# CASE STUDY 2

CHANDPUR ENTERPRISES LIMITED,
STEEL DIVISION

Name:

SYED ABDUL RAHMAN BIN SYED AHAMED
816025
KHALIDUL ANWAR BIN ISHAK
818573
NOOR HANIM BINTI MD ISA
818933

0 Introduction & Problem Statement 3 2.UUM CASE STUDY 2 DECISION ANALYSIS Date: SQQP 5023 – 10 JANUARY 2015 Table of Content Chapter Title Page 1.0 Analysis & Discussion 3-11 3.0 References 11 2 .

work. Because of lower and upper limits on the measures of every crude material in a batch and changing measures of power and time devoured for distinctive crude materials. time. for an occasion. plan for aircrafts or creation. sustenance or apparel or benefits. publicizing arrangements or venture choices. 2. Steel Division case study. cash. furniture. These assets might be utilized to make items such as hardware. As talked about in Chandpur Enterprises Limited (CEL). and the organization overseeing executive needs to settle on the crude materials requirement for August creation at his steel plant. warehouse space and crude materials. INTRODUCTION & PROBLEM STATEMENT Numerous administration choices include attempting to make the best utilization of a organization's assets. overseeing chief of CEL can't just utilize the least expensive crude material. Akshay Mittal. Assets commonly incorporate hardware.UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – 1.1 There is couple of vital focuses should be breaking down for better choice making which are. A linear program and Excel's Solver enhancement capacity will give the ideal amounts that meet the imperatives. Linear programming (LP) is a generally utilized scientific demonstrating method designed to help supervisors in arranging and choice making with respect to asset allocation. DISCUSSION & ANALYSIS 2. a) What would be the best batch that could be making for one batch? 3 .

per batch.000 kg Figure 1: Solution to the batch model 4 . Revenue = 29000 * Cost of RM = ∑ ifi /1000 Rate per Ton∗x i /1000 i¿ ∑¿ Electricity Cost = 4.30 * [700 *( Consumables Cost = 2000 * ixi ¿ /1000+1200 ¿¿ ∑ ∑ ifi /1000 Salary Cost = 3000 a) Constraint on batch size of 4.UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – b) What is the profit associated with this batch? Decision variables: x i = kilograms of raw materials i to order per batch Related variables: fi = recovery i * x i = finished goods tons of raw material i The optimization is: Max [Revenue – Cost of RM – Electricity Cost – Consumables Cost – Salary Cost] Where.

421. profit per batch will be INR5. to optimize a batch without any constraint related to monthly limits.UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – So. b) Batch optimization with limits implied by monthly supply Figure 2: Solution to a model with batch variables and linear limits implied by monthly supply 5 .

As a result of this constraint. Thus.430760 0 0 0 0 0 0 2. This enhances the general proficiency and in a roundabout way diminishes the time of one bunch.56473868 0.E+30 0. significance of seeing just how touchy that arrangement is to model suspicions and information is essential.18 1. There are more batches every month this optimization in light of the breaking point on the month to month supply. conditions are continuing changing in certifiable just in this contextual analysis.14 2.72127846 1.49234907 6 . These shows yield more every month by doing more groups.98050847 4.56199723 1.E+30 0. 2.073069 0. Solver now becomes strength to utilize all the more excessive material rather than less expensive material. will the administrative requirement of 4. Affectability examination only for the group without month to month requirements in view of this case study: Figure 3: Sensitivity analysis for batch model without supply limits Variable Cells Name Tasla Raw Material per Batch (Kg) Rangeen Raw Material per Batch (Kg) Sponge Raw Material per Batch (Kg) Local Scrap Raw Material per Batch (Kg) Imported Scrap Raw Material per Batch (Kg) HC Raw Material per Batch (Kg) Final Reduced Value Cost Objective Coefficient Allowable Increase Allowable Decrease 1391.37 0.788450 556. Implies.65316276 2.000000 1113.000 kg for each batch of finished product hamper the capacity to make benefit? Is it worth to discover administrative endorsement to expand that point of confinement? Ideal answers for LP have hitherto been discovered called.322.65367232 1. On the other hand.715379 835.UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – Alternative yields less per batch: INR 5. presumption on complete assurance in information and relationship of a issue are characterize.67 3.788450 1391.93138483 1. deterministic assumptions.E+30 0.24 0.00457297 6.37 2. 328 versus 321.2 Second analysis. to handle the error.

25%) If it requires approximately INR1. profit increase to iv.24 0.72303 HC Raw Material per Batch (Kg) Pig Iron Raw Material per Batch (Kg) Tasla Raw Material per Batch (Kg) Rangeen Raw Material per Batch (Kg) Sponge Raw Material per Batch (Kg) Local Scrap Raw Material per Batch (Kg) Imported Scrap Raw Material per Batch (Kg) HC Raw Material per Batch (Kg) Pig Iron Raw Material per Batch (Kg) Total Finished Product per batch (Kg) 1113.03952679 0 ` 0 Constraint R.78845 1386.96255 1344.93138483 0 -0.9610169 Constraints Tasla Raw Material per Batch (Kg) Rangeen Raw Material per Batch (Kg) Sponge Raw Material per Batch (Kg) Local Scrap Raw Material per Batch (Kg) Imported Scrap Raw Material per Batch (Kg) Final Value Shadow Price 1391.E+30 1. Side 0 0 0 0 0 Allowable Increase 1.243094 1.357690 4000 0.715379 835.E+30 1391.86152 3618. what amount of benefit will Akshay Mittal lose in the event that he should use in any event one unit of a crude material in a clump given or pick not to utilize that crude material? This is to stay away from miserable if CEL does not arrange a specific sort of crude material From the sensitivity analysis in the case study: 7 .788450 556.430760 278.57320807 0 0 0 -0.43076 276.357690 0 2.E+30 1.H.80347947 3.878465 0 1. INR109.E+30 557. 000 (~6. profit increase per batch by INR3.55792 1113.788450 1391. 300. iii.000 in capital and time investment to increase the batch size by just 100 kg.788450 1391.31349 1.80967742 13.78845 1391.3 Third analysis.430760 278.64997 4453.715379 835.96107 1.E+30 Allowable Decrease 1391.E+30 1.E+30 956.491289 852.98991 1331. ii.36581 278.40 If increase batch size by ~320 batches per month.073069 0 0 1.357690 1391.E+30 1441. will able to recover that cost in less than 12 months 2.788450 556.35769 1.78845 1344. Batch size is a big constraint on profits If increase the batch size by 1 kg.E+30 280.073069 0 1113.63952679 -2.39526792 0 0 0 0 0 0 0 0 0 4000 1751.UUM CASE STUDY 2 DECISION ANALYSIS Pig Iron Raw Material per Batch (Kg) SQQP 5023 – 278.504909 4000 Discussion: i.98991 2226.56395268 -0.

Row 31 shows.UUM CASE STUDY 2 DECISION ANALYSIS i. INR1. Imported Scrap.705 which is much higher than the benefit every month assessed in question 2.245.245.4 Forth analysis.1. benefit per clump INR4.1 INR1. 739. without any monthly limit constraint. 739. 873 dropped essentially from inquiry 2. CEL would losing INR2. benefit every month shows INR1. 788. At the point when run Solver for boosting the benefit every month.1 on month to month commitment. 2. SQQP 5023 – Row 13 indicates. Imported Scrap is the only raw material not being used in the current optimized plan which is the maximum profit per batch ii. Akshay Mittal must know the suggestions from ideal batch from question 2.93 per additional kilogram if use iii. Suggest buying Imported Scrap if necessary and the price must below INR20. Figure 4: Nonlinear model with batch decision variables and a monthly objective 8 . 070 per ton. In the meantime.

Month to month enhancement: y i = tons of raw material i to order per month b = number of batches in a month Revenue = 29000 * Cost of RM = ∑ igi Rate per Ton∗ yi i¿ ∑¿ Electricity Cost = 4. nonlinear model required to check if worldwide optima have. An approach to detail a straight month to month model is to utilize month to month crude material choice variables and include a choice variable for the quantity of batches. Nonlinear model need to use at many distinctive beginning stages to see dependably wind up at same ideal arrangement. Along these lines. subsequent to this is a nonlinear model. there is probability that this enhancement may not produce a worldwide most extreme and only one of numerous nearby maxima. Be that as it may.30 * 700 *( Consumables Cost = 2000 * iyi ∑ ¿+1200∗b ¿ ∑ igi Salary Cost = 3000 * b 9 .UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – The past methodology finishes up a shabby and ease crude material such as HC great in cluster plan and might incorporated in with the general mish-mash.

batch size limit and hours available per month.UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – Subject to min and max constraint for each i.000 kg. constraint on batch size of 4. Monthly optimization: Max [Revenue – Cost of RM – Electricity Cost – Consumables Cost – Salary Cost] Figure 5: Linear model with batch decision variables and a monthly objective 10 .

. Management. Steel Division: Teaching Note 11 . & Hanna. 3. Chandpur Enterprises Limited. Prentice Hall. Improve time per month from 600 hours to higher. ii.UUM CASE STUDY 2 DECISION ANALYSIS SQQP 5023 – Discussion: i.5 Profit per month is same as profit per month for nonlinear monthly model. M. Hire better maintenance personnel to reduce maintenance time b. Put in place a better safety plan for workers to reduce time in related activities. ii.7 hours. (2011). Render B. Every one hour increase in time will result profit by INR2.. (2006).E. iii. 981. Improve the time per month: a. R. what are the suggestions to improve profits? Based on sensitivity analysis (Fig 3): i. Quantitative Analysis for ii. would be applicable for the next 7. Stair.M. 2. This additional profit iv. Timely supply of consumables and spare parts to reduce waiting time (emergency) d. Find other sources for Rangeen to increase supply. Use better / costlier machinery to reduce breakdown periods c. REFERENCES i. Nonlinear model did provide a global optimal Last analysis. Negotiate a deal with supplier and pay an amount up to an additional INR919 per ton of supply for each ton over the current limit of 500 tons.