Godrej Appliances, a business unit of the highly diversified, Godrej & Boyce Mfg. Co. Ltd.

is
one of the largest players in the Home Appliances space in India. In 1958, Godrej was the First
Indian Company to manufacture Refrigerators and has now become synonymous with the
category. The company is present across India through 100+ Exclusive Brand Outlets in 24
states and through over 23000 dealer and retailer outlets. Godrej Appliances is known for
delighting the consumer with innovative, relevant and green technologies. Godrej has created
many milestones in the Indian appliance space – be it in the environment/energy efficiency
space, including the launch of the first green AC in the world (2012), launch of the first green
refrigerator in India (2001), launch of the first 5 star range of refrigerators (2008), launch of
the first inverter AC in India (2005), the first refrigerator with 6 Star Performance(2012) or a
pure consumer delight space like the launch of the Godrej Edge Duo – India’s first single door
refrigerator with a separate veggie drawer, Godrej NXW AC – India’s first most power-saving
green inverter AC with 6.15 ISEER, Godrej Eon Front Load washing machine with Allergy
Protect Technology. Godrej’s focus on balancing consumer needs with the environmental
cause has enabled the organization to redefine the technology landscape in the appliances
industry – to the delight of both the consumer and the environment. Both the manufacturing
units of Godrej Appliances’ - in Shirwal and Mohali became the first and only manufacturing

units in the country to be honoured with the coveted Platinum Green Co certification for their
efforts in green manufacturing. Godrej Appliances was the first one to include R290 and R600
in its air conditioners and refrigerators - natural hydrocarbons that are completely environment-
friendly refrigerants, contributing to the fight against climate change. Through continuous
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improvement in quality, a deep commitment to on-time delivery, a continuous thrust on
innovation and research, and a clear policy of keeping in step with the latest manufacturing
technology, the company is fully equipped to match world-class standards.

Godrej Appliances holds ISO 9001-2015, ISO 14001-2015 and OHSAS 18001-2007
Certificates awarded by TUV Nord. Godrej Appliances is a business unit of Godrej & Boyce
Mfg. Co. Ltd.
The refrigerator product categories include Frost Free, Direct Cool, Bottom mounted and Next
Generation (NXW) and the markets extend across all the major regions in India. At present two
plants located in Mohali (North) and Shirwal (West) cater to the requirement of the markets.
There is much unmet demand and the data for the unmet demand suggests setting up of
additional manufacturing facilities. The challenge is to identify the best region to set up their
third (or fourth, fifth, sixth) manufacturing plant in India. A preliminary manufacturing costs
and transportation costs estimate is as given in table 1 & table 2 below,

Transportation Cost to Demand Regions

Uttar
Supply Region Punjab East Central South
Pradesh
Punjab 75 105 145 100 225
Uttar Pradesh 102 77 85 90 200
East 165 90 80 150 230
Central 95 85 145 60 110
South 230 180 220 120 70
Table 1: Transportation cost across regions.

Fixed Low Fixed Medium Fixed High

Supply Region
Cost (Rs) Capacity Cost (Rs) Capacity Cost (Rs) Capacity
Punjab 6,000 80 9000 140 12000 200
Uttar Pradesh 4,500 80 6750 140 10500 200
East 6,500 80 9750 140 14000 200
Central 4,100 80 6150 140 9000 200
South 4000 80 6000 140 8000 200

Table 2: Fixed Manufacturing Costs across regions.

The demand across regions is as given in table 3,

Uttar
Punjab East Central South
Pradesh
Demand 100 70 160 180 80
Table 3: Demand across regions.
With the above data help Godrej Appliances in identifying the best region for meeting the
unmet demand. Once the ideal region is shortlisted the target is to then identify the best location
within the region for establishing the manufacturing plant. Every region will have a distribution

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centre near to a railway head to cater to requirements of other regions, but the destinations
within the region must be supplied from the regional manufacturing plant itself. Further each
region will have to source raw materials and sub-assembly components from within the region.
Region Punjab: Warehouse - Bhatinda Region Uttar Pradesh: Warehouse –
Sources / Transport Quantity Longitude
Kanpur
ation Cost
Sources / Transport Quantity Longitude
Rs 1000 / in Units Latitude Xn,
Ton Mile ation Cost
Markets (Fn) (Dn) Yn, Rs 1000 / in Units Latitude Xn,
Supply Sources Ton Mile
Chandigarh 0.9 200 30.73 76.77
Markets (Fn) (Dn) Yn,
Jalandhar 0.95 150 31.33 35.30
Supply Sources
Ludhiana 0.85 160 30.92 75.73
Allahabad 0.9 300 25.43 81.46
Sangrur 0.78 80 30.24 74.84
Varanasi 0.95 50 25.31 82.97
Markets
Azamgarh 0.85 50 26.07 83.18
Amritsar 1.5 20 31.63 74.87
Etah 0.78 190 27.51 78.79
Kapurthala 1.5 15 31.37 75.39
Markets
Bhatinda 1.5 490 30.21 74.94
Etawah 1.5 10 26.81 79.00
Mansa 1.5 35 29.99 75.39
Pratapgarh 1.5 15 25.89 81.94
Patiala 1.5 30 30.33 76.38
Kanpur 1.5 520 26.44 80.33
Aligarh 1.5 20 27.89 78.08
Shahajahanpur 1.5 25 27.86 79.82

Region East: Warehouse – Jamshedpur Region Central: Warehouse – Katni

Sources / Transport Quantity Longitude Sources / Transport Quantity Longitude
ation Cost ation Cost
Rs 1000 / in Units Latitude Xn, Rs 1000 / in Units Latitude Xn,
Ton Mile Ton Mile
Markets (Fn) (Dn) Yn, Markets (Fn) (Dn) Yn,
Supply Sources Supply Sources
Rourkela 0.75 200 22.26 84.85 Pithampur 0.8 150 22.61 75.67
Durgapur 0.7 180 23.52 87.31 Chhindwara 1.2 100 22.05 78.93
Asansol 0.8 120 23.67 86.95 Itarsi 1.02 200 22.6 77.75
Ranchi 0.92 90 23.34 85.3 Ratlam 0.95 140 23.33 75.03
Markets Markets
Kolkata 1.2 55 22.57 88.36 Bhopal 2 44 23.25 77.41
Patna 1.2 25 25.59 85.13 Indore 1.5 51 22.72 75.85
Jamshedpur 1.2 430 22.80 86.20 Gwalior 1.2 40 26.21 78.18
Cuttack 1.2 30 20.46 85.88 Jabalpur 1.5 25 23.18 79.98
Sambalpur 1.2 50 21.46 83.98 Katni 1.8 430 23.83 80.41

Region South: Warehouse – Bangalore

Sources / Transport Quantity Longitude
ation Cost
Rs 1000 / in Units Latitude Xn,
Ton Mile
Markets (Fn) (Dn) Yn,
Supply Sources
Chennai 0.8 180 13.08 80.27
Hyderabad 0.75 200 17.39 78.48
Coimbatore 0.85 140 11.01 76.96
Kochi 0.9 70 9.93 76.26
Markets
Mysore 2 20 12.29 76.64
Madurai 1.65 10 9.92 78.11
Bangalore 1.25 510 12.97 77.59
Hubli 1.45 30 15.36 75.12
Trichi 1.85 20 10.79 78.70

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Develop a Model that identifies the region and within the region the location. For sake of
differentiation the groups may take the following Data or any values for inputs. The Final
solution should change with changes in demand.
Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 1: Demand 100 70 160 180 80 590

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 2: Demand 80 120 200 190 100 690

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 3: Demand 100 240 100 300 120 860

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 4: Demand 150 120 80 180 100 630

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 5: Demand 140 110 200 190 100 740

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 6: Demand 161 126.5 230 218.5 115 851

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 7: Demand 133 104.5 190 180.5 95 703

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 8: Demand 210 165 300 285 150 1110

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 9: Demand 147 115.5 210 199.5 105 777

Uttar
Supply Region Punjab East Central South
Pradesh Total
Group 10: Demand 175 137.5 250 237.5 125 925

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Region: Punjab Region: Uttar Pradesh Region: East
%age of Sources / %age of Sources / %age of Sources /
Total Total Total
Demand
Demand Demand
Allocation Markets
Supply Sources Allocation Markets Allocation Markets
33.90% Chandigarh Supply Sources Supply Sources
25.42% Jalandhar 50.85% Allahabad 33.90% Rourkela
27.12% Ludhiana 8.47% Varanasi 30.51% Durgapur
13.56% Sangrur 8.47% Azamgarh 20.34% Asansol
Markets 32.20% Etah 15.25% Ranchi
3.39% Amritsar Markets Markets
2.54% Kapurthala 1.69% Etawah 9.32% Kolkata
83.05% Bhatinda 2.54% Pratapgarh 4.24% Patna
5.93% Mansa 88.14% Kanpur 72.88% Jamshedpur
5.08% Patiala 3.39% Aligarh 5.08% Cuttack
4.24% Shahajahanpur 8.47% Sambalpur

Region: Central Region – South

%age of Sources / %age of Sources /

Total Total

Demand Demand

Allocation Markets Allocation Markets

Supply Sources Supply Sources
25.42% Pithampur 30.51% Chennai
16.95% Chhindwara 33.90% Hyderabad
33.90% Itarsi 23.73% Coimbatore
23.73% Ratlam 11.86% Kochi
Markets Markets
7.46% Bhopal 3.39% Mysore
8.64% Indore 1.69% Madurai
6.78% Gwalior 86.44% Bangalore
4.24% Jabalpur 5.08% Hubli
72.88% Katni 3.39% Trichi