Sunday, January 26, 2020

Feasibility Study On Le Diner Restaurant

Feasibility Study On Le Diner Restaurant There are various approaches that can be deliberate for considering project feasibility and vital consideration necessary for each feasibility methods. The purpose of this study is not to solve the problem, but to decide whether the problem is worth solving. It includes tests such as Operational, Technical, Economic and Schedule feasibility. Operational feasibility study tests the operational range of the new information system before it is going to be established. The requested new system must have high operational feasibility and the usability will be high as well. With the start of the new system, will the restaurants employees (waitresses, owners) be fully involved in making and processing the new system? Is the current paper-based system well liked and efficiently and effectively been used, and are they comfortable using the existing system? Do the waitresses and the owners Frank Anderson, Gina Wong and Wayne OConner support the project? Will they see the need for a modification for the existing paper-based system? Will there be any new request from the owners using the system or required any new modifications after the new system been made? Will the new system be secure from viruses? And no further changes will be made in the future? Technical Feasibility This feasibility study deliberates about the technical requirements of the new proposed system for the restaurant which will effectively satisfy the employees. Considerations of the technical requirements are then compared to the technical capability of the restaurant. Software, hardware and network settings must be installed in part of the new system invention; can the Le Diner Restaurant obtain those kinds on production? Will there be a prototype for the new system, and will there be a trial to try on before building the actual system? Do the staff and owners have the skills and experience in other words practical knowledge in IT; do they have an IT background? If not, can it be learned and taught? Will the new system incorporate with other company information systems? Will the combination of hardware and software supply sufficient routine and performance? Does the new system available and has been made by other IT professional before and does the technology even exists at all? Economic Feasibility Economic feasibility involves a method and also an effort to make sure whether or not it is consistent and likely to complete. This feasibility basically evaluating the efficiency of the new system, where it analysed the new system costs and incomes as well as benefits of the proposed system and whether it will be greater than its lifetime costs, in other words it must be an accurate weigh for the cost versus the benefits before taking any action. To determine the total cost of ownership, estimation costs must be done for: The management, IT team and employees Training personnel Hardware such as required desktop, CPU and software such as the required application to build the new system request which are the stock control software and point of sale software. The estimated costs for postponing the project License and fees Consulting costs Facility costs Installing the system Conversion of file An analysis that needs to be considered is as follows: Will the new system be cost effective? Which means will it be worth the price to be spent for the new system to be implemented? Providing a basis for comparing developments. Comparison between the total expected cost of each section against the total expected benefits, to see whether the benefits outweigh the costs and by how much. Will the system be promising or possible with the given resource constraints, Resource constraints is an important resources that IT teams have to plan and manage on regular basis are machines, materials, people and working capital. Obviously, if these resources are available in abundance then the project could be accelerated to achieve shorter project duration. Other than the importance of costs, economic feasibility also evaluates tangible and intangible benefits to the restaurant. Tangible Benefits They are the costs for which it is assigned on a specific financial value and measured in Dollar ($) value. In this case the new system inventory software A new customer ordering system and food preparation system practically using the point-of-sale. The new system will eventually help to reduce the use of paper and also will automatically save costs spent. Budget saved from buying a new cupboard for the records to be filled in. With the new system the restaurant will have an increase of profit because of fast services. The new system will be beneficial for the waitresses in many ways such as a new food ordering system where theyre using Portable Device Assistance. Intangible Benefits Overtime for the employees will be eliminate The waitresses will enjoy their work with the help of Portable Device Assistance (P.D.A), where they can make their work more efficient and easy. It will create a working environment which is effortless and less manpower required because the new system is in its simplest form of usage. Schedule Feasibility Schedule Feasibility is a consideration and collaboration between time and costs. It is also the probability of the schedules time frame for the new system being completed within its expected due date. If the system has a high possibility of completion by the chosen due date, then this feasibility is considered to be high. The restaurant management need to establish a firm timetable for the project, will they established such timetable? Can the restaurant or IT team control the aspects that will eventually impacted schedule feasibility? What are conditions must be satisfied during the development of the system? Will an accelerated schedule pose any risks? If so, are the risks acceptable? Will project management techniques be available to coordinate and control the project? TASK 2 Task 2 Feasibility Report LE DINER To: Steering Committee From: Mohammad Sueib bin Suhaimi, Assistant Project Leader Date: 11th April 2013 Subject: Feasibility Report of the new system for Le Diner Italian Restaurant Introduction I, Mohammad Sueib bin Suhaimi conducted and investigate the different system criteria regarding about the current system and also for the new system. The main purpose of this feasibility report is to decide whether to develop the new system and to determine if the proposed solution is practical and feasible with the support of the different criteria of the feasibility study. Below is the Background of the existing system of the restaurant and also the problems that arises while conducting the system. There are problems that need to be considered and needed some attention and required necessary changes in order for the restaurant to have a better and time consuming system that will work for the employees. Existing System Background The Italian restaurant is owned and shared by three people whom are friends named Frank Anderson, Gina Wong and Wayne OConner. The restaurant is moderately in size and currently the system is done manually by hand. The goods are sent to the backdoor of the restaurant and Frank check the goods and update the stock log book every night after daily sales have been tallies. The current customer ordering system is where the waitresses of the restaurant takes order from customers and write it on order tickets and later been send to cash counter to total up, and next they send it to the kitchen where the orders are prepared, once it has been prepared the waitress will deliver the food to the customer and the order ticket will be placed into order ticket box. The tickets are reviewed nightly and Frank makes some adjustment to inventory. Problem The main problem of the existing system are basically the used of hand and paper based system which errors are occurred regularly. In Addition, the inventory systems are also paper-based, where it affects the supplier delivery order causing inconvenience, creating out-of-stock problems and impacting sales. When the inventory stock is low they have to reordered the goods where most of the time the time management is poor and not organized properly. As a result and in some cases the foods are wrongly ordered. The customer ordering system are also affected because of the system, as a result the order ticket are sometimes misplaced. Either never sent to the kitchen for prepare or never sent into the order tickets box. Therefore, the kitchen staff are struggling to keep up with the food preparation and making sure the foods are prepared at the correct order, and retrieved by the appropriate waitress. Benefits of the New System The new system will eventually help to reduce the use of paper and also will automatically saved costs spent. A new ordering system is where the customers order will be redirected to the kitchen complete with the detail of the waitress that is placing the order for different tables for different groups of customer that dined in the restaurant, a device which is specially made for the restaurant that eventually will eliminate the use of paper and manual work by the waitresses. With the new ordering system, food preparation in the kitchen will be much easier, smooth and proper. The new system will capture the point-of-sales data which is the information from a barcode data that will automatically assembled and collect the given info needed for inventory stock. Typically, the information gathered would identify the goods that are low in stock, at what prices, and when and where the transaction took place. As a result, it will eliminate the stock problems and stock problem. The system is also saves time where it helps the waitress to handles orders easier and proper. Frank himself whos in charge for the stock, the new system will automatically save, record and update all the important details he needs for inventory management and food ordering Feasibility of a New System Operational Feasibility It is very important for the employee of the restaurant to get involved and take part of creating the new system Will the user use the system once it has been made? This goes to the waitresses and also Frank that will use the system, the system will eventually will be user friendly and easy access for them to use and will not take a long time for them to learn to use it. The working environment of the restaurant will change to reliable and fast service. The customer will receive their foods on an earliest point of time after placing their orders, this will effect of how the system will be beneficial for the end user. The system again is user friendly, the user of the system will quickly adapt to the change and the system will have an easy access and different language system as well so that different people with different background will understand and will quickly understand how the system works. As a result the system actually will reduce the work load if used effectively. Technical Feasibility Is the project possible with current technology? The current necessity of building the new system is possible with the current technology available. The web based centralized application for Le Diner Restaurant can be implemented based on J2EE framework. Currently the new system technology is available with various third party dealers and which is also compatible with other systems but this new device and system will be added some new features and updated features that will be beneficial for every party involved. There are a few things to be consider as well to think through in this feasibility include manpower such as debuggers, testers, system analyst and programmer. Also need to consider the software and hardware to be used. Of course, the researcher needs to examine the monetary factors since it might need a huge investment. Resource constraints is very important in technical feasibility, it is crucial on having to plan and manage on usual basis are people, machineries, materials, and the people involve as far as working capital. Apparently, if the given resources constraints are obtainable then the project of the new system creation could be speeded up to accomplish shorter project duration, which automatically will affect the schedule feasibility. The system can be learned as it has no language barrier, as it is installed with a special all language translator that will translate from English to different kinds of other language. The device and the new system will be user friendly and the language will be in its simplest form for better understanding especially for older generation where basically they dont want to learn much compare to the younger generation. Economic Feasibility It will be an increased flexibility efficiency of operation by eliminating redundant data entry in the stock log book. Is the project possible, given resource constraints? It has to be develop system in-house due to resource limitations. Appropriate decision, increased monitoring of the new system and control due to access to up-to-date information. Cost and also error reduction and more effective use of staff time. There will be an ultimate high quality services, increased output and input material and efficiency The following costs spent for the construct of the new system which estimated will be finished in 2 months and also the organization and IT Team that will be involved to developed the new system are as follows: Requires: Costs and Hours spent Total costs for 2months 2 System Analysts $10.00 per hour $14,600 3 Programmers $20.00 per hour $29,200 2 Graphical User Interface $40.00 per hour $58,400 2 System Architect $30.00 per hour $43,800 1 Database Specialist $35.00 per hour $51,100 Equipment of Hardware and Software Costs Costs for a Year Point-of-sale software $25.00 for One Month $300.00 Portable Device Assistance (P.D.A) $65.00 for 1 piece of device Printing Device $70.00 for 1 device New network connection installed (updated regularly) $20.00 a month $240.00 As the estimated costs of building the system been done, the benefits of the system must be at the same level and doesnt outweigh thr level with both cost and the benefit for both parties. Satisfaction for both parties is important. Schedule Feasibility The new system may possibly be able to be developed, but that doesnt mean we have the skills required to properly apply that technology. It is true that it can be learn and taught, nevertheless, it will affect the technical feasibility of the project and definitely, it will impact the schedule feasibility as well. Considering this feasibility is to time and duration of the project whether if it is too long to be complete before it is useful. To approximate whether the prospective timeframes and the time of completion date schedules can be met. As well as whether meeting these date will adequate for dealing with the needs of the restaurant. The system will be developed within the timeframe given and it needs to be an exact date of when the system should be completed. If its going to take a longer period of time, it eventually will impacted the economic feasibility and also making sure that the management techniques must be able to coordinate and control the project Recommendation This feasibility is very important for the employee of the Le Diner restaurant to be completely involved and take part of creating the new system. If theyre not completely participating in the project they will not be able to further on to continue to the phase and to the next. Timeframe and consideration of each feasibility study are important as well. The new system is suitable to be called N.F.O.S (New Food Ordering System) for the waitresses to use to conduct their work. They will be using a specialized device where it consists of specific software that consists of menu details of the Le Diner Restaurant and together it also will detect as well as capture the point-of-sale data. There will be a new specialized device called Portable Device Assistance (P.D.A) and a newly designed software for the inventory stock system as well. This completely new system will completely help Frank to easily update and check the stock every night without staying late overtime if there an error occurred, it will completely eliminate error. To my conclusion this new system is worth every penny spent. Comparison to the current existing system, it is not environmental friendly where it is paper-based system and especially frequent inaccuracies and miscalculation especially for inventory stocked. Most importantly the new system will help to The system will help the employee to gain more profit and to have a better working environment and also a system that will actually help every single staff with their work by making their work easier to tolerate.

Saturday, January 18, 2020

International Joint venture Essay

International Joint Ventures (IJVs) are becoming increasingly popular in the business world as they aid companies to form strategic alliances. These strategic alliances allow companies to gain competitive advantage through access to a partner’s resources, including markets, technologies, capital and people. International Joint Ventures are viewed as a practical vehicle for knowledge transfer, such as technology transfer, from multinational expertise to local companies, and such knowledge transfer can contribute to the performance improvement of local companies. Within IJV’s one or more of the parties is located where the operations of the IJV take place and also involve a local and foreign company. Basic Elements of an IJV Contractual Agreement. IJVs are established by express contracts that consist of one or more agreements involving two or more individuals or organizations and that are entered into for a specific business purpose. Specific Limited Purpose and Duration. IJVs are formed for a specific business objective and can have a limited life span or be long-term. IJVs are frequently established for a limited duration because (a) the complementary activities involve a limited amount of assets; (b) the complementary assets have only a limited service life; and/or (c) the complementary production activities will be of only limited efficacy. Joint Property Interest. Each IJV participant contributes property, cash, or other assets and organizational capital for the pursuit of a common and specific business purpose. Thus, an IJV is not merely a contractual relationship, but rather the contributions are made to a newly formed business enterprise, usually a corporation, limited liability company, or partnership. As such, the participants acquire a joint property interest in the assets and subject matter of the IJV. Reasons for Forming a Joint Venture There are many motivations that lead to the formation of a JV. They include: Risk Sharing – Risk sharing is a common reason to form a JV, particularly, in highly capital intensive industries and in industries where the high costs of product development equal a high likelihood of failure of any particular product. Economies of Scale – If an industry has high fixed costs, a JV with a larger company can provide the economies of scale necessary to compete globally and can be an effective way by which two companies can pool resources and achieve critical mass. Market Access – For companies that lack a basic understanding of customers and the relationship/infrastructure to distribute their products to customers, forming a JV with the right partner can provide instant access to established, efficient and effective distribution channels and receptive customer bases. This is important to a company because creating new distribution channels and identifying new customer bases can be extremely difficult, time consuming and expensive activities. Geographical Constraints – When there is an attractive business opportunity in a foreign market, partnering with a local company is attractive to a foreign company because penetrating a foreign market can be difficult both because of a lack of experience in such market and local barriers to foreign-owned or foreign-controlled companies. Funding Constraints – When a company is confronted with high up-front development costs, finding the right JVP can provide necessary financing and credibility with third parties. Benefits Many of the benefits associated with International Joint Ventures are that they provide companies with the opportunity to obtain new capacity and expertise and they allow companies to enter into related business or new geographic markets or obtain new technological knowledge. Furthermore, International Joint Ventures are in most cases have a short life span, allowing companies to make short term commitments rather than long term commitments. Through International Joint Ventures, companies are given opportunities to increase profit margins, accelerate their revenue growth, produce new products, expand to new domestic markets, gain financial support, and share scientists or other professionals that have unique skills that will benefit the companies. Structure International Joint Ventures are developed when two companies work together to meet a specific goal. For example, Company A and Company B first begin by identifying and selecting an IJV partner. This process involves several steps such as market research, partner search, evaluating options, negotiations, business valuation, business planning, and due diligence. These steps are taken on by each company. There are also legal procedures involved such as IJV agreement, ancillary agreements, and regulatory approvals. Once this process is complete, the IJV Company is formed and during this final procedure the steps taken are formation and management. Management There are two types of International Joint Ventures: dominant parent and shared management. Within dominant parent IJV’s, all projects are managed by one parent who decides on all the functional managers for the venture. The board of directors, which is made up of executives from each parent, also plays a key role in managing the venture by making all the operating and strategic decisions. A dominant parent enterprise is beneficial where an International Joint Venture parent is selected for reasons outside of managerial input. Finance When two or more partners get together and form an International Joint Venture agreement, they must decide early on in regards to what the financial structure will entail as this will aid in management and control. Some of the steps include establishing the capital required to start the IJV, the impact of securing a strong strategic alliance partner, and financial reporting. Once an arrangement is made, a tax-planned joint venture will be created which will aid in maximizing the after-tax returns. Factors affecting IJV Economic Factors Poor formation and planning Problems that arise in joint ventures are usually as a result of poor planning or the parties involved being too hasty to set up shop. For example, a marketing strategy may fail if a product was inappropriate for the joint venture or if the parties involved failed to appropriately asses the factors involved . Parties must pay attention to several analysis both of the environment and customers they hope to operate in. Failure to do this sets off a bad tone for the venture, creating future problems. Unexpected poor financial performance One of the fastest ways for a joint venture is financial disputes between parties. This usually happens when the financial performance is poorer than expected either due to poor sales, cost overruns or others. Poor financial performance could also be as a result of poor planning by the parties before setting up a joint venture, failure to approach the market with sufficient management efficiency and unanticipated changes in the market situation. A good solution to this is to evaluate financial situations thorough before and during very step of the joint venture. Management problems One of the biggest problems of joint ventures is the ineffective blending of managers who are not used to working together of have entirely different ways of approaching issues affecting the organization. It is a well-known fact that many joint ventures come apart due to misunderstanding over leadership strategies. For a successful joint venture, there has be understanding and compromise between parties, respect and integration of the strengths of both sides to overcome the weaker points and make their alliance stronger. Inappropriate management structure In a bid to have equal rights in the venture, there could be a misfit of managers. As a result, there is a major slowdown of decision making processes. Daily operational decisions that are best made quickly for more efficiency of the business tends to be slowed down because there is now a ‘committee’ that is in place to make sure both parties support every little decision. This could distract from the bigger picture leading to major problems in the long run. Cultures Factors When a joint venture is formed, it is literarily an attempt at blending two or more cultures in the hope of leveraging on the strength of each party. Lack of understanding of the cultures of the individual parties poses a huge problem if not addressed. A common problem in these multi-cultural enterprises is that the culture is not considered in their initial formation. It is usually assumed that the cultural issues will be addressed later when the new unit has been created. Usually, compromises are reached and certain cultural from the parties are kept on while others are others are either out rightly discarded or modified. Pros and Cons for IJV The joint venture is becoming a popular way for companies that outsource their operations to retain a piece of the ownership pie. The creation of a new legal entity during the launch of a joint venture comes with its share of ups and downs. On the plus side: Joint ventures enable companies to share technology and complementary IP assets for the production and delivery of innovative goods and services. Joint ventures can be used to reduce political friction and improve local/national acceptability of the company. Joint ventures may provide specialist knowledge of local markets, entry to required channels of distribution, and access to supplies of raw materials, government contracts and local production facilities. In a growing number of countries, joint ventures with host governments have become increasingly important. These may be formed directly with State-owned enterprises or directed toward national champions. On the minus side: A major problem is that joint ventures are very difficult to integrate into a global strategy that involves substantial cross-border trading. In such circumstances, there are almost inevitably problems concerning inward and outward transfer pricing and the sourcing of exports, in particular, in favor of wholly owned subsidiaries in other countries. Problems occur with regard to management structures and staffing of joint ventures. Many joint ventures fail because of a conflict in tax interests between the partners. Disputes & Agreements Disputes When two or more partners agree on an International Joint Venture, there are possibilities for disputes to arise. Particularly in IJV’s, there can be issues between the partners who are likely to want their home country’s governing law and jurisdiction to apply to any disputes that may come up; therefore, to avoid such a problem, a neutral governing law and jurisdiction is chosen in some cases. A popular dispute resolution technique used in IJV’s is arbitration; however, many times a court process is given priority as this system has more authority. Other dispute resolution strategies utilized are mediation and litigation. Agreements Entering into an International Joint Venture agreement begins with the selection of partners and then generally this process continues to a Memorandum of Understanding or a Letter of Intent is signed by both parties. The Memorandum of Understanding is a document describing an agreement between parties. On the other hand, a Letter of Intent is a document outlining an agreement between the parties before the agreement is finalized. Examples of successful IJV Sony-Ericsson is a joint venture by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. The stated reason for this venture is to combine Sony’s consumer electronics expertise with Ericsson’s technological leadership in the communications sector. Both companies have stopped making their own mobile phones. Omega Navigation Enterprises Inc. is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. One of the vessels, namely the Omega Duke, is owned through a 50% controlled joint venture with Topley Corporation, a wholly owned subsidiary of Glencore International AG (Glencore).They have also formed an equal partnership joint venture company with Topley Corporation, namely Megacore Shipping Ltd.

Friday, January 10, 2020

Effect on Economy Due to Change in Rbi Policy

Shivans gupta PGPFM nifm- Faridabad Shivans gupta PGPFM nifm- Faridabad Effect of Monetary Policy of RBI on Economy Effect of Monetary Policy of RBI on Economy 2012 2012 Effect of Change in monetary policy of RBI on Economy Economy An  economy  consists of the  economic systems  of a country or other area; the  labour,  capital, and  land  resources; and the  manufacturing, production,  trade,  distribution, and  consumption  of  goods  and services of that area.A given economy is the result of a process that involves its  technological evolution,  history  and  social organization, as well as its  geography,  natural resource endowment, and  ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. Repo rate Repo rate is the rate at which RBI lends to commercial banks generally against government securities. Reduction in Repo rate helps the commercial banks to get mo ney at a cheaper rate and increase in Repo rate discourages the commercial banks to get money as the rate increases and becomes expensive.As the rates are high the availability of credit and demand decreases resulting to decrease in  inflation. Reverse Repo rate Reverse Repo rate is the rate at which RBI borrows money from the commercial banks. The increase in the Repo rate will increase the cost of borrowing and lending of the banks which will discourage the public to borrow money and will encourage them to deposit. Cash Reserve Ratio Cash Reserve Ratio is a certain percentage of  bank deposits  which banks are required to keep with RBI in the form of reserves or balances . Higher the CRR with the RBI lower will be the  liquidity  in the system and vice-versa.RBI is empowered to vary CRR between 15 percent and 3 percent. But as per the suggestion by the Narshimam committee Report the CRR was reduced from 15% in the 1990 to 5 percent in 2002. As of October 2012, the CRR is 4. 5 percent. Statutory Liquidity Ratio Every financial institute have to maintain a certain amount of liquid assets from their time and demand liabilities with the RBI. These liquid assets can be cash, precious metals, approved securities like bonds etc. The ratio of the liquid assets to time and demand liabilities is termed as  Statutory  Liquidity  Ratio. There was a reduction from 38. % to 25% because of the suggestion by Narshimam Committee. The current SLR is 23%. Bank rate Bank rate, also referred to as the  discount rate, is the  rate of interest  which a  central bank  charges on the loans and advances to a  commercial bank. Whenever the banks have any shortage of funds they can borrow it from the central bank. Repo (Repurchase) rate is the rate at which the central bank lends short-term money to the banks against securities. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from the centra l bank becomes more expensive.It is more applicable when there is a liquidity crunch in the market. Inflation In  economics,  inflation  is a rise in the general  level of prices  of goods and services in an economy over a period of time. [1]  When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the  purchasing power  of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the  inflation rate, the annualized percentage change in a general  price index  (normally the  Consumer Price Index) over time.Gross domestic product  (GDP) Gross domestic product  (GDP) is the  market value  of all officially recognized final goods and services produced within a country in a given period. GDP  per capita  is often considered an indicator of a country's  standard of living; GDP per capita is not a measure of personal income (See  Standard of living and GDP). Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita (See  Gross domestic income). GDP is related to  national accounts, a subject in  macroeconomics. GDP is not to be confused with  Gross National Product  (GNP) which allocates production based on ownership.Interest rate An  interest rate  is the rate at which  interest  is paid by a borrower for the use of money that they borrow from a  lender. Specifically, the interest rate (I/m) is a percent of principal (I) paid at some rate (m). For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for deferring the use of funds and instead lending it to the borrower. Interest rates are normally expressed as a  percentage  of the  principal  for a period of one year. Money supply In  economics, the  money supply  or  money stock, is the total amount of  monetary assets  available in an  economy  at a specific time. There are several ways to define â€Å"money,† but standard measures usually include  currency  in circulation and  demand deposits  (depositors' easily accessed assets on the books of financial institutions). Money supply data are recorded and published, usually by the government or the central bank of the country. Public and private sector analysts have long monitored changes in money supply because of its possible effects on the  price level,  inflation, the  exchange rate  and the  business cycle.Relation between two variables Interest rates & investments Interest rates & the bond prices are inversely related to each other. When interest rates move up, it causes the bond prices to fall & vice – versa. Say for example, you have a bond, which is yielding 10% now. Suddenly, the interest rates in the economy move up to 11%. Now your bond is giving fewer yields than the market return. Obviously it price is going to fall in such a case. Reverse is the case when interest rates fall, the bond price will move up because it is giving more returns than the market return.So movements in interest rates have serious implications for individual investments. Inflation and economy Inflation effects the economy on three sides. One, it is directly linked to  interest rates. The interest rates prevailing in an economy at any point of time are nominal interest rates, i. e. , real interest rates plus a premium for expected inflation. Due to inflation, there is a decrease in purchasing power of every rupee earned on account of interest in the future, therefore the interest rates must include a premium for expected inflation.In the long run, other things being equal, interest rates rise one for one with rise in inflation. Money supply and the economy Money supply also effects the economy on thre e sides. One, money supply is used to control the  inflation in an economy. On the demand side, whenever money supply in the economy increases, consumer-spending increases immediately in the economy because of increased money in the system. But supply can’t vary in the short – term, so there is a temporary mismatch of demand & supply in the economy which exerts an upward pressure on inflation.This argument assumes that demand drives supply, which is generally the case. On the supply side, due to an increase in demand, supply can only be increased by capacity additions. This causes the cost of production to rise & that is reflected in inflation. Two, money supply also has a direct relationship with the  growth of an economy. Until an economy reaches full – employment level, the economy growth is the difference between money supply growth rate & the inflation, other things being equal. When an economy reaches full employment level, the growth in money supply i s set off by a growth in inflation, other things being equal.This happens because output can’t rise after full employment & therefore inflation increases one for one with the money supply. Three, money supply also has a relationship with  interest rates. One variable can be used to control the other. Both can’t be controlled simultaneously. If the RBI wants to peg the interest rate at a certain level, it has to supply whatever money is demanded at that level of interest rate. If it wants to fix the money supply at a certain level, the demand & supply of money will determine the interest rates. Usually it is easier for RBI to control the interest rates through its open market operations (OMO).So, the money supply is allowed to vary but RBI controls it by playing around with interest rates through its OMO. Cash Reserve Ratio (CRR) & statutory liquidity ratio (SLR) and an economy CRR is the percentage of its total deposits a bank has to keep with RBI in cash or near cas h assets & SLR is the percentage of its total deposits a bank has to keep in approved securities. The purpose of CRR & SLR is to keep a bank liquid at any point of time. When banks have to keep low CRR or SLR, it increases the money available for credit in the system. This eases the pressure on interest rates & interest rates move down.Also when money is available & that too at lower interest rates, it is given on credit to the industrial sector which pushes the economic growth. Monetary policy and economy It refers to a regulatory policy whereby the monetary authority of a country maintains its control over the money supply for the realization of general economic objectives. It involves manipulation of money supply, the level & structure of interest rates & other conditions effecting the level of credit. The central bank signals the market about the availability of credit & interest rates through this policy.The RBI fixes the bank rate in this policy which forms the basis of the st ructure of interest rates & the CRR & SLR, which determines the availability of credit & the level of money supply in the economy. So it plays a very important role in the development of a economy. Practical Analysis of the Research Table of different Monetary Rates DATE| Reverse Repo Rate| Repo Rate| CRR| SLR| Bank Rate| Mar-10| 3. 5| 5| 6| 24| 6| May-10| 3. 75| 5. 5| 6| 24| 6| Jul-10| 4| 6| 6| 24| 6| Sep-10| 4. 5| 6| 6| 24| 6| Nov-10| 5| 6. 5| 6| 24| 6| Jan-11| 5. 5| 7| 6| 24| 6| Mar-11| 5. 75| 7. 25| 6| 24| 6|May-11| 6| 7. 5| 6| 24| 6| Jul-11| 6. 5| 8| 6| 24| 6| Sep-11| 7| 8. 5| 6| 24| 6| Nov-11| 7. 75| 8. 5| 5. 5| 24| 6| Jan-12| 7. 75| 8. 5| 4. 75| 24| 6| Mar-12| 7. 75| 8. 5| 4. 75| 24| 6| May-12| 7| 8| 4. 75| 23| 9| Effect of change in Repo rate on bank Prime Lending Rate Prime Lending Rate Dates| ICICI| SBI| Repo rate| 20-Apr-12| 18. 5| 14. 5| 8| 04-01-2012| 18. 75| 14. 75| 8. 5| 13-Aug-11| 18. 75| 14. 75| 8| 04-Jul-11| 18. 25| 14. 25| 8| 07-May-11| 18| 14| 7. 75| 24-Feb-11| 1 7. 5| 13| 7. 25| 03-Jan-11| 17| 12. 75| 7| 06-Dec-10| 16. 75| 12. 5| 6. 5| 18-Aug-10| 16. 25| 12. 25| 6| | | | | | | | | | |As the repo rate and reverse repo rate have direct impact on bank prime lending rate. From year 2010 to 2012 the repo rate keeps on increasing from 6 to 8. 5 the PLR of SBI and ICICI also increasing from 12. 25 to 14. 75 and from 16. 25 to 18. 75 respectively. But as the RBI cut down its Repo Rate by . 50 points the PLR of banks also down by . 25 points. Impact of change in CRR and SLR on Money Supply As the CRR is same in 2010-11, 2011-12 i. e 6%, there is not so much change in money supply it is in between 15000-16000. But as it start to decrease in 4th quarter of 2011-12 money supply start increasing and cross to 16000.And in Ist quarter of 2012-13, CRR become 4. 75 and SLR become 23% then Money supply is 17500 cr. in Indian Economy. Reverse Repo Rate| Repo Rate| Bank Rate| CRR| SLR| money supply|   |   |   |   |   |   | 5. 75| 6| 6| 6| 24| 15100 | 5. 25| 6. 25| 6| 6| 24| 15100| 5. 5| 6. 5| 6| 6| 24| 15100| 6. 5| 7. 5| 6| 6| 24| 15100| |   |   |   |   |   | 7| 8| 6| 6| 24| 16000| 7. 5| 8. 5| 6| 6| 24| 16000| 7. 5| 8. 5| 6| 5. 5| 24| 16000| 7. 5| 8. 5| 6| 4. 75| 24| 16000| |   |   |   |   |   | 7| 8| 9| 4. 75| 23| 17500| Effect on Increase in Money supply on Inflation As Money supply increases in the economy, there is more money in the market hich ultimately increase the purchasing power of people. Because of increase in purchasing power the cost of production increases and ultimately Inflation rate increases. So money supply in 2012-13 increases to 17500 cr. The inflation rate become 10. 05 from 8. 65. Reverse Repo Rate| Repo Rate| Bank Rate| CRR| SLR| money supply| inflation rate|   |   |   |   |   |   |   | 5. 75| 6| 6| 6| 24| 15100| 11. 99| 5. 25| 6. 25| 6| 6| 24| 15100| 10. 55| 5. 5| 6. 5| 6| 6| 24| 15100| 10. 23| 6. 5| 7. 5| 6| 6| 24| 15100| 9. 56| |   |   |   |   |   |   | 7| 8| 6| 6| 24| 16000| 8. 86| 7. 5| 8. 5| 6| 6| 24| 16000| 10. 06| 7. | 8. 5| 6| 5. 5| 24| 16000| 6. 49| 7. 5| 8. 5| 6| 4. 75| 24| 16000| 8. 65| |   |   |   |   |   |   | 7| 8| 9| 4. 75| 23| 17500| 10. 05| Impact of Repo rates, CRR and of Money supply on GDP Growth Rate Data categories and components| units| 2010-11| 2011-12| 2012-13| GDP(Current market price)| in rs. | 7674148| 8912178| 159527986| Growth rate| in %| 18. 1| 16. 1| 16. 9| As we see that our GDP growth rate start decreasing because of increasing rates. Because there is money declination in the market the purchasing power of people and our production starts declining which ultimately effect on our GDP growth.But as in financial year 2012-13 the RBI cut its rate by . 50 then our GDP growth rate increase by . 8 %. Conclusion RBI increase or decrease the rates i. e. repo rate, reverse repo rate, Cash reserve ratio, statutory liquidity ratio to control the money supply in the economy. As this small change in th ese ratios affect a lot on the whole economy and its various component like on investment index, cost of production, inflation, interest rate, exchange rate, prime lending rate of bank, home loan and car loan rate, deposit rate of bank and etc.In first quarter of financial year 2012-13, RBI decrease the repo rate by, reverse repo by, CRR by, SLR by the ultimate objective of this reduction in rate is to increase the money supply in the economy. As the rate decline in 2012-13, the RBI release 17500 cr. In the market. But this increase in money supply increase the purchasing power of consumer which ultimately effect on inflation and hence inflation also increase. But because of decrease in rates, it is easy to take more loan for the corporate which increase their production and in result of this our GDP also increase by . %. The prime lending rate is directly proportional to the repo rate of RBI. So there is a fall also come in prime lending rate of banks by . 25 points because of decr ease in repo rate by . 50 So, The change in monetary policy of RBI affect many other rates and and which also affect the consumer and these rates are the instrument of RBI to control the money supply in the economy. Bibliography * www. rbi. org. in * www. indiabudget. nic. in * www. wikipedia. org * www. simpletaxindia. net * www. karvy. com * www. tradingeconomics. com

Thursday, January 2, 2020

Mahatma Gandhis Influence and Ideas Essay - 1861 Words

Mahatma Gandhis Influence and Ideas Mahatma Gandhi was a man of faith and great conviction. He was born into an average Hindu family in India. Like most teenagers he had a rebellious stage when he smoked, spent time with girls and ate meat (forbidden to strict Hindus). The young Gandhi changed as a person while earning a living as a lawyer in South Africa. He came in contact with the apartheid and the future Mahatma began to emerge, one who championed the truth through non-violent resistance. It was between 1915 and his assassination in 1945 that he struggled for Indias freedom. Gandhis teachings of non-violent resistance, known as satyagraha, has had a lasting effect and influence on the world today. He has been the role model†¦show more content†¦Many of them were put in prison but, as Gandhi taught, served their sentences with dignity. Eventually, In 1914, the government gave in and abolished the special tax, agreed to recognized the Hindu marriage ceremony and changed the registration law. It is a testame nt to both Gandhis abilities as a leader and the power of his ideals that he was able to rally the Indian population and bring about these vital changes. Feeling that his work in South Africa was complete he returned to India. By 1919 Gandhi had become one of the leaders of the Indian National Congress. In 1920 he became president of the All-Indian Home Rule League and began to draw together different groups who wanted independence for India. Gandhi began a campaign of non-cooperation against the British and was joined by thousands of people, some of whom had given up working for the British. When violence broke out in one region Gandhi was arrested. During his trial he told the court, I ran the risk and if I was set free I would still do the sameÂ… I am, therefore, here to submit not to a light penatily but to the highest penalty. I do not ask for mercy. (Wilkinson, 49) By saying this Gandhi was standing by his belief that by conducting themselves with dignity and humility India ns would make a greater impact on the British government than they wouldShow MoreRelatedGandhi : The World Of Mahatma Gandhi1320 Words   |  6 PagesPaper: Gandhi Mohandas Karamchand Ghandi, better known to the world as Mahatma Gandhi is one of the world’s main faces when we think or talk of the Indian independence movements, women’s rights and all around freedom for humanity. This individual used strategies and tactics of his own to achieve justice for the Indian culture while he was alive. 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