ACKNOWLEDGEMENT

Every work constitutes great deal of assistance and guidance from the people concerned and
this particular project is of no exception.
A project of this nature is surely a result of tremendous support, guidance, encouragement
and help.
Wish to place on record my sincere gratitude to my project guide Ms. Afeefa Fatima,
Faculty Member, Lal Bahadur Shastri Girls College of Management, Lucknow. I thank
her for constructive help and encouragement throughout the project. Without her support and
guidance taking this would not have been possible.
Also, wish to acknowledge enthusiastic encouragement and support extended to me by my
family members.
Im also thankful to my friends who provided me their constant support and assistance.

LAKSHMI YADAV
Roll No.: 120911010008
BBA (4th Sem)

DECLARATION
I

do

hereby

declare

that

the

research

report

titled

WORKING

CAPITAL

MANAGEMENT AT DAIRY COPERATIVES submitted by me in partial fulfillment of

the requirement of Bachelor of Business Administration, exclusively prepared and
conceptualized by me and is not submitted to any other Institution or University or published
anywhere before for the reward of any Degree/Diploma/Certificate. It is the Original work of
mine and has not been obtained from any other part.

LAKSHMI YADAV
Roll No.: 120911010008
BBA (4th Sem)

CONTENTS
Acknowledgement

Declaration

Content

Introduction

4-7

Management of Working capital

8-14

Brief history of Parag

15-23

Structure of the organization

24-27

Product line of Parag Dairy

28-33

Dairy supply chain structure

34-38

Process of distribution

39-44

Objective of study

45

Scope and limitation of study

46-55

Cost pattern of Parag Dairy

56-58

Financial aspect of milk plant

59-60

Research methodology

61-62

Identification of the problem area

63

SWOT Analysis

64-65

Market Share of different Producers in LKO.

66-68

Analysis and Interpretation of Data

69-70

Finding and Conclusion

71-72

Bibliography

73

INTRODUCTION
TO INDIAN DAIRY INDUSTRY
Worlds largest food factory. In celebration , India Dairy. com invites you
to Indian is the worlds highest milk producers and all set to become the
find out more about the achievements. Here, you can find or contribute ,
answer

to

every

question

about

Indian dairy. Be it investors ,

researchers , entrepreneurs or the merely curious India Dairy . It has

something for everyone.
DIAL A MARKET TO INDIA
Today, India is The Oyster of the global dairy industry. It offers
opportunities galore to entrepreneurs worldwide, who wish to capitalize
on one of the on the worlds largest and fastest growing market for milk
and milk products. A bagful of pearls awaits the international dairy
processor in India. The Indian dairy industry is rapidly growing , trying to
keep pace with the galloping progress around the world. As he expands
his overseas operations to India many profitable options awaits him. He
may transfer technology , sign joint ventures or use India as a sourcing
center for regional exports. The liberalization of the Indian economy
beckons to MNCs and foreign investors alike.

WORKING CAPITAL
Working

capital (abbreviated WC)

is

financial

metric

which

represents operating liquidity available to a business, organization or other

entity, including governmental entity. Along with fixed assets such as plant and
equipment, working capital is considered a part of operating capital. Gross
working capital equals to current assets. Net working capital (NWC) is
calculated as current assets minus current liabilities. If current assets are less
than current liabilities, an entity has a working capital deficiency, also called
aworking capital deficit.
A company can be endowed with assets and profitability but short of liquidity if
its assets cannot readily be converted into cash. Positive working capital is
required to ensure that a firm is able to continue its operations and that it has
sufficient funds to satisfy both maturing short-term debt and upcoming
operational expenses. The management of working capital involves managing
inventories, accounts receivable and payable, and cash.

CALCULATION
The basic calculation of the working capital is done on the basis of the gross
current assets of the firm.
INPUTS
Current assets and current liabilities include three accounts which are of special
importance. These accounts represent the areas of the business where managers
have the most direct impact:
accounts receivable (current asset)
inventory (current assets), and
accounts payable (current liability)
The current portion of debt (payable within 12 months) is critical, because it
represents a short-term claim to current assets and is often secured by long term
assets. Common types of short-term debt are bank loans and lines of credit.
An increase in net working capital indicates that the business has either
increased current assets (that it has increased its receivables, or other current
assets) or has decreasedcurrent liabilitiesfor example has paid off some shortterm creditors, or a combination of both..

WORKING CAPITAL CYCLE

DEFINITION
The working capital cycle (WCC) is the amount of time it takes to turn the net
current assets and current liabilities into cash. The longer the cycle is, the longer
a business is tying up capital in its working capital without earning a return on
it. Therefore, companies strive to reduce its working capital cycle by collecting
receivables quicker or sometimes stretching accounts payable.
MEANING
A positive working capital cycle balances incoming and outgoing payments to
minimize net working capital and maximize free cash flow. For example, a
company that pays its suppliers in 30 days but takes 60 days to collect its
receivables has a working capital cycle of 30 days. This 30 day cycle usually
needs to be funded through a bank operating line, and the interest on this
financing is a carrying cost that reduces the company's profitability. Growing
businesses require cash, and being able to free up cash by shortening the
working capital cycle is the most inexpensive way to grow. Sophisticated buyers
review closely a target's working capital cycle because it provides them with an
idea of the management's effectiveness at managing their balance sheet and
generating free cash flow.

WORKING CAPITAL MANAGEMENT

Decisions relating to working capital and short term financing are referred to
as working capital management. These involve managing the relationship
between a firm's short-term assets and its short-term liabilities. The goal of
working capital management is to ensure that the firm is able to continue
its operations and that it has sufficient cash flow to satisfy both maturing shortterm debt and upcoming operational expenses.
A managerial accounting strategy focusing on maintaining efficient levels of
both components of working capital, current assets and current liabilities, in
respect to each other. Working capital management ensures a company has
sufficient cash flow in order to meet its short-term debt obligations and
operating expenses.
DECISION CRITERIA
By definition, working capital management entails short-term decisions
generally, relating to the next one-year periodwhich are "reversible". These
decisions are therefore not taken on the same basis as capital-investment
decisions (NPV or related, as above); rather, they will be based on cash flows,
or profitability, or both.
One measure of cash flow is provided by the cash conversion cyclethe net
number of days from the outlay of cash for raw material to receiving payment
from the customer. As a management tool, this metric makes explicit the inter-

relatedness of decisions relating to inventories, accounts receivable and payable,

and cash. Because this number effectively corresponds to the time that the firm's
cash is tied up in operations and unavailable for other activities, management
generally aims at a low net count.
In this context, the most useful measure of profitability is return on
capital (ROC). The result is shown as a percentage, determined by dividing
relevant income for the 12 months by capital employed; return on equity (ROE)
shows this result for the firm's shareholders. Firm value is enhanced when, and
if, the return on capital, which results from working-capital management,
exceeds the cost of capital, which results from capital investment decisions as
above. ROC measures are therefore useful as a management tool, in that they
link short-term policy with long-term decision making. See economic value
added (EVA).
Credit policy of the firm: Another factor affecting working capital management
is credit policy of the firm. It includes buying of raw material and selling of
finished goods either in cash or on credit. This affects the cash conversion cycle.

MANAGEMENT OF WORKING CAPITAL

Guided by the above criteria, management will use a combination of policies and
techniques for the management of working capital. The policies aim at managing
the current assets (generally cash and cash equivalents, inventories and debtors) and
the short term financing, such that cash flows and returns are acceptable.
CASH MANAGEMENT: Identify the cash balance which allows for the business to
meet day to day expenses, but reduces cash holding costs.
INVENTORY MANAGEMENT: Identify the level of inventory which allows for
uninterrupted production but reduces the investment in raw materialsand minimizes
reordering costsand hence increases cash flow. Besides this, the lead times in
production should be lowered to reduce Work in Process (WIP) and similarly,
the Finished Goods should be kept on as low level as possible to avoid over
productionsee Supply chain management; Just In Time (JIT); Economic order
quantity (EOQ); Economic quantity
DEBTORS MANAGEMENT: Identify the appropriate credit policy, i.e. credit terms
which will attract customers, such that any impact on cash flows and the cash
conversion cycle will be offset by increased revenue and hence Return on Capital
(or vice versa); see Discounts and allowances.
SHORT TERM FINANCING: Identify the appropriate source of financing, given
the cash conversion cycle: the inventory is ideally financed by credit granted by the
supplier; however, it may be necessary to utilize a bank loan (or overdraft), or to
"convert debtors to cash" through "factoring".

INDIAN DAIRY INDUSTRY

INDIA is the 2nd largest in the emerging economies in the world, with a GDP
growth rate of ~6.5%, 3th largest economy in the world (based on PPP) with a
GDP of US $ 4.4Trillion, and according to BRIC report published by Goldman
Sachs, India will be the 2 largest economy after China by the year 2035.
India, world's largest milk producer, accounting for more than 16% of world's
total milk production, is the world's largest consumer of dairy products. The
total amount of milk produced has tripled from 23 million tonnes back in 1973
to 95 million tonnes in 2008 and expected a production level of 135 million
tonnes by 2015 but the projected demand for milk by 2021-22 estimated at 180
million tonnes which implies that milk production would have to be doubled.
Milk production is growing at 3.3% while consumption is growing at 5%
leaving a gap between demand and supply. Inorder to meet the rapid growing
demand and to increase the milk production, Union Govt has started a central
scheme National Dairy Plan Phase 1, for a period of 2011-12 to 2016
17.This scheme will be implemented with a total investment of about 2242
crore. This scheme main objective is to help provide rural milk producers with
greater access to the organised milk processing sector and thus to bridge the
gap between the demand and supply of milk in the country.
The share of the total milk processing capacity by private sector is 44%of total
installed capacity of 73 MLPD (Million Litres Per Day) in the country.

Therefore, the total share of the organized sector, both cooperatives as well as
the private sector is barely 12%. What is, therefore, disquieting is that as much
as 88% share of the total milk production is commanded by the unorganized
sector. Inorder to attract promote Dairy Industry and attract more investment in
this sector, govt has also reduced the excise duty of 16% to Zero on Dairy
processing Machineries.
The untapped potential of the dairy sector is immense and opportunity to set up
a new dairy venture is great. And there is vast potential for the export of dairy
products, as the cost of milk production in India being the lowest. These factors
are attracting huge amount of investments in dairy processing, manufacturing
dairy processing equipment, fruit packaging equipment and equipments for
biotechnology related dairy industry.

COMPANY PROFILE
INTRODUCTION :
Lucknow Pradeshik Co-operative Dairy Federation came into being on 23 rd
march 1938 via registration number 257 , the capital invested was only
Rs. 100/- and liters of liquid milk. Today 2 lakh liters of milk are
handled in the co-operative production unit and turnover has touched Rs.
50 crore mark.
In Brief :
Established
Registered
First dairy Inspector
Board of Directors

: 1938
: 23rd March 1938
: Mr. N . K. Phargava
: Mr. Gopal Lal Pandya
Mr. Nirmal Chandra Chaturvedi
Mr. Tej Shankar
Mr. Pushkar Nath Bhatt
Initial Capital Investment : Rs. 100/Present Capital
: State Government 90%
Co-operative 10%
Location
: Initial Charbagh
Area of Distribution
: Initially Bakshi Ka Talab , Tiwariganj
, Gosaiganj,
Presently
: The entire district.
In spite of the several setback and hurdle , the Lucknow Pradeshik Cooperative Dairy has steadily progressed and retain its position firmly in
the present market and given strength to the operation flood II.

BRIEF HISTORY OF PARAG

The history of co-operative dairy industry in U.P. dates back to 1917 ,
when the Katra Co-operative Milk Society , Allahabad was established.
LPMU was established in 1938 as the first step towards organized dairy
development programme all over India. At the time of independence four
milk supply schemes were operating in Lucknow , Allahabad , Varanasi
and Kanpur cities. The Agra co-operative dairy came into existence in
second five-year plan while dairies at Bareilly , Gorakhpur and Mathura
were adopted later on.
The apex institution of dairy co-operative was registered was under the
name PCDF (Pradeshik Co-operative Dairy Federation) in the year 1962
during the fourth five-year plan. Aligarh and Merrut were also proposed
to be included in the scheme. The Govt. of U.P. also entrusted PCDF
with the responsibility of implementing the operation flood. It was to
establish co-operative structure in some of the best milk sheds located in
ten states in U.P. being of them.

OPERATION FLOOD I , II AND III WERE STARTED IN

U.P. WITH THE FOLLOWING OBEJECTIVE :
1. Removing the middlemen between the producers and consumers by the
procurement of the milk by the producers directly through village cooperative.
2. To increase the production of milk from milking animals by providing
inputs to the producers.
3. To arrange the supply of liquid milk in the major cities of U.P.
4. For carrying out the whole programme successfully by proper
planning , implementation , follow-up maintenance etc , an effective
organization structure has been charted out.
(keep this below operation flood definition}

OPERATION FLOOD

Operation Flood , launched in 1970 , has been instrumental in helping the

farmers mould their own development. It was carried out in the three
phases:

Development Phase I
Development Phase II
Development Phase III

OPERATION FLOOD
A recent World Bank audit shows that of the Rs. 200 crores it invested
in operation Flood II , the net return into the rural economy has been
whopping Rs. 24,000 crores per year over a period of ten years , or a
total of Rs. 240,000 crores in all. No other major development program
has matched this input-output ratio.
Operation flood , launched in 1970 , has been instrumental in helping the
farmers mould their own development , thus helping reach milk to
consumers in 700 towns and cities through a national milk grid. It also
helped eradicate the need for middlemen there by reducing the seasonal
price variation. As a result of the co-operative structure the whole
exercise of production and distribution of the milk and milk products has
become

economically viable for farmers to undertake on their own. In this manner

the farmer himself can enjoy the fruits of his own labor , instead of
surrendering a majority of the profit to corrupt the middlemen.

THREE PHASES OF DEVELOPMENT

The scheme sought to establish milk producers co-operatives in the
villages and make technology available to them. The broad objectives are
to increase milk production (a flood of milk) , augment rural incomes and
transfer to milk producers the profits of milk marketing which are hitherto
enjoyed by well-to-do middlemen.

Development Phase I
Phase-I of Operation flood was financed by sale within India of skimmed
milk powder and butter oil gifted by the EC countries via the World
Food Program. As founder-chairman of the National Dairy Development
Board (NDDB) of India , Dr. Kurien finalized the plans and negotiated the
details of EEC assistance. He looked after the administration of the
scheme as founder-chairman of the erstwhile Indian Dairy Corporation ,
the project authority for Operation Flood. During its first phase , the
project aimed at linking Indias 18 best milk sheds with the milk market
of the four metropolitan cities of Delhi , MuPGDMi , Calcutta and
Madras.
3

Development Phase II
Phase-II of the project , implemented during 1981-85 raised this to some
136 milk sheds linked to over 290 urban markets. The seed capital raised
from the sale of WFP/EEC gift products and World Bank loan has
created , by the end 1985 , a self-sustaining system of 43,000 village cooperatives covering 4.25 million milk producers. Milk powder production
went up from 22,000 tonnes in the pre project year to 1,40,000 tonnes in
1989 , thanks to dairies set up under Operation Flood. The EEC gifts thus
helped to promotes self-reliance. Direct marketing of milk by producers
cooperatives resulting in the transfer of the profits , milk contracts
increased by several million liters per day.

Development Phase III

Phase-III of the Operation Flood enabled dairy co-operatives to rapidly
build up the basic infrastructure required to procure and market more and
more milk daily. Facilities were created by the co-operatives to provide
better veterinary first-aid health care services to their producer members.
All in all , the Dairy India has emerged as a desktop fact book of the
dairy industry. It is essential reading for any one wishing to get a
balanced picture of Indias dairy scenario. Furthermore , it sums up Indias
experience in this vital area which is of relevance to other developing
countries

AN INTRODUCTION OF ORGANISATION SECNARIO OF

DAIRY INDUSTRY
One of the important feature of early stages of economic development in
the rapid increase for food due to population and income effects among
food products demand for milk increase relatively at higher rate or
education makes people conscious of the value to meet the ever
increasing demand .
Dairying is the good source of income for the small and marginal
farmers , number of studies have pointed out the possibility of limiting
dairy development authorized to bring about social and economic change
in rural areas.

HISTORICAL BACKGROUND OF LMU AND DAIRYING

In the 20th century the dairy industry of the world was established but it
faced the challenge from the growing member of economical substitute
foods , notably , vegetables , margarine but including imitation cream

cheese , skim milk or a sodium casein at as protein source since there is

yet no vegetable protein having the mild pleasant flavor of milk protein .
The dairy industry is organized in rural and urban areas on local ,
national and international basis. The organization represents farmers,
processors , distributors , supplier , engineer , educator , industrial and
research scientist.

The international dairy federation with H.Q. in Brussels (Belgium)

sponsors on international dairy congress at four years interval.
History of co-operative dairy industry in U.P. dates back 1917 when
Katra co-operative milk society , Allahabad was established LMU was
established in 1938.
According to the aim new milk production industry was established in
Lucknow on 23rd March 1993 because Lucknow being the capital of U.P.
is situated in the midst of the state. Its geographical area is 2528 sq. km ,
and according to the latest census its population is 10.5 lakh , which is
nearly 1159 lakh of rural and urban , which now is increasing on a
greater pace.
The dairy industry has always been strictly regulated because it is
concerned with a basic but highly perishable good in which organism can
grow quickly to dangerous numbers.

U.P. has been a pioneer state in the country in organizing dairy industry
on co-operative lines for the first time. The ideal behind this was to
develop milk production in the remote rural areas for meeting milk
requirement of the urban consumers and also to lend incentives to milk
producers. They are sponsored by govt. farmers co-operative groups,
industrial processors , suppliers or marketers and design organizations.
The first co-operative artificial breeding association was organized in
Denmark in 1936. There are now many associations use a few highly
selected bulls to breed large no. of

cows , regulatory agencies operate in all advanced countries supported by

either local or national govt.
To give further importance to dairy development in India , Operation
flood I , II , III was launched.
a) Flood I : This scheme was started in 1971 with assistance of
World Bank under world food programs. This was the worlds
largest dairy development program in which 12,224 co-operative
societies were set up all over India by spending Rs. 116.40 crores
1,89,92,000 farmers were benefited by the program and there was
50% rise in annual milk production.
b) Flood II : This scheme was launched on 2 nd oct 1979. This time
Rs.485.50 crores were spent for setting 155 district level milk co3

operative unions under the working area of 25 state level milk

federation this helped around 1 crore farmers and now the
production goes to 144 kgs of milk percentage .
c) Flood III : This scheme launched in 1982. There were 35 co0perative milk unions in U.P. with a total of 4329 village level
dairy co-operative societies. The U.P. Govt. in 1976 created a
separate

department

of

dairy

development

with

the milk

commissioner as its head. At the Govt. level a separate department

of Pashudhan Vikas was created.

STRUCTURE OF THE ORGANISATION

MANGING DIRECTOR
.
CHIEF GENERAL MANAGER

GENERAL MANAGER

Quality Control Administration Purchasing

Marketing

Manager

Mnager & Input manager Manager

Manager

Manager

Procurement

Factory

Shift manager
FINANCE MANAGER

Accountant

Head Assistant

Accountant Assistant

Cash Department

Chief cashier

ORGANIZATION STRUCTURE
PCDF has ten divisions. Every division has manager who is responsible
to General Manager. G. M. of every division is responsible to Managing
Director.
The division heads of each division shall be responsible for the
performance and of their respective division not only at the head office
but also in the units / unions in the field. These officers shall not merely

insure achievement of the targets fixed and implementation of systems for

their functional areas but promptly attend to the problems of the
units/unions.
The divisional heads shall discharging their duties within the policy frame
laid down by the Managing Director and subject of his control &
supervision only important performance and control reports , matters ,
questions involving exception to approved policy , systems development
and other important matters need to be put up before the Managing
director.
Bill

before

approval

&

implementation ;

be

routed

through

the

Management Service Division (MSD) , which will check the plan to see
whether they are in conformity with corporate objective and will see that
that they are in conformity with other plans and system and contradiction
occurs.
The divisional heads should see the terms made by them and their
officers and purposively designate link officers for each officer in their
division. All letters to the NDDB shall before dispatch , be sent to the
MSD , which will take speedy clearance at the appropriate level. A copy
of all such letters shall be the CPM section the MSD.

NATIONAL DAIRY DEVELOPMENT BOARD (NDDB)

The National Dairy Development Board was created to promote, finance and
support to the following
1-

Producer owned and controlled organizations.NDDBs programmes and

activities
2-

Seek to strengthen farmer and support national policies that are favorable

3-

To the growth of such institution. Fundamental to NDDBs efforts are

cooperative principles and the Anand Pattern cooperatives of Cooperation.

The National Dairy Development Board (NDDB) was founded to replace

exploitation with empowerment, tradition with modernity, stagnation with
growth, transforming dairying into an instrument for the development of Indias
rural people.
3

PRODUCT LINE OF PARAG

Dairy products are manufactured under name PARAG. They had a
considerable market share in U.P and other regions in the north and east. There
has been an increase in the market completion due to coming up of many
private dairies that have introduced their own brand of milk product
AMUL products still have to face a stiff competition in Lucknow with PARAG
Products due to the efficient distribution network of the marketing division of
LMU is liquid milk. Other milk products are:

1. MILK
2. BUTTER
3. GHEE
4. PANEER
5. FLAVORED MILK
6. SKIMMED MILK POWDER
7. MILK CAKE
8. ICE-CREAM
9. MATTHA
10. CURED

FEATURES OF PRODUCT
Products of L.M.U. are marked as the brand name PARAG
Parag produces different types of milk

pouches and milk

products like butter , ghee , milk , cake , ice cream , cheese ,

khowa etc.
WHOLE MILK
Parags Full cream milk contains 6% fat , 9% S.N.F. (SOLID NOT FAT).
It is fortified with vit.A for extra nutrition. Parags Full cream is hygienic

too. Each pack contains pasteurized bacteria free milk. It is available in

green pouches and is priced at Rs. 22 per liter.
TONED MILK
Parag toned milk is ideally suited for infants or those who prefer a low
fat diet and it is just the right kind of drink for the figure conscious. It
has 3% fat and 8.5% S.N.F. (Solid not fat i.e. protein , carbohydrate ,
calcium , phosphorus and other fortified with Vit.A providing extra
nutrition. Each pack contains pasteurized bacteria free milk and it is
fortified too. Parags toned milk is available in Red packed of 500ml.
Priced at Rs.18 per liter.

JANTA MILK
It is economy pouch , which is suitable for tea , curd. It is also
pasteurized milk with 0.55% fat and 8% S.N.F. It is available in two
packed sizes of 500ml and 200ml ( Pack is priced at Rs. 12 per liter. It
is also fortified)
TYPE OF MILK
MILK TYPE
Full Cream Milk

PACKET COLOUR

QUANTITY

Green

500 ml

Red

500 ml

(FCM)
Toned Milk
(TM)

Janta Milk

Blue

200 ml & 500 ml

(TM)
Double Toned

Orange

500 ml

(DTM)

OTHER PRODUCTS
Following are main milk by- products manufactured by L.M.U :1. Butter : Contains 80% fat , permitted color , salt , size available 20 gm ,
and 50gm , and 100gm.
2. Ghee : 99.7% fat natural flavor.
3. Paneer : Contains 50% of fat, Pack size available - 100gm & 500 gm
Polypack.
4. Flavored milk: In 200gm. Polypack.
5. Skimmed Milk powder: In 500gm Polypack & 25 kg bag.
6. Milk cake: contains-milk solid & sugar flavors and preservative , pack
size available 100gm cartoon.
7. Ice cream: In 50ml & 100ml cup.
8. Mattha: In 200ml Polypack.
9. Curd : In 200 gm

COLLECTION AND DISTRIBUTIN OF MILK

The

report

present

detailed

information

about

the

Lucknow

Milk

Union (Parag) its evolution and organization structure.

Dairy work happens through various procedures. Basic of the dairy
work is like this structure
Milk Collection Mechanism
Milk Distribution Mechanism

Collection of Milk

Dairy (Reprocessing
of milk)

Parag is the brand name

of products of

Distribution
of milk

Luknow Producers Co-

operative milk union. It is a big co-operative unit based on the values of

understanding co-operation profit for milk producers and providing quality
products to consumers

at a cheaper price. PARAG does maximum

utilization of milk to increase milk efficiency in reasonable costs of

production and hence overall cost.
3

PARAG work may be divided into 3-subunites.

a. Marketing
b. Administration and Production
c. Industry Unit
Administration co-ordinates various function , looks after salaries and
wages and various human resources problems of production. The industry
unit is engaged in the function of producing various industrial products
like milk , butter etc.
Whereas the marketing is engaged in distribution and proper sale of these
products.
PUBLIC RELATION means the efforts made by industries , unions ,
corporation , occupations , government or other organizations to establish
productive relationship report and partnership
PUBLIC RELATION is popularly defined as on the other basis of
acceptance of well-organized efforts by society for the welfare and
development of entire community is termed as PUBLIC RELATION.

DAIRY SUPPLY CHAIN STRUCTURE

Member Farmer

Society

Chilling Center

Dairy

Inter Dairy Transfer

Other Milk
Product

Milk

Parlour

Redistribution
Stockist

Exclusive
Agent

Institution

Vender

CUSTOMER

Retailer

The Parag Dairy did a lots of efforts to collect the milk. It is a

dynamic and complex field involving many workable principles and
production over a period of years

COLLECTION OF MILK
SURVEY
Firstly , LPCM union does some survey in rural areas. The survey team
tells about the societies activities to that farmer who has sufficient milk.
ROUTES AND SOCIETIES
Initially , PARAG societies were established on those routes where there is
possibility of milk. Milk societies cater to a cluster of 6-10 villages each.
They are well connected through road network to facilitate milk
transportation to larger towns. At present there are 10 routes and 466
societies of Parag Dairy.
Collected milk from societies is finally sent to the dairy for various
treatments and tests.

RATES OF MILK
The milk collected from various societies is brought to the dairy and here
it is weighted and duly recorded in the register. The capacity of the milk

Can is approximately 50 liters. Afterwards , the milk is sent to various

laboratory processes. The quality of milk is also tested there.

Lab workers test the milk for FAT & SNF percentage and also determine
whether the milk is fresh or sour.
After performing various tests , the Procurement and Input Department
decides the quality of milk and then a valid rate of milk is given to the
member farmer accordingly.
AIMS OF L.P.C.M. UNION LTD :
Co-operative union has some target which they fulfill every year.
The aims are :1. No. of Societies
2. Total no of members
a) Number of ladies member
b) Number of SC , ST Caste Ladies
c) Number of SC , ST Caste Members
d) Number of Backward Caste Members
e) Number of I.R.D.P. Members
3. No of Farmer Members
4. Animal health primary treatment aid
5. Vaccination
6. Sterility Prohibition
7. Balance diet of animals
8. Production of green grass
9. Artificial breeding
10. Quantity of seeds (in kg.)
11. Purchasing of liquid milk and products of milk
a) Average of liquid milk purchasing (in thousand liters)
b) Purchasing of Ghee (in thousand liters)
c) Butter (in thousand liters)
12. Benefits of society / Distribution of bonus
3

a) Pure benefits of society numbers

b) Societies number (bonus)
c) Distribution of Bonus Money (in lakh Rs.)

DISTRIBUTION OF MILK

The 4 Ps Are always influencing the advertising process and decision.

These 4 Ps are :
1. Promotion
2. Product
3. Price
4. Place

The channel of distribution is the path , which the products takes while
moving to the ultimate consumers.

The term channel of distribution refers to network of middleman through

whom the product flows till it finally reaches to the hands of the actual
users.
Under the broad name of place which is a marketing component , the
most common channel for consumers goods is manufacturer wholesaler
retailer consumer.
For industrial products it may be manufacturer sole-selling agents
distributors dealer and finally users.

PROCESS OF DISTRIBUTION

DAIRY DISTRIBUTION SYSTEM AN OVERVIEW : -

AGENTS :Firstly , Agents enrolled with Distribution Department (Sales dept) of

LPMU gives the location of place where they require the milk. Then the
supply vehicle unloads the required amount of milk to that agent shop.
All demands get through supply vehicles.

Processed milk and other related products need different distribution

structure. The difference in the distribution structure is for the following
reasons.
Different time of sale
Processed milk can be sold from agents or outlets only early in the
morning and evening.
Different service level from retail. Unlike processed milk mozzarella
cheese many need more customer education and hence is

sold

through premium retail store.

Different shelf life whereas processed milk is still highly perishableButter, Ghee or paneer have better shelf life and can be sold
through normal FMCH distribution structure.
Milk union sells their products through agents. Lucknow has a total of
approx. 1900 outlets selling milk and about 800 agents are serviced by
PARAG. Lucknow has a huge demand for milk.
The sale of milk is highly skewed towards the early morning hours . In
Lucknow around 40% of the agents temporary structures for selling milk
in morning. 40% of the agents have a milk booth or operate from there
houses and balance 20% is regular retail outlets selling milk too.
Dairy use milk truck or van (painted with Logo and Slogan) for
distributing the products to retailers.

CHANNEL GF DISTRIBUTORS

Some types of agent are like that :

Retailer
Bakery or confectionary shop
Road side seller
Hotels / Institutional

PROCESS MAPPING
Distribution vans are used for supplying the processed milk and curd to
agents. Agents are hubs identified by Dairy for distribution of its
products. Agents generally sell exclusively dairys
3

brand of products.

Retailer deposits security and should purchase milk on daily basis. Dairy
officially can impose penalty in case agents are found selling other brand
of milk.

ROUTE PLANNING
There are 37 routes in Lko. Route planning has been done keeping
primarily the total time available and no of outlets for any given route.
No of outlet in a route is a function of Approximate purchase by the agents en-route. Purchase governs
the time taken for loading / unloading at any given outlet to be
kept for that route.
Terrain / accessibility of the outlets.
Distance between the outlets. The terrain / accessibility and distance
between outlets determines the time taken for inter outlet travel.
Institutions est. en-route. Institutions have their own systems for
entry / exit and documentation hence , routes having higher no. of
institutions would have lesser no. of outlets for the route.
All routes have been encoding with relation to there respective
district sand outlets have been encoded for their respective routes.

This has been done to track sales at retail level , management of

empty

crates

etc.

separate

routes

have

been identified

for

institutional sales .

CONTAINERIZATION

CONTAINERIZATION of vehicle is required to facilitate stacking of

crates that fast empty and milk crates movement at retail points while
maintaining the temperature inside vehicle. Container doesnt become a
bottleneck in fast moment of vehicles (fast movement is required to finish
milk supply early in night and to preserve the quality of milk).
Milk pouches are left at shopkeeper premised in night to be sold only in
morning. Most of the retailer doesnt have freezer for storing milk.
The delivery of milk crates is in three stages.
Crates are downloaded from the container.
Crates are bought near the shop entrance.
Shop keeper puts creates inside the shop / deep freezer.
Containerization would reduce handling losses during these activities. The
vehicle crew levels the crates on the road and move to its next service
point. The crew needs to be trained to deal with the end customer of

dairy appropriately. With increasing competition , all organization would

have to think of :
Keeping the end customer happy.
Providing the best quality product and service.
Maintaining a social , friendly and innovative corporate
image.
Competition is hooting up in dairy sector. Dairy is expected to have
growth rate of 20% or more after the year 2002. Multinationals like
Nestle have a strong presence in dairy items sold through FMCG retail
distribution channels , however , these factor could become a leveler for
any organization.

TYPE OF VEHICLE
1.
2.

BIG VEHICLE
SMALL VEHICLE

Tata 407 DCM Toyota

Tempos

The dispatch sheet is given to the attendant. Dispatch sheet also

doubles as a gate pass for vehicle movement out of DAIRY. Parag has a
separate document dispatch summery for gate pass. Physical enumeration
is done at gate by security to cross check

the figures mentioned in the dispatch statement vehicles out of the factory
premises. The dispatch sheet and empty trays are returned to dairy official
the next day.

OBJECTIVE OF THE STUDY

The purpose of this project is to diagnose the information contained in financial

statement as to judge the profitability and current financial affairs.
To estimate the working capital requirement of the firm. Just like a doctor
examine his patient by recording his body temperature, blood pressure, etc
before making his conclusion regarding the illness and before giving his
treatment, a financial analyst analysis the financial statement with various tools
and techniques of analysis before commenting upon the financial affairs
(positive and Negative) & working capital condition of an enterprise . The
analysis and interpretation of financial statement is essential to bring out the
mystery behind the figures in financial statements. The main objectives of the
study are as related to the topic are as under.
To find out the concept of working capital & cash flow
analysis.
To find and analyze the group wise composition of working
capital in Parag Dairy.
To study the different mechanism to maintain proper
working capital in Parag Dairy.
3

 Estimation of working capital.

Evaluate
working
capital

requirement

in

the

manufacturing firm.
To find various alternatives of working capital
To analyze the financial position of the Parag Dairy.

SCOPE AND LIMITATION OF THE STUDY

Working capital is considered as central nervous system of firm. The importance

of working capital is reflected in fact that financial managers spend most of
their time in managing current assets and current liabilities. Adequate working
capital needs to be maintained in order to discharge day to day liabilities and
protect the business from adverse effects in times of calamities and
emergencies. It aims at protecting the purchasing power of assets and maximize
the return on investment. In other words, goal of working capital management is
to minimize the cost of working capital while maximizing a firms profits.

Scope
Determining the total funds required to meet the current operations of the
firm(i.e. determination the level of current assets).
To decide the structure of current assets(i.e. the proportion of long term
and short term capital to finance current assets).
To evolve suitable policies, procedures and reporting systems for
controlling the individual components of current assets(mainly cash,
receivables and inventory)
To determine the various sources of working capital.
To ensure optimum investment in current assets.

 To strike a balance between the twin objectives of liquidity and

profitability in the use of funds.
To ensure adequate flow of funds for current operations.
To speed up the flow of funds or to minimize the stagnation of funds.

Limitation of study
unnecessary accumulation of inventories,which leads to
mishandling of inventories ,waste theft and losses in
increase.
Excess of working capital is indication of defective credit
policy and slack in collection period.These leads to higher
bad debt losses that reduce profits.
It makes management complacent which degenerates in
to managerial inefficiency.
Inadequate working capital stagnates growth.
It becomes difficult to implement operating plans and
achieve the firmss target profits.
It leads to inefficient utilization of fixed assets.

MANAGEMENT OF WORKING CAPITAL

I-

INVENTORY

It is time to review our inventory level and ensure reduction as number of days
of turn over. Sincere effort should be made for liquidation of non / slow
moving inventory. The inventory against AMAs need to be reviewed &
reduced.

II-

BOOK DEBTS

Units and busuness sector should continued with their vegorous efforts to
achieve minimum level of 180 days to turn over at the company level.
The areas to be focused a part from the collectable out standing from the
current bills are , dues against differad debts, bills under verifications , turn over
recognized but not billed due to various reasons etc.
The dispatches , which only add to turn over , without immediate billing and
corresponding billing and corresponding cash collections are to be reviewed
thoroughly and the billing schedule with the customer may be reviewed for
changes. The practices of dispatching material which could not be billed
immediately is not be encouraged head of the unit shall personally reviewed
goods dispatched but pending billing for more then three three month on regular
basis. A focused presentation on this has to be made to the budget team units
3

must strive hard to control the increase in differed debts and also old and held
outstanding.

III-

CONTRACT CLOSING ISSUES

Miner supply from units to settle outstanding commercial disputes in respect of

project completed in the part of contract were of are yet to closed, should also
be fully included in the budget to insure expenditious closure of old contract
and realization of large overdue outstanding an amount of Rs.3.6 cr. is
outstanding against final payment which could be realized by the solving to the
contract closing issues. This will also enable to withdraw huge amount of
provision created for contractual obligation. Units shall make focused
presentation on their action plan to the budget team.
IV-

CASH FLOWS

Units should ensure positive net flows through the year. Allocation of funds to
units with negative balance at any point of time will be done only with my
approval. The units should also generate free cash flow from their operations.
The free cash flow for R.E-2006-07

B.E-2007-08 should be presented to

directors.

V-

CAPITAL EMPLOYED

In 2007-08 , the capital employed has increased to Rs. 451,51 cr. from Rs.
447,49 cr.

in 2006-07. Increase in capital employed due to the recent

investment in modernization scheme should also give the return commitment in

the project report.

Better working capital management will help us to reduce the capital

employed.
VI-

DIVERSTMENT OF UN PROFITABLE PRODUCT LINE

As part of budget exercise the unit shall have a detailed review of the market
share in constitution with business sectors and develop stragies.

OPERATING CYCLE
The operating cycle concept presents the heart of working capital management
in a more dynamic form. The time that elapses to convert raw materials in to
cash is known as operating cycle. In the other words the time that elapses
between the purchase of raw materials and the collection of cash for sale is
referred to as the operating cycle.
The operating cycle involve the following procedure

Conversion
Conversion
Conversion
Conversion

of cash into raw material.

of raw material in to work-in-progress.
of work-in-progress into finished goods
of finished goods into Sales {debtors and

cash}

COST OF PRODUCTION

[1]- Cost of buying milk from corporative or other sources[2]- Logistic cost of manufacturing units[3]- Cost of transportation to carry the milk to manufacturing units:[4]- Processing cost
(a) Deprecation
(b) Labor cost
(c) Electricity / water
(d) Maintenance cost
(e) Managerial cost
(f) Infrastructure cost
[5]- Storage cost
[6]- Transportation cost
[7]- Variable Cost
(a) Raw Material
(b) Additives
(c) Power & Fuels
(d) Conversion Changes
(e) Distribution Changes
(f) Cash Handling Changes
(g) C & C Inward
[8] Fixed Cost
(a) Factory & General Administrative cost
(b) Employees Cost
(c) Consumables

(d) Repair & maintenances

(e) Telephone
(f) Rent, Rates & Taxes
(g) Insurance
(h) Professional Fees
(i) Apportionment of QC cost
(j) Apportionment of Administrative cost
(k) General Expenses

PRODUCTION PLANNING AND IMPLEMENTATION

While any Dairy project is implemented we look forward in the following

pattern for its project implementation:
Various Steps of Project Implementation are:[1]. Investment Opportunities Project Planning; Financial Analysis; Project
Cost Estimates; Product Yields.
[2]. Plan for Product Manufacturing

Technological Aspects ; Mass

Balance Process Flow Diagrams ; Engineering Aspects with Building Plan

Layout and Equipment List; Liquid Milk Handling; Products.
[3]. Development of Plant Layout

Production Block ; Building

Plan;

Special Features ; Hygiene Features ; Factory Location; Brief Specifications of

Key Equipment.
[4]. Cleaning & Sanitization Cleaning Cycle ; CIP; Time & Temperature
Schedule; Chemical Sanitizers With the growing consumer awareness towards
health and nutrition , appropriate packaging and nutritional

labeling

have

become important.
This trend has been further accelerated by the changing dietary habits and
lifestyle of the ever-increasing number of nuclear families.
They are demanding convenient, easy to cook, ready to eat foodstuffs in
appropriate packaging that retains freshness, flavor and taste, preserves nutrition
and has a long shelf life.
This is borne out by marked increase in expenditure on meals away from home
as well as on packaged foods, purchased during regular grocery shopping.

[5]. Packaging :-While packaging any of the Dairy Product we take care of the
following things:
Packaging Materials Tin Containers, Aluminium Foil/Containers, Paper
Carton Boards , Glass , Corrugated Board , Plastic Materials; Specifications
Packaging Techniques

Vacuum Packaging , Modified Atmosphere

Packaging , Oxygen Absorbers / Scavengers , Poly Clip System , Aseptic

Packaging , Computer - Aided Designing , Edible Packaging , Disposal of
Packages, Recycling, Recommended Packaging and Storage .
Packaging Machines Tin Can Filling Machine, Seaming Machine, FormFill - Seal (FFS) Machine, Cup Thermo-Fill and Sealing Machine, Pre-formed
Cup Filling and Sealing Machine, In-line Cup Filling, Sealing and Cartoning
Machine , Multi Fill Machine , Vacuum and Gas Machine, Shrink Wrapping
Machine.

COST PATTERN OF PARAG DAIRY

Every company has to look for its cost incur. And in order to maximize its profit
it will try to find out the various fields in which cost is incurred and will try to
reduce it.

The cost pattern of Parag dairy dairy is as:Cost Head

Rs. In Lakh %

Electricity

939 65%

Consumable

89 6%

Repairs & Maintenance

423 29%

Total

1,451 100%

Electricity cost constitutes 65% of the total core cost, maximum among all other
costs , hence needs focus to explore the possible areas of cost reduction.

Hence we should look in the matter of electricity as it constitute 65% of total

cost.
In booth various equipment that consume electricity are:Bulk Vending System
Bulk vending system has an automated vending system; the milk is dispended in
specified quantity (500 ml) when coin is inserted.
Milk Chilling Unit
MCU is used to maintain the temperature of loose milk at -8 degree celcius to
conform to the quality parameters set by company. MCU works as a heart for
the vending system having two containers of 1000 liters and 500 liters for
storing loose milk.

Deep Freezer
Deep Freezers of different sizes and capacities are used to store the ice-cream in
the form and shape in which it is supposed to be sold in the market.
Light Points
Since MCU and Deep Freezers account for maximum electricity consumption,
they become the Target Area to study whether equipments are utilized to their
fullest capacity
so in order to reduce this expenses we will try to find out the average electricity
consumption of the booth, and try to see how are booth are consuming more
than

average

consumption , and how much are consuming less than

consumption.
Parag Dairy booth is of two types:I-

Milk shop

In this type shop only Milk items of Parag Dairy are saled.
II-

Mini Shop

Through these kind of shop Parag Dairy supplies only milk.

For this Mother Dairy provided with a set of information in which:we are given the electricity consumption data of the 750 booth. and the per
equipment consumption data used.

FINANCIAL ASPECTS IN RUNNING OF MILK PLANT

To meet the growing demand of milk in pouches, it was envisaged to set up

in house poly pack capacity of 6 lack liters at dairy in the adjoining plot
of dairy.
However initially on experimental basis in the existing premises poly pack
operation of 50,000 LPD was made operational using existing available
services with minimum investment .
The packing capacity was further expanded to 1 lack liters. However by
further adding 2 no packing machines the total packing facility

from

existing premises has been increased to 1.5 lac litters per day.
Looking into space constraint further expansion in the existing premise
is not possible.
Mean while sale of milk in pouches is increasing day by day and average
growth per year is more than 15%. There is no surplus packing capacity
available with existing co-packers.
In view of the above to take care of the next five years requirement of
additional milk in pouches, Vendor development group has recommended
setting up of 6 lack liters per day of milk packaging facility in the adjoining
plot and also increasing existing milk processing facility from 4 LLPD to
10 LLPD at Dairy.
It is also necessary to have some percentage of own packing facility from
strategic point of view.

Objective
1. The facility can be setup at Dairy in minimum time due to availability of
required land.
2. The main input for setting up many Dairy is availability of good quality
fresh water. The water Quality and Quantity of underground tube wells at
Dairy is very good due to near the river Hindon.
3. It is necessary to create a production facility to meet the market demand
to keep edge over the competitors in the field.
4. To set up and run the facility at Dairy will be very cost effective due to
availability of infrastructure at Dairy, which can be in actually shared, based
on need.
5. The proposed packing plant will be a role model for other Co-packers to
adopt in their plants from layout of plant to delivering final milk quality in
pouches and dispatch.

RESEARCH METHODOLOGY
3

Meaning of Research Methodology

Research in common parlance refers to a search for knowledge one can define
research as a scientific and systematic search for pertinent information on a
specific topic.
In fact Research is an art of scientific investigation . Research is an academic
activity and as such the term should be in technical sense.
Research comprises defining and redefining problems, formulating hypothesis
or suggested solutions, collecting , organizing and evaluating data, making
deductions and reaching conclusions and at last

carefully testing the

conclusions to determine whether they fit the formulating hypothesis.

Research is thus an original contribution to the existing stock of knowledge
making for its advancement. It is the pursuit of truth with the help of study,
observation , compression, and experiment. In short the search for knowledge
through objective and systematic method of finding solution to a problem is
research. The systematic approach concerning generalization and the
formulation of a theory is also research. As such the term research to the
systematic method concerning of enunciating the problem, formulating a
hypothesis, collecting the facts or data , analysis the facts and reaching certain
conclusions either in the form of solutions towards the concerned problem or in
certain generalizations for some theoretical formulation.
Some people consider research as a movement , a movement form the known to
unknown. It is actually a voyage of dictionary.

Methodology

The following information about the PPM plant installation:I-

Maximum plant capacity

6, 00,000 lit/ day

II-

Actual production of plant

1, 00,000 l/d (1 yrs)

3,00,000 l/d (2 yrs)
4, 00,000 l/d (3 yrs)
6, 00,000 l/d (4 yrs)

III-

Working days

365

IV-

Total projected investment

800 laces

The topic
of this project is Working
in PARAG
IDENTIFICATION
OFcapital
THEmanagement
PROBLEM
AREADAIRY.

The main problem arises is that when people do not know that exact financial
position and requirements of any organization, because by only looking at
balance sheet and profit loss account, we cant predict the requirements and
current financial affairs of any organization, there are other tools also which are
been used to measure the requirements of the fir. Generally people, employees
and other shareholders of the company only look at the general accounts of the
company but they lack to see other things such as financial analysis and change
in requirement policy of the company, through which the working capital
required for the current financial affairs of the company can be predicted.

Strength :SWOT ANALYSIS OF PARAG DAIRY

The major strength of the traditional dairy product sector is the mass
appeal enjoyed by the wide variety of products. The market for these
products far exceeds that for western dairy products like milk powder ,
table butter and cheese. Their operating margins are also much higher
then the western dairy products. The increasing demand for these products
presents a great opportunity for the organized dairies in the country to
modernize and scale up the production.
3

Weakness:
The major weakness of this sector is the practice of inadequate hygiene
in the preparation and handling of these products and their relatively short
shelf life. The preparation and marketing of these products is generally
done by halwais and that limits development in the sector.

Opportunity:
The expanding business prospects provided by these products and their
accompanying value-addition , call for a thorough study of this sector. It
would facilitate an increase in
the production and marketing of hygienically prepared and properly
packed

products

to meet the demand of a growing population as has

been demonstrated at the NDDBs Sugam Dairy.

MARKET SHARE OF PRODUCERS IN LUCKNOW

3

During the project work a survey is being conducted to know the market share
of PARAG in Lucknow city. This survey is been done among 50 people. This
shown with the help of following Table & Pie Chart.
Table No. 1.1
Duration

Numbers of
Consumers

Parag
Amul
Deva
Local
Suppliers
Total

26
15
6
3

Percenta
ge
52 %
30 %
12 %
6%

50

100 %

It is clear from the graph that :1. 52 % of market share is captured by PARAG.
2. 24% of of market share is captured by AMUL.
3. 12% of market share is captured by DEVA.
4. 6% of market share is captured by Local Suppliers.

BUYING BEHAVIOR OF CUSTOMERS

During the project work a survey is being conducted to know the buying
behavior of consumers in Lucknow city, whether they buying milk in
morning time or evening time or both times. This survey is been done among
50 people. This shown with the help of following Table & Pie Chart.
Table No. 1.2
Time

Numbers of
Consumers

Morning
Evening
Both time
Total

Percentage
23
12
15
50

It is clear from the graph that :5. 46% Consumers are buying milk in morning only.
6. 24% Consumers are buying milk in evening only.
7. 30% Consumers are buying milk in both time.

46 %
24 %
30 %
100 %

QUANTITY NORMALLY DEMANDED OF MILK

TABLE NO. 1.3
Quantity

Numbers of
Consumers

1 Litre
Litre
Litre
Total

Percentage
32
15
3
50

It is clear from the graph that :8. 64% Consumers are buying 1 Litre milk.
9. 30% Consumers are buying Litre milk.
10.6% Consumers are buying Litre milk.

64 %
30 %
6%
100 %

ANALYSIS AND INTERPRETATION OF DATA

Out of 50 consumers 44% consumer are used PARAG products

Daily and 50% consumers is used PARAG products weekly, &
12% used monthly.
64% consumers are satisfied with taste & quality of PARAG
Products & 36% consumers are dissatisfied.
60% consumers are satisfied with the price of PARAG Products ,
whereas 40% consumers are dissatisfied.
92% consumers are satisfied with the quality of PARAG Products &
80% consumers are dissatisfied.
88% consumers wants more number of PARAG booths to be set up
in their locality & 12% & have no effect.
32% consumers have positive response to switch over, If other
brands are available at the same quality & 68% consumer have no
response.

 We contacted with 50 consumers , 26 consumer are using PARAG

milk, 15

consumers

are

using AMUL, 6 consumers

DEVA & 3 consumers are using Fresh milk.

are using

FINDINGS AND CONCLUSION

There is a need to maintain a balance

working capital for maximization

profits or minimization of working capital cost or to maintain balance

between liquidity and profitability in PARAG DAIRY.

The dangerous excessive working capital of

PARAG are- Unnecessary

accumulation of inventories, Indication of defective credit policyand

stack collection period, degeneration in to managerial inefficiency and
speculative profit grow.

The

danger of inadequate working capital areStagnated growth,

difficult to implement operating plans, difficult even to meet day to day

commitments, inefficient utilization of fixed assets.

Working

capital management goal is maintain a satisfactory level of

working capital.

Gross working capital concept of PARAG DAIRY focuses attention on

the two aspect of current assets management. These two are- Optimum
investment on current assets and financing of current assets.

 The operating cycle concept pattern penetrates to the heart of working

capital management in PARAG in a more dynamic form. The time that
elapses to convert raw materials in to cash is known as operating cycle.

Working capital requirement in PARAG DAIRY is determined by a wide

variety of factors , They are-Size of business, Production cycle of
process, Production policy, Credit policy,

availability of credit, Close

co-ordination between production and distribution policy, Credit policy

of RBI and so on.

BIBLIOGRAPHY

To prepare my Project on WORKING CAPITAL MANAGEMENT in PARAG

DAIRY I have studied many books and use websites. The detail is following-

BOOKS
FINANCIAL MANAGEMENT
FINANCIAL MANAGEMENT
-FM PRINCIPLES AND PRACTICES

-I. M. PANDEY
PRASANCHANDRA
-SUDHINDRA BHAT

WEBSITES

WWW. PARAG DAIRY.COM

WWW.GOOGLE.CO.IN
WWW.DAIRYINDUSTRY.CO.IN
Http://Www.Dairyuniverseindia.Com/Marketdate.Html