Summer Training Report

On

MATERIAL COST CONTROL

For the partial fulfillment of the award of
Bachelor of Business Administration (2008-2011)

Submitted To
JIWAJI UNIVERSITY GWALIOR

Submitted by
AKASH GUPTA BBA-V Sem.

PRESTIGE INSTITUTE OF MANAGEMENT, GWALIOR

Airport Road, Near Deen Dayal Nagar, Gwalior-474020 Email: info@prestigegwl.org; Website: www.prestigegwl.org

DECLARATION
I AKASH GUPTA, student of BBA V Semester of Prestige Institute of Management, Gwalior, hereby declare that the project is my original piece of work and not the copy of any such work undertaken by someone else, all the information , facts and figures presented in the report are first hand in nature. They are actually based on my intense efforts conducted in CADBURY INDIA LTD. I have completed this project under the guidance of Prof. NAVITA NATHANI ( Faculty PIMG)

Date:

AKASH GUPTA BBA Vth SEM

CERTIFICATE

This is to certify that

Mr.AKASH

GUPTA Student of BBA Vth Semester

programme has completed her summer training of 4 weeks and prepared this report of MATERIAL COST CONTROL under my guidance.

Date:

Prof. NAVITA NATHANI (Faculty Guide)

ACKNOWLEDGEMENT
The present work is dedicated to the persons who not only taught me, but continue inspire me in knowing the clandestine facts of workmanship. I bow in honor before these great teachers. The accomplishment of the present study became possible by the invaluable assistance and guidance of my professional guides to whom I may gratefully indebted. Firstly I would like to express my sincere gratitude to my faculty guide Prof. NAVITA NATHANI without whose invaluable guidance, moral support and encouragement my work would have ever assumed the present shape, research. I was indebted to my parents and friends for their moral support and possible efforts they made for me.

Date:

AKASH GUPTA BBA V SEM

INDEX

page no

History of the Organization & Objective Organizational Structure

Financial Performance Material Cost Control Production & Operations Marketing

Strength & Weakness of the Organization.

Suggestion Special Point Names of the CEO/MD/Department Head Chapter -1 Introduction Chapter II Objective of The Study Chapter III Result & Discussion Chapter IV Suggestion Chapter V Conclusion

HISTORY OF THE ORGANISATION AND OBJECTIVE

CADBURY INDIA Cadbury began its operations in 1948 by importing chocolates and then re-packing them before distribution in the Indian market. After 59 years of existence, it today has five company-owned manufacturing facilities at Thane, Induri (Pune) and Malanpur (Gwalior) , Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai). The corporate office is in Mumbai. Our core purpose Working together to create brands people love captures the spirit of what we are trying to achieve as a business. We collaborate and work as teams to convert products into brands. Simply put, we spread happiness! Currently Cadbury India operates in three sectors viz. Chocolate Confectionery, milk food Drinks and in the Candy category. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations. Cadbury enjoys a value market share of over 70% the highest Cadbury brand share in the world! Our flagship brand Cadbury Dairy Milk is considered the gold standard for chocolates in India. The pure taste of CDM defines the chocolate taste for the Indian consumer. In the Milk food drinks segment our main product is Bourn vita the leading Malted Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is the undisputed leader. We recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is sold in 25 countries worldwide. The Cadbury India Brand Strategy has received consistent support through simple but imaginative extensions to product categories and distribution. A good example of this is the development of Bytes. Crispy wafers filled with coca cream in the form of a bagged snack, Bytes is positioned as The new concept of sweet snacking. It delivers the taste of chocolate in the form of a light snack, and thus heralds the entry of Cadbury India into the growing bagged Snack Market, which has been dominated until now by Salted Bagged Snack Brands. Bytes were first launched in South India in 2003.

MALANPUR FACTORY In 1989 the company stated manufacturing operations from its third and newest factory at Malanpur near Gwalior in M.P.

Using the most modern state of the art technology, the unit today manufactures range of liquid milk chocolate and a variety of enrobed chocolate products. Factory in 8 phases 1988-89 1994-95 1997 2001 2005 2006 2008 2009 LOCATION Telephone No. Parent Company : : distt. Bhind. 07539-83803, 83804 Cadbury Schweppes International UK clairs & Gems 5 Star Perk Chocolate expansion Fruity Gems Ultra Perk Short clair Sticks

: Plot No. 25, Malanpur Industrial area, Malanpur

Total Area 24 Acres Constructed 8.5 Acre HISTORY OF ORGANISATION Fifty years ago, the real taste of chocolate as we know it today, landed on Indian shores. An event that carried forward the entrepreneurship and vision born as far back as 1824, when John Cadbury set up shop in Birmingham (UK) to sell among other things his own cocoa concoction. From these modest beginnings emerged

Cadbury Schweppes that is today the leading manufacturer of confectionery and beverages in the United Kingdom. A company that has its presence in over 200 countries worldwide and has made the name Cadbury synonymous with cocoa products in countries across the planet. This is the brand that came to India in 1947 to a nation that was in its infancy, a market that was ready for the world and a people that were open to new ideas, new products. Within a year of being set up as a trading concern, Cadbury fry India was incorporated as a Private Limited company, set up for processing imported chocolates and Bourn vita. The same year saw the launch of Cadburys Milk chocolate for millions of Indians. Through 50 years of investment in capital and marketing, the scale and scope of our operations has expanded to cover a range of brands in the chocolate, sugar confectionery and malted food drinks segments. We have a majority share in the Indian chocolate market and a significant presence in sugar confectionery and food drinks. Today Cadbury India Ltd, a subsidiary of Cadbury Schweppes employs over 200 people across the country. And operates in one of the fastest growing chocolate markets for Cadbury Schweppes group across the globe.

ORGANISATION STRUCTURE Chairman C Y Pal Chairman - Non Executive

Managing Director

Anand Kripalu Managing Director

Non-Executive Directors Harsh Mariwala Radhakrishnan B. Menon Suresh Talwar

Executive Directors

Atul Bhatia Executive Director Science & Technology

Rajesh Garg Executive Director Finance & Commercial

Jaiboy Phillips Sanjay Executive Director - Supply Executive Chain Marketing

Purohit Director -

Sunil Sethi V Chandramouli Executive Director Executive Director Sales & Customer HR & Strategy Development

Senior Management Ashish Pisharodi Rajesh Ramanathan Vice President - Modern Vice President - People & Trade Talent Shivanand Sanadi Vice President Affairs Dr. Shantanu Samant Legal Vice President Science & Technology

Vivek Sarbhai Dharmesh Joshi Vice President - Logistics & Vice President Customer Operations Manufacturing Development Sherezad Irani VP - Procurement Monaz Noble Company Secretary Sanjay Kurup VP - Manufacturing (Baddi)

FINANCIAL PERFORMANCE Finance holds the key to all human activity. Finance department of malanpur factory is also working in the same direction and with the same objective but it has some limitation because most of the importance finance related matter are directly dealt and finalized by the central finance department in the Mumbai head office. Factory finance department always endeavors of maximizing the profit of high company through two possible ways: 1. Reduction in cost 2. Increase in Sales FINANCIAL FUNCTIONS 1. Preparing variance report a) Material user variance report b) Packaging material user variance report 2. Production report 3. Excise related matter 4. Export related matter 5. Payment to small engineering items and other goods.

MATERIAL COST CONTRL MATERIAL COST CONTROL Material cost control is the management of cost of material it consists of the following . 1. Capital costs 2. Storage costs 3. Risk of price decline 4. Risk of obsolescence MATERIAL Material is very important factor for production. it includes physical commodities used to manufacture the final end product. It is the starting point from which the first operation starts. Material refers to all of commodities in the process of manufactures. Proper control of material is necessary from the time orders of purchase material are placed with supplies. Until the have been consumed.

COST It is the amount of resources given up in exchange for some goods or services. The cost is that which is given or a sacrifice to obtain something cost is also different from value as cost is measured in terms of money whereas values is measured in terms of usefulness or utility of an article. We can define as: the amount of expenditure (actual or notional) incurred on or attributable to a given thing or to ascertain the cost of a given thing.

Methods of controlling the size of material: There arc two method of controlling as follows: 1) Standardization. 2) Simplification. Standardization and simplification are the tools of material control to optimize on the number of items and reduce the size of material, carried in the stores. Standard institutions: Standardization and simplification are the continuous process for controlling the size of materials, so there are many institutions regarding the help of this, these arcs as follows . Indian Standard Institute. . International Organization for Standardization. . Other Specialilised Institutions. Types of stores department: I) centralized stores 2) Decentralized stores 3) Central stores with sub- stores. 1) Centralized stores :In case of such a store, material are received by and issued from one stores department materials kept at one central store. 2) Decentralized stores: Under this type of stores, independent stores are situated in various departments. Such types or stores setup to meet the requirements of materials of each production department are not very popular because of the heavy expenditure involved. 3) Central stores with sub-stores: Such stores should be situated near production departments. For each item of material, a quantity is determined and this should be kept in stock in sub-store at the beginning of any period .In the end of a period the storekeeper of each sub-store will requisition from the central stores. Fixation of KO.Q. And various level: A) E.O.Q.:

The decision about how much order has great significance in inventory management .the quantity should be order neither small nor big because cost of buying and carrying material are very high. Economic order quantity is the size of the lot to be purchased which is economically ) viable .this is the quantity of material which can be purchased at minimum costs .economic order quantity is the point at which inventory carrying cost is equal to order costs E.O.Q. is made. 01' two parts. Ordering cost. Carrying cost. EOQ = 2All I Where: A Annual. B Cost of placing an order/. Ordering cost or buying cost PCI' unit 1 Inventory carrying cost of one unit C*S(cost per unit*storage cost) a) Minimum Level or safety stock level: It represent the minimum qty. of an item, which must be keep in store at all time .the main (II' determination of minimum level is that ,due to this, production should not be stoped.Calcu1all' formula of min. stock level is as follows Minimum level = Re-ordering level-(Normal consumption*Normal Re-order period . b) Maximum Level: It represents the maximum quantity of an item of material which can be held in stock at any time .stock should not exceed this quantity .the quantity is fixed so that there may bb no overstocking .the formula of maximum stock level given by WHELDON is as follows Maximum stock level= Reordering level + Re-ordering Quantity-(Minimum Consumption*Minimum Reordering period) '--

c) Average stock level: The average stock level is calculated by the following formula: Average stock level = Minimum stock level + of re-order quantity d) Reordering level:The order is sent before the materials reach minimum stock level. Re-order level = Safety stock + (Average usage *Average re=-order period) OR Maximum consumption * Maximum Re-order period OR Maximum usage * Maximum lead time

SAMPLE & TOOLS 1. First in first out (FIFO) method: Under this method material is first issued from the earliest consignment on hand and priced at the cost at which that consignment was placed in the stores .in other words, materials received first arc issued first. The units in the opening stock of materials are treated as if they are issued (first, the units from the first purchase issued next and so on until the units left in the closing stock of materials arc valued at the latest cost of purchases. ['his method is most suitable in times of falling price of materials to jobs or works orders will he high, while the cost of replacement of materials will be low .but in case of rising prices this method is not suitable because the issue price of materials to production will be low ,while the cost of replacement of materials will be high. Advantages of FIFO Method: . Main advantage of FIFO method is that it is simple to understand and easy to operate. . It is logical method because it takes into consideration the normal procedure. Of utilizing first those materials which arc received first .Materials are issued in order of purchases, <; 0 materials received first are utilized first. . Under this method, materials are issued at the purchase price; so the cost of jobs or work order is correctly ascertained so far as cost of materials is concerned. Thus, the method recovers the cost price of the materials. . This method is useful when prices are falling. . Closing stock of materials will be valued at the market price as the closing stock under this method would consist of recent purchase of materials. . This method is also useful when transactions arc not too many and price of materials are fairly steady. Disadvantages of FIFO method: . This method is increase the possibility of clerical errors, if consignment are received frequently at fluctuating prices as every time an issue of materials is made ,the store ledger clerk will have to go through his record to ascertain the price to be charged.

. For pricing one requisition more than one price has often to be taken. . When prices rise ,the issue price does reflect the market price as material are issue from the earliest consignment .therefore the change of production is low because the cost of replacing the material consumed will be higher than the price of issue. 2) Last in first out method (LIFO) method: The issues under this method are priced in the reverse order of purchase i.e., the price of the latest available consignment is taken. This method is sometimes known as the replacement cost method because materials are issued at the current cost to jobs or work orders except when purchases were made long ago. This method is suitable in times of rising prices because material will be issued from the latest consignment at a price which is closely related to the current price levels. This method was first introduced in the U.S.A.during the Second World War to get the advantages of rising prices Advantages of LIFO Method: . Like FIFO method, this is simple to operate and is useful when transactions are not too many and the prices are fairly steady. . Like FIFO, this method recovers cost from production because actual cost of material is charged to production. . . In times of rising prices, LIFO method of pricing issues is suitable materials are issued at the current market prices which arc high .this method thus helps in showing a lower profit because of increased charged to production during periods of rising prices and lower profit reduces burden of income-tax.. Disadvantages of LIFO Method . Like FIFO, comparison between one job and the other job will become difficult because one job started a few minutes after another of the same type many bear are different charged of materials consumed. . Like FIFO, this method many lead to clerical errors as every time as issue is made. till. Stored ledger clerk will have to go through the record to as certain the price to be charge. For pricing a single requisition, more than one price has often to be adopted. . The stock in hand is valued at price which does not reflect current market price.

3) A VERAGE COST METHOD: The principle on which the average cost method is based is that all of the materials in store arc show mixed up that an issue can not be made from any particular lot of purchases and, there fore, it is proper if the materials arc issued at the average cost of materials in store. Average may be of two types: I) Simple arithmetic average. 2) Weighted arithmetic average. Simple average price: A price which is calculated by dividing the total of the prices of the material in the stock from which the material to be period could be drawn by the number of the prices used in that total. Weighted average price: A price which is calculated by dividing the cost of materials in the stock from which the materials to be priced could be drawn by the total quantity of materials in the stock.

2.2.

OBJECTIVE OF STUDY

OBJECTIVE OF STUDY 1. To highlight the policies and procedures of Material cost control 2. To make a detailed analysis of the strategies adopted by the company for planning and monitoring costs 3. To identify the vertical areas where greater attention is needed for better management. 4. To find our better plan for company for controlling material.

PERSONAL POLICIY QUALITY ASSURANCE OF CADBURY 1. Market high quality, superior value products that consistently meet our specifications and comply with local regulatory requirements, while continuously improving and exceeding our consumers expectations. 2. Guarantee that our customers and consumers come first by actively listening and understanding their quality and value expectations at the points of purchase and consumption. 3. Ensure that any representation of our company image, including our products and trademarks, meet approved standards, reinforce our commitment to quality and safeguard the reputation of Cadbury. 4. Maintain a right first time culture that consistently embraces quality and food safety, where everyone understands their responsibilities and accountabilities. 5. Operate audited quality management systems that continually improve processes to deliver this policy and our standards. 6. Assign clear management accountability for setting and meeting measurable goals and targets for quality and food safety. 7. Work with our supply chain and business partners to assure compliance with our quality policy and systems, ensuring quality throughout our supply chain. 8. Place continuous improvement at the heart of our performance enabling us to deliver superior products and service to our consumers and customers. 9. Create a passion for quality where success and achievement are communicated, recognized and celebrated.

ENVIRONMENT, HEALTH AND SAFETY POLICY At Cadbury PLC, we see sound and responsible environmental, health and safety (EHS) management as an integral part of achieving our goal to grow the value of our confectionery and beverages businesses for our shareowners. We believe that such an approach will generate and sustain significant environmental, social and financial benefits, thereby contributing to our objective

of long-term sustainability. 1. Conduct our business in compliance with environmental, health and safety laws and with our global standards, and regularly assess the compliance of our operations against these requirements. 2. Maintain and continually improve systems to manage our EHS responsibilities, establishing and ensuring employee accountability for our EHS performance at all levels of the organization. 3. Set clear targets for continual improvement in our EHS performance and monitor these targets to ensure that they are met. 4. Strive to prevent pollution and to minimize the environmental costs and impacts of our global operations. 5. Provide a safe and healthy environment for our employees, contractors and other visitors to our sites 6. Train and motivate our employees to understand their EHS responsibilities and to participate actively in our EHS programmers 7. Communicate with our shareowners, employees, customers and other interested parties by regularly reporting on our EHS performance and maintaining an open dialogue. 8. Review and update this policy regularly.

PRODUCTION & OPERATION PRODUCT OF MALANPUR FACTROY The story of Cadbury Dairy Milk started way back in 1905 at Bourneville, U.K., but the journey with chocolate lovers in India began in 1948. The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they think of Cadbury Dairy Recently, Cadbury Dairy Milk Desserts was launched, specifically to cater to the urge for 'something sweet' after meals. Cadbury Dairy Milk has exciting products on offer - Cadbury Dairy Milk Wowie, chocolate with Disney characters embossed in it, and Cadbury Dairy Milk 2 in 1, a

delightful combination of milk chocolate and white chocolate. Giving consumers an exciting reason to keep coming back into the fun filled world of Cadbury. Our Journey: Cadbury Dairy Milk has been the market leader in the chocolate category for years. And has participated and been a part of every Indian's moments of happiness, joy and celebration. Today, Cadbury Dairy Milk alone holds 30% value share of the Indian chocolate market. In the early 90's, chocolates were seen as 'meant for kids', usually a reward or a bribe for children. In the Mid 90's the category was re-defined by the very popular `Real Taste of Life' campaign, shifting the focus from `just for kids' to the `kid in all of us'. It appealed to the child in every adult. And Cadbury Dairy Milk became the perfect expression of 'spontaneity' and 'shared good feelings'. The 'Pappu Pass Ho Gaya' campaign also went on to win Silver for The Best Integrated Marketing Campaign and Gold in the Consumer Products category at the EFFIES 2006 (global benchmark for effective advertising campaigns) awards.

Did You Know: Cadbury Dairy Milk emerged as the No. 1 most trusted brand in Mumbai for the 2005 edition of Brand Equity's Most Trusted Brands survey. During the 1st World War, Cadbury Dairy Milk supported the war effort. Over 2,000 male employees joined the armed forces and Cadbury sent books.

MARKETING OF CADBURY Dairy Milk has always tried to keep a strong association with milk, with slogans such as "a glass and a half of full cream milk in every half pound" and advertisements that feature a glass of milk pouring out and forming the bar.

campaign for the Fruit & Nut variety ("everyone's a fruit and nutcase") was particularly memorable and featured the writer, radio and television personality Frank Muir. On 9 March 1976, American singer Neil Diamond performed a concert televised throughout Australia during which he did a humorous live commercial for Dairy Milk. This concert, including the ad as a bonus selection, was released on DVD on 1 July 2008.

In 2004, Cadbury's started a series of television advertisements in the United Kingdom and Ireland featuring a person and an animal representing the person's happiness debating whether to eat one of a range of bars including Dairy Milk.

In 2005, Cadbury's original Dairy Milk bar celebrated its 100th birthday, being first sold in 1905. It remains the UK's biggest selling chocolate brand. Dairy Milk is sold in the United States under the Cadbury label, but it is manufactured by the Hershey's company in Pennsylvania. On 28 March 2008, the second Dairy Milk advert produced by Glass and a Half Full Productions aired. It features several trucks at night on an empty runway at a Mexican airport racing to the tune of Queen's "Don't Stop Me Now". The ad campaign ran at the same time as the problems at Heathrow Terminal 5 with baggage handling; in the advert baggage was scattered across the runway. On 5 September 2008, the Gorilla advert was relaunched with a new soundtrack Bonnie Tyler's "Total Eclipse of the Heart" a reference to online mash-ups of the commercial. Similarly, a version of the truck advert appeared, using Bon Jovi's song "Living' on a Prayer". News Related to Cadbury 1. Cadburys relaunches Bourneville chocolates news 15 October, 2008 Bourneville, a much neglected dark chocolate bar from Cadburys' has been relaunched as a new category of dark chocolates in India. "Dark chocolate is one of the fastest growing categories abroad. However, in India, it is still in a nascent stage. Thus, we are almost doing category creation with this launch," said Sanjay Purohit, executive director- marketing and international business, Cadbury India 2. Festive campaigns by Coca Cola and Cadburys news 03 October 2008 Coca Cola has launched a special festive season communication drive of its carbonated drink brand Thums Up. While the "Taste the Thunder" TV commercial features Akshay Kumar performing acts like mountaineering and roller coaster ride, the company is also launching a similar initiative for the market

in southern states featuring Tollywood star Mahesh Babu.

The initiative comes as a follow-up to the company's announcement of venturing into the 350 ml pack segment of all its major brands. 3. Cadbury and Tamil Nadu Agricultural University join hands for cocoa research project news 30 May 2008 Mumbai: Cadbury Asia Pacific, the Asian arm of UK confectionery giant Cadbury Plc, has recalled 11 types of its Chinese-made chocolate as a precaution, the Hong Kong government said in a statement. In a statement, issued from its Singapore office, Cadbury said it has recalled 11 chocolate products as tests ''cast doubt on the integrity of a range of our products manufactured in China.'' The products were meant for distribution in Taiwan, Hong Kong and Australia, its said. Tests ''cast doubt on the integrity of a range of our products manufactured in China,'' Cadbury said in the statement issued from its office in Singapore. 4. Cadbury, others recall China-made confectionery news 29 September 2008 Mumbai: Cadbury Asia Pacific, the Asian arm of UK confectionery giant Cadbury Plc, has recalled 11 types of its Chinese-made chocolate as a precaution, the Hong Kong government said in a statement. In a statement, issued from its Singapore office, Cadbury said it has recalled 11 chocolate products as tests ''cast doubt on the integrity of a range of our products manufactured in China.'' 5. Worm turns for Cadbury news Mohini Bhatnagar 28 November 2003

Hyderabad: The worms in the chocolate bars controversy has hit Cadbury India where it hurts most and that is in sales. The company today faces tough times ahead as the business environment for its chocolates becomes increasingly negative with rising raw material prices and low consumer sentiments, post the worms controversy in October this year. 6. Cadbury India net profit at Rs 190 million news 13 July 2002 Mumbai: Cadbury India Ltd has posted a net profit of Rs 190 million for the quarter ended 16 June 2002 as compared to Rs 93.60 million for the quarter ended 17 June 2001.

STRENGTH & WEAKNESS Strengths Cadbury is the largest global confectionery supplier, with 9.9% of global market share. Strong manufacturing competence, established brand name and leader in innovation. Advantage that it is totally focused on chocolate, candy, chewing gum, unique understanding of consumer in these segments.

Weaknesses The company is dependent on the confectionery and beverage market, whereas other competitors e.g. nestle have a more diverse product portfolio, where profits can be used to invest in other areas of the business and R&D. Other competitors have greater international experience - Cadbury has traditionally been strong in Europe. New to the US, possible lack of understanding of the new emerging markets compared to competitors.

Suggestions

1. Necessary knowledge and skills about new learning strategies at all levels; 2. Accreditation of the current teacher training and staff development programs offered by various providers; 3. A critical mass of local experts to spread the new knowledge and skills throughout the teachers in the country; 4. Suitable alternative model for in-service training; 5. A plan for national implementation; Indication of support and commitment by the government

SPECIAL POINT Use of Advertising' No. 1 FMCG Company Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India in 2008, by the Great Place to Work Institute.

Great Place to Work 2007' Cadbury India' has been awarded the "Bronze Award for Excellence in People Management" in the 'Great Place to Work 2007' survey conducted by Grow Talent Company Limited and Business world. The award recognizes Cadbury India as a national leader in the area of Human Resource Management.

Great Place to Work 2007' Cadbury India' has been awarded the "Bronze Award for Excellence in People Management" in the 'Great Place to Work 2007' survey conducted by Grow Talent Company Limited and Business world. The award recognizes Cadbury India as a national leader in the area of Human Resource Management. Cadbury India received a bronze award at the Cannes Lions International Advertising Festival for partnering with a mobile phone operator in 2005 to provide exam results via SMS to school children.

Reader's Digest Award recognizes Bourn vita Bourn vita won the 'Reader's Digest Trusted Brands' Gold Award for the vitamin health supplement category in Indian in 2006. The merit was based on 7000 responses from questionnaires and telephone interviews across Asia. Suraksha Puraskar Award 2005 Cadbury India's Bangalore factory has received the "Suraksha Puraskar" safety award from the National Safety Council - Karnataka chapter. ABBY Award wins for India. The prestigious ABBY awards, held in March, recognize creative excellence in the Indian Advertising Industry. The Ultra Perk campaign won four Silver Awards in total and the Cadbury Dairy Milk Campaign, Miss Palampur, also won a Silver Award. This year Cadbury also sponsored the new 'Young ABBY' Award. Cadbury wins the Effies 2006 At the recent Effie 2006 awards organized by The Advertising Club of Mumbai, our 'Pappu Pass Ho Gaya' advertising campaign bagged two more awards - Gold in the Consumer Products category and Silver in the integrated advertising campaign category.

INTRODUCTION INTRODUCTION of TOPIC In India we believe that effective communication and availability of information at the right team and time and right place is critical for an edge in business. In order to achieve this we realize to importance of and have in place, an effective IT infrastructure. Cost accounting isnt just collecting data for history. it is an important tool in predicting and assuring future profitability . We cant overstress the importance of our costing tools that provide complete cost estimates at the time of quotation/order entry based on your latest materials, labor and overhead costs. MATERIAL COST CONTROL Material cost control is the management of cost of material it consists of the following. 5. Capital costs 6. Storage costs 7. Risk of price decline 8. Risk of obsolescence MATERIAL Material is very important factor for production. it includes physical commodities used to manufacture the final end product. It is the starting point from which the first operation starts. Materials refer to all of commodities in the process of manufactures. Proper control of material is necessary from the time order of purchase material is placed with supplies. Until the have been consumed.

COST

It is the amount of resources given up in exchange for some goods or services. The cost is that which is given or a sacrifice to obtain something cost is also different from value as cost is measured in terms of money whereas values is measured in terms of usefulness or utility of an article. We can define as : the amount of expenditure ( actual or notional ) incurred on or attributable to a given thing or to ascertain the cost of a given thing.

RESULTS & DISCUSSION During my research in CADBURY INDIA LTD., MALANUR I found that MATERIAL COST CONTROL is an integral part of industrial success. For purchasing material we should concentrate on the cost of material through material cost control company can take a top position in corporate market. Material cost has played a very important role in economic condition of company. After analyzing the data I have reached the conclusion that the miscellaneous expenditure of the company has reduced which is good sign and shows the capability of the company in handling wastage, losses and bad debts.

DISCUSSION I have found here these below things from analysis of data. For economic purchase order of 114 units of MS PIPE. We analysis of three quotations for choosing lower cost of material. We select the B.D. Raj. & Cos quotation because the lower cost of material. This is the 56185.469 with applying 4% ST & fright. In store material we found these below things from the store keeping receipt. Here we show about the two type of material. ITEM CODE CC5801008 CC5801009 Re-order level 1290 2700 Max. level 1700 3600 stock Min. level 540 900 stock Avg. level 990 1500 stock

As such we can get these levels for further items. For issuing the material we found the knowledge through FIFO and LIFO method. How material received in store and how should issue it from the store etc. During my research period. I have found material cost control management of the company is very sound thats why their economic position is also very sound.

OBJECTIVES OF STUDY OBJECTIVES OF STUDY

1. To highlight the policies and procedures of Material cost control 2. To make a detailed analysis of the strategies adopted by the company for planning and monitoring costs 3. To identify the vertical areas where greater attention is needed for better management. 4. To find our better plan for company for controlling material.

SUGGESTIONS There are some suggestion,which may certainly improve the efficiency of material cost control management. FIFO and LIFO methods should be apply for keeping and issuing the material in stores. I suggest through research in this regard to arrive at some suitable mix of both this method which gives due consideration to value, quality importance etc of stock items. The maximum and minimum level of each item should be indicated to avoid over-stock or under-stock situation. Internal performance report an inventory on at least monthly basis should be prepared to study the material price variance, material usage and inventory level variance from hr estimate figure. Material should be purchase at the lower cost but also quality should be maintains.

CONCLUSION

References (Co site )

link retrieved on -----date 1. Kothari C.R. , Research methodology (Methods & Techniques), Wishwa Prakashan, 24th Reprint March 1999/ 2. CHANDRA PRASANNA, FINANCIAL MANAGEMENT, Tata MegrawHill publishing com. Ltd. New Delhi, Fifth edition 2002. 3. Shukla SM, ACCOUNTING FOR MANAGERS, SAHITYA BHAWAN PUBLICATION COM. Ltd Raipur. WEB-SITE: www.google.com www.rediff.com