Draft Maths Management Assignment

OVERVIEW – AN INTRODUCTION

Two local manufacturing and production companies have been selected as the subject companies of this assignment; namely (1) Top Glove Corporation Berhad and (2) Padini Holdings Berhad. Brief background introductions of both companies are presented as follow.

Top Glove Corporation Berhad

Top Glove Corporation Berhad, first established in Malaysia since 1991, has become the largest rubber glove manufacturer in the world. Top Glove has been listed in the Bursa Saham Kuala Lumpur in year 2001 and in a short span of slightly more than a year, the company’s listing has been successfully promoted from the Second Board to the Main Market of Kuala Lumpur Stock Exchange in 2002. TBC…

Padini Holdings Berhad

            Padini Holdings Berhad ventured into Malaysia’s apparel industry, manufacturing, trading and supplying garments to order for retailers and distributors. Starting as a sole proprietorship manufacturer for ladies garments and wholesaling of the finished products to departmental stores in 1971, TBC…

COST AND REVENUE FUNCTION

After going some research and interview session, brief information data regarding the annual production output, annual variable cost of goods sold, annual fixed cost as well as the annual TBC…

 Top Glove Corporation Berhad

Table 1: A brief production, cost and revenue data from Top Glove Corporation Berhad

	Price/unit	Output ('000)	Variable Cost (RM'000)	Total Variable Cost (RM'000)	Fixed Cost (RM'000)	Total Revenue (RM'000)	Profit (RM'000)
2010	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…
2009	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…
2008	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…
2007	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…	TBC…
2006	0.13	7,635,469	0.11	822,959	113,921	992,611	55,731

                Source: Top Glove Corporation Berhad annual report from 2006-2010

The annual production output, variable cost, fixed cost, total revenue and profit of Top Glove Corporation Berhad in Table 1 are extracted from the annual report of the corporation, coupled with some interview and verbal TBC…

as follow:

 TC = TVC + FC         ;     where TVC = VC x Q

   TR = P x Q

   Profit = TR - TC

Upon deriving the cost and revenue function, the break-even point for production output of the company is derived and computed as TBC…

;

TR = TC

PQ_b = TVC + FC

 Break-even output, Q_b;

PQ_b - VQ_b = FC

(P – V) Q_b = FC

            Q_b = FC/ (P – V)

Where, Q_b = 113,921,000/ (0.13-0.11)

            = TBC…