The Challenge: Order Valuation
The company involved in production and export of chocolate and confectionaries had a hard time to accept or reject sales orders, since they had no systematic solutions.
Exports were made on delivered duty paid (DDP) terms. They based costs on accounting data and added customs tax and delivery expenses of outsourced logistics. Government Export Promotions were not included in order costing.
The Solution: Bu using Reflex, the export manager
Could allocate government export promotions to orders received. Furthermore, instead of using accounting data, he could use global market prices for the basic ingredients at the date of the order.
Could estimate available capacity to meet the order before accepting the order to avoid delivery date delay penalties.
Could renegotiate order terms with the customer instead of outright rejection of unprofitable orders. He simulated order parameters to make an counter offer. For example, if the Saudi order was not in sufficient to fill the whole truck, he made a discount in price so that Saudi customer increased the order quantity to set the truck at full load.
- Avoided unprofitable orders.
- İncreased the profitability of already profitable orders.
- Calculated the effect of government export promotions on order costing to find the real breakeven points.