Operations Research

3rd submission
On Manipal Bakery

Presented to:
Prof. Sayan Mukherjee
Operation Department

Group – AG1
Aditya Kumar Pandey – 18S604
Anisha Jaiswal – 18S608
Manu Krishna U – 18S627
Rahul Mishra – 18S637
Siddharth Jain – 18S650
Contents
Interpretation ......................................................................................................................................... 2
Inference ................................................................................................................................................. 2
Recommendations .................................................................................................................................. 3
Limitations .............................................................................................................................................. 3
Learnings from the project ..................................................................................................................... 4

1|Page
Interpretation
The project described the derivation of an optimal product mix per day that can be produced by
Manipal Bakery to maximize the profit. Also, it was deduced that the total labour time can be reduced
by a few minutes to assign the task effectively.

Inference
Based on the result of the project, it is concluded that Manipal Bakery should reduce their production
of bread by 10 packets and biscuit by 10 kg as it will help them to reduce the expenses to 3527.56 and
maximize profit to 2860 per day.

In sensitivity report we tried to unearth the following inferences:

Final Value (Resource utilized) can be understood by relating it to Constraint R.H. side (Resource
available). For storage space, area available is 500 sq. ft. but only 31.1 sq. ft. is required (rest is
underutilized). Similarly, for skilled labour 975 minutes are required to produce the product mix but
1920 minutes of labour is being used, so here one labour can be easily reduced, and cost of production
will also be reduced.

Shadow price - Since there is slack available in storage space, machine time and skilled labour there
is no requirement to pay any extra amount to get additional units of these resources, so here the
reduced cost is 0. But, in case of shelf life since the full time is being utilized and the reduced cost is
non-zero. This implies that Rs.2 extra can be paid for getting one extra day as a shelf life of bread and
similarly Rs.46.66 and Rs.2.33 can be paid to get one extra unit of shelf life of cake and biscuit
respectively. This will lead to increase in the storage time or shelf life without getting the product
perished and would in turn increase the production.

Allowable increase means that the number of days of shelf life of products can be increased by 40, 60
and 300 days to get the same product mix respectively i.e., the current product mix (quantity) of bread,
cake, and biscuit will remain the same if we increase the shelf life of bread, cake and biscuit by 40, 60,
300 days.

Allowable decrease is “constraint R.H. side – final value” (in the sensitivity report) i.e. the slack
available.

2|Page
Reduced cost is 0, which means that they cannot increase their profit because if they increase their
profit then the sales volume would change.

If the reduced cost would be positive, it would mean that profit (objective coefficient) could be
increased by that value without any change in the number of items sold (Final value).

Allowable decrease – an amount that can be decreased in the profit of each product so that same
number of products are sold.

Allowable increase – an amount that can be increased in the profit of each product so that same
number of products are sold.

Based on the results of the task assignment model, it can be inferred that the total labour time can be
reduced from 130 (45 + 45 + 30 + 10) minutes to 114 (42 + 38 + 26 + 8) minutes by restructuring the
assignment time of each task as per the efficiency of the labour.

Recommendations
The findings and analysis of the project has led to the recommendation that Manipal Bakery should
produce 190 packets of bread, 20 kgs. of biscuits and 10 kgs. of cakes per day to maximise the profit.
Also, the labour time assigned to each of the four labours for various stages of production i.e.
packaging, production of bread, production of biscuits and production of cake should be 42 mins, 38
mins, 26 mins, 8 mins respectively.

Application of this recommended product mix and task assignment would lead to profit maximization
and optimal work distribution while keeping in mind the constraints faced by Manipal Bakery.

Limitations
The project has been carried out under certain limitations which are as follows:

i) Manipal Bakery produces and sells many food items, but here the study is limited to bread,
biscuits and cakes as they are the items of maximum demand.
ii) Calculation of the storage space of each product is approximated, which is sometimes
subject to change based on the requirement of Manipal Bakery.

3|Page
Learnings from the project
The project was based on real-time data collected from Manipal Bakery which provided us the hands-
on experience of operations research. The major learnings from the project are as follows:

i) Collection of primary data in real-life scenario

ii) Clarity of the concepts of linear programming problem
iii) Interpretation of excel sensitivity reports
iv) Application of assignment model

4|Page