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Jaikumar Textiles

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Jaikumar Textiles, LTD. (A): The Nylon Division case summary

The Nylon division of Jaikumar Textiles, ltd manufactured nylon yarn using four basic areas: polymerization, spinning, draw twisting and packing and testing. The production machines typically made two different thicknesses – 15/1g denier single strand of glittering nylon and the 84/21 fd denier multifilament dull nylon. The company was facing intense competition from introduction of new fiber technology by competitors and were adapting to the changing market and business conditions.

The process for determining production schedules for the different nylon thickness appeared to be random rather than data driven. The general manager and his staff were responsible for planning of the production for every month based of pricing forecast from the marketing group and a set of broad guidelines to make the most efficient use of the existing production facilities. There was also monthly allocation on usage of extruder and spinning machines to ensure smooth and efficient operation of each operating department. The uncertainty in future market pricing for the product played an important role in making decision of monthly production volumes. Thus to optimize the current production tooling and gain most profit, the production levels were fixed prior at the beginning of each production month.

The General Manager of the company- Kadiyala faces an important decision of accepting or rejecting a firm order offer from a client for delivery of the product in the month of May. The client’s offer of Rs.182/kg for 5000 kg of the 15/1g denier nylon appeared to be above the predicted market pricing from the marketing department and would also suffice the minimum production volume schedule of 3000 kg. Based on predicted vs actual pricing information provided, it appears that the probability that the marketing group

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