MANAGERIAL
ECONOMIC PROJECT
(B5 BATCH)
SUBMITTED BYPRAKHAR KULSHRESHTHA(11103527)
HIMANSHU GOYAL(11103481)
NAMAN JAIN(11103507)
UTKARSH DEMBLA(11103612)
ACKNOWLEDGEMENT :
This project is not only the result of our combined effort but
that of various people who have guided and helped us at
every step of its making.
Our deepest thanks to our teacher SANTOSHI SEN GUPTA
who guided us not only through various stages of our project,
but also paid special attention towards its progress.
All the observations and facts are based on survey and
sources mentioned at the end.
NATIONAL THERMAL POWER
CORPORATION
A brief picture of history
NTPC Ltd. was incorporated on 07.11.1975 as National
Thermal Power Corporation Ltd. (NTPC) with the objective
to augment the existing supply of power supplied primarily by
State Electricity Boards and to provide power and power related
products (and services) at competitive prices.
It is a schedule ‘A’ Maharatna listed CPSE under the
administrative control of Ministry of Power with 84.50%
shareholding by the Government of India. It’s registered and
corporate offices are at New Delhi.
Vision/Mission
The vision of the company is to be the world’s largest and
best power producer, powering India’s growth. The mission of
the company is to ‘develop and provide reliable power, related
products and services at competitive prices, integrating multiple
energy sources with innovative and eco-friendly technologies
and contribute to society.’
Industrial / Business Operations:
NTPC’s primary business is power generation through
coal and gas based sources. The company has its presence
across the country with 19 coal based and 8 gas based power
stations, including 4 coal based and 1 gas based stations of its
joint ventures. Over the time, its portfolio became diversified
with ventures into hydro power, coal mining, power trading,
power distribution, oil & gas exploration, etc. and therefore, the
company rechristened itself as ‘NTPC Limited’ in 2005. NTPC
is now venturing into nuclear, wind and solar power; equipment
manufacturing, and providing services for R&M of power
stations. On the global front, NTPC is exploring opportunities
for acquisition of stake in coal mines and setting up of power
plants abroad, besides offering international consultancy services.
Strategic Issues:
NTPC has been ranked as the number one independent
power producer in Asia and the number two in the world by
Platt’s (Platt is a leading global provider of energy, petrochemicals
and metals information, and a premier source of benchmark
price assessments for those commodity markets) in 2010. It is
the largest power generating company in the country with total
revenue of over ` 57,000 crores during 2010-11 and market
capitalization of more than R 1,59,000 crores as on 31.03.2011.
The company targets to have an installed power generating
capacity of 1,28,000 MW by the year 2032. Thus, NTPC plays
a key role in the economic growth of the country by providing
reliable power and related products and services at competitive
prices; integrating multiple energy sources with innovative and
eco-friendly technologies, and contributing to society in other
meaningful, substantial ways.
Availability of adequate fuel for operating the plants at
very high plant load factor and at an affordable price is a
major challenge for which the Company is adopting a strategy
of backward integration and progressively diversifying its fuel
mix to increase the share of non-fossil fuel.
Performance Highlights:
The operational performance of the company along with
performance indicators and selected financial ratios during the
period 2008-09 to 2010-11 can be seen on the opposite page.
The Company registered an increase of `8160.65 crore in
total income during 2010-11 which went up to ` 57407.30 crore
in 2010-11 from ` 49246.65 crore during 2009-10. The net profit
of the company correspondingly increased to ` 9102.59 crore,
an increase of ` 374.39 crore over the previous year. Tariff for
sale of power from NTPC’s station is regulated and determined
by Central Electricity Regulatory Commission (CERC). Turnover
of the Company depends on the tariff as well as total generation
of electricity.
Technology Up-gradation,
Research & Development :
As a strategic initiative to support the technology needs of
existing power plants and to adapt to emerging technologies,
NTPC set up its R&D wing way back in 1980-81. To synergize
the efforts & facilities of the two departments R&D and Energy
Technology (ET), these were integrated to create NTPC Energy
Technology Research Alliance (NETRA). The focus areas of
NETRA are: Climate change & Waste Management; New &
Renewable Energy, Efficiency Improvement & Coal Reduction
and production and providing High-end Scientific Support to
Utilities. NETRA complex is the first ECBC (Energy Conservation
Building Code) compliant building in NTPC. NETRA has filed
14 patents such as ash based utensil cleaning powder, ash based
product for construction, ANN based system for condition
monitoring of transformers, robotic systems, integrated bio-diesel
plant, method & apparatus for efficient heat integration, PSA
based CO2 capture technology, etc.
ELASTICITY
production(in mil unit)
year
2003
138276
sales(rs mil)
190206
price(rs)
1.375553241
elasticity
-0.951281536
2004
148048
188519
1.273364044
0.591375781
2005
158271
225069
1.422048259
0.821539789
2006
170880
266564
1.559948502
0.987940994
2007
188674
325344
1.724371138
0.968682591
2008
200863
369462
1.839373105
0.308896301
2009
206939
417913
2.0194985
1.287553661
2010
218840
461687
2.109701152
0.044088589
2011
220536
547050
2.480547394
0.064671461
2012
222068
610020
2.746996416
1
CROSS PRICE ELASTICITY:
For year 2012:
QUANTITY
PRICE
Q1=3772
P1=2.48
Q2=4272
P2=2.75
 EXY=(∆Qx*Py)/(∆Py*Qx)
Exy=((4272-3772)*2.48)/(2.48-2.75)*4272
Exy=1.075045083
Since the cross price elasticity is greater
than zero,therefore the two products
are Substitutes.
MARGINAL AND AVERAGE
PRODUCT OF LABOUR
Year
Labour
Production(in mil unit)
TP( in mil units)
AP
MP
2003
21408
138276
138276
6.459081
-22.3616
2004
20971
148048
148048
7.059654
22.76837
2005
21420
158271
158271
7.388936
28.02
2006
21870
170880
170880
7.813443
10.27367
2007
23602
188674
188674
7.993984
162.52
2008
23677
200863
200863
8.483465
-21.1707
2009
23390
206939
206939
8.847328
33.71388
2010
23743
218840
218840
9.217032
31.40741
2011
23797
220536
220536
9.267387
7.158879
2012
24011
222068
222068
9.248594
9.248594
FORECASTING:
MOVING AVERAGE OF PRODUCT
year
production(in mil unit)(A)
2003
138276
2004
148048
2005
158271
2006
170880
3 quarter moving average(F)
148198.3333
A-F
22681.67
A-F^2
514458003
2007
188674
159066.3333
29607.67
876613925
2008
200863
172608.3333
28254.67
798326188
2009
206939
186805.6667
20133.33
405351111
2010
218840
198825.3333
20014.67
400586882
2011
220536
208880.6667
11655.33
135846795
2012
222068
215438.3333
6629.667
43952480.1
3175135385
2013
220481.3333
RMSE
21297.67
 Moving average method for predicting forecasted value has been granted
excellent to predict the forecasted value for the next year.Here ,a 3 quarter
moving average has been chosen,it can be any quarter moving average .
 AS in 3 quarter,values of last 3 months are averaged and is predicted for the
next month as for whole year.Error assumed is calculated by a term RMSE
which got the assumed error predicted in the forecasted value.
GRAPHS
GRAPH BETWEEN LABOUR AND TOTAL
PRODUCTION
Labour
TP
21408
138276
20971
148048
21420
158271
21870
170880
23602
188674
23677
200863
23390
206939
23743
218840
23797
220536
24011
222068
TP
250000
200000
150000
TP
100000
50000
0
20500
21000
21500
22000
22500
23000
23500
24000
24500
GRAPH BETWEEN LABOUR AND AVERAGE
PRODUCT, MARGINAL PRODUCT
(LABOUR WISE SORTED)
year
labour
AP
MP
2004
20971
7.059654
22.76837
2003
21408
6.459081
-22.3616
2005
21420
7.388936
28.02
2006
21870
7.813443
10.27367
2009
23390
8.847328
33.71388
2007
23602
7.993984
162.52
2008
23677
8.483465
-21.1707
2010
23743
9.217032
31.40741
2011
23797
9.267387
7.158879
2012
24011
9.248594
9.248594
200
150
100
AP
MP
50
0
20500
-50
21000
21500
22000
22500
23000
23500
24000
24500
GRAPH BETWEEN LABOUR AND AVERAGE
PRODUCT , MARGINAL PRODUCT
(year wise sorted)
year
labour
AP
MP
2003
21408
6.459081
-22.3616
2004
20971
7.059654
22.76837
2005
21420
7.388936
28.02
2006
21870
7.813443
10.27367
2007
23602
7.993984
162.52
2008
23677
8.483465
-21.1707
2009
23390
8.847328
33.71388
2010
23743
9.217032
31.40741
2011
23797
9.267387
7.158879
2012
24011
9.248594
9.248594
200
150
100
AP
MP
50
0
20500
-50
21000
21500
22000
22500
23000
23500
24000
24500
CONCLUSION
The primary goal of this project is to understand
elasticity and forecasting concepts in practical
life.Through this project we are able to understand
that how elasticity and forecasting tools help the
company to maximise its benefits. Through the
forecasting procedure we are able to assure the
future happenings for the company,whether it will
be in loss or profit,we can then enhance the
percentage of the profits and predict the next step
ahead of it.Elasticity will help us to determine
whether any company will be substitute or
complementary. Elasticity of demand tells us how
many more units of a product will be sold when the
price is cut .Hence this project provided us a great
opportunity to learn these concepts.
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http://www.ntpc.co.in
Wikipedia
Forbes Global 2000
www.timesofindia.indiatimes.com
The economics times