Instructions

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.


Question 67

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?

Solution

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.


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