MANAGERIAL ECONOMICS

TABLE OF CONTENTS Title Page No.

ACKNOWLEDGEMENT 2

TABLE OF CONTENTS 3

CHAPTER 1- INTRODUCTION 4

1.1 INTRODUCTION 4

1.2 OBJECTIVES OF THE PROJECT 5

1.3 SCOPE OF THE PROJECT 6

1.4 METHODOLOGY 7

CHAPTER 2- PROFILE OF AN ORGANISATION 8

CHAPTER 3- MICRO ECONOMIC CONCEPT 9

3.1 DECISION MAKING 11

3.2 EQUILIBRIUM POINT 12

3.3 ELASTICITY 13

3.4 DEMAND FORECASTING 17

3.5 PRODUCTION- RETURN CONCEPT 22

3.6 COST AND REVENUE 23

3.7 BREAKEVEN POINT 25

3.8 MARKET STRUCTURE AND COMPETITION 26

 FINDINGS, SUGGESTIONS AND CONCLUSION 27

INTRODUCTION:

The project work and field study on the industry “Jai furn world” is mainly conducted to
identify and understand the “Micro Economic Concepts” such as Decision making, Market
Equilibrium (Demand and Supply), Production, Cost and Revenue and Market Structure.
Micro Economics is concerned with the behaviour of individual entities such as markets, firms
and households. It also considers how individual prices are set such as the prices of land, labour
and capital. It includes the identification of the remarkable efficiency properties of market. Micro
Economics can explain how the self-interest of individuals working through the competitive
market can produce a societal economic benefit. Today, Micro Economics has moved beyond the
early concerns to include the study of monopoly, the role of international trade, finance and
many other vital subjects.

Micro Economics is a detailed study of the behaviour of individual firms, consumers and
markets. Individual markets contain much of the grand sweep and drama of economic history
and the controversies of economic history and the controversies of economic policy.
Understanding supply and demand requires more than simply parroting the words. A full mastery
of microeconomic analysis means understanding the demand curves, supply curves, learning
about different concepts of costs, and understand how perfect competition differs from
monopoly.

All these and other key topics will be our subjects as we tour through the industry to
understand the fascinating world of Micro Economics.
1.2 OBJECTIVES OF THE PROJECT
The main objective of our company is to produce a extraordinary sense of Quality to
look good , feel and longevity of our furniture’s, making them a great value for your investment.

● To Maintaining the highest quality furniture and be a leading manufacturer in the

furniture industry.
● Delivery in period of time
● Provide employment opportunities for the society
● To develop skills and knowledge in woodworking to our employees
● To maintain technological leadership through continues effort to update product
technology and manufacturing method in company
● To maintain employment and safeguard the interest of labours.
● We use raw material efficiently and effectively

PRIMARY OBJECTIVE:
The primary objective of this project is to study about the demand and supply in the
industry “Jai fun world”.

SECONDARY OBJECTIVE:
The secondary objectives of this project are:
 To know about the company
 To know the demand and supply of the product
 To know how decision making is done in this company
 To know the demand forecasting of the product
1.3 SCOPE OF THE PROJECT

Every project is conducted to fulfil certain objective and this in turn fulfils some purpose
and is of significance for one or more than one party. This company provide unique product in
aesthetic and practical mix of both traditional and temporary designs, we integrate Hand beaten
Copper, Brass, Steel, Handmade as well as Imported Tiles and Hand Paintings into the design
and manufacturing of our wooden furniture so the company has more scope in future

 This project provides a practical insight of demand and supply in a company

 To know the latest trend of demand and supply for the product
 This project is also helpful in the demand forecasting
 Planning to implement more ancient model to attract customers
 Delivery of supply can take place further more faster
 Implementing more innovating idea to create increase number of orders
 Implementing different technology of machines to do work
1.4 METHODOLOGY

DATA COLLECTION:
Primary Data: The primary data was collected by having conversation with the company
owner. Like the information about the demand and supply trend.
Secondary Data: Secondary data was collected from the website of the company. It is the details
regarding the history of the company.

RESEARCH DESIGN:
The research design refers to the overall strategy that we choose to integrate the different
components of the project in a coherent and logical way, thereby, ensuring effective addressing of
demand and supply of the product.
This project is a causal or experimental research design which describes the market demand and
supply of the company’s product and its price. The collected data is made to measure the impact of
manipulation on independent variable on dependent variable.

4.1FIELD STUDY

Had a clear study about the company production unit

Primary data:

Collected information with workers

Secondary data:

Analysis competitor for the company we choosen

3.2 SWOT ANALYSIS

Strength:

 Best servicing
 Time management
 Customer loyality

Weakness:

 Infrastructure lacking
 Insufficient place

Opportunity:

 Importing new trending design

 Digital marketing

Threads:

 Company don’t not have online marketing

Profile of organization:

Jai furn world

Nature of Business Manufacturer/ retailers

Additional Business Service Provider

Company CEO Manikandan

Year of Establishment 2005

Since 2005, Jai Furn World in Saravanampatti, Coimbatore has been in the business of
retailing and distributing furniture. This dealer primarily stocks and retails furniture and interior
décor for homes and households. It also deals in office furnishings for commercial spaces and
business establishments. In the business for years, this enterprise is one of the prominent points-
of-sale in the city for buying fancy and stylish furniture pieces. It features a product range that is
sync with the accepted trends and styles in interior décor and design. Being of high quality, trendy
designs and available at affordable price points, the products have helped them gain a staggering
base of customers over the course of time.

We use Traditional methods and processes of Hand Crafting in making our furniture’s with
highly talented craftsmen. In additional we use high quality of woods like
 ➢ Teak Wood
➢ Sissoo Wood
➢ Satinwood
➢ Rosewood
➢ Pine Wood
➢ Mulberry Wood
➢ Mahogany Wood
➢ Bamboo wood etc..,

Incorporating aesthetic and practical mix of both traditional and temporary designs, we
integrate Hand beaten Copper, Brass, Steel, Hand made as well as Imported Tiles and Hand
Paintings into the design and manufacturing of our wooden furniture’s.

We also use Custom Designed & exclusively manufactured Handles, walking that extra
mile to ensure our furniture’s get a classic look perfectly in alignment with the theme of the
overall design & style, thus giving them a very fresh look and feel.

Attention to minute details and extraordinary sense of Quality is displayed in the

finishing, look, feel and longevity of our furniture’s, making them a great value for your
investment. we have 300 plus employee working in our company in on sit and offsite .the
employee are well talented in the work. the work finishing done by the works is too good. Even
the company concentrate more in finishing part and the wood use in furniture company in high
quality so the wood last long for many years

We have executed projects both in the Home as well as Commercial sectors. the main
produce ands service provided are

➢ Interior Design
➢ Home Styling
➢ Designer Furniture
Interior Design

Exclusive designing of Interiors including contemporary and traditional elements bringing

Elegance, Fresh appeal, practicality and longevity to your space.

Home Styling

Excellent usage of space, colourful, functional, maximum comfort and high quality
materials, all in a judicious mix makes our Home styling an everlasting experience of Pleasure,
Pride and Comfort for our Customers thus delivering value for their investment.
Having our own Furniture Manufacturing Unit, cuts down costs thus delivering cost benefits to
our cost conscious customer

Retailing and distributing

Here we do both retailing and hold sales distribution ,the company main moto to sell n number of
product in less margin, so the hole sale and retail supply are used benefit of the customers

Designer Furniture

Splash of Metals such as Hand beaten Copper, Brass, Steel, Handmade as well as Imported
Tiles and Hand paintings. High quality Finishing. Hand Crafted by skilled, traditional craftsmen.
our Designer Furniture’s are a class apart

Services offered by Jai Furn World

Jai Furn World in Saravanampatti has a vast catalogue of furniture pieces to cater to
residences as well as office spaces. For decorating your home, you can select from a variety of
elegantly crafted wooden almirahs, center tables, cottz beds, dining tables, diwan-cum-beds, foam
diwans, sofa sets and dining tables. You can shop for a wide range of office furniture such as
executive chairs. This establishment is also into designing, installing and support services for
modular kitchens through kitchen-by-design service. On the premises is a team of sales staff that
help you in shortlisting from their furniture range according to your needs and requirement

For the local citizens of Saravanampatti, this furniture retailer is a recognised name. It
occupies a prominent location at Shop no 201, Sathy Main Road, surrounded by innumerous
shopping destinations and commercial complexes. Sathy Main Road acts as a landmark in locating
this showroom. Contact numbers to reach out to this dealer are: +(91)-422-2667886.

Address

+(91)-422-2666886
+(91)-9943314929
Shop no 201, Sathy Main Road, Saravanampatti, Coimbatore - 641035, Opposite to City
Union Bank

www.jaifurnworld.com
Recent click of jai furn world showroom:
 CHAPTER -3

MICRO ECONOMIC CONCEPT

3.1 DECISION MAKING

SITUATION 1:
The Proprietor was involved in Trading since 2005. In the year 2009, he wish to start new
showroom, that time he need to take decision to start up new showroom are go up with old one .
He had two options. They are:

1. To maintain a old furniture showroom with taken for rent.

2. To build new furniture showroom .

He decided to start a new furniture showroom because there is huge demand for this, to attract
customer he thought a good better showroom is needed. The consequence of his decision was
positive.

ANALYSIS: S.NO OPTION 1 OPTION 2

1 He has normal investment . He has to invest more. i.e to
. build the new showroom,
land , labor need to increase
2 He have sufficient number He has to increase the
of clients service and client ,so that he
can get huge number of
profit.
3 It can minimum of 3 labors He has to invest in human
in company so that he can resource.
manage the salary expenses .
 4 Less maintenance. More maintenance.

Here the building up new furniture showroom lead to better development and good profit to the
organization ,even our suggestion is to choose option 2,even though more investment we can get
the invest amount within 3 yr period of time, and it lead to better development to the
organization

SITUATION 2:
The Proprietor was involved in furniture manufacturing since 2005, He had good supply in
market ..the order are more so he not able to fulfill his demand so he thought to expand his
manufacturing firm in April 2016 ,so. He had two options. They are:

1. To continue with the older manufacturing unit

2. To explain manufacturing unit

He decided to expand his manufacturing firm, after the month of December ,later due to
demonetisation there were huge problem in change of money so the business goes down

Business Impact Analysis of demonetization :

1. Liquidity – The immediate impact will be on liquidity. Businesses dealing with a large
amount of cash can no longer use the currency to drive business.

2. Loan Demand – To fill up the gap and run the business smoothly the demand of loans or
funding from the bank and other financial institutions will increase.

3. Loan Dis-approval – Businesses dealing with cash will have difficulty in getting funding
as the Balance sheet will give a different story, making them unqualified for loans.
 Moreover, Banks will be reluctant and extremely cautious as they would want to avoid
NPA’s.

4. High Cost – Even if one can avail funding through other institutions, the cost of lending
will be much higher.

Then,GST playes major role ,increse of tax upto 28% so that sales goes totally down,because
I/34 of money is goes for tax so people not affored to buy product so he canclled to expand his
manufacturing firm.
Therefore in GST the final produce by manufacturer of wooden furniture will be taxed at 12
%which in the current VAT was 12.5% However the rate of plywood has become 28% which in
the current VAT was 5–6%. Although the credit can be claimed.
3.2 EQUILIBIRIUM POINT
Economic equilibrium may also be defined as the point at which supply equals demand for a
product, with the equilibrium price existing where the hypothetical supply and demand curves
intersect.

DEMAND SUPPLY
10000 4.3 1.5
25000 3.5 3
30000 2.5 4.5
 40000 1 5

4
DEMAND
3
SUPPLY
2 Column1

0
10 25 30 40

Where, X axis = Quantity

Y axis = Price

DEMAND:

Demand is the willingness and ability of buyers to purchase different quantities of good
at different prices during a specific period of time.

Demand is determined by the following:

Size of the market

Income of the consumer

Price of the related goods

Taste and preferences

Population

Government policies

Special influences
As the economy has grown, more consumers are willing to buy luxury items for their living and
work environments. The global luxury furniture market is expected to grow at a CAGR of over 4
percent between 2015-2019. In terms of location, Europe has the largest market for luxury
furniture, but developing countries such as China and India are not far behind. Demand of
furniture is being increasing in this modern days.

More furniture vendors are choosing to go green.

With luxury comes the expanding trend to go green. Many vendors are developing eco-
friendly furniture. This trend is driven by environmental concerns, such as the problem of
deforestation. Although eco-friendly furniture is more expensive, the demand is on the rise,
making it worthwhile for manufacturers and companies to offer these products.

SUPPLY:

The supply side of the market typically involves the terms on which the business produce and sell
their products. More precisely, supply relates to the quantity supplied of a good to its market price.
Supply is determined by the following:

Cost of production

Prices of inputs

Technological advances

Prices of related goods

Government policy

Special influences

The product is supplied at the cost of 30,000 INR for wooden king size double bed
.
The few data that we could 30,000 INR -
collect are represented below:
Prices of Inputs
Cost of Production 20,000 INR (per ton - approx

Production and operation plan:

Plans for input:
To be able to perform the aggregate planning process, the following information should
be available to this production planning team. These data include the following:

● Hire additional workers as demand increases

● Employment costs for advertising, travel, interviewing, training, and others

● Shift premium costs if additional shift is added

● Skilled workers may not be available when needed

● Layoff workers as demand decreases

● Cost of severance pay & increases in unemployment insurance costs

● The company must have adequate capital investment in equipment for the peak work
force level

● Materials / purchasing Information

● Operations / manufacturing Information

● Engineering / process Designs

● Sales, marketing and distribution Information

● Financial and accounting information

● Human resources information

Managing labours in emergency time:

● Providing foods to workers

● Encouraging them
● Proving overtime salary
● Providing additional leaves in future
● Having mind relaxation section etc..,

Price fixing:

● All prices must cover costs and profits.

● Review prices frequently to assure that they reflect the dynamics of cost, market demand,
response to the competition, and profit objectives.
● Prices must be established to assure sales.

Cost of materials 22000.00

+ Cost of labor 3000.00

= Total cost 25000.00

+ Desired profit (30% on sales) 7000.00

= Required sale price 32000.00

Demand Price
Demand pricing is determined by the optimum combination of volume and profit. Products
usually sold through different sources at different prices retailers, discount chains, wholesalers,
or direct mail marketers are examples of goods whose price is determined by demand. A
wholesaler might buy greater quantities than a retailer, which results in purchasing at a lower
unit price. The wholesaler profits from a greater volume of sales of a product priced lower than
that of the retailer. The retailer typically pays more per unit because he or she are unable to
purchase, stock, and sell as great a quantity of product as a wholesaler does. This is why retailers
charge higher prices to customers. Demand pricing is difficult to master because you must
correctly calculate beforehand what price will generate the optimum relation of profit to volume.

Competitive Pricing
Competitive pricing is generally used when there's an established market price for a particular
product or service. If all your competitors are charging $100 for a replacement windshield, for
example, that's what you should charge. Competitive pricing is used most often within markets
with commodity products, those that are difficult to differentiate from another. If there's a major
market player, commonly referred to as the market leader, that company will often set the price
that other, smaller companies within that same market will be compelled to follow.

To use competitive pricing effectively, know the prices each competitor has established. Then
figure out your optimum price and decide, based on direct comparison, whether you can defend
the prices you've set. Should you wish to charge more than your competitors, be able to make a
case for a higher price, such as providing a superior customer service or warranty policy. Before
making a final commitment to your prices, make sure you know the level of price awareness
within the market.

If you use competitive pricing to set the fees for a service business, be aware that unlike a
situation in which several companies are selling essentially the same products, services vary
widely from one firm to another. As a result, you can charge a higher fee for a superior service
and still be considered competitive within your market.

Mark-up Pricing
This pricing method often generates confusion--not to mention lost profits--among many first-
time small-business owners because markup (expressed as a percentage of cost) is often
confused with gross margin (expressed as a percentage of selling price). The next section
discusses the difference in markup and margin in greater depth.
Cost reduction

Waste management control

● conserving raw materials in correct amount

● minimizing waste volume and toxicity

● eliminating or minimizing the number of regulatory requirements

● that apply to your operations and the risk of associated penalties

Technology implementation

● Cutting machine

● Sander machine

● Drilling machine

● Planning machine

● Compressor polish
3.3 ELASTICITY:

Supply and demand can often tell us whether certain forces increase or decrease quantities.
But for these tools to be truly useful, we need to know how much supply and demand respond to
changes in price. The quantitative relationship between price and quantity purchased is analysed
using the crucial concept of elasticity.

DEMAND ELASTICITY:
The price elasticity of demand measures how much the quantity demanded of a good changes
when its price changes.

𝑫𝒆𝒎𝒂𝒏𝒅 𝑬𝒍𝒂𝒔𝒕𝒊𝒄𝒊𝒕𝒚= 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒄𝒉𝒂𝒏𝒈𝒆 𝒊𝒏 𝒒𝒖𝒂𝒏𝒕𝒊𝒕𝒚 𝒅𝒆𝒎𝒂𝒏𝒅𝒆𝒅/𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆

𝒄𝒉𝒂𝒏𝒈𝒆 𝒊𝒏 𝒑𝒓𝒊𝒄𝒆

COLLECTED YEAR QUANTITY PRICE PER SET

DATA: S.NO DEMANDED (PER (INR)
MONTH) king size
wooden bed
1 2017 10 30,000
2 2016 15 25,000

In this case, percent change in price is more hence it is a product with considerable elasticity
SUPPLY ELASTICITY:

Consumption is not the only thing that changes when prices go up or down. Businesses also
respond to price in their decisions about how much to produce. Economists define the price elasticity
of supply as the responsiveness of the quantity supplied of a good to its market price. 𝑺𝒖𝒑𝒑𝒍𝒚

𝑬𝒍𝒂𝒔𝒕𝒊𝒄𝒊𝒕𝒚= 𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒄𝒉𝒂𝒏𝒈𝒆 𝒊𝒏 𝒒𝒖𝒂𝒏𝒕𝒊𝒕𝒚 𝒔𝒖𝒑𝒑𝒍𝒊𝒆𝒅/𝑷𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒄𝒉𝒂𝒏𝒈𝒆 𝒊𝒏

𝒑𝒓𝒊𝒄𝒆

COLLECTED YEAR QUANTITY PRICE (INR)

DATA: S.NO SUPPLIED (PER
MONTH)
1 2017 10 30,000
2 2016 15 25,000

Therefore, Supply Elasticity

Elasticity in nature
3.4 DEMAND FORECASTING:

Demand forecasting is predicting future demand for the product. In other words, it refers
to the prediction of probable demand for a product or a service on the basis of the past events and
prevailing trends in the present.

Calculation for demand forcasting

YEAR y(demand)SALE CR (x)X2 XY

2013 80 2 6400 160
2014 85 2 7225 170
2015 89 2 7921 178
2016 80 1.5 6400 120
2017 65 1 4225 65
399 8.5 32171 693

Y=a+bx

∑y=na+b∑x

-∑xy=a∑x+b∑x2

693=a9+b32171

399=5a+b399

 5*(693=a9+b32171)
 9*(693=a9+b32171)

3465=a49+160855

3591=a45-3591

-126=b157264
B=-8012

A=-0.124

∑y=na+b∑x

399=6*0.124+8012*9

2018=72168

2019=72108

2020=72108

2021=72109

2022=72109

From this above information ,We came to know that the sales for the year 2013,2014,2015 was more
than the current years that is 2 crore and for the upcoming years th sales will rise . The company will
have a more demand in the coming years.
3.5 PRODUCTION – RETURN CONCEPT:
The production function specifies the maximum output that can be produced with a given quantity of
inputs. It is defined for a given state of engineering and technical knowledge.
Various stages of productivity can be witnessed in the company proving the law of variable
proportions.(production of master normal bed set(per month))

Labour TP AP MP
1 0 0 0
2 18 9 18
3 25 8.333333 7
4 35 8.75 10
5 40 8 5
6 45 7.5 5
7 55 7.857143 10
8 60 7.5 5
9 70 7.777778 10
10 75 7.5 5

100%
90%
80%
70%
60%
MP
50%
AP
40%
TP
30%
20%
10%
0%
1 2 3 4 5 6 7 8 9 10
Where X axis – Unit of labour
Y axis – Marginal Products/Returns

FINANCIAL PLAN
Below are the initial financial goals for the company:

 Obtain an operating line of credit from a financial institution.

 Finance growth through retained earnings.

 Operate on a 25-30% gross margin.

The financial plan for Trestle Creek Cabinets is outlined in the following sections.
BREAKEVEN POINT:

It is defined as the level of output when total revenue is equal to total cost. This is a point of no profit
and no loss.

year total production

VC FC TOTALCOSTPRICE PER PRODUCT
AVERAGE PRICE
2012 220 300000 500000 450000 25000 28000 250000
2013 240 450000 550000 460000 28000 30000 300000
2014 260 492000 580000 470000 30000 32000 350000
2015 300 528000 592000 490000 32000 35000 400000
2016 260 500000 482000 470000 30000 31000 390000
2017 200 480200 450000 440500 29000 300000 380000
3.6 COST & REVENUE:

Cost is the lowest total expense needed to produce each level of output. When quantity rises,
total cost also rise. Cost are of two categories namely, fixed cost and variable cost.
Fixed cost (FC) represent the total expense that is paid out even when no output is produced; fixed
cost is unaffected by any variation in the quantity of the output.
Variable cost (VC) represents expenses that vary with level of output – such as raw materials,
wages, and fuel – and includes all costs that aren’t fixed.
Always by definition,
Total Cost (TC) = FC + VC
Whereas revenue is the sum of total cost and profit,
Revenue = TC + Profit

VC TC PRICE TR AR MR PROFIT LOSS

1500 6500 700 0 0 0 6500
2000 7000 900 900 900 900 6100
2500 7500 1000 2000 1000 1100 5500
3000 8000 1500 4500 1500 2500 3500
3500 8500 2500 10000 2500 5500 1500
4000 9000 3300 16500 3300 6500 7500
4200 9200 3800 22800 3800 6300 13600
4500 9500 4500 31500 4500 8700 22000

3.8 MARKET STRUCTURE & COMPETITION:

 The company falls under the oligopoly market form and it is perceived mainly
from its demand elasticity
 Jai Furn world has monopolistic market structure
Features of Monopolistic Competition:
1. Large Number of Sellers:
There are large numbers of firms selling closely related, but not homogeneous products. Each
firm acts independently and has a limited share of the market. So, an individual firm has limited
control over the market price. Large number of firms leads to competition in the market.

2. Product Differentiation:
Each firm is in a position to exercise some degree of monopoly (in spite of large number of
sellers) through product differentiation. Product differentiation refers to differentiating the
products on the basis of brand, size, colour, shape, etc. The product of a firm is close, but not
perfect substitute of other firm.

S.NO FEATURES Monopolistic

1 Number of firms Many but not large
2 Nature of product Product differentation
3 Price Elasticity of Large
demand for an
individual firm
4 Entry Easy entry
5 Profit Abnormal profit or loss
in short run and normal
in long run
6 Selling or promotion Very essential
cost
7 Price policy Price Making

FINDINGS:
1. The company we chose “Jai fun world”, has helped us in understanding the micro economic
concepts.

2. The study reveals that how the company is taking its decision and forecasting the demand.

3. The company is also able to meet its equilibrium paint and have given us a better understanding
regarding the concepts.

4. The factor which hinders the learning during the study is time constraint, i.e. the company’s head
was not able to give us ample of tie for discussion.

5. Till now the company have not gone through any loss, so we were not able to get the breakeven
point.

6. The study helped us to upgrade our knowledge in the field.

7.There is no website for the company

SUGGESTIONS:

1. The company welcomed our suggestions and feedback.

2. We suggested the demand forecasting that we did for the company.

3.lach of machine technique used in company

3. Because of lack of experience in the field and technical knowledge, we were not able to suggest
more to the company.

Competitors:

Furncoms industries, saravannampatti

Wooden gardens, saravanampatti Coimbatore

MACRO ECONOMIC CONCEPT:

The study of macroeconomics takes into account many of the factors that determine not just
the current financial state of a nation or region but its prospective future.
As the world trends toward a global economy in which corporations establish international presences
and countries finance each other based on the promise of shared profit, it is essential to have a clear
view of a country's economic situation .
Macroeconomics is the study of BIG(macro) issues .
Why study important? Here are a few critical reasons :
 It describes how the economy(that is so complex) as a whole functions and how the level
of national income and employment is determined on the basis of demand and supply.
 It helps to achieve the goal of economic growth, a higher GDP level, and higher level of
employment. It analyses the forces which determine economic growth of a country and
explains how to reach the highest state of economic growth and sustain it.
 It helps to solve economic problems like poverty, unemployment, inflation, deflation by
mean of formulating proper policies .
 With a detailed knowledge of the functioning of an economy , it has helped macro-
economist to formulate correct economic policies .
 Macroeconomics has evolved over the time and macroeconomic theory has saved us from
the dangers of application of microeconomic theory to the problems that require us to look
broader view over economy .

So in short(at national level) if you have fair idea of macroeconomics ,you should be able to
understand some of things like great depression of 2008 , Fiscal policies, how tax rates are
determined , Inflation , Unemployment , Minimum wage , Income inequality etc.

At an individual level macroeconomics could be of some use like :

1-Is it a good time to switch jobs?
2- Should you ask for raise ?
3- Should buy new house or wait?
4-Should get a fixed or variable rate mortgage?
At business level it could help in :
1- How much to manufacture ?
2- Inventory levels ?
3- Invest in new plants ?
4- Expand into foreign markets or downsize?

HOW ECONOMICS PLAY ROLES IN FURNITURE

Furniture refers to movable objects intended to support various human activities such as seating
(e.g., chairs, stools, and sofas), eating (tables), and sleeping (e.g., beds). Furniture is also used to
hold objects at a convenient height for work (as horizontal surfaces above the ground, such as
tables and desks), or to store things (e.g., cupboards and shelves). Furniture can be a product of
design and is considered a form of decorative art. In addition to furniture's functional role, it can
serve a symbolic or religious purpose. It can be made from many materials, including metal,
plastic, and wood. Furniture can be made using a variety of woodworking joints which often
reflect the local culture.

People have been using natural objects, such as tree stumps, rocks and moss, as furniture since
the beginning of human civilisation. Archaeological research shows that from around 30,000
years ago, people began constructing and carving their own furniture, using wood, stone, and
animal bones. Early furniture from this period is known from artwork such as a Venus
figurine found in Russia, depicting the goddess on a throne. The first surviving extant furniture is
in the homes of Skara Brae in Scotland, and includes cupboards, dressers and beds all
constructed from stone. Complex construction techniques such as joinery began in the early
dynasticperiod of ancient Egypt. This era saw constructed wooden pieces, including stools and
tables, sometimes decorated with valuable metals or ivory. The evolution of furniture design
continued in ancient Greece and ancient Rome, with thrones being commonplace as well as
the klinai, multipurpose couches used for relaxing, eating, and sleeping. The furniture of
the Middle Ages was usually heavy, oak, and ornamented. Furniture design expanded during the
Italian Renaissance of the fourteenth and fifteenth century. The seventeenth century, in both
Southern and Northern Europe, was characterized by opulent, often gilded Baroque designs. The
nineteenth century is usually defined by revival styles. The first three-quarters of the twentieth
century are often seen as the march towards Modernism. One unique outgrowth of post-modern
furniture design is a return to natural shapes and textures.

The furniture industry in India is considered as a "non organized" sector, with handicraft
production accounts for about 85% of the furniture production in India.

The furniture sector in India only makes a marginal contribution to the formation of GDP,
representing just a small percentage (about 0.5%).

Among all the types of furniture used, office furniture segment is the one that boasts the most
important companies, both from the point of view of size and of the technological innovation of
the production. The furniture industry employs a total of around 300,000 workers.

Foreign trade picture with regard to furniture is not very impressive. In 2000, India ranked 48th
among furniture exporters and 49th among importers. This situation can be explained by he high
import duty applied, and on the other hand, from the low technological level of Indian companies
and the local tastes and traditions that influence the style of the products offered, making them
difficult to export.

The more recent data shown in the table below, obtained from ministry of commerce, shows the
trend in this category over the past 6 months.

Wood and Wood Products, Furniture and Fixtures" carry a weight of 27.01 % in the total
MANUFACTURING SECTOR. This category has however shown a decline in recent some
years.

The visible consumption of furniture is estimated to be 15 USD per year per inhabitant but this
average hides wide variation in populations and in cities.

Usually, a manufacturer or a craftsman has his own store(s) where he presents products or
imported furniture. Consumers choose in the store or order bespoke furniture.

India presents a favourable outlook to sell furniture and one expects the furniture industry to
grow further in the coming years. Two important reasons for this are: First India's large size,
Secondly, Indian tastes have started to be more refined and Indian people are looking for more
western furniture style. The prospect of the furniture sector in India seems positive.
 Several agreements have been signed between local producers looking for technology
and European companies trying to reach a market or to reduce their costs.

A recent on-field UEA research , co-funded by the European Commission, has allowed to
identified some 150 Indian companies (furniture manufacturers and retailers but also banks,
hotels, enterprises) wishing to start commercial and/or industrial co-operation with EU
counterparts. Their company profiles are quite complete.

Legislation on various ways of setting up business and on intellectual property rights

exists as well as a lot of advantages for foreign companies to establish business alone or with
partners in India . Indian government is continuously taking steps to minimize entry-exit barriers
for foreign companies and government is facing pressure to liberalise the duty structure. Further,
in comparison with other countries such as China and Mexico, where the time required to start a
business is less, India still involves more legal fulfilments. Hopefully, in coming years these
shortcomings will be done away with.

INDIAN FURNITURE INDUSTRY

Size of the INDUSTRY

The Indian furniture industry is estimated at around Rs 35,000
crore (Rs 350 billion). Eighty-five per cent of this falls into the
unorganised sector

Geographical distribution
All the metropolititan cities

Output per annum

The market of wooden furniture solely owns the share of nearly Rs 60 crore

Percentage in world wide

India was the biggest furniture importer in 2004 05, with a 17 world share in furniture
imports worldwide.
History

India is a land of wonderful and marvelous artistic work of wood which being appreciated
worldwide The Indian and beautiful traditional attributes of art and design have established a reputation
of Indian Furniture Industry in the ration and worldwide to be appreciated by people. There are
exceptional designs, nch, compact, and luxunous trends and, not the the supreme quality have given
elegance to the furniture segment in the traditional as well as modern aspect Tradition in making lots of
developments in the Indian furniture market is to make a luxury statement. The old "charpais' (string
beds), inlaid 'door jambs', handcrafted "almans' (cupboards) Thulas' (swings) and grandfathers wooden
kursi (chair), wooden 1akht (divans), old fashioned round tables with bloated legs and ornamented master
beds are back in turniture stores and in homes as well. Often wood is recycled, culled from old discarded
turnture and crumbling havelis' (traditional Indian mansions) in the villages and former princely chiefs
that are being puled down by real estate developers to make way for high rises Indian Brief Introduction
organized sector with handicraft production accounts for about ot the Furniture Industry is considered as a
"non tormaton of GDp representngRst a furniture production in India The furniture sector only makes a
marginal contribution to the furniture production in India The furniture sector only makes a marginal
contrbution to the formation of GDP Just small ercentage. In the year 2000, India ranked 48th among
furniture exporters and 49th among importers This was due high import duty applied, and on the other
hand, from the low technological level of Indian companies and the local tastes andtraditions that
influence the style of the products offered, making them difficult to export

During 2005, data for index of industrial production, as many as 14 of the 17 industry groups
shown positive growth as compared to the the previous years
However, Wood Products Furniture and Fixtures have shown a negative growth of 167% Today in India
wood Products

Furniture carry a weight of 27 01 in the total manufacturing sector This calegory has however
shown a decline in recent some years The visible consumpton of furniture in In is estimated to be 15 USD
per year per inhabitant but this average hides wide vanation in
populations and in cities. India has a favorable outlook to sell furniture and one expects t
furniture industry to grow further in the coming years Two important reasons for this are First India's
large size and Secondly, Indian tastes have started to be more refined and India people are looking for
more western furniture style The prospect of the furniture sector in India seems positve A recent research
has identified some 150 Indian companies not only as the furniture manufacturers and retailers but also
banks enterprises wishing to start commercial and/or industrial co-operation with EU counterparts Indian
Legislation on various setting up business and on intellectual property rights exists as well as a lot of
advantages for foreign companies
s alone or with partners in India Indian government is taking steps to minimize entry-exit barriers for
foreign and ernment is facing pressure to liberalise the duty structure Further, in comparison with other
countries such a Cnna and red to start a business is more it has become a hindrance for development of
this industy

Furniture Industry comprises

-Living Room Furn ture

-Bedroom Furniture
-Kitchen Furniture
-Drawing Room Furniture
-Dining Room Furniture
-Entryway Furniture

It is been estimated that the world home furniture market is worth Rs 20,000 crore and dunng
the past three years, grew by 20 a year This also covered livmng room turniture The Indian demand for
lving room furniture has enjoyed steady growth over the years In the year 2006, the Indian furniture
andustry was estimated at around Rs 35,000 crores Indian Furniture Industry s
highly unorganized sector The furniture industry in India employs a total of around 300,000 workers and
the total production of furniture in 2001-02 was USD 3580 million

Market Capitalization

The Indian wooden turniture industry is able to generate approximately a turnover of Rs 3.500 crore
annually The market of furniture solely owns the share of nearly Rs 60 crore And as per one of the survey
done recently the industry expected to grow by 20 percent in coming times

Size of the industry

Among all the types of furniture the office furniture segment is the one that boasts the
most important both from the point of view of size and of the technological innovation of
the production The fumture ndustry employs a total of around 300 000 workers The total production
furniture in 2001-02 according to Annual survey of Industry was USD of otal pr
uc ol Turniture in 2001-02 according lo Annual survey ol industry was U 3580 million.

Total contribution to the economyl sales

Indian Furniture Industry is estimated to be more than Rs 60,000 cr The industry is dominated by
unorganzed sector whch constitutes 90% the total Indian market The organized furniture market is at 10%
and growng at about 35% CAGR segment comprises 65% of the home market & 35% of Institutions. The
entire Home decor category spends furniture accounts about 68% of the share while remaining 32%
comprises of furnishings and home improvement lmported furnture construtisto 85% of the total
organized furniture industry in the country India imports furniture from Italy. Germany. Span, Chna,
Korea Malaysia, Indonesia and Philippines

Top leading companies

The marked development of the Indian Furniture Industry has enhanced the leading foreign trands to t in
ther confidence The world market now feels pleasure and confident to join hands with Indian Furniture
brands, to name few are Godrej s Boyce Manufacturing Co. Ltd., Furniture Wala Zubair, Yantra,
Renaissance, N R Jasani & Company, Furniture Concepts Durian Kan Millennium Lifestyles, Truzo.
Modular Furniture BP Ergo, Tangent Featherlite and Haworth and much more to add to the growth of the
industry

Employment opportunities

There are numerous opportunities in India for business of Fumuture as the household has increased ts
income ntule the economy is reaching to new horizons of developments There are opportunities like start
up a business or work as on a or decorator of furniture or the supplier of the furniture to the local market
from the national market Mnmum qualtoatenrequired for any candidate to start up the job in this
industrycom/indian industries/furniture.html Teconomy is reaching to new horizons or developments TT
decorator of furniture, or the s required for any candidate to start up the job in this industry
Latest developments

Indian share of the wooden furniture market is around Rs 60 crore (Rs 600 m on) The world home
furniture market is worth Rs 20 000 crore (Rs 200 baon) Dunng the past three yeas tgaw by 20s year
According to a World Bank study, the organised furniture industry s expected to grow by 20 s a and ada
Russia and Brazil will witness a boom Indian range of indigenous furniture includes both residental and
contract system tunture wth an
concentration in office and kitchen furniture Indian manufacturers generally use a three-tier sellng and
distributon structure ant retailer India was the biggest furniture importer in 2004-05 with a 17 share n
tumtue mots wouade A toti ar 104h importers shipped furniture to India during this penod The current
imports are mainly from Italy Germany Spain China Korea Malaysa Indonesia the Phipones and The
furniture market in India is manly concentrated in A Band Ccties t has been estimated that the top 784
urban centres contribute 41s to the total consumer tumlare masket A and Etne cities together contribute
33% of the total market
CONCLUSION:

The study of the company that we did for our project helped us in better understanding about
the micro economic concept.

The data that we were able to collect from the company provided us the information about
the demand and supply of its product, the elasticity of demand, demand forecasting, equilibrium
concept and also the breakeven point. In addition, the company also provided us this decision making
strategy with their previous case of decision making strategy. We were able to know the market
structure in support of the company.

The completion of our project is possible only because of the co-operation from the company
head and also by the guidance of our faculty Mr. John V. Sugumaran.