AN ANALYSIS ON INVENTORY MANAGEMENT AT

WHIRLPOOL OF INDIA LIMITED, PUDUCHERRY

SUMMER PROJECT REPORT
Submitted by
R.GOPAL
REGISTER NO: 27348312
Under the Guidance of
M!. R. HEMALATHA, MBA.,
Faculty, Department of Management Studies
in partial fullfilment for the award of the degree
of
MASTER OF BUSINESS AMINISTRATION
DEPARTMENT OF MANAGEMENT STUDIES
SRI MANA"ULA VINAYAGAR ENGINEERING COLLEGE
PONDICHERRY UNIVERSITY
PUDUCHERRY
SE!TEMBER" #$$%
SRI MANA"ULA VINAYAGAR ENGINEERING COLLEGE
MADAGADIPET, PUDUCHERRY
DEPARTMENT OF MANAGEMENT STUDIES
#ONAFIDE CERTIFICATE
Thi& to certify that the 'ro(ect )or* entit+ed $AN ANALYSIS ON INVENTORY
MANAGEMENT AT WHIRLPOOL OF INDIA LIMITED, PUDUCHERRY% i& a bonafide
)or* done by R.GOPAL &REGISTER NO: 27348312' in 'artia+ fu+fi+ment of the re,uirement
for the a)ard of Ma&ter of Bu&ine&& Admini&tration by !ondicherry Uni-er&ity durin. the
academic year #$$% / #$$0.
GUIDE HEAD OF DEPARTMENT

Submitted for 1i-a"1oce E2amination he+d on
E(TERNAL E(AMINER
AC"NOWLEDGEMENT
Fir&t and foremo&t, I than* the God for hi& &ub&tantia+ b+e&&in. and mercy at a++ &ta.e& in
the com'+etion of the 'ro(ect.
I ta*e thi& o''ortunity to e2're&& my dee' &en&e of .ratitude to SHRI N."ESAVAN,
Founder 3hairman, SHRI M.DHANASE"ARAN, Mana.in. irector and SHRI
S.V.SUGUMARAN, 1ice"3hairman of our co++e.e for their .ood )i&he& for thi& 'ro(ect.
I e2're&& my immen&e .ratitude to our !rinci'a+
DR. V.S.".VEN"ATACHALAPATHY for hi& &u''ort and encoura.ement for the com'+etion
of my 'ro(ect.
I e2tend the immen&e .ratitude to the 4ead of the e'artment MR. S.JAYA"UMAR for
hi& moti-ation, in&'iration, and encoura.ement for the com'+etion for my 'ro(ect.
The -a+uab+e and unf+inchin. re,uita+ &u''ort in thi& Endea-or
MRS. R.HEMALATHA my interna+ .uide, e'artment of Mana.ement Studie& )ho&e
a&&i&tance )a& immea&urab+e to the com'+etion of thi& 'ro(ect.
I am &incere+y than*fu+ to MR. N.RAMESH, Finance Mana.er, 5hir+'oo+ of India
6imited 75OI68 for hi& he+' and &u''ort throu.hout the 'ro(ect. I e2tend my than*& to MR.
".VIJAY GANESH, Mana.er of Materia+& !+annin. for hi& he+'. I e2tend my &incere than*& and
my dee' &en&e of .ratitude to MR. L.GANESH "UMAR, e'uty Mana.er"Materia+ !+annin.
for hi& *ind a&&i&tance and MR. R.VISHNU PRATAP, E2ecuti-e"Finance, )ho )ere a+&o my
E2terna+ Guide&.
I )ou+d a+&o +i*e to than* a++ the &taff of the or.ani9ation for he+'in. me direct+y and
indirect+y to conc+ude thi& )or*. 6a&t, but not the +ea&t, my heart fe+t .ratitude to my 'arent&,
re+ati-e& and my friend& for their con&tant encoura.ement, &u''ort, he+' and -a+uab+e ad-ice to
ma*e thi& 'ro(ect a &ucce&&.
ABSTRA3T

E-ery or.ani9ation need& in-entory for &mooth runnin. of it& acti-itie&. It &er-e&
a& a +in* bet)een 'roduction and di&tribution 'roce&&e&. The in-e&tment in in-entorie& con&titute&
the mo&t &i.nificant 'art of current a&&et&:)or*in. ca'ita+ in mo&t of the underta*in.&. Thu&, it i&
-ery e&&entia+ to ha-e 'ro'er contro+ and mana.ement of in-entorie&. The 'ur'o&e of in-entory
mana.ement i& to en&ure a-ai+abi+ity of materia+& in &ufficient ,uantity a& and )hen re,uired and
a+&o to minimi&e in-e&tment in in-entorie&. Ra) materia+&, .ood& in 'roce&& and fini&hed .ood&
a++ re're&ent -ariou& form& of in-entory. Each ty'e re're&ent& money tied u' unti+ the in-entory
+ea-e& the com'any a& 'urcha&ed 'roduct&. Becau&e of the +ar.e &i9e of the in-entorie&
maintained by firm&, a con&iderab+e amount of fund& i& re,uired to be committed to them. It i&
therefore ab&o+ute+y im'erati-e to mana.e in-entorie& efficient+y and effecti-e+y in order to a-oid
unnece&&ary in-e&tment&. A firm ne.+ectin. the mana.ement of in-entorie& )i++ be (eo'ardi9in.
it& +on. run 'rofitabi+ity and may fai+ u+timate+y. The reduction in e2ce&&i-e in-entorie& carrie& a
fa-orab+e im'act on the com'any;& 'rofitabi+ity.
The &tudy &tart& )ith an introduction to in-entory mana.ement, 3om'any;&
'rofi+e, it& 1i&ion < Mi&&ion, Achie-ement& and a+&o the need for &tudy, re-ie) of +iterature and
ob(ecti-e& are &et out for the &tudy. Re&earch methodo+o.y, ata ana+y&i& < Inter'retation,
Findin.& and Su..e&tion& of the &tudy fo++o).
One of the main area& of the 'ro(ect i& the ana+y&i& 'art, )here the data are
ana+y&ed < inter'reted, to find out ho) the in-entorie& )ere mana.ed. Some of the too+& u&ed in
in-entory are re.ardin. to=
Economic Order >uantity
Safety Stoc*
AB3 Ana+y&i&
FSN Ana+y&i&
Trend Ana+y&i& and
In-entory Turno-er Ratio.
And then conc+u&ion&, +imitation& < &co'e for further &tudy )ere di&cu&&ed.
CONTENTS
CHAPTER TITLES PAGE NO.
6IST OF TAB6ES
6IST OF 34ARTS
I
INTROU3TION
!ROFI6E OF T4E 3OM!AN?
NEE FOR T4E STU?
@
#
@A
II RE1IE5 OF 6ITERATURE
@B
III OBCE3TI1ES OF T4E STU?
D@
I1 RESEAR34 MET4OO6OG?
D#
1 ATA ANA6?SIS AN INTER!RETATION
DE
1I
FININGS OF T4E STU?,
SUGGESTION AN RE3OMMENATIONS
EF
A@
1II 3ON36USION A#
1III
6IMITATIONS OF T4E STU?
S3O!E FOR T4E FUT4ER STU?
AD
AE
BIBI6IOGRA!4? AA
LIST OF TA#LES
TA#LE NO. NAME OF THE TA#LE PAGE NO.
A.@.@ E3ONOMI3 ORER >UANTIT? DE
A.#.@ SAFET? STO3G D%
A.D.@ AB3 ANA6?SIS E@
A.E.@ FSN ANA6?SIS EE
A.A.@ 3A63U6ATION OF IN1ENTOR? TREN EA
A.A.# IN1ENTORIES !ER3ENTAGE EB
A.B.@ IN1ENTORIES TURNO1ER RATIO < 1E6O3IT? E0
LIST OF CHARTS
CHART NO. NAME OF THE CHART PAGE NO.
A.D.@ AB3 ANA6?SIS E@
A.E.@ FSN ANA6?SIS EE
A.A.# TREN OF IN1ENTOR? E%
CHAPTER)I
1.1 INTRODUCTION
In-entory contro+ i& -ita++y im'ortant to a+mo&t e-ery ty'e of bu&ine&&, )hether 'roduct or
&er-ice oriented. In-entory contro+ touche& a+mo&t e-ery facet& if o'eration&. A 'ro'er ba+ance
mu&t be &truc* to maintain 'ro'er in-entory )ith the minimum financia+ im'act on the cu&tomer.
In-entory contro+ i& the acti-itie& that maintain &toc* *ee'in. item& at de&ired +e-e+&. In
manufacturin. &ince the focu& i& on 'hy&ica+ 'roduct, in-entory contro+ focu& on materia+ contro+.
HIn-entoryI mean& 'hy&ica+ &toc* of .ood&, )hich i& *e't in hand& for &mooth and
efficient runnin. of future affair& of an or.ani9ation at the minimum co&t of fund& b+oc*ed in
in-entorie&. The fundamenta+ rea&on for carryin. in-entory i& that it i& 'hy&ica++y im'o&&ib+e and
economica++y im'ractica+ for each &toc* item to arri-e e2act+y )here it i& needed, e2act+y )hen it
i& needed.
In-entory mana.ement i& the inte.rated functionin. of an or.ani9ation dea+in. )ith
&u''+y of materia+& and a++ied acti-itie& in order to achie-e the ma2imum co"ordination and
o'timum e2'enditure on materia+&. In-entory contro+ i& the mo&t im'ortant function of
in-entory mana.ement and it form& the ner-e center in any in-entory mana.ement or.ani9ation.
An In-entory Mana.ement Sy&tem i& an e&&entia+ e+ement in an or.ani9ation. It i& com'ri&ed of a
&erie& of 'roce&&e&, )hich 'ro-ide an a&&e&&ment of the or.ani9ation;& in-entory.
1.2 PROFILE OF THE COMPANY
1.2.1 WHIRLPOOL CORPORATION
5hir+'oo+ 3or'oration i& the )or+d;& +eadin. manufacturer and mar*eter of ma(or
home a''+iance&. The com'any manufacture& in @D countrie& on E continent& name+y ="" 3anada,
United State&, Me2ico, Ar.entina, Bra9i+, S+o-a*ia, Germany, S)eden, France, Ita+y, South
Africa, 3hina and India and mar*et& 'roduct& in more than @%$ countrie& under ma(or Brand& 7#B
inc+udin. Affi+iate&8 name& &uch a& 5hir+'oo+, Gitchen Aid, Ro'er, E&tate, Bau*nect&, I.ni&,
6aden, In.+i&, Braotem', 3ro++&, Acro& and 3on&u+. 5hir+'oo+ i& a+&o the 'rinci'a+ &u''+ier to
Searo, Roebuc* and com'any of many ma(or home a''+iance& mar*eted under the Genmore
brand name&. 4ead ,uartered at Benton 4arbour, Michi.an, U.S.A, 5hir+'oo+ 3or'oration i& the
)or+d;& +eadin. manufacturer and mar*eter of ma(or home a''+iance&. 5a&hin. Machine&, ryer,
i&h")a&her&, Refri.erator&, Free9er&, 3oo*er&, Micro")a-e O-en&, Room air"conditioner&,
Sma++ Gitchen A''+iance&, etc.,
5hir+'oo+ of India 6imited, a fu++y o)ned by 5hir+'oo+ Inc, US, 7J@# bi++ion8, a +eadin.
.+oba+ con&umer durab+e '+ayer. 5hir+'oo+ of India +imited manufacture& and mar*et&
refri.erator& and )a&hin. machine&. The com'any ha& di-er&ified it& 'roduct ran.e into Air
3onditioner& and Micro)a-e O-en&. The .ro)th in the con&umer durab+e indu&try ha& &+o)ed
do)n due to +ac* of demand. The year #$$$ ha& been a bad year for the indu&try a& the o-era++
.ro)th )a& f+at. The refri.erator& re.i&tered a f+at .ro)thK )a&hin. machine& &a) a ne.ati-e
.ro)th )hi+e the air conditioner &e.ment 'erformed )e++ e2hibitin. a .ro)th rate of #$L.
5hir+'oo+ 3or'oration ha& a mana.ement &y&tem ca++ed 5ES 75or+d)ide E2ce++ence Sy&tem8
and a -a+ue to a.ed 'erformance &y&tem ca++ed 4!3 74i.h !erformance 3u+ture8, )hich dri-e&,
are the action& and initiati-e& of unit.
1.2.2 WHIRLPOOL CORPORATION TODAY 1.2.2 WHIRLPOOL CORPORATION TODAY
#UILDING CUSTOMER LOYALTY WORLDWIDE
5hir+'oo+ 3or'oration arri-ed in the ne) century and mi++ennium a& the )or+d;& +eadin.
manufacturer and mar*eter of ma(or home a''+iance&. Today, 5hir+'oo+;& .+oba+ '+atform
'ro-ide& our o'eration& )ith re&ource& and ca'abi+itie& no other manufacturer can match and )ith
brand& that con&umer& tru&t.
To &u&tain the 'roducti-ity &a-in.& that i& bein. achie-ed by our o'eration&, they ha-e
embedded their O'erationa+ E2ce++ence !roce&& " ba&ed on Si2"Si.ma and +ean manufacturin.
&*i++& and ca'abi+itie& " )ithin each of their )or+d)ide manufacturin. faci+itie&. The com'any;&
.+oba+ information techno+o.y or.ani9ation 'ro-ide& Internet too+& that cut the com'+e2ity and
co&t& of doin. bu&ine&& for 5hir+'oo+ and it& trade 'artner&. 5hir+'oo+;& uni,ue .+oba+ '+atform
a++o)& the com'any to tran&fer *ey inno-ation& and 'roce&&e& acro&& re.ion& and brand&. Ba&ed
on the continuin. &ucce&& of the com'any;& .+oba+ inno-ation 'roce&&, )hich be.an in @FFF,
5hir+'oo+ ha& introduced uni,ue 'roduct inno-ation& to con&umer& )or+d)ide.
In&'ired by their bo+d inno-ation& and de&i.n&, increa&in. number& of cu&tomer& around
the .+obe are tru&tin. 5hir+'oo+ to ma*e their +i-e& ea&ier. More than e-er before, 5hir+'oo+
3or'oration em'+oyee& and brand& are connectin. )ith cu&tomer& in )ay& that )i++ +a&t a
+ifetime.
IMPROVING FUNCTION AND PERFORMANCE IMPROVING FUNCTION AND PERFORMANCE
At 5hir+'oo+ 3or'oration, They ta*e 'ride in the ,ua+ity of a''+iance& to mar*et and
manufacture. They are committed to bui+din. 'roduct& that con&umer& around the )or+d can
de'end on to meet their dai+y need&. Their commitment to ,ua+ity be.in& in the conce't &ta.e&
and continue& throu.hout the +ifetime of the a''+iance. They are con&tant+y &ee*in. out ne) and
uni,ue )ay& to im'ro-e the function, 'erformance and &u&tainabi+ity of our 'roduct&. They )ant
our brand& to be the brand& cu&tomer& tru&t in e-ery home M e-ery)here.
1.2.3 *+, HISTORY OF WASHING MACHINE
Ancient 'eo'+e& c+eaned their c+othe& by 'oundin. them on roc*& or rubbin. them )ith
abra&i-e &and& and )a&hin. the dirt a)ay in +oca+ &tream&. E-idence of ancient )a&hin. &oa' )a&
found at Sa'o 4i++ in Rome, )here the a&he& containin. the fat of &acrificia+ anima+& )a& u&ed a&
&oa'.
The ear+ie&t )a&hin. NmachineN )a& the &crub board in-ented in @%F%. American, Came&
Gin. 'atented the fir&t )a&hin. machine to u&e a drum in @0A@, the drum made Gin.O& machine
re&emb+e a modern machine, ho)e-er it )a& &ti++ hand 'o)ered. In @0A0, 4ami+ton Smith
'atented the rotary )a&hin. machine. In @0%E, 5i++iam B+ac*&tone of Indiana bui+t a birthday
're&ent for hi& )ife. It )a& a machine, )hich remo-ed and )a&hed a)ay dirt from c+othe&. The
fir&t )a&hin. machine& de&i.ned for u&e in the home. The 4ur+ey Machine 3om'any of 3hica.o,
I++inoi& introduced the fir&t e+ectric"'o)ered )a&hin. machine 7the Thor8 in @F$0. A+-a C. Fi&her
)a& the in-entor. The machine )a& a drum ty'e )ith a .a+-ani9ed tub and an e+ectric motor, for
)hich a 'atent )a& i&&ued on Au.. F, @F@$.
The 5hir+'oo+ 3or'oration &tarted in @F@@ a& the U'ton Machine 3o., founded in St.
Co&e'h, Michi.an, to 'roduce e+ectric motor"dri-en )rin.er )a&her&. US e+ectric )a&hin.
machine &a+e& increa&ed after 5or+d 5ar I, reachin. F@D,$$$ unit& in @F#0. The main rea&on )hy
&o many 'eo'+e bou.ht the )a&hin. machine )a& becau&e it &a-ed 'eo'+e +ot& of time in dome&tic
ta&*&, and the re&u+t )a& that &ocietyO& e2'ectation& for c+ean+ine&& )ent u'.
In @FA@, 'roduction of Euro'eO& fir&t automatic )a&hin. machine& &tarted. In @F%0, the
fir&t microchi'"contro++ed automatic )a&hin. machine& )ere 'roduced. 5a&her de&i.n im'ro-ed
mar*ed+y durin. the @FD$&K the mechani&m )a& no) enc+o&ed )ithin a cabinetK more attention
)a& 'aid to e+ectrica+ &afetyK &'in dryer& )ere introduced, to re'+ace the dan.erou& 'o)er
)rin.er& of the day.
Bendi2 introduced the fir&t automatic )a&hin. machine in @FD%, ha-in. a''+ied for a
'atent in the &ame year. Genera+ E+ectric introduced the fir&t to' +oadin. automatic a+&o in @FE%.
Thi& machine had many of the feature& that are incor'orated into modern machine&. A +ar.e
number of US manufacturer& introduced com'etin. automatic machine& 7main+y of the to'
+oadin. ty'e in the +ate @FE$;& ear+y @FA$&. Se-era+ manufacturer& e-en 'roduced &emi"automatic
machine&, )here the u&er had to inter-ene at one or t)o 'oint& in the )a&h cyc+e.
In the UG, e+ectric )a&hin. machine& did not become 'o'u+ar unti+ the @FA$&. The ear+y
e+ectric )a&her& )ere &in.+e tub, )rin.er"ty'e machine&, automatic )a&hin. machine& bein.
e2treme+y e2'en&i-e. urin. the @FB$&, t)in tub machine& brief+y became -ery 'o'u+ar, he+'ed
by the +o) 'rice of the Ro++& Ra9or )a&her&. In the +ate @FF$&, the Briti&h in-entor Came& y&on
+aunched a ty'e of )a&hin. machine )ith t)o cy+inder& rotatin. in o''o&ite direction&K )hich, it
i& c+aimed, reduce& the )a&h time and 'roduce& c+eaner re&u+t&K ho)e-er, thi& machine i& not
current+y in 'roduction.
1.2.3 *-, HISTORY OF WHIRLPOOL
@F@@ 6oui& U'ton founded the U'ton Machine in thi& year to 'roduce motor"dri-en
)rin.er )a&her&.
@F@B Fir&t order of )a&her& )a& &o+d to Sear&, Roebuc* < 3o.
@F#F U'ton Machine 3om'any mer.ed )ith Nineteen 4undred 5a&her 3om'any of Ne)
?or*.
@FE0= Fir&t O5hir+'oo+O brand automatic )a&her )ith dua+ di&tribution )a& introduced. It
inc+uded t)o 'roduct +ine& one each )a& di&tributed throu.h Sear& and Nineteen 4undred.
@FA%= The 3om'any )a& rechri&tened a& O The 5hir+'oo+ 3or'oration.O
@FA0= the 3om'any mo-ed out of country for the fir&t time and in-e&ted in Bra9i+ian
a''+iance mar*et throu.h 'urcha&e of e,uity in Mu+tibra& S.A.
@FB0= The E+i&ha Gray II Re&earch < En.ineerin. 3enter )a& com'+eted in Benton
4arbor. In the &ame year the com'anyO& re-enue& cro&&ed the +e.endary J@ Bi++ion mar*
for the fir&t time.
@F%0= 5ithin a decade com'any doub+ed it& feat of J@ Bi++ion mar* and reached the J#
bi++ion re-enue +e-e+.
@F0B= The OGitchen AidO di-i&ion of 4obart 3or'oration )a& 'urcha&ed.
@F0%= 5hir+'oo+ tied"u' )ith Sundaram 3+ayton 6td. of India to form T1S 5hir+'oo+
6td.
@F0F= Thi& )a& a hi&toric year &ince the re-enue& cata'u+ted to hei.ht& of o-er JB Bi++ion
mar*. A+&o, the (oint -enture )ith N.1.!hi+i'& of Nether+and& ca++ed 5hir+'oo+ Euro'e
B.1. )a& formed to manufacture and mar*et a''+iance& in Euro'e.
@FF$= 3om'any e&tab+i&hed (oint -enture )ith Mat&u&hita E+ectric 3om'any of Ca'an to
'roduce -acuum c+eaner& for the North American mar*et.
@FF@= The 3om'any introduced and committed .+oba++y to it& 5or+d)ide E2ce++ence
Sy&tem, )hich i& a T>M 'ro.ram dedicated to e2ceedin. cu&tomer e2'ectation&. The
-i&ion to .+oba+i9e O5hir+'oo+ 3or'O. )a& rea+i9ed in the &ame year.
@FFD= Fir&t time 5hir+'oo+ became the No.@ &tand"a+one brand in UG, Ire+and,
Nether+and& and Be+.ium
@FFA= 5hir+'oo+ 3or'. ac,uired ma(ority of &ta*e in the T1S 5hir+'oo+ 6td. The 3
manufacturin. faci+ity of Ge+-inator India )a& a+&o ac,uired.
@FFB= 5hir+'oo+ 5a&hin. Machine& 6td. and Ge+-inator India 6td. mer.ed to.ether to
form 5hir+'oo+ of India 6td.
@FF0= Thi& year .a-e birth to a ne) com'any -i&ion that &ay&, NE-ery 4ome E-ery)here
)ith !ride, !a&&ion < !erformance.N
@FFF= 5hir+'oo+ of India cro&&ed the mi+e&tone of @ mi++ion &a+e& of a''+iance&.
#$$#= The O 5hir+'oo+ Strate.ic Architecture O )a& +aunched a& a frame)or* to achie-e the
-i&ion. The re-enue& of 5hir+'oo+ 3or'. &oared to J@$.A Bi++ion.
#$$@= 5hir+'oo+ India re.i&tered 'rofit < &o+d @.# mi++ion a''+iance&. It a+&o achie-ed the
No.@ 'o&ition in 3 < FA.
#$$#= The Aircon ran.e )a& &ucce&&fu++y +aunched and the 5hir+'oo+ of India ac,uired
BL mar*et &hare.
#$$D= A ne) mi&&ion &tatement of NE-erybody creatin. +oya+ cu&tomer& for +ifeN )a&
ado'ted.
#$$B= 5hir+'oo+ 3or'oration ac,uire& Mayta. and become the 5or+d& +ar.e&t )hite
.ood& com'any.
1.2.4 #OARD OF DIRECTORS
a+ton Ni.e+ Garric* PSi+-a 73hairman8
Ra( Cain 7Mana.in. irector8
Robert 6a)rence Min*
SS Raman
G.1. 3handra&e*aran
SC Scarff
Anand Bhatia
1.2.. *+, WHIRLPOOL VISION STATEMENT
E/01 H2304 E/015600. W786 P790, P+!!72:, P0;23+:<0
5i++ create the )or+d;& be&t home a''+iance&, )hich ma*e& 6ife ea&ier and more en(oyab+e for a++
'eo'+e. Their .oa+ i& a 5hir+'oo+ 'roduct in e-ery home, e-ery)here.
They )i++ achie-e thi& by creatin.= "
P790 in their )or* and each other
P+!!72: for creatin. unmatched cu&tomer +oya+ty for their brand&
P0;23+:<0 re&u+t& that e2cite < re)ard .+oba+ in-e&tor& )ith &u'erior return&
They )i++ brin. thi& dream to +ife throu.h the 'o)er of uni,ue .+oba+ < their
O=8!8+:97:> ?02?@0M 52A7:> 82>0860M 0/015600.
1.2.. *-, WHIRLPOOL MISSION STATEMENT
The mi&&ion of the cor'orate i& that the demand of their &e+-e& &o a& to care their
cu&tomer& and they )i++ &er-e )ith 'ride in e-ery home and brin. 'ro&'erity to their in-e&tor&
and cu&tomer&. They are 're'ared to chan.e the &tandard& of their indu&try and be the En-y of
their com'etitor&. They )i++ be +eader& in home a''+iance&, )hich a++ other& &tart to emu+ate.
1.2.B CORE COMPETENCIES
I::2/+872:: Uni,ue and com'e++in. &o+ution& -a+ued by our cu&tomer& and a+i.ned to our
brand& create com'etiti-e ad-anta.e and differentiated &hareho+der -a+ue.
O?0+872:+@ EC<0@@0:<0 *OPE(,: A methodo+o.y for &o+-in. 'rob+em& < continuou&
im'ro-ement of 'roduct& < 'roce&&e& throu.h 'ur&uit, ac,ui&ition, and uti+i9ation of
*no)+ed.e u&in. critica+ thou.ht and '+anned e2'erimentation he+'& u& achie-e
o'erationa+ e2ce++ence.
C=!8230 EC<0@@0:<0: E2ce++in. the cu&tomer e2'ectation from the com'any, it& brand&,
'roduct& and &er-ice& are a three"&te' 'roce&&. The three &te'& are= Gno) a cu&tomer, Be a
cu&tomer, Ser-e a cu&tomer.
Gno)in. a cu&tomer he+'& u& *no) )ho our cu&tomer& are, ho) to treat them, ho) )e
add -a+ue, and )hat the dri-er& of brand +oya+ty are. Thi& information i& .athered from the
cu&tomerO& data ba&e hi&tory. Thi& )ay )e are better ab+e to cu&tomi9e 'roduct& for them and
recommend the ri.ht 'roduct to &o+-e 'rob+em&. Bein. a cu&tomer i& im'ortant to &hare cu&tomer
*no)+ed.e and in&i.ht&, dri-e action& ba&ed on cu&tomer in&i.ht&, be 'a&&ionate about our brand&
and cu&tomer +oya+ty and 'ro-ide a 'o&iti-e -oice for our brand&. 5e &ho) em'athy for
cu&tomer& and &ee* to re&o+-e their 'rob+em& by creatin. con&i&tent cu&tomer touch"'oint&, )ith
our endea-or a+)ay& bein. to 'ro-ide uni,ue &o+ution& for the cu&tomer.
1.2.7 PRODUCTION
MANUFACTURING FACILITIES IN INDIA
5hir+'oo+ ha& in-e&ted hea-i+y in it& manufacturin. faci+itie& in India. 5hi+e the factorie&
in Faridabad and !ondicherry ha-e been u'.raded to meet the e2actin. )or+d c+a&& &tandard of
5hir+'oo+, the one under the con&truction at Ran(an.aon, !une )i++ &et the &tandard& a& one of
the )or+d;& front runner& in en-ironmenta+ &en&iti-e and eco"friend+y manufacturin. unit&.
FARIDA#AD
The refri.erator faci+itated at Faridabad in 4aryana manufacture& direct coo+.
Refri.erator& ran.in. from @BA +iter& to D@$ +iter&. Infu&ion of techno+o.y and u' .radation of
machinery a+on. )ith &tream+inin. of 'roce&&ed ha& enhanced the '+ant ca'acity from %,$$,$$$
unit& to 0,A$,$$$ unit& annua++y. 5hir+'oo+;& focu& at thi& '+an in on manufacturin. refri.erator&
that are made to &uit Indian condition& and re,uirement&, )hi+e matchin. 5hir+'oo+ .+oba+
,ua+ity &tandard.
PUDUCHERRY
The )a&her;& faci+ity at !uducherry on the Ea&t coa&t, manufacturer& &emi automatic and
automatic )a&her&. 3on&tant feedbac* from con&umer& ha& re&u+ted in im'ro-ed 'roduct ,ua+ity
and &ty+in., +eadin. to an im'ro-ed mar*et &hare. Thi& unit )a& a)arded the co-eted ISO F$$@
certification in @FFE and ISO @E$$@ certification in @FFB.
RANJANGAON
A &tate of art .a++ery for the manufacturer& of the G+oba+ No Fro&t refri.erator at
Ran(an.aon near !une, thi& R&. D$$ crore '+ant bui+t to e2actin. )or+d"c+a&& &tandard&, under+ine&
5hir+'oo+;& commitment& to India. It ha& been de&i.ned in accordance )ith the eco+o.ica+ and
en-ironmenta+ criteria that ha-e become &uch a concern in today;& &cenario the )or+d o-er.
1.2.8 WHIRLPOOL #RANDS
N286 A307<+: #+:9! N286 A307<+: #+:9!
United State& = 5hir+'oo+, Gitchen Aid, Ro'er, E&tate, G+adiator.
3anada = 5hir+'oo+, In.+i&, Gitchen Aid.
Me2ico = 5hir+'oo+, Acro&, Su'ermatic, Scro++&.
P7:<7?+@ P29=<8!
Air !urifier&, Automatic ryer&, Automatic 5a&her&, Bui+t"in O-en&,
ehumidifier&, i&h)a&her&, free9er&, 4ot 5ater 4eater&, 41A3, Micro)a-e O-en&, Ran.e&
7Ga& and E+ectric, Free9er&, Side"by"Side8, Room Air 3onditioner&, Tra&h 3om'actor&, )a&her&.
"78<60: A79 P29=<8!
B+ender&, Food !roce&&or&, 4and Mi2er&, 4ot")ater i&'en&er&, Stand Mi2er&, Toa&ter&,
3offee Ma*er&, Cuicer&.
P73+1 M+A08! S0/09
United State&, 3anada and Me2ico.
P7:<7?+@ P29=<8!
Bui+t"in O-en&, 3oo*er& 7Ga& and E+ectric, Free&tandin., Bui+t"in and Surface Unit&8,
i&h)a&her&, ryer&, Free9er& 7U'ri.ht and 3he&t8, Micro)a-e O-en&, Refri.erator& 7Bui+t"in,
3ombi& and Side"by"Side8, 5a&her& 7Front and To' 6oadin.8.
P73+1 M+A08! S0/09
Euro'e, Midd+e Ea&t, Africa, A&ia !acific.
P7:<7?+@ P29=<8!
Free9er&, Ga& and E+ectric Ran.e&, Micro O-en&, Refri.erator&, Room Air 3onditioner&,
5a&her&, 3om're&&or&.
1.2.D WHIRLPOOL OF INDIA LIMITED E PUDUCHERRY
5hir+'oo+ of India 6imited i& a fu++y o)ned com'any by 5hir+'oo+ 3or'oration, USA
4ead ,uarter& at Benton 4arbor, Michi.an USA. 5hir+'oo+ 3or'oration i& the )or+d& +eadin.
manufacturer& and mar*eter of home a''+iance&. 5a&hin. Machine&, ryer&, i&h 5a&her&,
Refri.erator&, Free9er&, 3oo*er&, Micro)a-e O-en&, Room Air 3onditioner&, Sma++ *itchen
A''+iance&, etc.
5hir+'oo+ of India +imited, )a&her unit, !uducherry )a& the fir&t manufacturin. -enture
of the 5hir+'oo+ 3or'oration, USA, the )or+d;& +ar.e&t manufacturer of home a''+iance&. In
@F0%, thi& unit )a& formed a& a (oint -enture )ith M:& Sundaram 3+ayton +imited, a T1S .rou'
com'anie& and )a& named a& T1S 5hir+'oo+ 6imited. Thi& unit i& +ocated on a @$$ acre
&'ra)+in. area manufacturin. automatic and &emi automatic )a&hin. machine. Thi& unit i&
certified ISO F$$@ faci+ity by U6. It ha& a+&o been c+eared for HSI mar* certification from
Ca'ane&e >ua+ity &tandard& for E2'ort& to Ca'an after our faci+ity a''ro-a+.In 5OI6, )a&her unit
ha& a tota+ of @@ de'artment& com'ri&in. of ##$ em'+oyee& on the )ho+e. Out of )hich B% i&
mana.ement e2ecuti-e& and re&t @AD are 'roduction o'erator&.
The -ariou& de'artment& in the company are
Admini&tration e'artment
Finance e'artment
4uman Re&ource e'artment
Materia+& e'artment
!roduction e'artment
Medica+ e'artment
Store& e'artment
!+ant Maintenance e'artment 7!M8
Re.iona+ Techno+o.y 3enter 7RT38
!roce&& En.ineerin. e-e+o'ment 7!E8
>ua+ity A&&urance e'artment 7>A8
S037 A=823+87< F=@@1 A=823+87< H27F2:8+@ AC7!
5hitema.ic 4 %$ Q % *.
5hitema.ic S %$ Q % *.
5hitema.ic Su'er"Soa* Q B.# G.
5hitema.ic E BA Q B.# G.
5hitema.ic SB$"Bu99 Q B G.
5hitema.ic SI B$ Q B.# G.
4 BA Q B G.
F"BA Q B G.
F! BA Q B G.
F! B$ 6R Q B G.
F! S'+a&h Q A G.
Sen&ation ER Q B.A G.
Sen&ation EM Q B.A G.
1.2.1G CLASSIFICATION OF WASHING MACHINE
1.2.11 ACHIEVEMENTS
5hir+'oo+ came to India on the cre&t of a +on. trai+ of achie-ement& and ha& &ince
furthered thi& record. By end"@FFF, 5hir+'oo+ became the +ar.e&t &e++in. a''+iance brand in the
country. A cou'+e of year& +ater, it a+&o became the +ar.e&t e2'orter of home a''+iance& from
India. In the cour&e of thi& .ro)th and de-e+o'ment, 5hir+'oo+ ha& a+&o achie-ed immen&e brand
e,uity in the Indian mar*et. 5hir+'oo+ ha& &ucce&&fu++y e&tab+i&hed ne) ru+e& of mar*etin. and
brandin. in the home"mar*et &ector. It& ri-a+& ha-e ado'ted the ne) 'ractice&, but the 5hir+'oo+
brand &tand& out to the e2tent that authoritati-e &ur-ey& re'orted it to be the mo&t 'referred brand
in refri.erator& and )a&hin. machine& in #$$D. 7Mi++)ard Bro)n Brand Trac*8.
5hir+'oo+ of India e2'ort& to more than A$ hi.h"-a+ue mar*et& in A&ia and other 'art& of
the )or+d a& )e++. It& 'roduct& are cu&tomi9ed to the +oca+ &tandard& and different need& of each
of the&e mar*et&. The&e ,ua+itie& of 5hir+'oo+ are e2em'+ified in it& Indian &a+e& a& )e++. The
com'any ha& &et u' a hi.h+y e,ui''ed 'roduct de-e+o'ment centre in !une, )hich 'ro-ide&
.+oba+ de&i.n &er-ice& to three other 5hir+'oo+ re&earch and de-e+o'ment faci+itie& ba&ed in
Bra9i+, Ita+y and the US. Indeed, the Indian o'eration& of 5hir+'oo+ are a -ery im'ortant
contributor to it& .+oba+ -i&ion of NBein. in e-ery home, e-ery)hereN. In )a&her 'roduct&,
5hir+'oo+ )a& a.ain the fir&t to come out )ith a 3ombimatic / a &in.+e tub &emi"automatic
)a&hin. machine that did a)ay )ith the ha&&+e of &hiftin. c+othe& from one tub to another.
1.2.12 C23?+:1 7! !625: -1 + ;@+8 O>+:7F+872: S8=<8=0 +! -0@25=

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1.3 NEED FOR THE STUDY
E-ery or.ani9ation need& in-entory for &mooth runnin. of it& acti-itie&. It &er-e& a& a +in*
bet)een 'roduction and di&tribution 'roce&&e&. The in-e&tment in in-entorie& con&titute& the mo&t
&i.nificant 'art of current a&&et&:)or*in. ca'ita+ in mo&t of the underta*in.&. Thu&, it i& -ery
e&&entia+ to ha-e 'ro'er contro+ and mana.ement of in-entorie&. The 'ur'o&e of in-entory
mana.ement i& to en&ure a-ai+abi+ity of materia+& in &ufficient ,uantity a& and )hen re,uired and
a+&o to minimi&e in-e&tment in in-entorie&. So, in order to under&tand the nature of in-entory
mana.ement of the or.ani9ation, I too* thi& In-entory Mana.ement a& a to'ic for my 'ro(ect, to
.i-e findin.& and &u..e&tion& by ado'tin. and ana+y9in. different in-entory contro+ techni,ue&.
CHAPTER)II
REVIEW OF LITERATURE
2.1 MEANING OF INVENTORY
In-entory .enera++y refer& to the materia+& in &toc*. It i& a+&o ca++ed the id+e re&ource of a
com'any. In-entorie& re're&ent tho&e item& )hich are either &toc*ed for &a+e or they are in the
'roce&& of manufacturin. or they are in the form of materia+& )hich are yet to be uti+i9ed.
It a+&o refer& to the &toc*'i+e of the 'roduct& a firm )ou+d &e++ in future in the norma+
cour&e of bu&ine&& o'eration& and the com'onent& that ma*e u' the 'roduct.

In-entory i& a detai+ed +i&t of tho&e mo-ab+e item& )hich are nece&&ary to manufacture a
'roduct and to maintain the e,ui'ment and machinery in .ood )or*in. order.
2.2 TYPES OF INVENTORIES
A manufacturin. firm .enera++y carrie& the fo++o)in. ty'e& of in-entorie&=

Ra) Materia+&.
Bou.ht out 'art&.
5or*"in"'roce&& in-entory 75I!8.
Fini&hed .ood& in-entorie&.
Maintenance, re'air and o'eratin. &tore&.
Too+& in-entory.
Mi&ce++aneou& in-entory.
Good& in tran&it.
Good& for re&a+e.
Scra' Materia+.
2.3 REASONS FOR HOLDING INVENTORY
To &tabi+i9e 'roduction.
To ta*e ad-anta.e of 'rice di&count&.
To meet the demand durin. the re'+eni&hment 'eriod.
To 're-ent +o&& of order&.
To *ee' 'ace )ith chan.in. mar*et condition&.
2.4 MOTIVES OF HOLDING INVENTORIES
The Tran&action Moti-e )hich faci+itate& continuou& 'roduction and time+y e2ecution of
&a+e& order&.
The !recautionary Moti-e )hich nece&&itie& the ho+din. of in-entorie& for meetin. the
un'redictab+e chan.e& in demand and &u''+ie& of materia+&.
The S'ecu+ati-e Moti-e )hich induce& to *ee' in-entorie& for ta*in. ad-anta.e of 'rice
f+uctuation&, &a-in. in re"orderin. co&t& and ,uantity di&count& etc.,.
2.. COSTS ASSOCIATED WITH INVENTORY
!roduction co&t.
3a'ita+ co&t.
Orderin. co&t.
3arryin. co&t.
Shorta.e co&t.
2.B INVENTORY CONTROL
The main ob(ecti-e of in-entory contro+ i& to achie-e ma2imum efficiency in 'roduction <
&a+e& )ith minimum in-e&tment in in-entory.
In-entory contro+ i& a '+anned a''roach of determinin. )hat to order, )hen to order and
ho) much to order and ho) much to &toc*, &o that co&t& a&&ociated )ith buyin. and &torin. are
o'tima+ )ithout interru'tin. 'roduction and &a+e&.
2.7 #ENEFITS OF INVENTORY CONTROL
The benefit& of in-entory contro+ are=
Im'ro-ement in cu&tomer&; re+ation&hi' becau&e of the time+y de+i-ery of .ood& and
&er-ice&.
Smooth and uninterru'ted 'roduction and hence, no &toc* out.
Efficient uti+i9ation of )or*in. ca'ita+.
Economy in 'urcha&in..
E+iminatin. the 'o&&ibi+ity of du'+icate orderin..
2.8 PRINCIPLES OF INVENTORY CONTROL
In-entory i& on+y created by &'endin. money for materia+& and the +abour and o-erhead to
'roce&& the materia+&.
In-entory i& reduced throu.h &a+e& and &cra''in..
Accurate &a+e& < 'roduction &chedu+e foreca&t& are e&&entia+ for efficient 'urcha&in.,
handin. < in-e&tment in in-entory.
Mana.ement 'o+icie& )hich are de&i.ned to effecti-e+y ba+ance &i9e and -ariety of
in-entory )ith co&t of carryin. that in-entory are the .reate&t factor in determinin.
in-entory in-e&tment.
Foreca&t& he+' determine )hen to order materia+&. 3ontro++in. in-entory i& accom'+i&hed
throu.h &chedu+in. 'roduction.
Record& do not 'roduce contro+.
3ontro+ i& com'arati-e < re+ati-e, not ab&o+ute. It i& e2erci&ed throu.h 'eo'+e )ith
-aryin. e2'erience& and (ud.ment ru+e& < 'rocedure& e&tab+i&h a ba&e from )hich the
indi-idua+& can ma*e e-a+uation and deci&ion.
5ith the con&i&tent 'ractice& bein. fo++o)ed, in-entory contro+ can become 'redictab+e
and 'ro'er+y re+ated to 'roduction and &a+e& acti-ity.
2.D INVENTORY CONTROL E TERMINOLOGY
D03+:9:
It i& the number of item& re,uired 'er unit of time. The demand may be either
determini&tic or 'robabi+i&tic in nature.

O90 <1<@0:
The time 'eriod bet)een t)o &ucce&&i-e order& i& ca++ed order cyc+e.
L0+9 8730:
The +en.th of time bet)een '+acin. an order and recei't& of item& i& ca++ed +ead time.
S+;081 !82<A:
It i& a+&o ca++ed buffer &toc* or minimum &toc*. It i& the &toc* or in-entory needed to
account for de+ay& in materia+& &u''+y and to account for &udden increa&e in demand due to
ru&h order&.
I:/0:821 8=:2/0:
If the com'any maintain& in-entorie& e,ua+ to D month& con&um'tion. It
mean& that in-entory turno-er i& E time& a year i.e., the entire in-entory i& u&ed u' and
re'+aced E time& a year.
2.1G INVENTORY COST RELATIONSHIPS
There are t)o ma(or co&t a&&ociated )ith in-entory. !rocurement co&t and carryin. co&t.
Annua+ 'rocurement co&t -arie& )ith the number& of order&. Thi& im'+ie& that the 'rocurement
co&t )i++ be hi.h, if the item i& 'rocured fre,uent+y in &ma++ +ot&. The annua+ 'rocurement co&t i&
direct+y 'ro'ortiona+ to the ,uantity in &toc*. The in-entory carryin. co&t decrea&e&, if the
,uantity ordered 'er order i& &ma++. The t)o co&t& are diametrica++y o''o&ite to each other. The
ri.ht ,uantity to be ordered i& one that &tri*e& a ba+ance bet)een the t)o o''o&ition co&t&. Thi&
,uantity i& referred to a& HEconomic Order >uantityI.
2.11 ECONOMIC ORDER HUANTITY
MEANING
A deci&ion about ho) much to order ha& .reat &i.nificance in in-entory mana.ement.
The ,uantity to be 'urcha&ed &hou+d neither be &ma++ nor bi. becau&e co&t& of buyin. and
carryin. materia+& are -ery hi.h. Economic order ,uantity i& the &i9e of the +ot to be 'urcha&ed
)hich i& economica++y -iab+e. Thi& i& the ,uantity of materia+& )hich can be 'urcha&ed at
minimum co&t&. Genera++y economic order ,uantity i& the 'oint at )hich in-entory carryin. co&t&
are e,ua+ to order co&t&. In determinin. economic order ,uantity it i& a&&umed that co&t of
mana.in. in-entory i& made u' &o+e+y of t)o 'art& i.e., orderin. co&t and carryin. co&t. The co&t
re+ation&hi'& are &ho)n in be+o) fi.ure.
FORMULA FOR CALCULATING ECONOMIC ORDER HUANTITY *EOH,

E<2:237< O90 H=+:8781

3o&t& Annua+ Tota+ 3o&t
Annua+ In-entory 3arryin. 3o&t
Annua+ Orderin. 3o&t
>T Economic Order >uantity
Order >uantity
2.12 SAFETY STOC"
MEANING
The economic order ,uantity formu+a i& de-e+o'ed ba&ed on a&&um'tion that the demand
i& *no)n and certain and that the +ead time i& con&tant and doe& not -ary. In actua+ 'ractica+
&ituation&, there i& an uncertainty )ith re&'ect to the both demand a& )e++ a& +ead time. The tota+
foreca&ted demand may be more or +e&& than actua+ demand and the +ead time may -ary from
e&timated time. In order to minimi9e the effect of uncertainty due to demand and the +ead time, a
firm maintain& &afety &toc*, re&er-e &toc*& or buffer &toc*&.
The &afety &toc* i& defined a& Hthe additiona+ &toc* of materia+ to be maintained in order
to meet the unantici'ated increa&e in demand ari&in. out of uncontro++ab+e factor&I.
In &im'+e it i& te++& about )hich i& u&ed to 'rotect a.ain&t uncertaintie&.
Becau&e it i& difficu+t to 'redict the e2act amount of &afety &toc* to be maintained, by
u&in. &tati&tica+ method& and &imu+ation, it i& 'o&&ib+e to determine the +e-e+ of &afety &toc* to be
maintained.
DETERMINATION OF SAFETY STOC"
If the +e-e+ of &afety &toc* i& maintained i& hi.h, it +oc*& u' the ca'ita+ and there i& a
'o&&ibi+ity of ri&* of ob&o+e&cence. On the other hand, if it i& +o), there i& a ri&* of &toc* out
becau&e of )hich there may be &to''a.e of 'roduction. 5hen the -ariation in +ead time i&
'redominant, the &afety &toc* can be com'uted a&=
Safety Stoc* S 7Ma2imum 6ead time" Norma+ 6ead time8 T emand
SAFETY STOC"
The &er-ice +e-e+ of in-entory thu& de'end& u'on the +e-e+ &afety &toc*&. 6ar.e the
&afety &toc*&, there i& a +e&&er ri&* of &toc* out and, hence, hi.her &er-ice +e-e+. Sometime& hi.her
&er-ice +e-e+& are not de&irab+e a& they re&u+t in increa&e in co&t&, thu&, fi2in. u' a &afety &toc*
+e-e+ i& critica+. U&in. 'a&t date re.ardin. the demand and +ead time data, re+iabi+ity of &u''+ier&
and &er-ice +e-e+ de&ired by mana.ement, &afety &toc* can be determined )ith accuracy.
2.13 A#C ANALYSIS
MEANING
The in-entory of an or.ani9ation .enera++y con&i&t& of thou&and& of item& )ith -aryin.
'rice&, u&a.e rate and +ead time. It i& neither de&irab+e nor 'o&&ib+e to 'ay e,ua+ attention of a++
item&.
AB3 ana+y&i& i& a ba&ic ana+ytica+ too+ )hich enab+e& mana.ement to concentrate it&
effort& )here re&u+t& )i++ be .reater. The conce't a''+ied to in-entory i& ca++ed a& AB3 ana+y&i&.
Stati&tic& re-ea+ that (u&t a fe) item& account for bu+* of the annua+ con&um'tion of the
materia+&. The&e fe) item& are ca++ed A c+a&& item& )hich ho+d the *ey to bu&ine&&. The other
item& *no)n a& B < 3 )hich are numerou& in number but their contribution i& +e&& &i.nificant.
AB3 ana+y&i& thu& tend& to &e.re.ate the item& into three cate.orie& A,B < 3 on the ba&i& of their
-a+ue&. The cate.ori9ation i& made to 'ay ri.ht attention and contro+ demanded by item&.
FEATURES OF A#C ANALYSIS
A Class (High Value) Class (Moderate Value) C Class (!ow Value)
@. Ti.ht contro+ on
&toc* +e-e+&
#. 6o) &afety &toc*
Moderate contro+
Medium
6e&& contro+
6ar.e
D. Ordered fre,uent+y
E. Indi-idua+ 'o&tin. in
&tore&
A. 5ee*+y contro+
re'ort&
B. 3ontinuou& effort to
reduce +ead time
6e&& fre,uent+y
Indi-idua+
Month+y contro+
Moderate effort&
Bu+* orderin.
3o++ecti-e 'o&tin.
>uarter+y contro+
Minimum effort&
ADVANTAGES
Thi& a''roach he+'& the mana.er to e2erci&e &e+ecti-e contro+ < focu& hi& attention on+y
on a fe) item&.
By e2erci&in. &trict contro+ on A c+a&& item&, the materia+& mana.er i& ab+e to &ho) the
re&u+t& )ithin a &hort 'eriod of time.
It re&u+t& in reducer c+erica+ co&t&, &a-e& time and effort and re&u+t& in better '+annin. and
contro+ and increa&ed in-entory turno-er.
AB3 ana+y&i&, thu&, trie& to focu& and direct the effort ba&ed on the merit of the item& and,
thu&, become& an effecti-e mana.ement contro+ too+.
2.14 FSN ANALYSIS
A++ the item& in the in-entory are not re,uired at the &ame fre,uency. Some are re,uired
re.u+ar+y, &ome occa&iona++y and &ome -ery rare+y. FSN ana+y&i& c+a&&ifie& item& into fa&t
mo-in., &+o) mo-in., non mo-in. item&.
2.1. INVENTORY TURNOVER RATIO
Goh+er define& in-entory turno-er a& Ha ratio )hich mea&ure& the number of time& a
firm;& a-era.e in-entory i& &o+d durin. a yearI.
A hi.her turno-er rate indicate& that the materia+ in ,ue&tion i& a fa&t mo-in. one. A +o)
turno-er rate, on the other hand, indicate& o-er"in-e&tment and +oc*in. u' of )or*in. ca'ita+ on
unde&irab+e item&.
In-entory turno-er ratio may be ca+cu+ated in different )ay& by chan.in. the numerator,
but *ee'in. the &ame denominator. For in&tance, the numerator may be materia+& con&umed, co&t
of .ood& &o+d or net &a+e&. Ba&ed on any one of the&e, the ratio differ& from indu&try to indu&try.
Stoc* turno-er i& mea&ured in term& of the ratio of the -a+ue of materia+& con&umed to the
a-era.e in-entory durin. the 'eriod. the ratio indicate& the number of time& the a-era.e in-entory
i& con&umed and re'+eni&hed. By di-in. no. of day& in a yeat by turno-er ratio, the number of
day& for )hich the a-era.e in-entory i& he+d, can be a&certained.
3om'arin. the no. day& in the ca&e of t)o different materia+&, it i& 'o&&ib+e to *no) )hich
i& fa&t mo-in. < )hich i& &+o) mo-in.. On that ba&i&, attem't may be made to reduce the
amount of ca'ita+ +oc*ed u', and 're-ent o-er"&toc*in. of &+o) mo-in. item&.
Net &a+e&
In-entory turno-er ratio S
A-.. in-entory
No. of day& in a year
In-entory -e+ocity S
In-entory turno-er ratio
2.1B A STUDY ON INVENTORY MANAGEMENT #Y RAMYA

In thi& re-ie) Mi&&. RAM?A, )ho a& done the 'ro(ect about In-entorie& at 5OI6, it i&
con&titute the mo&t &i.nificant 'art of the current a&&et& of a +ar.e ma(ority of com'anie& in India.
Ra) materia+&, .ood& in 'roce&& and fini&hed .ood& a++ re're&ent -ariou& form& of in-entory.
Each ty'e re're&ent& money tied u' unti+ the in-entory +ea-e& the com'any a& 'urcha&ed
'roduct&. Becau&e of the +ar.e &i9e of the in-entorie& maintained by firm&, a con&iderab+e amount
of fund& i& re,uired to be committed to them. It i& therefore ab&o+ute+y im'erati-e to mana.e
in-entorie& efficient+y and effecti-e+y in order to a-oid unnece&&ary in-e&tment&. One of the mo&t
critica+ and time"con&umin. a&'ect& of manufacturin. i& mana.in. the ta&*& of maintainin.
&ufficient amount& of materia+& on hand at a++ time&. One of the main area& of the 'ro(ect i& the
ana+y&i& 'art )here the data obtained from the e2i&tin. &tudy i& been uti+i9ed. For the ana+y&i&
'art, AB3 ana+y&i& )a& carried out. The norm& )ere fi2ed for each of the in-entory 'art ta*en
into account for the 'ro(ect. There by the in-entory to be *e't for the 'roduction of each mode+
)a& a+&o arri-ed at.
2.17 A REPORT ON INVENTORY MANAGEMENT #Y VIJAYARAMAN
In thi& re-ie) Mr. 1ICA?ARAMAN .R, )ho a& done the 'ro(ect about A re'ort In-entory
at 5OI6, an In-entory Mana.ement Sy&tem i& an e&&entia+ e+ement in an or.ani9ation. It i&
com'ri&ed of a &erie& of 'roce&&e& )hich 'ro-ide an a&&e&&ment of the or.ani9ation;& in-entory.
The In-entory Mana.ement Sy&tem a+&o aid& the or.ani9ation in achie-in. it& .oa+& and
ob(ecti-e& )ith the 'rimary focu& on addin. -a+ue for the cu&tomer&. The mana.ement of
in-entory add& -a+ue for cu&tomer& 7,ua+ity, &'eed, f+e2ibi+ity, and co&t8, and thi& i& the 'rimary
con&ideration of the O'eration& Mana.ement Sy&tem. In-entory mana.ement i& 'o&&ib+y one of
the riche&t area& of o'eration& mana.ement, )ith many too+& and techni,ue& a-ai+ab+e to he+'
mana.er& run their 'roce&&e& a& effecti-e+y a& 'o&&ib+e.
In thi& 'ro(ect he made an ana+y&i& for E2'ort Oriented Unit& 7EOU8 and fi2in. norm& for
3offee Ma*er, 3offee Grinder, Grind Mi++ < Micro O-en. After fini&hin. ana+y&i& he com'are&
bet)een the Su..e&ted norm& and E2i&tin. norm&. 4e a+&o made an ana+y&i& of 5a&hin. Machine
and their norm& for different c+a&&ification of 5a&her& at 5OI6. Fina++y he u&ed corre+ation )ith
Stati&tica+ Too+&. 4e a+&o c+a&&ified EOU;& < 5a&her& 'roduct& )ith AB3 3+a&&ification.
2.18 INVENTORY AS MANAGING INVENTORY #Y WOLFE #AG#Y
In thi& re-ie) Mr. 5O6FE BAGB? e2'+ain& in-entory a& Mana.in. in-entory to Meet
!rofit Goa+&, Shortenin. the ca&h cyc+e, a-oidin. in-entory &horta.e, A-oid e2ce&&i-e carryin.
co&t& for unu&ed in-entory, Im'ro-in. 'rofitabi+ity by decrea&in. ca&h con-er&ion, CIT.
G0887:> !3+8 +-2=8 7:/0:821
5hen a manufacturin. firm )or*& to .ain .reater contro+ o-er mana.ement of it&
in-entory, it he+'& to *no) )hat thi& mean& for a com'any. For &tarter&, ma2imi9in. a
manufacturer;& ca&h f+o) and 'rofitabi+ity inc+ude& *ee'in. a )atchfu+, di&cernin. eye on
chan.e& in &u''+y and demand, )hich mean& &imu+taneou&+y &crutini9in. e2terna+ factor&
that mi.ht affect &u''+y and demand.
S6280:7:> 860 <+!6 <2:/0!72: <1<@0
Much of thi& can be accom'+i&hed )hen manufacturer& u'date their &chedu+in.
&y&tem&. The 5eb"ba&ed nature of an in-entory mana.ement &y&tem a++o)& E+ectronic
data interchan.e of 'ro(ected demand and -endor re,uirement& are tran&mitted throu.hout
the di&tribution net)or*. Thi&, in turn, *ee'& the net)or*&, 'roduction and de+i-erie& in
near rea+"time &ynchroni9ation )ith the +ate&t net)or* in-entory, foreca&t and actua+
demand information. Another )ay to &horten the ca&h con-er&ion cyc+e i& to ha-e c+ear
channe+& of communication )ith -endor&. Sti++, ad-anced in-entory mana.ement &oft)are
i& nothin. )ithout a &tron. interna+ &u''+y chain, e&'ecia++y )hen +oya+ em'+oyee& )ho
)ant to )or* on beha+f of the com'any;& .oa+& &u''ort it.
A/2797:> 7:/0:821 !628+>0
Mo&t manufacturer& reco.ni9e that &u''+ier in-entorie& are im'ortant. E-en
thou.h more &toc* mean& hi.her tota+ co&t&, the a+ternati-e i& often too +itt+e &toc* )hich
tend& to 'ut the bra*e& on o'eration&. Thi& mean& ne.ati-e im'act in more )ay& than one.
One ob-iou& )ay to ta*e 'recaution& for a-oidin. in-entory &horta.e i& by u&in. more
than one -endor in 'articu+ar area& of the &u''+y chain.
A/279 0C<0!!7/0 <+17:> <2!8! ;2 =:=!09 7:/0:821
Mo&t com'anie& need to reduce in-entory in )hate-er )ay &eem& mo&t
rea&onab+e, con&iderin. the -ariab+e& faced by the manufacturer. Thi& i&n;t to &ay that
manufacturin. firm& )i++ be e+iminatin. )arehou&in. anytime &oon. But, it i& im'ortant to
note that dra&tic reduction& in in-entory co&t& are a-ai+ab+e to mo&t any com'any that
)ant& better contro+. Much of thi& effort dea+& )ith bui+din. co++aborati-e re+ation&hi'&
)ith &u''+ier& to the 'oint )here mo&t in-entory"re+ated matter& can be )or*ed out.
3on&i.nment in-entory i& another )ay to &a-e in-entory co&t&. Gi-e &omeone e+&e the
re&'on&ibi+ity for mo-in. in-entory &o it doe&n;t co&t the manufacturer a& much to ho+d
onto it
I3?2/7:> ?2;78+-7@781 -1 90<0+!7:> <+!6 <2:/0!72:
Boo&tin. financia+ 'erformance i& another benefit that come& from better
in-entory mana.ement. In fact, a +ar.e number of manufacturer& en(oy &i.nificant &a-in.&
and better 'erformance by choo&in. the a''roach to in-entory reduction that )or*& be&t
for them. One -ita+ mea&urement for determinin. ho) effecti-e+y a manufacturer;&
in-entory mana.ement &y&tem i& o'eratin. i& referred to a& in-entory turno-er.
E&&entia++y, it mea&ure& ho) efficient+y in-entory mo-e& throu.h the or.ani9ation. In fact,
manufacturin. e2ecuti-e& are to+d ne-er to undere&timate the im'ortance of in-entory
turn&. Gainin. better contro+ o-er account& recei-ab+e& 'o+icie& i& another 'o'u+ar+y
re'orted a''roach for u&in. in-entory to im'ro-e 'rofitabi+ity. e'endin. u'on the nature
of bu&ine&&, ear+y or on"time 'ayment di&count& can be the incenti-e for mo-in. in-entory
fa&ter.
JIT
For year&, American manufacturer& ha-e &tri-ed for im'ro-ed in-entory
mana.ement &y&tem&. The c+o&er they .et to carry 9ero in-entorie&, the c+o&er they .et to
reach the manufacturin. efficiency. Such thin*in., combined )ith today;& a-ai+ab+e
techno+o.y, ha& brou.ht in-entory mana.ement &y&tem& to a ne) +e-e+. Manufacturer&
can no) meet their cu&tomer&; demand )ithout incurrin. the co&t& and burden& that come
from &toc*in. e2ce&& in-entory. Feature& &uch a& effecti-e foreca&tin., -endor
mana.ement and data mana.ement contro+ ma*e it 'o&&ib+e for manufacturer& to achie-e
a much hi.her rate of efficiency. The&e feature& enab+e manufacturer& to &ee* to mana.e
in-entory a& a financia+ in-e&tment, a& )e++ a& a method for 'uttin. more money in their
'oc*et&.
2.1D A STUDY ON INVENTORY MANAGEMENT #Y CHARLES AT"INSON
In thi& re-ie) Mr. 34AR6ES ATGINSON e2'+ain& in-entory a& in-entory mana.ement
to'ic&, he e2'+ain& a-era.e in-entory +e-e+&, in thi& to'ic he e2'+ained about t)o 'art&. The fir&t
ha+f 'art of thi& artic+e co-er& ho) to find )hat in-entory +e-e+& &hou+d be, and the &econd ha+f
co-er& ho) to e-a+uate it..
A-era.e In-entory 6e-e+&
P+8 I: H25 82 O?8737F0 A/0+>0 I:/0:821 L0/0@!I
In thi& 'art, it 'ro-ide& a brief de&cri'tion for ho) o'tima+ in-entory +e-e+& for materia+&
are *e't. E&&entia++y, thi& &ection can &er-e a& a &tartin. 'oint for in-entory mana.er&. The Fir&t
thin. he determine& the idea+ in-entory +e-e+& i& a materia+O& Economic Order >uantity 7EO>8.
Thi& i& the amount one &hou+d be orderin. )hen you '+ace order&.
Ne2t he determine& Safety Stoc* 7SS8. Thi& i& the amount that you &hou+d ha-e remainin.
)hen the EO> arri-e&. Thi& &hou+d be intuiti-e becau&e &afety i& )hat you ha-e )hen your
&hi'ment arri-e& and )hen the order arri-e& 7EO>8 it .et& added to the &afety &toc*.
It i& c+ear that a-era.e minimum and ma2imum +e-e+ becau&e you mi.ht not recei-e the
EO> e2act+y )hen you '+anned to and therefore may ha-e more or +e&&. On a-era.e you &hou+d
ha-e the SS amount )hen you recei-e &hi'ment&. Bet)een the&e t)o a-era.e minimum and
ma2imum -a+ue& +ie& your +on."term a-era.e in-entory.
P+8 II: H25 82 A!!0!! *0/+@=+80, I:/0:821 L0/0@!I
A-era.e In-entory can be ca+cu+ated by Sim'+i&tic Method.
Mo&t method& of accountin. ta*e the be.innin. in-entory of a 'eriod, add it to the endin.
in-entory of a 'eriod, and di-ide by #. Thi& e&&entia++y 'ro-ide& the mathematica+ a-era.e for a
.i-en month.
A/>. I:/0:821 J *#0>7::7:> I:/0:821K *#0>7::7:> I:/0:821 K U:78! P29=<09)U:78!
S2@9,,L2
Or more &im'+y=
A/>. I:/0:821 J *#0>7::7:> I:/0:821 K E:97:> I:/0:821,L2
CHAPTER)III
O#JECTIVES OF THE STUDY
PRIMARY O#JECTIVE
To ana+y&e the efficiency of In-entory Mana.ement of 5hir+'oo+ of India 6td.
SECONDARY O#JECTIVE
To identify o'timum +e-e+ of in-entory )hich minimi9e& the co&t.
To identify the &afety &toc* +e-e+ for -ariou& com'onent&.
To c+a&&ify the -ariou& com'onent& ba&ed on it& -a+ue and mo-ement&.
To identify in-entory re,uirement of the com'any for the ne2t year.
CHAPTER)IV
RESEARCH METHODOLOGY
4.1 RESEARCH
Re&earch i& a 'roce&& in )hich the re&earcher )i&h to find out the end re&u+t for a .i-en
'rob+em and thu& the &o+ution he+'& in future cour&e of action. The re&earch ha& been defined a&
HA carefu+ in-e&ti.ation or en,uiry e&'ecia++y throu.h &earch for ne) fact& in branch of
*no)+ed.eI
4.2 RESEARCH DESIGN
The re&earch de&i.n u&ed in thi& 'ro(ect i& Ana+ytica+ in nature the 'rocedure u&in., )hich
re&earcher ha& to u&e fact& or information a+ready a-ai+ab+e, and ana+y9e the&e to ma*e a critica+
e-a+uation of the 'erformance.
4.3 DATA COLLECTION
P73+1 S2=<0!
@. ata are co++ected throu.h 'er&ona+ inter-ie)& and di&cu&&ion )ith Finance"
E2ecuti-e.
#. ata are co++ected throu.h 'er&ona+ inter-ie)& and di&cu&&ion )ith Materia+
!+annin." e'uty Mana.er.
S0<2:9+1 S2=<0!
@. The data are co++ected from the annua+ re'ort& maintained by the com'any for the
'a&t &i2 year& -i9., #$$#"#$$%
#. ata are co++ected from the com'any;& )eb&ite.
D. Boo*& and (ourna+& 'ertainin. to the to'ic.
4.4 TOOLS USED IN THE ANALYSIS
Economic Order >uantity.
Safety Stoc*.
AB3 Ana+y&i&.
FSN Ana+y&i&.
6inear Re.re&&ion method.
In-entory turno-er ratio&.
4.. PERIOD OF STUDY
The 'eriod of the &tudy at 5hir+'oo+ of India 6imited, !uducherry i& for one month.
CHAPTER)V
DATA ANALYSIS AND INTERPRETATION
..1 ECONOMIC ORDER HUANTITY *EOH,
MEANING
Economic Order >uantity i& the In-entory mana.ement techni,ue for determinin.
o'timum order ,uantity )hich i& the one that minimi&e& the tota+ of it& order and carryin. co&t&.
TA#LE ..1.1 ECONOMIC ORDER HUANTITY
S@. N2.
C23?2:0:8! D03+:9
P0 10+
R0)O90
C2!8L
290
C+17:>
C2!8L=:78
L10+
EOH
N2. 2;
=:78!
O9009
N2. 2;
290
?0 10+
1.
Bearing - Ball Sealed
6006 3,60,000 12,200 2 66,272.17 30,000 5.43
2.
Bearing - Ball Sealed -
6205 - Swift 48,000 6,200 2 17,251.09 4,000 2.78
3.
Drive assl - !B" - #$ina
%&gitat'r( - 2 )in drive 1,44,000 1,700 36 3,687.82 12,000 39.05
4.
Drive assl - *#" Dl+ -
!B" - #$ina %,-)eller( 96,000 1,700 36 3,011.09 8,000 31.88
5.
Driven ./lle - !B" -
#$ina %Sa-e )/lle( 2,40,000 1,700 36 4,760.95 20,000 50.41
6.
0as$ ti-er - *1' Dl+
%!ing2'( - 0it$ 2/33er
%S60( 30,000 1,700 2 7,141.43 2,500 4.20
7.
0as$ ti-er - *1' Dl+
%!ing2'( - 0it$'/t 2/33er
%S, 60( 42,000 1,700 2 8,449.85 3,500 4.97
8. 4eater %00( 21,600 4,700 2 10,075.71 1,800 2.14
9. 4eater %#$andini( 9,600 6,200 2 7,714.92 800 1.24
10. .ig tail 1'nne1t'r-3.0 3,60,000 6,200 2 47,244.05 30,000 7.62
11. .ig tail 1'nne1t'r-3.8 1,80,000 6,200 2 33,406.59 15,000 5.39
12. Seal drive t/2e - Swift 42,000 6,200 2 16,136.91 3,500 2.60
13. Seal t/2 s/))'rt - Swift 42,000 6,200 2 16,136.91 3,500 2.60
14. 00 5't'r - 0elling 90,000 6,200 18 7,874.01 7,500 11.43
15. S)las$ 5't'r 42,000 6,200 18 5,378.97 3,500 7.81
16. 5't'r - 6ea-' 3,00,000 65,200 18 46,619.02 25,000 6.44
17. #la-) t/2 66,600 10,100 2 25,935.69 5,550 2.57
18.
S/s)ensi'n S)ring &ssl
789 70 %7i-st/d( 7,200 10,000 2 8,485.28 600 0.85
19. D''r 8'1: - 4ig$ *nd 1,800 15,400 2 5,264.98 150 0.34
20.
D''r 8'1:, 8'w *nd,
78970 1,800 15,400 2 5,264.98 150 0.34
21. Ball Bearing-"/ter, 78970 3,600 8,400 2 5,499.09 300 0.65
22. Ball Bearing-,nner, 78970 3,600 8,400 2 5,499.09 300 0.65
23.
4eating *le-ent ,
4ig$;5id *nd,78970 1,800 8,400 2 3,888.44 150 0.46
24. 4eater 8'w end 1,800 8,400 2 3,888.44 150 0.46
25. .ress'stat, 78970 3,600 8,400 2 5,499.09 300 0.65
26. 9i-er 92-*#6018-789 1,800 8,900 2 4,002.50 150 0.45
27.
0ater Distri2/ti'n
&1t/at'r, 78970 1,800 7,900 2 3,770.94 150 0.48
28. !/t ./s$ ,n, 78970 21,600 16,400 2 18,821.26 1,800 1.15
29. 4eater #li),78970 3,600 7,750 2 5,282.05 300 0.68
30. Bell'w, 78970 3,600 84,300 2 17,420.68 300 0.21
31.
S$'1: &2s'r2er &ss,
78970 7,200 9,800 2 8,400.00 600 0.86
32.
<niversal 5't'r &ss,
5id=4ig$ *nd,78970 1,800 49,200 18 3,136.88 150 0.57
33. 5't'r 8'w end 1,800 57,200 18 3,382.31 150 0.53
34. 0ind'w >lass,78970 3,600 23,100 18 3,039.74 300 1.18
Drain ./-), 789 1,800 20,100 2 6,014.98 150 0.30
35.
36.
"n ; "ff Swit1$ 8'w end
%./s$ 2/tt'n swit1$( 1,800 7,700 2 3,722.90 150 0.48
37.
9$er-'stat ?aria2le, 8'w
*nd, 78970 1,800 8,500 2 3,911.52 150 0.46
38. .'l ? Belt,78970 1,800 1,700 2 1,749.29 150 1.03
39. 9/2 Sealing, 78970 3,600 1,700 2 2,473.86 300 1.46
40. SS #'il 2,40,000 52,200 18 37,309.52 20,000 6.43
ANALYSIS M INTERPRETATION :
In the abo-e tab+e the EO> < the no. of order& 'urcha&ed 'er year for -ariou&
com'onent& are ca+cu+ated. The ca+cu+ated EO> i& com'ared )ith the no. of unit& of each
com'onent 'urcha&ed in the or.ani9ation. It i& found that, there i& a -ariation in the EO> < no. of
unit 'urcha&ed. It i& under&tood that the com'any i& not fo++o)in. EO> for 'urcha&in. the
materia+& < therefore the in-entory mana.ement i& not &ati&factory.
..2 SAFETY STOC"
MEANING
Safety &toc*& are the minimum additiona+ in-entory )hich &er-e a& a &afety mar.in to
meet an unantici'ated increa&e in u&a.e re&u+tin. from an unu&ua++y hi.h demand and an
uncontro++ab+e +ate recei't of incomin. in-entory.
T+-@0 ..2.1 S+;081 !82<A
S@. N2. C23?2:0:8!
M+C. L0+9
T730
N23+@
L0+9 T730 D03+:9
S+;081
S82<A
1. Bearing - Ball Sealed 6006 0.27 0.166 3,60,000 37,440
2. Bearing - Ball Sealed - 6205 Swift 0.27 0.166 48,000 4,992
3. Drive assl - !B" - #$ina %&gitat'r( - 2 )in drive 0.27 0.166 1,44,000 14,976
4. Drive assl - *#" Dl+ - !B" - #$ina %,-)eller( 0.27 0.166 96,000 9,984
5. Driven ./lle - !B" - #$ina %Sa-e )/lle( 0.27 0.166 2,40,000 24,960
6. 0as$ ti-er - *1' Dl+ %!ing2'( - 0it$ 2/33er %S60( 0.27 0.166 30,000 3,120
7.
0as$ ti-er - *1' Dl+ %!ing2'( - 0it$'/t 2/33er
%S, 60( 0.27 0.166 42,000 4,368
8. 4eater %00( 0.27 0.166 21,600 2,246.4
9. 4eater %#$andini( 0.27 0.166 9,600 998.4
10. .ig tail 1'nne1t'r-3.0 0.27 0.166 3,60,000 37,440
11. .ig tail 1'nne1t'r-3.8 0.27 0.166 1,80,000 18,720
12. Seal drive t/2e Swift 0.27 0.166 42,000 4,368
13. Seal t/2 s/))'rt Swift 0.27 0.166 42,000 4,368
14. 00 5't'r 0elling 0.27 0.166 90,000 9,360
15. S)las$ 5't'r 0.27 0.166 42,000 4,368
16. 5't'r - 6ea-' 0.27 0.166 3,00,000 31,200
17. #la-) t/2 0.27 0.166 66,600 6,926.4
18. S/s)ensi'n S)ring &ssl 789 70 %7i-st/d( 0.27 0.166 7,200 748.8
19. D''r 8'1: - 4ig$ *nd 0.27 0.166 1,800 187.2
20. D''r 8'1:, 8'w *nd, 78970 0.27 0.166 1,800 187.2
21. Ball Bearing-"/ter, 78970 0.27 0.166 3,600 374.4
22. Ball Bearing-,nner, 78970 0.27 0.166 3,600 374.4
23. 4eating *le-ent , 4ig$;5id *nd,78970 0.27 0.166 1,800 187.2
24. 4eater 8'w end 0.27 0.166 1,800 187.2
25. .ress'stat, 78970 0.27 0.166 3,600 374.4
26. 9i-er 92-*#6018-789 0.27 0.166 1,800 187.2
27. 0ater Distri2/ti'n &1t/at'r, 78970 0.27 0.166 1,800 187.2
28. !/t ./s$ ,n, 78970 0.27 0.166 21,600 2,246.4
4eater #li),78970 0.27 0.166 3,600 374.4
29.
30. Bell'w, 78970 0.27 0.166 3,600 374.4
31. S$'1: &2s'r2er &ss, 78970 0.27 0.166 7,200 748.8
32. <niversal 5't'r &ss, 5id = 4ig$ *nd,78970 0.27 0.166 1,800 187.2
33. 5't'r 8'w end 0.27 0.166 1,800 187.2
34. 0ind'w >lass,78970 0.27 0.166 3,600 374.4
35. Drain ./-), 789 0.27 0.166 1,800 187.2
36. "n ; "ff Swit1$ 8'w end %./s$ 2/tt'n swit1$( 0.27 0.166 1,800 187.2
37. 9$er-'stat ?aria2le, 8'w *nd, 78970 0.27 0.166 1,800 187.2
38. .'l ? Belt,78970 0.27 0.166 1,800 187.2
39. 9/2 Sealing, 78970 0.27 0.166 3,600 374.4
40. SS #'il 0.27 0.166 2,40,000 24,960
ANALYSIS M INTERPRETATION :
In the abo-e tab+e, &afety &toc* for the -ariou& com'onent& ca+cu+ated are &ho)n. Actua+
demand i& .i-en for each com'onent for a 'eriod of @ year and the +ead"time i& ca+cu+ated at a
ma2imum of @$$ day& < norma+ of B$ day& and the&e )ere con-erted into 'er annum. So, from
ca+cu+ation of &afety &toc*, )e can ab+e to determine ho) much the com'any can ho+d the
in-entory in re&er-e &toc* 'er annum.
..3 A#C ANALYSIS
MEANING
The AB3 &y&tem i& a )ide+y u&ed c+a&&ification techni,ue to identify -ariou& item& of
in-entory for 'ur'o&e& of in-entory contro+. On the ba&i& of unit co&t in-o+-ed, the -ariou& item&
are c+a&&ified into D cate.orie&=
7@8 A, con&i&tin. of item& )ith the +ar.e in-e&tment,
7#8 3, )ith re+ati-e+y &ma++ in-e&tment& but fair+y +ar.e number of item& and
7D8 B, )hich &tand& mid")ay bet)een cate.ory A < 3.
3ate.ory A need& the mo&t ri.orou& contro+, 3 re,uire& minimum attention and B de&er-e& +e&&
attention than A but more than 3.
A C@+!! *H7>6 V+@=0,

ri-e a&&+y " NBO " 3hina 7A.itator8 " # 'in dri-e
ri-e a&&+y " E3O +2 " NBO " 3hina 7Im'e++er8
5a&h timer " Eco +2 7Nin.bo8 " 5ith bu99er 7SB$8
4eater 7558
4eater 73handini8
55 Motor " 5e++in.
S'+a&h Motor
Motor " Ceamo
4eatin. E+ement, 4i.h:Mid End,F6T%$
4eater 6o) end
Timer T#"E3B$@0"F6T
5ater i&tribution Actuator, F6T%$
Be++o), F6T%$
Thermo&tat 1ariab+e, 6o) End, F6T%$
Uni-er&a+ Motor A&&y, Mid < 4i.h End,F6T%$
Motor 6o) end
5indo) G+a&&,F6T%$
rain !um', F6T
# C@+!! *M290+80 V+@=0,
Bearin. " Ba++ Sea+ed " B$$B
Bearin. " Ba++ Sea+ed " B#$A " S)ift
5a&h timer " Eco +2 7Nin.bo8 " 5ithout bu99er 7SI B$8
oor 6oc* " 4i.h End
oor 6oc*, 6o) End, F6T%$
Ba++ Bearin."Outer, F6T%$
Ba++ Bearin."Inner, F6T%$
Sea+ dri-e tube " S)ift
Sea+ tub &u''ort " S)ift
!re&&o&tat, F6T%$
Shoc* Ab&orber A&&y, F6T%$
On : Off S)itch 6o) end 7!u&h button &)itch8
SS 3oi+
!o+y 1 Be+t,F6T%$
T+-@0 ..3.1 A#C ANALYSIS
C+80>270! T28+@ N2. I803! 7: C@+!!0! P0<0:8+>0
A @0 EA
B @E DA
3 0 #$
T28+@ 4G 1GG
ANALYSIS M INTERPRETATION :
C C@+!! *L25 V+@=0,
ri-en !u++ey " NBO " 3hina 7Same 'u++ey8
!i. tai+ connector"D.$
!i. tai+ connector"D.0
3+am' tub
Su&'en&ion S'rin. A&&+y F6T %$ 7Fim&tud8
Nut !u&h In, F6T%$
4eater 3+i',F6T%$
Tub Sea+in., F6T%$
The abo-e tab+e &ho)& the c+a&&ification of -ariou& com'onent& a& A, B < 3 c+a&&e& u&in.
AB3 ana+y&i& techni,ue& ba&ed on unit -a+ue. From the c+a&&ification A c+a&&e& are tho&e )ho&e
unit -a+ue i& more than R&.@$$ and con&titute& EAL of tota+ com'onent&. B c+a&&e& are tho&e
)ho&e unit -a+ue i& bet)een R&.#A"@$$ con&titute& DAL of tota+ com'onent& and 3 c+a&&e& are
tho&e )ho&e unit -a+ue i& +e&& than R&.#A con&titute& D$L of tota+ com'onent&. It i& .ood that the
com'any maintain& it& in-entorie& ba&ed on it& -a+ue u&in. contro++in. techni,ue&.
C6+8 ..3.1 A#C A:+@1!7!
45
35
20
0
5
10
15
20
25
30
35
40
45
50
& B #
..4 FSN ANALYSIS
MEANING
A++ the item& in the in-entory are not re,uired at the &ame fre,uency. Some are re,uired
re.u+ar+y, &ome occa&iona++y and &ome -ery rare+y.
FSN c+a&&ifie& item& into Fa&t mo-in., S+o) mo-in. and Non"mo-in..
FAST MOVING ITEMS

Bearin. " Ba++ Sea+ed " B$$B
Bearin. " Ba++ Sea+ed " B#$A " S)ift
ri-e a&&+y " NBO " 3hina 7 A.itator 8 " # 'in dri-e
ri-e a&&+y " E3O +2 " NBO " 3hina 7 Im'e++er 8
ri-en !u++ey " NBO " 3hina 7 Same 'u++ey 8
5a&h timer " Eco +2 7 Nin.bo 8 " 5ith bu99er 7 SB$ 8
5a&h timer " Eco +2 7 Nin.bo 8 " 5ithout bu99er 7 SI B$ 8
4eater 7 55 8
4eater 7 3handini 8
!i. tai+ connector"D.$
!i. tai+ connector"D.0
Sea+ dri-e tube " S)ift
Sea+ tub &u''ort " S)ift
55 Motor " 5e++in.
S'+a&h Motor
Motor " Ceamo
SS 3oi+
SLOW MOVING ITEMS
3+am' tub
Su&'en&ion S'rin. A&&+y F6T %$ 7 Fim&tud8
oor 6oc* " 4i.h End
oor 6oc*, 6o) End, F6T%$
Ba++ Bearin."Outer, F6T%$
Ba++ Bearin."Inner, F6T%$
4eatin. E+ement , 4i.h:Mid End,F6T%$
4eater 6o) end
!re&&o&tat, F6T%$
Timer T#"E3B$@0"F6T
5ater i&tribution Actuator, F6T%$
Nut !u&h In, F6T%$
4eater 3+i',F6T%$
Be++o), F6T%$
Shoc* Ab&orber A&&y, F6T%$
Uni-er&a+ Motor A&&y, Mid < 4i.h End,F6T%$
Motor 6o) end
5indo) G+a&&,F6T%$
rain !um', F6T
On : Off S)itch 6o) end 7 !u&h button &)itch 8
Thermo&tat 1ariab+e, 6o) End, F6T%$
!o+y 1 Be+t,F6T%$
Tub Sea+in., F6T%$#D @%
T+-@0 ..4.1 FSN ANALYSIS
C+80>270! T28+@ N2. 7803! 7: C@+!!0! P0<0:8+>0
F @% ED
S #D A%
N $ $
T28+@ 4G 1GG
ANALYSIS M INTERPRETATION :
In the abo-e tab+e &ho)& the c+a&&ification of -ariou& com'onent& a& FSN item& u&in.
FSN ana+y&i& techni,ue& ba&ed on mo-ement&. From the c+a&&ification F item& are tho&e )hich
mo-e& fa&t+y and con&titute& EDL of tota+ com'onent&. S item& are tho&e )hich mo-e& &+o)+y
con&titute& A%L of tota+ com'onent& and N item& are tho&e )hich doe&n;t mo-e 7Non"mo-in.
item&8. Accordin. to data .i-en, there i& no Non"mo-in. item&. It i& not .ood a& the com'any
maintain& +o) 'ercenta.e in mo-in. item&.
C6+8 ..4.1 FSN A:+@1!7!
0
10
20
30
40
50
60
7 S !
... TREND ANALYSIS
MEANING
Re.re&&ion mean& de'endence and in-o+-e& e&timatin. the -a+ue& of a de'endent -ariab+e
?, from an inde'endent -ariab+e R.
? S a U b2
5here aS y / b 2K b S V 2y / n 2 y

V2
#
" n2
#
T+-@0 ....1 CALCULATION OF INVENTORY TREND
YEAR
*C,
I:/0:8270!
*R!.,
Y
(
(JC)2GG.
(
2
(Y
*R!,
#$$D F,@%,00,A@E "# E
"@0,DA,%%,$#0
#$$E 0,BB,B0,D$$ "@ @ "0,BB,B0,D$$
#$$A #$,D%,0A,AA$ $ $ $
#$$B @%,A0,B@,#@D @ @ @%,A0,B@,#@D
#$$% @%,##,0#,$@E # E DE,EA,BE,$#0
TOTA67V8
73,G3,8.,.D1 G 1G 2.,G1,7D,D13
2 S V2:n S $:A S $

y S Vy:n S %D,$D,0A,AF@:A S @E,B$,%%,@@0.#
b S V 2y / n 2 y S #A,$@,%F,F@D" A T $ T %D,$D,0A,AF@ S#,A$,@%,FF@.D
@$"AT$
V2
#
" n2
#

a S y / b 2 S @E,B$,%%,@@0.# / #,A$,@%,FF@.D T $ S @E,B$,%%,@@0.#
y S a U b2
S @E,B$,%%,@@0.# U #,A$,@%,FF@.D 2
The foreca&t of in-entory for the year #$$0 i& com'uted by &ub&titutin. 2 S #$$0 in the abo-e
e,uation.
S@E,B$,%%,@@0.# U #,A$,@%,FF@.D 2
S@E,B$,%%,@@0.# U #,A$,@%,FF@.D 72"#$$A8
S@E,B$,%%,@@0.# U #,A$,@%,FF@.D 7#$$0"#$$A8
S@E,B$,%%,@@0.# U #,A$,@%,FF@.D 7D8
S@E,B$,%%,@@0.# U %,A$,AD,F%D.F
S##,@@,D@,$F#.@

Therefore in-entory for the year #$$0 )i++ be a''ro2imate+y R&.##,@@,D@,@$$
T+-@0 ....2 INVENTORIES PERCENTAGE
Y0+! I:/0:8270! P0<0:8+>0
#$$D F,@%,00,A@E F.BA
#$$E 0,BB,B0,D$$ F.@A
#$$A #$,D%,0A,AA$ #@.E$
#$$B @%,A0,B@,#@D @0.A$
#$$% @%,##,0#,$@E @0.@$
#$$0 ##,@@,D@,@$$ #D.#$
TOTAL D.,1.,1B,BD1 1GG
ANALYSIS M INTERPRETATION :
In the abo-e tab+e &ho)& the 'ercenta.e of in-entorie& increa&e& from F.BA to @0.@$ in the
year #$$D"#$$%. the in-entory for the year #$$0 i& e2'ected to be #D.#$ )hich i& a.ain in the
increa&in. trend. Thi& infer& that the in-entory re,uirement i& increa&in. in the future 'eriod a+&o.
It &ho)& &ati&factory 'o&ition of in-entorie& a& it im'+ie& increa&in. 'roduction < demand for the
'roduct.
C6+8 ....2 TREND OF INVENTORY
0
5
10
15
20
25
2003 2004 2005 2006 2007 2008
..B INVENTORIES TURNOVER RATIO
MEANING
Thi& ratio i& ca+cu+ated to con&ider the ade,uacy of the ,uantum of ca'ita+ and it&
(u&tification for in-e&tin. in in-entory. A firm mu&t ha-e rea&onab+e &toc* in com'ari&on to &a+e&.
It i& the ratio of net &a+e& and the a-era.e in-entory. Thi& ratio he+'& the financia+ mana.er to
e-a+uate in-entory 'o+icy. Thi& ratio re-ea+& the number of time& fini&hed &toc* i& turned o-er
durin. a .i-en a accountin. 'eriod.
T60 ;23=@+ ;2 860 +872 7! N08 !+@0!
A/>. I:/0:821

T+-@0 ..B.1 I:/0:8270! T=:2/0 R+872 M V0@2<781
Y0+
N08 S+@0!
*R!.,
A/>. I:/0:821
*R!.,
R+872 V0@2<781
*7: D+1!,
#$$D @#,D$,$A,@DE 0,E#,$F,D%@ @.EB= @ #A$
#$$E @B,$B,ED,BBF 0,F#,#0,E$% @.0$= @ #$D
#$$A @@,%D,D$,A0@ @E,A#,#B,F#A $.0$= @ EAB
#$$B AA,AD,%E,A%@ @0,F0,#D,D0@ #.F#= @ @#A
#$$% %F,@@,%0,##$ @%,E$,%@,B@D E.A= @ 0@

ANALYSIS M INTERPRETATION :
In the abo-e tab+e &ho)& in-entory turno-er ratio for the 'a&t year&. The ratio i& &ho)in.
increa&in. trend from@.EB to E.A in the year #$$D to #$$%, e2ce't in the year #$$A )hich &ho)&
on+y $.0$ time&.
5herea& in the -e+ocity of in-entorie& &ho)& +e&& in #$$% a& com'ared to #$$D )hich i&
0@ day& in #$$% and #A$ day& in #$$D e2ce't in the year #$$A )hich i& EAB day&. Thi& &ho)& that
the in-entorie& are ea&i+y con-erted into &a+e& )ithin the &horte&t 'eriod i.e. the com'any )a& ab+e
to &e++ R&. E.A by in-e&tin. ru'ee one in the &toc* in #$$%.
CHAPTER)VI
B.1 FINDINGS OF THE STUDY
It i& found that, there i& a -ariation in the EO> < no. of unit 'urcha&ed. It i& under&tood
that the com'any i& not fo++o)in. EO> for 'urcha&in. the materia+&. So, the in-entory
mana.ement i& not &ati&factory.
From ca+cu+ation of &afety &toc*, )e can ab+e to determine ho) much the com'any can
ho+d the in-entory in re&er-e &toc* 'er annum.
From the c+a&&ification A c+a&&e& are tho&e )ho&e unit -a+ue i& more than R&.@$$ and
con&titute& EAL of tota+ com'onent&. B c+a&&e& are tho&e )ho&e unit -a+ue i& bet)een
R&.#A"@$$ con&titute& DAL of tota+ com'onent& and 3 c+a&&e& are tho&e )ho&e unit -a+ue
i& +e&& than R&.#A con&titute& D$L of tota+ com'onent&. It i& .ood that the com'any
maintain& it& in-entorie& ba&ed on it& -a+ue u&in. contro++in. techni,ue&.
From the c+a&&ification F item& are tho&e )hich mo-e& fa&t+y and con&titute& EDL of tota+
com'onent&. S item& are tho&e )hich mo-e& &+o)+y con&titute& A%L of tota+ com'onent&
and N item& are tho&e )hich doe&n;t mo-e 7Non"mo-in. item&8. Accordin. to data .i-en,
there i& no Non"mo-in. item&. It i& not .ood a& the com'any maintain& +o) 'ercenta.e in
fa&t mo-in. item& in com'ared to S+o) mo-in. in-entorie& ba&ed on mo-ement& u&in.
contro++in. techni,ue&.
From the ca+cu+ation it &ho)&, that the 'ercenta.e of in-entoried increa&e& from F.BA to
@0.@$ in the year #$$D"#$$%. the in-entory for the year #$$0 i& e2'ected to be #D.#$
)hich i& a.ain in the increa&in. trend. Thi& indicate& increa&in. efficiency of the
mana.ement.
The ratio i& &ho)in. increa&in. trend from@.EB to E.A in the year #$$D to #$$%, e2ce't in
the year #$$A )hich &ho)& on+y $.0$ time&. 5herea& in the -e+ocity of in-entorie& &ho)&
+e&& in #$$% a& com'ared to #$$D )hich i& 0@ day& in #$$% and #A$ day& in #$$D e2ce't
in the year #$$A )hich i& EAB day&. Thi& &ho)& that the in-entorie& are ea&i+y con-erted
into &a+e& )ithin the &horte&t 'eriod i.e. the com'any )a& ab+e to &e++ R&. E.A by in-e&tin.
ru'ee one in the &toc* in #$$%.
B.2 SUGGESTIONS AND RECOMMENDATIONS
Accordin. to EO>, a& the com'any doe& not fo++o) EO> for it& 'urcha&in., the com'any
can be ad(u&ted to order materia+&. Thi& )i++ reduce the co&t < he+' to enhance the 'rofit
of the com'any.
The com'any i& re,uired to maintain &afety &toc* for it& com'onent& in order to a-oid
&toc*"out condition& < he+' in continuou& 'roduction f+o).
Under AB3 ana+y&i&, the mana.ement mu&t ha-e more contro+ on A than B<3, becau&e A
c+a&& con&titute& more7EAL8 of hi.her -a+ue&. There &hou+d be ti.ht contro+ e2erci&ed on
&toc* +e-e+&, to a-oid deterioration. Thi& i& done throu.h maintainin. +o) &afety &toc*,
continuou& chec* on &chedu+e& < ordered fre,uent+y in in-entorie&, in order to a-oid o-er
in-e&tment of )or*in. ca'ita+.
The com'any mu&t not .o to the Non"mo-in. item& a& far a& 'o&&ib+e, becau&e there )i++
be unnece&&ary b+oc*in. of )or*in. ca'ita+. Thi& )ou+d hinder the other acti-itie& of the
or.ani9ation.
The 'a&t data &ho)& increa&e in in-entory the com'any i& a+&o e2'ectin. more in-entorie&
for future 'eriod i.e. #$$0. The mana.ement i& re,uired to maintain the &ame in-entory
trend in the forth comin. year a+&o.

The in-entory turno-er ratio indicate& )hether in-e&tment in in-entory i& )ithin 'ro'er
+imit or not. It a+&o mea&ure& ho) ,uic*+y in-entory i& &o+d. It re,uire& to maintain a hi.h
turno-er ratio than +o)er ratio. A hi.h ratio im'+ie& that .ood in-entory mana.ement and
it a+&o ref+ect& efficient bu&ine&& acti-itie&.
CHAPTER)VII
CONCLUSION
A better in-entory mana.ement )i++ &ure+y be he+'fu+ in &o+-in. the 'rob+em& the
com'any i& facin. )ith re&'ect to in-entory and )i++ 'a-e )ay for reducin. the hu.e in-e&tment
or b+oc*in. of money in in-entory. From the ana+y&i& )e can conc+ude that the 3om'any can
fo++o) the Economic Order >uantity 7EO>8 for o'timum 'urcha&e and it can maintain &afety
&toc* for it& com'onent& in order to a-oid &toc*"out condition& < he+' in continuou& 'roduction
f+o). Thi& )ou+d reduce the co&t and enhance the 'rofit. A+&o there &hou+d be ti.ht contro+
e2erci&ed on &toc* +e-e+& ba&ed on AB3 ana+y&i& < maintain hi.h 'ercenta.e in fa&t mo-in.
item& in in-entorie& a& 'er on FSN ana+y&i& for efficient runnin. of the in-entory. Since the
in-entory Turno-er ratio &ho)& the increa&in. trend, there )i++ be more demand for the 'roduct&
in the future 'eriod&. If they cou+d 'ro'er+y im'+ement and fo++o) the norm& and techni,ue& of
in-entory mana.ement, they can enhance the 'rofit )ith minimum co&t.
CHAPTER)VIII
8.1 LIMITATIONS OF THE STUDY
The entire ana+y&i& a''+ie& on+y to 5hir+'oo+ India 6td, !uducherry.
The &tudy ta*e& into account on+y the ,uantitati-e data and the ,ua+itati-e a&'ect& )ere not
ta*en into account.
The a&&um'tion made in the EO> and Safety &toc* formu+a& re&trict the u&e of the formu+a. In
'ractice, unit co&t, +ead time, re,uirement& of in-entory item& are not accurate+y 'redictab+e.
Rate of con&um'tion -arie& in many ca&e&. A& &uch a''+ication of the formu+a often become&
a difficu+t and com'+icated matter.
AB3 ana+y&i& i& not one time e2erci&e and item& are to be re-ie)ed and recate.ori&ed
'eriodica++y.
8.2 SCOPE FOR THE FURTHER STUDY
To .i-e '+an to the com'any )hat to order, )hen to order and ho) much to order.
It i& u&efu+ for decidin. o'eratin. 'o+icy < -o+ume of in-entory.
It he+'& to de-e+o' the 'o+icie& for the e2ecuti-e& in in-entory.
It he+'& the com'any )hat item& .ood& are cate.ori9ed.
!ro(ect he+'& to dea+ )ith foreca&tin. in in-entory.
#I#LIOGRAPHY
REFERENCES #OO"S

M ? Ghan ! G Cain HFinancia+ Mana.ementI E
th
edition Tata McGra) 4i++.
R.S.N. !i++ai 1. Ba.a-athi HMana.ement Accountin.I S 3hand < 3o.
Martand Te+&an. HIndu&tria+ En.ineerin. < !roduction Mana.ementI S 3hand < 3o.
R. !aneer&e+-am HO'eration& Re&earchI !rentice ha++ Of India !ri-ate 6td.
B.M. 6a++ Ni.am I.3. Cain H3o&t Accountin.I !rentice ha++ Of India !ri-ate 6td.
S.!. Iyen.ar H3o&t < Mana.ement Accountin.I Su+tan 3hand < Son&.
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