Impact of Government Law on Edible Oil

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Int. J Sup. Chain. Mgt Vol. 1, No. 1, June 2012

Impact of Government Law on Edible Oil Supply Chain in Bangladesh Perspective Reaz Ameen Choudhury#1, Meghla Clara Costa*2 Department of Management, American International University Bangladesh, Dhaka, Bangladesh 1 reaz@aiub.edu *2 Department of Electrical and Electronic Engineering, American International University Bangladesh, Dhaka, Bangladesh 2 clara15@aiub.edu Abstract-This descriptive study is not intended as a detailed analysis; its aim is to present an overall view of the impact of a government law regarding edible oil marketing and distribution in Bangladesh. Social, economic, environmental and sustainability issues are not covered in this report. All the data of this report is collected from secondary source. This study is going to deliver contribution to the new investors who are going to invest in this industry, existing industries for legal compliance and process improvement. The academics can use this report for analyzing market scenario and Bangladesh government authorities can use it partially for monitoring market and decision making purpose. Keywords- Edible oil, Supply Bangladesh, Strategic, Tactical. Chain, Government Law, #1

1. Introduction
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as manufacturer, the supply chain includes all functions involved in receiving and filling a customer request. These functions include, but are not limited to, new product development, marketing, operations, distribution, finance, and customer service [2], [15]. Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes the crucial components of coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies [3], [15]. The main objectives of this study are: i) to present a global overview of the main vegetable oils. ii) Identify the market controlling mechanism of Bangladesh government in

edible oil supply chain; and iii) identify the impact of the controlling mechanism in industry level. Two edible oil processing units; 1. Bangladesh Edible Oil Ltd. (BEOL) is the only 100% foreign owned joint venture in edible oil industries in Bangladesh and 2. Nurjahan Group, one of the largest edible oil importer and seller of edible oil in loose market has been analyzed for the study. The first section of this study summarizes the global production and consumption of the main vegetable oils; section two looks at the edible oil business in Bangladesh; section three assesses the strategic decision of the government regarding supply chain of edible oil; section four analyzed the impact of the law in industry level. Finally, section five highlights the major conclusions and findings of the report.

2. Literature Review
South Asia is arguably the most vulnerable region to increasing food inflation given the large segment of the population living below or near the poverty line. The recent escalation in world food prices is an increasing and growing concern. From a public policy perspective, rising food prices, if sustained, can wreak havoc on the important gains made across developing economies over decades in terms of poverty reduction and achieving Millennium Development Goals (MDGs). Rising food prices can also trigger important destabilizing forces in an economy if second round effects lead to higher inflation and other challenges to macroeconomic management [15]. According to the latest data, international food prices increased by 26.4% (year-on-year) in...
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