JSW CASE REPORT:

Assignment questions:

The customer relationship manager at JSW Steel Ltd, a large steel manufacturer in India, needed to analyse
his available transportation and logistics options to meet an urgent order for a long-time and valued client. The
manager needed to decide whether to send the shipment through the customary rail route or, instead, to use the
new sea route that his company had recently developed. His dual objective was to meet the customer's
requirements in time, while also delivering some financial benefit to boost his company's quarterly results.

1. What are existing challenges facing Kumar? What are the alternatives available to him?

Challenge: 12 Hours to decide the best transportation mode to deliver a 7.000-ton sales order
to JSAW on time.
Alternatives:
5. Train transportation (High cost~+22%), Less Lead time);
6. Vessel (Lower cost ~-22%, Higher Lead time, No experience).

2. How much money would JSW make if Kumar chose to send the material to JSAW by
rail?

Quantity Full delivery of ordered Delivery between 80% to Delivery between 70%
delivered quantity 99% to 79% Delivery less than
70%

Price (in ₹) 30,000/ton 28,000/ton 25,000/ton

Nil

Destination (rest of India)

Price (₹)
Gurgaon siding 3,990
Himachal region 4,598
Mundra region 3,180
Indore and other parts of
2,689
Central India

Eastern region
3,500

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(No. of tonnes * Selling Price/tonne) – (No. of tonnes* Transportation Cost (JUMBO/
BOXN)

3. How many hours are required to transport the material from JSW to JSAW using the rail
and barge options? Which mode is faster?

By rake: Range [142.5-172.5]

By barge: Range [140.5 – 168.5]

5. Keeping all the possibilities in mind, what should Kumar do? Why?

Trade-off analysis, Decision tree analysis to estimate the expected returns if he chose to take the available decisions. This will
help him arrive at the best options to meet certain objectives, such as on-time, on-time in full etc.

5. An agency at the Goa port can provide immediate information to Kumar on the availability of Class I
barges. How much should Kumar pay the agency to obtain such information?

Kumar is willing to pay a value that is less than the difference between: Expected Value With Perfect Information (given
by the agency) – Expected Value Without perfect Information and
compare between rail and vessel. The cost of the information should be less than 573.317 (₹) to reliable.be

Differenc
Benefit Mg ExpectedValue ExpectedValue e
Mode
(₹) With Info (₹) With Out Info (₹) (₹)
Barge
(Vessel) 192.637.200 191.543.117 192.847.200 1.304.083
Train 187.740.000 185.862.600 187.740.000 1.877.400
Difference 4.897.200 5.680.517 5.107.200 -573.317

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DECISION TREE:
Compasrison of expected pay off values
for the various barge and rail options.