Sales allocation method improvement: a case study in automobile manufacturing company

Abstract

The aim of the research is to manage the sales allocation of vehicle in distribution function in sales planning department in automobile manufacturing company by improve the allocation method to increase the retail sales ratio. The research started with the study of literatures and the current allocation method in terms of overall process workflow, sales computer system, and data collection of the previous years. Then the current allocation method is examined, analyzed and model implemented. The proposed allocation method is then established with the used of verification system for Back Order data, new booking forecast method by Moving Average methodology with Seasonal index of the past records. The results of the proposed allocation method model will be compared with that of the current allocation method model from the sampling data of actual January 2008 allocation. Sales allocation according to the proposed allocation model is suitable for the current situation of automotive industry which is highly competitive as it responds to the real market demand more accurately, more systematic and effective than the current allocation method model. The proposed allocation method can improve the average matching ratio of all dealers nationwide by 4.07% which gives the direct improvement impact to retail sales ratio of the company by 4.07% and shorten customer delivery lead time by a half month. Moreover, sum of percentage error of matching ratio of all dealers is improved by 15.27% and the significant improvement in reduction of the sum of percentage error of Back order remaining by a hefty 47.5%. It implies the higher sales opportunity and customer satisfaction to the corporate which better overall retail sales and larger market share nationwide can also be expected. The recommendation is to implement the proposed allocation method to the model that is in shortage supply situation since this proposed allocation system is very clear, simple and effective which will help the corporate to allocate the right amount of vehicles to the right location of dealers at the right time.