The Ruddle Co. Ltd had planned to install and, with effect from next April, commence operating…
The Ruddle Co. Ltd had planned to install and, with effect from next April, commence operating… | savvyessaywriters.org
The Ruddle Co. Ltd had planned to install and, with effect from next April, commence operating sophisticated machinery for the production of a new product – product Zed. However, the supplier of the machinery has just announced that delivery of the machinery will be delayed by six months and this will mean that Ruddle will not now be able to undertake production using that machinery until October. The first six months of production stated the commercial manager of Ruddle, is particularly crucial as we have already contracted to supply several national supermarket groups with whatever quantities of Zed they require during that period at a price of £40 per unit. Their demand is, at this stage, uncertain but would have been well within the capacity of the permanent machinery we were to have installed. The best estimates of the total demand for the first period are thought to be: Whatever the level of demand, we are going to meet it in full even if it means operating at a loss for the first half year. Therefore I suggest we consider the possibility of hiring equipment on which temporary production can take place. Details of the only machines which could be hired are: In addition to the above costs there will be a variable material cost of £5 per unit. For purchases greater than 10 000 units a discount of 20 per cent per unit will be given, but this only applies to the excess over 10 000 units. Should production capacity be less than demand then Ruddle could subcontra
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