Operation research project


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Operation research project

  1. 1. EXECUTIVE SUMMARY Customers usually like shopping at a departmental store that has quality products, good parking space, good infrastructure, helpful customers, hygienic and products neatly placed. Customers do like shopping at Nilgiris mainly because of good quality products, fine infrastructure and hygienic. Most customers don’t like shopping at Nilgiris because of its unhelpful staff and no ample space for parking. The parking space is only available in few outlets that are in Chennai. Hence most customers find it very difficult to park and hence find it very inconvenient to shop at Nilgiris. The second aspect is that the staffs are unhelpful and are sometimes rude to the customers. They are usually unaware of most products that are available in the shop. They are not willing to help customers in case of any difficulty in finding any products. The sales revenues of Nilgiris have seen a sharp fall of 15% over the past five years. They have lost out on their competitors as they have not been able to meet their customer requirements and hence the sales revenues have decreased. This project is to suggest ways by which Nilgiris can improve their sales revenues and determine whether the sales revenue of the departmental store increases or decreases considerably by introducing various parameters like price discounts, ample parking space, offers, private labels etc. This will be calculated by using the non parametric test two sample sign tests. 1|Page
  2. 2. INTRODUCTION Nilgiris was started as dairy products in ooty in the year 1905.Then they started the first super market in the year 1936 in Bangalore (BRIGADE ROAD). In south India they have 40 outlets. In Tamilnadu they have 20 outlets; In Chennai they have 7 outlets, in 2011 they are planning to open 40-45 outlets through out Chennai. They have 2000 employees all over India. Sales from the dairy Form is per year 125 crore. They have 20% of their own products in all the outlets and 80% of the FMCG products. The chairman of the store is Mr. Raja Chellaiyan. Managing Director- Mr.N.C NeelaGopal. 2|Page
  3. 3. PROBLEM STATEMENT Nilgiris over the past years have lost to their competitors. This is obvious from the sales revenues of Nilgiris. The sales revenue has dropped by about 15% for the past five years. DATA COLLECTION PRIMARY DATA I have carried out a primary research in which I requested 110 people who filled out questionnaires. The observations are further depicted in the form of graphs below. OBSERVATIONS: From the study that was conducted by me, I came to know the following about Nilgiris: Familiarity of the store: 3|Page
  4. 4. Frequency of visit Location of outlet usually shopped at: Variety of products: Preferable mode of payment 4|Page
  5. 5. Reasons why people like/ prefer shopping at Nilgiris 5|Page
  6. 6. Reasons why people don’t like shopping at Nilgiris Satisfaction of customers 6|Page
  7. 7. Rating of Nilgiris In the questionnaire I also added a few questions on whether the customers would shop more at Nilgiris on a basis of five parameters. They are: 1. Price discounts 2. Offers 3. Private labels 4. Better parking space 5. Home delivery STATISTICAL TESTING To check whether these outcomes will increase the sales revenues or not I used the ‘Two sample sign test’ statistical tool. Price discounts in the products in six branches in Chennai Branch Before After Besant Nagar 8 7 + T. Nagar 23 25 - Vadapalani 10 8 + Mylapore 29 24 + Anna Nagar 18 25 - 7|Page
  8. 8. K.K Nagar 12 14 - Step 1: If 1st value > 2nd value – ‘+’ Step 2: Count the no. of ‘+’ = 3 Count the no. of ‘-‘= 3 No. of observations = 6 Step 3: n*p= 6*1/2= 3 Since 3<5 apply small sampling Step 4: Hypothesis Testing I. Null Hypothesis H0 “ There is no significant difference in the sales revenue when there is a price discount” II. Alternate Hypothesis H1 “ Not as stated as above” III. Test Statistics : No. of ‘+’ Signs (x) P(x)= nCx px q n-x P= ½ q= ½ n= 6 3 6 C3 (1/2)3(1/2)6-3 0.3125 4 6 C4(1/2)4(1/2)6-4 0.2343 5 6 C5(1/2)5(1/2)6-5 0.09375 6 6 C6(1/2)6(1/2)6-6 0.01562 Z= 0.65617 8|Page
  9. 9. IV. Level of significance @ 5% One tail test the table value of z is 0.64 V. Decision : Since the calculated value of z (0.65) is greater than the table value of z (0.64) accept H0 VI. Conclusion : there is no significant difference in the sales revenue when there is a price discount The statistical tool ‘Two sample sign test’ was used to check whether the rest of the parameters affected the sales revenues of Nilgiris. The following were the results: Parameter Result 1. Price discount No change 2. Offers Change 3. Private labels Change but with a little difference 4. Better parking space Change 5. Home delivery No change RECOMMENDATIONS: Hence I would like to recommend Nilgiris that in order to improve their sales they can: • Give more offers to their customers • Nilgiris has already got their private labels so they should continue with their private labels as this increases their sales by a small fraction but still increases • Most people complain that most of their branches have no proper parking space and hence it becomes very uncomfortable for them to shop. Hence in order to improve their sales Nilgiris should provide their customers with an ample parking space. • From the study we conducted we also came across that the staff in Nilgiris are not very helpful and they are unaware of most of the 9|Page
  10. 10. products that are available in the store. Hence Nilgiris should train their employees well so that they are able to help customers better. CONCLUSION: Hence by using these strategies Nilgiris will once again win over heir competitors and become the market leader. Hope these recommendations do help Nilgiris in a big way. Hopefully customers become loyal to them instead of only being one time buyers. Nilgiris can also then start up CRM initiatives so that they are able to keep their loyal customers satisfied with their services. 10 | P a g e