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Transcript of 82018262-KMF
Visvesvaraya Technological University
MBA, Belgaum.
Project Report on
`COSTING”
A Report Submitted in Partial Fulfillment of
The Requirement for the Award of
MASTER’S DEGREE IN BUSINESS ADMINISTRATION
2011-2012
Submitted by:
MALLIKARJUN N. HEBBALKAR
USN NO. 2VX10MBA44
KARNATAKA MILK FEDERATION DHARWAD
Institute Guide: Company Guide:
PROF.NITYANAND Faculty Finance VTU, MBA, Belgaum.
DECLARATION
I hereby declare that this project report titled as " costing, In –plant Training ” It
has been prepared by me as part of my academics during the year 4th Dec 2006 to 31st
Dec 2006 and 1st Jan 2007 to 31st March 2007, two days in a week. For the partial
fulfillment of degree of "Master of Business Administration", under the guidance
and supervision of our PROF.NITYANAND, at VISVESVARAYA
TECHNOLOGICAL UNIVERSITY – BELGAUM
To the best of my knowledge and belief the matter presented in this report has
not been submitted earlier for the award of any degree to any university. This report
is prepared by me on my own efforts.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
MALLIKARJUN N. HEBBALKAR
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
CONTENTSS.No. TITLES PAGE No.
I.Company Profile
Sector Details History Functions Objectives Vision Mission Products Organization Chart Departments Milk procurement Procedure
01020418181919
II. Research Methodology Need for the study Objectives Data Collection Method Sample Size Tools for data collection
203031313132
III. Data Analysis Conceptual Frame Work Tables Interpretation
336975
IV.Conclusion
Findings Suggestions Conclusion
Bibliography
7781
83
KARNATAKA MILK FEDERATION DHARWAD
SECTOR DETAILS HISTORY FUNCTIONS OBJECTIVES VISION MISSION PRODUCTS ORGANIZATION CHART DEPARTMENTS MILK PROCUREMENT PROCEDURE
A. SECTOR DETAILS
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Dharwad milk union (DMU) came into existence on 3-3-1986. DMU was established
under a co-operative Act as on 3-3-1986 at Dharwad & Gadag, Haveri, Uttar Kannada
& Dharwad come under this operation.
The Dharwad Milk Union is a co-operative society among the 13 establishments,
under KMF. The Dharwad Milk Union (DMU) is one of the most modern plants in
the country. It is located in the specious 25acres of land, located in Lakamanahalli
Industrial Area, Adjacent to the National Highway-4.
The milk is collected from farmers, that raw-milk is processed & sold in the markets
with brand of Nandini. Around 1.18 lakhs liters of milk is collected every day from
various farmers. Various quality control measures are undertaken specially in keeping
the surroundings clean and healthy.
Karnataka co-operative Milk Producers Federation Limited (KMF) is the Apex Body
in Karnataka representing Dairy Farmer’s Co-operative. It is the 3rd largest Dairy Co-
operative among the Dairy Co-operative in the country; in south Indian it stands 1st in
terms of procurement as well as sales. The brand is the household name for fresh milk
& milk products.
Karnataka Milk Federation (KMF) sells products by name of NANDINI. They are
famous for taste and quality. Nandini products like Peda, Paneer various types of
Curds and milk are liked by thousands of people in India. Almost every district in
state of Karnataka has milk producing co-operative Union.
B. History:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
History of KMF:
The Karnataka diary development co-operation was established in the year 1975
under the World Bank assistance. The main objective was to organize the best pattern
milk co-operative societies & thereby helping the formers to increase the milk
production by getting technical input service and procuring the milk. In order to
process and market the milk so collected, dairies and chilling centers were established
in southern part of Karnataka. The KMF is the Apex body according to the national
development board.
History of DMU
A group of experience officers appointed by the KMF surveyed the whole Dharwad
district (including the two newly formed districts Gadag & Haveri) & Uttar Kannada.
Further they found out that there is a need for a Milk dairy. They traveled even the
surrounding villages about the milk & milk products & even they considered the
benefits they would be getting from the Milk dairy.
Seeing the overwhelming response and the untapped resources & the huge market the
KMF decided to set up the Milk union in 1984, known as the Dharwad District Co-
Operative Milk Producers Societies Union Limited. Further in 1988 the Raipur
Diary & the chilling centers. Setup in 1968 also came under this union. DMU was a
Rs. 7crores project of which Government has share capital of Rs. 2crores 7 the
authorized capital of DMU was of Rs 5 crores.
Evaluation
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Karnataka Milk Federation which is most popular as KMF evolved itself as a premier
and most profitable Dairy farmers’ organization in the state of Karnataka.
As an agency in 1975 to implement the world bank Aided Dairy Development
projects, Karnataka Dairy Development Corporation (KDDC) was formed, the
company grew itself fast as it spreads the wings of the new found rural economic
activity – Dairying all over the state, the genesis of Apex Co-operative body took the
shape of KMF in 1983 encompassing entire state with 13 district Co-operative milk
union executing various parameters of Dairy activity – organization of Dairy Co-
operative milk routes, veterinary services, procurement of milk in two shifts of the
day, chilling, processing of milk, distribution of milk and also establishment of cattle
feed plants , Nandini sperm station, liquid nitrogen supply, training centers – as its
main stay.
The entire system was reconstructed on the model of now well know ‘ANAND’
pattern Dairy Co-operative societies. 8 southern districts of Karnataka was considered
initially with a target of organizing 1800 Dairy Co-operative societies, 4 milk unions
and processing facilities were set up to the tune of 6.5 lakhs per day by 2012.
Under Operation Flood – II &III, project which started in 1984 & 1987 covered the
remaining parts of Karnataka. Thirteen milk unions are organized in 175 Talukas of
all 20 District then and the field work was extended by organizing more dairy Co-
operative societies. The processing facilities i.e., chilling centers, milk Dairy Co-
operative societies. The processing facilities i.e. chilling centers, milk dairies and
powder plants were transferred in phases to the administrative control of respective
Co-operative
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Milk unions and the activities continued to be implemented by these District
Organizations. Additional processing facilities were created & existing facilities
augmented every decade with the help of Govt. / Zillah Panchayat and NDDB to
handle ever increasing milk procurement without declaring milk holidays. The
processing facility as exists lakh liters/day is further strengthened.
C. Functions of DMU
→ The main function of DMU is to procure milk from villagers for a right
price.
→ To educate the villagers about the milk & its quality.
→ To make ‘NANDINI’ as a part of dairy life for its customers.
→ To provide good quality of cattle feed, fodder, veterinary properly & in
an efficient manner.
→ To see that the milk is brought from DCS’s to the chilling centers in
the prescribed time.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
D. Objectives of DMU
→ Providing hygienic & good quality of milk to the consumers.
→ To build the economic strength of the milk products in villages.
→ To eliminate middlemen’s in the business so that the milk products
receive their appropriate share of bread.
→ To educate the villages about the adulteration of milk & its harmful
effects on the body.
→ To see that every citizen becomes healthy by consuming good quality
of milk.
→ To make villagers self-viable & build self image in the society.
E. Vision of DMU
→ Cleanliness.
→ Total quality maintenance.
→ Maintenance of discipline.
→ Co-operation.
→ Transparency.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
F. Mission of DMU:
→ To promote social economic development of rural people.
→ Empowering rural people through self-sustaining through dairy
activities.
→ Ensure that the milk & FDP supply to its customers around the clock.
→ To penetrate up country market to enhance liquid milk sales & PDF.
→ To be self sufficient in milk production through rural development.
G. Products of DMU:
→ MILK:
1. Toned milk.
2. Standard milk.
3. Shubham milk.
→ MILK PRODUCTS:
1. Butter,
2. Ghee,
3. Curd,
4. Lassi,
5. Paneer,
6. Milk powder.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
PRODUCTS OF DMU:
TYPES OF MILK:
Pasteurized Toned Milk: - It is the Karnataka’s most favorite milk. Nandini
Toned, Fresh and pure milk contains 3.0% FAT and 8.5% SNF. It is available in
500ml and 1 liter pouches
Nandini Homogenized Milk: Nandini
Homogenized and Pasteurized milk is pure and contains
3.5% FAT and 8.5% SNF. It is rich in nutrients and has
got uniform thickness. One can feel the extra creamy feel till
the last drop. It is available in 500ml, 1 liter and 5 liters
pouches.
Pasteurized Toned Milk
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Shubham Milk
Homogenized Cow’s Pure Milk
Good life Milk
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
MILK PRODUCTS:
Ghee & Butter
Milk Powder
Flavoured Milk
Butter Salted & Unsalted
Dharwad Peda
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Paneer
Ghee in Pet Jar
H. Organization Chart:
The organization is three tiered on Co-operative principles.
A. Dairy Co-operative Societies at grass root level.
B. District Co-operative Milk Unions at single / multi district level.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
C. Milk Federation at state level.
All above three are governed by democratically elected board from among the
milk producers. Under the direction of elected boards, KMF, various
functional Units & Unions are performing the assigned tasks to ensure
fulfillment of organization objective.
I. Departments
Administration department.
Purchase department.
Quality control department.
Production department.
Procurement & input (P&I) department.
Human resource department.
Finance department.
Marketing department.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Departmental Study:
1. Administration Department:
This department controls the over all functioning of the organization. The department
looks after the administrative functions such as payment of salaries, arrangements to
be made for conveying various meetings & formation of policies etc.
Functions
Maintaining up-to-date files, books etc.
Collecting & presenting data in the form of useful information from the
records.
Implementing the organization system & organization policies in the co-
ordinate manner.
Maintenance of records of officer’s entrance & leave from the premises.
Providing required facilities etc.
Ensuring smooth running of the office by interfacing with the external
agencies whenever required. E.g. making payment of telephone, water &
electricity bills etc.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Other Functions:
Employee’s attendance,
Sanction of increments,
Promotion,
Transfers,
Personal security,
Time officers,
Administrative officers,
Labour officer.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Administration department structure:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Deputy Manager
Assistant Manager (Board) Assistant Manager (Personnel)
Administrative Superintend Administrative Superintend
Administrative Assistant
Time Canteen Security
KARNATAKA MILK FEDERATION DHARWAD
2. Purchase Department:
As in any organization even in this organization the purchase department does the
work of purchasing of goods & required raw material which are ordered by the stores
department to maintain smooth functioning of all the departments in DMU & to meet
the requirements at the right time. The weekly report submitted by the stores
department gives an idea the item whether it is to be purchased or not.
If the need arises they even make a call for tenders mentioning all the order. But in
case of few cases the decision is left to the board. For instance, purchase of machinery
is to done but its cost is in lakhs then this decision is left in the hands of board
whether to purchase or not.
If there is any defect in the goods or if they are not up to the specification then
they are returned back or the suppliers are given a notice about the matter as the case
may be.
Function:
• Receiving indent (requirement) from various department.
• Determination of purchase material quality.
• Maintain comparative statement of all suppliers.
• Sending the purchased items to the quality control department for
checking the quality.
• Return the defective goods to the respective suppliers for replacement.
• Calling tenders & sending quotations.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Opinion Of:
Finance officers
Audit department
Finally Managing director’s approval.
Purchase department structure
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Purchase Officers
Purchase Superintend
Assistant Purchase Officers
Helpers
KARNATAKA MILK FEDERATION DHARWAD
3. Quality Control Department:
Alcohol test.
Clot on boiling.
Taste.
Flavor.
Acidity.
Corrected lactometer reading.
Gender method for the test.
Milk tester method.
Moisture.
Solid not Fat test (SNF).
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Quality Control Department Structure:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Deputy Manager
Assistants Manager
Chemist
Tester
Helper
KARNATAKA MILK FEDERATION DHARWAD
4. Production Department
The main objective of this department is to follow up the production schedule
as per the plan & to maintain good relations with other department in the plat
& ensure to upgrade the technical efficiency of production. Most of the
production equipment are imported from Sweden & Denmark. The entire
production process, at every stage of production the plant takes care to
maintain the quality & freshness of the milk & milk products.
Objectives:
Department preplans the production activities soon after receiving the order:
Execute, Co-ordinate, organize & monitor the production
activities.
Increase the output as far as possible.
Decrease that the actual production & wastages.
Ensure that the actual production meets the planned
requirements.
Procedure following in production process:
When the milk is received from the cans or tankers, it is first taken for the testing,
here the freshness & quality of the milk is tested. After the approval of the testing
officers the milk is then taken to the chilling centers for extending the self-life of the
milk.
DMU has 2-2.5 lakhs production capacity of milk, 12,000 liters/hr capacity cream
separation, 36 tones/day production capacity of butter & 12-15 tones production
capacity powder plants in Karnataka.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Everyday input:
Milk processed (in liters) – 1.18 to 1.24 lakhsWater (in liters) – 8 to 10 lakhs.Electricity – 11,000Coal – 6 tones.
Production department structure:
5. Procurement & Input Department:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Manager (Diary)
Deputy Manager Deputy Manager
Manager Assistants
Technical Officer
Senior Supervision
Junior Supervision
AccountsAssistants
StoresAssistants
Typist Clerk
Manager (Dairy) Dairy Technicians Dairy Workers
KARNATAKA MILK FEDERATION DHARWAD
To upgrade the functioning & expand the productivity capacity of each society the
union provides many facilities.
Remunerative price for the milk produced.
Animal husbandry & veterinary health care programmed for the member
animals.
Cross breeding programmers.
Supply powder seeds for animal’s development.
Training to all the members of Co-operatives for smooth functioning of co-
operative.
Subsidized cattle feed to the member of the society.
DMU has 13 doctors to provide door to door service.
First aid centers at every co-operative society.
Conducting animal health camp every 2 weeks.
→ Functions:
Procurement of milk producer’s co-operative society.
Establishment of milk produce’s co-operative societies.
Encourage in producing more milk.
Giving fair prices for good quality milk.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
P & I Department structure:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Manager
Procurement Wings
Deputy Manager
Assistant Manager
Technical Wings
Development Officer
Assistant Manager
Extension Officer Marketing Assistant
Clerks Clerks Helper
KARNATAKA MILK FEDERATION DHARWAD
6. Finished goods store (FGS) department:
FGS department is an intermediate between the production & marketing
department. It is only concerned with issue of goods to marketing department
which are received from production department. The goods are usually perishable
items such as Butter, Ghee, Peda & paneer.
The goods received are stored in cold storage under 16 degree Celsius condition &
stored goods are issued on demand by the marketing department. If the stock is
out of demand, the indent is sent back for further certification with regard to
present stock.
FGS is only concerned with quality dispatching aspect. Other sections do the
accounting, clearing of stores, maintenance etc. Before dispatching, approval of
the goods by quality department is mandatory. A consolidated dairy and monthly
report is submitted to production, marketing and finance department. This
department practices the BIN CARD system and FIFO method is followed.
Policies
• Maintain maximum and minimum stock level for inventory so as to avoid
twin Evils i.e., blockage of capital and storage in the disruption of the
smooth running of the unit.
• Ordinary available commodities are maintained in a possible minimum
number.
• Items of urgent nature are not easily available sometimes, so they are
stored in sufficient number to meet the future demands.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Finished Goods and stores Department structure
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
MANAGER
Marketing Manager Account Assistant
Marketing Manager
Dairy Workers
KARNATAKA MILK FEDERATION DHARWAD
7. Human Resources Department:
This department after the requirement, selection & welfare of the employees. It
also conducts training, development & orientation programs for the employees.
Objectives:
• Training.
• Career Development.
• Performance appraisal.
• Suggestion schemes.
Benefits:
• Medical Facilities (ESI).
• Shoe & uniform.
• Government Holidays.
• Attendance Bonus.
• Increment for promotion of small Family.
Leave:
• Earn Leave (EL) – 30 days per year.
• Extra ordinary – accident, sick – 10 months’ salary.
• House Construction / purchase advance – 15 months’ salary.
• 10 days compensatory leave per 20 days H.P (Half Pay Leave).
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Recruitment:
• It will be organized by the central office.
• Every 10 years employee receives the time Bond bones (T.B.T).
• Retirement age – 58 years.
Training & Education Programme:
• Women secretary training.
• Milk tester training.
• Woman management committee members training.
• First aid worker training.
• Animal husbandry & dairy management training programs.
Awareness Programs:
• Health & Nutrition.
• Gender Sensitization.
• Legal Literacy.
Training Programs:
• National Diary Development Board (NDDB).
• National Dairy Research Institute (NDRI).
• Institute of Rural Management Anand (IRMA).
• Karnataka Milk Federation Centers Training Institute (Bangalore).
• Regional Training Centers (Dharwad).
• Vaikunt Mehata Institute of Co-operative Management (Pune).
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
8. Finance Department:
This department controls the financial activities of the diary. Financial activities
include like preparation of annual report, maintenance of accounts etc. this
department is also held responsible for keeping the record of all inflow & outflow of
money. It prepares budget every financial rule for receipts & payments.
Functions
• To prepare monthly accounts (such as receipts, payments accounts etc).
• To prepare integrated business plans,
• To prepare procurement & transportation change bills,
• To prepare quarterly financial statement,
• To prepare year ending financial statement (such as profit & loss accounts &
balance sheet), Marking payment to farmers for the procurement of milk,
maintain budgetary control, Passing all payment bills, Maintain sales
Ledger,
• Preparation of cost sheet, Maintenance of all subsidiary books under Co-
operative society Acts (books like cash book; debtors & salary registers).
• Direction to the internal audit.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Finance Department Structure:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Deputy Manager
Assistant Manager
Assistant Account Officers
Assistant Accountant
KARNATAKA MILK FEDERATION DHARWAD
9. Marketing Department
The marketing department of DMU is considerable extensive which covers
major area such as Dharwad, Uttar Kannada district, Haveri, Gadag, Sirsi and
Karwar covering almost 26 taluks.
Marketing milk & milk products is done under the brand name called
“Nandini” except loose milk packets & milk products which are marketed with the
name of KMF by its marketing agencies. As the products are of perishable nature
hence the biggest responsibility lines in the hands of marketing department to sell
all the products before they loose its quality.
Before pre-liberalization (July 21-1991) DMU enjoyed a monopoly due to Co-
operative organization & other benefits received from the state government. But
after 1991 the scenario totally changed, new products Diaries started grounding
like mushrooms with entrance of private Diaries the DMU started facing tough
competition in the market which resulted in major loss of market share gradually
over the years. Today DMU as only 23% of total market share. DMU operates in
17 cities having total population 1.05 million.
Functions
• To prepare the marketing plan at the very beginning of the year, taking into
consideration the demand, sales production capacity & customer’s demands.
• To promote milk &milk products in the market.
• To study competitor’s products & their strategies.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Media of Advertising
• News papers
• Magazines
• Wall paintings
• Pamphlets
• Television
Distribution channel
DMU has its own marketing channels. It follows two types of direct channels. Those
are;
• Consumer market
• Institutional market
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Consumer market
DMU sells directly to the consumers through its special vendors. It distributes its
products to around 424 retailers & milk parlors. These sell only KMF products.
Institutional Markets:
There is a demand of 4000 liters of milk per day from the institutions, hospitals, jails,
school; hostels etc. strategies adopted by this department are as follows:
• Conduct awareness programs of milk & homogenized processed milk.
• Attain dairy complaints of consumer & retailers.
• Need for healthy promotional activities against competitors.
• Adopting differentiated marketing strategies in place of undifferentiated
• marketing strategies.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Main Dairy
Agents Own Sales Person
Own Parlors
Consumers
Consumers
KARNATAKA MILK FEDERATION DHARWAD
Competitors
• Bharat
• Siddhi Vinayak
• Datta
• Mayoor
• Goppal
• Aditya
• Arogya milk
• Loose vendors etc.
Marketing Department Structure
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
Marketing Manager
Deputy Manager
Marketing Superintendent
Development Officer
Technical Officer
Development Officer
Vanshroff
Vanshroff Marketing Assistant
Marketing Assistant
Marketing Manager
Deputy Manager
Marketing Superintendent
Development Officer
Technical Officer
KARNATAKA MILK FEDERATION DHARWAD
J. Milk procurement procedure
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
DCS
Fresh Liquid Milk
Chilling
Storing
Pasteurization
Separation
Homogenization
Storing
Packing
Dispatching
KARNATAKA MILK FEDERATION DHARWAD
Explanation of the procedure
1. Collection of milk
In this stage, the milk is bought from the various DCS to the main dairy in a
can containing 40 liters capacity of in milk in a vehicle. The cans are marked with
two different colors to differentiate between the cow milk & buffalo milk. The
recolor is used for buffalo milk & green or blue is used for cow milk. Once the
milk is bought to the dairy it undergoes for testing of FAT & SNF.
2. Testing
In this stage the testing takes place in three different processes, such as:
→ Smelling (odor) test
A man at the dock station checks the acidic nature of the milk by
smelling or tasting the raw-milk. If it is found that the tasted milk has
some bad smell or taste, then the dairy will pay lower rate of the milk
to such society members than the normal rates.
→ Extraneous matter appearances-
This test is conducted by the chemist. The chemist checks two aspects,
mainly whether the milk is contaminated or not & secondly whether
the milk is in liquid from or curd from. He also checks for the presence
of any extraneous matters like dust & flies which results in spoilage of
milk.
→ Acidic test-
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
The payment to suppliers depends mainly on the SNF & FAT content
in the raw milk. The suppliers may add sugar to the milk so as to
increase the content of SNF & FAT content in the milk. Hence to avoid
adulteration, this test in conducted.
In this process, 10ml of milk & 1ml of hydrochloric acid is collected in a test tube.
This solution is shaken well & is heated for 5minutes. If the solution turns into orange
color it proves that sugar is added to it.
3. Chilling & Storing
After testing, the milk is stored in the SILOS (storage tanks). It is maintained
in the cold temperature of 4 degree Celsius. The union is having 7 the other 4
horizontally among which 2 are having capacity of 10,000 liters each & the
other 2 have 15,000 liters capacity each.
4. Pasteurization & separation
In this stage, the heating of milk is done at 72 degree Celsius. When the milk
is passing through pasteurization process the cream is removed depending up
on the quality of milk required (standardization).
5. Packing & dispatching
In this, the packing of fluid products is done by machines & manually in case of
solid products like Peda. The machines are automatic with the capacity of packing
10,000-14,000 packets per hour. The machine packs the milk in 500ml pouches
made of plastic. These machines are used to pack all types of milk as well as other
products like lassi, ghee etc.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
6. After packing the milk pouches are arranged in caters. Each cater contains 10
liters of milk. These caters are then kept in a cold room which has a temperature
of about 5 degree Celsius or below sometimes.
McKinsey’s 7-S Frame Work
The profile of the company can be explained with the help of McKinsey’s 7-S model.
The McKinsey’s 7-S framework is as bellow
• Strategy: the plan devised to maintain and build competitive advantage over
the competition.
• Structure: the way the organization is structured and who reports to whom.
• Systems: the daily activities and procedures that staff members engage in to
get the job done.
• Shared Values: called "super ordinate goals" when the model was first
developed, these are the core values of the company that are evidenced in the
corporate culture and the general work ethic.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
• Style: the style of leadership adopted.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the employees working for the
company.
7S Checklist Questions
Here are some of the questions that you'll need to explore to help you understand your
situation in terms of the 7S framework. Use them to analyze your current (Point A)
situation first, and then repeat the exercise for your proposed situation (Point B).
Strategy:
• What is our strategy?
• How do we intend to achieve our objectives?
• How do we deal with competitive pressure?
• How are changes in customer demands dealt with?
• How is strategy adjusted for environmental issues?
Structure:
• How is the company/team divided?
• What is the hierarchy?
• How do the various departments coordinate activities?
• How do the team members organize and align themselves?
• Is decision making and controlling centralized or decentralized? Is this as it
should be, given what we're doing?
• Where are the lines of communication? Explicit and implicit?
Systems:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
• What are the main systems that run the organization? Consider financial and
HR systems as well as communications and document storage.
• Where are the controls and how are they monitored and evaluated?
• What internal rules and processes does the team use to keep on track?
Shared Values:
• What are the core values?
• What is the corporate/team culture?
• How strong are the values?
• What are the fundamental values that the company/team was built on?
Style:
• How participative is the management/leadership style?
• How effective is that leadership?
• Do employees/team members tend to be competitive or cooperative?
• Are there real teams functioning within the organization or are they just
nominal groups?
Staff:
• What positions or specializations are represented within the team?
• What positions need to be filled?
• Are there gaps in required competencies?
Skills:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
• What are the strongest skills represented within the company/team?
• Are there any skills gaps?
• What is the company/team known for doing well?
• Do the current employees/team members have the ability to do the job?
• How are skills monitored and assessed?
SWOT Analysis of DMU
Strengths
• Nandini enjoys good image
• Wide distribution network leads to regular & timely supply.
• Milk processed is local milk, which reduce the transportation cost.
• It enjoys highest market shares in the packed milk segment.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
• Different price & quality to suit different customers
Weaknesses
• Proper customer feedback needs to be taken.
• Recurring quality problem.
• Lowest paying brand i.e., commission given by the company is less compared
to other brands.
• Inadequate sales promotional activity. Due to bad smell that persists causes
low sales.
Opportunities
• There is scope for developing in new area.
• Availability of buffalo milk-improves milk quality.
• Predominant of loose milk segment- divide appropriate strategies.
Threats
• No entry barriers for private players.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
• Low level of consumer awareness.
• Persuade benefits of competing brand.
a. Need for study
→ Understand the true profitability of earned by the DMU.
→ For getting the practical knowledge about the cost &costing techniques.
→ Ascertainment of costs involved in producing milk and milk products.
→ Analyze overhead costs so they can be managed more effectively.
→ Measuring product performance.
b. Objectives:
→ To identify the process involved in procuring milk.
→ To know and assign the cost involved for each identified activities.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
→ To know the estimated cost of manufacturing milk.
→ To identify the gap and suggest improvements that can be taken place.
c. Data collection:
The data is collected from both primary and secondary sources.
→ Primary sources:
Primary source are the data collected at first hand. It is collected by discussing the
subject with the management, employees, department heads etc.
→ Secondary sources
These are the data that have been derived from the original source. Here
the original source includes the record maintained by the company, from
the website of the company etc.
d. Sample size
The size of sample covers preceding three years financial statement.
e. Tools for data analysis: tables, charts etc.
Conceptual frame work:
COST ACCOUNTING
Cost accounting means recording expenditure & income in a systematic way so that
this information would be useful in arriving at the cost of production.
COST
Cost means the amount of expenditure incurred on given thing or in rendering
services.
COST ACCOUNTANCY
It is the widest of all the items includes not only costing & cost accounting but also
cost control, cost audit, cost ascertainment &budgetary control.
ADVANTAGES
To the management:
• Profitable & unprofitable activities are disclosed.
• It guides future production policies.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
• It provides information upon which estimates & tenders are based.
• It helps in increasing profit by disclosing idle capacity.
To the workers:
• It discloses the efficiencies of different workers.
• Workers will get better wages.
• It provides job security.
To the society
• People will get better quality goods at a reasonable price.
• Curbing inflationary trend in the economy.
• Public feels that the prices charged by the concerns are fair & reasonable.
DISADVANTAGES
• It is expensive.
• It is sometimes not accurate.
• Absence of readymade statement.
INSTALLATION:
Steps
• Objectives to be achieved after installing cost system.
• Studying the existing organization & routine.
• Deciding the cost structure of cost accounts.
• Determining the cost rates.
• Introducing the system.
• Organizing the cost office.
• Relation of cost office with other department.
• Authority and responsibility should be clearly defined.
COST SHEET/ STATEMENT OF COSTS
It is a document which provides for the presentation of estimated detailed cost
in respect of cost unit. The statement summarizes the cost of manufacturing a
particular list of products and discloses the prime cost, works cost, cost of production
and total cost.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
PURPOSES
A cost sheet serves the following purposes:
• It discloses the total cost as well as the cost per unit.
• It helps for comparison.
• It helps for preparation of vendors & quotations.
• It gives the breakup of total cost by eliminates and sub –divisions.
• It helps for fixing the selling price.
Cost sheet pasteurized Toned Milk as on 1-11-2011
SL NO PARTICLARS AMOUNTA Raw Materials Cost1 Price paid to DCS 17.402 Chilling cost at CC 0.153 BMC maintenance cost 0.044 Transportation Charges from DCS to CC 0.665 P&I input cost 0.146 KMF levy 0.01
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
TOTAL 18.40
B Raw material Cost at Main Dairy 7 Transportation cost from DCS to BMC 0.178 Transportation cost from BMC to Main Dairy + CC to PDD 0.39
TOTAL 0.56C Process cost 1 Process & manufacturing cost 0.722 Packing cost 0.573 Direct Labour connected with processing 0.084 Weight Volume Difference 0.57
TOTAL 1.94D Administrative Overheads1 General salary of all Staff 2.292 Other Administrative Cost 0.19
TOTAL 2.48E Selling & Distribution Overheads 1 Distribution Transportation Charges 0.982 Retailer Margin 0.773 Advertisement & publicity 0.074 Salary of marketing Staff 0.28
TOTAL 2.10F Interest -G Depreciation 0.16
H TOTAL COST 25.64I PROFIT/LOSS -3.64J SELLING PRICE 22.00
INTERPRETATION
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
The dairy follows its own costing method. There are no specialized personnel
or committee appointed or organized by the diary in this regard.
Procurement of raw material for pasteurized Toned Milk is Rs. 18.40/-
Process includes process cost, manufacturing cost, packing cost & labour cost
which is Rs.1.94/-
Administrative overhead includes other processing & marketing cost which is
Rs.2.48/-
Selling & distribution overhead includes transportation charges, retailer
margin, advertisement expenses, salary of marketing manager etc. which is
Rs.2.10/-
Cost sheet Homogenized cow Milk as on 24-11-2011
SL NO PARTICLARS AMOUNTA Raw Materials Cost1 Price paid to DCS 17.402 Chilling cost at CC 0.153 BMC maintenance cost 0.044 Transportation Charges from DCS to CC 0.665 P&I input cost 0.146 KMF levy 0.01
TOTAL 18.40B Raw material Cost at Main Dairy 7 Transportation cost from DCS to BMC 0.17
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
8 Transportation cost from BMC to Main Dairy + CC to PDD 0.39
TOTAL 0.56C Process cost 1 Process & manufacturing cost 0.722 Packing cost 0.573 Direct Labour connected with processing 0.084 Weight Volume Difference 0.57
TOTAL 1.94D Administrative Overheads1 General salary of all Staff 2.292 Other Administrative Cost 0.19
TOTAL 2.48E Selling & Distribution Overheads 1 Distribution Transportation Charges 0.982 Retailer Margin 1.003 Advertisement & publicity 0.074 Salary of marketing Staff 0.28
TOTAL 2.33F Interest 0G Depreciation 0.16
H TOTAL COST 25.87I PROFIT/LOSS -1.87J SELLING PRICE 24.00
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
INTERPRETATION:
Procurement of raw material for Homogenized Cow Milk is Rs. 18.40/-
Process includes process cost, manufacturing cost, packing cost & labour cost
which is Rs.1.94/-
Administrative overhead includes other processing & marketing cost which is
Rs.2.48/-
Selling & distribution overhead includes transportation charges, retailer
margin, advertisement expenses, salary of marketing manager etc. which is
Rs.2.33/-
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost sheet SHUBHAM MILK as on 24-11-2011
SL NO PARTICLARS AMOUNTA Raw Materials Cost
1 Price paid to DCS 17.402 Chilling cost at CC 0.153 BMC maintenance cost 0.044 Transportation Charges from DCS to CC 0.665 P&I input cost 0.146 KMF levy 0.01
TOTAL 18.40B Raw material Cost at Main Dairy 7 Transportation cost from DCS to BMC 0.178 Transportation cost from BMC to Main Dairy + CC to PDD 0.39
TOTAL 0.56C Process cost 1 Process & manufacturing cost 0.722 Packing cost 0.573 Direct Labour connected with processing 0.084 Weight Volume Difference 0.57
TOTAL 1.94D Administrative Overheads1 General salary of all Staff 2.292 Other Administrative Cost 0.19
TOTAL 2.48E Selling & Distribution Overheads 1 Distribution Transportation Charges 0.982 Retailer Margin 1.003 Advertisement & publicity 0.074 Salary of marketing Staff 0.28
TOTAL 2.33F Interest 0G Depreciation 0.16
H TOTAL COST 25.87I PROFIT/LOSS 0.13
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
J SELLING PRICE 26.00
INTERPRETATION:
Procurement of raw material for Homogenized Cow Milk is Rs. 18.40/-
Process includes process cost, manufacturing cost, packing cost & labour cost
which is Rs.1.94/-
Administrative overhead includes other processing & marketing cost which is
Rs.2.48/-
Selling & distribution overhead includes transportation charges, retailer
margin, advertisement expenses, salary of marketing manager etc. which is
Rs.2.33/-
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost sheet of PEDA as on 27.08.2011
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
PARTICULARS PEDA KHOA KHOA 250
Gram
100
Gram
25
Gram
Bulk 200
GramMilk Purchase price (120 KG
MILK)
2088.00 2088.00 2088.00 2088.00 2088.00
PTC/Kg (120 * 0.65) 78.00 78.00 78.00 90.00 90.00CC Chilling cost/Kg ( 120 * 0.15) 18.00 18.00 18.00 18.00 18.00CC Transportation/Kg (120*
0.42)
50.40 50.40 50.40 49.20 49.20
P & I Input Cost (0.25*120) 30.00 30.00 30.00 30.00 30.00Other administrative cost
(120*0.19)
22.80 22.80 22.80 22.80 22.80
Genl salary 344.00 344.00 344.00 258.00 258.00COST OF HEATING 330.00 330.00 330.00 280.00 280.00COST DETERGENT 20.00 20.00 20.00 20.00 20.00COST OF SUGAR @ 11 % OF
MILK @ Rs 28.00 / KG
369.60 369.60 369.60 0.00 0.00
YIELD IN KGS 31.00 31.00 31.00 22.00 22.00COST OF DIRECT LABOUR 231.88 231.88 231.88 69.30 69.30TOTAL 3582.68 3582.68 3582.68 2925.30 2925.30COST PER KG 115.57 115.57 115.57 132.97 132.97PACKING COSTVPP 1.00 1.50 14.00 0.00 6.50TIXO TAPE 0.07 0.11 0.00 0.00 0.00BOPP TAPE 0.10 0.15 0.15 0.10 0.00DC CARTONS 4.00 7.20 0.00 0.00 0.00MC CARTONS 0.93 1.20 1.50 1.00 1.00TOTAL 6.10 10.16 15.65 1.10 7.50TOTAL MFG + PKG COST / KG 121.67 125.73 131.22 134.07 140.47AVG REALISATION 159.40 170.00 170.00 170.00 180.00CONTRUBUTION / KG 37.73 44.27 38.78 35.93 39.53DEALER PRICE / KG 155.98 170.00 170.00 170 180DEALER PRICE / PIECE 39.00 17.00 4.25 0.00 36.00
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
INTERPRETATION:
Milk purchase price is 120 kg milk.
PTC/kg (120*0.65).
CC Chilling cost/kg (120*0.15).
CC Transportation/kg (120*0.42).
P&I cost (0.25*120).
Other administrative cost (120*0.19).
Cost of 1 kg PEDA is Rs. 15.57/-
Packing cost differs depending upon size & weight of Peda i.e., for 250 grams
its Rs.121.67/-, for 100 grams its Rs.125.73/- & for 25 grams its Rs.131.22/-
Total cost includes manufacturing & packing cost per kg.
Selling price is also calculated is done depending up on 1kg.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost sheet PANEER as on 27.08.2011
Particulars 200 grm
1000
grm BulkMilk purchase price (1000 kg milk) 17400.00 17400.00 17400.00PTC/kg (1000 * 0.75) 650.00 650.00 650.00Cc chilling cost/kg ( 1000 * 0.15) 150.00 150.00 150.00Cc transportation/kg (1000* 0.42) 420.00 420.00 420.00P & i input cost (0.25*1000) 250.00 250.00 250.00Other administrative cost (1000*0.19) 190.00 190.00 190.00General salary 2870.00 2870.00 2870.00Cost of heating 770.00 770.00 770.00Cost of chemicals 42.00 42.00 42.00Cost of Maslin cloth 15.00 15.00 15.00YIELD in kgs 160.00 160.00 160.00Cost of labour 441.60 441.60 441.60TOTAL MFG COST 23198.60 23198.60 23198.60Cost per kg 144.99 144.99 144.99PACKING COST
200 grm
1000
grm Bulk200 gm paneer packet 6.50 3.75 0.40Cost of sealing 0.03 0.10 0.00BOPP tape 0.00 0.00 0.10MC cartons 0.00 0.00 0.80TOTAL 6.53 3.85 1.30TOTAL MFG + PKG COST / KG 151.52 148.84 146.29PROFIT/LOSS 20.40 -10.72 -8.17SELLING PRICE 171.92 138.12 138.12
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
INTERPRETATION:
Milk purchase price is 1000 kg milk.
PTC/kg (1000*0.75).
CC Chilling cost/kg (1000*0.15).
CC Transportation/kg (1000*0.42).
P&I cost (0.25*1000).
Other administrative cost (1000*0.19).
Cost of 1 kg KHOA is Rs. 15.57/-
Packing cost differs depending upon size & weight of PANEER i.e., for 200
grams its Rs.6.53/-, for 1000 grams its Rs.3.85/- & for Bulk its Rs.1.30/-
Total cost includes manufacturing & packing cost per kg.
Profit/loss valuation is done depending on per kg.
Selling price is also calculated is done depending up on 1kg.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost sheet of KHOA as on 27.08.2011
Particulars BULK 200 grmsMilk purchase price 2088.00 2088.00PTC/kg 90.00 90.00CC Chilling cost/kg 18.00 18.00CC Transportation 49.20 49.20P & I input cost 30.00 30.00Other administrative cost 22.80 22.80General salary 258.00 258.00Cost of Heating 280.00 280.00Detergent cost 20.00 20.00Cost of sugar 0.00 0.00YIELD in kgs 22.00 22.00Cost of Direct Labour 69.30 69.30TOTAL 2925.00 2925.00COST PER KG 132.97 132.97PACKING COSTVPP 0.00 60.50Tixo Tape 0.00 0.00BOPP Tape 0.10 0.00DC cartons 0.00 0.00MC cartons 1.00 1.00
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
TOTAL 1.10 7.50TOTAL COST 134.07 140.47PROFIT/LOSS/kg 35.93 39.53SELLING PRICE 170.00 180.00
INTERPRETATION:
Milk purchase price is 1000 kg milk.
PTC/kg (1000*0.75).
CC Chilling cost/kg (1000*0.15).
CC Transportation/kg (1000*0.42).
P&I cost (0.25*1000).
Other administrative cost (1000*0.19).
Cost of 1 kg KHOA is Rs. 15.57/-
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Packing cost differs depending upon size & weight of Khoa i.e., for 200 grams
its Rs.6.53/-, for 1000 grams its Rs.3.85/- & for Bulk its Rs.1.30/-
Total cost includes manufacturing & packing cost per kg.
Selling price is also calculated is done depending up on 1kg.
Cost sheet GHEE as on 27.08.2011
PARTICULARS 1000 ml 500 ml 200 ml 15 kg TinCost of Butter Fat 139.35 139.35 139.35 139.35Conversion cost 4.13 4.13 4.13 4.13Cost of film / Tin 1.45 1.64 2.60 5.00Cost of M Cartons Rs 21 each 1.75 1.75 1.75 -
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost of gum tape / soldering 0.05 0.05 0.05 0.20Direct labour 0.11 0.29 0.34 0.10Cost of Maintenance 0.10 0.10 0.10 0.10Fixed wages 2.80 2.80 2.80 2.80ADM charges 0.08 0.08 0.08 0.08Agmark Charges 0.36 0.36 0.36 0.36Total charges 150.18 150.55 151.56 152.12Ghee UTP 139.95 142.82 147.19 156.18 -10.23 -7.73 -4.37 4.06PROFIT/LOSS
SELLING PRICE/AGENT RATE 177.27 180.9 186.36 185.71
INTERPRETATION:
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost of M cartons Rs.21 each
Total cost differs depending upon size & weight of Ghee i.e., for 1000ml its
Rs.150.18/-, for 500ml its Rs.150.55/-, for 200ml its Rs.151.56/-, for 15kg tin
it is Rs.152.12/-
Here selling price is nothing but the agent rate.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost sheet of SALTED BUTTER as on 27.08.2011
PARTICULAR 500 gm
US500 gm S 100 gm S 10 gm S
Cost of Butter 162.75 158.82 158.82 158.82Cost of salt 0.00 0.40 0.40 0.40Cost of VPP Rs 130 / kg 1.02 1.02 2.21 18.78Cost of DC Cartons 4.00 4.00 8.50 9.00Cost of M Cartons Rs 23 each 1.54 1.54 1.54 1.54Cost of Gum Tape/Soldiering 0.78 0.78 0.78 0.78Direct labour 0.84 0.84 0.84 1.03Cost of Maintenance 0.11 0.11 0.11 0.15Fixed wages 2.80 2.80 2.80 2.80Adm charges 0.08 0.08 0.08 0.08Storage charges 0.35 0.35 0.35 0.35Total charges 174.27 170.74 176.43 193.73
SELLING PRICE 180.7 176.52 178.03 168.84 PROFIT/LOSS 6.43 5.78 1.60 -24.89
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
INTERPRETATION:
There are two different types of butter produced by the diary those are salted
butter & unsalted butter.
The cost sheet for the salted butter is shown in above table where as the cost
sheet prepared for the unsalted butter is shown below.
Cost of VVP is 130/kg.
Cost of M cartons is Rs.21each.
Total cost differs depending upon size & weight of salted butter i.e., for
500grms its Rs.170.74/-, for 100grms its Rs.1176.43/-, & for 10grms it is
Rs.168.84/-
Here selling price is nothing but the agent rate.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
Cost sheet of Unsalted Butter as on 27.08.2011
PARTICULAR 500 grms
Cost of Butter 162.75Cost of salt 0.00Cost of VVP 1.02Cost of DC Cartons 4.00Cost of M Cartons 1.54Cost of Gum Tape/Soldiering 0.78Direct labour 0.84Cost of Maintenance 0.11Fixed wages 2.80Adm charges 0.08Storage charges 0.35Total charges 174.27
PROFIT/LOSS 6.43SELLING PRICE 180.7
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
INTERPRETATION:
Cost of VVP is 130/kg.
Cost of M cartons is Rs.21 each.
Total cost is 174.27 for 500 grams of unsalted butter.
Here selling price is nothing but the agent rate.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
CHAPTER IV
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
A.FINDINGS
B.SUGGESTIONS
C.CONCLUSION
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
A.FINDINGS:
Nandini products have a good image in the market.
Pricing Strategies of the products are appreciated by its customers.
Proper training programs are going on from last few years. Trade union is
active.
In the diary the co-ordination at all the levels of management is appreciable.
Lack of consumer awareness about the wide range of products available.
The method of costing adopted by DMU is lengthy & difficult to understand.
The growth percentage of the different milk products is not constant, as the
demand for toned milk & standards milk is increase day by whereas the
demand for shubham milk is decreasing.
The demand for Nandini milk Peda in twin cities is less as the Mishra Peda &
Thakur Peda’s have captured the market.
DMU has a waste area of operation which is geographically spread.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
B. SUGGESTION:
Firstly I would suggest the diary to utilize the whole space available to
it. Each & every corner of the infrastructure available should be made
use.
Increase the advertisement effect of the various milk products
produced by the diary especially in the twin cities.
They should try hard to increase the sales as all the upcoming activities
& opportunities depend up on the sales & profit earned by it.
They should try to decrease the cost of the product without making any
changes in the quality of the products, as this will automatically
increase the profit ratio.
They should try to decrease the cost of such as manufacturing, selling
& distribution expenses.
They should try to come up with many more related products & should
try to capture the larger share & the market.
They should set the standards for everything for efficient use of
resources available & for reducing wastages.
C. CONCLUSION
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
DMU is a large scale dairy situated in Lakamanhalli industrial area; it is
successfully functioning from the year 1984. It manufactures various types of milk
and milk products. Products manufactured by the dairy are qualitative in nature.
It has good name in the market. There is sufficient demand for its products in
the market. In recognition of the outstanding work done by the company, it has been
honored as the “BEST DAIRY” in the district in spite of the healthy completion faced
by it.
After studying at DMU, I felt that the method of maintaining accounts is in
proper manner but in store department still the modern electronic system is missing
and they should soon adopt it for reducing the paper work as well the work load of the
store’s manager.
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
BIBLIOGRAPHY
ANNEXURES
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
BIBLIOGRAPHY
www.kmf.com
www.nandini.com
BIBLIOGRAPHY
REFERANCE BOOKS:
Marketing research : Tull and Hawkins
Global CEO : Magazines
Corporate today : Magazines
Auto magazines
INTERNET WEBSITES
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM
KARNATAKA MILK FEDERATION DHARWAD
VISVESVARAYA TECHNOLOGICAL UNIVERSITY – BELGAUM