JSW STEEL – LOGISTICS DILEMMA

INTERNATIONAL LOGISTICS MANAGEMENT

SUBMITTED BY –

MATHEW FEBIN CHARLES

B2539
The problems faced by JSW Steel were as follows –

1. Rakes or Rail
2. Whether they will get a clean barge
3. If they will be able to complete their quarterly target
4. If they will be able to deliver the goods on time to JSAW
5. BOXN and JUMBO availability
6. Moving ahead as per the mission of the organization

Dilemma –

Rail route or sea route to transport the materials.

The total cost – Rs. 30000

Cost of transportation –

Barge – 22% cheaper than rail

That would be 100-22 = 78%

Rake – 3180 (As per exhibit)

Barge – 3180 x 78% = 2480.4

Cost of clean barge Class I = 30/ton

= 2480.4 + 30

= 2510.4

Cost of clean barge Class II = 25/ton

=2480.4+25

=2505.4

If delivery is delayed, then 10% deduction on original value

= 30000-10%

= 27000
If delayed contribution margin

Class I barge

= 27000 – 2510.4

= 24489.6

Class II barge

= 27000 – 2505.4

= 24494.6

Rake = 27000 – 3180

= 23820

Unclean + delay = 20% deduction

= 30000 – 20%

= 24000

Barge = 24000 – 2480.4

Contribution Margin = 21519.6