Section-2, Group-8, GreatLakes Institute of Management

Section 2, Group 8

Submitted by,

Deepika Prakash FT12 210

Najeeb Imran Khan FT12 231

Rahul Mahesh Pulupudi FT12 244

Rohit Jadye FT12 248

Vivek Pratap Singh FT12 276

RED BRAND CANNERSQM Case

Section-2, Group-8, GreatLakes Institute of Management

Case Overview

Section-2, Group-8, GreatLakes Institute of Management

Description of Objectives & Constraints

To calculate optimized product mix of Red Canners products to maximize profit.!!

Constraints –◦ Demand Constraint◦ Availability Constraint◦ Quality Constraint

&

Whether to buy more Grade A Tomatoes.??

Section-2, Group-8, GreatLakes Institute of Management

Grade A

Canned Whole Tomato

Tomato Juice

4

Input & Output Variables

Grade B

Canned Whole Tomato

Tomato Juice

Tomato Paste

Section-2, Group-8, GreatLakes Institute of Management

•Weight of Grade A Tomato in Canned Whole Tomato

AC•W

eight of Grade B Tomato in Canned Whole Tomato

BC

•Weight of Grade A Tomato in Juice

AJ

•Weight of Grade B Tomato in Juice

BJ

•Weight of Grade A Tomato in Paste

AP

•Weight of Grade B Tomato in Paste

BP

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Variables in Decision Making

Section-2, Group-8, GreatLakes Institute of Management

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Objective Function Maximize Profit:

1.48 X (AC+BC) / 18 + 1.32 X (AJ + BJ) / 20 + 1.85 X (AP+BP) / 25 – 180,000.

OR

MAX.0.0822AC + 0.0822BC + 0.066AJ + 0.066BJ + 0.740AP + 0.740BP – 180,000.

Section-2, Group-8, GreatLakes Institute of Management

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Subjected to: Demand Constraint (from exhibit – 1)

Constraints-1. AC + BC ≤ 14,400,000.2. AJ + BJ ≤ 1,000,000.3. AP + BP ≤ 2,000,000.

Product Demand Forecast

Weight Total weight in Pounds

Canned Tomato 800,000 18 14,400,000

Juice 50,000 20 1,000,000

Paste 80,000 25 2,000,000

Section-2, Group-8, GreatLakes Institute of Management

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Subjected to:

Availability ConstraintTotal tomatoes available = 3,000,000 poundsGrade A = 600,000.Grade B = 2,400,000.

Constraints-1. AC + AJ + AP ≤ 600,000.2. BC + BJ + BP ≤ 2,400,000.

Section-2, Group-8, GreatLakes Institute of Management

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Subjected to:Quality Constraint

Constraints(Weighted avg. method)-1. AC – 3BC ≥ 0.2. 3AJ – BJ ≥ 0.3. BP ≥ 0.

Product Min. Quality

Canned (AC+BC) 8

Juice(AJ+BJ) 6

Paste(AP+BP) 5

Section-2, Group-8, GreatLakes Institute of Management

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Solution

No since Fixed cost increases by 0.75million and revenue increases by only 0.7million

Section-2, Group-8, GreatLakes Institute of Management

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Optimum Sloution

Section-2, Group-8, GreatLakes Institute of Management

We can further consume

600,000 pounds of Grade A Tomatoes. Increase in

revenue by .0903 cents per

pound.

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We should buy more.?

Section-2, Group-8, GreatLakes Institute of Management

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THANK YOU