eChapters

Interest Rate : Provisional Interest rate @ 14.50% p.a. has been taken for evaluation of the project report. However, the sanctioning authority may consider the exact rate of interest applicable, on the date of sanction. Development of farm should be completed within 3 months from first disbursement.
 
Repayment of loan : A five-year repayment programme has been drawn with six months moratorium period, the installments will be monthly starting from 6th month onwards. The applicant has to make tie-up with the local MPCS and the repayment should be routed through the MPCS.

Interest Rate: Provisional Interest rate @ 15.75% p.a. has been taken for evaluation of the project report. However, the exact interest rate will be decided by the sanctioning authority on the date of sanction.

Disbursement of loan: Funds for fodder cultivation and civil construction should be disbursed first. Development of sheds and fodder plots should be completed within 3 months from first disbursement. Then disbursement of 1^st Batch cow (10 animals) will be done. Last disbursement for 2^nd Batch cows (10 animals) should be done after 5-6 months of purchase of 1^st batch cows.

Insurance: The animals and other assets (sheds, equipment) must be insured. Wherever necessary, Risk / Mortality fund may be considered in lieu of dairy insurance.

Assumptions

    ·    Freshly calved animals in 1st or 2nd lactation are purchased in two batches of five animals each at an interval of 5 to 6 months.

    ·    Cost of rearing calves not considered as it will be nullified by their sale value or retention value.

    ·    Fodder cultivation considered in two acres and working capital for one crop / season considered. Two crops considered per year.
 
    ·    Manure is utilized for fodder cultivation.

Model Project for Setting Up 10 & 20 Cow Dairy Farm (Indicative)

    ·    The models are only indicative and in no way designed to provide exact economics. Following guidelines may be used by the interested persons to work out the details of their project, depending upon the local market and conditions.

    ·    An interactive module considering the land availability for fodder cultivation, willingness to opt for silage bunkers, type of chaff cutter (manual or machine operated), milking machine, mister set, etc. is under preparation.

    ·    The proposed interactive module would require preference for set of inputs and intended herd size and accordingly generate output outlining the estimated investment, cost and return.

Introduction

Dairy is vital to the economics of many developing countries. Animals are a source of food, more specifically protein for human diets, income, employment and possibly foreign exchange. For low income producers, dairy can serve as a store of wealth; provide draught power and organic fertilizer for crop production and a means of transport. Consumption of dairy and dairy products in developing countries, though starting from a low base, is growing rapidly. Dairying has become an important secondary source of income for millions of rural families and has assumed a most important role in providing employment and income generating opportunity. Indian Dairying is unique in more than one ways. It ranks first with its 199.1 million cattle & 105.3 million buffaloes accounting for about 51 percent of Asia’s and about 19 per cent of world’s bovine population. It also ranks first in milk production with a production of 121.8 million tones in 2010-11 and the demand is expected to be 180 million tones by 2020. To achieve this demand annual growth rate in milk production has to be increased from the present 2.5 % to 5%. Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming. Besides milk, the manure from animals provides a good source of organic matter for improving soil fertility and crop yields.

Dairy rearing is central to livelihoods and survival of millions of people of India. It is estimated that approximately 100 million people derive their live hood from dairy rearing as primary or secondary source of income. Dairy related activities help to maintain regular in flow of income for these households. Small farmers in India generate nearly half of their income from dairy and the value of cattle represents a significant part of their wealth, so the death of cattle poses a significant risk and affects farmers’ net worth and income.

a. Type of risks to dairy based livelihoods

Large animal’s are expensive and thus carry higher risk exposure. Dairy losses due to the disease, accident, theft, natural calamity can cause significant losses to these household. Sometimes owners are forced to sell their animals due to loss due to incurable disease/ disorder/ fodder and water scarcity and they are unable to rebuild their stock. Many times animal losses force them into poverty trap from where they are unable to recover.

Risks faced by dairy owner’s dairy dependent livelihoods can be classified into two broad categories

    a.    General Principles and practices
    b.    Analyzing project appraisals and reports
    c.    Capital Expenditure decisions, reinvestment and payback
    d.    Assessing project profits.

a. Financing the dairy enterprise

Dairy rearing provides triple benefits of income, employment and nutritional security to the society and is important source of subsidiary income to small/marginal farmers and agricultural laborers. Finance is a prerequisite and of paramount importance for setting up of a dairy enterprise whether a dairy farming unit for milk production, sheep or goat unit/piggery unit, dairy/poultry processing unit etc. Decisions about credit are often most important judgments that people in the agricultural industry must make. These decisions often determine whether individuals operating in input, production, processing, and services based dairy enterprise would succeed in making profit.

The Feasibility study of dairy project cover capital investment on land, building, infrastructure, working capital, manufacturing and marketing cost, and financial projections to work out its viability. Once viability is established, a detailed project report should include the following ten steps for project planning and implementation:

First Step: This step involves appointing a consultant to plan the project in relation to the design the dairy plant, proposed market and select an architect and a structural consultant. Prepare tender documents for civil works and plant equipment. Study the demand-supply of target products through a market survey to formulate the suitable product mix in terms of volume and range. e.g. study of various dairy products e.g. Khoa, ghee, Ice cream. The capacity of the plant and the provision of various facilities would be determined by the products demand.

According to a recent study, over 94% of new businesses fail during first year of operation. Lack of funding turns to be one of the common reasons. Money is the bloodline of any business. The long painstaking yet exciting journey from the idea generation to revenue generating business needs a fuel named capital. That’s why, at almost every stage of the business, entrepreneurs find themselves asking – How do I finance my startup?

Now, when an entrepreneur require funding depends largely on the nature and type of the business. Here is a comprehensive list of funding options for startups that will help the entrepreneur to raise capital for business.

1. Technical Feasibility of Dairy Unit

This includes following information such as
 
    1.    Availability of good quality animals in nearby dairy market,
 
    2.    Availability of good grazing grounds and lands,
 
    3.    Availability of green/dry fodder,
 
    4.    Availability of concentrate feed, medicines etc.
 
    5.    Further availability of veterinary aid, dairy breeding (AI) centre, milk collection and marketing centre are also important.

    6.    Nearness of the selected area to veterinary/breeding/milk collection centre and the financing bank’s branch.

    7.    Capability of the owner and employees such as technical knowledge and skill.

Any farmer/Entrepreneur who wishes to avail bank loan for starting or expanding his dairy enterprise should apply for loan to the nearest branch of a commercial bank, regional rural bank or co-operative bank in their area in the prescribed application form which is available in the branches of financing banks.

Preparing Projects for Bank Appraisal

    1.    The entrepreneur can prepare the project or Scheme report after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Co-operative Society / Union / Federation / commercial dairy farmers.
 
    2.    The project report should have mention about practical training and experience in dairy farming. So in order to meet this requirement the inexperienced entrepreneurs can visit progressive dairy farms and government / military / agricultural university dairy farms in the vicinity to have first hand information about the enterprise. Nowadays several online portals (www.aaqaa.com.) also provide useful guidance and information on setting up dairy based enterprise.

    1.    Technical support
    2.    Financial support

1. Technical support

A. Institutes for Professional skills in dairy based enterprises:

Several institutions offer training programmes in dairy based enterprises:

I. Society for Innovation & Entrepreneurship in Dairying (SINED)

Society for Innovation & Entrepreneurship in Dairying (SINED) is registered under society regulation act 1860, hosted by National Dairy Research Institute, Karnal for promotion of entrepreneurship in dairying. The major activity of the society is to administer a Technology Business Incubator which provides support for technology based entrepreneurship in Dairying.

Introduction
Demand of dairy products is on the rise in India. India‘s demand forecast for milk and milk products is more than the current supply of these products. To meet this demand entrepreneurship initiatives are need of the hour. Further, younger generations of India are more interested in commercial dairy farming rather than subsistence based farming. Therefore, scientific as well as commercial dairy entrepreneurial training to farmers about advanced technology used in breeding, feeding, housing and healthcare is essential.

a. Barriers for Entrepreneurship in dairy

An average dairy entrepreneur faces several barriers to start a new enterprise. Some of them are as under

    1.    Lack of financial support: A major stumbling block for many dairy farmers to expand production or diversify into new high value enterprises is lack of access to finance. Farmers who are starting new enterprises often face difficulty raising investment capital.

1. General

In this the nature of objectives of the enterprise i.e. setting up a dairy farm, details of proposed investments, specification of the project area, name of the financing bank branch, status of beneficiary: (Individual/Partnership/Company/Corporation/Co-operative Society / Others) details of borrowers profile in terms of capability, experience, financial soundness, technical / other special qualifications are mentioned.

2. Technical Aspects

    a)    Location, Land and Land Development: This involves the site details of the proposed project. The total land area and its cost. Also, particulars of land development such as fencing, boundary wall, gates are mentioned in it. Thus, site map is also mentioned in this subheading.

    b)    Civil Structures: Several structures like sheds, milking room, store room, quarters for dairy farm manager / labourers are also to be constructed. So, their measurements as well as approximate costs need to be mentioned.

The total milk production in the country for the year 2013-14 has been estimated at 126 million metric tonnes and the demand is expected to be 180 million tonnes by 2020. To achieve this demand annual growth rate in milk production has to be increased from the present 2.5 % to 5%. Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming.

a. Requirements of project report for setting up dairy units

Project report can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Co-operative Society / Union / Federation / commercial dairy farmers.

a. Dairy entrepreneurship

A dairy entrepreneur is a person who undertakes dairy based activities such as rearing of milch animals, production of milk, processing of milk, manufacture of milk products and marketing of milk and milk products and also involved in buying and selling of other inputs of dairy business. He finds ways and means to create and develop a profitable dairy business. Dairy entrepreneurs see their farming as a business and as a means of earning profits. So they are willing to take calculated risks to make profits and to grow their businesses. They are also motivated to improve dairy production through mechanization and application of technologies in the field of dairy and allied enterprises.

Twenty first century is the century of entrepreneurship and every individual can be an agent for innovation and change. Entrepreneurship is regarded as one of the most crucial factors in the economic development of every region of the country. It widens the horizons of economic development even in the socially and industrially backward regions. Dynamic entrepreneurs are considered to be the agent of change in a society. Entrepreneurs play a very important role in generating new employment and setting up new business. The problem of poverty, inequality and regional imbalances can be tackled with the development of entrepreneurship. However, in all economic development activities more and more focus is being centered on entrepreneurship of the people. Entrepreneur has been now recognized as a concept, not only for starting industries but also in the development of dairy enterprise. In India, it is believed that tremendous latent entrepreneurial talent exists which, if properly harnessed, could help in solving many of the serious problems facing the country.

The financial and commercial book keeping that is generally practiced by dairies, the main purpose of which is to ascertain the total results of the business during a given period, does not answer the question whether the costs of processing of milk products and of the various operations involved in manufacturing, are reasonable. For this purpose, dairy plants have to keep detailed records of the expenditure incurred on different components and processes, for planning of production and controlling of costs. In large multi-product dairy plants, production is generally characterized by mixed and joint production and the different operating operations are interrelated. Thus, it becomes difficult to draw a distinction and allocate and apportion the consumption of various services and utilities to arrive at the cost of different operations of various products.
The Bureau of Indian Standards has developed three different sets of records on dairy accounts which may be used to record different information for cost and quality control. These records are:

DAIRY BUSINESS

Most ambitious young men at some time or another are likely to develop an interest in going into business for themselves. This is prompted not only by the thought that a person owning his own business is more independent but also by the hope of increasing personal income. However, when these same young men look about them and see the general existence of “big business” in practically all lines of endeavour, they often lose courage and decide to remain as workers with some company where they can enjoy a certain degree of security. 
The general condition is an important factor in determining the success of new business enterprises. Similarly, innovations like the creation of new products or the development of new methods of merchandising often gives rise to opportunities for a new business enterprise. The introduction of “Softy” ice cream and other soft-served frozen products made it possible for several hundred small businesses to get established in our country. The advent of single- service paper container was the spark that started several milk-plant operations which later grew into companies of considerable size. Ironically, the paper milk container also spelled the doom for many older independent plants that could not or did not adjust soon enough to this new way of packaging. The chocolate-coated ice-cream bar idea started a number of new enterprises which grew from small companies going to concerns of considerable size. Vending machines made it possible for many small companies to get started selling milk, ice cream, candy and lassi etc. 

Air pollution is the introduction of chemicals, particulate matter, or biological materials into the atmosphere that cause harm or discomfort to humans or other living organisms, or cause damage to the natural environment. The concern to determine the importance of the airflow as a possible source of contamination in dairy and food industry is growing, because the airborne dust particles can introduce foreign matter including microbial contaminants into the dairy products. Maintenance of air quality in a dairy factory plays an important role and is very much monitored by controlling the temperature, humidity and particle concentration. Air quality control is required for the comfort and safety of employees. To reduce the possibility of contamination in products it is necessary to impose additional controls on air quality. Airborne contamination can be controlled by air filtration.

Noise has become a very important “stress factor” in the environment of man especially with regard to health. However, not much attention is being paid towards its elimination or control in dairy plants. The harmful effects of noise(s) in the workplace as an occupational hazard is really a cause of great concern. Apart from reducing the work efficiency, in the long run it causes serious auditory and non-auditory effects on the worker. Thus, it becomes imperative to set legal standards in workplaces to be monitored constantly to avoid or reduce the health hazards of the workers.

Noise and Noise Pollution

Noise is often defined as “Unwanted Sound” or “Undesirable Sound”. The “Noise Pollution” has been coined to signify the vast cacophony of sounds that are being produced in the modern life, leading to health hazards.

Milk processing plants involve processing of raw milk into products like market milk, cheese, butter, ice cream, condensed milk, dried milks and traditional dairy products. The by-products processing includes buttermilk, whey and its derivatives. Dairy effluents contain dissolved sugar, protein, fat and minerals. Spills and leaks of products or by-products, residual milk or milk products in piping and equipment before cleaning, wash solutions from equipment and floors, condensate from evaporation processes and cheese trimmings are some of the sources of dairy effluents in a dairy plant. The key parameters are the biological oxygen demand (BOD), chemical oxygen demand (COD), total suspended solids, total dissolved solids etc. Common dairy waste techniques include grease traps, oil water separators for separation of floatable solids, equalization tanks. Biological treatment consists of aerobic and anaerobic process.

Cleaning and sanitizing of dairy plants is essential for providing safe milk products to the consumers as well as for ensuring the good shelf life of these products. It ensures cleanliness, hygiene of the equipments and surroundings and also ensures that the products meet the safety standards. Cleaning of dairy plant consists of broadly of removing the soil from the surface of the equipment by dissolving or suspending the soil in a warm solution of suitable cleaning agents. In the dairy industry, the soil is primarily milk and milk product residues which may be more or less modified by processing treatment. 
Milk and milk product residues are complex mixtures of milk sugar, fat, proteins and mineral salts. Some of these solids are present in emulsion, some are in a colloidal state, and others are in true solution. When milk products are heated in vats or pumped through sanitary pipe lines or over coolers, the metal or glass surfaces become coated with milk remains, which, if allowed to dry, may be difficult to remove.

Water Requirements

Dairy plant requires large quantities of water on a daily basis for processing and cleaning purposes. Normally the specific water consumption ranges from 1000-5000 litres per 1000 litres of milk processed. The actual requirement can vary between dairies and is a function of 
    a)    Manufacturing process or manufacturing profile.
    b)    Auxiliary processes such as steam generation, design of the refrigeration processes and extent of social services.
    c)    Multiple use/reuse.
Water is a very valuable basic natural resource  and needs careful consumption. The water supply system in a dairy plant should be designed in such a way that consumption for each manufacturing department and auxiliary processes can be determined. This makes it possible to influence water consumption directly, and major losses can be determined very rapidly.

The compliance with hygienic and aesthetic standards in the dairy factory is, in the final analysis, dependent on the human element. Each employee, from top management to the most junior operative, has his role in the factory sanitation programme and carelessness at any stage may cause quality deterioration of products or endanger the health of consumers. Legal action against the dairy may also result from neglect of hygiene. Personnel hygiene refers to the personal cleanliness and related habits of the workers. Milkborne infections frequently originate from food contaminated by workers through their hands, breath, hair, perspiration, pimples, infected wounds, coughs, and sneezes. Transfer of even traces of human and animal excreta by the workers is a potential source of pathogenic microorganisms. Foodborne illness is known to originate from workers who were ill and practiced unsanitary food handling methods or poor personal hygiene. Even the healthy worker, who does not exhibit the symptoms of the disease, may harbour food poisoning bacteria in the respiratory or intestinal tract. It is always desirable, as a matter of practice, to look at different parts of the human body in terms of potential sources of bacterial contamination. Provisions regarding personal hygiene of employees are contained in all legislation dealing with milk treatment.

Food Hygiene is a scientific discipline describing handling, preparation, and storage of food in ways that prevent foodborne illness. This includes a number of routines that should be followed to avoid potentially severe health hazards. Food can transmit disease from person to person as well as serve as a growth medium for bacteria that can cause food poisoning. Since food hygiene has a direct effect on the health of individuals patronizing the catering facility, it is obligatory on the part of the management to lay down definite guidelines for maintaining hygienic conditions and ensuring their proper implementation. Cleanliness should be the basis of all food hygiene programmes and should be aimed at food protection as well as improving and maintaining the quality of food. 

The primary objective of dairy plant hygiene is to ensure the consistent daily turn-out of safe and clean products which comply with pure-food and public health laws. A secondary and commercially important aim is to preserve the keeping quality of dairy products and so enhance consumer confidence in them. An integral part of a dairy is the quality control laboratory. Continuous testing is necessary for many purposes, including equipment hygiene. Bacteriological standards of dairy products can be maintained only if the raw product is of good bacteriological quality and is protected against contamination from the equipment with which it comes in contact during all stages of processing. 
Many factors may influence the maintenance of dairy equipment in a hygienic condition; the most important are the dairy buildings, the materials and construction of the equipment, personnel, water supply, cleaning procedures, and laboratory control. It is quite impossible to place these points in order of importance, efficient control of dairy plant hygiene being dependent on proper attention to all factors.

Dairy industry has long dealt with issues of food pathogens and inadvertent adulteration; it is time to review the plant systems with a new perspective. Each plant has its own handling protocols, physical lay-out and employee policies. Milk and other materials entering the facilities, till the distribution of the finished product needs special attention.
 
I. INCOMING MATERIALS

In general, start by considering the milk, food ingredients, packaging, chemicals and other materials that come into plant facility and warehouses, and ensure that these product streams are secure, and that materials are stored in asecure place.

The machine parts, which have relative motion, rub against each other. The rubbing surfaces are never perfectly smooth, even when they are highly polished. If they are observed under a microscope, one sees small depressions and elevations which get interlocked when the machine parts are under pressure, and give rise to a resisting force called frictional force. Due to friction, the parts get worn out and become useless. Friction produces heat, which, in this case, represents loss of work. To reduce this wear and loss of power caused by friction, certain foreign substances are introduced between the rubbing surfaces which keep them apart. These substances are called lubricants; and lubrication is the science of reducing friction by the application of a suitable substance between the rubbing surfaces of bodies having relative motion.

A broader definition of a tool is an entity used to interface between two or more domains that facilitates more effective action of one domain upon the other. The most basic tools are simple machines. For example, a crowbar simply functions as a lever. The further out from the pivot point, the more force is transmitted along the lever. A hammer typically interfaces between the operator’s hand and the nail the operator wishes to strike.
A telephone is a communication tool that interfaces between two people engaged in conversation at one level. And between each user and the communication network at another. It is in the domain of media and communications technology that a counterintuitive aspect of our relationships with our tools first began to gain popular recognition.
Marshall McLuhan famously said “We shape our tools. And then our tools shape us.” McLuhan was referring to the fact that our social practices co-evolve with our use of new tools and the refinements we make to existing tools.

Concept of Inventory

‘Inventory’ may be defined as ‘usable but idle resource’. If resource is some physical and tangible object such as materials, then it is generally termed as stock. Thus stock or inventory are synonymous terms though inventory has wider implications. Broadly speaking, the problem of inventory management is one of maintaining, for a given financial investment, an adequate supply of something to meet an expected demand pattern. This could be raw materials work in progress finished products or the spares and other indirect materials. Inventory can be one of the indicators of the management effectiveness on the materials management front. Inventory turnover ratio (annual demand/average inventory) is an index of business performance. A soundly managed organization will have higher inventory turnover ratio and vice-versa. Inventory management deals with the determination of optimal policies and procedures for procurement of commodities. Since it is quite difficult to imagine a real work situation in which the required material will be made available at the point of use instantaneously, hence maintaining, inventories becomes almost necessary. Thus inventories could be visualized as ‘necessary evil’.

Since time immemorial when man used primitive tools and machines to carry his loads, to draw his water, to till his land and to fabricate his building materials, he has been faced with the prospect of maintaining these assets until such time as he considered their useful life to be ended. Maintenance is very important to extend the useful life of an asset. Maintenance is usually viewed only as a repair function. It is, however, “a combination of any actions carried out to retain an item in, or restore it to, an acceptance condition”. In fact maintenance keeps or ensures that the entire production system is kept reliable, productive and efficient. All departments of a production system may have been designed beautifully without giving due consideration to maintenance management. The end result is obvious. Organizations like the National Productivity Council and others are playing a vital role in propagating the importance of Maintenance Management of all assets of the organization. In fact, all organizations must be having some assets, and hence the need for proper maintenance and ‘physical assets management’ which is synonymous with the word ‘Tero-technology’.

There are specific hazards associated with equipment, operation or a particular section. Such possible hazards and their preventive measures are discussed below.
I. Milk Reception Dock
    1.    Where the top of a vat, into which a 40 litre can of milk is to be dumped, is higher than the milk can, two men should lift and empty the can.
    2.    Where steam jet method of can washing is used, to avoid burning, employees would be furnished with protective equipment, including rubber boots and long aprons
    3.    Cans should be stacked in areas away from frequently used passage ways
    4.    Cans should not be stacked so high that they may fall and injure someone

Apart from the job content and specialization, the conditions or the atmosphere in which employees work is critical to their productivity. Work environment includes the tools and equipment provided to perform the job, the atmosphere at the work place, worker motivation etc.

Tools and Equipments

The quality of tools and equipment provided to a worker has a profound effect on the worker’s contribution to his job. A poorly designed tool can cause excessive physical burden on the worker and may result in fatigue. A faulty computer monitor can cause severe eyestrain, which might affect productivity in an office environment. Hence, tools and equipment should be appropriate for the production task. The design should consider ergonomic factors like grasping pressure, size, weight, ease of use etc. when designed properly, tools enable users to work efficiently, resulting in higher productivity. The equipment installed should be able to meet the capacity requirements of the job, have safety features and be easy to use. The use of the right tools and equipment can improve productivity in an organization substantially.

Employee motivation and job enrichment are described as two management techniques used to improve human behaviour and attitude towards work, with a view to utilize available human resources more efficiently and thus make man-management more effective. Just as the employee has certain wants that the organization is expected to satisfy, the organization too expects certain types of behaviour usually termed as ‘Direction’ or ‘Motivation’. Obviously this managerial function is not so easy, as it involves many problems, and it is these problems and their possible solutions that one is concerned.
Job enrichment is also a motivational problem created by the alienation of employees from their work, or by lack of their interest in their work. Here the problem is how to make the work more interesting, purposeful and acceptable to employees so that they may perform it more enthusiastically and with a greater sense of responsibility. Like motivation this is also a problem of human behaviour and work attitude. In fact both employee motivation and job enrichment are the problems which every supervisor and manager has to face while working and making their subordinates work.

TRANSFER

A transfer is a change in job assignment. It may involve a promotion or demotion or no change at all in responsibility and status. It is a change in assignment in which the employee moves to another job at approximately the same level of responsibility, the same skill, the level of pay. Transfer is to be distinguished from promotion and demotion which imply an ascending or descending change respectively, in the hierarchy of positions. A transfer may be either temporary or permanent, depending upon the need, and may occur within a department, between departments and divisions, or between plants or officers within a company/organization.

Whatever may be the nature and strength of resistance to the performance appraisal, management cannot relinquish this practice. Without employee appraisal, salary increases, reassignments or promotions cannot be administered rationally. Each of these areas has its specific problems and one of the solutions of modern times has been offered by an unusually promising frame work offered by Peter Drucker concept of Management by Objectives (MBO).
MBO calls on the subordinate to set his short-term performance goals in consultation with his superior. Goals explicitly state the actions which the employee will follow. Instead of being appraised in a traditional way by his superior, the subordinate appraises his own performance by evaluating it vis-à-vis the goals. Before establishing a goal, the individual studies his job, assesses his potentialities, and formulates some specific plans to reach the goal. The supervisor is not the evaluator, but directs the goal-setting process to ensure that it matches the objectives of the organization.

What is Performance Appraisal?

Performance Appraisal (PA) is the process through which an individual employee’s behaviour and accomplishments for a fixed time period are measured and evaluated. The major purpose of measuring and evaluating is to assess the worth or value of an employee. Performance appraisal is a systematic and objective way of judging the relative worth or ability of an employee in performing his task. Performance appraisal helps to identify those who are performing their assigned tasks well and those who are not and the reasons for such performance.

Training is a major manpower management function. No organization can afford not to train its employees, regardless of his previous education, training, and experience. He has to be introduced into the work environment of his new employer inducted and taught to perform his assigned tasks in a new milieu. Moreover, changing technology, increasing automation in offices and factories and in almost all institutions is bringing about redesigned or altered jobs. People are constantly being “trained” and retrained by the way their superiors and other employees associate them with work. 
Training is a part of management development and also a form of organizational development. The most effective managers are those who can best develop the human resources of an organization for the purpose of achieving organizational goals and objectives. If the employees perceive training as a means to achieve their personal goals at work, they will welcome such opportunities. Some essentials about training may be borne in mind and they are:

RECRUITMENT 
Recruitment is the process of identifying the prospective employees, stimulating and encouraging them to apply for a particular job or jobs in an organization. It is a positive action as it involves inviting people to apply. The purpose is to have an inventory of eligible persons from amongst whom proper selection of the most suitable person can be made.

The Process of Recruitment
Before thinking of inviting people to apply for a job one has to decide what types of persons are to be invited and what their characteristics should be. This calls for fixing the ‘job specifications’ which may also be called ‘man specifications’. Job specifications are based on job description which is dependent upon the nature and requirements of a job. 

Thus, job specification will be different for each job. The various elements of job specification are:

Importance and Value of Human Resources

The employees are the human resources of an organization which are crucial for its functioning. The acquisition of human resources and their maintenance involves costs. Manpower costs include costs of research and designing of manpower programmes that is man-power planning, work study and designing of personnel policies etc. The costs of commissioning of man power, that is, costs of recruitment, induction, placement and training etc. The cost of maintenance of these resources is a very significant component of the total costs of an organization. Maintenance costs include wages and salaries, welfare and medical benefits, PF, gratuity and other retiring benefits etc. These costs form a substantial part of the total costs of an organization. In the last 30 years the treatment of manpower costs has been recognized as a separate division in accounting practices. The other assets like machinery, buildings etc come under depreciation. In contrast, human assets are the employees at all levels, as they grow in age and experience, add to their productivity and capacity to earn for the organization and become more valuable.

Traditionally, Labour Laws have a protective function consisting of established standards both to protect workers in their workplace and to provide them a basic minimum level of living conditions. Alongwith this function, there also existed in most systems, a legal framework for the regulation of industrial relations between employers and workers. These functions had their impact on problems of development. The emphasis was more on labour legislation for its own sake, development being a separate proposition. This mutual lack of concern was perhaps due to historical factors. The most important aspect is the fact that in developed countries of the Western world, labour legislation followed the emergence of industrialization and in response to a demand for economic and social betterment of the workers, whereas in developing countries the emergence of labour laws preceded industrial growth.

In economics and business, specifically cost accounting, the break-even-point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has “broken even”. A profit or a loss has not been made, although opportunity costs have been paid, and capital has received the risk-adjusted, expected return.
For example, if a business sells less than 1000 liters of milk each day, it will make a loss, if it sells more, it will be a profit. With this information, the business managers will then need to see if they expect to be able to process and sell 1000 liters of milk per day.

SOURCES OF LOSSES
In most of the cases of excessive fat or product loss, a combination of several factors rather than any single factor are responsible.
 
Inaccuracy in weighing: Receiving room scales should be checked regularly with a set of weights. The check should be made immediately before weighing operations begin. Improper drainage of the weighbowl will permit a carry over into the next batch dumped, resulting in incorrect weighing. Errors in weight in bulk handling methods may be caused also by improper leveling of the tank, incorrect calibration of the measuring rod, or carelessness on the part of the person taking the measurement.
 
Inaccuracy in sampling: Failure to collect representative samples may sometime cause sizeable losses. Milk should be properly agitated before taking samples. The composite sample should be preserved and refrigerated and should be protected from mould growth.

Definition
Production and operations management is the process of conversion of inputs into outputs, using physical resources, so as to provide the desired utility/utilities —of form, place, possession or state or a combination thereof—to the customer while meeting the other organizational objectives of effectiveness, efficiency and adaptability. It distinguishes itself from the other functions such as personnel, marketing etc. by its primary concern for ‘conversion by using physical resources’. Figure 1.1 describes a generalized concept of production system. It takes resource inputs and processes them to produce useful outputs in the form of goods or services.

    1.    What is the percentage of water in an adult’s body weight
        a)    50%    b)    60%
        c)    90%    d)    70%
    2.    __________ is a direct reactant in hydrolytic processes of many foods
        a)    Water    b)    Moisture content
        c)    Both a&b    d)    None
    3.    The bond angle of the isolated water molecule (vapor state) is
        a)    109°    b)    104.5°
        c)    109°28'    d)     103.6°

    1.    Laminar flow hood works on the principle of 
        a)    High-efficiency particulate air filter
        b)    High-energy particulate air filter
        c)     High-efficiency pressure air filter
        d)     None
    2.    Most of the organisms are killed
        a)    121°C for 5 min.    b)    15lb/in²
        c)     a & b    d)     None
    3.    Autoclaving is not recommended for
        a)    Oils    b)    Powders
        c)     Sensitive fluids    d)     All