Varun Nagar Agricultural Cooperative Society Case analysis(VNACS)

Situation Analysis Manager-Mr. Agarwal

Assets:5 lacks cash + 5 lacks worth paddy stock Liabilities: 5lacks + 5,29,167rs bank over draft. Other persons in case: farmers and Mr.Dwiwedi

Problem Defnition

Statement of Objective

Functions: marketing farmers paddy supplying(seeds, fertilizers) to farmers

How to maximize profit To meet the expectations in favor of coop and also serving in the society? best interest of farmer members. Measure whether to sell paddy or not? To sustain the good image of the Co-operative society To accept the offer or in the years to come. not from fertilizers To maintain good relation with Jaldhara District Cooperative Bank, and to remain credit worthy.

Criteria for evaluation

Generation of options

Evaluation of options

Payment for the 1. Should we retain the procured paddy to paddy stock? farmers. 2. Should he buy fertilizer? Maximum benefit to the Alternatives: farmers. Sell paddy stock now and do not buy fertilizer. To maintain Retain paddy stock till credit worthiness September/ October, with bank. and purchase fertilizer now. To maximize the Retain paddy stock till total revenue for September/ October, but the Co-operative do not purchase society fertilizer. Sell paddy stock now, and purchase fertilizer now.

Option1:If we sell paddy now we get 100tons*50000=5lakhs. We can pay to farmers but we cant pay interest to bank. Option2:If we want to buy fertilizers by retaining paddy we need additional loan amount of 5.7lakhs which is difficult to get funding. Option3:Retain paddy gives 6lakhs in October . After paying to farmers and bank we get additional amount of 27,833rs. Option4: Option 4 gives net loss of 30,167rs.(5lakhs+70,000-6,00,167 = loss of 30,167rs.

Decision making

Action plan

Contingency Planning
1st option has less loss compared to others and no significant risk. So we sell paddy and not retaining fertilizers is contingency Planning.

Final alternative is to retain paddy stock and not to buy fertilizer. It meets all the criteria. this alternative earns profit while the rest alternatives are making losses.

3rd one fulfills the objective of society. it was formed that the larger interest of the stakeholders should be served. This way society is able to pay the farmers the value to its produce as well as build corpus of the society There is no significant risk in it.

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