Q.1 Do you agree with the proposals of the logistics manager?

If yes, what resources are required to implement the suggestions? Answer. Yes, I agree with the proposals
of the logistics manager. For managing 94 million calls per year , the measures were necessary to reduce
the logistics cost as a percentage of sales from 2.3 to 1.8 percent. The reason why I agree with the
proposal is because of the measures taken by the manager which are as follows : A. Sales Forecasting. The expected forecasting accuracy should be around 2 percent. If the variation becomes more than 5
percent, it results either in stockpile or stock depletion which would lead to high carrying cost or lost market.
- Bottom-up Forecasting helps in a way that the information related to demand directly flows from
salesman and cycle vendors to the top Management Branch Office helping us to get the forecasting more
accurate. B. Funds Management. - No credit Sales. To manage 94 million calls per year it becomes
necessary to not give credit sales because keeping a record itself becomes a hectic job. - Encourage
dealers/wholesalers to have a higher stock-turnover ratio for higher ROI, instead of increasing the
commission. - Collection responsibility on the wholesaler only. C. Inventory Management. As we know
that this Inventory has a shelf life of 3 months. So the inventories needs to be managed properly. - The
inventory at factory before excise is for 6 days. - Stock with channel members is for 6 days. - Factory
should produce and dispatch strictly as per the branch orders, so that neither they are short or supply nor
they over produce. - Inventory and forecast review once a week to go according to plan. D. Transportation
Management. - No delays : as a delay of one day in transit time costs INR 30 million as interest cost. Daily interest cost on one truckload of material Rs. 3500. - Long route coverage and no transhipments. Transit time bonus/ penalty for.