Logistics Management

Topics: Logistics, Inventory, Supply chain management Pages: 12 (3150 words) Published: January 2, 2013
Subject: Logistics Management

Total marks 80

Case 1(10 Marks)

M/s Britecolor Paints Ltd. (BPL) is a manufacturer of decorative paints for households commercial premises and industrial application.

(a)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 twenty-five 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 J 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 choice.

(b)In their effort to satisfy the customer, M/s BPL manufactured every possible shade by combining various primary shades and would await the prospective customer to carry out the purchase. It ensured that these shades were available at

each and every depot even at the cost of transportation incurred in sending goods in less than full truckload lots. This certainly provided a very high service level and customers who could get the shade as per their desire, were fully satisfied.

(c) 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.

(d)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.

(e)Nevertheless, the economic runs of industrial paints were always assured due to high off-take by the industrial customers.

(f)The objective of the manufacturer was to increase the realization taking into account, economic runs, inventory, seasonality and individual choices of domestic / industrial customer.


If you are appointed as the logistics consultant, then advise M/s BPL in respect of ‘

(a)How to achieve economy in transportation, by maintaining almost same service level?

(b)Demand Forecasting technique to take care of seasonality, reduction in inventory.

(c)Information technology to substitute maintenance of high inventory without affecting customer service level.

(d)Connectivity between factory and depots (networking Diagram)

Case 2(10 Marks)

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 young collegians and office goers. it has its ‘7,- most modern kitchen at New •Mumbai to cater the needs for fresh Nasta. Vegetables and chicken items are transported from the procurement centres of Nasik, Pune, Aurangabad using hired Trucks. While transporting vegetables and chickens there were shortages,.. damages and decomposition problems which varies from 1Y’lo 15% and there is inconsistency in the transit time the reliability of the

raw material transporters is very low. Packaging of the Nasta is very good and attractive but it is not long lasting tyje. Hoever, the quality and taste are the reasons for its popularity. Nasta is sold in three different packs — party, family and individual. The Nasta looses the taste and flavour after 8 hours, if not preserved in refrigeration....
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