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ICE CREAM PARLOUR LPP PROBLEM

Details :Amul parlor, near vanaz company, kothrud


We visited to our nearest AMUL ice cream parlor shop which is near our residence
consisting of 2 freezer of 500 liters each. There we collected information in 3 variant
sizes as family pack, large cups equivalent to large cones and small cups similar to small
cones. So here family pack we considered of 1 liter, large cups & cones of 60 ml and
small cups & cones of 45 ml.
Here for using linear programming we took profit as our objective function for
maximizing profit and thus as per the discussion with parlor owner he said the profit is
around 18% so by deducting electricity bill and freezer depreciation he remains with 12%
of the profit so our decision variable will we 12% as our net profit of price.
We have considered profit on per liter basis as family pack calculation is obtained easily
but for large cup we obtained profit on 60 ml and then converted to per liter basis to keep
all the denominations same for profit in liters.
So based on the data collected we will find the objective function as
How many numbers of boxes the parlor should sold to a particular flavor to earn
the maximum profit
Objective: Profit maximization
Define: Decision Variable
X1 = quantity of vanilla flavor sold or stored with the size of 1 liter.
X2 = quantity of chocolate flavor sold or stored with the size of 1 liter.
X3 = quantity of rajbhog flavor sold or stored with the size of 1 liter.
X4 = quantity of mango flavor sold or stored with the size of 1 liter.
X5 = quantity of butter scotch flavor sold or stored with the size of 1 liter.
X6 = quantity of green pista flavor sold or stored with the size of 1 liter.

X7 = quantity of vanilla flavor sold or stored with the size of 60 ml.


X8 = quantity of butter scotch flavor sold or stored with the size of 60 ml.
X9 = quantity of vanilla flavor sold or stored with the size of 40 ml.
X10 = quantity of butter scotch flavor sold or stored with the size of 40 ml.
Objective Function:
ZMax= 7.2X1 + 9.6X2 + 14.4X3 + 10.8X4 + 9X5 + 8.4X6 + 50X7 + 50X8 + 30X9
+ 30X10
Vanilla family pack profit = price*12%
60*0.12 = 7.2
It would be same for rest of 5 flavor as depending on price of ice cream flavor.
Vanilla & butter scotch large cup& cones profit = price of (60 ml)*12%
25*0.12 = 3
So if profit on sale of 60 ml of cup gives 3 rs as profit so for 1 liter it would be 50 rs as
this has to be done because we cannot compare family pack of 1 liter profits with 6o ml
of large cups profit so we have calculated profit for large cups and small cups in
denominations of 1 liter.
Vanilla & butter scotch small cup & cones profit = price of (40 ml)*12%
10*0.12 = 1.2
For 40 ml profit is 1.2 rsso for 1 liter we would get profit as 30 rs.
Under Constraints:
Here we have compared data with the price as we cannot compare price which is
mentioned in the table and the amount of liter we get in the solution so we have made
constraints in price as price*units of demand.
Vanilla family pack:
<
60*100
Chocolate family pack:
<
80*45
Rajbhog family pack:
<
120*45
Mango family pack:
<
90*50
Butter scotch family pack:
<
75*45
Green pista family pack:
<
70*35
Vanilla large cups & cones:
<
(25*1000*60 ml)/1000
Butter scotch large cups & cones:
<
(25*1000*60 ml)/1000
Vanilla small cups & cones:
<
(10*1250*40 ml)/1000
Butter scotch small cups & cones:
<
(10*1250*40 ml)/1000
The quantity for liter we obtain as a solution would not exceed by 500 liter as the freeze
capacity is 500 liter so
L18:L27 = 500
Large cup& conescapacity should not exceed by 60 liter per flavor as per the demand
Vanilla large cup & cones: R18 < 60
Butter scotch large cup & cones: S18 < 60
Small cup & cones capacity should not exceed by 60 liter per flavor as per the demand
Vanilla small cup & cones: T18 < 60
Butter scotch small cup & cones: U18 < 60

family pack
objecti
ve
coeffici
ent
price

vani
la

chocol
ate

rajbh
og

man
go

gree
n
pista

large cup&
cones
vani butt
la
er
scot
ch
50
50
25
25

small cup&
cones
vani butt
la
er
scot
ch
30
30
10
10

7.2
60

9.6
80

14.4
120

10.8
90

butt
er
scot
ch
9
75

360
0
360
0
60

3600

5400

4500

3375

2450

1500

1500

500

500

3600

5400

4500

3375

2450

1500

1500

500

500

45

45

50

45

35
500

60
<=
60

60
<=
60

50
<=
50

50
<=
50

8.4
70

Profit

Max

117
51

From this above we obtained that by if we do not put constraints in large cup &
small cup as demand as less than we would get all to liter quantity in large cup for
vanilla as it has its highest profit.
So in solution we will get liter of quantity to be sold or are currently sold at Amul
ice cream parlour.
Vanilla family pack:
60 liter
Chocolate family pack:
45 liter
Rajbhog family pack:
45 liter
Mango family pack:
50 liter
Butter scotch family pack: 45 liter
Green pista family pack:
35 liter
Vanilla large cup & cones: 60 liters
Butter scotchlarge cup & cones: 60 liters
Vanilla small cup & cones: 50 liters
Butter scotch large cup & cones: 50 liters
Hence by getting this all calculation using linear programming we can suggest the
particular parlor to sell the products more having shadow price and limit sale
where there is reduced cost.

Answer Report
Constraints
Cell
Name

Cell

Formula

Stat

Sla

=
500

Value
$L$1
6
$M$
16
$N$
16
$O$
16
$P$1
6
$Q$
16
$R$1
6
$S$1
6
$T$1
6
$U$
16
$T$1
8
$U$
18
$W$
18
$R$1
8
$S$1
8

vanila

3600

chocolate

3600

rajbhog

5400

mango
butter
scotch
green
pista

4500

vanila
butter
scotch

1500

vanila
butter
scotch

500

vanila
butter
scotch

50

3375
2450

1500

500

50

500

vanila
butter
scotch

60
60

$L$16<=$L
$17
$M$16<=$
M$17
$N$16<=$
N$17
$O$16<=$
O$17
$P$16<=$P
$17
$Q$16<=$
Q$17
$R$16<=$
R$17
$S$16<=$S
$17
$T$16<=$T
$17
$U$16<=$
U$17
$T$18<=$T
$18
$U$18<=$
U$18
$W$18=$V
$19
$R$18<=$
R$20
$S$18<=$S
$20

us
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng
Bindi
ng

ck
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Sensitivity Report
Variable Cells

Cell
$L$1
8
$M$1
8
$N$1
8
$O$1

Name

Fin
al
Val
ue

Reduced
Cost

Objecti
ve
Coeffici
ent

Allowa
ble
Increas
e

Allowa
ble
Decrea
se

vanila

60

7.2

1.2

1E+30

chocolate

45

9.6

1E+30

2.4

rajbhog
mango

45
50

0
0

14.4
10.8

1E+30
1E+30

7.2
3.6

8
$P$1
8
$Q$1
8
$R$1
8
$S$1
8
$T$1
8
$U$1
8

butter
scotch
green
pista

45

1E+30

1.8

35

8.4

1E+30

1.2

vanila
butter
scotch

60

50

1E+30

42.8

60

50

1E+30

42.8

vanila
butter
scotch

50

30

1E+30

22.8

50

30

1E+30

22.8

Constra
int
R.H.
Side

Allowa
ble
Increas
e

Allowa
ble
Decrea
se

3600

1E+30

0.03

3600

4800

0.06

5400

7200

0.04

4500

5400

0.024
0.017142
857

3375

4500

2450

4200

1.712

1500

1.712

1500

Constraints

Cell
$L$1
6
$M$1
6
$N$1
6
$O$1
6
$P$1
6
$Q$1
6
$R$1
6
$S$1
6
$T$1
6
$U$1
6
$T$1
8
$U$1
8
$W$
18

Analysis

Name
vanila
chocolate
rajbhog
mango
butter
scotch
green
pista
vanila
butter
scotch

Fin
al
Val
ue
360
0
360
0
540
0
450
0
337
5
245
0
150
0
150
0

Shadow
Price

vanila
butter
scotch

500

2.28

500

600

500

2.28

500

600

vanila
butter
scotch

50

1E+30

50

1E+30

500

7.2

500

60

Here we are getting 11,751 rs as profit per freezer and the data is for single freezer but the
data is for summer season as thus the parlor also has 12 family pack flavors and 6 variety
in large & small cups and cones. The flavor we took are the most commonly sold in the
market with highest sales. As the freezer get emptied in a week so as per the ownersecond
freezer get emptied in 2 weeks so if we want to calculate per month profit it would be

11,751*4+11,751*2= 70,506rs.
But here we are considering per freezer per week so our decision would be based on it.
Being a manager we should take care about the space (area), storage and 8 months being
off season then there would be more cost of electricity as well as area acquired. So at that
period owner should accommodate or run only 1 freezer and another should be utilized
for storage of milk products or it can rent it for other storage purpose so that it can earn
something from it which is more than the expense keeping it idleand utilizing the floor

area which would be our opportunity cost for other business.


But on the analysis part we would suggest that all the flavors are binding constraint but
there is a condition to storage capacity so more of them cant be stored and products are

refilled after 1 week.


Here in variable cells under sensitivity report we do not have any reduced cost as all the

constraints are binding and if any quantity is increased than it can be sold.
As allowable decrease as in chocolate family pack state that if 2 liter of pack has been
reduced to 43 than our profit will be reduced by 19.2 rs. But if it is reduced to 42 liter
than our profit comes to 11,708 rs which comes to the difference of 43 rs. Hence same
would be the case for the other flavor and other cups. Thus if the value is decreased more
than the allowable decrease than drastic reduction in profit is seen. If we reduce the
quantity up to the allowable decrease than that price reduction would be reduced as to the

objective coefficient.
In constraints of chocolate family pack we are getting allowable increase of 4800rs as it
would be increase from 45 liter to 105 liter as by doing this our profit has increased
by144 rs as 0.03*4800. As shadow is also interpreted as if value of a product is 10 rs and
shadow price is 2 than from bring product from outside or arranging by any means
possible profit can be obtained up to 12 but after 12 we would incur loss. As the value
increases for 10 to 12 our profit goes on reducing. This can be same for the rest of the
flavor and for arrangement of additional quantity it can use other freezer if it is filled half
or it can outsource from other place.

Based on the previous solver problem we can take assumption that as there is more profit
on large cups and cones so I would recommend it to increase its sales as being a franchise
it cannot reduce the price so offering the choice to buyers buying other products would
help to increase the sale, whereas the owner is only maintaining the parlor so there is no

additional cost as to the electricity where he has to run both the freezer 24X7.
Other steps to undertake would be it should stick cartoon wallpaper so that children in the
parlor get excited and by such ways it can sale it candies and cones so it would help to
sell more for that products.