- For a fresh produce business assume that a company procures Green Coconut from 3 different procurement partners. These 3 procurement partners can be classified as below :
a. Wholesaler - He provides Green coconut as Rs 21, doesn't ensure quality & can deliver only in bulk. Minimum 2500 pieces.
b. Retailer - He provides green Coconut at Rs 35, ensures best quality & delivers at our warehouse daily. No minimum limit, can deliver even 1 piece to warehouse.
c. Farmer group - He provides Green coconut at Rs 24 ensures quality & takes no delivery responsibility.
There are no minimum qty condition associated with Farmer group. Assume that over long terms, as farmer group gets more volume, they can assure us Prices <18 & can even take care of delivery & quality. Wholesaler/retailer cannot assure same, as there are lot of middlemen between them & farmer.
Design a procurement model that allows us to shift from retailer to farmer group within a period of 6 months. Assume that, we are able to scale from 25 coconuts/day to 1500 coconuts/day by the end of 6 months
Can the question be solved mathematically?