Decision Sheet - Nirmal Rayon

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Decision Sheet
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Nirmal Rayons Limited
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1. Analysis of the Consultant’s Report

1.1 Confectionary Industry
The Following considerations have been neglected
* Cellophane is used for 80 % of the organized sector production * It is used for 5 % of the unorganized sector production
Revised estimates
* Assuming that 40 kg cellophane is required to wrap 1 tonne of candies, we obtain the following demand: (See: Exhibit A6) Year | Revised Estimate (tonnes)| Differnece (Tonnes)|
1972 | 596| 74|
1973 | 599| 76|
1974| 622| 78|
1975| 637| 83|
1976| 660| 85|

1.2 Cigarette Industry
* Consultant’s figures for 1971 and 1972 show an unexplained dip of -14% followed by a sharp rise of 31% (See: Exhibit A5) * Ignores the effect of politco-legal environmental factors * Sin taxes

* Regulations
* The revised estimates for cigarette demand are shown below:

Year | Revised Estimate |
1972| 1661.727|
1973| 1730.213 |
1974| 1834.673 |
1975| 1941.873|
1976| 2051.812|
1977| 2164.49 |

1.3 Textile Industry

* Claim that per capita consumption low in 1966-67 because of monsoon failures. However, there has been a negative growth for the last five years (-4%, -5%, -3%, 6% & -4%) (Exhibit A2) Since, the consumption of cotton has decreased almost consistently and consumption of man-made fabrics has increased in the same period, monsoon failures are unlikely to be the reason. * Assumption of constant 1.4% increase in per capita consumption over the next ten years. Considering the erratic change coupled with the fact that per capita consumption in 1969 (13.52) is almost the same as that in 1952 (13.46) (Exhibit A2) there is no justification for this assumption. *...
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