Fabric And Fashion Case Study

Our analysis on producing smooth-textured shirts did validate Ted’s argument. The constituent bound of the velvet shirts are $22.00 and the demand is 6,000, which yields a keep squander profit of $132,000. This being less than the fix courts of velvet During our analysis we found that simplifying the programming models into several manageable sections allowed us to address the independent proceeds processes. Our teams determine the sideline portion in margins in appendix A by winning the difference of the total revenues and protean costs. Our team separated the silk blouse and camisole since they’re the only two maturates requiring silk; additionally we applied a similar approach for cotton skirts and sweaters. We then made the observations hand on our model in appendix A: The descent plan in appendix B did change since velvet is now considered a fixed cost due to the impinging non accepting unused velvet. This will result in the net contribu tion margin of twain velvet drawers ($136 + $36 = $172) and velvet shirts ($22 + $18=$40) to growing. The change in velvet’s contribution margin results in unavoidable changes in the production plan as depict in appendix B.

The changes needed in production are as follows: Increase tailored skirts from 8,067 to 3,178, add the production of velvet drawers from 0 to 3667, and increase the button blouses 9244 to 15762. Products made of wool, cashmere and velvet did not change. Costs associated with not using velvet materials turn from unsettled costs to sunk costs. As a result, Katherine must dumb found the pants and shirts on crop to make ! up some(prenominal) of the increase in sunk costs. The net contribution increase of both items does make Katherine’s decision to listen to Ted illogical. In order to maximize profits with an increased labor and production cost associated with the Wool Blazer we recommend that TrendLines produce the following quantizes is outlined below and in appendix C. • affirm the...If you penury to get a full essay, order it on our website: OrderCustomPaper.com

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