Project Mba
STUDY OF INVENTORY MANAGEMENT
By S.BALAJI
A PROJECT REPORT Submitted to the FACULTY OF MANAGEMENT STUDIES
In partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
IN
(FINANCE / MARKETING)
(Emblem)
ANNA UNIVERSITY CHENNAI 600 025 MAY, 2004
ii
BONAFIDE CERTIFICATE Certified that this project report titled “A STUDY ON INVENTORY
MANAGEMENT” is a bonafide work of Mr. S.BALAJI who carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this on any other candidate. ABSTRACT In any organization the inventory of materials plays vital role in working capital management. A small saving in the inventory will reflect a vital margin in profit of the organization. Inventory control means the availability of right materials of right quantities coordinated with lead time. Each and every component of inventory is important and managing the inventories to keep in an optimum level is a must. Being an auto ancillary industry IPPL is facing a stiff competition in the market. Since inventory is the major part of their cost of production there is a need for inventory control by way of reducing cost and optimum utilization of materials. Though the company is having certain policies regarding this, still it requires through study of their policy and systems to some extent to understand the inventory management. v The import components are contributing nearly 25% of the total production
cost. The present order quantity is very high with some items which cause the problem of over stocking. Which leads to additional carrying cost v Holding of stock is very high level v Working capital blocked in the inventory for 133 days which is not a
healthy sign for an organization. Due to confidentiality of the data and year ending
By S.BALAJI
A PROJECT REPORT Submitted to the FACULTY OF MANAGEMENT STUDIES
In partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
IN
(FINANCE / MARKETING)
(Emblem)
ANNA UNIVERSITY CHENNAI 600 025 MAY, 2004
ii
BONAFIDE CERTIFICATE Certified that this project report titled “A STUDY ON INVENTORY
MANAGEMENT” is a bonafide work of Mr. S.BALAJI who carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this on any other candidate. ABSTRACT In any organization the inventory of materials plays vital role in working capital management. A small saving in the inventory will reflect a vital margin in profit of the organization. Inventory control means the availability of right materials of right quantities coordinated with lead time. Each and every component of inventory is important and managing the inventories to keep in an optimum level is a must. Being an auto ancillary industry IPPL is facing a stiff competition in the market. Since inventory is the major part of their cost of production there is a need for inventory control by way of reducing cost and optimum utilization of materials. Though the company is having certain policies regarding this, still it requires through study of their policy and systems to some extent to understand the inventory management. v The import components are contributing nearly 25% of the total production
cost. The present order quantity is very high with some items which cause the problem of over stocking. Which leads to additional carrying cost v Holding of stock is very high level v Working capital blocked in the inventory for 133 days which is not a
healthy sign for an organization. Due to confidentiality of the data and year ending