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Abdul has 8 factories, with different capacities, producing boutique kurtas. In the production process, he incurs raw material cost, selling cost (for packaging and transportation) and labour cost. These costs per kurta vary across factories. In all these factories, a worker takes 2 hours to produce a kurta. Profit per kurta is calculated by deducting raw material cost, selling cost and labour cost from the selling price (Profit = selling price - raw materials cost - selling cost - labour cost). Any other cost can be ignored.
Abdul has received an order for 2,000 kurtas from a big retail chain. They will collect the finished pre-packaged kurtas directly from the factories, saving him the selling cost. To deliver this order, he can use multiple factories for production. Which of the following options will ensure maximum profit from this order?
Profit = selling price - raw materials cost - selling cost - labor cost
Since selling cost is zero.
New Profit = Original Profit + Selling cost
Profit per Kurta
for factory 1, 775+60 = 835
for factory 2, 800+45 = 845
for factory 3, 900+60 = 960
for factory 4, 800+68 = 868
for factory 5, 600+75 = 675
for factory 6, 875+65 = 940
for factory 7, 500+85 = 585
for factory 8, 600+70 = 670
Arranging all factories in decreasing profits,
Factory (3>6>4>2>1>5>8>7)
Factories 3, 6 and 4 will ensure maximum profit.
