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The document summarizes a group presentation on supply chain management in the dairy industry. It provides key details about the dairy industry in India, including that India is the largest milk producer in the world. It also discusses the primary and organized sectors of the dairy industry, examples of companies studied, and concepts like inventory management that were covered in the presentation.

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88 views3 pages

S11 PDF

The document summarizes a group presentation on supply chain management in the dairy industry. It provides key details about the dairy industry in India, including that India is the largest milk producer in the world. It also discusses the primary and organized sectors of the dairy industry, examples of companies studied, and concepts like inventory management that were covered in the presentation.

Uploaded by

AdityaHriday
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CR-1 REPORT SCM-X

SESSION-11 (06/11/2017)
Group Presentation: SCM in Dairy Industry

Dairy industry deals with milk and other milk products


India the largest milk producer in the world (Operation Flood)
Annual Output of 147 million tonnes
Dairy Industry grew at a CAGR of 16& in the last 5 years, ending 2016
Whereas milk production grew by 5%
Per capita availability of milk in India: 294grams/day in 2013
20% organised sector: co-operatives and private companies
90% organised sector in developed nations
Primary Research of OMFED, Milk Mantra, AMUL
DCMMF body which manages warehouses for AMUL
ESCM implemented by AMUL IT Integration in SCM

Comments:

Minimum price present in the dairy industry minimum fixed price offered by
Odisha Government
Is milk a commodity product? Why is it priced low?
Milk is a product with low implied demand uncertainty, hence has a low price, since
the inventory requirement is low and thus the low inventory carrying cost. Price
expectancy for the product is also low. Retailers earn a profit of the range of 0.40
to 0.50 per unit.
Presentations to concentrate more on the SCM aspect
Pricing mechanism for the project to be covered by the upcoming groups

INVENTORY MANAGEMENT (continued)


Cost of Inventory:

Ordering Cost (irrespective of order quantity)


Inventory Holding Cost
Purchase Price

Inventory management is a planning decision:

How much to buy


When to buy
How much to stock

Submitted by: Shreya Sharda (UM16053)


CR-1 REPORT SCM-X

Q average order quantity

D demand per unit time

Cycle inventory = Q/2


Q
Average Flow Time =
2D
Inventory Turnover Ratio = Average sales/Average Inventory

Single Period Inventory Model

For perishable products, inventory management cannot be done through P and Q


models, since inventory=0.
Value of a newspaper after the date of publication = 0 (unless theres a salvage rate
offered)
Value of winter garments falls below the actual value after the season is over

Cu
P
C o+ C u
Where

Cu : cost per unit of demand under-estimated


Co : cost per unit of demand over-estimated
P : probability that a unit will not be sold

Risk of demand going higher than purchase


o Opportunity Cost = cost of under-estimation Cu
Risk of demand being less than the purchase
o Loss =Cost of over-estimation Co = (Purchase price) (Salvage Value)

Cash Cost Opportunity Cost

P x Co (1-P) x Cu

Cu
P
C o+ C u

Submitted by: Shreya Sharda (UM16053)


CR-1 REPORT SCM-X

How much to order when the demand is normal D with as standard deviation? = D + z x d

Z x d

Next Class Discussion:


Difference between inventory for a company v/s inventory for entire supply chain

Submitted by: Shreya Sharda (UM16053)

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