Varun Nagar Agricultural Cooperative Society
Executive summary:
Varun Nagar Agriculture cooperative society (VNACS) has two assets which include, Rs 5, 00,000 in cash and a paddy stock which is worth Rs 5, 00,000. The liabilities of VNACS include, Rs 5, 00,000 to be paid for procurement of paddy to farmers, and Rs 5, 29,167 to be paid towards over draft amount this also includes the accrued interest over the period of seven months (Rs 29,167 is the interest to be paid for seven months from September 1990 to march 1991) as the overdraft has been drawn September last year. Mr. Agarwal the Manager of VNACS has two make decisions about two business proposals in front of him, whether he should retain paddy stock and whether he should buy fertilizer stock. Mr. Agarwal taking all the option available into consideration decides to retain paddy stock and not to buy fertilizer stock this decision will be in the best interest of Cooperative and farmers at large.
Situation Analysis:
Objectives:
The Co-operative society should sustain the good image earned over the years, which helped them in ensuring the support of the bank and members of the society.
Taking the above into consideration the objectives are:
* To meet the expectations and also serving in the best interest of farmer members.
* To sustain the good image of the Co-operative society in the years to come.
* To maintain good relation with Jaldhara District Cooperative Bank, and to remain credit worthy.
Problem statement
Mr. Agarwal has two options .
* Should he retain the paddy stock?
* Should he buy fertilizer?
Evaluation Criteria
* Payment for the procured paddy should be made to the farmers on or before the Due date.
* Maximize the benefits to the farmers by getting higher price for the agricultural produce and cheaper price for agricultural inputs.
* To maintain credit worthiness with bank. Society has already taken an overdraft of R 5 lakhs.
* To maximize the total revenue...
