Business Decision

Problems for
Parthenon (I) Pvt. Ltd.
Group - 9 : Partheonon
Kumar Shringar Sah -31NMP28
Manish Raj - 31NMP30
Mayank Khandelwal - 31NMP32
Nand Bhushan - 31NMP35
Surbhit Sharma - 31NMP50
Vinamra Nanavati - 31NMP55
Company Overview

● Parthenon (I) Pvt. Ltd is a small manufacturer of plastic products such as

dashboard, mud flaps used in Automobile industry since 2007
● Clients include Maruti (WagonR, Swift & Ritz Models) ,Ford (Figo Model) &
TATA(Indigo Model)
● Company has 5 factories in Agra, Bilaspur,Cuttack,Dwarka,and Elephantganj
● Recently received a large contract from multiple car manufacturers for the
production of plastic dashboard for various models
● Parthenon has 3 distribution centres in Farakka, Goa and Hyderabad
● From the distribution centres, the finished products to be shipped to 10 different
car factories at 10 different locations just after Dussehra Festival
Problem-1: Allocation of Production hours for
profit maximization
● 2 Production Lines at each factory : M-1 & M-2 , Capable to perform Moulding ,
Trimming and Packaging.
● Unit rate : Rs 18 per dashboard
● Raw material cost: Rs 6 per pound; maximum raw material available = 1000pounds
pounds pounds M-1 M-2
40 dashboards per
Production Capacity 25 dashboards per hour
hour
Raw Material Consumption
40 pounds per hour 50 pounds per hour
Rate
Maximum availability per day
15 hours 10 hours
during the next week
Minimum operation time per
5 hours 5 hours
day to cover setup costs
Operating Cost Rs 50 per hour Rs 75 per hour
Problem-1: Formulation
Objective: Obtain allocation of production hours on each production line to maximize
profit for Parthenon

M1 = number of hours per day spent on the M-1 Production Line

M2 = number of hours per day spent on the M-2 Production Line

Total Cost : 6(40) M1 + 6(50) M2 + 50M1 + 75M2 = 290 M1 + 375 M2

Total Revenue : 25(18) M1 + 40(18) M2 = 450M1 + 720M2

Profit Contribution: Zmax profit = (450 - 290) M1 + (720 - 375) M2 = 160M1 + 345 M2
Problem-1: Formulation (contd.)

M1 <= 15 M-1 maximum

M2 <= 10 M-2 maximum
M1 >= 5 M-1 minimum
M2 >= 5 M-2 minimum
40 M1 + 50 M2 <= 1000 Raw material
available
M1, M2 >= 0
Problem-1: Solution
 Problem-1: Optimal Solution
Using Simplex Method

The optimal decision is to schedule 12.5 hours per day on the

Production Line M-1 and 10 hours per day on the Production Line
M-2. Hence, Max. Profit per day = Rs. 5450
Problem-2: Product Mix Selection for profit
maximization
● 3 varieties of dashboards - Type A, Type B & Type C
● Each undergoes 3 processes - moulding, trimming & packaging
● Time taken by each product in each processes is tabulated below

Process Type A Type B Type C Total Time Available (hours)

Moulding 1hr 2hr 1.5hr 9hr

Trimming 1 0.4 0.3 6.75

Packaging 0.5 0.2 0.5 6.75

Profit per
Rs.110 Rs.160 Rs.150
dozen
Problem-2: Formulation

Objective Function, Zmax= 110 x + 160 y +150 z

Constraints:

1) x + 2y + 1.5z <= 9

2) x + 0.4y + 0.3z <= 6.75

3) 0.5x + 0.2y + 0.5z <= 6.75

4) x>=0, y>=0, z>=0

Problem-2: Solution
 Problem-2: Solution

From the final simplex tableau, we find that the maximum profit is RS 961.88 and this is
obtained by the following production levels.
Type A: 6.19 dozen units
Type B: 0 dozen units
Type C: 1.88 dozen units
 Problem 3 : Assignment Model :Allocation of
manager to maximize company’s efficiency

● Parthenon (I) Pvt. Ltd needs to allocate its 6 managers to six departments on the basis of their
experience and capability to maximize company’s efficiency.
● In below table , the efficiency of manager’s in each of the departments is indicated and in order to
maximize their efforts, they need to be assigned to obtain maximum efficiency.

Managers Procurement Production Quality Sales & Marketing HR Deptt Finance

Shringar Shah 65 60 75 90 40 85
Manish Raj 40 60 70 85 90 75
Mayank Khandelwal 90 65 85 60 70 65
Nand Bhushan 50 85 65 55 60 60
Surbhit Sharma 75 40 70 90 75 70
Vinamra Nanavati 85 95 90 55 40 95
Step-1 Maximize to Minimize
Managers Procurement Production Quality Sales & Marketing HR Deptt Finance
Shringar Shah 30 35 20 5 55 10
Manish Raj 55 35 25 10 5 20
Mayank Khandelwal 5 30 10 35 25 30
Nand Bhushan 45 10 30 40 35 35
Surbhit Sharma 20 55 25 5 20 25
Vinamra Nanavati 10 0 5 40 55 0

Step-2 Row Opportunity Cost Matrix

Managers Procurement Production Quality Sales & Marketing HR Deptt Finance
Shringar Shah 25 30 15 0 50 5
Manish Raj 50 30 20 5 0 15
Mayank
0 25 5 30 20 25
Khandelwal
Nand Bhushan 35 0 20 30 25 25
Surbhit Sharma 15 50 20 0 15 20
Vinamra Nanavati 10 0 5 40 55 0
Step-3 Column opportunity cost Matrix
Managers Procurement Production Quality Sales & Marketing HR Deptt Finance
Shringar Shah 25 30 10 0 50 5
Manish Raj 50 30 15 5 0 15
Mayank
0 25 0 30 20 25
Khandelwal
Nand Bhushan 35 0 15 30 25 25
Surbhit Sharma 15 50 15 0 15 20
Vinamra Nanavati 10 0 0 40 55 0
Step-4 Not Optimal Solution
Managers Procurement Production Quality Sales & Marketing HR Deptt Finance
Shringar Shah 20 25 5 0 45 0
Manish Raj 50 30 15 10 0 15
Mayank
0 25 0 35 20 25
Khandelwal
Nand Bhushan 35 0 15 35 25 25
Surbhit Sharma 10 45 10 0 10 15
Vinamra Nanavati 10 0 0 45 55 0
Continued…….
Sales &
Managers Procurement Production Quality HR Deptt Finance
Marketing
Shringar Shah 20 25 5 0 45 0
Manish Raj 50 30 15 10 0 15
Mayank
0 25 0 35 20 25
Khandelwal

Nand Bhushan 35 0 15 35 25 25

Surbhit Sharma 10 45 10 0 10 15

Vinamra Nanavati 10 0 0 45 55 0
Maximised Efficiency Assignment
Managers Department Efficiency
Shringar Shah Finance 85
Manish Raj HR Department 90
Mayank Khandelwal Procurement 90
Nand Bhushan Production 85

Surbhit Sharma Sales & Marketing 90

Vinamra Nanavati Quality 90

Average Efficiency 88.33
Problem-4: Trans-shipment
● Problem of minimization of freight cost from factories to 10 Car Factories through
3 distribution centers
 Problem-4: Trans-shipment-
- Products to be transported from manufacturing facility to distribution centers
- Related Production capacity and storage capacity is tabulated below.

Storage
Manufacturing Production Distribution
Capacity(per
factory Capacity(per day) center
day)
Agra 150 Farakka 300
Bilaspur 180 Goa 350
Cuttack 200 Hyderabad 250
Dwarka 175
Elephantganj 195
 Problem-4: Trans-shipment-
- Freight Cost to Distribution center from manufacturing facility is tabulated below.

Manufacturing
Distribution center
Centre
Cities Farakka Goa Hyderabad
Agra Rs. 15 Rs.13 Rs.18
Bilaspur 14 19 17
Cuttack 11 12 17
Dwarka 13 18 10
Elephantganj 12 16 13
Solution
 Problem-4: Trans-shipment
- Products to be transported from distribution centers to car manufacturers factory.
- Related transportation costs is tabulated below.

Supp
Distribution Centre Car factories Dummy
ly
I J K L M N O P Q R
F 9 7 6 6 7 8 4 5 9 5 0 300
G 6 5 9 5 5 6 9 3 7 9 0 350
H 6 7 8 6 7 8 5 9 5 4 0 250
Demand 50 60 70 65 60 70 65 70 75 65 105 900
Solution
Problem-4: Trans-shipment Solution
Problem-4 Conclusion: Trans-shipment

1. From Agra to Goa and further it supplies to Jhumri-taliya, Lalitpur ,Mumbai, Nagpur and
Patna.
2. From Bilaspur to Farakka and further it supplies to Kanhaiya-nagar, Lalitpur and
Osmanabad.
3. From Cuttack to Goa and further it supplies to Jhumri-taliya, Lalitpur ,Mumbai, Nagpur
and Patna
4. From Dwarka to Hyderabad and further it supplies to Indira-nagar, kanhaiya-nagar and
Lalitpur.
5. From Elephant-ganj to Farakka and Hyderabad and further it supplies as per NOTE-2 & 4.
6. Minimum trans-shipment cost= 14870 (11035 + 3835)
THANK YOU