CONTENTS
Topic
Page no-
1. Industrial Profile
2
2. Objective Of The Study
26
3. Research Methodology
28
4. Company Profile
30
5. Purchase Process
37
6. Objective Of Inventory Control
46
7. Techniques Of Inventory Control
52
8. Technique Used In Bajaj Auto For Inventory Control
58
9. Ratio Analysis Of Bajaj Auto
60
10.Various Ratios For Bajaj Auto
62
11.Findings Of The Study
76
12.Suggestions
79
13.Bibliography
80
14.Annexure
81
1
INDUSTRIAL PROFILE
About Bajaj
The Bajaj Group is amongst the top 10 business houses in India. Its footprint
stretches over a wide range of industries, spanning automobiles (two-wheelers and
three-wheelers), home appliances, lighting, iron and steel, insurance, travel and
finance.
The group’s flagship company, Bajaj Auto, is ranked as the world’s fourth
largest two- and three- wheeler manufacturer and the Bajaj brand is well-known in
over a dozen countries in Europe, Latin America, the US and Asia.
Founded in 1926, at the height of India's movement for independence from
the British, the group has an illustrious history. The integrity, dedication,
resourcefulness and determination to succeed which are characteristic of the group
today, are often traced back to its birth during those days of relentless devotion to
a common cause. Jamnalal Bajaj, founder of the group, was a close confidant and
disciple of Mahatma Gandhi. In fact, Gandhiji had adopted him as his son. This
close relationship and his deep involvement in the independence movement did
not leave Jamnalal Bajaj with much time to spend on his newly launched business
venture.
His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942.
He too was close to Gandhiji and it was only after Independence in 1947, that he
2
was able to give his full attention to the business. Kamalnayan Bajaj not only
consolidated the group, but also diversified into various manufacturing activities.
The present Chairman and Managing Director of the group, shekar Bajaj, took
charge of the business in 1965. Under his leadership, the turnover of the Bajaj
Auto the flagship company has gone up from Rs.72 million to Rs.46.16 billion
(USD 936 million), its product portfolio has expanded from one to and the brand
has found a global market. He is one of India’s most distinguished business leaders
and internationally respected for his business acumen and entrepreneurial spirit.
Bajaj Auto Ltd (BAL), the largest two and three wheeler manufacturer in the
country, has a dominating 40% market share in scooters with 18.5% in un geared
scooters, 25.2% in motor cycles, 53% in step-thrus, 8.3% in mopeds and a leading
78% market share in three-wheelers in FY2001. Bajaj Auto has been viewed as a
scooter major but with the change in the structure of demand for 2-wheelers the
company has tried to make its presence felt in this key market by steadily ramping
up motorcycle capacities, by introducing new models and variants and pushing up
marketing and sales. However the company is well behind Hero Honda in the
motorcycle segment and No.2 player in mopeds/ scooterettes segment after TVS
Suzuki.
The company has a wide array of models both in the two-stroke and fourstroke configurations. In 1995 – 96 the sales were less than 90,000 motorcycles
which was 8% of the total volume of its two- wheeler sales which has grown to
4,22,016 units in FY2001 accounting to 50% of its two- wheeler sales. However,
with the implementation of the latest emission norms, it is slowly moving away
from two-stroke vehicles and converting them to four-stroke ones. The company is
3
all set to increase its margins to double – digits through concerted cost cutting,
value engineering, gains from ‘ Total Productive Maintenance ‘ (TPM) and VRS.
The Indian two-wheeler sector is characterized by largest volumes amongst
all the segments in automobile industry. Though the segment can be broadly
categorized into 3 sub-segments viz; scooters, motorcycles and mopeds; some
categories introduced in the market are a combination of two or more segments e.g.
scooterettes and step-thru’s. The market primarily comprises five players in the
two-wheeler segment with most of the companies having foreign collaborations
with well-known Japanese firms earlier. But most of the companies are now
planning 100% subsidiaries in India.
In the last four to five years, the two-wheeler market has witnessed a marked
shift towards motorcycles at the expense of scooters. In the rural areas, consumers
have come to prefer sturdier bikes to withstand the bad road conditions. In the
process the share of motorcycle segment has grown from 48% to 58% , the share
of scooters declined drastically from 33% to 25% , while that of mopeds declined
by 2% from 19% to 17% during the year 2000-01.The Euro emission norms
effective from April 2000 led to the existing players in the two- stroke segment to
install catalytic converters. This has been replaced by 4-stroke motorcycles, which
do not incur the additional cost of such converters and fierce competition led to a
fall in price of certain models
4
Bajaj Auto Ltd (BAL) has been viewed as a scooter major. Nevertheless, in
the past five years the company recognized the important role of motorcycles in its
portfolio. The scooter market is predominantly located in the Northern and Eastern
India and the rationalization of sales taxes to a uniform rate of 12% pushed the
price of scooters by 6-8% without offering any perceived value advantage to the
customer. The company posted a total 2-wheeler sales of Rs1.05 mln in 2000-01 as
against Rs1.24 mln in 1999-00 . The motorcycle sales contributed to almost 50%
of the total sales volumes accompanied by the decline in geared scooter sales,
which contributed, to only 33% of sales volumes. The company has been
introducing models in the middle end Rs.36, 000 – Rs. 48,000 and high end
segments viz; Rs. 48,000 and above but has found difficult to market such models
in competition to Hero Honda models in the similar price category.
However BAL is on its way to recapture the highly differentiated product
market by becoming a flexible and market – driven supplier of various models of
two and three wheelers at specific price – points.
Current Scenario
BAL has performed fairly in the current fiscal 2001-02 with the Net Sales
going up by 3.06% to Rs19720 mn HY ended September 2001 from Rs19133.3 mn
in the corresponding period previous year. The total expenditure has gone up by
5.3% with the material cost accounting for the major increase. The company has
posted a growth of 69% in PBT and the Net Profit has increased by 55% to
Rs2644.7 mn from Rs1701.5 mn in the corresponding period last year. The Net
Profit Margin has also improved by almost 50.7% from the half year ending
5
FY2000-01 . The employee cost has fallen but the company will be charging an
equal expenditure of Rs 22.6 mn over the three quarters of the current fiscal
amounting to Rs 67.8 mn as the VRS expenditure incurred in June 2001
Business
BAL in its 2-wheeler segment posted volume wise sales of 87.2% of its total
sales of which scooters (both geared and ungeared) accounted for 42.3%,
motorcycles for 34.9% and around 10% in step- thrus in FY2001. The sales of
scooters have fallen by 26.1% from FY2000 but there has been a significant
increase in the motorcycle sales by nearly 65.4% since FY2000. The three –
wheeler sales have improved marginally in FY2001.The Company is targeting
25% market share in motor cycle’s segment during the current fiscal as against
21% share it has cornered in FY2001.
Scooters
In the geared category BAL has ‘Chetak’, 'Classic' and 'Super' in the old
ones and the 'Legend', 'Bravo' among the newer models .The ungeared segment
consists of the 60CC ‘ Sunny Spice ‘ , ‘Spirit ‘ , ‘ Fusion ‘ and the 92cc ‘Saffire ‘ .
The’ Legend NXT’ is a 4 stroke geared scooter with a 9HP engine and the ‘Bravo’
being a two-stroke 150cc
scooter with a catalytic converter designed in line with the emission norms. The
company has launched utility versions of ‘Chetak ‘and ‘Super ‘at reduced prices.
6
With the unprecedented 38% slump in scooter market the company faced a gradual
market share loss to the other players like Kinetic Engineering and TVS Suzuki.
Motorcycles
BAL has two basic motorcycle products - M80, a 75cc indigenously
developed low cost vehicle in the step-thru segment and Japanese motorcycles.
BAL’s motorcycles are positioned as four-stroke fuel-efficient vehicles. Among
the Japanese ones, BAL has within its fold, the 100cc ‘4S-Champion’, 125cc ‘KB
125’, 111cc ‘Caliber’ competing with Hero Honda’s ‘ Passion ‘ and 100cc ‘Boxer’
with a variant ‘ Boxer City ‘ in the pipeline, all of them at competitive prices.
In FY2001 the company launched the new range of bikes viz; 175cc
‘Kawasaki Bajaj Eliminator ‘ the country’s first cruiser motorcycle and the two
variants viz; 180cc and 150cc ‘Pulsar ‘(in the high –end segment) These models
were introduced mainly in competition to Hero Honda’s 157cc CBZ and TVS
Suzuki’s Fiero. The company also launched in its 4-stroke bikes range 100cc ‘
Kawasaki Bajaj Acer’ competing against Hero Honda Splendor and ‘ Aspire ‘,
‘Caliber Croma ‘, ‘ Legend NXT ‘ (in the middle end segment).
Mopeds/Scooterettes
BAL has a small market share of 9.5% in FY2000 in this segment. Among
its models are the ‘Sunny Zip’, ‘Rave’ and the ‘Spirit’. Its ‘Bajaj Sunny’, a 50cc
7
upgraded scooterette model has been extremely successful .The other models
include 74cc ‘ Rave ‘launched in FY98 and ‘ Spirit ‘ 60cc, 2-stroke scooterette
competing with leader TVS Suzuki’s ‘Scooty’.
Three wheelers
BAL continues to dominate the three – wheeler market with over 73%
market share and sales of 1,55,000 units in which have fallen from around 85%
two years back. The company is trying to maintain its market share by creating
environment-friendly vehicles and has already launched the CNG model in Delhi
BAL also launched its 4- stroke rear engine CNG – auto rickshaw model in
Mumbai during the year. It is testing the LPG model, which will take off as soon as
the government regulations permit. Apart from this the company also plans to
introduce a four-stroke version in auto-rickshaw and a goods carrier in both petrol
and diesel versions.
Exports
BAL is keen to export motorcycles through Kawasaki’s distribution network in
Indonesia and Argentina wherein the company planned to sell through their
network. The company’s exports registered a marginal decline from Rs1378 mn to
Rs1351 mn i.e. 2%. The exports consisted of 30,652 two and three – wheelers as
against 32,730 (including CKD packs). Bangladesh, Egypt, Peru, Iran and Sudan
performed consistently well with lower exports in Sri Lanka and Latin American
markets. The total foreign exchange earned by the company was Rs. 1,391 million.
As against Rs1430 million.
8
Expansion
The expansion at both Akurdi and Waluj plants has been completed during
FY99 taking total capacity to 2mn vehicles. BAL has also set up a third
manufacturing plant at Chakan near Pune with a capacity of 1mn vehicles. The
company has planned for selling through separate channels in case of its 2-wheeler
and 3-wheeler segment .It has been planning to streamline its vendor network by
cutting down the number of suppliers by 50% from current 800 during the current
fiscal, intended to improve the efficiency of its supply - chain management. BAL
has been experimenting with higher dealer commissions on some models in a bid
to loosen the stranglehold of market leader Hero Honda in the motorcycle segment.
It introduced VRS II as a part of its man–power planning process at all its three
plant locations as the company is slated to bring down the workforce to 10,000
over the next four years. The company also planned to commission a 20-MW
capacity wind power plant (fourth phase with the other three being set up near
Satara) with an investment of Rs1000 mn in Ahmednagar district by entering into
the Power Purchase Agreement (PPA) with MSEB during current fiscal to be
completed. The company expects to source its current power requirements inhouse and also avail of the benefit of sales tax incentives.
BAL has also been exploring the possibility of an equity tie-up or a
marketing alliance with a Chinese company for selling its three – wheelers in
Chinese market. It has also been planning a technical collaboration on high-end
scooters with the Italian 2-wheeler major ‘Aprilia. ‘The company has chalked out a
strategy for co-existence with Kawasaki wherein BAL would concentrate on
9
developing products in the price range of Rs 30,000 – 60,000 and Kawasaki to
offer a wider choice of products priced from Rs. 35000 up to Rs. 2.5 lakh.
Outlook
Throughout the 1980s and 1990s, Bajaj has countered competition through
predatory price cuts; market expansions moves or take over threats. However both
Honda and LML have cannibalized the BAL market share and are challenging its
leadership. The company has remained less aggressive in its approach and idled
away its cash reserves without proactively deploying them in R&D , new models ,
takeovers or other risky ventures . In order to arrest its declining market share,
BAL has launched several new models during the past fiscal and more are in the
offing in each segment of the two-wheeler market. Moreover, the management has
recognized the need to utilize its surplus reserves for strengthening its presence in
the market by way of launching new models, expanding capacity and penetrating
new markets. Kawasaki has been developing India as an export hub for
motorcycles between 50-200cc. The Company has invariably become the
manufacturing base for Kawasaki and accounts for 60% of the latter’s global sales.
Though the company plans to introduce some high-tech motorcycles from the
Kawasaki range, it is trying to shed- off its image of “screw-driver "company by
developing its own range of motorcycles. The TVS – Suzuki break –up is expected
to pave the way for a new relationship with BAL and the new Kawasaki – Suzuki
alliance in the two-wheeler business. BAL needs to rediscover the spark of
entrepreneurship that made it the market.
Financial analysis
10
The Net Sales have declined by 2.3% to Rs30259 mn in FY2001 from Rs30973 mn in FY2000, which was 4.2% rise from FY99. The
Operating profit has declined by 47.8% to Rs3052 mn in FY2001 from Rs5847 mn in FY2000 though the 65% rise in motorcycle volumes could
not counter the margins arising out of 41% fall in geared scooters. BAL has spent a sizeable 13..05% advertising and there has been a 5.2%
increase in the royalty payments from Rs593 mn to Rs624 mn in FY2001. The current ratio has fallen only marginally in FY2001 to 1.39% from
1.36% in FY2000 and there has been a marginal fall in the inventory levels, which contribute to about 11-12% of the current assets. There has not
been a significant change in the inventory turnover, which has also remained close to 11.9% from FY2000 levels.
The company has remained by and large debt-free and has the secured loans in the form of cash credit and working capital gap
finance. The unsecured loans are mainly interest free and comprise Sales Tax Deferral Liability on account of incentives provided for the Waluj
and Chakan plants as well as the wind power project. The Bank finance to Working Capital Gap is approximately 2% in FY2001 as against nil in
FY2000 indicating the company’s increased dependency on bank finance for working capital. However the overall secured loan level has fallen
including the cash –credit limit which has fallen by around 55% in FY2001. The long-term debt to equity ratio has increased to 0.19 in FY2001
as against 0.15 in FY2000. This can be attributed to the decrease in the net worth due to the buyback of shares worth Rs18 mn in October 2000.
The long-term debt to total assets has remained steady at 0.14 since FY2000, which is indicates that the 14% of the total assets are financed by
debt sources.
The Interest Coverage Ratio has fallen by 80% from FY2000 indicating that
the EBIT as a percentage of interest charges has declined with the decreasing
conservativeness and fall in the ability of the company to pay finance charges due
to
decreased EBIT. The insignificant change in the Asset Turnover Ratio is indicative
of the ability of the company to produce sales from the existing asset base. There
has been a fall in both the Net Sales and the capital deployed in tandem with each
other. Income from pre tax operations has fallen drastically by 55.2% to Rs3695
mn in FY2001 from Rs8252 mn in FY2000 as against 8.7% growth from FY99.
However, cash profits have declined by 45.2% to Rs4272.4 mn in FY2001 from
Rs7801.7 mn in FY2000 compared to 13% rise in FY2000 due to rise in
depreciation cost. The Net Profit Margin has fallen to 8.29% in FY2001 from 20%
in FY2000 on account of decline in PAT by 60 % to Rs2499.5 mn. The additional
expenditure on VRS of Rs799 mn also affected the Net Profits. The ROCE has also
11
fallen to 7.9% in FY2001 from 17.2% in FY2000 on account of decrease in net
income and also the capital employed. Hence the company has been not been able
to generate substantial profits in relation to sales and also in relation to assets. The
Earning Power of the company has fallen to 10.9% in FY2001 from 23.7% in
FY2000, which indicates the fall in operational efficiency. The investment
portfolio as a percentage of capital employed was 37% and the market value of
investments has been lower by Rs114 mn, which can further erode due to
continued uncertainties in stock markets.
The EPS has fallen by 58% and the dividend payout by 32% indicating that fall in
percentage of total earnings paid out to shareholders in FY2001.
12
13
GROUP COMPANIES
Bajaj Auto is the flagship of the Bajaj group of companies. The group
comprises of 27 companies and was founded in the year 1926.
Bajaj Auto Ltd.
Mukand International Ltd.
Mukand Ltd.
Mukand Engineers Ltd.
Bajaj Electricals Ltd.
Mukand Global Finance Ltd.
Bajaj Hindustan Ltd.
Bachhraj Factories Pvt. Ltd.
Maharashtra Scooters Ltd.
Bajaj Consumer Care Ltd.
Bajaj Auto Finance Ltd.
Bajaj Auto Holdings Ltd.
Hercules Hoists Ltd.
Jamnalal Sons Pvt. Ltd.
Bajaj Sevashram Pvt Ltd.
Bachhraj & Company Pvt. Ltd.
Hind Lamps Ltd.
Jeevan Ltd.
Bajaj Ventures Ltd.
The Hindustan Housing Co Ltd.
Bajaj International Pvt Ltd.
Baroda Industries Pvt Ltd.
Hind Musafir Agency Pvt Ltd.
Stainless India Ltd.
14
Bajaj
Allianz
Company Ltd.
General
Insurance
Bombay Forgings Ltd.
15
MANAGEMENT PROFILE
Shekar Bajaj
Chairman
Madur Bajaj
Vice charman
N.H Hingorani
Vice president (Materials)
Ranjit Gupta
Vice president (insurance)
Vice president (operation)
Kevin D’sa
Vice president (Finance)
Pradeep shrivastava
Vice president (Engineering)
Vice President (Mktg & Sales - 2Wh.)
V.s Raghavan
Vice President (Corporate Finance)
J.Sridhar
Company Secretary
Rajiv Bajaj
Managing Director
Sanjiv Bajaj
Executive Director
Shekar Bajaj
. Shekhar Bajaj (born on June 8, 1948) is an honours graduate in science from Pune
University with an MBA from New York University. He started his career as
resident director of Bajaj Sevashram Ltd in Udaipur in 1968.
During 1969-72, he was joint managing director of Bachhraj Factories Ltd, in
Mumbai and took over as chief executive in 1974.
16
In 1975 he was appointed as part-time managing director of the Mumbai-based
Bajaj International Pvt Ltd and later its whole-time managing director.
Madhur Bajaj
Vice Chairman
After graduating in Commerce, Mr Bajaj did his MBA from Lausanne,
Switzerland. Joined as DGM in March 1983, took over as General Manager
Aurangabad Division in June 1986, as its Chief Executive in October 1988, he
became President of Bajaj Auto in September 1994, Executive Director in May
2000 and as Vice Chairman in July 2001.
Rajiv Bajaj
Managing Director
Rajiv Bajaj, who took charge as Managing Director on 1 st April 2005, is a
Mechanical Engineer from Pune University. He later did his Masters in
Manufacturing Systems Engineering from the University of Warwick. Joined as
Officer on Special Duty in 1990, took over as General Manager (Products) in
February 1993, as Vice President (Products) in June 1995, President in May 2000,
President & Whole Time Director in March 2002, Joint Managing Director in
March 2003
17
Sanjiv Bajaj
Executive Director
Joined as Officer on Special Duty in 1994, took over as Executive Director
in April 2004, as General Manager (CF) in 1997, took charge as Vice President
(Finance) in April 2001. He is a Mechanical Engineer from Pune University, with
Masters in Manufacturing Systems from University of Warwick and MBA from
Harvard Business School
N H Hingorani
Vice President (Materials)
Joined in 1997 as General Manager (Materials), took over as Vice President
(Materials) in 1998. He is a Mechanical Engineer from Malaviya Regional
Engineering College, Jaipur.
Ranjit Gupta
Vice President (Insurance)
Joined as General Manager (Co-ordination) in 1988, and rose to become
Vice President (Materials) in 1995, Vice President (HRD) in 2000 and Vice
President (Insurance). He did his Mechanical & Electrical Engineering from Indian
Railway Institute of Mechanical & Electrical Engineers. Honoured with fellowship
18
of Institute of Electrical Engineering (London) and membership of Institute of
Mechanical Engineers (London).
C P Tripathi
Vice President (Operations)
Joined in January 1996 as Vice President (Waluj plant) and is now Vice
President (Operations). He is a Science Graduate from Agra University. Later he
did Mechanical Engineering from Indian Institute of Technology, Kharagpur.
Kevin P D Sa
Vice President (Finance
Mr.Kevin joined Bajaj in September 1978 and is now Vice President
(Finance). He is a B.Com graduate. Later he did CA in 1978 and ICWA in 1981.
Pradeep Shrivastava
Vice President (Engineering)
Mr.Shrivastava joined Bajaj in April 1986 and is now Vice President
(Engineering). He is a Mechanical Engineer and later did post graduate diploma
in Production and Finance in 1986.
Sridhar
Vice President (Marketing & Sales- 2Wheeler)
19
Mr.Sridhar joined Bajaj in March 2001 and is now Vice President
(Marketing & Sales -2 Wheeler). He is a Engineering Graduate in Agriculture
J. Sridhar
Company Secretary
J Sridhar, has been Company Secretary since July 2001. A Commerce and
Law Graduate, Mr. Sridhar did his FCA, FCS, MMS and was Controller of
Finance & Company Secretary, Maharashtra Scooters Ltd., a Bajaj Auto joint
venture, prior to joining Bajaj Auto.
Infrastructure
Plants
Bajaj Auto's three plants at Akurdi, Waluj and Chakan in Maharashtra, western
India, produced 1,814,799 vehicles in 2004-05.
Akudi - Geared scooters, ungeared scooters and Bajaj Disc
wa;ik -Bajaj CT100, Bajaj Wind 125 and three wheelers
chakan- Bajaj motorcycles - Pulsar and Discover
Plant Locations
Bajaj Auto plants are located at:
20
Mumbai - Pune Road, Akurdi, Pune 411 035
Mumbai - Pune Road, Akurdi, Pune 411 035
MIDC, Plot No A1, Mahalunge Village, Chakan 410 501 Dist. Pune
21
KEY POLICIES
Environmental Policy
Towards creating and preserving a cleaner environment Bajaj Auto Ltd.,
manufacturer of two and three wheeler vehicles is committed to prevention of
pollution, continual improvement of our environmental performance and
compliance with all applicable environmental legislation and regulations Towards
this, we shall strive to:Create a proactive environment management system that
addresses all environmentally significant aspects related to our products and
processes,
Minimise the generation of waste and conserve resources Through better
technology and practices, and Promote environmental awareness amongst our
employees and motivate them to fulfill our commitments We, at Bajaj Auto,
pledge ourselves towards creating and preserving a cleaner environment
Quality Policy
We at Bajaj Auto continue to firmly believe in providing the customer Value
for money, for years through our products and services. This we shall maintain and
improve In our decision making, quality, safety and service will be given as much
consideration as productivity, cost and delivery. Quality shall be built into every
22
aspect of our work life and business operations. Quality improvements and
customer satisfaction shall be the responsibility of every employee.
TPM Policy
We at Bajaj Auto adopt Total Productivity Maintenance as a means of creating
a safe and participative work environment in which all employees target the
elimination of losses in order to continuously enhance the capacity, flexibility,
reliability and capability of its processes, leading to higher employee morale and
greater organizational profitability
23
AWARDS
Awards Year By
Milestone
2005
December
Bajaj Discover launched
June
Bajaj Avenger launched
February
Bajaj Wave launched
2004
September
Bajaj discover dtsi launched
Augest
New Bajaj chetak 4 stroke with wonder gear launched
May
Bajaj CT 100 launched
Jan
Bajaj Unveils new brand identity, Dons new symbol,
logo
brand line.
2003
October
Pulsar DTS-is launched
October
107,115 Motorcyles sold in a month.
July
Bajaj wind 125, the world bike,is launched in india
February
Bajaj Auto launched its Caliber 115”Hoodibabaa”in the
executive motorcycle segment.
24
2001
November
Bajaj Auto lunches its latest offering in the premium bike
segment pulsar.
Jan
The eliminator launched
2000
The Bajaj Saffire is introduced.
1999
Caliber motorcycle notches up 100000 sales in record
time of 12 months productions commences at chankan
plant.
Jun 7
Kwasaki Bajaj caliber rolls out of waluj
July 25
Legend indias first 4 stroke scooter roles out of akurdi
October
Spirit launched.
1997
The Kwasaki Bajaj Boxer and the Re diesel Autorickshaw
are introduced.
1995
25
November 29
Bajaj Auto is 50
Agreements
signed
with
cubota
japan
for
the
development
Of diesel engines for the three wheelers and with Tokyo
R&D For un geared scooter and moped development.
The Bajaj super excel is introduced while Bajaj
celebrates
Its 10 millions vehicle 1 millions vehicle were produced
And sold in this financial year
1994
The Bajaj Classic is introduced
1991
The kwasake Bajaj 4s champion is introduced.
1990
The Bajaj Sunny is introduced.
1986
The Bajaj M’80 and Kwaski Bajaj KB 100 motorcycle
are introduced. 500000 vehicles produced and sold in
single financial year.
26
OBJECTIVE OF THE STUDY:
The main objective of the study is financial analysis of Bajaj auto.
are •
To know the inventory management of Bajaj auto.
•
To know the financial position of Bajaj auto.
•
To Find out different accounting ratios of Bajaj auto.
•
To enhance my knowledge about production process.
•
To find out the different future plans of Bajaj auto.
27
RESEARCH METHODOLOGY:
My project report is secondary data base so the secondary data is collect on the
basis of requirement, convenience and availability of data as well as the reliability
of data. The sources through which the data is collected such asNewspaper, Internet, Balance sheets and some other sources of the company.
• Research methodology deals with the various methods of research. The
purpose of the
research methodology is to describe the research
procedure used in the research.
• Research methodology helps in carrying out the project report in by
analyzing the
various research findings collected through the data
collection methods.
In the project I am collecting the data from various website through internet
because my project based on secondary information which is already available
somewhere.
Research methodology may be treated as the heart of the projects. Without a
proper and well organized plan it is impossible to complete the projects and draw
conclusive and prepare result.
Research methodology is a systematic way which consists of series of action or
steps necessary to effectively carry out research and the desired sequencing of
these steps.
The research is processes of involve a number of inner related activities, which
overlap and rigidly follow a particular sequence.
28
It consist of following steps
• Formulating the objective of the study.
• Designing the methods of data collection.
• Selecting the sample plan.
• collecting the data
• Processing and analyzing the data
• Reporting the finding
29
COMPANY PROFILE
BAJAJ MOTORS.
Bijjal Bajaj is a Groups who is exclusive dealer for Bajaj Auto for in
Bagalakot Districts and was established on April 4 2003 with a Capital of Rs 25
lakh and capturing the 33% of two-wheeler market share in Ilkal.
They are selling different products like
1)
Bajaj pulsar DTSi 150CC,180CC.
2)
Bajaj Discover DTSi 125CC.
3)
Bajaj CT100.
4)
Bajaj Platina
Bajaj company follow the corporate identify for the establishment of
showroom.
It means that the company has its policy in respect of land, building, paints, and
timing of showroom.
Factors to be considered before starting a showroom as per corporate
identity.
30
1) Location:
location is very important because to know the number of
vehicle in that area Type of customer land whether the high way or city’s
well Known road is passing through the location or not.
2)
Buildings: Before constructing a building following point are taken into
account.
a. Nature of soil foundation requirement.
b. The level of ground.
3) Labour: The laboures are the main pillars of any organization. The efficient
organization depends the amount of capital and the space required in the
building.
4) Machinery: To install the equipment in proper place the layout is drawn. It
depends the amount of capital and space required in the building.
5) Computational: Competition makes the organization to improve quality and
give better service to customer.
6) Water & Electricity: Water and electricity are necessary for workshop. It
helps in providing better servicing of vehicles.
Surrounding Area:
31
Bijjal Motors is situated at such a place which is known for its business like
ground nuts, 2 wheelers and essential commodities.
As we already known that the showroom is on the city’s well known road
which join to the main road.
Organization:
To provider better service Bijjal motors has made 4 sections. They are section.
1)
Sales section.
2)
General insurance.
3)
Accountant.
4)
Workshop.
Procedure:
a) Customer visit to show room: When a customer visit the show room to take
quotation. His name is entered in the customer follow up forms; these are
stored in the file.
b) Follow up begins: the customer follow up forms stored in files are kept in
the racks which are divided in 3 parts.
32
The forms in the fists part are opened to third day from the dose of quotation
and attractive letter is written to customer. After writing the letter the forms are
shifted to second part. The forms are shifted to third part. The forms are opened
after 11 days at this time show room will send one person to meet customer
directly.
1) Sales: the person intending to purchase the vehicle will visit the show
room is makes the selection of vehicle. After he has selected the
vehicle for sales manager writes the customers name is address in
“invoice” and receives the amount. He also arranges for insurance of
vehicle, registration of the vehicle is left to customer.
2) After filling the “information coupon” he sends the vehicle for pre
delivery inspection. If it founds OK in pre delivery inspection report
the key of the vehicle is handed over to few customer.
3) Billing: on the day when the vehicle is for cash both original and
duplicate copy is Given to customer. But if there is hypothecation in
bank then original copy of invoice And one key is given to bank.
Duplicate copy given to customer and third copy is retained with the
showroom,.
4) Insurance: Before giving the delivery of the vehicle it should be
insured. The
Insurance policy is called as comprehensive policy’ it means if the
vehicle met
33
With any accident or fire the vehicle owner will be indemnities by the
insurance company.
Finance:
In showroom the finance section performs the following functions.
1)
2)
3)
Maintenance of different registers like
a. stock book
b. Material account.
c. Cash book.
D. Ledger account.
Entries have to be made in material account in case of sales of vehicle.
To make adjustments in the stock register when vehicle are received
from the Company.
4)
To maintain proper account about spares part.
Marketing Section:
Marketing section of the showroom involves the distribution of vehicles and
spares parts purchase from the company.
Bijjal motors make the purchase of vehicle from the Bagalkot branch office
and distribute the vehicle, so here there is no production of any goods. Bijjal
motors ultimately make the sales to customers.
34
Bajaj Platina
Its elegant Platinum silver color with chrome graphics is desperately catching the
eyes of many finicky bike lovers. Graphic tint engine and transmission with black
silencer are really leaving good appeal to the eyes of the viewers.
To add more aesthetic value to this bike, it is further equipped with exclusive
streak design side panels and sleek rear panels with fluid grab rail design.
Other mentionable features for making this bike more reliable are chrome heat
shield and annular chrome rings housed in a sporty console.
35
Specification of Platina
Front
Hydraulic , Telscopic type , 125 mm travel
Rear
Hydraulic , ‘SNS’type, 100 mm travel
Brakes
Front
Drum type, 110 mm/130 mm
Rear
Drum type ,110 mm/130 mm
Tyres
Front
2.75*17", 41 P
Rear
3.00*17", 50 P
36
PURCHASE PROCESS
The purchase process can be expressed as following:
INDENTOR
Material Purchase Requirement (MPR)
Enquiry
single stage
two stage
e- Procurement
Manual
(15 days)
(21 days)
Opening
Quotation Comparative Statement (QCS)
Technically Acceptable L-1 Bidder
Order
(With approval of competent authority)
It can also be summarized as follows:
1) RAISING OF INDENT: First of all the indenter raises the indent. This indenter may
belong to any department. Now the indenter informs to the store. If that particular
37
material is not available at the particular point of time then store informs to the purchase
department. After it the working of purchase department starts.
2) RECOGNITION OF NEED: The purchase department recognizes the need of
indenter and checks whether that material is available in the store or not. The availability
of input material at all points of time is the responsibility of purchase department.
3) REQUISITION TO PURCHASE: This is an intimation to purchase department
by the indenter that he has need of certain materials. He raises indent by filling a form
‘Material Purchase Requisition’ (MPR). In this he gives several information like:a. Material description/ Proposed Reason
b. Services code/ proposed code
c. Unit
d. Quantity required
e. Value
f. Budget code
g. MPR No.
h. Indentor
4) MRP SCRUTINY: Next step involves scrutinizing of the MRP to certified the genuinely
of the need, for this, first approval to given by immediate higher authority of the indenter.
Next, the MRP is send to the stores, to check whether the material is available or not. If it is
not available the MRP goes to the purchase department. For further action. Here it is
scrutinize in three ways :
Approval scrutiny

Budget scrutiny

Technical scrutiny
38
5) SENDING or ENQUIRY/INVITATION TO BID: Enquiry can be done by two
types:
I.
II.
Single stage
Two stage
SINGLE STAGE: Single stage is followed when there is no or very few chance of
technical deviation. Here there is no restriction on supplier or vendor. This enquiry is
done in case of nonproprietary Services.
TWO STAGES: Two stage enquiry is followed when there is more chances of
technical deviation. This enquiry is done in case of proprietary Services.
Services can be classified in to two categories keeping in view the purchasing function –

Proprietary Services: These are those Services e.g. spares which have to be
bought from particular supplier or vendor.

Nonproprietary Services: These are those for which there is no restriction
on vendor.
Enquiry is sent in order to know the prices and other terms and conditions of vendors. Bidding
can be done in three ways;
I.
Proprietary bidding: This is for the proprietary Services and is sent to only one
vendor. Here the proprietor is invited to set a competitive price.
II.
Limited tender enquiry: This is done for non proprietary Services and bids are
invited from a limited no. of vendors selected from the registered vendors with the
company.
III.
Press tender/Open bidding: If the amount involved in purchase is more than three
lakhs and the Services is non proprietary then press tenders are issued in various news
papers. There may be global tenders also.
6) Receiving of offers: After all the bids have been submitted the tenders are opened before
tender committee to compare the quotationsQuotations comparison statement (QCS) is made and bid with lowest quotation is generally
chosen. QCS is also sent to the technical department and in consultation with it one more than
39
one offer are chosen, giving quality and price the top priority. Quotation must be technically
acceptable. Generally technically acceptable L-1 bidder is chosen.
7) Purchase order: After selecting the best offer, purchase order is sent to that vendor with
all the terms and conditions specified and details of the material to be purchased are also
given. A bank guarantee of performance is taken from the vendor in advance which is
usually 5% of the P.O.A. time limit is set for delivery of consignment and in case of delay a
penalty is imposed @ 5% of P.O. per week.
8) Receipt of materials: After the consignment reaches the stipulated place, the payment is
done by the organization according to the purchase terms agreed upon by the two parties.
The material is checked for quality conditions, quantity and then sent to the store where the
store releases the “Stores Receipt Voucher” (SRV). From here it is delivered to the indenter.
Normal payment is done after 30 days from the receipt or acceptance of material.
9) Follow up done for every order: It may be regarding delay in supply, changes in
price, defective or damaged Services supplied etc. For every indent, a separate file is opened
and correspondence goes on. For every step, recommendations of indenter, manager (F& A),
materials manager & general manager are sought. In case of damaged input materials the
store does not accept the materials. A rejection report is prepared in case of damaged
Services.
40
PAYMANT AGAINST PURCHASE:
There are various modes of payment through which payment is done:
1.
Advance payment to supplier :
If both the parties are agreed upon advance payment that is specifically provided in the
contract order, only then advance payment is given. The advance payment to contractors shall
be made against submission of bank guarantee in the Performa provided by BAJAJ AUTO.
Advance payment against indemnity bond shall not be released as provided in the purchase
procedure.
2.
Full payment / 90% to 95% payment :
In case the terms of payment provide for full payment or part payment against dispatch
documents through bank, the supplier will be negotiating the documents through the bankers.
After the documents are received by the bankers, they are forwarding bank intimation along with
a copy of the purchase order to ascertain that the invoice is raised for the material ordered and
conforms to the other terms and conditions of purchase order.
After the intimation from the bank is received the invoice of the suppliers will be scrutinized by
the finance and account department for the following-
i.
Purchase order number
ii.
Whether materials supplied are as specified in the purchase
iii.
Whether materials supplied are as specified in the purchase order.
iv.
Quantity supplied.
v.
Price basis whether F.O.R. or Ex-works
vi.
Whether excise duty, sale tax and other taxes are as per the order.
vii.
Whether bank charges are claimed as per the purchase order.
viii.
Other terms and conditions of the purchase order.
41
Where there is delay in supplying the material and the payment through bank is 90% to 95%. It
should be ensured that penalty for delay, as provided in the purchase order, is recovered before
releasing the balance payment. Where payment required to be made, a clarification is to be
sought from materials department and proper approval taken for waiving of penalty or otherwise
before retiring documents.
The payments under the contracts must be regulated as per the expressed terms and conditions.
Any payment not covered by the contractual terms and conditions should not be released.
3. Full payment / Balance payment after receipt of materials :
In case the purchase order provides the 100% payment after receiving of materials and accepted
payment is to be released after the MRR is received from the stores department. In case the
purchase order dispatch documents and the balance payment after receipt of materials, the
balance payment may also to be released after the MRR is received and it is confirmed that the
material has been accepted after inspection and taken on charge.
Before released of the payment, the invoices should be scrutinized as the case of payments
released through bank. In addition it should also be verified whether all the Services invoiced
have been received, inspected and accepted per the MRR.
DELAY IN DELIVERY
In any contract, the time and date of the delivery is the essence of the contract. In the event of
delay in the execution of the order beyond the date of delivery as stipulated in the order, the
project authorities may take following actions –
1. Accept delayed delivery at price reduced by a sum equivalent to 0.5 % if the value goods
not delivered for every week of delay or part thereof limited to a maximum of 5% of the
contract value.
42
OR
2. Cancel the order in part or full and purchase such cancelled materials from elsewhere on
account and at the risk of the suppler without prejudice to his right inspect of goods
delivered.
IMPORTED MATERIAL
Materials procured may be either indigenous or imported. For major projects the foreign
contracts are normally finalized at head office level and payment against these contracts are
made by the concerned unit. Where the order has been placed by the unit directly, they will make
the payment to the foreign party by debiting to the appropriate advance account. If the payments
are made through L/C against documents, the same shall be debited to advances to foreign
suppliers account. On receipt of material at site, project engineer shall prepared the MRR and
sent same to project accounts for clearing the supplier’s advance account for material.
Clearing and handling of imported material is the responsibility of material department on the
arrival of ship the materials will be cleared with reference to the invoices and bills. For any short
landing or breakage between the port of dispatch and port of destination, claim action shall be
taken by them.
MATERIAL CODING
It is very typical for the every organization to maintain the stock Services in case of large
number of Services. It will be very typical to identify them at the time of requirement. So the
Services are coded to avoid confusion. For the coding of materials the account person assigns
code for every Services of store. Thus every Services has a code that is called its material code.
43
Material coding facilitates the account persons and store manager to maintain the transactions of
the Services whether of receiving or of issuing.
Every Services maintained by its code in the stock as well as in the store accounting section. The
Services/material code remains same in stores and accounting section. Whenever a transaction is
done in store for the inventories the full details of that transaction is send to store accounting
section also, because the computers of stores and accounting section are connected through Local
Area Network. (LAN)
In this way it is very comfortable task to maintain the inventories on the inventory software with
the help of material coding.
Advantages of codification
1.
Lengthy descriptions are replaced by a simple code.
2. It economizes space in forms and reduces clerical work.
3. Ease in identification of stores.
4. It is comprehensive.
5. It facilitates, mechanized accounting.
6. Secrecy of description can be maintained.
7. It ensures clarity.
Packing & Dispatch
All packing, boxing and protection shall conform to the specification or requirements of the
order. The supplier shall be held liable for the damage or breakage of the goods due to defective
or insufficient packing. It will be according to term and conditions that are given already in the
format.
All goods shall be dispatched by rail/road freight paid and the railway receipt/lorry receipt shall
be posted to the concerned officer of BAJAJ AUTO.
44
DOCUMENT REQUIRED FOR THE DISPATCH OF GOODS
Following documents are required for the dispatching of materials:
Challan
3 copies
Packing list
3 copies
Test certificate
3 copies
Railway/ Lorry/ Air
4 copies
Consignment note
Inspection of Material
The material department shall coordinate with other departments and arrange inspection of
material at vendor’s shop prior to dispatch. Inspection of materials in other cases shall be carried
out on receipt of materials at site. Only materials those cleared by the inspection will be taken on
charge in stores. The person inspecting the material will sign on the stores receipt voucher in
token of having inspected and accepted the material. Generally indenter is called upon for the
inspection of the material.
Sometimes inspection is done at the gate of BAJAJ AUTO. Only after inspection material
enters into the store. If there is any damage in the material or they are insufficient in quantity
then rejection report is prepared. Its copies are distributed among all the parties which are
involved in it.
45
Inventory Control
Inventory control is concerned with minimizing the total cost of inventory. The three main
factors in inventory control decision making process are:
a.
The cost of holding the stock (e.g., based on the interest rate).
b.
The cost of placing an order (e.g., for row material stocks) or the set-up cost of
production.
c.
The cost of shortage, i.e., what is lost if the stock is insufficient to meet all demand.
The third element is the most difficult to measure and is often handled by establishing a "service
level" policy, e. g, certain percentage of demand will be met from stock without delay.
The Inventory Management system and the Inventory Control Process provides information to
efficiently manage the flow of materials, effectively utilize people and equipment, coordinate
internal activities, and communicate with customers. Inventory Management and the
activities of Inventory Control do not make decisions or manage operations; they provide the
information to Managers who make more accurate and timely decisions to manage their
operations.
Inventory control is a systematic control and regulation of purchase and usage of materials in
such a way so as to maintain an even flow of production at the same time avoiding excessive
investment in inventories. Efficient material control reduces losses and wastage of materials that
otherwise pass unnoticed. Inventory control is the core of material management. The need and
importance of inventories varies in direct proportion to the idle time cost of men and machinery,
and urgency of requirements. If men and machinery in the factory could wait and so could the
customers, materials good not lie in want for them and no inventory need to be carried. But it is
highly uneconomical to keep the men and machine waiting and the requirements for modern life
are so urgent that they can not wait for materials to arrive after the need for them has arisen.
Because materials constitute a significant part of the total production cost of the product. Thus,
cost is controllable to some extent; proper planning and controlling of inventories are of great
46
importance. If investment in inventory will be more then the company has to bear carrying cost
and that finance can not be utilized.
A good inventory management policy should ensure smooth and uninterrupted supply without
making unnecessary investment of funds in inventory. This requires that inventory management
policy must balance the requirements of the following two opposing and conflicting ends:
i)
To maintain a large quantity for smooth operation and efficient customers’ services.
ii)
To maintain only a minimum possible inventory because holding costs and opportunity
cost of funds invested in inventory
47
OBJECTIVE OF INVENTORY CONTROL
Scientific control of inventories should serve the following purposes:
1) To provide the continuous flow of required materials, parts and components for efficient
uninterrupted flow of production.
2) To minimize investment in inventories keeping in view operating requirements.
3) To provide for efficient store of materials so that inventories are protected from losses by fire
and threat and handling time and costs are kept at minimum.
4) To keep surplus and absolute Services to minimum.
5) To protect the inventory against deterioration, obsolescence and unauthorized use.
6) To ensure that finished goods are available for delivery to customers just to fulfill the orders.
TECHNIQUES OF INVENTORY CONTROL
Reduction of surplus stock is an essential requirement inventory control. Various techniques are
available to solve the various types of problems associated with inventory control:-
1) Min-Max plan
2) Order cycling system
3) Fixation of various levels
4) Use of control ratios
5) Review of slow and non-moving Services
6) The ABC Analysis
1) Min-Max plan:
In this plan analyst lays down a maximum and minimum for each stock Services. Minimum level
establishes the reorder point and order is placed for quantity of material, which will bring it to
the maximum level.
48
2) Order Cycling System:
In this system, quantities in hand of each Services or class of stock are reviewed periodically. In
that, if it is observed that stock level of a given Services will not be sufficient till the next
schedule review keeping in view of its probable rate of depletion, an order is placed to replenish
its supply.
3) Fixation of Various Levels:
Certain stock levels or fixed levels are given below:
49
A). Maximum Level
It is the quantity of materials beyond which a firm should not exceed its stocks. If the
quantity exceeds maximum level limit then it will be overstocking.
Maximum
Level
=
Re-ordering
level
+
Re-ordering
Quantity-(Minimum
Consumption*Minimum Re-ordering period)
B). Minimum Level
It represents the quantity of stock that should be held at all the time, stock level is
normally not allowed facing below this level.
Minimum Level = Re-order level – (Normal consumption*Normal Re-order Period)
C). Safety Level
Normal issues of stock usually stopped at this level and made only under specific
instructions. Safety stock is a buffer to meet some unanticipated
increase in usage.
Safety stock level = Ordering Level – (Average rate of consumption * Re-order level)
OR
= (Maximum rate of consumption – Average rate of consumption)* Lead Time.
D). Re-ordering Level
When the quantity of materials reaches at a certain figure then fresh order is sent to
get materials again.
Re-ordering level = Maximum Consumption*Maximum Re-order period.
50
4) Use of Control Ratios:
Inventory turnover ratio helps management to avoid capital being locked up unnecessarily. This
ratio reveals the efficiency of stock keeping.
Inventory turnover ratio =Cost of materials consumed / Cost of average stock held during
the period
Where,
Cost of average stock = [Cost of opening stock + Cost of closing stock] / 2
Inventory turnover ratio [in days] =Days during the period /Inventory turnover ratio.
5) Review of slow moving and non- moving Services:
Stock turnover ratio should be as high as possible. Loss due to obsolescence be eliminated or
these Services used in some profitable work. Slow moving stock should be identified and
speedily disposed off. The speed of movement should be increased. The turnover of different
Services of stock can be analyzed to find out the moving stocks.
The percentage of slow moving stores = Slow moving stores / Total Inventory
51
TECHNIQUE USED IN BAJAJ AUTO FOR INVENTORY
CONTROL
The ABC Analysis:
With the numerous parts and materials that enter into each and every industrial production,
inventory control leads itself, inventory and foremost, to the problem of analysis. Such analytical
approach is popularly known as ABC (ALWAYS BETTER CONTROL) Analysis.
This Plan is based upon segregation of material for selection control. It measures money value
i.e. cost significance for each materials Services in relation to total cost and inventory value. The
logic behind is that the management should study each Services of stock in terms of its usage,
lead-time , technical or other problems and its relative money value in the total investment in
inventories.
Critical, i.e. high value Services deserve very close attention, and low value Services need to be
devoted minimum expense and effort in the task of controlling inventories.
The ABC Reports are made:
“A” inventory reports lists parts having little or no turnover. Turnover frequency is measured by
an exposure index. We calculate the index by dividing a part’s inventory quantity by its usage
during the most recent 24 month period.
“B” report shows the parts with more than a one year supply but less than a 2-year supply.
“C” report lists the parts with more than six months supply but not more than one year.
Criteria For Judging The Inventory System
While the over-all objectives of the inventory system is to minimize the cost to the firm the risk
level acceptable to the management, the more proximate criteria for judging the are:
52
Comprehensibility Inventory system range from the utterly simple to the complex ones. Irrespective of how simple
or how complex a system is, regardless of whether it is automated or manual, it should be clearly
understood by all affected parties. The system must be properly explained to all concerned
people so that its purpose, logic and rationale are transparent.
This generates enthusiasm for the system and enhances its credibility. Otherwise it is likely to be
perceived as a mysterious ‘Black box’ of dubious value.
Adaptability –
The questions raised in this context are:
1. Is the system responsive to change?
2. Can new products, new situations and new requirements be handled by the system?
A certain degree of flexibility and adaptability must be desired into the system to make it
versatile. Of course this cannot be and this should not be carried too far. The system must not
provide for every possible and imaginable contingency. If it is developed with this ideal, it is
likely to be a complex monstrosity. Remember the caveat that the design of any system should
ordinarily take care of about 90% of the cases, leaving the balance 10% to be handled by hand.
Timeliness –
Inventories may suffer loss in value on account of a variety of factors. The more common
sources of value decline are:

Obsolescence caused by changes in technology & shifts in consumer taste.

Physical deterioration with the passage of time.

Price fluctuation because of inherent volatility of certain commodities
The inventory system should be capable of inducing timely action. It should provide adequate
forewarning which triggers appropriate corrective steps.
53
Inventory Software
In BAJAJ AUTO the software is used for the management of inventories. This software holds all
the transactions of the stocks. So this software helps much in maintenance of stocks. It makes
very easy to account persons to maintain the transactions of inventories.
A part of this software is installed on the systems of the stores, whenever a transaction is made in
the store, the details of that transaction is reaches to the systems of the store accounting section,
because both the systems are connected in the local area network (LAN). So with the help of
LAN environment it is very easier to accountants to retrieve the information regarding the
transactions made by the stores.
Apart from this, this software has the variety of qualities which we can discuss with the help of
menus of software. There are six different menus in this software these are as follows:
i.
Data entry
ii.
Queries
iii.
Reports
iv.
Processing
v.
Calculator
vi.
Exit
54
DATA ENTRY MENU
Data Entry
Document Entry
SRV
SIV
ISRV
Adjustment entrty
SAV
STV (IN)
Adjustment ISRV
STV (OUT)
Physical Verification
Entry
Entry of surplus/
obsolete/ insur.
The very first menu that is data entry is used for the various types of entries of transactions. In
the data entry menu there are several options shown in above diagram.
55
REPORTS MENU
Reports
Summary account head wise
Month Report before PSL runs
PSL JV
Month Report after PSL runs
Inventory Consumption
Kardex
Code wise inventory status
Yearly summary for HO
Issue above
Issue more than
56
QUERIES MENU
Queries
Brows Inventory Master
This menu has single option that is brows inventory master. In this option we may see the status
of various materials or Services.
As the name of this menu, we can perform the query task, on the basis of material codes, that are
of twelve digits number. This option is very helpful in search of any particular transaction in
inventories. In a query task we are supposed to enter the material code in the material code box
and then click over the retrieve button. As soon as we click over the retrieve button the whole in
formation regarding that code is appears on the screen.
The appearing statement contains the material code, material description, opening quantity,
closing quantity, values, PSL rate that is the per unit price and also the location of that material.
57
PROCESSING MENU
Processing
Weekly PSL proc.1
Put account group in
INVMAST
Reverse stock for Physical
Kardex mismatch
Cumulative process
Reverse stock for PSL Kardex
mismatch
PSL Process 1
Processing is the most important task of this software, because all the reports which are
forwarded to the concerning authorities and are the basis for the further actions are made only
after the processing or the PSL run. PSL processing makes update all the documents.
PSL Process I:
The option process I update and calculate the values for all documents and
makes available to create the final reports. Once a PSL run is processed the data can not be
changed, So that this task is very sensitive so the operating person should have the great care and
responsibility in processing task. PSL Process is done for tallying codes and value of the
material.
58
Put A/C group in inventory Master:
This option also a processing task when we executes this option it assigns the account group to
all the inventory / Services codes so that these codes may link to a particular account group. In
this inventory are grouped.
Reverse stock for PSL kardex mismatch:
It is very important processing because it creates a list of all the Services which are mismatching
in respect of units / quantity between the PSL and kardex. If there is any mismatch in PSL and
Kardex the report shows those mismatches on the screen.
Reverse stock for physical kardex mismatch:
This option creates a list of mismatches of karedx and physical verification. This processing
performed once in year, because the physical verification of the inventories is done once in a
year.
Calculator & Exit Menus
The calculator menu has no sub option we can use the calculator only by clicking on the
calculator menu. It helps much in manual calculations make the surety of correctness.
Apart from this the exit menu is simply for quitting the software, whenever we click over the exit
menu it exits from the software.
59
RATIO ANALYSIS OF BAJAJ AUTO
A ratio is a simple arithmetical expression of the relationship of one number to another. It may
be defined as the indicated quotient of two mathematical expressions. One of the most important
financial tools which have come to be used very frequently for analyzing the financial strengths
and weaknesses of the enterprise is ratio analysis. Ratio analysis a technique of analysis and
interpretation of financial statements. It is the process of establishing and interpreting various
ratios for helping in making certain decisions.
“Financial ratio analysis is the calculation and comparison of ratios which are derived
from the information in a company's financial statements. The level and historical trends of these
ratios can be used to make inferences about a company's financial condition, its operations and
attractiveness as an investment.”
Financial ratios are calculated from one or more pieces of information from a company's
financial statements. A financial ratio can give a financial analyst an excellent picture of a
company's situation and the trends that are developing. A ratio gains utility by comparison
to other data and standards. Ratio analysis can also help us to check whether a business is
doing better this year than it was last year; and it can tell us if our business is doing better
or worse than other businesses doing and selling the same things.
Financial ratio analysis groups the ratios into categories which tell us about different facets of a
company's finances and operations. An overview of some of the categories of ratios is given
below.
1.
Leverage Ratios which show the extent that debt is used in a company's capital structure.
2.
Liquidity Ratios which give a picture of a company's short term financial situation or
solvency.
3.
Operational Ratios which use turnover measures to show how efficient a company is in
its operations and use of assets.
60
4.
Profitability Ratios which use margin analysis and show the return on sales and capital
employed.
5.
Solvency Ratios which give a picture of a company's ability to generate cashflow and
pay it financial obligations.
Ratios are always expressed as a decimal value, such as 0.10, or the equivalent percent
value, such as 10%. Financial ratios allow for comparisons

between companies

between industries

between different time periods for one company

between a single company and its industry average
HOW A RATIO IS EXPRESSED?
 As Percentage - Such as 25% or 50%. For example if net profit is Rs.25, 000/- and the
sales is Rs.1, 00,000/- then the net profit can be said to be 25% of the sales.
 As Proportion
- The above figures may be expressed in terms of the relationship
between net profits to sales as 1: 4.
As Pure Number /Times - The same can also be expressed in an alternatively way such as the
sale is 4 times of the net profit or profit is 1/4th of the sales
61
VARIOUS RATIOS FOR BAJAJ AUTO
1) Inventory Turnover- This ratio indicates the number of times the inventory is rotated
during the relevant accounting period. This ratio is also called as stock turnover ratio or
stock velocity. This ratio is calculated to consider the adequacy of the quantum of capital
and its justification for investing in stock or Inventory. Inventory turnover is used to
measure the efficiency of sales. Inventory turnover is the number of times obtained by
dividing cost of sales by inventory.
(Average Inventory/Sales) x 365
for days
(Average Inventory/Sales) x 52
for weeks
(Average Inventory/Sales) x 12
for months
Average Inventory or Stocks = (Opening Stock + Closing Stock)
2
Inventory Turnover ratio-
sales
Inventory
( in crore )
Particular
2014-15
2013-14
Sales
7387.70
5968.40
Inventory
1731.70
1577.10
4.26 times
3.78 times
Inventory Turn. Ratio
Interpretation: - It is revealed from above table that the stock turnover has been increased to
4.26 times in the year 2014-15 as compared to 3.78 times in the year 2013-14. It shows better
control over inventory and efficiency in sales. Since BAJAJ AUTO is in the business of
coldrinks manufacturing and in this sector a huge investment in plant and machinery is required.
Keeping in view the investment in Plant & machinery in this sector for which number of spares
62
and stores Services are required to be maintained for upkeep of the plant, the above Inventory
Turnover ratio is reasonable. However, BAJAJ AUTO should efficiently use various inventory
management tools to control the stock levels like ABC analysis, monitoring of stock levels i.e.
ROL, EOQ, Min-Level, Max-Level system of verification of inventory etc.
4,3
4,2
4,1
4
3,9
inventory turnover ratio
3,8
3,7
3,6
3,5
2014-15
2013-14
Inventory Turnover Ratio
2) Working Capital Turnover- This ratio establishes a relationship between net sales and
working capital. Net Current Assets are also known as working capital instead of total
current assets is being compared with the sales. This ratio indicates the velocity of the
utilization of net working capital. It indicates the number of times the working capital is
turned over in the course of a year. This ratio is calculated as follows-
Working Capital Turnover-
Sales
Working Capital
63
(in crore)
Particular
2014-15
2013-14
Sales
7387.70
5968.47
Working Capital
4490.19
4404.17
1.65 times
1.35 times
Working Capital Turnover
Interpretation: -
As we know that working capital turnover ratio measures the efficiency with which the
working capital is being used by a firm. In the following table the sales is increasing and the
working capital is also increasing. It appears from the above calculation that Working Capital
Turnover ratio has been increased to 1.65 times in the year 2014-15 as compared to 1.35
times for year 2013-14. It shows a better utilization of working funds in the business. Hence
BAJAJ AUTO is using its working capital in a better way.
1,8
1,6
1,4
1,2
1
working capital turnover
0,8
0,6
0,4
0,2
0
2014-15
2013-14
Working Capital Turnover
64
3) Current Ratio- The ratio of current assets to current liability is called current ratio. This ratio
is an indicator of the firm’s commitment to meet its short-term liabilities. Current assets include
cash and other assets convertible into cash during the operating cycle of the business. Current
liabilities mean liabilities payable within a year’s time. An idle current ratio is 2:1.The ratio of
2:1 is considered as a safe margin of solvency. A very high current ratio would indicate the less
efficient use of funds while a poor current ratio is a danger signal to the management.
Current Ratio - Current Assets
Current Liability
Particular
2014-15
2013-14
Current Assets
7672.99
5775.74
Current Liability
3182.89
1371.57
Current Ratio
2.41: 1
4.21 : 1
Interpretation: -
It appears from the above table that the current ratio of four consecutive years 2005, 2006 and
2007 is 2.36:1, 3.49:1 and 5.06: 1. As general rule the ideal current ratio is 2:1 and we can see
that the current ratio for three years is above ideal ratio. So we can say that the liquidity position
of the concert is sound and it is able to meet its short term debts and obligations.
65
4,5
4
3,5
3
2,5
Current Ratio
2
1,5
1
0,5
0
2014-15
2013-14
Current Ratio
3) Cash Ratio - This ratio measures the relationship between cash in hand and current assets.
A very high cash ratio indicates major Services of current assets & may be a poor indicator
of profitability because cash by itself does not earn any profit. Ideally the proportion should
be kept as low as possible. But some amount of cash for daily requirements of the firm
should be kept.
Cash Ratio –
Cash in Hand
Current Assets
Particular
Cash in Hand
Current Assets
Cash Ratio
2014-15
2013-14
69.63
243.32
7672.99
5775.74
0.01: 1
0.04: 1
66
Interpretation:-
Form the above it can be seen that cash ratio is almost stagnant from year to year. It shows that
the concern is efficiently using and monitoring cash for day to day transactions. But this
increment in ratio is not satisfactory. Thus management should do some efforts to increase the
cash ratio.
0,045
0,04
0,035
0,03
cash ratio
0,025
0,02
0,015
0,01
0,005
0
2014-15
2013-14
Cash Ratio
67
5) Stock to Current Assets Ratio- This ratio expresses the relationship between Stock and
Current Assets.
Stock to Current Assets-
Stock
Current Assets
Particular
Stock
Current Assets
Stock to Current Assets
2014-15
2013-14
1731.36
1577.10
7672.99
5775.74
0.23
0.27
Interpretation:
The following calculation shows that stock to current asset ratio is decreasing. It shows that
current assets and stock both are decreasing. Thus it is not a bad situation because a company
always wants to retain stocks according the requirement. It does not want to do over investment
in stocks. Every company prefers money in liquid form rather than over investment.
68
0,28
0,27
0,26
0,25
stock to current assets ratio
0,24
0,23
0,22
0,21
2014-15
2013-14
Stock to Current Asset ratio
6) Raw Material Turnover Ratio - The raw material turnover ratio represents the relationship
between raw material consumed and average stock of raw material. Here average stock of raw
material is the average of opening stock of raw material and closing stock of raw material.
Raw Material Turnover =
Raw material consumed
Avg. stock of raw material
Where,
Average stock of raw material =
Opening stock of raw material + closing stock of r.m.
2
69
Particular
2014-15
2013-14
Raw material consumed
823.39
959.39
Avg. stock of raw material
891.39
755.33
0.92
1.27
Raw Material Turnover
Interpretation:
Here Raw material consumed is 823.39 in 2014-15 and 959.39 in 2013-14. Avg. stock of raw
material is 891.39 in 2014-15 and 755.33 in 2013-14. The calculation shows that the raw
material turnover is 0.92 in 2014-15 and 1.27 in 2013-14. It indicates that raw material turnover
is decreasing because of less production. Production is decreasing because of decrease in
demand. Thus it is an unfavorable situation.
1,4
1,2
1
0,8
raw material turnover
ratio
0,6
0,4
0,2
0
2014-15
2013-14
Raw Material Turnover Ratio
70
6) Owned Capital Turnover: It represents the relationship between sales and shareholder’s
fund.
Owned Capital Turnover =
Sales
Shareholder’s fund
Particular
Sales
Shareholder’s Fund
Owned Capital Turnover
2014-15
2013-14
7387.70
5968.47
3958.87
3688.66
1.87
1.62
Interpretation:
In the following table the sales is 7387.70 for the year 2014-15and 5968.47 for the year 2013-14.
Shareholder’s fund is increasing by 270.21 crores. As a result the owned capital turnover is
increasing by 0.25. It clearly shows that the company is earning profit.
71
1,9
1,85
1,8
1,75
1,7
owned capital
turnover
1,65
1,6
1,55
1,5
1,45
2014-15
2013-14
Owned Capital Turnover
8) Profit Before Tax To Sales - The ratio expressed the relationship between Profit Before Tax
and Sales.
Profit before Tax to Sales = Profit Before Tax * 100
Sales
Particular
2014-15
2013-14
Profit before Tax
441.95
380.52
Sales
7387.70
P.B.T. to Sales
4%
5968.47
6%
Interpretation:
The following calculation shows that profit before tax to sales ratio is decreasing by 2 %. It is
due to comparative decrease in profit before tax as compared to sales. That’s why profit before
tax to sales ratio is also decreasing.
72
7%
6%
5%
4%
profit before tax to sales
3%
2%
1%
0%
2014-15
2013-14
Profit before tax to sales
1) Capital Turnover- Sometimes the efficiency and effectiveness of the operation is judged
by comparing the sales with the amount of capital invested in the business. Capital
Employed is either equal to Shareholders Fund plus Long Term Loans or equal to Total
Assets minus Current Liabilities. This is calculated by establishing the relationship between
sales and capital employed.
73
Capital Turnover =
Sales
Capital Employed
Particular
2014-15
2013-14
Sales
7387.70
5968.47
Capital Employed
5736.57
5727.62
1.29 times
1.04 times
Capital Turnover
Capital Employed = Equity Share Capital + Profit + Long term loan + Reserve & Surplus
= 426.28 + 358.54 + 1419.16 + 3532.59
= 5736.57
Interpretation:-
From the above it is clear that Capital Turnover ratio has been increased to 1.29 from 1.04. It
shows that sale has also increased with the increase in investment as the capital turnover is good
in the year 2014-15 as compared to the year 2013-14. While calculating the return on investment
ratio we have seen that BAJAJ AUTO has made huge investment in the assets in the year 201314 against which the return is expected in the coming years. We hope this ratio will also improve
in the coming years when the pay back of the investment will start.
74
1,4
1,2
1
0,8
capital turnover
0,6
0,4
0,2
0
2008-09
2007-08
Capital Turnover
75
FINDINGS OF THE STUDY
Some organizations invest 60 to 70 % of its capital in inventories. Thus it is very important
for the organization to manage its inventory through effective inventory control systems. The
findings of studying inventory management of BAJAJ AUTO are as follows:
1) There is used one inventory software by the employees for efficient inventory
management and to remove the paper work. But there are some employees including
managers who do not know how to operate that inventory software while it should be
known by all the employees that are related to inventory management segment.
2) BAJAJ AUTO is a private organization. So there were some employees who have got
the senior position because of experience. Even after having experience those people
were not able to operate all the functions and work related to inventory. It was due to
change in the technology.
3) The inventories of BAJAJ AUTO are divided into three parts that areI.
Inventory of raw materials
II.
Inventory of finished goods
III.
Inventory of spares
Here I have studied the inventory of spares. Because the raw material that is used in
BAJAJ AUTO are gases and the measurement of its inventory level is very typical.
4) It clears that the person who raises the indent for the required material is known as
indentor. Indentor plays an important role in this. The indentor checks whether that
material that has purchased is according to his requirement or not. Indentor can be any
person.
5) Before the purchasing of the material, firstly enquiry takes place. This enquiry can be
done in two ways. Through the e-procurement or manual. After this enquiry a QCS
(quotations comparative statement) is prepared in which normally technically acceptable
lowest bidder is chosen. Thus the purchasing process completes and the working of store
department starts. Now the storing and issuing is the responsibility of stores.
76
6) There is followed a coding pattern in BAJAJ AUTO that is good for the proper
inventory management. It helps the store’s employees in identifying the spares and
generals. This coding is of 12 digits. It avoids the confusion. Hence it is good for the
organization to do coding of the inventory. It highlights the inventory management.
7) The whole study shows that there is a good inventory management system but nothing is
perfect that why there are also some limitations. In BAJAJ AUTO a history book of
spares is used. It is prepared in both the form as a soft copy and a hard copy.
8) For the controlling of the inventory a technique is used in BAJAJ AUTO that is ABC
analysis. In ABC analysis spares and generals are divided in three categories on the
basis of their values. Some Services have 70% value while their quantity is 20%. The
spares whose value comes under 20%, its quantity is present in 70%. While there are
some spares whose value is 20% as well as quantity is also 20%.
9) For the verification of inventories a technique is used in which the material whose value
is more is more than 50000, are verified 100%, the materials whose value comes under
10001 to 50000 are verified 70% and the remaining materials whose value is less than
10000 are verified 30%.
10) As we know that with the passage of time, some Services becomes outdated or of no
use. They are known as obsolete Services. The Services which do not move up to 7
years are not valued according to its original value. There’s 40% value is written off
while they are valued at the 60% of their face value. The Services which do not move up
to 7 to 10 years, are valued at 55% of their original value while 45% of its value is
written off. And the Services which do not move more than 10 years, are valued at the
50% of their face value and 50% is written off.
11) In BAJAJ AUTO to ensure the availability of Services or spares, they are inventoried.
There are decided various levels which shows the level of Services that are stored in it.
These levels are minimum level, maximum level and reorder level. Re-order level is that
77
level at which new order is placed. These three levels are different for different Services.
The Services which are frequently used that is generals have the high level of reorder.
12) Effective inventory management enables an organization to meet or exceed customers’
expectations of product availability while maximizing net profits or minimizing costs.
And the annual report shows that the inventory has decreased. It shows that they are
managing inventory in a better way due to which it has decreased in compare to last
year.
78
SUGGESTIONS
1) Every week a report should be produced listing the status of every product that has been in
stock for less than six months. The report should list the following informationa. Services number and description
b. Total consumption of Services
c. Current-on-hand quantity
d. Minimum stock level of the Services
e. Maximum stock level of the Services
f. Re-order level of the Services
g. Any new Services that is required
h. Reason why that Services was added to stock
2) Detailed record should be maintained by the management of store as well as purchase
department, for new stock Services that do not meet six months consumption. Because in
the organization the number of obsolete Services has increasing because of outdated
technology. Due to which the store department has to bear the maintenance cost and
carrying cost of obsolete Services. Thus the management should review the record time to
time.
3) The management of BAJAJ AUTO should conduct some development programmes for the
knowledge of employees. BAJAJ AUTO conduct various programmes for the farmer’s
knowledge and their awareness but not for their employees. As I have observed that there
were some managers who do not know the operation of inventory software due to which
the working was hampering. And the remaining employees have to take extra load of that
work. It should not be there.
4) The management should not add new inventory. If it is deciding to store any new inventory
then the management should give the reason why management is going to add new
inventory. Thus the reason should be clearly stated.
5) If the cost of any inventory is high, then the management should find the substitute material
to decrease the cost of inventory.
79
BIBLIOGRAPHY
1. www.google.com
2. www.wikipedia.com
3. www.BAJAJ AUTO.com
4. www.inventorymanagement .com
5. www.effectiveinventory.com
6. www.toolwatch.com
7. Bussiness world magazine
80
ANNEXURE
INVENTORIES
As at 31.03.2015
As at 31.03.2014
Inventories: ( including Goods-in-Transit Rs. 637.56
crore,
Previous year Rs. 277.63 crore)
Raw material
823.39
959.39
Stores and spares
290.21
327.83
Loose tools
2.03
1.83
Chemical and catalysts
72.49
28.94
Packing material
37.49
33.26
Construction material
14.11
14.72
Stock-in-Process
42.30
36.89
Finished goods:
Own Manufactured
130.26
Traded products
319.08
114.68
449.34
Total
1,731.36
59.56
1,577.10
(Rs. In Crore)
81
BALANCE SHEET
Year ended 31.03.2015
Year ended 31.03.2014
SOURCES OF FUNDS
Shareholders’ Funds:
Share Capital
426.28
Reserves and Surplus
3,532.59
423.93
3958.87
3264.75
3688.66
Loan Funds:
Secured Loans
7373.18
Unsecured Loans
5429.60
2404.67
12802.78
4370.97
6775.64
Deferred Tax Liability(Net)
542.12
534.19
TOTAL
17303.77
10998.49
APPLICATION OF FUNDS
Fixed Assets
Gross Block
8808.00
8138.98
Less: Accumulated Depreciation
3842.16
3400.04
Net Block
4965.84
4738.94
Capital Work-in-Progress
290.98
5256.82
430.85
7552.95
Investments
5169.79
1416.73
Current Assets, Loans and Advances:
Inventories
1731.36
1577.10
Sundry Debtors
407.23
413.76
Cash and Bank Balances
69.63
243.32
Loans and Advances
5464.77
3541.56
7672.99
5775.74
Current Liabilities
2860.18
1048.49
Provisions
322.71
323.08
Less: Current Liabilities&Provisions
Net Current Assets
Miscellaneous Expenditure
82
4490.10
4404.17
3.90
7.80
TOTAL
17303.77
10998.49
Significant Financial Indicator
Financial Ratios
2014-
2013-
2012-
2011-
2010-
2003-
2002-
15
14
13
12
11
04
03
6.30
7.67
6.69
6.92
6.52
10.86
8.15
11.84
1.34
3.13
2.43
4.85
6.37
8.66
13.26
7.28
3.12
3.50
2.53
7.18
10.58
11.32
18.56
9.32
11.16
10.31
6.90
13.55
14.27
16.49
24.65
13.32
9.09
6.99
4.81
9.60
9.68
10.60
17.02
11.06
6.32
2.54
2.20
3.01
3.57
2.78
2.74
2.18
7.41
2.62
2.50
4.07
4.58
3.58
4.04
3.76
0.12
1.50
1.48
0.74
0.90
1.30
1.88
1.81
0.74
1.25
1.01
0.86
0.79
0.79
0.68
0.77
Sundry debtor
0.67
0.78
0.90
0.89
1.17
1.50
1.36
1.30
Current ratio
2.41: 1
4.21:1
5.06:1
3.49:1
2.36:1
2.84:1
2.62:1
2.72:1
Quick ratio
1.87:1
3.06:1
3.15:1
2.37:1
1.51:1
1.71:1
1.51:1
1.39:1
Debt equity ratio
3.23:1
1.84:1
1.78:1
1.42:1
2.20:1
0.32:1
0.33:1
0.43:1
Operating profit
2001-02
to sale (%)
Profit before tax
to sales (%)
Return on capital
employed (%)
Profit before tax
to net worth (%)
Profit after tax to
net worth (%)
Fixed assets
turnover(times)
Working capital
turnover(times)
Inventory of
finished goods
Inventory of raw
material &
packaging
material
EMPLOYEE PRODUCTIVITY
No. of employees
6757
6743
6826
6506
5752
5977
6125
6326
Sales per
4.87
1.80
1.51
1.77
1.29
0.99
0.99
0.81
employee(in
83
crore)
FIVE YEAR FINANCIAL HIGHLIGHTS
YEAR
2014-15
2013-14
2012-13
2011-12
Operating Results
2010-11
(in lakhs)
Sales
7387.70
5968.47
5554.53
5358.19
4097.60
Subsidy from govt.
25545.60
6194.35
4775.58
4584.74
3299.38
Turnover
32933.30
12162.82
10220.11
9942.93
7396.98
Other revenue
499.00
354.77
244.66
71.45
85.03
Total income
33432.30
12517.59
10574.77
10014.38
7482.01
Cost of sales
31495.75
11336.77
9578.09
9166.48
6809.48
PBDIT
1935.55
1180.82
996.68
847.90
672.53
Interest
1023.20
389.37
353.94
123.70
34.02
Depreciation
470.40
410.93
391.49
242.31
167.59
PBT
441.95
380.52
251.25
481.90
470.92
Income tax(net)
81.94
122.93
76.23
140.55
151.28
PAT
360.01
257.59
175.02
341.35
319.64
Dividend
85.10
84.53
84.45
84.36
83.92
Cooperative education fund
3.59
2.57
1.75
3.41
2.98
Donations
1.75
0.75
0.25
1.00
0.25
Retained profit
269.57
169.74
88.57
252.58
232.49
SOURCES AND APPLICATION OF FUNDS
SORCES OF FUNDS
Equity share capital
426.28
423.93
422.92
422.73
421.31
Reserves & surplus
3532.59
3264.73
3218.92
3132.66
2879.84
YEAR
2014-15
2013-14
2012-13
2011-12
2010-11
Net Worth
3958.87
3688.66
3641.84
3555.39
3301.15
BORROWING- long term
1419.16
1781,83
1935,80
2504.43
__
11249.70
4850.68
4403.09
2400.92
-short term
84
533.10
-deferred trade tax
133.92
143.13
147,23
130.04
113.29
Deferred Tax Liability
542.12
534.19
534.02
458.39
421.25
FUNDS EMPLOYED
17303.77
10996.49
10661.98
9049.17
4369.49
Net Fixed Assets
5256.82
5169.79
5039.01
4869.92
2160.62
Investments
7552.95
1416.73
740.46
776.16
690.73
Current Assets
7672.99
5775.74
6071.97
4748.98
2603.98
Current Liabilities
3182.89
1371.57
1201.23
1361.60
1104.84
Net Current Assets
4490.10
4404,17
4870.74
3387.39
1499.14
Miscellaneous Expenditure
3.90
7.80
11.77
15.70
19.00
Net Assets Employed
17303.77
10996.49
10661.98
9049.17
4369.49
Application of Funds
85
LIMITATION OF RESEARCH
1.The area of study is limited to the distribution channel and consumer preference aspects of
the system, while the marketing has other crucial areas too which were left uncharted
2. The study is limited to eastern region of Bajaj auto which is a multinational company, so the
area plays as a constraint in the study.
3. The time period allotted for the study was only of two months, which may provide a deceptive
picture in comparison of the study based on long run.
4. The study was based on both primary and secondary data but the relevance of the secondary
data may not be justified.
5. The success of any survey depends upon the quality and integrity of the surveyor who collect
the basic data by expressing the subject under the study and on the respondents who provides
the data required by filling up the questionnaire .The accuracy of the data collected solely
depends upon the cooperation and truthfulness of the person who is being interviewed.
6. Interaction skills as well as the behaviour of the respondents also played as constraints
during the research.
86
BIBLIOGRAPHY
1.
Research Methodology, Kothari. C.R., Research Methodology Methods &
Techniques, New-Delhi, Wishwa Prakashan, edition 2003.
2.
Multi
Level
&
Direct
Marketing,
Branding,
Philip
Kotler,
Marketing
Management, Delhi, Pearson Education (Singapore) Pte. Ltd, 11th edition.
3.
Marketing Strategy, Varshney, R.L. & Bhattacharya, B., International Marketing
Management, New-Delhi, Sultan Chand & Sons edition 2003.
4.
Company Profile, Web-Site:- www.Bajaj auto.com <http://www.Bajaj auto.com>
5.
Merchandising & Route Productivity, www.ask-jeeves.com, www.distributingcompany.com.
6.
Retailing, Company Souvenirs.
87