Project Report on Vijaykant Dairy and Food Products Pvt Ltd

The project is based on the analysis of relationship between the Cost, Volume and Profit associated with the Various Products of Vijaykanth Dairy And Food Products Pvt Ltd, having a very well known Brand 'Adityaa milk'.

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Executive summary
The Indian economy’s most emerging and important sector which also is a mega market in
the 21
st
century is the ‘Dairy industry’. This industry is being generating the employment and
the income to the people around the domestic region of the country. India is also known for
the milk production among the countries of the Asian continent. The growth of the dairy
industry is consistently high and demanding in the present economy. The milk production of
India is more than 15.5% of the world’s milk production, which is more than 100 million tons
every year and is increasing year by year.
With the objective of making the dairying a mean for better future for millions of milk
producers at the root level with the consistency in the same, The NDDB (The National Dairy
Development Board) was formed in the year 1965 and began the operations.
The presently located Vijaykant Dairy & food products Pvt. Ltd (VDFPPL) at Neghinhal
village, Bailhongal Taluq, Belgaum District, Karnataka was established in the month of May
in the year 2005 with an initial capacity of 10,000 later per day to meet the demand of liquid
milk of different urban areas of North Karnataka and improve the Economic Conditions of
rural with milk produces by enhancing milk production providing a real market and
remunerative price. The company presently is well equipped with the technology for efficient
milk reception, processing, quality control and storage. The brand name of the Dairy is
“ADITYAA MILK”, which has become the household name, with the products like Adityaa
Milk, Curd, Ghee, Mysore pak, buttermilk, Lassi and huge verity of ice-creams.
The study is conducted at Vijaykant Dairy and Food products pvt ltd, and highlights on
various aspects of cost, volume and profit analysis. It also shows different scenarios of profit
on increase and decrease of costs.

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INTRODUCTION

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TOPIC CHOSEN FOR THE STUDY
Scenario Analysis of Various Products at Vijaykant Dairy and Food Products Pvt Ltd.

NEED FOR THE STUDY
The study is required to carry out a scenario analysis under different economic
condition that will help the management maintain desired profit level in the company.

MANAGEMENT PROBLEM
An increase in input cost of raw material by 23% is affecting the profitability of the
company apart of this the company is also facing severe competitions from dairies in North
Karnataka and South Maharashtra.

OBJECTIVES OF THE STUDY
1. To estimate change in profit under different scenarios.
2. To estimate the required amount of sales to earn the same level of profit under
different scenarios.
3. To estimate the demand elasticity of milk at Vijaykant Dairy.

SCOPE OF THE STUDY
1. The study will help the management of VDFPL to analyze the profitability of the
company in different scenario and to take appropriate action as desired.
2. It will also help the company to maintain the desired profit by altering the output level
under different scenario.

METHODOLOGY
The methodology adopted for the study is based on secondary data and also some
information collected through primary data by interacting with the Finance manager HR
manager and staff, about the company information.
Research type: Descriptive and quantitative.

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Secondary Data: Company Annual Report
Analysis Tools:The analysis of data is done through graphs and charts with the help
of MS-excel, balance sheets of previous year.

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Industry profile
Milk has been an integral of Indian food for centuries. The per capita availability if milk in
India has grown from 172 grams per person per day in 1972 to 182 grams in 1992 and 203
gram in 1998-99 and was expected to increase to 212 gram in 1999-00, however, it did
increase more than that. It is also seen that large part of the population cannot afford milk. At
this per capita consumption it is below the world average gram and even less than 220 gram
recommended by the Nutrition Advisory Committee of the Indian Council of Medical
Research.
There are regional disparities in production and consumption also. The per capita availability
in the northern region is 278 gram, western region is 174 gram, in southern region is 148
gram and in eastern region it just 93 gram per person per day. The disparity is due to
concentration of milk production in few pockets and high cost of transportation. Also the
output of milk in cereal growing area is much higher than elsewhere which can be attributed
to abundant availability of fodder, crop residues, etc which have a higher food value for
milch animals.
In India about 46 percent of the total milk produced in the country is consumed in liquid form
and 47 percent is converted into traditional products like Ghee, Paneer, Khoya, Curd malai
etc. and only 7 percent of the milk is converted into the production of western products like
milk powders, processed butter and processed cheese. Among the milk products
manufactured by the organized sectors some of the prominent ones are ghee, butter, cheese,
ice creams, milk powders, malted milk food, condensed milk infants foods etc. of these ghee
alone accounts of 85%.
It is estimated that 20% of the total milk produced in the country is consumed in the
producer-household level and the remaining is marketed through various cooperatives,
private dairies and vendors. Also of the total produce more than 50% is produced by
cooperatives and other private dairies.

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While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is
used for manufacturing processed value added dairy products, for private dairies only 45% is
marketed in fluid form and rest is processed into value added products like ghee, makhan etc.
Still, several consumers in urban areas prefer to buy loose milk from vendors due to the
strong perception that loose milk is fresh. Also, the current level of processing and packaging
capacity limits the availability of packaged milk.
The preferred dairy animal in India is buffalo unlike the majority of the world market, which
is dominated by cow milk. As high as 98% of milk is produced in rural area, which caters to
72% of the total population, where as the urban sector with 28% population consumes 56% of
total milk produced. Even in urban India, as high as 83% of the consumed milk comes from
the unorganized traditional sector.
Presently only 12% of the milk market is represented by packaged and branded pasteurized
milk, valued at about rupees 8000 Crores. Quality of the milk sold by unorganized sector
however is inconsistent and so is the price across the season in local areas. Also these
vendors add water and caustic soda, which makes the milk unhygienic.
India’s dairy market is multi-layered. It’s shaped like a pyramid with the base made up of a
vast market of low cost milk. The bulk of the demand for milk is among the poor in urban
areas whose individual requirement is small, may be a glass for use as whitener for tea and
coffee. Nevertheless, it adds up to a sizable volume millions of liters per day. In the major
cities lies and immense growth is potential for the modern sectors. Presently, barely 778 out
of 3700 cities and towns are served by its milk distribution network, dispensing hygienically
fact wholesome, quality pasteurized milk. According to one estimate, the packed milk
segment would double in the next five years, giving both strength and volume to the modern
sector. The narrow tip at the top is a small but a fluent market for western type milk products.
Growing volume
The effective milk market is largely confined to urban areas, inhabited by poor 25% of the
country’s population. An estimated 50% of the total milk produced is consumed here. By the
end of the twentieth century, the urban population is expected to increase by more than 100

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million to touch 364 million in 2000 a growth of about 40%. The expected rise in urban
population would be a boon to Indian dairying. Presently, the organized sector both
cooperative and private and the traditional sector cater to this market.
The consumer access has become easier with the information revolution the number of
households with TV has increased from 23 million in 1989 to 45 million 1995 and
consistently growing about 34% of this households in urban India has access to satellite
television channels.
Population for further growth
Of the three A’s of marketing- availability, acceptability and affordability, Indian dairying is
already endowed with the first to two. People in India love to drink milk. Hence no efforts are
needed to make it acceptable. Its availability is not a limitation either, because of the ample
scope for increasing milk production, given the prevailing low yields from dairy cattle. It
leaves the third vital marketing factor affordability. How to make milk affordable for the
large majority with limited purchasing power? That is essence of the challenge. One practical
way is to pack milk in small quantities of 250ml or less in polythene sachets. Already, the
glass bottles for retailing milk have given way to single-use sachets which are more
economical. Another viable alternative is to sell small quantities of milk powder in mini-
sachets, adequate for two cups of tea or coffee.
Emerging dairy markets
 Food service institutional market: it is growing at double rate of consumer market
 Defense market: an important growing market for quality products at reasonable
prices.
 Ingredients market: a boom is forecast in the market of dairy products used as raw
material in pharmaceutical and allied industries.
 Parlor market: the increasing away-from-home consumption trend opens new vistas
for ready-to-serve dairy products which would ride piggyback on the fast food
revolution sweeping the urban India.

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India, with her sizable dairy industry growing rapidly and on the path of modernization,
would have a place in the sun of prosperity for many decades to come. The one index to
the statement is the fact that the projected total milk output over the next fifteen years
(1995 to 2010) would exceed 1457.6 million tons which is twice the total population of
the past fifteen years!
Market size and growth
Market size for milk (sold in loss/packaged form) is estimated to be 36 million MT
valued at rupees 470 billion. The market is currently growing at around 4% per annum in
volume terms. The milk surplus states in India are Uttar Pradesh, Punjab, Haryana,
Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil-Nadu. The
manufacturing of milk products is concentrated in these milk surplus states. The top six
states, viz. Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil-Nadu and Gujarat
together account for 58% of national production.
Milk production grew by a mere one percent per annum between 1947 and 1970. Since
the early 70’s under operation flood, production growth increased significantly averaging
over five percent per annum.
About 75% of milk is consumed at the household level which is not a part of commercial
dairy industry. Loose milk has a larger market in India as it is perceived to be fresh by
most consumers. In reality however, poses a higher risk of adulteration and
contamination.
The production of milk products, i.e. milk products including infant milk food, malted
food, condensed milk and cheese stood at 3.07 lakh MT in 1999. Production of milk
powder including infant milk food has risen to 2.25 lakh MT in 1999, whereas that of
malted food is at 65000 MT. cheese and condensed milk production stands at 5000 and
11000MT respectively in the same year.

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Major players
The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative
Milk Marketing Federation (GCMMF) is the greatest player. All other local dairy
cooperatives have their local brands(for example Gokul, Warana in Maharashtra, Saras in
Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil-Nadu, Karnataka
Milk Federation (KMF) in Karnataka etc.). Other private players include J K Dairy,
Heritage Foods, Indian Dairy, Dairy Specialties, etc. Amrut industries, once a leading
player in the sector has turned bankrupt and is facing liquidation.
Packaging technology
Milk was initially sold door to door by the local milkman. When the dairy cooperatives
initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over
the years, several developments in packaging media have taken place. In the early 80’s
plastic pouches replaced the bottles. Plastic pouches made transportation and storage very
convenient, besides reducing costs. Milk packed in plastic pouches or bottles have a shelf
life of just one to two days, that to only if refrigerated. In 1996, tetra packs were
introduced in India. Tetra packs are aseptic laminate packs made up of aluminum, papers,
board and plastic. Milk stored in tetra packs and treated under Ultra High Temperature
(UHT) technique can be stored for four months without refrigeration. Most of the diary
cooperatives in Andhra Pradesh, Tamil-Nadu, Punjab and Rajasthan sell milk in tetra
packs. However tetra milk is costlier by rupees 5 to 7 compared to plastic pouches. In
1999 to 2000 nestle launched its UHT milk. Amul too re-launched its amul taaza brand of
UHT milk. The UHT milk market is expected to grow a rate of more than 10 to 12
percent in coming years.
Export potential
India has the potential to become one of the leading players in milk and milk product
exports. Location advantage: India is located amidst major milk deficit countries in Asia
and Africa. Major importers of milk and milk products are Bangladesh, China, Hong

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Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf
countries, all located close to India.
Low Cost of Production: Milk production is scale insensitive and labour intensive. Due to
low labour cost, cost of production of milk is significantly lower in India.
Concerns in export competitiveness are
Quality: Significant investment has to be made in milk procurement, equipments, chilling and
refrigeration facilities. Also, training has to be imparted to improve the quality to bring it up
to international standards.
Productivity: To have an exportable surplus in the long-term and also to maintain cost
competitiveness, it is imperative to improve productivity of Indian cattle.
There is a vast market for the export of traditional milk products such as ghee, paneer,
shrikhand, rasgolas and other ethnic sweets to the large number of Indians scattered all over
the world.
India’s export of milk products
Source: Dairy report Hindustan times

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What does the Indian Dairy Industry has to Offer to Foreign Investors?
India is a land of opportunity for investors looking for new and expanding markets. Dairy
food processing holds immense potential for high returns. Growth prospects in the dairy food
sector are termed healthy, according to various studies on the subject.
The basic infrastructural elements for a successful enterprise are in place.
 Key elements of free market system
 Raw material (milk) availability
 An established infrastructure of technology
 Supporting manpower
An entrepreneur's participation is likely to provide attractive returns on the investment in a
fast growing market such as India, along with an export potential in the Middle East,
Singapore, Malaysia, Indonesia, Korea, Thailand, Hong Kong and other countries in the
region.

India's Milk Product Mix
Fluid Milk 46.0%
Ghee 27.5%
Butter 6.5%
Curd 7.0%
Khoa (Partially Dehydrated Condensed
Milk)
6.5%
Milk Powders, including IMF 3.5%
Paneer & Chhana (Cottage Cheese) 2.0%
Others, including Cream, Ice Cream 1.0%
Source: NDDB(National Dairy Development Board) report, 2011

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Total contribution to the economy or sales
The Indian Dairy Industry engages in the production and processing of milk & cream. This
industry is involved in the manufacture of various dairy products like cheese, curd, yoghurt
etc. The Indian Dairy Industry specializes in the procurement, production, processing, storage
and distribution of dairy products. India as nation stands first in its share of dairy production
in the international scenario. The industry contributes about Rs 1, 15,970 to the national
economy.
Employment opportunities
The Indian Diary industry which is in the developing stage provides gainful employment to a
vast majority of the rural households. It employs about 8.47 million people on yearly basis
out of which 71% are women.
Jobs in Indian dairy industry are mainly in the fields of production and processing of dairy
products. An individual with minimum of 60% marks who has bachelor's degree course in the
dairy technology can easily be availing an opportunity to work in this industry. For the
graduation course in Dairy technology one has to qualify the All India Entrance Test that is
affiliated to the Indian Council of Agricultural Research. After that the person can continue
with his masters in dairy technology. Jobs would be for the following positions.
 Dairy Scientists: The main job of the dairy scientists is to deal with collection of milk
and taking care of the high yielding variety of animals.
 Dairy Technologists: the work of Dairy technology requires procurement officers
who take the responsibility of collecting milk from farmers, milk booths and cattle-
rear. This particular procurement officer should well understand the latest technology
that is applicable in maintaining the quality of milk of the process of transporting it to
the desired location.
 Dairy Engineers: dairy engineers are usually appointed is to set up and maintain
dairy plants.
 Marketing Personnel: These individuals deal with the sale and marketing of milk
together with milk products.

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Latest developments
 Indian Dairy Industry is the largest milk producer all over the world, around 100
million MTIndian Dairy Industries value of output amounted to Rs. 1179 billion in
2004-05 which approximately equals combined output of paddy and wheat. With
1/5th of the world'sbovine population
 In India the Milch animals constitutes45% indigenous cattle, 55 % buffaloes, and 10%
cross bred cows
Intensive Dairy Development Programmed (IDDP): The Schemes, modified under these
programs are on the basis of the recommendation of the evaluation studies which were
launched during Eighth Plan period and are being continued throughout the Eleventh Plan
with an outlay of Rs. 32.49 core for 2009-10.
Strengthening Infrastructure for Quality and Clean Milk Production (CMP): this is a
centrally sponsored scheme which was launched in October 2003, which had the main
objective of improving the quality of raw milk produced at the every village level in the
India.
Dairy Venture Capital Fund- this is introduced in the Tenth Five Year Plan to bring about
structural changes in unorganized sector, which would measure like milk processing at
village level, marketing of pasteurized milk in a cost effective manner, quality or the up
gradation of traditional technology to handle commercial scale using modern equipments and
management skills.

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Tracking the progress

Source: NDDB (National Dairy Development Board) Report.
Looking atthe current situation, the dairy industry in India seems to be moving on track
andachievinggrowth in line with the projections. Since the last vision document was prepared
in2011, the followingseries of events have occurred as a result of a promising environment
due to good monsoons, risingincomes and uninterrupted flow of investments. With the data
projected it can be said from the past projection as well the variation in the projection and the
actual values that are to be obtained in future will be very less. And if it so, the dairy industry
will be one among the leading industry in food production industry in years to come.

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Source: National Dairy Development Board report
The above statistics which shows the price predicated and the actual price of milk in Delhi
from year 2008 to 2030 and till now respectively, shows that there is consistent growth in the
milk and milk product’s prices and this act as the main source for the investment to generate
the income from it.
Thus, from the above data the things which can be considered is the demand associated with
the milk and its products which is uncontrollable with the production and supply, as the
demand for these things in increasing in a higher rate comparatively.
Key Areas of Concern in the Dairy Industry
(i) Competitiveness cost of production, productivity of animals etc.
The demand for quality dairy products is rising and production is also increasing in many
developing countries. The countries which are expected to benefit most from any increase in
world demand for dairy products are those which have low cost of production. Therefore, in
order to increase the competitiveness of Indian dairy industry, efforts should be made to
0
20
40
60
80
100
120
Prices
Years
Milk prices
prediction price
Actual price

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reduce cost of production. Increasing productivity of animals, better health care and breeding
facilities and management of dairy animals can reduce the cost of milk production. The
Government and dairy industry can play a vital role in this direction.
(ii) Production, processing and marketing infrastructure
If India has to emerge as an exporting country, it is imperative that we should develop proper
production, processing and marketing infrastructure, which is capable of meeting
international quality requirements. A comprehensive strategy for producing quality and safe
dairy products should be formulated with suitable legal backup.
(iii) Focus on buffalo milk based specialty
Dairy industry in India is also unique with regard to availability of large proportion of buffalo
milk. Thus, India can focus on buffalo milk based specialty products, like Mozzarella cheese,
tailored to meet the needs of the target consumers.
(iv) Import of value-added products and export of lower value products
With the trade liberalization, despite the attempts of Indian companies to develop their
product range, it could well be that in the future, more value-added products will be imported
and lower value products will be exported. The industry has to prepare themselves to meet
the challenges.

Milk production is, of course, only half of the story. The other half is the sale of milk and
milk products that provides the highest returns to our dairy farmers. Here too, S&T have
played an important role in development of products, processes, packaging, handling,
transport and storage. Among the major breakthroughs have been:
1. Automation of khoa production, moving this process from the backyard to the modern
dairy.
2. Design of the process technology and equipment for manufacture of peda, gulab
jamun, cchhanapodo, long-life panneer and other Indian milk products.
3. Development of continuous lines, including packaging, for fermented milk products
like longlife lassi, shrikhand, dahi (yogurt) and misti doi.
4. process technologies for production of Cheddar, Mozzarella and Emmental cheese as
well as a variety of cheese spreads using both cow and buffalo milk.
5. Preservation of starter cultures for fermented milk products.

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6. Process of manufacture of dry mixes for gulab jamun and frozen desserts.
7. User-friendly milk testing kits.

As satisfying as the achievements have been, the real challenges lie ahead. Among the most
important are:
1. Ensuring steady growth in productivity while ensuring that dairying remains
concentrated in our landless, marginal and small farmer communities.
2. Using advanced breeding technologies to accelerate the development of our high
potential Indian cattle and buffalo breeds.
3. Developing quality control methods that are sensitive to the fact that our milk comes
from large numbers of small producers.
4. Ensuring increasing reduction in losses from endemic and epidemic diseases at costs
our farmers can afford.
5. Expanding the variety, improving the quality and maintaining the relative price of
India’s dairy products so that they can meet competition from around the world.
6. Ensuring that the growth of the dairy industry contributes to enrichment of our
environment while continuing to benefit low-income producers without
compromising our nation’s need for milk.
These and other challenges face the current and next generation of scientists and
technologists. Their predecessors have built a solid foundation. The strength of that
foundation is due in large part to the fact that India’s dairy farmers have set the research
agenda. Beginning with Amul during the1940s, it was their need that inspired the work of our
dairy scientists and technologists. It is theevolving needs of India’s several million dairy
farmers that will inspire those who follow.


India being the world’s largest producer of dairy products by volume, accounting for holds
about 13% of world’s total milk production and also accounts the world’s largest dairy herd
India being a country that consumes its own milk production. India is neither considered an
active importer or an exporter of dairy products. However, bringing in the rules of Operation
Flood Programme, the situation changed significantly and imports have reduced to very small

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quantities. The year 2001, has brought India to be a key player in net exporting of dairy
products and after the year 2003 India’s import of dairy products has dipped while exports
have increased at a fast rate. Yet the country provides a share in global market still remains at
small rates of 0.3 and 0.4 percent for exports and imports respectively. This is because of
people who directly consumption of liquid milk by the producer households. This also
increases the demand for processed dairy products that has increased with the growth of
income levels, which have left little dairy surpluses for export. Although, India with more
consumers we exports special products like casein for food processing or pharmaceuticals.
The Indian dairy sector is also different from other dairy producing countries as India places
its importance on both cattle and buffalo milk.

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COMPANY PROFILE
Vijyakant dairy and food products commenced their business in 2006 at Neginhal,
Bailhongaltaluk with an authorized capital of 15 Crore. The company had a initial capacity of
5000 litres per day. The present capacity of the company is 1 lakh litres per day from across
1500 villages. The company is headed by Managing Director ShivkantSidnal. The following
is the details of company profile.
Company profile
Name of the Company Vijaykant Dairy and Food Products Limited
Year of Establishment 22
nd
May 2005
Date of Commencement of Business 21/07/2006
Address Neginhal Village, BailhongalTaluk,
Belagavi District-591102
Registration Date 16/09/2004
Registration No. 034702
CIN U51201KA2004PLC034702
Authorised Share Capital(in Rs.) 15,00,00,000
Paid up Share Capital(in Rs.) 8,01,00,000
Registered office 7309, ‘SushilaSadan’, Anjaneya Nagar Belagavi-
590016
Nature of the Industry Vijaykant Dairy And food products ltd is Milk
Industry Manufacturing Ice-cream, Curd, Ghee,
Mysore Pak, Buttermilk, Lassi, Shrikhand, Paneer
and other Milk Products
Initial Capacity 5,000 litres per day
Brand Name “Adityaa Milk”
Area 12 acres
Business Market Karnataka, Maharashtra, Kerala, Goa, Tamilnadu

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Email ID [email protected]

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the
company shall be stated
Business activities of the company
SL
NO
Name & Description of main
products/services
“NIC Code of the
Product/service
“% total turnover
of the company”
1

2



3
Manufacture of Milk

Manufacture of Cream, Better, Curd,
Ghee, Khava, Mysore Pak, Butter
Milk, Paneer, Lassi and Shrikhand
etc.
Manufacturing of Ice Cream
10501

10504



10505
55.65%

12.24%



29.89%


PARTICULAR OF HOLDINGS, SUBSIDIARY AND ASSOCIATE
COMPANIES
NAME & ADDRESS OF
THE COMPANY
CIN/GLN “HOLDING
SUBSIDIARY/A
SSOCIATE
%OF
SHARE
S HELD
APPLICAB
LE
SECTION
ADITYAA MILK ICE
CREAM LTD
U1513KA
2012PLC0
64467
SUBSIDIARY 99% Sec.2(87)(ii)

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BOARD OF DIRECTORES
The company is headed by the Managing director (MD) and following that the one
executive director, 3 non-executive director, 2 independent director and 1 company secretary
and internal auditor. The following are the list of directors give below.
Board of directors
Mr.ShivkantSidnal Managing Director(MD)
Mrs.DeepaShivkantSidnal Executive Director
Mr. Rahul AjitUppin Non-Executive Director
Mr.Mahantesh S. Gadavi Non-Executive Director
Mr.ShashikantRamuKulgude Non-Executive Director
Mr. SoniRajanJamnadas Independent Director
Mr. Bharat BabulalPurohit Independent Director
Mr. Ravi GajananHegde Company Secretary and Internal Auditor




BACKGROUND OF VDFPL
Vijakant Dairy was established on August 2006 with capacity of 5,000 litters per day.
To meet the demand of Milk of from urban and rural areas of North Karnataka and to
improve the economic condition of rural area with milk produces by enhancing milk
production. In Vijaykant Dairy, packaging of liquid milk was started from 25
th
August 2006,
while bulk milk production was started 27
th
July 2006. Presently the Vijaykant dairy procures
1 lakh litersof milk per day from across 1500 villages, with most superior and automatic
system to acknowledge the receipt of milk through ‘SMS’ system, thus becoming a source of
revenue for 40,000 farmers and generates more than thousands of jobs to rural youth,
benefiting many rural people directly and indirectly.

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Vijaykant Dairy and food products ltd has evolved as the largest and fastest growing
company with trademark/ Brand name “Adityaa Milk”. Vijaykant dairy food and products ltd
has established a fully integrated state of the art processing plant with utmost hygiene and
advanced machineries imported from Sweden and Italy and also equipped with high quality
laboratories and storage. The company has built an excellent marketing network, backed by
professional workforce and has spread its wings of marketing and sales across Karnataka,
Maharashtra, Goa, Kerala and Tamilnadu and also Gujarat and has plans to tap and penetrate
unexplored potential market.

VISION, MISSION AND OBJECTIVES
The VDFPL designs the vision and mission to meet the demand of Milk to urban and
rural areas of North Karnataka and to improve the economic condition of rural area with milk
by enhancing milk production. Those vision, mission and objectives are given below.

VISION
1. To make anenormous place to work where people are inspired to be the best
2. To bring out the wide range of quality products, that satisfies people’s desires and
needs.
3. To create a Strong bonding between company supply system and consumer to
create enduring value.
4. To achieve profitable growth through selling innovation, quality products to the
masses of India
5. To become number one in Karnataka in milk processing.
MISSION
1. To give fresh health oriented product with nutrients for a healthier life and well
creature of our consumers.
2. To uplift the livelihood of farmers by helping them to buy cattle and educating
about good cattle nourishment and cattle care in order to get excellent Milk
quality.
3. To Inspire moments of Joy and wellness of the Employees and costumer.

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OBJECTIVES
1. The aim of the company is to improve the livelihood of milk producers and create
employment to the rural youth and give good health to the society.
2. To provide quality and health oriented products to consumers.
3. To facilitate rural development by providing opportunities for self-employment at
rural level, preventing migration to urban areas, introducing cash economy and
opportunity for stable income.
4. To build economic strength of the milk products in the villages
5. Providing assured and remunerative for milk producer in the market by the farmer
members.

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PRODUCTS/SERVICE PRO FILE
TheVijaykant dairy and food products ltd has growing company; it manufactures the
various products to meet the requirement of customer needs. The products of the VDFPL
Company as listed below.
1. Packaged Milk
2. Ice-Cream
3. Mysore Pak
4. Shrikhand
5. Sweet Lassi
6. Pure Cow Ghee
7. Fresh Butter Milk
8. Fresh Curd
9. Paneer

 Milk


Adityaa Milk is homogenized, pasteurized, pure and fresh. It comes in different
packages to meet to the requirements of our consumers. They maintain ideal quality standards
consistency. Vijaykant dairy is presently supplying three different types of milk. The
following is the fat and SNF of three types:

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Sr. no TYPE OF MILK FAT SNF
1 TONED MILK 3.0% 8.5%
2 STANDARD MILK 4.5% 8.5%
3 HIGH FAT MILK 6.0% 9.0%

 Ice cream

Our Adityaa milk ice cream is made from pure and rich milk, which comes in
wide varieties, and in different packages, to fulfill the requirements of the consumers.
Our natural flavors like Mango, Orange, Apple, Pineapple, Chico, Strawberry,
Raspberry, Banana, Papaya, Coffee, Butter scotch, Chocolate, Toothy Fruity, Black
currant, An jeer , Tender coconut, Water melon, Chocó chips, Vanilla , Pista , are
made from pure pulp extracted from the fruits. There are exotic flavors like Dry fruits
sundae, fresh fruit ice cream, Chocó fudge and Adityaa Milk special irresistible. All
our regular varieties come in small, medium and large family packs.

 Mysore Pak

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Our Mysore Pak is made 100% pure ghee. Our Mysore Pak is the most delicious
product, one has ever experienced. Our Adityaa Milk Mysore Pak comes in 250 Gms
Boxes or Rs. 35/-, ½ KG Boxes for Rs. 70/- , 1 KG Boxes for Rs. 140/-.
 Shrikand

Shrikand is the dairy product basically originated from the state of Maharashtra. The
sour and sweet combination of the product gives the actual taste of the shrikand. The Adityaa
milk has come up with such a combination of this taste, which is mind blowing the outskirt of
Maharashtra, as well as the parts of Maharashtra.
Initially there was only a single and plain flavor but now the company has variety of
flavor of shrikand which are mango, ilachi, etc.

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 Lassi

Adityaa Lassi is made from rich fresh natural milk, the taste thickness and quality of
the Lassi gives ecstatic experience to Lassi lovers. Adityaa Lassi is homogenized and
pasteurized. Thus which turns theLassito highly delicious and healthy?

 Ghee

High quality ghee is prepared at Vijaykant dairy. Ghee preparation at dairy is done by
direct as cream method and by factory method. Ghee is prepared on contact basis. Ghee
manufacturing is done outside the main processing plant in the field. For making Ghee
boiler is present in the processing room at first floor which is according to the need. As the
ghee is prepared on contact all the equipments are of very old used by the contact. Heating if

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the butter or cream is done in large vats and fuel used for heating is coal and wood. The ghee
boiler in the plant has capacity of 1000 liters and it is manufactured by unicorn.

 Buttermilk

Adityaa buttermilk is very well prepared using milk and natural spices. Which make
the buttermilk so special and different others? Adityaa buttermilk is thoroughly pasteurized
and is totally bacteria free.

 Curd

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There are two types of curd prepared at Vijaykant dairy i.e. plain Dahi and Pot curd.
Almost the manufacturing of both are same but there is little difference in fat and SNF
percentage.
Plain Dahi is packed in low density polyethylene packs with contents of 200ml
incomparable taste. The ageing of the curd is done properly and it is released on attaining
adequate maturity. Hence the thickness of crud remains intact till used.
 Paneer

Paneer is the curd cheese which is made by curdling heated milk with lemon juice and
vinegar or any other food acids. It is the special dairy product throughout India. It is the
product which is used in many dishes which are served in India in almost every corner. It is
the most likes dairy product and has a good market demand, thus can lead to very helpful in
sales generation. Adityaa milk’s Paneer is good in tasty, healthy and fresh.

NATURE OF BUSINESS
Vijaykant Dairy is manufacture concern. Basically dairy concentrated on procurement
of milk but now milk products like milk, curd, butter milk, ghee, and ice-cream are the
various products manufactured in Vijaykant Dairy. Milk is perishable in nature and
consumed daily, the production process take place throughout the year.

AREA OF OPERATION
Presently it is operating regionally. Vijaykant dairy products are available to local
consumers like Belagavi, Bagalkot, Dharwad, Hubli, and Haveri districts. The Managing
Director of Vijaykant dairy is thinking to expand his dairy products throughout Karnataka
and other states in future,

INFRASTRUCTURE FACIL ITIES

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Vijaykant dairy is situated at Neginhal village which is 35km away from Belagavi and
14 km from Bailhongal. The manufacturing unit is set up in 12 acres of land where there is a
main plant in which Milk, Butter milk and Curd are produced and also a product plant is there
in which Ice-cream, Ghee, Peda and Mysore pak, no quarters are there in dairy, temporary
arrangement are done in the nearby villages and even in Belagavi city. A vehicle is arranged
to carry the staff from Belagavi to VDFPPL and in return dairy.

COMPETITORS’INFORMAT ION
The Vijaykant dairy was incorporated in 2006. In the period of 10 years the Adityaa
milk captures the overall market share of North Karnataka and growing rapidly in the market.
Although the Adityaa milk has facing strong competitors in the market, the competitors of
Adityaa milk are given below

1. Arokya Dairy
2. Mayur Dairy
3. Sahyadri Milk Dairy
4. Mahalaxmi Dairy
5. Nandini Milk Dairy
1. Arokya Dairy
Hatsun, India’s largest private dairy. From a modest ice cream manufacturer to one of
the leading in India’s dairy sector in just a span of three decades, Hatsun now stands
majestically as a hallmark of successful entrepreneurship the main products of this dairy are
Milk: Arokya, Hatsun Santosa full Cream Milk, Hatsun Komatha Toned Milk.
Ice-cream: Arun Ice Cream, Make your own Sundae, Arun Unlimited Hastun , Hatsun
Paneer Beverages: Aaros Milk/ Badam milk, Aaros Teal Masala Tea, Aaros coffee, Aaros
Ragi.
2. Mayur milk

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Mayur Milk Products Private Limited was registered at Registrar of Companies Gwalior on
28 June, 1999 and is categorized as Company Limited by Shares and an Indian Non-
Government Company. As this company is the old and huge market acquired, thus the old
players in the market affect the new players to perform, to avoid the sharing of sales with
them. Thus, VDFPL faces this company as huge competitor to acquire market of other states
like Madhya Pradesh.
3. Sahyadri Milk Dairy
Sahyadri milk and agro Products India Private Limited situated in karad, Maharashtra.
Has been in the market since a decade and has captured the wide market covering the major
portion of Maharashtra and neighboring states like Maharashtra and outskirt of Andhra
Pradesh.
These acts as the competitor as the VDFPL is the company which is spreading its name
across Maharashtra in huge speed thus being the already existing company in Maharashtra
the sahyadri milk dairy would act as a huge competition for VDFPL
4. Mahalaxmi dairy:
The Mahalaxmi dairy plant is located near Kolhapur, Maharashtra state which procure
round about 15,000 to 20,000 LTPD & its target market area in Belgaum district, Gokak & in
Maharashtra state .Besides above main brands to other competitive brands like, Krishna,
Gopal, Adityaaa etc.

5. KMF’s Nandini
It is one of the tough competitors of Adityaa milk, it is establish in the year 1985. It is
situated in Belgaum. The dairy sales of this dairy is 60000 liters/ day. The products of this
dairy are Milk, Ice-cream, Curd, Peda, Gulab Jammoon, Ghee, Butter Milk, the market has
covered whole Karnataka.

SWOT ANALYSIS

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SWOT analysis is tool for auditing an organization and its environment. It is the 1
st

stage of planning and helps marketer to focus on the key issues.SWOT stands for strength,
weakness, opportunities, and threats. Strength and weakness are internal factors and
opportunities and threats are the external factors.
STRENGTH
1. Vijaykant Dairy and Food Products Ltd, is located in rural area. It can collect
large amount of milk in surrounding area easily, and water is easily available
throughout the year, as it is situated near Malaprabha River.
2. Best quality products are produced in VDFPL by sophisticated imported
machineries.
3. Milk is necessary in day to day life and consumed daily, so there is demand for
the product throughout the year.
4. Production of ice-cream, Butter milk and Ghee are produced according to the
requirement of the market and avoids Production surplus.
5. The providing financial assistance to the farmers to buy the Cattles, which is just
like helping nature too produce more and more Milk.
6. The Qualified, Chief Promoter with an excellent socio political contacts.
7. The Unit is capable of proceeding all grade of milk (Standard/Toned/Full cream)
to suit the needs of all classes, all types of Customers.

WEAKNESSES
1. All the products are highly perishable in nature so can’t keep in stock for more
days.
2. As butter milk, Lassi and ice cream have seasonal and hence the revenue changes
according to the season
3. Poor retail selling and Low level of consumer awareness
4. Frequent power cut is major problem of the company.
5. Highly perishable products, there is chance of damage of milk.

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OPPORTUNITIES
1. Production of other milk products like Milkshakes, Peda, Khzova, Flavoured milk
etc.
2. The company is planning to enter all the Corporate, Hospitality, catering sectors to
push their products and make it available.
3. The company helps to create direct or indirect employment opportunities in rural
areas.
4. Lot of scope to expand, diversify and Building Bigger Organization.
THREATS
1. Milk and Milk products are perishable so risk is more.
2. Competition
3.
4. Non availability of required quantity of milk in close vicinity in case of Droughts
and Famines
5. Milk suppliers, the un-organized sector: Currently milk vendors are occupying the
pride of place in the industry.
6. Low level of consumer awareness
STATERGY
 To serves an instrument of the national to achieve self reliance in the design,
development and quality production of VDFPPL to meet the customers changing and
growing needs with special emphasis on military requirements.
 In fulfillment of these objectives, the company shall regard itself fundamentally
responsible design and development, relying however on such relevant facilities as are
available in other national institutions but always holding itself basically responsible
for the growth.
 To conduct its business economically and efficiently that it contribute its due share to
the national effort to achieve self reliance and self generating economy.
 Towards this end to develop, maintain an organization which will rapidly respond and
adopt the changing matrix as socio-economic relationship and where in climate as
growing technical competence self discipline, natural understanding, dup commitment

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and sense of belongingness will be fostered and each employee will be encouraged to
grow with accordance to his potential for the further organizational goals.
 Consistent with the basic objectives of the state the personal department of the
corporate office has adopted certain specific objectives which will act as a source as
inspiration and guidance in evolving per sonnet policies and roaming rules and
regulations for growth and employment or employees and to ensure their deep
commitment and sense of belongingness to the company, and the objectives are stated
below;
a) Issue equality at all the levels and provide them the right work, environment, job
satisfaction and professional challenges.
b) Provide healthy blend or employee who have grown with original those selected from
outside.

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Work Flow Model (End to End):
Flow diagram of processing of milk



























Collection of milk from villages
Reception of milk at factory
Analysis of milk
Chilling
Storage
Pasteurization
Standardization and homogenization
Storage
Packing
Storage in Cold room
Dispatch to market
Separation of cream storage
&Handling
Butter Manufacturing
Ghee Manufacturing

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The production procedure at Vijaykanth Dairy is done under different stages.
Collection of milk
In this stage that is the very first stage the milk is bought from the various places to the main
dairy. In 40 liters capacity cansin tempos and other vehicles. The can are of two types marked
with two different colors to differentiate between the cow and buffalo milk. The milk is
bought to the main dairy it under goes into following step.
Unloading
The cans are unloaded at the place which is called as dock station. The cans are
unloaded manually and the milk runs from the slider to the further but before the
milk runs further the followingsteps takes place.
Organ Elliptic test
This test is carried out by a person manually without using any machines but using
sense organs like nose and hence it is called as organoletic test. These tests
conducted before the cans are weighed. In this test various sub-tests are conducted
like.
Smelling and color test
A man at dock station of platform checks the acidic nature of milk by smelling or
tasting the raw milk. If the tested milk has bad odder then the dairy will pay lower
rate to such society members than the normal rate.
Extraneous- Matter appearances
In this test the raw milk is undergone into the test, which is conducted by the
chemist. The chemist checks for two aspects mainly whether the milk is
contaminated or not and the milk is in liquid form or curd form. He also checks
weather any extraneous matters like dust, flies etc which lead to spoilage of milk.

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Acidic test
The payment of the suppliers or DSC depends mainly on FAT and SNF content in
the raw milk. The supplier may add sugar to the milk so as to increase the FAT and
SNF content.Hence to avoid this adulteration sugar test is done. Its procedure is
10ml of milk is shaken in a test tube and 1ml of hydrochloric acid few crystals of
resorcinol is mixed to it. The solution is shaken well and heated for 5min. If solution
fears organ color it is demanded that sugar is mixed to it.
Storage of chilled milk
Once all the tests are over the milk is allowed to store in the SILOS (Storage tank). So as to
maintain its cold level of a 4'C.The unions having 5 Storage tanks, 1 tank's are vertical with
20000Liters capacity each and the Remaining horizontal among liters each, and other two of
10,000 liters each. After chilling the milk is passed to Pasteurizer for pasteurization.
Pasteurization
This step of production includes heating every particle of milk a 72'C Is 15 seconds and it
cold to in less than 4’C.? When it is passing through pasteurization the cream is removed
depending on the quality of the milk required.
Packaging
Once the Pasteurization classed is conducted the next step is to pack the milk. The packing is
done by the machine of fluid goods and were as it is done manually in case of solid goods
like Mysorepak .The machine packs the raw milk in two sizes. That is 500ml and 1000ml
pouches. These machines are automatic with a capacity of packing 70 to 72 pouches per min.
the machines are used to pack all different types of milk in plastic bags. These plastics are
polythene bags required for packing is bought from other company.
Storage
The past but not the process is the whole of the production process is Storage. The milk
packed in 500ml and 1000ml pouches are arranged in the crates. Each cater contain 121trs of
milk. This caters are stored in cold room which has Temperature of about 5'c or below.

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FLOW CHART OF ICE-CREAM




















SELECTION OF INGREDIENT
MIXING ICE-CREAM MIX
(SMP, SUGAR, GLYCEROL, SODIUM ALGINATE, LIQUID GLUCOSE, CREAM )
FORE WORMING (70C)
PASTEURIZING THE MIX (FOR 30 MINS)
HOMOGENIZING THE MIX (1
ST
STAGE 2500 SPINS)
(2ND STAGE 500 SPINS) COOLING AND AGEING OF MIX (0-4 C)
FREEZING THE MIX(-4 TO -5 C)
PACKING OF ICE-CREAM

HARDENING & STORAGE OF ICE CREAM (-23 TO -29 C)

WATER FROZEN 90%

ICE-CREAM

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Manufacturing details:
 Selection of ingredients : In Vijaykant Dairy & Food Products Pvt. Ltd the selection
of Ice-cream ingredients depends on –
1) Availability of milk products.
2) Perish ability of the products.
3) Convenience in handling.
4) Effects on flavors body and tenure of ice cream.
5) Cost & equipment availability.

 Figuring the mix: Knowledge of calculation of ice cream a mix is helpful in properly
balancing a mix, in establishing and maintaining uniform quality.
 Making the mix: Mixing of ingredients in a vat where they can be heated to facilitate
dissolving, blending and pasteurizing.
 Pasteurizing the mix: This process destroys all pathogenic disease producing
bacteria, thereby safeguarding the health of the consumer.
 Homogenizing the mix: The main function of homogenization is to make a
permanent and uniform suspension of the fat by reducing the size of fat globules.
 Cooling and ageing of mix: Cooling the mix immediately after homogenization to 0-
5c after which it should be held in ageing tanks until used.
 Freezing the mix: It depends upon the quality and yield of the finished product.
 Overrun in ice-cream: It is volume of ice cream obtained in case of volume of the
mix. This increases upon the air incorporated during the freezing process.
 Packing of ice-cream: The chief requirements of packaging of ice creams are
Protections against contamination, an attractive appearance ease of opening of
Recharge ease of disposal.

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 Hardening and storage of ice-cream: The freezing process is therefore co-united
without agitation during hardening until the temperature of the ice cream reaches -18c
or below. After that ice cream should store at below -23 to 18c.

STRUCTURE

















PRODUCTION
MANAGER
MARKETING
MANAGER
ADMINISTRAT
IVE
PROCUREMEN
T
LABORATERY
CHEMIST
FINANCE
ASSISTANT
PROCUREME
NT
ASSISTANT
CHEMIST
PLANT
OPERATOR
SALES
EXECUTIVE
SUPERVISOR
ACCOUNTAN
T MANAGER
CASHIER HELPERS
DAIRY
MANAGER
MANAGING
DIRECTOR
M.I.S

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ADMINISTRATION DEPARTMENT

Administration Manager

Assistant Administration Manager

Superset

Administration assistant Grade – 1

Administration assistant Grade – 2

Clerk/Computer operator

FINANCE DEPARTMENT

Finance Manager

Deputy Manager Finance

Assistant Manager

Account Assistant Grade -1

Account Assistant Grade -2

Account Assistant Grade-3

Helpers

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PURCHASE DEPARTMENT

Manager Purchases Department

Asst. Mgr. Purchase Department

Purchase Assistant Grade-1

Purchase Assistant Grade-2

Purchase Assistant Grade-3


PROCUREMENT AND INPUT DEPARTMENT

Procurement and Input

Deputy Manager Procurement Deputy Manager Veterinary Deputy Manager F & F

Assistant Manager Veterinary officer Clerk/ Computer Operator

Extension Officer Grade -1

Extension Officer Grade -2

Extension Officer Grade -3

Computer Operator

At tender

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PRODUCTION DEPARTMENT
Dairy Manager

Deputy Manager Production

Assistant Manager

Technical Officer

Dairy Supervisor

Operators

Helpers

MARKETING DEPARTMENT
Marketing Manager

Deputy Marketing Manager

Assistant Manager

Technical & extension Officer

Marketing Assistant Grade-1

Marketing Assistant Grade-2

Marketing Assistant Grade-3

Clerks

Helpers

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MIS DEPARTMENT

MIS refers to Management Information System
The structure of MIS department

MIS Officer

MIS Assistance



QUALITY CONTROL DEPARTMENT
Technical Officer QC


Operators


Helpers

In this department totally there are 10 workers

STORE DEPARTMENT
Structure of store Department

Store Officer


Store Assistant


Helpers

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SECURITY DEPARTMENT
The department includes security officer & security guards. The guards are working on contract basis.
They must have watch on each & every person who is going inside & coming out of the dairy. They
must also keep watch on the vehicles going in & outside the dairy

SYSTEMS
The store departments in VDFPPL follow the cold system (cold control system). A
card is maintained for each item and number is allotted. The card is attached to each article
consist of amount balance, date of issue, purchase, etc this is later recorded in separate ledger
book. The inventories are of different kind ranging from mechanical, spares, packing items to
animal drugs, etc.
This department has the following services.
1) It tries to maintain maximum and minimum level of inventories.
2) Ordinary and locally available commodities are maintained at possible level.

STAFFING
The staff deals with the various personnel policies followed by the organization.
Below are given the personnel policies followed by the organization.
PERSONNEL POLICIES
There are around 240 employees working. There are various policies followed. The
administrative department forms the policies.
RECRUITMENT AND SELECTION
Due to registration, termination, retirement and transfer the concerned department head will
give the manpower requirements along with the job description.
The manpower sourcing is done through advertisement, manpower, consultant, and
employment exchanges and personnel reference.

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PROMOTION
Promotion is on the basis of seniority.
SALARY AND EMPLOYEE BENEFIT
GROSS SALARY
A regular staff member in the union will have a gross salary consisting of basic salary,
dearness, allowance; house rent allowance and conveyance allowance.
OTHER FACILITIES
 Shift allowance
 Canteen facility

SKILLS
These are the distinctive competencies in the organization; it is the design and
development of products quality and service or viability of product. The employees in this
organization also have all the distinctive skills that are required for the understandings of
research and development activities.
The VDFPPL is improving the employee’s skill and techniques through motivating
them and giving proper training to them also through giving proper working condition.
STYLES
a) Vijaykant dairy has top to bottom or top down style system.
b) The style of organization is authorization. It means management cadre follows
authoritative.
The indicators of the style are,
 Follows rules and orders
 Reliable and dependable
Decision making parameters for day-to-day operations;

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Top managers will tell marketing manager to collect information regarding daily
requirements of the sale of MILK, ICE CREAM and MILK PRODUCTS based on demand.
Then this information will provided to production department indicating production
activities.
SHARED VALUES
The core of fundamental values that are widely share in the organization and serve as
guideline that are important, these values have great meaning because they focuses attention
and provide broader sense of purpose.
The values of the organization are;
1) Customer satisfaction.
2) Commitment to total quality.
3) Cost and time consciousness.
4) Innovative and creative.
5) Trust and team spirit.
6) Respect for individually.
7) Integrity.

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BACKGROUND OF THE STUDY
The Scenario analysis is a concept for studying the relationship between cost, volume
and profit. CVP analysis is an essential tool that provides the management with useful
information for managerial planning and decision making in the company. Profits of a
business firm are the result of interaction of many factors. Such as the most essential of these
factors are the cost of ‘produce, volume of salesand the selling prices of the products.
According to Herman C. Heiser, “the most significant single ‘factor in profit planning of the
average business is the relationship’ between the volume of production, costsand Profits”.
The CVP relationship is an important tool used for the profit planning of an ‘industry.
The three variables of CVP analysis i.e., costs, volume and benefit are interconnected and
reliant on each other. For instance, profit 'depend increase sales, offering cost to a huge
degree relies on cost and that relies on volume of creation as it is just the variable cost that
differs straightforwardly with generation, whereas fixed cost stays settled separated from of
the volume delivered. In cost-volume-benefit analysisendeavour is made to break down the
relationship between varieties in cost with shifts in volume.
The cost-volume-profit relationship is immense utility to management as it assists in profit
planning cost control and decision making. Cost-volume-profit analysis can be used to
answer questions such as;
1. How much sales should be made to avoid losses?
2. How much should be the sales to earn a desired profit?
3. What will be the effect of change in prices, costs and volume on profits?
4. Which product or product mix is most profitable?
5. Should we manufacture or buy some product or component?
The scenario analysis involves the analysis of how costs, total revenue and total profits are
related to sales volume, and the effect of change in costs and sales volume on profit those are
concern with predicting the value of the firm. It is also known as BEP Analysis’. The
management needs to understand the interaction between revenues, costs and volumes
determining the profits. All these analysis and information are provided by CVP
analysis/Scenario analysis.

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In CVP Analysis all expenses are classified into Variable and Fixed cost. Based upon a
knowledge of fixed and variable cost fundamentals and CVP analysis, it is possible to find
out break even sales volume, to compute the sales needed to generate desired profits and to
answer the questions arise in the course of management planning and decision making.

The CVP Analysis is based on several Assumptions
1. The total cost can be divided into a fixed element that is variable with respect to
the level of output. The variable cost consists of both, direct and indirect variable
cost of the product. Similarly, fixedcost also includes both, direct fixed cost and
indirect fixed cost.
2. When graphed, the behaviour of the total revenues and total cost is straight line in
relation to output units within the time period.
3. The fixed cost, selling price, variable cost are known and constant.
4. When multiple products are sold will remain constants the level total units sold
changes.The analysis either covers single product or sales mix.
5. In manufacturing firms, the inventory levels at the beginning and end of the period
are the same. This implies that the numbers of units produced during the periods
equal the numbers of units sold.
6. In case of time value of money all costs and revenues can be added and compared
without taking into account.
7. Many companies in industries such as chemicals, Airlines, plastics, Automobiles,
and semiconductors have found the simple cost volume profit relationship to be
helpful in long period and strategic planning decision as well as decisions about
product features and pricing.




Techniques of CVP Analysis

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The CVP is a management accounting procedures demonstrate the relationship
between different elements of benefit arranging, to be specific, unit sale price, variable cost,
sales mix and fixed cost. Following are widely used techniques to study the scenario analysis.
Contribution margin Concept
Contribution is the Difference between the varying cost and Sales. Also it can be
defined as the excess of the selling price on the Variable cost per unit. It is also known as
grass margin. Being variables the cast oversold on the costs of contribution is the amount that
provides a fixed costs and benefits.
Formula: 1. Contribution = Sales-Variable cost
Or
2. Contribution= Fixed Cost+ Profit (-loss)
Advantages of Contribution
1. It helps the Management in the fixing the selling price.
2. It helps with deciding the breakeven point.
3. It helps administration in the choice of suitable product mix revenue driven
expansion.
4. It helps in taking a choice as respects to including another product in the market.
5. It helps the administration in choosing whether to buy or make an product or a
part.

Break Even Analysis
The study CVP analysis referred to breakeven analysis. The break-even is most widely
known form of scenario analysis. It has two types of sense- narrow sense and broad sense,
this analysis helps the study of the relationship between costs, volume and profit at different
sales levels. Strictly speaking the technique of analyzing the level of operations in which the
point of no gain or loss. Breakeven also called as "critical point" or "point of equilibrium" or
" equilibrium point ".
Formulas: BEP (In sales) = FC/p/v ratio
Advantages or uses of break-even analysis
1. BEP is in a simple form and understandable

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2. The break even chart is helps to the managerial decisions because the chart shows
relationship of volume, costs at various level of output.
3. It helps to forecasting, growth and planning.
4. It helps improve the company efficiencies of business and profit at various levels.

Profit-Volume Ratio
The p/v ratio, which is also called the “contribution ratio’ or marginal ratio expressed
the relation of contribution to sales and can be expressed as,
Formula: P/V ratio= Contribution /Sales

The P/V ratio, which establishes the interaction between the contribution and sales, is
of vital importance for the study of the profitability of business operations. It reveals the
effect on the result of changes in this volume. The concept of the P / V is also useful to
calculate the breakeven point, the profit in a certain volume of sales, the sales volume
necessary to obtain a desired profit and volume sales necessary to maintain current benefits if
the sale price reduced purchase a specified percentage.

Same important formulas are used for calculation as given below
Total cost = Fixed Cost +Variable Cost
Contribution = Sales-Variable Cost
Profit = Contribution-Fixed cost
P/V Ratio =Contribution/ Sales
BEP (in units) = Fixed Cost/ Contribution per Unit
BEP (in sales) = Fixed Cost/p/v ratio
Change in Profit = (Calculated Profit- Actual Profit)/ Actual Profit
Change in Sales = (Calculated Sales-Actual sales)/Actual Sales
Margin of safety = Sales-Breakeven point

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DATA ANALYSIS AND IN TERPRETATION

1. To estimates the change in profit under different scenarios.

ANALYSIS FOR MILK
Scenario1: To estimate the change in profit for 2015-16, if the sales increase by 26% and
variable cost increase by23%.
Table No.1 Comparison of actual value with the calculated value.


Figure No.1 The 26% increase in sales and 23% in variable cost

0.000
50.000
100.000
150.000
200.000
The 26% increase in sales and 23% in variable cost
Actual valueSales value increase by 26% and Variable Cost by 23%
YEAR 2014-15
Actual value
( Amount in Crore)
Sales value increase by 26% and
Variable Cost by 23%
( Amount in Crore)
SALES 115.374 145.372
VC 101.590 124.955
Contribution 13.784 20.416
FC 13.486 13.486
PROFIT/LOSS 0.298 6.930
BEP 112.875 96.025
P/V Ratio 0.119 0.140
Margin of safety 2.499 49.347
Change in Profit

22.207 times

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Interpretation:
From the analysis the above table shows if company increase in sales by 26% and
variable cost by 23%, the company’s profit increases is 22.207 times and BEP reduce by
15%.

Scenario 2 (a): If the company’s Sales are same but Variable Cost Increase by 23%
Table No.2 Comparison of actual value with the calculated value.


Figure No.2 The 23% increase in variable cost

-200.000
-100.000
0.000
100.000
200.000
23% increase in variable cost
Actual valueVariable Cost Increase by 23%
YEAR 2014-15
Actual value
( Amount in Crore)
Variable Cost Increase by 23%
(Amount in Crore)
SALES 115.375 115.375
VC 101.590 124.956
Contribution 13.785 -9.581
FC 13.486 13.486
PROFIT/LOSS 0.299 -23.067
BEP 112.875 -162.403
P/V Ratio 0.119 -0.083
Margin of safety
2.5 277.778
Change in Profit

-78.243 times

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Interpretation:
The above table indicates the profit has been decreased 78.243 times as compared to
the actual profit when the Variable cost is being increased by 23%, hence the company sale
has to be increased and the gross margin reduces by 30.5%.

Scenario 2 (b): If company’s Fixed Cost increase by 3%

Table No.3 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Fixed Cost increase by 3%
(Amount in Crore)
SALES 115.375 115.375
VC 101.590 101.590
Contribution 13.785 13.785
FC 13.486 13.891
PROFIT/LOSS 0.299 -0.106
BEP 112.875 116.262
P/V Ratio 0.119 0.119
Margin of safety 2.5 -0.887
Change in Profit

-1.355 times


Figure No 3- The 3% increase in fixed cost

-50.000
0.000
50.000
100.000
150.000
3% increase in fixed cost
Actual valueFixed Cost increase by 3%

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Interpretation:
From the analysis, the above figure shows Change in profit has decrease by 1.355
times as compared to the actual profit when fixed cost increased by 3%, and the BEP
increases by 3%.

Scenario 2 (c): If the company’s simultaneously increase Fixed Cost by3% & Variable
Cost By 23%
Table No.4 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Simultaneous increase Fixed Cost
by 3%& Variable Cost By 23%
(Amount in Crore)
SALES 115.375 115.375
VC 101.590 124.956
Contribution 13.785 -9.581
FC 13.486 13.891
PROFIT/LOSS 0.299 -23.472
BEP 112.875 -167.275
P/V Ratio 0.119 -0.083
Margin of safety 2.5 282.65
Change in Profit

-79.598 times



Figure No.4The simultaneous increase in fixed cost by 3% and variable cost by 23%

-200.000
-100.000
0.000
100.000
200.000
Simultaneous increase in fixed cost by 3% and variable cost by
23%
Actual valueSimultaneous increase Fixed Cost by 3%& Variable Cost By 23%

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Interpretation:
The above table shows an increase in fixed cost by 3% and variable cost by 23% each
the change in profit decreased by 79.6 times, and The break-even has reduced compared to
actual break-even point.

Scenario 3: The impact of Decrease in Sales by 10%
Table No.5 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Decrease in Sales By 10%
(Amount in Crore)
SALES 115.375 103.837
VC 101.590 101.590
Contribution 13.785 2.247
FC 13.486 13.486
PROFIT/LOSS 0.299 -11.239
BEP 112.875 623.130
P/V Ratio 0.119 0.022
Margin of safety 2.5 -519.293
Change in Profit

-38.635 times


Figure No.5 The 10% decrease in sales
-200.000
0.000
200.000
400.000
600.000
800.000
10% decrease in sales
Actual valueDecrease in Sales By 10%

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Interpretation:
From the above analysis, the table shows if company’s sales decrease by 10%, it leads
to decrease in the profit by 38.635 times as compared to the actual profit. In this situation the
company incurred the loss and the break-even increases.

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ANALYSIS FOR MILK PRODUCTS
Scenario 1: 26% increase in Sales and 23% increase in Variable Cost to estimate the
change in profit.
Table No.6 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Sales value increase by 26% and
Variable Cost by 23%
(Amount in Crore)
SALES 30.0308 37.8388
VC 26.4430 32.5249
Contribution 3.5878 5.3139
FC 3.5103 3.5103
PROFIT/LOSS 0.0774 1.8036
BEP 29.382 24.9958
P/V Ratio 0.1194 0.1404
Margin of safety
0.6488 12.843
Change in Profit

22.2731 times


Figure No.6 The 26% increase in sales and 23% in variable cost

0
5
10
15
20
25
30
35
40
26% increase in sales and 23% in variable cost
Actual valueSales value increase by 26% and Variable Cost by 23%

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Interpretation:
From the above analysis, the table shows the 26% increase in sales and 23% increase
in variable cost in this objective the company leads to increase profit level by 22.2731 times,
so company should maintain this objective as increment for production.

Scenario 2 (a): If the company’s Variable Cost increases by 23%
Table No.7 Comparison of actual value with the calculated value.


Figure No.7 The 23% increase in variable cost
-100
-50
0
50
23% increase in variable cost
Actual valueVariable Cost Increase by 23%
YEAR 2014-15
Actual value
( Amount in Crore)
Variable Cost Increase by 23%
(Amount in Crore)
SALES 30.030 30.030
VC 26.443 32.524
Contribution 3.587 -2.494
FC 3.510 3.510
PROFIT/LOSS 0.077 -6.004
BEP 29.382 -42.267
P/V Ratio 0.119 -0.083
Margin of safety
0.648 72.297
Change in Profit

-78.477 times

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Interpretation:
The above table indicates the profit has decreased by 78.477 times as compared to the
actual profit when the Variable cost is being to increase by 23% and the break-even
decreased.

Scenario 2 (b): If company’s Fixed Cost will increase by 3%
Table No.8 Comparison of actual value with the calculated value
YEAR 2014-15
Actual value
( Amount in Crore)
Fixed Cost increase by 3%
(Amount in Crore)
SALES 30.030 30.030
VC 26.443 26.443
Contribution 3.587 3.587
FC 3.510 3.615
PROFIT/LOSS 0.077 -0.027
BEP 29.382 30.263
P/V Ratio 0.1194 0.1194
Margin of safety 0.648 -0.233
Change in Profit

-1.358 times


Figure No.8 The 3% increase in fixed cost
-5
0
5
10
15
20
25
30
35
3% increase in fixed cost
Actual valueFixed Cost increase by 3%

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Interpretation:
From the analysis the above table shows, if company increases fixed cost by 3%,
Change in profit has been decreased by 1.358 times as compared to the actual profit and BEP
has been increase by 3%.

Scenario 2(c): If the company’s simultaneously increases Fixed Cost by 3% and
Variable Cost By 23%
Table No.9 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Simultaneous increase Fixed Cost
by 3%& Variable Cost By 23%
(Amount in Crore)
SALES 30.030 30.030
VC 26.443 32.525
Contribution 3.587 -2.494
FC 3.510 3.615
PROFIT/LOSS 0.077 -6.110
BEP 29.382 -43.535
P/V Ratio 0.1194 -0.084
Margin of safety
0.648 73.565
Change in Profit

-79.837 times


-100
-50
0
50
Simultaneous increase in fixed cost by 3% & variable cost by
23%
Actual value
Simultaneous increase Fixed Cost by 3%& Variable Cost By 23%

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Figure No.9- The simultaneous increase in fixed cost by 3% & variable cost by 23%

Interpretation:
The above table shows, if company increases variable cost by 23% and fixed cost
by3% the change in profit decreased by 79.837 times, because of which the loss shall be
incurred by the company and the P/V ratio has reduce by 29.4%.
Scenario 3: The impact of Decrease in Sales by 10%
Table No.10 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Decrease in Sales By 10%
(Amount in Crore)
SALES 30.030 27.027
VC 26.443 26.443
Contribution 3.587 0.584
FC 3.510 3.510
PROFIT/LOSS 0.077 -2.925
BEP 29.382 162.251
P/V Ratio 0.1194 0.0216
Margin of safety
0.648 -135.224
Change in Profit

-38.750 times

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Figure No.10 The impact of 10% decrease in sales

Interpretation:
From the above analysis, the table shows 10% decrease in sales, this situation leads to
incurring of loss as this scenario leads to decrease in profit by 38.75 times as compared to the
actual profit and the BEP has increased.












-50
0
50
100
150
200
The impact of 10% decrease in sales
Actual valueDecrease in Sales By 10%

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ANALYSIS FOR ICE-CREAM
Scenario 1: to determine the Change in profit, if company increase the Sales by 26%
and 23% increase in Variable Cost.
Table No.11 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Sales value increase by 26%
and Variable Cost by 23%
(Amount in Crore)
SALES 61.992 78.110
VC 54.584 67.139
Contribution 7.408 10.971
FC 7.246 7.246
PROFIT/LOSS 0.161 3.725
BEP 60.641 51.590
P/V Ratio 0.119 0.140
Margin of safety
1.351 26.52
Change in Profit

22.069 times


Figure No.11 The 26% increase in sales and 23% in variable cost

0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
26% increase in sales and 23% in variable cost
Actual valueSales value increase by 26% and Variable Cost by 23%

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Interpretation:
The above table shows the 26% increase in sales and 23% increase in variable cost of
ice-cream which improves the profitability of the firm as the change in the profit is 22.069
times, the p/v ratio has increased by 15.95%.

Scenario 2 (a): If the company’s Variable Cost will Increase by 23%
Table No.12 Comparison of actual value with the calculated value.


Figure No.12- The 23% increase in variable cost
-100.000
-50.000
0.000
50.000
100.000
23% increase in variable cost
Actual valueVariable Cost Increase by 23%
YEAR 2014-15
Actual value
( Amount in Crore)
Variable Cost Increase by
23%
(Amount in Crore)
SALES 61.992 61.992
VC 54.584 67.139
Contribution 7.408 -5.147
FC 7.246 7.246
PROFIT/LOSS 0.161 -12.393
BEP 60.641 -87.278
P/V Ratio 0.119 -0.083
Margin of safety
1.351 149.27
Change in Profit

-77.751 times

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Interpretation:
The above table indicates the profit has decreased by 77.751 times as compared to the
actual profit if company variable cost is being to be increased by 23%. And the grass margin
of the company is reduced.

Scenario 2 (b): If company’s Fixed Cost will increase by 3%

Table No.13 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Fixed Cost increase by 3%
(Amount in Crore)
SALES 61.992 61.992
VC 54.584 54.584
Contribution 7.408 7.408
FC 7.246 7.464
PROFIT/LOSS 0.161 -0.056
BEP 60.641 62.460
P/V Ratio 0.119 0.119
Margin of safety 1.351 -0.468
Change in Profit

-1.346 times


Figure No.13 The 3% increase in fixed cost

-20.000
0.000
20.000
40.000
60.000
80.000
3% increase in fixed cost
Actual valueFixed Cost increase by 3%

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Interpretation:
From the analysis, the above table shows, if company to increased fixed cost by 3%,
change in profit has decreased by 1.346 times as compared to the actual profit, which means
the company goes under loss if this objective adopted. The company needs to maintain BEP
by increase sales volume.

Scenario 2 (c): If the company’s simultaneous increase in Fixed Cost 3% and Variable
Cost By 23%
Table No.14 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Simultaneous increase Fixed Cost by
3%& Variable Cost By 23%
(Amount in Crore)
SALES 61.992 61.992
VC 54.584 67.139
Contribution 7.408 -5.147
FC 7.246 7.464
PROFIT/LOSS 0.161 -12.610
BEP 60.641 -89.896
P/V Ratio 0.119 -0.083
Margin of safety 1.351 151.888
Change in Profit

-79.097 times

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Figure No.14 The simultaneous increase in fixed cost by 3% & variable cost by 23%

Interpretation:
The above table shows the change in profit has decreased by 79.097 times incurring a
huge loss, if the company the increase the both fixed cost by 3% and variable cost by 23%,
and also the BEP has been decreases as compared to actual value.

Scenario 3: The impact of Decrease in Sales by 10%

Table No.15 Comparison of actual value with the calculated value.
YEAR 2014-15
Actual value
( Amount in Crore)
Decrease in Sales By 10%
(Amount in Crore)
SALES 61.992 55.793
VC 54.584 54.584
Contribution 7.408 1.208
FC 7.246 7.246
PROFIT/LOSS 0.161 -6.038
BEP 60.641 334.560
P/V Ratio 0.119 0.022
-100.000
-50.000
0.000
50.000
100.000
Simultaneous increase in fixed cost by 3% & variable cost by
23%
Actual value
Simultaneous increase Fixed Cost by 3%& Variable Cost By 23%

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Margin of safety
1.351 -278.767
Change in Profit

-38.392 times


Figure No.15 The impact of 10% decrease in sales

Interpretation:
From the above analysis table shows, if 10% decrease in sales which decrease the
change in profit by 38.392 times as compared to the actual profit and the gross margin has
been reduce by 83.78%.









-100.000
-50.000
0.000
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
The impact of 10% decrease in sales
Actual valueDecrease in Sales By 10%

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2. To estimate required volume of sales under different economic condition
for the same level of profit.
ANALYSIS FOR MILK
Scenario 1: If company’s increase Variable cost by 23% for same profit requirement.
Table No.16 Comparison of actual value with the estimated value.
Increase/ decrease VC 23%
FC 0
YEAR 2014-15
Actual value
(Amount in Crore)
Estimated value
(Amount in Crore)
SALES 115.375 138.741
VC 101.590 124.956
Contribution 13.785 13.785
FC 13.486 13.486
PROFIT/LOSS 0.299 0.299
BEP 112.875 135.735
P/V Ratio 0.119 0.099
Margin of safety 2.5 3.006
Increase in Sales

20.25%


Figure No.16 The 23% increase in variable cost in same level of profit
Interpretation:
0.000
50.000
100.000
150.000
23% increase in variable cost in same level of profit
Actual valueEstimated value

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The above table shows, the increase in variable cost by 23% under same level of
profit, the company required to increase the sales volume by 20.25% to maintain same level
of profit and the P/v ratio has decreased as compared to actual figures.

Scenario 2: If the company’s increase the Fixed cost by 3% and Variable cost by
23%for same profit requirement.

Table No: 17-Comparison of actual value with the estimated value.
Increase/decrease VC 23%
FC 3%
YEAR 2014-15
Actual value
(Amount in Crore)
Estimated value
(Amount in Crore)
SALES 115.375 138.741
VC 101.590 124.956
Contribution 13.785 13.785
FC 13.486 13.891
PROFIT/LOSS 0.299 -0.106
BEP 112.875 139.807
P/V Ratio 0.119 0.099
Margin of safety 2.5 -1.129
Increase in Sales

20%

Figure No.17- The 23% increase in variable cost and fixed cost by 3% in the same level of
profit.
-50.000
0.000
50.000
100.000
150.000
23% increase in variable cost and fixed cost by 3% in the same
level of profit.
Actual valueEstimated value

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Interpretation:
From the above analyses the company increases the both the element i.e. variable cost
by 23% and fixed cost by 3% and thereby in order to have the same level of profit , the sales
volume is required to be increases to maintain same level of profit condition.

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ANALYSIS FOR MILK PRODUCTS
Scenario 1: If company’s increase Variable cost by 23% for same profit requirement.
Table No.18 Comparison of actual value with the estimated value.










Figure No.18 The 23% increase in variable cost in same level of profit



0.000
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
23% increase in variable cost in same level of profit
Actual valueEstimated value
Increase/decrease VC 23%
FC 0
YEAR 2014-15
Actual value
(Amount in Crore)
Estimated value
(Amount in Crore)
SALES 30.031 36.113
VC 26.443 32.525
Contribution 3.588 3.588
FC 3.510 3.510
PROFIT/LOSS 0.077 0.077
BEP 29.382 35.333
P/V Ratio 0.119 0.099
Margin of safety 0.648 0.78
Increase in Sales

20%

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Interpretation:
The above graph shows, the increase in variable cost by 23% under same level
of profit condition, the company mandatory to increase the sales volume by 20%
which leads to increase in break even.

Scenario 2: If the company’s increase the Variable cost by 23% and Fixed cost by
3%for same profit requirement.
Table No.19 Comparison of actual value with the estimated value.








Figure No.19- The 23% increase in variable cost and fixed cost by 3% in the same level
of profit.
0.000
10.000
20.000
30.000
40.000
23% increase in variable cost and fixed cost by 3% in the
same level of profit
Actual valueEstimated value
Increase/decrease VC 23%
FC 3%
YEAR 2014-15
Actual value
(Amount in Crore)
Estimated value
(Amount in Crore)
SALES 30.031 36.218
VC 26.443 32.525
Contribution 3.588 3.693
FC 3.510 3.616
PROFIT/LOSS 0.077 0.077
BEP 29.382 35.458
P/V Ratio 0.119 0.102
Margin of safety 0.648 0.76
Increase in Sales

21%

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Interpretation:
From the above analyses the company increases the both the element i.e. variable cost
by 23% and fixed cost by 3% and thereby in order to have the same level of profit , the
company sales volume is requisite to be increase by 21%.

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ANALYSIS FOR ICE-CREAM
Scenario 1: If company’s increase Variable cost by 23% for same profit requirement.
Table No.20 Comparison of actual value with the estimated value.
Increase/decrease VC 23%
FC 0
YEAR 2014-15
Actual value
(Amount in Crore)
Estimated value
(Amount in Crore)
SALES 61.992 81.631
VC 54.584 67.139
Contribution 7.408 14.492
FC 7.246 7.246
PROFIT/LOSS 0.161 0.161
BEP 60.641 40.816
P/V Ratio 0.119 0.178
Margin of safety 1.351 40.815
Increase in Sales

32%


Figure No.20 The 23% increase in variable cost in same level of profit

Interpretation:
The above graph shows in order to maintain the same level of profit, if company
increase the variable cost by 23%, the amount of required sales has to be increased by 32%
and the profit-volume ratio has increased.
0.000
20.000
40.000
60.000
80.000
100.000
23% increase in variable cost in same level of profit
Actual ValueEstimated value

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Scenario 2: If the company’s increase the Fixed cost by 3% and Variable cost by
23%for same profit requirement.
Table No.21 Comparison of actual value with the estimated value.
Increase/decrease VC 23%
FC 3%
YEAR 2014-15
Actual value
(Amount in Crore)
Estimated value
(Amount in Crore)
SALES 61.992 74.764
VC 54.584 67.139
Contribution 7.408 7.625
FC 7.246 7.464
PROFIT/LOSS 0.161 0.161
BEP 60.641 73.181
P/V Ratio 0.119 0.102
Margin of safety 1.351 1.583
Increase in Sales

21%


Figure No.21 The 23% increase in variable cost and fixed cost by 3% in the same
level of profit.

0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
23% increase in variable cost and fixed cost by 3% in the same
level of profit
Actual valueEstimated value

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Interpretation:
From the above analyses the company increases the both the element i.e. variable cost
by 23% and fixed cost by 3% and thereby in order to have the same level of profit , the
company sales volume is required to be increased by 21%.

3. TO ANALYSIS ELASTICITY OF DEMAND FOR MILK

Table No.22 Comparison of 2013-14 value with 2014-15 value.
2013-14 2014-15
Price 38/liter 40/liter
Quantity Demand 4.221842cr 5.19275cr

%change in QD 0.229973
%change in price 0.052632

Elastic demand 4.369479
(e>1)Relatively Elastic
demand

Interpretation:
The proportion of change in quantity demanded is greater than the proportion change
in price (e>1). The demand is set to be relatively elastic, the numerical value relatively elastic
demand lies between 1 and infinity, thus the value of elastic demand is 4.36 i.e. greater than
1.

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SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSION
FINDINGS
Based on the above data analysis the various alternatives to found out in the different
situation and interpreted the results. Based on the calculation the answers founded in the
analysis. Those findings are given below.

Findings for Milk
1. The actual sales volume of milk i.e.115.37cr, if company increase the sales by
26% and variable cost by 23%, which is leads to increase the profit by 22.20
times, the BEP decrease by 15%. Refer table no.1
2. If the sales are kept constant at current level and the variable cost of Milk
increases by 23% it will lead to decrease in profit by 78.24 times and gross margin
reduce by 30.5%. Refer table no.2
3. If the sales and variable cost are kept constant at current level If company
increases the fixed cost by 3% the profit decreases by 1.35 times and BEP
increase by 3.387 crore compared to actual value. Refer table no. 3
4. If company increases both fixed cost by 3% and variable cost by 23% these cost
incurred more loss it result decrease in profit by 79.60 times and the BEP
decreases by 248.19%. Refer table no 4
5. Due to competition if the sales of the company decrease by 10% it will lead to
decrease in profit by 38.635 times Refer table no.5
6. The company increase in variable cost by 23% under same level of profit, the
company required to increase the sales volume by 20.25% to maintain same level
of profit and the P/v ratio decreases by 16.80%. Refer table no. 16
7. Under inflationary condition if the company wants to earn the same level of profit,
then the company has to increase the sales volume by 20%. Refer table no. 17
8. The company’s price elasticity of demand for milk is greater than one, as a
categorised result relatively elastic product i.e. 4.36. Refer table no. 22

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Findings for Milk Products
1. If the company increases the sales volume 26%and variable cost 23% of milk
products, which is leads to increase the profit by 22.273 times, the BEP decrease
by 15%. Refer table no. 6
2. If the sales are kept constant at current level and the variable cost increased by
23% it will decrease the profit by 78.477 times, and break-even point decrease by
243.83%. Refer table no.7
3. If the sales and variable cost are kept constant at current level and only fixed cost
increased by 3% the profit decreases by 1.36 times but 3% increase in break even.
Refer table no.8
4. If company increases both variable cost by 23% and fixed cost by 3% these
incurred more loss, i.e. decrease in profit by 79.83 times and to maintain the same
level of profit the company need to increase the sales volume by more than 50%.
Refer table no. 9
5. Due to competition, if company decreases 10% in sales volume that leads to
decrease in profit by 38.75 times. The company should increases the BEP by
452.2% to maintain a desired profit. Refer table no. 10
6. The company increase in variable cost by 23% under same level of profit
condition, the company required to increase the sales volume by 20%. And BEP
increases by 20.25%. Refer table no. 18
7. Under inflationary condition if the company wants to earn the same level of profit,
than the company increase both the element i.e. variable cost by 23% and fixed
cost by 3%, the company sales volume is required to be increases by 21%. Refer
table no.19

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Findings for Ice-Cream
1. If the company increases the sales volume 26% and variable cost 23% of Ice-
Cream, which is leads to increase the profit by 22.069 times and the profit-volume
ratio increase by 15.95%. Refer table no. 11
2. If the sales and fixed cost are kept constant at current level and only variable cost
increased by 23% it will decrease the profit by 77.75 times, and the gross margin
decreases by 170%. Refer table no.12
3. If the sales and variable cost are kept constant at current level If company
increases the fixed cost by 3% the profit decreases by1.346 times. Refer table no.
13
4. If company increases both variable cost by 23% and fixed cost by 3% these
incurred more cost to company i.e. decrease in profit by 79.097 times and BEP
decrease by243.9% as compared to actual value. Refer table no. 14
5. Due to competition, if company decreases 10% in sales volume that leads to
decrease in profit by 38.392 times. The company should increases sales volume by
30% to maintain a desired profit. Refer table no. 15
6. The company in order to maintain the same level of profit, if it is increase the
variable cost by 23%, the amount of required sales has to be increased by 32% and
the profit-volume ratio has increase to 5.9%. Refer table no. 20
7. Under inflationary condition if the company wants to earn the same level of profit,
than the company increases the both the element i.e. variable cost by 23% and
fixed cost by 3%, Company required to be increase sales volume by 21%. Refer
table no. 21

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SUGGESTIONS
The Scenario Analysis helps the company to take same practical objectives for the
production. Based on the findings, the suggestions are given to the company for its profit
generation. The suggestions are:

Suggestion for Milk
1. Based on the findings the sales volume and variable cost of milk increases by
26% and 23% respectively it will lead to increase the profit by 22.20 times as
compared to actual value, it helps company to adopt it into the production process
to gain more profit. Refer table no.1
2. Based on the findings if company increases the fixed cost by 3% the profit
decreases by 1.355 times and BEP increase by 3.387 crore compared to actual
value. Hence the company increase sales by 0.351% to avoid the loss and get the
same level of profit. Refer table no. 3
3. Based on findings the increase in variable cost by 23% under same level of profit,
the company required to increase the sales volume by 20.25% to maintain same
level of profit which is helps for the production to maintain the same profit. Refer
table no. 16
4. Based on the findings under inflationary condition if company increases the both
the element i.e. variable cost by 23% and fixed cost by 3% and thereby in order to
have the same level of profit , the sales volume is required to be increased by 20%
to maintain same level of profit condition. Refer table no. 17
Suggestion for Milk products
1. Based on the findings the company increases the sales volume by 26%, there is
increase in the profit by 22.273 times. This will help the company to maintain its
profit margin to face the competition and gain desired profit level. Refer table no.
6
2. Based on the findings if company increases the fixed cost by 3% the profit
decreases by 1.36 times and break even increase by 3% so that company procure
the raw materials to increase the sales volume by 15%. Refer table no. 8

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3. Based on the findings if company increase in variable cost by 23% under same
level of profit condition, the company required increasing the sales volume by
20%. And BEP increases by 20.25%. Refer table no. 18
4. Based on the findings under inflationary condition if company increases the both
the element i.e. variable cost by 23% and fixed cost by 3% and thereby in order to
have the same level of profit , the company sales volume is required to be
increases by 21%. Refer table no. 19

Suggestion for Ice-Cream
1. Based on the findings, it is found that the company increases the sales volume
26% and variable cost 23% of Ice-Cream, which is leads to increase the profit by
22.069 times, which is need for company to maintain the profit levels. Refer table
no.11
2. Based on the finding, it found that if company increases the fixed cost by 3% the
profit decreases by 1.346 times. The firm should increase the sales by 15% to earn
desired profit. Refer table no.13
3. Based on the findings if company maintain the same level of profit, if it is increase
the variable cost by 23%, the amount of required sales has to be increased by
32%. Refer table no. 20
4. Based on the findings under inflationary condition if the company increases the
both the element i.e. variable cost by 23% and fixed cost by 3% and thereby in
order to have the same level of profit , the company sales volume is required to be
increased by 21%. Refer table no. 21




CONCLUSION

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The project undertaken has helped a lot in understanding the concept of “Scenario
Analysis of various products” at Vijaykant Dairy and food products ltd, Neginhal. This study
shows the effect of increase and decrease in the variable cost, fixed cost and also the sales
volume which effects on the profitability of the company and it also helps to determine the
required sales in the same level of profit. Hence it provides the scope for the management
with useful for managerial planning and decision making for the company growth.























Bibliography

85. (VDFPL) s’ Adityaa milk and milk products.

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 M Y Khan and P K Jain, Financial Managament, McGraw Hill Education (India)
Private Limited, 6
th
Edision, 2103, page no. 7.1 to 7.16.
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