A

PROJECT REPORT

ON

“COST REDUCTION AND CONTROL”

AT
PYROTECH ELECTRONICS PVT. LTD

2018-2019

PROJECT REPORT SUBMITTED TOWARDS PARTIAL

FULFILLMENT OF THREE YEAR BBA DEGREE PROGRAM

Submitted by: Guided by:

VAISHALI KHURANA DR.DIMPLE SINGH
GAUR
B.B.A FINAL YEAR (HOD-B.B.A PROGRAMME)

1
 BHUPAL NOBELS’ UNIVERSITY, UDAIPUR

PREFACE

It is very easy to give solution to the problem while sitting in an office but
difficulties arise when they are practically implemented in the market training thus
aims at giving the student a practical exposure of the highest level and the student
in acquiring the same.

The project aims at making the student aware of the market condition and
how the functional parts work in the organization. Training is an integral part of
B.B.A. and every student has to undergo the training for 45 days in company and
then prepare a project report on the same after the completion of the training.

On getting an opportunity to work with Pyrotech Electronics Pvt Ltd.,we

readily agreed to have a project in the prestigious company.

During the whole training, we get lot of experience and come to know about
that real business differs from the theory and learnt many new things, practically. I
undertook the project on "COST REDUCTION AND CONTROL" at Pyrotech
Electronics Pvt Ltd.

2
 ACKNOWLEDGEMENT
The successful completion of any project requires guideline and help
from a number people. I therefore, take this opportunity to express my
profound sense of gratitude to all those who extend their wholehearted help
and support to me carrying out the project work.

At the onset, I would like to thank Pyrotech Electronics Pvt. Ltd for
giving me the approval to this project in the such a prestigious and
professional organization and also for their immense contribution towards
execution and completion of this project, I am grateful to Ms. Surabhi Soni
(Executive-FINANCE & TRAINING) Pyrotech Electronics Pvt. Ltd. for
the moral support, encouragement and generous assistance.

I shall be failing in my duty if i do not express my thanks to the

project guide Mr.PRADEEP KOTHARI Pyrotech Electronics Pvt. Ltd.
who undoubtedly helped me and without whose help the project would not
have been completed

I also feel indebted to all the other staff members of Pyrotech

Electronics Pvt. Ltd. for their cordial behaviour and helping nature.have no

3
words to express adequately my deep sense of gratitude to each and every
one who has directly or indirectly helped me to complete this project
successfully.

VAISHALI KHURANA

BBA 3rd YEAR (VI SEM)

Sr. CONTENTS PAGE NO.

NO.
1. INDUSTRY PROFILE 7

2. COMPANY PROFILE 15

HISTORY AND STRUCTURE 17

VISION AND MISSION OF THE COMPANY 18

OBJECTIVE OF THE COMPANY 20

3. CONCEPTUAL FRAMEWORK 23
CONCEPT OF COST REDUCTION AND 25
CONTROL
TYPE OF COST REDUCTION 25
SOURCE OF COST REDUCTION 26
ALLOCATION & ABSORPTION OF INDIRECT 27
EXPENSES
PRODUCT WISE BREAK EVEN QUANTITY 28
4. RESEARCH METHODOLOGY 29

TITLE OF THE STUDY 30

DURATION OF THE PROJECT 30
OBJECTIVE OF STUDY 30

SOURCES OF INFORMATION 31
LIMITATION OF THE STUDY 32
5. PRODUCTION PLANNING & CONTROL 33

4
 6. MARKETING FUNCTION 45
7. BUSINESS POLICY 69

8. RECOMMENDATION AND CONCLUSION 71

9. APPENDIX 73
10. BIBLIOGRAPHY 76

INTRODUCTION

CHAPTER: 1
INDUSTRY PROFILE

> INDUSTRY VEIW

5
> OVERVIEW OF PYROTECH ELECTRONICS PVT.
LTD.
> MILESTONES

INDUSTRY VEIW

We are an ISO-9001 company associated with manufacturing and

supply of Control Room Equipment, Electronic Process Control Instruments
and Sensors, for last three decades for power plants, process plants and other
industries. Pyrotech came in to existence in 1976 and we have registered an
average rate of growth of 55%, since inception. We manufacture around 200
different types of instruments. All of our products are subject to 23 stringent
tests for quality control (High freq disturbance, ESD, Vibration, high
voltage, EMC etc.). We also represent Siemens field instruments, L&T
drives, Schneider PLC, Cirronet wireless radios, Madison Ultrasonic/Radar
level transmitter. Our project division has done complete C&I projects for
captive power, sponge iron, waste-water and other industries. Our group
companies are:-
1. PEPL unit-1: Electronic Process and Control Instruments.

6
 2. Pyrotech Control (India) Pvt. Ltd.: Enclosures, Control and Mosaic
panels.
3. PEPL unit-2: Control panels, control desks and Mosaic panels and
Industrial furniture.
4. Tempsens Inst. (I) Pvt. Ltd.: Temperature sensors, Thermocouples
and RTD’s.

We have wide acceptance amongst OEM’s and system integrators

namely BHEL, NTPC, Siemens, L&T, ABB, Honeywell Ltd., Yokogawa
India Ltd., etc. Our consultants include EIL, PDIL, HOWE, Holtec, Lurgi,
Tata Consulting Engineers, Toyo Engineering India Ltd., etc. Further, we
have been supplying our products and expertise to a wide array of customers
in Power, Petrochemical, Chemical, Fertilizer, Food processing, Metallurgy,
Cement, Sugar and other Industries.
Pyrotech Group
(Control & Instrumentation
Electronic & Sensor Equipment)

Pyrotech
Electronics Pvt.
Pyrotech Ltd. Unit II Pyrotech
Tempsens
Electronics ISO - 9001 : Marketin
Instrument India
Pvt. Ltd. Unit I 2008 g&
Pvt. Ltd.
EMS 14001 : Projects
ISO 9001:2000
ISO 9001:2000 2004 Pvt. Ltd.
(Temprature
(Electricals & OHSAS : 18001 : (Marketin
Sensors)
Electronics) 2007 g)
(Control &
Instrumentation)

Annuniciator Bar Thermocouple Services,

Graphindicator Industrial Resistance Marketing
Transducer Automation Thermometers(RTD' PLC
Scanner s) Projects
www.pyrotechindia.co www.peplelectronics.co www.tempsensindia
m m

7
 Overview of Electronics Engineering
The Electronics Industry in India took off around 1965 with an
orientation towards space and defence technologies. This was rigidly
controlled and initiated by the government. This was followed by
developments in consumer electronics mainly with transistor radios, Black &
White TV, Calculators and other audio products. Colour Televisions soon
followed. In 1982-a significant year in the history of television in India - the
government allowed thousands of colour TV sets to be imported into the
country to coincide with the broadcast of Asian Games in New Delhi. 1985
saw the advent of Computers and Telephone exchanges, which were
succeeded by Digital Exchanges in 1988. The period between 1984 and 1990
was the golden period for electronics during which the industry witnessed
continuous and rapid growth.
From 1991 onwards, there was first an economic crises triggered by
the Gulf War which was followed by political and economic uncertainties
within the country. Pressure on the electronics industry remained though
growth and developments have continued with digitalisation in all sectors,
and more recently the trend towards convergence of technologies.
After the software boom in mid 1990s India's focus shifted to
software. While the hardware sector was treated with indifference by
successive governments. Moreover the steep fall in custom tariffs made the
hardware sector suddenly vulnerable to international competition. In 1997
the ITA agreement was signed at the WTO where India committed itself to
total elimination of all customs duties on IT hardware by 2005. In the
subsequent years, a number of companies turned sick and had to be closed
down. At the same time companies like Moser Baer, Samtel Colour,
Celetronix etc. have made a mark globally.
Current Scenario

8
 In recent years the electronic industry is growing at a brisk pace. It is
currently worth $10 Billion but according to estimates, has the potential to
reach $ 60 billion by 2018. The largest segment is the consumer electronics
segment. While is largest export segment is of components.
In the journey of over 2 decades & more, we have expanded to match
global vision & progressed steadilythrough up gradation of technology,
quality and skills. Today, we are one of the India's leading manufacturers
of automation & control equipment.
Pyrotech has an exceptional multi-disciplinary array of products -
Panels, Enclosures, LVS, LIR/LIE, Computer Consoles, Electronic products
and Office-Industrial furniture. To reap advantages of Global Integrated
Chain, we collaborated with companies like Synelec (LVS), Subklew
(Mosaic Tile System), & Weigel Meters (Meters). In every true sense of the
word, we have become, “The Control Room Solutions Provider.”
Approved by major consultants and working with large OEMs,
we are in position to cater to the needs of a Varity of industries, ranging from
Power to Petrochemicals, Metering to Railways, Material Handling to
Process Control, Cement to Defense and many more.
Vision for Tomorrow Our work is focused on creating and
continuously improving a sensitive organization capable of reacting
promptly to market requirements and customer’s need. We will continue to
earn customer's trust with highest quality of services.
WE RESEARCH, PLAN, DESIGN AND INVEST FOR FUTURE.

MILESTONES

1976 Pyrotech is founded in Udaipur. First products Thermocouple

and RTD.

9
1980-1982 Diversification into electronics and panel making.
1982 First turnkey instrumentation package for JK White Cement.
1984 Prototype development of ALCOSY.
1985 Separate temperature sensor division, Tempsens established.
1986 Landmark year as BHEL Bangalore approves and starts using
ALCOSY enclosures.
1990 HZL Chanderia plant instrumentation package completed.
1991 Electronics division separated from the panel division, panels
division named Pyrotech Controls (I) Pvt. Ltd. First Line Side
Equipment developed and installed for NTPC.
1992 Training modules for TISCO developed.
1993 High performance 19 ’’ Racks developed for defence – supplied
to Indian Army.
1994 Major Power projects executed with mosaic tile system.
1998 New factory with a space of 50,000 sq. ft set up at Udaipur,
named Pyrotech Electronics Pvt. Ltd., Unit#2.
1999 Tie up with Synelec, France for Videowall, Siemens Germany
for PA1 products, Dr. Thiedig for SWAS. ISO 9001
CERTIFICATION RAJIV GANDHI NATIONAL QUALITY
AWARD.
2000 Control Room Design – new concept in Indian market.
2001 Prestigious projects executed – NTPC Simhadri, UPSEB, BSES
Seismic approval for mosaic control desk at 3.5g.
2002 Indigenous technology for mosaic tiles developed for Delhi
Metro Railway Corporation.
2003 Major orders executed for display walls for NTPC Rihand,
Ramagundam and Tata Power.

10
2004 New modular furniture range for industrial and offices
developed. Sales Turnover Rs. 25 Crore in 2004, Group
Turnover – Rs. 40 Crore.
2005 Major turnkey instrumentation package for NPCIL Kaiga and
Rawatbhata. Sales Turnover Rs. 32 Crore in 2005, Group
Turnover – Rs. 56 Crore Manufacturing of MCC draw out and
PCC panels started in 2005.
2006 Quantum increase in turnover from Rs. 32 crores to Rs.55
crores. Significant small and big orders were received in this
year.
2007 A new unit for Control Room & Office furniture started in
2007, in the name of Pyrotech Workspace Pvt Ltd, Udaipur
with an area of about 80,000 sq ft. Major order received from
Power Machines Ltd. Russia for NTPC Sipat Project (3 x 660
MW) for UCD, UCB and Marshalling Panels
2008 Accreditation from DNV, ISO 14001: 2004 and OHSAS 18001:
2007 received.
2009 New factory with a space of 70,000 Sq. ft. set up at Udaipur in
the name of Pyrotech Electronics Pvt. Ltd. Unit # 4.  12 KV
KIOSK developed for JVVNL.
2010 Major order from BHEL for Video Wall (56 Cubes) for NTPC
Dadri Korba and Farakka received. Major order from Invensys
for Video Wall (96 Cubes) for NTPC Mauda, Rihand and
Vindhyachal received. 
2011 Compact sub station as a new product line has been introduced
in product category which can be used as airports, malls, major
industries, complexes and remote locations.
2012-13 HT kiosk (indoor & outdoor) upto 11 KV/shelters, streetlights,
& CCTV mounting poles has been added in product portfolio

11
 which tooks high growth in 1st year of there launch.
Installation of a new lean manufacturing unit of CNC machined
and nano technologies process by HENKEL (Germany) &
powder coating plant (Huali,china).
2017-18 It has taken a step towards contributing in make in India Mission
Honourable Prime Minister Shree Narendra Modi by Making
India First LED lid-DLP video wall.

Exceeding customer satisfaction is the top priority. We have Industry

specific dedicated sales engineers; this provides a updated knowledge and
the best available technological product design for particular industry. We
also provide expert support during product selection, customization and
commissioning, to achieve maximum techno-economic effectiveness. The
close partnership with our customers’ starts long before goods are delivered
intensive individual consultation plays a central role for us.
Our marketing routes are direct and established. You can rely on them.
Our distribution and service outreach underlines our strong customer
orientation. Our products fulfill the most exacting demands and have been
tested under extreme conditions. We provide a comprehensive guarantee.
During the last 30 years, our team of professionals has recorded
numerous achievements, generating remarkable growth. Our staff of
industry-experienced engineers are dedicated to the constant improvement
and development of products. The managerial staff and technical personnel
have good training, technical knowledge and experience for their assigned
functions.
Our team work has resulted in successful development of the products,
the system, the approach, the services and above all, the confidence of our
customers.

12
 TECHNOLOGY

Pyrotech have two types of technology:

1. ALCOSY

2. FECOSY

Main technology is ALCOSY [ 20/30 ] which is complete

based on Aluminium 20 and 30. ALOSY has unique non - welded
modular construction and higher strength grade.

The company has developed technology for hi–tech

electronics Process control instruments and systems and applications
software for programmable logic controllers. All product manufactured
are in-house developed and includes quite a few import substitution
items.

13
 CHAPTER-2

COMPANY INTRODUCTION

Pyrotech Pvt. Ltd. Company was started in 1976 at Udaipur in

Rajasthan. Pyrotech is managed by well-knit team of energetic
technocrats. In the journey of over two decades and more, Pyrotech
has expanded to match global vision and progressed steadily through
up-gradation of technology, quality and skills. Pyrotech has mastered
the engineering of various products in the field of Electronics and
Electrical control equipments.
Pyrotech has an exceptional multi-disciplinary array of product.
Approved by major consultants and working with large OEMs,
Pyrotech is in position to cater to the needs of a variety of industries,
material handling to process-cement to defense and many more.

14
With the total construction area of 85000 sq. ft. the layout has been
designed to optimize the work flow. The manufacturing set-up has a
fully automated CNC sheet metal shop, CNC Engraving power
coating and modern point shop. Pyrotech also has a well-set wiring
and tubing shop. The company’s quality assurance debt, equipped
with the latest testing apparatus, ensures that the product quality
exceeds customer’s expectations. Its R&D provides effective and
flexible solutions.
Strategic alliances with foreign associates like Synelec-France,
Siemens-Germany and supreme-Germany, AMS Gmbh-Germany,
have lead the company to be a part of global integrated chain.
Therefore, the crux of their growth are-
1. Manufacturing excellence.
2. Timely delivery
3. Technical knowhow
4. Strong product profile.

Pyrotech treats every project as a unique. They assist customer to

choose the right kind of system that meet their requirements.

HISTORY AND STRUCTURE

CORPORATE MILESTONE:

 1976-Pyrotech international established by four technocrats in

Udaipur. Four products thermocouple & RTD’s.
 1980-Factory expansion for electronic products-indicators,
temperature controllers.
 1981-Execution of first turnkey instrumentation project for J.K.
white cement. Manufacturing of panels started.
 1984-Prototype development of ASCOSY. Separate
temperature sensor division tempests established.

15
 1986-Landmark year as BHEL Bangalore started using
ALCOSY technology. Large orders executed for IL Bokaro
steel power plant for marshalling panels.
 1990- HZL Chanderia instrumentation work commenced and
completed in November 1991.
 1991- High performances 19” racks developed for defense,
supplies to army for missile launch. National excellence awards
in CL & IE, R&D ELCINA award.
 1993-Major power projects executed fro PSEB Bhatinda;
Panipat with Swiss Mosaic tiles. LSE supplies for NTPC,
Korba.
 1996- Tie-up with Siemens AG for PAI series of products, Dr.
Thiedig for SWAS, Synelec France for video wall. Unit-1&2
attains the ISO 9001 Statys abd Tempsens accredited with ISO
9002. Honored with Rajiv Gandhi National Quality Award.
 1999-Executed orders for submarine program for navy, new
concepts for Indian market of control room design.
 2000 –Major projects executed for mega power house. NTPC,
Simhadari, UPSEBM, and BSES, etc. Now designs develop in
consoles and Fecosy panels.
 2001- Tie-up with AMS, Germany for oxygen and Zirconium
analyzers. New area offices at Hyderabad, Tricky, Kota,
Haridwar. Indiginous technology for active mosaic tiles
developed for Delhi metro rail Corporation.
 2003- Unit-2 attains ISO 9001:2000 industrial furniture range
introduced with major approvals from NTPC, BHEL AND
Tisco.
 2005 – Unit-2 attains ISO 9001-2000 from DNV Netherland,
Total turnkey control room solution for 1000 MW Jindal super
Thermal Power plant. Area – 10000 sq. ft..
 Aquila and Vectra CNC machines introduced.
 Expansion of conveyorised plan proposed ISO 14000:2004
(EMS).

16
 VISION OF TOMORROW:
“Our work is focused on creating and constantly improving an
organization capable of reacting promptly to market requirement and
customer need. We will continue to earn customer’s trust with highest
quality of services.”

“We research, plan, design and invest for future.”

VISION AND MISSION OF THE COMPANY

VISION:

Creating a vision is nothing but aligning the minds of all the

individuals that make up an organization in a particular direction so
that their cumulative energies lend a special energy to the organization
as a whole, rather than these energies getting dissipated by their
random and often conflicting application.
To achieve global dominance in control room solutions through
continuous product and technical innovation, customer oriented and a
focus on cost effectiveness.
A world class company which stresses (focus) on customer delight by
constantly exceeding their expectation in terms of quality, service,
value and safety.
Pyrotech, a customer oriented company emphasizes on customer
satisfaction by keeping balance between cost efficiency and
productivity. Quality, safety and environmental preservation are the
base line for their value added production activity.
At Pyrotech, strategic alliances are build with world leaders, to
provide unparalleled products and services, in the shape of innovative,
control room solutions to the global market place. Universal values
will inspire a humane and vibrant work environment where all will
strive constantly to improve the level of customer care along with the
quality, service and value for money and safety.
Pyrotech maintains a future vision that will make the company,
partners in customer’s success.

MISSION:
Today the company is well positioned to respond to the unique and
changing needs of the market place, and to tailor products to new and

17
specific requirements. And through a commitment to continuous
improvement in performance and reliability, as well as research into
new technologies.

“We don’t just push standard products……..

We build them exactly your way.”

At Pyrotech you convert your specification at the rate of excellence.

Pyrotech has steadily moved to provide robust and sturdy solutions to
stand upright in a world driven by technology. This has virtually acted
as a spur towards achieving higher standards of efficiency, investment
in state of the art technology, exposure to new manufacturing,
managerial practices and of course in all aspects- more options for
their customers.
Pyrotech group is one of the foremost in its field. Each product design
call for its own unique production expertise. It has spent years
perfecting a variety of production and matching processes. With the
close familiarity with integration technology, it has come up with cost
effective solutions for industrial applications- however complex. They
have a knockout combination of experience and technology.
With the technical process accumulation over years of experience,
Pyrotech provides complete engineers solutions, working together
seamless to handle your entire project in house from a single prototype
to production runs to fully finished and assembled products.
VISION: What do we want to be known for?

MISSION: What do we want to contribute and to whom?

PURPOSE: Why do we exist as an organization?

VALUES: What is it that we hold, that defines our behavior and

culture?

GOALS: Where do we want to be and when?

STRETAGY: How are we going to achieve our goals? (The

collective of the foreseeable decisions and the rationale underlying
them.)

OBJECTIVES OF THE COMPANY:

18
To establish nationwide marketing base with establishment in major
metropolitan cities and dealer network in other cities.
Increasing production base by induction and training of professional
manpower and adopting state of art technology for manufacturing.
Important of sophisticated electronic instruments while offering
commissioning support and sales services.
Manufacturing micro processor/micro controller base instruments with
foreign tie-up and export market.

ORGANIZATIONAL POLICY:
The organization policy is to manufacture defect free panels, control
desks, process control system, and industrial enclosures to provide
value for money and customer satisfaction. The organization wants to
create zero defect working cut by continually improving quality
technology and skills.

ACHIEVEMENTS:
The company’s objectives have been achieved by producing high
quality goods, which satisfies customer’s needs. The goods have been
successfully field-tested and production used and are highly reliable,
accurate and intrinsically safe. The research and development unit,
which is recognized by the department of science and technology,
government of India has contributed a lot towards the development of
products and ultimately the achievement of company’s objectives. The
company is committed to employ expert personnel, provide quality
products to the customer nationwide and maintain its reputation for
future prospect. Its future is bright.
1. November 1993-Department of electronics was awarded
“EXCELLENCE IN ELECTRONICS”

2. September 1994- Pyrotech Electronics Pvt. Ltd. Unit-1 was

honored with “ELCINA” award for research and development.

3. November 1999- Pyrotech Electronics Pvt. Ltd. Unit-2 was

honored with “RAJIV GANDHI NATIONAL QUALITY
AWARD.”

AWARDS AND RECOGNITION

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 The company has received the R & D
August, 93

 The company has been awarded “Excellence in Electronics”

From department of Electronics Government of India in
November 17, 93.

 The company has also been awarded a shied and certificate

From income tax departments for paying second highest
Income tax in 1996 - 97.

 The company has been awarded ISO – 9001 certificate in 1999.

 The company has also been awarded ELCINA [llnd prize] for R &
D in September`94.

DEPARTMENTS OF PYROTECH
Following are the strong hands of us:-
1. Marketing
2. Commercial
3. Stores
4. Design
5. CNC
6. Fabrication
7. Painting
8. Internal Tubing
9. Wiring
10.Quality assurance
11.Packing
12.Dispatch
13.Finance
14. Personnel and HRD

PRODUCT RANGE
1. Control Panel
2. Processor Panel
3. Electronic Panel

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4. Instrument Panel
5. Mosaic mimics Panel
6. Junction Box
7. Calibration Box
8. Purge Panel
9. Analyzer Panel
10.Pneumic Panel
11.LIE &LIR
12.Large Video Screens
13.Control room design
14.Test Bench
15.19” Rack Enclosures
16.Swas Panel
17.Computer consoles and CRT Desks
18.Centralized control desks
19.Relay Pane &Gas analyzer /shelter

21
 CHAPTER-3

CONCEPTUAL FRAMEWORK:

22
 Cost reduction & control according to various authors;-
“Mead, Mellot and Field”: focus on the control of cost & reduction
of product in business.
“J.S.Mill”: Cost Control is a technique which provides the
necessary information to the management that actual costs are
aligned with the budgeted costs or not
“G.W.Grestenberg”: “Cost control is the practice of identifying and
reducing business expenses to increase profits and it starts with the
budgeting process. A business owner compares actual results with the
budgeted expectations and if actual costs are higher than
planned, management takes action.”

Difference between of cost control &

cost reduction:
Cost Control Cost Reduction

Cost Control is a process in Cost Reduction is a process,

which we focus on which aims to lower the unit
controlling the total cost cost of a product
through competitive manufactured or service
analysis. It is a practice rendered without affecting its
which works to align the quality. It can be done by
actual cost in agreement with using new and improved
the established norms. methods and techniques. It
ascertains substitute ways to
reduce the production cost of
a unit.

23
 CONCEPT OF COST REDUCTION & CONTROL:
Cost reduction is a planned positive approach to reduce
expenditure. It is a corrective function by continuous process of
analysis of costs, functions, etc. for further economy in application
of factors of production.

1. The reduction must be a real one in the course of manufacture or

services rendered. Real cost reduction comes through greater
productivity. Greater productivity may be through
(1) obtaining a large quantity of production from the same
facilities;
(2) using materials of lower price and of different quality without,
however, sacrificing the quality of the finished product, i.e.,
reducing cost through the process of substitution;
(3) simplifying the process of manufacture without sacrificing the
quality of the finished product;
(4) changing features of the product suitably without sacrificing
the quality of the product etc.

2. The reduction must be a permanent one. It is short-lived if it

comes through reduction in the prices of inputs, such as materials,
labour etc. The reduction should be through improvements in
methods of production from research work.

TYPES OF COST REDUCTION & CONTROL:

Cost reduction is the process of eliminating waste and improving
processes to reduce overhead and/or cost of goods sold. The
following are common types of cost reduction.

1.Automation

24
Doing things automatically with information technology,
machines androbots.
2.Productivity
Improving the productivity of workers. For example, a decision
supporttool may allow workers to make better decisions faster.
3.Efficiency
Improving the efficiency of equipment and processes. For
example, replacing a slow computer with a faster model that
uses less power.
4.Outsourcing
Focusing on your core competencies and outsourcing things in
areas where you aren't particular productive. For example, a small
businessthat manufacturers bicycles may outsource tax preparation
to an accounting firm.
5.Waste
Removing waste in processes such as unnecessary transportation,
inventory, activities or waiting. For example, a restaurant that
makes its own bread doesn't need to overstock bread or drive
across town to a bakery to pick up fresh bread each morning.
6.Quality Control
Identifying quality problems as early as possible to reduce the cost
of poor quality. For example, identifying a quality problem on
theproduction line is cheaper than shipping it all the way to the
customer and having them complain and ship it back to you.

7.Reliability
Improving the reliability of systems, equipment and processes. For
example, a system crash can cause a great deal of waste as workers
wait for the system to come back up or implement time-
consumingworkarounds.

25
 SOURCES OF COST REDUCTION
 Potential Sources of Future Wind Energy Cost Reductions:-

ALLOCATION & ABSORPTION OF

INDIRECT EXPENSES

Overhead  absorption is the amount of indirect

costs assigned to cost objects . Indirect costs are
costs that are not directly traceable to an activity or
product. Cost objects are items for which costs are
compiled, such as products, product lines, customers,

26
 retail stores, and distribution channels. Overhead
absorption is a necessary part of the requirement
by both the GAAP and IFRS accounting
frameworks to include overhead costs in the
recorded amount of inventory that is shown in a
company's financial statements . Overhead
absorption is not needed for internal management
reporting, only for external financial reporting.

Examples of indirect costs are:

 Selling and marketing costs

 Administrative costs
 Production costs

Selling, marketing, and administrative costs are usually charged

to expense in the period incurred. However, indirect production
costs are classified as overhead and then charged to products
through overhead absorption.

Overhead absorption involves the following steps:

1. Classify indirect costs. Depending on the type

of allocation  desired, some costs may be included in overhead
and others may not. For example, overhead absorption for a
product would not include marketing costs, but marketing costs
might be included in an internal cost report for a distribution
channel.
2. Aggregate costs. Shift the identified costs into cost pools.
Each cost pool should have a different allocation base. Thus, the
indirect costs related to a facility might be aggregated into a cost
pool that is allocated based on square footage used.
3. Determine allocation base. This is the basis upon which
overhead is assigned to a cost object. For example, facility costs
may be assigned based on square footage used, while labor-

27
 related indirect costs may be assigned based on direct labor
used.
4. Assign overhead. Divide the allocation base into the total
amount of overhead included in a cost pool to arrive at
the overhead rate.

PRODUCT WISE BREAK EVEN

QUANTITY

Revenue is the unit quantity sold multiplied by the selling price

per unit. To figure total costs you first multiply the
unit quantity sold by the variable costs per unit, then you add the
fixed costs. So it looks like this: You then reorder the equation to
solve for BEQ

BREAK EVEN POINT =

TOTAL FIXED EXPENSES
SELLING PRICE PER UNIT-MARGINAL COST PER UNIT

, an“It’s one of the more popular ways that managers calculate

marketing ROI,” says Avery, pointing out that other common ones
include calculating the investment payback period, calculating an
internal rate of return using net present valueanalysis. “I
like breakeven analysis because it is easy to
understand and it’s often the simplest way to think
about return on investment.” The other forms of ROI
often require a more complex understanding of

28
financial concepts such as the firm’s cost of capital or
the time value of money.

CHAPTER-4

RESEARCH METHODOLOGY

29
 RESEARCH METHODOLOGY

“FRANCIS RUMMEL” Research is a careful enquiry or examination to

discover new information or relationships and to expand and verify existing
knowledge.

TITLE.: “Financial analysis of Pyrotech Electronics Pvt,Ltd “

Duration Of Study:
Project was accomplished within 45 days of its
commencement

 OBJECTIVES OF RESEARCH:

Every research inquiry has certain well define objective for tracking on right
path and right direction. Objectives provide useful guidance for
programming and its evaluation. Thus, in the absence of clear cut objectives
the study can’t take right direction.
Therefore the study under taken deals with the following objectives:-
1. To know the efficiency with which the working capital is being
utilized.
2. To analyze the position of the company through working capital
ratios.
3. To find out the operating cycle.To make some recommendations.

 DATA COLLECTION
The most important and essential thing of a research is data. Inaccurate data
may spoil our objective. There are several ways of collecting appropriate
data which differ considerably in the context of money, cost, time and other
resources at the disposal of the researcher.
There are two types of data via:

30
Primary data
Secondary data

1 Primary data: These can be collected either through experiment or

through survey. These data are collected afresh and for the first time, and
thus happen to be original in character.

2 Secondary data: These data have already been collected by someone else
which has already been passed through the statistical process.
I have used secondary data in this research. With The help of company’s
annual reports and other data,this research has done.

SOURCES OF INFORMATION

The analysis was based on following documents and related information:-

 The company publication including booklets,news bulletin etc.

 Reference books and journals related with working capital and

financial statement analysis.

LIMITATION OF THE STUDY

31
1. Ratios will be correct only if the accounting data, on which they
are based, are correct.
2. Comparison is not possible if different company adopts
different accounting policies.
3. It becomes less effective due to continuous changes in price
level.
4. A single ratio will not be able to convey much information.
5. Result may be misleading in the absence of absolute data.
6. It ignores qualitative factors, as ratios are tools of quantitative
analysis only.
7. It is difficult to forecast future, as it is mainly based on past
trends and financial data.
8. The research work relied on certain data andthe information provided
by the unit.

CHAPTER-5

32
 PRODUCTION PLANNING &
CONTROL

INTRODUCTION

Production planning and control is an important task of Production

Manager. It has to see that production process is properly decided
in advance and it is carried out as per the plan. Production is
related to the conversion of raw materials into finished goods. This
conversion process involves a number of steps such as deciding
what to produce, how to produce, when to produce, etc. These
decisions are a part, of production planning. Merely deciding about
the task is not sufficient.

The whole process should be carried out in a best possible way and
at the lowest cost. Production Manager will have to see that the
things proceed as per the plans. This is a control function and has
to be carried as meticulously as planning. Both planning and
control of production are necessary to produce better goods at
reasonable prices and in a most systematic manner.

33
Goldon B. Carson:
“Production planning and control involves generally the
organization and planning of the manufacturing process.
Specifically, it consists of the planning of the routing, scheduling,
dispatching and inspection, co-ordination and the control of
materials, methods, machines, tooling and operating times. The
ultimate objective is the organization of the supply and movement
of materials and labour, machine utilization and related activities,
in order to bring about the desired manufacturing results in terms
of quantity, time and place.”

Charles A. Koepke:
“Production planning and control is the coordination of a series of
functions according to a plan which will economically utilize the
plant facilities and regulate the orderly movement of goods through
the entire manufacturing cycle, from the procurement of all
materials to the shipping of finished goods at a predetermined
rate”.

Characteristics of Production Planning and

Control:
The forgoing discussion brings out the following traits of
production planning and control:

34
1. It is the planning and control of manufacturing process in an
enterprise. The questions like—What is to be manufactured?
When it is to be manufactured? How to keep the schedule of
production etc.? —are decided and acted upon for getting good
results.

2. All types of inputs like materials, men, machines are

efficiently used for maintaining efficiency of the
manufacturing process.

3. Various factors of production are integrated to use them

efficiently and economically.

4. The manufacturing process is organized in such a way that

none of the work centres is either overworked or under worked.
The division of work is undertaken very carefully so that every
available element is properly utilized.

Objectives of Production Planning and Control:

Planning of production precedes control. Whatever is planned

needs to be controlled. The ultimate objective of both planning and
control is to use various inputs in an efficient way and to have
proper control over various targets and schedules fixed earlier.

35
The following details will bring out the objectives of production
planning and production control:

Production Planning:
1. To determine the requirements for men, materials and
equipment.

2. Production of various inputs at a right time and in right quantity.

3. Making most economical use of various inputs.

4. Arranging production schedules according to the needs of

marketing department.

5. Providing for adequate stocks for meeting contingencies.

6. Keeping up-to-date information processes.

Production Control:
1. Making efforts to adhere to the production schedules.

2. Issuing necessary instructions to the staff for making the plans

realistic.

3. To ensure that goods produced according to the prescribed

standards and quality norms.

4. To ensure that various inputs are made available in right

quantity and at proper time.

36
 It ensures that optimum utilization of production capacity is
achieved, by proper scheduling of the machine items which
reduces the idle time as well as over use.
 It ensures that inventory level are maintained at optimum
levels at all time, i.e. there is no over-stocking or under-
stocking.
 It also ensures that production time is kept at optimum level
and thereby increasing the turnover time.
 Since it overlooks all aspects of production, quality of final
product is always maintained.

MARKETING FUNCTION

37
Essence of Cost Reduction

The rationale behind any firm’s decision to enter international

marketing is usually to increase profitability, and this is based
upon a recognition of the fact that the size of the firm’s actual
market share is a primary determinant of profitability. This is
supported by PIMS (Profit Impact of Market Strategy) research
findings. This shows that firms with a larger market share normally
have lower unit costs, and they are perceived by customers to
market higher-quality products, leading to relatively higher market
prices. Both of these factors result in higher profits for the firm.

Importance of Cost Reduction in marketing

The following are the importance of reduction of costs in
marketing.

1. Economies of scale:
Economies of scale are obtained as a result of manufacturing
additional products with the same or only slightly higher fixed
costs, so that, in practice, for every additional product produced,
the unit cost reduces. This is a slight oversimplification of the
situation as, for example, installation of new plant might in the
short term increase unit costs during the period when the plant is
running at below its economic capacity. Whilst in domestic
markets, the benefits from economies of scale follow directly, in
international markets, these economies must more than off-set
savings achieved by having local plants, which result in reduced
transport costs and the avoidance of import tariffs.

2. The experience effect

Although it is less well known than economies of scale, the
experience effect has potentially greater benefit for cost reduction.
Its origins lie in the observation that the time needed to perform a
specific task reduces as the operatives become more familiar with
it. A series of studies by the Boston Consulting Group found
evidence that the effect was much more widespread than this,
however, and covered all aspects of business, including high and

38
low technology, products and services, and consumer and
industrial products. There is a direct relationship between the
cumulative volume of production and the costs incurred in
producing the same product benefits. The experience
effect provides an opportunity for cost reductions, although if
managers do not make a concerted, efforted cost will be rise.

3. Location of production facility

Driven by the continual need to reduce costs, companies have
increasingly considered selective location or relocation of
production facilities. As firms increasingly market their products
globally, so their choice of manufacturing locations is determined
by many other considerations than simply being close to particular
markets. They might choose to locate a factory in a less developed
country in order to take advantage of lower labor costs, but also
they may well develop specific skills and areas of specialization in
those locations. For example, a large proportion of televisions,
radio, calculators, and jeans are manufactured in LDCs.

India, with 1.2 billion inhabitants, 100 million of whom are

considered to represent a financially aware middle class, presents
the attractive opportunity of an emerging market as well as a huge
skilled but cheap workforce for multinationals seeking low-cost
manufacturing bases. Thomson-CSF (France), Coca-Cola,
Motorola, IBM and Hewlett Packard have all decided to set up
there.

Problems associated with manufacturing in Western countries have

helped to accelerate this transfer of manufacturing. Lagging
productivity, reluctance to source materials and parts globally,
strong unions and high standards of living were the causes of the
decline in the US manufacturing base. Many regions and countries
are responding to this opportunity for inward investment by
marketing a variety of incentives and attractions to companies
wishing to relocate.

39
It is not only in manufacturing that relocation of activities can
benefit from lower labor costs. For instance, the introduction of
fiber optic cables allows considerably more information to be
transferred quickly and accurately by telecommunications, and so
can lead to high labor-content jobs such as data input, order
processing and invoicing being carried out in other countries. This
has considerable implications for services such as insurance and
banking.

Cost control by management means a search for better and more

economical ways of completing each operation. Cost control is
simply the prevention of waste within the existing environment.
This environment is made up of agreed operating methods for
which standards have been developed.

These standards may be expressed in a variety of ways, from broad

budget levels to detailed standard costs. Cost control is the
procedure whereby actual results are compared against the standard
so that waste can be measured and appropriate action taken to
correct the activity.

Cost control is defined as the regulation by executive action of the

costs of operating an undertaking. Cost control aims at achieving
the target of sales. Cost control involves setting standards. The firm
is expected to adhere to the standards.

CHAPTER-7

40
 BUSINESS POLICY

1. Implement Telecommuting
Allowing your employees to telecommute rather than work in the
office or on-premises can cut back business spending in a variety
of ways. Telecommuting may allow you to cut the lease or rent
payment you make each month because you require a smaller
space to operate the business when some or most of your
employees telecommute to work. With fewer employees in the
office, this can also cut back your spending on utilities, such as
electricity and water.
2. Alter Workweek
Switching full-time workers to part-time status reduces your
payroll expenses. Closing the office one or two additional days a
week can also cut back on the wages you pay employees, as well as
operational costs, such as electric and water. After the downturn in
the economy that began in 2007, many U.S. companies went to a
four-day workweek to cut back on expenses without having to lay
off employees or close the business altogether.
3. Reduce Salaries
If you are one of the owners of the business, you and any
additional owners may also consider taking a reduced salary.
Reducing your salary allows you to cut back on business expenses.
Money that once went to paying your salary can cover other costs
or go into a savings account to cover future business expenses.

CHAPTER-8
41
RECOMMENDATION AND
CONCLUSIONS

Any cost reduction assessment is an exercise in judgements since

there is no reliable and applicable data of previous deployment or
obvious comparators. The assessment here has sought to provide a
bottom up techno-economic assessment – still effectively
judgemental based – on a central band of outcomes, which we have
described as a subjective 60% confidence interval (defined by the
P20 and P80 levels).

This is not a meta-analysis, so we have been selective in our

references and where possible we have tried to benchmark against
UK specific projects based on FEED studies and other confidential
project studies, although there are very large discrepancies within
the latter group.

Noting the caveats, about uncertainty, the main conclusion of the

cost projection exercise at this stage in the development of CCS is
that the biggest and most easily exploitable reductions are available
from economies of scale benefits from a well designed integrated
transport and storage network that allows sharing of pipelines and
linking of multiple storage facilities. These scale benefits will only
be realisable if there is sufficient throughput of CO2. Even so an
appropriately located transport hub could in principle transport 8–
10mt/yr of CO2 by the late 2020s. This is equivalent to 2GW of
85% abated coal plant or 5GW of CCGTs. The gains from
improving capture systems are important and could contribute a
broadly equal benefit, however, they are likely to be harder to
achieve as this depends more on the successful application of
learning by doing. All this requires a substantial rollout of CCS
eventually of the order several GW a year of capacity. On this basis

42
our central case potential reduction for LCOE is of the order of
about one third. If one takes a broad confidence band the range of
cost paths would be very wide, probably with cases of little or no
real reduction by 2040, even based on reasonably high deployment
levels. The extreme low cost paths are capped by the fact that the
underlying base plant costs is unlikely to fall very significantly as
the technologies are essentially mature.

1. Current assets of past 5 years shows that the debtors

constitute substantial portion of current assets every year .The
second major constitute of current assets are inventory while
cash /bank acquire a nominal amount.
2. Current ratio varies between 2 to 3 during 5 years .This
shows better liquidity position of the company as compared
to theoretical standard.
3. The receivable turnover ratio was of fluctuating nature .This
shows that the company has no fixed credit policy.
4. Average collection period shows the liberal collection policy
of the company and more funds being locked up in debtors
which needs to be improved.
5. The increasing inventory turnover indicates that the
management is constantly taking initiatives for keeping
inventory holding period at lowest resulting in efficient
inventory management.
6. Current assets of past 5 years shows that the debtors
constitute substantial portion of current assets every year .The
second major constitute of current assets are inventory while
cash /bank acquire a nominal amount.
7. Current ratio varies between 2 to 3 during 5 years .This
shows better liquidity position of the company as compared
to theoretical standard.

43
8. The receivable turnover ratio was of fluctuating nature .This
shows that the company has no fixed credit policy.
9. Average collection period shows the liberal collection policy
of the company and more funds being locked up in debtors
which needs to be improved.
10. Since raw material, work in progress & finished goods
are taking more time to be converted into sales .Therefore the
working capital requirement will also be more.
11. Company has increased its finished goods holding
period due to a conscious policy decision to avoid stock out
situation and carry more finished goods inventory to expand
sales.

44
CHAPTER-9

APPENDIX

45
 Following is a list of notable staff reductions taken across the non-academic units. Please note that
this list is demonstrative and not comprehensive: Enrollment Management eliminated two full-time
positions in Marketing as well as a position in the Registrar’s Office the President’s Office eliminated two
Public Safety Officer positions Technology Services eliminated three service desk positions as well as
additional positions in hardware and applications Facilities eliminated overtime in Custodial Services and
significantly reduced overtime across the board for other areas Student Affairs eliminated a learning
specialist position in Disability Support Services, two positions in residence life, and one position in
housing. University Advancement eliminated two Advancement Services specialist positions and delayed
the hiring of several senior positions crucial to the future success of the Capital Campaign Significant
reductions have been made to non-salary related expenditures as well. Enrollment Management has been
forced to reduce digital print advertising, travel, and to produce fewer printed materials for prospective
students. University Advancement has restricted travel and entertainment budgets which impact donor
relations. Student Affairs eliminated Family Weekend, reduced dining hours and operations, and reduced
support for Orientation, Residence Life programming, and Athletics. Facilities and Technology services
have reduced equipment, supplies, and services budgets which impacts the level of support which they can
provide the campus community. Since a significant focus of cost reduction efforts has been to non-salary
related expenses, it is important to examine the overall impact of these efforts across the university.
Expenses in the related categories of materials and supplies, travel, and other expenses were reduced by
5.1% (from $23.2M to $22.0M) between FY2016 and FY2017. Expenses in these categories are projected to
reduce by 18.6% (from $22.0M to $17.9M) by the end of FY2018. The following graph depicts this change.

46
47
 CHAPTER-10

BIBLIOGRAPHY

To obtain more information regarding the present study and to substantiate it with theoretical proof,the
following references were made:

 Financial Management – I.M.Pandey

 Financial Management – khan and Jain

 Financial Management – Ravi M.kishore.

 Financial Management – Agarwal & agarwal

Web Site visited

 www.pyrotechindia.com
E mail;
 pmppl@pyrotechindia.com

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49