B in case of toned and double toned milk by mixing

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In case of whole milk, by mixing cow and buffalo milk. b. In case of toned and double toned milk, by mixing whole milk with skimmed milk. c. In case of sold cow-milk, by mixing purchased cow milk with skimmed milk/water. 2. As given in the case, cow milk procured during 1961-62 has 4.2% fat and buffalo milk –  7.1%. These are assumed to be standard fat percentages for this and the next years for all  calculations.
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3. We assume that in 1961-62, the dairy produces whole milk at a 6.6% fat level. As we would  show in the upcoming calculations (patience!) when we formulate the problem,  manufacturing whole milk at the minimum 6% fat level would require more cow milk than is  procured during the year. And moreover, the higher fat level in whole milk was essentially  what the dairy manager was cribbing about at the “board meeting.” 4. Despite the formal definition of skimmed milk as very low fat milk containing less than 0.5%  fat, we assume (this time for our own simplicity), that it has 0% fat. And, since no  information is provided regarding where does this skimmed milk come from, we assume it is  purchased by the dairy, its cost being included under “Cost of milk and milk powder” in the  income statement (Exhibit 5). 5. Water is assumed to be free! The ratios for mixtures are calculated using alligations – a simplified model for weighted average  arithmetic. Whole Milk   Toned Milk   Double Toned Milk  
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Cow Milk   The Excel sheet provided as a supplement contains detailed formulas and calculations used for  arriving at the table shown below ( Table 3 ). Sold  (in  ‘000  litres) Fractio (Cow  Milk) Fractio (Buffal o Milk) Fraction  (Skimm ed Milk) Cow Milk  Requiremen t (in ‘000  litres) Buffalo Milk  Requirement  (in ‘000 litres) Skimmed  Milk  Require ment Bottl ing  Rati o Bottled  Sales (in  ‘000  litres) Loose  Sales (in  ‘000  litres) Who le 3,62 7 0.172 0.827 0 625.4 3,001.8 0.00 2/7 1,036 2,590 Tone d 2,45 8 0.078 0.376 0.545 192.6 924.6 1,340 2/7 702 1,755 Dou ble-  Tone d 892. 3 0.039 0.188 0.773 34.9 167.8 689.5 0 0 892 Cow  Milk 42.4 0.833   0.167 35.3 0 7.066 2/7 12 30 Total 7,019 888.3 4,094.3 2,037 1,750 5,269 For current production, we are using the case fact that milk is sold in bottled and loose form in the  ratio 2:5 (i.e.  2/7  of milk sold is bottled milk – we call this ratio as the  bottling ratio ). Also given is  that double toned milk is given for free. Since exhibit 3 does not mention the breakup of double- toned milk sales into bottled and loose, we assume it to comprise entirely of loose sales (I.e.  bottling ratio = 0).
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  • Spring '12
  • AbhinavDhar
  • Ratio, MD

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