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BALA FOOTWEARS
Managerial Economics
Project Presentation
GROUP MEMBERS
• Hassan Abbas• Muhammad Saad• Hafiz Islam Aslam• Adil Naeem• Osama Imran
Introduction to Company
Introduction to Company
1. Bala Hawai Chappal1. Bala Hawai Chappal
2. Bala Eva2. Bala Eva
3. Bala PU 3. Bala PU
4. JS International Trading Co,.4. JS International Trading Co,.
Bala Footwears
Hierarchy
CEOHaji M. Aslam
Department HeadHaji M. Afzal
Departments HeadHaji M. Iqbal
Labor Dep.
Production Dept
Stock Dep.
Finance Dep.
Accounts Dep.
Sales Dept
Import & Export Dep.
Purchase Dep.
Bala Hawai Chappals
Established in 1985 Company’s main business Capacity to produce more than 1300000 pairs
annually Export to Europe and Australia Rubber Flip Flops and PVC Flip Flops
Bala EVA
Established in 2005 Import Plant from Taiwan Eva Slippers and Eva Flip Flops Eva Compounding machine to maintain the quality
Bala PU ( Polyurethane )
Established in 2009 Import the PU plant from China Producing leather slipper Providing jobs to more than 150 employees directly
and indirectly
Import and Export Import machinery from Taiwan and China Import Polyurethane resin and other chemicals Export products to Australia, France and Dubai
JS International Trading Company
Introduction to the Product
PU Slippers
Can be made light, comfortable, flexible and hard Direct attach PU outsole for durability and flexibility Ideal casual wear Attractive styling
Economic Problems
Availability of Polyurethane resin Shortage of Electricity and Sui Gas Availability of Artificial leather and other important
items Lack of skilled labor
Causes of Failure of Product
High energy prices and other inputs Outdated production methods are still prevailing in
the factory Improper availability of raw material Transportation and utility infrastructure facilities are
not adequate The company is facing high competition from china
Steps to Increase Demand
New techniques for production, design and
marketing Needs to build outlets at domestic level Participation in trade fairs can increase exports Research and development activities for improving
quality and physical testing services Use of e-commerce strategies can broaden their
product market
PRODUCT COST ANALYSIS
Fixed Cost of PU slippers (one month)
• Factory Rent Rs. 343000/4 = Rs. 85750• Factory Permanent Rs.38000/4 = Rs. 9500
Labor salary• Management Salaries Rs. 80000/4 = Rs. 20000• Depreciation Expense• Manufacturing Plant Rs. 5000000 × 10% × 1/12
Rs.41667/month
• TOTAL FIXED COST Rs. 156,917
Variable Cost of PU Slippers
• Polyurethane Material Rs.5250000• Cutting Charges Rs.300000• Printing Charges Rs.300000• Embossing Charges Rs.225000• Upper Leather Rs.1875000• Inner Leather Rs.1125000• Upper-Man Wage Rs.525000• Bottom-Man Wage Rs.225000• Production labor Wage Rs.750000• Packing Trimming Wage Rs.450000• Electricity Charges Rs.375000• Packing Material Rs.525000• Transportation Cost Rs.150000• Other Misc.exp Rs.375000• Buckles Rs.675000
TOTAL VARIABLE COST Rs.13125000
Variable Cost per Unit
Items Rs.• Polyurethane Material 70• Cutting Charges 04• Printing Charges 04• Embossing Charges 03• Upper Leather 25• Inner Leather 15• Upper-Man Wage 07• Bottom-Man Wage 03• Production labor Wage 10• Packing Trimming Wage 06• Electricity Charges 05• Packing Material 07• Transportation Cost 02• Other Misc.exp 05• Buckle 09
Variable Cost per Unit 175
Fixed Cost per unit
Fixed Cost per unit
= Total Fixed Cost / No. of Units
= 156917/ 75000
= Rs. 2.09
Profit Calculations
• The price selling charged by the company is as follows:
Price of PU slipper/unit = Rs. 195
• Profit considering Average variable cost
Per Unit Profit = (P – AVC)
Per Unit Profit = (195 – 175)
Per Unit Profit = Rs. 20
• Total Profit = Q (P – AVC)
Total Profit = 75000 (195 – 175)
Total Profit = Rs. 1,500,000
Profit Calculations
• Profit considering Average cost
Average Total Cost per unit
= Average Cost per unit + Average Fixed Cost per Unit
TC = 175 + 2.09
TC = 177.09
• Per Unit Profit = (P – AC)
Per Unit Profit = (195 – 177.09)
Per Unit Profit = Rs. 17.91
• Total Profit = Q (P – AC)
Total Profit = 75000 (195 – 177.09)
Total Profit = Rs. 1,343,250
Market Structure
Market Structure
• Number and size of sellers• Number and size of buyers• Product Differentiation• Entry/ Exit
Company’s Role in the Economy of Pakistan
Company’s Role in the Economy of Pakistan
• Shown Good Performance• Increase Exports• Local Consumption• Exports• Generating Employment• Business in different Countries
Thank You
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