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Rougir Cosmetics International Did Not Have Internal Capacity To Meet Demand

Rougir Cosmetics International did not have the internal capacity to meet demand for its products. It was considering producing 12,000 cartons of FC in-house and outsourcing the remaining 8,000 cartons, while outsourcing all 8,000 cases of BC. The document included calculations for labor hours and materials needed for different production stages and products, as well as cost estimates for producing the items internally versus outsourcing. It aimed to determine the most cost-effective production approach.

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Sameed Zaheer Khan
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690 views3 pages

Rougir Cosmetics International Did Not Have Internal Capacity To Meet Demand

Rougir Cosmetics International did not have the internal capacity to meet demand for its products. It was considering producing 12,000 cartons of FC in-house and outsourcing the remaining 8,000 cartons, while outsourcing all 8,000 cases of BC. The document included calculations for labor hours and materials needed for different production stages and products, as well as cost estimates for producing the items internally versus outsourcing. It aimed to determine the most cost-effective production approach.

Uploaded by

Sameed Zaheer Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Rougir Cosmetics International Did not have internal capacity to meet demand

Demand
FC 12000 cartons
BC 8000 cases
HC 18000 cases

FC BC
Demand Calcs. IN HOUSE 0 8000
Demand Calcs. OUTSOURCE 12000 0
12000 8000

adjustable

Two Stage Production


1st Shift 2nd Shift
Stage I Labour-Hours 15000 13500
Material prep. + initial mixing Cost/LH 8.5 9.35

Stage II Labour-Hours 10000 9000


Final Blending+ Packaging Cost/LH 9.25 10.175

Ingredient Cost/pound Available (lbs)


Purified Water 1 200000
Oil 1.5 50000
Scents & Colours 3 7500
Emulsifiers 2 15000
EXHIBIT 1
CRT/VND FC BC HC
Labour (hours/carton) Labour (hours/carton)
Stage I 1.5 1.8 1 Stage I
Stage II 0.8 1 0.5 Stage II
Materials (lbs/carton) Materials (lbs/carton)
Water 8 6 7 Water
Oil 1 3 2 Oil
Scents & Colours 0.5 0.3 0.4 Scents & Colours
Emulsifiers 0.5 0.7 0.6 Emulsifiers
TO PRODUCE TOTAL

INTERNAL
Costing (per quarter) Labour (hrs/carton) Materials (lb/carton)
Stage I Stage II Totol L Water Oil
FC 0 0 0 96000 12000
BC 14400 0 14400 48000 8000
HC 0 0 0 126000 36000
Sub Totals 14400 0 14400 270000 56000

OUTSOURCING per carton TOTAL COSTS


FC 40 0 if loop for cap max at i19
BC 55 0
0
per carton in-house
FC BC HC

12.75 15.3 8.5


7.48 9.35 4.675

8 6 7
1.5 4.5 3
1.5 0.9 1.2
1 1.4 1.2
32.23 37.45 25.575

S&Cs Emul. TOTAL COST


6000 6000 144000
4000 4000 202400
7200 10800 223200
17200 20800 569600

0
569600 objective function

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