This report based on quantitative method of analysis to examine manufacturing figures and to find solutions to fulfil the contract at minimum cost.
1. 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 ÃÂ£15 per metre, or buy in from other factory with the cost of ÃÂ£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 ÃÂ£4800. To maintain at least 500 metres per week we should buy in 180 metres which costs ÃÂ£3780. Total cost incurs is ÃÂ£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...