1.

Analyse the revenue projections of the Golden toast and comment and improving the
revenue yield

Demand for three categories

  jan feb mar apr may jun
Bread 60% 60% 60% 50% 50% 50%
Cakes 20% 20% 20% 25% 25% 30%
Snacks 20% 20% 20% 25% 25% 20%

Volume(in Kgs) of each category in each month

  jan feb mar apr may jun

Bread 45000 54000 60480 53424 56629 62292
Cakes 3000 3600 4032 5342 5663 7475
Snacks 3600 4320 4838 6411 6796 5980

Cost of each category in each month

  jan feb mar apr may jun
Bread 60 60 60 60 60 60
Cakes 300 300 300 300 300 300
Snacks 250 250 250 250 250 250

Revenue projection of each category in each month

  jan feb mar apr may jun
Bread 2700000 3240000 3628800 3205440 3397740 3737520
Cakes 900000 1080000 1209600 1602600 1698900 2242500
Snacks 900000 1080000 1209500 1602750 1699000 1495000

Revenue yield can be improved by increasing the safety stock to account for lost sales and
wastages to meet the demand.
Assumption: We assumed that the safety stock is equivalent to lost sales and wastages.

2. If you are a supply chain analyst, what kind of aggregate planning strategy you would
recommend? Why?
We recommend chase strategy

3. Analyse the staffing requirement and its impact on cost

no of  No of
Revenue kgs no of Employ kgs
contributi they fixed ee they
on of produc employe market produc
each e in a es in the wage e in a
  employee day category rate day
Bread 3000 50 30 180 1500
8.3333 133.33
Cakes 2500 33 16 300 33
Snacks 2000 8 18 200 144
Assumption: The company is using chase strategy; they are hiring the employees temporarily from
the market whenever there is requirement. The number of employees that they need to hire is
calculated based on the requirement for the month.

No of additional employees they need to hire in each month is

jan feb mar apr may jun

0 6 10 6 8 12

0 0 0 5 7 14

0 0 2 9 10 7

Over time costs because of these additional employees per day is

jan feb mar apr may jun
0 1080 1857.6 1010.88 1395.48 2075.04
0 0 38.41537 1611.044 1996.399 4171.669
0 0 431.6667 1742.5 2063.333 1383.333

Monthly overtime costs is

jan feb mar apr may jun
0 32400 55728 30326.4 41864.4 62251.2
0 0 1152.461 48331.33 59891.96 125150.1
0 0 12950 52275 61900 41500

4. Analyse the profitability projections and how do you propose to improve the profitability
through category management, lost sales, wastages cost and production planning

  wastages lost sales

Bread 3% 5%
Cakes 5% 10%
Snacks 10% 5%

gross
  capacity margin
Bread 2500 25%
Cakes 300 40%
Snacks 250 30%

The loss because of wastages is given by

jan feb mar apr may jun
81000 97200 108864 96163.2 101932.2 112125.6
54000 64800 72576 96156 101934 134550
108000 129600 145140 192330 203880 179400

The loss because of lost sales is given by

jan feb mar apr may jun
 81000 97200 108864 96163.2 101932.2 112125.6
72000 86400 96768 128208 135912 179400
27000 32400 36285 48082.5 50970 44850

Gross profit margin in each category in each month is

jan feb mar apr may jun

Bread 675000 810000 907200 801360 849435 934380
Cakes 360000 432000 483840 641040 679560 897000
Snacks 270000 324000 362850 480825 509700 448500

Profit after lost sales, wastages and overtime costs is

jan feb mar apr may jun
Bread 513000 583200 633744 578707.2 603706.2 647877.6
Cakes 234000 280800 313343.5 368344.7 381822 457899.9
Snacks 135000 162000 168475 188137.5 192950 182750

distribution cost 25000

12500
other overheads 0
20000
managerial remuneration 0
15000
total investment 00
cost of capital 15%

3500
monthly cost 00
2250
cost of capital 00
3687
total cost per month 50

Net profit after considering all fixed and variable costs is

jan feb mar apr may jun
Bread 144250 214450 264994 209957.2 234956.2 279127.6
Cakes -134750 -87950 -55406.46 -405.3325 13072.04 89149.94
Snacks -233750 -206750 -200275 -180612.5 -175800 -186000
total profit -224250 -80250 9312.539 28939.37 72228.24 182277.5

5. If you were to advise Subbu, on demand management and supply chain efficiencies, prepare
your views and implementation plan