DSBM

1. GEETA. P. DAREKAR
(M. Pharm (Ph d)
SCOP AURANGABAD MH

3. ENTERPRUNERSHIP
 Qualification- D or B Pharm.
 Experience- Running a store.
 Ability – Run business.
 Investment- 5-10 lakhs.
 Location.

4. WHERE?
• Limited finance (loan)
• Buying capacity of customer
(credit)
Rural or
small town
• Huge investment
• Buying capacity of customer
(nature of work &
occupation)
Urban or
big cities

5. SITE FOR DRUG STORE
1. Availability of finance
2. Business locality
3. Thickly populated residential area
4. Developing area
5. Hospitals
6. Flow of traffic
7. Parking
8. Drug store
9. Near to hotel, school, cinema hall & play ground

6. SITE FOR DRUG STORE
1) Availability of finance
Sufficient finance-Urban areas, Devoloped area.
Meager fianace-Rural area, Devoloping area.
2) Business locality
open in locality
Adv- Attract more no of good customers.
D. adv- Huge Investment is required-high rented & exorbitant land prices.
3) Thickly populated residential area
People prefer to buy medicine during evening walk.

7. 4) Developing area
-Big cities-new localities
-No competition
5) Hospitals
Hospital or nursing home- (don’t have their own M store, P Practice is
good).
6) Flow of traffic
Avoid: a) signals (parking problems)
b) Road circles
Select that site of the road which takes people to their home while
reyurning they can purchase.

8. 7) Parking
Busy shopping center- enough parking space
Avoid restricted areas where parking not allowed
8) Drug store
Should not be any competitor already existing near the location
except if sale potential is good
9) Near to hotel, school, cinema hall & play ground
Not preferable – customers stay away from these premises
Restaurant- problems to maintain cleanliness.

9. Near cinema hall- in case cold drinks and ice cream facility are given so
its good option to open near cinema hall.
Metropolitan cities (D,M,K,C)
 Site- Connected with various mode of transport.
Good surrounding (Traffic)
 Essential services- near bank, post office & warehouse.
 Rules and regulation of municipal corporation

10. ACQUISITION OF PREMISES
DRUG STORE
1) RENT- locality, building (high rent in big cities & market
area)
-legal written agreement is required- about rent, period of
possesion & actual use of shop.
2) LEASE- buy for certain period of time.
3) PURCHASED

11. LAYOUT OF DRUG DESIGN
Main Factor Responsible For Success Of Drug Store
1) Location and its proper layout design
2) Professional management
3) Sound financial position
Function of drug store-provide convenience & help to
customer

12. OBJECTIVE OF LAYOUT DESIGN
1. Attract large no of customer
2. To increase the sale of store
3. Reduce selling expenses to a minimum
4. Provide customer satisfaction
5. Project professional image and improve general appearance
6. Minimize the movement of customer within the drug store
7. Provide surveillance in order to reduce the chances of pilferage and
theft
8. To have space for reserve stock, office and resting place for the
employee.
9. Best utilization of available space
10. Proper entrance foe incoming goods
11. Provide protection of medicine from any damage and maintain potency.

13. GENERAL REQUIREMENT
Location -ground floor
Construction- (cement concrete, mosaic tiles)
Racks- storage of medicines
Place- refrigerator Counter
Furniture- working table, chairs for staff and customers.

14.  Schedule N of D & C rules 1945.
10 sq meter area.
 Outer front- Attractive (Glass, glazed tiles and marbles)
 Floors and walls- smooth and washable.
 Lighting- cheerful, display appears more attractive, easy to find
medicine.
 Name and insignia- neon and fluorescent lighting.
Illumination – steady without glare & should not put strain on eyes.

15. LAYOUT OF DRUG STORE

16. LEGAL ASPECTS OF A DRUG STORE
Minimum qualification
1) DIP- registered pharmacist– retail D S
2) DIP or Matriculation (4 yrs) – Wholesale D S.
3) Rich- appoint Registered pharmacist
Minimum space
Retail Drug Store- 10 sq mt.
Wholesale drug store- 10 sq mt
Store Arrangement
Racks- store of drugs.
Refrigerator- 2-8 degree celsius (antibiotic, vitamin,vaccine,sera or
enzymatic preparation)

17. DOCUMENTS REQUIRED TO OPEN RETAIL DRUG STORE
License
1) Application (Duplicate)- form 19 * of D & C 1945. 1st-
biological products & 2nd non biological products.
2) Fee Rs.1500 (total Rs 3000) state bank of India/ Government
treasury.
3) a) Attested copy of diploma in pharmacy from any institution
recognized by PCI.
b) Attested copy of registration certificate by state council
c) Attested copy of SSC
d) Affidavit from qualified person

18. License
4. Affidavit on non judicial stamp paper duly attested by First
class magistrate.
Partnership- by partners.
Proprietor- 1
5. Map of Drug store signed by Proprietor or Partners.
6. Rent receipt or affidavit (owner).
7. Copy of partnership deed I partnership concern.
8. Refrigerator purchased receipt
VALID– 5 YRS

19. DOCUMENTS REQUIRED FOR RENEWAL OPEN RETAIL
SALE LICENSE
License
1) Application (Duplicate)- form 19 * of D & C 1945. 1st- biological
products & 2nd non biological products.
2) Fee Rs.1500 (total Rs 3000) state bank of India/ Government
treasury.
3) Late fee of 500 rs per month
4) Original license in case of 1 st renewal or latest.
5) Affidavit on non judicial stamp paper duly attested by partner
if any duly attested by oath commissioner.

20. DOCUMENTS REQUIRED TO OPEN WHOLESALE DRUG
STORE
License
1) Application (Duplicate)- form 19 of D & C 1945. 1st- biological products & 2nd non
biological products.
2) Fee Rs.1500 (total Rs 3000) state bank of India/ Government treasury.
3) a) Attested copy of diploma in pharmacy from any institution recognized by PCI.
b) Attested copy of registration certificate by state council
c) Attested copy of experience (SSC - 4yrs sale/distribution of drug) on
salary basis. OR
Attested copy of experience (Graduation --- 1yr sale/distribution of drug) on
salary basis.
c) Attested copy of SSC
d) Affidavit from qualified person

21. Affidavit on non judicial stamp paper duly attested by First class
magistrate.
Partnership- by partners.
Proprietor- 1
5. Plan of the premises on blue print.
6. Rent receipt or affidavit (owner).
7. Copy of partnership deed I partnership concern.
8. Refrigerator purchased receipt
VALID– 5 YRS

22. IMPORTANCE AND OBJECTIVE OF PURCHASING
Purchase of material is important function of material management.
Objective –not only to procure the raw material at the lowest price but also
to reduce the cost of the final product.
Following point are taken into consideration while purchasing the material.
1. Right Source- capable of supplying items of uniform quality.
2. Right Quality- Sample should be tested.
3. Right Quantity- price structure, discounts & availability of items.

23. 4. Right Price- not low p ---- cost structure.
5. Right time- lead time (total time bet recognition of need of item
till its receipt)
6. Right place of delivery-- premises of business.
7. Right mode of transportation-- road , rail or air.

24. Purchasing or procurement

25. Purchasing requisition
Selection of the suppliers
Placing the order
Receiving and Checking of Material
Checking of Invoice or Bill
Recording of bills in books
Releasing the payment to the supplier
Purchasing
Procedure

26. PURCHASING PROCEDURE
The sequence of steps in which purchase transaction is carried out.
1. Purchase requisition: stock of article- minimum.
R form store in charge------ indicated types, quantity & quality of the
item.
2. Selection of the suppliers: list to supplier --- invite quotation----
comparative---lowest rate, ability to supply, quality, delivery.
3. Placing the order: standard purchase order– supply order, Details of
items, quantity & price. 5-6 copies of order. 2 to the supplier, 1 to store
incharge,1 to the account department, 1 remains to purchase manager.

27. 4. Receiving and checking of material; received and inspected
for quality and quantity. Goods compared with challan form or
invoice or bill.
5. Checking of invoice or bill- if goods are received in
satisfactory condition invoice or bill is checked before it is
approved for payment.

28. 6.Recording of bills in books- Bills are sent to the account
section, where the bills are entered in to the accounts book.
7. Releasing the payment to the supplier- According to terms
and condition of the supply order the payment is released by
the account section to the supplier.

29. METHODS OF PURCHASING
1. By inspection- Oldest method, thorough checked on quality &
quantity.
2. By sample- Random Sample is examine.
3. By description- basis of catalogue or price list of supplier
4. By grade- by mentioning grades ISI, IP, BP & USP

30. METHODS OF PURCHASING
Sr.
No
Method Explanations
1 Buy inspection • Oldest method
• Goods are thoroughly examined with regard to their
quality and price structure
• Method is still used in wholesale and retail.
2 By sample • Very Common method
• The sample of goods is supplied by the supplier for
its approval from the buyer.
• Buyer examines the sample and place the order for the
supply
of goods as per the quality of the sample approved.
3 By description • It refers to the purchases of goods made on the
basis of description of goods in the catalogue or
price list of the supplier.
4 By grade • The Goods which are standardized and graded are
purchased in required quantity simply by mentioning their
grades,e. g. ISI agmark, I.P., B.P., U. S.P. etc.

31. SELECTION OF SUPPLIERS

32. Selection of suppliers
• In gov. departments, public sector undertaking
and large business houses, the supply of all types
of items of daily use are received through the
suppliers who are in their approved list
• Prepare approved list of suppliers questionnaire is
send to various supplier.
• After receiving these questionnaires, the approved
list of suppliers is prepared.

33. The following points should be
generally taken into consideration while
preparing approved list.
• Reputation of the supplier in the market.
• Financial condition of the supplier
• Manufacturing capabilities of the supplier
• Capability of the supplier to supply at a short notice
• After sales service facilities provided by the supplier
• Terms and conditions of payment

34. CREDIT INFORMATION
Definition of Credit: Through which the items can be brought
or sold without making cash payment.
• Whenever any sale deed is done between buyer and seller, the terms of
payment is also finalized in
• order to avoid any misunderstanding at the later stage.
• The sale of merchandise is done either on cash payment or on credit.
• In pharmaceutical marketing ,45 days credit facility is provided by many
manufacturer to the wholesalers.
• This facility is not for new wholesaler in initial stage.
• A wholesaler, usually gives 21 days credit facility to its retailers in business.
• Now days a substantial amount of trading involves credit.
• It is advantageous to both buyer and seller.
• When the sale is done on credit, it will certainly increase the sale but it involves
the risk of bad debts and delayed payments.

35. This problem can be avoided by many business organisations have accredit
department which investigates the credit worthiness of each prospective customer.
The following information may be obtained about the buyer before selling the goods
on credit.
1. The character of buyer:
He should be honest, reliable, trustworthy and having reputation for fairness and justice.
1. Financial position of the buyer:
This is done to know the financial position of the buyer, in order to find its capacity to pay
debt etc.
3. Assets and liability of the firm:
The information helps to judge its state of business.
These information can be obtained by going through the financial statements of the firm,
bank reference and salesmans report.

36. TENDERS
DEFINITION: A TENDER OR A QUOTATION IS A WRITTEN OFFER TO DO A WORK OR TO
PROVIDE A MATERIAL AT A GIVEN PRICE WITHIN PRESCRIBED PERIOD UNDER SPECIFIED
CONDITIONS
Sr.
No.
Types of
Tender
Explanation
1 Open tenders: • Used when the value of purchase is high. & when
supply sources are not known.
• Open tenders are very expensive.
• These tenders are given in leading newspaper.
• It gives wide publicity & is open to any vendor. The
vendor has to deposit an earnest money with the
tender information & tender number.
• The purpose is for fixing & finalizing prices of materials,
terms & conditions.

37. Sr.
No.
Types
of
Tender
Explanation
2 Limited
tender
• The system is used only in those cases where the value of
tender is moderate.
• The tenders are invited only from those firms which are on
the approved list of supplier.
Advantages:
1. The suppliers are well conversant with the itmes to be
supplied.
2. The suppliers generally submit realistic quotations because
the are regular
supplier of those items.
3. These are less chances of any error in supplying
the items of required specifications.
4. There are chances of progressing reduction in price.

38. Sr.N
o.
Types of
Tender
Explanation
3 Single tender • When the items to be purchased are
proprietary in nature or the order is to be
repeated within a short period.
• The tender is send only to a single supplier
who is dealing with the items of specific
specifications.

39. Sr
No
Types of
Tender
Explanation
4 Oral tender • In case the supplies are of minor character
and are urgently required, a person or a
committee is deputed to purchase the
specified items from the market.
• After collecting the information regarding the
price charged and quality of product to be
supplied from three to four suppliers.
• The items are purchased from the supplier
which has
quoted the minimum price of the specified
items.

40. 5 Global
Tender
• The tenders are invited from all parts of the world.
• These are for large contracts for supplies from
foreign countries or when foreign collaboration
is required in proposed project
• The notice containing the following information is
issued to call the tender:
a)Name and detailed specification of material to be
purchased.
b)Quantity to be purchased
c)Period of delivery.
d)Earnest money to be deposited
e)Terms and conditions of purchase
f) Date, time and place for receiving and opening of the
tenders.

41. 5 Global
Tender
The tender are sent by supplier in sealed envelope before the
due date.
The word ‘Tender’ or quotation and its date of opening must be
written on the top of the envelope.
After opening the tender is on due date and time in the
presence of the representatives of the supplier, the purchase
officer write on each tender,the serial number of tender, total
number of tenders received and number of page in a
particular tender.
Any correction or over writing is also attested during that
period in order to avoid any dispute at a later stage.
A comparative statement is prepared from the tenders or
quotations which are received.
Generally, the order is placed with the firm which has quoted
the lowest rate-The factors like sample specification, make
guarantee period,period of supply,other expenses like
freight,sale tax,packing and forwording charges are also
considered.

42. Contracts Definition: It is also called as purchase
order or supply order. After the selection of supplier.
A mutual agreement is done between the supplier
and the buyer. This agreement is called contract.
• Suppliers name and address.
• Order number, date and the reference number.
• The detailed specifications of the items and quantity ordered.
• Rate and the amount.
• Mode and date of delivery
• Packing and forwarding instructions.
• Mode of payment and the terms of payment
• Signature of the official authorized to place order.

43. Storage: The drugs are stored in a drug store must be arranged in such a
way that they are easily traceable as and when required. For this
purpose following methods are used.
1. According to manufacturers: The drugs are arranged in a drug store
manufacturer wise. For example the drugs manufactured by Glaxo(India) Ltd.
are placed at one place i.e.in one cupboard.
According to pharmacological action: In this method medicines are divided
according to their pharmacological actions and drugs of one group are placed
at on placed in one cupboard likewise drugs of other groups are stored.
Alphabetically : In this method drugs are placed alphabetically. The drugs
with letter ‘A’ are placed in another cupboard. Out of above methods, storing
of drugs manufacturer wise is most popular and convenient method.

44. Codification of Various Items of Drug Store
Codification is the process of assigning of code symbol or a
number to a particular material for easy identification.
Advantages of codification
• Ambiguity in description is avoided.
• The length in description is minimized.
• The codes ensures secrecy of items lying in the store.
• It prevents duplication.
• It standardizes the purchasing as well as storage.
• It reduces the varieties.
• It makes purchasing, recording, accounting, computerizing pricing, costing location,
indexing and inspection efficient and result-producing.
• It assures planned and quality production.

45. Methods of Codification
1. Alphabetically method/Letter Code Method :
• In this system, letters are choosen to represents particular
classification.
• Alphabet consist of 26 letter.
• So each position in the code has 26 possible letters.
• This method is useful when store contains few items.
• e. g. ’T’ represents Tablet, ’C’ represents Capsule.
• This method is simple but if lacks flexibility and expansion.

46. 2. Mnemonic method:
Main disadvantages of this method is that material can not be
identified without making reference to code index. When we
use letters to help memory, we call such a system a
mnemonic system . In this method, letters of the alphabet are
used to describe an item. E g. ’AT’ represents Aspirin tablet,
‘ATP’ represents Aspirin Tablet of Paracetamol

47. 3.Numerical method/Sequence Method: In this method separate number are
given to different classification of store items. This involves use of
following method.
1.Decimal system: In this system number are given In such a way that each
digit represents subgroups of previous gift. e.g. Code no.16.1,16.11,16.111
are assigned to three different tablets belonging analgesic group i.e.16.1
represents tablet Analgin,16.11 represent tablet Dispirin and 16.111
represent tablet paracetamol. Main advantage is its capacity to expand to
accommodate new items. Disadvantage is being cumbersome in use.
2.Block System: In this method no. are reserved for specified classification.
e.g.101-300 are reserved for tablet,301-500 are reserved for capsule.

48. 4. Combination method:
In this method both mnemonic & numerical method are combined
to give code to different items. e.g. Code AT 300 represents
Aspirin tablet 300mg and AT 301 is allotted to Aspirin tablet
600mg.

49. 5. Location coding method:
• In big organizations there are large number of stores and each
store may be quite large in size.
• So the store rooms are divided in blocks.
• Each block is identified by lateral block letter and a longitudinal
letter.
• Within each block every row is divided vertically in to two
column and horizontally into shelves.
• Each and every shelf is given a particular number.
• The location of item can be identified from warehouse number,
block number, row number, column number, rack number and
shelf number etc.

50. PRICING OF MATERIALS:
The price which is going to be charged from customers can be
calculated by using one of the following method.
1.First in first out method (FIFO)
2. Last in first out method (LIFO)
3. Average cost Method
4.Replacement price method
5.Inflated price method
6.Standard price method

51. PRICING OF MATERIALS:
The price which is going to be charged from customers can be
calculated by using one of the following method.
1.First in first out method (FIFO): In this method ,the material which is
received 1st are issued 1st .The issues are priced at cost price of oldest
consignments till it get exhausted. As soon as the oldest lot is
exhausted, the issues are priced at the cost price of the next of oldest
lot in the sequence. The closing stock is valued at cost price of latest
consignment.

52. 1. FIRST IN FIRST OUT METHOD (FIFO):
e.g. April 1 ----
April 5 ----
April 10 --
200 unit purchased @ Rs 50 per unit.
500 unit purchased @ Rs 60 per unit.
300 units sold.
The issue of 300 units will be priced as under:
From the first lot 200 units @ Rs 50 --
Remaining 100 from 2nd lot @ Rs 60 --
Rs 10,000.00
Rs 6000.00
Total: Rs 16,000.00
The value of closing stock of 400 units will be closed @ 60 i.e.the value of
closing stock would be 24000 (400×6=2400 Rs)

53. 2.Last in first out method (LIFO):
In this method price of latest consignment is used for calculating value of issue
until that consignment is exhausted.
e. g. April 1 --
April 6 --
April 10 --
500 units are purchased @50–
300 units are purchased @60--
400 unit sold
The issue of 400 units on April 15,will be priced under:
first 300 units @ 60 =18000
100 units @ 50= 5000
23000 Rs
=================
The closing stock of 400 units will be price @ Rs 50 i.e.Rs 20000.

54. 3.Average Cost Method:
In this method when new stock of goods is received, the total value
of goods in stock divided by total quantity in hand will give average
price until new stock is received.
Instead of simple average, where only unit cost is considered,
weighted average cost can also be use where along with unit
cost, quantity of units is also considered.

55. e.g. Following two lots where
purchased during April 2005.
1000 units @ Rs 3
5000 units @Rs 5
By simple average cost =5+3/2=4
While the weighed average cost could be as under
The weighted average cost = 28000/6000=4.67
Unit Cost Rs Weight Weighted Cost Rs
3 1000 3000
5 5000 25000
Total 6000 28000

56. 4.Replacement price method
• Also known as Market price method.
• In this method the material issues are charged at predetermined
price. The standard price is fixed after careful examination of
current market price, trend of price and market conditions etc.
• This price is applicable only for particular period.
• This price include acquisition cost, invoice price and transport
charges.

57. 5.Inflated price method:
This method is used for those goods which are subject to some wastage.
The total divided by the quantity expected to be finally available for use and that rate is
used for sale of goods. There are some types of normal wastage during material usage.
e.g. Loss of breaking the bulk, evaporation etc.
100 Packets of menthol where purchased at the rate of Rs.60 per packet.
There is wastage of 10% menthol during its storage.
The total cost of 100 packets @60 per packet ---------
--------------------------------------------------100×60= 6000Rs
Material left after wastage -----100-10=90 packets
Therefore, cost per packet =6000/90=66.66 Rs.

58. 6.Standard price method:
In this method,the material issues are priced as actual
acquisition cost.
This method is applicable,where purchase are made for specific
job and are kept physically separate in the store room.

59. Legal requirement and price control on bulk drugs and
formulations
The retail price is the price fixed by the Government for a
new drug under paragraph 5 of Drugs (Prices Control) Order,
2013. It came into force on 15.05.2013.It regulates price of 348
drugs.The ceiling price of a scheduled formulation of specified
strengths and dosages as specified under the first schedule
shall be calculated as under:

60. Step1: First the Average Price to Retailer of the scheduled formulation i.e. P(s)
shall be calculated as below: Average Price to Retailer,
(Sum of prices to retailer of all the brands and generic versions of the
medicine having market share more than or equal to one percent of the
total market turnover)
P(s) =
(Total number of such brands and generic versions of the medicine having
market share more than or equal to one percent of total market turnover on the
basis of moving annual turnover
for that medicine.)

61. Step2. Thereafter, the ceiling price of the scheduled
formulation i.e.
P(c) shall be calculated as below:
Where,
P(s) = Average Price to Retailer for the same strength and dosage of the
medicine as
calculated in step1 above.
M = % Margin to retailer and its value =16 Margin to retailer: While fixing a
ceiling price of scheduled formulations and retail prices of new drugs, sixteen
percent of price to retailer as a margin to retailer shall be allowed.
P(c) = P(s).(1+M/100)

62. Maximum retail price:
• The maximum retail price of scheduled formulations shall be fixed by the manufacturers
on
the basis of ceiling price notified by the Government plus local taxes wherever
applicable, as under:
Maximum Retail Price = Ceiling price + Local Taxes as applicable
• The maximum retail price of a new drug shall be fixed by the manufacturers on the
basis of retail price determined by the Government plus local taxes wherever
applicable, as under:
Maximum Retail Price = Retail Price + Local Taxes as applicable

63. Calculation of retail price of formulation
The retail price of a formulation shall be calculated by the Government in accordance
with
the following formula namely:
R.P. = (M.C. + C.C. + P.M. + P.C.) x (1 + MAPE/100) + ED.
Where,
"R.P." means retail price;
"M.C." means material cost and includes the cost of drugs and other pharmaceutical
aids used.
"C.C." means conversion cost worked out in accordance with established
procedures "P.M." means cost of the packing material used in the packing of
formulation, including process loss.
"P.C." means packing charges worked out in accordance with established
procedures of costing.
"MAPE" Maximum Allowable Post-manufacturing Expenses
"E.D." means excise duty: Provided that in the case of an imported formulation.

64. Reference
1. Remington’s Pharmaceutical Sciences.
2. Drug store & Business management by Mohammed Ali &
Jyoti.
3. Drug Store and Business Management by R. M. Mheta.