Chandpur Enterprises Limited, Steel Division Case Study Harvard Case Solution & Analysis

Chandpur Enterprises Limited, Steel Division Case Study Case Solution


The case talks about the raw material optimization for the newly joined undergraduate managing director Akshay Mittal in Chandpur Enterprises Limited. The company started its operation in 2006 and it was primarily focused on engaging in diversification. The company in the year 2006 started as a steel business and then added snack food business in the year 2007. After the joining as a managing director, Akshay Mittal was challenged to propose an optimal raw material quantity that could not only provide the quality steel for the company, but also could help in cutting the cost of the company to maximize its overall return. By analyzing the varied nature of the raw material used with their upper and lower bound, an optimal solution could be devised in this report.

The optimization of raw material is required in a way to minimize the overall cost and maximize the profitability of the company. It can be seen that making steel required seven raw materials and in addition to these materials, other variables include the electricity consumption as well as salaries and other expenses. The raw materials should be adjusted in such a way, that the total production price should be less than or equal to INR 29,000 per ton. The overall production of steel uses the batch processing system.

Literature Review 8 journal articles

A number of studies could be reviewed for the similar issues that have been carried out in various journals. Some of them are covered below:

  • (Xianhong Li, 2012) This study discussed the optimization of the ingredients used in the blending of cement raw material by applying general non-linear time-varying model. By applying the model based on MATLAB-GUI, a mathematical model is created that could result in the optimal ratio of ingredients, which could come up with the final product, cement. The optimal solution is derived by defining the objectives as well as the rolling non-linear constraints. The paper also provides some numerical examples in order to solve the issues relating to ingredient ratio optimization in raw material blending process.
  • (Duffuaa, 1991) This study elaborated the use of mathematical economic optimization model for SAFCO. In order to make the two major products of the company that are ammonia and urea, optimal raw material feed rate is required. By taking the objective function of minimizing the total cost in order to maximize the profit, a zero-one integer programming model is used. In the end, a sensitivity analysis is also performed. All the relevant data is gathered with the help of thorough analysis and then, the model is applied to generate the optimal solution for the company. By using the model, substantial saving could be obtained from each of the two plants.
  • (Jie Li, 2016) By developing the novel modeling and the global optimization-based planning formulation, optimal volumes are analyzed in this study. The paper talks about non-linear optimization model, which could help in providing the daily production requirement. The result of using this approach was positive in terms of significant increase in profit for the company. In addition to this, the paper provides a software solution in which by changing the demand, cost parameters as well as specification and optimal solution could be devised automatically.
  • (Hämäläinen, 2012) This study talked about the mathematical modeling applied in making the paper product. In order for making the final product, several challenges were notified, including the computational fluid dynamics to the finite element analyses. With the help of this modeling, an optimal solution is devised for the overall process as well as the end product, in a way to maximize the overall profit of the company and cutting the cost..............
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