Business and Management IA Research Proposal -How Should Afrisians Ginning Limited reduce the increased costs in production that arise due to power cuts in Mwanza and ensure consistent pricing from farmers to increase output and profitability for the firm

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Aleem Ahmed IB1

Research Proposal

How Should Afrisians Ginning Limited reduce the increased costs in production that arise due to power cuts in Mwanza and ensure consistent pricing from farmers to increase output and profitability for the firm?

Rationale for study: The rationale for choosing this specific topic is because currently Afrisians Ginning Limited is facing high production costs, as the city Mwanza is facing a lot of power cuts, which requires the company to use generators on a daily basis which thus increases their production costs. The operation in Mwanza began in early 1997. 6-7 years ago the company opened another branch in Shinyanga where they have less power problems. Recently, they only work in Mwanza for 3-4 months where as before the power cuts prevailed, they used to work in Mwanza for at least 6-7 months. This has been a problematic situation for the company as they have invested a lot in fixed assets in Mwanza and they are unable to move the operations to another facility as they will lose a lot of money. Moreover, farmers in Mwanza have been charging higher prices in fear of commodity prices fluctuations and they also tend to sell to the buyer that offers the highest price, hence due to the increased level of production costs, Afrisians need to increase their prices. I have chosen to investigate this problem further and to find out what recommendation I can provide to the company to reduce their costs and to ensure that they are receiving consistent prices from the farmers.

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Theoretical Framework:  Which financial and non financial tools will you use and why?

SWOT analysis: to learn the company’s position in terms of its ability to shift production to another facility or to better utilize its resources in Mwanza.  

Porters 5 Force analysis: to study the competitive the market is and to identify the marketing standing of AGL and how much bargaining power suppliers as well as the buyers have.

Ratios: comparing costs on a yearly basis to see if the company is improving or doing worse overall.- especially comparing production costs.

Areas of the syllabus ...

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