The document discusses logistics and supply chain management for Karnataka Engineering Company. It provides background on the company's operations in India including production facilities, branches, and transportation of products. It then focuses on the company's business in Andhra Pradesh, providing sales data and issues to analyze. The analysis identifies that 3 warehouses are required in Andhra Pradesh based on demand. The optimal locations are near Hyderabad, Vijaywada, and Cuddappah. A new distribution model is proposed that would reduce the number of trucks needed by optimizing routes from the 3 warehouses.

1. Karnataka Engineering Company
A case study: Logistics & Supply Chain Management
Course: Logistics & Supply Chain Management
Professor: TAS Vijayaraghavan
-:Submitted By:-
PGCBM-19
Rana Sarkar (RB11018/108138)
Vikrant Singh (RB11014/108825)
Sangita Sharma (RB11077/108553)

2. Company Background
Based in Raichur
Entered in to two wheeler industry in 1981 with Mopeds
Started scooter production in 1983
19 branches all over India managed by Branch Manager
The minimum throughput that would justify setting up of a branch in any
state would be 4.25 lakh per month (78 Mopeds or 33 Scooters per
month or any other combination)
Marketing offices are located in most of the states
Mopeds and Scooter are transported by a specially adapted trucks with a
capacity of either 80 Mopeds or 50 Scooters or combination of both
Secondary transportation is arranged by marketing offices by LCVs or
trucks
Marketing Offices of KEC Ltd
Srinagar
Chandigarh Delhi
Srinagar
Lucknow
Jaipur
Chan
digar
h
Ahmadabad
J
Bhopal ai
p Calcutta
ur
Ranchi
Mumbai
Delhi
Hyderabad
Bangalore
Chennai
Cochin

3. Business in Andhra Pradesh
Marketing office is situated in Hyderabad
Operating with two branch ware houses one at Adoni and other at
Mahbubnagar
Selection criteria: first major town close to production facility
Hyderabad collects orders, communicate to both warehouses
Secondary transportation responsibility with ware house manager
Difficulty in arranging secondary transportation
Some Factual data
Sales in Jan-Jul 1998 are 465 Mopeds and 78 Scooters

4. In Jan-Jul 1998 AP contributed around 5.3 % of KEC’s total moped sales
and 3.6% total scooter sales
Average monthly off take in AP during Jan-Jul 1998 are 1925 Mopeds and
288 Scooters
The current rate of tax : 4 % CST
Current sales in AP Rs.14.33/- million PA
At this rate the money out flow to exchequer Rs.573260/-
Cost for setting up of one branch Rs.17000/- to Rs.21000/- pm ie
Rs.204000/- to Rs.252000/- PA
So up to two branches could be set up in the state at the current rate of
tax and sales
Issues
At what volumes is the opening of a warehouse in a state justified
primarily on the grounds of the 4% CST for transaction across states ?
How many warehouses do you think are required of KEC’s products in
Andhra Pradesh? What could the candidate locations of the warehouse
be? What would be the criteria on which to select the candidates?
Determine the optimal selection of warehouse and the best allocation of
the demand points to the selected warehouses.
What are the best choices for the shipment (truck) size from the
warehouses to the demand points? Given the size, what routing would
you recommend for a typical despatch run.

5. Analysis
The following table shows the coordinates of the Branch office locations
Sl X- Y Moped
No Name Coordinate Coordinate Offtake Rate
1 Adoni 2.2 10 41 4.8
2 Chittore 5 4 106 4.8
3 Nellore 6.5 7 44 4.8
4 Ongle 6.5 9.5 20 4.8
5 Chirala 7 10.5 54.8 4.8
6 Cuddappah 4.5 7.1 61.4 4.8
7 Hindupur 2.4 5.8 71.2 4.8
8 Anantpur 2.8 7.8 76 4.8
9 Kurnool 3.4 10.2 24.8 4.8
10 Tiupati 5.5 5 90.6 4.8
11 Guntur 7 11.8 119 4.8
12 Vijaywada 7.5 12.1 253 4.8
13 Kammam 6.9 14.1 104 4.8
14 Warangal 6.5 15.8 89 4.8
15 Rajanundry 9.1 13.3 80 4.8
16 Kakinada 9.9 13 76.4 4.8
17 Vizag 11.2 15.2 124.6 4.8
18 Vijayanagarm 11.5 16 38 4.8
19 Mehboobnagar 3.2 13.2 36 4.8
20 Hyderabad 4.2 14.5 728 4.8
21 Nizamabad 3.5 18 69 4.8
22 Karim Nagar 5.1 17.8 79 4.8

6. Using Logware

7. Selecting 1 location for warehouse

8. Selecting 2 location for warehouse

9. Selecting 3 location for warehouses

10. Selecting 4 location for warehouses

11. It is evident from the Screenshots of Logware ……
3 Ware Houses are required as per Multiple center – of – Gravity Location
Method , If you increase more than 3 ware houses cost getting increase as
shown in above MultiCOG Method.
Best Locations also identified to supply various Demand points mentioned
in Map of Andhra Pradesh from ware houses and X & Y Coordinates for
ware houses are also shown in figures (Near to Hyderabad, Vijaywada and
Cuddappah) .
Based on our analysis on demand and rate per km, we have identified the
old and new distribution method as shown in given below table.
OLD NEW
Place BIG MED SMALL BIG MED SMALL
Adoni 0 0 0 0 0 0
Anantpur 1 0 0 1 0 0
Chirala 0 1 0 0 1 0
Chittore 1 1 0 1 1 0
Cuddapah 1 0 0 1 0 0
Guntur 1 1 0 1 1 0
Hindupur 1 0 0 1 0 0
Hyderabad 9 0 0 9 0 0
Kakinada 1 0 0 1 0 0
Karimnagar 1 0 0 1 0 0
Khammam 1 1 0 1 1 0
Kurnool 0 1 0 0 1 0
Mehbubnagar 0 0 0 0 0 0
Nellore 0 1 0 0 1 0
Nizamabad 1 0 0 1 0 0
Ongole 0 0 1 0 0 1
Rajamundry 1 0 0 1 0 0
Tirupati 0 2 0 0 2 0
Vijayawada 3 0 1 0 0 0
Vizag 1 1 0 1 1 0
Vijayanagaram 0 1 0 0 1 0
Warangal 1 0 1 1 0 1
Total Trucks 24 10 3 21 10 2

12. Conclusion
The company should have 3 ware houses and the points
to where it has to supply is shown in the screenshot
below.
The no of truck required will be reduced by 3 big truck
and 1 small truck.
The warehousing decisions will ensure better response
times to satisfy customers requirement and lower the
total cost by optimized cost related to distribution.