ASSIGNMENT SUBMISSION FORM

Course Name: Logistics and Supply Chain Management - I

Assignment Title: Grocery Gateway Case Write-up

Submitted by: Group – L1B9

Group L1B9
Group Members PGID
Itisha Jain 61920289
Sangeeta Pandey 61920421
Paritosh Nayak 61920443
Trisha Sinha 61920582
Madhusree Sarker 61920417
 Considering the demand is uniformly distributed across the location we can estimate on an average order and cost saving as
given below:
Stop/hr (A) 2.7 4.0
Average orders/ day (B) 1117
Average truck shift/day (C) = (B/(A*6.5)) 64 43
Variable cost/ Day (D) = C*30*8 15273 10309
Cost saving/ year = (15273-10309)* 360 1786971
So, increasing stop per hour will save approximately $1786971/year. Moreover, the required number of trucks will be also less
(approximately 30% of the truck can be reduced) and saving on fixed cost will be approximately $16500.

Grocery Gateway Case

For Grocery Gateway to achieve four stops per hour for its drivers, Dominique was considering the following 3 options. These 3
options can be evaluated in the following way:

Options Pros Cons

Keeping the trucks on the road Reach more customers and serve more Increase in the variable cost of vehicle and driver and
longer by extending driver shifts areas within the given time period increase in truck maintenance costs such as extra fuel cost,
repair cost

Expanding the licensing agreement
to include a new feature to analyze
route profitability and to
determine the desirability of
delivery in particular time slots.
Increase in the delivery charge
Options 1 and 2 could lead to higher growth in productivity and efficiency and could lead to higher customer satisfaction.
The software will provide the drivers with
routes that will cost less and increase their
profitability
Increase profitability as the cash inflow can
be utilized in other areas of operations
Customers may not mind a slight increase
in the delivery fee as they value the
convenience provided by the online
delivery immensely
The investment of $250,000 will initially impact the
profitability of the firm considerably.
There is a lot of uncertainty involved in whether the initial
investment will provide substantial returns in the future.
The new feature being added could lead to frequent glitches
in the entire system.
Loss in revenues as customers might start ordering less
frequently
Reduced customer base as price-sensitive customers looking
for affordable options may completely stop ordering online