2014

Strategic Management

Submitted To:

MR. JAVAID AHMED

AZHAR HUSSAIN 141

HARIS AHMED KHAN 141
SYED KHURRAM ALI 14126
12/9/2014

Costing of Masala products (Estimated):

Production Cost
Rated capacity
Estimated No. of Operating Hours
Estimated Production Capacity
Capacity Utilization
Annual Capacity Utilization Growth Rate
Provision for Wastage
Approximate Net weight of a Spice
packet
Total Packet produced
Total ingredients Cost per packet
Total Processing Cost per packet

200 Kg / Hr
9 Hrs / Day
1800 Kg / Day
70%
5%
2%
50 grams / pack
36000
Rs. 16.41
Rs. 4.8

Packing Cost
Rated capacity
No. of hours worked
Estimated packets per day
Cost of packaging per packet
Total manufacturing cost per packet

4500 Packets /
Hour
8 Hrs / Day
36000
Rs. 8
Rs. 29.21

National Foods incurred total cost of Rs. 29.21, which it then sold to wholesaler at a margin of
39.5% i.e 41.12. Wholesalers then keep their margin of around 16% and sold to retailers, a 50
gram masala product costs Rs. 48.95 to retailers, he then take its own margin of almost 11-12%.
The end consumers in the market then buy it at Rs. 55.