Selection of Distribution Nodes

High demand, More future growth, Competition, Responsiveness, Long term Plan Warehouse Maharashtra, Gujarat, UP, TN

CFAs

Moderate demand, Operational Efficiency, Expected ROI less poor connectivity and high logistics cost North Eastern region, A&N, Lakshadweep etc.

Low Demand, Customer scattered, Low Accessibility, Growth Potential low

NOC

Low demand Markets

Contd.

Cost structure for calculation of expenses for LIL/CFAs: - Inventory Carrying cost - Rental for Space - Fixed Operating costs salaries etc. - Variable costs hired labors etc. It has been assumed that NOC takes Rs 50000 monthly; correspondingly, the annual cost comes out to be Rs 6,00,000

Direct
LIL Channel NOC Channel 10% to 29% 35% to 6%

Retail
35% to 50% 20 to 15%

States with High Retail Trade - NOC depots States with High Direct Trade - LIL Depots Low Demand or High Cost States - CFAs

Out of 3 sources , Which source should be allocated to which depot ? Could the existence of 3 sources influence the need of multiple depots in certain states?

Market priorities and demand Well established connection with the bounding states Planned capacity of the allocated sources to meet the requirement Thus ,states like Maharashtra, Uttar Pradesh, Tamil Nadu need to have multiple depots so as to meet the demands of depots in neighbouring sites