A Study On Inventory Management

AN ORGANIZATIONAL STUDY
AND
A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD
CEMENT CORPORATION LIMITED, KARUR
INTERNSHIP PROJECT REPORT
Submitted by
L.BOOPATHI
Register No: 732211631005
in partial fulfillment for the award of the degree
Of
MASTER OF BUSINESS ADMINISTRATION

in
DEPARTMENT OF MANAGEMENT STUDIES
NANDHA ENGINEERING COLLEGE

ERODE 638052
JULY 2012
BONAFIDE CERTIFICATE
NANDHA ENGINEERING COLLEGE
ERODE 638052
DEPARTMENT OF MANAGEMENT STUDIES
INTERNSHIP PROJECT WORK
This is to certify that the project entitled
AN ORGANIZATIONAL STUDY
AND
A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD
CEMENT CORPORATION LIMITED, KARUR
is the bonafide record of project work done by
L.BOOPATHI
of MBA during the year 2011-2013
Project Guide
Head of the Department
Submitted for the Summer Internship Training Viva-Voce examination held on
Internal Examiner
External Examiner
DECLARATION
I affirm that the project work titled AN ORGANIZATIONAL STUDY

AND A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD
CEMENT CORPORATION LIMITED, KARUR being submitted in partial
fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION
is the original work carried out by me. It has not formed the part of any other
project work submitted for award of any degree or diploma, either in this or any
other University.
(Signature of the Candidate)

L.BOOPATHI
I certify that the declaration made above by the candidate is true.

(Signature of the Guide)
K.NATHIYA, MBA, M.Phil.
Assistant professor
ACKNOWLEDGEMENT
I would like to express my gratitude to Chairman Thiru.V.SHANMUGAM
of NANDHA ENGINEERING COLLEGE, ERODE for giving me an
opportunity and facility to complete this project.
I wish to place my deep sense of gratitude to principal Dr.V.R.SAMPATH,
of NANDHA ENGINEERING COLLEGE, ERODE.
I offer my profound gratitude to Mr.N.DEVRAJ, B.E., MBA.
Department
of
Management
Studies,
NANDHA
Head,
ENGINEERING
COLLEGE, ERODE. for his entire support to complete this project report.
I owe my boundless gratitude to my faculty guide K.NATHIYA, MBA.
MPhil. Assistant Professor of MBA Department, for his guidance and
supervise of this project for successful completion.
I
sincerely
thank
to
Mr.THIRUNAVUKARASU,
HUMAN
RESOURCE MANAGER, CHETTINAD CEMENT CORPORATION

LIMITED, KARUR. for giving me permission to do this project at their
concern.
I express my sincere thanks to my beloved parents, friends and the staff
member for and those who are encouraged and supported for completion and
this project report.
L.BOOPATHI
CONTENTS
CHAPTER`
DESCRIPTION
ABSTRACT
LIST OF TABLES
LIST OF CHARTS
INTRODUCTION
I
II
III
1.1
1.1
1.2
1.3
1
2
15
25
4
5
Introduction to the study

Industry profile
Company profile
Organization chart
DEPARTMENT PROFILE
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3
PAGE NO
Production Department
Store Department
Human Resource Department
Marketing Department
Financial Department
Quality Department
Scope of the study
Limitations of the study
26
27
27
29
30
32
33
34
MAIN THEME OF THE PROJECT

3.1 Objectives of the study
35
3.2 Need of the study
35
3.3 Research Methodology
36
3.4 Tools for Analysis
37
3.5 Review Literature
38
DATA ANALYSIS & INTERPRETATION

SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSION
39
5.1 Findings
5.2 Suggestions
5.3 Conclusion
56
57
58
BIBILOGRAPHY & ANNEXTURE
59
LIST OF TABLES
TABLE NO
DESCRIPTION
PAGE NO
4.1.1
Level of inventory
40
4.1.2
Inventory turnover Ratio
42
4.1.3
Inventory conversion period
44
4.2.1
EOQ analysis for the year 2006-07
46
4.2.2
48
4.2.3
50
4.2.4
52
4.2.5
54
LIST OF CHARTS
CHART NO
DESCRIPTION
PAGE NO
4.1.1
Level of inventory
41
4.1.2
Inventory turnover ratio
43
4.1.3
Inventory conversion period
45
4.2.1
47
4.2.2
49
4.2.3
51
4.2.4
53
4.2.5
55
ABSTRACT
The purpose of inventory management is to ensure availability of raw material
in sufficient qualities as and when required and also minimize investment in
inventories. There is an essential to manage inventories efficiently and effectively in
order to avoid excess investment. It is possible for a company to reduce the level of
inventories to a considerable extent without any adverse effect on production and sales
by using simple inventory planning and control techniques. The reduction of excessive
inventories will create a favorable impact on the company profitability. Inventory
turnover ratio, inventory conversion period are very helpful to know how effectively
plays and control in the organization EOQ analysis will enables the organization to
use of EOQ analysis is very effective and useful tool for classifying, monitoring and
control of inventories.
CHAPTER 1
1.1 INTRODUCTION TO THE STUDY
The study entitled as A study on Inventory Management of Chettinad Cement
Corporation Ltd, Karur. We are going to see the importance of Inventory Management in
production and how it will helps to controlling the inventory cost. Controlling the inventory
cost which enable to earn more profit. Inventory management is primarily about specifying
the size and placement of stocked goods. Inventory management is recurred at different
locations within a facility or within multiple locations of a supply or network to protect the
regular and planned course of production against the random disturbance of running out of
materials or goods. The scope of Inventory management also concerns the fine lines between
replenishment lead time, carrying costs of inventory, asset management, Inventory
forecasting, physical inventory, available physical space for Inventory, quality management,
returns and defective goods and demand and forecasting.
Types of inventory
Normally the inventory has divided into two types. These,
1.
Merchandising inventory,
2.
Manufacturing inventory.
The manufacturing inventory has been subdivided into three types. These,
1.
Raw materials,
2.
Work in process,
3.
Finished goods.
1.2 INDUSTRY PROFILE

History of the origin of cement
It is uncertain where it was first discovered that a combination of hydrate nonhydraulic lime and a pozzolan produces a hydraulic mixture, but concrete made from such
mixture was first used on large scale by roman engineers. They used both natural pozzolans
(trass or pumice) and artificial pozzolans (ground brick or pottery) in the concretes. Many
excellent examples of structures made from these concretes are still standing. Notably the
huge monolithic dome of the pantheon in Rome and the massive Bath of Caracalla. The vast
system of roman aqueducts also made extensive use of hydraulic cement. The use of
structural concrete disappeared in medieval Europe. Although weak pozzolanic concretes
continued to be used as a core fills in stone walls and columns.
Modern cement
Modern hydraulic cement began to be developed from the start of the industrial
Revolution (around 1800) driven by three main needs: Hydraulic renders for finishing brick
buildings in wet climates Hydraulic mortars for masonry construction of harbor works etc. in
contact with sea water.
Varieties of the cement

There are some varieties in cement that always find good demand in the market. To
know their characteristics and in which area they are most required, it will be better to take a
look at some of the details given below.
Portland blast furnace slag cement (PBFSC)

The rate of hydration heat is found lower in this cement type in comparison to PPC. It
is most useful in massive construction projects, for example-dams.
Sulphate resisting Portland Cement (SRPC)

This cement is beneficial in the areas where concrete has an exposure to seacoast or
sea water or soil or ground water. Under any such instances, the concrete is vulnerable to
sulphates attack in large amounts and can damage to the structure. Hence, by using this
cement one can reduce the impact of damage to the structure. This cement has high these
cement one can reduce the impact of damage to the structure. This cement has high demand
in India.
Rapid hardening Portland Cement (RHPC)

The texture of this cement type is quite to that OPC. But, it is bit more fine than OPC
and possesses immense compressible strength, which makes casting work easy.
Ordinary Portland Cement (OPC)

Also referred to as grey cement or OPC, it is of much use in ordinary concrete
construction. In the production of this type of cement in India, Iron (fe2O3), Magnesium
(MgO), Silica (SiO2), and Sulphur, trioxide (SO3) components are used.
Portland Pozolona Cement (PPC)

As it prevents cracks, it is useful in the casting work of huge volumes of concrete. The
rate of hydration heat is lower in this cement type. Coal waste or waste or burnt clay is used
in the production of this category of cement. It can be availed at low cost in comparison to
OPC.
Oil Well Cement (OWC)

Made of iron, coke, limestone and iron scrap, Oil Well Cement is used in constructing
or fixing oil wells. This is applied on both the off-shore and on-shore of the wells.
Clinker Cement (CC)

Produced at the temperature of about 1400 to 14560 degree Celsius, Clinker cement is
needed in the construction work of complexes, houses and bridges. The ingredients for this
cement comprise iron, quartz, clay, limestone and bauxite.
A part from these, some of the other types of cement that are available in India can be
classified as:
Low heat cement,
High early strength cement,

Hydrophobic cement,
High aluminum cement and
Masonry cement.
1.2.1 CEMENT INDUSTRY IN GLOBAL
Cement is a basic ingredient for the construction industry. It is estimated there are
1500 integrated cement production plants in the world. Although the players such a Lafarge
or CEMEX, the share of the four largest firms account only for 23% of the overall demand.
Demand
World cement demand was 2,283MT in 2005, with China accounting for 1,064MT
(47% of total). The expected demand for 2010 is estimated at 2,836 MT. China will increase
its demand by 250MT during the period, an increase higher than the total yearly European
demand.
Demand of Cement
Demand for cement in MT
2005
2010
Growth rate
North America
170
200
2.9%
Western Europe
208
236
2.2%
Asia/Pacific
1500
1900
5.2%
Other regions
405
500
4.7%
World cement demand
2283
2836
4.7%
Top 25 Cement companies in the world

S.NO
Name of the Company
1.
Aditya Birla Group-Grasim
Name of the
Country
India
2.
Al-Ghurair Group
Dubai
3.
Ambuja Cements Limited
India
4.
Anhui Conch Cement Company
China
5.
Arabian Cement Company
Egypt
6.
Ararat Cement Co.
South Africa
7.
Cement Cruz Azul Cement Co.
Armenia
8.
CEMEX Co.
U.S.A
9.
China National Cement Materials Group Corporation
China
10.
Cimpor Cement corp.
China
11.
CompanhiaSiderurgical National S.A
Brazil
12.
Concrete Casting Cement Company
Pacific Alloy
13.
CRH plc
America
14.
Eagle Materials Inc
U.S.A
15.
Heidelberg Cement Company
Germany
16.
James Hardie Cements
U.S.A
17.
Lafarge
India
18.
Libyan Cement Company
Libya
19.
Monarch Cement Ltd.
U.S.A, California
20.
Norcem
Germany
21.
Pretoria Portland Cement Company
South Africa
22.
Ready Mix Inc
India
23.
Rinker Group
Australia
24.
Semapa Group
Europe
25.
Smith-Midland Cement Company
U.S.A, Milford
1.2.2 CEMENT INDUSTRY IN INDIA

The cement industry in India has undergone a major shift over the last 6 years. The
Indian cement industry is the second largest producer of quality cement. Indian cement
industry is engaged in the production of several varieties of cement such as, ordinary Portland
cement (OPC), Portland pozzoland cement (PPC), Portland blast furnace slag Portland
cement (PBFSPC), sulfate resistance Portland cement (SRPC), white cement, etc., They are
produce strictly as per the Bureau of Indian standards (BIS) specifications and their quality is
comparable with the best in the world.
The industry occupies an important place in the national economy because of its
strong linkage to other sectors such as, construction, transportation, coal and power. The
cement industry is also one of the major contributors to the exchequer by way of indirect
taxes.
S.NO
1.
2.
3.
Name of the company
ACC Limited
Ambuja Cements Limited
Andhra Cements Ltd
Details of the company
Year of establishment
1994
Head quarters
Maharashtra
Web site
www.acclimited.com
1981
Head quarters
Gujarat
Web site
www.ambujacement.com
1936
Head quarters
Andhra Pradesh
Web site
www.andhracements.com
4.
5.
6.
7.
8.
9.
10.
11.
Barak Valley Cements Ltd
Bheema Cements Ltd
Binani Cement Ltd
Birla Corporation Limited
Burnpur Cement Ltd
1999
Head quarters
Assam
Web site
www.barakcement.com
1978
Head quarters
Andhra Pradesh
Web site
www.bheemacement.com
1996
Head quarters
West Bengal
Web site
www.binani.com
1919
Head quarters
West Bengal
Web site
www.grasim.com
1986
Head quarters
West Bengal
Web site
www.burnpurcement.com
1962
Head quarters
Tamil Nadu
Web site
www.chettinadcement.com
1951
Head quarters
Tamil Nadu
Web site
www.dalmiacement.com
1979
Head quarters
Andhra Pradesh
Chettinad Cement Corporation

Limited
Dalmia
Cement
Limited
Deccan Cements Ltd
(Bharat)
Web site
12.
Everest Industries Ltd
Year of establishment 1934

Head quarters
Maharashtra
Web site
13.
14.
15.
16.
17.
18.
19.
Grasim Industries Limited
Gujarat Sidhee Cement Ltd
Heidelberg Cement India Ltd
Hyderabad Industries Ltd
www.deccancem.com
www.everestind.com
1948
Head quarters
Madhya Pradesh
Web site
www.grasim.com
1973
Head quarters
Gujarat
Web site
www.gujaratsidhee.com
1958
Head quarters
Karnataka
Web site
www.mycemco.com
1946
Head quarters
Andhra Pradesh
Web site
www.hil.in
1962
Head quarters
Maharashtra
Web site
www.indianhumepipe.com
1994
Head quarters
Uttar Pradesh
Web site
www.jkcement.com
1938
Head quarters
Rajasthan
Web site
www.jklcem.com
Indian Hume Pipe Company

Ltd
J. K. Cement Limited
JK Lakshmi Cement Ltd
20.
21.
22.
23.
24.
25.
26.
27.
28.
Kalyanpur Cements Ltd
Katwa Cements Ltd
Kesoram Industries Ltd
Madras Cements Limited
Mangalam Cement Ltd
NCL Industries Ltd
Nirman Cements Ltd
OCL India Ltd
1937
Head quarters
West Bengal
Web site
www.kalyancemenet.com
1993
Head quarters
Karnataka
Web site
www.katwagroup.com
1919
Head quarters
West Bengal
Web site
www.kesocorp.com
1954
Head quarters
Tamil Nadu
Web site
www.madrascements.com
1976
Head quarters
Rajasthan
Web site
www.mangalamcement.com
1979
Head quarters
Andhra Pradesh
Web site
www.nclind.com
1983
Head quarters
Bihar
Web site
www.nirmancements.com
1949
Head quarters
Orissa
Web site
www.ocl.in
Panyam Cements & Mineral Year of establishment
1955
Inds Ltd
Andhra Pradesh
Head quarters
29.
30.
31.
32.
33.
34.
35.
Prism Cement Ltd
Rose Zinc Ltd
Sagar Cements Ltd
Sainik Cement Inds. Ltd
Sanghi Industries Ltd
Saurashtra Cement Ltd
Shiva Cement Ltd
Web site
www.panyamcements.com
1992
Head quarters
Andhra Pradesh
Web site
www.prismcement.com
1990
Head quarters
Rajasthan
Web site
www.rosezinc.com
1981
Head quarters
Andhra Pradesh
Web site
www.sagarcements.in
1991
Head quarters
Delhi
Web site
www.sainikcem.in
1985
Head quarters
Andhra Pradesh
Web site
www.sanghicement.com
1956
Head quarters
Gujarat
Web site
www.saurashtra.com
1985
Head quarters
Orissa
Web site
www.shivacement.com
36.
37.
38.
39.
40.
41.
42.
Shree
Digvijay
1983
Head quarters
Gujarat
Web site
www.digvijaycement.com
1983
Head quarters
Andhra Pradesh
Web site
www.anjanicement.com
1985
Head quarters
Andhra Pradesh
Web site
www.srivasavi.com
1981
Head quarters
Andhra Pradesh
Web site
www.chakracement.com
1983
Head quarters
Maharashtra
Web site
www.stresscrete.com
1946
Head quarters
Tamil Nadu
Web site
www.ramcocement.in
1993
Head quarters
Rajasthan
Web site
www.udaipurcement.com
Cement
Company Ltd
Somani Cement Company Ltd
Sri VasaviInds. Ltd
Sri Chakra Cements Ltd
Stresscrete India Ltd
The India cements Ltd
Udaipur Cement Works Ltd
43.
44.
45.
46.
UltraTech Cement Limited
Vinaycements Ltd
Visaka industries Ltd
Zuari cement corporation Ltd
2000
Head quarters
Maharashtra
Web site
www.ultratechcement.com
1986
Head quarters
Assam
Web site
www.vinaycements.com
1981
Head quarters
Andhra Pradesh
Web site
www.visaka.org
1985
Head quarters
Andhra Pradesh
Web site
www.zuaricement.com
1.2.3 CEMENT INDUSTRY IN TAMILNADU

The cement industry of India hopes the most in Tamilnadu. The Tamilnadu is the state
which has produces the quality cement in India.
The Tamilnadu government was formed a company name is Tamilnadu cement
corporation limited (TANCEM) in the February 1976 as public limited company. The
TANCEM was formed two cement plants in Tamilnadu. These,
1. Alangulam cement works. Alangulam, virudhunagar districts.
2. Ariylur cement works. Ariyalur, perambalur districts.
The following table shows the details of cement companies in districts of Tamilnadu. These,
S.NO
Name of the company
Details
Year
of
1962
establishment
Chettinad
Limited
Cement
Corporation Corporate office Chennai

Plant Places
Karur,
Ariyalur
Brand name
Chettinad.
Dhindukal,
Year
of
1946
establishment
Corporate office Chennai.
2
The India cements Ltd

Plant Places
Ramanathapuram,
Sangakiri, Ariyalur.
Brand name
Sankar
cement,
Coromandel cement.
Year
of
1950
establishment
Madras cement Ltd
Corporate office Chennai.

Plant place
Ariyalur.
Brand name
Ram co cement.
Year
of
1979
establishment
Tamilnadu cements corporation

Ltd
Corporate office Chennai (Govt).
Plant place
Ariyalur.
Brand name
Arasu cement
Year
of
1976
establishment
Corporate office Madurai.
5
Janathacem industries limited

Plant place
Rajapalayam,madurai.
Brand name
Janatha cement, agsar

cement.
Cement Company in Karur District

Chettinad Cement Corporation limited, karur is the one of most popular cement
manufacturer in Tamilnadu. The Chettinad cement work plants other than karur district,
1. Karikalini cement works, Dhindukal district,
2. Ariyalur cement works, Ariyalur district,
The Chettinad cement corporation limited, Karur is the head company in Chettinad cement
companies. They are produced 5,00,000 tons of cement per year. They are used those cement
for their own company use such as,
1. Chettinad builders pvt ltd,
2. Chettinad house pvt ltd,
3. Chettinad group of companies.
1.3 COMPANY PROFILE

History of the company
The history of the group house of Chettinad is linked with the 9 decades old saga. In
1912 took birth the House of Chettinad through a visionary idealist, born entrepreneur Dr.
Rajah Sir Annamalai Chettiar who believed in Social Transformation through business. The
founder of the House of Chettinad envisioned, his companies providing the stimulus for
Industrial Growth and conceived business as a means of improving the living standards of
people.
The corporate credo of the House of Chettinad STRIVE, SAVE AND SERVE is the
very thought of our founder. IN order to continue fulfilling his dreams and aspirations. To
reach greater heights and the reins were taken over by equally visionary businessmen his son,
Dr. Rajah Sir Muthiah Chettiar and grandson Dr. MAM. Ramaswamy. The house of
Chettinad reached new heights with generations of hard work, dedications and remains the
stamp of quality, integrity and reliability under the versatile, pragmatic and visionary
leaderships.
Present position of the company

Today, a 8500 million business group has ventured and diversified in varying fields
including manufacturing (Cement, Silica, Quartz, Grits), services (construction Transports,
Steel fabrication, Ship management and stevedoring. Clearing and forwarding) Trading,
power generation, plantation, farms, logistics. Education, sports management, literature, art
and music fields have also been contributed vastly. It is a matter of great pride and
satisfaction that the group finds worldwide patronage and earns precious foreign exchange for
the country.
The group aims to broaden its horizons and reach and the zenith in this millennium
under the yond, dynamic, enthusiastic, able leadership of Mr. MAMR Muthiah. The future of
the companies in the house of Chettinad is based on the time tested and proved guidelines of
total customer orientation, technology in the service of man and business as an instrument of
social service. To these timeless truths, we remain steadfast forever.
Management of Chettinad Cement Corporation Limited

CHAIRMAN
MR.M.A.M.RAMASWAMY
MD
SRI.M.A.M.R.MUTHAIAH
STARTED
1962
DIRECTORS
SRI.RAMANATHAN PALANIAPPAN
SRI.R.KRISHNA MOORTHY
SRI.SP.S.T.PALANIAPPAN
SRI.K.GANAPATHY&C.S.PARI
Dr.T.PRABHAKARA
RAO,
IAS
(TIIC
Corporation
Ltd,
NOMINEE)
COMPANY SECRETARY :
SRI.S.HARIHARAN
TYPE
PUBLIC
CO-SECRETARY
SRI.S.HARIHARAN
AUDITORS
M/S.P.B.VIJAYARAGRAN&CO
M/S V.SOUNDARARAJAN&CO
M/S KRISHAAN &CO
REGISTERED OFFICE
Chettinad
5th
603
Cement
Floor,
Anna
Telephone
Rani
Salai,
No:
Fax No :
Seethai
Chennai
600
Hall,
006.
+91-44-28292727
+91-44-28291594
e-mail : chtdmds@vsnl.com
PRODUCTION PLANTS
PULIYUR, KARIKKALI, ARIYALORE.
WEBSITE
www.chettinad.com
VISION
With almost a century of continuous growth and prosperity behind us we envisage our
future as another opportunity to which greater heights and to perfect the art of perfectionism
upholding the vision of our founder Dr. Rajah sir Annamalai Chettiar STRIVE, SAVE AND
SERVE. The nature ethics and style of business believe that nothing can supplement the
idealism which motivates the business we fall back on the time tested. Principles of total
customers orientation technology in service of man and business as an instrument of social
service to this timeless truth we remind steady fast forever.
MISSION
To achieve & sustain cost leadership in the cement market. The harness technology to
its full potential in a safe & clear environment in the entire business cycle & integrate quality
with continuous improvement. To became a vibrant learning organization by building skills
and competitiveness of employees for growth. To be the best and most respectable corporate
citizen.
Product profile of Chettinad Cement Corporation Ltd.
Pavithram: Unique cement manufactured at Puliyur works having high quality for
special concrete applications.
Chettinad Grade 53: Superior finely ground cement, suitable for plastering works,
giving a silky finished look. For RCC applications laser controlled manufacturing
would yield best result.
Chettinad Grade 43: Multipurpose cement, suitable for plastering and binding.
Chettinad PPC: A finely blended cement, providing very fine result for plastering
work, devoid of hair line cracks and giving excellent appearance to the building.
Sulphur Resistant Cement: Finds applications in the construction activity in the

coastal areas to save from corrosiveness due to salty environment.
MANUFACTURING DETAILS
Mines-Puliyur Works
Limestone is sourced from our mines at palayam which is located 40kms from the
factory. The mines are equipped with the latest machinery and technology including for
sequential blasting. The mined limestone is then crushed through primary and secondary
crusher.
Mines-Karikkali works
Limestone Mines are located at about 3 kms. from the factory. The mines are fully
mechanized and have also a terminator for mechanized breaking of individual boulders. The
Crusher is located at Mines and crushed limestone is transported by long belt conveyors to
factory.
Stacker and Reclaimer-Puliyur Works

The crushed limestone is then sent through the X-Ray analyzer and approved for
further process only on meeting quality standards backbone of the quality control.
Stacker and Reclaimer- Karikkali works

The entire quantity of crushed limestone passes through the online cross belt
analyzers and is stacked at the pile in the factory. Three numbers of separate stackerreclaimer are available with truck tipplers for proper stacking and
Reclaiming of corrective raw materials, fuels and additives. Stacker Declaimers help to
achieve high degree of stacking and ensure maximum level of consistency for the input
materials to raw mill, coal mill and cement mill.
Raw Mill-Puliyur Works

The limestone from the reclaimed is mixed with additive of bauxite and Iron ore and
transported to the vertical roller mill through weigh feeders (which control the additive
addition). The operator takes corrective steps on viewing any deviation. The loesche-German
make vertical roller mill is similar in principle to the tilting grinder with gigantic roller and
operated by the hydraulic system, to give fine blended raw material. From the loesche mill
the raw material is the taken to two silos to produce Varity of cement.
Raw Mill- Karikkali works

Pre-stacked limestone of stockpile is ground in the VRM along with corrective
materials with required ratios are made to produce raw meal and that is stored in Blending
cum Storage Silo. There are separate hoppers with weigh feeders for continuous and
regulated addition of each raw material. The mix passes through the cross belt analyzers
which analyze the mix chemistry and solve the mix ratio every minute to have very good
consistency in the raw mix.
Kiln-Puliyur Works
The finely grounded blended raw material is sent to a five stage kiln. Kiln is a key
process in the manufacture of cement where the calcinations & chemical reaction take place.
Coal fired burner (Controlled through latest solid & low feeder) is used to heat the air to
1400c and is fed from one end of the kiln. The data accusation and control center
meticulously monitor the entire process including the temperature.
Kiln- Karikkali works

Raw meal extracted from silo is fed to the kiln where it is sintered at about 1400o C to
clinker. This process is called preprocessing which consists of a five stage suspension heaters
with precalciner, the kiln and the clinker cooler. Clinker cooler with CIS and CFG for
maximum heat recuperation and the cooled clinker is transported to a storage silo.
Cement Mill-Puliyur Works

The clinker is then ground, depending upon the grade, the additive is added. For all
grades of cement 5% gypsum is added to control setting of cement we use Japanese
technology in fine grinding with vertical roller mill from anode Kobe, Japan, laser practical
size analyzer is used to monitor fineness of the cement for yielding very good quality cement.
Cement Mill- Karikkali works

Finally, grinding is done in OK Vertical Roller Mill for optical particle size
distribution and less power consumption with excellent ease of operation for feeding,
grinding and classification. To maintain quality of various types/grades of cement, there are
separate hoppers with weigh feeders for the addition of fly ash, gypsum, etc. Quality of final
product is monitored and controlled every hour by testing samples in the XRF analyzer. Final
products are stored in cement silos.
Packing House - Puliyur woks

The four automatic packing machines have been installed, together they have the
capacity to deliver 4800 tons per day of packed cement. These packing equipments are very
accurate and any fault can be rectified as each bag is verified before the next is filled. These
are also cross-checked by the Electronic weighing scale used to note the load carried by the
Lorries.
Packing House - Karikkali works

There are 2 nos. of Electronic Rot packer which automatically pack cement in bags,
each with a capacity of 150 tons/hour. Packed cement is loaded into trucks/wagons with
automatic loading machines.
ACHIEVEMENTS OF CHETTINAD CEMENT CORPORATION LTD.

S.No
AWARDS
YEAR
National Safety Award (for outstanding performance in Industrial Safety in
achieving
lowest
frequency
rate
in
Industry)
1976
Runners up Highest % reduction in frequency rate
1977
Merit Awards from Regional Directorate of Workers Education
1972
Tamil Nadu Film Arts Association, Chennai Shield
1978
National Productivity Award (Best Productivity Performance in Cement
Industry issued by NPC)
1985
Second Best
1986
Best
1995
Best
1996
Second Best
1997
National Safety Award (Mines)-(for lowest injury frequency rate Metal Mines
Mechanized Open Cast).
1986
Longest Accident Free Period.
1986
Best performance of the year.
1989
Conservationist of the year (for outstanding progress in the field of
Conservation of Energy, Metal Components & Machinery)

NCBM
National
Awards
(Improvement
in
Energy
Second
1987
Performance).
Best
1994
Best
1995
Best
1998
TNEB Energy Conservation Award - (One among the 15 Energy Efficient
H.T. Industries of 2000 KVA)
1998
NCBM National Award
Second Best for Energy Efficiency Performance
Source: Annual report of Chettinad Cement Corporation Limited
1998
MILESTONES OF CHETTINAD CEMENT CORPORATION LIMITED

Sl. No.
1
MILESTONES
YEAR
0.4 MTPA cement production capacity with wet process plant installed at
Puliyur.
1967
Modernized into dry process plant to a capacity of 0.8 MTPA with a kiln
2
capacity of 2000 TPD commissioned with modern vertical roller mills for
1989
fuel & limestone grinding.

3
4
2 Nos. of 5.4 MVA Capacity WARTSILA DG set installed.
1990
66 Nos. of wind electric Generator of total capacity 17.3 Mw installed at

PoolavadiUdumapletTaluk.
1994
ISO 9002 Certificate received.
1995
Stacker & Re-claimer for Limestone installed.
1996
Belt Elevator for Raw mill and Kiln feed installed.
1996
A) Impact Crusher for lime stone crushing at mines installed.

B) Bag filter for coal mill grinding system.
Vertical roller mill for cement grinding installed. Additional ESP installed
for Kiln/ Raw mill to handle excess process gases.
CIS/CFG
10
Latest
Cooler
installed.
Low
pressure
cyclone
1997
1998
installed.
Technology LV-Tech classifier installed in Raw Mill. The plant
2000
capacity increased to 1.2 MTPA cement.

11
Green field Cement plant with capacity of 0.9 MTPA was commissioned at
Karikkali.
2001
12
Rock breaker (Terminator) installed in mines.
2001
13
ISO 14001:2004 is implemented.
2003
14
Environment Management Service Certificate option.
2004
15
16
17
1 No. 15MW Coal based Captive Power Plant commissioned in 12 Months

at Karikkali.
Fly Ash Silo construction work completed at Puliyur and Karikkali.
2004
2005
Roller press with ball mill for cement grinding with capacity 0.7
MTPA installed at Karikkali.
2006
18
19
20
21
Vertical roller mill for cement grinding installed. Additional ESP installed
for Kiln/ Raw mill to handle excess process gases.
Karikkali plant capacity increased to 2.0 MTPA by increasing of blended
cement production.
Bag House installed in Raw Mill/Kiln Circuit in addition to the existing ESP
at Puliyur.
Energy dispersive X-Ray specto meter was put into service for increasing
the output and economical mines operation & conservation of minerals.
2006
2007
2007
2007
Advance Research laboratories, Switzerland make X-Ray Spectrometer

22
Sequential type was commissioned for augmenting clinker production and
2007
its quality.
23
24
25
26
27
28
Seethainagar Mines crusher capacity was upgraded for supply of 40%

Karikkali plant requirement of limestone.
Coal based 15 MW capacity CPP was commissioned during Feb-2008 at
Puliyur Works.
Automation & control sections PLC's OS software up gradation and PLC's
capacity.
KHD make Burner Management System for kiln operation to improve
quality of clinker and to save thermal energy.
Coal based 2 x 15 MW capacity CPP was commissioned during Sep-2008 at
Ariyalur.
Green field Cement plant with capacity 2.75 MTPA was commissioned
during Dec-2008 at Ariyalur.
2007
2008
2008
2008
2008
2008
Video conferencing facility was commissioned between Puliyur, Karikkali,

29
Ariyalur and Head Office for more effective and faster communications and
2008
project monitoring.
30
Brown field Cement plant with capacity 2.75 MTPA was commissioned at
Ariyalur during October-2009.
2009
Coal based 1 x 15 MW capacity CPP was commissioned during Jan31
2010 Erection and Commissioning of 2 Cement Plants in World Record

time at ariyalur 30 months from BhoomiPooja to commissioning highest
production capacity for cement in a single location at Ariyalur Three No. 15
2010
MW coal based captive power plants commissioned in 18 months at

Ariyalur Chettinad Cement Technical team rated No1 by FLS Denmark at
Ariyalur.
32
Roller press with ball mill for cement grinding with capacity 0.5 million
commissioned during February -2010 at Puliyur.
2010
Brown field Cement Plant with capacity of 2.5 MTPA was commissioned
33
at Karikkali in March 2011 along with coal based 30MW captive power
2011
plant within the same premises

Work is under progress for a new Green field production line of 2.5 MTPA
34
cement with 1 No. of 30MW Coal based captive power plant in Kallur
Village, ChincholiTaluk and GulburgaDist of Karnataka state and expected
to be commissioned in year 2012.
2011
1.4 ORGANISATION CHART
Executive Chairman
Chief Operating Manager
MD & CEO
DIRECTOR
HEAD
PRODUCTION
MANAGER
WORKERS
DIRECTOR
DIRECTOR
HEAD
ADMINISTRATION
HEAD
PERSONAL
MANAGER
DIRECTOR
ASST.MANAGER
WORKERS
DIRECTOR
HEAD
ACCOUNTS
ASST.MANAGER
DIRECTOR
CUSTOMER
SUPPORT
HEAD
PURCHASE
ASST.MANAGER
HEAD
PURCHASE
HEAD
CUSTOMER
CHAPTER 2
DEPARTMENT PROFILE
2.1 PRODUCTION DEPARTMENT
Chettinad Cement Corporation Ltd., (CCCL) initially the cement was manufactured in the
wet processing technology. Due to hike in the fuel price company went for expansion in the
year 1989 to produce with the least dry process technology
PRODUCTION PROCESS
Limestone is the basic raw material for producing cement. Limestone is received from the
quarry by tippers. The size of limestone is 1 cubic feet. The lime stones are crushed in the
limestone crusher and are brought to a size of 1 inch and below then that. The crushed
limestone is conveyed by and inclined belt conveyer to the raw mill hoppers. The active are
red mud and blue dust (around 2%) to get the required composition of kiln feed slurry.
The crushed lime stone with additives are grade in raw mills along with water to produced
slurry with around 30%-40% moisture cement. The slurry is pumped by slurry pumps to the
slurry silo. In the silo the compressed is pumped to mix the slurry well. The composition is
slurry is checked and pumped to slurry basis, if the composition is ok, if the slurry
composition is not ok high grade limestone is crushed ground in raw mills and pumped to the
same silo to the correct composition. The sludge is tipped into the wash mill; water is added
and availed well to produce sludge slurry. This is pumped to slurry silo as a sweetener.
The slurry from the basis is pumped to the kiln through variable speed slurry feeding
arrangement of the required rate determined by the kiln operators. The kiln feed slurry enters
the kiln, pass through drying, preheating zone. In this zone the kiln feed slurry gets tried and
pre heated to 8000 c. Now the material is in powder form and inters claiming zone where the
temperature will around 800-9000c. Now the materials enters burning zone where the
materials is treated to 1350-14500 c. Here the reaction takes place between Sio2, Cao, AI203,
and Fe203 to for di calcium silicate.C2S tri calcium, silicate C3S, tri calcium aluminate, terra
calcium, Aluminum Ferrite C4AF. The mixtures of product are called clinker.
RAW MATERIALS
Limestone
Iron ore
Bauxite
Gypsum
Fly ash
Slag
Coal
Raw lignite
Power
2.2 STORE DEPARTMENT
Store plays a vital role in the operations of a company. It is in direct contact with the user
department in it is day to day activities. The most important objective of store is to provide
uninterrupted supply of material section is located to production with to save material cost in
ash in an effective manner.
FUNCTIONS OF STORE DEPARTMENT
Management of receipts
Issue control on materials
Documentation received
Inspection of materials
Computerization of data received from user department.
Codification of materials.
Physical verification of stores
Stores vacation.
SECTION IN STORE DEPARTMENT
The store is divide d into three section and they are,
Receipt section.
Issue section.
Inventory section.
2.3 HUMAN RESOURCE DEPARTMENT
RECRUITMENT
In CCCL there is no recruitment policy. Recruitment is made based on the requirement of
man power based on the nature of the requirement of man power. The company either goes
for advertising in newspaper & considers unsolicited application experience is depends on the
job nature.
TRAINING AND DEVELOPMENT

In CCCL there is short term process of training for non-managerial to learn the technical.
Training program is formulated personal department may unable to execute, the take more
care and on internal training program and external training program such as firefighting
safety and occupational work etc.
PROMOTION
Promotion is given for the experienced and qualified person this improves the status skills
and earning if the workman
SAFETY MEASURES
1. Personal safety
2. Industrial safety
3. Housekeeping safety
SAFETY POLICY
The companys SAFETY FIRST DUTY NEXT
TOTAL STRENGTH
Workman
- 172
Staffs
- 56
Executives
- 107
Contract Workers
- 131
TOTAL
= 466
HOURS WORKING IN FACTORY

1 shift 12.00 pm to 8.00 Am
2 shift 8.00 Am to 4.00 pm
3 shift 4.00pm to12.00 pm
WELFARE FACILITIES OF THE COMPANY
First aid
Uniform and shoes
Insurance scheme
Drinking water
LOAN FACILITIES
Housing loans
Society loans.
Education loans.
ALLOWANCES
Housing rent allowances,

Conveyance allowances,
Dust impact reduction allowances,
Washing out dirt allowances
2.4 MARKETING DEPARTMENT

MARKETING AND SALES DEPARTMENT
The sales area over in Tamil Nadu, Karnataka and Andhra Pradesh. This section includes
zonal manager officers and staff dealers and contractors. The order is for customer through
telephone and fax. The order bags dispatch through road and rail the cost includes transport
package and tax.
The enter in the lorry permit slip. It includes the party name designation serial number
distance date and time order number of tones type of product and package code. The order is
supplied through goods train to Kerala and Karnataka. The train per vegan capacity is 63
tones product price includes excise duty and sales tax.
PACKING AND DISPATCH
The cement is extracted from the silo bottom and are place in automatic packers. There
are four automatic packers which help to pack the cement in 50kg per bags and are
transported to destination by means of trucks.
MARKET VIEW
Chettinad is also looking at setting up a new plant and some split location grinding
and packing units. By 2012 they hope to reach 15 million tones and, if the market continues
to grow, 20 million in 2015.
2.5 FINANCIAL DEPARTMENT
Finance is necessary for survival and smooth running of business. The accounts are
computerized and maintained in Tally in Chettinad cement Corporation Limited, Puliyur.
Every year the company presents its financial performance in the form of an annual report
which is sent to the shareholders along with AGM notice.
PRORIT AND LOSS ACCOUNT
In the annual report the profit and loss account and the balance sheet which is authorized by
the auditor would be published in the report. Profit and loss account is prepared to determine
the net profit or net loss for a specified period, normally one year.
BALANCE SHEET
Balance sheet is a statement which shows the financial position of the business at the end of
the financial period. The financial position, solvency and liquidity can be evaluated with the
help of balance sheet.
LIST OF DOCUMENT AND RECORD MAINTAINED
o VOUCHER
o RECEPIT
o TRANSANCTION ENTRY BOOK
o LEDGER BOOK
o SALES INVOICE
o SUBSIDARY BOOK
o CREDIT BOOK
o DEBIT BOOK
o STOCK REGISTER
o DATABASE OF EMPLOYEE
o JOURNAL ENTRIES
o BALANCESHEET
o ANNUAL REPORT
o PURCHASE ORDER
o SALES INVOICE
o OTHER VALUABLE DOCUMENT
2.6 QUALITY DEPARTMENT

Quality control is process by which entities review the quality of all factors involve in
production. This approach places an emphasis on three aspects;
Element such as controls, job management, defined, and well managed

processes, performance and integrity criteria, and identification of controls.
Competence, such as knowledge, skills, experience, and qualifications.
Soft elements, such as personnel integrity, confidence, organizational culture,

motivation, team spirit, and quality relationship.
2.7 SCOPE OF THE STUDY

The study helps the management to improve its profitability through a
reduction in non- moving inventory.
It develops the policies for both continuous review of inventory management

system.
The study helps to show the level of the inventory in the organization. The
company will make the proper inventory methods from the suggestions of the
study.
2.8 LIMITATIONS OF THE STUDY

It is difficult to get information from management.
The study period covers for five years which restricts to know more about the Inventory
management of the company.
Only quantitative analysis is possible through the statistical tools are used.
CHAPTER 3
3.1 OBJECTIVES OF THE STUDY
To analyze the inventory to perform production and sales activities smoothly.
To identify the existing inventory management and its effectiveness.
To study the management of inventories efficiently and effectively in order to

avoid excess investment.
To analysis the performance of inventory management.
3.2 NEED OF STUDY:

To find out the Inventory level of the company.
To increase sale of the product
To avoid excess Investment in Inventory.
3.3 RESEARCH METHODOLOGY

Research Design
The Descriptive type of research has been applied in the study. This research the
researcher has no control over the variables. Only reports what has happened or what is
happening. The research can only discover causes but cannot control the variables.
Data collection
Primary data
Primary data relating to the inventory management of Chettinad Cement, Karur have been
collected through personal interviews hold with the officials of the selected concern under
study.
Secondary data
The necessary data calculated from annual report, books, journals and websites.
Period of study
This study covers a period of five years from 2006 2007 to 2010 2011. The
accounting year commenced from April and ending with March of the next year.
Area of study
This study was conducted in Chettinad cement corporation limited, Puliyur, Karur
District.
3.4 TOOLS FOR ANALYSIS

The following tools have been applied in the present study.
They are listed below
Ration analysis (inventory) and
EOQ analysis
Ratio Analysis (Inventory)

The percentage of a mutual fund or other investment vehicle's holdings that have
been "turned over" or replaced with other holdings in a given year. The type of mutual fund,
its investment objective and or the portfolio manager's investing style will play an important
role in determining its turnover ratio.
Economic Order Quantity (EOQ)

Economic order quantity is that level of inventory that minimizes the total of
inventory holding cost and ordering cost. The framework used to determine this order
quantity is also known as Wilson EOQ Model. The model was developed by F. W. Harris in
1913.The most economical quantity of a product that should be purchased at one time. The
EOQ is based on all associated costs for ordering and maintaining the product. EOQ refers to
the size of the order which gives maximum economy in punches of materials.
EOQ =
2AO
C
Where
A = Annualusageinunit
O = Orderingcost
C = Carriyingcost
3.5 REVIEW OF LITERATURE

Bharathipathak 1991 the bulk of the banking business in the country is in the public sector
comprising the state bank of India and its seven associated banks and twenty nationalized
commercial banks till 1991, the Indian banking industry was operating in a highly regulated
and protected regime. But with the acceptance of Norseman committee recommendation,
competition has been injected into the banking industry in two forms.
The study has been found that HDFC Bank emerged as a leader in this financial
analysis of the year ended 2000-01. It closest competitor was ICICI Bank. Financial
performance of the other three, no doubt, lagged behind them, but it by no means, depressing.
These Bank obviously, have to focus more improving parameters like credit quality and cost
control for emerge as the top performance.
R. Hamsalakshmi-M.Manicham 2000 The study, it has been found the liquidity position
and working capital positions were favorable and good during period of study. Regarding
turnover ratio, efficiency in management of fixed assets and total assets must be increased.
Regarding return on investment and return on equity was proved that the overall profitability
position of the software companies had been increasing at a moderate way.
DrR.Dharmaraj 2003 The study article positing in Indian management industry have
concluded that for the last five year, there has been proliferation of international and domestic
providence of mutual funds. He says that this increased growth is due to the increasing cash
flows among innovative young companies through India.
Bharathipathak, Finance India Dec 2003
R. Hamsalakshmi-M.Manicham, Finance India Sep2 2009
DrR.Dharmaraj Indian journal of finance volume4 Allen and Carolinian (2003)
Dr Harish kumar2008 A capital adequacy ratio was constant over a period of time. During
the study period it was observed that the return on net worth had negative correlation with the
debt equity ratio. Inters income to working funds also had a negative association with interest
coverage ratio and the non performing to net advance was negatively correlated with interest
coverage ratio.
J R Raiyani2009 During the periods of high inflation depending on conventional accounting

wisdom. May results in firms financial information losing its meaning and creation of
unrealistic expectation among information users.
Dr.KavithaChavvali 2009 Inventory analysis of gold exchange trade funds. Mathew T.Jones
and Maurice ousted (2007) revised and evaluated pre-world war ii current date for countries
by treating gold follows on a continuous basis. The historical data of saving and investment
was taken over a time period of 1850- 1945.
N.Prasanna 2009 Stock performance Aitkin 1997 the external effect foreign direct
investment on export with example of Bangladesh where entry of a koala multinational in
garment exports led establishment of a member of domestic export firms creating the
countrys largest export industry.
Awedh2005 defend that inflator does not have really an effect on the profitability measured
by return on equity of foreign banks exerting in Lebanon. In the same way, the author steers
that the level of inflation affect more than the return on assets of Lebanese bank than foreign
banks in Lebanon.
Dr Harish kumarsingle,Theicfai journal of inventory management (vol vii Feb. 2008)
J R Raiyani, The infancys university journal of inventory research (vol viii, No 2 Feb. 2009)
Dr.R.B.Bhatasna, Indian journal of inventory (vol 5 No: 2 Feb 2011)
CHAPTER 4
4.1 RATIO ANALYSIS (INVENTORY)
4.1.1- Table shows level of Inventory

Qty in thousand tones
S.No
Particulars
2006-07
2007-08
2008-09
2009-10
2010-11
3330.80
5169.86
8392.21
11109.76
11265.50
1387.83
2154.11
3496.76
4629.10
4693.96
(stacker 15 Per cent)
832.70
1292.47
2098.05
2777.44
2816.40
TOTAL(clinker)
5551.33
8616.44
13937.02
18516.26
18775.86
Work in process
5386.48
8451.74
13822.02
18351.46
18611.09
Finished goods
6251.55
9316.59
14522.32
19216.54
19416.11
Total
17189.36
26384.77
42331.36
56084.26
56803.06
Raw materials
Lime stone
1
Iron ore
Clay ash
INFERENCE
The inventory level was found to be increased trend from 2006-2007 to 2010-2011.
The raw material was increasing from 2007 -2008 to 2010-2011
The inventory level was not increasing subsequently in 2010-2011
4.1.1- Chart shows level of inventory
INVENTORY LEVEL OF THE COMPANY(in thousand tons)

25000
20000
I
N
15000
V
E
N
T
O
10000
R
Y
5000
0
2006-07
2007-08
2008-09
YEAR
Raw materials
Work in process
Finished goods
2009-10
2010-11
INVENTORY TURNOVER RARIO
The inventory turnover ratio measures the number of times a company sells its
inventory during the year.
Inventoryturnoverratio =
Costofsales
Averagestock
Costofsales = sales Grossprofit
Average stock =
Opening stock + Closing stock

2
4.1.2 Table shows inventory turnover ratio
Cost of goods sold

S.No
Year
2006-07
2663028
487428
5.46 per cent
2007-08
2844494
503184
5.65 per cent
2008-09
3094850
819401.5
3.78 per cent
2009-10
4010580
945491.5
4.24 per cent
2010-11
4521886
822538.5
5.50 per cent
(`in lakhs)
Average stock (in tones) Inventory turnover ratio
INFERENCE
The inventory turnover ratio was high in the year 2006-07 after that 2007-08 the
inventory turnover ratio was decreased.
4.1.2- Chart shows inventory turnover ratio

6
5.652989761
I
N
V
5
E
N
T
O
R 4
Y
5.49747641
5.463428445
4.241793818
3.77696404
T
U 3
R
N
O
V
E 2
R
R
A 1
T
I
O
0
2006-07
2007-08
2008-09
YEAR
2009-10
2010-11
INVENTORY CONVERSION PERIOD

The inventory conversion period is the time required to obtain materials for a product,
manufactured it, sell it.
Inventory conversion period =
No. of days in the year

4.1.3- Table shows inventory conversion period

Inventory conversion
S.No
Year
No. of days
2006-07
365
5.46 per cent
66
2007-08
366
5.65 per cent
64
2008-09
365
3.78 per cent
96
2009-10
365
4.24 per cent
86
2010-11
365
5.50 per cent
65
period (in days)
INFERENCE
The inventory conversion period is normally indicates the wealth of the company. The
company wants to concentrates with its inventory conversion period.
4.1.3 - Chart shows inventory conversion period

120
100
C
O
N
V
E
R
S
I
O
N
P
E
R
I
O
D
96
86
80
66
65
64
60
40
20
0
2006-07
2007-08
2008-09
YEAR
2009-10
2010-11
4.2 EOQ ANALYSIS
4.2.1 Table shows EOQ analysis for the year 2006-2007
Annual
requirement
EOQ
Total
investment
with EOQ
Total
investment
without EOQ
Saving
inventory
cost
31500
36
1.5
65
1230
81794
138615
56821
15000
40
1.25
144
980
142345
145225
2880
Clay Ash
14000
42
144
767
111982
135915
23933
Sulphur
13000
34.5
1.75
153
716
110801
133927
23136
Gypsum
13500
35
1.25
144
869
126223
130688
4465
Bauxite
11500
36.5
1.5
150
748
113322
116173
2851
Item
Iron Ore
Lime
Stones
INFERENCE
The companys annual requirement for the year 2006-07 is 101000 tons of raw
materials. They using investment with EOQ spent ` 787168. When the same in without
investingEOQis882551. So the company saved ` 169432 in the year 2006-07.
4.2.1 Chart shows EOQ analysis for the year 2006-2007
145225
160000
138615
142345
135915
140000
133927
130688
126223
120000
I
N 100000
V
E
S
80000
T
M
E
60000
N
T
111982
116173
113322
110801
81794
40000
20000
0
Iron Ore
Lime Stones
Total investment with EOQ

Total investment without EOQ
Clay Ash
Sulphur
RAW MATERIALS
Gypsum
Bauxite
EOQ
Total
investment
with EOQ
Total
investment
without
EOQ
Saving
inventory
cost
75
1250
95626
169675
74049
154
744
116064
140115
24051
55
1.55
154
1100
171050
171050
14000
35
1.5
163
808
132916
153304
20388
Gypsum
12500
36
154
671
104676
153304
20388
Bauxite
11000
37
2.5
160
571
92787
118752
25965
Annual
requirement
Iron Ore
33500
35
1.5
Lime Stones
13500
41
Clay Ash
16500
Sulphur
Item
INFERENCE
materials. They using investment with EOQ spent ` 590000. When the same in without
investing EOQ is
` 921215. So the company saved ` 195739 in the year 2007-08.
180000
169675
171050
171050
153304
160000
153304
140115
132916
140000
118752
116064
120000
104676
100000
95626
92787
80000
60000
40000
20000
0
Iron Ore
Lime Stones

Clay Ash
Sulphur
Gypsum
Bauxite
EOQ
Total
investment
with EOQ
Total
investment
without
EOQ
Saving
inventory
cost
65
1260
83789
153905
7046
1.5
167
805
135642
151515
15873
38
1.75
165
807
134567
166445
13878
14000
37
1.75
164
769
127462
154384
26922
Gypsum
15000
35
2.5
165
648
108540
166775
58235
Bauxite
11200
170
684
117476
128191
10715
Annual
requirement
Iron Ore
13500
34
1.5
Lime Stones
13500
36
Clay Ash
15000
Sulphur
Item
36.5 1.75
INFERENCE
The companys annual requirement for the year 2008-09 is 98500 tons of raw materials. They
using investment with EOQ spent 68646. When the same in without investing EOQ is
800543. So the company saved 114076 in the year 2008-09.
180000
160000
153905
154384
151515
135642
140000
I
N
V
E
S
T
M
E
N
T
166775
166445
134567
128191
127462
117476
120000
108540
100000
83789
80000
60000
40000
20000
0
Iron Ore
Lime Stones
Clay Ash
Sulphur
RAW MATERIAL
Gypsum
Bauxite
EOQ
Total
investment
with EOQ
Total
investment
without EOQ
Saving
inventory
cost
95
1271
123231
217605
94374
37
1.75 174
727
127770
146226
18456
14000
40
1.5
175
864
152496
164575
12079
Sulphur
16000
38
1.75 174
834
146575
187161
40586
Gypsum
18000
36
2.75 175
686
121938
212190
90252
Bauxite
17000
37
1122
203082
205062
1980
Item
Annual
requirement
Iron Ore
34000
36
1.5
Lime Stones
12500
Clay Ash
180
INFERENCE
materials. They using investment with EOQ spent `875092. When the same in without
investing EOQ is 1132819. So the company saved `2577276 in the year 2009-10.
250000
217605
212190
203082
187161
200000
I
N
V
E
S
T
M
E
N
T
146226
150000
123231
164575
152496
146575
127770
121938
100000
50000
0
Iron Ore
Lime Stones
Clay Ash
RAW MATERIAL

Sulphur
Gypsum
Bauxite
205062
EOQ
Total
investment
with EOQ
Total
investment
without EOQ
Saving
inventory
cost
1.75 105
1268
135358
268736
133378
1.25 185
869
161852
167588
5736
195
551
109099
157770
48671
40
3.25 185
608
114455
187225
72770
17000
40
1.25 194
1043
203646
221110
17464
18000
39
2.75 200
715
144965
242235
97270
Item
Annual
requirement
Iron Ore
38000
37
Lime Stones
13500
35
Clay Ash
12000
38
Sulphur
15000
Gypsum
Bauxite
INFERENCE
materials. They using investment with EOQ spent 869375. When the same in without
investing EOQ is
1244664. So the company saved 375289 in the year 2010-11.
300000
268736
242235
250000
221110
203646
I 200000
N
V
E
S
150000
T
M
E
N
T 100000
187225
167588
161852
157770
144965
135358
109099
114455
50000
0
Iron Ore
Lime Stones

Clay Ash
Sulphur
RAW MATERIAL
Gypsum
Bauxite
CHAPTER 5
5.1FINDINGS
In inventory level of the company shows the increase of the raw materials, work-inprocess and finished goods in the year 2006-2009 but not increasing marginally in the
year of 2010-2011
In inventory turnover ratio the ratios of the year has been founded as low in the years of
2008-09 and 2009-10. After those periods the inventory turnover ratio has slightly
increased in the year 2010-11. Even though that level is quite low when compare with
2007-08.
In inventory conversion period is funded as good level. Even though they wants to keep
the inventory conversion period as low.
The company annual requirements of raw materials was increasing in 2006-2007, 20082009, 2009-2010, 2010-2011. Even though annual requirements is quiet low in 20072008.
The inventory level is affected when unqualified employees in charge of inventory it
creates impact on production, investment and profit.
They have a problem in maintaining the accounts regarding inventory management and
10 percent Computer assessment of inventory items for sale is inaccurate.
5.2 SUGGESTION
Chettinad Cement Corporation Limited sells the 75percent of the cements produced,
remaining 25 percent of cement used for own purpose and for sales to others they should
allowed more days as credit to their agent.
Chettinad Corporation should take steps to increase the level raw materials. To ensure
availability of raw material thorough increase the investment with help of EOQ.
Appointment of good employees to take in charge of inventory and ensure proper training
to employees this helps to make the effective inventory.
They should follow proper accounting system for inventory management and computer
assessment of inventory item for sale.
5.3 CONCLUSION
Chettinad cement is one of the leading cement manufacturers in Tamilnadu. They
produce high quality cement. The study covers the inventory management for
effective inventory control. Which helps to control the excess investment on
inventory? I have used a technique Economic Order Quantity Analysis named as EOQ
Analysis for find out the rate with EOQ and without EOQ investment for purchasing
of good in the manufacturing the cement in Chettinad Cement Corporation Limited.
BIBLIOGRAPHY
BOOKS
Khan MY Jain P.K Management Accounting : Text, problems and cases 4th
Edition Tata McGraw Hill 2007
Pandikumar Management Accounting Excel Books 2007
Ramachandran N Kakani Kumar Ram Financial Acccounting For
Management Tata McGraw Hill 2006
S.N Maheswari S.K Maheswari Accounting for Management Vikas

Publishing 2006
WEBSITES
www.chettinad.com
www.reportjunction.com
ANNEXTURE
(Rs. in Crores)
PROFIT AND LOSS A/C OF CHETTINAD CORPORATION LTD

Particulars
INCOME :
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Other
Manufacturing
Expenses
Selling
and
Administration Expenses
Miscellaneous Expenses
Less:
Pre-operative
Expenses Capitalized
Total Expenditure
Operating Profit
Interest
Gross Profit
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Reported Net Profit
Extraordinary Items
Adjusted Net Profit
Adjst. below Net Profit
P & L Balance brought
forward
Statutory
Appropriations
Appropriations
P & L Balance carried
down
Dividend
Preference Dividend
Equity Dividend %
Earnings Per Share-Unit
Earnings
Per
Mar-11
Mar-10
Mar-09
Mar-08 Mar-07 Mar-06
1,720.31 1,522.68 1,321.48 1,107.20

220.70
166.38
183.81
177.02
1,499.61 1,356.30 1,137.67
930.18
101.53
13.94
6.14
5.80
-6.00
-9.94
25.09
14.94
1,595.14 1,360.30 1,168.90
950.92
840.47
115.17
725.30
50.40
-3.02
772.68
584.17
98.68
485.49
45.03
12.54
543.06
209.71
426.82
80.00
100.54
172.17
310.57
64.54
80.45
158.90
243.37
37.70
85.58
157.66
181.71
41.32
71.53
110.26
183.28
28.74
77.27
83.79
168.90
19.16
46.97
248.09
209.12
167.89
147.04
130.31
102.17
7.47
0.00
10.24
0.00
3.34
0.00
3.70
0.00
2.56
0.00
2.41
0.00
1,072.63
522.51
64.57
457.94
362.87
95.07
19.50
0.00
0.40
75.17
43.03
32.14
0.00
314.24
847.09
513.21
77.91
435.30
308.08
127.22
30.80
0.00
-0.21
96.63
0.00
96.63
11.91
205.70
696.78
472.12
52.26
419.86
429.00
-9.14
51.25
0.60
-56.78
-4.21
0.00
-4.21
1.39
253.04
602.96
347.96
19.62
328.34
81.50
246.84
92.62
0.50
-10.05
163.77
0.00
163.77
0.00
148.79
532.42
240.26
18.18
222.08
53.17
168.91
58.32
NA
-4.39
114.71
0.00
114.71
0.00
73.97
423.40
119.66
19.42
100.24
36.09
64.15
0.98
NA
22.71
40.06
0.02
40.04
0.00
57.23
0.00
0.00
0.00
0.00
0.00
0.00
30.77
358.64
0.00
314.24
44.52
205.70
59.52
253.04
39.89
148.79
23.32
73.97
19.10
0.00
50.00
18.85
18.85
0.00
0.00
0.00
32.76
32.76
29.50
0.00
100.00
0.00
0.00
29.50
0.00
100.00
53.81
53.81
22.13
0.00
75.00
37.61
37.61
14.75
0.00
50.00
12.88
12.88
Share(Adj)-Unit Curr
Book Value-Unit Curr
242.33
289.84
120.39
133.05
89.23
59.13
(Rs in crores)
BALANCE SHEET OF CHETTINAD CORPORATION LTD, KARUR
Particulars
SOURCES OF FUNDS :
Share Capital
Reserves Total
Total Shareholders Funds
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
APPLICATION OF FUNDS
Gross Block
Less
:
Accumulated
Depreciation
Less: Impairment of Assets
Net Block
Lease Adjustment
Capital Work in Progress
Investments
Current Assets, Loans &
Advances
Inventories
Sundry Debtors
Cash and Bank
Loans and Advances
Total Current Assets
Less : Current Liabilities and
Provisions
Current Liabilities
Provisions
Total Current Liabilities
Net Current Assets
Miscellaneous Expenses not
written off
Deferred Tax Assets
Deferred Tax Liability
Net Deferred Tax
Total Assets
Contingent Liabilities
Mar-11
Mar-10
Mar-09 Mar-08 Mar-07 Mar-06
38.20
38.20
29.50
887.51
825.52
325.65
925.71
863.72
355.15
406.28
343.89
282.00
489.78
414.98
715.03
896.06
758.87
997.03
1,821.77 1,622.59 1,352.18
29.50
362.99
392.49
37.61
398.58
436.19
828.68
29.50
233.74
263.24
9.03
222.33
231.36
494.60
29.50
144.92
174.42
24.04
280.87
304.91
479.33
2,836.59 2,315.69 1,660.39

1,462.81 1,167.89
850.98
913.20
420.77
824.24
339.27
765.58
286.10
0.00
0.00
1,373.78 1,147.80
0.00
0.00
233.54
95.46
0.58
0.58
0.00
809.41
0.00
313.16
0.58
0.00
492.43
0.00
353.65
0.58
NA
NA
0.00
38.47
0.58
NA
NA
0.00
2.80
3.61
231.62
106.57
20.73
341.67
700.59
224.09
72.51
73.07
381.76
751.43
214.61
38.70
42.99
329.84
626.14
166.17
14.87
25.85
197.80
404.69
78.27
16.99
28.25
94.38
217.89
100.17
17.44
21.49
40.76
179.86
214.19
264.82
479.01
221.58
0.00
143.24
222.13
365.37
386.06
0.00
146.20
243.39
389.59
236.55
0.00
156.40
201.97
358.37
46.32
0.00
74.57
98.39
172.96
44.93
0.00
77.59
30.09
107.68
72.18
0.00
2.05
1.41
0.84
9.76
8.72
8.36
-7.71
-7.31
-7.52
1,821.77 1,622.59 1,352.18
43.38
12.95
29.68
0.73
65.03
-64.30
828.68
16.13
1.40
75.75
-74.35
494.60
32.60
2.99
81.73
-78.74
479.33
11.06

A Study On Inventory Management

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Study On Inventory Management

Uploaded by

Copyright:

Available Formats

AN ORGANIZATIONAL STUDY

INTERNSHIP PROJECT REPORT

MASTER OF BUSINESS ADMINISTRATION

NANDHA ENGINEERING COLLEGE

is the bonafide record of project work done by

Head of the Department

Submitted for the Summer Internship Training Viva-Voce examination held on

I affirm that the project work titled AN ORGANIZATIONAL STUDY

(Signature of the Candidate)

Register No: 732211631005

I certify that the declaration made above by the candidate is true.

RESOURCE MANAGER, CHETTINAD CEMENT CORPORATION

Introduction to the study

MAIN THEME OF THE PROJECT

3.2 Need of the study

3.3 Research Methodology

3.4 Tools for Analysis

3.5 Review Literature

DATA ANALYSIS & INTERPRETATION

BIBILOGRAPHY & ANNEXTURE

Inventory turnover Ratio

Inventory conversion period

EOQ analysis for the year 2006-07

EOQ analysis for the year 2007-08

EOQ analysis for the year 2008-09

EOQ analysis for the year 2009-10

EOQ analysis for the year 2010-11

Inventory turnover ratio

Inventory conversion period

EOQ analysis for the year 2006-07

EOQ analysis for the year 2007-08

EOQ analysis for the year 2008-09

EOQ analysis for the year 2009-10

EOQ analysis for the year 2010-11

1.2 INDUSTRY PROFILE

Varieties of the cement

Portland blast furnace slag cement (PBFSC)

Sulphate resisting Portland Cement (SRPC)

Rapid hardening Portland Cement (RHPC)

Ordinary Portland Cement (OPC)

Portland Pozolona Cement (PPC)

Oil Well Cement (OWC)

Clinker Cement (CC)

High early strength cement,

Demand for cement in MT

World cement demand

Top 25 Cement companies in the world

Name of the Company

Aditya Birla Group-Grasim

Ambuja Cements Limited

Anhui Conch Cement Company

Arabian Cement Company

Ararat Cement Co.

Cement Cruz Azul Cement Co.

China National Cement Materials Group Corporation

Cimpor Cement corp.

CompanhiaSiderurgical National S.A

Concrete Casting Cement Company

Eagle Materials Inc

Heidelberg Cement Company

James Hardie Cements

Libyan Cement Company

Monarch Cement Ltd.