Introduction to Commerce D.Pharmacy 2nd Year 2023 (2022-2023) Previous Year's Question Papers/Notes Download - HK Technical PGIMS

Drug storage and business management


Introduction to Commerce
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INTRODUCTION TO COMMERCE
Economic human activities are having three elements namely profession, business and
employment.
Profession - it means all those activities in which a person uses his educational training and
qualification to earn his livelihood. Example- pharmacist, doctor, lawyer, chartered accountant etc.
Employment / job - It means all those activities that are performed in exchange of monetary value.
Example factory workers, officers, teachers, etc.
A basic difference between the two is a profession has many jobs, but a job is just a part of
profession.
BUSINESS- Business includes all those activities related to production and distribution of goods
and services with main aim of earning profit. Industry and Commerce are the two main aspects of
business.
INDUSTRY- Industry is part of business activity which is concerned with production, conversion,
extraction, processing, repairing, assembling, repacking, etc.
Based on above functions industry is classified as:
1. Extractive Industry- the industry in which wealth is obtained from natural resources. Example
fishing, agriculture, mining, etc.
2. Genetic Industry- the industry related with multiplication of living species. Example nursery
(plants), poultry.
3. Construction Industry – industry related with civil engineering
4. Manufacturing Industry -
A. Analytical Industry- the industry which deals in analyzing and sorting of new material from
parenteral material. Example crude oil refinery.
B. Synthetic Industry- the industry wherein synthesis of new material is done. Example
manufacturer of pharmaceuticals.
C. Processing Industry- the industry related with conversion of raw material into finished goods.
Example paper industry, textile industry.
D. Assembling Industry- the industry which puts various parts together to get a final product.
Example Electronics or automobile industry.
Classification based on size and investment
Light industry- these industries involve in small capital investment and have a short duration
production cycle. Example manufacture of collapsible tubes, closures, rubber, caps, tin
containers etc.
Heavy industry- these Industries involve a big capital investment and also involved longer
production cycle example iron and steel industry ship building etc.
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Classification based on capital used
Industries are also classified as micro, medium, small and large scale based on the capital
employed, number of workers, machinery and tools used, and value of their product. Generally an
industry is said to be small scale industry if capital involved is not more than rupees 10 lacs.
Official classification of industry
For the purpose of licensing the government has made standard classification of industries as given
under the first schedule of industries development and Regulation Act 1951. These industries are
classified according to the type of products produced by them example- drugs and
pharmaceuticals, Medical and surgical appliances, cosmetic and toilet preparations etc.
On the basis of goods produced
Consumer Good Industry- the industry in which such goods are produced which are directly
consumed by end-user. Example toothpaste
Producer Good Industry- the industry in which goods are produced which are purchased by some
other industry. Example parts of electronic devices
On the basis of raw material
Agro Based Industries example food processing textile
Mineral industry example steel industry
Forest Industry example crude drugs of pharmacognosy
COMMERCE
Commerce is concerned with distribution of goods and services.
The passage of goods and services from the place of manufacture to the hands of customer has to
face many hindrances or problems which are as follows:
1. Hindrance of person: it is the first problem faced by producer how to establish contact and
communication with ultimate user of product? Hindrance can be overcome buy proper trade which
is the nucleus of Commerce.
2. Hindrance of exchange: money is the most common and acceptable means of exchange. The
problem of currency in international trade is solved by Banking and Finance.
3. Hindrance of place: the producer must supply his goods and services to every part of Globe
since customers are always located far and near. For this purpose he must arrange transportation
facility using most convenient mode that is roads/ rail / air or water transport.
4. Hindrance of time: the goods are produced according to demand and are worthy only when
supplied at the time of need. Hence hindrance of time can be sorted using warehousing facility.
5. Hindrance of knowledge: a product will be purchased by customer only when he has
information about it. Such knowledge regarding availability and utility of product can be given
through advertisement.
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6. Hindrance of damage or spoilage: whenever goods are stocked or Stored or transported, there
is a chance of damage and pilferage. This loss can be reduced by using proper packaging.
7. Hindrance of risk or loss: business is always associated with risk or loss due to natural hazards
or theft. Such hindrance can be compensated using insurance facility.
TRADE
Trade means buying, selling, transfer or exchange of goods and services.
Classification of trade
1. Internal trade- it is also known as home trade. This trade takes place within the boundaries of
a country. The internal trade is of two typesa] Wholesale trade- it means buying of goods in large quantity and selling them in moderate
quantity. The goods are purchased from manufacturer and sold to the retailer for resell. A person
carrying wholesale trade is called wholesaler.
b] Retail trade- it means buying of goods in moderate quantity and selling in units. The goods are
purchased from wholesaler and sold to the customer for personal use. A person carrying retail trade
is called retailer.
2. International trade- it is also called as foreign trade. The trade which takes place outside the
boundaries of a country is called international trade. It is of three typesa] Import- when trader of one country purchases goods from trader of some other country, then it
is called import Trade.
b] Export- when trader of one country sales goods to the trader of another country, then it is called
as export.
c] Entrepot- it is a trade in which the goods imported from one country are exported to some other
country.
Advantages of foreign trade:
1. It generates foreign exchange.
2. It increases standard of manufacturing.
3. It increases government income.
4. It encourages industrialization.
5. It is beneficial for customer and may raise standard of living.
6. It develops International cooperation and sometimes leads to cultural development.
Disadvantages of foreign trade:
1. It may cause mutual dependence.
2. Goods are sold at higher rate.
3. Country made products may suffer foreign competition.
4. It may lead to colonization and adverse cultural effects.
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AIDS TO TRADE
Trade is the nucleus of commerce and the activities revolving around trade are called as aids to
trade.
1. Banking- banks are financial institution which deal in money and money’s worth. The services
are provided by means of loans or Finance or foreign exchange.
2. Transportation- it is the activity concerned with movement of goods from place of manufacture
to the hands of customer. Appropriate transport is used for such movement.
3. Warehousing- warehouses are storage places required for storage of finished products. Such
godowns must be used to maintain availability of goods and stability of prices at the time of need.
4. Advertising- advertising is the publicity of the merchandise. The object of advertising is to
create, sustain and increase demand of products. It improves knowledge regarding availability
procurement and utilization of product.
5. Packaging- packaging removes the risk of damage/ breakage/ spoilage of material. So goods
should be suitability packed, so that they are protected during transport and handling.
6. Insurance- insurance gives protection against risk due to loss of property in breakage, handling,
storage, transportation, natural hazards and theft.
MANAGEMENT
Management is defined as the process of conducting and coordinating various business activities.
Pharmaceutical management when principles and practice of Management is applied to the
Pharmaceutical field or industry or drug store then it is called as Pharmaceutical management.
Importance of Management
1. Management aims at securing maximum results in minimum effort.
2. It makes optimum utilization of resources.
3. It gives proficiency in handling business.
4. It leads to the stability and growth of organization.
5. It helps to maintain coordination and discipline within employees.
Types or classification of Management
1. Top level management- example owner, chairman, president, etc.
2. Middle level management- example HOD, project heads, coordinator etc.
3. Low level management- example supervisors, operators etc.
Functions of Management
1. Planning- achieving a goal always requires a strategy, such strategy is nothing but planning. It
is done to get desired results making full utilization of resources. It involves time management,
forecasting of future problems and its solutions.
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2. Organizing-it is implementation of plan to construct and execute work premises for this purpose
grouping of similar activities into well-defined departments is done
3. Staffing- it means assigning responsibilities to persons. Right person should be selected for
right responsibility. It involves processes like recruitment, selection, training, communication,
participation, appraisal, dismissal, etc.
4. Directing- management is art of getting things done. Managers have responsibility to teach,
guide, instruct and supervise their subordinates. Hence motivating towards common goal is
essential part of directing.
5. Controlling- controlling is the action taken to ensure that the performance of organization is
according to the plan. Controlling is necessary for proper discipline.
6. Coordinating- various objectives of a firm can only be completed when management and its
employees go ahead in hand. Coordination between staff and departments is necessary to carry out
inter-dependent activities. Coordination is established by informing each responsible person of
his/her share in common risks and goals.
ECONOMICS
The word Economics is derived from two Greek words ‘Oikos’ meaning household and ‘Nomos’
meaning management. Thus literally economic means management of household.
Economics is defined as social science that studies all economic activities related with production,
distribution and consumption of goods and services.
Some authors describe economics as a science concerned with employment of scarce resources of
society to produce wealth and satisfy human wants by increasing welfare and economic status.
Many books have divided economics into two partsMicroeconomics- it is the study of behavior of basic elements in economy including individual
agents like business, firm, buyers, sellers, markets -their interaction and result of their interaction.
Macroeconomics- it studies the entire economy like production, consumption, savings,
investment, and issues affecting it. It studies factors like unemployment, national income, rate of
growth, and price levels.
Branches of Economics
1. Descriptive economics- it describes the relevant facts related to some economic field like
agriculture, industry or foreign trade.
2. Economic theory- it explains functioning of an economic system. Example it explains how
prices of product and productive services are determined?
3. Applied economics- an economic analysis made with a view to ascertain causes and importance
of economic events
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Types of economic systems
1. Capitalist system- According to capitalist system there is freedom of every kind. The producers
are free to acquire any property and produce any product. The consumers are free to use any
product and in any amount to satisfy their wants. They are also at liberty to spend their income in
any way they like. According to this system the means of production and distribution are generally
in the hands of private owners who operate them to earn profits. Advantages: Better economic
development, increased production.
2. Social system- According to this system the large and basic industries are owned and controlled
by the government. Even the distribution is also controlled by the government. Advantages:
Reduction of inequality of income, Fair distribution of consumer goods.
3. Mixed economy- In mixed economy the activities of both the systems i.e. capitalist system and
social system are used. It means some economic activities are controlled by the government and
some economic activities are kept open for the public.
Limitations of Economics:
1. Economics cannot predict future of business.
2. It studies only money related aspects of human activities.
3. It lacks accuracy.
4. It cannot study activities like planning which are fictitious yet important in economy.