Varun nagar agricultural cooperative society

Anant Tiwari 33005 Ashish Agrawal 33007 Niket Vanker 33031 Prachi Patel 33035 Priyanka Mehta 33038 Puja Barman 33039

Case summary
VNACS had with it 100 tones of paddy in storage,

payment of which was due to t he members of the society. Mr. Agarwal, manager of the society was planning to sell at about Rs. 5000/- per ton. But there is a possibility that if the society waited for six months it could get better returns. After meeting all the expenses of the operations of the society and before repaying the overdraft o fthe bank. The society had a cash balance of Rs. 500000/-. The bank charged an annual interest of 10%. NFC was offering 2000 bags of fertilizer at a special price of Rs. 250/- per bag, if the deliveries accepted within two weeks.

Objectives
Long term :-

To ensure sustainability of the cooperative through: 1. Confidence of farmers. 2. Confidence of bank Short term :To decide on the purchase plan for fertilizers and the selling plan of paddy, so as to ensure maximum returns to farmers without incurring any losses to the cooperative

Assumption
In September we will repay the bank overdraft

along with interest. Fertilizers required after six months.

Criteria
1.Prompt payment to farmers against their paddy produce 2.Profit maximization through sell of paddy and purchase of fertilizers. .Repayment of bank overdraft along with interest.

Alternatives
VNACS.xlsx

Choose the best alternative

Evaluation of Alternatives:

The farmers are being given the returns for paddy

in april in each case. Thus, the difference between the four alternatives lies in the way fertilizer purchases are handled. Since the fourth alternative gives the highest profit in terms of the subsidy in fertilizer purchase, we shall go with it as our preferred plan of action.

Contingency plan
In case the price of the paddy doesnt go up to

Rs. 6000/- per ton, then we may not be able to provide fertilizers at Rs. 274/- per bag. In the worst case, if the market price of fertilizers also falls then we shall provide fertilizer at its market price. In this case, the loss to the co-operative will be covered through the bank overdraft which will not be repaid in September.