project report on vijaykant dairy and food products pvt ltd

(VDFPL) s’ Adityaa milk and milk products.

Executive summary

The Indian economy’s most emerging and important sector which also is a mega market in

the 21st century is the ‘Dairy industry’. This industry is being generating the employment and

the income to the people around the domestic region of the country. India is also known for

the milk production among the countries of the Asian continent. The growth of the dairy

industry is consistently high and demanding in the present economy. The milk production of

India is more than 15.5% of the world’s milk production, which is more than 100 million tons

every year and is increasing year by year.

With the objective of making the dairying a mean for better future for millions of milk

producers at the root level with the consistency in the same, The NDDB (The National Dairy

Development Board) was formed in the year 1965 and began the operations.

The presently located Vijaykant Dairy & food products Pvt. Ltd (VDFPPL) at Neghinhal

village, Bailhongal Taluq, Belgaum District, Karnataka was established in the month of May

in the year 2005 with an initial capacity of 10,000 later per day to meet the demand of liquid

milk of different urban areas of North Karnataka and improve the Economic Conditions of

rural with milk produces by enhancing milk production providing a real market and

remunerative price. The company presently is well equipped with the technology for efficient

milk reception, processing, quality control and storage. The brand name of the Dairy is

“ADITYAA MILK”, which has become the household name, with the products like Adityaa

Milk, Curd, Ghee, Mysore pak, buttermilk, Lassi and huge verity of ice-creams.

The study is conducted at Vijaykant Dairy and Food products pvt ltd, and highlights on

various aspects of cost, volume and profit analysis. It also shows different scenarios of profit

on increase and decrease of costs.

Kousali Institute of Management Studies


INTRODUCTION



TOPIC CHOSEN FOR THE STUDYScenario Analysis of Various Products at Vijaykant Dairy and Food Products Pvt Ltd.

NEED FOR THE STUDYThe study is required to carry out a scenario analysis under different economic

condition that will help the management maintain desired profit level in the company.

MANAGEMENT PROBLEMAn increase in input cost of raw material by 23% is affecting the profitability of the

company apart of this the company is also facing severe competitions from dairies in North

Karnataka and South Maharashtra.

OBJECTIVES OF THE STUDY1. To estimate change in profit under different scenarios.

2. To estimate the required amount of sales to earn the same level of profit under

different scenarios.

3. To estimate the demand elasticity of milk at Vijaykant Dairy.

SCOPE OF THE STUDY1. The study will help the management of VDFPL to analyze the profitability of the

company in different scenario and to take appropriate action as desired.

2. It will also help the company to maintain the desired profit by altering the output level

under different scenario.

METHODOLOGYThe methodology adopted for the study is based on secondary data and also some

information collected through primary data by interacting with the Finance manager HR

manager and staff, about the company information.

Research type: Descriptive and quantitative.



Secondary Data: Company Annual Report

Analysis Tools:The analysis of data is done through graphs and charts with the help

of MS-excel, balance sheets of previous year.



Industry profile

Milk has been an integral of Indian food for centuries. The per capita availability if milk in

India has grown from 172 grams per person per day in 1972 to 182 grams in 1992 and 203

gram in 1998-99 and was expected to increase to 212 gram in 1999-00, however, it did

increase more than that. It is also seen that large part of the population cannot afford milk. At

this per capita consumption it is below the world average gram and even less than 220 gram

recommended by the Nutrition Advisory Committee of the Indian Council of Medical

Research.

There are regional disparities in production and consumption also. The per capita availability

in the northern region is 278 gram, western region is 174 gram, in southern region is 148

gram and in eastern region it just 93 gram per person per day. The disparity is due to

concentration of milk production in few pockets and high cost of transportation. Also the

output of milk in cereal growing area is much higher than elsewhere which can be attributed

to abundant availability of fodder, crop residues, etc which have a higher food value for

milch animals.

In India about 46 percent of the total milk produced in the country is consumed in liquid form

and 47 percent is converted into traditional products like Ghee, Paneer, Khoya, Curd malai

etc. and only 7 percent of the milk is converted into the production of western products like

milk powders, processed butter and processed cheese. Among the milk products

manufactured by the organized sectors some of the prominent ones are ghee, butter, cheese,

ice creams, milk powders, malted milk food, condensed milk infants foods etc. of these ghee

alone accounts of 85%.

It is estimated that 20% of the total milk produced in the country is consumed in the

producer-household level and the remaining is marketed through various cooperatives,

private dairies and vendors. Also of the total produce more than 50% is produced by

cooperatives and other private dairies.



While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is

used for manufacturing processed value added dairy products, for private dairies only 45% is

marketed in fluid form and rest is processed into value added products like ghee, makhan etc.

Still, several consumers in urban areas prefer to buy loose milk from vendors due to the

strong perception that loose milk is fresh. Also, the current level of processing and packaging

capacity limits the availability of packaged milk.

The preferred dairy animal in India is buffalo unlike the majority of the world market, which

is dominated by cow milk. As high as 98% of milk is produced in rural area, which caters to

72% of the total population, where as the urban sector with 28% population consumes 56% of

total milk produced. Even in urban India, as high as 83% of the consumed milk comes from

the unorganized traditional sector.

Presently only 12% of the milk market is represented by packaged and branded pasteurized

milk, valued at about rupees 8000 Crores. Quality of the milk sold by unorganized sector

however is inconsistent and so is the price across the season in local areas. Also these

vendors add water and caustic soda, which makes the milk unhygienic.

India’s dairy market is multi-layered. It’s shaped like a pyramid with the base made up of a

vast market of low cost milk. The bulk of the demand for milk is among the poor in urban

areas whose individual requirement is small, may be a glass for use as whitener for tea and

coffee. Nevertheless, it adds up to a sizable volume millions of liters per day. In the major

cities lies and immense growth is potential for the modern sectors. Presently, barely 778 out

of 3700 cities and towns are served by its milk distribution network, dispensing hygienically

fact wholesome, quality pasteurized milk. According to one estimate, the packed milk

segment would double in the next five years, giving both strength and volume to the modern

sector. The narrow tip at the top is a small but a fluent market for western type milk products.

Growing volume

The effective milk market is largely confined to urban areas, inhabited by poor 25% of the

country’s population. An estimated 50% of the total milk produced is consumed here. By the

end of the twentieth century, the urban population is expected to increase by more than 100



million to touch 364 million in 2000 a growth of about 40%. The expected rise in urban

population would be a boon to Indian dairying. Presently, the organized sector both

cooperative and private and the traditional sector cater to this market.

The consumer access has become easier with the information revolution the number of

households with TV has increased from 23 million in 1989 to 45 million 1995 and

consistently growing about 34% of this households in urban India has access to satellite

television channels.

Population for further growth

Of the three A’s of marketing- availability, acceptability and affordability, Indian dairying is

already endowed with the first to two. People in India love to drink milk. Hence no efforts are

needed to make it acceptable. Its availability is not a limitation either, because of the ample

scope for increasing milk production, given the prevailing low yields from dairy cattle. It

leaves the third vital marketing factor affordability. How to make milk affordable for the

large majority with limited purchasing power? That is essence of the challenge. One practical

way is to pack milk in small quantities of 250ml or less in polythene sachets. Already, the

glass bottles for retailing milk have given way to single-use sachets which are more

economical. Another viable alternative is to sell small quantities of milk powder in mini-

sachets, adequate for two cups of tea or coffee.

Emerging dairy markets

Food service institutional market: it is growing at double rate of consumer market

Defense market: an important growing market for quality products at reasonable

prices.

Ingredients market: a boom is forecast in the market of dairy products used as raw

material in pharmaceutical and allied industries.

Parlor market: the increasing away-from-home consumption trend opens new vistas

for ready-to-serve dairy products which would ride piggyback on the fast food

revolution sweeping the urban India.



India, with her sizable dairy industry growing rapidly and on the path of modernization,

would have a place in the sun of prosperity for many decades to come. The one index to

the statement is the fact that the projected total milk output over the next fifteen years

(1995 to 2010) would exceed 1457.6 million tons which is twice the total population of

the past fifteen years!

Market size and growth

Market size for milk (sold in loss/packaged form) is estimated to be 36 million MT

valued at rupees 470 billion. The market is currently growing at around 4% per annum in

volume terms. The milk surplus states in India are Uttar Pradesh, Punjab, Haryana,

Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil-Nadu. The

manufacturing of milk products is concentrated in these milk surplus states. The top six

states, viz. Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil-Nadu and Gujarat

together account for 58% of national production.

Milk production grew by a mere one percent per annum between 1947 and 1970. Since

the early 70’s under operation flood, production growth increased significantly averaging

over five percent per annum.

About 75% of milk is consumed at the household level which is not a part of commercial

dairy industry. Loose milk has a larger market in India as it is perceived to be fresh by

most consumers. In reality however, poses a higher risk of adulteration and

contamination.

The production of milk products, i.e. milk products including infant milk food, malted

food, condensed milk and cheese stood at 3.07 lakh MT in 1999. Production of milk

powder including infant milk food has risen to 2.25 lakh MT in 1999, whereas that of

malted food is at 65000 MT. cheese and condensed milk production stands at 5000 and

11000MT respectively in the same year.



Major players

The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative

Milk Marketing Federation (GCMMF) is the greatest player. All other local dairy

cooperatives have their local brands(for example Gokul, Warana in Maharashtra, Saras in

Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil-Nadu, Karnataka

Milk Federation (KMF) in Karnataka etc.). Other private players include J K Dairy,

Heritage Foods, Indian Dairy, Dairy Specialties, etc. Amrut industries, once a leading

player in the sector has turned bankrupt and is facing liquidation.

Packaging technology

Milk was initially sold door to door by the local milkman. When the dairy cooperatives

initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over

the years, several developments in packaging media have taken place. In the early 80’s

plastic pouches replaced the bottles. Plastic pouches made transportation and storage very

convenient, besides reducing costs. Milk packed in plastic pouches or bottles have a shelf

life of just one to two days, that to only if refrigerated. In 1996, tetra packs were

introduced in India. Tetra packs are aseptic laminate packs made up of aluminum, papers,

board and plastic. Milk stored in tetra packs and treated under Ultra High Temperature

(UHT) technique can be stored for four months without refrigeration. Most of the diary

cooperatives in Andhra Pradesh, Tamil-Nadu, Punjab and Rajasthan sell milk in tetra

packs. However tetra milk is costlier by rupees 5 to 7 compared to plastic pouches. In

1999 to 2000 nestle launched its UHT milk. Amul too re-launched its amul taaza brand of

UHT milk. The UHT milk market is expected to grow a rate of more than 10 to 12

percent in coming years.

Export potential

India has the potential to become one of the leading players in milk and milk product

exports. Location advantage: India is located amidst major milk deficit countries in Asia

and Africa. Major importers of milk and milk products are Bangladesh, China, Hong



Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf

countries, all located close to India.

Low Cost of Production: Milk production is scale insensitive and labour intensive. Due to

low labour cost, cost of production of milk is significantly lower in India.

Concerns in export competitiveness are

Quality: Significant investment has to be made in milk procurement, equipments, chilling and

refrigeration facilities. Also, training has to be imparted to improve the quality to bring it up

to international standards.

Productivity: To have an exportable surplus in the long-term and also to maintain cost

competitiveness, it is imperative to improve productivity of Indian cattle.

There is a vast market for the export of traditional milk products such as ghee, paneer,

shrikhand, rasgolas and other ethnic sweets to the large number of Indians scattered all over

the world.

India’s export of milk products

Source: Dairy report Hindustan times



What does the Indian Dairy Industry has to Offer to Foreign Investors?

India is a land of opportunity for investors looking for new and expanding markets. Dairy

food processing holds immense potential for high returns. Growth prospects in the dairy food

sector are termed healthy, according to various studies on the subject.

The basic infrastructural elements for a successful enterprise are in place.

Key elements of free market system

Raw material (milk) availability

An established infrastructure of technology

Supporting manpower

An entrepreneur's participation is likely to provide attractive returns on the investment in a

fast growing market such as India, along with an export potential in the Middle East,

Singapore, Malaysia, Indonesia, Korea, Thailand, Hong Kong and other countries in the

region.

India's Milk Product Mix

Fluid Milk 46.0%

Ghee 27.5%

Butter 6.5%

Curd 7.0%

Khoa (Partially Dehydrated Condensed

Milk)6.5%

Milk Powders, including IMF 3.5%

Paneer & Chhana (Cottage Cheese) 2.0%

Others, including Cream, Ice Cream 1.0%

Source: NDDB(National Dairy Development Board) report, 2011

Total contribution to the economy or sales



The Indian Dairy Industry engages in the production and processing of milk & cream. This

industry is involved in the manufacture of various dairy products like cheese, curd, yoghurt

etc. The Indian Dairy Industry specializes in the procurement, production, processing, storage

and distribution of dairy products. India as nation stands first in its share of dairy production

in the international scenario. The industry contributes about Rs 1, 15,970 to the national

economy.

Employment opportunities

The Indian Diary industry which is in the developing stage provides gainful employment to a

vast majority of the rural households. It employs about 8.47 million people on yearly basis

out of which 71% are women.

Jobs in Indian dairy industry are mainly in the fields of production and processing of dairy

products. An individual with minimum of 60% marks who has bachelor's degree course in the

dairy technology can easily be availing an opportunity to work in this industry. For the

graduation course in Dairy technology one has to qualify the All India Entrance Test that is

affiliated to the Indian Council of Agricultural Research. After that the person can continue

with his masters in dairy technology. Jobs would be for the following positions.

Dairy Scientists: The main job of the dairy scientists is to deal with collection of milk

and taking care of the high yielding variety of animals.

Dairy Technologists: the work of Dairy technology requires procurement officers

who take the responsibility of collecting milk from farmers, milk booths and cattle-

rear. This particular procurement officer should well understand the latest technology

that is applicable in maintaining the quality of milk of the process of transporting it to

the desired location.

Dairy Engineers: dairy engineers are usually appointed is to set up and maintain

dairy plants.

Marketing Personnel: These individuals deal with the sale and marketing of milk

together with milk products.

Latest developments



Indian Dairy Industry is the largest milk producer all over the world, around 100

million MTIndian Dairy Industries value of output amounted to Rs. 1179 billion in

2004-05 which approximately equals combined output of paddy and wheat. With

1/5th of the world'sbovine population

In India the Milch animals constitutes45% indigenous cattle, 55 % buffaloes, and 10%

cross bred cows

Intensive Dairy Development Programmed (IDDP): The Schemes, modified under these

programs are on the basis of the recommendation of the evaluation studies which were

launched during Eighth Plan period and are being continued throughout the Eleventh Plan

with an outlay of Rs. 32.49 core for 2009-10.

Strengthening Infrastructure for Quality and Clean Milk Production (CMP): this is a

centrally sponsored scheme which was launched in October 2003, which had the main

objective of improving the quality of raw milk produced at the every village level in the

India.

Dairy Venture Capital Fund- this is introduced in the Tenth Five Year Plan to bring about

structural changes in unorganized sector, which would measure like milk processing at

village level, marketing of pasteurized milk in a cost effective manner, quality or the up

gradation of traditional technology to handle commercial scale using modern equipments and

management skills.

Tracking the progress



Source: NDDB (National Dairy Development Board) Report.

Looking atthe current situation, the dairy industry in India seems to be moving on track

andachievinggrowth in line with the projections. Since the last vision document was prepared

in2011, the followingseries of events have occurred as a result of a promising environment

due to good monsoons, risingincomes and uninterrupted flow of investments. With the data

projected it can be said from the past projection as well the variation in the projection and the

actual values that are to be obtained in future will be very less. And if it so, the dairy industry

will be one among the leading industry in food production industry in years to come.



01/01/2008

01/01/2010

01/01/2012

01/01/2014

01/01/2016

01/01/2018

01/01/2020

01/01/2022

01/01/2024

01/01/2026

01/01/2028

01/01/2030

0

20

40

60

80

100

120

Milk prices

prediction priceActual price

Years

Price

s

Source: National Dairy Development Board report

The above statistics which shows the price predicated and the actual price of milk in Delhi

from year 2008 to 2030 and till now respectively, shows that there is consistent growth in the

milk and milk product’s prices and this act as the main source for the investment to generate

the income from it.

Thus, from the above data the things which can be considered is the demand associated with

the milk and its products which is uncontrollable with the production and supply, as the

demand for these things in increasing in a higher rate comparatively.

Key Areas of Concern in the Dairy Industry

(i) Competitiveness cost of production, productivity of animals etc.

The demand for quality dairy products is rising and production is also increasing in many

developing countries. The countries which are expected to benefit most from any increase in

world demand for dairy products are those which have low cost of production. Therefore, in

order to increase the competitiveness of Indian dairy industry, efforts should be made to



reduce cost of production. Increasing productivity of animals, better health care and breeding

facilities and management of dairy animals can reduce the cost of milk production. The

Government and dairy industry can play a vital role in this direction.

(ii) Production, processing and marketing infrastructure

If India has to emerge as an exporting country, it is imperative that we should develop proper

production, processing and marketing infrastructure, which is capable of meeting

international quality requirements. A comprehensive strategy for producing quality and safe

dairy products should be formulated with suitable legal backup.

(iii) Focus on buffalo milk based specialty

Dairy industry in India is also unique with regard to availability of large proportion of buffalo

milk. Thus, India can focus on buffalo milk based specialty products, like Mozzarella cheese,

tailored to meet the needs of the target consumers.

(iv) Import of value-added products and export of lower value products

With the trade liberalization, despite the attempts of Indian companies to develop their

product range, it could well be that in the future, more value-added products will be imported

and lower value products will be exported. The industry has to prepare themselves to meet

the challenges.

Milk production is, of course, only half of the story. The other half is the sale of milk and

milk products that provides the highest returns to our dairy farmers. Here too, S&T have

played an important role in development of products, processes, packaging, handling,

transport and storage. Among the major breakthroughs have been:

1. Automation of khoa production, moving this process from the backyard to the modern

dairy.

2. Design of the process technology and equipment for manufacture of peda, gulab

jamun, cchhanapodo, long-life panneer and other Indian milk products.

3. Development of continuous lines, including packaging, for fermented milk products

like longlife lassi, shrikhand, dahi (yogurt) and misti doi.

4. process technologies for production of Cheddar, Mozzarella and Emmental cheese as

well as a variety of cheese spreads using both cow and buffalo milk.

5. Preservation of starter cultures for fermented milk products.



6. Process of manufacture of dry mixes for gulab jamun and frozen desserts.

7. User-friendly milk testing kits.

As satisfying as the achievements have been, the real challenges lie ahead. Among the most

important are:

1. Ensuring steady growth in productivity while ensuring that dairying remains

concentrated in our landless, marginal and small farmer communities.

2. Using advanced breeding technologies to accelerate the development of our high

potential Indian cattle and buffalo breeds.

3. Developing quality control methods that are sensitive to the fact that our milk comes

from large numbers of small producers.

4. Ensuring increasing reduction in losses from endemic and epidemic diseases at costs

our farmers can afford.

5. Expanding the variety, improving the quality and maintaining the relative price of

India’s dairy products so that they can meet competition from around the world.

6. Ensuring that the growth of the dairy industry contributes to enrichment of our

environment while continuing to benefit low-income producers without

compromising our nation’s need for milk.

These and other challenges face the current and next generation of scientists and

technologists. Their predecessors have built a solid foundation. The strength of that

foundation is due in large part to the fact that India’s dairy farmers have set the research

agenda. Beginning with Amul during the1940s, it was their need that inspired the work of our

dairy scientists and technologists. It is theevolving needs of India’s several million dairy

farmers that will inspire those who follow.

India being the world’s largest producer of dairy products by volume, accounting for holds

about 13% of world’s total milk production and also accounts the world’s largest dairy herd

India being a country that consumes its own milk production. India is neither considered an

active importer or an exporter of dairy products. However, bringing in the rules of Operation

Flood Programme, the situation changed significantly and imports have reduced to very small



quantities. The year 2001, has brought India to be a key player in net exporting of dairy

products and after the year 2003 India’s import of dairy products has dipped while exports

have increased at a fast rate. Yet the country provides a share in global market still remains at

small rates of 0.3 and 0.4 percent for exports and imports respectively. This is because of

people who directly consumption of liquid milk by the producer households. This also

increases the demand for processed dairy products that has increased with the growth of

income levels, which have left little dairy surpluses for export. Although, India with more

consumers we exports special products like casein for food processing or pharmaceuticals.

The Indian dairy sector is also different from other dairy producing countries as India places

its importance on both cattle and buffalo milk.



COMPANY PROFILEVijyakant dairy and food products commenced their business in 2006 at Neginhal,

Bailhongaltaluk with an authorized capital of 15 Crore. The company had a initial capacity of

5000 litres per day. The present capacity of the company is 1 lakh litres per day from across

1500 villages. The company is headed by Managing Director ShivkantSidnal. The following

is the details of company profile.

Company profile

Name of the Company Vijaykant Dairy and Food Products Limited

Year of Establishment 22nd May 2005

Date of Commencement of Business 21/07/2006

Address Neginhal Village, BailhongalTaluk,

Belagavi District-591102

Registration Date 16/09/2004

Registration No. 034702

CIN U51201KA2004PLC034702

Authorised Share Capital(in Rs.) 15,00,00,000

Paid up Share Capital(in Rs.) 8,01,00,000

Registered office 7309, ‘SushilaSadan’, Anjaneya Nagar Belagavi-

590016

Nature of the Industry Vijaykant Dairy And food products ltd is Milk

Industry Manufacturing Ice-cream, Curd, Ghee,

Mysore Pak, Buttermilk, Lassi, Shrikhand, Paneer

and other Milk Products

Initial Capacity 5,000 litres per day

Brand Name “Adityaa Milk”

Area 12 acres

Business Market Karnataka, Maharashtra, Kerala, Goa, Tamilnadu



Email ID [email protected]

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the

company shall be stated

Business activities of the company

SL

NO

Name & Description of main

products/services

“NIC Code of the

Product/service

“% total turnover

of the company”

1

2

3

Manufacture of Milk

Manufacture of Cream, Better, Curd,

Ghee, Khava, Mysore Pak, Butter

Milk, Paneer, Lassi and Shrikhand

etc.

Manufacturing of Ice Cream

10501

10504

10505

55.65%

12.24%

29.89%

PARTICULAR OF HOLDINGS, SUBSIDIARY AND ASSOCIATE

COMPANIES

NAME & ADDRESS OF

THE COMPANY

CIN/GLN “HOLDING

SUBSIDIARY/A

SSOCIATE

%OF

SHARE

S HELD

APPLICAB

LE

SECTION

ADITYAA MILK ICE

CREAM LTD

U1513KA

2012PLC0

64467

SUBSIDIARY 99% Sec.2(87)(ii)


mailto:[email protected]


BOARD OF DIRECTORES

The company is headed by the Managing director (MD) and following that the one

executive director, 3 non-executive director, 2 independent director and 1 company secretary

and internal auditor. The following are the list of directors give below.

Board of directors

Mr.ShivkantSidnal Managing Director(MD)

Mrs.DeepaShivkantSidnal Executive Director

Mr. Rahul AjitUppin Non-Executive Director

Mr.Mahantesh S. Gadavi Non-Executive Director

Mr.ShashikantRamuKulgude Non-Executive Director

Mr. SoniRajanJamnadas Independent Director

Mr. Bharat BabulalPurohit Independent Director

Mr. Ravi GajananHegde Company Secretary and Internal Auditor

BACKGROUND OF VDFPLVijakant Dairy was established on August 2006 with capacity of 5,000 litters per day.

To meet the demand of Milk of from urban and rural areas of North Karnataka and to

improve the economic condition of rural area with milk produces by enhancing milk

production. In Vijaykant Dairy, packaging of liquid milk was started from 25 th August 2006,

while bulk milk production was started 27th July 2006. Presently the Vijaykant dairy procures

1 lakh litersof milk per day from across 1500 villages, with most superior and automatic

system to acknowledge the receipt of milk through ‘SMS’ system, thus becoming a source of

revenue for 40,000 farmers and generates more than thousands of jobs to rural youth,

benefiting many rural people directly and indirectly.



Vijaykant Dairy and food products ltd has evolved as the largest and fastest growing

company with trademark/ Brand name “Adityaa Milk”. Vijaykant dairy food and products ltd

has established a fully integrated state of the art processing plant with utmost hygiene and

advanced machineries imported from Sweden and Italy and also equipped with high quality

laboratories and storage. The company has built an excellent marketing network, backed by

professional workforce and has spread its wings of marketing and sales across Karnataka,

Maharashtra, Goa, Kerala and Tamilnadu and also Gujarat and has plans to tap and penetrate

unexplored potential market.

VISION, MISSION AND OBJECTIVESThe VDFPL designs the vision and mission to meet the demand of Milk to urban and

rural areas of North Karnataka and to improve the economic condition of rural area with milk

by enhancing milk production. Those vision, mission and objectives are given below.

VISION

1. To make anenormous place to work where people are inspired to be the best

2. To bring out the wide range of quality products, that satisfies people’s desires and

needs.

3. To create a Strong bonding between company supply system and consumer to

create enduring value.

4. To achieve profitable growth through selling innovation, quality products to the

masses of India

5. To become number one in Karnataka in milk processing.

MISSION

1. To give fresh health oriented product with nutrients for a healthier life and well

creature of our consumers.

2. To uplift the livelihood of farmers by helping them to buy cattle and educating

about good cattle nourishment and cattle care in order to get excellent Milk

quality.



3. To Inspire moments of Joy and wellness of the Employees and costumer.

OBJECTIVES

1. The aim of the company is to improve the livelihood of milk producers and create

employment to the rural youth and give good health to the society.

2. To provide quality and health oriented products to consumers.

3. To facilitate rural development by providing opportunities for self-employment at

rural level, preventing migration to urban areas, introducing cash economy and

opportunity for stable income.

4. To build economic strength of the milk products in the villages

5. Providing assured and remunerative for milk producer in the market by the farmer

members.



PRODUCTS/SERVICE PROFILETheVijaykant dairy and food products ltd has growing company; it manufactures the

various products to meet the requirement of customer needs. The products of the VDFPL

Company as listed below.

1. Packaged Milk

2. Ice-Cream

3. Mysore Pak

4. Shrikhand

5. Sweet Lassi

6. Pure Cow Ghee

7. Fresh Butter Milk

8. Fresh Curd

9. Paneer

Milk

Adityaa Milk is homogenized, pasteurized, pure and fresh. It comes in different

packages to meet to the requirements of our consumers. They maintain ideal quality standards

consistency. Vijaykant dairy is presently supplying three different types of milk. The

following is the fat and SNF of three types:



Sr. no TYPE OF MILK FAT SNF

1 TONED MILK 3.0% 8.5%

2 STANDARD MILK 4.5% 8.5%

3 HIGH FAT MILK 6.0% 9.0%

Ice cream

Our Adityaa milk ice cream is made from pure and rich milk, which comes in

wide varieties, and in different packages, to fulfill the requirements of the consumers.

Our natural flavors like Mango, Orange, Apple, Pineapple, Chico, Strawberry,

Raspberry, Banana, Papaya, Coffee, Butter scotch, Chocolate, Toothy Fruity, Black

currant, An jeer , Tender coconut, Water melon, Chocó chips, Vanilla , Pista , are

made from pure pulp extracted from the fruits. There are exotic flavors like Dry fruits

sundae, fresh fruit ice cream, Chocó fudge and Adityaa Milk special irresistible. All

our regular varieties come in small, medium and large family packs.

Mysore Pak



Our Mysore Pak is made 100% pure ghee. Our Mysore Pak is the most delicious

product, one has ever experienced. Our Adityaa Milk Mysore Pak comes in 250 Gms

Boxes or Rs. 35/-, ½ KG Boxes for Rs. 70/- , 1 KG Boxes for Rs. 140/-.

Shrikand

Shrikand is the dairy product basically originated from the state of Maharashtra. The

sour and sweet combination of the product gives the actual taste of the shrikand. The Adityaa

milk has come up with such a combination of this taste, which is mind blowing the outskirt of

Maharashtra, as well as the parts of Maharashtra.

Initially there was only a single and plain flavor but now the company has variety of

flavor of shrikand which are mango, ilachi, etc.



Lassi

Adityaa Lassi is made from rich fresh natural milk, the taste thickness and quality of

the Lassi gives ecstatic experience to Lassi lovers. Adityaa Lassi is homogenized and

pasteurized. Thus which turns theLassito highly delicious and healthy?

Ghee

High quality ghee is prepared at Vijaykant dairy. Ghee preparation at dairy is done by

direct as cream method and by factory method. Ghee is prepared on contact basis. Ghee

manufacturing is done outside the main processing plant in the field. For making Ghee

boiler is present in the processing room at first floor which is according to the need. As the

ghee is prepared on contact all the equipments are of very old used by the contact. Heating if



the butter or cream is done in large vats and fuel used for heating is coal and wood. The ghee

boiler in the plant has capacity of 1000 liters and it is manufactured by unicorn.

Buttermilk

Adityaa buttermilk is very well prepared using milk and natural spices. Which make

the buttermilk so special and different others? Adityaa buttermilk is thoroughly pasteurized

and is totally bacteria free.

Curd



There are two types of curd prepared at Vijaykant dairy i.e. plain Dahi and Pot curd.

Almost the manufacturing of both are same but there is little difference in fat and SNF

percentage.

Plain Dahi is packed in low density polyethylene packs with contents of 200ml

incomparable taste. The ageing of the curd is done properly and it is released on attaining

adequate maturity. Hence the thickness of crud remains intact till used.

Paneer

Paneer is the curd cheese which is made by curdling heated milk with lemon juice and

vinegar or any other food acids. It is the special dairy product throughout India. It is the

product which is used in many dishes which are served in India in almost every corner. It is

the most likes dairy product and has a good market demand, thus can lead to very helpful in

sales generation. Adityaa milk’s Paneer is good in tasty, healthy and fresh.

NATURE OF BUSINESS Vijaykant Dairy is manufacture concern. Basically dairy concentrated on procurement

of milk but now milk products like milk, curd, butter milk, ghee, and ice-cream are the

various products manufactured in Vijaykant Dairy. Milk is perishable in nature and

consumed daily, the production process take place throughout the year.

AREA OF OPERATIONPresently it is operating regionally. Vijaykant dairy products are available to local

consumers like Belagavi, Bagalkot, Dharwad, Hubli, and Haveri districts. The Managing

Director of Vijaykant dairy is thinking to expand his dairy products throughout Karnataka

and other states in future,

INFRASTRUCTURE FACILITIES



Vijaykant dairy is situated at Neginhal village which is 35km away from Belagavi and

14 km from Bailhongal. The manufacturing unit is set up in 12 acres of land where there is a

main plant in which Milk, Butter milk and Curd are produced and also a product plant is there

in which Ice-cream, Ghee, Peda and Mysore pak, no quarters are there in dairy, temporary

arrangement are done in the nearby villages and even in Belagavi city. A vehicle is arranged

to carry the staff from Belagavi to VDFPPL and in return dairy.

COMPETITORS’INFORMATION

The Vijaykant dairy was incorporated in 2006. In the period of 10 years the Adityaa

milk captures the overall market share of North Karnataka and growing rapidly in the market.

Although the Adityaa milk has facing strong competitors in the market, the competitors of

Adityaa milk are given below

1. Arokya Dairy

2. Mayur Dairy

3. Sahyadri Milk Dairy

4. Mahalaxmi Dairy

5. Nandini Milk Dairy

1. Arokya Dairy

Hatsun, India’s largest private dairy. From a modest ice cream manufacturer to one of

the leading in India’s dairy sector in just a span of three decades, Hatsun now stands

majestically as a hallmark of successful entrepreneurship the main products of this dairy are

Milk: Arokya, Hatsun Santosa full Cream Milk, Hatsun Komatha Toned Milk.

Ice-cream: Arun Ice Cream, Make your own Sundae, Arun Unlimited Hastun , Hatsun

Paneer Beverages: Aaros Milk/ Badam milk, Aaros Teal Masala Tea, Aaros coffee, Aaros

Ragi.

2. Mayur milk



Mayur Milk Products Private Limited was registered at Registrar of Companies Gwalior on

28 June, 1999 and is categorized as Company Limited by Shares and an Indian Non-

Government Company. As this company is the old and huge market acquired, thus the old

players in the market affect the new players to perform, to avoid the sharing of sales with

them. Thus, VDFPL faces this company as huge competitor to acquire market of other states

like Madhya Pradesh.

3. Sahyadri Milk Dairy

Sahyadri milk and agro Products India Private Limited situated in karad, Maharashtra.

Has been in the market since a decade and has captured the wide market covering the major

portion of Maharashtra and neighboring states like Maharashtra and outskirt of Andhra

Pradesh.

These acts as the competitor as the VDFPL is the company which is spreading its name

across Maharashtra in huge speed thus being the already existing company in Maharashtra

the sahyadri milk dairy would act as a huge competition for VDFPL

4. Mahalaxmi dairy:

The Mahalaxmi dairy plant is located near Kolhapur, Maharashtra state which procure

round about 15,000 to 20,000 LTPD & its target market area in Belgaum district, Gokak & in

Maharashtra state .Besides above main brands to other competitive brands like, Krishna,

Gopal, Adityaaa etc.

5. KMF’s Nandini

It is one of the tough competitors of Adityaa milk, it is establish in the year 1985. It is

situated in Belgaum. The dairy sales of this dairy is 60000 liters/ day. The products of this

dairy are Milk, Ice-cream, Curd, Peda, Gulab Jammoon, Ghee, Butter Milk, the market has

covered whole Karnataka.

SWOT ANALYSIS



SWOT analysis is tool for auditing an organization and its environment. It is the 1 st

stage of planning and helps marketer to focus on the key issues.SWOT stands for strength,

weakness, opportunities, and threats. Strength and weakness are internal factors and

opportunities and threats are the external factors.

STRENGTH

1. Vijaykant Dairy and Food Products Ltd, is located in rural area. It can collect

large amount of milk in surrounding area easily, and water is easily available

throughout the year, as it is situated near Malaprabha River.

2. Best quality products are produced in VDFPL by sophisticated imported

machineries.

3. Milk is necessary in day to day life and consumed daily, so there is demand for

the product throughout the year.

4. Production of ice-cream, Butter milk and Ghee are produced according to the

requirement of the market and avoids Production surplus.

5. The providing financial assistance to the farmers to buy the Cattles, which is just

like helping nature too produce more and more Milk.

6. The Qualified, Chief Promoter with an excellent socio political contacts.

7. The Unit is capable of proceeding all grade of milk (Standard/Toned/Full cream)

to suit the needs of all classes, all types of Customers.

WEAKNESSES

1. All the products are highly perishable in nature so can’t keep in stock for more

days.

2. As butter milk, Lassi and ice cream have seasonal and hence the revenue changes

according to the season

3. Poor retail selling and Low level of consumer awareness

4. Frequent power cut is major problem of the company.

5. Highly perishable products, there is chance of damage of milk.



OPPORTUNITIES

1. Production of other milk products like Milkshakes, Peda, Khzova, Flavoured milk

etc.

2. The company is planning to enter all the Corporate, Hospitality, catering sectors to

push their products and make it available.

3. The company helps to create direct or indirect employment opportunities in rural

areas.

4. Lot of scope to expand, diversify and Building Bigger Organization.

THREATS

1. Milk and Milk products are perishable so risk is more.

2. Competition

3.

4. Non availability of required quantity of milk in close vicinity in case of Droughts

and Famines

5. Milk suppliers, the un-organized sector: Currently milk vendors are occupying the

pride of place in the industry.

6. Low level of consumer awareness

STATERGY

To serves an instrument of the national to achieve self reliance in the design,

development and quality production of VDFPPL to meet the customers changing and

growing needs with special emphasis on military requirements.

In fulfillment of these objectives, the company shall regard itself fundamentally

responsible design and development, relying however on such relevant facilities as are

available in other national institutions but always holding itself basically responsible

for the growth.

To conduct its business economically and efficiently that it contribute its due share to

the national effort to achieve self reliance and self generating economy.

Towards this end to develop, maintain an organization which will rapidly respond and

adopt the changing matrix as socio-economic relationship and where in climate as



growing technical competence self discipline, natural understanding, dup commitment

and sense of belongingness will be fostered and each employee will be encouraged to

grow with accordance to his potential for the further organizational goals.

Consistent with the basic objectives of the state the personal department of the

corporate office has adopted certain specific objectives which will act as a source as

inspiration and guidance in evolving per sonnet policies and roaming rules and

regulations for growth and employment or employees and to ensure their deep

commitment and sense of belongingness to the company, and the objectives are stated

below;

a) Issue equality at all the levels and provide them the right work, environment, job

satisfaction and professional challenges.

b) Provide healthy blend or employee who have grown with original those selected from

outside.



Work Flow Model (End to End):

Flow diagram of processing of milk


Collection of milk from villages

Reception of milk at factory

Analysis of milk

Chilling

Storage

Pasteurization

Standardization and homogenization

Storage

Packing

Storage in Cold room

Dispatch to market

Separation of cream storage &Handling

Butter Manufacturing

Ghee Manufacturing


The production procedure at Vijaykanth Dairy is done under different stages.

Collection of milk

In this stage that is the very first stage the milk is bought from the various places to the main

dairy. In 40 liters capacity cansin tempos and other vehicles. The can are of two types marked

with two different colors to differentiate between the cow and buffalo milk. The milk is

bought to the main dairy it under goes into following step.

Unloading

The cans are unloaded at the place which is called as dock station. The cans are

unloaded manually and the milk runs from the slider to the further but before the

milk runs further the followingsteps takes place.

Organ Elliptic test

This test is carried out by a person manually without using any machines but using

sense organs like nose and hence it is called as organoletic test. These tests

conducted before the cans are weighed. In this test various sub-tests are conducted

like.

Smelling and color test

A man at dock station of platform checks the acidic nature of milk by smelling or

tasting the raw milk. If the tested milk has bad odder then the dairy will pay lower

rate to such society members than the normal rate.

Extraneous- Matter appearances

In this test the raw milk is undergone into the test, which is conducted by the

chemist. The chemist checks for two aspects mainly whether the milk is

contaminated or not and the milk is in liquid form or curd form. He also checks

weather any extraneous matters like dust, flies etc which lead to spoilage of milk.



Acidic test

The payment of the suppliers or DSC depends mainly on FAT and SNF content in

the raw milk. The supplier may add sugar to the milk so as to increase the FAT and

SNF content.Hence to avoid this adulteration sugar test is done. Its procedure is

10ml of milk is shaken in a test tube and 1ml of hydrochloric acid few crystals of

resorcinol is mixed to it. The solution is shaken well and heated for 5min. If solution

fears organ color it is demanded that sugar is mixed to it.

Storage of chilled milk

Once all the tests are over the milk is allowed to store in the SILOS (Storage tank). So as to

maintain its cold level of a 4'C.The unions having 5 Storage tanks, 1 tank's are vertical with

20000Liters capacity each and the Remaining horizontal among liters each, and other two of

10,000 liters each. After chilling the milk is passed to Pasteurizer for pasteurization.

Pasteurization

This step of production includes heating every particle of milk a 72'C Is 15 seconds and it

cold to in less than 4’C.? When it is passing through pasteurization the cream is removed

depending on the quality of the milk required.

Packaging

Once the Pasteurization classed is conducted the next step is to pack the milk. The packing is

done by the machine of fluid goods and were as it is done manually in case of solid goods

like Mysorepak .The machine packs the raw milk in two sizes. That is 500ml and 1000ml

pouches. These machines are automatic with a capacity of packing 70 to 72 pouches per min.

the machines are used to pack all different types of milk in plastic bags. These plastics are

polythene bags required for packing is bought from other company.

Storage



The past but not the process is the whole of the production process is Storage. The milk

packed in 500ml and 1000ml pouches are arranged in the crates. Each cater contain 121trs of

milk. This caters are stored in cold room which has Temperature of about 5'c or below.

FLOW CHART OF ICE-CREAM


SELECTION OF INGREDIENT

MIXING ICE-CREAM MIX

(SMP, SUGAR, GLYCEROL, SODIUM ALGINATE, LIQUID GLUCOSE, CREAM)

FORE WORMING (70C)

PASTEURIZING THE MIX (FOR 30 MINS)

HOMOGENIZING THE MIX (1ST STAGE 2500 SPINS)

(2ND STAGE 500 SPINS) COOLING AND AGEING OF MIX (0-4 C)

FREEZING THE MIX(-4 TO -5 C)

PACKING OF ICE-CREAM

HARDENING & STORAGE OF ICE CREAM (-23 TO -29 C)

WATER FROZEN 90%


Manufacturing details:

Selection of ingredients : In Vijaykant Dairy & Food Products Pvt. Ltd the selection

of Ice-cream ingredients depends on –

1) Availability of milk products.

2) Perish ability of the products.

3) Convenience in handling.

4) Effects on flavors body and tenure of ice cream.

5) Cost & equipment availability.

Figuring the mix: Knowledge of calculation of ice cream a mix is helpful in properly

balancing a mix, in establishing and maintaining uniform quality.

Making the mix: Mixing of ingredients in a vat where they can be heated to facilitate

dissolving, blending and pasteurizing.

Pasteurizing the mix: This process destroys all pathogenic disease producing

bacteria, thereby safeguarding the health of the consumer.

Homogenizing the mix: The main function of homogenization is to make a

permanent and uniform suspension of the fat by reducing the size of fat globules.

Cooling and ageing of mix: Cooling the mix immediately after homogenization to 0-

5c after which it should be held in ageing tanks until used.

Freezing the mix: It depends upon the quality and yield of the finished product.

Overrun in ice-cream: It is volume of ice cream obtained in case of volume of the

mix. This increases upon the air incorporated during the freezing process.


ICE-CREAM


Packing of ice-cream: The chief requirements of packaging of ice creams are

Protections against contamination, an attractive appearance ease of opening of

Recharge ease of disposal.

Hardening and storage of ice-cream: The freezing process is therefore co-united

without agitation during hardening until the temperature of the ice cream reaches -18c

or below. After that ice cream should store at below -23 to 18c.

STRUCTURE


PRODUCTION MANAGER

MARKETING MANAGER

ADMINISTRATIVE

PROCUREMENT

LABORATERY CHEMIST

FINANCE

ASSISTANT PROCUREME

ASSISTANT CHEMIST

PLANT OPERATOR

SALES EXECUTIVE

SUPERVISOR

ACCOUNTANT MANAGER

CASHIERHELPERS

DAIRY MANAGER

MANAGING DIRECTOR

M.I.S


ADMINISTRATION DEPARTMENT

Administration Manager

Assistant Administration Manager

Superset

Administration assistant Grade – 1

Administration assistant Grade – 2

Clerk/Computer operator

FINANCE DEPARTMENT

Finance Manager

Deputy Manager Finance

Assistant Manager

Account Assistant Grade -1

Account Assistant Grade -2

Account Assistant Grade-3

Helpers



PURCHASE DEPARTMENT

Manager Purchases Department

Asst. Mgr. Purchase Department

Purchase Assistant Grade-1



PROCUREMENT AND INPUT DEPARTMENT

Procurement and Input

Deputy Manager Procurement Deputy Manager Veterinary Deputy Manager F & F

Assistant Manager Veterinary officer Clerk/ Computer Operator

Extension Officer Grade -1



Computer Operator



At tender

PRODUCTION DEPARTMENT

Dairy Manager

Deputy Manager Production

Assistant Manager

Technical Officer

Dairy Supervisor

Operators

Helpers

MARKETING DEPARTMENT

Marketing Manager

Deputy Marketing Manager

Assistant Manager

Technical & extension Officer

Marketing Assistant Grade-1





Clerks

Helpers

MIS DEPARTMENT

MIS refers to Management Information System

The structure of MIS department

MIS Officer

MIS Assistance

QUALITY CONTROL DEPARTMENT

Technical Officer QC

Operators

Helpers

In this department totally there are 10 workers

STORE DEPARTMENT

Structure of store Department

Store Officer

Store Assistant



Helpers

SECURITY DEPARTMENT

The department includes security officer & security guards. The guards are working on contract basis.

They must have watch on each & every person who is going inside & coming out of the dairy. They

must also keep watch on the vehicles going in & outside the dairy

SYSTEMS

The store departments in VDFPPL follow the cold system (cold control system). A

card is maintained for each item and number is allotted. The card is attached to each article

consist of amount balance, date of issue, purchase, etc this is later recorded in separate ledger

book. The inventories are of different kind ranging from mechanical, spares, packing items to

animal drugs, etc.

This department has the following services.

1) It tries to maintain maximum and minimum level of inventories.

2) Ordinary and locally available commodities are maintained at possible level.

STAFFING

The staff deals with the various personnel policies followed by the organization.

Below are given the personnel policies followed by the organization.

PERSONNEL POLICIES

There are around 240 employees working. There are various policies followed. The

administrative department forms the policies.

RECRUITMENT AND SELECTION



Due to registration, termination, retirement and transfer the concerned department head will

give the manpower requirements along with the job description.

The manpower sourcing is done through advertisement, manpower, consultant, and

employment exchanges and personnel reference.

PROMOTION

Promotion is on the basis of seniority.

SALARY AND EMPLOYEE BENEFIT

GROSS SALARY

A regular staff member in the union will have a gross salary consisting of basic salary,

dearness, allowance; house rent allowance and conveyance allowance.

OTHER FACILITIES

Shift allowance

Canteen facility

SKILLS

These are the distinctive competencies in the organization; it is the design and

development of products quality and service or viability of product. The employees in this

organization also have all the distinctive skills that are required for the understandings of

research and development activities.

The VDFPPL is improving the employee’s skill and techniques through motivating

them and giving proper training to them also through giving proper working condition.

STYLES

a) Vijaykant dairy has top to bottom or top down style system.

b) The style of organization is authorization. It means management cadre follows

authoritative.



The indicators of the style are,

Follows rules and orders

Reliable and dependable

Decision making parameters for day-to-day operations;

Top managers will tell marketing manager to collect information regarding daily

requirements of the sale of MILK, ICE CREAM and MILK PRODUCTS based on demand.

Then this information will provided to production department indicating production

activities.

SHARED VALUES

The core of fundamental values that are widely share in the organization and serve as

guideline that are important, these values have great meaning because they focuses attention

and provide broader sense of purpose.

The values of the organization are;

1) Customer satisfaction.

2) Commitment to total quality.

3) Cost and time consciousness.

4) Innovative and creative.

5) Trust and team spirit.

6) Respect for individually.

7) Integrity.



BACKGROUND OF THE STUDY

The Scenario analysis is a concept for studying the relationship between cost, volume

and profit. CVP analysis is an essential tool that provides the management with useful

information for managerial planning and decision making in the company. Profits of a

business firm are the result of interaction of many factors. Such as the most essential of these

factors are the cost of ‘produce, volume of salesand the selling prices of the products.

According to Herman C. Heiser, “the most significant single ‘factor in profit planning of the

average business is the relationship’ between the volume of production, costsand Profits”.

The CVP relationship is an important tool used for the profit planning of an ‘industry.

The three variables of CVP analysis i.e., costs, volume and benefit are interconnected and

reliant on each other. For instance, profit 'depend increase sales, offering cost to a huge

degree relies on cost and that relies on volume of creation as it is just the variable cost that

differs straightforwardly with generation, whereas fixed cost stays settled separated from of

the volume delivered. In cost-volume-benefit analysisendeavour is made to break down the

relationship between varieties in cost with shifts in volume.

The cost-volume-profit relationship is immense utility to management as it assists in profit

planning cost control and decision making. Cost-volume-profit analysis can be used to

answer questions such as;

1. How much sales should be made to avoid losses?

2. How much should be the sales to earn a desired profit?

3. What will be the effect of change in prices, costs and volume on profits?

4. Which product or product mix is most profitable?

5. Should we manufacture or buy some product or component?

The scenario analysis involves the analysis of how costs, total revenue and total profits are

related to sales volume, and the effect of change in costs and sales volume on profit those are



concern with predicting the value of the firm. It is also known as BEP Analysis’. The

management needs to understand the interaction between revenues, costs and volumes

determining the profits. All these analysis and information are provided by CVP

analysis/Scenario analysis.

In CVP Analysis all expenses are classified into Variable and Fixed cost. Based upon a

knowledge of fixed and variable cost fundamentals and CVP analysis, it is possible to find

out break even sales volume, to compute the sales needed to generate desired profits and to

answer the questions arise in the course of management planning and decision making.

The CVP Analysis is based on several Assumptions

1. The total cost can be divided into a fixed element that is variable with respect to

the level of output. The variable cost consists of both, direct and indirect variable

cost of the product. Similarly, fixedcost also includes both, direct fixed cost and

indirect fixed cost.

2. When graphed, the behaviour of the total revenues and total cost is straight line in

relation to output units within the time period.

3. The fixed cost, selling price, variable cost are known and constant.

4. When multiple products are sold will remain constants the level total units sold

changes.The analysis either covers single product or sales mix.

5. In manufacturing firms, the inventory levels at the beginning and end of the period

are the same. This implies that the numbers of units produced during the periods

equal the numbers of units sold.

6. In case of time value of money all costs and revenues can be added and compared

without taking into account.

7. Many companies in industries such as chemicals, Airlines, plastics, Automobiles,

and semiconductors have found the simple cost volume profit relationship to be

helpful in long period and strategic planning decision as well as decisions about

product features and pricing.



Techniques of CVP Analysis

The CVP is a management accounting procedures demonstrate the relationship

between different elements of benefit arranging, to be specific, unit sale price, variable cost,

sales mix and fixed cost. Following are widely used techniques to study the scenario analysis.

Contribution margin Concept

Contribution is the Difference between the varying cost and Sales. Also it can be

defined as the excess of the selling price on the Variable cost per unit. It is also known as

grass margin. Being variables the cast oversold on the costs of contribution is the amount that

provides a fixed costs and benefits.

Formula: 1. Contribution = Sales-Variable cost

Or

2. Contribution= Fixed Cost+ Profit (-loss)

Advantages of Contribution

1. It helps the Management in the fixing the selling price.

2. It helps with deciding the breakeven point.

3. It helps administration in the choice of suitable product mix revenue driven

expansion.

4. It helps in taking a choice as respects to including another product in the market.

5. It helps the administration in choosing whether to buy or make an product or a

part.

Break Even Analysis

The study CVP analysis referred to breakeven analysis. The break-even is most widely

known form of scenario analysis. It has two types of sense- narrow sense and broad sense,

this analysis helps the study of the relationship between costs, volume and profit at different

sales levels. Strictly speaking the technique of analyzing the level of operations in which the



point of no gain or loss. Breakeven also called as "critical point" or "point of equilibrium" or

" equilibrium point ".

Formulas: BEP (In sales) = FC/p/v ratio

Advantages or uses of break-even analysis

1. BEP is in a simple form and understandable

2. The break even chart is helps to the managerial decisions because the chart shows

relationship of volume, costs at various level of output.

3. It helps to forecasting, growth and planning.

4. It helps improve the company efficiencies of business and profit at various levels.

Profit-Volume Ratio

The p/v ratio, which is also called the “contribution ratio’ or marginal ratio expressed

the relation of contribution to sales and can be expressed as,

Formula: P/V ratio= Contribution /Sales

The P/V ratio, which establishes the interaction between the contribution and sales, is

of vital importance for the study of the profitability of business operations. It reveals the

effect on the result of changes in this volume. The concept of the P / V is also useful to

calculate the breakeven point, the profit in a certain volume of sales, the sales volume

necessary to obtain a desired profit and volume sales necessary to maintain current benefits if

the sale price reduced purchase a specified percentage.

Same important formulas are used for calculation as given below

Total cost = Fixed Cost +Variable Cost

Contribution = Sales-Variable Cost

Profit = Contribution-Fixed cost

P/V Ratio =Contribution/ Sales

BEP (in units) = Fixed Cost/ Contribution per Unit

BEP (in sales) = Fixed Cost/p/v ratio

Change in Profit = (Calculated Profit- Actual Profit)/ Actual Profit

Change in Sales = (Calculated Sales-Actual sales)/Actual Sales



Margin of safety = Sales-Breakeven point

DATA ANALYSIS AND INTERPRETATION

1. To estimates the change in profit under different scenarios.

ANALYSIS FOR MILK

Scenario1: To estimate the change in profit for 2015-16, if the sales increase by 26% and

variable cost increase by23%.

Table No.1 Comparison of actual value with the calculated value.

YEAR 2014-15Actual value

( Amount in Crore)

Sales value increase by 26% and Variable Cost by 23%

( Amount in Crore)SALES 115.374 145.372VC 101.590 124.955Contribution 13.784 20.416FC 13.486 13.486PROFIT/LOSS 0.298 6.930BEP 112.875 96.025P/V Ratio 0.119 0.140Margin of safety 2.499 49.347Change in Profit 22.207 times



SALE

SVC

Contrib

utionFC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

0.000

50.000

100.000

150.000

200.000

The 26% increase in sales and 23% in variable cost

Actual valueSales value increase by 26% and Variable Cost by 23%

Figure No.1 The 26% increase in sales and 23% in variable cost

Interpretation:

From the analysis the above table shows if company increase in sales by 26% and

variable cost by 23%, the company’s profit increases is 22.207 times and BEP reduce by

15%.

Scenario 2 (a): If the company’s Sales are same but Variable Cost Increase by 23%


( Amount in Crore)

Variable Cost Increase by 23%

(Amount in Crore)

SALES 115.375 115.375

VC 101.590 124.956

Contribution 13.785 -9.581

FC 13.486 13.486

PROFIT/LOSS 0.299 -23.067

BEP 112.875 -162.403

P/V Ratio 0.119 -0.083

Margin of safety 2.5 277.778

Change in Profit -78.243 times




SALE

SVC

Contrib

ution

FC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

-200.000

-150.000

-100.000

-50.000

0.000

50.000

100.000

150.000

23% increase in variable cost

Actual value Variable Cost Increase by 23%

Figure No.2 The 23% increase in variable cost

Interpretation:

The above table indicates the profit has been decreased 78.243 times as compared to

the actual profit when the Variable cost is being increased by 23%, hence the company sale

has to be increased and the gross margin reduces by 30.5%.

Scenario 2 (b): If company’s Fixed Cost increase by 3%



( Amount in Crore)

Fixed Cost increase by 3%

(Amount in Crore)

SALES 115.375 115.375

VC 101.590 101.590

Contribution 13.785 13.785

FC 13.486 13.891


BEP 112.875 116.262

P/V Ratio 0.119 0.119

Margin of safety 2.5 -0.887




SALE

SVC

Contrib

ution

FC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

-20.000

0.000

20.000

40.000

60.000

80.000

100.000

120.000

140.000

3% increase in fixed cost

Actual value Fixed Cost increase by 3%

Figure No 3- The 3% increase in fixed cost

Interpretation:

From the analysis, the above figure shows Change in profit has decrease by 1.355

times as compared to the actual profit when fixed cost increased by 3%, and the BEP

increases by 3%.

Scenario 2 (c): If the company’s simultaneously increase Fixed Cost by3% & Variable

Cost By 23%



( Amount in Crore)

Simultaneous increase Fixed Cost by 3%& Variable Cost By 23%

(Amount in Crore)SALES 115.375 115.375VC 101.590 124.956Contribution 13.785 -9.581FC 13.486 13.891PROFIT/LOSS 0.299 -23.472BEP 112.875 -167.275P/V Ratio 0.119 -0.083Margin of safety 2.5 282.65Change in Profit -79.598 times



SALE

SVC

Contrib

utionFC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

-200.000

-150.000

-100.000

-50.000

0.000

50.000

100.000

150.000

Simultaneous increase in fixed cost by 3% and variable cost by 23%

Actual valueSimultaneous increase Fixed Cost by 3%& Variable Cost By 23%

Figure No.4The simultaneous increase in fixed cost by 3% and variable cost by 23%

Interpretation:

The above table shows an increase in fixed cost by 3% and variable cost by 23% each

the change in profit decreased by 79.6 times, and The break-even has reduced compared to

actual break-even point.

Scenario 3: The impact of Decrease in Sales by 10%



( Amount in Crore)

Decrease in Sales By 10%

(Amount in Crore)

SALES 115.375 103.837

VC 101.590 101.590


FC 13.486 13.486


BEP 112.875 623.130

P/V Ratio 0.119 0.022





SALE

SVC

Contrib

ution

FC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

-100.000

0.000

100.000

200.000

300.000

400.000

500.000

600.000

700.000

10% decrease in sales

Actual value Decrease in Sales By 10%

Figure No.5 The 10% decrease in sales

Interpretation:

From the above analysis, the table shows if company’s sales decrease by 10%, it leads

to decrease in the profit by 38.635 times as compared to the actual profit. In this situation the

company incurred the loss and the break-even increases.



ANALYSIS FOR MILK PRODUCTS

Scenario 1: 26% increase in Sales and 23% increase in Variable Cost to estimate the

change in profit.



( Amount in Crore)

Sales value increase by 26% and

Variable Cost by 23%

(Amount in Crore)

SALES 30.0308 37.8388

VC 26.4430 32.5249


FC 3.5103 3.5103

PROFIT/LOSS 0.0774 1.8036

BEP 29.382 24.9958

P/V Ratio 0.1194 0.1404


Change in Profit 22.2731 times



SALES VC Contribution FC PROFIT/LOSS BEP P/V Ratio Change in Profit0

5

10

15

20

25

30

35

40

26% increase in sales and 23% in variable cost



Interpretation:

From the above analysis, the table shows the 26% increase in sales and 23% increase

in variable cost in this objective the company leads to increase profit level by 22.2731 times,

so company should maintain this objective as increment for production.

Scenario 2 (a): If the company’s Variable Cost increases by 23%



( Amount in Crore)

Variable Cost Increase by 23%

(Amount in Crore)

SALES 30.030 30.030

VC 26.443 32.524


FC 3.510 3.510


BEP 29.382 -42.267

P/V Ratio 0.119 -0.083





SALE

SVC

Contrib

utionFC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

-100

-80

-60

-40

-20

0

20

40



Figure No.7 The 23% increase in variable cost

Interpretation:

The above table indicates the profit has decreased by 78.477 times as compared to the

actual profit when the Variable cost is being to increase by 23% and the break-even

decreased.

Scenario 2 (b): If company’s Fixed Cost will increase by 3%

Table No.8 Comparison of actual value with the calculated value


( Amount in Crore)Fixed Cost increase by 3%

(Amount in Crore)

SALES 30.030 30.030VC 26.443 26.443Contribution 3.587 3.587FC 3.510 3.615PROFIT/LOSS 0.077 -0.027BEP 29.382 30.263P/V Ratio 0.1194 0.1194Margin of safety 0.648 -0.233Change in Profit -1.358 times



SALES VC Contribution FC PROFIT/LOSS BEP P/V Ratio Change in Profit-5

0

5

10

15

20

25

30

35



Figure No.8 The 3% increase in fixed cost

Interpretation:

From the analysis the above table shows, if company increases fixed cost by 3%,

Change in profit has been decreased by 1.358 times as compared to the actual profit and BEP

has been increase by 3%.

Scenario 2(c): If the company’s simultaneously increases Fixed Cost by 3% and

Variable Cost By 23%



( Amount in Crore)

Simultaneous increase Fixed Cost

by 3%& Variable Cost By 23%

(Amount in Crore)

SALES 30.030 30.030

VC 26.443 32.525


FC 3.510 3.615


BEP 29.382 -43.535

P/V Ratio 0.1194 -0.084





SALE

SVC

Contribution

FC

PROFIT/L

OSS

BEP

P/V R

atio

Change

in P

rofit

-100

-80

-60

-40

-20

0

20

40

Simultaneous increase in fixed cost by 3% & variable cost by 23%


Figure No.9- The simultaneous increase in fixed cost by 3% & variable cost by 23%

Interpretation:

The above table shows, if company increases variable cost by 23% and fixed cost

by3% the change in profit decreased by 79.837 times, because of which the loss shall be

incurred by the company and the P/V ratio has reduce by 29.4%.




( Amount in Crore)


(Amount in Crore)

SALES 30.030 27.027

VC 26.443 26.443


FC 3.510 3.510


BEP 29.382 162.251

P/V Ratio 0.1194 0.0216





SALES VC

Contribution FC

PROFIT/LO

SS BEP

P/V Rati

o

Change

in Pro

fit

-50

0

50

100

150

200

The impact of 10% decrease in sales


Figure No.10 The impact of 10% decrease in sales

Interpretation:

From the above analysis, the table shows 10% decrease in sales, this situation leads to

incurring of loss as this scenario leads to decrease in profit by 38.75 times as compared to the

actual profit and the BEP has increased.



ANALYSIS FOR ICE-CREAMScenario 1: to determine the Change in profit, if company increase the Sales by 26%

and 23% increase in Variable Cost.



( Amount in Crore)

Sales value increase by 26%

and Variable Cost by 23%

(Amount in Crore)

SALES 61.992 78.110

VC 54.584 67.139


FC 7.246 7.246

PROFIT/LOSS 0.161 3.725

BEP 60.641 51.590

P/V Ratio 0.119 0.140


Change in Profit 22.069 times

SALES VC

Contribution FC

PROFIT/LO

SS BEP

P/V Rati

o

Change

in Pro

fit0.00010.00020.00030.00040.00050.00060.00070.00080.000

26% increase in sales and 23% in variable cost





Interpretation:

The above table shows the 26% increase in sales and 23% increase in variable cost of

ice-cream which improves the profitability of the firm as the change in the profit is 22.069

times, the p/v ratio has increased by 15.95%.

Scenario 2 (a): If the company’s Variable Cost will Increase by 23%



( Amount in Crore)

Variable Cost Increase by

23%

(Amount in Crore)

SALES 61.992 61.992

VC 54.584 67.139


FC 7.246 7.246


BEP 60.641 -87.278

P/V Ratio 0.119 -0.083



SALE

SVC

Contrib

utionFC

PROFI

T/LO

SS

BEP

P/V R

atio

Change

in P

rofit

-100.000

-80.000

-60.000

-40.000

-20.000

0.000

20.000

40.000

60.000

80.000





Figure No.12- The 23% increase in variable cost

Interpretation:

The above table indicates the profit has decreased by 77.751 times as compared to the

actual profit if company variable cost is being to be increased by 23%. And the grass margin

of the company is reduced.

Scenario 2 (b): If company’s Fixed Cost will increase by 3%



( Amount in Crore)

Fixed Cost increase by 3%

(Amount in Crore)

SALES 61.992 61.992

VC 54.584 54.584


FC 7.246 7.464


BEP 60.641 62.460

P/V Ratio 0.119 0.119



SALE

SVC

Contribution

FC

PROFIT/L

OSS

BEP

P/V R

atio

Change

in P

rofit

-10.000

0.000

10.000

20.000

30.000

40.000

50.000

60.000

70.000



Figure No.13 The 3% increase in fixed cost



Interpretation:

From the analysis, the above table shows, if company to increased fixed cost by 3%,

change in profit has decreased by 1.346 times as compared to the actual profit, which means

the company goes under loss if this objective adopted. The company needs to maintain BEP

by increase sales volume.

Scenario 2 (c): If the company’s simultaneous increase in Fixed Cost 3% and Variable

Cost By 23%



( Amount in Crore)

Simultaneous increase Fixed Cost by

3%& Variable Cost By 23%

(Amount in Crore)

SALES 61.992 61.992

VC 54.584 67.139


FC 7.246 7.464


BEP 60.641 -89.896

P/V Ratio 0.119 -0.083





SALES VC

Contribution FC

PROFIT/LO

SSBEP

P/V Rati

o

Change

in Pro

fit

-100.000

-80.000

-60.000

-40.000

-20.000

0.000

20.000

40.000

60.000

80.000

Simultaneous increase in fixed cost by 3% & variable cost by 23%


Figure No.14 The simultaneous increase in fixed cost by 3% & variable cost by 23%

Interpretation:

The above table shows the change in profit has decreased by 79.097 times incurring a

huge loss, if the company the increase the both fixed cost by 3% and variable cost by 23%,

and also the BEP has been decreases as compared to actual value.




( Amount in Crore)


(Amount in Crore)

SALES 61.992 55.793

VC 54.584 54.584


FC 7.246 7.246


BEP 60.641 334.560

P/V Ratio 0.119 0.022





SALES VC

Contribution FC

PROFIT/LO

SS BEP

P/V Ratio

Change in Profit

-100.000

-50.000

0.000

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

The impact of 10% decrease in sales


Figure No.15 The impact of 10% decrease in sales

Interpretation:

From the above analysis table shows, if 10% decrease in sales which decrease the

change in profit by 38.392 times as compared to the actual profit and the gross margin has

been reduce by 83.78%.



2. To estimate required volume of sales under different economic condition

for the same level of profit.

ANALYSIS FOR MILKScenario 1: If company’s increase Variable cost by 23% for same profit requirement.

Table No.16 Comparison of actual value with the estimated value.

Increase/ decrease VC 23% FC 0


(Amount in Crore)Estimated value

(Amount in Crore)SALES 115.375 138.741VC 101.590 124.956Contribution 13.785 13.785FC 13.486 13.486PROFIT/LOSS 0.299 0.299BEP 112.875 135.735P/V Ratio 0.119 0.099Margin of safety 2.5 3.006Increase in Sales 20.25%

SALES VC Contribution FC PROFIT/LOSS BEP P/V Ratio 0.000

20.000

40.000

60.000

80.000

100.000

120.000

140.000

23% increase in variable cost in same level of profit

Actual value Estimated value

Figure No.16 The 23% increase in variable cost in same level of profit

Interpretation:



The above table shows, the increase in variable cost by 23% under same level of

profit, the company required to increase the sales volume by 20.25% to maintain same level

of profit and the P/v ratio has decreased as compared to actual figures.

Scenario 2: If the company’s increase the Fixed cost by 3% and Variable cost by

23%for same profit requirement.

Table No: 17-Comparison of actual value with the estimated value.

Increase/decrease VC 23% FC 3%



(Amount in Crore)SALES 115.375 138.741VC 101.590 124.956Contribution 13.785 13.785FC 13.486 13.891PROFIT/LOSS 0.299 -0.106BEP 112.875 139.807P/V Ratio 0.119 0.099Margin of safety 2.5 -1.129Increase in Sales 20%



SALES VC Contribution FC PROFIT/LOSS BEP P/V Ratio -20.0000.000

20.00040.00060.00080.000

100.000120.000140.000

23% increase in variable cost and fixed cost by 3% in the same level of profit.


Figure No.17- The 23% increase in variable cost and fixed cost by 3% in the same level of

profit.

Interpretation:

From the above analyses the company increases the both the element i.e. variable cost

by 23% and fixed cost by 3% and thereby in order to have the same level of profit , the sales

volume is required to be increases to maintain same level of profit condition.



ANALYSIS FOR MILK PRODUCTS

Scenario 1: If company’s increase Variable cost by 23% for same profit requirement.



Increase/decrease VC 23% FC 0



(Amount in Crore)SALES 30.031 36.113VC 26.443 32.525Contribution 3.588 3.588FC 3.510 3.510PROFIT/LOSS 0.077 0.077BEP 29.382 35.333P/V Ratio 0.119 0.099Margin of safety 0.648 0.78Increase in Sales 20%



5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000




Interpretation:

The above graph shows, the increase in variable cost by 23% under same level

of profit condition, the company mandatory to increase the sales volume by 20%

which leads to increase in break even.

Scenario 2: If the company’s increase the Variable cost by 23% and Fixed cost by






5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

23% increase in variable cost and fixed cost by 3% in the same level of profit


Figure No.19- The 23% increase in variable cost and fixed cost by 3% in the same level

of profit.

Interpretation:


by 23% and fixed cost by 3% and thereby in order to have the same level of profit , the

company sales volume is requisite to be increase by 21%.





(Amount in Crore)SALES 30.031 36.218VC 26.443 32.525Contribution 3.588 3.693FC 3.510 3.616PROFIT/LOSS 0.077 0.077BEP 29.382 35.458P/V Ratio 0.119 0.102Margin of safety 0.648 0.76Increase in Sales 21%


ANALYSIS FOR ICE-CREAMScenario 1: If company’s increase Variable cost by 23% for same profit requirement.


Increase/decrease VC 23% FC 0



(Amount in Crore)SALES 61.992 81.631



VC 54.584 67.139Contribution 7.408 14.492FC 7.246 7.246PROFIT/LOSS 0.161 0.161BEP 60.641 40.816P/V Ratio 0.119 0.178Margin of safety 1.351 40.815Increase in Sales 32%


10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000


Actual Value Estimated value


Interpretation:

The above graph shows in order to maintain the same level of profit, if company

increase the variable cost by 23%, the amount of required sales has to be increased by 32%

and the profit-volume ratio has increased.

Scenario 2: If the company’s increase the Fixed cost by 3% and Variable cost by




YEAR 2014-15 Actual value Estimated value



(Amount in Crore) (Amount in Crore)SALES 61.992 74.764VC 54.584 67.139Contribution 7.408 7.625FC 7.246 7.464PROFIT/LOSS 0.161 0.161BEP 60.641 73.181P/V Ratio 0.119 0.102Margin of safety 1.351 1.583Increase in Sales 21%


10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

23% increase in variable cost and fixed cost by 3% in the same level of profit


Figure No.21 The 23% increase in variable cost and fixed cost by 3% in the same

level of profit.

Interpretation:


by 23% and fixed cost by 3% and thereby in order to have the same level of profit , the

company sales volume is required to be increased by 21%.

3. TO ANALYSIS ELASTICITY OF DEMAND FOR MILK



Table No.22 Comparison of 2013-14 value with 2014-15 value.

2013-14 2014-15

Price 38/liter 40/liter

Quantity Demand 4.221842cr 5.19275cr

%change in QD 0.229973

%change in price 0.052632

Elastic demand 4.369479 (e>1)Relatively Elastic

demand

Interpretation:

The proportion of change in quantity demanded is greater than the proportion change

in price (e>1). The demand is set to be relatively elastic, the numerical value relatively elastic

demand lies between 1 and infinity, thus the value of elastic demand is 4.36 i.e. greater than

1.

SUMMARY OF FINDINGS, SUGGESTIONS AND

CONCLUSION

FINDINGSBased on the above data analysis the various alternatives to found out in the different

situation and interpreted the results. Based on the calculation the answers founded in the

analysis. Those findings are given below.



Findings for Milk

1. The actual sales volume of milk i.e.115.37cr, if company increase the sales by

26% and variable cost by 23%, which is leads to increase the profit by 22.20

times, the BEP decrease by 15%. Refer table no.1

2. If the sales are kept constant at current level and the variable cost of Milk

increases by 23% it will lead to decrease in profit by 78.24 times and gross margin

reduce by 30.5%. Refer table no.2

3. If the sales and variable cost are kept constant at current level If company

increases the fixed cost by 3% the profit decreases by 1.35 times and BEP

increase by 3.387 crore compared to actual value. Refer table no. 3

4. If company increases both fixed cost by 3% and variable cost by 23% these cost

incurred more loss it result decrease in profit by 79.60 times and the BEP

decreases by 248.19%. Refer table no 4

5. Due to competition if the sales of the company decrease by 10% it will lead to

decrease in profit by 38.635 times Refer table no.5

6. The company increase in variable cost by 23% under same level of profit, the

company required to increase the sales volume by 20.25% to maintain same level

of profit and the P/v ratio decreases by 16.80%. Refer table no. 16

7. Under inflationary condition if the company wants to earn the same level of profit,

then the company has to increase the sales volume by 20%. Refer table no. 17

8. The company’s price elasticity of demand for milk is greater than one, as a

categorised result relatively elastic product i.e. 4.36. Refer table no. 22

Findings for Milk Products

1. If the company increases the sales volume 26%and variable cost 23% of milk

products, which is leads to increase the profit by 22.273 times, the BEP decrease

by 15%. Refer table no. 6

2. If the sales are kept constant at current level and the variable cost increased by

23% it will decrease the profit by 78.477 times, and break-even point decrease by

243.83%. Refer table no.7



3. If the sales and variable cost are kept constant at current level and only fixed cost

increased by 3% the profit decreases by 1.36 times but 3% increase in break even.

Refer table no.8

4. If company increases both variable cost by 23% and fixed cost by 3% these

incurred more loss, i.e. decrease in profit by 79.83 times and to maintain the same

level of profit the company need to increase the sales volume by more than 50%.

Refer table no. 9

5. Due to competition, if company decreases 10% in sales volume that leads to

decrease in profit by 38.75 times. The company should increases the BEP by

452.2% to maintain a desired profit. Refer table no. 10

6. The company increase in variable cost by 23% under same level of profit

condition, the company required to increase the sales volume by 20%. And BEP

increases by 20.25%. Refer table no. 18


than the company increase both the element i.e. variable cost by 23% and fixed

cost by 3%, the company sales volume is required to be increases by 21%. Refer

table no.19

Findings for Ice-Cream

1. If the company increases the sales volume 26% and variable cost 23% of Ice-

Cream, which is leads to increase the profit by 22.069 times and the profit-volume

ratio increase by 15.95%. Refer table no. 11

2. If the sales and fixed cost are kept constant at current level and only variable cost

increased by 23% it will decrease the profit by 77.75 times, and the gross margin

decreases by 170%. Refer table no.12



3. If the sales and variable cost are kept constant at current level If company

increases the fixed cost by 3% the profit decreases by1.346 times. Refer table no.

13

4. If company increases both variable cost by 23% and fixed cost by 3% these

incurred more cost to company i.e. decrease in profit by 79.097 times and BEP

decrease by243.9% as compared to actual value. Refer table no. 14

5. Due to competition, if company decreases 10% in sales volume that leads to

decrease in profit by 38.392 times. The company should increases sales volume by

30% to maintain a desired profit. Refer table no. 15

6. The company in order to maintain the same level of profit, if it is increase the

variable cost by 23%, the amount of required sales has to be increased by 32% and

the profit-volume ratio has increase to 5.9%. Refer table no. 20


than the company increases the both the element i.e. variable cost by 23% and

fixed cost by 3%, Company required to be increase sales volume by 21%. Refer

table no. 21

SUGGESTIONSThe Scenario Analysis helps the company to take same practical objectives for the

production. Based on the findings, the suggestions are given to the company for its profit

generation. The suggestions are:

Suggestion for Milk



1. Based on the findings the sales volume and variable cost of milk increases by

26% and 23% respectively it will lead to increase the profit by 22.20 times as

compared to actual value, it helps company to adopt it into the production process

to gain more profit. Refer table no.1

2. Based on the findings if company increases the fixed cost by 3% the profit

decreases by 1.355 times and BEP increase by 3.387 crore compared to actual

value. Hence the company increase sales by 0.351% to avoid the loss and get the

same level of profit. Refer table no. 3

3. Based on findings the increase in variable cost by 23% under same level of profit,

the company required to increase the sales volume by 20.25% to maintain same

level of profit which is helps for the production to maintain the same profit. Refer

table no. 16

4. Based on the findings under inflationary condition if company increases the both

the element i.e. variable cost by 23% and fixed cost by 3% and thereby in order to

have the same level of profit , the sales volume is required to be increased by 20%

to maintain same level of profit condition. Refer table no. 17

Suggestion for Milk products

1. Based on the findings the company increases the sales volume by 26%, there is

increase in the profit by 22.273 times. This will help the company to maintain its

profit margin to face the competition and gain desired profit level. Refer table no.

6

2. Based on the findings if company increases the fixed cost by 3% the profit

decreases by 1.36 times and break even increase by 3% so that company procure

the raw materials to increase the sales volume by 15%. Refer table no. 8

3. Based on the findings if company increase in variable cost by 23% under same

level of profit condition, the company required increasing the sales volume by

20%. And BEP increases by 20.25%. Refer table no. 18

4. Based on the findings under inflationary condition if company increases the both

the element i.e. variable cost by 23% and fixed cost by 3% and thereby in order to



have the same level of profit , the company sales volume is required to be

increases by 21%. Refer table no. 19

Suggestion for Ice-Cream

1. Based on the findings, it is found that the company increases the sales volume

26% and variable cost 23% of Ice-Cream, which is leads to increase the profit by

22.069 times, which is need for company to maintain the profit levels. Refer table

no.11

2. Based on the finding, it found that if company increases the fixed cost by 3% the

profit decreases by 1.346 times. The firm should increase the sales by 15% to earn

desired profit. Refer table no.13

3. Based on the findings if company maintain the same level of profit, if it is increase

the variable cost by 23%, the amount of required sales has to be increased by

32%. Refer table no. 20

4. Based on the findings under inflationary condition if the company increases the

both the element i.e. variable cost by 23% and fixed cost by 3% and thereby in

order to have the same level of profit , the company sales volume is required to be

increased by 21%. Refer table no. 21

CONCLUSION

The project undertaken has helped a lot in understanding the concept of “Scenario

Analysis of various products” at Vijaykant Dairy and food products ltd, Neginhal. This study

shows the effect of increase and decrease in the variable cost, fixed cost and also the sales

volume which effects on the profitability of the company and it also helps to determine the

required sales in the same level of profit. Hence it provides the scope for the management

with useful for managerial planning and decision making for the company growth.



Bibliography

http://www.hindustanstudies.com/files/dairysept09report.pdf

https://www.aavinmilk.com/dairyprofile.html

http://www.adityaamilk.com

Annual Reports of Vijakant Dairy and Food Products Ltd (2014-15)

M Y Khan and P K Jain, Financial Managament, McGraw Hill Education (India)

Private Limited, 6thEdision, 2103, page no. 7.1 to 7.16.


https://www.aavinmilk.com/dairyprofile.html

http://www.hindustanstudies.com/files/dairysept09report.pdf


Cost and management accounting, 10th edition, M.N.Arora, Vikas publishing House

Pvt ltd


project report on vijaykant dairy and food products pvt ltd

Data & Analytics