Main Project

SHIVAJI UNIVERSITY, KOLHAPUR
Chapter 1
Introduction to the Study and Methodology
1.1 Introduction to the Study
The aim of the study is to present the cost reduction and cost control techniques by
analyzing the logistics cost. These techniques can be used by logistics provider. This
study discussed cost structure if services given by the Mahindra Logistics Limited,
Pune to the customer and services like, Transportation (Goods Transport Associates),
Warehousing and Manpower services (Business Support System).
The cost reduction programs within a company cannot be overstated. Companies that
are losing money, need to increase profits, or must become more competitive need to
cut expenses in order to succeed. Knowing how to implement effective cost reduction
strategies can be the determining factor in the survival of a business. When a
company must generate more cash as fast as possible, management will have to
decide which costs can be most effectively reduced. If the reduction is needed
quickly, expenses cut first will normally be those that are not fixed or directly tied to
production. It is not a good idea to drastically reduce expenses that produce the
company product or service without careful evaluation. If your company understands
the importance of cost reduction as a tool to increase profitability, the company will
have a much have a much better chance of remaining profitable no matter what stage
of the economic cycle is occurring. That is because cost reduction is an effective tool
that can be responsive to a companies need. Managing expenses is just as important as
managing revenue. Keeping the competitive edge means keeping the company razor
sharp. There is no room for laxness which dulls the ability of a company to be
responsive to market trends. Changes can occurs rapidly, and companies that cannot
be respond with new methods, new material usage, service efficiency changes, or
technological adaptability will be quickly outperformed by other businesses. The
importance of cost reduction strategies lies in its contribution to a company’s honing
of performance.
1.2 Statement of Research Problem

The cost control and cost reduction is an important factor playing role in the
productivity of the organization. The controlled cost results in increased profitability
of the organization.
YSPM’s, Yashoda Technical Campus, SataraPage 1

The control over the cost and its significant important is considered in this project
report hence the study is entitled as study of Cost Control and Cost Reduction with
special reference to Mahindra Logistics Limited, Pune.
1.3 Objectives of the Study

 To study the conceptual framework of cost Reduction and cost control.
 To study the cost system in practice in Mahindra Logistics Limited.
 To provide necessary suggestions based on the findings of the study
1.3 Importance of the Study

This study focuses on lowering costs in business activity. The importance of cost
reduction plan is related to the most common reasons why expenses must be cut in
business.
 This study contributes in enhancing the profitability of the company.
 This study helps to the company for improving competitive standing in the
market.
 This study helps in optimum utilization of resources.
1.4 Scope of the study

The study of cost control and reduction is important milestone for financial
organization.
 Geographical Scope- This study is limited to the Mahindra Logistics Ltd.
Branch Pune.
 Conceptual Scope- Conceptual Scope is limited to concept of Cost
Accountancy, Cost, Logistics Cost, Cost Control and Cost Reduction.
 Analytical Scope- The tables, graphs, Percentage etc. will be used for the
analysis of data to satisfying the objective of the study.
 Periodical Scope- The researcher collects data of the three months for the
study.
1.6 Research Methodology

Types of Research
The researcher has used analytical type of research for the study purpose. In this study
researcher has used facts or information already available and analyze and evaluate
them.
Sources of data
The proposed study is carried with the help of only secondary sources of data
Secondary data
All the secondary data used for the study has been extracted from the annual reports,
manuals and worksheets of the company.
1.7 Limitations of the Study

 There was no permission to access the company’s confidential data.
1.8 Chapterisation
Sr. Chapter Name Contents
No.
1 Introduction to the study Introduction to study, Statement of research Problem
and Methodology Objectives of Study, Importance of the study, Scope
of the study, Research Methodology, Limitation of the
Study, Chaperisation.
2 Theoretical Background Introduction, Cost Accountancy, Difference
Between Cost Accountancy, Costing and Cost
Accounting. Cost, Concept of Logistic cost, Cost
Control, Cost Reduction.
3 Company profile Introduction, Historical Background, Vision, Mission,
Core Values, Financial Performance, Manpower,
Service Available, Awards, Future Plan, Organization
Chart.
4 Data analysis and Introduction, Analysis Transportation Service Cost,
Interpretation Analysis of Manpower Service Cost, Analysis of
Warehouse Service Cost.
5 Findings, Suggestions Introduction, Findings, Suggestions, Conclusion
and Conclusion

Annexure
Bibliography
Chapter 2
Theoretical Background
2.1 Introduction
This chapter consists of the concept or the theoretical background of the subject. New
concept involves in the research was explained in this chapter. Concept related
definitions, advantages and other related point are cover in this chapter.
2.2 Concept of Cost Accountancy

The terminology of cost accountancy published by the Institute of Cost and
Management Accountants, London defines cost accountancy as the application of
costing and cost accounting principles, methods and techniques to the science, art and
practice of cost control and the ascertainment of profitability. It includes the
presentation of information derived there from the managerial decision- making.
2.2.1 Scope of Cost Accountancy
1. Costing
It involves following two steps,
The terminology of ICMA, London, defines costing as the technique and process of
ascertaining the cost. This definition emphasizes two important aspects.
1) The technique and process of costing
(i)Collection and classification of costs according to various elements and
(ii) Allocation and apportionment of the expenses which cannot is concerned
with the routine ascertainment of cost with a formal a formal procedure.
2) Ascertainment of cost it involves following three steps,
(i) Collection and analysis of expenses
(ii)Measurement of production at different stages and
(iii)Linking up of production with the expenses.
2. Cost Accounting
Mr. Wheldon defines cost accounting as the classifying, recording and appropriate
allocation of expenditure for the determination of the costs of products or services, the
relation of these of these costs to sales values, and the ascertainment of profitability.
The above definitions reveal the following aspects of cost accounting

1) Cost classification
This refers to grouping of like items of cost into a common group.
2) Cost recording
This refers to posting of cost transactions into the various ledgers maintained
under cost accounting system.
3) Cost allocation
This refers to allotment of cost to various products or departments.
4) Cost determination or cost finding
This refers to the determination of the cost of goods or services by informal
procedure, i.e., procedure that does not carry on the regular process of cost
accounting on a continuous on a continuous basis.
5) Cost reporting
This refers to furnishing of cost data on a regular basis so as to meet the
requirements of management.
3. Cost Control
The terminology published by ICMA, London, defines cost control as the guidance
and regulations by executive action of the cost of operation an undertaking.
According to this definition cost control aims at guiding the actual towards the lines
of target and regulates the actual if they deviate from the targets. This process will
become clear by enumerating the steps involved in any cost control techniques.
1) Fixation of targets in terms of costs and production performance.
2) Ascertaining the actual cost and production performance.
3) Comparison of actual with the targets.
4) Analysis the variance by causes and the person responsible for it.
5) Taking remedial steps to set right unfavorable variations.
Cost control is exercised through a variety of techniques such as inventory control,
quality control, budgetary control, standard costing, etc. The advantages of cost
control are as follows
1) It helps in utilizing the resources to the full extent.
2) It helps in reduction of price which is benefited by customers.
3) It helps in competing successfully in the market.
4) It increases the profit earning capacity of the business.

5) IT increases the Goodwill of the business.
4. Budgeting
Mr. Heiser in his book Budgeting- Principles and practice defines budget as an overall
blue print of a comprehensive plan of operation and actions expressed in financial
terms. According to him budgeting process involves the preparation of budget and its
fullest use not only as a device for planning and coordinating but also for control.
5. Cost Audit
The terminology of ICMA, London, and Defines cost audit, as the verification of the
correctness of cost accounts and of the adherence to the cost accounting plan.
2.3 Difference between Cost Accountancy, Costing and Cost

Accounting
Points of
Cost Accountancy Costing Cost Accounting
Differences
Cost accountancy is It involves in its

Scope It is border in scope.
broadest in its scope scope.
It is concerned with
formulation of costing It is concerned with
It is concerned with
Function principles, methods, ascertainment of
recording of cost.
and techniques to be cost.
adopted by a business.
Periodicity of It begins where cost It begins where

It is a starting point.
functioning accountancy ends. costing ends.
The persons involved The people involved

are experts in the field
Persons The person involved are cost clerks.
of cost accountancy
involved is cost account.
such as management
accountant.

2.4 Meaning of Cost

The term cost connotes different meaning to different people. But in Cost Accounting
it is used in Special sense. The terminology published by ICMA, defines cost as the
amount of expenditure (actual or notional) incurred on or attributable to specified
thing or activity.
When the incurred before deriving the benefit it is termed as deferred cost. Example
of deferred costs are insurance premium paid, advertisement expenses incurred and
cost of research and development.
When no benefit is derived by the incurrence of cost, it is termed as loss. Example of
loss are material destroyed by fire, salary paid for a period of strike, material spoiled
through bad workmanship, high prices paid for materials because of faulty purchases,
wage paid to workers for idle time arising from breakdown of machines.
2.4.1. Role of Cost in Cost Accounting
 It helps in choosing from among various alternative course of action.
 It helps in pricing decision.
 It helps to make or buy decision in respect of a component.
 It helps in matter relating to replacement of capital equipment by a new
one.
 It helps in determining the optimum level of operation depending upon the
behavior of cost in relation to scale of operation.
 It helps in deciding whether to sell a product at a particular stage of
production or to further process and sell at the stage of its completion.
 It is useful in deciding the acquisition of fixed assets.
 It helps in deciding to shut down or continue the operation of a certain
department owing to losses and wastage arising from such department.
 It helps in deciding whether an asset is to be bought in hired.
 It helps in evaluating the incurrence of different elements of cost on
different projects.
2.5 Meaning of Logistics Costs

Logistics management is the part of supply chain management that plans, implements,
and controls the efficient, effective forward and reverses flow and storage of goods,
services, and related information between the point of origin and the point of
consumption in order to meet
Customer’s requirements.
Logistics costs are defined differently by different companies. Logistics cost is the
total expenditure done on a single product from the beginning of procurement to
selling it to end customer.
Cost including
 Transportation service costs
Transport is responsible for the physical movement of materials between
points in the supply chain. It is the heart of the all logistics. As transport also
takes time, it can make. The direct impact on time utility and therefore It’s
Crucial to understand the role of the transportation.
There are several types of transportation systems available and each concerns
with the selection of most economical transportation mode e.g. sea, rail, road,
and air. Every organization uses transportation whether it’s for raw material or
finish product to end customers
 Labor service costs
A warehouse is any location where stocks of material are held on their journey
through supply chains. Warehousing is concerned with management of space
to hold inventories and it involve such issues as site selection, space
determination, layout and design, receipts issues and storage and preservation.
 Warehousing service cost
A warehouse is any location where stocks of material are held on their journey
through supply chains. Warehousing is concerned with management of space
to hold inventories and it involve such issues as site selection, space
determination, layout and design, receipts issues and storage and preservation.
2.6 Meaning of Cost Control-

Cost control is a tool of management executives to regulate the working of the
manufacturing concern. Under the globalize economy, mere planning is not

enough. Efforts are constantly made to scrutinize the result of the workings. If so,
out of control situations may be find out and eliminated immediately, with the help
of cost control, the executives can limit the costs within the planned level.
2.6.1 Characteristics of cost control

 Delineation of Centers of Responsibility
Overlapping operations and responsibilities destroy the very essence of cost
control.
 Delegation of Authority -
If person are charged with responsibility without authority, the cost control
will be ineffective. Hence, proper or adequate delegation of authority is
necessary for proper cost control.
 Measurement of Performance
A performance to be measured with the help of reasonable criteria. Standard
costing can be used as reasonable criteria. The person whose performance is
being measured should participate in setting the standards.
 Relevance of Controllable Cost
Only few costs are controllable at different levels of management evaluates
the performance of an employee with the help of costs incurred that are
controllable.
 Cost Reporting
Cost report provides a basis for effective cost control. Hence, if the cost
reports is not prepared and submitted in time, the cost control cannot be
exercised.
 Constant Efforts
The measurement of performances, knowing functioning of manufacturing
department and analysis of costs require constant efforts. This type of constant
efforts leads to cost consciousness and result in cost control.
 Policies and General Objectives
All the employees if the organization is communicated the policies and
general objectives. If so, cost control is very easy.

2.6.2 Advantages of Cost Control

 The chief advantages of cost control are briefly explained below
 Return on capital employed may be increased.
 The volume of profit is also increased with minimum output and sales.
 Management can increase the productivity with available resources.
 The employees getting job continuously.
 The employees can get reasonable remuneration with bonus.
 The available factors of production and resources are effectively used.
 The credit worthiness of the company is increased.
 There is a possibility of prosperity and economic stability of the industry.
2.6.3 Stages involved in Cost Control
 Planning
Planning may be done as in the form of budget, standard, estimate and like the
like. The past events have been considered for proper planning. The Planning
is expressed in both physical as well as monetary terms. The standards are
used as yardsticks.
 Motivation
The performance is evaluated; costs are ascertained and reported to the
management regarding the results of performance. Such report may be act as
motivating force and leads to better performance in the days to come.
 Communication
The planning and policy should be communicated to the employees. If so, they
can assume the responsibility and do the work properly. Communication has
two directions. They are upward direction and downward direction.
Instructions Flow from the top level to lower level. Likewise, report on
performance move towards upward.
 Appraisals and Reporting
The actual performance is compared with preplanned standard and finds the
deviations. The causes for such deviations are also analyzed. Finally, the
deviations with reasons are reported to the top level of management for cost
control.
 Decision Making

The top management may review the report on many directions. Lastly, the
management takes necessary corrective actions. Finally, the existing
standard or budget may be revised according to the prevailing situations.
2.7 Meaning of Cost Reduction

Cost reduction is a planned positive approach to reduce expenditure. It is a corrective
function by continuous process of analysis of costs, functions, etc. for further
economy in application of factors of production.
2.7.1 Characteristics of Cost Reduction

 The cost is permanent one. The reduction should be through improvements in
methods of production from research. It would be short lived if it comes
through reduction in the prices of inputs, such as material, labor etc.
 The reduction in cost real one in the course of manufacturer or service
rendered. Real cost reduction comes through greater productivity.
 The reduction should not be at the cost of essential characteristics, such as
quality of the products or service rendered.
2.7.2Advantages of Cost Reduction
 Cost reduction increases profit.
 Cost reduction will provide more money for labor welfare schemes and
thus improve men management relationship.
 Cost reductions will help in making goods available to the consumer at
cheaper rates. This will create more demand for the products, economies of
large scale production, more employment in the standard of living.
 Cost reduction will be helpful in meeting competition effectively.
 Higher profit will provide more revenue to the government by way of taxation.
 As a result of reduction in cost, export price may be lowered which may
be lowered which may increase total exports.
 Cost reduction lays emphasize on a continuous search for improvement
which will improve the image of the firm for long-term benefits.
 Cost reduction is obtained by increasing productivity. Therefore, a developing
country, like India, which suffers from shortage of resources, can develop
faster if it makes the best use of resources by increasing productivity.
2.7.3 Tools and Techniques of Cost Reduction

The various techniques and tools used for achieving cost reduction are practically
the same which have been suggested for cost control.
Some of these are;
 Simplification and variety reduction.
 Budgetary control.
 Standard costing.
 Overheads control.
 Planning & control of finance.
 Automation.
 Market Research.
2.8 Difference between Cost Control and Cost Reduction.

Cost Control and Cost Reduction Are efficient tools of management but are different
concepts. The differences between these two concepts are summarized below
1. Cost control is the means to achieve the end, i.e., cost reduction. Thus cost
control is the first step achieve end objective. Cost reduction begins where
cost control ends.
2. Cost control is exercised by fixing standards or budgets and taking remedial
measures, in case actual deviate adversely from standards. Cost reduction is
achieved by improving upon standards and improving upon production
methods.
3. Cost control is management oriented whereas cost reduction is oriented
towards economizing all resources with a view to reduce cost of production.
4. Cost control ends after reaching the target. But under cost reduction
programme, products, process, procedures, organization, methods and
personnel are continuously scrutinized in order to improve efficiency and
reduced cost. It is thus a process of continuous self-analysis and self- criticism.

Chapter 3
Company Profile
3.1 Introduction
Mahindra Logistics Limited, Pune.(MLL) is a subsidiary of the USD 16.5 billion
Mahindra Group. They offer integrated supply chain solutions with the right
technology, processes, people and industry best practices. Today they are an
organization that operates out of more than 88 operating locations across India, have
12 branch offices and generate revenues in excess of INR 1900 crores.
3.2 Historical Background of the Company

The company was incorporated under its present names as a public limited company
under the Companies act, 1956 pursuant to the certificate of incorporation dated
August 24, 2007 granted the certificate for commencement of business dated October
15, 2007 by the RoC. The Promoter, Mahindra & Mahindra Limited, through its
logistics division, Mahindra Logistics -undertook the business of providing logistics
solutions, warehousing, freight forwarding and supply chain service (the Logistics
Business). Pursuant to a business transfer agreement dated September 11, 2008
between the Promoter and the company, the entire Logistics Business was transferred
to the Company. Subsequently, the Logistics Business has since then been undertaken
by the Company and the Subsidiaries.
3.3 Vision

To be India’s leading, most preferred, integrated logistics service provider.
3.4 Mission
To serve their customer in global markets, by providing creative, cost effective,
technology enabled solutions that continuously meet and exceed our customers
expectations, thus enhancing stakeholder value. To provide continuous opportunities
for growth and knowledge enhancement to our employees and business associates.
Also, to serve and give back to the communities within which we work, with integrity
and responsibility.
3.5 Core Values

 Consider every customer a partner, evolving to make every customer a co-
owner
 Be the standard by which competitors services are measured
 Social responsibility and inclusive growth
 Maintain the highest levels of professionalism, ethics and integrity in whatever
we do
 The growth, development and dignity of our employees
3.6 Service Available

 Transportation Services.
 Warehousing Services
 Manpower Services
3.7 Financial Performance

Mahindra Logistics Ltd. (MLL), one of Indias largest 3PL solutions providers,
announced its consolidated financial results for the quarter and the financial year
ended on March 31, 2018.
FINANCIAL YEAR18 performance compared with FINANCIAL YEAR17
 Revenue up by 28%, grows from Rs. 2667 crore to Rs.3416 crore,
 EBITDA up by 46%, grows from Rs. 86 crore to Rs. 126 crore,
 PBT up by 51%, increases from Rs 68 crore to Rs. 102 crore,
 PAT up by 42 %, increases from Rs 46 crore to Rs. 65 crore,

 EPS (Diluted) up by 37%, increases from Rs. 6.62 Compared to Rs.9.04
FINANCIAL YEAR18 performance compared with Q4 FINANCIAL YEAR17
 Revenue up by 23%, grows from Rs. 723 crore to Rs.893 crore,
 EBITDA up by 75%, grows from Rs. 22 crore to Rs. 39 crore,
 PBT up by 96%, increases from Rs 17 crore to Rs. 32 crore,
 PAT up by 70%, increases from Rs 12 crore to Rs. 21 crore,
 EPS (Diluted) up by 67%, increases from Rs.1.72 compared to Rs.2.87
In its first year of listing, the Board of Directors has recommended a dividend of 15%
(Rs. 1.50 per share)
 The Company continues to report robust performance on the back of healthy
revenue growth in SCM business Non-Mahindra business growth of 32% and
Mahindra business growth of 28%
 Non-Mahindra SCM business growth led by revenues from freight forwarding,
Consumer &Pharma and Auto & Engineering clients.
 EBITDA higher due to lower Fixed Term Strategic Consulting Service Fees
compared to earlier periods.
Post GST warehousing strategy 2nd multi-product, multi-user warehouse getting
ready
3.8 Awards
Sr.
Year Awards/ Recognition/ Achievements
No.
1 2013 Best 3PL Company of the Year (ELSC) Awards
2 Brand Excellence in Supply Chain & Logistics- Award at the
2013
4thAnnual CMO Asia Awards.
3 Manufacturing 3PL Service Provider of the Year at the 3rd Asia
2014
Manufacturing Supply Chain Summit
4 Two Silver Awards for its Public Service Campaign Being your
2014
courtesy with a glass of water
5 2014 Customer Award- GSK
6 2014 Porter Prize for Leveraging Unique Activities

7 2015 SCALE Award by CII Institute of Logistics

8 2015 Best Warehousing Practices Award by IIMM
9 2017 CSR Initiative of the Year
10 2017 2*2 Logistics- Customer Award- Honda Cars India Limited
11 2017 3PL Achiever of the Year at global Logistics Excellence Awards
3.9 Future Plans

2021-To be one of the most admire global Finance and Accounts Function.
3.10 Manpower
Sr. No. Position Count
1 Senior Manager 4
2 Manager 4
3.11 3 Deputy Manager 6 Organization
Chart 4 Senior Executive 20
5 Junior Executive 26
MahindraTotal
Logistics Limited, 60
Pune
Chief Executive Officer
Head Head Head Chief Chief Head

MPTS Information Human Operation Finance Marketing
Technology Resource Officer Officer

Chapter 4
Data Analysis and Interpretation
4.1 Introduction
Mahindra Logistics Limited (MLL) is a 3PL service provider company which is
basically providing Transportation, Warehousing and Manpower services. Company
is providing project base/ Customer base services. As per customers Requirement
Company is providing the above-mentioned service. During the Cost Reduction and
Controlling Study, Researcher selected this sector which is emerging, playing crucial
part in economy and having wide scope in upcoming days.
While doing study, for Data Analysis, secondary data is collected by researcher
through companies (MLL) database as well as monthly customer billing and vendor
billing.
4.2 Transportation Service Cost

For Analyzing Cost of Transportation, Researcher have selected one project viz.
COSMA International (India) Private Ltd, Situated at Talegaon MIDC, Pune, which is
having business with Company of monthly Rs, 5000000/- approximately through the
business of Transportation Service.
Customer
COSMA International (India) Private Ltd.
Business Associates (Transporter)
1. Goodwill Trans & Logistics Co.
2. Trimurti Transport
3. Amit Transport

Table No. 4.2 Revenue & Expenses Summary from Apr-2018 to Jun-2018 of
Transportation Services.
Total Revenue Total Expenses Margin
Month Percentage
(Rs.) (Rs.) (Rs)
Apr-18 3955670.00 3442318.00 519192.00 13%
May-18 5202690.00 4062366.00 631682.00 12%
Jun-18 3305103.00 3319550.00 512607.00 16%
Grand Total 12463463.00 10824234.00 1663481.00 13%
Graph No. 4.1 Graph Showing margin in Percentage.
18%
16% 16%
14%
13%
12% 12%
Amount in Rs.
10%
8%
6% Percentage
4%
2%
0%
Apr-18 May-18 Jun-18
Month
Above table and graph shows the monthly income and expenses of the organization of
the three months. In the month of April-18 the profit of the company is 13% and the
month of May-18 it is quietly decreased by 1%. And significantly in the month of
June-18 it is increased as 16%.

Table No. 4.2 The following table shows summary of transportation service cost.
Companies
Transporter
Movement From To Transporte Vehicle Freight
Bill Amount
No. Source Destination r Name type Amount
(Rs.)
(Rs.)
Goodwill
Flat Bed
Ameya Mvml Trans &
1 7-9 Mt 428,571 379,776
Chakan Chakan Logistics
32 Ft
Co.
Goodwill
Flat Bed
Ameya Nashik Trans &
2 7-9 Mt 7,890,498 6,685,326
Chakan Vilholi Logistics
32 Ft
Co.
Full
Ameya Tata Motors Trimurti Body 7-8
3 136,500 128,200
Chakan Pimpri Transport Mt 19-22
Ft
Goodwill
Flat Bed
COSMA Ameya Trans &
4 7-9 Mt 1,856,928 1,547,440
Talegaon Chakan Logistics
32 Ft
Co.
Full
COSMA Ameya Trimurti Body 7-8
5 202,058 161,200
Talegaon Chakan Transport Mt 19-22
Ft
Half
MLL Mvml Amit
6 Body 5.5 1,948,908 1,922,292
Vilholi Nashik Transport
Mt 17 Ft
Total 12,463,463 10,824,234
Above table shows the transportation service cost for the different Movements. For
the transportation service which is given to Customer Company COSMA, Talegaon
Company hires three transporters. In this table six movements are shown from their
source to the destination. This table also shows the companies freight amount and

transporter bill amount for all the movements. The table shows the vehicle types of all
transporters which are used to transportation service.
Table No. 4.3 The following table difference between Actual paid cost and Total
Calculated cost.
Total Actual
Diesel Average Approx Calculated
Movement Distance Fuel Other paid Variance
Required Per Toll Total cost
No. (Km) Cost Expenses Cost (Rs.)
(Liter) (Liter) charges (Rs)
(Rs) (Rs)
1 20 7 3 473 700 0 1,173 1,472 299
2 420 140 3 9,940 700 900 11,540 12,558 1,018
3 100 20 5 1,420 700 200 2,320 2,600 280
4 70 23 3 1,657 700 0 2,357 1,840 (517)
5 70 14 5 994 700 0 1,694 2,600 906
6 20 7 3 473 700 0 1,173 798 (375)
Other Cost includes Diver salary, Driver Bhatta and Provision for maintenance of
Vehicle. Diesel Rate Rs. 71 per liter.
Graph no. 4.2 Graph shows the difference between calculated total cost and Actual
Paid Cost.
14000
12000
10000
Amount in Rs.
8000
6000 Caculated Total Cost
4000 Actual Paid Cost
2000
0
1 2 3 4 5 6
Movement No.

Above table and graph shows the difference between actual costs paid by the
company to the transporter and calculated cost as per competitor’s rate or current
scenario. For the movement no 1st, 2nd, 3rd and 5th company is paid excess money to
the transporter. And for the movement of 3rd and 6th company is already in profit.
4.3 Manpower Service Cost

For analyzing the Manpower cost Researcher have selected the project namely
Thermax WWS, which is having business with MLL of monthly Rs, 1700000 /-
approximately through the business of Manpower Service.
Customer Name
Thermax Ltd. - WWS, Chinchwad Pune.
Business Associates -
Ratna Services Pune.
Table No. 4.4 Revenue & Expenses Summary from Mar.18 to May.18 of Manpower
Services.
Total Margin In Margin in
Month Total Income
Expenses Amount percentage
Mar-18 1600124.49 1403660.19 196464.31 12%
Apr-18 1299969.30 1012759.00 287210.30 22%
May-18 1307991.54 1014496.07 293495.47 22%
Total 4208085.33 3430915.26 777170.08 18%
Graph No. 4.3 The following Graph shows margin in percentage.
25%
22% 22%
Percentage
20%
15%
12%
10%
Margin in percentage
5%
0%
Mar-18 Apr-18 May-18
Months

Above table and graph shows the monthly income and expenses of the organization.
And also shows the margin in amount as well as percentage. In the month of Mach-18
the margin is 12% and significantly it is increased in the month of April- 18 as 22%.
And it is remains constant for the month of May-18.
Table No. 4.5 The following table shows Comparative Rates of Man days
Rate Per Man days
Paid to vendor Billed to customer

Category
(Rs.) (Rs.)
Skilled 614.00 608.00
Semiskilled 575.00 569.00
Unskilled 547.00 541.00
Graph No. 4.4 Graph shows Comparative rates of man days
620.00 614.00
608.00
600.00
580.00 575.00
Amount in Rs.
569.00
560.00
547.00
541.00 Paid to vendor
540.00 Billed to customer
520.00
500.00
Skilled Semiskilled Unskilled
Category
Above table and graph shows that rate per man days which is billed to the customer is
quite greater than the rate paid to the vendor, with the reference of rate structure of
vendor and Customer for all categories of the workers.

Table No.4.6 Table Shows Comparative Rates of Overtime

Rate Per Overtime Hours
Category Paid to vendor (Rs.) Billed to customer (RS.)
Skilled 105.00 104.00
Semiskilled 98.00 97.00

Unskilled 94.00 92.00
Graph No.4.5 The Following graph shows the Comparative Rates of Overtime
110.00
105.00
105.00 104.00
Amount in Rs.
Paid to vendor
100.00 98.00
97.00 Billed to customer
95.00 94.00
92.00
90.00
85.00
Skilled Semiskilled Unskilled
Category
Above table and graph shows that rate per Overtime Hours which is billed to the
customer are quite greater than rate paid to the vendor, with the reference of rate
structure of vendor and Customer for all categories of the workers.
Table No. 4.7 Table Showing Variance between approved and paid Overtime hours.
Total Overtime Total Overtime Variance in
Month hours approved by hours paid to Overtime hours
Customer (hrs.) Vendor (hrs.) (hrs.)
Mar-18 3,247.00 3,925.00 678.00
Apr-18 400.50 1,460.00 1,059.50
May-18 477.00 1,245.00 768.00
Total 4,124.50 6,630.00 2,505.50

Graph no.4.6 Graph Showing Variance between approved and paid Overtime hours.
4,500.00
4,000.00 3,925.00
3,500.00 3,247.00 Total OT hrs. ap-

proved by Customer
3,000.00
Amount in Rs.
2,500.00 Total OT hrs. paid to

Vendor
2,000.00
1,460.00
1,500.00 1,245.00
1,000.00
400.50 477.00
500.00
-
Month
Above table and graph shows the number of Overtime hours approved by customers
and number of Overtime hours paid to the vendor. From the month of March to May
there is extra 2506 overtime hours are paid to the vendor by company which is not
approved by customer.
Table No. 4.8.1 Table shows summary manpower service costs.

For the month March-18
Billed to Customer Paid to Vendor

Fixed cost 1216468.85 Man days 998437.69
Variable cost 69761.54 Overtime cost 391483.50
Overtime cost 313894.10 Other Cost 13739.00
Total 1600124.49 Total 1403660.19

Table No.4.8.2 shows summary manpower service costs.

For the month April-18

Fixed cost 1,216,468.85 Man days 851,625.50
Variable cost 44,339.74 Overtime cost 146,444.50
Overtime cost 39,160.71 Other Cost 14,689.00
Total 1,299,969.30 Total 1,012,759.00
Table No. 4.8.3 shows summary manpower service costs.

For the month May-18

Fixed cost 1216468.85 Man days 873146.07
Variable cost 44339.74 Overtime cost 124361.00
Overtime cost 47182.95 Other Cost 16989.00
Total 1307991.54 Total 1014496.07
Above tables shows the cost which is billed to the customer by company and the
company made payment to the vendor for their manpower services. It includes
different costs like fixed cost, variable cost, overtime cost and other costs. Fixed cost
is decided for the service in an agreement. Variable cost includes additional
supervisor salary. Other costs include employee welfare cost.
4.4 Warehousing Service Costs

For analyzing the Warehouse cost Researcher have selected the project namely CHEP
India Private Limited. Chakan Pune. Which is having Monthly business with MLL of
Rs. 1900000/- approximately through the business of Manpower Service &
Warehouse Service.
Customer Name -
CHEP India Private Ltd. Chakan Pune.

Vendor Name
1. Vijay Logistics Pvt. Ltd. - Warehouse Services
2. HardevsLabour Supply – Manpower Services.
3. Sahyadri Security Services – Security Guards Service.
Table No. 4.9 Revenue & Expenses Summary from Mar.18 to May.18 of Warehouse
Services.
Total Income Total Margin in Margin in

Month
(Rs.) Expenses (Rs.) amount (Rs.) Percentage
Mar-18 1661553.86 1563927.74 97626.12 6%

Apr-18 1678593.80 1575815.95 102777.85 6%
May-18 1800906.87 1622913.21 177993.66 10%
Total 5141054.54 4762656.90 126132.55 7%
Graph No. 4.7 Graph Showing Margin in Percentage of Warehousing Cost.
12%
10% 10%
Amount in Rs.
8%
6% 6% 6%
4% Margin in Percentage
2%
0%
Months
Above table and graph shows the monthly income and expenses of the organization.
And also shows the margin in amount as well as percentage. The margin is 6% for the
month of March-18 it will be the constant in the month of April and it is increased as
10% in the month of May-18.

Table No. 4.10.1 Following tables shows the Analysis Warehouse service cost
Mar-18
Sr. Cost paid to
Particulars Cost Billed to Customer
No. Vendor
With 5.5%
Remuneration Charges
1 Fixed + Extra Area Rental 684,374.28 582,406.16
2 Fixed Manpower MLL 85,455.00 118,913.00
3 Fixed Manpower Vendor 393,910.63 383,209.00
4 Fixed Equipment 51,346.85 48,670.00
Add. Manpower & OT
5 298,946.65 283,209.12
Billing
Without 5.5%
6 Consumables 147,520.46 147,520.46
Total 1,661,553.86 1,563,927.74
Table No.4.10.2 Following tables shows the summary Warehouse service cost
Apr-18
Cost Billed to Cost paid to
Sr.no. Particulars
Customer Vendor
With 5.5%

4 Fixed Equipment 51,346.85 51,346.85
Additional Manpower &
5 307,872.69 293,146.60
Overtime Billing
Without 5.5%
6 Consumables 97,439.50 97,439.50
Total 1,678,593.80 1,575,815.95

Table No. 4.10.3 Following tables shows the Analysis Warehouse service cost
May-18
Sr.no Cost paid to
Particulars Cost Billed to Customer
. Vendor
With 5.5%
4 Fixed Equipment 51346.85 51,346.85
Additional Manpower &
5 412,568.20 322,626.30
Overtime Billing
Without 5.5%
6 Consumables 115057.06 115,057.06
Total 1,800,906.87 1,622,913.21
Above Tables shows the cost billed to the customer and cost paid to the vendor for the
warehouse Services. It include fixed and additional area rent, fixed manpower cost
utilized in warehouse, fixed equipment cost, additional manpower and overtime
hours, and consumable expenses. All the cost billed to the customer includes
remuneration charges except consumable expenses.

Chapter 5
Findings & Suggestions
Introduction
With the help of analysis and interpretation of data, researcher has identified findings.
As per those findings, Researcher finds out the conclusion and some important
suggestion given to overcome the problems of company and also search potential
customer of the Company.
Findings
The study finds the following findings during the data analysis and interpretation.
1. With the study of Market Situation, Diesel Rates, Competitors Rates MLL
paying Excess amount to Transporter in case of Transportation Services.
(Table No.4.3)
2. In Manpower Services vendor is charging excess Overtime Hours are more
than customer approved OT hours.(Table No.4.7)
3. In Manpower Services Overtime Hours are increased because of workers
absenteeism.(Table No.4.7)
4. In Manpower Service Customer Billing Rates are not updated for financial
year 18-19, overtime billing done to Customer as per old rates.(Table No.4.5
and 4.6)
5. In Warehousing Service Cost Remuneration Charges are not levied on
Consumables Expenses which MLL billed to Customer.(Table No.4.10)
Suggestions
From the data analysis and interpretation Researcher suggest the following points
1. In Transportation Services, company need to pay charges to Vendor as per
Market Rates, as in current scenario, Vendor is charging excess rates to MLL.
Reduction in Vendor Rates will help to increase profit ratio.
2. In the Manpower Services required proper utilization of manpower by
reducing absenteeism of workers so it will reduce extra Manpower cost.
3. The company should have to pay overtime cost to vendor as per customers
approved Overtime hours only.

4. In Manpower Services the company should have to revise rate structure of the
company which is used for the customer billing.
5. In Warehouse Service the company should have to levy Remuneration
Charges on Consumables bills as Company is charging on other services to
customer.
Conclusion
The third party logistics providers are now becoming more involved in the design,
management, control and reduction of cost of firms' supply chains. On the basis of
analysis it is conclude that the suggestions given by researcher are helpful to control
and reduce the cost of business. With the study of market situations, competitors
Rates Company should have set their service rate it will be reduce in service cost and
company should have revise their rate structure for current financial year it will be
result in revenue growth and increased in profit. Reduction in absenteeism of workers,
Overtime hours it will reduce extra manpower cost and helps to increase profit ratio.

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SHIVAJI UNIVERSITY, KOLHAPUR

1.2 Statement of Research Problem

YSPM’s, Yashoda Technical Campus, SataraPage 1

1.3 Objectives of the Study

1.3 Importance of the Study

1.4 Scope of the study

1.6 Research Methodology

1.7 Limitations of the Study

YSPM’s, Yashoda Technical Campus, SataraPage 3

2.2 Concept of Cost Accountancy

The above definitions reveal the following aspects of cost accounting

YSPM’s, Yashoda Technical Campus, SataraPage 5

5) IT increases the Goodwill of the business.

2.3 Difference between Cost Accountancy, Costing and Cost

Cost accountancy is It involves in its

Periodicity of It begins where cost It begins where

The persons involved The people involved

YSPM’s, Yashoda Technical Campus, SataraPage 6

2.4 Meaning of Cost

2.5 Meaning of Logistics Costs

YSPM’s, Yashoda Technical Campus, SataraPage 7

2.6 Meaning of Cost Control-

YSPM’s, Yashoda Technical Campus, SataraPage 8

2.6.1 Characteristics of cost control

YSPM’s, Yashoda Technical Campus, SataraPage 9

2.6.2 Advantages of Cost Control

YSPM’s, Yashoda Technical Campus, SataraPage 10

2.7 Meaning of Cost Reduction

2.7.1 Characteristics of Cost Reduction

2.7.3 Tools and Techniques of Cost Reduction

2.8 Difference between Cost Control and Cost Reduction.

YSPM’s, Yashoda Technical Campus, SataraPage 12

3.2 Historical Background of the Company

YSPM’s, Yashoda Technical Campus, SataraPage 13

To be India’s leading, most preferred, integrated logistics service provider.

3.5 Core Values

3.6 Service Available

3.7 Financial Performance

 PAT up by 42 %, increases from Rs 46 crore to Rs. 65 crore,

YSPM’s, Yashoda Technical Campus, SataraPage 15

7 2015 SCALE Award by CII Institute of Logistics

3.9 Future Plans

Chief Executive Officer

Head Head Head Chief Chief Head

YSPM’s, Yashoda Technical Campus, SataraPage 16

4.2 Transportation Service Cost

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Graph No. 4.1 Graph Showing margin in Percentage.

YSPM’s, Yashoda Technical Campus, SataraPage 18

YSPM’s, Yashoda Technical Campus, SataraPage 19

1 20 7 3 473 700 0 1,173 1,472 299

2 420 140 3 9,940 700 900 11,540 12,558 1,018

3 100 20 5 1,420 700 200 2,320 2,600 280

4 70 23 3 1,657 700 0 2,357 1,840 (517)

5 70 14 5 994 700 0 1,694 2,600 906

6 20 7 3 473 700 0 1,173 798 (375)

YSPM’s, Yashoda Technical Campus, SataraPage 20

4.3 Manpower Service Cost