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incorrect will downvoted 8.3 Raw Materials Decision - Local Purchase vs Other Purchase N 97 X Ltd has two factories, one at Lucknow and another
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8.3 Raw Materials Decision - Local Purchase vs Other Purchase N 97 X Ltd has two factories, one at Lucknow and another at Pune producing 7,200 Tonnes and 10,800 Tonnes of a product against the maximum production capacity of 9,000 and 11,880 Tonnes respectively at Lucknow and Pune. 10% of the raw material introduced is lost in the production process. The maximum quantity of Raw Material available locally are 6,000 and 13,000 Tonnes at * 720 and 2 729 per Tonne at Lucknow and Pune respectively. For the additional needs, a Supplier of Bhopal is ready to supply raw material at our factory site at * 792 per Tonne. Other Variable Costs of the production process are *22.32 Lakhs and 3 32.94 Lakhs and Fixed Costs are *18 Lakhs and 24.84 Lakhs respectively for Lucknow and Pune Factory. The output is sold at a Selling Price of 1,450 and 1,460 per tonne by Lucknow and Pune Factory respectively. You are required to compute the Cost per Tonne and Net Profit earned in respect of each factory. Can you suggest any other alternative production plan for both the factories without any change in present total output of 18,000 Tonnes whereby the Company may earn Optimum ProfitStep by Step Solution
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