Profit Mazimization for Puff Shoes

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Case Study Profit Maximization For Puff Shoes Introduction Company Background Puff shoes is a small enterprise which comes under the MSMEs or the Micro, Small and Medium Enterprises and deals with footwear production under its own ‘Puff’ brand and as third party manufacturers for other prominent brands through the outsourcing of manufacturing by major footwear brands. It has a turnover of about INR 2.78 Cr. Since the commencement of Operations in 1996, Puff shoes has progressed impressively to becoming a reputed footwear manufacturer in the Delhi(India) region where the factory and office are located. Puff shoes is accredited with having processed orders of international footwear brands such as Nike and Fila. It specializes in the manufacturing of the Sports shoes (runners) and the Sneakers. Though they initially produced only 4 sizes of footwear (i.e. sizes 4, 5, 6 and 7), since 2001, Puff shoes has also additionally started manufacturing footwear of sizes 8, 9, 10 and 11. Factory information Number of Employees: 10-15(on contract basis) Number of Machines: 3 Contract Manufacturing: Buyer Label offered Location: Delhi Suppliers: All over India Vendors: All over India Product information As had been mentioned earlier, through the factory had commenced with the production of just 4 sizes of footwear, it presently manufactured 8 sizes ranging from size 4 to 11. The shoe sizes were broadly categorized under two headings- the Small size and the Big size. The ‘Small’ size range encompassed of those footwear ranging from 4 to 7 i.e. sizes 4, 5, 6 and 7 while the ‘Big’ size range had the rest i.e. sizes 8, 9, 10 and 11. The footwear that was created for both these size ranges had their own pricing differentials and t... ... middle of paper ... ...solidated table it is found that Sports Design shoes are expected to be more profitable at Rs 29 lacs than compared to Sneekers, which stood at Rs 21 lacs. From the consolidated table it is found that size 11 is expected to be more profitable than the other sizes with a profit of around Rs 10 lacs. With the Proposed schedule, the Demand of each month can be met In December 2014, Demand can be met even by Machine 3 not being utilized to its full capacity Total Profits for the year 2014 is expected to exceed Half a crore Total Demand for the year 2014 is expected to be around 5 lakhs It is found that Profit / Shoe is expected to be Rs. 10.45 for the year 2014 Conclusion Thus, the Company by following the Expected Demand Schedule can be able to achieve the optimum profit along with meeting optimal capacity utilization and maximum number of working hours per day.

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