Inventory strategy for processing independent demand a study on amul

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this project is about the INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND of Amul done in SILCHAR town of ASSAM

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Inventory strategy for processing independent demand a study on amul

  1. 1. INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND (A Study on Amul) Dissertation Submitted to Assam University, Silchar for the award of the Degree of Business Administration By SAGARDWIP DEY Under the guidance of DR D. GHOSH DEPARTMENT OF BUSINESS ADMINISTRATION JN SCHOOL OF MANAGEMENT STUDIES ASSAMUNIVERSITY SILCHAR – 788 011, INDIA MAY 2012
  2. 2. DEPARTMENT OF BUSINESS ADMINISTRATION ASSAMUNIVERSITY (A CentralUniversity) SILCHAR-788011 (Assam) : 03842-270200, 270847Dr .D.Ghosh CERTIFICATEI certify that the work entitled “INVENTORY STRATEGY FOR PROCESSINGINDEPENDENT DEMAND” written and submitted by Sri Sagardwip Dey in partialfulfillment of the requirement for the Degree of Master of Business Administrationis a work by him. Sri Sagardwip Dey is a very hard working and sincere student.Dated, Silchar (DebomalyaGhosh)The 16th May, 2012 4
  3. 3. PrefaceI SAGARDWIP DEY declare that the project report titled “INVENTORY STRATEGYFOR PROCESSING INDEPENDENT DEMAND” in Amul Silchar, carried out by meunder the supervision of Dr.D.Ghosh is the result of the original work done by me.To the best of my knowledge and belief this report would not be submitted to anyother institution apart from Department of Business Administration of AssamUniversity or any other organization for using any purposes.My special thanks are to Mr. Ajay Agarwal& my friends who helped me a lot in datacollection and their encouragement in the successful completion of my work.For the Purpose of the research I have visited Amul’s warehouse, distributor &retailersDated, Silchar (Sagardwip Dey)The 16th May 16, 2012 5
  4. 4. INDEXChaptersPage no. INTRODUCTION 6-7 Introduction of study 7 Objectives of study 7 Scope of study 7 CONCEPTUAL & THEORITICAL FRAME 8-19 Meaning & definition of inventory 9 Classification of inventory 9 Risk & cost associated with inventory 9 Understanding inventory management 11 Historical review of inventory management 12 Types of inventory 13 Inventory cost 14 Purpose of inventory management 15 Benefits of inventory management 15 Inventory control techniques 16 ORGANIZATION PROFILE20-50Introduction 21 Organization overview 25 Organization structure 28 Production function 30 Operation analysis 30 Amul supply chain 33 Plant 34 6
  5. 5. Amul products 36Amul product history 50RESEARCH METHODOLOGY 51-53Research meaning 52Research design 52Nature of data 52Research type 53Sampling size & technique 53DATA ANALYSIS & INTERPRETATION 54-92Inventory movement data 55Findings 91Suggestions 92Conclusion 92APPENDIX 93-99BIBILOGRAPHY 100-101 7
  6. 6. CHAPTER – 1INTRODUCTION 8
  7. 7. INTRODUCTION OF THE STUDY This study is about the inventory management of Amul in Silchar town. Everyenterprise needs inventory for smooth running of its activities. It serves as a link betweenthe production and distribution process. The greater a time lag, the higher the requirementof inventory the unforeseen fluctuation of inventory demand and supply of goods,fluctuating inventory prices, necessitate the need for inventory management. The investment inventory constitutes the most significant part of the currentassets inventory of the under taking. Thus it is very essential to have a proper control andmanagement of inventory. Inventories cost account for nearly 55 percent of the cost ofproduction, as it is clear from an analysis of financial statements of large number ofprivate and public sector organizations. So, it essential to establish suitable procedures forproper control of materials from the time of purchase order placed with supplier untilthey have been consumed properly. This study is about how the distributors are managing their inventory, what arethe problems they are facing and what are the inventory techniques they are using tomaintain the inventory level.OBJECTIVE OF THE STYDYTo understand the practical concept of Inventory Management &and analyze themanagement technique used in managing the inventory.To find the problems faced by retailers & distributors in selling and storing.To collect the information about the movement of Inventory in the lower leg.SCOPE OF THE STUDYThe study carried out in Silchar city so its scope is mainly limited to Silchar city.It gives information about the size of the retail network.It gives information about the services given by distributor to their retailerIt will served retailer &consumer in better manner.It provides suggestions to the company to improve their inventory strategy. 9
  8. 8. CHAPTER – 2CONCEPTUAL & THEORITICAL FRAME 10
  9. 9. MEANING AND DEFINITION OF INVENTORYThe term inventory is originated from the French word Inventaire and the LatinInventariom which implies a list of things found. The term “inventory” has a widermeaning then the term “Materials” or “store”.According to the “Institute of Chartered Accountant of India” inventory means“Tangible Property” held a) For sale in the ordinary course of business. b) In the process of production for sale. c) For rendering of services.The term inventory refers to the stockpile of the products a firm is offering for sales andthe components that make up the product. Inventories are the stocks of the product of acompany, manufacturing for sale and the components that make up the product.The various forms in which inventories exist in manufacturing company are (1) rawmaterial (2) work-in process, (3) finish goods and (4) store and spares. However, incommercial parlance, inventory usually includes store, raw material, work-in process andfinish goods. The term inventory includes – raw material, work-in process, finish goodspackaging, spares and others stocked in order to meet an unexpected demand ordistribution in the future.CLASSIFICATION OF INVENTORIES Classificationof InventoryProduction Work-in Progress Finished goods MRO inventoryInventory1. Production InventoryIn production inventory there are two types of productioninventory that are as follows:a) Material, which are purchases from the market like raw material and readymadeParts & components require for manufacturing of equipment. 11
  10. 10. b) Special part or component manufactured in once own company & kept in stock foruses in manufacturing.2. Maintenance RepairOperating supplies (MRO Inventory)There are material purchase from vendor & require for Maintenance or productionprocess.3. Work in progressThere are semi-finished products in various stages of production on the factory floor.4.Finished goods inventoryThese consist of manufactured kept in warehouses or retail outlets & are meet for sale.RISKS & COST ASSOCIATED WITH INVENTORIESHolding of inventories exposes the firm to a number of risks & costs. Risk of holdinginventories can be put as follows:-i) Price decline This may be due to increase in the market supply of the product, introduction ofa new competitive product price-cutting by the competitors etc.ii) Product deterioration This may be due to holding a product for too long a period for too long a periodor improper storages condition.iii) Obsolescence This may be due to change in customer‟s taste, new production techniqueimprovements in the product design, specifications etc.THE COSTS OF HOLDING INVENTORYi) Material costs This includes the cost of purchasing the goods, transportation and handlingcharges less any discount allowed by the supplier of goods.ii) Ordering costs This includes the variable cost associated with placing an order for the goods.The fewer the orders lower will be the ordering costs for the firm.iii) Carrying cost This includes the exposes for storing the goods. It comprises storage costs,insurance costs, spoilage costs, cost of funds tied up in inventory. 12
  11. 11. Understanding inventory managementEvery management problem is a decision problem. Decision is an important task that allorganizations have to take. The allocation of resource is a common issue to allorganizations. Organizations have to acquire, allocate and control the factors ofproduction which are necessary for the achievement of the business‟s objectives.Inventory management as one of the key activities of business logistics, has always beena major preoccupation for the company‟s survival and growth.The aim of inventory management is to hold inventories at the lowest possible cost, giventhe objectives to ensure uninterrupted supplies for ongoing operations. When makingdecisions on inventory, management has to find a compromise between the different costcomponents, such as the costs of supplying inventory, inventory-holding costs and costsresulting from insufficient inventoriesAccording to Wild inventory control is the activity which organises the availability ofitems to the customers. It coordinates the purchasing, manufacturing and distributionfunctions to meet the marketing needs. This role includes the supply of current salesitems, new products, consumables; spare parts, obsolescent items and all other supplies.Inventory enables a company to support the customer service, logistic or manufacturingactivities in situations where purchasing or manufacturing of the items is not able tosatisfy the demand. Lack of satisfaction could arise either because of the speed ofpurchasing or manufacturing is too protracted, or because quantities cannot be providedwithout stocks. Clodfelteradds that a good inventory control system offers the followingbenefits: a) The proper relationship between sales and inventory can better be well maintained. Without inventory control procedures in place, the store or department can become overstocked or under stocked. b) Inventory control systems provide a business with information needed to take markdowns by identifying slow-selling merchandise. Discovering such items early in theseason will allow a business to reduce prices or make a change in marketing strategybefore consumer demand completely disappears. c) Merchandise control systems allow buyers to identify best-sellers early enough in theseason so that re-orders can be placed to increase total sales for the store or department. d) Merchandise shortages and shrinkage, can be identified using inventory controlsystems. Excessive shrinkage will indicate that more effective merchandising controlsneed to be implemented to reduce employee theft or shoplifting.Emphasizing the pertinence of the topic, in 2001, Gourdin noted that „inventory is onearea of logistics that has received a great deal of management attention over the pastdecade. Executives now realize that holding excessive stocks is simply too expensive.Therefore, a great deal of effort has been expended to eliminate unnecessary inventorywithout compromising customer service. However, there are numerous situations whereinventory simply must be held, particularly when meeting the needs of global customers. 13
  12. 12. Management‟s goal should be to hold only what is necessary to satisfy customerrequirements and manage it effectively‟ (Gourdin 2001:82).Inventory problems preoccupy profit- making organizations and nonprofit institutions aswell. Inventories are common to agriculture, manufacturers, wholesalers, retailers,hospitals, churches, prisons, zoos, universities and national, state and local governments.Indeed, inventories are also relevant to the family unit in relation to clothing,pharmaceutical products, food and so forth. This indicates how inventories are importantand deserve a serious attention in order to achieve organizational objectives.Historical review of inventory managementHistorically, inventory management has often meant too much inventory and too littlemanagement or too little inventory and too much management. There can be severepenalties for excesses in either direction. Inventory problems have proliferated astechnological progress has increased the organization‟s ability to produce goods ingreater quantities, faster and with multiple design variations. The public has compoundedthe problem by its receptiveness to variations and frequent design changes .since the mid-1980s the strategic benefits of inventory management and production planning andscheduling have become obvious. The business press has highlighted thesuccess ofJapanese, European, North American firms in achieving unparalleled effectiveness andefficiency in manufacturing and distribution. In recent years, many of the firms have„raised the bar‟, yet again by coordinating with other firms in their supply chains. Forinstance, instead of responding to unknown and variable demand, they share informationso that the variability of the demand they observe is significantly lowerSilver, Pyke and Peterson continue arguing that in the United States ofAmerica and other Western Countries, productivity improvement was pursued throughreducing the amount of direct manufacturing labour expended per unit of output. Thiswas a valid strategy because of the high labour content in many manufactured products.However, the proportion of unit cost due to labour has been steadily decreasing in recentyears. In fact, the ratio of purchased materials to sales (in dollars) reached 60 percent forU.S. firms in 1985. Even large manufacturing firms, such as the U.S auto assemblers,purchase up to 60 percent of the value of the product. This implies that management ofraw materials inventories is an area that shows great promise for productivityimprovement. Japanese firms received much deserved attention in the mid-to late 1980sbecause of their remarkable performance on quality and inventory management. Thetremendous interest in Just-in-Time manufacturing (JIT) indicates that work-in-processinventory management is also an area ripe for improvement. 14
  13. 13. Types of inventoryAccording to Stock and Lambert, inventories can be categorized into six distinct formsthat are: a) Cycle stock. Cycle stock is inventory that results from the replenishment process and is required in order to meet demand under conditions of certainty, that is, when the firm can predict demand and replenishment times (lead times) almost perfectly. For example, if the rate of sales for a constant 20 units per day and the lead time is always 10 days, no inventory beyond the cycle stock would be required. While assumptions of constant demand and lead time remove the complexities involved in inventory management, let‟s look at such an example to clarify the basic inventory principles. b) In-transit inventories. In-transit inventories are items that are en route from one location to another. They may be considered part of cycle stock even though they are not available for sale and /or shipment until after they arrive at the destination. For the calculation of inventory carrying costs, in-transit inventories should be considered as inventory at the place of shipment origin since the items are not available for the buyer, sale, or subsequent reshipment. c) Safety or buffer stock. Safety or buffer stock is held in excess of cycle stock because of uncertainty in demand or lead time. The notion is that a portion of average inventory should be devoted to cover short-range variations in demand and lead time. Average inventory at a stock-keeping location that experiences demand or lead time variability is equal to half the order quantity plus the safety stock. d) Speculation stock. Speculation stock is inventory held for reasons other than satisfying current demand. For example, materials may be purchased in volumes larger than necessary in order to receive quantity discounts, because of a forecasted price increase or materials shortage, or to protect against the possibility of a strike. e) Seasonal stock. Seasonal stock is a form of speculative stock that involves the accumulation of inventory before a season begins in order to maintain a stable labour force and stable production runs or, in the case of agricultural products, inventory accumulated as the result of a growing season that limits availability throughout the year. 15
  14. 14. f) Dead stock is inventory that no one wants, at least immediately. The question is why any organization would incur the costs associated with holding these items rather than simply disposing of them. One reason might be that management expects demand to resume at some point in the future. Alternatively, it may cost more to get rid of an item that it does to keep it. But the most compelling reason for maintaining these goods is customer service. Perhaps an important buyer has an occasional need for some of these items, so management keeps them on hand as a goodwill gesture.Inventory costsAccording to Gourdin there are three types of costs that must be considered in settinginventory levels. a) Holding (or carrying) costs are costs such as storage, handling, insurance, taxes, obsolescence, theft and interest on funds financing the goods. These charges increase as inventory levels rise. In order to minimize carrying costs, management makes frequent orders of small quantities. Holding costs are commonly assessed as a percentage of unit value, i.e. 15 percent, 20 percent, rather than attempting to derive a monetary value for each of these costs individually. This practice is a reflection of the difficulty inherent in deriving a specific per-unit cost for, for example, obsolescence or theft. b) Ordering costs are those costs associated with placing an order, including expenses related to personnel in a purchasing department, communications and the handling of the related paperwork. Lowering these costs would be accomplished by placing a small number of orders, each for a large quantity. Unlike carrying costs, ordering costs are generally expressed as a monetary value per order. c) Stock-out costs include sales that are lost, both short and long term. These charges are probably the most difficult to compute, but arguably the most important because they represent the costs incurred by customers (internal or external) when inventory policies falter. Failure to understand these costs can lead management to maintain higher (or lower) inventory levels than customer requirements may justify. 16
  15. 15. PURPOSE OF INVENTORY MANAGEMENT1. To maintain independence of operations  Provide “optimal” amount of cushion between work centers  Ensure smooth work flow2. To allow flexibility in production scheduling3. To meet variation in product demand4. To provide a safeguard for variation in raw material or parts delivery time  Protect against supply delivery problems (strikes, weather, natural disasters, war, etc.)5. To take advantage of economic purchase-order sizeBENEFITS OF INVENTORY MANAGEMENT1. Reduced stocking costs resulting from efficient matching of requirements to stock2. Re-order recommendations highlight urgent needs. Help prevent Stock-outs.3. Instant access to 24 month usage pattern aids decision making reveals trends. Olddata easily purged.4. Automatic capture on audit trail of all stock movement details helps resolve5. Instant month-end valuation of receipt, issues adjustment etc.6. Rapid stock and work-in progress evaluation.7. True multi-location without constraints.8. Easy monitoring of slow moving stocks.9. Automation of inventory checking cycles ensures that items are not forgotten.Improves accuracy10. Automatic tracking of scrap rates and recalculation of safety levels reduces effort,improves control11. ABC analysis system focused attention on high value stock holdings. 17
  16. 16. INVENTORY CONTROL TECHNIQUESInventory control techniques are employed by the inventory control organization withinthe framework of one of the basic inventory models, viz. Fixed order quantity systemsor fixed order period system. Inventory control techniques represent the operationalaspect of inventory management and help realize the objectives inventory managementand control.Several techniques of inventory control are in use and it depends on theconvenience of the firm to adopt of the techniques. What should be stressed,however, is the need to cover all items of inventory and all stages, i.e. from the stage ofreceipt from supplies to the stage of their use.The techniques are most commonly used are the following, Economic Order Quantity (EOQ) Continuous Review Periodic Review Systems Hybrid systemEconomic Order Quantity (EOQ)How much to order –Major decision area where focus on decision regarding how much Quantity to order at atime is important case of inventory management. Number of techniques has beendeveloped to help managers in this decision. Most widely used technique is “Economicorder Quantity”. This represents the size of an order for which the total cost isminimum economy in purchasing.Total cost for this purpose consist 2 major costs –a) Ordering cost or procurement cost.b) Carrying / Holding cost. Where, These two types of cost are opposed to one another. The ordering cost decreasewhile carrying cost increases with every increase in Qty of purchase order. So themanagement has to take decision that there will be balance between 2 opposing cost tohave EOQ with minimum total cost.How to calculate EOQ:-1) Mathematical approach – calculate by formula. 2 AB EOQ = -------- (in units) C ×SWhere, 18
  17. 17. A = Annual usage in units B = Cost of placing an order C = cost per unit S = Carrying cost as a percentage of Aug inventory. If EOQ determined in terms of rupees where annual usage expressed in rupees by formula Annual usage = annual usage unit × unit cost.Continuous Review A continuous review (Q) system, sometimes called a reorder point (ROP) system or fixed order-quantity system, tracks the inventory of an item each time withdrawal is made to determine whether it is time to reorder. In practice, these reviews are done are done frequently and are often continuous. At each review, a decision is made about an item‟s inventory position. If it is judged to be too low, the system triggers a new order. Inventory Position= On-Hand inventory + Scheduled receipt – Backorders IP = OH + SR – BO When demand is certain When demand & lead time are constant. The downward-sloping line represents the on- hand inventory, which is being depleted at a constant rate. When it reaches reorder point, a new order is placed. The on-hand inventory continues to drop throughout lead time until the order is received. At that time, this marks the end of the lead time, on hand inventory jumps up. A new order arrives just when the inventory drops to 0. The time between orders is the same for each cycle. IP IP IP Order received On Q Q Q - ha nd OH inv ent Order ory Placed L L L Time TBO TBO TBO L L L 19
  18. 18. When demand is uncertainIn reality demand & lead times are not always predictable. This system operates whendemand is variable and uncertain. We assume that the variability in lead times isnegligible and, therefore, can be treated as constant. The wavy downward-sloping lineindicates the demand varies from day to day. Its slope is steeper in the second cycle,which means the demand rate is higher during this time period. The changing demandrates means the time between order changes, so TBO1≠TBO2≠TBO3. Because ofuncertain demand, sales during lead time are unpredictable, and safety stock is added tohedge against lost sales. This addition is why re-order level is higher in this than the re-order level of certain demand.Periodic review systemAn alternative inventory control system is the periodic review (P) system, sometimescalled a fixed interval recorder system or periodic record system. In this system anitems inventory position is received periodically rather than continuously. 20
  19. 19. Hybrid SystemsVarious hybrid inventory control systems merge some but not all features of the P & Qsystems. There are two types Optional Replenishment System Base-stock systemOptional Replenishment SystemIt is used to review the inventory position at fixed time interval and, if the position hasdropped to (or below) a predetermined level, to place a variable size order to coverexpected needs.Base-stock systemIn this system replenishment order is issued each time when withdrawal is made, for thesame amount of withdrawal. 21
  20. 20. CHAPTER – 3ORGANIZATION PROFILE 22
  21. 21. AMUL means "priceless" in Sanskrit. A quality control expert in Anandsuggested the brand name “Amul,” from the Sanskrit “Amoolya,” Variants, all meaning"priceless", are found in several Indian languages. Amul products have been in use inmillions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray,Amul Cheese, Amul Chocolates, AmulShrikhand, Amul Ice cream, NutrAmul, AmulMilk and Amulya have made Amul a leading food brand in India. Today Amul is asymbol of many things. Of high-quality products sold at reasonable prices, of the genesisof a vast co-operative network, of the triumph of indigenous technology, of the marketingsavvy of a farmers organization and have a proven model for dairy development. Symbol of Amulis a ring of four hands, which are coordinated each other .Theactual meaning of this symbol is coordination of hand of different people by whom thisunion is now at top.First hand is for the farmers (producers), without whomthe organizationwould do not existed. Farmers are theinspiration of the AMUL – the taste ofIndia.Second hand is for the representatives of processors bywhom the raw milkprocessed into different finishedproducts.Third hand is for marketers without whom the productwould have not been able toreach to the customer.Fourth hand is for customers without whom theorganization could not carry onbecause they are thepeople who consume the product. The union ofAmulwould nothave been the second biggest successfulcompany in the world without thecoordination of the above four handThe Birth of AmulMilk, The inspiration behind a revolutionOver six decades ago the life of a farmer in Kaira was very much like that offarmers anywhere else in India. His income was derived almost entirely fromseasonal crops. Many poor farmers faced starvation during off-seasons. Theirincome from milch buffaloes was undependable. The milk marketing systemwas controlled by contractors and middlemen. As milk is perishable, farmerswere compelled to sell their milk for whatever they were offered. Often theyhad to sell cream and ghee at a throwaway price. 23
  22. 22. They were in general illiterate. But they could see that the system under which contractors could buy their produce at a low price and arrange to sell it at huge profits was just not fair. This became more noticeable when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk had to be transported 427 kilometers, from Anand to Bombay. This could be done only if milk was pasteurized in Anand.After preliminary trials, the Government of Bombay entered into anagreement with Polsons Limited to supply milk from Anand to Bombay on aregular basis. The arrangement was highly satisfactory to all concerned –except the farmers. The Government found it profitable; Polsons kept a goodmargin. Milk contractors took the biggest cut. No one had taken the trouble tofix the price of milk to be paid to the producers. Thus under the BombayMilk Scheme the farmers of Kaira District were no better off ever before.They were still at the mercy of milk contractors. They had to sell their milk ata price the contractors fixed. The discontent of the farmers grew. They wentin deputation to Sardar Patel, who had advocated farmers‟ co-operatives asearly as 1942. Sardar Patel reiterated his advice that they should market their milk through a co-operative society of their own. This co-operative should have its own pasteurization plant. His advice was that the farmers should demand permission to set up such a co-operative. If their demand was rejected, they should refuse to sell their milk to middlemen.Sardar Patel pointed out that in undertaking such a strike there shouldbe some losses to the farmers as they would not be able to sell theirmilk for some time. If they were prepared to put up with the loss, hewas prepared to lead them. The farmers‟ deputation readily acceptedhis proposal. Sardar then sent his trusted deputy, Mr. Morarjibhai Desai, to Kaira District to organize milk co-operative – and a milk strike if necessary. Mr. Desai held a meeting in Samarkha village on January 4, 1946. It was resolved that milk producers‟ co- operative societies should be organized in each village of Kaira District to collect milk from their member-farmers. All the milk societies would federate into a Union which would own milk processing facilities. The Government should undertake to buy milk from the Union. If this wasn‟t done, the farmers would refuse to sell milk to any milk contractor in Kaira District. 24
  23. 23. The Government turned down the demand. The farmers called a „milkstrike‟. It lasted 15 days. Not a drop of milk was sold to the milkmerchants. No milk reached Bombay from Anand, and the BombayMilk Scheme almost collapsed. After 15 days the milk commissionerof Bombay, an Englishman, and his deputy visited Anand, assessedthe situation and accepted the farmers‟ demand.This marked the beginning of the Kaira District Co- operative Milk Producers‟ Union Limited, Anand. It was formally registered on December 14, 1946. Its objective was to provide proper marketing facilities for the milk producers of the district. The Union began pasteurizing milk in June 1948, forthe Bombay Milk Scheme – just a handful of farmers in two villageco-operative societies producing about 250 liters a day.An assured market proved a great incentive to the milk producersin the district. By the end of 1948, 432 farmers had joined villagesocieties, and the quantity of milk handled by the Union hadincreased to 5000 liters a day.In the early stages, rapid growth brought in its wake seriousproblems. Their solution provided the stimulus for further growth.For example, as the co-operative movement spread in the district, itwas found that the Bombay Milk Scheme could not absorb theextra milk collected by the Union in winter, when buffaloesyielded an average of 2.5 times their summer yield. Thus by 1953,the farmer-members had no regular market for the extra milkproduced in winter. They were again forced to sell a large surplusat low rate to middlemen.The only remedy was to set up a plant to process the extra milk into products like butter and milkpowder. The logic of this step was readily accepted by the Government of Bombay and theGovernment of India, except for a few doubting Thomases. The government of India helped theUnion to get financial help from UNICEF and assistance from the Government of New Zealandunder the Colombo Plan. Technical aid was provided by F.A.O. A Rs.50 – lakh factory toprocess milk powder and butter was blueprinted. Its foundation stone was laid by the thenPresident of India the late Dr. Rajendra Prasad on November 15, 1954. The project wascompleted by October 31, 1955, on which day the late Pandit Jawaharlal Nehru, the then PrimeMinister of India, declared it open. The new dairy provided a further fillip to the co-operativemovement among milk producers. The union was thus enabled to organize more village co-operative societies and to handle more and more milk each year. This event also brought abreakthrough in dairy technology as the products were made processing buffalo milk for the firsttime in the world. Kaira Union introduced the brand “Amul” for marketing its product range.The word “Amul” is derived from Sanskrit word „Amulya‟ which means „priceless‟ or precious‟.In the subsequent years Amul made cheese and baby food on a large commercial scale againprocessing buffalo milk creating a history in the world. 25
  24. 24. 1964 was the turning point in the history of dairy developmentprogram in India. Late ShriLalBahadurShastri, the then PrimeMinister of India who visited Anand on 31s October forinauguration of Amul‟s Cattle Feed Plant, having spent a night withfarmers of Kaira and experiencing the success wished andexpressed to MrKurien, then the General Manager of Amul thatreplicating Amul model throughout our country will bring a greatchange in the socio-economic conditions of the people. In order tobring this dream into reality, 1965 The National Dairy DevelopmentBoard (NDDB) was established at Anand and by 1969-70 NDDBcame out with the dairy development program for India popularlyknown as “Operation Flood” or “White Revolution”. The OperationFlood program, even today, stands to be the largest dairydevelopment program ever drawn in the world. This saw Amul asmodel and this model is often referred in the history of WhiteRevolution as “Anand Pattern”. Replication of “Anand Pattern” hashelped India to emerge as the largest milk producing nation in theworld.The Amul ModelThe Amul Model of dairy development is a three-tieredstructure with the dairy cooperative societies at the villagelevel federated under a milk union at the district level and afederation of Establishment of a direct linkage between milk producers and consumers by eliminating member unions at the state level. Middleman. Milk Producers (farmers) control procurement, processing and marketing 26
  25. 25. The Amul model has helped India to emerge as the largest milk producer in the world.More than 13 million milk producers pour their milk in 1, 28,799 dairy cooperativesocieties across the country. Their milk is processed in 176 District Co-operative Unionsand marketed by 22 State Marketing Federations, ensuring a better life for millions.The Organization – An OverviewGCMMF Overview: Gujarat Cooperative Milk Marketing Federation (GCMMF) is Indias largest foodproducts marketing organization. It is a state level apex body of milk cooperatives in Gujaratwhich aims to provide remunerative returns to the farmers and also serve the interest ofconsumers by providing quality products which are good value for money. 27
  26. 26. Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is the largestOrganization in FMCG industry engaged in marketing of milk & milk products under the brandnames of AMUL and SAGAR with an annual turnover exceeding Rs 5000 crores. GCMMF is a unique organization. Its a body created by Farmers, managed bycompetent professionals serving a very competitive and challenging consumer market. It is a truetestimony of synergistic national development through the practice of modern managementmethods.Vision: GCMMF will be an outstanding marketing organization, with specialization inmarketing of food and dairy products both fresh and long life with customer focus and ITintegrated. The network would consist of over 100 offices, 7500 stockiest covering at least everyTaluka. Head quarter servicing nearly 10 lakhs outlets with a turnover of Rs.10, 000 Cr andserving several co-operatives. GCMMF shall also create markets for its products in neighboringcountries.Mission: We at GCMMF endeavor to satisfy the taste and nutritional requirements of thecustomer of the world through excellence in the marketing by our committed team. Through co-operative networking, we are committed to offering quality product that provides best value formoney. 28
  27. 27. Number of Producer Members 6,34,675Number of Village Dairy Cooperative Societies 1163Total Milk Handling Capacity 2.4 Million liters per dayMilk Collection (Daily Average 2010-11) 1.5 Million litersMilk Drying Capacity 100 Mts per dayWhey Drying Capacity 60 Mts per dayCattle Feed Manufacturing Capacity 1100 Mts per daySales Turnover Sales Turnover Rs (Million) US $ (in million) 2000-01 5090 113 2001-02 4690 100 2002-03 4880 102 2003-04 5460 116 2004-05 6000 138 2005-06 7090 160 2006-07 8220 202 2007-08 10770 272 2008-09 13780 310 2009-10 16950 360 2010-11 21110 469 29
  28. 28. Organization Structure:Organization Structure is divided into two parts: External Organization Structure Internal Organization Structure External Organization StructureExternal Organization Structure is the organization structure that affects the organizationfrom the outside.The following is internal organization chart of Amul. State Level Marketing Federation District Milk Product Union Ltd Village Milk Product Union Ltd Villagers External Organization Structure Chart As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-operative organization. The villagers of more than 10000 villages of Gujarat are the bases ofthis structure. They all make village milk producers union, district level milk producers unionand then a state level marketing federation is established. The structure is line relationship,which provides easy way to operation. It also provides better communication between twostages 30
  29. 29. Internal Organization Structure:The following is internal organization chart of Amul: Chairman Managing Director General Manager Asst. General Manager Internal Organization Structure Chart 31
  30. 30. Production Function: Expansion of the production technology and changes in technical field is going to bringout revolution in the industry sector which eventually gives stand to study and favors the comebacking subject i.e. production and management. Production and operation management is planning, organizing, staffing, directing andcontrolling of all the production system that portion of organization that converts inputs intoproducts and services. In general production system takes raw material, personnel, machines,buildings and other resources and produce products and services. The core of production system is its conversion subsystem where in workers; rawmaterials are used to convert inputs into products and services. This production department is atheart of the firm, as it is able to produce low cost products and superior quality in timelymanners. Thus, there arises enormous need of giving due importance to this department as awhole and a strong concrete base being foundation pillars of a manufacturing organization, if theintention is to succeed domestically and globally.Operating Analysis- Amul‟s only source of raw material is Village Milk societies. Milk is brought from suchvillage milk societies every morning and evening. This milk is then sent to the dairy plant. In thedairy plant the milk is processed i.e. it is made free from germs.· 32
  31. 31. Milk ProcessingThe entire process of milk can be divided into following steps: Milk Processing ChartDistribution Network: Most producers work with marketing intermediaries to bring their products to market.The marketing intermediaries make up a marketing channel also called distribution channel.Distribution channels are sets of interdependent organizations involved in the process of makinga product or service available for use or consumption. The Head Office of GCMMF is located at Anand. The entire market is divided in 5zones. The zonal offices are located at Ahmadabad, Mumbai, New Delhi, Kolkata and Chennai. 33
  32. 32. Moreover there are 49 Depots located across the country and GCMMF caters to 13 Exportmarkets. A zero level of channel also called a direct marketing channel consists of a manufacturerselling directly to the final customers. A one level channel; contains one selling intermediarysuch as retailer to the final customers. A two level channel two intermediaries are typicallywholesaler and retailer. A three level channel are typically wholesaler, retailer and jobber inbetween. GCMMF has an excellent distribution. It is its distribution channel, which has made it sopopular. GCMMF‟s products like milk and milk products are perishable. It becomes that muchimportant for them to have a good distribution.Distribution Chart We can see from above figure that GCMMF distribution channel is simple and clear.The products change hands for three times before it reaches to the final consumer. First of all theproducts are stored at the Agents end who are mere facilitators in the network. Then the productsare sold to wholesale dealers who then sell to retailers and then the product finally reaches theconsumers.Distribution Chart 34
  33. 33. Amul’s Supply Chain Farmer s Village Village Local Milk Sold to Cooperative Cooperative Restaurants/Other Village & Societies Societies (with Milk related Local Residents (Without Chilling Chilling Units) businesses Units) Network Milk Processing Chilling Services Union & Plants Warehouses * Veterinary Services * Animal Warehouses Husbandry * Animal Feed Factory * Milk Can Wholesalers/C&S Producers * Agriculture University Retailers Home Delivery * Rural Mgmt Contractors Institute * Trucking Facilities CONSUMERS CONSUMERS 35
  34. 34. PlantsFirst plant is at ANAND,which engaged in the manufacturing of milk, butter, ghee, milkpowder, flavored milk and buttermilk.Second plant is at MOGAR, which engaged in manufacturing chocolate, nutrAmul,AmulGanthia and Amul lite 36
  35. 35. Third plant is at Kanjari, which produces cattle feed.Fourth plant is at Khatraj, which engaged in producing cheese.Today, twelve dairies are producing different products under the brand name Amul. TodayAmul dairy is no. 1 dairy in Asia and no. 2 in the world, which is matter of proud for Gujaratand whole India. 37
  36. 36. AMUL PRODUCTS Product Name:Amul Gold Packing:Poly Pack - 500ml, 1000ml, 5 Ltr Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8°C) Product Name:Amul Taaza Packing:Poly Pack - 500ml, 1000ml, 200ml, 5 Ltr Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8°C) Product Name:Amul Butter Packing:100g, 500g, 50g, 20g, 8.1g Shelf Life: Best before 12 months from packaging Storage condition: At 4°C or below Product Name:Amul Lite Packing:100g, 500g, 200g Shelf Life: Best Before 6 months Storage condition: Under Refrigeration below 10° C 38
  37. 37. Product Name:Delicious Table MargarinePacking:100g, 500g, 200g tub & Single serve packShelf Life: 9 months under refrigerationStorage condition: Store Under Refrigeration under 10°CProduct Name:Amul Cooking ButterPacking:100g, 500g, 50g, 20g, 8.1gShelf Life: Best before 6 months from packagingStorage condition: At 4°C or belowProduct Name:Amul Processed CheesePacking:Cheese Block( 200g,400g, 1 kg)Cheese Tins (400g NEOE,EOE),EOE tin has an easy openendCheese Slices (200g,400g,750g), Amul A+ Cheese Slices200gCheese Chiplets (200g, 500g and 1 kg)Shelf Life: 9 Months for Cheese Tins and CheeseChiplets and 6 Months for Cheese Blocks and CheeseSlicesStorage condition: Refrigerated at 4°C or below.Product Name:Amul Emmental CheesePacking:Amul Emmental Cheese is available in a 400 gmpack for the comsumer and a large wheel (5.5 Kg) for theinstitutional segments.Shelf Life: 45 days from date of packagingStorage condition: Refrigeration temperature i.e. 4°Centigrade to 8° Centigrade 39
  38. 38. Product Name:Amul Gouda CheesePacking:Amul Gouda Cheese is available in a 250 gmpack for the comsumer and a larger wheel of 1 Kg for theinstitutional segments.Shelf Life: 6 Months from date of packagingStorage condition: Refrigeration temperature i.e. 4°Centigrade to 8° CentigradeProduct Name:Amul Cheese SpreadPacking:Amul Cheese Spread Tub 200g(Plain, Pepper,Garlic,)Shelf Life:Storage condition:Product Name:Amul Pizza Mozarella CheesePacking:1 kg Pack, 200g packShelf Life: 6 Months from date of packagingStorage condition: To be stored in the deep fridgecompartment of the refrigerator. Product Name:Amul Gold Packing:1000 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient 40
  39. 39. Product Name:Amul Taaza Packing:1000 ml, 500 ml & 200 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: AmbientProduct Name:Amul Calci+ MilkPacking:1000 ml & 200 mlShelf Life: 120 days when stored in cool and dry placeStorage condition: AmbientProduct Name:Amul Lite MilkPacking:1000 ml, 200 mlShelf Life: 180 days when stored in cool and dry placeStorage condition: AmbientProduct Name:Amul Kool KokoPacking:200 ml Glass Bottle, 250 ml Can & 200 ml TetraShelf Life: 180 days when stored in cool and dry placeStorage condition: Ambient 41
  40. 40. Product Name:Amul Kool Milk ShaakePacking:Can: 220ml and Tetra: 180mlShelf Life: Best before 180 days from date of packingStorage condition: Needs no refrigeration until openedProduct Name:Nutramul Energy DrinkPacking:Shelf Life: Best before 180 days from date of packingStorage condition: Needs no refrigeration until openedProduct Name:Amul Masti Spiced Butter MilkPacking:200 ml & 1 Litre in TetrapakShelf Life: 180 days when stored in cool and dry placeStorage condition: Ambient Product Name:Amul Kool Cafe Packing:200 ml Glass Bottle, 250 ml Can & 200 ml Tetra Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient 42
  41. 41. Product Name:Amul KoolLasseePacking:200 ml & 1 Litre in TetrapakShelf Life: 120 days when stored in cool and dry placeStorage condition: AmbientProduct Name:Amul Prolife Probiotic LasseePacking:200 ml GlassShelf Life: Best Before 10 days from PackagingStorage condition: Keep Under Refrigeration below 8° CProduct Name:Amul Prolife ButtermilkPacking:1 Litre Plastic BottleShelf Life: 7 days when stored below 8° CelsiusStorage condition: ChilledProduct Name:Amul StaminaPacking:200 ml Tetra Pack, 250 ml Can( Orange &Lime)Shelf Life: Best before 120 days from packagingStorage condition: Cool and dry place 43
  42. 42. Product Name:Amul PROPacking:500g Glass Cube Jar&500g RefillShelf Life: Best before 12 months from the date ofmanufactureStorage condition: AmbientProduct Name:Amul Ice CreamPacking:Cone 120 ml, 100ml, 80 ml & 50 mlCup 125 ml, 100 ml, 80 ml, 90 ml & 40 mlPlastic 1 litre, 750 ml, 500 ml, 125 ml, 100 ml, 80 mlContainer & 60 mlStick 70 ml, 60 ml, 40 ml Bulk / catering packs (5 litre, 4 litre), takeTake home packs (2.2 litre, 1.5 litre, 1.25 litre, 1Home litre), combo packs (750 ml+750ml Free) and family packs (500 ml, 250 ml)Shelf Life: Best before 12 months from the date ofmanufactureStorage condition: -18°C or belowProduct Name:Amul FlaavyoPacking:125 ml, 500 ml cup, 5 ltr Bulk packShelf Life: Best Before 6 months from PackagingStorage condition: Keep Under -18°C 44
  43. 43. Product Name: Amul MalaiPaneer Packing:Diced Paneer - 100 g, 200 g & 1 kg ,Block Paneer - 200 g & 1 kg Shelf Life: Best before 6 months Storage condition: Stored Frozen Product Name: Amul MastiDahi Packing:Poly Pack - 200 gm, 400 gm, 1 kg ,PP Cup - 200 gm, 400 gm, 100 gm Shelf Life: Best Poly Pack - 7 Days from the date of packaging PP Cup - 15 Days Storage condition: Under Refrigeration (Below 80C) Product Name:Amul Probiotic Dahi Packing:200g & 400gShelf Life: Best before 6 months Storage condition: Under Refrigeration (Below 8°C) Product Name: Amul Flaavyo Yoghurt Packing:100 g Cup Shelf Life: Best Before 15 days from Packaging Storage condition: Under Refrigeration (Below 8°C) 45
  44. 44. Product Name: Amul GheePacking:Pouch: 500 ml & 1 Ltr Tin: 200ml, 280ml,500ml, 1Lrt, 2 Ltr and 5 Ltr Refill: 200ml, 500ml and 1Ltr PET Jar: 200ml & 500 ml Bulk Pack :10 Kg PlasticBucket , 15 Kg TinShelf Life: Pouch Packing: 9 Months Tin Packing : 12Months Refill Packing : 9 Months Jar Packing : 6 MonthsBulk Packing : 12 MonthsStorage condition: Dry and Cool placeProduct Name: Sagar GheePacking: Pouch: 500ml & 1 Ltr& Tin: 1 Ltr, 2Ltr & 5 LtrShelf Life: Pouch Packing: 9 Months & Tin Packing: 12MonthsStorage condition: Dry and Cool placeProduct Name: Amul Cow GheePacking: Pouch: 500 ml &Tin: 1 LtrShelf Life: Pouch Packing: 9 Months &Tin Packing: 12MonthsStorage condition: Dry and Cool placeProduct Name: AmulsprayPacking:1 Kg Pouch / Tin, 500g Pouch / Tin/ Refill, 200gPouch / Refill, Rs 10 Pack, Rs 5 PackShelf Life: 12 monthsStorage condition: Ambient 46
  45. 45. Product Name: AmulyaPacking:1 Kg Pouch, 500g Pouch / Refill, 200g Pouch /Refill, Rs 10 Pack, Rs 5 PackShelf Life: 12monthsStorage condition: AmbientProduct Name: Sagar Skimmed Milk PowderPacking:500g PouchShelf Life: 12 monthsStorage condition: AmbientProduct Name: Sagar Tea & Coffee WhitenerPacking: 42 g Pouch pack &10 kg JarShelf Life: 12 monthsStorage condition: AmbientProduct Name: Amul Full Cream Milk PowderPacking:1 Kg Pouch / Tin, 500g Pouch / Tin/ Refill, 200gPouchShelf Life: 12 monthsStorage condition: Ambient 47
  46. 46. Product Name: NutramulPacking:500g RefillShelf Life: 12 monthsStorage condition: AmbientProduct Name: Amul ShrikhandPacking:100g, 200g, 500g, 1 Kg, 10 Kg, 20 KgShelf Life: 6 months when stored at 0° CStorage condition: RefrigeratedProduct Name: Amul GulabJamunPacking:1 kg (26 units of GulabJamun), 500 g (13 unitsof GulabJamun)Shelf Life: Best before 9 months from packagingStorage condition: Cool and dry placeProduct Name: Amul BasundiPacking:500 ml Tetrapak, 1 Lit TetrapakShelf Life: 180 days when stored in cool and dry placeStorage condition: Ambient 48
  47. 47. Product Name: Amul AvsarLadooPacking:Each box contains 15 Ladoos, Net weight 500gShelf Life: 45 DaysStorage condition: Store in a cool and dry placeProduct Name: Amul Mithai MatePacking:400 g Tin: For Household Consumption. , 7.5 kgTin: Bakery and Institutions, 280 kg Barrel : ForIndustrial Use like Biscuit and Chocolate manufacturingetcShelf Life: 400 g Tin : Best before 12 months, 7.5kgTin :Best before 6 months, 280 kg Barrel : Best before 3monthsStorage condition: cool and dry placeProduct Name: Amul Rejoice Assorted Chocolate GiftPacksPacking:Amul Rejoice assorted chocolate 135g, 173g,and 412gShelf Life: 9 monthsStorage condition:15° C, dry placeProduct Name: Amul Cooking ChocolatePacking:500g, 10 kg, 20 kgShelf Life: 12 monthsStorage condition: 15° C, dry place 49
  48. 48. Product Name: Amul ChocolatePacking:Milk Chocolate 12g, 22g, 35gFundoo Milk Chocolate 12g, 30gDark Chocolate 35gFruit & Nut 40g, 2x150gAlmondbar 35gShelf Life: 12 monthsStorage condition: 15° C, dry placeProduct Name: Amul ChocozooPacking:ChocozooTub : 500g, Chocomini Tub : 300g,Chocozoo Tin : 232g, Chocozoo Birthday pack : 81g,Chocozoo Elegant Pack : 93g, Chocozoo pack of three :27gShelf Life: 12 monthsStorage condition: 15° C, dry placeProduct Name: Utterly Delicious Chocolate SyrupPacking:Chocolate syrup 650g plastic bottle, Chocolatesyrup 3kg plastic JarShelf Life: 6 monthsStorage condition: Ambient, refrigerate after opening 50
  49. 49. Product Name: Amul wafer chocolates Packing:Amul Bindaaz wafer 15g (chocolate flavor). Amul Bindaaz wafer 15g (strawberry flavor). Shelf Life: 9 months Storage condition: 15° C, dry placeProduct Name: Amul Fresh CreamPacking:200 ml : For Household Consumption1 Ltr : For Caterers, Hotels, Restaurants and Institutions.Shelf Life: 200ml : Best before 120 days from packagingwhen stored in a cool and dry place1 Ltr : Best before 120 days from packaging when storedin a cool and dry placeStorage condition: Cool and dry place Product Name: Amul Pouch Butter Milk Packing:Poly Pack - 500ml Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8°C) 51
  50. 50. Amul product history Amul 1956 Milk Ice cream Chocolates Shrikhand Fresh Milk Cheese Ghee Power Breadspread 1996 1973 1980 1956 1962 1956 1958 Fat Free Cheese Cow Nutrauamul Gulabjamun UHT Range Amulspray Amul Butter Dessert Spread Ghee 1973 1997 1980/99 1968 1956 2002 1986 2002 Gulabjamun Condensed Softy Mix Eclairs Amul WMP Paneer Amul Lite mix Milk 2001 2001 1960 1997 1994 1999 1996 Amul Shakti Kulfi Mix Buttermilk Amulya pizza Cheese Margarine 2003 2001 1998 1987 1998 2004 Amul IMF Emmental Chocozoo Laddoo fresh Curd 1&2 Cheese 2005 2004 1999 2001 1999 Flavoured Instant Basundi Frozen Pizza Milk FCMP 2005 2002 2001 2002 Khoa Fresh Cream Gouda Cheese 2006 2002 2002 Kool Cafe 2005 52
  51. 51. CHAPTER – 4RESEARCH METHODOLOGY 53
  52. 52. Research Meaning: A sane inventory management is of great necessity in any business organizations. Thefuture of business organizations depends upon how the top management defines and considersinventory in relationship with the company‟s objectives or service levels.Knowing factors that push to a purchasing behavior and meeting customers‟ needs remain acrucial matter for the growth and survival in nowadays competitive market. Baki et al add thattoday‟s competitive marketing environment forces producers and customers to get closer to eachother. This means organizations should give a great importance to customers‟ needs and listen totheir voices, and suppliers and customers should be closer and closer to each other in order toproduce goods or services based on the customer needs. Therefore, manufacturers and serviceproducers need an effective planning and control system for a powerful coordination in betweenall stages of the organizations (processes, and other). The implementation and the use of aneffective planning and control system in an organization improve productivity and performanceof distribution, while decreasing waiting times. The enterprise resource planning (ERP) systemsare examples of the most strategic tools, which provide robust tools for planning, coordinationand control of the processes in all organizations.Research Design A research design is a plan that specifies the objectives of the study, method to be adopted in the data collection, tools in data analysis and hypothesis to be framed. “A research design is an arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure”.Nature of Data The approach of this study consists of combining research into primary and secondary data. Secondary data, that is, the literature phase of the research has essentially been provided in the previous chapters. The theoretical part or the literature of the study is represented by the debate of various parameters relative to inventory management and customer service management. This is of a vital importance in the sense that it provides a measured explanation concerning inventory management and customer service management in a business logistics environment where globalization, technological innovation and changing societal expectations negatively or positively impact on the growth and survival of business organizations on one side and manufacturing industries logistics on the other. Primary data has also been analyzed in the form of an empirical study. In this phase, manufacturing industries in Gauteng Province (especially in Pretoria and Johannesburg) were included in the study. In light of the above, it has to be indicated that the respondents in this population (manufacturing industries in Gauteng Province) were precisely those dealing with inventory management and customer service management. 54
  53. 53. Employees or managers of business organizations that were approached were typicallyin manufacturing industries logistics according to sectors.Research TypeDescriptive research, also known as statistical research, describes data and characteristics aboutthe population or phenomenon being studied. Descriptive research answers the questions who,what, where, when, "why" and how...Although the data description is factual, accurate and systematic, the research cannot describewhat caused a situation. Thus, Descriptive research cannot be used to create a causalrelationship, where one variable affects another. In other words, descriptive research can besaid to have a low requirement for internal validity.The description is used for frequencies, averages and other statistical calculations. Often thebest approach, prior to writing descriptive research, is to conduct a survey investigation.Qualitative research often has the aim of description and researchers may follow-up withexaminations of why the observations exist and what the implications of the findings are.Sampling SizeandtechniqueSize of the sample: It refers to the number of items to be selected from the universe to constitute as asample. In these study 1 warehouse, 1 distributor & 25 retailers of Amul in Silchar hasbeen taken.Sample design: The sampling technique used in this study is simple random sampling method.This method is also called as the method of chance selection. Each and every item ofpopulation has equal chance to be included in the sample.Questionnaire: The questions are arranged logical sequence. The questionnaire consists of avariety of questions presented to the employees for the response. Dichotomousquestions, multiple choice questions, rating scale questions were used in constructingquestionnaire. 55
  54. 54. CHAPTER – 4DATA ANALYSIS AND INTERPRETATION 56
  55. 55. Inventory Movement Data a) Inventory flow from distributor to retailer Amulya 10 kg jar 15 level of inventory Opening Balance 10 Opening Inwards Outwards Closing Inwards Balance Balance 5 Standard 2.345207 1.602082 1.6329931 Outwards Deviation 0 0 Mean 10.5 0 0.833333 9.6666667 1 2 3 4 5 6 Closing days Balance Amulya 25 Kg bag 40 level of inventory Opening 30 Balance Opening Inwards Outwards Closing Balance Balance 20 Inwards Standard 0.983192 2.345208 3.204163 10 Deviation 0 Outwards 0 Mean 35.8333 0 1.5 34.33333 1 2 3 4 5 6 Closing days Balance Amul A+ Cheese Slice 200 gm 150 Opening Inwards Outwards Closing Opening level of inventory Balance Balance Balance 100 Inwards Standard Deviation 54.02838 0 8.93868 54.13470 50 Mean 64.33333 0 8.5 75.83333 Outwards 0 1 2 3 4 5 6 Closing days Balance 57
  56. 56. Cheese Chiplet 200gm 160 140level of inventory 120 Opening Balance Opening Inwards Outward Closing 100 Balance s Balance 80 Inwards 60 Standard 40 Deviation 9.786044 0 4.27395 9.93478 Outwards 20 Mean 0 0 128.16666 3.66666 124.5 Closing 1 2 3 4 5 6 Balance days Opening Inwards Outwards Closing Balance Balance Standard Deviation 10.50714 0 4.89897 7.26636 Mean 61 0 4 57 Opening Inwards Outwards Closing Balance Balance Standard Deviation 5.16397 0 4.08248 5.47722 Mean 11.66666 0 1.66666 10 58
  57. 57. Cheese Tin 400gm 70level of inventory 60 Opening 50 Balance Opening Inwards Outwards Closing 40 Balance Balance Inwards 30 20 Standard 10 Outwards Deviation 16.62227 0 7.27782 14.88175 0 Mean 40.5 0 5.83333 34.66666 1 2 3 4 5 6 Closing Balance days Almond bar 35gm 400 350 Opening Inwards Outwards Closing Balance Balancelevel of inventory 300 Opening 250 Balance Standard 200 Inwards Deviation 142.4078 0 135.7743 10.32795 150 Mean 86 0 59 27 100 Outwards 50 0 Closing 1 2 3 4 5 6 Balance days Pizza Cheese 200 gm 50 Opening Inwards Outwards Closing Balance Balancelevel of inventory 40 Opening Balance 30 Standard Inwards Deviation 0 0 0 0 20 Mean 44 0 0 44 10 Outwards 0 1 2 3 4 5 6 Closing Balance days 59
  58. 58. Amul milk chocolate 20 gm 600 Openinglevel of inventory 500 Opening Inwards Outwards Closing Balance 400 Balance Balance 300 Inwards Standard 200 100 Deviation 108.9293 0 36.48013 97.07522 Outwards Mean 0 408 0 55 353 1 2 3 4 5 6 Closing days Balance Opening Inwards Outwards Closing Balance Balance Standard Deviation 10.32795 0 8.16496 8.164965 Mean 227 0 3 223 Bindazz Wafers 18gm box 140 120level of inventory Opening 100 Balance Opening Inwards Outwards Closing 80 Balance Balance Inwards 60 Standard 40 Deviation 46.96239 36.7423 19.125 43.01976 20 Outwards Mean 75 15 10 80 0 1 2 3 4 5 6 Closing Balance days 60
  59. 59. Bindazz Wafers 18gm jar 500level of inventory 400 Opening Opening Inwards Outwards Closing Balance 300 Balance Balance Inwards 200 Standard 100 Deviation 73.48469 0 73.4846 0 Outwards Mean 0 271 0 30 241 1 2 3 4 5 6 Closing Balance days Choco Zoo 12x300gm Tub Opening Inwards Outwards Closing 120 Balance Balancelevel of inventory 100 Opening 80 Balance Standard 60 Inwards Deviation 27.24273 24.4949 4.84768 26.72576 40 Mean 76 10 6 80 20 Outwards 0 1 2 3 4 5 6 Closing days Balance Choco Zoo 12x500gm Tub 10level of inventory Opening Opening Inwards Outwards Closing 8 Balance Balance Balance 6 Inwards Standard 4 Deviation 0.516397 0 0.408248 0.408248 2 Outwards Mean 0 8 0 0 8 1 2 3 4 5 6 Closing days Balance 61
  60. 60. Opening Inwards Outwards Closing Balance BalanceStandardDeviation 160.4992 0 60.22181 112.1903Mean 1430 0 87 1343 Opening Inwards Outwards Closing Balance BalanceStandardDeviation 70.56817 0 55.01151 19.043809Mean 58 0 32 25 Opening Inwards Outwards Closing Balance BalanceStandardDeviation 24.494897 0 24.4949 0Mean 70 0 10 60 62
  61. 61. Fruit N NUT 40gm 70level of inventory 60 Opening Opening Inwards Outwards Closing 50 Balance 40 Balance Balance Inwards 30 Standard 20 Deviation 16.32993 0 10.32796 10.32795 10 Outwards 0 Mean 33 0 7 27 1 2 3 4 5 6 Closing days Balance Opening Inwards Outwards Closing Balance Balance Standard Deviation 10.84435 0 9.62808 1.224744 Mean 14 0 5 10 Milk Chocolate 35 gm 600 500 Opening Inwards Outwards Closinglevel of inventory Opening 400 Balance Balance Balance 300 Inwards Standard 200 Deviation 76.9686 0 20.89657 57.94393 Outwards Mean 447 0 37 411 100 0 Closing 1 2 3 4 5 6 Balance days 63
  62. 62. Rejoice Assorted 135 gm 6 Opening Inwards Outwards Closinglevel of inventory 5 Opening Balance Balance Balance 4 3 Inwards Standard 2 Deviation 0 0 0 0 1 Outwards Mean 5 0 0 5 0 1 2 3 4 5 6 Closing days Balance Utterly Chocolate Syrup 650 ml Opening Inwards Outwards Closing 8 Opening Balance Balancelevel of inventory 6 Balance Standard 4 Inwards Deviation 0 0 0 0 Mean 6 0 0 6 2 Outwards 0 1 2 3 4 5 6 Closing days Balance Amul Fresh Cream 1ltr 100 80level of inventory Opening Balance Opening Inwards Outwards Closing 60 Balance Balance Inwards 40 Standard Deviation 0 0 0 0 20 Outwards Mean 89 0 0 89 0 Closing 1 2 3 4 5 6 Balance days 64
  63. 63. Amul Fresh Cream 200ml Opening Inwards Outwards Closing 10 Balance Balancelevel of inventory 8 Opening Standard Balance 6 Deviation 0 0 0 0 Inwards Mean 4 9 0 0 9 2 Outwards 0 1 2 3 4 5 6 Closing Balance days Amul Butter 100gm 10000 Opening Inwards Outwards Closing 8000level of inventory Opening Balance Balance Balance 6000 Standard Inwards 4000 Deviation 1465.734 1837.117 214.588 1516.305 Mean 7925 750 1091 7799 2000 Outwards 0 Closing 1 2 3 4 5 6 Balance days Amul Butter 500gm 2000 Opening Inwards Outwards Closinglevel of inventory Opening 1500 Balance Balance Balance 1000 Inwards Standard Deviation 402.8237 0 130.259 297.1514 500 Outwards Mean 1038 0 179 859 0 1 2 3 4 5 6 Closing Balance days 65
  64. 64. Mithai Mate 4000 3500 Opening Inwards Outwards Closinglevel of inventory 3000 Opening Balance Balance Balance 2500 2000 Inwards Standard 1500 Deviation 728.9761 391.9184 456.8129 665.6646 1000 Mean 2472 160 474 2158 Outwards 500 0 Closing 1 2 3 4 5 6 Balance days Amulspray 1kg Pch 2500 2000 Opening Inwards Outwards Closinglevel of inventory Opening Balance Balance Balance 1500 Standard Inwards 1000 Deviation 687.8120 357.189 121.639 635.32146 Mean 1505 324 188 1699 500 Outwards 0 Closing 1 2 3 4 5 6 Balance days Amulspray 18 gm Pch 10000level of inventory 8000 Opening Balance Opening Inwards Outwards Closing 6000 Balance Balance Inwards 4000 Standard 2000 Outwards Deviation 1054.8994 0 654.343 465.7948 Mean 7556 0 458 7098 0 1 2 3 4 5 6 Closing Balance days 66

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