Assignment 2

Food Corporation of India

Submitted By:
Group 10 (Section: C) ALOK BHARTI PGP2011529 DEBOJYOTI BURMAN PGP2011615 KANNAN G A PGP2011678 PA BADRINARAYANAN PGP2011764 PUPPALA MOUNIKA PGP2011802 ROOPAK KUMAR GUPTA FPM

UNDERSTANDING THE PROBLEM

This case is about the Food Corporation of India, Andhra Pradesh. The FCI undertakes the inter-state & intra-state movement of food grains to meet the requirements of deficit areas. In this case were considering intra-state movements of food grains organized by Food Corporation of India. The intra-state movements have been further divided into first movement and second movement. i) First movement basically is said to occur when the rice/paddy is procured from farmers and millers and moved to other depots in same district. ii) Second movement is said to take place when commodity is transferred from depots of one district to either depots of other districts or depots in the same district. The regional office of FCI, Hyderabad prepares monthly transportation plans which give the quantity of rice to be transferred to other districts. The plans take into account the demand & supply patters, volume of procurement, and storage facilities of various depots involved. All the dispatches generally take by trains except to Karimanagar as it is no railway connection. Dispatches to Karimnagar are made via roads at a rate of Re 0.05 per quintal per kilometre. PROBLEM: We have to find out an optimal pattern of rice movement to meet the demands of the districts with minimum costs. The cost structure between the different Depots and districts can be tabulated as follows:
Vishakha 5.01 6.66 7.98 8.25 16.59 Anant 14.19 12.15 11.28 8.67 12 Hydera bad 10.95 9.36 8.55 8.25 5.1 Adilab ad 10.53 9.06 8.1 7.83 9.69 Khamm an 7.08 5.67 4.62 4.26 9.69 Karimna gar 17.5 13.875 15 12.75 4.25 Waran gal 6.15 7.32 6.51 6.09 8.22 Kurno ol 11.85 11.58 10.26 8.25 9.66 Cuddap ah 13.65 14.94 14.79 12.69 14.58 Chitto or 13.23 12.24 11.28 10.56 18.15

EG WG Krishna Guntur Nizamab ad

All costs are in Rs per quintal.

The cost of road travel to Karimnagar has been calculated by measuring the distance on the map and using the given scale of 1cm = 50 Km. For e.g. the distance between Krishna & Karimnagar was found to be 6 cm and thus using scale, weve 6 cm = 6*50 km = 300 km. Now the price per quintal per km is given as Re 0.05. So the cost per quintal of freight from Krishna to Karimnagar comes out to be 300*0.05 = Rs 15 per quintal. The quantity transported is given in the case as:
Vishakhapat nam Ananta pur Hydera bad Adilab ad Kham man Karimna gar Waran gal Kurnoo l Cudda pah Chittoo r

EG WG Krishna Guntur Nizamab ad

80000 20000 0 0 0

0 100000 0 0 0

0 20000 80000 0 0

0 0 10000 0 0

0 0 10000 0 0

0 0 25000 0 0

0 0 5000 0 0

0 0 0 40000 0

0 0 0 10000 0

0 0 0 20000 10000

All values in the table are in quintals.

The total cost of transportation comes out to be = Rs. 40,04,550 Now we found out the optimal solution for the given problem. As the case involves three varieties of rice, viz. coarse, fine & S. Fine, weve calculated the optimal solutions for the three cases differently. 1. Coarse: The optimal solution in this case comes out to be:
Vishakhapat nam EG WG Krishna Guntur Nizamab ad 0 0 0 0 0 Anantap ur 0 0 5000 45000 0 Hyderab ad 0 25000 5000 0 0 Adilab ad 0 0 10000 0 0 Khamm an 0 0 10000 0 0 Karimna gar 0 15000 0 0 10000 Warang al 0 5000 0 0 0 Kurno ol 0 0 30000 0 0 Cuddap ah 0 5000 0 0 0 Chitto or 0 0 20000 0 0

All values in the table are in quintals.

The total cost in this case comes out to be = Rs 17,45,825 2. Fine: The optimal solution in this case comes out to be:
Vishakhapat nam EG WG Krishna Guntur Nizama bad 60000 20000 0 0 0 80000 Anantap ur 0 25000 0 25000 0 50000 Hydera bad 0 20000 0 0 0 20000 Adilab ad 0 0 0 0 0 0 Khamm an 0 0 0 0 0 0 Karimna gar 0 0 0 0 0 0 Warang al 0 0 0 0 0 0 Kurno ol 0 0 10000 0 0 10000 Cuddap ah 0 5000 0 0 0 5000 Chitto or 0 0 10000 0 0 10000

All values in the table are in quintals.

The total cost in this case comes out to be = Rs 14,31,600

3

3. S Fine:
Vishakhapat nam EG WG Krishna Guntur Nizamab ad 20000 0 0 0 0 Ananta pur 0 0 0 0 0 Hyderab ad 0 20000 30000 0 0 Adilab ad 0 0 0 0 0 Khamm an 0 0 0 0 0 Karimna gar 0 0 0 0 0 Waran gal 0 0 0 0 0 Kurno ol 0 0 0 0 0 Cuddap ah 0 0 0 0 0 Chitto or 0 0 0 0 0

All values in the table are in quintals.

The total cost in the optimal solution of this case comes out to be = Rs 5,43,900 Hence the total cost in optimal solution comes out to be = Rs 17,45,825 + 14,31,600 + 5,43,900 = Rs 37,21,325 Hence, following observation can be made: 1. Optimal Cost = Rs 37,21,325 2. Old Cost = Rs 40,04,550 Thus, we can conclude that by following the optimum solution, we can reduce the costs by Rs 2,83,225.