RCF Case Study

Facility Planning
● RCFplanning the distribution of Urea in Karnataka.
● Potential Rake Point-Warehouses (RPW) are Gulbarga, Hospet, Raichur,
Bellary, and Bangalore.
● Potential Feeder Point-Warehouses are given in first column in Table 1
● Two modes of transport- Railway (Mumbai-RPW) and Road (RPW-FPW)
 Karnataka Map

Ref. https://www.go2india.in/karnataka/index.php
Schematic Diagram
Table 1: Forecasted requirements at marketing districts in M
tonnes Marketing Dist.(FPW) Jan Feb Mar April May Jun July Aug

Gulbarga 32 26 24 35 57 69 75 52

Belgaum 18 13 15 20 32 38 50 31

Bangalore 35 33 23 35 41 46 54 32

Mysore 18 17 18 20 23 27 32 19

Dharwar 12 13 8 11 15 20 26 16

Raichur 13 16 23 26 31 48 53 34

Bellary 10 10 4 7 10 16 14 10

Hassan 12 11 4 8 11 17 23 12

Chitradurg 8 7 2 4 9 15 15 9
 Table 2: Cost Matrix (Rs/ ton) for RPWs to FPWs
Banglore Hospet Raichur Gulbarga Bellary

Banglore Nil 156 185 386 157

Raichur 113 103 Nil 156 108

Gulbarga 133 139 124 Nil 156

Bellary 102 42 105 204 Nil

Dharwar 130 83 145 176 108

Belgaum 139 120 162 180 138

Mysore 83 161 227 283 1812

Hassan 102 139 201 270 191

Chitradurg 115 Not Known Not Known Not Known Not Known
 Table 3: Cost Matrix (Rs/ton) : Mumbai-RPWs

Mumbai to

Bangalore 320

Hospet 250

Raichur 203

Gulbarga 145

Bellary 230
 Trade off between Number of RPWs and FPWs
● Assumptions:
○ All demand has to be met
○ The capacity at Mumbai is sufficient to fulfill the total demand of FPWs
○ Fixed costs of opening a warehouses is the same for all locations
○ Assume something reasonable for missing data
● Consider the average requirements of Urea for each FPWW
○ Can use the given data to estimate average monthly demand and compute yearly demand
○ Can assume that fluctuations in demand from month to month can be handled by stocking the
required amount in the FPW
● For n = 1 , find the best RPW which minimizes the total cost
● Do it for n=2,3,4 and 5; where n is number of RPWs open at a time
○ Remember that you have to now allocate each FPW to some open RPW
 Solution for different number of RPWs
# of RPWs Cost Rs/year Location Allocation

1 874717.5 Gulbarga All FPW’s

2 751824.0 Gulbarga, -Raichur, Gulbarga, Bellary, Dharwar, Belgaum, Hassan

Bangalore -Bangalore, Mysore, Chitradurg

3 709357.5 Gulbarga, -Gulbarga,Dharwar,Belgaum

Bangalore, -Bangalore, Mysore, Chitradurg
Raichur -Raichur, Bellary, Hassan

4 699880.5 Gulbarga, -Gulbarga, Dharwar, Belgaum

Bangalore, -Bangalore, Mysore, Chitradurg
Raichur, -Raichur, Hassan
Bellary -Bellary

5 697675.5 Gulbarga, -Gulbarga, Dharwar, Belgaum,

Bangalore, -Bangalore, Mysore, Chitradurg,
Raichur, -Raichur,
Bellary, -Bellary
Hospet -Hassan
Total cost vs Number of RPW’s
One possible heuristic
1. W=Set of warehouse locations, F=set of facilities
2. n= number of warehouses to be located
3. For a given n, select some combination of n warehouses from W and store it
in Wn
4. Assign each facility from F to a warehouse in Wn
5. Calculate the cost of construction and transportation to corresponding
facilities for this warehouse combination
6. Change the warehouse selection (replace one with another) and see if cost
improves. Stop when no improvement is possible.