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AEREN
FOUNDATION’S Maharashtra Govt. Reg.
No.: F-11724
Subject: Trade Documentation & Logistics
Total
Marks: 80
Case 1
(10 Marks)
If you are appointed as the logistics
consultant, then advise M/s BPL in respect of ‘
Question.(a) How to achieve economy in
transportation, by maintaining almost same service level?
Answer:M/s. Britecolor Paints Ltd. (BPL) is a manufacturer of decorative paints
for households, commercial premises and industrial application.
M/s. BPL had embarked on a policy of
satisfying every possible customer in respect of shades, delivery and
durability. Thus it went ahead and created 25 depots, one almost in every major
city. The manufacturing base however was maintained at Pune. The factory
received information in connection with stocks from depots once in a week and
there was no inter-communication between depots. Since they were in a
competitive market, price was predetermined, i.e. the manufacturer had no
liberty to price the product as per one's own
Question.(b) Demand Forecasting technique
to take care of seasonality, reduction in inventory.
Answer:While on one hand M/s BPL had a population of very satisfied customers,
they had almost 50%of their total domestic sales lying as finish goods
inventory at various depots, on the other hand.Industrial paints, though not
very customised, the respective industrial customer was quite satisfied.
Consequently, the inventory of finished goods was very low in this segment. But
at the same time, realisation was also lower due to stiff competition from
other industrial paint manufacturers than the domestic segment.
To handle the increasing variety and
complexity of managerial forecasting problems, many forecasting techniques have
been developed in recent years
Question.(c) Information technology to
substitute maintenance of high inventory without affecting customerservice
level.
Answer:Nevertheless, the economic runs of industrial paints were always assured
due to high off-take by the industrial customers.The following information is the
minimum information required:
Maintenance Requirements from an Inventory
System
On-line or real-time parts information is
necessary to plan maintenance activities. The planner must know when selecting
parts for a job that they are in stock, out of stock, in transit, etc. The
planner must have current information.
If the information the planner has is
current, he will
Question.(d) Connectivity between factory
and depots (networking Diagram)
Answer:The objective of the manufacturer was to increase the realization taking
into account, economic runs, inventory, seasonality and individual choices of
domestic/industrial customer.I think the main problem lies is in their
distribution and manufacturing locations. They have 25 depots and only one
manufacturing unit and that to in pune. They should have chosen bhiwandibecasue
it connects all national highways and because of that communication and
availability of the product becomes more easy.
From the point of view of Customer, there is
no difference, because he can claim Excise Credit to the extent he has received
in your Excise Invoice (factory or Depot). From your point of view, as far as
Excise Calculation is concerned, there is one
Case
2
(10 Marks)
In case you are appointed as logistic
consultant to solve the problems, you are required to put forwardyour suggestions
for:
Question.(a) Proper transportation policy
to ensure minimum transportation loss of vegetables and poultry products and
reduction in the packaging costs.
Answer:ABCL Ltd. is leading/ Fast Food Processing Company operating from Thane.
It is involved in the fast food business since last 10 years and has tie up
with a foreign firm operating in the same field. It handles both Vegetable as
well Non—Vegetable products for which it arranges the vegetables and chickens
from the local vegetable vendors and poultry farms as well as from far off
places like Nasik, Pune and Aurangabad.
It has very good market in Mumbai, Pune and
surrounding cities. The products are sold in the brand name of ‘Nasta’ which is
very popular brand amongst the
Question.(b) Demand Forecasting techniques
to take care of the seasonality, reduction in inventory and shortageand other
related problems.
Answer:ABCL Ltd is a leading Fast Food Processing Company operating from
Thane. It is involved in the fast food
business since last 10 years and has a tie up with a foreign firm operating in
the same field. It handles both
vegetable as well as non-vegetable products for which it arranges the required
vegetables and chickens from local vegetable vendors and poultry farms as well
as from far off places like Nasik, Pune and Aurangabad. It has very good markets in Mumbai, Pune and
the surrounding cities. The products
are sold in the brand name of Nasta which is very popular brand among the young
collegians and office goers. It has its
most modern kitchen at New Mumbai to cater to the needs for fresh Nasta.
Vegetables and chicken items are transported from the procurement centres of
Nasik, Pune, Aurangabad
Question.(c) Suggestion for improved
Purchase and Distribution policy.
Answer:The team of senior executives has recommended your name as a Logistics
Consultant. You are required to put
forward your suggestions for the following:
a)
Proper
transportation policy to ensure minimum transportation loss of vegetables of vegetables
and poultry products and reduction in the packaging costs. Advice on the company owning its own fleet of
transport.
b) Demand forecasting techniques to take care of
Question. (d) Is it advisable to have
company owned dedicated transport fleet?
Answer:Although many companies use dedicated truck fleets to transport their
goods, few give adequate thought to which type of configuration they choose for
those fleets. But they should consider the options carefully, because this
decision can have a significant impact on cost and service.
The term "dedicated fleet," also
known as "dedicated contract carriage," refers to tractors, trailers,
drivers, and other resources exclusively devoted to serving a set of facilities
or lanes in a transportation network. They usually are owned or
Case
3
(10 Marks)
Mumbai Flour Mills provide high quality
bakery flours to commercial bakers as well as to the consumer market. The commercial buyers have consistent demand
and brand loyalty, whereas the consumers have minimal brand loyalty. They,
instead, generally prefer known names over store brands. Demand is seasonal for the flour with the
annual break occurring just before Diwali.
It slacks off drastically during January and February. To offset both these phenomena, Mumbai Flour
Mills and its major super market chain accounts carry out special deals and
sales promotions.
The Production Planning Department of the
company which is located at Akola in Maharashtra, has the responsibility of
controlling the inventory level at the plant warehouse at Nagpur as well as the
three distribution centres located at Nasik in Maharashtra, Bhopal in Madhya
Pradesh and Hyderabad in Andhra Pradesh.
Planning has been routinely based on past
experience and history. No formal
forecasting is performed by the company.
Distribution centres get their requirements by rail from Nagpur. The lead time of replenishment from Nagpur to
distribution centres is 7 days. The
replenishment rate is 48 to 54 pallets per wagon depending upon the type of
wagon used. In case there is any
emergency demand, then 18 pallets can be made available by truck with 3 days
transit time.
Recently, the company has experienced two
major stock-outs for its consumer size 5 kg sacks of refined quality white
flour. One of these was problems in the
milling operations, the other occurred when the marketing department initiated
‘buy-one-get-one-free’ coupon promotion.
Ever since these events took place, the planning has become excessively
couscous and hence, errs on the side having excessive inventories at the
distribution centres. Additionally, two
other events have affected distribution centre’s throughputs
(1) implementation of direct factory supply
for replenishing the five largest super market chains and (2) a price
increasing making the Mumbai Flour Mills more expensive than its national brand
competitors such as Eillsburry, or Tata maida.
Out of the 1,500 pallets in Hyderabad
distribution centre, the Mumbai Flour Mills shows only 396 pallets for open
orders. This has led the company to use
outside overflow storage where there are another 480 pallets. Flour is easily damaged. Hence, the company prefers to minimize
handling. Overstocking at the distribution
centres alone costs Rs. 1.85 per pallet for outside storage to which must be
added Rs. 4.25 per pallet extra handling charges and Rs. 225 oer truck load for
transportation. Similar scenarios are
seen at other distribution centres as well.
Mr. Mohan, the distribution manager, is
contemplating various approaches to solve the inventory problem. It is clear that the product must be in place
at the time a consumer is making a decision to buy the product At the same time, the company cannot tolerate
the overstocking situation and the stress that it is putting on facilities and
cash flow. Mr. Mohan’s first thought is
“better information system”, which will provide timely and accurate information
throughout the organization.
Question.(1) Evaluate the alternative
solution that could be considered by Mr. Mohan.
Answer:
Question.(2) What additional solution do
you propose?
Answer:
Question.(3) Examine the transportation
system and its drawbacks?
Answer:
Case 4
(10 Marks)
Question.(i) Examine the possibility of
alternatives in transportation of the inbound and outbound materials?
Answer:M/s Modern Garments is the manufacturer of ladies and gents garments,
such as tops, shirts, undergarments, etc.
Their manufacturing technology is advanced and, at the same time, there
are several players who have access to such latest technologies. The supply chain for M/s Modern Garments
includes significant purchases of raw materials, stitching of garments,
packaging of finished products and supply of goods to its customers.
The logistics functions are the key
competitive elements in the market. M/s
Modern Garments is considering to take over the control over its inbound and
outbound logistics functions. These have
a direct bearing upon the inventories, reduction in the losses due to transit
delays and improvement in transit time and service reliability. However, the company has to look into the
cost implications of such changes.
Question.(ii) How to reduce the cost of
inbound and outbound logistics functions?
Answer:M/s Modern Garments have been the leader in the readymade shirts market
in India for a number of years. After
liberalization, they entered into a joint venture with a French company to
expand its business in the area of trousers and T-shirts. Despite the new joint venture, M/s Modern
Garments still continues to manufacture its shirts at Thane near Mumbai and has
started a new state-of-art garment manufacturing plant at Pune in
Maharashtra, to compete with other market
players. The company has planned to undertake
the distribution of garments made and packed in its plants at Navi Mumbai and
Kalyan so as to retain the
Question.(iii) What could be the major
problem in exploiting the inbound and outbound logistic functions?
Answer:After liberalization, the market has grown more matured and the
expectations of the customers towards the features of the product have
increased and also the technology and the design has improved
considerably. Now, in the market only the
garments with good delivery quality are acceptable. All the competitors have equally good quality
product in the market. Presently the
area of logistics distribution, customer service and satisfaction are the areas
of prime concern in order to have extra value addition to the product. The product defects due to stitching, cutting
and transportation are now under increasing scrutiny.
Question.(iv) Is it advisable to have
dedicated transport system to operate packaged materials mainly for thecompany?
Answer:
Question.(v) What arrangements have to be
made to ensure the service quality for customers?
Answer:From the cost control point of view, the amount of money held up in
distribution pipeline is significant.
The large variety of garments now means more raw materials and components
are to be held in stock. Presently, the
incoming supplies are arranged by the vendor firms and also, they may have to
be persuaded to opt for jointly approved transporters. Due to product variations, the order
fulfillment and its processing are of considerable importance. The traditional information system has become
inadequate. There are over 500 retail
outlets through which the finished products are distributed with the help of
more than 50 transporters. Lead-time
variability is creating problems of buffer stocks with the distributors. The transit time
Case
5
(10 Marks)
Question.1. What are the company’s present
logistical problems?
Answer:‘The company has four state-of-an-art manufacturing plants accredited
with ISO certification & backed by strong technical support from their
foreign collaborators. The company is also having a well established all India
distribution network consisting of numbers of dealers. The products flow from
the manufacturing plants to the warehouses, managed & maintained by the
company, located at different places across the country. The dealers draw their
requirements from these warehouses for onward delivery to their customers, The
inventory of the products is under the ownership of the company and is
maintained as per
Case
6
(10 Marks)
Question.1. Identify the main logistical
problems of the Company
Answer:Corporate managers traditionally have viewed logistics as a mandatory
cost bucket. But top-performing companies now recognize that mastering supply
chain and logistics can be more than that: It can be the source of competitive
advantage.
This strategic shift opens up significant
growth opportunities for logistics providers, with winners using different
paths and business models to foster growth. The major challenges for providers
are aligning corporate strategy with the right organizational model and
matching that strategy to targeted customer segments—by size, footprint,
vertical category and market. Leading logistics providers excel at
understanding key customers’ needs
Question.2. To offer better customer
service level and reduce the operating cost, how will you go aboutredesigning
the distribution network?
Answer:Indeed, network studies have been known to reduce distribution costs by
as much as 25 percent. But cutting too much can compromise your ability to
provide the highest levels of service that your customers have been expecting.
A lot of effort and energy needs to go into understanding how your network is
performing today before you can start picking away at where the opportunities
are.
To accomplish this, you start by asking the
right
Case
7
(10 Marks)
Question.1. What is the main problem in
this case? What are your suggestions to the company on inventorymanagement?
Answer:M/s. Decorative Laminates Corporation (DLC) is a supplier of decorative
sheets for wooden furniture makers in domestic as well as commercial markets.
In spite of competition in this field their sales volumes shown growth during
last 2 to 3 years. The last year was recorded 15% more sales compared to
previous year. Even though the sales volume are increasing the profit margin is
getting reduced day by day due to future competition. In one of the monthly
management review meetings it was observed that the main cause for depleting
profitability is the increasing procurement costs. The report presented by the
new Purchase Manger revealed that in order to obtain quantity discounts from
the suppliers the company was purchasing inputs & other maintenance items
much more than their actual requirements. This has
Question.2. What type of logistical cost
approach you would suggest to the company?
Answer:Systems approach – indicates that company’s objectives can be
realized by recognizing the mutual interdependence of the major functional
areas of the firm, such as marketing, production, finance, and logistics.
Implications of the systems approach:
·
One logistics
system does not fit all companies
·
Stock-keeping
units (SKUs) or line items of inventory (stocks of goods that are maintained
for a variety of purposes)
· From logistics perspective – the
proliferation of
·
·
Case 8
(10 Marks)
Question.1. What are the main problems in
the logistical network of M/s. Compu-Tech?
Answer:M/s. Compu-Tech is on the reputed Indian companies producing various
types of computer printers. Their production plant is situated at Noida in
northern India and the products are distributed through distribution centers
located in every region. The company introduced LS popular line of Desk Jet
printers first time in India in 2005. Immediately on the launch of this
products.
The solo more than one lacs units during that
year. But the problems came with the boom in sales.
Q2.
What solutions would you propose of overcome these problems?
Answer: To see lean perfected – study the NASCAR pit. In a matter of seconds,
the pit crew has changed tires, wiped down the windshield, filled up fuel, and
given the driver a drink of water. Everything is in the right place at the
right time. If only every distribution center would run that smoothly. What’s
clear is that mastering inventory levels is central to the equation of
eliminating waste, but inventory management is becoming a vexing problem for
some organizations – compounded by multi-channel distribution, inadequate
demand forecasting, and a lack of communication among appropriate parties.
Taking a closer look at the experiences of
Dear
students get fully solved assignments
Send
your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call
us at : 08263069601
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