Grocerry Store

PRODUCTION & OPERATIONS MANAGEMENT

Project Title: Analysis of a wholesale grocery store

Items: Sugar, Refine oil, Potato, Onion, Coconut

Group Members: Priyanka Kalwar 14202145 Ankit Agrawal 14202151 Chandrakant Kumar 14202161 Shrabani Choudhary 14202177 Bhagyashree Mohanty 14202181

Background of the businessThe project pertains to a retail cum wholesale grocery store named Gopiram Banwarilal Ltd. which is situated in the Sonepur district of Odisha. The firm has been named after the proprietor Gopiram Banwarilal.Talking about Sonepur which is our research destination, the place became a district in 1993 and is popularly known as The city of Temples. The name can be accredited to the presence of 108 temples in Sonepur district .The count increases to 160 if we add the newly built 50 temples .The presence of large no. of temples makes the place boast of a rich cultural heritage passed down through generation. The average population of Sonepur district is nearly 6 lakh as per the census report of 2011.Insight into the life of the proprietor The firm was founded by Gopiram Banwarilal as early as 1968. At that time, the firm was dealing mostly in herbs (Jadi Buti) accompanied by grocery items in a meagre amount. As time passed on Ramesh Kumar Agrawal stepped in his fathers shoes, to take up the responsibility of the business. Backed by new and innovative ideas Ramesh Kumar Agarwal tried to extend his business.Therefore he shut down the herbs business and entered the market in the grocery business. His perseverance finally bore fruit and the business grew up. Yes, there were ups and downs in the business but he never gave hope .All the goods were sold mainly in the local market.Growth of the businessIn 1981 a second hand jeep was purchased for procuring goods which helped them cover a larger market segment both in terms of purchase of goods as well as in terms of distribution network. The grocery items were brought from Bolangir and sold in Sonepur market.With the passage of time, Sonepur was announced as a district and hence there was a migration to this place from the neighbouring villages .This led to a rapid development of the district a large no. of retail shops opened in the area in a disorganised way which gradually took the form of a market complex. Due to the increase in population the business grew at a rapid rate and so did the competition but the firm was always a step ahead of its competitors and thus was able to maintain the market share at 35-40% .with this increase there was a need for better logistics and hence 2 more vehicles were bought to cover the areas .The procurement of goods was extended further to Sambalpur, Barpali, Bargarh, Boudh etc.Since it was not possible to calculate the inventory level of each and every product, in this project we focused mainly on the following items:1) Refine oil2) Sugar3) Potato4) Onion5) Coconut

REFINE OILBASIS

PROCURED FROMBARGARH

EOQ150 TINS (15*150)

AVERAGE COST per TINRS 900 ( DEPENDS ON THE MARKET)*(The market rate is subject to fluctuation due to rise in prices, govt. policies, taxes etc.)

TRANSPORTATION COSTRS 3000

WAREHOUSE COST (INVENTORY)RS 1 per TIN

AVG SELLING PRICE per TINRS 950

AVG TURNOVER 40 TINS

STOCK TURNOVER WITHIN 3 TO 4 DAYS

STOCK RECEIVED WITHIN1 DAY

UNLOADING LABOUR COSTRS 1.5 per TIN

RE-ORDER POINT40 TINS

ORDERING COSTRS 2 (TELEPHONE CHARGES)

OTHER EXPENSES (DAMAGE DUE TO LEAKAGE OR UNEXPECTED LOSS, DISCOUNT)RS 5 per TIN

PROFIT950-(900+20+1+1.5+2+5) = 20.5 per TIN

SUGAR

BASIS

PROCURED FROMBALANGIR, RAIPUR

EOQ16 TONNE, (320*50)

AVERAGE DELIVERY COST per 50 KG OF PKT.RS 1350 ( DEPENDS ON MARKET)*(The market rate is subject to fluctuation due to rise in prices, govt. policies, taxes etc.)

TRANSPORTATION COSTAS RECEIVED IN DEELIVERY PRICE SO IT IS IGNORED.

WAREHOUSE COST (INVENTORY)RS 1 per 50 KG PKT.

AVG SELLING PRICE per PKTRS 1390

AVG TURNOVER (50 KG)50 PKTS


STOCK REACHES WITHIN2 DAYS FROM WB, WITHIN 1 DAY FROM SAMBALPUR & BALANGIR

UNLOADING LABOUR COSTRS 3 per PKT

RE-ORDER POINT100 PKTS.


OTHER EXPENSES (DAMAGE DUE TO RAT OR UNEXPECTED LOSS, DISCOUNT)RS 2 per PKT

PROFIT1390-(1350+1+3+2) = 34 per PKT.

POTATOBASIS

PROCURED FROMWESTBENGAL(MEDINIPUR, BALANGIR,SAMBALPUR)

EOQ16 TONNE (320*50) FOR WB , 12 TONNE (240 * 50) FOR SAMBALPUR, BALANGIR

AVERAGE COST per 50 KG OF PKT.RS 250 per PKT FROM WB , 300perPKT FROM SAMBALPUR & BALANGIR ( DEPENDS ON MARKET)*(The market rate is subject to fluctuation due to rise in prices, govt. policies, taxes etc.)

TRANSPORTATION COST10000 FROM WB, 4000 FROM SAMBALPUR & BALANGIR ( DEPENDS UPON MARKET)

WAREHOUSE COST (INVENTORY)RS 1 per 50 KG PKT.

AVG SELLING PRICE per PKTRS 320 (FROM WB) 350 (FROM SAMBALPUR & BALANGIR)

AVG TURNOVER (50 KG)60 PKTS

STOCK TURNOVER WITHIN 5 TO 6 DAYS ( IF 16 TONNE)

STOCK REACHES WITHIN2 DAYS FROM WB, WITHIN 1 DAY FROM SAMBALPUR & BALANGIR


RE-ORDER POINT130 PKTS.(FOR WB), 70 PKTS (FOR SAMBALPUR, BALANGIR)



PROFIT320-(250+31+1+3+2) = 33 per PKT. (FROM WB)350-(300+16.5+1+3+2) = 27.5 per PKT (FROM SAMBALPUR & BALANGIR)

ONIONBASIS

PROCURED FROMBALANGIR,PATNAGARH

EOQ50 PKTS (50*50 KG)

AVERAGE COST per PKTRS 530 ( DEPENDS ON MARKET)*(The market rate is subject to fluctuation due to rise in prices, govt. policies, taxes etc.)


WAREHOUSE COST (INVENTORY)RS 1per PKT

AVG SELLING PRICE per PKTRS 590 per PKT

AVG TURNOVER 10 PKTS


STOCK REACHES WITHIN1 DAY


RE-ORDER POINT20 PKTS



PROFIT590-(530+36+1+3+3)= RS 17

COCONUTBASIS

PROCURED FROMBALANGIR, PATNAGARH

EOQ100 PKTS (100*50 pcs)

AVERAGE COST per PKTRS 720 ( DEPENDS ON MARKET)*(The market rate is subject to fluctuation due to rise in prices, govt. policies, taxes etc.)


WAREHOUSE COST (INVENTORY)RS 1 per PKT

AVG SELLING PRICE per PKTRS 775 per PKT

AVG TURNOVER 20 PKTS


STOCK REACHES WITHIN1 DAY


RE-ORDER POINT30 PKTS


OTHER EXPENSES (DAMAGE DUE TO DRY COCONUT OR UNEXPECTED LOSS, DISCOUNT)RS 3 per PKT

PROFIT775-(720+35+1+3+3) =13

DEMAND FORECASTINGFor forecasting the demand, the previous sales are taken into account. In addition to it, special occasions like festivals, sudden price rise or fall, expected shortage of the product in the market are few other cases where the sales may fluctuate from the natural sales level. Overall the trend analysis method is followed to forecast the demand.

CONCLUSIONThe project was a practical experience for all of us. We got to understand how the forecasting of demand is done at the ground level. We got a first hand experience on how the inventory is managed and the operations of the business are handled. We got to apply our theoretical concepts pertaining to inventory management which helped us to gain a better understanding of the topic.We got to know that every firm follows the inventory management principle. Its just that they do it with practical experience. Overall it was a wonderful learning experience.

Grocerry Store

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Transcript of Grocerry Store