Sole distributor selling to retailers

Demand (No. of loaves) of 400 gms. 41375

Rate per unit Total Cost
Commission to distributor (in paise) (in paise)
2 82750
Rate per unit Total Cost
Production Cost (in paise) (in paise)
45 1861875
Rate per unit Total Cost
Wrapping Cost (in paise) (in paise)
8 331000
Total Cost 2275625
Revenue 2813500
Profit (in Rupees) 5378.75
Demand(no of loaves) 41375
number of depots 15
Distribution Capacity(loaves/per day) 1900
Trips required 1

Production Cost + Wrapping Cost

Rate per unit Quantity
0.53 41375

Depot Management COST

2300 15
Feeding to Depot Cost ( Estimated)
Cost of 3 4-wheeler vehicle 45000 3

Depriciation of vehicle per month

Salary to driver 200 3
Additional Clerk 350 1
Maintenance and Tax
Interest
Fuel Cost
Cost of Transportation
Depot+Transportation
Cost per loaf (Transportation + Depot)
Cost per loaf (Production and Wrapping)
Cost per loaf
Selling price per loaf
Profit per loaf
 margin
15

Total cost
21928.75
21928.75
21000
34500

135000 1 4 wheeler

2250 2250 3750

600 900
350
450
900
1980 Total cost
6530
41030
0.9916616314 0.0019094
0.53
1.5216616314
0.68
-0.8416616314
 -20375

7110
135000
144360
3.4890634441
 STANDARD 4-120

Purchase Cost 45000 ANTICIPATED DEMAND

Expected Life 5 CARRIAGE CAPACITY OF TRUCK

Salvage Value 0 TRIPS NEEDED

Depreciation per Year 9000 POSSIBLE DISTRIBUTION

Depreciation per day 24.65753 5 trucks

Fixed Expenses per km

Depreciation 24.65753

Maintenance and Tax 5

Interest 8% 9.863014
Office Personnel(3) 7
Total FE 46.52055

Variable expenses per km

Petrol and Oil 22
Salary of Driver cum salesman 10
Total VE 32
Total Expenses per km 78.52055
Total Expenses for a 100km run per day 7852.055
Carrying Capacity per day 7000

Transportation Expense per loaf of bread 1.121722

101

Vehicle 4 wheeler 120

Demand(no of loaves) 41375

Capacity(loaves/per trip) 3500
Trips required 12
Suggestion is:
3 vehicle * 2 trip
2 vehicle * 3 trip
Transportation cost
Rate per unit(paisa) Quantity Total cost(paisa)
5 trucks X 3 Trips per day 1.3502935714 49660 67055.5787571429

Production Cost
Rate per unit(paisa) Quantity Total cost(paisa)
45 49660 2234700
Wrapping Cost
Rate per unit(paisa) Quantity Total cost(paisa)
8 49660 397280
Total Cost 2699036
Revenue 3376880
Profit (Rupees) 6778.444
 STANDARD 4-120

49660 Purchase Cost 45000

3500 Expected Life 5

14 Salvage Value 0

STRIBUTION Depreciation per Year 9000

3 Trips Depreciation per day 24.65753

Fixed Expenses per km

Depreciation 24.65753

Maintenance and Tax 5

Interest 8% 9.863014
Office Personnel(3) 7
Total FE 46.52055

Variable expenses per km

Petrol and Oil 33
Salary of Driver cum salesman 15
Total VE 48
Total Expenses per km 94.52055
Total Expenses for a 150km run per day 14178.0825
Carrying Capacity per day 10500

Transportation Expense per loaf of bread 1.3502935714

Vehicle 4 wheeler 120

Demand(no of loaves) 41375

Capacity(loaves/per trip) 3500

Trips required 12

Suggestion is:

3 vehicle * 2 trip

2 vehicle * 3 trip
Transportation cost
Rate per unit(paisa) Quantity Total cost(paisa)
5 trucks X 3 Trips per day 1.350293571 41375 55868.396500125

Production Cost
Rate per unit(paisa) Quantity Total cost(paisa)
45 41375 1861875
Wrapping Cost
Rate per unit(paisa) Quantity Total cost(paisa)
8 41375 331000

Total Cost 2248743

Revenue 2,813,500

Profit (Rupees) 5,648

Appointment of Distributor to Distribute to Retailers

Vehicle 4 wheeler 120

Demand(no of loaves) 41375

Capacity(loaves/per trip) 3500
Trips required 12
Suggestion is:
3 vehicle * 2 trip
2 vehicle * 3 trip
Transportation cost
Rate per unit(paisa) Quantity Total cost(paisa)
3 vehicle * 2 trip 1.13 21000 23730
2 vehicle * 3 trip 0.8571428571 21000 18000
41730
Commission to distributor
Rate per unit(paisa) Quantity Total cost(paisa)
2 42000 84000
Production Cost
Rate per unit(paisa) Quantity Total cost(paisa)
45 42000 1890000
Wrapping Cost
Rate per unit(paisa) Quantity Total cost(paisa)
8 42000 336000
Total Cost 2351730
Revenue 2856000
Profit (Rupees) 5042.7

Incremental Cost for third Trip

Depreciation 12
Maintenance 2

Variable 16
Total Incremental Cost for third trip 30
Standard 4 wheeler 120

Demand(no of loaves) 41375

Capacity(loaves/per trip) 2000
Trips required 21
Suggestion is:
9 vehicle * 2 trip
1 vehicle * 3 trip
Transportation cost
Rate per unit(paisa) Quantity Total cost(paisa)
9 vehicle * 2 trip 1.32 36000 47520
1 vehicle * 3 trip 1.2 6000 7200
54720
Commission to distributor
Rate per unit(paisa) Quantity Total cost(paisa)
2 42000 84000
Production Cost
Rate per unit(paisa) Quantity Total cost(paisa)
45 42000 1890000
Wrapping Cost
Rate per unit(paisa) Quantity Total cost(paisa)
8 42000 336000
Total Cost 2364720
Revenue 2856000
Profit (Rupees) 4912.8

Incremental Cost for third Trip

Depreciation 10
Maintenance 2

Variable 12
Total Incremental Cost for third trip 24
 3 wheeler AutoRickshaw

Demand(no of loaves) 41375

Capacity(loaves/per trip) 1400
Trips required 30
Suggestion is:
10 vehicle * 3 trip

Transportation cost
Total cost(paisa) Rate per unit(paisa) Quantity
10 vehicle * 3 trip 1.0714285714 42000

Commission to distributor
Total cost(paisa) Rate per unit(paisa) Quantity
2 42000
Production Cost
Total cost(paisa) Rate per unit(paisa) Quantity
45 42000
Wrapping Cost
Total cost(paisa) Rate per unit(paisa) Quantity
8 42000
Total Cost 2355000
Revenue 2856000
Profit (Rupees) 5010

Total Cost for 3 trips

Depreciation 9
Maintenance 5
Interest 3
Variable 28
Total Cost for 3 trips 45
Total cost(paisa)
45000

45000

Total cost(paisa)
84000

Total cost(paisa)
1890000

Total cost(paisa)
336000
 Option 1 Option 2 Option 3 Option 4
Profit 5378.75 -34823.8 5,648 4988.5