Food Supply Chain and Logistics : Mid term paper

Marks 50 : Duration : 1 hour 30 minutes

Instructions :
Section 1 : Objective type- 10 questions (10)

Section 2 : Short answers – 10 questions (20)

Section 3 : Analytical and Quantitative section – 2 questions (20)

For section 1 & 2 , please use the question sheet itself to mark your answers.

For section 3 , you may use additional sheets. Please attach the rough sheets to
show your workings.

Section 1 : Objective Type (Each question carries 1 mark)

1)What percentage of the fruits, vegetables and groceries retailing is handled by
the ‘organised sector’ such as branded retail stores ? (Select one answer)

 Less than 10%  Around 40-50%

 Around 75%  More than 90%

2)What kind of coding system do the ‘dabbawallahs’ of Mumbai use to codify their
boxes ? (Select one)

 RFID  Barcodes
 Name tags  A symbol+colour coded labeling
system

3)Amongst the following products , which item has the highest wastage in transit?

 Biscuits  Potato
 Cabbage  Tomato

4)Which industry has one of the most complex and specialized and highly
automated supply chain management systems ? (Select one)

 Banking & Financial industry  media and Entertainment

 Automobile  Travel and tourism

5)What is the capacity(volume load) of a TATA 407 truck (Select one)

 4 tonnes  407 tonnes
 40 tonnes  4 quintals

6)In the current vegetable/fruit supply chain , who has the highest profit margin ?

 The transporter  Retail shop owners

 The farmers  The middlemen

7)From which sources can you gather prices of commodities and farm produce?
(Select all that apply)

 Internet websites  TV – News & Commodity related

programs
 SMS services on mobile phone  Newspapers

8)How did the Namdhari’s chain control the supply related uncertainties? (Select all
that apply)

 Cultivate their own produce  Contract farming to set of farmers

 Buy from wholesale mandi’s  None of the above

9)What are the standard pick up & drop time commitments offered by the
dabbawallahs ? (Select all that apply)

 Pick up in morning , Deliver by noon  Pick up at any time, Deliver within 1

hour
 Pick up in afternoon , Deliver by  Their schedules are erratic
evening

10)What are the key macro processes involved in a supply chain management ?
(Select all that apply)

 Customer Relationship Management  Internal Systems Management

 Supplier Relationship Management  HR & Training management

Section II : Short answers (each question carries 2 marks)

Answer the following questions briefly (1-2 sentences).

11)How do the dabbawallahs optimize the ‘reverse logistics’ issue of carrying the
empty tiffen boxes back to source ?
12)What are the top 4 reasons of why India’s agri supply chain system is ineffective
today ?

13)Mention some of the pre-trip planning done by modern fleet operators prior to
the journey ?

14)You need to transport a load of 3 tonnes from Chennai to Bangalore. The

distance between Chennai & Bangalore is 350 kms. The 2 tonne trucks charge
about Rs 7/km . The 4 tonne truck charge a flat fee of rs 4500. How would you ship
the load ?

15)Mention any 4 key management lessons which the dabaawallahs teach us.

16)As a sourcing manager in charge of purchasing fresh produce , mention 2 key

pain areas in your daily operations and how will you over come them ?

17)Why do the street push cart vendors do not usually work on Sundays ? (Two
significant reasons)

18)True or False . Explain with a brief justification.

a) They carry more fruits in first half of month , and more vegetables towards
second half of month

b) They usually work only in first half of the day and take rest or do alternate
professions in evenings.

19)If you are starting a new juice shop next to your college campus, mention any 4
key USP (Unique selling proposition) which you will implement to attract
customers ?
20) Mention any two demand prediction methods
Section 3 : Analytical and Quantitative section
21 ) You are the Purchasing manager for GRT Hotel. They have launched a new 24
hour S.Indian restaurant called ‘Dakshin’ and you are in charge of all procurement
decisions. The following are the assumptions based on the preliminary discussions
with the management and the chefs.Customers can order one or more items in the
menu , in any combination. ( 10 marks)

Menu and Requirements

Groceries Vegetables & Fruits Milk

Idli with Sambar 1 kg .5 kg 0

and chutney

Vada .5 kg .5 kg 0

Coffee .5 kg 0 .25 litres

Juice 0 1 kg 0

Milkshake .5 kg .5 kg .25 litres

Demand :
The expected number of customers per day and expected breakup of items
purchased are as follows :

Mon(day1) Tue(Day2) Wed(Day3) Thu(Day4) Fri(Day 5)

Total 100 125 150 150 200

customer
s

Idli with 90 100 125 125 175

Sambar
and
chutney

Vada 50 50 50 50 100

Coffee 50 75 75 75 150

Juice 30 30 30 30 30

Milkshake 10 20 20 20 10
Costs
Groceries Fruits & vegetables Milk Transport

Rs 50/kg Rs 25/kg Rs 25/litre Rs 1000/day

Please answer these questions and also show the numerical work in rough sheets .
Each question carries 2 marks:

a) Please compute the requirement for groceries, fresh produce & milk for the
first 5 days of operations

b) Please compute the item wise costs for ALL items in menu (excluding
transport). For e.g. Vada’s cost = Cost of grocery + Cost of fresh produce +
Cost of milk= Rs NN)

c) Assume that all these items are being purchased from same supplier and the
truck is sent out to pick each day’s delivery in the morning. What is the
blended cost of transportation/kg for each day ? What is the transport cost
attached to each item (based on its net weight) for each day ? Since the
quantity which is transported varies each day , how does transport cost/item
get affected by it ? Assume that 1 litre of milk = 1 kilogramweight .

d) Given the above data about costs of raw materials & transport , arrive at
breakeven costs for each menu item. Since transport component would vary
with quantity, how will you keep a stable overall price ?

e) If only 50% of the expected demand is met on day 4 (Thursday) ,please

compute the excess items in your inventory and the total cost of this
wastage. How will this affect the next day’s order ?

22) Please read the case study and answer the questions that follow. You would
need to validate your answers based on your analysis and interpretations.

INTRODUCTION

McDonald's Corporation, one of the leading global food service retailers with more than 30,000
restaurants in 119 countries had to spend a lot of time planning its operations prior to its entry into the
Indian market in October 1996.US-based fast food giant, McDonald's success in India had been built on
four pillars: limited menu, fresh food, fast service and affordable price. Intense competition and
demands for a wider menu, drive-through and sit-down meals – encouraged the fast food giant to
customize product variety without hampering the efficacy of its supply chain.
Few companies appreciate the value of supply chain management and logistics as much as McDonald's
does. From its experience in other countries , McDonald's was aware that supply chain management
was undoubtedly the most important factor for running its restaurants successfully. Amit Jatia,
Managing Director, Hardcastle Restaurants Private Limited said, “A McDonald's restaurant is just the
window of a much larger system comprising an extensive food-chain, running right up to the farms”.

McDonald's worked on the supply chain management well ahead of its formal entry to India. “We spent
seven years to develop the supply chain. The first McDonald's team came to India way back in 1989,”
said S. D. Saravanan (Saravanan), Product Manager, National Supply Chain, McDonald's India.

In 2005, nine years after it entered India, McDonald's India (McDonald's) opened its 50th outlet at
Faridabad. In the pre-liberalization era, it was difficult, if not impossible, for foreign fast food chain to
set up operations in India. But post-liberalization, McDonald's was able to expand its chain of retail
outlets in the country because of its careful planning of its supply chain operations in India.

a) What form of partnership exists between the McDonald's and those who operate their outlets ?
What in your view was the key behind the development of such an effective partnership? (2.5
marks)

b) Describe the benefits a farmer or supplier gains as a result of their partnership with Mc
Donald's. How did Mc Donald's improve its operational efficiencies as a result of this
partnership? ( 2.5 marks)

c) Why do think it took a global giant like McDonald’s over 7 years to setup the backend supply
chain system in India ? ( 5 marks)