COST OPTIMIZATION USING LINEAR PROGRAMMING: A STUDY AT VAAGN AUTO PVT. LTD
COST OPTIMIZATION USING LINEAR PROGRAMMING: A STUDY AT VAAGN AUTO PVT. LTD.
Authors:
Dr. J Sofia Vincent1, Mr. Yogeshwaran P2
1Dr. J Sofia Vincent, Professor, Master Of Business Administration Panimalar Engineering College, Chennai - 600123
2Mr. Yogeshwaran P, Student, Master Of Business Administration Panimalar Engineering College, Chennai - 600123
ABSTRACT
Cost optimization in manufacturing has become a critical management imperative, particularly in the rapidly evolving Electric Vehicle (EV) sector. Rising operational costs, supply chain volatility, and intense market competition necessitate systematic, data-driven approaches to resource allocation and production planning. This study applies Linear Programming (LP) techniques to develop a comprehensive cost optimization model for Vaagn Auto Pvt. Ltd., a Chengalpattu-based EV manufacturer specializing in electric three-wheelers. The model incorporates key cost components raw materials, labour, machine utilization, and component costs—and is solved using LINGO optimization software. Multiple LP formulations are developed to address profit maximization, total production cost minimization, labour cost reduction, machine cost efficiency, and overall production cost optimization. Results demonstrate that the TITAN CARGO OPEN (X₇) with a unit cost of ₹218,000 dominates cost- minimization strategies, while BEAST LX CLOSED (X₄) leads profit-maximization scenarios with ₹45,000 profit per unit. The findings confirm that LP is a reliable, practical tool for production planning and cost control in EV manufacturing environments, with the potential to significantly reduce wastage, improve resource utilization, and enhance organizational profitability.
Keywords: Cost Optimization, Linear Programming, Electric Vehicles, Resource Allocation, Production Planning, LINGO, EV Manufacturing