PLANNING PRODUCT MIX FOR PANCHTANTRA CORP

Group members :Khusboo Chinoy (11) Khusboo Prasad-

(33)
Simi Mandalia (39) Avani Mehta (40) -

INTRODUCTION TO THE CASE

Ganesh, Project Director for Kapadkunj Intensive Handloom Development (IHD) Project of the PANCHTANTRA Corporation, was preparing the production plan for his project for the next month.

Following informations are available regarding the project:

Two types of Handloom Product 60 x 40 Lungis 40 x 40 Shirtings

Ganesh expected 3000 loom days of production capacity Has 480 Kgs of 60s Yarn and 2400 Kgs of 40s Yarn Production capacity is not to be increased from 11000 m of Lungis & 22000 m of Shirtings Ganesh aimed at produce as much quantities of lungis as possible, this quantity is limited by sales manager instruction.(i.e. not more than 11000 meters.)

GANESH(PD FOR KAPADKUNJ IHD) PLAN

Aimed to produce as much as Lungis as possible Had allocated remaining Loom capacity for the production of Shirting

GANESHS PLAN
So first by following Ganesh plan we get following quantity, Ganesh want to produce as much of lungis as possible so,
loom days 3000 40 yarn 2400k.g 2400x1000/60 =40000m 60 yarn 480k.g 480x1000/40 =12000m max. qty. 11000m

But maximum 11000m can be produce So producing 11000m lungis we required) 2200 loom days. So remaining 800 loom days will allotted to shirting material production. So (800 x 12) 9600m of shirting material can be produced. So here Ganesh produce Lungis = 11000m Shirting material = 9600m Profit = Rs. 15660

GANPATHYS PLAN
By following Ganpathy plan we get following quantity, Ganpathy want to produce as much of shirting material as possible. So we get following quantity loom days 3000 40s yarn 2400k.g 2400x1000/100 =24000m But maximum 22000m can be produce So producing 22000m of shirting material we required (22000x100/1000) 2200 k,g of 40 yarn material So with remaining 200k.g of 40 yarn material we produce (200x1000/60) 3333.3m of shirting materials. So here Ganesh produce Lungis = 3333m Shirting material = 22000m Profit will be Rs. 16199.7 So by looking both plant we can say that Ganpathy plan is better than ganesh plan because its gave more revenue. for production restriction(shirting) 22000m

Q.1) What product mix will maximize ganeshs project profit?

Let assume, x1 = meters of production of lungis material x2 = meters of production of shirting material SO, objective function will be, max Z = 0.9x1 + 0.6x2 Subject to following constraints, 1.) x1/5 + x2/12 <=3000 for loom days availability 2.) 0.06x1 + 0.1x2 <=2400 for 40s yarn 3.) 0.04x1 <=480 for 60s yarn 4.) x1 <=11000 for production restriction for lungis 5.) x2 <=22000 production restriction for shirting So, by solving in Excel we get, X1 0.2 0.06 0.04 x2 0.083 0.1 0 utilization sign 3000 <= 2400 <= 268.4420772 <= r.h.s 3000 2400 480

loom days 40s yarn 60s yarn

For production restriction (lungis) 1 11000 For production restriction (shirting) 0 22000

6711.051931 <=

19973.36884 <=

ob. Function 0.9 0.6 Value 6711.052 19973.37 Max z 18023.97 So, optimum product mix will be produce 6711m lungis and 19973m of shirting materials. And profit at optimum product mix will be Rs.18023.97
By his previous plan profit was Rs. 15660

so we recommended Ganesh to follow optimum product mix quantity to increase his plants profit.

Q.2) WHAT PRODUCT MIX WILL RECOMMENDED TO GAVE MINIMUM WAGES TO WAIVER OF RS.61500?
Max Z = 0.9x1 + 0.6x2 Subject to following constraints,

1.) x1/5 + x2/12 <=3000 for loom days availability 2.) 0.06x1 + 0.1x2 <=2400 for 40s yarn 3.) 0.04x1 <=480 for 60s yarn 4.) x1 <=11000 for production restriction for lungis 5.) x2 <=22000 production restriction for shirting 6.) 4.5x1 + 1.5x2 >=61500 for waiver constraints
So, by solving in Excel we get X1 RHS Loom days 3000 40s yarn 2400 60s yarn 480 For production restriction (lungis) 11000 For production restriction (shirtings) 22000 0.2 X2 0.083 Utilization 3000 Sign <=

0.06
0.04 1 0

0.1
0 0 1

2126.122
328.9796 8224.49 16326.53

<=
<= <= <=

So, optimum product mix will be produce 8224.49m of lungis and 16326.53m of shirting materials. And profit at optimum product mix will be Rs.17197.96 x1= 8224.49 x2=16326.53 max Z=17197.96

Wages according to 1st answer is (4.5 x 6711) + (1.5 x 19973) = Rs.60159 Wages according to 2nd answer is (4.5 x8224.49) + (1.5 x16326.53) = Rs. 61500 So extra wages paid to the waivers is Rs.1341

Q.3) WHAT PRODUCT MIX RECOMMENDED IF NOT MORE THAN RS.1.50 LAKHS IS AVAILABLE FOR THE PROJECT?
max Z = 0.9x1 + 0.6x2

Subject to following constraints,

1.) x1/5 + x2/12 <=3000 for loom days availability 2.) 0.06x1 + 0.1x2 <=2400 for 40s yarn 3.) 0.04x1 <=480 for 60s yarn 4.) x1 <=11000 for production restriction for lungis 5.) x2 <=22000 production restriction for shirting 6.) 4.5x1 + 1.5x2 >=61500 for waiver constraints 7.) 10x1 + 6x2 <=150000 for money constraint

So, by solving in Excel we get X1 X2 0.083 0.1 0 0 1 1.5 6 Utilization 2753.333 1326.667 440 11000 6666.667 59500 150000 Sign <= <= <= <= <= <= <= 3000 2400 480 11000 22000 61500

RHS Loom days 40s yarn 60s yarn For production restriction (lungis) For production restriction (shirtings) Waiver wages constraints Money constraints 150000
Ob. Function Value Max z.

0.2 0.06 0.04 1 0 4.5 10

0.9 0.6 11000 6666.67 13900

So, optimum product mix will be produce 11000m of lungis and 6667 of shirting materials.

THANK YOU