SUPPLY PRACTICES AND INVENTORY

MANAGEMENT OF DAIRY
DEVELOPMENT CORPORATION (DDC)

Prepared by:- Manoj Kumar Moktan

Supervised by;- Pitri Raj Adhikari
 Purpose of the study

I. To examine the formulation and implementing

procedure of sales plan in DDC
II. To evaluate the variance between budgeted and actual
sales of the DDC
III. To assess the effectiveness of sales plan in DDC
 Significance of the study

I. It helps us to understand how the big organization

formulates its planning and policies to achieve its
objectives
II. It helps in decision making and implementation of
effective and efficient planning and policies on
producing, distributing, and promotional activities
III. It helps to know the performance of the biggest
governmental organization in the present scenario
 Research method

i. Research design (Descriptive )

ii. Population and sample (50)
iii. Sampling technique (Convenience sampling)
iv. Data collection procedure(Questionnaire distribution)
v. Research tools ( Descriptive ,mean, standard deviation,
correlation analysis)
 Limitations of the study
I. This study is concentrated on the area of inventory
management of Dairy Development Corporation
II. The study is considered only Dairy Development
Corporation and is based upon annual available reports of
the DDC i.e. based on secondary source of data as well as
the Primary data
III. This study is concerned with the company and ignored
other managerial functions
IV. The experts’ visit to the field and interaction with
respondents was disallowed due to country lock down.
 Results
Annual requirement and annual purchase of raw material(In millions)
Year Annual Annual Purchase(AP)
Requirement(AR)
2071/72 188.05 112.93

2072/73 199.02 174.55

2073/74 205.11 180.90

2074/75 145.02 136.40

2076/77 208.42 191.63

Mean 189.12 159.28

S.D 25.85 33.24

Relationship between actual sales and closing stock(In millions)
Year Actual Sales Closing Stock

2071/72 465.44 134.40

2072/73 431.94 114.29

2073/74 401.32 151.11

2074/75 354.10 108.42

2076/77 484.99 100.10

Mean 427.56 121.66

S.D 52.05 20.76

Inventory turnover of dairy development corporation

Year Ratio (%) % Change

2071/72 1.53 -

2072/73 1.67 9.15

2073/74 1.45 -13.17

2074/75 1.45 00.00

2076/77 2.49 71.72

Mean 1.72

S.D 0.44
 Findings
I. DDC is not preparing the systematic periodic performance
reports detailed by assigned responsibilities for
accomplishing the planning objectives.
II. In FY 2073/74 and 2076/77, the annual requirement of raw
material is higher that is 205.11 and 208.42 million
respectively. The average annual requirement of Dairy
Development Corporation for five years was 189.12 and the
other annual purchase was 159.28, which is less compare
between requirement and purchase.
III. The actual sales and closing stock of DDC are in a
fluctuating trend. The highest actual sales were 484.99
million observed in FY 2076/77 and lower is 354.10 million
in FY 2074/75.
iv. In FY 2071/72, 2072/73, and 2073/74 the ratio was reported
to be 1.53 1.67, and 1.45 respectively. The ratio was
recorded as the lowest for the year 2073/74 and 2074/75. In
FY 2073/74 and 2074/75, the ratio of both FY is the same
which was 1.45 times. In 2076/77, the ratio is 2.49 times,
which is the highest one for the entire study period. On
average, the inventory turnover ratio was 1.72 times.
 Discussion

I. There is no co-ordination between the various

departments sales forecast; marketing plan, advertising
plan etc are the main component of sales budget
II. Kralijic Matrix has done and ignore the ABC analysis
III. DDC have to manage the inventory management and
supply chain in systematic way so, that every people
can get dairy products in reasonable price
 Conclusion

I. Dairy Development Corporation has maintained a

higher level of inventory as compared to the total cost
of goods sold.
II. The average trend except for WIP, the variables are
decreasing. So it can be said that the company can't get
success for better performance.
III. By the overall analysis, it can be concluded that Dairy
Development Corporation should maintain the
economic order size, which helps to minimize the
inventory cost and to increase the profit of the
company.
 Action implication
I. Corporation should develop the profit planning process
systematically. There should be effective planning of
substantive plan and financial plan to achieve the goals and
objectives of the enterprise. it may be impossible without
long-term and short term planning
II. Only top level managers should not be involved in decision
making, there must be the participation of lower level
personnel too. Decision making process is a group effort or
an integrated process
III. It should also consider the price; supply and policies of
other private diaries DDC should attract the booth centers
and consumers towards its products
IV. The management should select the goals and objectives on
the basis of their needs
Thank You