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  • VNACS Case: Mr. Agarwal's Predicament: Presented by

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    ravi007kant
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    This document analyzes options for an Indian farmer, Mr. Agarwal, who faces constraints of limited capital, storage space, and unpredictable paddy prices. It evaluates four options: holding the full paddy harvest, selling the full harvest to repay credit, or selling half the harvest while repaying half the credit. The analysis recommends selling half the harvest to repay half the credit in the short term, while obtaining more loans and capital for fertilizer in the long term to hedge risks and reduce inventory.

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    VNACS

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    This document analyzes options for an Indian farmer, Mr. Agarwal, who faces constraints of limited capital, storage space, and unpredictable paddy prices. It evaluates four options: holding the full paddy harvest, selling the full harvest to repay credit, or selling half the harvest while repaying half the credit. The analysis recommends selling half the harvest to repay half the credit in the short term, while obtaining more loans and capital for fertilizer in the long term to hedge risks and reduce inventory.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    4 views5 pages

    VNACS Case: Mr. Agarwal's Predicament: Presented by

    Uploaded by

    ravi007kant
    This document analyzes options for an Indian farmer, Mr. Agarwal, who faces constraints of limited capital, storage space, and unpredictable paddy prices. It evaluates four options: holding the full paddy harvest, selling the full harvest to repay credit, or selling half the harvest while repaying half the credit. The analysis recommends selling half the harvest to repay half the credit in the short term, while obtaining more loans and capital for fertilizer in the long term to hedge risks and reduce inventory.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 5

    VNACS Case:

    Mr. Agarwals
    Predicament
    Presented by:
    Ravi Kant
    Nished Singhal
    OBJECTIVES & CRITERIA
    Analyse various options
    Propose immediate course of action

    Maximize profit
    Minimize risks
    1. Hold Paddy
    2. Sell Paddy
    Buy Fertilizer
    3. Sell Paddy
    Repay credit
    4. Sell half Paddy,
    Repay half credit
    OPTIONS
    Constraints and Concerns
    Lack of Capital
    Limited Storage Space
    Unpredictability of future Paddy price


    Evaluation
    -200000
    -150000
    -100000
    -50000
    0
    50000
    100000
    150000
    200000
    250000
    3750 5000 6250 7500
    Expected Profit
    Hold Sell Sell half
    *Expected profit/loss for 6 month period of 1
    st
    April to 31 Sep 1991
    RECOMMENDATIONS
    Sell half the paddy and repay the
    bank overdraft partially.

    Long Term: Arrange more
    capital/loan from lenders.

    Contingency
    Tap into returned bank money in
    case of paddy damage etc.

    Hedging of risks
    Inventory reduction
    Half credit repayed

    With more Capital,
    fertilizer can be
    bought.
    Decrease in price of
    paddy
    Half of storage space
    unused.

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