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Research Proposal 13-02-2011

Research Proposal 13-02-2011

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Published by: enchunuru on Jul 07, 2012
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05/13/2014

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INTRODUCTION
Inventory management theory was first developed in 1915 on scientific line when severalauthors acting independently developed an economic lot size equation which minimised thesum of carrying and holding costs for cases where demand was known and constant.Earlier to the inventory management theory one statistical approach was developed byR.H.Wilson to determine the re-order points and it was presented and published in HarvardBusiness Review (HBR). But the early models of inventory management and control had littleapplication in those days. From the period of post-world war-II operations research techniqueswere immensely required due to the advances in technology and hence, an extensivedevelopment of inventory theory and its application was introduced to solve the problems from post-world war-II. In 1950’s the electronic advancement (computers) were taken place insolving the inventory control problems.In India inventory control techniques were developed in 1960’s. But, from 1970’s only newmodels have been developed in our country. Technological innovations were taken place inlarge-scale organisations which are being used for inventory control.The increased scope of industrialisation in India and globalisation can be identified the number of management problems, inventory as one of the important management problem.
Meaning and Definition:
Inventory refers to a stock of goods. The material held in stock point indicates volume andvalue which can be ascertained by enumeration is called as physical inventory. Inventoriesenable the organisations to perform effectively the functions of buying, manufacturing andselling at different rates and at different time. Amount of inventory to be kept at a certain timedepends upon the nature and size of the organisation, rate of turnover, terms on which goodsare sold and purchased, and time required to procurement.
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1.
Fred Hansman defined the inventory as “an idle resource of any kind, provided thatsuch resources has economic value”.2.Inventory in accounting sense may be defined as “the goods and services requiredor procured by an enterprise for the purpose of subsequent sales but not yettransferred in the hands of the customer”. – gopalakrishnan.p & M.S.SandilyaThe term inventory management involves a trade-off between cost and benefits of inventory. Ina systematic approach to inventory management, a financial manager has to identify followingimportant points.i.The items that are more important than others
ii.
The size of each order for different items.The objectives of inventory management are to determine the optimum level of inventory, andto maximise the wealth of shareholders and to minimise the cost of holding inventories.There are some risks involved in the investment on inventories. The market value of inventorymay fall below the price which was paid on the previous purchase. The market value below theearlier price causes inventory losses. To avoid the losses arising due to the change in the pricesof inventory there must be proper inventory management for all the large scale organisations
NEED AND IMPORTANCE OF RESEARCH PROBLEM:
Transport, communication and energy play an important role in the economic development of anation. Shortage of any of these basic infrastructural ingredients of development willautomatically slow down the process of progress. The modern economy cannot sustain withoutan efficient system of transport. Broadly the transport can be of two categories viz: Goods and passenger transport, passenger transport plays a vital role in the prosperity of society.The passenger bus transport has the special nature of easy operation, economical, safe,convenient, flexible and reliable service. These characteristics therefore lead to the importanceof passenger bus transport in India, particularly in view of the complexity of demographicalfeatures of the country.
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In any transport undertaking, inventory management constitute important department of theorganisation. The efficiency of the transport undertaking can be judged on the basis of rendering services to the passengers. Vehicles (buses) must be repaired and maintained in-time; otherwise it cannot serve the public. For proper maintenance of buses separate stores andspares, and purchase departments and workshops at central, regional and divisional level are to be organised in all the transport undertakings.Inventory management is a comprehensive approach to plan, purchase, and store and distributethe materials. To manage inventory at all levels transport undertakings normally employsvarious quantitative techniques in planning and control of its inventory. Larger the materialinventories causes the requirement of huge capital. For this purpose inventory control forms theinventory management function which involves in striking the balance between carrying largeinventory to allow flexibility and costs associated with carrying such large inventory.Finally, the important purpose of the current research study is to attempt to study the innovativeinventory management practices of Andhra Pradesh State Road Transport Corporation.
OBJECTIVES OF THE STUDY:
1.To study the current inventory management practices of APSRTC.
2.
To examine the uncertainties involved in purchasing and proper utilisation of inventory at all levels.3.To study the present inventory control system and procedure in APSRTC4.To study the current practices for analysing the stores and spares information withits operational difficulties.
5.
To evolve the technique of Economic Order Quantity (EOQ) which minimises thecost involved in ordering and carrying the inventory of central stores of AndhraPradesh State Road Transport Corporation.6.To suggest optimal statistical forecasting method for calculation of Safety stock,Re-order level, Maximum level and Danger level of central stores of AndhraPradesh State Road Transport Corporation.
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