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MBA Paints A Colourful Horizon [ Insert Company Emblem ]

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MBA Paints is a paint company that has been in existence for over 10 years manufacturing paint products for the decorative and architectural market. MBA Paints manufactures three basic lines of paint products: Low Cost Paint Products Trade Paint Products Flagship Paint Products Company Background

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The three different products each individually service a different particular type of market based on annual demand: The low cost product is supplied to the mass market where quality is of lesser importance than cost and therefore this product is of acceptable quality but sold at an exceptional low price. The trade product is manufactured with the contractor in mind for its reasonably good quality at a reasonably good price . The flagship product is manufactured for the customer that desires superior quality and luxurious where price is not necessarily the main concern when purchasing the product . Market Background

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The manufacturing of paint can simply be described by the principle of the simple mixing ingredients for baking a cake. The flower, sugar and other baking additives are mixed and bound together by the addition of an egg component after which an even flow is established by the addition of water. Paint Manufacturing Background

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Likewise, paint products are basically formulated and manufactured using four different raw materials namely Emulsion (Binder Component - Bought in Litres), Titanium Dioxide (TiO2 - White Pigment for Coverage - Bought in kilograms), Fillers (Build the paint film and reduce cost - Bought in kilograms) and Water (Achieve flow for the paint to be apply with paint brush or roller). Paint Manufacturing Background

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The Emulsion and Titanium Dioxide are the most expensive raw materials in the total paint formulation but is also mainly responsible for obtaining an overall better quality product whereas the fillers and water are the lesser expensive components but reduces the quality the larger the quantities. Thus by utilising the raw materials at different levels one can shift the balance between. Paint Manufacturing Background

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Paint is manufactured in 1000 litre batches according to a formulation or recipe in litres and therefore it is essential that products bought in mass (kilogram tons) should be converted to volume (litres) using the given specific gravity (SG or Density) of the relevant raw material. Paint Manufacturing Background The components of each product are mixed together according to methods on the formulation recipe under a high speed mixer and the total manufacturing time adds up to 1 Hour for both the Flagship and Trade Products individually as well as the Low Cost Product.

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As there is a difference between the units of measure for powders and liquids there is a constant conversion calculation. SG refers to Specific Gravity or otherwise known as Density SG = Mass/Volume Using the SG of the various raw materials the buyer and paint chemist can cost and formulate the paint products regardless in what unit the particular raw material is sold at.. Specific Gravity

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The Flagship product is formulated using 280L of Emulsion, 220 L of Titanium (550kg at an SG of 2.5), 180L of Fillers (450kg at and SG of 2.5) and 320L of Water. The Trade product is formulated using 180L of Emulsion, 150 L of Titanium (380kg at an SG of 2.5), 320L of Fillers (800kg at and SG of 2.5) and 350L of Water. The Low Cost product is formulated using 100L of Emulsion, 50L of Titanium (130kg at an SG of 2.5), 430L of Fillers (1080kg at and SG of 2.5) and 420L of Water. Paint Formulation Background

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Sales trends of the last five years has shown that the total monthly demand for the various paint products are as follow: Trade Product Demand is three times the monthly volume of the demand for Flagship Product Low Cost Product Demand are double the monthly volume of the demand for Trade Product As a standard measure management therefore instructs that: Total monthly volume of the Trade Product Manufactured should be three times the total monthly volume of the Flagship Product Manufactured The total monthly volume of the Low Cost Product Manufactured should be double the total monthly volume of the Trade Product Manufactured. Paint Sales Background

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Profits made on volume of product sold are R 21 300 per 1000L batch of the Flagship Product R 18 900 per 1000L batch of the Trade Product R 9 800 per 1000L batch of the Low Cost Product. Income Background

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Management wants to estimate how much litres of each product needs to be manufactured in order to maximise profits by meeting demand estimates by best utilising the monthly available resources limited to: 180 manufacturing hours 35 000 L Emulsion 75 ton Titanium Dioxide 250 ton Fillers 100 000 L of Water. Management Question

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Trade Demand 3X Flagship Demand Low Cost Demand 2X Trade Demand

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Production will have to manufacture the following volumes of each product in order to maximise profits to R 2.462 Million thereby also meeting demand estimates with optimum utilisation of the monthly available limited resources: Low Cost Product = 108 000 Litres Trade Product = 54 000 Litres Flagship Product = 18 000 Litres Management Conclusion

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Thank You MBA Paints

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