by Dr. H.R.Sheikh, professor, Emeritus, Textile Institute of Pakistan.
Commission Weaving is occasionally undertaken by independent weaving mills equipped with modern shuttle less looms for clients who supply their own yarn and specify fabric constructions. The charges are usually calculated per pick and quoted accordingly. The method of calculation is based on the installed capacity, operating speeds, fabric constructions, conversion cost etc. and is explained as follows:
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1. Technical data and production capacity of a weaving mill comprising of
60 shuttle less looms
Table-1
Particulars Air Jet Looms Remarks
Number of Looms 30 30
Specified by the client Actual Production is equal to
RPM×60×8×0.9
PPI × 39.37
Reed Space of Looms 75 inch 110 inch
Loom Speed in RPM 700 550
Fabric Construction.
16×10(Denim)
70×40
30×30 (Shirting)
80×60
Width of cloth (inches) 63 98
Efficiency (%) 90 90
Actual production per
loom shift in meters. 192.02 100.58
2. Conversion Cost
The components of the conversion cost for the plant comprising of 60 shuttle less looms are listed in table 2 along with assumed monthly expenses. (Rs. in millions).
Table-2
Mark-up on Loans. 7.319
Salaries, wages and overhead at the factory and head office 1.335
Utilities, electricity, gas, diesel, water etc. 2.10
Insurance of plant & machinery, vehicles, stock-in-process
cash-in-transit. 0.20
Contractors for loading, unloading, packing, bailing etc. 0.10
Spare parts, stores, chemicals, sizing ingredients, lubricants,
greases, etc. 0.50
Total 11.554
The conversion cost for own weaving is Rs.11.554 million per month. However, for commission weaving the amount of mark-up on loans is not included. Consequently, the conversion cost for commission weaving works out at Rs. 4.235 million. This is due to the fact that the finance of the management of the weaving mill is not involved for the yarn, stock in process and finished goods inventory. The conversion cost per meter of the fabric in both cases and charges per pick in the case of commission weaving are calculated as following Table 3.
Table-3
Particulars Denim Shirting Remarks
Own
weaving Commission weaving Own weaving Commission weaving
Conversion Cost per
month ( Rs. in Million) 11.554 4.235 11.554 4.235 This calculation is based on 60 looms weaving shed.
Conversion cost per
shift. (Rs. in Million) 0.1284 0.0471 0.1284 0.471
Conversion cost per
loom shift. Rs.2140 Rs. 784.20 Rs. 2140 Rs.784.20
Production per loom
shift. (MTRS) 192.02 192.02 Rs. 100.58 Rs.100.58
Conversion cost per
meter of fabric. Rs.11.15 Rs. 4.084 Rs. 21.28 Rs. 7.80
Charges per pick -- Rs.0.1021 Ps.10.21 -- Rs.0.13 Ps. 13
Adding 20 % profit
margin -- Ps.12.252 -- Ps.15.60
Per Pick Charges to be
quoted. -- Ps. 13 -- Ps. 16
Theses calculations show per pick charges to be quoted for denim and shirting fabrics @ ps.13 and ps.16 respectively. The client will make his own arrangements for taking delivery of the grey fabric. However, if the grey fabric is to be delivered to the client in the form of bales, extra charges have to be paid by the client ranging from about Rs.0.75 to Rs.1.00 per meter of the fabric. The management of the concerned weaving mills allocates adequate number of looms in proportion to the size of the order and the delivery period specified by the client.
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