Gear Box Manufacturing Cost

Sr.No

Item
1 Gear Blanks
2 Cost of Gear Shaft blanks
3 Grear Housing
4 Gear Box Assembly Kit
5 Other Tools and consumables
6 packaging material
Total Cost Price of Gear Box
assembly Capacity monthly for a complete gear Box
Units Sold in 2013-14
Closing Stock of year
Total Units manufactured in 2013-14
Total Units to be Sold in 2014-15
Total Units manufacttured in 2014-15
Total Cost of Manufacturing
Working Capital (inventroy * cost * 15%)
Capacity Management - Current Year
Working hours per day = (450+450+390)*.85
1 gear box = 4 gears + 2 gear shafts
Monthly Capactiy of H1 = (1096/(5*4))*25
Monthly Capacity of H2 = (1096/(8*2))*25
Monthly Capacity of S1 = (1096/(3*4))*25
Monthly Capacity of S2 = (1096/(5*2))*25
Monthly Capacity of FG1 and FG2
=(1096/(2*4))*25
Monthly Capacity of FG1 and FG2 =
(1096/(6*2))*25
Monthly Capacity of Heat Treatment
Monthly Capacity of Heat Treatment
Assembly Capacity monthly for a complete gear Box

The above row in yellow defines the capacity for the entire plant
Annual Capacity of the Plant = 1350*12
Total Units to be manufactured in 2014-15
therefore units to be manufactured per month on avg

New Capacity will be based on Optimization of H2

Total Time Available (1096*25)
Time used by H2 for shafts (1350*16)
Idle Time for H2
Setup time to shift from Shafts to gears
Effective idle time H2 for manufacturing
Max No. Shafts that can be manufactured
Max No. Gears that can be manufactured
The new Capacity of the Plant = 1350+157

Cost
2400
2800
6000
800
340
160
12500

20000
11700
1125
12825
13455
14580
160,312,500.00
2109375
Management - Current Year
1096 Gear Box Equivalents
1350 GBE
1700 GBE
2275 GBE
2725 GBE
3425 GBE
2275 GBE
2130 GBE
1710 GBE
6075 GBE

ity for the entire plant

16200
14580
1215

Time
27400
21600
5800
120
5680
157 GBE
157 GBE
1507 GBE

PBT Statement for both Years

S.No

Factor
1 Sales Realization
2a Raw Material Cost
b Bougt out items
c Rejections
d packing material costs
3 Manpower
a Direct
b Indirect
4 Other cost tools and consumables
5 Plant O H and Power etc.
6 Repairs and Maintenance
7 Depreciation
8 Interest
9 Administrative and selling costs
10.00 welfare costs
11 [1-(2 to 10)] PBT
Profitability

Current
234000000
60840000
79560000
1216800
1872000
9720000
2040000
3978000
21600000
4680000
7480000
9309375
4680000
1,000,000.00
26023825
11.121292735
PBT growth %

rs

After Changes(for 25%

increase in profitability
269100000
69966000
91494000
1399320
2152800
9720000
2040000
4574700
21600000
5382000
7480000
9309375
5382000
1,000,000.00
37599805
13.9724284653
44.4822388715

Month
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar

20013-14
Industry Sales
Company Sales
15000
25000
35000
10000
10000
20000
20000
10000
5000
10000
15000
20000

900
1500
2100
600
600
1200
1200
600
300
600
900
1200

2014-15
Industry Demand
17250
28750
40250
11500
11500
23000
23000
11500
5750
11500
17250
23000
Alternatives

Alternative 1: Using varying monthly production according to demand : A blend o

Alternative 2: Increase the Plant Capacity based on the H2 ut

2014-15
Company Demand
1035
1725
2415
690
690
1380
1380
690
345
690
1035
1380

Alternative 1
Production
Inventory
1125
1350
1440
1350
1065
1350
0
1025
335
1025
670
1025
315
1205
140
1025
475
1025
1155
1025
1490
1025
1480
1025
1125

Alternatives

ccording to demand : A blend of full capacity production and level production

ant Capacity based on the H2 utilization and Alternative 1

Alternativ
Production
1500
1500
1350
1020
1020
1020
1020
1020
1020
950
1020
1020

Alternative 2
Inventory
1125
1590
1365
300
630
960
600
240
570
1245
1505
1490
1130
Comments
Can Implemented for the year 2014-15

To be implemented for yeas 2014-15

onwards and is the best solution as this
also satisfies the condition of having 3
days Finished goods and 7 days of WIP
inventory