You are on page 1of 2587

BARLEY WATE

Details
Intial Investment Franchise Fee to Barley Water-one time payment Cost of the Soda Machine Deposit Cost of the RO Machine

Total Initial Investment

Total Initial Investment

Salary of the Employee(Benefits Excluded i.e, Breakfast,Lunch,Dinner to an Employee) Electricity Expenses(Two tubelights,Stereo and Fan) Rent

Delivery Expenses

Disposal Glasses expenses

Flavor Expenses

Maintainence Cost of the Soda Machine

Maintainence Cost of the Soda Machine Taxes paid

Masala and Jaljira(provided by Barley Franchisee) Lemon Expenses Electricity Expenses(RO Machine and Soda Machine) CO2 Expenses Maintainence of the RO Machine

WATER DETAILS@INFOCIT
Total Cost/month( applies to Variable Cost)
2,38,500.00 50,000.00 1,50,000.00 50,000.00 11,500.00

Type of Cost Details


Fixed Cost Fixed Cost Fixed Cost Fixed Cost Fixed Cost

Fixed Cost

5,00,000.00

Fixed Cost

5,00,000.00

Fixed Cost Fixed Cost Fixed Cost


Rs. 280/Delivery and 2 Deliveries/month

5,000.00 1,000.00 21,000.00

Variable cost

560.00

Variable cost

Rs40/100 glasses & 8500 glasses/month

3,400.00

Variable cost

Rs.400/10 litre and 2 orders of 400 litre/month

800.00

Variable cost

Rs 200/repair. Maximum repairs=10/year Total cost Rs. 2000/year

166.67

Variable cost Variable Cost

Rs 200/repair. Maximum repairs=10/year Total cost Rs. 2000/year

161,226.60

166.67 13,435.55

Variable cost Variable cost Variable cost Variable cost Variable cost

Rs. 320/1 kg.and Used Quantity =6kgs/month Rs25/kg and 35Kgs/month

1,920.00 875.00 2,000.00 500.00 200.00

Rs.500/30 kgs.

NFOCITY

BREAK EVEN RECOVERY PERIOD DEPENDS ON THE SALE OF THE SODA GLASSES MADE. AS

BREAK EVEN RECOVERY PERIOD DEPENDS ON THE SALE OF THE SODA GLASSES MADE. AS PER THE OWNER, RECOVERY PERIOD IS 1.6 YEARS.

BARLEY WATER DE
Heads Total Fixed Cost Delivery Expenses Raw Material Expenses Flavor Expenses Masala+Jal-jira Expenses Lemon expenses Co2 Expenses Disposal glasses expenses Other Recurring Expenses Maintainence Cost of the Soda Machine Taxes paid(30% C.T.) Electricity Expenses(RO Machine and Soda Machine) Maintainence of the RO Machine Total Cost Total Variable Cost Revenue/month(25000*30) Profit/month Highest Revenue till date/month* *Highest sales is recorded not at the Infocity Branch but at the Vastrapur Branch and the sales at Infocity fluctuates nearer to the Average sales/day Total Cost/month 527000 560 7495 800 1920 875 500 3400 15803 167 13436 2000 200 550858 23858 75000 51142 13000glasses*10Rs/glass.=130000Rs.

TER DETAILS@INFOCITY

ost/month 7000 560 495 800 920 875 500 400 5803 167 3436 000 200 0858 3858 5000 1142

glass.=130000Rs.

OCITY

In order to formulate an LPP for Barley Water, We interacted with the Franchisee Owner and informed us that in order

The Over-all Cost can be minimized by reducing the Variable cost of the heads as mentioned in "Head Costing"

Some Notations to be used in LPP Cost Specifications Tota Cost Total Fixed Cost Delivery Expenses Raw Material Expenses Other Recurring Expenses Z K D R E

Notations

LPP MinZ=K+D+R+E+F Subject to Constraints affecting the Barley Water Maximum Sales Minimum Sales O<=3 O>=2 f<=30 litre f>=20 litre m=6kgs m=6kgs l<=40kgs l>=35kgs g<=13000 pieces g>=8500 pieces

Constraint Notations Order Flavor Masala+Jal-jira Lemon Disposal glasses

Note: The LPP has been designed on the basis of the data collected from the Franchisee Owner and on the observa been rounded up for the sake of convenience and simplicity (For e.g,

d informed us that in order to run the business efficiently, Barley Water as a whole tries to reduce the over all cost of the Business.

entioned in "Head Costing" Sheet i.e, Reducing the Cost of Raw materials,Delivery expenses and Other recurring expenses.

Notations

straint Notations O f m l g

wner and on the observation at the Barley Soda Center. Also Some of the figures during calculation have e and simplicity (For e.g, month has been taken as 30 days)

all cost of the Business.

urring expenses.

For maximum sales Total Fixed Cost Delivery Expenses Raw Material Expenses Flavor Expenses Masala+Jal-jira Expenses Lemon expenses Co2 Expenses Disposal glasses expenses Other Recurring Expenses Maintainence Cost of the Soda Machine( g ) Taxes paid(30% C.T.)( t) Electricity Expenses(RO Machine and Soda Machine)(e) Maintainence of the RO Machine( r ) Total Cost Total Variable Cost Revenue/month Profit/month Highest Revenue till date/month* *Highest sales is recorded not at the Infocity Branch but at the Vastrapur Branch and assuming that the sales cannot go highest beyond this point for the sake of convenience

527000 840 9820 1200 1920 1000 500 5200 15868 167 13501 2000 200 553528 26528 130000 103472

13000glasses*10Rs/glass.=130000Rs.

553528

166058

13838

f m l c g R

<= <= <= <= <= <=

Maximum value of the constraints 1200 (3-orders were given maximum when highest sales was made) 1920 1000 (40 kgs were used when maximum sales was made) 500 5200 9820

g t e r E D

<= <= <= <= <= <=

167 13838 2000 200 15868 840

hest sales was made)

sales was made)

For minimum sales Total Fixed Cost Delivery Expenses Raw Material Expenses Flavor Expenses Masala+Jal-jira Expenses Lemon expenses Co2 Expenses Disposal glasses expenses Other Recurring Expenses Maintainence Cost of the Soda Machine( g ) Taxes paid(30% C.T.)( t) Electricity Expenses(RO Machine and Soda Machine)(e) Maintainence of the RO Machine( r ) Total Cost Total Variable Cost Revenue/month Profit/month* Lowest sales/day* 800 Lowest Revenue till date/month* 24000 *=Sales recorded at Infocity Branch

527000 560 7495 800 1920 875 500 3400 15803 167 13436 2000 200 550858 23858 24000 142

For sake of LPP to assume the minimum constraints,we are assuming that Rs800/day sales would be recorded throughout the month and order for Raw-materials,Delivery expenses and recurring expenses is same as the average sales/month because of the lack of availability of data for the minimum sales for each and at the same time promoting the spirt of enterprenuership to convert minimum sales to average sales. Profit/month=142Rs Is not possible in reality but this is done for formulation of LPP

24000