Operations Research

Abhijit Naik
(2009061)
Elaine Fernandes
(2009077)
Ganesh Iyer
(2009078)
Mansi Navlakha
(2009088)
NitinC
(2009096)
Case Background
Mahalaxmi Enterprises
Located in Kundaim Industrial Estate
Distributors & retailers of hardware & paints
Distributor of Acetylene, Oxygen & Nitrogen
cylinders.
Distributes cylinders to engineering and
cutting workshops in Ponda, Verna , Corlim
& within Kundaim.

 Most selling Items

A ctu a lp h o to fro m M a h a la xm i’ s
sto re h o u se
Berger Red oxide primer 20ltrs Acetylene Cylinders
 Vehicles

2 Tata Ace’s
1st bought in 2006 (mileage 12kmpl) 1 Tata 407
2nd bought in 2009 (mileage 14kmpl) Bought in 2005 (mileage 7kmpl)
Cost Structure
 Variable cost per trip is the diesel charges per trip

Since the variable cost per trip does not consider the carrying
capacity of the vehicles , we decided to calculate the variable
cost / trip / cylinder .
Total cost per trip / cylinder = Fixed
cost / trip / cylinder + variable cost
/ trip / cylinder

The total costs per trip per cylinder is considered for the
Assignment model . The assignment model will help us assign the
vehicles to the destinations such that the cost is minimized .
Since the number of lines equals the order of the square
matrix ( 3lines = 3X3 matrix ), we have reached an optimal
solution after 3 steps

The cells highlighted in yellow are the assignments of

the vehicles to the respective destinations
 SOLUTION :

According to the transportation model , the

total cost / trip / cylinder is 62 . 9 Rs
 EOQ for Red Oxide Primer

Cost of a 20 litre container is 2263 Rs

Demand for this paint is the highest among all
categories available
Follows FIFO
Sometimes the metal containers rust from the bottom
and are classified under damages
Storage costs comprise of the shed rental which is
used to store the paint inventory
Handling charges comprise of payments to workers for
loading and unloading the inventory .
Administration charges comprise basic stationery costs
Total Carrying costs

ORDER DETAILS
Calculations…
EOQ CALCULATIONS

EOQ VALUE
=
EOQ VALUE = 22 UNITS
ORDERS PER YEAR = 22 Orders
Cost Savings
 

 THANK YOU