manvi motors
1. PRODUCT MIX AT MANVI MOTORS
The Manvi Motors of Malaysia produces cars under an agreement with Suzuki of Japan and trucks under an agreement with General Motors of the USA. The company was established in 1972 and now employs approximately 1000 people and can generally produce an average of 25 cars and trucks per day.
Capital investment constraints have limited the nature of Manvi’s manufacturing facilities. Consequently, it is not able to manufacture many of the items required for the assembly of cars and trucks. These items are imported from Suzuki or GM. However, both Suzuki and GM must limit the quantities of parts shipped to Manvi because of constraints on their own capacities. Suzuki and GM have guaranteed to provide parts sufficient for 500 cars and 200 trucks respectively per month.
GM has just announced several price increases, which have raised the direct manufacturing cost (which includes all labor and material costs) of a Manvi truck from $800 to $1000 converted to US dollars.
Suzuki has not raised prices on purchased parts, so the direct manufacturing cost of a Manvi car has remained stable at $800.
The Ministry of Economics controls the selling price of Manvi’s output: cars sell at $4300 and trucks sell at $6000.
Manvi’s vehicles have a reputation as well-made and dependable products, suitable for the Malaysian market. Demand is so great that the company can sell all the cars and trucks it can produce, and the company expects no change in this situation. Manvi presently has unfilled orders (already paid for) for 150 cars and 100 trucks.
The manufacturing process for both cars and trucks consists essentially of two departments, which limits the number of vehicles that can be produced during any month. These departments are fabrication and engine assembly. An agreement with the Ministry of Labor has set the minimum labor usage combined in both departments to be at 14,000 worker-hours.
The fabrication department is organized as
The Manvi Motors of Malaysia produces cars under an agreement with Suzuki of Japan and trucks under an agreement with General Motors of the USA. The company was established in 1972 and now employs approximately 1000 people and can generally produce an average of 25 cars and trucks per day.
Capital investment constraints have limited the nature of Manvi’s manufacturing facilities. Consequently, it is not able to manufacture many of the items required for the assembly of cars and trucks. These items are imported from Suzuki or GM. However, both Suzuki and GM must limit the quantities of parts shipped to Manvi because of constraints on their own capacities. Suzuki and GM have guaranteed to provide parts sufficient for 500 cars and 200 trucks respectively per month.
GM has just announced several price increases, which have raised the direct manufacturing cost (which includes all labor and material costs) of a Manvi truck from $800 to $1000 converted to US dollars.
Suzuki has not raised prices on purchased parts, so the direct manufacturing cost of a Manvi car has remained stable at $800.
The Ministry of Economics controls the selling price of Manvi’s output: cars sell at $4300 and trucks sell at $6000.
Manvi’s vehicles have a reputation as well-made and dependable products, suitable for the Malaysian market. Demand is so great that the company can sell all the cars and trucks it can produce, and the company expects no change in this situation. Manvi presently has unfilled orders (already paid for) for 150 cars and 100 trucks.
The manufacturing process for both cars and trucks consists essentially of two departments, which limits the number of vehicles that can be produced during any month. These departments are fabrication and engine assembly. An agreement with the Ministry of Labor has set the minimum labor usage combined in both departments to be at 14,000 worker-hours.
The fabrication department is organized as