The nylon division of Jaikumar textile limited deals with the production of nylon, the production process has four stages which include polymerization, spinning, and draw twisting and packing and testing. The polymerization involves the washing of the caprolactum powder and the formation of this powder into small pellets; the pellets are then heated in tanks where other chemicals are added and three types are formed, the glittering, the semi dull and the full dull.
The strands are then hardened using cold air and then passed through the draw twister which reduces the diameter of the strands making them resistance to break. The strands are finally packed by hand in a special container.
The problem faced by the firm include the breakdown of the draw twisting machine that can only be allocated 1,000 hours and this means that it can only produce only a third of its capacity, the other problem is that the competitor need to be informed about the hire of the spinning machine as soon as possible. The other problem is that there is need to allocate more spinning hours to denier 44/10sd due to its increasing demand. Finally the marketing department fore see an increase in the price for denier 84/21fd by 25%
The industry seem to have idle capacity as indicated by the possibility of hiring a spinning machine, the price of the products they produce also seem to fluctuate by a large margin especially the denier 15/1g. The industry is a perfect competitive market in that prices are determined by demand and supply this is evident in the memorandum by the assistance manager to increase production of 44/10sd due to increasing demand for the product.
The company makes decisions at the beginni ...