INTRODUCTION

Adequate inventories facilitates production activities and help to customers satisfaction by

providing good service.
The basic financial aim of an enterprise is maximization of its value. At the same time, a large
both theoretical and practical meaning has the research for determinants increasing the firm
value. Most financial literature contains information about numerous factors influencing the
value. Among those factors is the net or!ing capital and elements creating it, such as the level
of cash tied in accounts receivable, inventories and operational cash balances. A large ma"ority
of classic financial models proposals, relating to the optimum current assets management, ere
constructed ith net profit maximization in vie. #n order to ma!e these models more suitable
for firms, hich ant to maximize their value, some of them must be reconstructed. #n the
sphere of inventory management, the estimation of the influence of changes in a firm$s decisions
is a compromise beteen limiting ris! by having greater inventory and limiting the costs of
inventory. #t is the essential problem of the corporate financial management.
The basic financial inventory management aim is holding the inventory to a
minimally acceptable level in relation to its costs. %olding inventory means using capital to
finance inventory and lin!s ith inventory storage, insurance, transport, obsolescence, asting
and spoilage costs. %oever, maintaining a lo inventory level can, in turn, lead to other
problems ith regard to meeting supply demands. The inventory management policy decisions,
create the ne inventory level in a firm. #t has the influence on the firm value. #t is the result of
opportunity costs of money tied in ith inventory and generally of costs of inventory managing.
&oth the first and the second involve modification of future free cash flos, and in consequence
the firm value changes.
#nventory changes 'resulting from changes in inventory management policy of the
firm( affect the net or!ing capital level and the level of operating costs of inventory
management in a firm as ell. These operating costs are result of storage, insurance, transport,
obsolescence, asting and spoilage of inventory.
Maximization of the oners$ ealth is the basic financial goal in enterprise
management. #nventory management techniques must contribute to this goal. The modifications
to both the value)based *+, model and value)based -+, model may be seen in this article.
#nventory management decisions are complex. *xcess cash tied up in inventory burdens the
enterprise ith high costs of inventory service and opportunity costs. &y contrast, higher
inventory stoc! helps increase income from sales because customers have greater flexibility in
ma!ing purchasing decisions and the firm decrease ris! of unplanned brea! of production.
Although problems connected ith optimal economic order quantity and production order
quantity remain, e conclude that value)based modifications implied by these to models ill
help managers ma!e better value)creating decisions in inventory management.
INTRODUCTION OF INVENTORY
#nventories constitute the most significant part of current assets of a large ma"ority of companies in
#ndia. +n an average, inventories are approximately ./0 of current assets in public limited
companies in #ndia. &ecause of the large size of inventories maintained by firms, a considerable
amount of feuds is required to be committed to them. #t is therefore, absolutely imperative to m1nage
inventories efficiently and efficiently in order to avoid unnecessary investment. A firm neglecting
the management of inventories ill be "eopardizing its long run profitability and may fail ultimately.
#t is possible for fore a company to reduce its levels of inventories to a considerable degree e.g. 2/ to
3/ percent, ithout any adverse effect on production and sales, by using simple inventory planning
and control techniques. The reduction in excessive inventory carries a favourable impact on a
company$s profitability.
MEANING OF INVENTORY:-
#nventory is the physical sto!e of goods maintained in an organization for its smooth sunning. #n
accounting language it may mean stoc! of finished goods only. #n a manufacturing concern, it
may includes ra materials, or!)in)progress and stores etc. #n the form of materials or supplies
to be consumed in the production process or in the rendering of services.
#n brief, #nventory is unconsumed or unsold goods purchased or manufactured.
NATURE OF INVENTORIES :-
#nventories are stoc! of the product a company is manufacturing for sale and
components that ma!e up the product. The various forms in hich inventory exist in a
manufacturing company are ra materials, or! in progress and finished goods.
RAW MATERIALS:-
4a materials are those inputs that are converted into finished product though
the manufacturing process. 4a materials inventories are those units hich have been
purchased and stored for future productions.
WORK IN PROGRESS:-
These inventories are semi manufactured products. They represent products that need
more or! before they become finished products for sales.
PACKAGING MATERIAL:-
-ac!aging material includes those items hich are used for pac!aging of
perfumery product i.e. cap of the bottle, pump, coller,liver, box etc.
FINISHED GOODS:-
5inished goods inventories are those completely manufactured products hich
are ready for sale. 6toc! of ra materials and or! in progress facilitate production. 7hile stoc!
of finished goods is required for smooth mar!eting operation. Thus, inventories serve as a lin!
beteen the production and consumption of goods.
The levels of four !inds of inventories for a firm depend on the nature of its
business. A manufacturing firm ill have substantially high levels of all three !inds of
inventories, hile a retail or holesale firm ill have a very high and no ra material and or!
in progress inventories. 7ithin manufacturing firms, there ill be differences. 8arge heavy
engineering companies produce long production cycle products, therefore they carry large
inventories. +n the other hand, inventories of a consumer product company ill not be large,
because of short production cycle and fast turn over.
INVENTORY MANAGEMENT
As the cost of logistics increases the manufacturers are loo!ing to inventory management as a
ay to control costs. #nventory is a term used to describe unsold goods held for sale or ra
materials aaiting manufacture. These items may be on the shelves of a store, in the bac!room
or in a arehouse mile aay from the point of sale. #n the case of manufacturing, they are
typically !ept at the factory. Any goods needed to !eep things running beyond the next fe
hours are considered inventory.
9#nventory9 to many small business oners is one of the more visible and tangible aspects of
doing business. 4a materials, goods in process and finished goods all represent various forms
of inventory. *ach type represents money tied up until the inventory leaves the company as
purchased products. 8i!eise, merchandise stoc!s in a retail store contribute to profits only
hen their sale puts money into the cash register.
#n a literal sense, inventory refers to stoc!s of anything necessary to do business. These stoc!s
represent a large portion of the business investment and must be ell managed in order to
maximize profits. #n fact, many small businesses cannot absorb the types of losses arising from
poor inventory management. :nless inventories are controlled, they are unreliable, inefficient
and costly.
#nventory management simply means the methods you use to organize, store and replace
inventory, to !eep an adequate supply of goods hile minimizing costs. *ach location here
goods are !ept ill require different methods of inventory management. ;eeping an inventory,
or stoc! of goods, is a necessity in retail. <ustomers often prefer to physically touch hat they
are considering purchasing, so you must have items on hand. #n addition, most customers prefer
to have it no, rather than ait for something to be ordered from a distributor. *very minute that
is spent don because the supply of ra materials as interrupted costs the company unplanned
expenses
DEFINITIONS OF INVENTORY MANAGEMENT
2. -olicies, procedure and techniques employed in maintaining the optimum number or
amount of each inventory item.
3. 6ystems and processes that identify inventory requirements, set targets, provide
replenishment techniques and report actual and pro"ected inventory status.
=. %andles all functions related to the trac!ing and management of material. This ould
include the monitoring of material moved into and out of stoc!room locations and the
reconciling of the inventory balances. Also may include A&< analysis, lot trac!ing, cycle
counting support etc.
DEFINITIONS OF INVENTORY
2. #nventory> goods that businesses intend to sell to their customers or ra materials or in)
process items that ill be converted into salable goods
3. #nventory is the stoc! of idle resources hich has economic value and is maintained to
fulfill the present and future needs of an organization
=. #n Manufacturing +rganization > #nventory can be as ra materials, spare parts,
components and finished goods etc?
@. #n 6ervice +rganization > #nventory of any &an! can be broachers, forms, pamphlets
and also can be currency notes and coins. %ospitals can have inventory as syringes,
glucose bottles, medicines etc.
I IMPORTANCE MPORTANCE OF OF INVENTORY INVENTORY
#nventory represents one of the most important assets that most businesses possess, because the
turnover of inventory represents one of the primary sources of revenue generation and
subsequent earnings for the companyAs shareholdersBoners.
The ord 'invento!' can refer to both the total amount of goods and the act of counting them.
Many companies ta!e an inventory of their supplies on a regular basis in order to avoid running
out of popular items. +thers ta!e an inventory to insure the number of items ordered matches the
actual number of items counted physically. 6hortages or overages after an inventory can indicate
a problem ith theft or inaccurate accounting practices.
-ossessing a high amount of inventory for long periods of time is not usually good for
a business because of inventory storage, obsolescence and spoilage costs. %oever,
possessing too little inventory isnAt good either, because the business runs the ris! of losing out
on potential sales and potential mar!et share as ell.
O"#ECTIVES OF INVENTORY MANAGEMENT
The basic managerial ob"ectives of inventory control are to)foldC first, the avoidance
over)investment or under)investment in inventoriesC and second, to provide the right quantity
of standard ra material to the production department at the right time. #n brief, the
ob"ectives of inventory control may be summarized as follos>
A$ O%e&tin' O()e*tive+:
'2( En+,in' Av&i-&(i-it! o. M&tei&-+: There should be a continuous availability of all
types of ra materials in the factory so that the production may not be help up ants of any
material. A minimum quantity of each material should be held in store to permit production
to move on schedule.
'3( Avoi/&n*e o. A(no0&- W&+t&'e: There should be minimum possible astage of materials
hile these are being stored in the godons or used in the factory by the or!ers. 7astage
should be alloed up to a certain level !non as normal astage. To avoid any abnormal
astage, strict control over the inventory should be exercised. 8ea!age, theft, embezzlements
of ra material and spoilage of material due to rust, bust should be avoided.
'=( Po0otion o. M&n,.&*t,in' E..i*ien*!: #f the right type of ra material is available to the
manufacturing departments at the right time, their manufacturing efficiency is also increased.
Their motivation level rises and morale is improved.
'@( Avoi/&n*e o. O,t o. Sto*1 D&n'e: #nformation about availability of materials should be
made continuously available to the management so that they can do planning for
procurement of ra material. #t maintains the inventories at the optimum level !eeping in
vie the operational requirements. #t also avoids the out of stoc! danger.
'D( "ette Sevi*e to C,+to0e+: 6ufficient stoc! of finished goods must be maintained to
match reasonable demand of the customers for prompt execution of their orders.
234Hi'5-i'5tin' +-o6 0ovin' &n/ o(+o-ete ite0+ o. 0&tei&-+$
274 De+i'nin' %ooe o'&ni8&tion .o invento! 0&n&'e0ent: <lear cut accountability should
be fixed at various levels of organization.
"$ Fin&n*i&- O()e*tive+:
294 E*ono0! in %,*5&+in': A proper inventory control brings certain advantages and
economies in purchasing also. *very attempt has to ma!e to effect economy in purchasing
through quantity and ta!ing advantage to favorable mar!ets.
2:4 Re&+on&(-e Pi*e: 7hile purchasing materials, it is to be seen that right quality of material
is purchased at reasonably lo price. ,uality is not to be sacrificed at the cost of loer price.
The material purchased should be of the quality alone hich is needed.
'=(O%ti0,0 Inve+tin' &n/ E..i*ient U+e o. *&%it&-: The basic aim of inventory control from
the financial point of vie is the optimum level of investment in inventories. There should be
no excessive investment in stoc!, etc. #nvestment in inventories must not tie up funds that
could be used in other activities. The determination of maximum and minimum level of stoc!
attempt in this direction.
I IMPORTANCE MPORTANCE OF OF INVENTORY INVENTORY MANAGEMENT MANAGEMENT
9$ COUNTING CURRENT STOCK
All businesses must !no hat they have on hand and evaluate stoc! levels ith respect to
current and forecasted demands. Eou must !no hat you have in stoc! to ensure you can meet
the demands of customers and production and to be sure you are ordering enough stoc! in the
future. <ounting is also important because it is the only ay you ill !no if there is a problem
ith theft occurring at some point in the supply chain. 7hen you become aare of such
problems you can ta!e steps to eliminate them.
:$ CONTROLLING SUPPLY AND DEMAND
7henever possible, obtain a commitment from a customer for a purchase. #n this ay, you
ensure that the items you order ill not ta!e space in your inventory for long. 7hen this is not
possible, you may be able to share responsibility for the cost of carrying goods ith the
salesperson, to ensure that an order placed actually results in a sale. Eou can also !eep a list of
goods that can easily be sold to another party, should a customer cancel. 6uch goods can be
ordered ithout prior approval.
Approval procedures should be arranged around several factors. Eou should set minimum and
maximum quantities hich your buyers can order ithout prior approval. This ensures that you
are maximizing any volume discounts available through your vendors and preventing over)
ordering of stoc!. #t is also important to require pre)approval on goods ith a high carrying cost.
;$ KEEPING ACCURATE RECORDS
Any time items arrive at or leave a arehouse, accurate paperor! should be !ept, itemizing the
goods. 7hen inventory arrives, this is hen you ill find brea!age or loss on the goods you
ordered. #nventory leaving your arehouse must be counted to prevent loss beteen the
arehouse and the point of sale. *ven samples should be recorded, ma!ing the salesperson
responsible for the goods until they are returned to the storage facility. 4ecords should be
processed quic!ly, at least in the same day that the ithdraal of stoc! occurred.
<$ MANAGING EMPLOYEES
&uyers are the employees ho ma!e stoc! purchases for your company. 4eard systems should
be set in place that encourage high levels of customer service and return on investment for the
product lines the buyer manages.
7arehouse employees should be educated on the costs of improper inventory management. &e
sure they understand that the loer your profit margin, the more sales must be generated to ma!e
up for the lost goods. #ncentive programs can help employees !eep this in perspective. 7hen
they see a difference in their paychec!s from poor inventory management, they are more li!ely
to ta!e precautions to prevent shrin!age.
*ach stoc! item in your arehouse or bac! room should have its on procedures for
replenishing the supply. 5ind the best suppliers and storage location for each and record this
information in official procedures that can easily be accessed by your employees.
#nventory management should be a part of your overall strategic business plan. As the business
climate evolves toards a green economy, businesses are loo!ing for ays to leverage this trend
as part of the big picture. This can mean re)evaluating your supply chain and choosing
products that are environmentally sound. #t can also mean putting in place recycling procedures
for pac!aging or other materials. #n this ay, inventory management is more than a means to
control costsC it becomes a ay to promote your business.
SUCCESSFUL INVENTORY MANAGEMENT
6uccessful inventory management involves balancing the costs of inventory ith the benefits of
inventory. Many small business oners fail to appreciate fully the true costs of carrying
inventory, hich include not only direct costs of storage, insurance and taxes, but also the cost of
money tied up in inventory. This fine line beteen !eeping too much inventory and not enough
is not the managerAs only concern. +thers include>
Maintaining a ide assortment of stoc! )) but not spreading the rapidly moving ones too
thinC
#ncreasing inventory turnover )) but not sacrificing the service levelC
;eeping stoc! lo )) but not sacrificing service or performance.
+btaining loer prices by ma!ing volume purchases )) but not ending up ith slo)
moving inventoryC and
%aving an adequate inventory on hand )) but not getting caught ith obsolete items.
The degree of success in addressing these concerns is easier to gauge for some than for
others. 5or example, computing
A"OUT A"OUT I INVENTORY NVENTORY C CONTROL ONTROL
#nventory consists of the goods and materials that a retail business holds for sale or a
manufacturer !eeps in ra materials for production. #nventory control is a means for maintaining
the right level of supply and reducing loss to goods or materials before they become a finished
product or are sold to the consumer.
#nventory control is one of the greatest factors in a company$s success or failure. This part of the
supply chain has a great impact on the company$s ability to manufacture goods for sale or to
deliver customer satisfaction on orders of finished products. -roper inventory control ill
balance the customer$s need to secure products quic!ly ith the business need to control
arehousing costs. To manage inventory effectively, a business must have a firm understanding
of demand, and cost of inventory.
ADVANTAGES OF INVENTORY CONTROL:
'2( 4eduction in investment in inventory.
'3( -roper and efficient use of ra materials.
'=(Fo bottlenec! in production.
'@( #mprovement in production and sales.
'D( *fficient and optimum use of physical as ell as financial resources.
'.(+rdering cost can be reduced if a firm places a fe large orders in place of numerous small
orders.
'G(Maintenance of adequate inventories reduces the set)up cost associated ith each production
4un.
INVENTORY COSTS
There are three main types of cost in inventory. There are the costs to carry standard inventories
and safety stoc!. +rdering and setup costs come into play as ell. 5inally, there are shortfall
costs. A good inventory control system ill balance carrying costs against shortfall costs.
SAFETY STOCK
6afety stoc! is comprised of the goods needed to be !ept on hand to satisfy consumer demand.
&ecause demand is constantly in flux, optimizing the 6afety 6toc! levels is a challenge.
%oever, demand fluctuations do not holly dictate a company$s ability to !eep the right supply
on hand most of the time. <ompanies can use statistical calculations to determine probabilities in
demand.
ORDERING COSTS
+rdering costs have to do ith placing orders, receiving and stoage. Transportation and invoice
processing are also included. #nformation technology has proven itself useful in reducing these
costs in many industries. #f the business is in manufacturing, then to production setup costs are
considered instead.
THE COST OF SHORTFALLS
6toc! out or shortfall costs represent lost sales due to lac! of supply for consumers. 6ales
departments prefer these numbers be !ept lo so that an ample stoc! ill alays be !ept.
8ogistics managers prefer to err on the side of caution to reduce arehousing costs.
6hortfall costs are avoided by !eeping an ample safety stoc! on hand. This practice also
increases customer satisfaction. %oever, this must be balanced ith the cost to carry goods.
The best ay to manage stoc!out is to determine the acceptable level of customer service for the
business. +ne can then balance the need for high satisfaction ith the need to reduce inventory
costs. <ustomer satisfaction must alays be considered ahead of storage costs.
CYCLICAL COUNTING
Many companies prefer to count inventory on a cyclical basis to avoid the need for shutting
don operations hile stoc! is counted. This means that a particular section of the arehouse or
plant is counted physically at particular times, rather than counting all inventory at once. 7hile
this method may be less accurate than counting the hole, it is much more cost effective.
<yclical counting is preferred because it allos for operations to continue hile inventory is
ta!en. #f not for this practice, a business ould have to shut don hile counts ere ta!en, often
requiring the hire of a third party or use of overtime employees. <yclical counting usually
utilizes the A&< rule, but there are other variations of this method that can be used. The A&<
rule specifies that trac!ing 3/ percent of inventory ill control H/ percent of the cost to store the
goods. Therefore, businesses concentrate more on the top 3/ percent and counter other goods
less frequently. #tems are categorized based on three levels>
A C&te'o!: Top valued 3/ percent of goods, hether by economic or demand value
" C&te'o!: Midrange value items
C C&te'o!: <heaper items, rarely in demand
7arehouse staff can no schedule counting of inventories based on these categories. The A
category is counted on a regular basis hile & and < categories are counted only once a
month or once a quarter.
COMMON INVENTORY VALUATION METHODS
The methods a company uses to value the costs of inventory have a direct effect on the business
balance sheets, income statements and cash flos. Three methods are idely used to value such
costs. They are 5irst)#n, 5irst)+ut '5#5+(, 8ast)#n 5irst)+ut '8#5+( and Average <ost. #nventory
can be calculated based on the lesser of cost or mar!et value. #t can be applied to each item, each
category or on a total basis.
FIFO
5#5+ operates under the assumption that the first product that is put into inventory is also the
first sold. An example of this in action can be made hen e assume that a idget seller
acquires 3// units on Monday for 4s.2.// per unit. The next day, he spots a good deal and gets
D// more for 4s.GD per unit. 7hen valuing inventory under the 5#5+ method, the sale of =//
units on 7ednesday ould create a cost of goods sold of 4s.3GD. That is, 3// units at 4s2.//
each and 2// units at 4s.GD each. #n this ay, the first 3// units on the income statement ere
valued higher. The remaining @// idgets ould be valued at 4s.GD each on the balance sheet in
ending inventory.
LIFO
8#5+ assumes instead that the last unit to reach inventory is the first sold. :sing the same
example, the income statement and balance sheet ould instead sho a cost of goods sold of
4s.33D for the =// units sold. The ending inventory on the balance sheet ould be valued at
4s.=D/ in assets. 7hen this method is used on older inventories, the company$s balance sheet
can be greatly s!eed. <onsider the company that carries a large quantity of merchandise over a
period of 2/ years. This accounting method is no using 2/)year)old information to value its
assets.
WEIGHTED AVERAGE
Average <ost or!s out a eighted average for the cost of goods sold. #t ta!es an average cost
for all units available for sale during the accounting period and uses that as a basis for the cost of
goods sold. To site our example again, e ould calculate the cost of goods sold at I'3// x 4s.2(
J 'D// x 4s.GD(KBG//, or 4s.H32 each. The remaining @// units ould also be valued at this rate
on the balance sheet in ending inventory.
SPECIFIC IDENTIFICATION
A less commonly used, but important method to valuation is called specific identification. This
method is used for high)end items that are more easily trac!ed. #n some cases, this method can
be used for more common items, but less value is realized from this accounting method is such
cases. This is because poerful and detailed trac!ing softare is required to employ specific
identification on large numbers of goods.
INFLATIONARY EFFECTS ON VALUATION
Fo matter ho you loo! at it, you are still coming up ith G// idgets that cost you a total of
4s.DGD. This ould all be ell and good if the value of money remained static. %oever, mar!et
conditions change causing inflationary changes. 7hen this happens, your accounting method can
have a strong impact on ho healthy the business loo!s on income statements and balance
sheets. The affects cash flo hen businesses see! credit to pay for ongoing operations.
RISING PRICES
7hen prices are rising, using 5#5+ ill sho a greater value on the balance sheet, thereby
increasing tax liabilities but also improving credit scores and the ability to borro cash for
ongoing operations. +lder inventory is being used to determine the cost of goods sold and neer
inventory is being used to report assets. 8#5+ decreases the value on the income statement, but
can reduce the level of depreciation you are able to ta!e on assets. This is good for taxes but bad
for borroing. #ndustries most li!ely to adopt 8#5+ are department stores and food retailers. The
method is rarely used in defences.
NEED OF THE STUDY :-
#nventories are equivalent to cash and they ma!e up an important of the total cost.
#t is essential that inventory should be properly safeguarded and correctly accounted.
-roper control of inventory can ma!e a substantial contribution to the efficiency of a
bussiness. The success of a business concern largely depends upon efficient purchasing,
storage, consumption and accounting.
#nventory plays a vital role in study of inventory
management in bul! so # selected the 65- 6ons pvt.ltd.
STATEMENT OF PRO"LEM
The current system in the company under inventory management system hich doesn$t
specify the safety stoc! hich leads to scare for stoc!s at emergency.
The data are not properly updated at the end of each day$s or!. -roper data
security system is not provided. Annual maintenance contract is not provided.
4ecords are not maintained properly.
INDUSTRY PROFILE
The perfume industry in #ndia has come of age. 5rom a cottage industry it has become full)
fledged industry in the last to decades. The industry is groing at 23D percent annually. The
groth is attributed to an increase in disposable income.
7#T% L8+&A8#MAT#+F, liberalization and the #T revolution, living standards of the #ndians
have increased manifold. The demand for fashionable products has increased too. That is hyC
all global players are eyeing the subcontinent for business purpose. The illegal flo of lifestyle
products confirm the great demand for these products in #ndia. The affinity of the #ndians for
foreign goods also compels the indigenous manufacturers to tie)up ith international brands to
tap this segment of people.
The fragrances industry is big business, very big business. #t includes much more than retail sales
of fragrances. 4elated industries such as chemical companies supply the chemicals and the
fragrances are made from it. Most fragrances chemicals are synthesized from petroleum
products. 6ome companies formulate fragrances and flavours for other companies. Mar!eting
and advertising are used to create and promote the image of a fragrance.
The perfume industry, basically, as "ust a cottage industry some to decades ago. &ut no, due
to the huge demand among the people, it has blossomed into a full)fledged industry. 4ecently,
NAlcome -erfumes and <osmetics$, declared a plan to set up a 4s. 2// crore green field perfume
plant in and around Foida 6pecial *conomic Mone.
The domestic perfume mar!et is estimated to be orth 4s.=// crore and is groing at around
23D percent annually. The forecast is that it may gro at a rate of 3// percent in the coming
years, ith fast changing consumer behaviour and habits.
Leneva)base #nternational 5ragrance association has estimated that the global perfume mar!et is
orth O @/ billion, out of hich the mass mar!et has a G/ percent share. #n this, #ndia, <hina has
a considerable share.
7ith the groing demand for fragrance, the #ndian perfume companies are planning to change
their strategies by utilizing their resources mainly for the domestic mar!et and a meager portion
for exports. Apart from that these that these companies are also planning a multiple mar!eting
and distribution strategy to foray into a mar!et ith huge potential. The potential is immense as
the middle class is groing rapidly and disposable incomes are increasing.
2Hi+to! o. %e.,0e in/,+t!4
9$973=
2G./ ) #n 2G./, in 8ondon, Pames %enry <reed founded the %ouse of <reed. filtered, all by
hand in the highest tradition of the founder, Pames %enry <reed. <reed,cologne,designer
perfume, +livier <reed,-erfume,omens perfume,Pames %enry <reed,*mpress
*ugQRSTnie,discounted perfume,fragrance,<ountry,5rench perfume, perfume
industry,Pasmine,omens fragrances,shopping cart,originality,scents,Master -erfumer,the
5rench.
:$9>:9
2U32 ) <oco <hanel revolutionised the perfume industry by being the first to ma!e a mass
mar!et scent for every oman hen she launched <hanel FoD in 2U32. Eou can still spritz on
some of that vintage glamour today ith your on bottle, V@. for D/ml *WT at %ouse of 5raser
;$9>?7
5eb 3H, 2UHG ) 7hen perfumed gloves came into fashion in the 2.th century, the ton
gradually developed a separate perfume industry. ... The -rovencal Art and %istory Museum,
originally the 2Hth century home of 8ouise de Mirabeau, houses a fine collection of -rovencal
art. The 2Gth century 5ragonard.
<$9>??
Fov 3D, 2UHH ) #t is one of the 3// fragrance)related art ob"ects currently on vie in the
96cents of Time9 exhibit at the Museum of 6cience and #ndustry. The exhibit traces the history
and evolution of fragrance, connecting each phase ith the social, political and cultural trends of
the time. ...
@$ 9>>9
5eb 2G, 2UU2 ) 7ritten in collaboration ith -atricia &ayer, the boo! includes chapters on
4ene 8aliqueAs life, the development of the perfume industry, the history of the 8alique
company, and collecting tips. An appendix provides information on dating bottles by the
signature .
3$ 9>>>
Wec U, 2UUU ) of nely fragrances remain on the shelf after a year of launching,9 says
international director for Antonio -:#L perfumes, *ugeni Ma"o. cosmetics industry is a dynamic
one. itAs competitive and only companies that manage to create an product that differs from the
rest ill remain9
7$ :===
Pun 3/, 3/// ) %alifaxAs eight)year)old 9Fo 6cents9 policy is creating a big stin! in the
perfume industry. 4epresentatives from the American and <anadian perfume industry ere in
%alifax Tuesday to launch a counter attac! ad campaign as a ay of stopping the campaign from
spreading.
?$:==9
Fov 3=, 3//2 ) hitherto un!non insights into the use of perfumes through the ages and
learn that 9the history of perfume is often intertined ith the history ... &ut, it as the Arabs
ho lin!ed 9the past and present of the perfume industry9, says the portal. 9The process of
extracting oils from floers.
>$:==:
Apr 22, 3//3 ) 6cented oils and perfumes ere stored in elaborate and beautiful pots and
"ars throughout *gyptian history. ... 9Fever before has a series of exhibitions in *gypt and
abroad been devoted to a single industry, hich has resulted in such a ide range of artistic and
utilitarian ob"ects,9

9=$:==<
6ep 33, 3//@ ) #t as a scent that changed the American position in the perfume
industry. 7omen across this nation began to forsa!e all of the costly and ell) ... 6he offered her
vast store of perfume !noledge and its history ith great generosity.

COMPANY PROFILE
SOMA"HAI FULA"HAI PATEL 2SFP4
65- 6ons '#ndia( -vt. 8td established in 2UU3 is one of the leading manufacturers of
-erfumes and cosmetics in #ndia. 65- is located in 6pecial *conomic Mone, <hennai and as
5ormerly !non as 6. 5. -atel X 6ons '#ndia(.65- manufactures ide range of over 2///J
products under its on brands AAhsanA, ATaraA, ATaibahA, AMala!iA, A6alaamA, A6ilent YalleyA and
A<razy MomentsA. These products are idely available in more than 3/ countries. -roduct
range includes Attars 'concentrated perfume oils(, 6pray -erfumes '*WT, *W-, colognes and
body mists(, -erfume Lels, <reams and Lels for %air and body, <leansing lotion, 6hoer
Lels, 6hampoos, %air +il and Talcum poders.
65- is a #6+ U//2 certified company and is committed to manufacture quality products.
All products manufactured are s!in friendly and abide by all international standards laid
don by governing bodies li!e #54A, 5WA et al.
65- factory is spread over 2//,/// sq. ft area and
employees over @//J people. #t houses a ell equipped 4 X W laboratory and highly
qualified team to develop and manufacture high quality products. #t has a sound
infrastructure and modern facilities hich helps every activity and product of 65- fulfill its
brand promise and mantra Z
BRINGING FRANGRANCE TO LIFE
65- processes are managed and controlled through 6A-. The 65- team is s!illed, trained and
equipped to meet and deliver all customer expectations.
VISION AND MISSION
<ompany vision becomes a globally leading company in perfumes and cosmetics
industry.
<ompany mission, delivers the quality product ith protection of environment and protect
The health of customer.
65- aims at attaining, commanding mar!et position in supply of perfumery and
cosmetic product by meeting the needs and expectation of customers and enhancing their
satisfaction.
MANAGEMENT
65- as started by its present Managing Wirector Mr. Winesh 6. -atel an entrepreneur ith
dream and vision to ma!e 65- a globally leading <ompany in perfumes and <osmetics industry.
%e believes hard or!, commitment and passion combined can enrich every individualAs life.
R A D L&(
65- has ell equipped laboratory and research section, equipped to carry out in)house
development and testing required as per laid don standards. 8atest L<, refract meters, 6L
meter, -h meters, Yiscometers and other #nstruments are manned by trained personnel.65- is
committed to quality through its strict quality control methods. :sing latest technology every
component and product are tested as per international standards at all stages of manufacturing to
ensure high quality perfumes and cosmetics.
"LENDING
65- also blends some of its
+n fragrances. #t has H nos
of blending tan!s of capacity
2 ton ith cooling lines.
#t has WM 7ater plant and a
4+ ater plant. 65- has to
tan!s for alcohol storage hich can hold D//// liters.
COSMETIC MANUFACTURING
<osmetic products manufacturing is done is ell
equipped modern facilities. This plant has oil phase
vessel, ater phase vessel and a main homogenizing
vessel of capacity 2 ton. 65- also has
D/ liter plant to cater to smaller needs
DISTILLATION
65- also houses a unique and traditional perfume oil
extraction unit from natural
ingredients. %ere by distillation oils are extracted
hich are used in fragrance blends.
FILLING AND PACKING
-roduction facilities are ell laid don ith
separate buildings for Attars, 6prays, <reams and
Lels, %air oils and Talcum poder. A total of 23
production lines have a capacity to fill and pac!
23/,/// units every day per shift.
WAREHOUSE
The nely constructed are house has area of over
3//// sq. ft and is ell arranged to monitor and
move material ith ease. All products are bar)coded
for efficient identification. 65- is ell connected by
road, sea and air to have excellent supply chain.
TRAINING
65- Training <entre provides trainings to all its employees on regular basis. The training is
totally based on s!ill and personality development to drive individuals and the company forard.
SHOWROOM
The shoroom ithin the factory premises
displays a range of products. #t also displays
pac!aging material components. %ere customers
can select items of their choice for their mar!ets.

BUALITY O"#ECTIVES OF SFP
+n)time delivery of final product to customer.
Mero level of non)conformity at #n)process and final stage of the product.
Mero level of customer complaint to enhance customer satisfaction.
BUALITY POLICY OF SFP
SFP committed to the aim and ob"ectives of the company to manufacture products that are
satisfy customer$s needs and expectations.
SFP shall implement the quality management system to meet agreed requirements to enhance
customer satisfaction and improve its effectiveness continually.
SFP commit to highest levels of integrity and professionalism in all aspect of our business.
Ce/enti&-+ o. SFP
4aad voor accreditatie, Fetherland has licensed 65- 6ons '#ndia( -vt. 8td and listed
in the bureau$s register of licensees of ,uality management system certification in
respect of the products and services in accordance ith #6+ U//2>3//H and also #6+
2@//2> 3//@ for *nvironment management system.
65- is a member of export promotion council.
65- has been recognized as one star export house having the certificate issued by the
ministry of commerce X industry, government of #ndia.
#n 3//G 4AP#Y LAFW%# national quality aard panel has aarded 65- ith a
<ommendation certificate for quality standard of the company at all #ndia level.
65- is a member ith *ssential oil association of #ndia.
65- is register ith #54A and 5WA.
FACILITIES AND TECHNOLOGY OF SFP
7ell planned perfume blending set up ith the required vessels, tan!s and all relevant
accessories.
Traditional fragrance extraction set up for manufacturing special attars.
7ell)equipped cosmetics manufacturing unit ith boiler etc.
W.M. ater plant
4.+. ater plant.
7ell)equipped pac!aging section having bottles and tubes filing and rapping machines.
7ell)equipped talc manufacturing unit.
%air oil unit ith automatic filling, capping machines, shrin! rapping and labeling
machine.
Alcohol'perfumery grade( storage tan!s
,uality control laboratory ith advanced L< machine and relevant testing
apparatuses.
7ell)equipped in built 4XW centre.
Wesign and development department hich consistently create pac!aging design
hich customers$ purpose and also innovates ne designs and present to them.
The company has arehouse having a large space and materials handling equipments
and for!lift.
The plant has 23 filling lines and a capacity of 2, 3/,/// bottles per shift.
All the activities of company are done in the orld class softare 6A- business 2.
.HUMAN RESOURCE
Co0%eten*eC &6&ene++C t&inin'
Available competence level of each employee on the basis of his education s!ill and
experience is assessed and accordingly training needs are identified and provided competence
map is done for all those ho are directly connected to the performance of conformity to
product required directly 'or( indirectly.
&eside training communication system is established providing relevant information
to enhance the aareness level of personnel in relation to 65- performance required.
*ffectiveness of the action ta!en is evaluated organist requirement and corrective
actionsB further improvement oriented actions are ta!en as on)going exercise.
7hile implementing the above activities it is ensured that personnel are made aare
of the relevance and important of their activities considering this an integral requirement for
their contribution toards achievement of quality ob"ectives.
4ecords of education, training, s!ill X experience are maintained as long as the
employee is in service roll in 65-.
M&n%o6e in SFP
*very department has a highly experienced and qualified team. <ompany has around 3D/
s!illed or!ers. The company has 23/ experienced hands in the line of sales and mar!eting
team. The company has a fully equipped training hall hich accommodates D/ persons at a
time and regular training programs are held at different levels. The training is totally based on
s!ill and personality development to drive individuals and the company forard

ORGANISATIONAL CHART
DESCRIPTION OF PRODUCTION PROCESS
PERFUMERY AND COSMETIC PRODUCTS:
M&tei&- ,+e/:
-erfumery compounds, aroma chemical solvents. <osmetics ingredients, coloring
materials procured are the ra materials,
St&'e 9
-rocured material as above is sub"ected to inspection and testing to confirm their meeting
specified equipment.
St&'e :
<ompounds either as they are ith colouring material or a formulated combined of more
than one compound ith or ithout colouring material after sub"ected to process. #nspection and
testing are send for filling X pac!aging.
St&'e ;
-roduct are then filling in convenient sizes and pac!aging iUn cartons as per customer$s
requirements.
Wuring filling operation the containers and the associated accessories are sub"ected to in
process inspection to ensure state of conformance to specified requirements.
St&'e <
-ac!aged products undergo final inspection before effecting delivery.
MARKETING
65- has organized tie)up in Wubai to fee the mar!et in :.A.*. and distribution of the
premium attars to African countries li!e, 6udan, *gypt,
6omalia, Figeria, Lhana, :ganda, Mambia, 6outh Africa, 8ibya, Algeria, Mauritania,
morocco, <had, and <ameroon.
#n 6audi Arabia the company is having distribution tie)ups in Peddah, 4iyadh, Mecca,
Medina, etc.
Also the company is having distribution outlets in ;uait, Muscat, &ahrain, Woha),atar,
8ebanon, Pordan, 6yria, #ran, #raq, and Afghanistan.
The company is also having export mar!et in 6ri 8an!a, 6ingapore, Malaysia, #ndonesia,
Thailand, Myanmar and &angladesh.
#n the est the company is having mar!et in Atlanta, Fe Eor!, Fe Persey, <hicago,
8as Angeles, 8ondon, 6pain, and 5rance.
#n #ndia there are GD/ distributors throughout the country.
PRODUCT PROFILE
Di..eent "&n/+ M&n,.&*t,e/ (! SFP :


OBJECTIVE OF STUDY :-
Pi0&! o()e*tive:-
To analyze that the existing inventory management system in SFP
SONS In/i& %vt$-t/.
Se*on/&! o()e*tive:-
2. To verify the mismatch beteen the order and receipt of mate
3. To find out the impact of inventory on or!ing capital.
=. To find out minimum stoc! level, ho much stoc! should be order.
LITERATURE REVIEW
6uccess of any industrial underta!ing depends upon the . m$s 2( Money
3( Manpoer =( Machine @( Mar!et D( Material .( Management
Materials are pivotal importance not less than any
other M$s. -roblems have their root in material affects the efficiency of all men, machine,
money X mar!eting decisions of the firms and thus become the grave concern of
management at all levels. #f there ere too much of material problems li!e ideal funds
lied up in excessive inventory storage and obsolesces difficulties mar!et pressure ould
arise. Thus the importance of inventory management is realized.
A number of studies have been done in the
field of inventory management by various researchers. 6ome of them are given beloC
9$ A,t5o:- "en &t /e Wi--i&0 !e& :==?
This study tells that the main focus of inventory management is on
transportation and arehousing. The decision ta!en by management depend s on the
traditional method of inventory control models. The traditional method of inventory
management is ho much useful in these days the author tell about it. %e is also saying
that the traditional method is not a cost reducing, it is so much expensive. &ut the
managing the inventory is most important or! for any manufacturing unit.
3$ A,t5o: - #on S*5ei(.e/e 9>>:
%e said that it is easy to turn cash into inventory, the challenge is to
turn inventory bac! into cash. #n early 2UU/$s many distributor recognize that they
needed help controlling and managing their largest asset inventory. #n response to this
need several companies developed comprehensive inventory management modules and
systems. These ne pac!age include many ne features designed to help distributors
effectively managed arehouse stoc!. &ut after implementing this many distributors do
not feel that they have gained control of their inventory.
=$ A,t5o:-Wo-. "&'(!C M&n&'in' invento!
#n this study Mr. 7.&agby explains that by managing the inventory it
becomes easier for the organization to meet the profit goals, shorter the cash cycle, avoid
inventory shortage, avoid excessive carrying costs for unused inventory, and improve
profitability by decreasing cash conversion and adopt P#T system. According to this study
companies need to get smart about inventory.
&oosting financial performance is another benefit that comes from
better inventory management. #nfect large number of manufacturers en"oy savings and
better performance by choosing the approach of inventory reduction.
5or this company needs to maximize the cash flo and profitability
and this includes !eeping a atchful discerning eye on charge in supply and demand
<$ A,t5o: - A+.&D,e A50e/ O*to(e 9:C :==<
2Ati*-e .o0 0&+te eD,ie0ent %-&nnin' &n/ 0&+te %o/,*tion +*5e/,-in'4
%e said that most of the manufacturing company vendors have planning
and scheduling product hich assume either infinite production capacity for calculating
quantities of ro material and or! in progress '7#-( requirements or infinite
quantities of ra material and 7#- materials for calculating production capacity. There
are many problems ith this approach and ho to avoid these by ma!ing sure that the
product you are buying indeed ta!es into account finite quantities of required materials as
ell as finite capacities of or! centers in your manufacturing facilities.
@$ A,t5o:- D$Hoo%0&n A%i- 7C :==;
2Ati*-e .o0 invento! %-&nnin' &n/ o%ti0i8&tion4
#n this article he said that inventory optimization recognize that
different industry have different inventory profiles and requirements. 4esearch has
indicated that solutions are priced in a large range from tens of thousands of dollars to
millions of dollars. #n this niche mar!et sector price is definitely not an indicator of
the quality of solution, 4+# and usability are paramount.
3$ A,t5o:-Si-veC E/6&/ A De*::C :==:
2Ati*-e .o0 %o/,*tion &n/ invento! 0&n&'e0ent )o,n&-4
This article considers the context of a population of items for
hich the assumption underlying the *+, derivation holds reasonably ell.
%oever as is frequently the cash in practices there is an aggregate constraint that
applies to the population as a hole. To common forms of constraints are>
2( the existence of budget to be allocated among the stoc!s of the items and
3( a purchasing production facility having the capability to process at most a certain
number of replenishment per year. &ecause of the constraint the individual
replenishment quantities cannot be selected independently.
@$ A,t5o:- C5&-e+ At1in+on
2A +t,/! on invento! 0&n&'e0ent4
#n the study by Mr. <harles At!inson, he explained the inventory
management and assessment of inventory levels. As per this study inventory management
need to address to issue
-art #. %o to optimize average inventory levels.
-art ##. %o to assess 'evaluate( inventory levels.
This study tells about hat the manager should do and not to do, and
ho much amount should be order in one placed orders. Average inventory can be
calculated by simplistic method.
Average inventory [ beginning inventory Jend inv.B3
?$ A,t5o:-De-&,n&! C C S&5in EC :==7$
A lots of or! has been done but no if e ant to go ahead e
must have good visibility upon this field of research. That is hy e are focused on
frame or! for an exhaustive revie on the problem of supply chain management ith
inventory inaccuracies . The author said that their aim in this or! is also to present the
most important criterion that allo a distinction beteen the different type of
managing the inventory.

RESEARCH METHODOGY
4esearch methodology is the ay to systematically solve the research problem$
+b"ective of research study is to analysis of inventory of 65- 6ons and analyzing of
inventory, e determining folloing inventories)
2. 4a materials inventory,
3. 7or! in progress inventory,
=. -ac!aging material inventory X
@. 5inished goods inventory
#n this section of inventories, e should analyze the annual investment in inventories,
Yaluation of inventory after closing balance of items in inventory. #n this manner, e
calculate reorder point, safety stoc! levels, minimum X maximum levels of inventory.
7or!ing hypothesis of the ob"ective is that inventories are the stoc! piles of goods in an
organization. 65- invests about @/0 of total assets inventory should be analyzed their
records.
The analysis of inventory according to their data is available in the company. The data
collection of inventory for analysis is by the direct store department. # ent to the all inventories
as ra material, or! in progress inventory, finished goods inventory by the proper observation
of data$s of the company.
The particular method for data collection used direct intervie ith assistants and
telephone intervie ith friends to !non about annual investment of inventories and other
important data.
PERIOD OF STUDY :
The study as conducted in a period beteen Panuary 3/2/ to April 3/2/ during hich
the researcher studied the company$s relationship ith dealers and distributors and obtained their
vie.
Met5o/ o. /&t& *o--e*tion :
#n analysis of inventory of 65-, 7e collect the data by the different sources. 7e collect the
primary and secondary data.
6*<+FWA4E WATA Z
The secondary data are those data that are already in presence for specific
purpose, e use the secondary data about inventory to loo! old records of the company .5or
the daily information about the items are sho the M4F, ledger register and daily issue slip
of materials, the purchase register and other documentary evidence used for the findings.
#n the analysis of inventory, the secondary data provided is not sufficient then e collected
primary data.
-4#MA4E WATA Z
-rimary data or fresh data are those data that are originated very first time
ith the help of primary data e formulated the research ob"ectives. -rimary data are the
accurate, attainable, reliable and useful data.
2. #nventory control techniques used by the company
3. #nventory systems as perpetual and periodic systems.
=. 6toc! levels etc.
@. <ompany$s ebsite
INVENTORY MANAGEMENT TECHNIBUES
#n managing inventories, the firm$s ob"ective should be in consonance ith the ealth
maximization principle. To achieve this, the firm should determine the optimum level of
investment in inventory. To deal ith the problems of inventory management effectively, it
becomes necessary to be conversant ith the different techniques of inventory control.
Although the concepts involved in inventory management are production)oriented and are
not strictly financial it is important that the financial manager understand them since they
have certain built)in financial costs. The different techniques of inventory control may be
summarized as follos>
'2( Invento! -eve- Te*5niD,e
The main ob"ective of stoc! control is to determine and maintain the optimum level of stoc!
so that there is neither shortage of any material nor unnecessary investment in inventory. 5or
this purpose, determination of maximum and minimum limits of inventory and ordering level
is necessary.
'3( M&Ei0,0 +to*1 Li0it: This represents the quantity of inventory above hich it should not
be alloed to be !ept. The main ob"ect of fixing this limit is to ensure that unnecessary
or!ing capital is not bloc!ed in stores. The quantity is fixed !eeping in vie the
disadvantages of overstoc!ing.
RE-ORDERING LEVEL 2ORDERING LEVEL4
#t is the point at hich if the stoc! of the material in stores reaches, the store!eeper should
initiate the purchase requisition for fresh supply of material. This level is fixed somehere
beteen maximum and minimum level is such a ay that the difference of quantity of the
material beteen the reordering level and the minimum level ill be sufficient to meet
requirements of production up to the time of fresh supply of the material. #t is fixed after
ta!ing into consideration the folloing factors>

A"C ANALYSIS:
A&< Analysis is a basic analytical management tool hich enables top
management to place the effort here the result ill be greatest. This technique,
popularly !non as alays better control or the alphabetical approach, has universal
applications in many areas of managing the inventory.
The technique tries to analyze the distribution of any characteristic by
money value of importance in order to determine its priority.
The annual consumption analysis of any organization ould indicate that a handful of
top high value items less than 2/0 of total number ill account for a substantial portion
of about GD0 of the total consumption value and these fe vital item are called A class items
hich need careful attention of the materials manager. 6imilarly a large number of bottom
items over G/0 of total number called the trival many account only for about 2/0 of the
consumption value and are !non as the N<$ class. The items that lie beteen the top and
bottom are called the N&$ category item.
The folloing facts need to be noted ith regard to A&< Analysis>
2. Through usually the inventory items are classified into three categories viz A& and< only,
but nothing prohihibits a firm to underta!e the analysis on the basis of a larger
catagorisization.
3.#t is necessary for an effective A&< analysis that all the items should be included for the
<lassification.
=.Through according to A&< Analysis category < gets only a simple attention, the
management should nevertheless have to be vigilant in its approach. 5or example an items
may be of small value but may be critical in the sense that its non)availability hampers the
production process and its supply is irregular. The management has to be extra careful about
its inventory, even though the items figures in the category <. Thus the A&< analysis not the
ultimate exercise in inventory management, it needs supplementing ith detailed !noledge
and monitoring.
@.-rice of the items and their physical quantities shouldn$t be made the basis of A&<
analysis. #t is rather the usage value of the items hich must be used for the purpose of
classification.
ECONOMIC ORDER BUANTITY TECHNIBUE

+ne of the ma"or inventory management problems to be resolved is ho much inventory should be
added hen inventory is replenished. #f the firm is buying ra materials, it has to decide lost in
hich it has to be purchased on replenishment. #f the firm is planning a production run, the issue is
ho much production to schedule 'or ho much to ma!e(. These problems are called o/e
D,&ntit! %o(-e0+C and the tas! of the firm is to determine the optimum or economic order quantity
'or e*ono0i* -ot +i8e(. Wetermining an optimum inventory level involves to type of costs> 'a(
ordering costs and 'b( carrying costs> The economic order quantity is that inventory level that
minimize the total of ordering and carrying costs.
*+, [ 3'annual usage in unit('order cost(
Annual carrying cost per unit
VED ANALYSIS:
The Y*W analysis is used generally for spare parts. The requirement and urgency of spare parts is
different from that of materials. A)&)< analysis may not be properly used for spare parts. The
demand for spares depends upon the performance of the plant and machinery. 6pare parts are
classified as> Yital 'Y(, *ssential '*( and Wesirable 'W(. The vital spares are a must for running the
concern smoothly and these must be stored adequately. The non)availability of vital spares ill
cause havoc in the concern. The * types of spares are also necessary but their stoc!s may be !ept at
lo figures. The stoc!ing of W types of spares may be avoided at times. #f the lead time of these
spares is less, then stoc!ing of these spares can be avoided.
The classification of spares under three categories is an important decision. A rong classification of
any spare ill create difficulties for production department. The classification of spares should be
left to the technical staff because they !no the need, urgency and use of these spares.
#UST-IN-TIME 2#IT4 SYSTEM :
Papanese firms popularized the ),+t-in-ti0e 2#IT4 +!+te0 in the
orld. #n a P#T system material or the manufactured components and part arrive to the
manufacturing sites or stores "ust fe hours before they are put to use. The delivery of material is
synchronized ith the manufacturing cycle and speed. P#T system eliminates the necessity of
carrying large inventories, and thus, saves carrying and other related costs of manufacturer. The
system requires perfect understanding and coordination beteen the manufacturer and supplier
in terms of the timing of delivery and quality of the material. -oor quality material or
complements could halt the production. The P#T inventory system complements the total D,&-it!
0&n&'e0ent 2TBM4. The success of the system depends on ho ell a company manages its
suppliers. The system puts tremendous pressure on suppliers. They ill have to develop adequate
system and procedures to satisfactory meet the needs of manufacturers
INVENTORY TURNOVER RATIO > '#T4(
#n accounting, the #nventory turnover is an equation that measures the number of times
inventory is sold or used over in a period such as a year. The equation equals the cost of
goods sold divided by the average inventory. #nventory turnover is also !non as
inventory turns, stoc! turn, stoc! turns, turns, and stoc! turnover.
#T4 [ <ost of goods sold
Average inventory
INVENTORY MANAGEMENT SYSTEM IN SFP SONS INDIA PVT$LTD$
The procurement of inventory is totally depends on orderBdemand. #n first step they get
the order from customer then they rite a form that form called indent form by hand riting.
After getting order they ill send the order to purchase department for buying of 4a
Material and -ac!aging material. *very time that causes the delay of delivery of goods to the
customer. After receiving the ra materials from supplier they chec! the quality, because quality
is more important for them. #n hole production process @)D times they ill chec! the quality
and after that quality chec! seal on product.
They are using 5#5+ method for delivery of good to the customers. 5irst #n 5irst +ut
'5#5+( means first order should deliver first and after that continue process. #t is good ay of
delivery that ma!e the customer satisfied. *very inspection about available stoc! is on 6A-
every one can !no ho much stoc! is available, and ho much order should be placed. 5or
every order they !eep the numbers for identification.
W&e5o,+e &&n'e0ent
There is separate arehouse for !eeping the different types of inventory li!e
4a material, pac!aging material, semi finished good and finished good. 4a materials
includes the perfumery liquid, arranging of these things they have rac! and rac! numbers, and
unique code number for each and every liquid for identification. 5or talcum poder ra material
are the talc poder hich they !ept in plastic bags in production unit itself.
-ac!aging material include box, cap color, nec! etc. hich require after
filling the product in bottles. 5inished goods and pac!aging material they are !eeping in same
arehouse left side finished good and right side pac!aging material. 5inished good order ise
and pac!aging material ho to find easily.
*ach and every data maintained in systems so it is very easy to get the information.
SCOPE OF STUDY

The scope is to drive meaningful application of theory for actual implementation. As
the study is focusing on identifying the present potential of the company$s inventory methods
and aims, e identify best set of inventory method to be carried to improve the company$s policy
to determine their inventory.
This study provides insight to the management of high value item and
lo value items. This study also gives the idea about industrial focus and addressal toards
maintaining inventory.
.
LIMITATION OF STUDY
#t consumes more time and requires lots of expenditure. More time is needed to do
this study.
6tudy is based on secondary data only.
The quality of inventory is not compared in analysis.
The analysis is based on figures present in the internal records only.
The study is based on to year reports given by mar!eting and finance
department that has its on limitation.
7or!ing environment didn$t permit more involved ay of collecting data.
T&(-e @$9 E*ono0i* o/e D,&ntit!
Eear *+,'in units(
3/2/ =3/.G.
3//U 2/U.D=
#nterpretation>
#t is infer that the *conomic order quantity for the year3//U is 2/U.D= and 3/2/ is
=3/.G.. Eear 3/2/ *+, is 3.U times more than 3//U *+,.
C5&t no$@$9
INVENTORY TURNOVER RATIO
TA&8* F+.D.3
#nterpretation>
#t shos that the ratio of sales and inventory for the year 3//U is 3.@ and for the
year 3/2/ =./H. #t shos that the inventory sales ratio of year 3//U is higher than year 3/2/.

Eear 6ales '\( #nventory'E( 4atio '\BE(
3/2/ .=2=/H3U..D 3.3UGH=D.D 3.@/
3//U H22=332. 3.==.UGD =./H
C5&t no$ @$:
T&(-e @$; tot&- invento! in D,&ntit!
T&(-e @$< Tot&- invento! in v&-,e2in -&*1+4
Eear 4a material 6emi finished
good
-ac!aging
material
5inished good Total inventory
3/2/ D2H3=3D 23GD.=@ U2G/@D/ 2/.=/3HG 3.3DH.U.
3//U .=/D2@2 2/H..U3 UHHU=.H U/DDGG@ 3.==.UGD
Eear 4a material 6emi finished
good
-ac!aging
material
5inished good Total inventory
3/2/ G@/='in !g( D2/3. @DHD33 =@3U23 HDUH.=
3//U H@/.'in !g( @=@.G D@U@/U =/2H./ U/=2@3

C5&t no$@$;
T&(-e no$@$@ Pe*ent&'e o. invento! .o0 tot&- invento!
Eear 4 M - M 6 M 5 L Total
inventory
3//U 3=.U@0 =G.D@0 @.2=0 =@.=H0 2//0
3/2/ 2U.G=0 =@.U30 @.H.0 @/.@H0 2//0
C5&t no$@$<

T&(-e no$@$3 %e*ent&'e o. &6 0&tei&- .o0 tot&- invento!
Eear 4a material Total inventory -ercentage
3//U .=,/D,2@2 3,.=,=.,UGD 3=.U@0
3/2/ D2,H3,=3D 3,.3,DH,.U. 2U.G=0
C5&t no$@$3
T&(-e no$@$7 %e*ent&'e o. +e0i .ini+5e/ 'oo/ .o0 tot&- invento!
Eear 6emi finished good Total inventory -ercentage
3//U 2/H..U3 3.==.UGH @.2=0
3/2/ 23GD.=@ 3.3DH.U. @.H.0
C5&t no$@$7
T&(-e no$@$? Pe*ent&'e o. P&*1&'in' 0&tei&- .o0 tot&- Invento!.
Eear -ac!aging material Total inventory -ercentage
3//U UHHU=.
H
3.==.UGH =G.D@0
3/2/ U2G/@D/ 3.3DH.U. =@.U30
C5&t no$@$?
T&(-e no$@$> Pe*ent&'e o. Fini+5e/ 'oo/+ .o0 tot&- invento!
Eear 5inished good Total inventory -ercentage
3//U U/DDGG@ 3.==.UGH =@.=H0
3/2/ 2/.=/3HG 3.3DH.U. @/.@H0
C5&t no$ @$>
T&(-e no$@$9= A"C *-&++i.i*&tion
Lrade Fo. of items -ercentage
A DG =2...0
& .D =..230
< DH =3.330
Total 2H/ 2//0
C5&t no$@$9=
A&< Analysis 3//H)3//U
April 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
Apr-2008 - Quantity Apr-2008 - Amount
AHSAN
Perfume Oils 1,02,024 1377038.87 C
Eau e Perfume !",!44 230183".13 A
Eau e #oilette 10,17$ 3$2407.12 %
Total 1,71,744 404128!.12
TARA
&tem 'roup
Eau e Perfume 2,080 !14!2.12 %
(air Oil !",370 3$$1$7.$! C
#al)um Po*+er 3,24,!28 221"2!7.! A
Eau e #oilette
Total 3,8!,"78 2$3$877.27
SILENT VELLY
&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 2,$$4 130340."4 %
(air Cream
,-ampoo
.otions 1"2 "403.$$ %
Total 28!$ 13"744.$
May 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
/ay-2008- Quantity /ay-2008- Amount
AHSAN

Perfume Oils 1,!7,224 1!88$!8."4 C
Eau e Perfume 1",!24 "!$0$".47 %
Eau e #oilette 4,320 1!7183.01 A
Total 1,81,0$8 2701"11.42
TARA

&tem 'roup
Eau e Perfume 3,200 7"1!7.11 C
(air Oil 8,8!$ 14"!17.32 %
#al)um Po*+er 1,$0,344 7814$2.82 A
Eau e #oilette
Total 1,72,400 1010137.2!
SILENT VELLY

&tem 'roup
(air Oil 480 30100.41 %
,-o*er 'el 144 10!"3.$8 A
(air 'el 144 !!3!.82 C
%o+y ,plas- !04 24$!".1 C
(air Cream
,-ampoo 33$ 2$$03."3 A
.otions 240 13!7$.$2 %
Total 1848 1110$".!$
Pune 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
0une-2008- Quantity 0une-2008- Amount
AHSAN

Perfume Oils 1,17,!7$ 131841".8! %
Eau e Perfume 27,4$4 1130428.47 A
Eau e #oilette 2,784 1048"0.$" C
Total 1,47,824 2!!373".01
TARA

&tem 'roup
Eau e Perfume 480 11873.!7 %
(air Oil !,4"$ 1!4$37.41 A
#al)um Po*+er 47,232 4"7!30.23 C
Eau e #oilette 72 $0"8.84 %
Total !3280 $70140.0!
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el 432 1$$07.4$ C
%o+y ,plas- 3,$00 17$13$.4 C
(air Cream
,-ampoo 144 11401.$" A
.otions 840 $2"80.0" %
Total !01$ 2$712!.$4
Puly 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
0uly-2008- Quantity 0uly-2008 -Amount
AHSAN

Perfume Oils "7,488 113$3$!.1$ C
Eau e Perfume 17,448 78"3!3.0! A
Eau e #oilette 2,208 10438".2 %
Total 1,17,144 2030107.41
TARA

&tem 'roup
Eau e Perfume 800 1"78".28 %
(air Oil 180 $8$0.$" %
#al)um Po*+er 32,73$ 384288.!4 C
Eau e #oilette 144 121"7.$8 A
Total 338$0 42313$.1"
SILENT VELLY

&tem 'roup
(air Oil "$ $020.08 %
,-o*er 'el
(air 'el
%o+y ,plas-
(air Cream 144 131"0.38 A
,-ampoo
.otions 72 2!82.8! C
Total 312 217"3.31
August 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
Au1-2008- Quantity Au12008-Amt
AHSAN

Perfume Oils 1,87,0!$ 2232"81 C
Eau e Perfume 30,7!2 13!12"4."7 A
Eau e #oilette 1"2 10781.02 %
Total 2,18,000 3!"!0!$.""
TARA

&tem 'roup
Eau e Perfume 1,$00 3"!78.!$ A
(air Oil 1,41$ 31$"3."4 %
#al)um Po*+er $4,032 8"8033.$8 C
Eau e #oilette 72 $0"8.84 %
Total $7,120 "7!40!.02
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 1,2"$ $340".11 A
(air Cream
,-ampoo
.otions 3$0 1$284.34 C
Total 1$!$ 7"$"3.4!
6eptember 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
,ep-2008-Quantity ,ep2008-Amt.
AHSAN

Perfume Oils 2,80,$!$ 3$43082.!$ C
Eau e Perfume !7,!48 2!8$300.7$ A
Eau e #oilette !,37$ 184313.3! %
Total 3,43,!80 $413$"$.$7
TARA

&tem 'roup
Eau e Perfume 3,!20 87072.8$ %
(air Oil 2,232 77"12.2 A
#al)um Po*+er !0,472 3!"78!.22 C
Eau e #oilette
Total !$,224 !24770.28
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- !04 24$!".07 A
(air Cream
,-ampoo
.otions
Total !04 24$!".07
+ctober 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
O)t2008-Quantity O)t-2008-Amt
AHSAN

Perfume Oils 1,0",83$ 122!240.1$ C
Eau e Perfume 31,020 11!227$.4! A
Eau e #oilette $72 24$71.8" %
Total 1,41,!28 2402188.!
TARA

&tem 'roup
Eau e Perfume
(air Oil 4,200 "$434.71 A
#al)um Po*+er 1,1$,088 !$288".2 C
Eau e #oilette
Total 120288 $!"323."1
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 1,224 !"88$.38 A
(air Cream
,-ampoo
.otions
Total 1224 !"88$.38
Fovember 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
2o3-2008-Quantity 2o3-2008-Amount
AHSAN

Perfume Oils $!,!20 7!"4!0.!3 C
Eau e Perfume 40,324 1!0"870.84 A
Eau e #oilette 4,7!2 1"172!.!$ %
Total 1,10,!"$ 24$104$."3
TARA

&tem 'roup
Eau e Perfume 800 1"78".28 A
(air Oil 1,200 2!847."1 %
#al)um Po*+er !$,"7$ 2$1!44.28 C
Eau e #oilette
Total !8"7$ 307181.47
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas-
(air Cream
,-ampoo
.otions
Total
Wecember 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
e)-2008-Quantity e)-2008-Amt
AHSAN

Perfume Oils 1,44,2$4 1843142.24 C
Eau e Perfume 2",!84 12312$$.38 A
Eau e #oilette $,$72 23$237.42 %
Total 1,80,!20 3310$4$.04
TARA

&tem 'roup
Eau e Perfume "$0 22"!0.1$ %
(air Oil 2,8!$ 7!!11.28 A
#al)um Po*+er 1,3!,480 $"2142."7 C
Eau e #oilette
Total 13"2"$ 7"0$04.41
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 3$0 1702!.11 A
(air Cream
,-ampoo
.otions
Total 3$0 1702!.11
Panuary 3//H
BRAND NAME CONSUMPTION VALUES IN RS GRADING
0an200"-Quantity 0an-200"-Amount
AHSAN

Perfume Oils 1,01,37$ 111!78".03 C
Eau e Perfume 22,288 8$!4"8.7$ A
Eau e #oilette !,"04 224110."" %
Total 1,2",!$8 220!3"8.78
TARA

&tem 'roup
Eau e Perfume "$0 2210!.37 %
(air Oil 1,800 42702.4$ A
#al)um Po*+er 1,12,$!$ !3"000.02 C
Eau e #oilette 72 !!30.!4 %
Total 11!488 $0"338.3"
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 144 $43".27 A
(air Cream
,-ampoo
.otions
Total 144 $43".27
5eb 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
4e5-200"-Quantity 4e5-200"-Amount
AHSAN

Perfume Oils $0,408 727184.84 C
Eau e Perfume 2!,17$ 100380$.8 %
Eau e #oilette 2,0$4 12117!.3" A
Total 87,$48 18!21$7.03
TARA

&tem 'roup
Eau e Perfume
(air Oil 2,400 4"233.18 A
#al)um Po*+er 74,"28 $73110.8 C
Eau e #oilette 72 !!30.!4 %
Total 77400 727874.!2
SILENT VELLY

&tem 'roup
(air Oil 240 1422".32 A
,-o*er 'el
(air 'el
%o+y ,plas- 432 1"317.8 C
(air Cream
,-ampoo
.otions
Total $72 33!47.12
March 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
/ar-200"-Quantity /ar-200"-Amount
AHSAN

Perfume Oils 84,$24 "!!170.08 C
Eau e Perfume 1",708 71"7$0.18 A
Eau e #oilette 480 27802."$ %
Total 1,04,812 1702733.22
TARA

&tem 'roup
Eau e Perfume
(air Oil 4,320 "!732."" A
#al)um Po*+er 20,112 233482.!! C
Eau e #oilette
Total 24432 32"21!.!4
SILENT VELLY

&tem 'roup
(air Oil 120 $"0".44 %
,-o*er 'el
(air 'el
%o+y ,plas- 21$ "204.2$ C
(air Cream
,-ampoo "$ $748.$7 A
.otions 48 3$$".$$ A
Total 480 2$!32.03
5inancial year 3//U)3/2/
April 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
Apr-200"-Quantity Apr-200"-Amt
AHSAN

Perfume Oils 2,02,""2 238812$.24 C
Eau e Perfume !!,41$ 24!1!02.23 A
Eau e #oilette 11,328 38!100.27 %
Total 2,$",73$ !224728.74
TARA

Item Group
Eau e Perfume 480 10$42.24 C
(air Oil 3,$00 "$400.8 %
#al)um Po*+er 1,18,"$8 7"1$87.3! A
Eau e #oilette
Total 123048 8"8730.3"
SILENT VELLY

&tem 'roup
(air Oil "$ !!27.$8 %
,-o*er 'el
(air 'el
%o+y ,plas- 2,$$4 113!13.37 C
(air Cream
,-ampoo 1"2 134"7.$ A
.otions 288 20$44.2" %
Total 3240 1!3182."4
May 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
/ay 6200"7 - Quantity /ay-200"-Amount
AHSAN

Perfume Oils 1,47,312 187$017." A
Eau e Perfume 3",480 1!11140.04 %
Eau e #oilette 1,!3$ 4"8!4.72 C
Total 1,88,328 3437012.$$
TARA

Item Group
Eau e Perfume "$0 21283.2 C
(air Oil 7,$20 1704!3.77 %
#al)um Po*+er 71,$28 418!72.12 A
Eau e #oilette
Total 80208 $1030".0"
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas-
(air Cream
,-ampoo
.otions
Total
Pune 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
0une-200"-Qnty 0une200"-Amt
AHSAN

Perfume Oils 1,28,"28 133830".12 C
Eau e Parfum $,4!$ 2$"$41.$8 A
Eau e #oilette 1,488 !3310.24 %
Total 1,3$,872 1$$12$1.04
TARA

Item Group
Eau e Parfum
(air Oil 8,880 143!01.2 A
#al)um Po*+er 70,320 !180"!.78 C
Eau e #oilette
Total 7"200 $$1!"$."8
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 1,"44 82812.7 A
(air Cream
,-ampoo
.otions
Total 1"44 82812.7
Puly 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
0uly-200"-Qnty 0uly-200"-Amt
AHSAN

Perfume Oils 3,44,772 4730478."$ C
Eau e Perfume 3",81$ 1$2"4!7.42 A
Eau e #oilette !,37$ 1"7208.48 %
Total 3,8","$4 $!!7144.8$
TARA

Item Group
Eau e Perfume 4,800 107232 A
(air Oil ","72 21!0$7."$ %
#al)um Po*+er 1,71,120 1370713.7" C
Eau e #oilette
Total 1,8!,8"2 1$"3013.7!
SILENT VELLY

&tem 'roup
(air Oil "$ !!!".3$ %
,-o*er 'el
(air 'el
%o+y ,plas- 1,440 $1"48.8 C
(air Cream
,-ampoo "$ $803.!2 %
.otions 144 10444.32 A
Total 177$ 847!$
August 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
Au1-200"-Qnty Au1-200"-Amt
AHSAN

Perfume Oils 3,08,381 3$7!$31.1! C
Eau e Perfume 4$,008 1"2401".!2 A
Eau e #oilette 8,3!2 280743.3$ %
Total 3,$2,741 !8803"4.03
TARA

Item Group
Eau e Perfume 1,"20 428"2.8 %
(air Oil 3,300 82202."2 A
#al)um Po*+er 83,0$4 7!11"2."1 C
Eau e #oilette
Total 88,284 87$288.$3
SILENT VELLY

&tem 'roup
(air Oil 144 833".04 %
,-o*er 'el
(air 'el
%o+y ,plas- 3,240 13"384.8 C
(air Cream
,-ampoo "$ $803.!2 A
.otions
Total 3480 1!4!27.3$
6eptember 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
,ept-200"-Qnty ,ept-200"-Amt
AHSAN

Perfume Oils 1,81,!12 22!77!0.08 C
Eau e Perfume 38,0$4 1300!00.!7 A
Eau e #oilette !,424 1804$7.!2 %
Total 2,2!,000 3738718.17
TARA

Item Group
Eau e Perfume
(air Oil "48 2"043.!1 A
#al)um Po*+er !7,$00 321"!8.!8 C
Eau e #oilette
Total !8!48 3!1002.0"
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 3,$72 1!7"$".44 A
(air Cream
,-ampoo
.otions
Total 3$72 1!7"$".44
+ctober3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
O)t-200"-Qnty O)t-200"-Amt
AHSAN

Perfume Oils 1,74,!88 20$4442.37 C
Eau e Parfum !2,320 1842301.8! A
Eau e #oilette $,1"2 1843"7.7$ %
Total 2,33,100 40"1141."8
TARA

Item Group
Eau e Parfum
(air Oil 3,888 "$082.!$ %
#al)um Po*+er 1,0",200 $223!1.11 C
Eau e #oilette 288 2120!.44 A
Total 11337$ 73"$3".11
SILENT VELLY

&tem 'roup
(air Oil 240 138"8.4 C
,-o*er 'el 1"2 1270$.!$ A
(air 'el
%o+y ,plas-
(air Cream
,-ampoo
.otions
Total 432 2$$04."$
Fovember 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
2o3-200"-Qnty 2o3-200"-Amt
AHSAN

Perfume Oils 1,1!,104 13"4237.3" C
Eau e Parfum 2$,4"$ 114712".2 A
Eau e #oilette 1,872 !!748.1$ %
Total 1,43,472 2!"7114.7!
TARA

Item Group
Eau e Parfum !00 131$0 %
(air Oil 1,$80 4!"01.!4 A
#al)um Po*+er 2",184 310"!8.7" C
Eau e #oilette
Total 313$4 370020.33
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el 3$0 12110.4 C
%o+y ,plas- 144 $1"4.88 %
(air Cream
,-ampoo 1"2 13$07.04 A
.otions 144 43$8."$ C
Total 840 3$281.28
Wecember 3//U
BRAND NAME CONSUMPTION VALUES IN RS GRADING
e)-200"-Qnty e)-200"-Amt
AHSAN

Perfume Oils 1,72,0$4 1"07!"1.01 C
Eau e Perfume !!,$$0 210$838.02 A
Eau e #oilette $,8$4 2373$".$ %
Total 2,34,!88 42!17"8.$3
TARA

Item Group
Eau e Perfume !,040 2348$4 A
(air Oil !,184 147$"".0! %
#al)um Po*+er 18,000 280$14.! C
Eau e #oilette
Total 28,224 $$3177.!!
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 2,!"2 111442.03 A
(air Cream
,-ampoo
.otions
Total 2!"2 111442.03
Panuary 3/2/
BRAND NAME CONSUMPTION VALUES IN RS GRADING
0an-2010-Qnty 0an-2010-Amt
AHSAN

Perfume Oils 1,08,288 10$3!24."$ C
Eau e Perfume 27,044 10!!0"3.44 A
Eau e #oilette 3,!!2 11!244.1$ %
Total 1,38,884 22338$2.!$
TARA

Item Group
Eau e Parfum $,240 2"0784 A
(air Oil 4,!$0 107$"7.73 %
#al)um Po*+er 78,$00 78703!.!3 C
Eau e #oilette
Total 8",400 118!!17.2$
SILENT VELLY

&tem 'roup
(air Oil
,-o*er 'el
(air 'el
%o+y ,plas- 1,"44 83$71.21 A
(air Cream
,-ampoo
.otions 2,1$0 $8$73.41 C
Total 4104 1!2344.$2
FINDINGS
<ompany is maintaining zero safety stoc! it cause production loss.
The inventory turnover is in decreasing order in 3//H)/U it is =, but in 3//U)3/2/ it is
3.@.
&y A&< Analysis e can say that there is a little difference beteen A & X < class items
so every product is important for company.
There is positive correlation beteen sales to inventory.
The percentage of ra material from total inventory is 3=.U@0 in 3//U and 2U.G=0 at
3/2/.
The percentage of finished goods, semi finished good, pac!aging material from total
inventory is =@0 ,D0,=G0 in 3//U but in 3/2/ @/0, @0, =@0.
<ompany$s aim to achieve more sale it may require huge amount of inventory in future.
<ompany is concentrating on domestic mar!et and first time they achieve the target of 2/
crore, that is good sign of establishment of domestic mar!et.
*conomic order quantity '*+,( in year 3//U is 2/U.D3. units *+, for year 3/2/ is
=3/.G. units, it shos that company can place more orders at one time.
There is good relationship beteen company and their distributors, vendors and sales
executives.
SUGGESTION S
There can be a system here in periodical revie 'tice in a month( of inventory could
be carried out so that the inventory can be !ept under control.
There should be periodical revie of movement of items so that any non moving
items can be identified and suitable action can be done.
At present the company is maintaining zero safety stoc! for all items, if the safety
stoc! is maintained for important items, delay in production can be eliminated and orders
can be supplied in time hich ill result in a better credibility in both international and
domestic mar!et.
#t has been predicted that if company is planning to achieve more sale it may require huge
amount of inventory in future. 6o the company has to arrange capital to meet future
requirement.
#t is suggested that they can have close monitoring of receipts and issue for A
class items in order to have control of inventory.
To increase the inventory turnover ratio by increasing the sales level and maintaining
the required level of inventory.
To maintain the 4e)order level, Min)stoc! level and *conomic order quantity
company should consider the demand of the product.
There should be proper communication beteen purchase and production
department.
There is no communication from dispatch section to store department, about
quantity asted. 5eedbac! about the quantity asted ill help the store department to
forecast future requirements and to focus on minimum possible aste.
#mprove the minimum value of product < up to D0)H0 in total sale value by
increasing mar!et level of these products. #t helps to get min return on investment in
these products as soon as possible.
There is one arehouse for !eeping the finished good and pac!aging material and
pac!aging material are not arranged in good manner so it should be in order ise.


CONCLUSION
#nventory control is exercise hen you order an item. #f you do a poor "ob then everything after
is inventory correction
L+4W+F L4A%AM

#nventory is the physical asset of a company that can create problem if there is shortage, hile in
production and also if it$s in excess even after production. #nventory is constantly changing as
quantities are sold and replenished.
%ence it can be understood that efficient inventory management can ta!e the company to ne
heights and inefficient inventory management can ruin the company.
<ompany is highly concentrated on domestic mar!et, it increase the mar!et level of company
because trend of domestic mar!et is changing.
The study on #nventory management in 65- 6ons '#ndia( -vt. 8td about A &< analysis for items
is predicting future inventory requirements etc.
5rom the study it is predicted that future sales have to be achieved and inventory level have to be
maintained.
A&< Analysis as carried out to identify the fast moving and important items.
The company has to periodically revie the inventory to avoid production loss.
The results of the study can be further extended for future research.
"I"LIOGRAPHY
5inancial Management) Theory And -ractice) -rasanna <handra
Management Accounting) 4.;. 6harma and 6ashi. ;. Lupta
5inancial Management Z #. M. -andey Finths *dition
5inancial Management Z6.<.;uchhal
MAT*4#A8 MAFAL*M*FT &++; Z &E 4AP*FW4A M#6%4A
+-*4AT#+F AFW -4+W:<T#+F -8AFF#FL &++;
8+L#6T#<6 MAFAL*M*FT Z &E ;. 6%4#W%A4A &%AT
MAT*4#A8 MAFAL*M*FT Z &E 6. W. A-%A8*
-4+W:<T#+F AFW -4+W:<T#+F AFW MAT*4#A8 MAT*4#A8 MAFAL*M*FT MAFAL*M*FT) ) - -. . 6A4YAFAY*8 6A4YAFAY*8 , ,6 6. . 6:MAT%# 6:MAT%#
WWW$INVENTORY $COM
WWW$INVESTOPEDIA$COM
WWW$WISEGEEK$COM
.mbaguys.net


Rajeev Gandhi quality award
Product Profile
Different Brands Manufactured by SFP :

-our %omme

-our 5emme

Magic
Fight

"o/! Mi+t
<lean *ffect
#n <ontrol
-odium
:rban <olours
6tressed +ut
7a!e :p
5resh :p
Wazzling
Futritious

Lotion
*nergizing 4ose
5irming +live
4elaxing Aloe Yera
4evitalizing Almond
6limming Multi Yitamin
Toning Mus!
Almond
4ose

<leansing 8otion

Ce&0+
Antidandruff
<oconut
%erbal
Wazzling

H&i Ge-+
*xtra %old
Mega %old
4egular %old
6tyling
7et 8oo!

S5o6e Ge-+
Aleo Yera
8emon
4ose
%erbal

S5&0%oo+
Aloe Yera
Anti Wandruff
%erbal
8emon

H&i Oi-+
Pasmine
Amla
%erbal
<oconut

:=0- S%&!
&lossom <ool
&lossom 8ove
&lossom Fature
&lossom -leasure
&lossom 4omance

;=0- S%&!
Lolden Magnet
-leasures for Men
-leasures for 7omen
4omantic for Men
4omantic for 7omen
6andal
7hite 5loer

@=0- S%&!
Ahsan for Men
<harm 2.
+nly Ahsan
-earl for 7omen

3= 0- S%&!
Fe Man
Fe 7omen
Attraction
5reedom
A"ooba
-erpetuity
5resh