Sixty Pouches at ₹380: Costing, Capacity and Worker Safety
A four-woman self-help group has an order for 60 embroidered pouches at a buyer-fixed price of ₹380 per piece. Each pouch uses 0.30 m of outer fabric costing ₹300 per metre and 0.25 m of lining at ₹120 per metre. About 10% of the outer fabric is wasted in cutting. A zip costs ₹12, and thread, beads and backing come to ₹15 per pouch. Each pouch takes 2 hours of embroidery and finishing, and the group values its labour at ₹90 per hour. Workshop overhead is ₹20 per pouch. The buyer wants delivery in six working days, and the four women can work six hours a day each. The group's normal target is a 20% profit on total cost. On the third long day one worker reports wrist pain and blurred vision, and another has begun leaving loose needles on the table.
1. Calculate the total cost per pouch and the quote at a 20% profit; decide whether ₹380 is acceptable.
Read the worked answer
Outer fabric: 0.30 m × ₹300 = ₹90; with 10% waste the required length is 0.30 ÷ 0.90 = 0.333 m, so cost = ₹100. Lining: 0.25 × ₹120 = ₹30. Zip ₹12. Thread, beads and backing ₹15. Labour: 2 h × ₹90 = ₹180. Overhead ₹20. Total cost = 100 + 30 + 12 + 15 + 180 + 20 = ₹357.
Target price at 20% profit = 357 × 1.20 = ₹428.40, round to ₹430. The buyer offers ₹380, a surplus of ₹23 over cost, which is 6.4% on cost-well below the 20% target.
Decision: do not accept ₹380 as a normal order. Either negotiate at least ₹425–430, or reduce cost: buy outer fabric in bulk (₹270/m saves about ₹10), nest the pattern to cut waste from 10% to 5% (saves about ₹5), and simplify embroidery to 1.5 h (saves ₹45), bringing cost to about ₹297 and a 20% price to ₹356. If the group accepts ₹380 for a first order, it should be a deliberate market-entry decision with a written reason, not a costing error.
2. Check whether the six-day deadline is feasible and set out a production plan that protects the buffer.
Read the worked answer
Work content: 60 pouches × 2 h = 120 hours. Capacity: 4 women × 6 h × 6 days = 144 hours. Buffer = 24 hours (20%). A 10% rework allowance adds 12 hours, leaving 12 hours spare, so the order is feasible only if the six days are uninterrupted and work does not start late waiting for zips or lining.
Plan: day 1 cut and fuse all 60 in a batch; days 2–5 stitch in two batches of 30; day 6 finish, insert zips, press and inspect. Keep one worker on cutting and finishing so the embroiderers are not constantly changing tasks. Check at pouch 10: if the actual time is 2.5 h, work content becomes 150 h and the deadline fails; then the group must add hours or negotiate the quantity. The 20% buffer should not be treated as spare capacity for a second order in the same week. Batch cutting also reduces the 10% fabric waste and makes the costing assumption more reliable.
3. Recommend safety measures for the reported wrist pain, blurred vision and loose needles, including what to change in the schedule.
Read the worked answer
Wrist pain: likely from gripping the hoop and repetitive small stitches without support. Use a floor or lap frame so the hoop is held, keep the wrist neutral, support the forearm, and rotate tasks every 45–60 minutes (stitching, cutting, pressing, packing). Add a 5-minute stretch break each hour and a 15-minute break after 2 hours.
Blurred vision: from close work under poor light. Provide bright, glare-free task lighting, a magnifier if needed, and follow the 20-20-20 rule-every 20 minutes look 20 feet away for 20 seconds.
Needles: keep a magnetic pin dish or sealed sharps box at each table, count needles at the start and end of the day, never hold pins in the mouth, and sweep the floor with a magnet.
Schedule change: cut the continuous embroidery block to 45 minutes and add the lost time by starting batch cutting earlier, not by extending the day. Persistent wrist pain or vision change needs medical advice. Record the incident and adjust the deadline or piece rate rather than pushing through; a missed deadline is cheaper than a chronic injury.