Q1. Calculate the warehouse space required for the distributor given the following data:

Monthly Forecast = 50000 units (1 month = 25 days)

Stock Norm = 6.5 days (Cycle Stock = 3 days; Safety Stock = 3.5 days = 2 days of Sales Fluctuation Reserve + 1.5 days of Emergency Reserve)

Carton Size = 50 units

Stacking Norm = 5 cartons

Carton Length = 0.55 mt; Carton Width = 0.35 mt

Required Space?

Q2. Calculate the salesperson requirement for the distributor given the following data:

A distributor needs to cover to 100 wholesale outlets and 800 retail outlets selling FMCG products. The desired visit frequency to each wholesale outlet is four times a month where as required visit frequency to retail outlet is twice a month. On an average a sales representative of the distributor works for 10 hours a day. Out of this, 1 hour is spent on administrative work like making reports (done in the morning) and 1 hour is marked for having lunch. Due to traffic conditions it takes 15 minutes to complete one retail outlet visit and 30 minutes to complete one wholesale visit. Wholesale visit also takes longer because of greater efforts to convince the wholesalers and because their purchase quantities are large. Based on these conditions calculate the number of sales representatives required for the distributor assuming that each sales representative works for 25 days in a month.

Q3. Explain the following evaluation measures:

1. Unique Outlets Billed (UOB)
2. Number of Bills Cut per unit of Time
3. Lines cut per unit of Time
4. Average Bill Value

Q4. Calculate the Return on Investment (RoI) for the distributor given the following data:

Monthly Turnover = 100000000; Distributor Gross Margin = 3.0%; 25 days in a month

Delivery Expenses

Van Running Cost = Rs 10,000/day (for all the owned vans combined)

Van Hiring Cost = 3,00,000/van/month; Number of hired vans = 5

Van Depreciation = Rs 6,00,000/year (for all the owned vans combined)

Manpower Expenses

Salesperson salary = Rs 11,000/month/salesperson ; Number of salesperson = 15

Godown keeper and delivery boy salary = Rs 12,000/month/delivery person;

Number of delivery person = 6

Admin salary = Rs 15,000/month/admin; Number of admin people = 2

Godown and office rent = Rs 7/sq ft; Size of Godown and office = 55,000 sq ft

Administrative and other expenses = Rs 1,00,000/month

Total Required Investment (in days) = 8.5

Stock = 5.5; Credit = 1.5; Pending Claims = 0.5; Cash in Hand = 1.0

Q5. Calculate the Return on Investment (RoI) for the distributor given the following data:

Ganesh is distributor of Jockey. His Jockey business has a monthly turnover of Rs. 8 crore with channel margin equal to 5%. The business requires a total Godown space of 20000 sq feet and the rentals in the godown area are Rs. 25 per sq feet per month. Staff salaries include salesmen salary of Rs 4 lac per month, Godown keepers and delivery boys salary of Rs. 1 lac per month (both included) and computer operator salary of Rs. 50000 per month. Delivery expenses include van running cost of Rs. 10 lac per month for own vehicles and hired van expense of Rs. 5 per month. Depreciation value for Ganesh-owned vans is Rs. 1 lac per month. Overhead costs include electricity, stationary, printer etc and costs Ganesh Rs. 1 lac per month. Jockey has asked Ganesh to necessarily invest in stocks (8 days), credit (2.5 days) and cash on hand (1.5 days). On an average Ganesh has claims pending with Jockey worth equal to 0.5 days of sale. To ensure sufficient investment in the business, Ganesh has taken a loan of Rs 1 crore at an annual rate of 12% to ensure sufficient investment in the business. Calculate annual Return on Investment (RoI) for Jockeys distribution business, assuming a 25 day month, and comment whether RoI is appropriate for Ganesh to continue the business.