Professional Documents
Culture Documents
PAPFISH
A report submitted to
Instructor: Prof. Lalita Murty
Academic Associate: Ms. Diti Shah
By
Abhik Paul
Roll No: 15004
Section: B
On
27 June 2015
i|Page
Memo
DATE
TO
FROM
SUBJECT
As per your request, please find attached the decision report of Mobile Van fish selling project
of PAPFISH and its recommended future course of action.
The Mobile Van fish selling project must satisfy the vision of PAPFISH, which is to increase
the visibility of the organisation using providing fresh fish at doorsteps. Also, the activity of
the organisation, which is not a welfare activity to the fishermen, should not incur such
significant losses. It reflects that the project is poorly managed and is unable to deliver on its
goals.
I recommend that the Mobile Van fish selling project undergo appropriate restructuring in the
existing system and continue with the project.
ii | P a g e
Executive Summary
Mobile Van fish selling project is incurring huge losses, and a decision has to be made about
its future course of action. PAPFISH has the option to shut down mobile van 1 and 3, and
continue with mobile van 2; or it could alternatively restructure the existing project and
continue by incorporating the appropriate changes. The decision taken must align with the
PAPFISHs objective, result in an increase in profitability, effectiveness and efficiency as well
as reflect positively to the locals.
I recommend incorporating appropriate and adequate restructuring of the mobile van fish
selling project and continue with the same.
iii | P a g e
Table of Contents
Content
Page Number
Executive Summary
iii
Situational Analysis
The Options
Evaluation of Options
Recommendations
Action Plan
Exhibits
iv | P a g e
Situational Analysis
PAPFISH, an apex body of fishermen cooperatives, instituted the mobile van fish selling
project. This activity was the only retail activity that added visibility of PAPFISH. It suggests
the importance of the project as an integral part of PAPFISHs strategy to expand it in other
cities.
For that purpose, PAPFISH instituted three mobile vans in three locations. The number of vans
operating is adding to the expenses of PAPFISH by an amount of Rs. 2,43,600 per year per
van, whereas the van is unable to operate in full capacity. It implies the need to reduce the costs
of vans operating as well as operate the vans in its full capacity.
Presently, three employees handle the operations of each van. The skill sets of the driver were
not utilised fully, who can easily handle the work of the supervisor. Thus, the salary of
supervisor adds to the cost of the project by Rs. 2,40,516 per year per van, which needs to be
curtailed. Also, the number of working hours of employees is 11 hours with a break time of 4
hours. It adds to the expenses of the project by Rs. 3,10,000 (approx.) as salaries. The extra
costs incurred without any return to the project suggests the need to reduce the number of
working and break time hours.
After 2004, PAPFISH lost the fishing rights of the site. It impacted the supply of fishes. The
margin of the fishes were fixed, and it did not earn any premium on high valued fishes. The
constrained supply of fish and the uncompetitive pricing of fishes prohibited PAPFISH to
generate greater revenue.
It can be argued that the losses incurred are due to under-utilisation of human resources, static
pricing of fishes and unorganized planning of working hours and break time hours. Thus,
PAPFISH must choose a viable option which would provide highest return for absorbing the
deficit as well as for its future growth.
1|Page
The Options
1. Revive the existing mobile van fish selling project by transferring supervisors,
incorporating competitive pricing of fishes and reduce the number of working and break
hours and continue with it.
2. Shutdown the operation of mobile vans 1 & 3 but continue with mobile van 2 only.
Evaluation of Options
1. Revive the existing mobile van fish selling project by transferring supervisors,
incorporating competitive pricing of fishes and reduce the number of working
and break hours and continue with it.
Increase in Effectiveness & Efficiency: The extra human resource, i.e., the
supervisor incurs around Rs. 7.2 lakhs per year as per Exhibit 1. It can be easily
substituted by incentivising the driver to do the extra work @ Rs. 4000 per
month, which saves Rs. 6.72 lakhs per year.
2|Page
Impact of Locals: The local people and the leader will continue to oppose
parking of the mobile fish vans. The reduced number of parking hours will
certainly not have any negative impact on the sale of fishes.
2. Shut down the operation of mobile vans 1 & 3 but continue with mobile van 2.
Increase in Profitability: The shutting down of those two mobile van achieves
the purpose of cutting down on losses. Hence, the profitability of the project
increases to around Rs. 98,238 per year (as per Exhibit 2).
Impact of Locals: The lone mobile van will not attract too much attention
from the locals. Hence, there will be less demand. But, this will also make the
locals believe that PAPFISH has succumbed to the opposition. This, in turn,
will encourage them to oppose the parking of the mobile van 2. Hence, the
project will be shut down completely due to continuous opposition from the
locals.
Considering the mentioned criteria, the restructuring of the existing system of mobile van fish
selling project by incorporating appropriate methods would be suitable.
Recommendation
It is recommended that PAPFISH restructure the mobile van fish selling project by
incorporating the appropriate restructuring methods and continue with it.
3|Page
Action Plan
1. Given the varying market demands, the margin should not be static. The open market
system demands the pricing to be competitive as well as be dynamic. The high valued
fish and fish weighing more than 2 kilos should be charged a premium of at least Rs. 10
per kg.
2. The number of employees assigned to each van be reduced to 2, i.e., the cutter and the
driver. The driver should be incentivised by paying an additional amount of Rs. 4000
per month to perform the extra work of the supervisor.
3. The number of working hours should be reduced to 9 hours from 11 hours. Also, the
break time should be reduced to 2 hours from 4 hours.
4|Page
Exhibits
Exhibit 1: Profit for Option 1
New (in Rs.) Old (in Rs.)
1943838
1775358
Sales Margin
Expense
Supervisor
Driver
0
613387.6
721548
573696
Cutter
345413.5
422172
Ice
Wastage
72000
234000
72000
234000
Diesel
Maintenance
280800
108000
280800
108000
Miscellaneous
108000
108000
182236.9
-744858
4000
Margin
River Fish ( >2 kg)
Marine Fish
Assumed 40% fish in the
category
45
58
986310
1775358
Expenses
Supervisor
Driver
Cutter
240516
191232
140724
721548
573696
422172
Ice
Wastage
72000
78000
72000
234000
Diesel
Maintenance
93600
36000
280800
108000
Miscellaneous
36000
108000
98238
-744858
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