Minimizing cost in transporting milk for Sudha Dairy

By:

P Santosh Kumar (09FN-075)

Pushkar Kumar Singh (09FN-082)

Rajeev Kumar (09FN-088)

Objective

To minimize the cost for transporting milk to various distribution centers for Sudha Cooperative Dairy, Bihar & Jharkhand and to choose as low cost potential new site

Usages of Operations Research Airline Industry (routing and flight plans, revenue management) Telecommunications (network routing, queue control) Manufacturing Industry (inventory control, production scheduling, capacity planning) Transportation

Sudha Cooperative Dairy Co-operative dairy came into existence in 1983 Processes around 780000 litre of milk daily Products like Milk Curd, Pedda, Lassi, etc.

Current Facilities

Potential New Site

Data AnalysisThe Fig shows the excel solver output of the minimum cost incurred in transporting Raw Milk to Sasaram Processing Unit

Data Analysis (Cont’d)The Fig shows the excel solver output of the minimum cost incurred in transporting ProcessedMilk from Sasaram Processing Unit

Data Analysis (Cont’d)The Fig shows the excel solver output of the minimum cost incurred in transporting Raw Milk to Mahawa Processing Unit

Data Analysis (Cont’d)The Fig shows the excel solver output of the minimum cost incurred in transporting ProcessedMilk from Mahuwa Processing Unit

Data Analysis (Cont’d)The Fig shows the excel solver output of the minimum cost incurred in transporting Raw Milk to GAYA Processing Unit

Data Analysis (Cont’d)

The Fig shows the excel solver output of the minimum cost incurred in transporting ProcessedMilk from GAYA Processing Unit

Conclusion

Conclusion (Cont’d)From a purely financial viewpoint, Gaya is the best

site for the new Milk processing unit. This site would save the company about 13 Lakh rupees annually as compared to the Mahuwa alternative and about 73 lakh rupees as compared to the Sasaram alternative.

However, as with any site selection decision, management must consider a wide variety of factors, including some nonfinancial ones.Management also must consider whether there are any cost trends or trends in the marketplace that might alter the picture in the future.

RecommendationsFrom the value that we have obtained we

would recommend Sudha to start its new processing unit at Gaya , this is going to reduce collection and distribution for tha company.

BibliographyAnish Mishra , manager at Sudha dairy.www.energymanagertraining.com/dairy/

MilkProcessing.htm dir.indiamart.com/impcat/milk-processing-

plants.html