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CASE

ANALYSIS
ON:
KAMDHENU
DAIRY(A)
Submitted By:Group-9, Sec-A
Anil Joshi
Chetan Chouhan
Khullar Abhinav Braham
Nirnay Bhaskar
P Kameshwari Jyotsna
Rameen Khan
Uttam Kumar

Kamdhenu Dairy
Kamdhenu dairy is a co-operative society in a Western state of India. Its operational model
is that of acquiring raw milk that farmers produced and producing it into the several main
products and several by-products. 12 different main product and by-product combinations
are formed by :
Main products:
1. FA milk for state milk scheme
2. Milk powder (available as whole or skimmed)
3. Baby food
4. Cheese
5. Standardized milk
By products:
1. Ghee
2. Butter
The challenge faced by the co-operative societys managers is on two fronts:
1. The milk supply is varying with seasons, with average supply of Winter (SeptemberApril) being 119,024 litres per day and that of Summer (May to August) being
189,338 litres per day.
2. The daily output of the most profitable product ie FA milk has to be promised in
advance. In case of overshooting the stated output, the state shall not purchase it,
and in case of not meeting the demand, the co-operative shall be fined 8 paise per
litre of shortfall.
As of now, the committed quantity of FA milk to the state by the society was 75,000 litres
per day. The good thing about the situation is that they have no problem in selling all that
they produce. However the problem is that in which direction they should expand so as to
maximize their profit.

Decision Variables
X1: Total amount of (FA Milk + Butter) combination daily
X2: Total amount of (FA Milk + Ghee) combination daily
X3: Total amount of (S.M.P + Butter) combination daily
X4: Total amount of (S.M.P + Ghee) combination daily
X5: Total amount of (W.M.P + Butter) combination daily
X6: Total amount of (W.M.P + Ghee) combination daily
X7: Total amount of (Baby Food + Butter) combination daily
X8: Total amount of (Baby Food + Ghee) combination daily
X9: Total amount of (Cheese + Butter) combination daily
X10: Total amount of (Cheese + Ghee) combination daily

X11: Total amount of (Standardised Milk + Butter) combination daily


X12: Total amount of (Standardized + Ghee) combination daily

Objective Function
Z = 503X1 + 448X2 + 544X3+ 355X4+ 910X5+ 745X6+ 865X7+ 633X8+ 1833X9+ 1610X10+ 757X11+
632X12
(The objective function maximizes profit)

Constraints
1)
2)
3)
4)
5)
6)
7)

Butter: 0.0062X1 +0.0992X3 + 0.0686X5 + 0.0696X7 + 0.0560X9 + 0.0681X11 <= 10000


Ghee: 0.0048X2 + 0.0756X4 + 0.0448X6 + 0.0529X8 + 0.0426X10 + 0.0519X12 <= 2500
Milk Powder: 0.0813X3 + 0.0813X4 + 0.1179(X5+X6) <= 6000
Baby Food : 0.1307( X7 + X8) <= 7000
Cheese : 0.1094( X9 + X10) <= 2000
Raw Milk ( May to Aug): X1 + X2+ X3+X4+X5+X6+X7+X8+X9+X10+X11+ X12 <= 119024
Raw Milk (Sep to April): X1+X2+X3+X4+X5+X6+X7+X8+X9+X10+X11+X12 <= 189338

The excel sheet below shows the solution from EXCEL SOLVER and the optimal value of Z.

Variables
Coefficients
Solution
Z

x1
503
0
1.23E+08

Constraints
Butter
0.0062
Ghee
Milk Powder
Baby Food
Cheese
Raw Milk(May-Aug)
1
Raw Milk(Sep-April)
1
LHS
Butter
7577.426
Ghee
4.38E-14
Milk Powder
6000
Baby Food
6515.641
Cheese
2000
Raw Milk(May-Aug) 119024
Raw Milk(Sep-April) 119024

x2
448
0

x3
544
0

x4
355
0

0.0992
0.0048
0.0813

x5
x6
x7
x8
x9
x10
910
745
865
633
1833 1610
50890.59 2.98E-13 49851.88 4.42E-15 18281.54 1.38E-13

0.0606
0.0756
0.0813

0.1179

0.0696
0.0448
0.1179

0.0529
0.1307

1
1
RHS
10000
2500
6000
7000
2000
119024
189338

1
1

1
1

1
1

1
1

0.056

1
1

x11
759
0

x12
632
4.69E-13

0.0681
0.0426

0.0519

0.1307
1
1

0.1094
1
1

0.1094
1
1

1
1

1
1

<=
<=
<=
<=
<=
<=
<=

10000
2500
6000
7000
2000
119024
189338

Microsoft Excel 12.0 Limits Report


Worksheet: [Kam case.xlsx]Limits Report 1
Report Created: 8/26/2011 2:25:27 AM

Target
Cell
Name
$D$8 Z x1

Cell
$D$7
$E$7
$F$7
$G$7
$H$7
$I$7
$J$7
$K$7
$L$7
$M$7
$N$7
$O$7

Adjustable
Name
Solution x1
Solution x2
Solution x3
Solution x4
Solution x5
Solution x6
Solution x7
Solution x8
Solution x9
Solution x10
Solution x11
Solution x12

Value
122942362.8

Value
0
0
0
0
50890.58524
2.98428E-13
49851.87911
4.42008E-15
18281.53565
1.37779E-13
0
4.68958E-13

Lower
Limit
0
0
0
0
0
2.98428E-13
0
4.42008E-15
0
1.37779E-13
0
4.68958E-13

Target
Result
122942362.8
122942362.8
122942362.8
122942362.8
76631930.27
122942362.8
79820487.41
122942362.8
89432308
122942362.8
122942362.8
122942362.8

Microsoft Excel 12.0 Sensitivity Report


Worksheet: [Kam case.xlsx]Sheet1
Report Created: 8/26/2011 2:24:16 AM

Adjustable Cells
Cell
$D$7
$E$7
$F$7
$G$7
$H$7
$I$7
$J$7
$K$7
$L$7
$M$7
$N$7
$O$7

Name
Solution x1
Solution x2
Solution x3
Solution x4
Solution x5
Solution x6
Solution x7
Solution x8
Solution x9
Solution x10
Solution x11
Solution x12

Final
Value
0
0
0
0
50890.58524
2.98428E-13
49851.87911
4.42008E-15
18281.53565
1.37779E-13
0
4.68958E-13

Reduced
Gradient
-361.9433975
-416.928688
-351.995649
-540.9423653
0
-164.9477161
0
-232.0052567
0
-222.9436803
-105.9414749
-233.0483475

Constraints
Cell
$D$20
$D$21
$D$22
$D$23
$D$24
$D$25
$D$26

Name
Butter LHS
Ghee LHS
Milk Powder LHS
Baby Food LHS
Cheese LHS
Raw Milk(May-Aug) LHS
Raw Milk(Sep-April) LHS

Final
Value
7577.426248
4.38117E-14
6000
6515.6406
2000
119024
119024

Lagrange
Multiplier
0
0
381.6793925
0
8848.263521
865
0

Upper
Limit
0
0
0
0
50890.58524
2.98428E-13
49851.87911
4.42008E-15
18281.53565
1.37779E-13
0
4.68958E-13

Target
Result
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8
122942362.8