Zulu Tyres LLC

Zulu Tyres LLC is a company started by the KGK group in 1968. The Company is in the car tyre business
and is the largest car tyre manufacturer in the GCC. In UAE itself, it has two plants. The company has a
presence in 30 countries with more concentration in Asia.

Zulu is preparing to open its third plant in UAE in Fujairah. Based on past experience with other plants,
the company’s strategy division has drawn up an estimate of the volume or total product it can produce
in a day with every additional worker that it employs. This is represented in the table below.

No. of Total
Workers Product
1 8
2 17
3 27
4 38
5 51
6 67
7 78
8 85
9 90
10 92
11 88

The company has to take a few strategic decisions. The first decision relates to how many
workers it should employ per day. For this it has to also look for some additional data.

Another aspect that it has to consider is the way in which costs will change as it produces more.
After doing some quick surveys and analysis on cost, they realized that they have to pay $80 per
worker per day. The fixed cost per day amounted to $300. Raw material like rubber amounted
to $4 per tyre produced.

At this stage, an analysis of cost is important because at any time the company would be
required to consider new contracts requiring additional production per day.

Another crucial factor is that it should have a target for its marketing team so as to ensure that
it is utilizing the plant to the maximum and leaves no excess capacity.

Questions

1) What kind of additional data will Zulu require to determine the number of employees it
should have per day?
2) How would costs change with output for Zulu Tyres?
3) How would the firm set its target output per day?