LOGISTICS & SUPPLY CHAIN MANAGEMENT
N.B.: 1) Section I is compulsory. (60 marks)
2) In Section II solve any 3 out of 4 questions. 2hrs.
Section – I
(1) Briefly answer the following questions:
(a) What is the impact of “vehicle utilization” on the costs of transportation?
(b) Briefly distinguish between Mission Based Costing and Activity Based Costing.
(c) Write any three important differences between the concepts of 3rd party logistics and 4th party logistics?
(d) What is Matrix Organization?
(e) Pipeline inventory is a form of inventory.
(2) Case Study
Food Savories Ltd is engaged in the manufacturing of various types of fast food items that are ready-to-eat variety. It has been in the business for the past 12 years. It has its factory as well as the processing unit in Navi Mumbai. The raw materials required are mainly vegetables, chicken which the company procures from either the local vendors, or from various suppliers situated at Nashik, Pune and other districts. The required materials are procured with the help of hired transporters. However, the hired transporters do not care much about the preservation of the goods. Hence, about 20% of the goods are lost due to damage, deterioration, pilferage, etc. Again the hired transporters are unreliable with regard to their availability as well as prompt delivery schedules.
The company’s products are quite popular with the customers who are situated in Mumbai, Navi Mumbai, Pune, etc. However, the company stands to lose the market due to erratic supply schedules, which do not cater promptly to the customers. The packaging of the products is attractive, but it does not preserve the product for a long time. The shelf life is only about 5 hours, if the goods are not properly refrigerated. Loss on this account is about 10%.
The company has about 10 distribution centers. But there does not seem to be the much coordination between these centers. Logistical information system is not adequate. Due to this, the company is unable to expand its business. In fact, due to competition, there is fear that the company may stand to lose its existing clientele. Due to mismanagement, the company is unable to meet increase in the demands during festival seasons and holidays.
You are appointed as a logistics consultant. You are required to put forward your suggestions with regard to:
1) Setting-up of proper, effective logistical information system to improve coordination. (2)
2) Effective forecasting system to reduce inventory carrying cost, wastages, damages, pilferages. (2)
3) Setting up of effective purchasing and distribution system. (2)
4) Improved system of storage, handling and packaging. (2)
5) Alternative modes of transport to reduce/eliminate wastages. (2)
6) Following information refers to pedestal fans. (5)
Annual Demand: 36, 000 units
Unit price of a pedestal fan: Rs.4,000/-
Ordering cost is Rs. 500 per order
Inventory carrying Cost: 25%. Calculate the EOQ for pedestal fan.
Section – II
(Any 3. 10marks each)
(3) Explain the various elements and importance of Customer Service in competitive business scenario?
(4) Briefly discuss any three modes of transportation with their relative advantages and disadvantages?
(5) Discuss the factors deciding the number, design, layout and design objectives of a warehouse.
(6) Briefly explain Q & P models or approaches [Perpetual and Periodic review methods] for managing Inventory. Compare their significant features.
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