Procurement Of Explosives -CIL

Quantitative techniques -2
GROUP-2

Introduction
The case deals with the optimum procurement
and allocation plan of explosives for various
subsidiaries of Coal India Limited (CIL).
Explosives, an expensive input, play a crucial
role in the process of coal mining. A good
amount of money is also spent on its
transportation.
A systematic approach is needed for the
proper procurement and allocation of
explosives, so as to optimize on transportation
cost, as well as to ensure balanced
despatches and reliability

Objective
To move goods at the least possible
price from one place to another
To make sure the goods are allocated
efficiently, in other words not less or
more than required

Techniques Used
Concepts of transportation and
assignment used to solve the case
These techniques have been put to
use after through reading of the case
TORA software has been put to use,
rather than solving these problems
mechanically

Steps In Transportation
Problem
Select any unused square to
evaluate
Beginning at this square, trace a
closed path back to the original
square via squares that are currently
being used
Beginning with a plus (+) sign at the
unused corner, place alternate
minus and plus signs at each corner
of the path just traced

Steps in Transportation
Problem..
Calculate an improvement index by
first adding the unit-cost figures
found in each square containing a
plus sign and subtracting the unit
costs in each square containing a
minus sign
Repeat steps 1 though 4 until you
have calculated an improvement
index for all unused squares. If all
indices are 0, you have reached
an optimal solution

Exhibit 3 : Distance from factories to CIL subsidiaries

Asaso Dhanb
l
ad

Ranc
hi

Nagpu Bilasp
r
ur

Singra
uli

ICI

150

90

109

930

540

511

IDL

435

375

222

710

481

568

IBP

745

685

532

490

101

490

2178

1358

KEL
MEL

2391
1083

2331
1032

1797

870

50

439

1085

932

587

795

IGEL

1145

NAV.EX
P

755

695

542

NAV.FU
S

755

695

542

PREMIE
R

1495

1435

TIEL

2100

278
278
462

111
111
851

2074
766
550
647
647
1178

1282
2026

1257

1646

2065

1859
MACWI
N

2100

2035

1100
2000

1490

1810

Exhibit 4 :quoted transportation cost from factories to CIL

subsidiaries
Asaso Dhanb
l
ad

Ranc
hi

Nagpu Bilasp
r
ur

Singra
uli

ICI

600

600

600

900

900

900

IDL

600

600

600

900

700

900

IBP

900

900

900

600

600

900

KEL

1440

1250

MEL

1360

1000

IGEL

1250

800

NAV.EX
P

650

600

NAV.FU
S

600

PREMIE
R

660

TIEL

950

MACWI
N

1020

1140

400

550

650

900

900

EECL

900

PROCESS USED
Combined exhibit 3 and 4 results into
one table .
Checked the rim conditions that is
demand = supply or not.
Applied transportation problem
solution through north west corner
method.
The occupied cells represent the
minimum transportation cost.

Results Found Out

Total transportation cost =317*435 +
4500*150 + 3983* 375 + 685 *874
+ 532*3926 +2178*264 + 1358
*2426 + 50*2360 +2050 *587 + 278
* 44 + 111*1206 +1490*2099 +
1810*61 + 675*4300+ 766 * 2589 +
111*600 + 851 *660 + 1646 *950

THANK YOU