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    Nakshbandi industries was the largest towel manufacturer in India. While the company had grown over the years, declining profits were due to rising operating costs from old machinery. The company's CEO, Mr. Teli, proposed two alternatives to boost profits: 1) Replace machinery with an updated version, keeping labor costs the same. 2) Install a new semi-automated weaving system, requiring outside funding but reducing material and labor costs while increasing quality and quantity. Key questions considered whether automation is always a good choice, the benefits of automation, and what conditions would be needed for Nakshbandi to automate.

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    Nakshbandi industries was the largest towel manufacturer in India. While the company had grown over the years, declining profits were due to rising operating costs from old machinery. The company's CEO, Mr. Teli, proposed two alternatives to boost profits: 1) Replace machinery with an updated version, keeping labor costs the same. 2) Install a new semi-automated weaving system, requiring outside funding but reducing material and labor costs while increasing quality and quantity. Key questions considered whether automation is always a good choice, the benefits of automation, and what conditions would be needed for Nakshbandi to automate.

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    37 views2 pages

    Case Study

    Uploaded by

    nisaa89
    Nakshbandi industries was the largest towel manufacturer in India. While the company had grown over the years, declining profits were due to rising operating costs from old machinery. The company's CEO, Mr. Teli, proposed two alternatives to boost profits: 1) Replace machinery with an updated version, keeping labor costs the same. 2) Install a new semi-automated weaving system, requiring outside funding but reducing material and labor costs while increasing quality and quantity. Key questions considered whether automation is always a good choice, the benefits of automation, and what conditions would be needed for Nakshbandi to automate.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
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    CASE STUDY

    NAKSHBANDI INDISTRIES LIMITED:


    Nakshbandi industries were the only public limited company in towel manufacturing India. The companys balance sheet was fairly strong and the company had grown and prospered over the years. Despite the growth, old machinery had increased operating costs to the point that profits were declining. To bolster profits, Mr.Teli proposed two alternatives (1) to replace the machinery with an improved version of the same type; or (2) to install a new semi-computerized shuttles weaving system. Under the first alternative, the equipment could be financed in house, however, there would be no labour saving. Considering the second alternative, the costs would require outside equity, but there would be substantial material and labour savings. Also, the quality and quantity of production would increase. QUESTIONS: 1. 2. 3. 4. Is automation always a good strategic choice? What are the benefits of automation? What condition would you consider necessary for nakshbandi to automate? What other alternative night be considered?

    MOHAMMAD DIN TANNES AND EXPORTERS:


    Introduction: Mr.S.M. Pervez, partner and director of S. Mohammad din, was concerned about the rapid decline of quality raw skins purchase for tanning. In the past decade the output of high quality lather had dropped from 70%to 8%. Mr Pervez wondered what to do with the increasing volume of low and medium quality tanned leather. Questions: 1. What alternatives are available to mohammad din tanners? 2. What other uses are there for lower quality leather? 3. To what extent would din tanner becoming a large scale manufacturer of industrial work gloves and other products change the character of the company? 4. What are the risks of a tannery expanding into the production of leather goods?

    Identification of the Problem: The rapid decline of quality raw skins purchase for tanning. The output of high quality lather had dropped from 70%to 8%. Mr Pervez wondered what to do with the increasing volume of low and medium quality tan leather at Mohammad Din Tannes and Exporters

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