Small Scale Production Of Auto-Battery In Nigeria: An Engineering Economic Model

ABSTRACT

This work is aimed at determining the feasibility of manufacturing automobile

batteries on a small scale ·Ievel. It involves an economic evaluation directed at

the typical 12V, 60Ah car battery. A process analysis was done with a view to

determining the scalability of the processes. A review of relevant literature

gives insights on the product structure and workings, material interactions,

process requirements and the various manufacturing strategies and their

respective benefits. The process is designed with a bias for outsourcing,

a growing trend in the direction of specialization and agile product

development. Thus, the process is designed for assembly as a parallel/flow

line hybrid work system. Next, economic models are developed to assess

costs, profit, revenue and optimal production volume. Also, breakeven and

Payback Period models are developed for determining the viability of the

venture. It was found that with 11 workers, the facility yields up to 1173 units

of car battery per month. This requires an initial capital investment of W I,

132,160. At an initial price of N 5,500, the product is expected to generate

monthly revenue of N6,450,830 at full running capacity. Thus, a profit margin

of N 3,015,340 was obtained, amounting to 46.7% of total revenue.

Breakeven occurs at a demand of 121 units, which is 10.3% of the monthly

production capacity. This study shows the potentials and entrepreneurial

opportunities of investing in the small scale manufacture of engineering

products.

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