Vnacs Case Analysis

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VNACS Case Purpose and Scope Our purpose is to suggest the best course of action to Mr Agarwal. He needs to decide on how to spend the 5 lakh cash, whether to pay the bank or buy 2000 bags of subsidized fertilizers and selling of 100 tons of paddy now or waiting for 6 months in expectation of better prices. While doing this he must keep in mind the objectives of society. Abstract and Executive summary In the process of deciding future course of action we have kept in mind the sustainability of cooperative by maintaining confidence of bank as well as the farmers. Based on this I suggest to pay farmers and bank immediately by selling paddy. This recommendation is based on the assumption that main objective of the cooperative is not profit maximization. The priority is the reputation of cooperative in the eyes of farmers and the bank. Body Pay the farmers immediately with cash of 5L Pay the farmers immediately with cash of 5L Pay farmer 6 month later by selling paddy @6000 Pay farmer 6 month later by selling paddy @6000 Yes No Yes No Pay the bank now Pay the bank now Pay Bank now Pay Bank now Yes No Yes No Yes No Yes No Sell the paddy 6 month later @ 6000/ton and use that amount to pay the bank. Sell the paddy 6 month later @ 6000/ton and use that amount to pay the bank. Sell the paddy @5000/ ton and use it to pay the bank. Sell the paddy @5000/ ton and use it to pay the bank. Buy fertilizer Buy fertilizer Buying fertilizer possible only in this case Buying fertilizer possible only in this case CASE - III CASE - III CASE - II CASE - II CASE - I CASE - I Sell paddy now@ 5000 and pay farmer and bank 6 month later Sell paddy now@ 5000 and pay farmer and bank 6 month later Buying fertilizer not possible in these three cases as the amount in hand requirement is more than 5 lakhs due to insurance, labor and storage

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