PROJECT On Mutual Fund

A STUDY ON JIT AS A MODERN INVENTORY MANAGEMENT TECHNIQUE IN
DHARWAD MISHRA PEDHA AND FOOD PROCESSING INDUSTRY
INTRODUCTION
The just-in-time (JIT) inventory system is a management strategy that aligns raw material
orders from suppliers directly with production schedules.
Just-in-time manufacturing is also known as the Toyota production system (TPS) because the
car manufacturer Toyota adopted the system in 1990s.
Companies’ employee this inventory strategy to increase efficiency and decrease waste by
receiving goods only as they need them for the production process, which reduces inventory
costs. This method requires producers to forecast demand accurately.
NEED FOR THE STUDY
In the face of global competition, the need of customers’ demands from the
companies to improve the product quality and customer services. It is perceived that just-
intime (JIT) is highly beneficial in manufacturing industry. The reduction of wastage has long
been used by the manufacturing sector as a means to reduce costs and improve the product
quality. However recent studies revealed that service industries are improving their
operations using JIT. The operations and activities in many service systems are sequentially
similar to activities in manufacturing system. The critical elements the JIT in the context of
Indian industries were identified using a mail survey approach. This study is made to
understand how business can get benefits if it follows JIT as inventory technique; to know the
balance between “theory and practices”
SCOPE OF THE STUDY
A concept of Just in Time (JIT) manufacturing uses a systems approach to develop

and operate a manufacturing system. It organizes the production process so that parts are
available when they are needed within the necessary time at the right place.
JIT exceeds the concept of inventory reduction; it is an all-encompassing philosophy geared

to eliminate waste as anything that does not add value.
Page 1
Here an attempt is made to incorporate JIT Techniques for forging industry the seven steps of
JIT were applied to various stages of industry. Reorganizing the workplace and reducing the
up time plays a vital role.
The scope of the study includes the costs associated with inventories for five financial years
(i.e. from 2016-17 to 2020-21). This study provides insight to the management of high-cost
activities and helps the management to take necessary steps regarding those activities.
OBJECTIVES OF THE STUDY
• To study the strategy in use at Mishra pedha, Dharwad

• To evaluate JIT inventory management practice of Mishra pedha FOOD Industry.
• To increase the organization’s ability to compete with rival units and remain
competitive over the long run by maintaining zero inventory level.
• To reduce the wastage in time, material, efforts involved in production process.
• To know the cost associated with inventory
• To offer suitable suggestions.
• To know the exact annual demand for the product of Mishra pedha Industry.
• To reduce inventory holding costs and increase inventory turnover.
• Increase productivity.
LIMITATIONS OF THE STUDY
1. Study was confined only to the selected component in the stores department.
2. Detail study about all the materials was not possible because of time limit.
3. Study was made only on the selected inventory management techniques.
4. Some of the information was kept confidential by the stores department.
5. Study was made only on the 5 financial year data (i.e. from 2016-17 to 2020-21)
6. Lack of control over time frame.
Page 2
RESEARCH METHODOLOGY
The present study is carried out to study the JIT inventory management system of
“Mishra pedha Industry”. The data is gathered from primary sources as well as secondary
source.
 Primary Data: -
The data has been gathered through interaction and discussions with the executives
working in the division. Some of the important information has been gathered through couple
of unstructured interviews of executive.
 Secondary Data: -
Annual reports published by the company (i.e., from 2016-17 to 2020-21) and some of
the websites are used for collecting the required information.
RESEARCH DESIGN
The whole research work is divided into 5 chapters. The chapter is arranged in a
sequence order and they are as follows
Chapter 1: Introduction
The first chapter is “Introduction” which consists of need, objectives, scope,

Limitations and Research methodology of the study.
Chapter 2: Conceptual Framework
The second chapter is focuses on the “Conceptual Framework” of JIT inventory

management system which consists of meaning and definition of cost, meaning and definition
of cost management, elements of cost, classifications of cost, methods of inventory control,
history of JIT manufacturing technique, purpose of JIT, elements of JIT, key features of the
JIT approach, advantages of JIT, disadvantages of JIT.
Page 3
Chapter 3: company profile
The third chapter describes the profile of the “Mishra pedha Industry” which consist of
company profile, company history, vision, mission and objectives of the company,
organizational structure and SWOT analysis.
Chapter 4: Data Analysis and Interpretation
The fourth chapter is concerned with ‘Data Analysis and Interpretation”. Data is
relating to the cost associated with inventory of “Mishra pedha Industry”.
Chapter 5: Findings, Suggestions and Conclusion
Finally, fifth chapter is concerned with Findings, Suggestions and Conclusion of this study.
CONCLUSION
After studying this chapter, we are able to know the Role of JIT in business, objectives
of the study, Need for the study, Scope of the study, Research Methodology, and Research
Design of the study. Every research will be having one other limitation, and this chapter also
helps to know the limitations of the study.
Page 4
INTRODUCTION
Meaning of cost:
In a business, cost expenses the amount of money that is spent on the production or
creation of a goods or services. Cost does not include a mark-up for profit. The price paid to
acquire, produce, accomplish, or maintain anything, an outlay or expenditure of money, time,
labour, trouble, etc.
Definition:
The expenses faced by the business in the process of supplying goods and services to
consumer.
Cost Management Meaning:
Cost management is the process of planning and controlling the budget of a business.
Cost management is a form of management accounting that allows a business to predict
impending expenditures to help reduce the chance of going over budget.
Cost Management Definition:
Cost management is a method of reducing operating or production expenses in order to

provide less expensive products or services to consumers.
ELEMENTS OF COST
Following are the elements of cost: -
 Material
 Labour
 Expenses
 Overhead
Materials
Page 5
Materials costs are the tangible goods used in producing the product. These costs can be
direct or indirect. Direct materials are the quantifiable and traced to costs of material used in
production. Indirect material either cannot be traced to products or it is not cost effective to
do so. For example, a company producing artisan crafts may consider wood to be a direct
material, as the company can easily quantify how much wood goes into each craft. However
glue and other fasteners may not be cost effective to track in this manner. In that case, these
items would be considered indirect materials.
Labour
Wages and salaries paid to employees involved in manufacturing are known as labourcosts.
These costs can be broken down into direct and indirect labour. Direct labour cost includes
the wages that are paid to employees that physically handle the product. For this reason,
direct labour is also referred to as touch labour. Indirect labour costs are any other wages and
salaries related to production, but are not traceable back to units of product. For example
wages for material handlers and line workers are usually considered to be direct labour cost.
However, factory maintenances workers, plant supervisors and quality control engineers
would be considered indirect labour.
Expenses
An expense is the cost of operations that a company incurs to generate revenue. As the
popular saying goes, “it costs money to make money”. It includes payments to suppliers,
employee wages etc.
Overhead
Overhead costs are related to production, but are not classified as direct labour or direct
materials. This includes all indirect labour& materials costs, as well as any other untraceable
costs. Common overhead costs include depreciation on factory equipment, manufacturing
rents, supplies costs, insurance costs and licensing fees.
For some small business, overhead costs make up the majority of production costs. In these
cases, small-business owners should be careful to recognize that just because overhead costs
Page 6
are not easily traceable to products doesn’t mean that effective cost management is any less
important.
CLASSIFICATION OF COSTS
The following points highlight six main types of classification of costs. The types are:
(1) Cost classification by Nature

(2) Cost classification by function
(3) Cost classification by relation to cost centre
(4) Cost classification by Time
(5) Cost classification for Decision making
(6) Cost classification by nature of production process.
1. Cost Classification by Nature:
The cost can be differentiated by its nature or the purpose for which it has occurred.
It can be treated as an expense under this category & the expenses so incurred is
divided as follows:
i. Material cost:
Page 7
Material cost is the cost of the raw material and its related cost such as procurement cost,
taxes, insurance, freight inwards, etc.
ii. Labour cost:
Labour cost is the salary and wages paid to the employees, i.e., permanent temporary or
contractual employees working in an organization.
The labour cost can be analyzed into the following:
a. Monetary benefits payable immediately: Salaries and wages, dearness and

other allowances, production incentive or bonus.
b. Monetary benefits after sometime in future: Employer’s contribution to

P.F., E.S.I., pension etc. gratuity, profit linked bonus.
c. non-monetary benefits (fringe benefits): Free or subsidized food, free

medical or hospital facilities, free or subsidized education to the employee’s children,
free or subsidized housing etc.
iii. Other expenses:
All the other overheads excluding material and labour comes under this head. Some of these
are packaging, promotion, job processing charges, etc.
Page 8
2. Cost classification by functions:
The cost can also be classified by the business functions for which the resources have been
used.
There are five significant functions of a business which involves some expense and are
essential to the organization in their way. The cost involved in such business operations are
explained below:
i. Production:
Production cost comprises of all the direct and indirect costs incurred in the production of
goods and services.
ii. Administration:
The costs involved in the management activities of an organisation like electricity, stationery,
telephone expenses, rent etc.
iii. Selling:
The indirect costs incurred on the sales function of the goods and services like an
advertisement, promotion, research, customer service, etc. are clubbed under selling cost.
Page 9
iv. Distribution:
Distribution cost refers to the cost incurred for making the goods or services available to the
customers. These are warehousing, delivery services, transportation, etc.
v. Research and Development:
Research is essential to develop a new product or modify an existing one. The cost incurred
on the research team, research implementation, findings, etc.
3. Cost classifications by relation to cost centre:
The elements of cost can be studied under the classification direct and indirect
costs. If the object of interest for identifying and measuring cost is to determine how much
sacrifice is involved in manufacturing a particular product, then initially one can define the
three elements of total cost i.e., materials, labour, and expenses.
i. Direct costs:
The direct costs are those which can be identified easily ad indisputably with a unit of
operation or costing unit or cost centre. Costs of direct material, direct labour and direct
expenses can be directly allocated or identified with a particular cost centre or a cost unit and
Page 10
can be directly charged to such cost centre or cost unit. These costs are also called ‘traceable
costs.
ii. Direct material:
The direct material costs are those which can be identified easily and indisputably
with a unit of operation or costing unit or cost centre. The direct material cost can directly
allocate or identified with particular cost centers or cost units and can be directly charged to
such centers or cost units.
Raw materials are directly identifiable as part of the final product and are classified as
direct materials. For example, wood used I production of tables and chairs, steel bars used in
steel factory etc. are the direct materials that becomes part of the finished product.
iii. Direct labour:
The labour cost incurred on the employees who are engaged directly in making the
product, their work can be identified clearly in the process of converting the raw materials
into finished product is called ‘direct labour cost’. For example, wages paid to the workers
engaged in machining department, fabrication department, assembling department etc.
iv. Direct expenses:
The direct expenses refer to expenses that are specifically incurred and charged for
specific or particular job, process, service, cost unit or cost center. These expenses are also
called ‘chargeable expenses.
Some of the examples of direct expenses include the following:
(1) Cost of drawings, designs and layout.

(2) Royalties’ payable on use of patents copyrights etc.
(3) Hire charges of special tools and equipment for particular job or work.
(4) Architects, surveyors and other consultation fees of particular job or work.
Page 11
Sometimes, if the direct expenses are negligible or small amount, it will be treated as
overhead.
v. Indirect costs:
Indirect costs cannot be allocated but which can be apportioned to cost centers or cost
units. These costs are also called as ‘common costs. The indirect costs are not traceable to
plant, department, operation or to any individual final product. All overhead costs are indirect
costs.
Costs of indirect material, indirect labour, and indirect expenses in aggregate

constitute the overhead costs and are the indirect component of the total cost. Indirect costs
cannot be directly allocated to cost units or cost centers and have to be absorbed or recovered
into cost units.
vi. Indirect material:
The costs incurred on materials used to further the manufacturing process, which
cannot be traced into the end product and the material required in the production process but
not necessarily built into the product are called ‘indirect material.
For example, cutting oil used in cutting surface, threads and buttons used in stitching
clothes, lubricants used in maintenance of plant and machinery, cotton waste used in cleaning
the machinery etc. are considered as indirect materials.
vii. Indirect labour:
The cost of indirect labour consists of all salaries and wages paid to the staff for the
purpose of carrying and tasks incidental to goods are services provided which will not form
part of salaries and wages paid in working directly upon the product.
For example, salaries and wages paid to store keepers, watch and ward, supervisors,
timekeepers, quality control, managers, clerical staff, salesman etc. these indirect labour costs
cannot be identified with any particular job, process, cost unit or cost centre.
Page 12
viii. Indirect expenses:
Indirect expenses are those which are incurred by the organization in carrying out
their total business activities and cannot be conveniently allocated to job, process cost unit or
cost centre. Rent, rates, taxes, insurance, lighting, telephone, postage and telegrams,
depreciation etc. are the examples of indirect expenses.
The concepts of direct and indirect costs are meaningless without identification of the
relevant cost unit or cost centre. Segregation of costs into direct and indirect costs is essential
for proper accounting and control of costs and also for managerial decision-making purpose.
Advanced manufacturing technology such as Robotics, computer aided design and
manufacture, flexible manufacturing systems, optimized production technology, just-in-time
etc. are revolutionizing the manufacturing process at shop-floor, quality and creating areas for
improved opportunities. They have dramatically changed the manufacturing cost behavior
patterns.
The direct cost component of product cost is decreasing while depreciation,

engineering and information processing costs are increasing. These changes have resulted in
higher overhead rates and a shrinking base of direct costs over which to allocated those costs.
4. Cost classification by Time:
i. Historical cost:
This cost is the actual cost that is ascertained after it has been incurred. Historical
costs are available only after the completion of production. Such cost figures have only
historical value.
Costs reported by conventional financial accounts are based on historical valuations.

But during periods of changing price levels, historical costs may not be correct basis for
projecting future costs. Naturally historical costs must be adjusted to reflect current or future
price levels.
Page 13
ii. Predetermined cost:
Predetermined costs are estimated costs. These costs are determined prior to
production on the basis of actual costs and the factors affecting the cost. Predetermined costs
made on a more or less scientific basis result in a standard cost.
iii. Estimated costs:
Estimated costs are that, according to investigation and analysis, are most likely to be
incurred. They are estimated in advanced based on the following assumptions: firstly, that
costs are more or less free to move; and secondly, that what is made is the best estimate of the
cost conditions that will apply when the cost is incurred.
Standard cost:
It is a predetermined calculation of how much costs should be under specified

working conditions. It I built up from an assessment of the value of cost elements and
correlates technical specifications and the quantification of materials, labour and other costs
to the prices and usage rates expected to apply during the period in which the standard cost is
intended to be used.
It main purpose is to provide basis for control through variance accounting for the
valuation of stock and work-in-progress and in some cases, for fixing selling prices. A
standard cost is a planned cost for a unit of product or service rendered.
Page 14
5. Cost classification for Decision making:
In this category, costs are classified based on whether they are relevant to managerial
decisions. These costs are as follows:
i. Marginal cost:
Marginal costs are defined as “the amount at any given of output by which aggregate
costs are changed If the volume of output is increased or decreased by one unit.” Marginal
cost refers to the increase in total cost that results from an increase in output by one unit.
Marginal cost denoted by variable cost, and it consistsof direct material cost, direct labor cost,
direct expenses, and variable overheads.
ii. Sunk costs:

Sunk costs refer to costs that have already been incurred and cannot be changed by a
future decision. These costs become irrelevant costs for later decisions.
For example, if a manager decides to replace an existing machine with a new one, the
amount of capital invested in the existing machine (less scrap value) will be irrecoverable
and, as a result, is known as a ‘sunk cost’.
iii. Opportunity costs:

The opportunity cost of a product or services is measured in terms of revenue that
could have been earned by applying the resource to some other use. Opportunity cost can be
defined as the cost of foregoing the best alternative.
Thus, the opportunity cost of yarn produced by a composite spinning and weaving
mill, which is used in the weaving section, would be the price that could have been obtained
by selling the yarn in the market.
Page 15
iv. Differential costs:

Differential costs refer to the difference in total cost between two alternatives. When
choosing an alternative result in an increase in total costs, such increased costs are known as
incremental costs.
On the other hand, if the choice results in a decrease in total costs, such decreased
costs are called decremental costs.
v. Abandonment costs:
Abandonment refers to complete retirement or withdrawal of a fixed asset from
service or use. Fixed assets are abandoned when they are no longer serviceable.
Abandonment cost refers to the cost incurred in abandoning a fixed asset (i.e., the
cost cannot be recovered or salvaged from the abandoned asset). It is also known as
abandonment loss.
vi. Relevant cost:

The relevant cost is a cost appropriate in aiding to make specific management
decisions. Business decisions involve planning for futureand consideration of several
alternatives courses of action. In this process the costs which are affected by the decisions are
future costs. Such costs are called relevant costs because they are pertinent to the decisions in
hand.
The cost is said to be relevant if it helps the manager in taking a right decision in
furtherance of the company’s objective. A relevant cost is a future cost which differs between
alternatives. It can also be defined as any cost which is affected by the decision at hand.
vii. Replacement cost:

The replacement cost is a cost at which material identical to that is to be replaced
could be purchased at the date of valuation (as distinct from actual cost price at the date of
Page 16
purchase). The replacement cost is a cost of replacing an asset at any given point of time
either at present or in the future (excluding any element attributable to improvement).
viii. Short-run cost:
The short-run costs are costs that vary with output when fixed plant and capital
equipment remain the same and become relevant when a firm has to decide whether or not to
produce more in the immediate future.
ix. Long-run cost:
The long-run costs are those which vary with output when all input factors including
plant and equipment vary and become relevant when the firm has to decide whether to setup a
new plant or to expand the existing one.
x. Normal cost:
The normal cost is normally incurred at a given level of output in the conditions in
which that level of output is achieved. Normal cost includes those items of cost which occur
in the normal situation of production process or in the normal environment of the business.
The normal idle time is to be included in the ascertainment of normal cost.
xi. Abnormal cost:

It is an unusual or a typical cost whose occurrence is usually irregular and unexpected
and due to some abnormal situation of the production. Abnormal cost arises due to idle time
for some heavy break down or abnormal process loss. They are not considered in the cost of
production for decision making and charged to profit and loss account.
xii. Explicit cost:

These costs are also called as ‘out of pocket costs’. The explicit cost is a cost that will
necessitate a corresponding outflow of cash. These costs involve cash outlay or payment to
other parties. Explicit costs are relevant is some decision making problems such as fluctuation
of prices during recession, make or buy decisions etc. these costs are recorded in the books of
accounts an can be easily measured.
Page 17
xiii. Implicit cost:
These costs are also called as ‘imputed costs or notional costs. The implicit cost is a
cost which doesn’t involve actual cash outlay, which is use only for the purpose of decision
making and performance evaluation. Interest on capital is common type o implicit cost. No
actual payment of interest is made but the basic concept is that, had the funds been invested
elsewhere they would have earned interest. Thus, implicit costs are a type of opportunity
costs which cannot be recorded in the books of account but are important for certain types of
managerial decisions such as replacement of equipment of profitability of two alternative
courses of action.
xiv. Avoidable cost:
The avoidable costs are those costs which under given conditions of performance
efficiency should not have been incurred. Avoidable costs are logically associated with some
activity or situation and are ascertained by the difference of actual cost with the happening of
situation and the normal cost.
When spoilage occurs in manufacture in excess of normal limit, the resulting cost of
spoilage is avoidable cost. Cost variances which are controllable may be termed as avoidable
cost. These costs are also called as ‘escapable costs’. The avoidable cost will not be incurred
if an activity is not undertaken or discontinued.
Avoidable cost will often correspond with variable costs. Avoidable cost can be
identified with an activity or sector of a business and which would be avoidable if that
activity or sector did not exist. It refers to costs which can be reduced due to a contraction in
the activities of a business enterprise. It is the net effect on costs that is important, not just the
costs directly by the contraction.
Page 18
xv. Unavoidable cost:
The unavoidable costs are ‘inescapable costs’ which are essentially to be incurred,
within the limits or norms provided for. It is the cost that must be incurred under a program of
business restriction. It is fixed in nature and inescapable.
xvi. Controllable cost :
The controllable cost is a cost chargeable to a budget or cost centre, which can be
influenced by the actions of the person in whom control of the centre is vested. It is always
not possible to predetermine responsibility, because the reason for deviation from expected
performance may only become evident later.
For example, excessive scrap may arise from inadequate supervision or from latent
defect in purchased material. The controllable cost is a cost that can be influenced and
regulated during a given time span by the actions of a particular individual within an
organization.
xvii. Uncontrollable cost:
These costs cannot be influenced by the action of specified member of the

organization. The controllability of cost depends upon the level of responsibility under
consideration. Direct costs are generally controllable by the shop level management. The
uncontrollable cost is a cost that is beyond the control (i.e., uninfluenced by actions) of a
given individual during a given period of time.
xviii. Past cost:
The past costs are actual costs incurred in the past and are generally contained in the
financial accounts. These costs report past events and the time lag between event and its
reporting makes the information out of date and irrelevant for decision-making. These costs
will just act as a guide for future course of action.
Page 19
xix. Future cost:
The future costs are cost expected to be incurred at a later date and are the only costs
that matter for managerial decisions because they are subject to management control. Future
costs are relevant for managerial decision making in cost control, profit projections, appraisal
of capital expenditure, introduction of new products, expansion programs and pricing etc.
xx. Shut-down costs:
Shut- down costs are costs that still be incurred when a plant is shut down temporarily.
Sometimes, the normal operations of a business must be suspended temporarily due to
unfavorable market conditions, strikes, or other forces.
During the suspension of production or other activities, certain costs may still need to
be incurred, and these are considered ‘shut-down costs’. Example of shut-down costs includes
rent for factory premises, salaries of top management, and so on.
xxi. Postponable costs:
These are the costs that can be postponed or shifted to the future with little or no
effect on the efficiency of current operations. These costs are Postponable but not avoidable
and must be incurred at later stage.
The concept of a Postponable cost is highly significant in the railway and transport
business, where it’s possible to delay the cost of repairs and maintenance for a certain period.
xxii. Urgent cost:
The urgent costs are those which must be incurred in order to continue operations of
the firm. For example, cost of material and labour must be incurred if production is to take
place.
xxiii. Conversion cost:
Page 20
It is the incurred to convert raw materials into finished goods. It is the sum of direct
wages, direct expenses and manufacturing overheads.
6. Cost classification by Nature of production process:
Classification by Production Process
Batch Process Operation Operating Contract Joint

Cost Cost Cost Cost Cost Cost
Batch cost:
Batch cost is the aggregate cost related to a cost unit which consists of a group of
similar articles which maintain its identity throughout one or more stages of production.
i. Process cost:
When the production process is such that goods are produced from a sequence of
continuous or repetitive operations or processes, the cost incurred during a period is
considered as process cost. The process cost per unit is derived by dividing the process cost
by number of units produced in the process during the period.
Accounts are maintained for cost of a process for a period. The average cost per unit
produced during the period is process cost per unit.
ii. Operation cost:
Operation cost is the cost a specific operation involved in a production process or

business activity.
Page 21
When there are distinctly separate operations involved in a process, cost for each
operation is found out or effective control mechanism.
iii. Operating cost :

Operating cost is the cost incurred in conducting a business activity. Operating costs
refer to the cost of undertakings which do not manufacture any product but which provide
services.
iv. Contract cost:
Contract cost is the cost of a contract with some terms and condition of adjustment
agreed upon between the contracted and the contractor.
Contract cost usually implied to major long term contracts as distinct from short term
job costs. Escalation clause is sometimes provided in the contract in order to take care of
anticipated change in material price, labour cost etc.
v. Joint cost:
Joint costs are the common cost of facilities or services employed in the output of two
or more simultaneously produced or otherwise closely related operations, commodities or
services.
When a production process is such that from a set of same input, two or more
distinguishably different products are produced together, products of greater importance are
termed as by-products and the costs incurred prior to the point of separation of the products
are termed as joint costs. For example, in a petroleum refinery industry, petrol, diesel oil,
naphtha, tar etc. are produced jointly in the refinery process.
Page 22
Methods of inventory control | material management
There are some selective inventory control methods to have an effective control on the
inventory. The important methods are:
1. ABC Analysis (always better control)

2. FSN Analysis (Fast, Slow moving and Non moving)
3. SDE Analysis (Scarce, Difficult, Easy)
4. VED Analysis (Vital, Essential, Desirable)
5. HML Analysis (High, Medium, Low) 6. Just-In-Time (JIT) Inventory system.
1. ABC Analysis:
One of the widely used techniques of inventory control is the ABC (Always better
control) Analysis is based on the annual consumption of inventory items in a year.
It has been found that:
a. Only a small number of inventory items consume a very large share of inventory
consumption.
b. A little larger number of inventory items covers a moderate share of annual inventory
consumption.
c. A very large number of items just cover a very small share of annual inventory
consumption.
d. These facts gave birth to the concept of ABC analysis. The ABC approach is a means
of categorizing inventory items into three classes ‘A’, ‘B’ and ‘C’.
Page 23
a. Class A items:
10% of items have 70% of the annual inventory consumption.
b. Class B items:
20% of the items have 20% of annual inventory consumption.
c. Class C items:
70% of the items have only 10% of the annual inventory consumption.
2. FSN Analysis:
FSN analysis is an inventory management technique which is based on the rate of

consumption of spares and goods in an organization. This analysis divides the inventory into
three categories based on their speed or rate of utilization, their consumption rate, and
average stay. FSN stands for Fast-moving, Slow-moving, and Non-moving.
For instance, the items can be classified as follows:
a. Fast moving (F):

Items that are frequently issued say more than once a month.
b. Slow moving (s):

Items that are issued less than once a month.
c. Non-moving (N):
Items that are not issued \used for more than 2 years.
3. SDE Analysis:
In situation where scarcity of items is not uncommon SDE Analysis is helpful.
a. “S”
Page 24
It refers to scarce items which are known to be in short supply because of the various reasons.
This items which require more than 6 months ‘lead time.
b. “D”
“D” items are of difficult items which may be difficult to obtain in inadequate quantity or
quality immediately. Items which require more than a fortnight but less than 6 months’ lead
time
c. “E”
“E” items are items which are easily available and no difficulty is experienced in purchase
and procurement i.e. less than a fortnights’ lead time. SDE Analysis helps to avoid out-
ofstock position of items by management with reference to their free availability.
4. VED Analysis:
This classification is applicable only for spare parts and is based on criticality. In
general, criticality of a spare part can be determined from the production downtime loss, due
to spare being not available when required. The VED analysis is done to determine the
criticality of an item and its effect on production and other services.
a. Vital (V):
A spare part will be termed vital, if on account of its non-availability
there will be very high loss due to production downtime and a very high cost
will be involved if the part is produced on emergency basis.
b. Essential (E):
A spare part will be considered essential if, due its non-availability,
moderate loss in incurred.
c. Desirable (D):
Page 25
A spare part will be desirable if the production losses not very

significant due to its non-availability. Most of the parts will fall under this
category. The VED analysis helps in focusing the attention of the management
on vital items.
5. HML Analysis:
The cost per time (per piece) is considered for this analysis. The items of inventory
should be listed in the descending order of unit value and it is up to the management to fix
limits for these categories. High cost items (H), medium cost items (M) and Low Cost item
(L) help in bringing controls over consumption at the departmental level.
This classification is as follows:
a. High cost items (H):

Items whose unit value is very high
b. Medium cost items (M):

Items whose unit value is of medium value.
c. Low Cost items (L):

Items whose unit value is low.
This type of analysis helps in exercising control at the shop floor level i.e. at the use
point.
6. just-In-Time Inventory System:
Just in time also known as Just in time is an inventory management method where by
labour, material and goods [to be used in manufacturing] are re-filled or scheduled to arrive
exactly when needed in the manufacturing process.
Page 26
JIT approach has the capacity when adequately applied to the organization, to
improve the competitiveness of the organization in the market significantly by minimizing
wastes and improving product efficiency and product quality.
Definition:
The just-in-time or JIT is an inventory management system where in the material, or

the products are produced and acquired just a few hours before they are put to use. The
Justin-time system is adopted by the firms, to reduce the unnecessary burden of inventory
management, in case the demand is less than the inventory raised.
JIT was originated in Japan. Its introduced as a recognized technique/philosophy/ way

of working is generally associated with the Toyota motor company, JIT being initially known
as the “Toyota production system”.
In today’s competitive world shorter product life cycles, customers rapid demand and
quickly changing business environment is putting lot of pressures on manufacturing for
quicker response and shorter cycle times. This can only be done by just in time (JIT)
philosophy. Under ideal conditions a company operating at JIT manufacturing system would
purchase only enough materials each day to meet that day’s needs.
Moreover, the company would have no goods still in process at the end of the day,
and all goods completed during the day would have no goods have been shipped immediately
to customers. As this sequence suggests, “Just-in-time” means that raw material are received
just in time to go into production, manufacturing parts are completed just in time to be
shipped to customers.
JIT applies primarily to repetitive manufacturing process in which the same products
and components are produced over and over again. In JIT works are multifunctional and are
required to perform different tasks. The just-in-time inventory system focus is having the
right time, at the right place, and in the exact amount.
Page 27
History of just-in-time manufacturing
The exact reasons for adoption of JIT in Japan are unclear, but has been suggested it
started with a requirement to solve the lack of standardization. Plenert offers four reasons,
paraphrased here. During Japan’s post- world war II rebuilding of industry
1) Japan’s lack of cash made it difficult for industry to finance the big-batch, large
inventory production methods common elsewhere.
2) Japan lacked space to build big factories loaded with inventory.
3) The Japanese island were and/are lacking in natural resources with which to build
products.
4) Japan had high unemployment, which meant that labor efficiency methods were not
an obvious pathway to industrial success. Thus the Japanese “leaded out” their
processes. “They built smaller factories. In which the only materials housed in the
factory were those on which work was currently being done”. Plenert goes on to
explain Toyota’s key role in developing this lean or JIT production methodology.
Potential Risks
In general, companies employing JIT manufacturing practices enjoy reduced cycle

times, faster times to market, and reduced operating costs, although there are some potential
risks, especially for smaller organizations. In order to find success with JIT, it’s important to
find suppliers that are close by, or that can supply materials quickly with limited advance
notice. Sometimes, minimum order policies can pose a rick to smaller manufactures who
might order smaller quantities of materials.
History of the technique
The management technique originated in Japan and is often attributed to Toyota.
Page 28
However, many believe that Japan’s shipyards were the first to develop and successfully
implement this approach. Its origins are seen as three-fold: Japan’s post- war lack of cash,
lack of space for big factories and inventory, and Japan’s lack of natural resource. Thus the
Japanese “leaned out” their processes, and JIT was born.
News about the process and JIT/TPS reached western shores in 1997 with
implementation in the U.S. and other developed countries beginning in 1980.
An example Disruption
In 1997 a fire that took place at a brake parts plant owned by the company Aisin
destroyed its capacity to produce a P-value part for Toyota vehicles. Aisin was the sole
supplier of this part for Toyota, and company had to shut down production for several weeks.
Because of Toyota’s JIT inventory levels, it ran out of P-value parts after just one day.
Nevertheless, the fire cost Toyota nearly $15billion is lost revenue and 70,000 cars.
The problem trickled through to other suppliers for Toyota, as well. Some suppliers were
forced to shut down because the auto manufacturer didn’t need their parts to complete any
cars on the assembly line.
JIT - Background and History
JIT is a Japanese management philosophy which has been applied in practice since the
early 1970s in many Japanese manufacturing organizations. It was first developed and
perfected within the Toyota manufacturing plants by TaiichiOhno Ohno as a means of
meeting consumer demands with minimum delays. TaiichiOhno Ohno is frequently referred
to as the father of JIT.
Toyota was able to meet the increasing challenges for survival through an approach
that focused on people, plants and systems. Toyota realized that JIT would only be successful
if every individual within the organization was involved and committed to it, if the plant and
Page 29
processes were arranged for maximum output and efficiency, and if quality and production
programs were scheduled to meet demands exactly.
JIT manufacturing has the capacity, when properly adapted to the organization, to
strengthen the organization’s competitiveness in the marketplace substantially by reducing
wastes and improving product quality and efficiency of production.
There are strong cultural aspects associated with the emergence of JIT in Japan. The
Japanese work ethic involves the following concepts.
• Workers are highly motivated to seek constant improvement upon that which already
exists. Although high standards are currently being met, there exist even higher
standards to achieve.
• Companies focus on group effort which involves the combining of talents and sharing
knowledge, problem-solving skills, ideas and the achievement of a common goal.
• Work itself takes precedence over leisure. It is not unusual for a Japanese employee to
work 14-hour days
• Employees tend to remain with one company throughout the course of their career
span. This allows the opportunity for them to hone their skills and abilities at a
constant rate while offering numerous benefits to the company.
These benefits manifest themselves in employee loyalty, low turnover costs and
fulfillment of company goals.
THE PUPROSE OF JIT
Ordering inventory on as-needed basis means that the company does not hold any
safety stocks, and it operates with continuously low inventory levels. This strategy helps
companies lower their inventory carrying costs, increase efficiency, and decrease waste. JIT
requires manufacturers to be very accurate in forecasts for the demand for their products.
Page 30
Just-in-time inventory system represents a shift away from the older “just-in-case”
strategy, in which producers carried much larger inventories of stock and raw goods, in case
they needed to produce more units because of higher demand.
Just-in-time inventory management is a positive cost- cutting inventory management

strategy, although it can also lead to stock outs. The goal of JIT is to improve a company’s
return on investment by reducing non-essential costs.
ADVANTAGES OF JIT
Companies like to use JIT as it is seen as a more cost-efficient method of holding

stock. Its purpose is to minimize the amount of goods you hold at any one time, and this has
numerous advantages:
Less space needed:
With a faster turnaround of stock, you don’t need as much warehouse or storage space to
store goods. This reduces the amount of storage an organization needs to rent or buy, freeing up
funds for other parts of the business.
Waste reduction:
A faster turnaround of stock prevents goods becoming damaged or obsolete while sitting
in storage, reducing waste. This again saves money by preventing investment in unnecessary
stock, and reducing the need to replace old stock.
Smaller investments:
Page 31
JIT inventory management is ideal for smaller companies that don’t have the funds
available to purchase huge amounts of stock at once. Ordering stock as and when it’s needed
helps to maintain a healthy Cash flow.
The main benefits of JIT system are:
1. No big storage areas or godowns are required, avoiding building costs.

2. No additional security personnel to guard these godowns, reducing labor costs.
3. No excessive buying leading to less capital investment
4. No excessive production leading to time & labor cost saving.
5. Reduced overheads & scrap
6. Reduced WIP as a result of production against demand
7. Storage costs & damages during storage are totally avoided.
8. Strong supplier/customer relationships
9. Enhanced competitive position in the market

10. Improved worker & equipment efficiency
11. Increased team work & flexibility
12. Reduction in paperwork & follow-ups involved there-in
13. JIT is a time saver, cost saver, labor saver & subsequently a value enhancer of our
product.
14. In JIT, immense focus is on quality of the final product and companies work to
achieve “first time right” for all goods.
DISADVANTAGES OF JIT
Risk of running out of stock:
By not carrying much stock, it is imperative you have the correct procedures in place
to ensure stock can become readily available, and quickly. To do this, you need to have a
good relationship with your supplier(s). You may need to form an exclusive agreement with
suppliers that specifies supplying goods within a certain time frame, prioritising your
Page 32
company. JIT means that you become extremely reliant on the consistency of your supply
chain.
Lack of control over time frame:
Having to rely on the timeliness of suppliers for each order puts you at risk of delaying
your customers’ receipt of goods. If you don’t meet your customers’ expectations, they could
take their business elsewhere, which would have a huge impact on your business if this occurs
often.
More planning required:
With JIT inventory management, it’s imperative that companies understand their sales
trends and variances in close detail. Most companies have seasonal sales periods, meaning a
number of products will need a higher stock level at certain times of the year due to higher
demand. Therefore, you need to factor that into planning for inventory levels, ensuring
suppliers are able to meet different volume requirements at different times.
If run properly, JIT inventory management is seen as one of (if not the) best ways of
managing inventory. While it is not without risks, it has significant rewards, and is ideal for those
who are able to plan carefully in advance, and build strong relationships with suppliers.
ELEMENTS OF JIT INCLUDE
1. Continuous improvement:
 Attacking fundamental problems - anything that does not add value to the product.
 Devising systems to identify problems
 Striving for simplicity - simpler systems may be easier to understand, easier to
manage and less likely to go wrong.
 A product oriented layout - produces less time spent moving of materials and parts.
Page 33
 Quality control at source - each worker is responsible for the quality of their own
output.
 Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes
 Preventative maintenance, Total productive maintenance - ensuring machinery and
equipment functions perfectly when it is required, and continually improving it.
2. Eliminating waste. There are seven types of waste:
 Waste from overproduction.

 Waste of waiting time.
 Transportation waste.
 Processing waste.
 Inventory waste.
 Waste of motion.
 Waste from product defects.
3. Good housekeeping - workplace cleanliness and organization.
4. Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch
size is 1item.
5. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility

and job satisfaction.
6. Leveled / mixed production - to smooth the flow of products through the factory.
7. Kanbans - simple tools to `pull' products and components through the process.
8. Jidoka (Autonomation) - providing machines with the autonomous capability to use

judgement, so workers can do more useful things than standing watching them work.
9. Andon (trouble lights) - to signal problems to initiate corrective action.
Page 34
KEY FEATURES OF THE JIT APPROACH
Smooth Production Flow:
One of the main features of the JIT process is a uniform production process. From the
just in time delivery of material from your suppliers until the delivery of goods to your
customers, this technique helps to prevent fluctuating production rates. This strategy also
eliminates delays and excess work-in-process inventories.
Pull-method:
Pull method is also one of the key features of JIT system where it contributes to a
smooth production process. It removes the work-in-process inventory between the production
steps, thus reducing the wait-times and associated costs.
Automated Purchasing
The JIT system takes help of the best inventory management system. The inventory
system automatically calculates the raw material required depending on the inventory levels
and production levels. Then the supplier would receive a message to deliver the products.
This reduces time wastage, workforce and improves accuracy.
Reliable Vendors
This reduces the time of searching from the ocean of available vendors. The vendors
being limited, you can build a great rapport with them which encourages delivery of high-
quality goods in time.
Maintenance of equipment
The just in time inventory system requires strict adherence to timely maintenance
schedules. Preventive maintenance of the manufacturing and production equipment will
enable the business to avoid the machine breakdowns and costlier downtimes.
Page 35
Stronger relationships and Employee satisfaction
It provides flexible facilities, encourages multi-skilled workers and provides a great

atmosphere for teamwork. This positively impacts and enhances the production system. The
small lot productions at frequent intervals allow the business to find new ways to improve the
product. This gives a competitive edge, gives the idea to strategize, eliminate added costs and
achieve more efficient operations.
USERS OF JIT
i. AUTOMOBILE INDUSTRIES-
a) Toyota motor corporation.
b) Tesla
c) Harley-Davidson USA
ii. ELECTRONICS INDUSTRY

a) Apple
b) Dell Technologies.
iii. DROP SHIPPERS-

a) India mart.
b) Bluember.
iv. McDonald’s corporation.

v. Target corporation (TGT) & Wal-Mart (WMT).
CONCLUSION
After studying this chapter, we are able to know the “conceptual Framework” of JIT
inventory management system which consists of meaning and definition of cost, meaning and
definition of cost management, elements of cost, classifications of costs, methods of
inventory control, history of JIT manufacturing technique, purpose of JIT, key features of JIT
Page 36
approach, element of JIT, advantages of JIT, and disadvantages of JIT. The chapter gives the
brief theoretical information relating to the JIT inventory management.
INTRODUCTION
This chapter deals with the information about “Big Mishra Pedha”. It includes the
history, vision, mission objectives and scope of the company, organizational structure,
competitors, customers and SWOT analysis of the firm etc.
COMPANY PROFILE
Company Name Big mishrapedha
Native name Mishra pedha, DharwadMishraPedha
Business Type Sweets, Namkeens & Bakery
Established on 1933
Product/Service Manufacturers of sweets, Namkeens & Bakery
Address G.A.Mishra from house, near navodaya school, kyrakoppa
road, Dharwad-580007, Karnataka
Partner/ MD Shri Sanjay G. MISHRA
Page 37
Contact person Shri S.V. Borkar

Contact details 8296963751
Bankers ICIC BANK ltd.
No. of employees 300
BACKGROUND
Big Mishra Pedha is the ambitious venture of the family of late Ganesh Avadh bihari
Mishra of Dharwad, who own the renowned brand ‘Dharwad Mishra Pedha’. Synonymous
with the making of quality sweets especially the hugely famous Dharwad Mishra Pedha since
1933, the house of Mishra has emerged as a leading and fastest growing Sweets & Bakery
product company in south India. Dharwad Mishra Pedha is house hold name is Karnataka,
Maharashtra and Goa. Tremendous hard work, visionary outlook and a steely determination
to make it big, by three generation of the Mishra family have gone into the creation of the
brand, Dharwad Mishra Pedha’, which today is a brand to reckon with.
BACKGROUND OF THE PROMOTERS AND THE MANAGEMENT TEAM :
Shri Sanjay G. Mishra: Shri Sanjay G. Mishra took to the family business as
effortlessly as a fish takes to water. His apprenticeship under his father and grandfather
helped him gain valued insights into their chosen business. Once he took to his wings
powered by his vision & ambition, the business has steadily grown year-on-year, & reaching
one milestone after another has now become a habit for him. He has over 35 years of handson
experience in every aspect of the business. Taking over the complete business mantle from
his father about 35 years ago with 8 outlets and the reach being only in the surrounding areas
Hubli-Dharwad, Sanjay G. Mishra has now taken it to more than 130 exclusive spread over
the states of Karnataka, Maharashtra &Goa.
BIG MISHRA PRODUCT RANGE:
Big Mishra product comprises of Sweets, Namkeens, Savouries, Cakes, pastries

Breads, Cookies, Biscuits & other Bakery products, instant food mixes like idle batter Dosa
Page 38
batter, kesari Bath, RavaIdli mix, RavaDosa mix, erc. Frozen Food products, Ice Cream,
Fryums, Dairy products mouth fresheners, soft drinks etc.
COMPETITORS OF THE BIG MISHRA PEDHA:
1. M/S. Thakur Pedha, Dharwad

2. m/s. Renuka Sweets, Hubli
CUSTOMERS OF BIG MISHRA PEDHA
1. Bug Mishra Pedha, Dharwad

2. Big Mishra Pedha, Hubli
3. Big Mishra Pedha, Bengaluru
4. Big Mishra Pedha, Goa
5. Big Mishra Pedha, Bibwewadi- Pune
MISHRA PRODUCTS
Dharwad Pedha Motichoorlado Doodhpeda
Page 39
Gulab jamun mysore pak
Motichur ladoo are soft, ladoo made mainly with gram flour, sugar, and spices. The gram
flour batter is fried to make tiny balls or boondi and mixed with sugar syrup, nuts or seeds
and later shaped to neat round balls. Motichur ladoo is a popular sweet from the north Indian.
Page 40
Doodhpeda :- 2 ways to make instant peda in 15 mins. Doodhpeda is a popular Indian sweet
made with milk, sugar and a flavoring ingredient like cardamom or saffron.
Gulab jamun :- gulab jamun is a very popular Indian sweet. There are some versions of
making it with khoya, milk powder, bread or sweet potatoes. These soft sugar syrup balls are
a treat always.
Dharwad pedha :- Dharwad pedha is a specialty of Dharwad region and these festival pedha
are made with Ricotta cheese, milk, sugar and Ghee.
Mysore Pak: - Mysore Pak is a delectable Indian sweet made from roasted gram flour and
pure ghee.
Vision of big mishra pedha:
Page 41
Our mission is to be a leading manufacturing providing superior quality products and

services at competitive prices. We want be a globally innovative and competitive business
providing 100% genuine services to our customers. We are committed to total customer
satisfaction by providing quality products and services.
I. Strengths
• Abundant availability of raw material

• Vast domestic market
II. Weakness
• High requirement of working capital.

• Inadequately developed linkages between research organizations and industry.
III. Opportunities
 Opening of global market
IV. Threats
• Affordability and cultural preference of fresh food

• High inventory carrying cost
• High taxation
CONCLUSION
After studying this chapter, we came to know about the company profile, vision,
mission and objectives customer and competitors. This chapter also gives information about
the SWOT Analysis of firm. The last part of the chapter deals with the information relating to
different products and services of the company.
Page 42
INTRODUCTION
In this chapter an attempt is made to study the JIT inventory management technique of
“Mishra pedha Industry”. The study is made using the data of annual reports and the five
financial year data and finally the comparison of annual performance is made on the basis of
following criteria:-
 Total production
 Total cost
 Total sales of the firm
 Cost associated with material
 Maintenance cost
 Cost associated with labour
 Miscellaneous expenses
 Total profit of the firm
 The percentage of salary to total cost
 The percentage of material cost to total cost
 The percentage of miscellaneous expenses to total
 The percentage of ordering cost and purchasing cost to total cost
 The percentage of maintenance cost to total cost
Page 43
All the analysis are doing using tools of MS excel and the data are presented in the
form of tables and chart,
4.1:-Table and chart showing Total production
YEAR TOTAL PRODUCTION (In Kg)

2016-17 183005
2017-18 172508
2018-19 202507
2019-20 180002
2020-21 135006
Source-primary Data
Page 44
TOTAL PRODUCTION (In Kg)

250000
Total production
200000
150000
100000
50000
0
2016-17 2017-18 2018-19 2019-20 2020-21
Year
(Chart N o. 4.1)
Interpretation
The Chart No.4.1 shows that, the Total production of Mishra pedha industry is in decreasing
trend since last two years. The highest Total production is in the year 2018-19 i.e. of 202507
kg and the lowest Total production is in the year 2020-21 i.e. of 135006 kg. That is because
of less demand for the products and lockdown by the government due to COVID-19.
4.2:-Table and chart showing the Total Cost
YEAR TOTAL COST (Rs)

2016-17 44227074
2017-18 44067712
2018-19 53866620
2019-20 47443500
2020-21 33940350
Source-primary Data
Page 45
60000000
50000000
40000000
TOTAL COST
30000000
20000000
10000000
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
(Chart No.4.2)
Interpretation
The Chart No. 4.2 shows that the Total Cost of Mishra pedha Industry is fluctuating year by
year. The highest Total cost is in the year 2018-19 i.e. of Rs 53866620 and the lowest Total
cost is in the year 2020-21 i.e. of Rs 33940350. It is because of decline in the production
activity.
4.3:-Table and chart showing total sales
YEAR TOTAL SALES (Rs)

2016-17 54534000
2017-18 54337500
2018-19 66420000
2019-20 58500000
2020-21 41850000
Page 46
Source -primary Data
TOTAL SALES
70000000
60000000
50000000
Total sales
40000000
30000000
20000000
10000000
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : -4.3)
Interpretation
The Chart No. 4.3 shows that the Total sales of Mishra pedha Industry is in decreasing trend
since last two years. It is decreased from 66420000 Rs in the year 2018-19 to 41850000 Rs in
the year 2020-21. The highest sales is in the year 2018-19 i.e. of Rs 6,64,20,000 and the
lowest sales is in the year 2020-21 i.e. of Rs 4,18,50,000. Due to COVID-19 the sales in the
last year is too low when compared to sales of other years.
4.4:-Table and chart showing the cost associated with material
YEAR Ordering cost and Material Cost associated

purchasing cost Operating cost with material
20106-17 17743332 1784082 19527414

2017-18 17473102 1762708 19235811
2018-19 21996649 2004665 24001314
2019-20 18878800 1942740 20822640
Page 47
2020-21 12143556 1672614 13816170
Source –primary Data
30000000
25000000
Cost associated
with material
20000000
15000000
10000000
5000000
0
20106-17 2017-18 2018-19 2019-20 2020-21
YEAR
(Chart No. 4.4)
Interpretation
The Chart No.4.4 shows that the cost associated with material of Mishra pedha Industry is
fluctuating year by year. It is because of fluctuation in the demand. The highest cost is in the
year 2018-19 i.e. of Rs 2,40,01,314 and the lowest cost is in the year 2020-21 i.e. of Rs
1,38,16,170. Ordering and purchasing cost as well material operating costs are also in
decreasing trend since last two years. Ordering & purchasing cost decreased by 55,99,776 Rs
and material operating cost decreased by Rs 1,11,468 during last five years.
4.5:-Table and chart showing maintenance cost
YEAR MAINTENANCE COST

2016-17 2653623
2017-18 2794062
2018-19 2931996
Page 48
2019-20 2846610
2020-21 2636421
Source-primary Data
MAINTENANCE COST
3000000
2950000
Maintenance cost
2900000
2850000
2800000
2750000
2700000
2650000
2600000
2550000
2500000
2450000
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : -4.5)
Interpretation
The Chart No.4.5 shows that the maintenance cost incurred by Mishra pedha Industry is
fluctuating year by year. The highest maintenance cost is in the year 2018-19 i.e. of Rs
29,31,996 and the lowest maintenance cost is in the year 2020-21 i.e. of Rs 26,36,421.
4.6:-Table and chart showing the cost associated with labour
YEAR Wages Salary cost associated with labour

2016-17 5548633 6047097 11595730
Page 49
2017-18 5538064 6118383 11656447

2018-19 6658327 7519161 14177488
2019-20 6040687 6917628 13468614
2020-21 4774285 6571747 13064555
Source-Primary Data
cost associated with labour

16000000
cost associated with labour
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
(Chart No.:-4.6)
Interpretation
The Chart no. 4.6 shows that the cost associated with labour of Mishra pedha Industry is in
increasing trend for the first three years. It is increased from Rs. 11595730 to 14177488 in the
year 2016-17 to 2018-19. But in the last two year it is decreased from Rs.13468614 to
13064555. The highest wages paid is in the year 2018-19 i.e. of Rs 6658327 and the lowest
wages paid is in the year 2020-21 i.e. of Rs. 4774285. But salary paid to labours is in
increased trend. It is increased from Rs.6047097 to Rs.7519161 for the first three years.
4.7:-Table and chart showing miscellaneous Expenses

YEAR MISCELLANEOUS EXPENSES
2016-17 4422706
Page 50
2017-18 4406770
2018-19 4936662
2019-20 4744350
2020-21 4294035
MISCELLANEOUS EXPENSES
5000000
4800000
MISCELLANEOUS EXPENSES
4600000
4400000
4200000
4000000
3800000
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : - 4.7)
Interpretation
The Chart No. 4.7 shows that the miscellaneous expenses of Mishra pedha Industry is in
decreasing trend since last two years. It is decreased by Rs. 642627. The highest
miscellaneous expense is in the year 2018-19 i.e. of Rs.4936662 and the lowest
miscellaneous expenses in the year 2010-21 i.e. of Rs.4294035.
4.8:-Table and chart showing the Total profit

YEAR TOTAL PROFIT
2016-17 10306926
2017-18 10269787
Page 51
2018-19 12553380
2019-20 11056500
2020-21 7909650
Source-primary Data
14000000
12000000
10000000
TOTAL PROFIT
8000000
6000000
4000000
2000000
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : -4.8)
Interpretation
The Chart No.4.8 shows that the Total profit of Mishra pedha Industry is in decreasing trend
since last two years. The highest total profit is in the year 2018-19 i.e. of Rs. 12553380 and
the lowest total profit is in the year 2020-21 i.e. of Rs 7909650. The profit is decreased by Rs.
4643730 during last two years.
4.9:-Table and chart showing the percentage of salary cost to total cost
Year Salary (Rs.) TOTAL COST Percentage
2016-17 6047097 44227074 13.672
2017-18 6118383 44067712 13.884
2018-19 7519161 53866620 13.958
Page 52
2019-20 6917628 47443500 14.581

2020-21 6571747 33940350 19.363
Source-primary Data
Salary to total cost Percentage

25
20
Salary to total cost
15
10
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : -4.9)
Interpretation
The Chart No. 4.9 shows that the percentage of salary to total cost of Mishra pedha Industry
is in increasing trend. It is increased from 13.672 per cent to 19.363 per cent during last five
years. The percentage of salary to total cost is not much varied for the first three years but in
last two years it is varied much.
4.10:- Table and chart showing the percentage of material cost to total cost
Year Cost associated with TOTAL COST Percentage

material
2016-17 19527414 44227074 44.15

2017-18 19235811 44067712 43.65
Page 53
2018-19 24001314 53866620 44.55

2019-20 20822640 47443500 43.88
2020-21 13816170 33940350 40.70
Source-primary Data
Material to total cost Percentage

45
44
Material to total cost
43
42
41
40
39
38
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : -4.10)
Interpretation
The Chart No.4.10 shows that the percentage of material cost to total cost of Mishra pedha
Industry is in decreasing trend since last two years. It is decreased from 44.55 per cent to
40.70 per cent in the year 2018-19 to 2020-21.the highest percentage is in the year 2018-19
i.e. of 44.55 per cent and the lowest is in the year 2020-21 i.e. of 40.70 per cent.
4.11:-Table and chart showing the percentage of miscellaneous expenses to total cost
YEAR MISCELLANEOUS TOTAL COST Percentage

EXPENSES
2016-17 4422706 44227074 9.999
2017-18 4406770 44067712 9.999
Page 54
2018-19 4936662 53866620 9.165

2019-20 4744350 47443500 10
2020-21 4294035 33940350 12.651
Miscellaneous Exps to TC Percentage

14
12
10
ME to TC
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : - 4.11)
Interpretation
The Chart No. 4.11 shows that the percentage of miscellaneous expenses to total cost of
Mishra pedha Industry is constant for the first two years. Later on it is in increasing trend. It
is increased from 9.165 per cent to 12.651 per cent during last two years.
4.12:-Table and chart showing the percentage of ordering cost and purchasing cost to total
cost
YEAR Ordering cost and purchasing TOTAL COST Percentage
cost
2016-17 17743332 44227074 40.11

2017-18 17473102 44067712 39.65
2018-19 21996649 53866620 40.835
2019-20 18878800 47443500 39.792
Page 55
2020-21 12143556 33940350 35.779
Source-primary Data
OC and PC to total cost Percentage

42
41
40
39
Percentage
38
37
36
35
34
33
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
(Chart No.:-4.12)
Interpretation
The chart No.4.12 shows that the percentage of ordering and purchasing cost to total cost of
Mishra pedha Industry is fluctuating year by year. It is decreased from 40.11 per cent to
35.779 per cent during last five years. The highest percentage is in the year 2018-19 i.e. of
40.835 per cent and the lowest is in the year 2020-21 i.e. of 35.779 per cent.
4.13:-Table and chart showing the percentage of maintenance cost to total cost
YEAR MAINTENANCE TOTAL COST Percentage

COST
2016-17 2653623 44227074 5.999
2017-18 2794062 44067712 6.34
2018-19 2931996 53866620 5.443
2019-20 2846610 47443500 6
Page 56
2020-21 2636421 33940350 7.76
Source-Primary Data
Maintenance cost to TC Percentage

9
8
7
6
Percentage
5
4
3
2
1
0
2016-17 2017-18 2018-19 2019-20 2020-21
YEAR
( Chart No. : - 4.13)
Interpretation
The chart No. 4.13 shows that, the percentage of maintenance cost to total cost of
Mishra pedha Industry is fluctuating year by year. It is increased from 5.999 per cent to 7.76
per cent during last five years. It is highest in the year 2020-21 i.e. of 7.76 per cent and it is
lowest in the year 2018-19 i.e. of 5.443 per cent.
INTRODUCTION
This chapter mainly contains the findings on the basis of the analysis of the data made
in IV chapter “Data Analysis and Interpretation”. Then the suggestions are drawn from these
findings. Finally the chapter consists of the conclusion of the study.
FIDINGS
Page 57
 The Total production of Mishra pedha industry is in decreasing trend since last two years.
The highest Total production is in the year 2018-19 i.e. of 202507 kg and the lowest Total
production is in the year 2020-21 i.e. of 135006 kg. That is because of less demand for the
products and lockdown by the government due to COVID-19.
 The Total cost of Mishra Pedha Industry is fluctuating year by year. The highest Total
cost is in the year 2018-19 i.e. of Rs 5,38,66,620 and the lowest Total cost is in the year
2020-21 i.e. Rs 3,39,40,350. It is because of decline in the production activity.
 The Total sales of Mishra PedhaIndustry are in decreasing trend since last 2 years. The
highest sales is in the year 2018-19 i.e. Rs 6,64,20,000 and the lowest sales is in the year
2020-21 i.e. of Rs 4,18,50,000.
 The cost associated with material of Mishra Pedha Industry is fluctuating year by year. It
is because of fluctuation in demand. The highest cost is in the year 2018-19 and the
lowest cost is in the year 2020-21. Ordering and purchasing cost as well as material
operating cost are also in decreasing trend since last two years. Ordering and purchasing
cost decreased by Rs.55,99,776 and material operating cot decreased by Rs. 1,11,468
during last five years.
 The maintenance cost incurred by Mishra Pedha Industry is fluctuating year by year. The
highest maintenance cost is in the year 2018-19 and the lowest maintenance cost is in the
year 2020-21. Because of less productivity in that year the maintenance cost has also
reduced.
 The cost associated with labour of Mishra pedha Industry is in increasing trend for the
first three years. But in the last year it is decreased to Rs. 13064555. The highest wages
paid is in the year 2018-19 and the lowest wages paid is in the year 2020-21.
 The miscellaneous expense of Mishra Pedha Industry is in decreasing trend since last two
years. It is decreased by Rs. 642627.
 The Total profit of Mishra Pedha Industry is in decreasing trend since last two years. The
profit decreased by 4643730 during last two years. Due to decrease in the sales the profit
also moved downwards.
 The percentage of salary cost to total cost of Mishra Pedha Industry is in increasing trend.
It is increased from 13.672 per cent to 19.363 per cent during last five years. The
Page 58
percentage of salary to total cost is not much varied for the first three years but in last two
years it is varied much.
 The percentage of material cost to total cost of Mishra Pedha Industry is in decreasing
trend since last two years. Because of less purchasing and ordering cost the material cost
has also moved downwards.
 The percentage of miscellaneous to total cost of Mishra Pedha Industry is constant for the
first two years. Later on it is in increasing trend.
 The percentage of ordering and purchasing cost to total cost of Mishra Pedha Industry is
fluctuating year by year. It is decreased from 40.11 per cent to 35.779 per cent during last
five years. Due to less demand, the productivity of the firm decreased. Due to less
productivity the purchasing and order of materials are also decreased.
 The percentage of maintenance cost to total cost of Mishra Pedha Industry is fluctuating
year by year. It is increased from 5.99 per cent to 7.76 per cent during last five years.
SUGGESTIONS
1. Big Mishra is well known for the sweet of Dharwad Pedha and the company having very
good quality of Pedha and as well as other sweets when compared to the other units of
sweet mart. Therefore the big Mishra is suggested to maintain the same quality to retain
customer.
2. Company can also adopt labour on contract basis for controlling labour cost during the
time when it has more demand for its product during season and festival time.
3. The company is suggested to adopt daily wage payment system rather than monthly
payment system. Because it will help the company and workers both.
CONCLUSION
A just-in-Time method is a philosophy, which believes that waste can be eliminated

by cutting unnecessary inventory and removing non value-added activities in operations. As
specifications and continuous improvement through value additions.
Page 59
A better inventory management will surely be helpful in solving the problems the
company is facing with respect to inventory and will pave way for reducing the huge
investment or blocking of money in inventory.
The JIT inventory management technique is implemented for the industry. The change
in the workplace layout may help a lot in reducing the man and material movement. A new
furnace may reduce the setup time and operation time for the operation. This may help to
reduce inventory cost.
Page 60

PROJECT On Mutual Fund

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PROJECT On Mutual Fund

Uploaded by

Copyright:

Available Formats

A STUDY ON JIT AS A MODERN INVENTORY MANAGEMENT TECHNIQUE IN

DHARWAD MISHRA PEDHA AND FOOD PROCESSING INDUSTRY

NEED FOR THE STUDY

balance between “theory and practices”

SCOPE OF THE STUDY

A concept of Just in Time (JIT) manufacturing uses a systems approach to develop

JIT exceeds the concept of inventory reduction; it is an all-encompassing philosophy geared

OBJECTIVES OF THE STUDY

• To study the strategy in use at Mishra pedha, Dharwad

LIMITATIONS OF THE STUDY

The first chapter is “Introduction” which consists of need, objectives, scope,

Chapter 2: Conceptual Framework

The second chapter is focuses on the “Conceptual Framework” of JIT inventory

Chapter 3: company profile

Chapter 4: Data Analysis and Interpretation

Chapter 5: Findings, Suggestions and Conclusion

Cost Management Meaning:

Cost Management Definition:

Cost management is a method of reducing operating or production expenses in order to

Following are the elements of cost: -

(1) Cost classification by Nature

1. Cost Classification by Nature:

ii. Labour cost:

The labour cost can be analyzed into the following:

a. Monetary benefits payable immediately: Salaries and wages, dearness and

b. Monetary benefits after sometime in future: Employer’s contribution to

c. non-monetary benefits (fringe benefits): Free or subsidized food, free

free or subsidized housing etc.

iii. Other expenses:

2. Cost classification by functions:

v. Research and Development:

3. Cost classifications by relation to cost centre:

ii. Direct material:

iii. Direct labour:

iv. Direct expenses:

Some of the examples of direct expenses include the following:

(1) Cost of drawings, designs and layout.

Costs of indirect material, indirect labour, and indirect expenses in aggregate

vi. Indirect material:

vii. Indirect labour:

viii. Indirect expenses:

The direct cost component of product cost is decreasing while depreciation,

4. Cost classification by Time:

Costs reported by conventional financial accounts are based on historical valuations.

ii. Predetermined cost:

iii. Estimated costs:

It is a predetermined calculation of how much costs should be under specified

5. Cost classification for Decision making:

ii. Sunk costs:

iii. Opportunity costs:

iv. Differential costs:

vi. Relevant cost:

vii. Replacement cost:

viii. Short-run cost:

ix. Long-run cost:

xi. Abnormal cost:

xii. Explicit cost:

xiii. Implicit cost:

xiv. Avoidable cost:

xv. Unavoidable cost:

xvi. Controllable cost :

xvii. Uncontrollable cost:

These costs cannot be influenced by the action of specified member of the