BALA Footwear

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BALA FOOTWEARS Managerial Economics Project Presentation

Transcript of BALA Footwear

Page 1: BALA Footwear

BALA FOOTWEARS

Managerial Economics

Project Presentation

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GROUP MEMBERS

• Hassan Abbas• Muhammad Saad• Hafiz Islam Aslam• Adil Naeem• Osama Imran

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Introduction to Company

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Introduction to Company

1. Bala Hawai Chappal1. Bala Hawai Chappal

2. Bala Eva2. Bala Eva

3. Bala PU 3. Bala PU

4. JS International Trading Co,.4. JS International Trading Co,.

Bala Footwears

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Hierarchy

CEOHaji M. Aslam

Department HeadHaji M. Afzal

Departments HeadHaji M. Iqbal

Labor Dep.

Production Dept

Stock Dep.

Finance Dep.

Accounts Dep.

Sales Dept

Import & Export Dep.

Purchase Dep.

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Bala Hawai Chappals

Established in 1985 Company’s main business Capacity to produce more than 1300000 pairs

annually Export to Europe and Australia Rubber Flip Flops and PVC Flip Flops

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Bala EVA

Established in 2005 Import Plant from Taiwan Eva Slippers and Eva Flip Flops Eva Compounding machine to maintain the quality

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Bala PU ( Polyurethane )

Established in 2009 Import the PU plant from China Producing leather slipper Providing jobs to more than 150 employees directly

and indirectly

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Import and Export Import machinery from Taiwan and China Import Polyurethane resin and other chemicals Export products to Australia, France and Dubai

JS International Trading Company

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Introduction to the Product

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PU Slippers

Can be made light, comfortable, flexible and hard Direct attach PU outsole for durability and flexibility Ideal casual wear Attractive styling

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Economic Problems

Availability of Polyurethane resin Shortage of Electricity and Sui Gas Availability of Artificial leather and other important

items Lack of skilled labor

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Causes of Failure of Product

High energy prices and other inputs Outdated production methods are still prevailing in

the factory Improper availability of raw material Transportation and utility infrastructure facilities are

not adequate The company is facing high competition from china

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Steps to Increase Demand

New techniques for production, design and

marketing Needs to build outlets at domestic level Participation in trade fairs can increase exports Research and development activities for improving

quality and physical testing services Use of e-commerce strategies can broaden their

product market

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PRODUCT COST ANALYSIS

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Fixed Cost of PU slippers (one month)

• Factory Rent Rs. 343000/4 = Rs. 85750• Factory Permanent Rs.38000/4 = Rs. 9500

Labor salary• Management Salaries Rs. 80000/4 = Rs. 20000• Depreciation Expense•  Manufacturing Plant Rs. 5000000 × 10% × 1/12

Rs.41667/month

• TOTAL FIXED COST Rs. 156,917

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Variable Cost of PU Slippers

• Polyurethane Material Rs.5250000• Cutting Charges Rs.300000• Printing Charges Rs.300000• Embossing Charges Rs.225000• Upper Leather Rs.1875000• Inner Leather Rs.1125000• Upper-Man Wage Rs.525000• Bottom-Man Wage Rs.225000• Production labor Wage Rs.750000• Packing Trimming Wage Rs.450000• Electricity Charges Rs.375000• Packing Material Rs.525000• Transportation Cost Rs.150000• Other Misc.exp Rs.375000• Buckles Rs.675000

TOTAL VARIABLE COST Rs.13125000

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Variable Cost per Unit

Items Rs.• Polyurethane Material 70• Cutting Charges 04• Printing Charges 04• Embossing Charges 03• Upper Leather 25• Inner Leather 15• Upper-Man Wage 07• Bottom-Man Wage 03• Production labor Wage 10• Packing Trimming Wage 06• Electricity Charges 05• Packing Material 07• Transportation Cost 02• Other Misc.exp 05• Buckle 09

Variable Cost per Unit 175

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Fixed Cost per unit

Fixed Cost per unit

= Total Fixed Cost / No. of Units

= 156917/ 75000

= Rs. 2.09

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Profit Calculations

• The price selling charged by the company is as follows:

Price of PU slipper/unit = Rs. 195

• Profit considering Average variable cost

Per Unit Profit = (P – AVC)

Per Unit Profit = (195 – 175)

Per Unit Profit = Rs. 20

 • Total Profit = Q (P – AVC)

Total Profit = 75000 (195 – 175)

Total Profit = Rs. 1,500,000

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Profit Calculations

• Profit considering Average cost

Average Total Cost per unit

= Average Cost per unit + Average Fixed Cost per Unit

TC = 175 + 2.09

TC = 177.09

• Per Unit Profit = (P – AC)

Per Unit Profit = (195 – 177.09)

Per Unit Profit = Rs. 17.91

 • Total Profit = Q (P – AC)

Total Profit = 75000 (195 – 177.09)

Total Profit = Rs. 1,343,250

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Market Structure

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Market Structure

• Number and size of sellers• Number and size of buyers• Product Differentiation• Entry/ Exit

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Company’s Role in the Economy of Pakistan

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Company’s Role in the Economy of Pakistan

• Shown Good Performance• Increase Exports• Local Consumption• Exports• Generating Employment• Business in different Countries

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Thank You