A

“SUMMER INTERNSHIP”
PROJECT REPORT

ON

“MY CHOICE HOME APPLIANCES”

SUBMITTED BY NISHAN
MISHRA, ROLL NO: 28
CHANDRAPRAKASH JAIN, ROLL
NO:18
VAIBHAV JAIN, ROLL NO:UNDER THE
GUIDANCE OF MR. SHREYAS
TRIVEDI

FOR THE

PARTIAL FULFILMENT FOR AWARD DEGREE OFBACHELER OF

BUSINESS ADMINISTRATION

AT

S.S. AGRAWAL COLLEGE OF COMMERCE AND MANAGEMENT,NAVSARI

AFFILATED TO VEER NARMAD SOUTH GUJRAT UNIVERSITY

ACADEMIC YEAR 2023-24
Project Completion Certificate (College)
Project Completion Certificate (Company)
 DECLERATION

I/We,

Mishra Nishan, Jain Vaibhav, Jain Chandraprakash, Hereby

Declare That the Project report Entitled “Summer Training’’ at “My choice home appliances “. We
wish to express our heartfelt gratitude to our guide ‘’Shreyas Trivedi.’’ This report is Written and
Submitted by us/me to ‘’S.S. AGRAWAL COLLEGE OF COMMERCE AND MANEGMENT, Navsari ‘’

This is our own/my own work and has been not submitted to any other university or institution for
any other purpose.

PLACE: Navsari

DATE:

MR. MISHRA NISHAN

MR. JAIN VAIBHAV

MR. JAIN CHANDRAPRAKASH
 ACKNOWLEDGMENT

A Project is the fruit of experiment and it goes a long way to modelling a person and gaining
a new insight in that field of research.

In this rewarding experience, one recognizes the help support rendered by kind heart behind
its success.

We’d especially like to thank our honorable principal, Dr. Vaishali Parekh, for giving us
the special opportunity to prepare a project report on the operation of a firm.

We would also like to thank you our project guide S h r e y a s T r i v e d i for the
guidance.

And we would also like to thank A person/Persons helps in company to complete the
project, who help us with the completionof the project with his constant support.
 CHAPTER 1:

GENERAL INFORMATION

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1.1 NAME& LOCATION OF COMPANY.

My choice home appliances.

The company is located in gidc,

Bilimora.

Aataliya, Gujarat

96325

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1.1 YEAR OF ESTABLISHMENT.

My choice home appliances is established in year 2007. The company is a supplier of

pressure cooker, Ss cooker, Ss coated utensils. They are wholesaler supplier. They are
leading manufacturer of the market.

They are satisfying customers since 2007 with their products. They are in market since 28
years and filling consumer needs with high satisfaction.

1.2 BRIEF HISTORY.

My choice home appliances started with its first manufacturing unit at bilimora, Gujarat
(India) with 7500 soft covered area & 26 to 50 employees are working in this organization.
They plan to expand geographically across india for quicker customer reach.

Bilimora is a location where they first started their firm. They have one and only
manufacturing plant. They providing best quality of products.

1.3 NAME OF THE PROMOTERS.

 Rajesh Patel: He is a Managing Director of the my choice home appliances group.

Having worked his way from a shop floor engineer in 2011 in the firm. Today he is a
leading and dominant player in the manufacturing area. He has refocused the
traditional manufacturing to high value added business.

 Rohan Gandhi: He joined the firm in year 2010. Having completed master degree in
Chennai. He started working from the basics initial years to learn the business and

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 then on lead organization in developing the export market. He is currently looking
into exports and bank finance.

 Divan Patel: He joined the firm in the year 2015 after graduation in Eng. & getting
wide experience in well-known precisions machine and tools as well as product
manufacturing.

1.4 VISION STATEMENT.

“LEDERSHIP THROUGH QUALITY”

Demanding applications have always been the focal point of my choice home appliances
group. Leadership through quality means that any decision we take is driven by the impact
that it will take on the long term value we provide to our customer.

We believe that this vision “Leadership through quality” can give us a sustainable advantage
in the global market place.

1.5 MISSION STATEMENT.

“To provide customers with best in class products that makes a positive difference in their
lives”

Any relationship cannot exist without trust. “Being Ethical” is an integral part of my choice
home appliances group culture.

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Honest and transparent behavior with the company stakeholders is some of the values that my
choice home appliances group emphasizes to its employees on a daily basis.

A company mission statement serves as a clear statement of purpose for an organization and
outlines its goals and values.

It is the foundation for a company’s identity, and it sets standards for all employees to strive
for a mission statement should be unique to each company and reflect its personality, culture,
and values.

It should be easy to remember and create a sense of unity, inspiring employees to work
towards the same purpose.

1.6 ORGANIZATIONAL STRUCTURE OF COMPANY.

Figure 1

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Organization chart:

Figure 2

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1.7 CONTROLLING SYSTEM.

My choice home appliances. Has its corporate office in bilimora and they have one and only
branch.

Mostly all of its controlling is done from bilimora plant. All the activities of finance, sales,
etc. is handled from bilimora. The Raw Material is handled From Bilimora and they have to
submit all the reports in Bilimora head office. Board meetings are held in Bilimora corporate
office.

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 CHAPTER 2:

PRODUCTION DEPARTMENT

15
2.2 PLANT LOCATION.

Plant location maybe understood as the function of determining where the plant should be
located maximum operating economic and effectiveness. The selection of the place for
locating a plant is one of the problem perhaps the most important which is faced by an
entrepreneur while launching a new enterprise.

A selection on pure economic consideration while ensure an easy and regular supply of a raw
material, labor force, Efficient Plant layout, Proper utilization of production Capacity and
reduce cost of production.

My Choice home appliances Company is located at Bilimora which is not so far from the big
cities like surat and bilimora is city where the company gets all the necessary facilities and
services for goods.

In bilimora the service facility are good it is one of the big advantage for the company.

2.3 PLANT LAYOUT USED.

Figure 3

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Figure 4

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 Figure 5

2.3 RAW MATERIAL USED.

Raw materials are materials or substances used in the primary production or manufacturing of
goods. Raw materials are commodities that are bought and sold on commodities exchanges
worldwide. Traders buy and sell raw materials in what is called the factor market because raw
materials are factors of production as are labour and capital.

Here in my choice home appliances plant the raw material term defined aluminium &
Stainless steel which converted into Cooker after different process.

Pressure cookers typically come in two compositional varieties in the indian market: stainless
steel and aluminum.

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There are benefits and drawbacks to each of these options. However, when deciding which is
best among aluminum and stainless, it really boils down to personal preferences. So, let's
compare both these pressure cookers on some fundamental criteria to determine which one
would be the most appropriate for your needs.

In comparison to steel, aluminum is a lighter and thinner metal. As a result, it may be simpler
to handle and man over than a steel cooker of the same size and capacity.

As per we discussed above stainless steel and aluminum both is important raw material
required for the production of the cookers.

2.4 INVENTORY CONTROL METHOD.

 FIFO (First in first out): “First In, First Out”: method to guarantee no product
obsolescence.

Figure 6

Other examples to assure FIFO are Gravity stand, roller stand, Kanban.

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  Kanban: A method of regulating the flow of goods both within the factory and
without side suppliers and customers. Based on automatic replenishment through
signal cards that indicate when more goods are needed.

 Function: Eliminates waste from inventory and overproduction. Can eliminate the
need for physical inventories (instead relying on signal cards to indicate when more
goods need to be ordered).

 Visual control: Visual indicators, displays and controls used throughout

manufacturing plants to improve communication of information.

 Function: Makes the state and condition of manufacturing processes easily accessible
and very clear to everyone.

2.5 MATERIAL PRODUCTION SCHEDULE (MPS).

Basically all the materials required in the company are brought or purchased according to pull
system. In pull system when customers order that the raw material is to be purchased then
proceed. No raw material in stock. Only some products like bolt, spanner, and screw are
stored as they are the tools which can be needed anytime when there are small issues in
machines which can be manually done.

Figure 7

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2.6 CAPACITY REQUIREMENT PLANNING.

The term CRP in this context refers to the process of determining in detail the amount of
labor and machine resources required to accomplish the tasks of production. Capacity
requirements planning is one of the management tools.

It helps the company use its resources efficiently by making its production process accurate.
It determines the capability of the production goal of the company.

The company can determine how many products it can make and meet production objectives
through this process.

The capacity of a channel of a Cooker size liter is 30 to 40 piece where in channels altogether
produce 60 piece per day.

Channel 1 produces 20 piece

Channel 2 produces 20 piece

Channel 3 produces 30 piece

TOTAL 70pieces

The company maintains its schedule accordingly because the actual production capacity is
more.

The company is leading in the world, they have the best technology that they can produce
more and fast but still the company focuses more on changing the actual capacity. So, they
plan schedule as per day that they should produce more than now.

They train the employees that they can produce more as per hours.

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2.7 AGGREGATE PRODUCTION PLAN.

Aggregate production planning, abbreviated as APP, is useful for operation management. It is

associated with the determination of production, inventory, and personnel levels to fulfil
varying demand over a planning perspective that ranges from a period of six months to one
year.

Aggregate production plans are needed to exploit workforce opportunities and represent a
crucial part of operations management. Aggregate production plans facilitate the matching of
supply and demand while reducing costs.

The process of Aggregate production planning applies the upper-level predictions to lower
level, production-floor scheduling and is most successful when applied to periods 3 to 18
months in the future. Plans generally either “chase” demand, adjusting the workforce
accordingly, or are “level” plans, meaning that labor is comparatively constant with
fluctuations in demand being met by inventories and backorders.

The concept of aggregate production planning denotes the process of determining the overall
quantities of products to be manufactured or produced in a plant or other manufacturing
facility during a medium-term planning period such as a month, or a quarter.

2.8 ON THE JOB& OFF THE JOB TRAINING.

2.8.1On the job training.

My choice home appliances is a cooker manufacturing company and all workers need
technical knowledge that’s why company give more emphasis to on the job training. The
Company provides on the job training directly on the actual machine.

The Experience worker gives training to the new or needful workers. Workers get Training
on the actual machines; it will increase their efficiency and effectiveness.

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The company gives an emphasis on job rotation so workers moving from one department to
others department and gets the knowledge about their job as well as to create good relation
with the different department.

Also the company gives apprentice training in which first trainee get theoretical knowledge
then they gets practical knowledge so worker’s efficiency will increase and company will
achieve better quality of product.

2.8.2Off the job training.

My choice home appliances give off the job training in which the trainer give training
through lecture, case study and audio-visuals like slides, films and try to give training related
to company vision, time management, motivation and multi-skill training. At the time, the
company gives training their workers related to ISO 14001:2004 which is concern about
noice pollution prevention.

2.9 MATERIAL HANDLING EQUIPEMENT.

In the organization many types of such as raw material, purchased components, finished
goods, packaging material maintenance and repair suppliers, scrap and west and rejects or
rework are used and handled.

Many chemical which is hazardous to human being should be handled very carefully so that
chemical may not harm anybody even the raw material or the main product need special
handling to protect them from condition such as heat, humidity, light dust, flame etc.

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Figure 8

Figure 9

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 CHAPTER 3:

MARKETING DEPARTMENT

25
3.1 LIST OF PRODUCTS AND SERVICES.

 My choice home appliances supplies the below products.

 SS Cooker
 Stainless Utensils
 SS Coated Utensils

Product 1

3.2 NUMBER OF CUSTOMERS.

There are more than 10 customers of my choice home appliances. All of those company are
Indian.

 UCOOK UTENSILS.
 KENT RO. SYSTEMS
 PREETHI COOKER
 DIMONDS COOKER
 INDUS VALLEY UTENSILS

All brands as per above is a customer of my choice home appliances. They providing best
quality of cookers.

3.3 MAJOR COMPETITORS.

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As there are only few companies all over the world that produces cookers. The demand for
cooker is more and in comparison to that supply less. Due to which the main competition
between companies is that which company gives best quality ducts and a perfect cooker size.

In such big companies or in this field the companies have contract that one company cannot
pull other companies customers.

3.4 SPECIFIC DISTRIBUTION CHANNEL.

Channel of distribution can be defined as “Use of intermediaries like wholesaler, retailers,

agents, etc. between manufactures and customers for the purpose of facilitating availability of
Goods and services is known as distribution channels.”

There are different types of Levels of Channels:

 Manufacturing – Consumer
 Manufacturer – Retailer – Consumer
 Manufacturer – Wholesaler – Retailer – Consumer
 Manufacturer – Agent – Wholesaler – Retailer – Consumer

 In the My Choice home appliances they gives importance to (Manufacturer-

Consumer).

This channel is a part of non-integrated in which follow the direct channel. My choice home
appliances first they manufacturing the cooker according to consumer from whom they get
the order in advance. In some case my choice home appliances company sell goods indirectly
to customer because of cooker need in every big or small firm. My Choice home appliances
give more importance to direct channel of distribution in which the chances of wastage is
less.

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3.5 PLC SEGMENT.

Figure 10

 A product life cycle is the length of time from a product first introduced to consumers
until it is removed from the market. A product’s life cycle is usually broken down into
four stages;
 Introduction
 Growth
 Maturity
 Decline

3.5.1 Introduction.

Figure 11

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The introduction stage is the first stage in the product life cycle where a company tries to
build awareness about the product or service in a market where there is less or no
competition. The marketing objective in the introduction stage is to create customer
awareness and stimulate trial. The goal is to initiate the initial purchase of the product by
customers.

My choice home appliances company satisfying customers since 2007.

3.5.2 Growth.

Figure 12

The product of my choice home appliances. Is on the Growth stage. If the product is
successful, it then moves to the growth stage. This is characterized by growing demand, an
increase in production, and expansion on its availability.

The marketing objective in the growth stage is to stress points of difference. The goal is to
build market share by highlighting the superior characteristics of the product versus
competitive products. As it is serving the best quality and the product demand is more.

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3.5.3 Maturity.

Figure 13

This is the most profitable stage, while the costs of producing and marketing decline. The
marketing objective in the maturity stage is to maintain brand loyalty with reminder
orientation.

The company built its market share in the growth stage, now it is the time to maintain and
hold the market share.

3.5.4 Decline.

Figure 14

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A decline is a fall or descent and, in the product life cycle, the decline stage represents similar
behavior for products.

The decline stage in the product life cycle is when a product dissolves as a result of decreased
or negative growth.

3.6 MARKET SEGMENTATION.

Figure 15

A market segments consists of a group of customer who share a similar shares of needs and
wants.

The stainless largely consume by air manufacturing. This segment of producing handles for
fitting into the manufacture of original engineering and cooker products is a major segment of
this market.

They focus on market segment like Cosmetic & Heavy machinery. As the product is required
or is a solution to that type of products. Their efforts are produce the perfect cooker size with
the best quality as all the cooker are used in other product that are related to lives.

They produce the product on demand of customer, what customer ask for. The cooker size
what the customer prefer. They mostly do segment marketing.

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3.7 PRICING METHOD.

The Pricing Methods are the ways in which the price of goods and services can be calculated
by considering all the factors such as the product/service, competition, target audience,
product’s life cycle, firm’s vision of expansion, etc. influencing the pricing strategy as a
whole.

Figure 16

My choice home appliances. Set the price on the basis of raw material.

3.7.1 Raw material.

Aluminum

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If the price of raw material ex. aluminum & steel price increases that may impact on the price
of the product. If the cost of raw material increases its impact will be on the product price.
The price of the product will be increased.

3.7.2 Logistic cost.

The cost of transporting the product from factory to customer or from factory to port and then
to customer this price should be included in the product itself. And sometimes it depends on
the deal that if customer is ready to give the transportation charge then it will be added in the
directly.

3.7.3 Process cost.

The cost of process which includes the cost of machine service etc. are included the price of
the product. And sometimes the company ask in advance the price so it can be helpful for the
process.

3.7.4 Value added cost.

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When the product goes on the port and it has to be sent outside the country the company send
it through sea. So, the port charges/duties like custom duty and many more are included in the
bill of product because company always cannot bear the price of production and if the
company bears the duties or charges that it is included in the bill or price of the product.

3.7.5 Raw material loss.

During the process the cooker get through many process where the cooker gets polishing and
such more processes are done on cooker and due to that the cooker size get smaller and the
rest of material is just of waste. So the price of duct is set accordingly which cover the cost of
waste material.

3.7 EXPORT PROCESS.

Figure 17

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 CHAPTER 4:

HRM/PERSONNEL DEPARTMENT

35
4.1 RECUITEMENT PROCEDURE.

The company gets information about new employee by the old/working employee in the
company. The employees working gives reference to the HR department. The HR department
contact the people referred to them and ask for their bio-data/Resume. They look after
qualification and age.

The company usually choose the person which is between the ages of 19 to 25 as that age
group of people will work for long time. If the age is above 25 to 26 they reject the person.
After getting the person which suits or who’s qualification and ability fits in the job which the
company required they are then call for interview. The sub-head manager takes their
interview.

Figure 18

4.2 SELECTION PROCESS.

In selection process the interview is taken by the Head manager. The interview would be
verbal and then online again.

Figure 19

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4.3 NUMBER OF EMPLOYEES.

NUMBER OF HEADS NUMBER OF NUMBER OF LABOURS

EMPLOYEES

10 25 50

4.4 ATTENDANCE MAINTENANCE.

In my choice home appliances the attendance taken or maintained is done by punch card
machine.

4.5 FRING BENEFITS.

Fringe benefits are the additional benefits offered to an employee, above the stated salary for
the performance of a specific services. Some fringe benefits such as social security and health

37
insurance are required by law, while others are voluntarily provided by the employer.
Company gives all the fringe benefits to the employees so that they are safe for life.

These will make employee feel safe by the company that they are protected by some benefits.

4.6 LEAVE RULES.

4.6.1 Privilege Leaves.

As per the factories act, the leave entitlement of the employees is termed as earned leave,
whereas, under the shops and establishment Act, the entitled leaves are termed as privilege
leaves or pl. Under the finance Act, a single earned leave is granted for every 20 working
days. The company provides 20 privilege leaves to its employees.

4.6.2 Sick Leave.

Sick leave- these employees take when they fall sick. The company allows/grant only 9 sick
leaves.

4.6.3 Casual Leave.

Casual leave or cl is granted to an eligible employee if they cannot report to work due to
unforeseen situation. Casual leave can also be utilized if ineligible employee wants to take
leave for a couple of days for personal reasons, but not for a vacation. The company allows 7
casual leave. And on different day’s different employee have 1 leave in a week. So, that the
company’s production doesn’t stop.

4.7 TRANSFER RULES.

In My choice home appliances all the employees are treated equally. They get their
promotion/transfer on the basis of performance they do.

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If they perform overall good, bring new ideas, has good leadership quality/is helping nature;
after seeing all his performance in work, behavior if his result is best then there are chance
that he can get promotion.

4.8 PERFORMANCE APPRAISAL.

My choice home appliances give some amount of money with the salary/wage as
performance appraisal. If an employee has worked well or has put more efforts on his work
then the company provides Rs.200/- to him.

4.9 WAGES AND SALARY ADMINISTRATION.

Wages and salary are provided/ given as per the government rule. The percentage of amount
decided by the government/law according to that the salary/wages are provided.

4.10 EMPLOYEE FEEDBACK AND MECANISM.

My choice home appliances looks more after the employee, that the employee should have
their satisfaction related to their work and their salary/wage. Every 3 months the employees
are gathered and they are given a sheet of paper called as the Employee satisfaction/Employee
feedback form, the form consists of few basic question and at last a box which is left for writing
any issue or problem faced by employee in the company.

This all form are kept as record and if any employee is facing problem then the HR department
will help the employee with his problem.

4.11 GRIVENCE HANDLING PROCEDURE.

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 Figure 20

Those grievances of employees which are not being disclosed must be recognized by the
management.

After identifying the grievances, Management should correctly define them. Every data
related to grievance must be gathered from all sources and after that it should be classified as
facts, data, options.

After data collection, analysis of information must be done in order to develop alternative
solutions and select the best solution.

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After the analysis of grievances, it must be redressed immediately by implementation the
solution in a speedy manner.

There should be follow-up after the implementation of solution to check the effectiveness of
the solutions.

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 CHAPTER 5

FINANCE DEPARTMENT

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5.1 INTRODUCTION

Financial management is the managerial function that involves planning, controlling, and
handling the acquisition and utilization of funds needed in a business. It encompasses all
activities related to raising, using, and managing the earnings of the business. The primary
activities of financial management can be summarized as follows:

• Anticipating Finance Needs: This involves forecasting the financial requirements of the
business to ensure that sufficient funds are available to meet the business objectives. It
includes budgeting and financial planning to determine the amount of capital needed for
various business operations.

• Acquiring Financial Resources: This involves securing the necessary funds from various
sources such as equity, debt, or internal earnings to meet the anticipated finance needs. It
includes identifying the best sources of funding and negotiating the terms and conditions to
ensure the availability of funds at the right time and cost.

• Allocating Funds in the Business: This involves distributing the acquired funds across
different business areas and projects to optimize the use of financial resources. It includes

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investment decisions, working capital management, and ensuring that funds are used
efficiently to maximize returns and support the business strategy. In other words, financial
management is crucial for ensuring that a business has the necessary funds to operate
effectively, invests wisely, and maximizes its financial performance with minimal
disruptions.

5.2 FNANCIAL PLANNING.

One of the most important function of finance manager is that of planning. Financial planning
is essentially concerned with judicious procurement and profitable use of funds – a use which
determined by realistic inventories decisions. Financial planning helps management to avoid
waste by providing policies and procedures which make possible a closer coordination
between various functions of the business enterprise. Financial planning is responsibility of
top level management.

Finance guide and regulates investments decisions and expenditure. To get the best out of the
available funds is the major task of finance manager. Finance is a common denominator for
the vast range of corporate objectives and major part of any corporate plan must be expressed
in the financial terms.

My choice home appliances Does a systematic financial 20% to 25% of finance is provided
to the company first decides the project and then the finance is procured from banks to avoid
wastage of finance.

5.3 SOURCE OF FUND.

Source of funds refers to the origin of funds used in a transaction. It relates to the account that
was used to make a payment and the source of the money in that account.

Businesses must put checks in place relating to the source of funds (SOF) to ensure that their
customers are not using transactions to launder money gained through illegal activities.

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Companies always seek sources of funding to grow their business. Funding, also called
financing, represents an act of contributing resources to finance a program, project, or need.
Funding can be initiated for either short-term or long-term purposes.

For growing their business units, companies seek for sources of funding. Funding, also
known as the financing, is an act to contribute the resources to finance the project, or an
investment or any cause related to the business. Funding is out for long as well as short term

purpose.

Sources of funds refer to the various means through which a business can secure the
necessary capital to support its operations, growth, and other financial needs. For Shree Uma
polymers, the primary sources of finance include:

• Owners’ Capital

• Financial Institutions

• Cash Credit Facility

5.4 FINANCIAL INFORMATIONS.

Turnover/ 2-5 cr.

Net worth/ 5.11%

Profit/Revenue/ 1 cr.

5.5 ACCOUNTING POLICY.

The accounting department is responsible for maintaining records of all types of accounts
within the company. The company utilizes a computerized system to record and monitor
daily transactions. There are two main types of accounts:

1. Yearly accounts.

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2. Quarterly accounts.

The department reviews these accounts and prepares the balance sheet accordingly. It then
compares the actual balance sheet with the planned balance sheet and takes necessary actions
based on this comparison.

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 CHAPTER 6:

SAFETY DEPARTMENT

47
6.1 NO. OF FIRE EXTINGUISHERS.

Type of Fire Extinguisher Type of Fire Extinguisher

DCP 5

ABC 47

Co2 16

Fire extinguishers.

In manufacturing department there’s high probability of fire due to machines and other
materials use for production. To prevent fire to grow more and to stop the fire, Fire
extinguishers can be used. There are 40 Fire extinguishers on different places.

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6.2 SAFETY EQUIPMENT PROVIDED TO WORKERS.

 Safety shoes
 Ear plug
 Safety goggle
 Hand gloves
 Nose mask
 Gum boot
 Helmet
 Safety belt
 Surgical gloves

6.3 SAFETY POLICY.

My choice home appliances is committed to manufacture and offer products and services in a
way that ensures the safety of our stake holders. We believe that all occupational injuries can
be prevented with total employee involvement safety is an integral part of overall
management.

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6.4 LIST OF INSURANCE POLICY.

 Stock Insurance
 Plant and machinery Insurance
 Workmen Insurance policy
 Electrical breakdown Insurance

6.5 LIST OF GENERAL INSURANCE POLICY.

 Fire Insurance: It is a contract of insurance against the loss/damage by accidental fire

in firm. The insurance company pays some of amount to cover loss/damage.

 Marine insurance: It is covers the loss or damage of ships, cargo, terminals and any
transport by which the property is transferred or held between the pont of final
destination.

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 CHAPTER 7:

PURCHASE DEPARTMENT

51
7.1 PURCHASE PROCEDURE.

Figure 22

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7.2 RAW MATERIAL ORDERED.

7.2.1 Direct material.

Direct materials are those material that are core to the production process and can be directly
traced to the specific product manufacture.

Ex: Aluminum, Steels.

7.2.2 Indirect material

Indirect material are those material that are ancillary to the production process and cannot be
directly traced or attributed to the production of a specific product.

Ex: Handle, Bolts etc.

7.3 ORDERING COST.

Ordering costs are the expenses your company incurs to purchase and receive the products it
stocks in its inventory. These ordering costs can include shipping fees, unexpected
transportation costs, inspection fees and other expenses necessary to acquire inventory
products.

7.4 CARRYING COST.

Carrying cost is the amount that a business spends on holding inventory over a period of time.
It is the cost of owning, storing, and keeping the items in stock.

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