VNACS Case Study

Analysis
Group 3:
Aruna Bir -2210014
Srishti Jain - 2210058
Souvik Chakraborty - 2210057
Khush Lodaya – 2210027
Livingston L - 2210031
 About VNACS
● VNACS assists its members in procuring
agricultural produce from the farmers and
markets it to the district mandies.

● The society also procures and supplies

agricultural inputs like seeds, fertilizers
and pesticides to farmer members.

● The society is in place to benefit the

farmers and also to explore various
alternatives for making a surplus.
 Understanding Situation

• VNACS have cash balance of 5 lakhs.

Current
Finances of • VNACS had already taken an overdraft of 5lakhs
VNACS under its cash credit arrangements.

• VNACS holds 100 ton of paddy with market value

of 5 lakhs
 Problem Statement

Decision-making with respect to paddy,

fertilizers & repayment to bank &
society members
 Generating Options
Pay the Society
Members

Option 1: Option 2: Option 3: Option 4:

Sell paddy now & Sell paddy now & Sell paddy later & don’t Sell paddy later & buy
pay the bank. buy fertilizers buy fertilizers fertilizers

(Deficit of 30 k (Deficit of (Surplus of Rs 65,000) (Deficit)

so rejected) Rs5,85,000)
 Evaluation & Recommendations

Option Option
Criteria Option 1
2
Option 3
4

Repayment to members of society

Repayment to Bank

No deficit to VNACS

RECOMMENDATION: Based on the criteria shown above, VNACS should go for option 3.
 Action & Contingency Plan

• VNACS should go with option 3, i.e.

31st Mar 1991 pay farmers with available cash balance
Pay the members from the & sell paddy along with repayment to
available cash balance the bank 6 months later.

• The contingency plan is to watch the

paddy prices. A breakeven price of Rs.
5400 per ton has been calculated, which
is our stop loss. In case paddy prices do
Mar 1991 Oct 1991 not rise as estimated, they can be sold
(Now) Sell paddy after 6 months when it reaches Rs. 5400.
and also pay the amount to
the bank
Any Questions?