enhancement of household productivity - using pareto policy

0

ENHANCEMENT OF HOUSEHOLD PRODUCTIVITY

BY: D.G.L.R De Silva

Undergraduate

Management & Productivity Development Division

N.I.B.M

A dissertation submitted in partial fulfillment of the requirement of the

Higher Diploma in Business Management

NATIONAL INSTITUTE OF BUSINESS MANAGEMENT

1

Preface

I am extremely happy to produce this report regarding the reduction of the monthly

consumption cost in a house hold. In my endeavor I have mainly taken the Pareto Policy and

through that I have identified the vital few & trivial many to cut down the cost.

The main idea of doing this project is to minimise the household expenditure by twenty percent

without affecting the quality of household members and this is the report which includes two

months research. I have collected data from 1st of January 2012 to 29th January 2012 ,and then

implemented the Pareto Theory. In doing so I was able to reduce the house hold expenditure

with the support of the family members.

When going through this report you could see the different ways & methodologies, such as

Pareto policy, and to what extent it has been successful in this project. And also the constraints

of the project are stated as well.

In the analysis part the desired result and to what extent I was able to achieve it with the help

of the family members and what are the reasons for the achievement. Last but not the least the

four members of the family when looking at the final result in the near future also hope to

further implement cost cutting measures.

2

Acknowledgement

I gratefully acknowledge the contributions made by Mr.Ashoka De Silva, Mr. Ajith De

Silva, Mrs. Saroja De Silva, Mr. Kavinda De Silva, Mr. Ayesh Gunathileke & Mr

Navaka Navaratne.

I would like to gratefully acknowledge the contributions of Mr.Ashoka De Silva my

Professional Development Module Lecturer for his guidance & helpfulness in

preparation of this dissertation as a fulfillment for my Higher Diploma.

With the consistent support of my father Mr. Ajith De Silva & Mother Saroja De Silva

gathering of the Bills, providing the Details regarding shopping, marketing and

payments was of utmost importance as it helped to formulate the major parts of the

enhancement of household productivity report.

My brother Mr. Kavinda De Silva contributed in numerous ways that he could with his

technical expertise and last but not the least my two good friends Ayesh Yapa and

Navaka Navaratne.

I would like to gratefully acknowledge the outstanding contributions of Ajith De Silva

& Saroja De Silva. Were it not for their outstanding support & creative contributions to

this project, it would not be the success that it is. “Thank you.”

3

Executive summary

This report emphasis on how the house hold expenditure has been reduced by

collecting data, analyzing and implementing appropriate suggestions’ and recommendations.

To collect data bills have been obtained daily and it has been analyzed according to the Pareto

principles. Based on the analysis concluded items are been separated from the vital few items.

After all measures are taken to reduce the cost of those items with the help of the family

members which gave us a positive result compared to the desired result of 20%. The result of

the project is given as follows making a productive one. The approach taken will be useful in

terms organizational level as well.

Is a snap shot of the overall report?

Should state the result of the project.

There are 3 parts for the result;

- Current status

- Desired status

- Achieved status

Current Status Desired Status Achieved Status

31732.00 29687.00 22411.00

The achieved reduction = 9321

31732 × 100

= 29.37%

The expected reduction was 20%

4

List of figures

State the list of all the figures used in this report and their respective pages.

Figure No. Description Page

No.

1 Bar chart illustrating the expenditure of February 25

2 Chart illustrating the Pareto Law 26

List of tables

State the list of all the tables used in this report and their respective pages.

Table No. Description Page No. 1 Instrumentation 09

2 Information chart 10

3 Analysis form 10

4 Opening balance for month January 13

5 Data from month 18

6 Closing balance for month January 20

7 Information chart for month January 22

8 Analysis form 24

9 Vital few items 25

10 The concluded items 26

11 Triple W Programme 28

12 Opening balance for month February 30

13 Data form for month February 34

14 Closing balance for month February 35

15 Comparison of expenditure on the concluded items 38

5

Table of Contents

Preface........................................................................................................................................ 1

Acknowledgement ..................................................................................................................... 2

Executive summary .................................................................................................................... 3

List of figures ............................................................................................................................. 4

List of tables ............................................................................................................................... 4

1 Introduction ........................................................................................................................ 7

1.1 Introductory paragraphs .............................................................................................. 7

A brief introduction about the; ............................................................................................... 7

1.2 Statement of problem .................................................................................................. 7

1.3 Objective ..................................................................................................................... 8

1.4 Significance of the study ............................................................................................. 8

2 Background ......................................................................................................................... 9

3 Methodology ..................................................................................................................... 12

3.1 Population & sampling .............................................................................................. 12

3.2 Instrumentation.......................................................................................................... 12

3.3 Procedure & Time frame ........................................................................................... 13

3.4 Conceptual Framework ............................................................................................. 13

3.4.1 Pareto Law ......................................................................................................... 13

Information chart .................................................................................................................. 13

Analysis form ....................................................................................................................... 14

3.5 Validity & Reliability ................................................................................................ 14

3.6 Scope & Limitations.................................................................................................. 15

4 Data presentation .............................................................................................................. 15

4.1 Opening balance as at 31st Dec. 2011 ....................................................................... 15

4.2 Data of Items Consumed of Month January 2012..................................................... 17

4.3 Closing balance as at 29thJan.2012............................................................................ 22

5 Data analysis ..................................................................................................................... 24

5.1 Information chart ....................................................................................................... 24

5.2 Analysis of Consumed Items in Month January ....................................................... 25

6 Findings ............................................................................................................................ 29

6.1 Vital few items .......................................................................................................... 29

7 Conclusions ...................................................................................................................... 30

6

7.1 Conditions ................................................................................................................. 30

7.2 Items to reduce expenditure ...................................................................................... 30

8 Recommendations ............................................................................................................ 31

9 Implementation of Recommendations .............................................................................. 32

10 Results ........................................................................................................................... 33

10.1 Opening Balance as at 31st Jan 2012 ......................................................................... 33

10.2 Data of Consumed Items of Month February............................................................ 34

10.3 Closing Balance as at 29th February .......................................................................... 38

10.4 List of Consumed Items for Month February............................................................ 39

10.5 Comparison of expenditure on the concluded items ................................................. 41

10.6 The comparison of Current Expenditure, Desired Expenditure, Achieved

Expenditure of the Concluded Items .................................................................................... 42

10.7 Reduction of the Expenditure of the Concluded Items ............................................. 42

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1 Introduction

1.1 Introductory paragraphs

A brief introduction about the;

The members of the family

There are four members in the family .Father is employed at Chilaw plantations.

Mother is a house wife, me & my younger brother are reading for our degrees.

Currently the father is the only one whose earning and through that house hold

expenses and cost of living is managed.

The current monthly income of the family

The current income accounts to LKR 49,000.00

The current Monthly expenditure

The cost incurred in a month is around LKR 39,229.00

Future incomes expected

In the near future once the two sons complete their degrees a substantial income is

expected with the paths they choose to go.

The probability of losing the present income.

The probability is that due to an illness this families sole bread winner the father would

lose his income.

1.2 Statement of problem

State;

What is the current expenditure

LKR 39229.00

The current income

LKR 49,000.00

The current savings.

The current savings are sufficient.

The desired or ideal expenditure.

The desired expenditure is to minimize the payments for the household bills.

Calculate the %to reduce (=Current expenditure- expected expenditure * 100)

Current expenditure

= 39,229.00 – 31,000.00 * 100

39,229.00

= 20%

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1.3 Objective

State the objective of the project in the 3 parts:

Standard

Performance

Condition

Standard Performance Condition

% of reduction in the

monthly expenditure

Reduce the household

expenditure

a) Pareto Law

b) Without affecting

to the quality of lifestyle of

the family members

1.4 Significance of the study

State why the report is important

Emphasize on;

Path finding

We have to gather facts and figures in order to give solutions.so according findings and

analysis then implementation and results. Designing the path and way forward is the

challenging part.

Empowering.

Each and every member of the family should be empowered to manage the house hold

and reduce the cost of living that is anticipated due to the economic condition in the

country.

Aligning.

Aligning plays a pivotal role as according to the conceptual frame work the aligning

should go hand in hand.

Modeling.

Last but not the last the modeling is created looking at the broader picture so that

through that model the process works properly.

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2 Background

Other ap This project is done in CPD module which led to use Parato approach in order to

reduce the house hold expenditure which ultimately helped to make it a productive one and

enhance the saving of family.

In the late 1800s, Vilfredo Pareto, an economist, established that 80% of the land in Italy was

owned by 20% of the population. This was the first instantiation of a socio-economic law that

soon appeared to have universal scope.

Here are a few examples where the Pareto law typically applies:

80 % of a stock is filled with 20 % of the products.

20 % of the customers account for 80 % of the sales volume.

80 % of the profit is achieved with 20 % of the customers (not necessarily the same 20 %

as the ones who achieve 80 % of the sales)

80 % of the wealth is owned by 20 % of the persons (this proportion is highly variable

from country to country. It would be interesting to correlate that proportion with the quality

of life per country)

Approaches available other than the Pareto law to carry out this project.

Another approach to cost reduction will be Target costing. Here after deciding the desired

expenditure we can take measures to cut cost until the desired level. In this approach cost can

be reduced but sometimes the quality of the life tends to get low and unnecessary time will be

spend on low cost tasks. So adopting target costing with Parato approach seems to be much

more effective approach.

Value analysis is another approach to cost reduction and it will avoid the items which won’t

add value to the members in the family. Therefore wasteful items can be eliminated and this

will reduce the expenditure of family and enhances saving which will become future

investments.

Identifying the cost for each activity or using activity based costing will be useful in carrying

out a project like this. Based on identifying the activity which influence the cost and taking

steps to that activity will gradually decrease the cost of that cost pool ensure to decrease the

cost finally.

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So combining those mentioned approaches with Pareto will ensure an efficient and effective

approach to cost reduction in terms of households and in an organization.

The unique term used in the project is junk food. This includes all the fast food items and short

east that is been consumed by the members of the family.

Provide a description about the unique terms used in the report.

Instrumentation - We use bills, discussions, observations, etc. as instruments to collect

data. Tell family members to collect all their bills. Tell them to come in the evening

and give all details of their expenses to you. Maintain a CR book to record all the details.

“Vital few and Trivial many” - This was done according to the Pareto Policy.

After Data was gathered the gathered data was analyzed and accordingly put in to

tables to identify the Vital few and Trivial many.

Gantt chart - a chart that is prepared to monitor the process from the beginning

to the very end.

Information Chart - Usage Value = Consumed Units * Unit Price. To get this

value data is gathered and inserted into a table.

Validity & reliability - Validity is the accuracy of the data collected. Reliability

is the consistency of the data.

Scope and limitations – Stating the scope or the frame within which the project

has being carried out.

Eg: only 29 days of January has being considered, as February has only 29 days.

Stating the limitations occurred when carrying out the project.

Eg: Inflation of prices would affect the accuracy of expenses.

The investments can be fall into the categories of long term and medium term will be

expelled. Since the information applicable to the analysis is household expenditure,

operating cost like vehicle maintenance, house safeguarding, cloths & shoes etc.. will

be ignored. This affects the level of correctness in the analysis.

Different unexpected expenses like medical bills, expenses for weddings, outings and

parties are hard to evaluate in terms of monthly expenditure. Inflation of prices would

affect the accuracy of expenses. Inability to value household items that are already half

used such as gas require necessary distribution that leads to a degree of inaccuracy.

Selected months of research as different number of days with difference of 2 days.

Therefore first month should be included with only 29 days of consumptions in order

to maintain the level of balance.

Data Presentation – Data was gathered and accordingly turned in to meaningful &

useful information. And presented in a readable manner.

Expenditure – the cost that has to be incurred.

Information chart – no/item/consumed units/unit price/usage value.

Analysis form - Usage Value% = Usage Value of a given item x 100

Total Expenditure of the Month

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Cumulative Usage Value % of Item 3 = Cumulative Usage Value % of Item2 +

Usage Value % of Item 3

With these formulas calculations are done and then inserted into a table.

Opening & Closing Balance-

The Total Expenditure of Month February = Opening Balance + Consumption –

Closing Balance

The Total Expenditure of Month January = Opening Balance + Consumption –

Closing Balance

The difference of the Expenditure of = The Total Expenditure of Month January

And Month February - The Total Expenditure

of Month February

Current Status, Desired Status and Achieved Status - These words signify that the

found figures were categorized in this manner.

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3 Methodology

3.1 Population & sampling

Population

All the items consumed by the family members during the year 2012.

Sampling frame

Not the capital items, only the recurrent items.

Sampling

We cannot use any sampling method due to the restrictions of the HDBM.

Therefore the month January was selected as the sample to collect data & the

month February was selected to implement recommendations.

3.2 Instrumentation

We use bills, discussions, observations, etc. as instruments to collect data.

Tell family members to collect all their bills.

Tell them to come in the evening and give all details of their expenses to you.

Maintain a CR book to record all the details.

Table 1: Format for Collecting Data relevant to Opening Balance, Consumption during the

specified period & Closing Balance.

We maintain a CR book to record day-to-day expenses while attaching the relevant

transaction document in order to fill the above format.

Date Item Description No. of

units

Unit Price

(Rs.)

Item Value

(Rs.)

13

3.3 Procedure & Time frame

State the entire process.

Prepare a Gantt chart for the entire extent of the project, i.e. from 31st Dec. to

15th April.

Table X: Procedure & Time Frame

3.4 Conceptual Framework

3.4.1 Pareto Law

Identify vital few items from trivial many items.

In this household project the following formats are used to analyze the data collected

based on Table 1.

Information chart

No. Item Consumed units Unit price Usage value

Table 2: Format of the Information Chart

Usage Value = Consumed Units * Unit Price

Activity

January February March

W1 W2 W3 W4 W1 W2 W3 W4 W1 W3

Collecting data

Analyze data

Implementation

Report writing

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Analysis form

No. Item Unit

Price

Consumption Usage value Usage Value

%

Cumulative

of Usage

Value %

1

2

3

Table 3: Format of the Analysis Form

Usage Value % = Usage Value of a given item x 100

Total Expenditure of the Month

Cumulative Usage Value % of Item 3 = Cumulative Usage Value % of Item2 + Usage Value

% of Item 3

Vital few items are identified by demarcating the items at 80% of Cumulative Value %.

Concluded items are identified by considering Vital Few items with the conditions given in

the objective & other relevant conditions. Recommendations are made to reduce the monthly

Usage Value of the Concluded Items. The recommendations are implemented using the

Triple W (3W) program. The degree of achievement of the objective will be highlighted by

comparing the expenditure of the month of data collection and the expenditure, of the month

of implementation

3.5 Validity & Reliability

These measures were taken to ensure the Validity and the Reliability of the data

collected.

The bills data were recorded in a CR Book.

The data gathered were put in to a table in the CR Book and Report, so that accurately

and consistently data would be easy to use and analyzed.

Measure and record the items of the opening and closing balances.

Take the current market prices of the items.

Calculate the bills according to the exact time period.

Use one unit price for good at the whole period of research

Measuring the opening and closing of the electricity, water and vehicle meter.

15

3.6 Scope & Limitations

The scope or the frame within which the project has being carried out.

Eg: only 29 days of January has being considered, as February has only 29 days.

The limitations occurred when carrying out the project.

Eg: Inflation of prices would affect the accuracy of expenses.

The investments can be fall into the categories of long term and medium term will be

expelled. Since the information applicable to the analysis is household expenditure,

operating cost like vehicle maintenance, house safeguarding, cloths & shoes etc. will

be ignored. This affects the level of correctness in the analysis.

Different unexpected expenses like medical bills, expenses for weddings, outings and

parties are hard to evaluate in terms of monthly expenditure.

Inflation of prices would affect the accuracy of expenses.

Inability to value household items that are already half used such as gas require

necessary distribution that leads to a degree of inaccuracy.

Selected months of research as different number of days with difference of 2 days.

Therefore first month should be included with only 29 days of consumptions in order

to maintain the level of balance.

4 Data presentation

4.1 Opening balance as at 31st Dec. 2011

Item Description Available

quantity

Unit Price

(Rs.)

Item Value

(Rs.)

Petrol 100L 135.00 1350.00

Rice 25kg 100.00 2500.00

Sugar 10kg 98.00 980.00

Dhal 2kg 160.00 160.00

Saffron 100g 30.00 300.00

Sault 2packets 55.00 110.00

Coconut oil 2Bottle 145.00 145.00

16

Eggs 5 12.00 60.00

Tea(Leaf) 100g 55.00 550.00

Anchor 2packets 122.00 244.00

Biscuits 2packets 40.00 80.00

Maggie Noodles 1packet 33.00 33.00

Soap 2 23.00 46.00

Tooth paste 1 Tube 240.00 240.00

Shampoo 90ml 90.00 90.00

Ginger 100g 50.00 50.00

Matches boxes 2 4.00 8.00

Potato 1kg 40.00 40.00

Red onion 1kg 120.00 120.00

B onion 500g 35.00 35.00

Beans 100g 100.00 100.00

Carrot 250g 110.00 110.00

Chicken 1kg 180.00 180.00

Fish 500g 75.00 75.00

Coca cola Mega 1 bottle 180.00 180.00

Cordial 1 bottle 200.00 200.00

Milo 1pack 112.00 112.00

Tomato-source 100g 60.00 6.00

Panadol 1 card 20.00 20.00

Custard powder 1packet 45.00 45.00

Food color 28ml 50.00 50.00

Baking Powder 100g 50.00 50.00

Highland 500g 230.00 230.00

Mustard cream 150g 100.00 100.00

Chocolate flavored milk 1 bottle 175.00 175.00

Chinese chili paste 200g 220.00 220.00

Mortien fast kill 250ml 150.00 150.00

Harischandra Noodles 1 packet 65.00 65.00

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Table 4: Opening Balance for Month January

4.2 Data of Items Consumed of Month January 2012

Harischandra kurakkan flour 1packet 75.00 75.00

Nestamalt 500g 105.00 105.00

Milk bottle 1 bottle 95.00 95.00

Medicine - - 2500.00

Sausages 1 packet 118.00 118.00

Gas 1Cilinder 2550.00 2550.00

Total Value 6652.00 14652.00

Date Item Description No. of

units

Unit Price

(Rs.)

Item Value

(Rs.)

01-Jan Patrol 10l 135.00 1350.00

Coconut oil 5L 165.00 165.00

Raththi 5 packets 122.00 122.00

Biscuits 2 packets 55.00 55.00

Chicken 3 kg 180.00 180.00

Vegetables - - 200.00

02- Jan Sugar - 100.00 100.00

Banana 3 360.00 120.00


Magee noodles 4 packets 33.00 132.00

Photo copy - - 105.00

Fish 1kg 150.00 150.00

03- Jan Transportation 150.00

Patrol 8L 135.00 1080.00

Fruits - - 250.00

Bread - 50.00 50.00

Reload - 50.00 50.00

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04- Jan Transportation - 150.00 150.00

Vegetables - 300.00 300.00

Dhal 1 kg 1600.00 160.00


fish 1kg 800.00 800.00

gas 1kg 112.00 112.00

Bread 1 50.00 50.00

Snacks 1packet 150.00 150.00

Reload 50.00 50.00 50.00

06- Jan Patrol 8L 135.00 1080.00

Transportation - 150.00 1500.00

Panadol 2 cards 20.00 40.00

Eggs 10 12.00 120.00

chilies’ 200g 280.00 280.00

Milo 1 packet 112.00 112.00

Samba rice 3kg 84.00 252.00


Bread 3 50.00 150.00

Fish 500g 75.00 75.00

Reload - 100.00 100.00

08- Jan Sausages 1 packet 118.00 118.00

Bread 1 50.00 50.00

Reload - - 50.00

Soap 4 33.00 132.00

09- Jan Chicken 1kg 530.00 530.00

Patrol 10L 135.00 1350.00

Eggs 10 12.00 120.00

Red rice 4kg 60.00 240.00

Rice – keera samba 1kg 70.00 70.00


Fruits - - 200.00

10- Jan Transportation - - 230.00

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Tooth paste 4 tubes 240.00 960.00

Shampoo 2 bottles 150.00 300.00

Reload - - 100.00

Bread 2 50.00 1000.00


Coconut oil 1 bottle 165.00 165.00

Nestomalt 400g 430.00 430.00


Fish 1kg 120.00 120.00

Dhal 500g 160.00 80.00

Sugar 2kg 112.00 224.00

Jack Fruit 1 60.00 60.00

Patrol 3L 135.00 405.00

Red onion 1kg 120.00 120.00

B onion 1g 70.00 70.00

Banana 2.5kg 230.00 230.00

Ice cream 1L 250.00 250.00

Vegetable - - 250.00


Umbrella 1 150.00 150.00


Gasoline 500ml 200.00 68.00

Motrin fast kill 250ml 150.00 150.00



Bread 1 50.00 50.00

Reload - 100.00 100.00


Chicken 1kg 180.00 180.00

Tea leaf 500g 55.00 55.00

Eggs 5 12.00 60.00

Coconut oil 1L 165.00 165.00

20

Nestomalt 400g 215.00 215.00

Flour 1kg 85.00 85.00

Milk Powder 1kg 590.00 590.00

Astra 250g 118.00 118.00

Anchor 1 packet 122.00 122.00

14- Jan Transportation 2 40.00 80.00

Patrol 8L 135.00 1080.00

Eggs 10 12.00 120.00

Bread 1 50.00 50.00

15- Jan Shampoo 1 150.00 150.00

Magee Noodles 2 packets 33.00 66.00

Snack 1 packet 88.00 88.00


Soap 2 33.00 66.00

Red onion 1kg 120.00 120.00

Eggs 10 181.00 181.00

Bread 2 50.00 100.00


Bread 1 50.00 50.00

Reload - 100.00 100.00

Soap 6 33.00 198.00

18- Jan Transportation 2 40.00 80.00

Chicken 1kg 180.00 180.00


Reload - 50.00 50.00

Tea leaf 1kg 500.00 500.00

19- Jan Bread 1 50.00 50.00


Reload - - 100.00

21- Jan - - - -

22- Jan Coca cola 1 Bottle 180.00 180.00

Flour 1kg 65.00 65.00

21

Table 5: Data Form for Month January

Coconut 2 40.00 80.00

Reload - - 450.00

Bread 1 50.00 50.00

23- Jan Ice cream 1L 250.00 250.00

Transportation - - 190.00

Eggs 10 12.00 120.00

Bread 2 50.00 100.00


Samba Rice 1 kg 70.00 70.00

24- Jan Coconut oil 1L 165.00 165.00


Nestomalt 400g 215.00 215.00

Bread 2 50.00 100.00

25- Jan carrots 1 4.00 4.00

leeks - 50.00 50.00

26- Jan Patrol 8L 135.00 1080.00

27- Jan Siddhalepa 2 40.00 80.00

Tea leaf 500g 55.00 55.00

Transportation 2 40.00 80.00

Highland milk 2 40.00 80.00

28- Jan Eggs 10 12.00 120.00


29th Jan Vim 1 150.00 150.00

Drinks - - 750.00


Total Value 18990

22

4.3 Closing balance as at 29thJan.2012


quantity

Unit Price

(Rs.)

Item Value

(Rs.)

Tooth Paste 1Tube 240.00 240.00

Shampoo - - -

Patrol 2L 135.00 270.00

Soap 2 33.00 66.00

Deodorant 1 270.00 270.00

Vim 1 15.00 15.0

Match Boxes 1 Pack 4.00 4.00

Siddhalepa - - 34.00


Eggs 2 12.00 24.00

Astra 50 g 310.00 31.00


Fish 90 g 85.00 85.00

Ginger 80 g 50.00 40.00

Coconut 1 65.00 65.00

Onion 1 kg 132.00 132.00

Garlic 500g 266.66 133.33

Fruits - - 80.00

Coconut Oil 300 ml 200.00 180.00

Sugar 2 kg 96.00 192.00

Milo 400g 265.00 265.00

Nestomalt 800g 215.00 430.00

Tea 400g 345.00 345.00

Drinks 2L 250.00 500.00

Milk Bottle 2Bottle 50.00 100.00

Ice cream 1L 250.00 250.00

Gasoline 500ml 75.00 75.00

23

Table 6: Closing Balance for Month January

Total Expenditure for the Month January = Opening Balance of 31st Dec 2011 + Value of

Consumption of month January – Closing Balance of 29th January 2012

(14652.00 + 18990.00)- 26232.33 = 7409.67

Electricity - - 2555.00

Telephone - - 3382.00

Net Connection - - 3207.00

Total Value 3383.00 26232.33

24

5 Data analysis

5.1 Information chart


01 Telephone bill - - 3382.00

02 Net connection - - 3207.00

03 Electricity - - 2555.00

04 Drinks - - 250.00

05 Patrol 55L 135.00 7425.00

06 Vegetables - - 1572.00

07 Coconut oil 4L 625.00 625.00

08 Eggs 48 12.00 576.00

09 Transportation - - 2455.00

10 Astra 450g 118.00 205.00

11 Milk bottle 2 50.00 100.00

12 Food color 56ml 50.00 100.00

13 Chicken, fish 6.5kg - 1585.00

14 Flour - 85.00 150.00

15 Tea leaf - 55.00 315.00

16 Coca cola 2 bottle 180.00 360.00

17 Dhal 2 .5kg 160.00 400.00

18 Rice 9 kg - 1052.00

19 Onion 3 kg - 310.00

20 Umbrella 1 170.00 170.00

21 Biscuits 3packets - 243.00

22 Motrin fast kill 500ml 150.00 300.00

23 Sugar 1 kg 112.00 112.00

24 Milk powder - - 889.00

25 Sausages 2packets 118.00 236.00

26 Magee noodles 9packets 33.00 297.00

27 Garlic 200g 133.00 147.00

28 Soap 11 33.00 363.00

25

29 Cake 1 800.00 800.00

30 Mustard cream 150g 100.00 100.00

31 Sprats 500g 80.00 80.00

32 Vim 1 150.00 150.00

33 Medicine - - 4000.00

34 Reload - - 1000.00

35 Siddaleapa 2 40.00 80.00

36 Coconut 1 40.00 40.00

37 Tooth paste 4 240.00 960.00

38 Fruits - - 430.00

39 Photocopy - - 105.00

40 Bread 1 7 50.00 850.00

41 Shampoo 4 150.00 600.00

42 Ice cream 1L 250.00 250.00

43 Gasoline 500ml 150.00 125.00

44 Matches box 2 4.00 8.00

45 Deodorant 1 270.00 270.00

Total - - 39229

Table 7: Information Chart for January

5.2 Analysis of Consumed Items in Month January

No. Item Unit

Price

Consumption Usage

value

Usage Value

%

Cumulative

of Usage

Value %

01 Petrol 135.00 55L 7425.00 18.92 18.92

02 Medicine - - 4000.00 10.19 29.11

03 Telephone - - 3382.00 8.62 37.73

04 Net connection - - 3207.00 8.17 45.90

05 Electricity - - 2555.00 6.51 52.41

06 Transportation - - 2455.00 6.25 58.66

26

07 Chicken, fish - 6.5kg 1585.00 4.04 62.70

08 Vegetables - 1572.00 4.00 66.70

09 Rice 9kg 1052.00 2.68 69.38

10 Reload - - 1000.00 2.54 71.92

11 Toothpaste 240.00 4tubes 960.00 2.44 74.36

12 Milk powder 5packets 889.00 2.26 76.62

13 Bread 50.00 17 850.00 2.16 78.78

14 Cake 800.00 1 800.00 2.03 80.81

15 Coconut oil 165.00 4 bottles 625.00 1.59 82.40

16 Shampoo 150.00 4 bottles 600.00 1.52 83.92

17 Eggs 12.00 48 576.00 1.46 85.38

18 Fruits - - 430.00 1.09 86.47

19 Dhal 160.00 2.5kg 400.00 1.01 87.48

20 Soap 33.00 11 363.00 0.92 88.40

21 Coca cola 180.00 2bottles 360.00 0.91 89.31

22 Tea leaf 55.00 - 315.00 0.80 90.11

23 Onion - 3kg 310.00 0.79 90.90

24 Motrin fast kill 150.00 500ml 300.00 0.76 91.66

25 Magee 33.00 9packets 297.00 0.75 92.41

26 Deodorant 270.00 1 270.00 0.68 93.09

27 Ice cream 250.00 1L 250.00 0.63 93.72

28 Drinks - - 250.00 0.63 94.35

29 Biscuits - 3packets 243.00 0.61 94.96

30 Sausage 118.00 2 236.00 0.60 95.56

31 Astra 118.00 400g 205.00 0.52 96.08

32 Umbrella 170;00 1 170.00 0.43 96.51

33 Flour 85.00 - 150.00 0.38 96.89

34 Vim 150.00 1 150.00 0.38 97.27

35 Garlic 280.00 20g. 147.00 0.37 97.64

36 Gasoline 150.00 500ml 125.00 0.31 97.95

37 Sugar 112.00 1kg 112.00 0.28 98.23

38 Photocopy - - 105.00 0.26 98.49

27

39 Milk bottle 2 50.00 100.00 0.25 98.74

40 Food color 50.00 56ml 100.00 0.25 98.99

41 Mustard cream 100.00 150ml 100.00 0.25 99.24

42 Sprats 80.00 500g 80.00 0.20 99.44

43 Siddhalepa 40.00 2 80.00 0.20 99.64

44 Coconut 40.00 1 40.00 0.10 99.74

45 Matches box 4.00 2 8 0.02 100.00

46 total - - 39229.0

0

Table 8: Analysis Form

28

Bar Chart illustrating January Expenditure

Concentrating on the vital few which incur the major cost and bringing that cost down would

enable to bring the overall cost down, rather than concentrating on the Trivial many and

minimizing the cost of small items.

0 1000 2000 3000 4000 5000 6000 7000 8000

Petrol

Medicine

Telephone

Net Connection

Usage Value %

Usage Value

Consumption

Pareto Policy

Trivial Many

Vital Few

80%

20%

29

6 Findings

6.1 Vital few items

Identified items that contribute to 80% of the total household expenditure

No. Item Unit

Price

Consumpti

on

Usage

value

Expenditure

%

Cumulative

%

01 Patrol 135.00 55L 7425.00 18.92 18.92

02 Medicine - - 4000.00 10.19 29.11

03 Telephone - - 3382.00 8.62 37.73

04 Net connection - - 3207.00 8.17 45.90

05 Electricity - - 2555.00 6.51 52.41

06 Transportation - - 2455.00 6.25 58.66

07 Chicken, fish - 6.5kg 1585.00 4.04 62.70

08 Vegetables - 1572.00 4.00 66.70

09 Rice 9kg 1052.00 2.68 69.38

10 Reload - - 1000.00 2.54 71.92

11 Toothpaste 240.00 4tubes 960.00 2.44 74.36

12 Milk powder 5packets 889.00 2.26 76.62

13 Bread 50.00 17 850.00 2.16 78.78

14 Cake 800.00 1 800.00 2.03 80.81

Total 31732.00

Table 9: Vital Few Items

30

7 Conclusions

7.1 Conditions

Without affecting the Quality of Life.

Within the Income Level.

Without affecting the Quality of Life of others.

7.2 Items to reduce expenditure

Table 10: The Concluded items

No. Item

01 Patrol

02 Telephone

03 Net connection

04 Electricity

05 Transportation

06 Chicken, fish

07 Vegetables

08 Rice

09 Reload

10 Toothpaste

11 Milk powder

12 Bread

13 Cake

31

8 Recommendations

Here recommendations will be made to reduce the cost of each and every item.

Eg: Electricity – Using LED TV’S instead of LCD and CRT TV’S.

Reduce the electricity consumption which contributes to light the house.

Electricity

Using equipment like the computer and television, which are regularly used in the

household, in a planned manner.

Reduce the electricity consumption which contributes to light the house.

Doing all the Ironing at one specific time interval.

Petrol

Use the vehicle on weekends and for emergency purposes.

L.P gas

Cocking the dishes as per needed rather than cocking earlier and heating it again.

Transportation

Travel outside only for useful purposes.

Mobile and Telephone

Using Skype to talk with the brother who is in abroad rather than using the telephone

and mobile.

Using the mobile if needed for emergency and using it in off peak time for

international calls.

Junk food

Adapting to home cooked food rather than buying from outside.

However, the cost of all the vital items cannot be cut down as there is the condition as

not to affect the quality of life of the family members.

32

9 Implementation of Recommendations

WHAT WHEN WHO REMARKS

Using LED TV’S and

screens instead of

LCD & CRT TV’S

and LCD & CRT

computer monitors.

1st February Father By 40% reducing the

electricity bill.

Growing essential

and expensive

vegetables and fruits

in the home garden.

1st February Mother and two sons. Home grown

nutritious fresh

vegetables and fruits.

Installing a solar

panel.

1st February Father & Two

Brothers.

For the increase of

electricity bill by

50%, by installing

this saving money &

giving energy to the

national grid and

getting electricity free

for 1 month.

Switch off lights and

fans when no-one is

around.

1st of February Younger Brother Introduce a fine.

Replace all the

normal bulbs with

CFL bulbs.

1st of February Father Total cost for CFL

bulbs =

(how to find the

money)

Not keeping the

television & the

Computer on stand-

by when not in use.

1st of February By all users Maintaining a record

of Stand-By periods.

Doing all the Ironing

at one specific time

interval.

1st of February Mother Do Ironing according

to the weekly Ironing

Schedule.

Table 11: Triple W Program

33

10 Results

10.1 Opening Balance as at 31st Jan 2012


quantity

Unit Price

(Rs.)

Total Value(Rs.)

Tooth Paste 1Tube 240.00 240.00

Shampoo 1 bottle 230 230.00

Patrol 2L 135.00 270.00

Soap 2 33.00 66.00

Deodorant - - -



Eggs 8 12.00 96.00

Meadowlea 500 g 495.00 495.00


Fish 90 g 85.00 85.00

Ginger 80 g 50.00 40.00

Coconut 1 40.00 40.00

Onion 1 kg 132.00 132.00

Garlic 500g 266.66 133.33

Fruits - - 80.00

Coconut Oil 300 ml 200.00 180.00

Sugar 2 kg 112.00 224.00

Milo 400g 265.00 265.00

Nestomalt 800g 215.00 430.00

Tea 400g 345.00 345.00

Drinks 2L 250.00 500.00

Milk Bottle 2Bottle 50.00 100.00

Ice cream 250ml 62.00 62.00

Gasoline 500ml 75.00 75.00


34

Table 12: Opening Balance for Month February.

Consumed Items of Month February



Date Item Description No. of units Unit Price

(Rs.)

Usage

Value(Rs.)

01-Feb Patrol 6L 135.00 810.00

Coconut oil 500ml 165.00 82.50

Anchor 2 packets 122.00 122.00

Biscuits 1 packet 55.00 55.00

Chicken 1 kg 180.00 180.00


02- Feb Reload - 100.00 100.00

Banana 1 120.00 120.00



Photo copy - - 105.00

Fish 1k 150.00 150.00

03- Feb Transportation 100.00

Patrol 8L 135.00 1080.00

Fruits - - 250.00

Reload - 50.00 50.00

04- Feb Transportation - 150.00 150.00

Vegetables - 300.00 300.00

35

Dhal 1 kg 160.00 160.00


Sugar 1kg 112.00 112.00

Snacks 1packet 150.00 150.00

06- Feb Patrol 6L 135.00 810.00

Transportation - 100.00 100.00


Eggs 10 12.00 120.00

Garlic 200g 280.00 280.00

Milo 1 packet 112.00 112.00

Samba rice 3kg 84.00 252.00


Bread 3 50.00 150.00

Fish 500g 75.00 75.00

Reload - 100.00 100.00

08- Feb Sausages 1 packet 118.00 118.00

Bread 1 50.00 50.00

Reload - - 50.00

Soap 4 33.00 132.00

Patrol 8L 135.00 1080.00

Red rice 2kg 60.00 120.00

Rice – samba 1kg 70.00 70.00


Fruits - - 200.00

10- Feb Transportation - - 230.00

Tooth paste 4 tubes 240.00 960.00

Shampoo 2 bottles 150.00 300.00

Reload - - 100.00


Coconut oil 1 bottle 165.00 165.00

Nestomalt 400g 430.00 430.00

36


Fish 1kg 120.00 120.00

Dhal 500g 160.00 80.00

Sugar 2kg 112.00 224.00

Patrol 3L 135.00 405.00

Red onion 1kg 120.00 120.00

B onion 1kg 70.00 70.00

Banana 2.5kg 230.00 230.00

Ice cream 1L 250.00 250.00

Vegetable - - 250.00



Gasoline 500ml 75.00 68.00

Motrin fast kill 250ml 150.00 150.00



Reload - 100.00 100.00


Chicken 1kg 180.00 180.00

Tea leaf 500g 345.00 350.00

Coconut oil 1L 165.00 165.00

Nestomalt 400g 215.00 215.00

Flour 1kg 85.00 85.00

Astra 250g 118.00 118.00

Anchor 1 packet 122.00 122.00

14- Feb Transportation 2 40.00 80.00

Patrol 6L 135.00 810.00

Eggs 10 12.00 120.00

15- Feb Shampoo 1 150.00 150.00

Magee Noodles 2 packets 33.00 66.00

Snack 1 packet 88.00 88.00


37

Soap 2 33.00 66.00

Red onion 1kg 120.00 120.00

Bread 2 50.00 100.00


Bread 1 50.00 50.00

Reload - 100.00 100.00


Tea leaf 1kg 500.00 500.00


19- Feb Bread 1 50.00 50.00


21- Feb - - - -

22- Feb Coca cola 1 Bottle 180.00 180.00

Flour 1kg 85.00 85.00

Reload - - 50.00

Bread 1 50.00 50.00

23- Feb Ice cream 1L 250.00 250.00

Bread 2 50.00 100.00


Samba Rice 1 kg 70.00 70.00

24- Feb Coconut oil 1L 165.00 165.00


Bread 2 50.00 100.00

Reload - - 350.00


Matches box 1 4.00 4.00

26 –Feb - - - -

27- Feb Siddhalepa 2 40.00 80.00

Sprats 500g 80.00 80.00

Tea leaf 500g 55.00 55.00

28- Feb Patrol 6L 135.00 810.00

38

Table 13: Data Form for Month February

10.2 Closing Balance as at 29th February

Eggs 5 12.00 60.00

29-Feb Vim 1 150.00 150.00

Drinks - - 750.00


quantity

Unit Price

(Rs.)

Total (Rs.)

Patrol 2L 135.00 270.00

Soap 1 33.00 33.00

Deodorant - - -



Eggs 1 12.00 12.00

Astra 50 g 118.00 31.00


Fish 90 g 85.00 85.00

Ginger 80 g 50.00 40.00

Onion 1 kg 132.00 132.00

Garlic 500g 266.66 133.33

Fruits - - 80.00

Coconut Oil 300 ml 200.00 180.00

Sugar 250g 112.00 48.00

Nestomalt 400g 215.00 107.00

Tea 400g 345.00 345.00

39

Table 14: Closing Balance for Month February

10.3 List of Consumed Items for Month February


01 Tooth paste 2tubes 240.00 480.00

02 Shampoo 3 230.00 690.00

03 Petrol 35l 135.00 5355.00

04 Soap 7 33.00 231.00

05 Matches box - - -

06 Deodorant - - -

07 Vegetables - - 1272.00

08 Eggs 16 12.00 312.00

09 Highland 250g 118.00 118.00

10 Panadol 3 20.00 60.00

11 Fish and chicken 4.5kg - 705.00

12 Ginger - - -

13 Coconut 1 40.00 40.00

14 Onion 2kg 190.00

15 Garlic 200g 266.66 280.00

16 Fruits - - 570.00

17 Coconut oil 1.2l 200.00 247.00

18 Sugar 1.7kg 112.00 400.00

Toothpaste 3 tubes 240.00 720.00

Drinks 2L 250.00 500.00

Ice cream 250ml 150.00 62.00

Gasoline 500ml 75.00 75.00




Total - - 6677.00

40

19 Milk powder - - 1140.00

20 Tea leaf 500g 345.00 350.00

21 Drinks - - 750.00

22 Milk bottle 2 50.00 100.00

23 Ice cream 2l - 688.00

24 Gasoline 500ml 75.00 75.00

25 Electricity - - 1455.00

26 Telephone - - 1882.00

27 Net connection - - 2207.00

28 Vim 1 150.00 150.00

29 Biscuits 3 - 293.00

30 Reload - - 500.00

31 Magee noodles 3 33.00 99.00

32 Photo copy - - 105.00

33 Transportation - - 1825.00

34 Dhal 1.5kg 160.00 240.00

35 Rice 4kg - 1040.00

36 Bread 11 50.00 550.00

37 Sausages 1 118.00 118.00

38 Medicine - - 4000.00

39 Motrin fast kill 250ml 150.00 150.00

40 Food color 28ml 50.00 50.00

41 Flour 2kg 85.00 170.00

42 coca cola 1bottle 180.00 180.00

43 Mustered cream 150g 100.00 100.00

44 Siddhalepa 2 40.00 80.00

45 Sprats 500g 80.00 80.00

46 Total - - 29687.00

The Total Expenditure of Month February = (Opening Balance + Consumption) – Closing

Balance

41

The Total Expenditure of Month January = Opening Balance + Consumption -

Closing Balance

The difference of the Expenditure of = The Total Expenditure of Month January

And Month February -

The Total Expenditure of Month February

10.4 Comparison of expenditure on the concluded items

No. Item Consumption for

January

Consumption

for February

Savings

01 Patrol 7425.00 5355.00 2070.00

02 Medicine 4000.00 4000.00 -

03 Telephone 3382.00 1882.00 1500.00

04 Net Connection 3207.00 2207.00 1000.00

05 Electricity Bill 2555.00 1455.00 1100.00

06 Transportation 2455.00 1825.00 630.00

07 Chicken, Fish 1585.00 705.00 880.00

08 Vegetable 1572.00 1272.00 300.00

09 Rice 1052.00 1040.00 12.00

10 Reload 1000.00 500.00 500.00

11 Toothpaste 960.00 480.00 480.00

12 Milk powder 889.00 1140.00 251.00

13 Bread 850.00 550.00 300.00

14 Cake 800.00 - 800.00

15 Total - - 9321.00

Table 15

42

10.5 The comparison of Current Expenditure, Desired Expenditure, Achieved

Expenditure of the Concluded Items

10.6 Reduction of the Expenditure of the Concluded Items

Reduction % = month January expenses – month February expenses * 100

Month January expenses

= 9321 * 100

31732

= 29.37%

The expected reduction was 20%

No. Item

Usage Value of

Month January

(Rs.)

Usage Value of

Month February

(Rs.)

Difference of

Usage Value

01 Patrol 7425.00 5355.00 2070.00

02 Telephone 3382.00 1882.00 1500.00

03 Net connection 3207.00 2207.00 1000.00

04 Electricity 2555.00 1455.00 1100.00

05 Transportation 2455.00 1825.00 630.00

06 Chicken, fish 1585.00 705.00 880.00

07 Vegetables 1572.00 1272.00 300.00

08 Rice 1052.00 1040.00 12.00

09 Reload 1000.00 500.00 500.00

10 Toothpaste 960.00 480.00 480.00

11 Milk powder 889.00 1140.00 -251.00

12 Bread 850.00 1882.00 -1032.00

13 Cake 800.00 2207.00 -1407.00

Total Usage Value 27732.00 22411.00 5782.00

Current Expenditure Desired Expenditure Achieved Expenditure

For Jan Rs.31732.00 For Feb Rs.29687.00 For Feb Rs.22411.00

enhancement of household productivity - using pareto policy

Documents

silva saroja

silva mother saroja

family members

household expenditure

contributions of mr

quality of household

report emphasis

desired result