The information

1. the industry data for demand growth, in the past 5 years

Period Demand
2012 5000
2013 5500
2014 6500
2015 7000
2016* 6500 up to june 2016
2016 7476
2017** 8000 *we assume that the economic growth for 2017 and 2016 same

at the beginning of july 2016, the government announced that the nations economic growth will alow

The government predicts the economic growth at 6.8% for next three months, to anticipate the lower

Economic Growth in the past 4 years

period economic growth
2012 6.00%
2013 6.30%
2014 8.40%
2015 6.20%
2016 6.80%
2017** 6.80%
*we assume that the economic growth for 2017 is same with economic growth 2016

2. Your company is one of the market pioneers who curently hold 40%-45% market share. Based on m
3. Product price growth in the Past 4 years
2012 2013 2014 2015
Maximum $ 350.00 $ 350.00 $ 385.00 $ 320.00
Average $ 200.00 $ 280.00 $ 250.00 $ 290.00
Minimum $ 180.00 $ 265.00 $ 220.00 $ 275.00
017 and 2016 same

onomic growth will alow down for the next three months, but they are confident it will regain strengths in the mo

to anticipate the lower growth, down from 7% previously

arket share. Based on market structure analysis this is an oligopoly industry

egain strengths in the months following the slower growth period
Cost Of Production Fixed Cost Variabel cost per unit 3000
Direct Raw materials 0 38.876 116628
Direct labor 0 58.932 176796
Electricity 2314.9 1.2214 5979.1
inspection 1709.64 0 1709.64
depreciation 1500 0 1500
 3100 3200 3300 3400 3500 3600 3700 3800
120515.6 124403.2 128290.8 132178.4 136066 139953.6 143841.2 147728.8
182689.2 188582.4 194475.6 200368.8 206262 212155.2 218048.4 223941.6
6101.24 6223.38 6345.52 6467.66 6589.8 6711.94 6834.08 6956.22
1709.64 1709.64 1709.64 1709.64 1709.64 1709.64 1709.64 1709.64
1500 1500 1500 1500 1500 1500 1500 1500
 3900 4000
151616.4 155504
229834.8 235728
7078.36 7200.5
1709.64 1709.64
1500 1500
Raw materials

Period 2012 2013 2014 2015 2016 2017

January 2 2.4 3.7 4.7 2.9
february 2.2 2.3 3.8 4.2 2.8
March 2.3 2.4 4.2 4.2 2.8
April 2.4 2.6 4.3 3.8 2.9
May 2.3 2.5 4.3 3.2 3
June 2.4 2.5 4.4 3 3
July 2.6 2.4 4.6 3
August 2.5 2.7 5 3.1
September 2.4 2.8 4.9 2.9
October 2.2 2.8 4.8 2.8
November 2.4 3.1 4.8 2.9
December 2.5 3 5.2 3.1
total 28.2 31.5 54 40.9 43.6812 46.65152

average 2.35 2.625 4.5 3.408333 3.6401 3.887627

*every unit need 10 kg raw material

I assume that when we want to know about the average price for year 2017
we should following the economic growth, in the case we know that the economic growth is 6.8 %.
In 2016 I multiple the total price of 2015 with 6.8%, when I got the result
I divided it with 12 months to know the average price.
after know the price for 2016 i use the similar way to know the price for 2017.
I got 3.887627 by multiple the total price in 2016 with 6.8% because every year economic is growing.
 Period Price/1kg cost
2012 2.35 23.5
2013 2.625 26.25
2014 4.5 45
2015 3.408333 34.08333
2016 3.6401 36.401
2017 3.887627 38.87627

omic growth is 6.8 %.

ear economic is growing.

Labor

Period 2012 2013 2014 2015 2016 2017

January 2 2.3 3 5 6
February 2 2.3 4 5 6
March 2 2.5 4 5 6
April 2 2.5 4 5 6
May 2 2.5 4 5 6
June 2 2.5 4.5 5 6
July 2 2.5 4.5 5
August 2.3 2.5 4.5 5
September 2.3 3 4.5 5.5
October 2.3 3 5 5.5
November 2.3 3 5 5.5
December 2.3 3 5 5.5
total 25.5 31.6 52 62 66.216 70.71869
average 2.125 2.633333 4.333333 5.166667 5.518 5.893224

*To make 1 unit, 8 hours of labor is needed

Period Price/ 1 Hour Cost
2012 2.125 17
2013 2.6333333333 21.06667
2014 4.3333333333 34.66667
2015 5.1666666667 41.33333
2016 5.518 44.144
2017 5.893224 47.14579
Electricity
Period Output Cost
2012 2200 $ 5,000.00
2013 2500 $ 5,300.00
2014 2900 $ 5,450.00 $7,000.00
2015 2600 $ 5,600.00
$6,000.00
2016* 2777 $ 5,812.64 f(x) = 1
2017** 2966 $ 6,198.94 $5,000.00 R = 0.
Assume economic growth will affect the amount of output
$4,000.00
6.8%*2600 176.8
6.8*2777 188.83 $3,000.00

$2,000.00
The avearge price from 2012 until 2015 is
average cost $ 5,337.50 $1,000.00
average output 2550 $-
average price/unit $ 2.09 2100 2200 230
The cost for 2016 and 2017 I multiply with the average price/unit
 Electricity
$7,000.00

$6,000.00
f(x) = 1.221364432x + 2314.8948361758
$5,000.00 R = 0.6980165021

$4,000.00

$3,000.00

$2,000.00

$1,000.00

$-
2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 3100
 Period Inspection time cost
2012 100 $ 2,500.00
2013 150 $ 2,650.00
2014 175 $ 2,800.00
2015 180 $ 2,850.00
$3,000.00
2016* 144 $ 2,570.40
2017** 108 $ 1,927.80 $2,500.00
The inspection cost is realixed as a non value added cost to the company,
$2,000.00
and the management wishes to minimize and to get rid of this cost in the next 5 years period
so we divide 180 hours with 5 years to minimize the cost we get 36 hours, in 2016 we reduce the 36 h
$1,500.00
we get 144 hours for 2016 and we do the same thing for 2017 and we get 108 hours for 2017
$1,000.00
average hours from 2012 until 2015 is 151.25
average cost from 2012 until 2015 is $ 2,700.00 $500.00
average cost/hour (inspection time) is $ 17.85
$-
180 hours : 5 = 36 90

Because the inspection is fixed cost, so the amount of insp

 cost
$3,000.00
f(x) = 7.929748346x + 1417.0676112504
$2,500.00 R = 0.6278245602

$2,000.00
years period
6 we reduce the 36 hours from previous year
$1,500.00
urs for 2017
$1,000.00

$500.00

$-
90 100 110 120 130 140 150 160 170 180 190

o the amount of inspection for 2012-2017 is remain the same

The company's Fixed assets
Assets Purchase Price Estimated Life
Office Building 200000 on 1 january 2010 15 years
Warehouse Building 110000 on 18 march 2010 10 years
Machineries 17000 on 21 mrch 2010 8 years
*Because the instruction we should calculate production budget so we just use machineries because i

Depreciation
The company's fixed asset
Type asset estimated life estimated residual value
Machineries 17000 on 21 march 2010 1000
calculation : (17000-1000)/8 years = 2000/years
For 2017 depreciation expense is 9/12*2000=1500
 Estimated Reidual Value
$ 50,000
$ 10,000
$ 1,000
machineries because it has relation on production process