“Transportation Model of four malls in Indore”

MAJOR RESEARCH PROJECT

Submitted to the

CH Institute of Management & Communication

As a partial fulfillment
For the diploma
In
Management
For the term – II

Guided By: Submitted By:

Prof. Suchita Gupta Sachin Kumar Vishwakarma

Shanil Gupta

Sandeep Pandey

Shashwat Srivastav

CH Institute of Management & Communication

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 DECLARATION

We do here by declare that the Major Research Project report entitled

“Transportation Model of Four Malls in Indore” submitted by us to ‘CH Institute of

Management & Communication’, Indore which is done by ourselves and was prepared

upon the data and information gathered during the preparation of project in these malls.

We declare that this report has not been submitted earlier to any other Institute or

Company. It is fresh work and done with honesty & hard work.

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 CH Institute of Management & Communication, Indore

Monthly Progress Report (Ist/IInd)

Of
Major Research Project

We have completed the assigned work

On entitled “Transportation Model of four malls in Indore”, given by our

guide.

Name Signature

1. Sachin Kumar Vishwakarma

2. Shanil Gupta

3. Sandeep Pandey

4. Shashwat Srivastav

Date:

Guide Remarks:

Signature

Guide Name: Prof. Suchita Gupta

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 CERTIFICATE

This is to certify that of

Has completed Major Research Project entitled “ Transportation Model of four malls in

Indore “, under my guidance and supervision of allotted guide. The candidate has

performed the research work with full satisfaction and of sufficiently high standard to

warrant its for external examination for the partial fulfillment of PGDM.

Guide Program Coordinator

Prof. Suchita Gupta

Director Academics

Dr. Mayank Saxena

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 ACKNOWLEDGEMENT

As any good work is incomplete without acknowledging the people who made it
possible, this acknowledgement is incomplete without thanking our guide, friends, and
our faculty, without whose support this project wouldn't have taken shape.

Since we have joined ‘ C H Institute of Management & Communication’ we have

gained so much knowledge, which has been possible due to the well managed
education imparted to us under conditions, which are quite conducive to learning, at our
college.

We express our sincere gratitude to Prof. Suchita Gupta, our guide for project of “
Transportation Model of Four Malls in Indore” , who has helped us by sharing his valued
experiences in his teaching, research and training which have thereby become an
unconscious part of our ideas and thoughts while making the project. Without his
sincere help and guidance the project report would have not been possible.

We thank all our team members who had worked hard to make the report to its
present form.

Lastly we would like to thank our families for their continuing support,
blessings and encouragement.

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 CONTENT

CHAPTER NO. CHAPTER TITLE Page No.

1. Introduction to Transportation Model 7-11

a. Linear Programming 7

b. Linear Programming Assumption 8

c. The Transportation Problem 9

d. The Transportation Matrix 10

e. Matrix Model of a Transportation Problem 11

2. Project Introduction 12

Company Profile

a. Central Mall 13

b. T. I. (Treasure Island) 14

c. More Mega Store 15

d. Vishal Mega Mart 16

3. Objectives of the project 17

4. Research Methodology 17

Data collection 17

Data analysis tool 19

5. Data analysis 19

VAM Method 20

Modi Method 21

6. Recommendation 24

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 7. Scope and Limitation 25

8. Bibliography 26

1. INTRODUCTION TO TRANSPORTATION MODEL

Transportation model is based on linear programming. To understand transportation
model better we need to understand linear programming.

a. Linear Programming
In mathematics, linear programming (LP) is a technique for optimization of a linear
objective function, subject to linear equality and linear inequality constraints. Informally,
linear programming determines the way to achieve the best outcome (such as
maximum profit or lowest cost) in a given mathematical model and given some list of
requirements represented as linear equations. More formally, given a polytope (for
example, a polygon or a polyhedron), and a real-valued affine function.

Defined on this polytope, a linear programming method will find a point in the polytope
where this function has the smallest (or largest) value. Such points may not exist, but if
they do, searching through the polytope vertices is guaranteed to find at least one of
them.

Linear programs are problems that can be expressed in canonical form:

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Maximize: ctx
Subject to: Ax<=b

X, Represents the vector of variables (to be determined), while c and b are vectors of
(known) coefficients and A is a (known) matrix of coefficients.
The expression to be maximized or minimized is called the objective function. The
equations Ax is less than and equal to b are the constraints which specify a convex
polyhedron over which the objective function is to be optimized.
Linear programming can be applied to various fields of study. Most
extensively it is used in business and economic situations, but can also be utilized for
some engineering problems. Some industries that use linear programming models
include transportation, energy, telecommunications, and manufacturing. It has proved
useful in modeling diverse types of problems in planning, routing, scheduling,
assignment, and design.

b. Linear Programming Assumptions

Linear programming requires linearity in the equations as shown in the above structure.
In a linear equation, each decision variable is multiplied by a constant coefficient with no
multiplying between decision variables and no nonlinear functions such as logarithms.
Linearity requires the following assumptions:

1) Proportionality - a change in a variable results in a proportionate change in that

variable's contribution to the value of the function.

2) Additivity - the function value is the sum of the contributions of each term.

3) Divisibility - the decision variables can be divided into non integer values, taking
on fractional values. Integer programming techniques can be used if the
divisibility assumption does not hold.

In addition to these linearity assumptions, linear programming assumes certainty; that

is, that the coefficients are known and constant.

The Effect of Constraints

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Constraints exist because certain limitations restrict the range of a variable's possible
values. A constraint is considered to be binding if changing it also changes the optimal
solution. Less severe constraints that do not affect the optimal solution are non-binding.
Tightening a binding constraint can only worsen the objective function value, and
loosening a binding constraint can only improve the objective function value. As such,
once an optimal solution is found, managers can seek to improve that solution by
finding ways to relax binding constraints.

c. The Transportation Problem

There is a type of linear programming problem that may be solved using a simplified
version of the simplex technique called transportation method.

Because of its major application in solving problems involving several product sources
and several destinations of products, this type of problem is frequently called the
transportation problem. It gets its name from its application to problems involving
transporting products from several sources to several destinations. Although the
formation can be used to represent more general assignment and scheduling problems
as well as transportation and distribution problems.

The two common objectives of such problems are :

(1) minimize the cost of shipping m units to n destinations

(2) maximize the profit of shipping m units to n destinations.

Let us assume there are m sources supplying n destinations. Source capacities,

destinations requirements and costs of material shipping from each source to each
destination are given constantly. The transportation problem can be described using
following linear programming mathematical model and usually it appears in a
transportation tableau.

There are three general steps in solving transportation problems.

We will now discuss each one in the context of a simple example. Suppose one
company has four factories supplying four warehouses and its management wants to

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determine the minimum-cost shipping schedule for its weekly output of chests. Factory
supply, warehouse demands, and shipping costs per one chest (unit) are shown below.

D1 D2 D3 D4
S1 X11 X12 X13 X14
S2 X21 X22 X23 X24
S3 X31 X32 X33 X34
S4 X41 X42 X43 X44

At first, it is necessary to prepare an initial feasible solution, which may be done in

several different ways; the only requirement is that the destination needs be met within
the constraints of source supply.

d. The Transportation Matrix

The transportation matrix is where supply availability at each factory is shown in the far
right column and the warehouse demands are shown in the bottom row. The unit
shipping costs are shown in the small boxes within the cells.

It is important at this step to make sure that the total supply availabilities and total
demand requirements are equal. Often there is an excess supply or demand. In such
situations, for the transportation method to work, a dummy warehouse or factory must
be added. Procedurally, this involves inserting an extra row (for an additional factory) or
an extra column (for an ad warehouse). The amount of supply or demand required by
the ”dummy” equals the difference between the row and column totals. It deals with
sources where a supply of some commodity is available and destinations where the
commodity is demanded.

The classic statement of the transportation problem uses a matrix with the rows
representing sources and columns representing destinations. The algorithms for solving
the problem are based on this matrix representation.

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 The costs of shipping from sources to destinations are indicated by the entries in the
matrix. If shipment is impossible between a given source and destination, a large cost of
M is entered. This discourages the solution from using such cells. Supplies and
demands are shown along the margins of the matrix.

As in the example, the classic transportation problem has total supply equal to total
demand.

e. Matrix model of a transportation problem:

S D
1 1

S D
2 2

S D
3 3

S D 11

4 4
In this way we can make transportation matrix and get the minimum cost & maximum
profit.

2. PROJECT INTRODUCTION
To study the transportation model of four malls in the city so that it could be find out
which mall is more convenient for which area people. The name of the malls are Central
Mall, T. I., Vishal Mega Mart, and More Mega Store. To calculate the transportation cost
for the customers to buy sugar in these malls. We have selected four areas of Indore
city which are Bengali Square, Palasia, Bhawar kua, and Malwa Mill. We have to find
out which will be most convenient mall and economical mall for the customers of which
area. We have to make Transportation model.

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 COMPANY PROFILE

a. CENTRAL MALL:

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Kishore Biyani-led Future Group, India’s one of the leading retailers, has launched a
2.25 lakh square feet Central Mall called Indore Central in Indore, Madhya Pradesh.
Located at RNT Marg , Indore Central houses over 500 fashion brands from categories
including apparel, eye wear, watches, footwear, cosmetics and fragrances, sportswear,
Jewellery, hand bags, electronics, home décor, furniture and furnishing and food
products.

Speaking on the launch, Vishnu Prasad, CEO, Central and Brand Factory, said, “With
the success of the Central format in other cities, we decided to bring the Central
experience to Indore to offer Indorites a one stop retail destination.”

Elaborating further, Rajesh Seth, VP – marketing, Central and Brand Factory, stated,
“At Central, Shoppers do not need to go from one outlet to the other to buy apparel as it
is displayed in one seamless area. The seamless concept saves a lot of time as
consumers can shop for multiple brands but pay at one cash counter only. The concept
has been appreciated by consumers in all existing Centrals.”

As shop-in-shop, Central houses five Pantaloon Retail ventures that include Home
Town, eZone, Food Bazaar, Ethnicity and F123. For dine out, Central offers Cafe
Bollywood , Brewberry cafe, Barista cafe, Indian sweet shop, snack bars, ice cream
Parlours like Nirulas and Baskin Robbins. It will soon get Inox as multiplex player.

With this opening, currently nine Central Malls are operational; two each in Mumbai and
Pune and one each in Bengaluru, Hyderabad, Vadodara and Gurgaon.

b. TREASURE ISLAND:

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Treasure Island is the first and the best mall of Indore. Here is some information about
the mall and the stores that say TI their home. You must visit if you are in Indore for
Business or for Pleasure. Shopping at Treasure Island, Indore is an adventure in its own
way. Huge mall, outlet centers and departmental stores give every Indorian shopper the
opportunity to find that great buy. Take a look at some of the amazing shops list and
you'll see why locals and visitors absolutely love shopping at Treasure Island.

The mall has become an iconic representation of shopping in Indore. Mall offer
shoppers clothing, electronics, house hold items and much more at one convenient
location. The Treasure Island Mall is the largest shopping center in Indore with 5 floors
and 245 stores. Everyone in the family can find whatever they are looking for at this
enormous facility. Another benefit to shopping at the TI Mall is its location which is in the
heart of the city .

c. MEGA MORE:

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Aditya Birla Retail Limited (ABRL) launched its fourth hypermarket -- More Megastore in
Indore. Speaking at the launch, Thomas Varghese, CEO, ABRL said, “Our vision is to
consistently provide the Indian consumer a complete and differentiated shopping
experience. This hypermarket is a step in this direction.” There are large aisles and 23
cash counters to facilitate quick billing and free parking space for over 300 cars for
hassle free traffic, informed Varghese.

The store has more than 35,000 variants of products, spread over an area of 60,000
square feet, across a wide range of categories including Fresh Fruits and Vegetables,
Large range of Personal Care products, Youth Fashion, Footwear, Luggage, Steel
Utensils and other Home needs, Kids toys, Sports, Local foods, Latest electronics,
mobiles and computers, Clothing and Footwear for ladies, men and children. ABRL has
already 640 supermarkets and three other Hypermarkets across country.

The store has a wide choice of private labels, which will give a minimum 10 per cent
saving over similar brands. Besides private label all products at the store are priced low
and with many deals and special discounts, guaranteeing more savings, clarified
Varghese.

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 d. VISHAL MEGA MART:

It started as a humble one store enterprise in 1986 in Kolkata (erstwhile, Calcutta) is

today a conglomerate encompassing 180 showrooms in 100 cities / 24 states. India’s
first hyper-market has also been opened for the Indian consumer by Vishal. Situated in
the national capital Delhi this store boasts of the singe largest collection of goods and
commodities sold under one roof in India .The group had a turnover of Rs. 1463.12
million for fiscal 2005, under the dynamic leadership of Mr.Ram Chandra Agarwal . The
group had a turnover of Rs 2884.43 million for fiscal 2006 and Rs. 6026.53 million for
fiscal 2007.

The group’s prime focus is on retailing. The Vishal stores offer affordable family fashion
at prices to suit every pocket.

The group’s philosophy is integration and towards this end has initiated backward
integration in the field of high fashion by setting up a state of the art manufacturing
facility to support its retail endeavors.

Vishal is one of fastest growing retailing groups in India. Its outlets cater to almost all
price ranges. The showrooms have over 70,000 products range which fulfills all your
household needs, and can be catered to under one roof. It is covering about 29, 90, 146
sq. ft. in 24 states across the country.

If we see Vishal, in the point of view of transportation model it is very good to know the
transportation cost.

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 3. OBJECTIVES OF PROJECT

Primary objective:

 To study the transportation model of four malls in Indore.

Secondary objective:

 To find out the minimum transportation cost for the customers.

 To find out the maximum profit for the customers.

 To understand how distance play an important role in transportation cost.

4. RESEARCH METHODOLOGY

“Research means search for knowledge” some times it may refer to a scientific and
systematic search for pertinent information on a specific topic. In fact research is an art
of scientific investigation.

DATA COLLECTION

For any research these two types of data are necessary:

1. Primary data
2. Secondary data

Primary Data:
For this project the primary data is collected through investigation and interview of staff
& manager etc.

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Most of the data we collected through investigation and interview with the staff. Data we
collected is given below:

 Demand and supply of sugar per day in these four malls is given below:

Table – 1.1

Central mall T.I. More mega Vishal

Demand(kg) 350 450 500 400
Supply(kg) 400 450 500 480

 Distance of these four malls from four different part of the city is given in term of
kilometer.

Table – 1.2

Central mall T.I. More mega Vishal

Bengali 6 10 5 6
Palasia 3 1 2 3
Bhawarkua 5 6 8 9
Malwa mill 2 3 4 4

 Price per kg of sugar in these four malls in Rs:

Table – 1.3

Central mall T.I. More mega Vishal

42 43 43 44

 We assumed the transportation cost Rs 1 per kilometer. On the basis of this

transportation cost we made the transportation matrix, which is given below:

Table – 1.4

Central Mall T. I. Mega More Vishal Demand

Bengali sq. 48 53 48 50 350

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Palasiya 45 44 45 47 450
Bhawar kua 47 49 51 53 500
Malwa Mill 44 46 47 48 400
Supply 400 450 500 480

Secondary Data:

The secondary data is collected from various sources available with in the
organization like,
a) Organizational web site
b)Company Past records
c) Library books
d) Internet

DATA ANALYSIS TOOL

 VAM ( VOGEL’S APPROXIMATION ) METHOD: It gives feasible solution to the

transportation matrix.

 MODI METHOD: It is used to get optimum solution.

5. DATA ANALYSIS

Table – 2.1

Central Mall T. I. Mega More Vishal Demand

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Bengali sq. 48 53 48 50 350
Palasiya 45 44 45 47 450
Bhawar kua 47 49 51 53 500
Malwa Mill 44 46 47 48 400
Supply 400 450 500 480 S=D

Here Supply is not equal to Demand,so we will add a dummy row.

Table – 2.2

D1 D2 D3 D4 Demand
S1 48 53 48 50 350
S2 45 44 45 47 450
S3 47 49 51 53 500
S4 44 46 47 48 400
S5 0 0 0 0 130
Supply 400 450 500 480 1830

a. VAM Method ( Vogal Approximation Method )

Now we’ll go for allocation through VAM Method

Table – 2.3

35
48 53 0 50 350/0 0 0 2
48
35 10
45 0 0 47 450/100/0 1 1 1
44 45 1 1 2
40 10
0 0 51 53 500/100/0 2 2 2
47 49 2
50 3
44 46 47 50 400/350/0 2 2 1
48 1 1 1

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 0 0 0 130 130/0 0
0
400/0 450/350/ 500/150/5 480/350
0 0 /0
44
1 44 45 47
2 2 1
2 2 1
2 2 1
2 2 1
2 1

Table – 2.4

Ta
ble – 1

48 53 48 350 50

45 44 350 45 100 47

47 400 49 100 51 53

44 46 47 50 48 350

0 0 0 0 130

m + n -1 = 8

b. Modi method

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 Table – 2.5

48
44 45
47 49
47 4
8

U1 + V3 = 48

U2 + V2 = 44

U2 + V3 = 45

U3 + V1 = 47

U3 + V2 = 49

U4 + V3 = 47

U4 + V4 = 48

U5 + V4 = 0

U1 = 0, U2 = -3, U3 = 2, U4 = -1, U5 = -49,

V1 = 45, V2 = 47, V3 = 48, V4 = 49

Table – 2

45 47 48

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49
45 47 x 49
0
42 X x 46
-3
x x X 51
2
44 46 50 X
-1
-4 2- -1 x
-49

Table2 – Table1

-3 -6 x -1
-3 X x -1
x X -1 -2
0 0 x X
-4 -2 -1 X

This is the optimum solution

Final Solution: After applying VAM & Modi method, we can see that which is the most
convenient and economic place for the customers to and buy sugar from which mall.
Customer that belongs to different places should go to which mall. All the result is given
below:

Table - 2.6

Central Mall T. I. Mega More Vishal Demand

Bengali sq. Yes (350) 350
Palasiya Yes (350) Yes(100) 450
Bhawar kua Yes (400) Yes (100) 500

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Malwa Mill Yes (50) Yes (350) 400
Supply 400 450 500 480

6. Recommendation

In this table it is clear that which customer should go where. For the customers of
Bengali square Mega more will be economical. For the Customer of Palasiya T.I and
Mega More will be economical. For the Customer of Bhawar kua Central Mall and T.I
will be economical. For the customers of Malwa Mill Vishal & Mega More will be most
economical and convenient to buy sugar from these two malls. Per kg. cost of sugar,
transportation cost of the customers are included in per unit cost of sugar. In this
transportation model distance has played a very important role. If we see it in the point
of view of customers it is very important to understand transportation model.

According to this project report, company should focus on those customers who live in
near by areas of a particular mall. Company can make its strategy according to the
report and should take care of those customers who lives far from the malls. They can
give some delivery facility to their customers, so that these customer could be attracted
to that mall and come to that mall again and again.

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 7. SCOPE AND LIMITATION

SCOPE OF THE STUDY

The scope of the study includes current transportation position of customers. The
research is useful for them to take necessary steps for reducing transportation cost to
ensure maximum profit.

1. This study is useful to analyze the various transportation cost of different malls.

2. It will help to find out the most convenient route.

3. Customers can understand from where to buy.

4. It is beneficial for the management of malls to understand on which area

customer to target.

LIMITATIONS

The limitations occur when the project is done at these malls.

1. Method of data collection was through personal interview and therefore it was
difficult to find out the real demand and supply of sugar.

2. Interaction with higher-level officials was limited due to their very busy schedules.

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 3. It was very difficult to get exact transportation cost because customers use
different types of transport medium which has different transportation cost.

4. We have taken the transportation cost on the basis of one specific vehicle, so it
can be one of the limitations of the project.

5. Even though enough care was taken to make research error-free some errors
may have occurred.

BIBLIOGRAPHY

Reference Books

· Operation research by. N. D. Vora

Search Engines

Company Website:

www. eindore.com/2009/05/30/indore-central
www.mouthshut.com/.../Treasure_Island_-_Indore
www.mouthshut.com/.../M2K_Mega_mall__-_Indore
www.vishalmegamart.net

www.google.com

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