Assignment Problem 1

Businesses often are faced with decisions involving a fixed charge that will affect the cost of their
future operations. For example, building a new factory or entering into a long-term lease on an existing
facility would involve a fixed cost that might vary depending upon the size of the facility and the
location. In addition, once a factory is built, the variable production costs will be affected by the labour
cost in the particular city where it is located.

Maya Manufacturing Ltd. is a furniture-making company. From being the pioneers in the veneer
business to being a leading furniture company, the journey has been an enriching and memorable
one. Today, they touch the lives of millions of Indians every day with their range of world-class home
and office furniture, innovative laminates, sturdy designer doors, exquisite veneers and top-grade
plywood. Maya manufacturing is planning to build at least one new plant, and three cities are being
considered: Nashik, Pune & Vadodara. Once the plant or plants have been constructed, the company
wishes to have sufficient capacity to produce at least 38,000 units each year. The costs associated with
the possible locations are given in the table below.

SITE ANNUAL FIXED VARIABLE COST PER ANNUAL CAPACITY

COST(Rs) UNIT(Rs)
Nashik 3,40,000 32 21,000
Pune 2,70,000 33 20,000
Vadodara 2,90,000 30 19,000

As a VP of Maya Manufacturing Ltd., your goal is to figure out the location(s) of the new plant(s).
Besides, there are following things that might influence your decision such as the total production
capacity is at least 38,000; the number of units produced at the Nashik plant is 0 if the plant is not
built, and it is not more than 21,000 if the plant is built; the number of units produced at the Pune
plant is 0 if the plant is not built and it is not more than 20,000 if the plant is built; the number of units
produced at the Vadodara plant is 0 if the plant is not built and it is not more than 19,000 if the plant
is built. Also, the cost incurred while planning these locations must be minimum. Finally, you are
required to come up with the new plant location(s) that Maya Manufacturing Ltd. should invest in,
along with the total cost incurred. State any assumptions that you have made while solving the
problem.

Assignment Problem 2
Study one real company and explain the different supply chain strategies that this company has
adopted. You can think in terms of inventory planning, logistics, Warehouse Management System etc.
but should not limit your research to these aspects. You can look for these on company’s website,
newsletters, news articles etc. Any info mentioned should come from a credible source and the source
should be mentioned in the solution.