Order Profitability — PO-2048
Margin erodingNorthStar Apparel · POLO-2048 · 10,000 pcs · live cost tracking against the approved cost sheet
Revenue
₹38,00,000
₹380 / pc
Estimated cost
₹29,60,000
₹296 / pc
Projected cost
₹33,60,000
₹336 / pc
Profit
₹4,40,000
Was ₹8,40,000
Margin
11.58%
Quoted 22.10%
Variance
−10.52 pts
₹4.00L lost
Estimate versus actual
Costs booked to date plus committed cost to complete
| Cost element | Estimated | Projected actual | Variance | Var % | Reason |
|---|---|---|---|---|---|
| Fabric | ₹18,40,000 | ₹19,40,000 | ₹1,00,000 | +5.4% | Excess dye loss 80 kg, 78 kg shade rejection, navy re-lot |
| Trims & accessories | ₹2,20,000 | ₹2,30,000 | ₹10,000 | +4.5% | Extra labels for replaced pieces |
| Job work — dye, print, embroidery | ₹3,20,000 | ₹4,20,000 | ₹1,00,000 | +31.3% | Navy re-dye lot, reprint of 100 pcs, expedite charges |
| In-house production | ₹3,20,000 | ₹3,50,000 | ₹30,000 | +9.4% | Overtime on lines 04 and 07, rework 462 pcs |
| Packing | ₹80,000 | ₹1,10,000 | ₹30,000 | +37.5% | Split shipment needs a second set of documents and cartons |
| Transport & freight | ₹20,000 | ₹80,000 | ₹60,000 | +300% | Two dispatches instead of one, vendor shuttling |
| Factory overhead | ₹1,60,000 | ₹2,30,000 | ₹70,000 | +43.8% | Order occupied lines 18 days longer than planned |
| Total cost | ₹29,60,000 | ₹33,60,000 | ₹4,00,000 | +13.5% |
Per piece: estimated ₹296.00 · projected ₹336.00
78% of the over-run traces back to one late dye lot
Where the ₹4.00 lakh went
Margin
11.6%
Actual
Quoted margin
22.10%
Projected margin
11.58%
Variance
−10.52
Cost structure — projected
Fabric₹19.40L57.7%
Job work₹4.20L12.5%
Production₹3.50L10.4%
Trims₹2.30L6.8%
Overhead₹2.30L6.8%
Packing₹1.10L3.3%
Transport₹0.80L2.4%
Total₹33.60L100%
Lesson for the next order
- Split navy dyeing across two vendorsAdopt
- Hold 3% fabric buffer on dark shadesAdopt
- Book embroidery capacity at order stageAdopt
- Quote 2% freight contingency on FOBReview
Profitability across live orders
Quoted margin against margin realised or projected
| Order | Buyer | Style | Revenue | Est. cost | Actual cost | Profit | Quoted % | Actual % | Trend |
|---|---|---|---|---|---|---|---|---|---|
| PO-2048 | NorthStar | POLO-2048 | ₹38.00L | ₹29.60L | ₹33.60L | ₹4.40L | 22.1% | 11.6% | ▼ 10.5 |
| PO-2044 | GlobalFit | SHORT-2231 | ₹28.80L | ₹24.36L | ₹24.22L | ₹4.58L | 15.4% | 15.9% | ▲ 0.5 |
| PO-2051 | UrbanCo | TSHIRT-1024 | ₹52.80L | ₹43.60L | ₹45.10L | ₹7.70L | 17.4% | 14.6% | ▼ 2.8 |
| PO-2062 | BluePeak | HOOD-3021 | ₹43.80L | ₹36.80L | ₹40.21L | ₹3.59L | 16.0% | 8.2% | ▼ 7.8 |
| PO-2057 | ModeLine | JOGGER-4421 | ₹36.90L | ₹29.68L | ₹30.12L | ₹6.78L | 19.6% | 18.4% | ▼ 1.2 |
| PO-2038 | NorthStar | TSHIRT-1024 | ₹32.40L | ₹26.75L | ₹26.98L | ₹5.42L | 17.4% | 16.7% | ▼ 0.7 |
| 6 orders | ₹2.33 Cr | ₹1.91 Cr | ₹2.00 Cr | ₹32.47L | 18.0% | 13.9% | |||