Logistics/Supply Chain/Supply Chain Management
dear sir, i need your help....
Case 5 (24 Marks)
Karnataka Engineering Company Limited
y 1983 (the case time context), the two-wheeler market had been liberalised and companies had to deal
with the new realities. Logistics was one of the business activities which got a strong look. The case of
Karnataka Engineering Company Limited (KEC) provides the background for analysing a key set of
Strengthening the distribution network for finished products is one of the most direct ways of improving
service effectiveness and cost efficiency of a firm’s marketing related operations. The cost of selling up
and operating different facilities in the distribution network have to be viewed vis-à-vis the recurring
transportation and inventory costs in the distribution network and increasingly, service measures such as
response time to different sets of downstream customers.
In this case, the logistics manager s faced with the issue of designing a distribution network. ‘Twowheelers
have to be distributed from a single factory to several dealers. For illustrating the nature of the
decision, one state (Andhra Pradesh) is taken up for detailed analysis. Here, it is assumed that distribution
will be done state-wise, because of commercial (tax) considerations.
Five hierarchical decisions have to be made in this case; deciding on the number of warehouses, the
location of those warehouses, the allocation of demand points to a warehouse, the selection of a shipment
size, and an order processing and routing policy for the actual distribution from warehouse to demand
points. Here, shipments from depots to dealers are through trucks or LCVs. Depending on the order
processing discipline that is selected, one could have the possibility of meeting the demands of two or
more dealers with a single trip. This would need a routing procedure.
1. At what volumes is the opening of a warehouse in a state justified primarily on the grounds of the 4 per
cent central sales tax for transactions across states?
2. How many warehouses do you think are required for the distribution of KEC’s products in Andhra
Pradesh? What could the candidate locations of the warehouses be? What would be the criteria on which
to select the candidates?
3. Determine the optimal selection of warehouses and the best allocation of demand points to the selected
4. What are the best choices for shipment (truck) size from warehouses to demand points? Given the size,
what routing would you recommend for a typical dispatch run?
I am sorry to say i cannot answer your academic assignment questions, you need understand and answer them by yourself. But if you have specific queries related to Logistics and SCM concepts then please let me know i will then try to address them.