CRITICAL ANALYSIS OF PERFORMANCE IMPROVEMENT OF
A 


Spinning
Mill with 32400 spindles working on 100% cotton
combed yarns 



The data given
below will help us to understand the impact on overall
contribution by 




1. Utilisation
of the plant 


2. Selling price increase 

3. Cheaper
rawmaterial for coarse counts 

4. selling price increase for coarse counts 

5.
Increased back process production 

6. Increased spindleage 

7.
Increased grams per spindle 

8. Working coarses counts 

9. working
finer counts 

10.Raw material price 











ASSUMPTIONS: 


The selling
prices is the actual net sales price for a
reasonably good yarn produced in Indonesia. 

Product mix is
decided by Linear programming which satisfies all the constraints given
below 

Linear
programming decides the maximum possible contribution meeting all the
constraints. 

contrubution =
Net sales price  clean raw material cost  packing and
forwarding cost 






grams per 


market
constraints 

spindle 


24sc should be
less than 60 tons per month 
240 

utilisation

97% 

20sc should be
less than 510 tons per month 
280 

no of RFs 
45 

30sc should be
less than 90 tons per month 
170 

no spls/RF 
720 

32sc should be
less than 20 tons per month 
155 



36sc should be
less than 20 tons per month 
135 



40sc should be
less than 300 tons per month 
120 



Total no of ring
frames should not be more than 45 









utilised 
total 
avg 

count 
24sc 
20sc 
30sc 
32sc 
36sc 
40sc 
rfs 
cotrbn 
count 




usd 


sell price 
1.96 
1.90 
2.10 
2.14 
2.30 
2.40 


raw mat 
1.30 
1.30 
1.30 
1.30 
1.30 
1.30 


packing 
0.04 
0.04 
0.04 
0.04 
0.04 
0.04 


contrbn 
0.62 
0.56 
0.76 
0.8 
0.96 
1.06 





12. 5 tons 
20.5 
0 
90 
20 
20 
225 
44.3 
354291 
36.09 

13.5 tons 
60 
22.9 
77.5 
0 
20 
225 
45 
366179 
34.39 

15 tons 
60 
137 
7.99 
0 
20 
225 
45 
377470 
31.4 

17 tons 
0 
303 
0 
0 
0 
207 
45 
389117 
28.12 

19 tons 
0 
408 
0 
0 
0 
162 
45 
400217 
25.69 

21 tons 
3.39 
510 
0 
0 
0 
117 
45 
411308 
23.72 




if the utilisation
goes up by 1% I.e form 97% to 98% 





15 tons 
60 
127 
15.7 
0 
20 
227 
45 
380179 
31.68 

17 tons 
0 
297 
0 
0 
0 
213 
45 
392156 
28.36 

19 tons 
0 
402 
0 
0 
0 
168 
45 
403256 
25.9 




if grams per
spindle is increased by 5% 





15 tons 
60 
88.6 
45.6 
0 
20 
236 
45 
390605 
32.74 

17 tons 
60 
171 
90 
0 
20 
169 
45 
399811 
29.5 

19 tons 
60 
276 
90 
0 
20 
124 
45 
410911 
26.92 




if the selling
price goes up 5% 





15 tons 
60 
137 
7.99 
0 
20 
225 
45 
426494 
31.4 

17 tons 
0 
303 
0 
0 
0 
207 
45 
442743 
28.12 

19 tons 
0 
408 
0 
0 
0 
162 
45 
458418 
25.69 




if the raw
material price comes down by 3 cents 





15 tons 
60 
137 
7.99 
0 
20 
225 
45 
390970 
31.4 

17 tons 
0 
303 
0 
0 
0 
207 
45 
404417 
28.12 

19 tons 
0 
408 
0 
0 
0 
162 
45 
417317 
25.69 




if the
rawmaterial for 20s, 24s and 30s is cheaper by 3 cents compared to other
counts 



15 tons 
60 
137 
7.99 
0 
20 
225 
45 
383634 
31.4 

17 tons 
60 
250 
0 
0 
0 
200 
45 
398281 
28.3 

19 tons 
60 
355 
0 
0 
0 
155 
45 
412531 
25.84 




if grams per
spindle comes down by 3% bec of cheaper raw mat
for 20s,24s and 30s 



15 tons 
51.3 
154 
0 
0 
20 
225 
45 
381512 
31.15 

17 tons 
0 
310 
0 
0 
0 
200 
45 
394824 
27.84 

19 tons 
0 
418 
0 
0 
0 
152 
45 
407902 
25.35 




if grams per
spindle comes down by 10% bec of cheaper rawmat for 20s,24s and 30s 



15 tons 
0 
212 
0 
0 
19.8 
218 
45 
375491 
30.41 

17 tons 
0 
326 
0 
0 
20 
164 
45 
385255 
27.05 

19 tons 
0 
441 
0 
0 
20 
109 
45 
395018 
24.39 




if 40sc can not be
sold more than 180 tons per month 





15 tons 
60 
92.1 
90 
7.91 
20 
180 
45 
373479 
31.45 

17 tons 
60 
243 
7.14 
0 
20 
180 
45 
386071 
28.3 

19 tons 
0 
408 
0 
0 
0 
162 
45 
400217 
25.69 




if 20sc can not be
sold more than 300 tons per month 





15 tons 
60 
137 
7.99 
0 
20 
225 
45 
377470 
31.4 

17 tons 
3.39 
300 
0 
0 
0 
207 
45 
389108 
28.13 

19 tons 
60 
300 
90 
0 
20 
97 
45 
395617 
26.0 




if 20sc can not be
sold more than 150 tons per month 





15 tons 
60 
137 
7.99 
0 
20 
225 
45 
377470 
31.4 

16 tons 
60 
150 
90 
0 
20 
161 
45 
379760 
29.79 

17 tons 
60 
150 
90 
0 
20 
161 
45 
379760 
29.79 

19 tons 
60 
150 
90 
0 
20 
161 
45 
379760 
29.79 




pleease note
in this case it has not considerd more than 16 tons , even thought the
option upto 

19 tons is
given to choose 





if spindle
installed is increased by 10% 





15 tons 
60 
35.5 
90 
20 
20 
225 
49 
398660 
33.76 

17 tons 
60 
169 
36.7 
0 
20 
225 
49.5 
416621 
30.62 

19 tons 
0 
349 
0 
0 
0 
221 
49.5 
429693 
27.75 




if grams/spl goes
up by 5% for 40sc 



15 tons 
60 
109 
25.3 
0 
20 
236 
45 
386556 
32.29 

17 tons 
0 
284 
0 
0 
0 
226 
45 
398527 
28.86 

19 tons 
0 
393 
0 
0 
0 
177 
45 
407582 
26.20 





if grams/spl goes
up by 5% for 20sc 







15 tons 
0 
170 
35.9 
0 
20 
225 
45 
379457 
31.49 

17 tons 
0 
293 
0 
0 
0 
217 
45 
394340 
28.53 

19 tons 
0 
394 
0 
0 
0 
176 
45 
407251 
26.18 







PLEASE NOTE
THAT WHATEVER CONCLUSIONS, STATEMENTS, OPINIONS ARRIVED AT BASED ON 
THE ABOVE DATA IS APPLICABLE ONLY FOR THE SAME DATA.
CONCLUSIONS, RESULTS MAY VARY 
DEPENDING UPON
THE PROUDCTIVITY OF DIFFERENT COUNTS, SELLING PRICE COMBINATIONS 

FOR DIFFERENT
COUNTS, OVERALL QUANTITY ETC 



