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which is 2,296,000 units, the company still can make Rs 260,000 profit.Alternatives1. Produce and sell bricks at 77.4% capacity (3,096,000 bricks per year)The reasons why produces bricks at this product level is that if company wants to recover working capital in full within project, it needs to generate Rs2 million as profit at least one year. According to the profit formula, the product level to reach this profit is 3,096,000 bricks.2. Produce and sell bricks at 100% capacity (4,000,000 bricks per year)If company produce and sell bricks at this level, it can make full use of productivity and generate the profit to a maximum level.Decision CriteriaRecommendation
ImplementationWhenWhoWhatMay2013SharmaObtain support from government. For example:Apply tax discount for net income. Request government to establish a more efficient supply channel to reduce relevant cost.May2013GuptaSell our bricks to construction company and building sectors. Maintain a continuous supply order.May2013SharmaCommunicate with market segment in our company to effectively use mass media to publicity environmental concept to the general public and raise people’s environmental protection awareness.June2013All staff in companySimplify all operational processes:Reduce operational cost and production lead timeImplement lean operationAvoid waste of raw materials and production timeContingency planIf Sharma cannot achieve the goal of increasing the capability, which is 77.4%, to get working capital back at the end of the project, keeping the sales volume of 2.4 millionbricks is the contingency plan in order to maintain the corporation operation with enough funds. As a result, in case if some previous implementation will not be available to increase the sales reaching the 3096000 bricks, the company is able to operate without loss under the current production.