FRP TOPIC

Location Priorities Index of Refueling StationsUnder the Guidance:Dr. Prithvi Yadav(GHS-IMR)(Kanpur)

Presented By-Amit Kumar Gupta1309

Research Objective –

• Feasibility study of New Project for Refueling Station• Demand Estimation • Business Potential measurement of Auxiliary outlets within the Refueling

Station  

Research Methodology Research Design- o Exploratory Research Sample Design-o City chosen is Kanpur Data Collection tools Secondary datao Journalso Magazineso Articleso Official websiteso Observations  Data Analysis Toolo Huff Gravity Model

Research Plan I have started my research for identifying the new retail outlet for refueling station within the

radius of 50km of Kanpur; I have visited major National Highways which are connecting to the

major cities of our state. I.e.

Lucknow highway (NH 25)

Allahabad highway (NH 2)

Delhi highway (NH91)

Hamirpur highway (NH 86)

Out of above mention, I have taken Hamirpur Highway (NH -86) as this Highway is been

considered as National Highway in the year 2010, which will connect Kanpur to Dewas (M.P)

664 km long. The major supply of coarse sand of Northern Eastern U.P is supplied by the

Hamirpur, daily more than 2000 trucks passes by this highway, which gives an opportunity for

a installation of new refueling station.

The major cities which receive coarse sand From Hamirpur are

Kanpur Ramabai Nagar

Orai Jalaun Lucknow Barabanki Faizabad Sitapur

Kannuj Fatehgarh Unnao Aurayia Hardoi Gonda Sultanpur Rai Bareily

Allahabad Balrampur Shahajanpur Mainpuri Pratapgarh Banda Jaunpur Banaras

Hamirpur has 175 coarse sand mines and more than 2000 trucks carry out the coarse sand from them and supplies to various cities.

So therefore total demand for diesel on the route will be2000 trucks with maximum fuel tank capacity 150 liters per trucks =

2000*150= 300000 liters diesel per day.

Huff Gravity Model This model helps in estimating the sales of a retail store which is based on the concept of

gravity: consumers are attracted to a store location just like Newton’s falling apple was attracted to the Earth. In this model, the force of the attraction is based on the two factors:

The size of the store (larger stores have more pulling power ) The time it takes to travel in the store (stores that takes more time to get to have less pulling

power). The Mathematical formula to predict the probability of a consumer going to a specific store

locations is as follows:

The formula indicates that the larger the size (Sj) of the store compared with compared with the

competing stores, the greater the probability that a customer will shop at the location. A larger

size is generally more attractive in consumer’s eyes because it means more merchandise

assortment and variety. Travel time or Distance (Tij) has the opposite effect on the probability

that a consumer will shop at a location.

The greater the Travel time or Distance from the consumer, compared with that of competing

locations, the lower the probability that the consumer will shop at the location.

The expected sale will be estimated by multiplying the calculated Probability with the average

sales of two locations.

Consumers will shop more to the closer shop rather than distant one.

Distan

ce fro

m point

A to B is

12.7

KM

The Shambhua is located between Bidhnu & Patara Distance is 7.2km from Bidhnu and 5.5 km from PataraDue to the miserable conditions of the road, time taken is 10 minutesfrom Patara to Shambhua and 20 minutes from Bidhnu.

Jain Automobiles (monthly sales)Daily expenses (Bidhnu) 3 labors + 1 supervisor = 3*150 + 200 = Rs. 650Electricity (generator fuel) = Rs.3500Maintenance expenses = Rs.100Total = Rs.4250

Sales 60 trucks of 150 liters capacity = 9000litres(Profit on each litre is Rs.90) = 9000*.90= Rs.8100

Contribution – fixed Expenses = Profit = 8100-4250= Rs.3850

Monthly profit = 3850*30= Rs.115500

Jai Shradha refueling StationDaily Expenses (Patara)3 labors + 1 supervisor = 3*150 + 200 = Rs. 650Electricity (generator fuel) = Rs.3500Maintenance expenses = Rs.100Total =Rs.4250 Sales 70 trucks of 150 liters capacity =10500litres(Profit on each litre is Rs.90) = 10500*.90= Rs.9450 Contribution – Fixed Expenses = Profit =9450-4250= Rs.5200

Monthly profit = 5200*30= Rs.156000  

The land which will be required for the refueling station is 2400 square meters, to open a new refueling station we can have 4800 square meters to gain the competitive advantage of location.

The cost of land (9 lakhs per 2400 square metres) i.e. Rs. 1800000 + 10%Registration charges = Rs. 1980000

Power (Solar Energy) = Rs. 180000+ Rs. 20000transpiration+installation fees Quotation

= Rs. 200000Security fees (for rural) = Rs. 10000General expenses (including legal expenses) = Rs.100000Advertisement and marketing expenses = Rs. 250000Total -----------------------

=Rs.2540000

Applying the equation in the formula

4800/202 =.40

2400 +2400 202 102

 4800/302 = .602400 + 2400302 202

 

The expected sales (Probability of support time’s market size) for the new location would be.40*115500+.61*156000= Rs. 142,515

Analysis • The sale of new refueling station will be feasible at the location (Shambhua) at National highway 86 which is

29km south from Kanpur.• With the help of Huff Gravity Model the site potential sales has been estimated which is the expected sales

(Probability of support time’s market size) for the new location would be .40*115500+.61*156000= Rs. 142,515 • This is more than of Jain Automobiles which is at Bidhnu, Kanpur.

SWOT analysis for the location (National Highway 86) Strength Main roads which supplies coarse sand to the northern & eastern U.PShorter routes, which saves fuel and time Weakness Roads are miserable; it takes more than 2 hours to cover a distance of 60kmPassengers often avoid this route. Opportunity Only 5 refueling station in this routeHeavy Demand of HSD (High Speed Diesel)Land for refueling station is available at reasonable rates. Threat Tough competitions with existing refuel station

Suggestions and Recommendations

As during my research I found that most of the refueling station use electric generators which

is increasing the working capital, the solar power pack of 5kilowatt** will help the owners to

reduce their cost, as the plant of solar power pack is of Rs. 180000+ Rs.10000 each on

transportation and installation = Rs. 200000.

Mobile Refuel station (bus) will be more profitable and will be pioneer idea in our nation. A

Chinese firm supplies this bus to many nations across the globe. Quotation

Only 2 food centers are present on the highway, so the feasibility of DHABHA at the refueling

station will be profitable as drivers who goes for a long distances, prefer every facilities under

one stop.

THANK YOU