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Inventory Management of Steel Industry:
BSRM, RSRM, & Islam Steel Mills Ltd.

Course Title: Project Operations and Management
Course Code: BA-3215

Submitted By:
INVADERS
Sk. Md. Rezowanur Rahman090311
Md. Faisal Rahman090336
Shara Binte Hamid090346
Jafrin Khan090355

Submitted To:
Md. Reaz Uddin
Assistant Professor

KHULNA UNIVERSITY
Business Administration Discipline
Management & Business Administration School
3rd year, 2nd term

March 06, 2012

Executive Summary
Inventories play a major role in the economy and businesses. From the firm’s view point, inventories represent an investment in capital; capital is required to store materials at any stage of completion. Thus the proper balance must be struck to maintain proper inventory level with the minimum financial impact to the organization. Inventory management, or inventory control, is an attempt to balance inventory needs and requirements with the need to minimize costs resulting from obtaining and holding inventory. Inventory may be kept “in-house,” meaning on the premises or nearby for immediate use; or it may be held in a distant warehouse or distribution center for future use. With the exception of firms utilizing just-in-time methods, more often than not, the term “inventory” implies a stored quantity of goods that exceeds what is needed for the firm to function at the current time

Table of Contents
Executive Summary2
Introduction5
Introduction6
rationale of study7
Objective7
Limitation of the studies7
Literature Review8
Definitions9
Why Keep Inventory?9
Inventory Management11
Major Types of Inventory12
Raw material12
Work-in-process12
Finished goods12
Operating Cycle13
Materials and Methods14
Methodology15
Research Methodology15
Research Questions15
Data collection method15
Primary source15
Secondary source15
Data Analysis16
Presentation of data16
Measurement of Variables17
Measurement of Variables18
Statistical Tests18
Hypothesis18
Company Profile of BSRM19
Company Profile of RSRM21
Company Profile of Islam Steel Mills Ltd.23
Demands of Billets26
Formulas27
Variables29
Hypothesis, ANOVA Calculations, and Conclusion33
Conclusion38
References40
Bibliography41

Introduction

Introduction
Every business needs adequate liquid resources for maintaining day-to-day cash flows. It requires sufficient cash for paying wages as well as salaries, as they fall due and to pay creditors if it is to keep its workforce, and ensure its supplies. Maintaining adequate working capital is not just important in the short-term. Sufficient liquidity must be maintained for ensuring the survival of the business in the long-term as well. Even a profitable business may fail if it does not have ample cash flow to meet its liabilities as they fall due. Therefore, when businesses make investment decisions they must not only consider the financial outlay involved with acquiring the new machine or the new building, etc., but must also take account of the additional current assets that are usually involved with any expansion of activity. Increased production tends to engender a need to hold additional stocks of raw materials and work in progress. Increased sales usually mean that the level of debtors will increase. A general increase in the firm’s scale of operations tends to imply a need for greater levels of cash. Then we should know why should the managers of a business pay special attention to working capital? Management must ensure that a business has sufficient working capital. Too little capital will result in cash flow problems highlighted by an organization exceeding its agreed overdraft limit, failing to pay the suppliers on time and being unable to claim discounts for prompt payment. In the long run, a business with insufficient working capital will be unable to meet its current obligations and will be forced to cease...
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