AllFreePapers.com - All Free Papers and Essays for All Students
Search

Mmfd Sales Forecast Case Solution

Autor:   •  January 26, 2017  •  Case Study  •  2,330 Words (10 Pages)  •  2,241 Views

Page 1 of 10

   

  1. PROJECT REPORT 

Harmonizing Demand forecast and supply at Mahindra & Mahindra 

 

 

 

[pic 2] [pic 3]

 

Mahindra & Mahindra is struggling with maintaining adequate stock of tractors, Irregular and short supply of tractors to the dealers from company stockyard during peak season, forced them to sell alternate model at discounted price to customers

Dealers carry stock of 40 days of their annual sales and additional 20 days of the sales were held at company stockyard, for customers who are willing to wait for 515 days.

[pic 4]


 

  1. Project Report 

Harmonizing Demand forecast and supply at Mahindra & Mahindra 

Mahindra & Mahindra Ltd. Was founded in 1945 and it had its headquarters in Mumbai. This multinational group is one of the largest vehicles manufacturers by production and largest manufacturer of tractors in India. In 2015 M&M manufactured 212237 tractors. It has business operations in 100 countries where it provides expertise in aerospace, automobile, farm equipment, finance, hospitality etc.

MMFD provided tractor and agricultural equipment under the “Mahindra Tractor” brand. It had four manufacturing facilities in India, three in the US, one in Australia and two in china.

Mahindra & Mahindra Farm Division(MMFD) is struggling to maintain the adequate supply of Tractors to the dealers and the reason was absence of efficient demand forecasting. Dealers of MMFD carried tractor stock equal to 40days of their annual sales, and an additional stock was kept at the stockyard of company. Therefore, there were 60 days in buffer for customers ready to wait for 5 to 15 days. The production at MMFD was driven by consumer demand and material availability. [pic 5]

Manager did not want to lose sales; therefore, to cater to market demand, they frequently did mid-month revisions in forecast plan and inter-stockyard transfer of tractors. But still dealers were not satisfied due to the supply of tractors, here in this report we’ll be discussing the methods of demand forecasting.

 

  1. Domestic Tractor Market in India 

  • Agriculture sector employed 58.2% of country’s workforce in 2011 and contributed 15.7% in the same year to the GDP, tractor is the most important equipment for agriculture production
  • In 2011, the domestic demand of tractor in India was largest in the world
  • 16 companies are present in the tractor market
  • Primary demand of tractor is from Agriculture sector and secondary from areas like haulage, constructions etc.
  • Increase in demand because of awareness and better quality seeds & irrigation facilities  
  • Only 10% of Indian farmer own tractor, but increased lending by banks has increased the demand of tractors

 

  1. MMFD’s Business Model 


  • MMFD has four manufacturing plants in India located at Mumbai, Jaipur, Rudrapur and Nagpur
  • These manufactured tractors were then transported to company’s stockyard by road (these stockyards are present in every state)
  • Presence of stockyards in every state helped them in avoiding the payment of central tax
  • MMFD had 26 sales office
  • Tractors were manufactured and supplied for the current month plus two months in advance
  • MMFD fad approximately 197 tractor models, the top 50 models accounted for 89% percent of sales
  1. Current Business Process 

  • Area Office: Employees here forecast the demand from dealer inputs and the final report is prepared after allocating different weights to components affecting future demand. Their work is limited to a region or area
  • Planning Marketing & Information System (PMIS): They analysis the reports submitted by

Area office and prepare the final forecasting report for entire country

[pic 6]

  • After incorporating any last-minute changes if any required, the report is submitted to Supply Chain & Production Control department (SCPC). Monthly plans are made by assigning day-to-day tasks. Weather company will be using shared or limited capacity and accordingly lead time duration is decided
  • Shop Floor will start working on the production plan given by SCPC, their work is mainly focused on production maximization
  • Now, tractors are manufactured and ready for supply to the dealers, the only cost here involved is transportation cost
  • MMFD delivers these tractors to the Area Stock Yard(ASY) based on the report/demand forecasted by Area office
  • From ASY, dealer sells the product to final customer
  1. Data Given 

Time

MMFD

Sales

Industry Sales

Time

MMFD

Sales

Industry Sales

Time

MMFD

Sales

Industry Sales

1

4698

10281

37

10905

24416

73

11282

27039

2

4605

11683

38

9842

24262

74

12870

31113

3

4859

14042

39

12259

29924

75

17811

39396

4

4136

10283

40

9285

21738

76

12128

27219

5

3872

9522

41

7950

20417

77

10161

24434

6

5938

14263

42

11482

33280

78

16359

41998

7

8790

20264

43

15817

35817

79

17796

43171

8

6825

15778

44

10288

26057

80

11604

27743

9

4858

12758

45

8743

23742

81

11517

27424

10

5907

14297

46

10419

26259

82

15925

35941

11

6386

17521

47

8801

23995

83

13532

32140

12

9085

24773

48

8631

28421

84

14648

43245

13

6492

15714

49

9682

22357

85

15411

38301

14

6832

17352

50

9052

23488

86

16653

40442

15

8867

20901

51

8242

29631

87

15411

38356

16

4998

12065

52

8242

20594

88

13534

31198

17

5305

13452

53

7674

20051

89

12454

29763

18

7618

22018

54

10339

27466

90

16300

42042

19

11443

27631

55

13919

34778

91

23378

55946

20

8716

21799

56

10531

25839

92

16975

37044

21

6119

16209

57

8435

23053

93

15135

35298

22

7408

16249

58

9750

23548

94

19430

42838

23

7493

18867

59

8477

22619

95

17534

41784

24

8541

23857

60

9814

28817

96

17822

45500

25

8029

16828

61

10684

24644

97

17740

42513

26

8650

19062

62

11693

27949

98

17952

41874

27

8650

22724

63

14439

32737

99

21552

48716

28

9960

15320

64

9081

21654

100

15699

38577

29

7152

16936

65

9781

22718

101

15059

36407

30

7322

21986

66

10307

28855

102

23508

56864

31

9239

30998

67

14800

33205

103

30519

67886

32

14123

22359

68

7960

20983

104

16175

39735

33

7341

20860

69

6858

17751

105

15315

36604

34

9404

24057

70

9438

22114

106

17950

42277

35

8613

23506

71

8487

20025

107

13534

36701

36

9425

27985

72

10609

31286

108

15054

43541

 

...

Download as:   txt (16.6 Kb)   pdf (666.3 Kb)   docx (854.7 Kb)  
Continue for 9 more pages »