FARMAID TRACTORS LIMITED CASE:

Q:1 – What are the factors leading to the perceived ‘lack of control’ and poor delivery quality?

A:1 - The first problem was the lack of control of company over the transporter. Transporters actually moved the tractors out of their godown after an average of two days, primarily due to non-availability of intended trucks for dispatch.

Q:2 – What forecasting technique should be used for inventory planning at the plant and the stockyards?

A:2 – Forecasts are made at three levels; at the national level, across all models, for overall capacity planning at the plant; regional forecast across dealers in a region so that regional stockyards can order; and finally dealer level forecasts. Seasonality needs to be addressed properly for the required service levels. Dealer level forecasts may have their limitation, and alternatives to this have to be considered.

Q:3 - Is there a need for central dispatch yard? What are the pros and cons?

A:3 – According to me, there is a need for central dispatch yard. Because currently all dispatches were made from the factory to the stockyards. Due to this there arose a problem of unmet demand at stockyards, ready for dispatch inventory and the availability of trucks based on the transporters’ inputs. The transporters’ used to move tractors to their godowns as there was no space for in the factory for holding finished stock. Due to the non-availability of the intended trucks for dispatch transporters’ moved the tractors out of their godowns after an average of two days. It should be located at a suitable highway location 20 kms away from the plant as there was no space nearer or adjacent to the existing plant for such expansion.

Q:4 – What is a good model for determining optimal location of stockyards and the associated allocation of dealers to the stockyards in the area of Gujarat?

A:4 - There should be a customer centric model means suppose in Gujarat out of 1000 tractor 300 comes from Ahmedabad dealer and the 200 from Rajkot then the location must be near to Ahmedabad . So on the basis of the priority to the dealer the location should be decided . Here no doubt there would be higher cost for the other dealer distribution but that would be subsidized as our godown is near to our priority dealer, and in long term our dealer who is giving the huge business will be happy and motivated as the lead time of the delivery is less for them .

Q:5 – Interpret the implications of the recommended locations versus the existing locations as given in Exhibit 11.

A:5 - . According to Exhibit 11 Valsad and Ahmedabad will be the optimal locations for stockyard which currently is held at Ahmedabad only. By taking this step operating cost can be reduced and distribution can be done more effectively in southern Gujarat as the demand is very high in that region. The distance from factory at Thane to Valsad is only 136 kms which tends to be minimum distance among all preferred places for stockyard. This will also save travelling cost to a large extent

-Compiled by Mithilesh Shukla & Aditya Singh