Fitt’s and Posner’s Phases of Learning Essay

Describe â€Å"Fitt’s and Posner’s† phases of learning and explain how you would structure practises to enhance a performance In this essay I will explain Fitt’s and Posner’s phases of learning and how I would structure practises to enhance performance. By practising a skill we can become better. Fitts and Posner theories were that everyone has to go through stages of learning, known as the cognitive, associative and autonomous stages of learning. Depending how good a person is at a particular sport, they will fall into a certain category. An example of this is Wayne Rooney. At a young age he was introduced to football and played amateur football from a young age, becoming one of the youngest strikers in football history. However by learning a skill in sport involves the development of skills by practice. An example of this is shooting practise – you can only become good by practising to kick the ball in between goalposts. Until a person becomes confident enough that they score a goal, they will naturally fall into the next category. The three stages of learning can be divided into two main categories; associationists and cognitivists. Associationists views learning of a sport as the link of particular stimulus and particular responses. Cognitivists see it as a function of the brain, where we learn through the understanding and knowledge of the sport. There are 3 stages of learning according to Fitts and Posner. They are: Cognitive v Associative v Autonomous Cognitive This is the initial stage of learning and is essential if the learner is to process successful through the other stages and is to move a stage where the skill can be performed. The cognitive stage involves formation of a mental picture of a skill. The most efficient way is from a demonstration, which allows them to see the key requirements and to work through the performance mentally. Visual guidance is one of the best ways to make others understand, and so that the person learning can see the correct method to perform the skill. They will then attempt to perform. Success rate is usually 2/3 out of 10. The cognitive stage initially concentrates more on the skill, rather than the game. There is a lack of control and consistency. Trial and error is also a key way to learn. Reinforcement of this can be by giving positive feedback. Questions will arise when learning skills of a sport if the skill is not correctly learnt. The learner will be confronted with some very specific, cognitively oriented problems. Examples of this are, â€Å"How do I score?† â€Å"What is the aim of this game?† â€Å"If so, where are the positions for players?† If the mental picture is not correct the skill will not develop. It is important that the coach explains very thoroughly what is required of each athlete. Associative Learning at the associative stage means that the skill is becoming more consistent, but there are still some errors. The simple element of the skill has been grasped however the performer still refers back to the mental picture. The performer can begin to detect errors and begin to realise his/her mistakes. Feedback should encourage a ‘feeling’ of a well performed skill. This means that the performer will begin to enjoy the sport. Success rate is 5/7 out of 10. Verbal guidance is essential as it is used in the associative stage. Some people never exceed this phase. An example of this is a semi-professional shot-put thrower. Some performers return to the cognitive stage to refer to the mental image of the skill. Also, some professional players return from autonomous stage to the associative stage if they have an injury – they need to work hard and rise up to the expected standard of an autonomous performer. Autonomous Learning at the autonomous stage is where the skill is done without conscious thought. The movements of the performer are fluent, consistent and athletically pleasing. There is an advanced stage of learning where the elements of the skill have become part of long term memory and are automatically produced in response to a an appropriate stimulus. The skill is automatic. The attention of the performer focuses on the next movement, for example tactics. Consistent practise is required to reinforce being at the autonomous stage. Success rate is 9/10 out of 10. In tennis for example a player would be able to perform a serve whilst contemplating what their opponent will do next, rather than being focusing on the technical side of the serve. Not all performers reach the autonomous stage in all skills. For those who do, if practise is not maintained revision to the associative stage will occur. Closed skills such as throwing events can be finely tuned so that a high level of performance can be produced. â€Å"Learning in its simplest form is the development of a position where we can’t perform a skill to a stage where we can perform it.† Knapp, 1973 The quote means that learning is a more or less permanent change in performance brought about by experience. Knapp is suggesting that once something is learnt, it remains with us, thus supporting the statement: Once you learn to ride a bike, you never forget’. Learning in sport involves the development of skills through practice, hence the saying: ‘Practice makes perfect’. Fitts & Posner recognised that as we learn, we do not move directly from â€Å"can’t† to â€Å"can†. They suggest that the learning process is sequential – we move through specific stages/phases as we learn. These stages are hierarchal, in other words each stage must be passed through before the next one is achieved. Ivan Pavlov was a scientist who conducted experiments on the response of dogs. He taught them that when a bell was rung, the dogs would learn to understand that it was time to eat. These findings link into Fitts and Posner’s phases of learning because a particular response with a stimulus can give a great benefit to sports performances. This approach can be used to mentally prepare the athlete for the sport. The player may be taught switching into the ‘zone’ whilst walking onto the pitch. However in order to achieve this, the player would need to gradually progress to that level of conditioned stimulus. In order to teach and improve somebody’s skills at a sport, I would structure a 6 week Personal Exercise Programme (or PEP). A PEP would help improve the skill of the performer, and help the learner to enhance their performance. This way the performer can test to see how long it takes him to master one specific skill. As a trainer I would encourage the performer and give feedback and give a clear understanding to the performer what they are doing right and wrong. Doing something wrong doesn’t mean its negative feedback it would just acknowledge the performer on how to improve, becoming more successful. I would ensure that the performer practices the skill consistently and monitor any improvements in their ability. In a professional football match I would help keep the players to the standard that is required by making them do drills as a team. Warm-ups are essential as they prevent muscles getting damaged. I would also make sure that the stamina of the players is always high; this can be achieved by the Cooper run. In a tennis match the athlete must be able to complete a full match. There are no substitutions so the athletes’ stamina must be high. By hitting a ball for a long period of time every other turn there must be a large amount of upper body strength. In order to help the athlete achieve this, the coach should set the athlete physical training such as sprints, press-up, sit-ups and bicep curls. Technique is needed when serving, volleying; as being able to retain balance quickly is essential. An example of this is Andre Agassi. â€Å"†¦he focused more on physical conditioning than in the past and became one of the fittest players on the tour. His upper-body strength allowed him to bench press 350 lb (159 kg), which helped him retain pace on his shots late into a match, as well as adding to his serve power. He had remarkable endurance and rarely appeared tired on court.† Golf is a sport where the athlete has to be very concentrated on the game. Having a perfect technique allows one to compete to a high level. In order to help raise concentration levels the coach must remove all apprehension and put the athlete in a confident frame of mind. To help an athlete raise concentration before a game the coach could give the athlete a structured diet. Junk food will slow down the concentration rate. Tiger Woods had a bad putting strike so he went home and perfected it. â€Å"Well, that’s one of the worst putting weeks I’ve had in a long time, very frustrating. When I get home I am going to practise until I get it right.† References: * Advanced P.E for Edexcel – Heinemann * http://nobelprize.org/educational_games/medicine/pavlov/readmore.html. * http://www.answers.com/topic/andre-agassi * http://www.asapsports.com/show_interview.php?id=410149

Supply Chain of Amul

ARAVALI INSTITUE OF MANAGEMENT (An institution of Marwar Education Foundation) Term Paper on Supply Chain of AMUL Submitted to:Submitted by: Dr. Parikshit CharanSunil Kansara PGP II PGDM (S) Section A Roll No. 30 HISTORY Amul was formally registered on December 14, 1946. The brand name Amul, sourced from the Sanskrit word Amoolya, means priceless. It was suggested by a quality control expert in Anand and it was chosen because it was a perfect acronym for Anand Milk Union Limited. The Amul revolution was started as awareness among the farmers. It grew and matured into a protest movement that was channeled towards economic prosperity Over five decades ago, the life of an average farmer in Kheda District was very much like that of his/her counterpart anywhere else in India. His/her income was derived almost entirely from seasonal crops. The income from milk buffaloes was undependable. Milk producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand – often milk went sour, especially in the summer season, as producers had to physically carry milk in individual containers. Private traders and middlemen controlled the marketing and distribution system for the milk. These middlemen decided the prices and the off-take from the farmers by the season. As milk is perishable, farmers were compelled to sell it for whatever they were offered. Often, they had to sell cream and ghee at throw-away prices. In this situation, the private trader made a killing. Moreover, the government at that time had given monopoly rights to Polson Dairy, which was run by a person of Parsi descent, (around that time Polson was the most well known butter brand in the country) to collect milk from Anand and supply to Mumbai city in turn (about 400 kilometers away). Another problem farmers faced was that in winter the milk output of buffaloes doubled which caused prices to fall down even further. India ranked nowhere amongst milk producing countries in the world in 1946. Gradually, the realization dawned on the farmers with inspiration from then nationalist leaders Sardar Vallabhbhai Patel (who later became the first Home Minister of free India) and Morarji Desai (who later become the Prime Minister of India) and local farmer, freedom fighter and social worker Tribhovandas Patel, that the exploitation by the trader could be checked only if they marketed their milk themselves. Amul was the result of the realization that they could pool up their milk and work as a cooperative Setting up of Kaira District Co-operative Milk Producers' Union In the early 40’s, the main sources of earning for the farmers of Kaira district were farming and selling of milk. That time there was high demand for milk in Bombay. The main supplier of the milk was Polson dairy limited, which was a privately owned company and held monopoly over the supply of milk at Bombay from the Kaira district. This system leads to exploitation of poor and illiterates’ farmers by the private traders. The traders used to beside the prices of milk and the farmers were forced to accept it without uttering a single word. However, when the exploitation became intolerable, the farmers were frustrated. They collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the freedom movement. Sardar Patel advised the farmers to sell the milk on their own by establishing a co-operative union, Instead of supplying milk to private traders. Sardar Patel sent the farmers to Shri Morarji Desai in order to gain his co-operation and help. Shri Desai held a meeting at Samarkha village near Anand, on 4th January 1946. He advised the farmers to form a society for collection of the milk. These village societies would collect the milk themselves and would decide the prices at which they can sell the milk. The district union was also form to collect the milk from such village co-operative societies and to sell them. It was also resolved that the Government should be asked to buy milk from the union. However, the govt. did not seem to help farmers by any means. It gave the negative response by turning down the demand for the milk. To respond to this action of govt. , the farmers of Kaira district went on a milk strike. For 15 whole days not a single drop of milk was sold to the traders. As a result the Bombay milk scheme was severely affected. The milk commissioner of Bombay then visited Anand to assess the situation. Having seemed the condition, he decided to fulfill the farmers demand. Thus their cooperative unions were forced at the village and district level to collect and sell milk on a cooperative basis, without the intervention of Government. Mr. Verghese Kurien showed main interest in establishing union who was supported by Shri Tribhuvandas Patel who lead the farmers in forming the Co-operative unions at the village level. The Kaira district milk producers union was thus established in ANAND and was registered formally on 14th December 1946. Since farmers sold all the milk in Anand through a co-operative union, it was commonly resolved to sell the milk under the brand name AMUL. At the initial stage only 250 liters of milk was collected everyday. But with the growing awareness of the benefits of the cooperativeness, the collection of milk increased. Today Amul collect 11 lakhs liters of milk everyday. Since milk was a perishable commodity it becomes difficult to preserve milk flora longer period. Besides when the milk was to be collected from the far places, there was a fear of spoiling of milk. To overcome this problem the union thought out to develop the chilling unit at various junctions, which would collect the milk and could chill it, so as to preserve it for a longer period. Thus, today Amul has more than 150 chilling centers in various villages. Milk is collected from almost 1073 societies. With the financial help from UNICEF, assistance from the govt. of New Zealand under the Colombo plan, of Rs. 50 millions for factory to manufacture milk powder and butter was planned. Setting Up of Gujarat Cooperative Milk Marketing Federation In 1954, Kaira District Co-operative Milk Producers’ Union built a plant to convert surplus milk produced in the cold seasons into milk powder and butter. In 1958, a plant to manufacture cheese and one to produce baby food were added. Subsequent years saw the addition of more plants to produce different products. In 1973, the milk societies/district level unions decided to set up a marketing agency to market their products. This agency was the Gujarat Cooperative Milk Marketing Federation (GCMMF). It was registered as a co-operative society on 9 July 1973 COMPANY PROFILE THE TASTE OF INDIA, AMUL comes from the Sanskrit word Amoolya, means priceless. It was suggested by a quality control expert in Anand and it was chosen because it was a perfect acronym for Anand Milk Union Limited. AMUL was formed under the dairy cooperative movement in India in 1946 The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. It is also the world's biggest vegetarian cheese brand . The system succeeded mainly because it provides an assured market at remunerative prices for producers' milk besides acting as a channel to market the production enhancement package. What's more, it does not disturb the agro-system of the farmers. It also enables the consumer an access to high quality milk and milk products. Contrary to the traditional system, when the profit of the business was cornered by the middlemen, the system ensured that the profit goes to the participants for their socio-economic upliftment and common good. Looking back on the path traversed by Amul, the following features make it a pattern and model for emulation elsewhere. Amul has been able to: ? Produce an appropriate blend of the policy makers farmers board of management and the professionals: each group appreciating its rotes and limitations, ? Bring at the command of the rural milk producers the best of the technology and harness its fruit for betterment. ? Provide a support system to the milk producers without disturbing their agro-economic systems, ? Plough back the profits, by prudent use of men, material and machines, in the rural sector for the common good and betterment of the member producers and ? Even though, growing with time and on scale, it has remained with the smallest producer members. In that sense. Amul is an example par excellence, of an intervention for rural change. Organization structure It all started in December 1946 with a group of farmers keen to free themselves from intermediaries, gain access to markets and thereby ensure maximum returns for their efforts. Based in the village of Anand, the Kaira District Milk Cooperative Union (better known as Amul) expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network now covers 2. 12 million farmers, 10,411 village level milk collection centers and fourteen district level plants (unions) under the overall supervision of GCMMF. There are similar federations in other states. Right from the beginning, there was recognition that this initiative would directly benefit and transform small farmers and contribute to the development of society. Markets, then and even today, are primitive and poor in infrastructure. Amul and GCMMF acknowledged that development and growth could not be left to market forces and that proactive intervention was required. Two key requirements were identified. The first, that sustained growth for the long term would depend on matching supply and demand. It would need heavy investment in the simultaneous development of suppliers and consumers. Second, that effective management of the network and commercial viability would require professional managers and technocrats. To implement their vision while retaining their focus on farmers, a hierarchical network of cooperatives was developed, which today forms the robust supply chain behind GCMMF's endeavors. The vast and complex supply chain stretches from small suppliers to large fragmented markets. Management of this network is made more complex by the fact that GCMMF is directly responsible only for a small part of the chain, with a number of third party players (distributors, retailers and logistics support providers) playing large roles. Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer prices supported by a low cost system. The Union looks after policy formulation, processing and marketing of milk, provision of technical inputs to enhance milk yield of animals, the artificial insemination service, veterinary care, better feeds and the like – all through the village societies. DISTRIBUTION CHANNEL Amul products are available in over 500,000 PLUS retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products. GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping. Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations Establishing best practices: A key source of competitive advantage has been the enterprise's ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel. In developing these practices, the federation and the unions have adapted successful models from around the world. It could be the implementation of small group activities or quality circles at the federation. Or a TQM program at the unions. Or housekeeping and good accounting practices at the village society level. More important, the network has been able to regularly roll out improvement programs across to a large number of members and the implementation rate is consistently high. For example, every Friday, without fail, between 10. 00 a. m. and 11. 00 a. m. , all employees of GCMMF meet at the closest office, be it a department or a branch or a depot to discuss their various quality concerns. Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a process check at the end to record how the meeting was conducted. Similar processes are in place at the village societies, the unions and even at the wholesaler and C agent levels as well. Examples of benefits from recent initiatives include reduction in transportation time from the depots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation of Zero Stock Out through improved availability of products at depots and also the implementation of Just-in-Time in finance to reduce the float. Kaizens at the unions have helped improve the quality of milk in terms of acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly focussed projects, reliant on a structured approach based on data gathering and analysis. ) For example, Sabar Union's records show a reduction from 2. 0% to 0. 5% in the amount of sour milk/curd received at the union. The most impressive aspect of this large-scale roll out is that improvement processes are turning the village societies into individual improvement centers. Supply Chain of Amul Consumers expect marketers to deliver products in the locations and forms they require. To meet expectations of such demanding consumers, alignments of our four Distribution Highways of Fresh, Chilled, Frozen and Ambient products were already made by introducing Project DIL. Subsequently, a major initiative was taken to enhance distribution network to smaller towns. About 1200 distributors in small towns across India were added during this initiative. Today about 3000 Distributors ensure availability of our products across India, whether it is in Leh or Lakshadweep, in Kutch or Arunachal. Simultaneously, to augment fresh milk distribution in various markets of India, approximately 1400 exclusive Milk Distributors have been inducted. ? AMUL has the largest cold chain network in India (i. e. 18000 refrigerators) as compared to any other company. The chemical components of milk are water, SNF and solids. Milk is very perishable product so it has to be consumed within 24 hours. In order to avoid wastage AMUL converts the milk in to SNF and milk solids by evaporating the water, which comprises up to 60-70% of milk contents. This is possible only if the distribution channel right from the producer to the consumer is well organized. It will be surprising to know that AMUL makes even the ‘Sarpanch’ to eat pizza i. e. it supplies pizzas even to rural market. ? Last year, theye divided the retail market into 14 specific segments to achieve further distribution efficiency. This year our focus was on inducting distributors having expertise in servicing such specific market segments. This initiative is yielding results by way of ensuring wider availability of our product range. ? The role of distributors in our business process has never been more diverse or more important, as it is today. As a matter of fact, we consider our Distributor to be the real â€Å"Marketing Manager† of our organization. To enhance business performance of our Distributors, a workshop on Marketing and Sales Management was designed in collaboration with a premier business school. The objective of the entire initiative was to upgrade the knowledge of our Distributors in terms of contemporary Business Management Practices, so that they can perform well not only as our business partner but also as Marketing Managers. During the year, 659 Distributors have undergone this programme in 39 locations. Cold Storage is an extremely essential component n the Federation’s distribution process. Unfortunately, availability of efficient cold storage facilities is grossly inadequate in our country. To cope up with the increasing need of suitable cold stores closer to our markets, we have continued our endeavour of creating the Federation’s own cold stores this year in various locations acr oss the country. We now own 24 state-of- the art cold rooms of different sizes. ? To get an exposure to our cooperative structure, our culture as well as operational systems and processes, every year we invite our distributors, major retailers and other business partners to Anand, for Amul Yatra. So far, about 7000 Distributors and other business partners have participated in this Amul Yatra. ? Over recent years, the Federation has successfully introduced new product lines. This year, in order to leverage their distribution network strengths, to optimize market supervision expenditures, to achieve increasing efficiency while keeping the distribution infrastructure lean, focused and productive, the Federation amalgamated its different distribution networks. Today, they operate an efficient distribution infrastructure consisting of 46 sales offices, catering to 3,000 distributors and five lac retailers. Almost every Federation stockist has visited Anand to participate in a unique programme called ‘Amul Yatra'. During this programme, stockists are exposed to the Federation Philosophy, the culture of Cooperation, as well as operational Systems and Processes. The Federation has also invited distributor's salesmen from all over the country to Anand for a training program focused on the Federation's philosophy and developing their selling skills. AMUL is a dairy cooperative in the western India that has been primarily responsible, through its innovative practices, for India to become the world’s largest milk producer. The distinctive features of this paradigm involves managing a large decentralized network of suppliers and producers, simultaneous development of markets and suppliers, lean and efficient supply chain, and breakthrough leadership. Every day Amul collects 447,000 litres of milk from 2. 12 million farmers , converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country. To implement their vision while retaining their focus on farmers, a hierarchical network of cooperatives was developed, this today forms the robust supply chain behind GCMMF’s endeavors. The vast and complex supply chain stretches from small suppliers to large fragmented markets. Management of this network is made more complex by the fact that GCMMF is directly responsible only for a small part of the chain, with a number of third party players (distributors, retailers and logistics support providers) playing large roles. Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer prices supported by a low cost system of providing milk at a basic, affordable price. THE BUSINESS MODEL From the very beginnFng, in the early 1950s, AMUL adopted the network as the basic model for long-term growth. †¢ The network explicitly includes secondary services to the farmer-suppliers. †¢ Several of the entities in the network are organized as cooperatives linked in a hierarchical fashion. Customers: In comparison with developed economies, the market for dairy products in India is still in an evolutionary stage with tremendous potential for high value products such as ice cream, cheese etc. The distribution network, on the other hand, is quite reasonable with access to rural areas of the country. Traditional methods practiced in western economies are not adequate to realize the market potential and alternative approaches are necessary to tap this market. Suppliers: A majority of the suppliers are small or marginal farmers who are often illiterate, poor, and with liquidity problems as they lack direct access to financial institutions. Again, traditional market mechanisms are not adequate to assure sustenance and growth of these suppliers. Third Party Logistics Services: In addition to the weaknesses in the basic infrastructure, logistics and transportation services are typically not professionally managed, with little regard for quality and service. In addition to outbound logistics, GCMMF takes responsibility for coordinating with the distributors to assure adequate and timely supply of products. It also works with the Unions in determining product mix, product allocations and in developing production plans. The Unions, on the other hand, coordinate collection logistics and support services to the member-farmers. In what follows we elaborate on these aspects in more detail and provide a rationale for the model and strategies adopted by GCMMF. Simultaneous Development of Suppliers and Customers: From the very early stages of the formation of AMUL, the cooperative realized that sustained growth for the long-term was contingent on matching supply and demand. The member-suppliers were typically small and marginal farmers with severe liquidity problems, illiterate and untrained. AMUL and other cooperative Unions adopted a number of strategies to develop the supply of milk and assure steady growth. First, for the short term, the procurement prices were set so as to provide fair and reasonable return. Second, aware of the liquidity problems, cash payments for the milk supply was made with minimum of delay. This practice continues today with many village societies making payments upon the receipt of milk. For the long-term, the Unions followed a multi-pronged strategy of education and support. For example, only part of the surplus generated by the Unions is paid to the members in the form of dividends Managing Third Party Service Providers: Unions focused efforts on these activities and related technology development . The marketing efforts were assumed by GCMMF. All other activities were entrusted to third parties. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, some veterinary services etc. It is worth noting that a number of these third parties are not in the organized sector, and many are not professionally managed. Hence, while third parties perform the activities, the Unions and GCMMF have developed a number of mechanisms to retain control and assure quality and timely deliveries. This is particularly critical for a perishable product such as liquid milk. Coordination for Competitiveness Coordination is one of the key reasons for the success of operations involving such an extensive network of producers and distributors at GCMMF. Some interesting mechanisms exist for coordinating the supply chain at GCMMF. These mechanisms are: Inter-locking Control The objective for developing such an inter-locking control mechanism is to ensure that the interest of the farmer is always kept at the top of the agenda through its representatives who constitute the Boards of different entities that comprise the supply chain. This form of direct representation also ensures that professional managers and farmers work together as a team to strengthen the cooperative. This helps in coordinating decisions across different entities as well as speeding both the flow of information to the respective constituents and decisions. Coordination Agency: Unique Role of Federation Its objective is to ensure that all milk that the farmers produce gets sold in the market either as milk or as value added products and to ensure that milk is made available to an increasingly large sections of the society at affordable prices Supplier Enhancement and Network servicing Their objective is to ensure that producers get maximum benefit and to resolve all their problems. They manage the procurement of milk that comes via trucks & tankers from the VSs. They negotiate annual contracts with truckers, ensure availability of trucks for procurement, establish truck routes, monitor truck movement and prevent stealing of milk while it is being transported. GCMMF’S SUPPLY CHAIN DISTRIBUTION CHANNEL Amul products are available in over 500,000 PLUS retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products. GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping. Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations Establishing best practices A key source of competitive advantage has been the enterprise's ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel. In developing these practices, the federation and the unions have adapted successful models from around the world. It could be the implementation of small group activities or quality circles at the federation. Or a TQM program at the unions. Or housekeeping and good accounting practices at the village society level. More important, the network has been able to regularly roll out improvement programs across to a large number of members and the implementation rate is consistently high. For example, every Friday, without fail, between 10. 00 a. m. and 11. 00 a. m. , all employees of GCMMF meet at the closest office, be it a department or a branch or a depot to discuss their various quality concerns. Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a process check at the end to record how the meeting was conducted. Similar processes are in place at the village societies, the unions and even at the wholesaler and C&F agent levels as well. Examples of benefits from recent initiatives include reduction in transportation time from the depots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation of Zero Stock Out through improved availability of products at depots and also the implementation of Just-in-Time in finance to reduce the float. Kaizens at the unions have helped improve the quality of milk in terms of acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly focussed projects, reliant on a structured approach based on data gathering and analysis. ) For example, Sabar Union's records show a reduction from 2. 0% to 0. 5% in the amount of sour milk/curd received at the union. SELECTION, MOTIVATION & EVALUATION OF CHANNEL MEMBERS Selection: The company takes into consideration a host of factors while selecting the channel members. This is because GCMMF believes that selection of channel members is a long run decision & the rest of the decision regarding the supply chain depends upon the efficiency & coverage by the channel members. The following are the host of factors considered by the company in selecting the channel members: ? Authentication is required by the regarding the identity of the channel members, which includes the name & address, photograph of the location. ? Proof of solvency which requires name & address of the channel member’s bankers ? Safety of the inventory, which means that the distributor/ dealer should et the stock of the company insured. ? Inventory or the perishable goods kept by the distributor/ dealer should be in good condition which means a detail of storage space & Refrigeration facility is to be provided. Refrigeration system should have deep freezers, cold room & walk in coolers. ? Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador, 3 Wheel er Van, Tricycle Van & Hand/Push cart. The number & model of each of the vehicle needs to be furnished to the company. ? GCMMF acknowledges the fact that it needs to be sensitive to the market demands. For this it requires that a number of salesmen needs to be present on the field. The salesmen too are divided into various categories like the Field salesmen & Counter salesmen. Also the details of Clerical Staff & Mazdoors are to be provided. The technical competence of the salesmen needs to be mentioned ? Details of the product kept of other companies have to be provided. The annual sales of these products too have to be mentioned. Also details of complementary products & product lines need to be mentioned. ? Dealers of the company must carry a good reputation. This is due to the fact that the company believes reputation of the dealer affects the clientele. ? Market coverage by the distributors needs to be defined which includes details of Geographic coverage & Outlets per market area. ? The company also requires the dealers to furnish any Advertising & Sales initiative undertaken by them on behalf of the company. Observation ? The company’s strength is in its procurement and not the distribution even they know this, as this is the industry’s main problem. Other companies fail to replenish demand due to lack in procurement of raw milk. Amul has loyal cooperatives that provide milk only to them, over time the relationship of trust has built up with these people that amul leverages now. ? Transport channel is another strength as the transporters have grown with the company overtime the bonding with them enables the company to give least margins when it comes to the distributors in the industry, lowering the costs. ? The company believes that there is an ongoing demand in the market and therefore no promotions are needed to increase the sales, also the fact this would affect the cost of the product the company doesn’t undertake many promotion schemes. The not being a profit driven organization, is able to provide products at the least price in the industry, and is able to give least channel margins as the channel members earn through volumes and not through high margins. ? The company is enabled to push its new products into the market by hooking them onto the fast moving products like Amul butter; they force the channel members to carry the new products as well. Comments and Suggestion: ? Amul should go in for exclusive outlets in at least all the shopping malls coming up these days and any location where footfalls are large in number. The advantages of this channel will be: Full range display Easier to promote new products Easy to push impulse purchase products Brand building will be facilitated ? Pushcarts should be increased in number in order to increase the market reach this can provide with e very effective channel for ice creams and flavored milks. ? Trade promotion should be formulated for newly launched products instead of just tagging them onto best sellers. ? The company should start a home delivery where a particular household will order full range of products required by it over a period of time. For this the company could provide a deliveryman with cycle to reach the different houses. ? In order to motivate the channel members it is also very essential for the company to increase the margins for the hard selling items e. g. Amul dahi where it faces competition from Nestle & Mother dairy. ? In order to remain sensitive to market demand, it is essential for the company to place additional salesmen on the field since the brand as such commands a high demand in the market but fails to match it with the supply. [pic][pic][pic]

What is the EU a trading area or an enlarged European State Should Dissertation

What is the EU a trading area or an enlarged European State Should Turkey allowed to join the club - Dissertation Example The so-called Kemalist ideology of Turkey is based on the philosophies developed by Kemal Ataturk, the first president of the Republic of Turkey (1923-1938). His ambition was to modernise the nation and, thereby, launch Turkey into mainstream Western culture.Ever since the foundation of modern day Turkey in 1923, this country with a predominantly Muslim population has been a secular democracy closely aligned with the West. Turkey was a founding member of the United Nations, and has been a member of NATO since 1952, the Council of Europe since 1949, the Organisation for Economic Cooperation and Development (OECD) since 1961 and an associate member of the Western European Union since 1992. Ankara chose to begin co-operating closely with the then European Economic Community (EEC) in 1959, and Turkey's prospective membership of the EEC's successor, the European Union, has been a source of much debate ever since. Turkey's relationship with the EEC was legally sanctioned in 1963 when it si gned an Association Agreement with the EU. This is the first preliminary step on the path to full membership. Since then, Turkish hopes have been put on hold, particularly following its invasion of Cyprus in 1974 and the military coup of 1980.A major turning point for Turkey's EU prospects was the decision reached at the Helsinki Summit in December 1999 to grant official candidate status to the country. In the period between 1999 and 2004, Turkey took great steps in order to meet the Copenhagen criteria, especially regarding stable institutions, the rule of law, human rights and respect for and the protection of minorities. A key step in this process was the signing of the protocol on the de facto abolition of the death penalty. The European Council decided in December 2004 to open accession negotiations with Turkey in October the following year. Nevertheless, practical negotiations on the 35 chapters of the ‘acquis communautaire’ only began in June 2006. From the very beginnings of the creation of the European Union, Turkey has shown a keen interest in the integration process in Europe and, indeed has considered becoming a member of EU to be a logical consequence of its modernisation and Westernisation policies. Consequently, it came as no surprise when Turkey applied for associate membership in 1959 and went on to sign the Ankara Agreement with the EU in 1963, an agreement which not only recognised Turkey’s eligibility to participate in European integration but explicitly envisaged Turkey’s eventual full membership of the EU. EU-Turkey relations have, however, experienced serious difficulties resulting from the essential incompatibility of both parties’ policies with the declared objectives of their Association agreement. In particular, it seems unlikely that the ultimate objectives of the Association Agreement –Turkish accession to the EU – will be achieved in the foreseeable future. On the one hand, this is b ecause the EU has always considered Turkey to be an awkward candidate for EU membership: turkey is different, problematic and thus, by implication, a more difficult case than any other applicants. The EU scepticism towards the prospect of Turkish membership can be seen in its policies, which have basically south to maintain and strengthen the existing Association Agreement. However, this has been inadequate to prepare Turkey for EU membership. In fact, the EU has developed an alternative approach towards Turkey, which can be best described as containment strategy, designed to delay indefinitely the prospect of membership while keeping Turkey within economic, security and political sphere of influence of the EU. This paper argued that the EU has treated Turkey differently compared to the other applicant countries in the present enlargement round. In this respect, before further exploring this argument, there seems to be an important question remaining: Why should the EU treat all app licants ‘fairly’ in the enlargement process? In this respect, the question might arise as to

Teacher professional development Assignment Example | Topics and Well Written Essays - 250 words

Teacher professional development - Assignment Example Without a doubt, this is a great program to harness learning. As of now, no other educational institutions are taking a proactive approach towards this active learning. Hence, any foundation to cultivate learning is a good one. Moreover, it stimulates a social environment in which children have the appropriate environment to nurture themselves. Therefore, this program is necessary to continue and improve the system in the long-run. One of the main challenges of this program is that it is very dynamic, and does not possess a straight forward curriculum. Since there is no standardization of the curriculum, it becomes a challenge to embed these programs holistically. Additionally, many teachers and students lack the correct resources to train their students. This creates an ambiguity of a mutual symbiotic relationship in which students do not fully comprehend teachers. Another element towards the weakness of the program is culture. Culture forbids asking questions, which in essence creates a barrier for students to challenge thinking and grow their intellect. In order to rectify this, it is crucial to have an open dialogue between students and teachers that creates an aura of symbiotic

Growing online gambling industry and its effects socially, Research Paper

Growing online gambling industry and its effects socially, economically - Research Paper Example Instant messaging has replaced the meet-and-greet sessions that were always held as part of family tradition (Powers 45). To add salt to an injury, the most socially revered types of gaming, gambling, was introduced into the virtual world. People were allowed to take their gambling into the virtual world with loads of money at stake and with addiction becoming a key concern amongst several social researchers (Gainsbury 21). The internet then led to an increase in the number of gambling options that an individual could ascribe to with each improvement making betting more lucrative and enticing to people. Research shows that approximately 8 million people participated in online gambling in the year 2001 with the exponential growth expected to hit a higher percentile in the forthcoming years (Shaffer and Hall 169). Despite a myriad of legislations being passed, gambling has become a lucrative business with more people joining and more side effects being felt by those who are around the players. The report herein will seek to identify any social and economic side effects that have resulted with the continued growth of online gambling in the world and what legislations have been put in place to check such increases. To start with, gambling is defined as the waging of money or anything that may of material value based on an event and its outcome. It requires one to bet and thus forfeit the placed bet in case the outcome of the event is on the contrary. The main intent of all those placing their bets is to win with the stakes depending on how the outcome is. Thus, the fact that it has been allowed to go on by the increasing number of laws and betting sites on gambling, means that it has been accepted as a legal way of doing things and has to be conducted according to the gaming rules (Powers 50). The internet brought about the virtual connectivity of each player and made it easier for people to gamble from closed doors and in the comfort of their own homes. It has

Hip Hop Culture Article Example | Topics and Well Written Essays - 1000 words

Hip Hop Culture - Article Example As an editor of this magazine, I was motivated by the fact I m a hip hop artist who has been inspired by the rap culture. In this magazine, I have talked about what hip hop entails, its origin, and influence on society. Introduction Hip hop is a wide conglomerate of artistic activities characterized by aspects of rap music. These aspects are oral, turn tablism, deejaying and breaking or break dancing. Rapping/ emceeing and spitting are spoken or chanted form of rhythmical lyrics which are accompanied by strong rhythm. The main components of hip hop music are content, flow and delivery. It is significant to note that there is a variable distinction between rap and spoken poetry in that rap is performed in accordance the musical beat while spoken can be performed with or without musical beats (Attridge 23-25). Deejaying as part of hip hop refers to a method of creating manipulation of sounds utilizing phonograph turn tables and a DJ mixer. Later, the element of Scratching introduced to the field of deejaying. Break dancing is a style that is associated with hip hop culture in that it brings people of common interests together. It is important to note that breaking dancing or any dance associated with hip hop borrows some traditional aspects from street dancing. deejays at work The connection between hip hop culture and graffiti is based on its establishment on early graffiti musicians and artists who used graffiti in their work to present their views on different aspects affecting the society. Graffiti is perceived as visual expression of hip hop or rap music. Hip hop culture originated in New York among African Americans in the twentieth century. Street culture has been in existence for a long time since it was seen as a direct way that one could express his or her ideas. Hip hop break dancing Origin of hip hop culture The origin of hip hop or rap music is associated with people like Dj Kool Herc and others. He is perceived as being influential in the establishm ent of hip hop since he incorporated traditional Jamaica culture in the genre. For instance, he pioneered development of things such as boastful poetry, speech and impromptu toasting, boastful poetry in music. Additionally, he is thought to have introduced the aspect of break-beat deejaying (Ogbar 65). This is a situation where funk songs breaks are separated from the main song and repetition is created which targeted nigh dance parties. Hard funk form forms the backbone of hip hop music (Edwards 39). Since hip hop came into prominence in the 1970s, DJs started releasing many records in order to capture the attention of people and introduce them to the new type of singing. During the 1970s, street gangs dwelled in abject poverty and engaged in violent acts. In an attempt to avoid breaking the law, they started rapping and writing graffiti in order to keep themselves busy and sale their records. By the end of 1970s, hip hop culture had attained media concentration in the U.S and othe r parts of the world. Influence of hip hop culture in society Positive effects of hip hop culture Hip hop culture has affected society in different ways. The development of mass communication helped in the rapid spread of hip hop culture. When young people listen to the rap songs,

Home Depot and Lowes Case Study Example | Topics and Well Written Essays - 2250 words

Home Depot and Lowes - Case Study Example They were initially set up as a local hardware store but it turned out to be a nationwide chain of home improvement stores. They serve to all the needs for complete home improvements like products from bathrooms to the storage rooms and paints to safes. Lowes store has approximately 216, 000 employees all over its stores. Home Depot was started in the year 1978 and is operating currently in all 50 states of United States. They were initially a warehouse and then turned out as one of the America's best home improvement retailers providing products from appliances to hard wares. They have approximately 209, 300 employees working with them through out their stores. Both these organizations provide all the home improvement products under one roof. Lowes and Home Depot have their own websites for the customers to browse through and purchase products. They offer variety of facilities as an online shop. In the recent decade online shopping has become on of the most comfortable and preferred was of buying goods and services. The E-commerce times (2005) stated "Online shopping has increased over last year because both new and experienced Internet buyers are not only researching products and comparing prices online before making a purchase, but they are also finding good holiday discounts online," said Heather Dougherty, senior retail analyst, Nielsen//Net Ratings. It is important to keep the information and the content interesting so that there is a high inflow of new and existing customers to the site. There are few factors that are very essential for a website. The Gantt chart below represents the important aspects of a website from the Polls result of Port 80, Australian web industry association. Good functionality 1 4.35% Site content 9 39.13% Meeting customer's expectations 3 13.04% Search engine optimization 2 8.70% Good graphic design 2 8.70% Keeping content current 1 4.35% Professional presentation 2 8.70% User friendliness 3 13.04% Security of site where apply eg credit cards, privacy 0 0% A study on the websites of the home improvement retailers Lowes and Home depot: Lowes' website: Lowes has an exclusive website, www.lowes.com. The site is simple and neat which has its name and their caption which is "Let's build something together". The focal point is the photo at the centre of the home page. The picture simply demonstrates the availability of all the home improvement products at the store. The picture has all the products required for a complete living providing a spacious atmosphere interpreting the availability of modest merchandises. The description below that states "Campus kick off", which insists on the availability of all the home improvement products with them under one roof. The first glance of the site provides idea about the products available at the store, the offers at the store, quick link to other services and the service desk. The products in the site are separated according to the departments and rooms. This helps in easy identification and selection of products. The page also helps customer choose products by the offers at the store and ther e are a lot of useful information about Lowes in the home page. The

Florida v. Harris and Florida v. ardines Essay Example | Topics and Well Written Essays - 1000 words

Florida v. Harris and Florida v. ardines - Essay Example Consistent in all global legislative systems, legal cases are initially sought out in lower and trial courts.Subsequently, the decisions are appealed and challenged in higher courts such as Supreme Court. Various concurring and dissenting opinions are revealed during the hearings of the cases and all circumstances are carefully accounted for before reaching final conclusion. References to past legal cases are very critical as situations of most of the cases resemble to those in older ones. This paper entails a detailed discussion and critical analysis of two separate legal cases which have mutually similar circumstances. Legal facts of case FLORIDA V. JARDINES This case revolved on deciding whether using a drug-sniffing dog on curtilage of an individual’s home, in hope of finding traces of illegal content, constitutes to meaning of ‘search’ as prescribed under the Fourth Amendment. Jardines’ house front porch was searched by police with Franky, a drug-sniff ing dog, and a warrant was requested on basis of suspicious information gathered through this search. Later, marijuana and other related material were discovered from premises and Jardines was arrested and charged accordingly. FLORIDA V. HARRIS This case pertained to a similar situation whereby a police officer, Mr. Wheetley, pulled over a driver for a routine check-post stop and insisted on searching the vehicle after his trained K-9 dog indicated that side door handle reflects some traces of drugs content. Subsequently, only methamphetamine ingredients were found and Harris, the driver, was charged with its possession. Later out on bail, Harris ran into officer Wheetley again and a similar search was conducted but in vain. Harris filed a case to suppress the evidence on basis that the officer did not have probable cause for searching his trunk as the dog displayed incompetent performance. At the hearing, officer eventually confessed about expiry of certification and his lack of du e diligence in maintaining updated records of dog’s performances and trainings (Supreme Court of the United States [a] 1-6). Court decisions FLORIDA V. JARDINES At the hearing of trial court, Jardines claimed that dog-sniffing investigation had no reasonable grounds and hence marijuana possession must be dispensed with. The trial court approved the motion which was subsequently reversed by the Florida Third District Court of Appeal. When petition was filed for scrutiny of this reversal, the Supreme Court nullified this decision and agreed to initial decision as given by trial court, suppressing that the trained-dog investigation falls under Fourth Amendment search and hence any warrant released on basis of information revealed in such search is itself void. FLORIDA V. HARRIS Initially, the trial court disapproved the motion to suppress on the grounds that officer had reasonable basis to conduct search. Harris entered an appeal against trial court’s decision and the int ermediate state court also affirmed the same. However, subsequently the Supreme Court intervened and denied trial court’s decision and claimed that officer didn’t have probable cause to search vehicle in accordance with the definition under Fourth Amendment. It ruled out on the adequacy of reason given by the officer that the dog was adequately certified and trained. Later, the court itself established certain standards to test dog’s reliability and potential as it claimed that a wider range of evidence is required to indicate number of times the dog might have given a false alert in similar past situations. The Florida Supreme Court ordered that a complete set of records and exhibits for dog’s credentials must be presented for review prior to establishing its potential and credibility. It designed various tests to assess its capabilities and produced a rigorous checklist which the

European influence in Africa Essay Example for Free

European influence in Africa Essay The presence of Europeans in African countries had a great influence on the cultural benefits, traditions and norms of Africans. African societies were composed of small ethnic groups bound by deep cultural and traditional benefits. Slave trade in North Africa disintegrated these cultural systems. The entry of Europeans in North Africa led to breaking of those small indigenous units into modular states that could be easily controlled by the colonial rule. They abolished the indigenous legal systems and imposed new legal systems based on European concepts of law. North Africa was integrated into the world capitalist system, where its main function was to provide raw materials and new markets for Western industrial revolution. This led to imposition of taxation forcing Africans into cheap wage labor. Land grabbing and alienation in settler colonies made it impossible for the economy of the colonized countries to grow. This is because the colonial administrations only developed areas they saw fit for their benefit and it led to growth of colonial cities such as Dakar, Lagos and Nairobi. Westernization in North Africa led to the rise of Christianity and reduced the number of Muslims in sub Sahara, which contributed to the destabilization of Africa traditions and cultural benefits. Christianity promoted the assimilation of new ideas and new lifestyles such as monogamy and nuclear family. African societies believed in polygamy and extended families. This is being practiced even to day. Christian missionaries introduced Western education, which involved mastery of European language and literacy. The adoption of new habits and tastes coupled with Christianity and western education, led to the development of a new elite that included teachers, clerks, lawyers and doctors. Slave trade degraded the value of African people because they were used against their will to benefit the European economy. This impacted negatively on African leaders because some still practice slave trade today. Europeans brought about, modernization in Africa in terms of Western education, Christianity and Western lifestyles. European influence in Asia (1650-1815). South East Asia comprised of societies that varied in different aspects. Main societies in south East Asia included China, Thailand and Cambodia, therefore European influence on South East Asia varied extensively depending on indigenous states. Societies in South East Asia had very distinct traditional beliefs and rulers who reigned with a conviction of permanency and stability. Europeans created new economic relationships in South East Asia by establishing new industries like rubber production and improvement of traditional ones such as rice and sugar industries. They were improved and expanded to meet the European needs. Communities in Cambodia protested against economical changes when agribusiness in form of plantation farming was introduced. Europeans aimed to make the traditional cultures modern. This was received positively by some south East Asians who had been trained in Western schools. They believed that Western culture would have positive effects on their cultural and economical backgrounds. The elites adopted the European language and mode of dressing. Adoption of the Western culture led to political, economical and social growth in Asia. However, it was difficult to assimilate the European culture and lifestyles in Asia because of the diversity of Asian cultural customs and traditions. Asia is composed of Muslim, Christianity and Buddhism and therefore impacting Christianity in Asia was difficult. These traditional settings emphasized on unifying of social, economic, political and social spheres, though it is impractical to unify all the spheres. The influence of Europeans in Asia was highly varied and uneven throughout the region. They used superior military technology to achieve conquest and monopoly. The Portuguese invasion of Malacca led to the decline of the trade systems as they tried to dominate the spice trade. The European therefore, caused the detachment of producers form their traditional markets. As a result the powerful trading cultures in southeastern Asia collapsed due to colonial influence. European influence was limited to the coastal ports and the adjoining regions. Peasant life in Asia was not affected by the European influence as they remained inside the confines of their village. (Alagappa 130-138). European influence in Middle East (1825-1941). Middle east societies combined religion with governance of their states. European powers overwhelmed the region and tried to separate governance from religion. They replaced the indigenous educational, social and political systems through modernization. The Kuranic schools were replaced by the Western education. Middle east is an Islamic region that viewed European powers as enemies for creating Christianity in the Muslim dominated region. This created a sense of distrust of the Europeans by the Arabs. Europeans faced great resistance form the Arabs who used national movements to adopt anti-western speeches in order to gain favor from their people.. European powers in the Middle East replaced the Muslim leaders by non-Muslim leaders to create artificial political territories since they did not arise from the societies. They created states that had conflicting ethnicities and divided other ethnic groups into two or three portions. For instance they divided the Kurds into Iran, Iraq, Turkey and Syria. (Kaelble 120-127). Dividing ethnic communities stirred political rivalry and violence in the Middle East. It also created instability among the Arabs, preventing political, social and economical development. The Arabs formulated revenge missions to the Europeans and resisted any form of invasion whether political, economical, educational or social.

Cantaloupe Description Essay Example for Free

Cantaloupe Description Essay The Cantaloupe At first glance, the cantaloupe looks round and light grayish-tan, with a hint of green. From afar it looks round and plain, about the size of a peewee soccer ball. On approach, the circular shape is less perfect with subtle dents and bumps all around. Surrounding the sphere shaped fruit are light tan lines like a dense city map with all the streets intertwining and curving around without any significant pattern, not geometric like gridlines. On the surface, there are small matchbook sized patches color the skin, some more yellow and other patches that are darker green. A particular indention looks like the fruit might have laid on a rock on the ground while it was growing. One end, where the flower might have once been, is the palest of yellow circles. On the opposite edge, the stubby vestige of a stem remains. This dried up nub is the brown and shriveled, slightly indented from the rest of the globe. Surrounding the stem is a dark circle of hunter green. Picking it up from the counter, the weight of this globular object seems significantly heavier than it looks, like a mini bowling ball. Despite the volume, it feels that the weight is not solid which is proven by the hollow sound the fruit makes when tapped, like patting a child on the head. The delineated lines feel like webbing and give the fruit a rough feel, but it’s not an uncomfortable roughness. The experience is somewhere in between a prickly cactus and a furry peach. At this point my mind starts to wander. Should I cut it open now or wait? Should I take a break? I look outside at the fat flakes of snow coming down outside and remind myself to get back to the task at hand. There is no resentment or anger. I look again at this object I have assigned myself to detail. When I am at a loss as to how to describe something in particular my mind wandering happens more frequently. I continue to focus my attention back to the cantaloupe as soon as I realize I’ve been distracted. I hold the cantaloupe to my eye. There is a faint line of brownish green that runs through the net-like lines covering the fruit. Some of the spaces between the lines look like parks because they’re darker green, while others ook grey like the concrete of a parking lot. My mind wanders again and I start to look to see if there are any recognizable maps in squiggles. I see a roundabout that reminds me of an intersection in England and another resembles the neighborhood where I grew up. The intertwining layers of the lines remind me of overgrown vines on a wall covering another layer of skin. The underneath layer has the vague look of green splotches, almost veins, like the streaks that run through blue cheese. I thump the cantaloupe again. It substitutes as a drum to make a tune. Apparently it has different thicknesses inside because the sound it makes when you knock it on the end is a higher pitch than when you rap it in the middle. One spot must be particularly thick because the sound is more substantial. Rubbing the skin makes the same sound as rubbing your hands together on a dry winter day. I try to make other noises using the produce, but intuition tells me that the only way to get another sound is to drop it on the floor. I’m not willing to do that. Before cutting into the orb, I notice a whiff of eau-de grocery store produce aisle a bit past its sell-by date. The smell isn’t strong and it’s only when I touch the fruit to my nose that I smell this. I then sniff each different area of the outer layer and notice that where the flower once might have been the smell is much stronger and sweeter. I scratch my finger nails on the rough skin, but it doesn’t affect the scent the way it would with an orange or lemon. It’s time to cut into the orb. Even as the knife makes the first gouge, clear pale orange juice escapes. I lick my fingers and find the sweet taste refreshing and different. Although the juice is the color of a Satsuma mandarin or a commercial worthy carrot, it tastes nothing like either. Slicing the melon in half, the cantaloupe now resembles a geode, with a plain outside and a brightly colored exotic inside. It’s filled with seeds and goo in the center. The slimy innards resemble the finest angel hair pasta, but instead of being the color of regular noodles, they are varying shades of orange, some even translucent. I carve out this gooey inside and the sweet smell now fills the air with its cloying tropical fermented flower mell. Friends who have been watching a movie in the other room come to see if they can have some, the smell having tempted them away from what they are doing. Ironic, because I’m no longer interested in the cantaloupe and ready to toss it into the composting bin. I send everyone away so that I can continue on. The meaty flesh isn’t too tough, nor is it too soft. I take a bite and let the flavor rush across my to ngue. The taste reminds me of summers on the farm eating the freshest fruits and vegetables straight out of the garden still warm from the sun. There’s a touch of salt in the taste, but the sweetness overpowers it. In spite the firm texture, the fruit feels soft and chewy and the volume of nectar is astounding. The tissue is softer and moister than the similar essence of a pumpkin and more compact than the inside of a fig. Squishing the orange flesh with my fingers, it all but dissolves into juice. What little remains is the finest of strings as soft as silk. I find a seed still attached, that I missed. The kernel is a flat oval with semi-pointed ends. Like a flat football with the air taken away, but miniscule in comparison. It’s almost as though the surrounding fibrous slime is dissolving in the air as I watch. I break open a seed using my fingernail. It’s soft and waxy, not much there. I take a wedge of the sliced cantaloupe and look at the difference between the skin and the edible meat. Like a rainbow, the color changes from thick rind on the outside to the orange moist, fleshy core on the inside. Like the color spectrum, the differences in shades are subtle, but quick. A yellow stratum is the most predominant, but considering the layer in question is less than an eighth of an inch thick, this golden subcutaneous layer isn’t very big. I make sure there isn’t anything I’ve overlooked and to check my notes for missing descriptive words. I’m shocked to look at the clock and see that more time has passed than I would have expected. I went several hours without checking my watch; something I can only do when I’m not bored. Learning to look beyond the obvious is something I already knew how to do. I enjoy observing people and watching facial expressions for meaning. What I’m not good at it is sitting still and holding my attention for long periods of time. Exercises like this help to train my brain to â€Å"settle own, focus, and catch up† as local monologuist Josh Kornbluth says. While I had to make a few self directed corrections along the way, I was fairly pleased that I was able to block out a significant amount of what was going on with family and friends in the other rooms and outdoors. Yes, there were a few times that my attention wandered, but I was back on track in seco nds rather than hours or days. The reward at the end was to finish a paper I was happy with and to share the small remainder of the cantaloupe with my friends while on a weekend away. Mission accomplished!

Study on the Determinants of Financial Derivatives

Study on the Determinants of Financial Derivatives Introduction Our research article is Determinants of Financial Derivatives. Before moving towards the definition of main purpose and significance of our research article, we want to give a brief introduction of the core keywords of our research article which are Financial Derivatives. 1.1. Introduction A derivative is a financial instrument (or more simply, an agreement between two people/two parties) that has a value determined by the future price of something else. Derivatives can be thought of as bets on the price of something. Suppose you bet with your friend on the price of a bushel of corn. If the price in one year is less than $3 your friend pays you $1. If the price is more than $3 you pay your friend $1. Thus, the underlying in the agreement is the price of corn and the value of the agreement to you depends on that underlying.[1] So derivatives are the collective name used for a broad class of financial instruments that derive their value from other financial instruments (known as the underlying), events or conditions. Essentially, a derivative is a contract between two parties where the value of the contract is linked to the price of another financial instrument or by a specified event or condition. Derivatives are usually broadly categorized by the: Relationship between the underlying and the derivative (e.g. forward, option, swap) Type of underlying (e.g. equity derivatives, foreign exchange derivatives, interest rate derivatives, commodity derivatives or credit derivatives) Market in which they trade (e.g., exchange traded or over-the-counter) Pay-off profile (Some derivatives have non-linear payoff diagrams due to embedded optionality) Another arbitrary distinction is between: Vanilla derivatives (simple and more common) and Exotic derivatives (more complicated and specialized) There is no definitive rule for distinguishing one from the other, so the distinction is mostly a matter of custom. Derivatives are used by investors to Provide leverage or gearing, such that a small movement in the underlying value can cause a large difference in the value of the derivative Speculate and to make a profit if the value of the underlying asset moves the way they expect (e.g. moves in a given direction, stays in or out of a specified range, reaches a certain level) Hedge or mitigate risk in the underlying, by entering into a derivative contract whose value moves in the opposite direction to their underlying position and cancels part or all of it out Obtain exposure to underlying where it is not possible to trade in the underlying (e.g. weather derivatives) Create optionability where the value of the derivative is linked to a specific condition or event (e.g. the underlying reaching a specific price level) Uses Hedging Hedging is a technique that attempts to reduce risk. In this respect, derivatives can be considered a form of insurance. Derivatives allow risk about the price of the underlying asset to be transferred from one party to another. For example, a wheat farmer and a miller could sign a futures contract to exchange a specified amount of cash for a specified amount of wheat in the future. Both parties have reduced a future risk: for the wheat farmer, the uncertainty of the price, and for the miller, the availability of wheat. However, there is still the risk that no wheat will be available because of events unspecified by the contract, like the weather, or that one party will renege on the contract. Although a third party, called a clearing house, insures a futures contract, not all derivatives are insured against counter-party risk. From another perspective, the farmer and the miller both reduce a risk and acquire a risk when they sign the futures contract: The farmer reduces the risk that the price of wheat will fall below the price specified in the contract and acquires the risk that the price of wheat will rise above the price specified in the contract (thereby losing additional income that he could have earned). The miller, on the other hand, acquires the risk that the price of wheat will fall below the price specified in the contract (thereby paying more in the future than he otherwise would) and reduces the risk that the price of wheat will rise above the price specified in the contract. In this sense, one party is the insurer (risk taker) for one type of risk, and the counter-party is the insurer (risk taker) for another type of risk. Hedging also occurs when an individual or institution buys an asset (like a commodity, a bond that has coupon payments, a stock that pays dividends, and so on) and sells it using a futures contract. The individual or institution has access to the asset for a specified amount of time, and then can sell it in the future at a specified price according to the futures contract. Of course, this allows the individual or institution the benefit of holding the asset while reducing the risk that the future selling price will deviate unexpectedly from the markets current assessment of the future value of the asset. Derivatives traded at the Chicago Board of Trade. Derivatives serve a legitimate business purpose. For example, a corporation borrows a large sum of money at a specific interest rate.[2] The rate of interest on the loan resets every six months. The corporation is concerned that the rate of interest may be much higher in six months. The corporation could buy a forward rate agreement (FRA). A forward rate agreement is a contract to pay a fixed rate of interest six months after purchases on a notional sum of money.[3] If the interest rate after six months is above the contract rate the seller pays the difference to the corporation, or FRA buyer. If the rate is lower the corporation would pay the difference to the seller. The purchase of the FRA would serve to reduce the uncertainty concerning the rate increase and stabilize earnings. Speculation and arbitrage Derivatives can be used to acquire risk, rather than to insure or hedge against risk. Thus, some individuals and institutions will enter into a derivative contract to speculate on the value of the underlying asset, betting that the party seeking insurance will be wrong about the future value of the underlying asset. Speculators will want to be able to buy an asset in the future at a low price according to a derivative contract when the future market price is high, or to sell an asset in the future at a high price according to a derivative contract when the future market price is low. Individuals and institutions may also look for arbitrage opportunities, as when the current buying price of an asset falls below the price specified in a futures contract to sell the asset. Speculative trading in derivatives gained a great deal of notoriety in 1995 when Nick Leeson, a trader at Barings Bank, made poor and unauthorized investments in futures contracts. Through a combination of poor judgment, lack of oversight by the banks management and by regulators, and unfortunate events like the Kobe earthquake, Leeson incurred a $1.3 billion loss that bankrupted the centuries-old institution. Types of derivatives OTC and Exchange-traded Broadly speaking there are two distinct groups of derivative contracts, which are distinguished by the way they are traded in the market: Over-the-counter (OTC) derivatives are contracts that are traded (and privately negotiated) directly between two parties, without going through an exchange or other intermediary. Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way. The OTC derivative market is the largest market for derivatives, and is largely unregulated with respect to disclosure of information between the parties, since the OTC market is made up of banks and other highly sophisticated parties, such as hedge funds. Reporting of OTC amounts are difficult because trades can occur in private, without activity being visible on any exchange. According to the Bank for International Settlements, the total outstanding notional amount is $684 trillion (as of June 2008).[5] Of this total notional amount, 67% are interest rate contracts, 8% are credit default swaps (CDS), 9% are foreign exchange contracts, 2% are commodity contracts, 1% are equity contracts, and 12% are oth er. Because OTC derivatives are not traded on an exchange, there is no central counter-party. Therefore, they are subject to counter-party risk, like an ordinary contract, since each counter-party relies on the other to perform. Exchange-traded derivative contracts (ETD) are those derivatives instruments that are traded via specialized derivatives exchanges or other exchanges. A derivatives exchange is a market where individuals trade standardized contracts that have been defined by the exchange. A derivatives exchange acts as an intermediary to all related transactions, and takes Initial margin from both sides of the trade to act as a guarantee. The worlds largest derivatives exchanges (by number of transactions) are the Korea Exchange (which lists KOSPI Index Futures Options), Eurex (which lists a wide range of European products such as interest rate index products), and CME Group (made up of the 2007 merger of the Chicago Mercantile Exchange and the Chicago Board of Trade and the 2008 acquisition of the New York Mercantile Exchange). According to BIS, the Scombined turnover in the worlds derivatives exchanges totaled USD 344 trillion during Q4 2005. Some types of derivative instruments also may trade on traditional exchanges. For instance, hybrid instruments such as convertible bonds and/or convertible preferred may be listed on stock or bond exchanges. Also, warrants (or rights) may be listed on equity exchanges. Performance Rights, Cash xPRTs and various other instruments that essentially consist of a complex set of options bundled into a simple package are routinely listed on equity exchanges. Like other derivatives, these publicly traded derivatives provide investors access to risk/reward and volatility characteristics that, while related to an underlying commodity, nonetheless are distinctive. Common derivative contract types There are three major classes of derivatives: Futures/Forwards are contracts to buy or sell an asset on or before a future date at a price specified today? A futures contract differs from a forward contract in that the futures contract is a standardized contract written by a clearing house that operates an exchange where the contract can be bought and sold, while a forward contract is a non-standardized contract written by the parties themselves. Options are contracts that give the owner the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an asset. The price at which the sale takes place is known as the strike price, and is specified at the time the parties enter into the option. The option contract also specifies a maturity date. In the case of a European option, the owner has the right to require the sale to take place on (but not before) the maturity date; in the case of an American option, the owner can require the sale to take place at any time up to the maturity date. If the owner of the contract exercises this right, the counter-party has the obligation to carry out the transaction. Swaps are contracts to exchange cash (flows) on or before a specified future date based on the underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other assets. More complex derivatives can be created by combining the elements of these basic types. For example, the holder of a swaption has the right, but not the obligation, to enter into a swap on or before a specified future date. 1.2. PROBLEM STATEMENT: The problem statement on which we are doing research is as follows: What are the Determinants that define the activities towards Financial Derivatives? 1.3. OBJECTIVE OF THE STUDY: The main objective of our research is that which one of this independent variable like Risk, Yield Spread etc affects the financial derivatives the most or which one of the following indicates the most involvement in financial derivative. 1.4. Limitations:- There are few limitations which are as under. The data which we are considering is only from Islamabad stock exchange. Out of numerous variables we have selected only four. 1.5. Plan:- Rest of the thesis is organized as fallows. In chapter II we have produced a literature review. In chapter III Data is collected and statistical tools are applied. In chapter IV the results are interpreted. In chapter V conclusions and recommendations are given. Chapter II Literature Review Credit derivatives and risk aversion in this article author discuss the valuation of credit derivatives in extreme regimes such as when the time-to-maturity is short, or when payoff is contingent upon a large number of defaults, as with senior trenches of collateralized debt obligations. In these cases, risk aversion may play an important role, especially when there is little liquidity, and utility-indifference valuation may apply. Specifically, we analyze how short-term yield spreads from default able bonds in a structural model may be raised due to investor risk aversion. Using derivatives to manage risk this Refers to some well-publicized failures with derivatives, and seeks explanations for these problems; points to the role of the US treasury department as a profit centre, and presents a three-phase risk management framework for the successful use of derivatives risk identification/determination of the desired risk profile, implementation (to include factors such as the role of the board in the co-ordination of resources), evaluation/feedback. Shows how three celebrated cases of derivatives fiasco failed in respect of various aspects of this framework (these being Gibson Greetings, Procter Gamble and Metallgesellschaft AG). Petersen and Thiagarajan (2000) Estimates and compares the risk exposure of two firms operating in the gold mining industry. Suggests that the difference between the two firms lies in the risks that they choose to manage and the tools that they use. It presents an extensive analysis of the building blocks underlying the effects of risk management including operating cash flows, taxable income, investment opportunities and equity risk exposure. Shows how one uses adjustments to the quality of ore extracted as a partial hedge against gold price fluctuations, whilst the other uses derivatives to reduce the fluctuations in its revenues and therefore operating cash flows. Comments on the incentives for risk reduction and their effect on the management of gold price risk, noting that compensation strategies can lead to differing managerial objectives. Argues that the use of alternative forms of risk management is a conscious choice by firms and that the use of derivatives should be seen ag ainst the alternative tools available. Alister and Mansfield (1980) states that Derivatives have been an expanding and controversial feature of the financial markets since the late 1980s. They are used by a wide range of manufacturers and investors to manage risk. This paper analyses the role and potential of financial derivatives investment property portfolio management. The limitations and problems of direct investment in commercial property are briefly discussed and the main principles and types of derivatives are analysed and explained. The potential of financial derivatives to mitigate many of the problems associated with direct property investment is examined. The management of foreign currency risk: derivatives use and the natural hedge of geographic diversification Summer 1999 Notes the lack of evidence of large companies use of foreign exchange derivatives (FXDs), related to the geographical diversification natural hedge, an alternative method of avoiding risk. Builds a model of company behavior, sampling 309 US companies by industry, including FXD, foreign sales, a sales-based Herfindahl index, and market value. Finds a significant and positive relationship between the use of FXDs and the level of foreign exchange exposure; and a negative relationship between geographic dispersion and FXD. Shows that there are economies of scale in FXD use, and that the findings are robust to industry membership and geographic diversification. Emory presents evidence consistent with managers using derivatives and discretionary accruals as partial substitutes for smoothing earnings. Using 1994-1996 data for a sample of Fortune5 00 firms, I estimate a set of simultaneous equations that captures managers incentives to maintain a desired level of earnings volatility through hedging and accrual management. These incentives include increasing managerial compensation and wealth, reducing corporate income taxes and debt financing costs, avoiding underinvestment and earnings surprises, and mitigating volatility caused by low diversification. After controlling for such incentives, I find a significant negative association between derivatives notional amounts and proxies for the magnitude of discretionary accruals. Gay and Nam analyzed the underinvestment problem as a determinant of corporate hedging policy. We find evidence of a positive relation between a firms derivatives use and its growth opportunities, as proxied by several alternative measures. For firms with enhanced investment opportunities, derivatives use is greater when they also have relatively low cash stocks. Firms whose investment expenditures are positively correlated with internal cash flows tend to have smaller derivatives positions, which suggest potential natural hedges. Our findings support the argument that firms derivatives use may partly be driven by the need to avoid potential underinvestment problems. Patil (2008) states that the Reserve Bank of Indias Working Group on Rupee Derivatives has, interalia, recommended introduction of exchange traded derivatives to supplement OTC derivatives. But before we introduce exchange traded interest rates futures it is necessary to be fully aware of the ground realities. The basic issue is the healthy development of the market and abolition of the regulations that artificially protect the interests of a set of intermediaries whose role and functions have got significantly reduced with massive induction of IT applications into the capital and financial markets. Regulatory reforms should facilitate continuous reduction in transaction costs and up gradation of transactional efficiency across different segments of the market. A regulatory regime that ends up protecting the role of certain players merely because they played a useful role in the past in the development of some segments of the markets would be doing a disservice Hentschel and Kothari makes Public discussion about corporate use of derivatives focuses on whether firms use derivatives to reduce or increase firm risk. In contrast, empirical academic studies of corporate derivatives use take it for granted that firms hedge with derivatives. Using data from financial statements of 425 large U.S. corporations, we investigate whether firms systematically reduce or increase their riskiness with derivatives. We find that many firms manage their exposures with large derivatives positions. Nonetheless, compared to firms that do not use financial derivatives, firms that use derivatives display few, if any, measurable differences in risk that are associated with the use of derivatives. Brinson, Randolph Hood and Beebower (1986), states that in order to delineate investment responsibility and measure performance contribution, pension plan sponsors and investment managers need a clear and relevant method of attributing returns to those activities that compose the investment management process- investment policy, market timing and security selection. The authors provide a simple framework based on a passive, benchmark portfolio representing the plans long-term asset classes, weighted by their long-term allocations. Returns on this investment policy portfolio are compared with the actual returns resulting from the combination of investment policy plus market timing (over or underweighting asset classes relative to the plan benchmark) and security selection (active selection within an asset class). Data from 91 large U.S. pension plans over the 1974-83 period indicate that investment policy dominates investment strategy (market timing and security selection), explaining on average 93.6 per cent of the variation in total plan return. The actual mean average total return on the portfolio over the period was 9.01 per cent, versus 10.11 per cent for the benchmark portfolio. Active management cost the average plan 1.10 per cent per year, although its effects on individual plans varied greatly, adding as much as 3.69 per cent per year. Although investment strategy can result in significant returns, these are dwarfed by the return contribution from investment policy-the selection of asset classes and their normal weights. Markides (1995) concluded that there is increasing evidence (especially in the business press) that over the past decade, many U.S. corporations have restructured. For example, Lewis (1990: 43) estimates that nearly half of large U.S. corporations have restructured in the 1980s. Similarly, a special report on corporate restructuring published in the Wall Street Journal (1985: 1) found that out of the 850 of North Americas largest corporations, 398 (47%) of them restructured. A major problem with many of these studies on restructuring is that they do not define exactly what is meant by restructuring. Corporate actions such as share repurchasing, refocusing, alliances, consolidations and leveraged recapitalizations can all fall under the general term restructuring; therefore, a researcher needs to look at these forms of restructuring separately if any generalizations are to be made. In this study, we focus on one specific type of restructuring, namely corporate refocusing. By this we m ean the voluntary or involuntary reduction in the diversification of U.S. firms-usually, but not necessarily, achieved through major divestitures-what Bhagat, Shleifer, and Vishny (1990) call the return to corporate specialization. We focus on this type of restructuring because according to the existing evidence it is by far the most common and most beneficial form of restructuring undertaken by firms (e.g., Lewis, 1990; Wall Street Journal, 1985). According to existing evidence, a significant proportion of major diversified firms in the U.S. have reduced their diversification in the 1980s by refocusing on their core businesses (for statistical evidence, see Lichtenberg, 1990; Mark- ides, 1990; Porter, 1987; Williams, Paez and Sanders, 1988). For example, Markides (1993) reported that at least 20 percent and as many as 50 percent of the Fortune 500 firms refocused in the period 1981-87. He also found that refocusing is a 1980s phenomenon: using the Rumelt (1974) strategic categories of diversification, he reported that whereas only 1 percent of the Fortune 500 firms were refocusing in the 1960s, more than 20 percent were doing so in the 1980s. Other studies have shown that these refocusing firms are characteriz ed by high diversification and poor profitability relative to their industry counter- parts, and that refocusing is associated ex-ante with improved stockmarket value (e.g., Comment and Jarrell, 1991; Markides, 1992a,b; Montgom- ery and Wilson, 1986). Yet, as Shleifer and Vishny (1991: 54) argue, there is very little ex- post evidence that refocusing is associated with profitability improvements. Doukas and Lang In this study they present evidence that geographic diversification increases shareholder value and improves long-term performance when firms engage in core-related foreign direct (greenfield) investments. Non-core-related foreign investments are found to be associated with both short-term and long-term losses. Our results suggest that the synergy gains stemming from the internalization of markets are rooted in the core business of the firm. Geographic diversification outside the core business of the firm bears strongly against the prediction of the internalization hypothesis. The analysis also shows that, regardless of the industrial structure of the firm (that is, number of segments), foreign direct investments outside the core business of the firm are associated with a loss in shareholder value, whereas core-related (focused) foreign direct investments are found to be value increasing. Unrelated international diversification, however, is less harmful for diversifie d (multi- segment) than specialized (single-segment) firms. The larger gains to diversified firms suggest that operational and internal capital market efficiency gains are considerably greater in multi-segment than single-segment firms when both expand their core business overseas. James and Finkelshtain (1965) said the effects of multivariate risk are examined in a model of portfolio choice. The conditions under which portfolio choices are separable from consumption decisions are derived. Unless the appropriate restrictions hold on investors preferences or on the probability distribution of risks, the optimal portfolio is affected by other risks. This requires generalizing the usual measures of risk aversion. With one risky asset, matrix measures of risk aversion are used to generalize the results of Arrow (1965) and Pratt (1964) concerning the effects of risk aversion and wealth on the optimal portfolio. With two risky assets, the choices made by two investors coincide if and only if their generalized risk-aversion measures are identical. Rosss notion of stronger risk aversion is then used to characterize the effect of risk aversion on the level of investment in the riskier asset. Browne (2000) tells us that Active portfolio management is concerned with objectives related to the out performance of the return of a target benchmark portfolio. In this paper, we consider a dynamic active portfolio management problem where the objective is related to the tradeoff between the achievement of performance goals and the risk of a shortfall. Specifically, we consider an objective that relates the probability of achieving a given performance objective to the time it takes to achieve the objective. This allows a new direct quantitative analysis of the risk/return tradeoff, with risk defined directly in terms of probability of shortfall relative to the bench- mark, and return defined in terms of the expected time to reach investment goals relative to the benchmark. The resulting optimal policy is a state-dependent policy that provides new insights. As a special case, our analysis includes the case where the investor wants to minimize the expected time until a given performa nce goal is reached subject to a constraint on the shortfall probability. On the basis of this literature review we have developed the following Theoretical framework. 2.2. THEORATICAL FRAMEWORK: The importance of: Risk_ Response Index Yield Spread_ Response Index Liquidity_ Response Index Geographical Diversification_ Response Index Financial Derivatives (Swap, Option, Future and Forward Contracts) For 2.3 Hypothesis: H0:  µ H1:  µ à ¢Ã¢â‚¬ °Ã‚ ¥ 3.5 If the mean respondent is 3.5 or above it means the factor is important because at the rating scale 1 is for strongly disagree and 5 is for strongly agree. Chapter III Data and Methodology 3.1. NATURE OF STUDY: This study was descriptive in nature and will describe the Risk, Yield spread, Liquidity, Geographical diversification in the term of determinants of Financial Derivatives. The study setting for this study is non-contrived in nature i.e. it was conducted in the normal work place and routine working conditions. 3.2. PRIMARY DATA COLLECTION: Data for this study was collected from the participants of the Islamabad Stock Exchange. These people were working or participating in the stock exchange where the people had knowledge about risk, yield spread, liquidity and geographical diversification. That is why; it was easier for us to conduct our research in Islamabad Stock Exchange to conclude our results that which one of the following factors like risk, yield spread, liquidity, and geographical diversification shows the maximum involvement in the determining of financial derivatives. 3.3. RESPONDENTS OF RESEARCH: Data were collected from 100 participants. Participants were asked to fill the questionnaire which was helpful to lead us towards the result and conclusion of our research. All participants were asked to write down on the questionnaire their gender and age. 3.4. RESEARCH INSTRUMENT: Questionnaire is an efficient data collection mechanism where we know exactly what is required and measures the variables of interest. Questionnaires were made with enough number of questions covering all the related areas. This helped us to conclude our result by measuring the affect of determinants on financial derivatives. Questionnaires were personally handed over to the participants by us. All surveys were completed during working hours. Respondents were guaranteed that their data would remain confidential. Respondents were instructed to indicate their opinions about the questions to rate on a Likert Scale. This scale was designed to examine how strongly respondents agree or disagree with statements on a 5-points scale with the following anchors; 3.5. DATA INTERPRETATION: Statistical tools were used for the interpretation of data. These tools included t-test, correlation and descriptive statistics to find the involvement of independent variables in determining the financial derivatives. In other words, statistical tool of correlation were applied to interpret the relationship between the indexes of independent variables and t-test was used to determine the involvement of independent variable in determining the financial derivatives. The total data was divided into two halves: Participants Below median age (39 and below) Participants above median age (above 39) We have applied sample mean test at  µ=3.5. Chapter IV Findings R1: Risky nature of instrument is not a matter of concern for me. R2: Since high risk means high return therefore I will shift to the risky securities. R3: Would you shift from one stock to another to reduce risk at the cost of return? R4: It is feasible to add a percentage of low risk securities to a portfolio. L1: Is a highly liquid security attractive to an investor L2: The stocks in which you trade are relatively liquid which attracts you towards them. L3: Liquidity reflects the performance of a firm therefore for diversification it is important Y1: Yield spread helps the investor to determine which security would be the better investment. Y2: Change in demand supply of the securities effect the yield spread change therefore I shift towards low yield spread. Y3: The market is forecasting a greater risk of default which implies a slowing economy (narrowing of spreads between bonds of different risk ratings) G1: Geographical diversification increases the potential return on your investment / portfolio. G2: Geographical diversification allows combining a diversification across domestic and foreign securities. In case of G1, H0 is accepted it implies people do not conside