AABC Case Studies
Maruti Petrochem: Simplifying the price tracking mechanism to prevent losses
Description:

The client is a petroleum products trader. He operates out of Mumbai, Daman, Silvassa and Vapi. Recently, he entered the wholesale trading of the best quality N-Propyl Alcohol, Ethyl Acetate and ISO Propyl Alcohol.

The situation:

The client’s 6-member sales team was unable to offer competitive pricing to his customers due to fluctuation in daily prices. As a result, the company incurred losses due to their sales team’s inability to track the pricing.

AABC Solution:

After reviewing the situation, AABC consultant suggested the client to prepare a detailed excel sheet of all products to track the cost and selling price.

The cost price of products was determined after considering the purchase price, evaporation, barrel and storage costs, freight inward and outward, and labour charges. The selling price of products was arrived at after adding the margin.

Further, he suggested including price escalation for clients – those who pay in advance and those who pay after 30/60/90 days. It addressed the client’s tracking problem and prevented losses.

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