Resource person: Sir Muhammad Ali

Presented by: Group INoVaToRZ

BBA-A-5
SUPERIOR UNIVERSITY, RAIWAND ROAD, LAHORE

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Topic

New Product
Development

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Table of Contents

Title
1) Acknowledgement __________________________________________

Page No
05

2) Dedication _________________________________________________

06

3) Executive Summary ________________________________________

07

4) Location Analysis _____________________________________________

08

5) Forecasting _________________________________________________

10

6) Capacity Planning ____________________________________________

10

7) Cost Analysis ________________________________________________

10

8) Registration _________________________________________________

14

9) Production Procedure_________________________________________

14

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Dedication
This
assignment
has
been
dedicated to our parents who help
us in every aspect of our life and
our teachers who always assist us
like Sir MUHAMMAD ALI & Sir
UMAR ZAKA

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Acknowledgement
We would like to thank the almighty Allah for giving us the
strength and capability of making this final project. We would
also like to thank Sir MUHAMMAD ALI for his cooperation
help for any queries we had regarding POM. We deem it a
privilege and a source of great pleasure in writing the rightful
acknowledgement of the inspiring guidance. And through this
activity of PRODUCT DEVELOPMENT and take whole
information that we have come to know that how widely we
have understand and implement PRODUCTION OPERATION
MANGEMENT in future.

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Executive summary

We were assigned post-mid assignment

related

to

the subject

Production Operation Management in which we had to develop a new

product. The project was assigned to us by the resource person Sir
Muhammad Ali.

It was a group project and all the members were assigned different
tasks in order to complete this assignment. We started this assignment
with the selection of product to develop. We selected Rice

The assignment was very beneficial for us as with the help of this we
have understood the production activities. It was completely practical
and it has helped us in understanding many concepts of the course.

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Noorani Rice Mill

Location Analysis:
The location analysis is very important stage in product development. We should keep in
mind the factor that effects the location decisions. We should keep in mind that our factory
should be at the place where raw material is easy approachable and labor moreover that
should far from the market
After the surveys at different industrial areas we have analyze that industrial area Feroz pur
road Rohi nala because this is industrial area and this area is near to mandi so thats and
beside that this is big rice belt area.

Product description:
We are going to make Basmiti rice this is most demanded rice in the country so thats why
we are making this product

Sale points:
We will sale our product at Super Markets, Hyper Markets & Departmental Stores and beside
that in some quantity we will export.

Storage points:
We will store our material & finished product at the warehouse in our factory.

Machines:
6 machine will be used for manufacturing this quality rice.

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Ingredients:
Mongi
Polish (100 grams)

Total Masala =350 grams and 650 mangos & Lemon & Carrot for 1 jar(1 kg)
5850 grams mango and 3150 grams Masala for 9 jars (1 carton)
70,200 grams mango and 37,800 grams Masala for 108 jars (12 cartons)
70.2 kg mangos and 37.8 kg Masala
108 kg ingredients used in 108 jars= 12 cartons per month
1296 kg ingredients used in 1 year

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Forecasting:
We will produce our product according to market demand of our product to avoid any
shortage of demand or excess of supply in the market. In first year we will produce 12000
bag per bag 50kg after observing that we will supply rice in the market after supplying we
will prepare for 2nd year and in this year we will approximately produce about 20000 bag.

Capacity Planning:
As we will start our new company so, first of all we will make our product on small scale
because our product is new. Initially we install small production unit with modern technology
equipment and trained workers. The reason to install small production unit is to set our
product image in the mind of our customers. When customers will demand our product then
we will install a new production unit where we will produce 25kg and 50kg.
Designed Capacity

15000kg/ Month

Effective Capacity

13000kg/ Month

Actual Capacity

12000kg/ Month

Cost Analysis
Cost of one year

Fixed cost
Cost of equipment
Depreciation 10 %
Total fixed cost

3000000
30000
3030000

Variable cost
Utility Bills
Labor
Packing Cost
Raw Material
Total variable cost
Total cost

120,000
39,000
221024
1115344
2575368
5605368

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Packing cost
Per Bag cost

20
12

Sheet cost

Seal cost

0.5

Label cost
Cost of 108 jars in one month

1.5
= 108 x 15

Cost of 108 jars in one year

= 1620 Rs.
= 1620 x 12
= 19,440 Rs.

Per carton cast

1 carton

= 11

Per year
11 x 12 carton

= 32
= 32 x 12

Total cost on packing

= 1584
= 19,440 + 1,584
= 21,024

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Raw Material Cost/Unit

SONF
SOKHA DANHIYA
METHARAY
KALONJI
PISI HOI MIRCH
TERMERIC
MUSTARD OIL
SALT
LEMON & Carrot
MANGO

Rs. 12
Rs. 4
Rs. 3
Rs. 6
Rs. 13
Rs. 8
Rs. 21
Rs. 1
Rs. 8
Rs. 13

Raw Material Cost of Total Production

1 Carton
89 x 9
12 Cartons in a Month
801 x 12

= 801
= 9612

1 Year
9612 x 12

= 115344

Electricity & Labor Cost

Electricity bill per month

= 10,000

Electricity bill per year

= 10,000 x 12

Labor on Packing machine

Salary of Labors

= 120,000
6
6500
= 6500 x 6
= 39,000

Cost of Pickle/ Year:

Working days of production is 22 days

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Ingredient of per unit cost is

Rs. 89
Per unit cost of bottle and Rs. 26
packaging
Per carton cost

= 115 x 9

= 1035 Rs
Cost of 12 cartons produce in 1 = 115 x 108
month
Cost of total production in 1 year

= 12420 Rs.
= 12420 x 12
= 149040

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Registration:
Our product is registered from REAP (rice exporter association of Pakistan)

Registration of quality:
Quality from PSQCA (Pakistan Standards & Quality Control Authority DEPARTMENT)

Standardization:
PSQCA LABORTARY

Quality
We will check the quality of rice by the quality of Raw material which is used in the Basmati

We have the four main production process .

i.
ii.
iii.
iv.

Drying port
Filtering
Polishing
Packaging.

Drying port

First department is drying department. For to dry rice there is big place allotted for that there are several labor
people are working for that purpose they put the raw material into the drying port for drying because when raw
material come to the mill it is in the wet condition and it cant be stock and process until it become dry. And if they
do not dry the rice then the breakage rate can be increase. Approximately they dry 40 ton rice in 8 hours. After
drying the rice they send them to the next department.

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 Filtering
It is the 2nd process in which drying rice come into the filter machinery. The machinery filter the rice sends into the
polishing machinery. The company manger Naveed Ali was saying that they sale the wastage that come from
filtering process and earn money and its approximately amount 18 to 25000 per day.

Polishing
It is 3rd process in which rice polish and come into the finishing goods in this process some rice brakeage, in this
machinery automatically divide into the three category
i.
ii.
iii.

Pure Rice
Half brakeage
Less half brakeage

One thing more that they get from this machinery that is (powder) that come from rice and it used in feed.

Packaging
It is final process in which they pack the rice into the bag. The bag contain on 50 kg packing. And some time when
they want to export in foreign countries they like to pack in 5kg, 10kg, and 25 kg bag. Its depend on order.

Conclusion
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