Industry Pay Packages A Case Study of Law of Demand

Industry Pay Packages A Case Study of Law of Demand

1. INDUSTRY PAY PACKAGES : A CASE STUDY OF LAW OF DEMAND Group Members:- Dharti Shah (46) Dhrumil Shah (47) Kavisha Shah (48) Param Shah (49) Shairavi Shah (50) Managerial Economics

2. Contents Demand and Law of Demand How Demand Affects Pay Packages Average Pay packages in the market Case Study on Sonaoverseas Corporation Products Manpower Pay Packages Perks and Perquisites Change in Salary of the Employees Why there is a change in the salaries? Bibliography

3. DEMAND & Law OF DEMAND Demand means desire backed by willingness and ability to pay a price for a specific good or service. A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa. 

4. Assumptions of demand While expressing the law of demand, the assumption is that other factors of demand, except the price of a good, are unchanged. If they don't remain constant, the inverse relation may not hold well. This law operates when the price of the good changes and all other non-price factors do not change. The main assumptions are: 1.Number of consumers 2.Taste and preferences 3.Income of consumer 4.Future expectation of price 5.Price of related goods

5. How Demand Affects Pay Packages If there is a higher supply and lower demand then the salaries will be lower. If there is a higher demand than supply then the salaries will go up. Salaries are based around the needs of the product, the more people want it the higher the salaries will be.

6. Case Study on Sonaoverseas Corporation Sonaoverseas corporation is a partnership firm trading in food products and processed food. It was established in 1977. Company aims at providing food products under 6 different brands. The company is manufacturing all its products in 5 different manufacturing units which are ISO and HASSAP certified. All the recipes are proprietary of the company. Exports in branded packing to various countries like Canada, USA, UK, Australia.

7. Products The company deals in various products as below: Pickle paste and chutneys Spices- whole, grounded and compounded Snacks and savories Biscuits and baked products Fruit juices and mango pulp

8. Manpower Sona Overseas Corporation is a trading company and has 8 workers and 2 consultants. Workers comprise of peons, receptionists , skilled labour , publicists, assistant manager, exports manager and food specialist. In these companies, as food is a seasonal process, contract workers are in demand. For example: in mango season, April-may more than 100 contract workers are required. The company hires custom and excise consultants. It also takes the service of logistics and forwarders.

9. Average Pay packages in the Food Industry Top Level M anagement - Rs 40000 – 50000 p.m Middle Level Management – Rs. 20000 – 30000 p.m Bottom Level Management – Rs. 3000 - 15000 p.m

10. Pay Packages Salaries drawn by the managerial skills range between Rs.35000 – 50000 (approx.) Salaries drawn by the administrative and office staff range between Rs. 8000 – 15000 (approx.) Consultants are given remuneration on container basis . There is a increase in the salary depending on the company turnover.

11. Perks and Perquisites Allowances are given to the employees on their needs. Allowances like medical allowance , conveyance allowance and children education allowance. The top level management has the benefit of ECGC policy The employees are given the benefits of LIC insurance.

12. Change in Salaries of the Employees Level of Employee 2009 (in rs .) 2013 (in rs . ) Assistant Manager 19500 33000 Officer Supervisor 7300 15000 Food Specialist 15500 27800 Skilled Labour 3100 11300 Unskilled Labour 1500 8000

13. Why Change in salaries? The prices of raw materials and procurement of raw materials, packing material and cost of forwarding went high. The pay and other charges also shooted up but the company has survived just due to 2 facts: Rise in selling prices Rise in value of US Dollar The company deals in US Dollars only and books the rates. Hence the company has managed to survive so far.

14. BIBLIOGRAPHY Wikipedia.org Investopedia.com Payscale.com Slideshare.com