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In this paper the break-even analysis tool applied for product insulating sleeve in small-scale manufacturing units. In manufacturing operations time in furnace section taken highly time as compared to another sections. The break-even quantity (BEQ) and break- even point (BEP) are obtained when increasing the number of furnace. The calculations are shown in break-even chart. When applying three furnaces that are sufficient to reduced the operations time in furnace sections.

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FINDING NUMBER OF FURNACES THROUGH BREAK-EVEN ANALYSIS IN SMALL-SCALE MANUFACTURING UNIT
BASANT KASHYAP
1
& SRIDHARK
2
1
Research Scholar, Department of Mechanical Engineering, CSIT, Durg, Chhattisgarh
,
India
2
Professor, Department of Mechanical Engineering, CSIT, Durg, Chhattisgarh
,
India
ABSTRACT
In this paper the break-even analysis tool applied for product insulating sleeve in small-scale manufacturing units. In manufacturing operations time in furnace section taken highly time as compared to another sections. The break-even quantity (BEQ) and break- even point (BEP) are obtained when increasing the number of furnace. The calculations are shown in break-even chart. When applying three furnaces that are sufficient to reduced the operations time in furnace sections.
KEYWORDS
:
Break-Even Point, Break-Even Quantity, Manufacturing Operation Time
INTRODUCTION
Break-Even Analysis
The using Break- Even Analysis in order to find the break even quantities which are required to be produced in order to gain profit. The most significant indicators of achievement to start-up of small-scale manufacturing industry are the time from opening the firm till the running stage of plant.
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When revenues of product sales equals to the total costs related with the sale of product that is also called Break-Even Point (BEP). In other words that case the profit = 0.
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The break-even analysis is manipulative tool to assist the plan and manage the manufacturing operations.
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The Break-Even Point (BEP) signify the quantity of manufacturing firm, where company’s whole revenues i.e. money coming into an initial stage of manufacturing industry are equivalent to its total operating cost (like total costs).
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In its simplest from, Break-Even Analysis give the insights into whether or not revenue from a product or service has the capacity to face the related costs of production of that product or service.
LITERATURE REVIEW
Omoniyi, Benjamin Badeji
[2]
uses a grouping of descriptive analysis and simple mathematical formulae to calculate the profitability and the degree of operating leverage of the factory. The break-even analysis helps to examine how total costs and profits vary with output with respect to the degree of automation or mechanization of the installed plant of a factory such that the factory can withstand competition more effectively and give top level managers the chance to build comparisons. Archit Soni, Rituraj Chandraker, Vikas Kumar Sinha [1] introduced the wastes generating in the manufacturing process, and then they have analyzed the difficulty occurring with using Break-even analysis and the
BEST: International Journal of Management, Information Technology and Engineering (BEST: IJMITE) ISSN(Print):2348-0513; ISSN(Online): 2454-471X Vol. 3, Issue 8, Aug 2015, 9-18 © BEST Journals
10
Basant Kashyap
& Sridhark
Impact Factor(JCC): 1.1947 Index Copernicus Value: 3.00
suitable implication are given. Therefore their work is based on reducing the need of inventory in the plant and for that they have used more furnaces which can explain the problem of inventory up to a larger extent. Meysam Kaviani [4] adopting a quantitative approach and following a mathematical line of dispute conducts a fairly exhaustive financial analysis of leverages and break-even points (BEPs) and their implications for other financial indicators and growing on the assumed relationships between certain financial indicators and ratios on the one side, and different classes of leverages and BEPs on the other side, aimed to provide financial analysts with a more generic insight into the subject, allowing them in light of the presented concepts to further investigate the case from different angles. Dr. Murari Premnath Sharma [5] introduced the formula and methodology for banking breakeven point. Which indicates that quantity of lending and deposit will recover the fixed cost and if there is desired profit it will also calculate. For breakeven point calculations we must fulfilled the above mentioned assumptions. This formula is useful we can compute breakeven interest as well as breakeven deposit amount and lending amount from above study. This study wills again refining in the latter study with decreasing number of assumptions. Mohammed B. Ndaliman and Katsina C.Bala [6] introduced the objective is to establish the cost / revenue interactions on break-even charts. These charts were obtained for the five years studied. Among the practical realities exposed include: the sales revenue and total cost were not linear, two or more break-even points were found to exist, some costs fall under both fixed and variable costs, and further than certain optimum production levels, sales revenue decreases piercingly and total cost also increases. The sales revenue and total costs are not always linear in as in general assumed in the theory. Two or more break-even points may exist for a particular industry depending on a number of factors. Luis Javier Serrano Tamayo [7] explained the individuality of the research lies in the use of an engineering computational tool combined with a statistical analysis of the vessels navigation, in order to quantify the variable costs. With this objective criterion was done a breakeven analysis and evaluated the investment decision. The new model of variable costs calculation, combining the naval computational tool with the statistical analysis of vessel’s fuel consumption was useful and reliable for break-even analysis. Nagendra Sohani, Burhan Adil [8] introduced the Small Scale Manufacturing Organizations should be very conscious, while selecting product before initial manufacturing. Because without implementation of atomization it is very difficult to get break even small scale industries are facing same problem. A break even analysis shows the comparative between the cost and profit with sale volume. The sales volume which equates total revenue with linked cost and result in neither profit nor loss is called break even volume. Erkki K. Laitinen [9] analyzed the relationship between the sales volume and the profit of the firm. In this paper BEA is extensive and applied for payment default prediction. First, breakeven point is defined the point, result may mean that the assumptions of BEA and its extended version are too simplify for larger firms. The structure of these firms is difficult and the sales and cost curves may be curvilinear instead of being linear. Robert Edwards and Royce Jones [10] proposes and demonstrates the computation of a monthly break-even point, expressed in sales dollars, which can serve as a control standard for determining whether a profit was made in a particular month. The monthly break-even point also provides an estimate of the level of the profit (or loss). Estimate of the break-even point is simple, uses data readily available to small business operators, The use of cash flow data to calculate profitability will never be perfectly precise because the costs of some products will occur in different periods than the receipt of their sales revenues and some fixed costs are not paid at even intervals. the calculation and use of monthly break-even points can be a valuable control device for small business operators, provide they recognize it for what it is just
Finding Number of Furnaces Through Break-Analysis in Small-Scale Manufacturing Unit
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another indicator of their business’ per statements and analyses. Clem Tisdel [11] examined t supplied by the firm to the market. Eve average variable costs of production o range of application to business. Und related in the kinked demand oligopoli for behavioural reasons. Enyi Patrick Enyi [12] helped firm and for analyzing the implications considerably the use of the concept organization of today’s competitive bu ‘only one product line’
no longer hold i
Problem Identification
For the analysis product insul it earns maximum profit to the firm a insulating sleeve only. The data that ar much times is required in the complet product can be manufactured ,and what
Figur
The above figure 1 shows the started from the store room or stock ro industry. At the initial stage the differe the maximum time taken the furnace minimize the furnace time operations. and barriers are identified in the produc
Even
ormance in the short run and do not attempt to subst e firm’s total revenue will be a non-linear function n so, since fixed price behaviour by businesses may b ver a considerable range of output, linear break-eve er conditions of imperfect competition, linear brea tic case and in circumstances where the business eng in perfecting the existing mathematical model for fi of a firm’s activity level on its costs and profits, has s in analyzing the economic implications of volume siness environment. The implication of this develop n breakeven analysis and hence, recommended for pe ting sleeve selected, the major product of the industr compared to other products. Now we have done al related to break-even analysis are collected from th process of production, what quantity of materials is the selling price of the product
1: Flow Diagram of Product Insulating Sleeve
systematic flow of part or piece of that product
in a p om and finished at packaging and selling process to nt types of raw materials are mixing to each other. operations so that for eliminating this time break-e hen analyzing the various manufacturing process t tion process.
11
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itute it for traditional financial of the amount of the product common, as well as constant n analyses has a considerable -even analysis may be quite ages in fixed pricing, possibly ding the breakeven point of a eriously reduced and hindered in a multi-product business ent is that the assumption of agogical purposes. y for analysis in our project as l our analysis for the product manufacturing firm like how re required , at what cost the roper manner. The process are other medium and large scale hen going on furnace section en analysis are conducted to e different types of variations
12
Basant Kashyap
& Sridhark
Impact Factor(JCC): 1.1947 Index Copernicus Value: 3.00
Data Collection
The following data which is shown in below table
Table 1:Time Required to Perform the Operations Manufacturing Operations No. of Items Produced Time Taken Precious Time
The appropriate composition is made 50 15 minute 15 minute Mixing the raw materials 50 80 minute 80 minute Pattern is dipped in proper mix up 50 5 minute 4 hours 10 minute Operation of surface finishing 50 3 minute 2 hours 30minute Process of natural drying 50 2 hour 2 hours Process of heat treatment 15 8 hour 16 hour Process of natural cooling 15 2 hour 2 hour Packaging the finished goods 15 5 minute 1 hour 15 minute The on top of table 1 can be obviously shown that there are the appropriate composition is made to natural drying operation the 50 products which are manufactured in the process in proper manner. This heat treatment operational process required maximum number of time because using only single furnace so that use more than one furnace and checked the BEP for different numbers of furnaces. Then find the number of furnaces which is most appropriate for this manufacturing firm
METHODOLOGY
Calculation of Break-Even Point (BEP) The price that the manufacturing industry is charge, variables costs (direct costs) of each unit and fixed costs (or indirect costs / overheads cost).
Terminology Symbols
ã
Total Revenue TR
ã
Selling Price P
ã
Number of Units Sold Q
ã
Total Costs TC
ã
Fixed Cost F
ã
Variables Costs V
ã
Total Fixed Cost FC
ã
Total Variable Costs VC
Formulation of the Terms
TR = P×Q VC = C×Q TC = FC+VC

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