# Kamdhenu Case

Topics: Milk, Butter, Dairy product Pages: 5 (1412 words) Published: August 28, 2011
DECISION ANALYSIS

CASE STUDY

Kamdhenu Case

GROUP 5

Abhijeet Mahajan
Amit Vijay
Bishakha Majumdar
Gaurav Khatri
Sahil Sambyal
Sakshi Makkar
Vaibhav Rastogi

Introduction:
The Kamdhenu Dairy is a cooperative of the dairy farmers – located in Sanand, a small town in one of the western states of India. Set up with a goal to ensure a steady market and revenue for the small dairy farmers, the Kamdhenu Dairy supplies pasteurized milk to the State Government – in a fixed quantity (75000 litres/day), throughout the year. However, the production of milk has wide seasonal variations – with production of milk in winter being 250 % of that in summer. The additional milk is used for producing other milk products. The problems before the KD are as follows:

1. Finding the optimum product mix.
2. Deciding if they should continue with the loss making products – cheese and baby food.

Question 1: Should Cheese be dropped from the product line ass suggested by Mr. Ramaswamy? Answer: After the analysis, as is clearly visible from the value of the shadow price of the Cheese, it’s both positive and large than the values of other products. Hence, we should continue with the production of cheese. Microsoft Excel 14.0 Sensitivity Report| | | | | |

Worksheet: [DA Kamdhenu.xlsx]Sheet2| | | | | |
Report Created: 8/26/2011 3:52:39 AM| | | | | |
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Variable Cells| | | | | |
|  |  | Final| Reduced| Objective| Allowable| Allowable| | Cell| Name| Value| Cost| Coefficient| Increase| Decrease| | \$B\$18| Solution x1| 7.5957| 0| 503| 407| 55|
| \$C\$18| Solution x2| 0| -55| 448| 55| 1E+30|
| \$D\$18| Solution x3| 0| -366| 544| 366| 1E+30|
| \$E\$18| Solution x4| 0| -555| 355| 555| 1E+30|
| \$F\$18| Solution x5| 2.4743| 0| 910| 923| 45|
| \$G\$18| Solution x6| 0| -165| 745| 165| 1E+30|
| \$H\$18| Solution x7| 0| -45| 865| 45| 1E+30|
| \$I\$18| Solution x8| 0| -277| 633| 277| 1E+30|
| \$J\$18| Solution x9| 1.83| 0| 1833| 1E+30| 223|
| \$K\$18| Solution x10| 0| -223| 1610| 223| 1E+30|
| \$L\$18| Solution x11| 0| -151| 759| 151| 1E+30|
| \$M\$18| Solution x12| 0| -278| 632| 278| 1E+30|
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Constraints| | | | | |
|  |  | Final| Shadow| Constraint| Allowable| Allowable| | Cell| Name| Value| Price| R.H. Side| Increase| Decrease| | \$N\$10| Cheese Constraint Total| 1.83| 923| 1.83| 2.4743| 1.83| | \$N\$11| Raw Milk Procurement Total| 11.9| 910| 11.9| 2.615355172| 2.4743| | \$N\$12| FA Milk Govt Supply Total| 7.5957| -407| 7.5957| 2.4743| 2.615355172| | \$N\$6| Butter Constraint Total| 2.9951592| 0| 10| 1E+30| 7.0048408| | \$N\$7| Ghee Constraint Total| 0| 0| 2.5| 1E+30| 2.5| | \$N\$8| Milk Powder Constraint Total| 3.587735| 0| 7.38| 1E+30| 3.792265| | \$N\$9| Baby Food Constraint Total| 0| 0| 5.36| 1E+30| 5.36|

x1| x2| x3| x4| x5| x6| x7| x8| x9| x10| x11| x12| FA Milk + Butter| FA Milk + Ghee| SMP + Butter| SMP + Ghee| WMP + Butter| WMP + Ghee| Baby Food + Butter| Baby Food + Ghee| Cheese + Butter| Cheese + Ghee| SM + Butter| SM + Ghee| Question 2: What should be the production program for the Dairy if it had no contractual obligations to supply FA Milk to the State Milk Scheme? Answer1: The production scheme for both the summer as well as the winter months can be found out from the two tables by just looking at the final values.

For Summer Months (May to August)
Microsoft Excel 14.0 Sensitivity Report| | | | | |
Worksheet: [DA Kamdhenu.xlsx]Sheet2| | | | | |
Report Created: 8/26/2011 11:46:17 AM| | | | | |
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Variable Cells| | | | | |
|  |  | Final| Reduced| Objective| Allowable| Allowable| | Cell| Name| Value| Cost|...