SolutionThe new market expansion, new production development and purchase of new plant can enhance the productivity and sales volume. That the fulfillment of the growth of need of NatureBros. Ltd. Although new product is not supporting the target sale but having the potential of waste sales and improve the position in future. 1-Currently the offered products are old fashion seasoning, salt free old fashion seasoning and enhancer. The company has decided to increase the market share by having different marketing strategies as our product are higher in quality and having a price base advantage over the competitor’s product. So all of the previous efforts have been done with advertising if aggressing advertising is started then market position would improve over the period of growth the market expansion, new product development and purchase of new pant is best on behalf on the Nature Bros. Ltd. And will help to improve the market share, sale volume, and market position in future. 2-Falling back to smaller market will help him reduce the cost of goods sold and help increase the percentage of return. Operating in current market is making him go further in debt. (Selected)
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3-The successive sale in 2005 through 2008 is proof through the Preformed Income that shows improvement as of 2003 balance sheet. So the Nature Bros. Ltd. Have two optionseither to expand or stop the operations the decision to the problem isto grow in term of new market expansion, new production development and purchase of new plant.
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