ASFA PHARMACY

A
Report On
Summer Training at
“ASFA PHARMACY”
(Opp. Kalakunj Society, Near water tank,
Varachha Road, Surat-6)

SUBMITTED BY:
Mehta Bhakti
Jarmanwala Priyanka
Goklani Reena
Gadhiyali Zainab
(S.Y.BBA SEM-IV)

PROJECT GUIDE
Mr. Bhaumik Shah

SUBMITTED TO:
Bhagwan Mahavir College Of Business
Administration Bharthana- Vesu, Surat

ACADEMIC YEAR 2017-18

1
B.M. College of BBA
ASFA PHARMACY

ACKNOWLEDGEMENT

We would like to express our most heartfelt thanks to Shri Swami Atmanand Saraswati
Ayurvedic Co-operative Pharmacy Limited (ASFA) for providing us an opportunity to take
training to their organization.

We are also thankful to director and over professors for provide us guidance. We would like to
pay our kind acknowledgement to Mr. Navinchandra B. Patel (President) for providing his
practical knowledge and we heartly thanks to our training guide Mr. Vinodbhai Kanojiya .

We are also thankful of those people and workers who are directly or indirectly helped us in our
training project work.

Bhakti Mehta
Priyanka Jarmanwala
Reena Goklani
Zainab Gadhiyali

2
B.M. College of BBA
ASFA PHARMACY

DECLARATION

We the undersigned Bhakti, Priyanka, Reena and Zainab that this project report entitled “A
study on management of Asfa” is result of our own training work carried out during may-june
2017 and has not been previously submitted to any other university or institution for any other
examination and for any other purpose by any other person.

We will not use this project report in future to use as a submission to any other university,
institutes or any other published without written permission of any guide.

We also promise not to allow any other person to copy from this report in any form.

If we are found/change a defaulter of above declaration.We know that our present or future
submission may become invalid, and/or we may be permitted to appear in the final exam.

Bhakti Mehta
Priyanka Jarmanwala
Reena Goklani
Zainab Gadhiyali

3
B.M. College of BBA
ASFA PHARMACY

Index

Serial Topic Page No.

No.
1. Acknowledgement 2
2. Declaration 3
3. Index 4
4. Introduction 8
5. Company Profile 13
6. Financial Highlights 18
7. Product Profile 25
8. Marketing Management 29
9. Human Resource Management 48
10. Production Management 73
11. Financial Management 131
12. Conclusion 163
13. Bibiliography 165

4
B.M. College of BBA
ASFA PHARMACY

EXECUTIVE SUMMERY

The Asfa Pharmacy completed 60 years. During these periods Pharmacy achieve
many progressive stages. This Pharmacy has a head office and other five branches. At this
way its branches are spreading in different area of all Gujarat state.

From the study of last 2 years Pharmacy’s financial report, we can say that rate of
progress of Pharmacy is very good. Asfa is co-operative pharmacy and since its establishment it
is never done loss but Asfa sale its medicines at low price so that its profit is less compare to
other Pharmacies. Pharmacy’s Sales and Profit is decrease in current year to compare past years.
For the duration of our training in Asfa, we found that the workers andmanagerial staff are good
and the management of all departments is efficient .Workers are fully satisfied with their work.
This Pharmacy’s aim is not only do profit but also work for employee welfare and societal
welfare.

5
B.M. College of BBA
ASFA PHARMACY

6
B.M. College of BBA
ASFA PHARMACY

Company Profile

History Of Ayurveda

Ayurveda, the science of life, prevention and longevity is the oldest and mostholistic medical
system available on the planet today. It was placed in writtenform over
5,000 yearsago in India, it was said to be a world medicine dealingwith both body and the spirit.
Before the advent of writing, the ancient wisdomof this healing system was a part of the spiritual
tradition of the SanatanaDharma (Universal Religion), or Vedic Religion. VedaVyasa, the
famous sage, shaktavesha avatar of Vishnu, put into writing the complete knowledgeof
Ayurveda, along with the more directly spiritual insights of self realization into a
body of scriptural literature called the Vedas and the Vedic literatures.

There are two main re-organizers of Ayurveda whose works are still existing in tact today -
Charak and Sushrut. The third major treatise is called the AshtangaHridaya, which is a concise
version of the works of Charak a n d Sushrut. Thus the three main Ayurvedic texts that are still
used today are the CharakSamhita (compilation of the oldest book AtreyaSamhita),
SushrutSamhita and the Ashtangha Hridaya Samhita. These books are believed to be over
1,200 years old. It is because these texts still contain the original and complete
knowledge of this Ayurvedic world medicine, that Ayurveda is known today as the only
complete medical system still in existence. Other forms of medicine from various
cultures, although parallel are missing parts of the original information.

7
B.M. College of BBA
ASFA PHARMACY

Introduction of Ayurveda

Ayurveda is a holistic system of medicine from India that uses a constitutionalmodel. Its aim is
to provide guidance regarding food and lifestyle so t h a t healthy people can stay healthy and
folks with health challenges can improvetheir health.

There are several aspects to Ayurveda that are quite unique:

 Its recommendations will often be different for each person regarding which foods and
lifestyle which they should follow in order to be completely healthy. This is due to its use
of constitutional model.

 Everything in ayurveda is validated by observation, enquiry, direct examination and

knowledge derived from the ancient text.

 It understands that there are energetic forces which influence nature and human beings.
These forces are called the Tridoshas.

 Because Ayurveda sees a strong connection between the mind and the body, a
huge amount of information is available regarding this relationship.

Theory of Tridosha
Ayurvedic practitioners take into consideration the body constitution of a patient before
prescribing any medicine, for the medicine, which suits a vatiya(vata)constitution, will not
help a patient having shleshmic(kapha)constitution.Tridosha – its types and correlation with
Panchmahabhoota

8
B.M. College of BBA
ASFA PHARMACY

 VATA
Organ in which situated Dominant Mahabhoota
PranaMurdha (palate) jala
SamanaKoshtha (stomach) Agni
VyanaSarva sharer (whole body) vayu

 PITTA
AalochakNetra (eye) Agni
SadhakHridaya (heart) aakash
PachakKoshtha (stomach) prithvi
RanjakYakrit, pleeha (liver, spleen) jala
BhrajakTvak (skin) vayu

 KAPHA
BodhakJivha (tongue) Agni
KledakAmashaya (stomach) jala
AvlambakHridaya (heart) prithvi
TarpakIndriya (sense organs) akasha
ShleshakSandhi (joints) vayu

Principle of Ayurveda

According to ayurvedic philosophy an individual bundle of `spirit’, desirous of expressing itself,

uses subjective consciousness or Satwa to manifest sense organs and a mind. Spirit and mind
then project themselves into a physical body, created from the five (Pancha) great (maha)
eternal elements (bhutas) – together called the Panchamahabhutas–which arise from Tamas.
The sense organs then using Rajas to project from the body into the external world to experience
their objects. The body becoming the mind’s vehicle, its physical instrument for sense
gratification.

9
B.M. College of BBA
ASFA PHARMACY

The Bhutas combine into "Tridoshas" or bioenergetics forces that governand determine our
health or physical condition. While the three gunas(Rajas or activity, Tamas or inertia and
Satwa, which balances the first two) or psychic forces determine our mental and spiritual
health.Ayurvedais thus aholistic system of health care that teaches us to balance these energies
inorder to achieve optimum health and well being.

The Panchamahabhutas

Vayu

Agni

Jal

Aakash

Prithvi

According to Ayurveda everything in life is composed of the Panchamahabhutas –

Aakash(Space), Vayu(Air), Jal(Water), Agni(Fire) and Prithvi (Earth).
10
B.M. College of BBA
ASFA PHARMACY

The Ayurvedic Medicine Industry in India

Ayurvedic Medicines are produced by several thousand companies in India, but most of them are
quite small, including numerous neighborhood pharmacies that compound ingredients to make
their own remedies. It is estimated that total value of products from the entire Ayurvedic
Production in India is on the order of one billion dollars (U.S.) The industry has been dominated
by less than a dozen major companies for decades, joined recently by a few others that have
followed their lead, so that there are today 30 companies doing a million dollars or more per year
in business to meet the growing demand for Ayurvedic medicine.

The products of these companies are included within the broad category of “fast moving
consumer goods” (FMCG; which mainly involves foods, beverages, toiletries, cigarettes, etc.).
Most of the larger Ayurvedic medicine suppliers provide materials other than Ayurvedic internal
medicines, particularly in the areas of foods and toiletries (soap, toothpaste, shampoo, etc.),
where there may be some overlap with Ayurveda, such as having traditional herbal ingredients in
the composition of toiletries.

The key suppliers in Ayurveda are Dabur, Himalaya,and Zandu, which together have about
85% of India's domestic market. These and a handful of other companies are mentioned
repeatedly by various writers
aboutthe Ayurvedic business in India; a brief description is provided for them, arranged here
from oldest to newest.

11
B.M. College of BBA
ASFA PHARMACY

STATUS OF AYURVEDA IN INDIA

The Indian government and non-government organizations have beencollecting statistics on the
Ayurvedic system in India and these data about the manpower and institutional aspects of
Ayurveda have emerged:

 Number of registered medical practitioners: 366,812

 Number of dispensaries: 22,100

 Number of hospitals: 2,189

 Number of hospital beds: 33,145

 Number of teaching institutions (undergraduate): 187

 Number of upgraded postgraduate departments: 51

 Number of specialties in postgraduate medical training: 16

 Number of pharmacies manufacturing Ayurvedic medicines:8400

In India, 60% of registered physicians are involved in non-allopathicsystems of medicine. In

addition to the nearly 400,000 Ayurvedic practitioners, there are over 170,000 homeopathic
physicians; India has about 500,000 medical doctors (similar to the number in the U.S., but
serving nearly 4 times as many people). Reliance on Ayurvedic medicine is heavy in certain
regions of India, such as Kerala in the Southwest. ManyAyurvedicpractitioners in
small villages are not registered. One of the famous clinics of India is described in Appendix
2 and a new clinic complex is serving visitors from abroad is mentioned in Appendix 3.

12
B.M. College of BBA
ASFA PHARMACY

COMPANIES PROFILE

COMPANY’S NAME: SHRI SWAMI ATMANAND SARASWATI AYURVEDIC

CO-OPERATIVE PHARMACY LTD.

REGISTERED OFFICE: ASFA Pharmacy opp. Kalakunj Society, Near water tank, Varachha
Road, Surat-6

NO. OF BRANCH: 2 Plant in Surat

5 other branch

7 total

EMAIL ADD.: asfaayu@yaho.co.in

REGISTERED DATE: 2 Sept, 1949

STARTED OPERATION: 2 Sept, 1949

SERVICE PROVIDE:Cheap and best quality medicines for the well being of the society

13
B.M. College of BBA
ASFA PHARMACY

HISTORY AND INTRODUCTION OF ASFA

Once in the golden morning Shree Swami Atmanand Sarswati comes in Surat and he
state to give knowledge of culture/ religion and ayurveda by his lectures at every place of Surat
city. He set up Tapi Brahmcharya Ashram at the land which was donated to in at the bank
of river Tapi. In Ashram many students study about Ayurveda and Sanskrit. And with
passes of time he started an ayurvedic clinic and a Pharmacy for medicines needed to run clinic.
A n d slowly with flow of time the promotion and expansion, the small Pharmacy
become only one co-operative ayurvedic pharmacy of Gujarat which isestablished in 2ndJune,
1949
with nameShri Swami Atmanand Saraswati Co-operative Pharmacy Limited which is known as
its short name “Asfa”.

“Asfa” (Shri Swami Atmanand Sarswati Ayurvedic Co-operative PharmacyLimited)

is established in 1948 in Surat at the bank of river Tapi. It is an only one co-operative
pharmaceutical pharmacy in Gujarat. Shri Swami Atmanand Saraswati who was the man with
strong mind power established the Pharmacy.

Shri Swami Atmanand Saraswati was spent his whole life in survive of peopleand teach Ayurved
to his Shishyas. He had only one goal of his whole life asfollows:
“I don’t desire state, I don’t desire paradise, I even don’t desire moksh, but I desire to
solve the problems of people who are suffering from the diesases by way of using
Ayurvedic treatment.”

Asfa has its head office at chowta pool and it has a factory at Varachha road in Surat. Asfa also
expanded its production capacity and established onemore factory at Navagam.Asfa has
about4000members now but when itwas started it has only70
members to operate various activities.

14
B.M. College of BBA
ASFA PHARMACY

By showing the above mentioned figure we can say that Asfa is very
rapidlygrow and expand in whole Gujarat. It has opened branches at Valsad,
Baroda, Ahemdabad, Bardoli and Bharuch etc.

Asfa sold its product in most of cities of Gujarat and Mumbai through itsdealers. Asfa has widely
distributed dealer network. Asfa produce qualitative product, by reason of that a slogan
“Aushadho to Asfanij”.

Asfa get a certificate of GMP(Good Manufacturing Practice) from Gujaratstate food and
medicine Control Corporation. Asfa is a first Pharmacy which isgets this type of certificate. Asfa
get GMP certificate in 2004 and also getISO9001
in 2005 and laboratory of Asfa get permission from food and medicinescommissioner’s office,
Gandhinagar.

15
B.M. College of BBA
ASFA PHARMACY

Details of Promoters and Owners

A Board of directors in which many members are well qualified in this field manages “swami
atmanand saraswati ayurvedic co-operative pharmacy ltd” some of the members are holding
doctor’s degree. This board of directors is responsible for providing guidelines to manage the
company, taking major decision, formulating, solving major problems, etc.

There are 16 members in board of directors. Some of the members are ayurvedic doctors and
remaining is from different field. They are doing their very well.

Board of Directors of “ASFA”

Dr. Navinchandra B. Patel President

Shri Arvindbhai M. Patel Vice-President

Dr. Purushotambhai P. Patel Secretary

Dr. Kanubhai G. Mavani Director

Dr. Bankimchandra R. Thakar

Shri Jagdishbhai P. Patel

Shri Pragnesh I. Desai

Dr. Nanubhai D. Harkhani

Shri Nitinchandra P. Mehta

Dr. Dharmisthaben C. Bhatt

Shri Parsotambhai N. Patel

Shri Charulataben R. Patel

Dr. Pradipbhai J. Suryavanshi Director

Dr. Ishwarbhai K. Patel Director

16
B.M. College of BBA
ASFA PHARMACY

ShriSandeepbhai J. Desai

Shrimati Swatiben N. Nayak General Manager

17
B.M. College of BBA
ASFA PHARMACY

Financial Highlights

The company has issued five thousand shares of rs.100 each raising the capacity of five lakh
rupees. Authorized share capital of the company is fully paid up and at the present there is no
plan to increase share capital. Company is making enough profit and has enough funds to finance
capital and day-to-day expenditure. These funds are as follows:

Year 2011-12 2012-13 2013-14 2014-15 2015-16

No. of Share 4180 4183 4187 4185 4205
Holder
Share 5,00,000 5,00,000 5,00,000 5,00,000 5,00,000
Capital
Reserve 58,69,254 63,89,674 67,04,275 72,16,347 77,00,192
Fund
Dead Stock 22,69,027 23,45,995 24,22,571 25,03,815 25,87,309
Fund
Machinery 55,31,043 58,51,931 61,55,461 64,44,237 67,21,196
Depreciation
Fund
Building 73,17,286 78,35,315 83,01,541 87,21,143 91,99,426
Depreciation
Fund
Building 24,76,613 27,43,460 30,22,663 34,35,302 40,68,014
Fund
Others 1,39,96,433 1,40,62,484 1,40,41,750 1,55,23,921 1,63,91,037
Sales 3,95,57,635 4,36,36,394 4,75,08,893 4,93,08,699 5,27,22,438
Dividend 15% 15% 15% 15% 15%

18
B.M. College of BBA
ASFA PHARMACY

Location Of Factory And Branches

The company has total seven retail outlets, which distributes the medicines produced by the
company. These are company’s own outlets located at different cities and towns of Gujarat state
at strategic places

Factory of “ASFA”

VARACHHA FACTORY

Opp. kalkunj society,

Near Water Tank,

Varachha Road,

Surat-395006

Phone No.(0261-648092, 644410)

Navagam Factory

11-18, Navagam Udhyognagar Co-operative Sangh,

Navagam,

District:Kamrej,

Surat.

Phone No:(02621-252440)

19
B.M. College of BBA
ASFA PHARMACY

OUTLETS

SURAT

1) Chautapul Branch

Opp. Bank of Baroda,

Chautapul,

Surat-3

2)5-7 Dhanvantari Complex,

Near Ayurvedic Hospital Compound,

Sumul dairy road, Station,

Surat.

AHEMDABAD

G-41 Devnandan Mall,

Opp. Sanyas Ashram,

Ellis Bridge,

Ahmedabad.

VADODARA

Balavant Building,

Kharivav road,

Ravpura,

Baroda.

20
B.M. College of BBA
ASFA PHARMACY

BHARUCH

8, Navrang shopping Center,

Sevashram road,

Bharuch.

VALSAD

3, Amar Chambers,

Opp. The Lalschool,

Station road,

Valsad.

BARDOLI

Hirachand Nagar,

Near sardar bag,

Station road,

Bardoli.

21
B.M. College of BBA
ASFA PHARMACY

Organization Structure Of “ASFA” Company

22
B.M. College of BBA
ASFA PHARMACY

Future Plan Of “ASFA”

 “ASFA” is only limited to Gujarat but now the company wants to expand its market share
in to other states like Maharashtra also.
 “ASFA” also plan to introduced 4 new medicines in the market which may be:
a) ‘Ojas tablet’
b) ‘mouth wash’
c) ‘ASFA Bam’
d) ‘sleep well tablet’
 Company has planned to increase overall turnover of the unit.
 To increase the quality of their product.
 Introduce Cosmetic products of Asfa in market.

Achievements and Awards of “ASFA”

23
B.M. College of BBA
ASFA PHARMACY

24
B.M. College of BBA
ASFA PHARMACY

Products Profile

Product Category Which “Asfa” Produce:

1. Hair Oil
2. Chyavanprash
3. Ghee
4. Bhasma
5. Pisti
6. Tablets
7. Churna
8. Ashwarishta Syrup
9. Toothpaste Powder
10.Purpati

25
B.M. College of BBA
ASFA PHARMACY

 Asfa Company Uses Assembly Line Production System and Raw materials
are ordered on the basis of Tender System.

26
B.M. College of BBA
ASFA PHARMACY

Product Name Short Description Dose

AamlakChurna Digestion, Eye dieases One tea spoon with

water or milk
Abhayarisht Headache, Piles, 10 to 15 ml with equal
Inflamation amount of water
Asfa Balm Waist pain, Cold, Cough As required apply
externally on affected
parts
Bhrungraj Hair Oil Hairfall, Hair enhancer As required apply in
hair
DashangLep Swelling, Burning As required apply
Sensation externally on affected
parts
SaptaparnaChurna Fever, Malaria 2 to 4 gm with water

ShrungBhasma Heart Pain 250 to 500 gm with

honey
Shiva Churna Constipation One tea spoon with
water

27
B.M. College of BBA
ASFA PHARMACY

PravalPisti Acidity, Fever, Cough 125 to 500 mg with

honey or milk
TamraBhasma Stomach ailments, Liver 20 mg to 60 mg with
disorders honey
TrifalaChurna Eye diseases, Constipation One tea spoon with
water
Vasavalekha Cough, Breathlessness, 5 to 10 gm with milk
TB
YastimadhuChurna Cough, Throught disorder One tea spoon with
water

28
B.M. College of BBA
ASFA PHARMACY

Chapter: 1 Marketing
Management

29
B.M. College of BBA
ASFA PHARMACY

30
B.M. College of BBA
ASFA PHARMACY

1.1Definition of Marketing

The American Marketing Association offers the definition as, “Marketing is an organizational
function and a set of processes for creating, communicating and delivering value to customers
and for managing customer relationship in ways that benefit the organization and its stakeholder.

31
B.M. College of BBA
ASFA PHARMACY

1.2 Structure of marketing department

32
B.M. College of BBA
ASFA PHARMACY

1.3 Promotional and advertising Activities.

“ASFA” does not use advertising and less use promotional activities as less as possible.
“ASFA” do promotion through public relations. “ASFA” made people aware about its
medicines through public relations. Public relation is informal form of marketing. People
who use “ASFA”’s medicines tell others about it and so on. “ASFA” have well
developed dealer network in Gujarat which play important role for promotion of “ASFA”
medicines.

“ASFA” become popular in Gujarat and its near states because of its high qualitative
medicines and fairly low prices than others.

1.4 Pricing Policies.

The marked or announced amount of money asked from a buyer is known asbasic price-
value placed on a product. Price is the one element of themarketing mix that produces
revenue. Prices are the easiest marketing mixelement to adjust; product features,
channels, and even promotion take moretime.

There can be competition between price-quality segments. The belowdiagram shows nine
price-quality strategies:

33
B.M. College of BBA
ASFA PHARMACY

Asfa has super-value strategy for its products. Asfa provides medicines at low price with high
quality.

Asfa set price for its products by taking care of the below matters.

 Asfa set price with considering its objective of provide medicines at

fairlyprice with good quality.

 Asfa decides price after the production is over so it estimate cost

of production and other expenditure and divide it by number of products
and addsome more for setting price.

 Asfa Also considered the price of competitors and try to set less price
thancompetitors.

1.5 Distribution Network

Most producers do not sell their goods directly to final users; between them stands a set
of intermediaries performing a variety of functions. These intermediaries constitute a
marketing channel also called trade channel or distribution channel. Formally, marketing
channels are set of interdependent organizations involved in the process of making a
product or service available for the use or consumption.

A marketing channel performs the work of moving goods from producers to consumers.
It overcomes the time, place, and possession gaps that separate goods and services from
those who need or want them. Why would a producer delegate some of the selling job to
intermediaries? Delegation means relinquishing control over how and to whom the
products are sold. But the producers can often gain in the effectiveness and efficiency by
using intermediaries. Through their contact, experience, specialization, and accessible to
target markets, usually offering the firm more then it can achieve on its own.

34
B.M. College of BBA
ASFA PHARMACY

“ASFA” has well developed distribution network for marketing activities. “ASFA” have
62 dealers for selling its medicines. “ASFA” has its own distribution network. “ASFA”
sells its medicines by its own stores and these stores are created in whole Gujarat state
such as in Surat, Ahmedabad, Ankleshwar, Anand, Navsari, Vadodara and in many other
cities of Gujarat.

“ASFA” use zero level and one level channel of distribution. A zero level channel also
called as direct marketing channel consists of a manufacturer selling directly to its final
35
B.M. College of BBA
ASFA PHARMACY

customers. A one level channel consists of one selling intermediary, such as retailer.
“ASFA” provides medicines to its retail stores as per their requirement and these stores
sells medicines direct to customers so customers gets medicines in lesser price then
competitor.

1.6 Supply Chain Management

If any dealer or customer has any complain against then “ASFA” take their complain and
take corrective actions.

36
B.M. College of BBA
 ASFA PHARMACY

1.7 Comparision of 4ps of various products of “ASFA” with

competitors

Marketing mix is the policy adopted by the manufacturer to get success in the field of marketing.
Those days when goods were matched with the market have gone. Marketing mix is a term used
to describe the combination of four inputs which constitute the core company’s marketing
system the product, price structure, promotional activities and distribution (place) system. These
are popularly known as 4ps of marketing. The four elements of marketing mix are:

 Product
A product is anything that can be offered to a market that might satisfy a want or need. Asfa
produce 288 medicines for its customer. Other companies donot have so large range of product
width and length. Asfa use rarely foundable herbs in its medicines which make difference from
competitors. Asfa produce more qualitative products than the competitors. Asfa also research and
produce new medicines and patent them. Such medicines like Asfahaemetone, Reducid,
Asfalax, Gasowin, Asfa-tone.

37
B.M. College of BBA
 ASFA PHARMACY

 Price
The marked or announced amount of money asked from a buyer is known as basic price of a
product. Asfa use value pricing method for its products. In this method, Asfa charging fairly low
price for highly qualitative product, which its competitor cannot done.
1. Sutshekhar rasa- 54 Rs. (20 tabs)
2. Motibhasma- 200 Rs. (1.5 gm)
3. Mandoorbhasma- 27 Rs. (5gm)
4. Arjuna churna-44 Rs. (100 gm)
5. Triphlachurna- 85 Rs. (100 gm)
6. Ayurvedicdantmanjan- 100 Rs. (15 gm)
7. Shankhpushi syrup- 40 Rs. (100 ml)
8. Brahmi Oil- 1000 Rs. (200 ml)
9. Bhrungraj Oil- 210 Rs. (200 ml)
10. Sapatmalam- 50 Rs. (100 gm)
11. Ashwagandhaavaleh- 130 Rs. (30 tablets)
12. Abhayarishta- 90 Rs. (220 ml)

 Promotion
Marketing communication consist of communication marketing activitiesthrough various forms
of promotion that is personal selling, advertising,publicity and public relationship, sales

38
B.M. College of BBA
 ASFA PHARMACY

promotion etc. together calledpromotion mix. Asfa does not do more expenditure for
promotional activitieslike other companies.

 Place
Place means the decision by which company transfers their product, location,inventory handling,
warehousing, storage facility, transportation etc. Asfa hasa big location for plant at bank of river
tapi. Asfa is located near the nationhigh way so it can transport and get material easily.Asfa
has own retailstore in various cities so it can easily provide medicines to customers than
itscompetitors. Competitors like Pooja, Zandu, Himalaya, Dabour etc. have notsowidely develop
distribution network in Gujarat.

1.8 Types and classification of products

Many people think a product is a tangible offering, but it can be more than that. Broadly a
product is anything that can be offered to a market to satisfy want or need including physical
goods, services, experiences, events, persons, places, property, organization, information and
ideas.

“ASFA” produce consumer goods. “ASFA” more than 288 medicines of different categories in
different quantity which are classified as follows:

Categories Medicines
Rasa Sutshekhar rasa
Vaatchintamani rasa
Vasantkusumakar
Jawaharmohar rasa
Chandramrut rasa

Bhasma Akeeka bhasma

Mandoor bhasma
Yashad bhasma
39
B.M. College of BBA
ASFA PHARMACY

Raupya bhasma
Shankh bhasma

Sogothi Balraksha sogothi

Khokhalini sogothi
Darajini sogothi
Kushthhar sogothi

Churna Arjuna churna

Kuberax churna
Nagkeshar churna
Markandi churna
Sarpgandha churna

Gugal Gokshuradi gugal

Triphala gugal
Kishor gugal
Pathyadi gugal

Dantmanjan Ayurvedic dantmanjan

Bhallatak dantmanjan
Dindayal dantmanjan

Syrup “ASFA” cough syrup

Bansafa
Balchaturbhadra syrup
Shankhpushi syrup

40
B.M. College of BBA
ASFA PHARMACY

Hair Oil Panchguna hair oil

Narayan hair oil
Brahmi hair oil
Bhrungraj hair oil

Dhrut&Kwath Brahmi dhrut

Trifala dhrut
Dasmul kwath
Maharasnadi kwath

Malam Jivanyadi malam

Darajno malam
Paradadi malam

Avaleh Chyavanprash aveleh

Vasavaleh
Pipalvadi avaleh
Kantkary avaleh

Asav&Arishta Abhayarishta
Ashok arista
Chandan asava
Draksh asava

41
B.M. College of BBA
ASFA PHARMACY

1.9 Unique features of “ASFA”’ products

“ASFA” produces more than 288 medicines and many other products. “ASFA” produces
medicines in various categories like asav, arishta, syrup, churna, avaleh etc. and all of
them has different unique features of “ASFA” product is “Better quality in low price”.

 We have a variety of asav and arishta that are prepared on the time testing
principle of ayurvedic. Our products in asav and arishta are of high medical value
the that of others.

 “ASFA”‘s syrup is meant for overall growth, stimulate appetite, and correct
digestive system and cough and respiration disorders.

 “ASFA” has prepared variety of churna through constant research and

experiments and that had been highly effective to cure digestive problem, skin
diseases, joint pain, cold and cough & many other.

42
B.M. College of BBA
ASFA PHARMACY

 “ASFA”’s avalehs are prepared from herbs which are rare to found which was not
made by others. These avalehs are costly because special herbs are used in it.

 “ASFA” sometime use ancient recipes for preparing medicines. “ASFA” has also
patent right of some medicines which are made by scientist of “ASFA”
laboratory.

1.10 Details of competitors

“ASFA” is a co-operative pharmacy working with the objective of surviving people.

“ASFA” produces ayurvedic medicines. “ASFA” produces more than 300 products
which other competitors do not produce. “ASFA” sells its products in Gujarat and other
nearer states and there is no other competitor with so large production in Gujarat but then
also “ASFA” faces competition from the national and international companies like
Zandu, Himalaya, Dabur, etc, from state level companies like Puja pharmacy, Gujarat
ayurvedvikasmandal, etc and it faces competition from companies like Ban pharmacy,
Baidyanath, Nahar pharmacy, Charak pharmacy etc.

MARKET SITUATION OF ASFA AMONG COMPETITORS

43
B.M. College of BBA
ASFA PHARMACY

The key suppliers in ayurveda are Dabur, Zandu and Baidyanath which together has
about 65% of domestic market. Dabur India ltd.(1884) is India’s largest ayurvedic
medicine supplier and fourth largest producer of FMCG. Zandu(1919) focuses
preliminary on ayurvedic medicines but it produces chemical and cosmetic products also.
Himalaya is established in 1939 in Bangalore and has business about 500 million dollar.
Vicco(1958) produce tropical therapies based on ayurveda and are best known
internationally for its toothpaste product.

“ASFA” has main competition from Baidyanath and Charak. Sir Baidyanath Ayurvedic
Bhawan Ltd. Was founded in 1917 in Calcutta and specialised in ayurvedic medicines.
The company reports having over 700 ayurvedic products made at 10 manufacturing
centers with 1600 employees. Charak pharmaceutical was founded in 1947 and currently
has 3 distribution centers in India; it produces liquid medicines, tablets and veterinary
suppliers.

44
B.M. College of BBA
ASFA PHARMACY

1.11 Packaging and Labeling

In past company used secure packaging but with passage of time aluminum selling, foil
selling to pack the medicines. For future company’s is planning to use sinking foil for
packaging.

Company use glass bottles and plastic bottles to fill tonic, tablets and churna. They take
precautions to make pills, tablets moisture free and use cotton to take care of tablets, pills.
They use machines for filling tonic and also to seal the bottles. Weighting machines is
also available in the company for filling medicines according to required weight at the
time of packaging.

After packaging product goes for labeling. They include following information on their
label

45
B.M. College of BBA
ASFA PHARMACY

1.12 Product Mix

Product mix means, ”The set of product offered for sale by a firm or a businessunit is
known as a product mix”.

ASFA COMPANY PRODUCT MIX

Asfa Company produces 288 no of product. But some no of product I includein diagram.

46
B.M. College of BBA
ASFA PHARMACY

There are three important aspect of product mix (1) width, (2) depth, (3)consistency.

(1)Width of the product mix is concerned with the number of product linesmarketed by
the company.

(2)The depth of the product mix depends on the average number of product items
included in the product lines.

(3)The consistency of the product mix indicates how far or to what extentthe product
lines are interconnected with each other from the viewpoint of their final use or
production requirements or channel of distribution.

47
B.M. College of BBA
ASFA PHARMACY

Chapter: 2 Human
Resource
Management

48
B.M. College of BBA
ASFA PHARMACY

49
B.M. College of BBA
ASFA PHARMACY

2.1 Organisation Chart

50
B.M. College of BBA
ASFA PHARMACY

2.2 LABOUR RELATIONS ACTIVITIES

Numbers of terms are used to denote word “Labour Relation”, such as employee-
employer relation, industrial relation, labour management relation etc.

According to Dale Yodder: “The industrial relation has been describe as a relationship
between management and employees or among employees and this organizations bad
characterize and grow out of employment.”

Objectives of Industrial Relationship in “ASFA”

 Develop a sense of co-operation

 Develop commitment and sense of belongingness

 To protect and safe guard the interest of labour as well as management

 To promote and maintain industrial peace and harmony

 To ensure and establish industrial democracy

 To increase production as well as productivity

 To improve living standard of working by pay of fair wages, benefits and

provision of better living and work condition.

+
51
B.M. College of BBA
ASFA PHARMACY

2.3 LABOUR WELFARE MEASURES

Labour welfare means anything done for the comfort and improvement.Intellectual or social of
the employees over and above the wage paid which isnot a necessity of the industry.

Employee welfare or labour welfare means, “The efforts to make life worthliving for workmen.”

 Intra mural welfare activity of Asfa

 Convenience and comfort during the work

 Workshop and cleanliness, lighting, elimination of dust, smoke, gases
 Control of effluents
 Supply of necessary beverage, pills and tables, tea, coffee
 Notice boards, posters, information, slogans
 Distribution of work hours and provision for rest hours, meal times and breaks
 House keeping, garden, passage, lawns, floor maintenance
 Medical facilities
 Compensation for accidents
 Safety instruments such as guards, caps, shoes, aid equipments
 Uniform and changing rooms
 Urinals and latrines, wash basins, waste disposal
 Provision for drinking water
 Economic services such as health insurance and bonus schemes

 Extra mural welfare activity of Asfa

 Transportation
 Vocational guidance and credit societies
 Discount in purchase on medicines
 Roads, lighting, garden
 Communication facility
 Security
 Training and development programs
52
B.M. College of BBA
ASFA PHARMACY

 Welfare activity for society

 Provide employment
 Provide ayurvedic medicines at fair price
 Effective waste disposal system
 Effective use of resources of society

2.4 TRAINING AND DEVELOPMENT

Training is a learning process which seeks a relatively permanent change in behaviour that
occurs as a result of experience. Training refers only to instruction in technical and organized
operations. Training courses are typically designed for a short term, stated set purpose.

In Asfa pharmacy, training is given with the objective of increase inproductivity of employees, in
crease quality of work, enhance and updateknowledge and skills of employees and many others
but there is no without training program in Asfa. Asfa provides training as on job training and
givetraining to new employee. In pharmacy, training is given to the workers whichare basically
at period of one month.

On job training is training is training in which pharmacy and its members arehelp and provide
guidance, if there is any difficulty in any work. Training isbased on learn and teach and hence,
employees will grow with experience.

Development is the process of transition of an employee from a lower level

of ability, skills and knowledge to that of higher level. Pharmacy also runprogram of
development periodically. Pharmacy tries to develop new skills,techniques and personality of
their employees.

53
B.M. College of BBA
ASFA PHARMACY

2.5 INDUCTION TRAINING

Induction is the process of receiving and welcoming an employee when hefirst joins a company
and giving him the basic information which he needs tosettle down quickly and happily and start
work. In the pharmacy, inductiontraining is given to all new joiners in Asfa. Asfa provide
induction training withobjective of reduce insecurity, anxiety, exploitation etc. from the mind of
new joiner and he/she can work easily and with skills.

CONTENTS OF INDUCTION TRAINING

Asfa have formal induction program. All details are providing by pharmacy tonew employee.
Asfa’s content of induction program includes the followingmatters:

 History of Asfa
 Objectives of pharmacy
 Name and designation of managers
 Employee’s designation and responsibility
 Layout of pharmacy
 Production and other processes of pharmacy
 Job duties, location, tasks, objectives etc
 Safety steps
 Employee benefits such as pays, holidays, welfare activities
 Introduction to superiors, coworkers and other staff

54
B.M. College of BBA
ASFA PHARMACY

2.6 MAINTAINANCE OF EMPLOYEE RECORDS

Asfa pharmacy maintained its record in the form of file. There are followingdetails, which are
involved in the record keeping of each employee.

The objectives of employee records in Asfa are following:

1.To provide an evidence of what has taken place in the organization.

2.To supply information required for taking personnel decisions.

3.To provide a basis for the formulation, evaluation and modification of personnel and program.

4.To meet statutory obligations under various labour laws.

55
B.M. College of BBA
ASFA PHARMACY

2.7 WAGES AND SALARY ADMINISTRATION

Wages and salary administration means establishment and implementation of sound

policies and practices of employees compensation so that employees are attracted,
maintained and public relation image is built up. It includes job evaluation, surveys of
wages and salaries, development and maintenance of wage structure, wage payment
incentives, wage changes, adjustment etc.

“ASFA” gives wages and salaries according to time base wage system. “ASFA” gives
salaries at 7th of every month. “ASFA” use time base system because it is old pharmacy
and in that time peace rate wage system is not famous in industry. “ASFA” also use this
method because of some advantages like easy to understand and calculate, earning of
workers are regular and fixed “ASFA” want to maintain quality which is not maintaining
peace rate etc.

In “ASFA”, while deciding the structure of wage and salary administration, “ASFA” first
set objective of it which are as follows:
 To give fair and regular wages to employee
 To improve productivity by motivation
 Control costs through sound wage and salary administration
 To improve public image of company
 To attract others for employment
 ASFA uses time wage system in which wages are paid according to time
spent at the job.

56
B.M. College of BBA
 ASFA PHARMACY

2.8 INCENTIVE AND MOTIVATION SYSTEM

Wage incentives are extra financial motivation. They are designed to stimulate human effort by
rewarding the person, over and above the time rated remuneration, for improvements in the
present or targeted results.

“ASFA” pharmacy uses certain incentive to motive its employees. Motivation means to force a
person and involve him to complete the work in right time and place with help by providing a
basic need or special need to worker. Especially Maslow’s need hierarchy used to motive
employees much as basic need, special need, safety need recognize, identify, self-realization.

Extra salaries one such type of incentive, which is given to those employees who show sincerity
and regularity throughout in their work. Salary is the main factor to motivate employees. Safety
need is also used to complete the work.

“ASFA” gives incentive base on looking different factors of employees such as personality,
nature, communication style, behavior, attitude etc.

For workers who are working at factories and branches are motivated in many ways. They are
given many incentives.

 Bonus:
All the workers working at company and its branches given bonus periodically.

 Extra work remuneration:

When there is more work load, workers are paid more as compensation.

 Loans and advances:

When workers needs money for any expense, company gives them loans at very nominal
condition.

57
B.M. College of BBA
 ASFA PHARMACY

 Sick leave:
Sick leave is permitted to the employee when he is not able to do the work due to illness.

2.8 PERFORMANCE APPRAISAL

Performance appraisal is the process of systematic, periodic and impartial,estimating or

judging the value, excellence, qualities or status and therebyevaluating the performance
or qualification of a person, things or object interms of requirement of the job for which
he is employed.

Asfa have no performance appraisal systembut Asfa can effectively measure the
performance of its workers. Asfa may use this appraised report
for promotion, transfer, statutory requirement, training and development and for
providing incentives.

Asfa can easily measure the performance of its workers on time base methodbecause in
Asfa all worker has a card for attendance and work hours areeasily calculated from that
card.

Asfa also the record the time of completion of job. There are many
medicinesare prepared by Asfa at the same time. Medicine prepared in variousdepartment
s and the time of processing in each department is record by Asfa
and from that time it can measure performance of workers of everydepartment.

 Salient (most important) feature of P.A.

Personal department after completing personal data sheet will forward the
performance appraisal record forms to reviewing authority for their respective
areas who in turn will distribute them to assessor of their area structure for
appraisal and review shall be as per following:

58
B.M. College of BBA
 ASFA PHARMACY

2.9 Human Resource Planning

1. Objectives
2. Process
3. Guidelines for effective HR planning

Objectives of human resource planning

 They ensure optimum use of existing human resources.

 They forecast future requirements for human resources.

 They provide control measures to ensure that necessary human resources are available as and
when required.

 They link human resource planning with organizational planning. They assess surplus and
shortage of human resources. They anticipate the impact of technology on jobs and human
resources. They determine the levels of recruitment and training. They estimate the cost of
human resources and housing needs of employees. They provide a basis of human development
programmes. They facilitate productivity bargaining. They meet the needs of expansion and
diversification programmed.

59
B.M. College of BBA
ASFA PHARMACY

Process of human resource planning

Human resource planning as been defining as, “The process by whichmanagement determines
how an organization should move from its currentmanpower position to its desirable manpower
position. Though itmanagement strive to have the right number and the right kind of people atthe
right place, at the right time, doings things which result in both theorganization and the
individual receiving, maximum long range profit

60
B.M. College of BBA
ASFA PHARMACY

In Asfa, human resource planning process is done by following steps:

1.Organizations objectives and policies

Human resource plan needs to be based on organizations objectives that means objective of
human resource must be derived from organizationsobjectives. Specific requirement in terms of
number and characteristics of employee should be derived from these objectives. Asfa take care
of organization objectives and policies while recruit employees.

Asfa also take care of such questions like whether organization should fillvacancies by internal
promotion or hiring from outside, which type of training and development program are needed,
what policies areneeded to handle staff unit, how to understand employee job etc.

2.Human resource demand forecast

Human resource forecasting is the process of estimating the future quality andquantity of people
require. The basis of forecast is annual budget and long term plans of Asfa, which are translated
into activity level for each functionand department. Base on this information the number of hours
to be workedby each skilled man power in a given period of time should be calculated.Once the
hours are available the next logical step is to find out the quantityand quality of personnel.

The human resource forecasting is done by various techniques likemanagerial judgment trend
analysis, Delphi method, flow models and workstudy method and many others. Asfa use
managerial judgment technique for its human resource forecasting because it is very simple
technique. In this techniques asfa’s managers are sit together, discuss and decide the future
demand for labour.

3.Human resource supply forecast

61
B.M. College of BBA
ASFA PHARMACY

Personnel demand analysis provides the manager with number and quality of employee that to be
require. Next logical step for manager is to find out thenumber of people likely to be available
from within and outside of anorganization. The supply forecast covers the existing human
resources,internal source of supply and external source of supply.

Asfa use the analysis of present employee human resource audit summaries,each employee skill
and ability for understanding capability available inorganizations work force. It also forecast the
internal source or supply.Managers are calculating the available supply of manpower within
theorganization. Asfa also calculate how many employees are available inmarket or outside the
organization whose are take responsibilities of job.

4.Human resource programming

Once, an organizations personnel demand and supply are estimated or forecasted by the
managers, then they take care of the balancing between them. The balancing is needed in order to
fill the vacancies by the rightemployees at right time. So human resource programming has
greater important in planning process.

5.Human resource plan implementation

Implementation require converting human resource plan into action, such human resource plan
includes recruitment, selection, placement, training,development, retraining and redevelopment,
Asfa use various plans like retention plan, downsizing plan and succession plan.

6.Control and evaluation program

Control and evaluation represent the monetary of HR planning process hr plan should include
budget target and standards. We should also clarify responsibility for implementation and
control. It should establish reporting procedure to monitor the execution of HR plan again
achieve result.

62
B.M. College of BBA
ASFA PHARMACY

2.10 Recruitment
In simple term, recruitment is understood as the process of searching for and obtaining
application for jobs, from among whom the right people can be selected.

 Recruitment

 Definition:
According to Flippo, “Recruitment can be defined as the process of searching for prospective
employees and stimulating and encouraging them to apply for jobs in an organization.”

Factors Affecting Recruitment

They have consider two factor of recruitment they are explain below

63
B.M. College of BBA
ASFA PHARMACY

 External sources:

External sources far outnumber the internal methods. Specifically, sourcesexternal to a pharmacy
are:

 Advertisement

This is the common source of recruitment. All types of organizations are using it for recruitment.
Asfause most of time this source for recruitment. It gives
advertisement in local and state level news paper. Asfa take care that advertisement must be
effectively drafted before publishing.

 Employment exchange

Employment exchanges have been setup all over the country in difference toin provisions of the
Employment Exchanges Act, 1959. The act requires theentire industrial establishment to notify
thevacancies before they are filled.
Asfa also notify its vacancies and take employees from employmentexchange.

 Campus recruitment

Colleges, universities and institutes are fertile ground for recruiters. Asfa alsorecruit it employee
from colleges and universities campuses. Employee
of pharmacy go to various B Pharm colleges and meets its principals andteachers take
information about students from them then meet those studentsand give job offer to them.

 Internal source:

Asfa uses internal source when they need more employees in short period of time.

 Relative of present employees

It is important internal source of Asfa. Asfa use this source when it requires urgent employees
for production at low cost. A major concern with employee

64
B.M. College of BBA
ASFA PHARMACY

recommendation is that the referred individuals are likely to be similar in typeto those who
are already working for the company.

 Promotion and transfer

This Pharmacy often uses promotion and transfer for vacant sits. This is
agood source of internal recruitment. Promotions to hire positions areadvantigable for pharmacy
by various kinds. Another way to recruit frompresent employee is transfer without promotion.
Pharmacy uses it when other branch has required skill and experienced employee.

 Former employee

Former employees are also an internal source of applicants. Some retiredemployees may be
willing to come back to work on part time bases or mayrecommend someone would be
interested in working for the pharmacy.

RCRUITMENT PROCESS OF ASFA

 The recruitment process of Asfa pharmacy starts with personal planning

of General Manager. When there is an any sit become vacant or a newemployee is or are
require, General Manager first plan how many employeesare require and of what
qualification. General Manager decides which type of people is requiring means which
type of skills an employee have need for recruitment in pharmacy. For example, quality
65
B.M. College of BBA
ASFA PHARMACY

laboratory technician requirequalification B.Sc. (Micro) and DMLT. Managers are

requiring qualification of MBA. So the first step of recruitment process of Asfa pharmacy
is set astandard for recruitment.

 The second step is searching for employees. General Manager decidesfrom where, the
employees are recruit and by which source. The middle levelof employees and workers
are mostly recruiting from city or areas
which arenear to pharmacy. In source for recruiting, General Manager uses bothinternal
and external source of recruitment. Manager use internal source suchas:
 Relatives of present employee
 Promotion and transfer
 Former employees

Internal source are use when more employees are required.Asfa use external sources such
as:
 Advertisement in news paper
 College campus recruitment
 Employment exchange

 The third step is screening of collected applications. Applications receivedin

response to advertisement are screened and only eligible applicants arecalled for
an interview. Here the recruitment process is ends and the selectionprocess
begins.

66
B.M. College of BBA
ASFA PHARMACY

2.11 Selection

Selection is the process by which candidates for employment are divided intoclass- those who
will be offered employment and those who will not. Thus, theselection process is a tool in the
hand of the management to differentiate thequalified and unqualified applicants by applying
various techniques such asinterviews, tests.

PROCESS OF SELECTION

Selection process starts when recruitment process ends. The steps of selection process are as
follows.

1. The first of selection process is receipt of applications. Applications are screened then
after and only those are selected whose are matched with require specifications and
attributes.

2. The next step taken by pharmacy is preliminary interview. In this onlygeneral

questions are asked and some information about pharmacyand of job is given to
applicant.

67
B.M. College of BBA
ASFA PHARMACY

3. The third step is selection test. Pharmacy takes written selection test inwhich they ask
questions on ayurvedic medicines. This test is takenonly for middle level. Here they
to select the candidate conduct test. Test helps to know the attitude, behavior and
performance. A test helps in getting better candidate for the job.
 Mathematical test
 English test
 Read and write test
 Mental test
 Skill test
 Job knowledge test
 Situation test
 Interest test

4. For worker and top level test is not taken. They call for interview. Interview is taken
by managers and the applicants who are passedfrom this are selected for job.
They conduct interview for 3 purposes:
 Obtaining information about candidate.
 Giving information to candidate about the company
 Establishing friendly relationship between the employer and the candidate.

There are several type of interview is conducted by them:

 Informal interview
 Non-directed interview
 Stress interview and board interview.

5. Job is offered to selected applicants by giving appointment later andinformation of

pharmacy, job and his co-workers.

Documents related to Recruitment and Selection:

68
B.M. College of BBA
ASFA PHARMACY

There are no documents related to recruitment and selection as there is no formal procedure
carried out by the company as such.

2.15 JOB DESCRIPTION

Job description is a written statement of what the jobs holder does, how it is done, under what
condition it is done and why it is done. It describes what job is all about, throwing light on job
content, environment and condition of employment. It is descriptive in nature and defines the
purpose and scope of job.

For example:
Job descriptions of “ASFA” pharmacy for top and middle level include same information as
follows.

2.16 JOB SPECIFICATION

69
B.M. College of BBA
 ASFA PHARMACY

Job specification summaries the human characteristics needed for satisfactory job completion. It
tries to describe the key qualification someone needs to perform the job successfully. It spells out
important attributes of a person in terms of education, experience, skills, knowledge and abilities
to perform a particular job.

“ASFA”s job specification for production manager is including the following things:
 Post graduation degree
 2-3 years experience
 Age
 Intelligence and power of decision making
 Various skills
 Behavior and personal attributes.

“ASFA”s job specification for middle level includes all above matters with some change in
education and skills.

For example designation required for the various post in “ASFA”:

2.17 HUMAN RESOURCE AUDIT & INFORMATION SYSTEM

In ASFA, HR audit is to get a clear judgment about the overall status of the organization and also
to find out whether certain systems put in place are yielding any results. HR audit also helps to
figure out any gaps and the reason for the same. Since every company plans certain systems and
targets, an HR audit compares the plans to actual implementation.

70
B.M. College of BBA
ASFA PHARMACY

Chapter:3
Production
Management

71
B.M. College of BBA
ASFA PHARMACY

72
B.M. College of BBA
ASFA PHARMACY

3.1 Organization structure of production department of “ASFA”

73
B.M. College of BBA
ASFA PHARMACY

3.2 PRODUCTION PLANNING

Production planning is the function of management which decides about the resources that will
be required for future manufacturing operations and allocating these resources to produce the
desired output at right time, in right amount, of required quality and at minimum cost.

Production planning is the planning of how much produce, Requirement of human resource and
finance. It is also planning of quality standard and
rawmaterials requirement etc. production plan is preparation of guiding planbefore starting
production plan involve when, what, how and why to producegoods.

In “ASFA” production planning is done considering the sales of previous year and demand of
current year. On the basis of the sales of the previous year and demand of current year company
prepares the list of the medicines that are to be produce throughout the year. After preparing the
list of medicines, company refers BMR (Batch Manufacturing Record) of the medicines that are
to be produced throughout the year for requirement of raw-material, machine capacity and man-
power. After considering the safety stock level of 40%, company places the order of the raw-
material which falls short of the stock of raw-material.

BMR (i.e. Batch Manufacturing Record) is the record which shows the requirement of raw-
material, machine capacity and man power for producing the particular quantity of medicine of a
particular category. Also “ASFA” produce the fixed quantity of the particular medicine
according to the quantity of the medicine mention in BMR irrespective of the quantity of demand
forecast.

74
B.M. College of BBA
ASFA PHARMACY

3.3 MATERIAL REQUIREMENT PLANNING

Material requirement planning is a technique for determining the quality andtiming for
the acquisition of dependent demand items needed to safety master schedule requirements.

In the modern world, enterprise resource planning system is being usedextensively and it also
takes care of whole organization instead of one unit of organization. Basically material
requirement planning consists of computer programmed, which is run periodically such as
weekly, monthly or quarterly toincorporate the latest schedule of production requirement.

“ASFA” company as a such do not prepare any material requirement planning as it produces the
quantity of the particular medicine as mention in BMR (Batch manufacturing record) if the
company gets the order of produces the particular medicine then it will refer BMR for quantity of
the medicine to be produced and the requirement of raw material. After considering the safety
stock level of 40% company gives the order of raw material which falls short of current stock
level. So the question of preparing MRP does not come in to picture as it is already mention in
BMR the amount of material required to be produced in 1 lot of medicine.

3.4CAPACITY REQUIREMENT PLANNING

Like MRP, the company do not do CRP that is capacity requirement planning because they
installed capacity of the machines in the company is according to BMR so the company produces
the quantity mention in BMR and not beyond that quantity and also not less then that quantity as
the company cannot increase the capacity and capacity will not utilize fully respectively. Also
the fixed quantity of medicine which is produced and being demanded by the dealer, the stock of
that medicine is 100% sold. If the dealer wants more quantity than they produced quantity
according to the BMR and stock the additional medicines for the future period.

75
B.M. College of BBA
ASFA PHARMACY

3.5 TYPES AND CLASSIFICATION MATERIAL HANDLING

Material handling is defined as controlled movement of material, from receipt, through storage
and production and up to the shipment of finished product. As definition suggests it is concerned
with storage and internal movement of following type of material.

 Raw material
 Work-in-progress inventory
 Finished product
 Surplus and waste
 Capital equipments

“ASFA” used only solid and liquid raw material. So material handling equipments of “ASFA” as
per given below:

76
B.M. College of BBA
ASFA PHARMACY

77
B.M. College of BBA
 ASFA PHARMACY

3.6 Type of production system

Broadly there are two types of production system:

 Continuous production system.

When an organization decides to manufacture one standard product or a few limited varieties of
standard product, such an organization operates with continuous production system. Here there is
no differentiation in product specification from customer to customer. A very large number of
customers are offered similar product. Such kind of production system is seen for items like
cement, fertilizers, petrochemicals, bulk chemicals, sugar, automobiles, and consumer durable.

There are two sub-categories of continuous system:

 Continuous flow type of production system (flow shop production system):In continuous flow
type production system, the entire plants or factory works as one integrated machine. It is a
special purpose plant. For e.g. petroleum refinery, cement, chemicals, yarn manufacturing etc.

78
B.M. College of BBA
 ASFA PHARMACY

 Assembly line production system: In assembly type of production system, various

components, spare parts are assembled together to prepare final product. One can actually see
various production operations. For e.g. automobiles, computer, wall clocks, refrigerators etc.

 Intermittent production system.

Intermittent production system is totally different than continuous production systems. In this
case, production specification varies from customer to customer. For e.g. heavy manufacturer
like Larsen & Turbo manufacture different heavy machines required by power sector, petroleum
refinery, etc.

There are two major classifications of intermittent production system:

 Job shop system: In job shop production system, each product is totally unique. Each customer
orders a special product to suit his or her application. An example of Rolls-Royee cars and
Larsen & Turbo fall in this category.

 Batch processing system: In this there is very large product mix offered to customers. To
satisfy large number of different types of customers, many products are manufactured.
Products are different but are of similar nature.

From the above theory, it is clear that company falls in batch manufacturing category because it
manufactures various types of diagnosis kits. Also certain sicknesses are non-seasonal like
diabetes, cancer, aids etc. for which company have to manufacture medicines regularly
throughout the year. Many other sicknesses are seasonal like malaria, gondeas, etc. for which
company has to increase production during particular season. So, company offer many large
product mix to their customers. Every month they manufacture different set of products. They
undertake batch wise production of different products one after another.

79
B.M. College of BBA
ASFA PHARMACY

3.7 Plant layout

Plant layout is configuration of departments, work stations and equipments in the production
system or in the conversion process. Plant layout is the arrangement of machinery, equipment
and facilities such as receiving and shipping department, tools room, maintenance room,
inspection cabin, stores, trolleys, drums and container and other handling equipments,
employees amenities like canteen, rest and change room, toilet, parking facility etc. so as to
ensure smooth and quick moment of material from raw-material stage to finished product stage
with minimum material handling, quality of operation, good communication etc. at the lowest
possible handling cost.

Depending upon nature of business, variety of finished type of machines, design of plant layout
shall vary. The arrangement of machines in one department and arrangement and sequence of
various departments shall also vary. Because of this reason, organizations are seen working with
any of the following type of plant layout:

1. Process layout
2. Product layout
 Line processing type(assembly type)
 Continuous flow type
 Combination layout ( Hybrid layout)
 Cellular layout
 Fixed position layout Service layout

The plant layout of “ASFA” is cellular layout type where machines and equipments are arranged
according to manufacturing process.

80
B.M. College of BBA
ASFA PHARMACY

3.8 Plant layout of “ASFA”

Where name of the rooms as per given below:

1. Production manager.
2. Ready made medicines room.
3. Granules department.
4. Tablet department
5. Churna packing room
6. Dhrut, oil, malam packing room
7. General packing room
8. Glass bottle room
9. Machine spare part room
10. Asav, aristh, sadhan room
11. Retail sample room
12. Packing material room
13. Bottle washing room
14. Liquid, semi-liquid filling room
15. Pills making, cutting and polishing room
16. Kharal, bhasma, bhavana section-1
17. Kharal, bhasma, bhavana section-2
18. Prohibited Asav making room
19. Quality control room
 Dark room
 Sterility testing room
 Zidiper preparation room
 Electronic equipment room
20. Electrical panel board
21. General bhatti department
 Syrup

81
B.M. College of BBA
ASFA PHARMACY

 Avelha
22. LPG room
23. D.M. water plant
24. Bhatti, bhasma, put section-1
25. Boiler room
26. Ladies/gents toilet
27. Kachidavakorentine section
28. Reject goods section
29. Churna section
30. Raw material department
 RM1
 RM2
 RM3
 RM4
31. Dispatch department
32. Cow dung cakes and coal stores
 Bhatti, bhasma put section-2
33. Water tank
34. Worker room ladies
35. Worker room gents
36. Board room
37. Security cabin
38. Parking stand
39. Boiler, chimney stock

82
B.M. College of BBA
ASFA PHARMACY

3.9 BRIEF IDEA ABOUT DEPARTMENTS AND MACHINE

83
B.M. College of BBA
ASFA PHARMACY

84
B.M. College of BBA
ASFA PHARMACY

85
B.M. College of BBA
ASFA PHARMACY

86
B.M. College of BBA
ASFA PHARMACY

87
B.M. College of BBA
ASFA PHARMACY

3.10 Records kept in production department

88
B.M. College of BBA
ASFA PHARMACY

89
B.M. College of BBA
ASFA PHARMACY

Packing department:

90
B.M. College of BBA
ASFA PHARMACY

3.11 Manufacturing Process

All the finish products of “ASFA” can be divided in 6 main categories and here, below we taken
general production process in each category and process for specific medicine in those
categories. Also “ASFA” produce 32 patent medicine. Categories are as follows:

 Category 1:Rasa, Rasayan, Bhasma, Parpati, Pishti.

PRODUCTION PROCESS OF RASA (AROGYA VARDHANI RASA)

91
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF RASAYAN (SUVARNA VASANTMALTI)

92
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF PARPATI (PANCHAMRUT PARPATI)

93
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF PISHTI (PRAVAL PISHTI)

94
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF BHASMA (SHANKH BHASMA)

95
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF CHURNA (KUBERAKSH CHURNA)

96
B.M. College of BBA
ASFA PHARMACY

2.Gugalvati, Tablets, Sogthi

PRODUCTION PROCESS OF SOGTHI (KUSTHHER SOGTHI)

97
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OD GUGAL (TRIPHLA GUGAL)

98
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF TABLETS (PUNARNAVA MANDUR)

99
B.M. College of BBA
ASFA PHARMACY

Category: 3 Avleh, Dhrith, Oil, Sharbat, Malam, Lep

PRODUCTION PROCESS OF DHRITH (TRIPHLA DHRITH)

100
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF OIL (BRAHMI OIL)

101
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF MALAM (SINDURADI MALAM)

102
B.M. College of BBA
ASFA PHARMACY

Category: 4 Asav, Aristh, Kwath (powder)

PRODUCTION PROCESS OF KWATH (DWATRIDHRASHANK KWATH)

103
B.M. College of BBA
ASFA PHARMACY

PRODUCTION PROCESS OF PATENT MEDICINES (SPL.GULKAND)

104
B.M. College of BBA
ASFA PHARMACY

3.12 INVENTORY CONTROL SYSTEM

Inventory control is the means by which material of the correct quality and quantity is made
available as and when it is required with due regard to economy in the storage costs, setup costs,
manufacturing costs, purchase prices and working capital.

As inventory is an essential part of any organization. Systematic management and control of

inventory for all items is a challenging job. “ASFA”’s main objectives of inventory control are:

 To maintain investment in inventory at the lowest level

 To supply the products to its user as per their requirement at right time.
 To keep inactive, waste, scrape and obsolete items at the minimum level.
 To minimize holding, replacement and shortage cost of inventory at minimum level.
 To maximize the efficiency in production.

In Asfa, the inventory is maintained in quarantine department in that all type of goods are stored
and maintained after the production of finished products.

SAFETY STOCK

It is the stock or inventory maintaining to meet unforeseen situation such asvariation in demand,
variation in supply of quantity by supplier and variation inlead time of supply etc. so it use in
emergency.

105
B.M. College of BBA
ASFA PHARMACY

3.13 DIFFERENT RECORDS KEPT IN STORE

Store Inward Receipt

3.14 STORE RECORD AND FUNCTION

In “ASFA”, they use store ledger and bin system for store records. Store ledger is stock record
which shows the receipts, consumption and balance of raw material both in qualities and values-
store accounting. Bin card is maintained by store keeper it records quantities only issue and

106
B.M. College of BBA
ASFA PHARMACY

receipts. Bin card can contained material received but awaiting inspection, name of suppliers,
unit cost of items, cost of total inventory carried.

There are some daily functions of store department are as follows:

 The quality and quantity of goods or raw material is checked before store.

 Classification and coding of material store keeper give different code to different material.

 Materials are kept in bins, racks etc. for each kind of material separate records is maintained.

 Materials are issued against the materials or store requisition.

 They use FIFO system for material issue and material is checked before issue.

 A review of the existing condition of material or goods shall be done once in six months.

 Records keeping of materials.

3.15 MATERIAL RECEIPT PROCESS

In “Asfa”, there is systematic process for material receipt as follows.
 The first step is purchase order given by company to suppliers.

 When material comes it is not directly sent to store department but it is given for
quality checking.

 In “Asfa”, there is one laboratory to check the quality of materials.

107
B.M. College of BBA
ASFA PHARMACY

 They are checking the quality of goods and compare with quality of samplewhich is
given by suppliers.

 If there is any discrepancy, it should be immediately reported to thepurchase

department and that goods are sent to rejected goods department.

 Rejected goods department take necessary action for the return of goodsto suppliers.

 If the goods are of quality, receiving section will prepare a “goodsreceivenote”. Four
copies of the note are prepared and three copies are sent to thestore keeper along with
the goods received and they attach green color “accept card” with materials.

 Received material is store in various containers by store department andissue when

they get order.

3.16 MATERIAL ISSUE PROCESS

In “Asfa”, there is a simple and short process of material issue. It is as follows.

 Received material store in different container, in different quantity, by stored department.

 When production department need material, production manager is make a report of

required material and send to store department.

 Store department check the availability of material. If require material isavailable, they
send it for quality checking to quality control department.

108
B.M. College of BBA
ASFA PHARMACY

 If quality is acceptable, they send report of it to store department.

 After this, store manager take the material which is require and send for cleaning that
material.

 At the last the cleaned material is send to purchase department with entry in material
outward book.

3.17 PURCHASE PROCESS

The process describes the sequence of steps leading to the completion of anidentified specific
task. Thus, purchasing process describes the sequence of steps by which purchase function is
carried through from its inception to itcompletion. The steps of process are as follows:

A) Receive requisitions
The requisition includes information like how many items wanted, when they should be
available, quantity in hand, who is making the request etc.In “Asfa”, who requires raw materials
or other things, they give “purchaserequisition slip” to production department.

B) Review requisitions

The review of requisition is necessary. This is done to answer questions like:

(1) Can a less expensive material serve purpose?
(2) Can it be eliminated?
(3) Can another item serve the same function?
(4) Can a supplier reduce price by revise specification?

C) Select suppliers

109
B.M. College of BBA
ASFA PHARMACY

“Asfa” is co-operative pharmacy and for purchase they invite quotation fromvarious suppliers.
After getting quotations and by comparing them “Asfa” selectthe suppliers. “Asfa” is not giving
so much important to price but give importantto quality.

D) Place orders
Orders are placed to selected suppliers. For order placing to selectedsuppliers, “Asfa” prepare a
purchase order and send to suppliers. Purchaseorder includes specific quantity and quality of
material at stipulated terms andmaterial send period and placed mentioned in it.

E) Monitor orders
If placed order is for long time then it is necessary to monitor those orders. “Asfa” also monitor
these types of orders because lengthy orders are checked to determine whether anticipated
deliveries are on schedule.

F) Receive orders
The purchase transaction is complete only after receiving the order quantity inan acceptable
condition. When material is comes in “Asfa”, it is checked for quality in “Asfa”‘s laboratory. If
qualities acceptable then only material is send tostore department with material inward receipt.

110
B.M. College of BBA
ASFA PHARMACY

111
B.M. College of BBA
ASFA PHARMACY

3.18DOCUMENTS OF PURCHASING

Purchase Request

112
B.M. College of BBA
ASFA PHARMACY

Comparison Statements

113
B.M. College of BBA
ASFA PHARMACY

3.19 Maintenance Planning of Machines

114
B.M. College of BBA
ASFA PHARMACY

Machineries experience wear & tear and hence they need servicing. One unscientific way is
to repair machines only when give some wrong symbols like excess noise, vibration, more
power/ fuel consumption, deterioration in quality, accidents, complete shut-down etc. This
non scientific maintenance at regular intervals.

“ASFA” follows preventive maintenance planning is as per below:

115
B.M. College of BBA
ASFA PHARMACY

116
B.M. College of BBA
 ASFA PHARMACY

3.20 QUALITY CONTROL

Quality is measure of characteristic of a product or service which impart itfunctional or aesthetic

value so as to satisfy the needs of and users for agiven price paid by them.

Quality control is a system of policies, procedures and guidelines which established and
maintained the specifies standard of quality. It includes allaspects of quality such as research and
development, design parameters,inspection, measurement and analysis of current quality levels,
future trendsand also competitor’s quality level, feedback from field performance of
quality,choice of machines, tools, processes etc., selection and training of productionand
inspection staff, corrective actions and follow up etc.

Asfa’s objective of quality control

Asfa’s main objective is to produce cost effective quality ayurvedic medicine.The other
objectives are as follows:

 To give qualitative products to customers.

 To see whether the medicines are confirms to pre-determine standards.
 To reduce wastage.
 To develop quality consciousness.
 To assess the quality.

117
B.M. College of BBA
ASFA PHARMACY

3.21 QUALITY CONTROL IN ASFA

Asfa checks the quality of all three type of product, raw-material, in processgoods and finished
product.

Raw –material
In this stage, raw materials are being checked and compare with specifiedquality or order placed.
In quality control laboratory they check the quality of raw material, ratio of water and solid
material etc. If quality of raw material isnot satisfactory, goods will be rejected. If acceptable
report is send to storedepartment. Usually they take 25 gm of raw material for quality checking.

In process goods
Asfa also check the quality of goods during the process of production so isthere any problem in
quality while processing, it can remove by takingcorrective actions and make qualitative
medicines for customers. These typesof checking record are kept in “standard verification”. 10
gm is taken for quality checking at work in progress level. Also sample size depends upon the
volume of production. For bulk production more samples are taken. For costly and small
production volume less samples are taken.

Finished product
When product are finished its process then from them some samples aresend to quality control
department for quality checking and if quality isaccepted then only finished product give to
packing department for packingand labeling. The document is used to keep these types of
records is called“Finishedproduct report”.

118
B.M. College of BBA
ASFA PHARMACY

3.22 Process of quality checking of products in different category.

Churna

119
B.M. College of BBA
ASFA PHARMACY

Syrup

120
B.M. College of BBA
ASFA PHARMACY

3.23 Equipments used in quality control department

121
B.M. College of BBA
ASFA PHARMACY

122
B.M. College of BBA
ASFA PHARMACY

123
B.M. College of BBA
ASFA PHARMACY

124
B.M. College of BBA
ASFA PHARMACY

125
B.M. College of BBA
ASFA PHARMACY

ABC ANALYSIS
Abc analysis is analysis according to the value of items. In “Asfa”, the inventory consists of
hundreds of items and many employee are controlled them. For this company do lot of expenses.
In order to affect economy in controlling such large inventory “Asfa” use a system known as
ABC (AlwaysBetter Control) analysis.

It has been found from the experience that all items included in inventory arenot of equal
importance. A few items in the inventory represent a largeproportion of total value of inventory.
Hence, more attention must be devotedto the control of such items. All the items are divided into
three categories.

 A – Category

It includes those items which are very important and of high value but formsonly a small
proportion of total quantity of inventory.

In “Asfa”, there are 10 items which are comes in categoryA and theyrepresents as much as 74%
of value of inventories. Strict control over receipt,storage and issue should be exercised over
these items. Items included in this category are gold, silver, saffron, volatile oil like clove
oil, cinnamon oil, eucalyptus oil etc.

 B – Category

Items included in category B are not as important as those in category A,butare important enough
for its proper records to be maintained. They constitute70 items of total number of items, but
represent 18% of total value of inventory of “Asfa”. These items are:

126
B.M. College of BBA
ASFA PHARMACY

 C – Category

The remaining items must be placed in categoryC. they are not so important from the view point
of maintaining control over the receipt and consumptionsuch items constitute 65% of the total
number of items but they represent 8%of total value.

127
B.M. College of BBA
ASFA PHARMACY

128
B.M. College of BBA
ASFA PHARMACY

VED ANALYSIS
The possible consequences of material stock outs when demand arises from the basis of VED
analysis. The cost of shortage depends upon the seriousness of the situation. Items are grouped as
V (Vital), E (Essential) and D(Desirable).

This classification of inventory is based on importance and application of different items in

production process. According to this classification there are three categories of item VED.

Vital items are those items without which production will instantly stop. All raw materials are
vital items. Similarly, there can be some another low value items which are absolutely necessary
for production process. As explained above, spare parts of machines like power generator or
boiler become vital items. Also electricity comes under this category.

Essential items are those items without which efficiency of production process will reduce.
Absence of these items may not cause total stoppage of production but rate of production may go
down. The items included in this category are material handling equipments like trolley, drums
and karats. However it is always possible to do manual handling but rate of material may slow
down. Also packing and sealing machines comes under this category as without this production
can be carried out but rate of movement of goods slow down as it is also a part of production
process.

Desirable items are those items, without which production may not stop instantly nor it will slow
down but there may be inconvenience in manufacturing. This category includes safety items and
auxiliary items.

129
B.M. College of BBA
ASFA PHARMACY

Chapter: 4 Finance
Department

130
B.M. College of BBA
ASFA PHARMACY

131
B.M. College of BBA
ASFA PHARMACY

4.1 Organization structure of finance department

132
B.M. College of BBA
 ASFA PHARMACY

4.2 Revenue and Capital Budgeting.

The investment decision relates to the selection of the assets in which funds will be invested
by a firm. The assets which can be acquired fall into two broad groups:

1. Long term assets which yield in return over the period of time in future.
2. Short term or current assets, defined as those assets which are convertible into cash without
diminution in value, usually within a year.

The first of these involving the first category of assets is popularly known in financial literature
as capital budgeting. Capital budgeting is probably the crucial financial decision of a firm. It
relates to the selection of an asset or investment proposal or course of action whose benefits are
likely to be available in future over the lifetime of the project.

“ASFA” is a co-operative pharmacy and it does work with the objective earning profit. “ASFA”
do not prepare revenue and capital budget. But if company prepares it then it is useful to them in
following ways:

Revenue budgeting is beneficial as it encourages cost consciousness, ensure discipline in

operations, better analysis of financial statement, detection of deficit area, better co-ordination of
departments, periodic evaluation of plans, timely improvement in profit plans etc.

Capital budgeting affects the profitability of the firm in the long run. Capital expenditure
decision has its effect over a long time span and inevitably affects the company’s future cost
structure. Capital investment involves costs and majority of the firm have scarce capital
resources./ this underlines the need for thoughtful, wise and correct investment decision as an
incorrect decision.

133
B.M. College of BBA
ASFA PHARMACY

4.3 Costing Methods.

The methods to be used for the ascertainment of cost of production differ from industry to
industry. It primarily depends upon the manufacturing process and also on the methods of
measuring the departmental and finished products.

There are various methods of costing are as follows:

 Job costing
 Contract costing
 Batch costing
 Process costing
 One operation costing
 Service costing
 Multiple operation costing

Asfa use batch costing and multiple operating costing methods. Asfa use these methods because
ASFA produce its products in batch and multiple operations are taken at a time in Asfa.

A batch may represent a number of small orders passed through the pharmacy in batch. Each
batch is treated as a unit of cost and separately coasted. The cost per unit is determined by
dividing the cost of the batch by number of units produced in a batch.

Multiple operation method of manufacturing consists of a number of distinct operations. It refers

to a cost of Converting the raw material into finished goods. Pharmacy also considers the
rejections in each operation also for costing of products.

134
B.M. College of BBA
ASFA PHARMACY

4.4 COSTING STRUCTURE OF ASFA

135
B.M. College of BBA
ASFA PHARMACY

4.5 COSTING SHEET OF ASFA

136
B.M. College of BBA
 ASFA PHARMACY

4.6 WORKING CAPITAL MANAGEMENT

Basically there are two types of capital need which comprises the following:

 Fixed capital, that is, to investing fixed assets which tend not to vary in short term. Tend only to
be volatile when major invested decisions are made. For ex: when assets are purchased or sold
and
 Working capital on the other hand is much more fluid and fluctuates with the level of business.
The working capital cycle links directly with the cash operating cycle. It comprises of short term
net assets.

Working capital is also known as revolving or circulating or short term capital.

The term working capital refers to that part of capital which is not tied up in fixed assets but is
used to meet the day-to-day requirements of business, which changes from day-to-day, and
which is converted into cash continuously.

Working capital management includes the management of

 Working capital finance

 Management of receivable
 Management of inventory
 Management of cash

WORKING CAPITAL FINANCE

Asfa uses the sources for working capital are as follows:

 Long Term Sources of Working Capital

 Equity shares
 Preference shares
 Long term loans

137
B.M. College of BBA
ASFA PHARMACY

 Short Term Sources of Working Capital

 Short term loans
 Bank overdraft
 Trade credit
 Commercial papers

MANAGEMENT OF RECEIVABLES

Receivables are assets accounts representing amount owed to the firm as aresult of sale of goods
in the ordinary courses of business.

Management of receivables is depending upon the credit policy of company.Asfa has the credit
policy as under.

 Asfa has too strict or too liberal credit policy

 Asfa’s credit standards are clearly specified in policy and strict for customers
 Asfa give cash discount on bulky purchase
 Asfa give goods only on one month credit period.
 Asfa timely collect and get its receivables

MANAGEMENT OF INVENTORY

‘Inventory control means the decision of the firm as to the extent to whichinventories can be
economically stored.’

Asfa’s main objectives of inventory control are:

 To maintain investment in inventory at the lowest level.
 To supply the products to its user as per their requirement at right time.
 To keep inactive, waste, scrape and obsolete items at the minimumlevel.

138
B.M. College of BBA
ASFA PHARMACY

 To minimize holding, replacement and shortage cost of inventory atminimum level.

 To maximize the efficiency in production.

MANAGEMENT OF CASH

Cash is the medium of exchange which allows management to carry on thevarious activities of
the business on day to day basis.

Cash management involves the following four factors:

 Ascertainment of the minimum cash balance and controlling the level of cash.
 Controlling cash inflows.
 Controlling cash outflows.
 Optimum investment of surplus cash.

139
B.M. College of BBA
ASFA PHARMACY

Statement showing changes in working capital

Particulars 2015 2016 Effects on working capital

Increase Decrease
Current assets
Debtors 857967.39 608666.21 249301.18
Closing stock 4638544 6424357 1785813
Loans and Advances 869473.62 1013400.62 143927
Cash and Bank Balance 4219683.04 2777780 1441903.04

Total current assets 10585668.05 10824203.83

Current liabilities
Total current liabilities 5194425.26 6022119.79 827694.53

Total current liabilities 5194425.26 6022119.79 1929740 2518898.75

Working capital 5391242.79 4802084.04

Change in working capital 589158.75 589158.75

140
B.M. College of BBA
ASFA PHARMACY

4.7 RATIO ANALYSIS

A ratio is only a comparison of the numerator with the denominator. The termratio refers to the
numerical or quantitative relationship between two figures. Aratio is the relationship between
two figures, and obtained by dividing theformer by the latter. Ratios are design to show how one
number is related toanother.

Ratio analysis is an important and age old technique of financial analysis. Thedata given in the
financial statement in absolute form are dump and are unable to communicate anything. Ratios
are relative form of financial dataand very useful technique to check upon the efficiency of a
firm.

Ratio analysis is extremely helpful in providing valuable insight into acompany’s financial
picture. Ratio normally pinpoints a business strength andweakness.

141
B.M. College of BBA
ASFA PHARMACY

4.8 CURRENT RATIO

CURRENT RATIO= CURRENT ASSETS

CURRENT LIABILITIES

YEAR CURRENT CURRENT CURRENT

ASSETS LIABILITIES RATIO
2013- 12003798.17 6113227.78 1.96:1
2014
2014- 10585667 5194425.26 2.04:1
2015
2015- 10824203.83 6022119.79 1.80:1
2016

20000000
18000000
16000000
14000000
12000000
CURRENT ASSETS
10000000
CURRENT LIABILITIES
8000000
6000000
4000000
2000000
0
2013-2014 2014-2015 2015-2016

Interpretation:

Current ratio is almost stable which shows that the ratio is satisfactory and current assets are
sufficient to meet current liabilities and the company should not depend upon its long term
sources to pay its short term liabilities.

142
B.M. College of BBA
ASFA PHARMACY

4.9 QUICK RATIO

QUICK RATIO= LIQUID ASSETS

LIQUID LIABILITIES

YEARS LIQUID LIQUID QUICK

ASSETS LIABILITIES RATIO
2013- 7545628.17 6113227.78 1.23:1
2014
2014- 5757048 5194425.26 1.11:1
2015
2015- 4246233.83 6022119.79 0.71:1
2016

14000000

12000000

10000000

8000000 LIQUID LIABILITIES

LIQUID ASSETS
6000000

4000000

2000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

Quick Ratio is decreasing which shows that the ratio is satisfactory and the assets can be
converted into cash promptly or very shortly.

143
B.M. College of BBA
ASFA PHARMACY

4.10 PROPRIETORY RATIO

PROPRIETORY RATIO = SHAREHOLDER FUNDS

TOTAL ASSETS

YEARS SHAREHOLDER TOTAL RATIO

FUND ASSETS

2013- 6488481.85 27964642. 0.23:1

2014 38
2014- 10529652.69 28280199. 0.37:1
2015 24
2015- 11123465.01 30637608. 0.04:1
2016 42

45000000

40000000

35000000

30000000

25000000 TOTAL ASSETS

20000000 SHAREHOLDER FUND

15000000

10000000

5000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

Ideal ratio is 1:3 this ratio shows the general financial position of the company. “ASFA’S”
proprietory ratio indicates positive features as it provides security to creditors.

144
B.M. College of BBA
ASFA PHARMACY

4.11 FIXED ASSETS TO PROPRIETORY RATIO

FIXED ASSETS TO PROPRIETORY RATIO

= FIXED ASSETS

PROPRIETORY RATIO

YEARS FIXED PROPRIETORY RATIO

ASSETS RATIO
2013- 15267381.21 6488481.85 2.52:1
2014
2014- 15631191.21 10529652.69 1.48:1
2015
2015- 16143097.71 11123465.01 1.45:1
2016

30000000

25000000

20000000
PROPRIETORY FUND
15000000
FIXED ASSETS

10000000

5000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

Fixed assets to proprietory fund ratio is 1.45:1 which indicates that assets have been mainly
financed by owners funds.

The extent of coverage of their debt is covered by assets

145
B.M. College of BBA
ASFA PHARMACY

4.12 LONG TERM FUND TO FIXED ASSETS RATIO

LONG-TERM FUND TO FIXED ASSETS RATIO

= LONG-TERM FUNDS

FIXED ASSETS

YEARS LONG FIXED RATIO

TERM ASSETS
FUNDS
2013- 6488481.85 15267381.21 0.42:1
2014
2014- 10529652.69 15631191.21 0.67:1
2015
2015- 11123465.01 16143097.71 0.69:1
2016

30000000

25000000

20000000
FIXED ASSETS
15000000
LONG TERM FUNDS

10000000

5000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

Long term fund to fixed assets ratio of the company is continuously increasing which
showsthat company believe in invested more in fixed assets rather then other long term
source.

146
B.M. College of BBA
ASFA PHARMACY

4.13 GROSS PROFIT RATIO

GROSS PROFIT RATIO = GROSS PROFIT*100

NET SALES

YEARS GROSS NET SALES RATIO

PROFIT
2013- 10768977.15 32114099.52 33.53%
2014
2014- 8236843.27 27923202.61 29.50%
2015

2015- 9270729.45 31035637.60 29.87%

2016

45000000

40000000

35000000

30000000

25000000 NET SALES

GROSS PROFIT
20000000

15000000

10000000

5000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

IN COMPARISION TO 2014 PERFORMANCE

2015 & 2016 gross profit ratio is almost stable whichdetermined stability in cost of production or
direct expenses or sale at reasonably good price higher gross profit ratio is always a good sign.

147
B.M. College of BBA
ASFA PHARMACY

4.14 DIRECT OPERATING RATIO

DIRECT OPERATING RATIO = COGS*100

NET SALES

YEARS COSTOF GOODS NETSALES RATIO

SOLD
2013- 8970357.05 32114099.52 27.93%
2014
2014- 8807836.95 27923202.61 31.54%
2015
2015- 10728485.12 31035637.60 34.57%
2016

45000000

40000000

35000000

30000000

25000000 NET SALES

20000000 COGS (COST OF GOODS SOLD)

15000000

10000000

5000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

In comparision to 2014 performance of 2015 & 2016 for direct operating ratio is 34.57% which
determined lower efficiency because a 34% part of sales is eaten up by direct operating cost.

4.15 NET PROFIT RATIO

148
B.M. College of BBA
ASFA PHARMACY

NET PROFIT RATIO = NET PROFIT*100

NET SALES

YEARS NET NET SALES RATIO

PROFIT
AFTER TAX
2013- 834069.33 32114099.52 2.60%
2014
2014- 651221.04 27923202.61 2.33%
2015
2015- 632510.59 31035637.60 2.04%
2016

35000000

30000000

25000000

20000000 NET SALES

NET PROFIT AFTER TAX
15000000

10000000

5000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

In comparision to 2014 performance 2015 & 2016, Net profit ratio has increased to 2.04% which
determined that the performance of the management is appreciated and plus point reinforced as
per the structure of co-operative.

4.16 OPERATING RATIO

149
B.M. College of BBA
ASFA PHARMACY

DIRECT OPERATING RATIO = TOTAL OPERATING EXPENSE

NET SALES

YEARS TOTAL NET SALES RATIO

OPERATING
EXPENSE
2013- 22813929.62 32114099.52 71.04%
2014
2014- 29298513.54 27923202.61 104%
2015
2015- 23164568.48 31035637.60 74.68%
2016

60000000

50000000

40000000
NET SALES
30000000
TOTAL OPERATING EXPENSE

20000000

10000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

In comparision to 2014 the ratio has been increased but it not good for the company as large part
of sales is eaten up by operating expenses.

4.17 INVENTORY TURNOVER RATIO

150
B.M. College of BBA
ASFA PHARMACY

INVENTORY TURNOVER RATIO = COST OF GOODS SOLD

AVERAGE INVENTORY

YEARS COGS AVERAGE RATIO

INVENTORY
2013- 8970357.05 4700956 1.91
2014 TIMES
2014- 8807836.95 4872088.5 1.81
2015 TIMES
2015- 10728485.12 5906293.5 1.82
2016 TIMES

18000000

16000000

14000000

12000000

10000000 AVERAGE INVENTORY

COGS
8000000

6000000

4000000

2000000

0
2013-2014 2014-2015 2015-2016

4.18 AVERAGE INVENTORY HOLDING PERIOD

151
B.M. College of BBA
ASFA PHARMACY

YEARS NO. OF INVENTORY PERIOD

DAYS (A) HOLDING (A/B)
PERIOD (B)
2013- 360 1.91 188 DAYS
2014
2014- 360 1.81 199 DAYS
2015
2015- 360 1.82 197 DAYS
2016

362

361.5

361
INVENTORY HOLDING PERIOD
(B)
360.5
NO. OF DAYS (A)

360

359.5

359
2013-2014 2014-2015 2015-2016

Interpretation:

In comparision to 2014 performance 2015 & 2016 Stock turnover ratio almost stable which
shows that the stock is not blocked and efficiency of the management.

4.19 DEBTORS TURNOVER RATIO

152
B.M. College of BBA
ASFA PHARMACY

DEBTORS TURNOVER RATIO = NET SALES

AVERAGE DEBTORS

YEARS NET SALES DEBTORS RATIO

2013- 32114099.52 488592.54 65.73
2014 DAYS
2014- 27923202.61 857967.39 32.55
2015 DAYS
2015- 310325637.60 608666.21 50.99
2016 DAYS

33000000

32000000

31000000

30000000
DEBTORS
29000000 NET SALES
28000000

27000000

26000000

25000000
2013-2014 2014-2015 2015-2016

4.10 AVERAGE COLLECTION PERIOD

153
B.M. College of BBA
ASFA PHARMACY

YEARS NO. OF DEBTORS PERIOD

DAYS (A) RATIO (B) (A/B)
2013- 360 65.73 5.47
2014 TIMES
2014- 360 32.55 11.06
2015 TIMES
2015- 360 50.99 7.06
2016 TIMES

440

420

400
DEBTORS RATIO
380 NO. OF DAYS

360

340

320
2013-2014 2014-2015 2015-2016

Interpretation:In comparision to 2014 performance, 2015 Debtors turnover ratio has increased
to 6 times which indicates that debts are collected quickly and also reflects the effectiveness of
the credit sales policy of the management.

4.21 CREDITORS TURNOVER RATIO

CREDITORS TURNOVER RATIO = NET PURCHASE
AVERAGE CREDITORS

YEARS CREDITORS PURCHASE RATIO

2013- 1629185.83 8444784.05 5.18
154
B.M. College of BBA
ASFA PHARMACY

2014 DAYS
2014- 746344.61 9008210.95 12.07
2015 DAYS
2015- 1754954.5 12514218.12 7.13
2016 DAYS

16000000

14000000

12000000

10000000
PURCHASE
8000000 CREDITORS
6000000

4000000

2000000

0
2013-2014 2014-2015 2015-2016

Interpretation:

In 2014 & 2015 ratio is almost stable and in year 2016 ratio increases which indicates the growth
in management.

4.22 AVERAGE PAYMENT PERIOD

YEARS NO. OF CREDITORS PERIOD

DAYS (A) TURNOVER (A/B)

155
B.M. College of BBA
ASFA PHARMACY

RATIO (B)
2013- 360 5.18 69.49
2014 TIMES
2014- 360 12.07 29.83
2015 TIMES
2015- 360 7.13 50.49
2016 TIMES

374
372
370
368
366
364 CREDITORS TURNOVER RATIO

362 NO. OF DAYS

360
358
356
354
352
2013-2014 2014-2015 2015-2016

Interpretation:

IN COMPARISION TO 2012 PERFORMANCE

2015 Creditors turnover ratio has remained constant at 9 times which reflects that the pattern of
payment to the suppliers is constant.

Balance Sheet
Comparative
statement
Absolute %
156
B.M. College of BBA
 ASFA PHARMACY

change change
Particulars As at 31-3- As at 31-3-
15 16
Liabilities:
Share capital 500000 50000 0 0
Reserves and surplus 9749738.44 10345501.24 595762.8 6.11
Profit and loss A/c 651221.04 632510.59 -18710.45 -2.87
General reserve 300989.25 300989.25 0 0
Provisions 10598407.95 11488694 890286 8.40
Dealer deposits 480000 490000 10000 2.08
Total liabilities: 22280356.68 23757695 1477338.3 6.63
5

Assets:
Fixed assets 6285822.74 6285822.74 0 0
Other fixed assets 9345368.47 9857275 511906.5 5.48
Investments 26000 26000 0 0
Current assets:
Total Inventories 5388230 7566755
Debtors 857967.39 608666.21
Cash and bank balance 4219683.04 2777780
Loans and advances 2157127.60 3515309.5
Total current assets: 12623008.03 14468510.71

Less current liabilities:

Total current liabilities: 5999842.56 6879913.23

Net assets: 6623165.47 7588597.5 965432.01 14.58

Total assets: 22280356.68 23757695 1477338.5 6.63

1

Balance Sheet
Common Size Statement

157
B.M. College of BBA
 ASFA PHARMACY

Particulars As at 31-3- As at 31-3- As at 31-3- As at 31-3-

15 16 15 16
Liabilities: (in %) (in %)
Share capital 50000 50000 2.244 2.10
Reserves and surplus 9749738.44 10345501.24 43.76 43.55
Profit and loss A/c 651221.04 632510.59 2.92 2.66
General reserve 300989.25 300989.25 1.35 1.27
Provisions 10598407.95 11488694 47.57 48.36
Dealer deposits 480000 490000 2.15 2.06
Total liabilities: 22280356.68 23757695 100 100

Assets:
Fixed assets 6285822.74 6285822.74 28.21 26.46
Other fixed assets 9345368.47 9857275 41.94 41.49
Investments 26000 26000 0.12 0.11
Current assets:
Total Inventories 5388230 7566755
Debtors 857967.39 608666.21
Cash and bank 4219683.04 2777780
balance
Loans and advances 2157127.60 3515309.5
Total current assets: 12623008.03 14468510.71

Less current
liabilities:
Total current 5999842.56 66879913.23
liabilities:

Net assets: 6623165.47 7588597.5 29.73 31.94

Total assets: 22280356.68 23757695 100 100

Balance Sheet

158
B.M. College of BBA
 ASFA PHARMACY

Trend Analysis

Particulars As at 31-3- As at 31-3- As at 31-3- As at 31-3-

15 16 15 16
Liabilities:
Share capital 50000 50000 100 100
Reserves and 9749738.44 10345501.24 100 106.11
surplus
Profit and loss A/c 651221.04 632510.59 100 97.13
General reserve 300989.25 300989.25 100 100
Provisions 10598407.95 11488694 100 108.40
Dealer deposits 480000 490000 100 102.08
Total liabilities: 22280356.68 23757695 100 106.63

Assets:
Fixed assets 6285822.74 6285822.74 100 100
Other fixed assets 9345368.47 9857275 100 105.48
Investments 26000 26000 100 100
Current assets:
Total Inventories 5388230 7566755
Debtors 857967.39 608666.21
Cash and bank 4219683.04 2777780
balance
Loans and advances 2157127.60 3515309.5
Total current assets: 12623008.03 14468510.71

Less current
liabilities:
Total current 5999842.56 66879913.23
liabilities:

Net assets: 6623165.47 7588597.5 100 114.58

Total assets: 22280356.68 23757695 100 106.63

159
B.M. College of BBA
 ASFA PHARMACY

Income Statement

Trend Analysis
Particulars 2015 2016 2015 2016

Net sales (A) 20942402 23429173 100 111.87

Less: COGS (B)
Purchase 9008210.95 12514218
Add: Opening stock 4832812 5201921
Add: Manufacturing 2359113.39 2015550
expense
Add: Wages 2109046.2 2562434
Less: Closing stock 5388230 7566755
12921053 14727368 100 113.98
Add: Other income © 215393.9 568925 100 264.13
Gross profit (A+C)-B 8236743 9270729 100 112.55
Less: Operating
expenses
Salary 4329229.55 5054753
Administration 1287194.83 1619563
expenses
Travelling expenses 86264.7 92099.27
Repairing expenses 593247.05 416338.1
Depreciation 941592 890286
Other expenses 264289.04 675345.4
7501817 8748385 100 116.6169
Operating profit 734926.1 522344.4 100 71.07441
Less: Non operating 116077.4 175934.7 100 151.5668
expenses
618848.7 346409.7 100 55.97647
Add: Non operating 143215.4 51509.5 100 35.96646
income
Profit before tax 762064.1 397919.2 100 52.21597
Less: Tax 423132.2 115217 100 27.22955
Net profit 338931.9 282702.2 100 83.40972

160
B.M. College of BBA
 ASFA PHARMACY

Income Statement

Common Size
Statement
Particulars 2015 2016 2015 (in 2016 (in
%) %)

Net sales (A) 20942402 23429173 100% 100%

Less: COGS (B)
Purchase 9008210.95 12514218
Add: Opening stock 4832812 5201921
Add: Manufacturing 2359113.39 2015550
expense
Add: Wages 2109046.2 2562434
Less: Closing stock 5388230 7566755
12921053 14727368 61.70 62.86
Add: Other income © 215393.9 568925 1.03 2.43
Gross profit (A+C)-B 8236743 9270729 39.33 39.57
Less: Operating expenses
Salary 4329229.55 5054753
Administration expenses 1287194.83 1619563
Travelling expenses 86264.7 92099.27
Repairing expenses 593247.05 416338.1
Depreciation 941592 890286
Other expenses 264289.04 675345.4
7501817 8748385 35.82 37.34
Operating profit 734926.1 522344.4 3.51 2.23
Less: Non operating 116077.4 175934.7 0.55 0.75
expenses
618848.7 346409.7 2.96 1.48
Add: Non operating 143215.4 51509.5 0.68 0.22
income
Profit before tax 762064.1 397919.2 3.64 1.70
Less: Tax 423132.2 115217 2.02 0.49
Net profit 338931.9 282702.2 1.62 1.21

161
B.M. College of BBA
 ASFA PHARMACY

Income Statement

Particulars 2015 2016 Comparative

Statement
Absolute %
change change
Net sales (A) 20942402 23429173 2486770.9 11.87
Less: COGS (B)
Purchase 9008210.95 12514218
Add: Opening stock 4832812 5201921
Add: Manufacturing 2359113.39 2015550
expense
Add: Wages 2109046.2 2562434
Less: Closing stock 5388230 7566755
12921053 14727368.44 1806315.9 13.98
Add: Other income © 215393.9 568925 353531.18 164.13
Gross profit (A+C)-B 8236743 9270729.45 1033986.18 12.55
Less: Operating
expenses
Salary 4329229.55 5054753
Administration 1287194.83 1619563
expenses
Travelling expenses 86264.7 92099.27
Repairing expenses 593247.05 416338.1
Depreciation 941592 890286
Other expenses 264289.04 675345.4
7501817 8748385 1246567.87 16.62
Operating profit 734926.1 522344.4 -212581.69 -28.93
Less: Non operating 116077.4 175934.7 59857.36 51.57
expenses
618848.7 346409.7 -272439.05 -44.02
Add: Non operating 143215.4 51509.5 -91705.87 -64.03
income
Profit before tax 762064.1 397919.2 -364144.92 -47.78
Less: Tax 423132.2 115217 -307915.18 -72.77
Net profit 338931.9 282702.2 -56229.74 -16.59

CONCLUSION

162
B.M. College of BBA
ASFA PHARMACY

The “ASFA” Pharmacy completed 60 years. During these periods Pharmacy achieve many
progressive stages. This Pharmacy has a head office and other five branches. At this way its
branches are spreading in different area of all Gujarat state.

From the study of last 3 years Pharmacy’s financial report, we can say that rate of progress of
Pharmacy is very good. “ASFA” is co-operative pharmacy and since its establishment it is never
done loss but “ASFA” sale its medicines at low price so that its profit is less compare to other
Pharmacies. Pharmacy’s Sales and Profit is decrease in current year to compare past years.

For the duration of our training in “ASFA”, we found that the workers and managerial staff are
good and the management of all departments is efficient. Workers are fully satisfied with their
work. This Pharmacy’s aim is not only do profit but also work for employee welfare and societal
welfare.

BIBILIOGRAPHY
 www.ayur.com/about html
163
B.M. College of BBA
ASFA PHARMACY

 www.holisticonline.com/ayurveda/ayv-introduction.htm
 www.indianmedicine.nic.in/html/ayurveda/ayurveda.htm#de
 www.wikipedia.org/wiki/ayurveda

 Marketing management by Philip Kotler

 Production management by K Aswathappa
 Management accounting by R.S.N. Pillai Bhagvati
&
 Financial management by I.M. Pandey
 Human Resource and Personnel Management by K Aswathappa

164
B.M. College of BBA