Konys Inc

Konys Inc. Case solution

Group 7

Mamta Golchha A024

Sachin Kamath A029

Amey Kanekar A030

Manisha Prakash A039

Chetan BR A011

Upendra Atre B010

SYNOPSIS

Konys Inc case is about deciding whether to go for Purchase long term contract, Options contract or spot prices. It also helps to understand how the expected profit is maximized by using various combinations of Purchase, options contract or spot prices.it helps to understand how to allocate purchase contract when risk is very low and spot prices when risk is higher. It helps us to apply newsvendor model to find out the optimal options contract value that should be used to reduce costs of spot prices and thus maximize expected profits.

Problem Identification

This case deals with the problem of making a decision on type of contract to be used for supply chain co-ordination. The decision is to be made whether to use Long term contract, an options contract with reservation price r spot market prices. The scope of decision can also include maintaining portfolio of types of contract in order to maximize the profit.

Questions from the case

Part A:

1) Derive the demand forecast for MC20 for Q3.

Steps followed were:

* Select the historical sales data from exhibit 2

* Using @risk software derive distribution function which is fit

* Fit parameter done using Chi square values related of each distribution

* The distribution selected was the one with least chi square value

* Thus the best fit distribution obtained was: Normal(2159071,772323)

2) Derive the Spot price distribution.

Steps followed were:

* Select the historical spot price data

* Using @risk software derive distribution function which is fit

* Fit parameter done using Chi square values related of each distribution

* The distribution selected was the one with least chi square value

* Thus the best fit distribution obtained was:...