INTRODUCTION Among the investment avenues, commodity futures trading is a fast growing sector with huge untapped potential, along with the financial markets. The major difference between commodity and financial markets is that, in commodities futures physical delivery takes place where as in the capital market it does not. In these markets, there are farmers, industrialists, warehouses, consumers, dealers and traders, who buy and sell commodities. There are warehouses, which stores commodities and there are consumers, who consume them eventually. In the Indian context, warehouses are necessary for the commodity sector and commodity future trading especially for farmers because agricultural commodities constitute a major segment of the Indian economy. When the role of warehouse is necessary The role of a warehouse is most necessary in the spot market where a farmer after having harvested his crop sells them to commission agents who in turn sells them to a Mandi. The Traders in Mandi may then sell it to a large consumer or to a trader who in turn will sell it to some other consumer, industry, exporter or miller at the right time and right price. The Goods during this period are stored in the warehouse. It is seen that today 80% of the warehousing capacity is used by the Government for storing various commodities under the Public Distribution System and for storing fertilizers Commodities form almost 58 percent of India's Gross Domestic Product out of which 22 percent is agriculture, and two third of the population depend up on agriculture for livelihood. Warehousing forms the basic platform of delivery based trading in commodity futures. Warehouses play an important role in commodities futures, as most of trades are settled with delivery. That is, if the seller chooses to handover the commodity instead of the difference in cash, the buyer must take physical delivery of the underlying asset. Hence, warehouses play a significant and decisive role in the proper and efficient functioning of commodity futures trading. Warehousing system and warehouse receipts act as the chain, connecting farmers with the future market and credit financing. Using this facility, the farmer can hold the commodity to future profit and can make money for giving the inputs and day-to-day expenditure. Buyers and sellers have different roles in a transaction. So an impartial collateral manager is essential to act as an interface between buyers and sellers. Warehouse assayer acts as collateral manager who is neutral, reliable and creditworthy to both parties.
There are several inefficiencies occurred in the traditional supply chain. First, the only means for price discovery is at the mandi. Although farmers might forecast the price from the previous days, they cannot know the real price in advance before they reach the mandi. In this way, they have to incur considerable amount of logistic costs. Without real-time information about price and demand, farmers cannot make effective decision about when/where/how much to sell or produce. Since the selling price is not discovered before reaching the mandi, the farmers earn low profits or are even in deficit, leaving them in...
The most important stage of the value chain is inbound logistics, because they have the chance to build value in advance. Thus, the factors of this phase are considered to be upward action. In this case, logistics task including the goods received from suppliers cargo storage, loading and unloading and the inside of the transport of goods, and lay the product on the shelf. Tesco is trying to retain consumer choice, at the levels of the store, at the same time increase the efficiency of its distribution system. For damaged goods and products quality control program of the application, it provides less unfairly assume cost, company a great opportunity, therefore, to prevent these costs on to consumers by to potentially add value for the company.
Pennings, Joost M.E. Research in Agricultural Futures Markets: Past Present and Future. Presentation Paper: Wageningen Agricultural University: Netherlands. 8 June 2001.
It is explained within these definitions commodities are often sold in future contracts by investors, which is an agreement to buy or sell a commodity in a designated future period at a price agreed upon at the commencement of the contract by the buyer and seller. Future contracts are standardised according to the quality, quantity, delivery time and location of the commodity. A future contract differs from an option, an option gives one of the parties a right and the other an obligation to buy or sell. While a future contract represents a requirement of parties, one to deliver and the other to accept delivery. A future contract is part of a class of securities called derivatives, named because securities derive their value from the worth of an underlying investment ( Farlex 2011).
...pital resources like distribution vehicles and storage warehouses should be outsourced to help reduce the high cost of operation which in turn can lead to reduction of its products price. The company should concentrate on product development and evolution and delegate distribution roles to outsourced firms. Such initiatives have worked well in the new Indian market and should be implemented in other areas.
Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.
In the competitive environment, it is necessary for moving products involves reception of products at an intermediate location, store, repackage, clear customs and transport to final destination. The other factor in the supply chain logistics is speed given information flows fast in the internet era. The customer expects everything quick accustomed to the instant status access to the information. With the real time inventory, customer expects the location of the product, it is next scheduled movement and the final delivery schedule.
Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.
Storage and transportation of stock are important activities that connect all three parts of the supply chain. To work on the logistics aspects of business, LeanFoods employs specialist transportation and storage companies. TDG is one such partner of LeanFoods, for storing and transportation of pallets of LeanFoods cereals. This enables LeanFoods to concentrate on its specialist area of manufacturing cereals and other food products. To reduce the distribution costs and keep the products competitive, LeanFoods shares transportation with another manufacturer, Kimberley Clark. Sharing of transportation helps in reducing the number of part-full or empty vehicles on the road. This system not only saves time and road miles but also provides additional benefits of reducing CO2 emissions.
Inventory management can enhance the efficiency in operation of the supermarket. Supermarket must ensure that the correct levels of inventory are being maintained throughout the store, and that merchandise is purchased at the best price point as possible. Holding too much inventory on hand generate costs like carrying costs. Whereas having too little inventory on hand makes customers dissatisfied and it leads to declining
1. Inbound logistics focuses on the materials and processes coming in to the organization before it has been subjected to different value creation activities. “Inbound logistics represents the material flows from a firm’s suppliers to itself from the buyer’s perspective (Samaras).” An example is the food industry, such as a restaurant, in managing incoming food and supply shipments to arrive at the restaurants when they are needed making sure to keep in mind the arrival times and inventory levels necessary. One of the many issues is that the part may all come in at different times, thus inbound logistics handling activities becomes extremely important in coordinating and optimizing incoming materials and services to when and where they are needed. This is especially true of the food industry, where the majority of the time the supplier in question are perishable and have a much shorter shelf-life as well as different handling risks and regulations. “The goal of inbound logistics in a lean manufacturing operation is to reduce total costs (i.e., considering the operation as a whole) by managing deliveries from suppliers so that the correct and defect-free materials are at the assembly line at the right time in the right quantities (Holmstrom, 1994).”
Preceding from this understanding and being a logistics staff officer, my carrier is full of logistics proble...
Customer order and decoupling point are what sets the inventory position in the production and tell them how they operate.
Warehouse is the place that use to storage or accumulation of goods, warehouse are mainly associated with the movement
As an outcome of the thesis, my professional interest on the issue associated with the development of logistics sector has been enhanced. Furthermore, I am planning to keep an eye on the sector to enhance my knowledge which will benefit me and the organization I work for.