Maximisation of Profit Contribution in Private and Joint Sector Paper mills in A.P.

Abstract

The Paper industry is vital for social, cultural, economic and educational development of a country. As such, it needs to survive and compete with global giants in the world. Therefore, it has to produce standard products at minimum cost. Against this background and for maximisation of  contribution, two paper mills i.e. private and joint sectors are brought into the sample. The optimal product mix for private sector paper mill is writing and printing paper and coated board while writing and printing, colour printing / process paper and newsprint for joint sector paper mill. The duality analysis shows that one hour of working in pulp mill and paper making departments increase profit contribution by Rs. 95,149 in the private sector paper mill whereas Rs. 82,621 in paper making department  of joint sector paper mill.
The sensitivity analysis reveals that within the range, a change either positive or negative in profit contribution per unit of optimal product mix would not cause for change in the optimal solution. The sensitivity analysis shows that the optimal product mix for writing and printing paper is in the  ange of 43,400  p1 C  50,100 and 26,946 34,848 for coated board. Similarly in the joint sector paper mill, writing and printing paper in the range of 41,167 1,13,583; colour printing / process paper 38,917 41,750 and news print 15,418 35,064. Finally, the private sector paper mill should produce 2,378 tonnes of writing and printing paper and 37,449 tonnes coated board to earn maximum profit. Like wise, 4,592 tonnes of writing and printing paper, 2,796 tonnes of colour printing/process paper and 4,714 tonnes of newsprint for joint sector paper mill.