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Literature Review
to both the value-based EOQ model and value-based POQ model may be seen in this article.
Inventory management decisions are complex. Excess cash tied up in inventory burdens the
enterprise with high costs of inventory service and opportunity costs. By contrast, higher
inventory stock helps increase income from sales because customers have greater flexibility in
making purchasing decisions and the firm decrease risk of unplanned break of production.
Although problems connected with optimal economic order quantity and production order
quantity remain, we conclude that value-based modifications implied by these two models will
help managers make better value-creating decisions in inventory management.
INTRODUCTION OF INVENTORY
Inventories constitute the most significant part of current assets of a large majority of companies in
India. On an average, inventories are approximately 60% of current assets in public limited
companies in India. Because of the large size of inventories maintained by firms, a considerable
amount of feuds is required to be committed to them. It is therefore, absolutely imperative to mnage
inventories efficiently and efficiently in order to avoid unnecessary investment. A firm neglecting
the management of inventories will be jeopardizing its long run profitability and may fail ultimately.
It is possible for fore a company to reduce its levels of inventories to a considerable degree e.g. 10 to
20 percent, without any adverse effect on production and sales, by using simple inventory planning
and control techniques. The reduction in excessive inventory carries a favourable impact on a
companys profitability.
MEANING OF INVENTORY:Inventory is the physical stoke of goods maintained in an organization for its smooth sunning. In
accounting language it may mean stock of finished goods only. In a manufacturing concern, it
may includes raw materials, work-in-progress and stores etc. In the form of materials or supplies
to be consumed in the production process or in the rendering of services.
In brief, Inventory is unconsumed or unsold goods purchased or manufactured.
NATURE OF INVENTORIES :-
Inventories are stock of the product a company is manufacturing for sale and
components that make up the product. The various forms in which inventory exist in a
manufacturing company are raw materials, work in progress and finished goods.
RAW MATERIALS:Raw materials are those inputs that are converted into finished product though
the manufacturing process. Raw materials inventories are those units which have been
purchased and stored for future productions.
WORK IN PROGRESS:These inventories are semi manufactured products. They represent products that need
more work before they become finished products for sales.
PACKAGING MATERIAL:Packaging material includes those items which are used for packaging of
perfumery product i.e. cap of the bottle, pump, coller,liver, box etc.
FINISHED GOODS:Finished goods inventories are those completely manufactured products which
are ready for sale. Stock of raw materials and work in progress facilitate production. While stock
of finished goods is required for smooth marketing operation. Thus, inventories serve as a link
between the production and consumption of goods.
The levels of four kinds of inventories for a firm depend on the nature of its
business. A manufacturing firm will have substantially high levels of all three kinds of
inventories, while a retail or wholesale firm will have a very high and no raw material and work
in progress inventories. Within manufacturing firms, there will be differences. Large heavy
engineering companies produce long production cycle products, therefore they carry large
inventories. On the other hand, inventories of a consumer product company will not be large,
because of short production cycle and fast turn over.
INVENTORY MANAGEMENT
As the cost of logistics increases the manufacturers are looking to inventory management as a
way to control costs. Inventory is a term used to describe unsold goods held for sale or raw
materials awaiting manufacture. These items may be on the shelves of a store, in the backroom
or in a warehouse mile away from the point of sale. In the case of manufacturing, they are
typically kept at the factory. Any goods needed to keep things running beyond the next few
hours are considered inventory.
"Inventory" to many small business owners is one of the more visible and tangible aspects of
doing business. Raw materials, goods in process and finished goods all represent various forms
of inventory. Each type represents money tied up until the inventory leaves the company as
purchased products. Likewise, merchandise stocks in a retail store contribute to profits only
when their sale puts money into the cash register.
In a literal sense, inventory refers to stocks of anything necessary to do business. These stocks
represent a large portion of the business investment and must be well managed in order to
maximize profits. In fact, many small businesses cannot absorb the types of losses arising from
poor inventory management. Unless inventories are controlled, they are unreliable, inefficient
and costly.
Inventory management simply means the methods you use to organize, store and replace
inventory, to keep an adequate supply of goods while minimizing costs. Each location where
goods are kept will require different methods of inventory management. Keeping an inventory,
or stock of goods, is a necessity in retail. Customers often prefer to physically touch what they
are considering purchasing, so you must have items on hand. In addition, most customers prefer
to have it now, rather than wait for something to be ordered from a distributor. Every minute that
is spent down because the supply of raw materials was interrupted costs the company unplanned
expenses
3. Handles all functions related to the tracking and management of material. This would
include the monitoring of material moved into and out of stockroom locations and the
reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle
counting support etc.
DEFINITIONS OF INVENTORY
1. Inventory: goods that businesses intend to sell to their customers or raw materials or inprocess items that will be converted into salable goods
2. Inventory is the stock of idle resources which has economic value and is maintained to
fulfill the present and future needs of an organization
3. In Manufacturing Organization : Inventory can be as raw
Inventory represents one of the most important assets that most businesses possess, because the
turnover
of
of
the primary
sources
storage,
obsolescence
and
spoilage
costs.
However,
possessing too little inventory isn't good either, because the business runs the risk of losing out
on potential sales and potential market share as well.
The basic managerial objectives of inventory control are two-fold; first, the avoidance
over-investment or under-investment in inventories; and second, to provide the right quantity
of standard raw material to the production department at the right time. In brief, the
objectives of inventory control may be summarized as follows:
A. Operating Objectives:
(1)
(2)
(3)
Promotion of Manufacturing Efficiency: If the right type of raw material is available to the
manufacturing departments at the right time, their manufacturing efficiency is also increased.
Their motivation level rises and morale is improved.
(4)
made continuously available to the management so that they can do planning for
procurement of raw material. It maintains the inventories at the optimum level keeping in
view the operational requirements. It also avoids the out of stock danger.
(5) Better Service to Customers: Sufficient stock of finished goods must be maintained to
match reasonable demand of the customers for prompt execution of their orders.
(6)Highlighting slow moving and obsolete items of materials.
(7) Designing poorer organization for inventory management: Clear cut accountability should
be fixed at various levels of organization.
B. Financial Objectives:
(1)
economies in purchasing also. Every attempt has to make to effect economy in purchasing
through quantity and taking advantage to favorable markets.
(2)
Reasonable Price: While purchasing materials, it is to be seen that right quality of material
is purchased at reasonably low price. Quality is not to be sacrificed at the cost of lower price.
The material purchased should be of the quality alone which is needed.
(3)Optimum Investing and Efficient Use of capital: The basic aim of inventory control from
the financial point of view is the optimum level of investment in inventories. There should be
no excessive investment in stock, etc. Investment in inventories must not tie up funds that
could be used in other activities. The determination of maximum and minimum level of stock
attempt in this direction.
goods that can easily be sold to another party, should a customer cancel. Such goods can be
ordered without prior approval.
Approval procedures should be arranged around several factors. You should set minimum and
maximum quantities which your buyers can order without prior approval. This ensures that you
are maximizing any volume discounts available through your vendors and preventing overordering of stock. It is also important to require pre-approval on goods with a high carrying cost.
3. KEEPING ACCURATE RECORDS
Any time items arrive at or leave a warehouse, accurate paperwork should be kept, itemizing the
goods. When inventory arrives, this is when you will find breakage or loss on the goods you
ordered. Inventory leaving your warehouse must be counted to prevent loss between the
warehouse and the point of sale. Even samples should be recorded, making the salesperson
responsible for the goods until they are returned to the storage facility. Records should be
processed quickly, at least in the same day that the withdrawal of stock occurred.
4. MANAGING EMPLOYEES
Buyers are the employees who make stock purchases for your company. Reward systems should
be set in place that encourage high levels of customer service and return on investment for the
product lines the buyer manages.
Warehouse employees should be educated on the costs of improper inventory management. Be
sure they understand that the lower your profit margin, the more sales must be generated to make
up for the lost goods. Incentive programs can help employees keep this in perspective. When
they see a difference in their paychecks from poor inventory management, they are more likely
to take precautions to prevent shrinkage.
Each stock item in your warehouse or back room should have its own procedures for
replenishing the supply. Find the best suppliers and storage location for each and record this
information in official procedures that can easily be accessed by your employees.
Inventory management should be a part of your overall strategic business plan. As the business
climate evolves towards a green economy, businesses are looking for ways to leverage this trend
as part of the big picture. This can mean re-evaluating your supply chain and choosing
products that are environmentally sound. It can also mean putting in place recycling procedures
for packaging or other materials. In this way, inventory management is more than a means to
control costs; it becomes a way to promote your business.
SUCCESSFUL INVENTORY MANAGEMENT
Successful inventory management involves balancing the costs of inventory with the benefits of
inventory. Many small business owners fail to appreciate fully the true costs of carrying
inventory, which include not only direct costs of storage, insurance and taxes, but also the cost of
money tied up in inventory. This fine line between keeping too much inventory and not enough
is not the manager's only concern. Others include:
Maintaining a wide assortment of stock -- but not spreading the rapidly moving ones too
thin;
Obtaining lower prices by making volume purchases -- but not ending up with slowmoving inventory; and
Having an adequate inventory on hand -- but not getting caught with obsolete items.
The degree of success in addressing these concerns is easier to gauge for some than for
others. For example, computing
ABOUT INVENTORY
CONTROL
Inventory consists of the goods and materials that a retail business holds for sale or a
manufacturer keeps in raw materials for production. Inventory control is a means for maintaining
the right level of supply and reducing loss to goods or materials before they become a finished
product or are sold to the consumer.
Inventory control is one of the greatest factors in a companys success or failure. This part of the
supply chain has a great impact on the companys ability to manufacture goods for sale or to
deliver customer satisfaction on orders of finished products. Proper inventory control will
balance the customers need to secure products quickly with the business need to control
warehousing costs. To manage inventory effectively, a business must have a firm understanding
of demand, and cost of inventory.
INVENTORY COSTS
There are three main types of cost in inventory. There are the costs to carry standard inventories
and safety stock. Ordering and setup costs come into play as well. Finally, there are shortfall
costs. A good inventory control system will balance carrying costs against shortfall costs.
SAFETY STOCK
Safety stock is comprised of the goods needed to be kept on hand to satisfy consumer demand.
Because demand is constantly in flux, optimizing the Safety Stock levels is a challenge.
However, demand fluctuations do not wholly dictate a companys ability to keep the right supply
on hand most of the time. Companies can use statistical calculations to determine probabilities in
demand.
ORDERING COSTS
Ordering costs have to do with placing orders, receiving and stowage. Transportation and invoice
processing are also included. Information technology has proven itself useful in reducing these
costs in many industries. If the business is in manufacturing, then to production setup costs are
considered instead.
THE COST OF SHORTFALLS
Stock out or shortfall costs represent lost sales due to lack of supply for consumers. Sales
departments prefer these numbers be kept low so that an ample stock will always be kept.
Logistics managers prefer to err on the side of caution to reduce warehousing costs.
Shortfall costs are avoided by keeping an ample safety stock on hand. This practice also
increases customer satisfaction. However, this must be balanced with the cost to carry goods.
The best way to manage stockout is to determine the acceptable level of customer service for the
business. One can then balance the need for high satisfaction with the need to reduce inventory
costs. Customer satisfaction must always be considered ahead of storage costs.
CYCLICAL COUNTING
Many companies prefer to count inventory on a cyclical basis to avoid the need for shutting
down operations while stock is counted. This means that a particular section of the warehouse or
plant is counted physically at particular times, rather than counting all inventory at once. While
this method may be less accurate than counting the whole, it is much more cost effective.
Cyclical counting is preferred because it allows for operations to continue while inventory is
taken. If not for this practice, a business would have to shut down while counts were taken, often
requiring the hire of a third party or use of overtime employees. Cyclical counting usually
utilizes the ABC rule, but there are other variations of this method that can be used. The ABC
rule specifies that tracking 20 percent of inventory will control 80 percent of the cost to store the
goods. Therefore, businesses concentrate more on the top 20 percent and counter other goods
less frequently. Items are categorized based on three levels:
Warehouse staff can now schedule counting of inventories based on these categories. The A
category is counted on a regular basis while B and C categories are counted only once a
month or once a quarter.
COMMON INVENTORY VALUATION METHODS
The methods a company uses to value the costs of inventory have a direct effect on the business
balance sheets, income statements and cash flows. Three methods are widely used to value such
costs. They are First-In, First-Out (FIFO), Last-In First-Out (LIFO) and Average Cost. Inventory
can be calculated based on the lesser of cost or market value. It can be applied to each item, each
category or on a total basis.
FIFO
FIFO operates under the assumption that the first product that is put into inventory is also the
first sold. An example of this in action can be made when we assume that a widget seller
acquires 200 units on Monday for Rs.1.00 per unit. The next day, he spots a good deal and gets
500 more for Rs.75 per unit. When valuing inventory under the FIFO method, the sale of 300
units on Wednesday would create a cost of goods sold of Rs.275. That is, 200 units at Rs1.00
each and 100 units at Rs.75 each. In this way, the first 200 units on the income statement were
valued higher. The remaining 400 widgets would be valued at Rs.75 each on the balance sheet in
ending inventory.
LIFO
LIFO assumes instead that the last unit to reach inventory is the first sold. Using the same
example, the income statement and balance sheet would instead show a cost of goods sold of
Rs.225 for the 300 units sold. The ending inventory on the balance sheet would be valued at
Rs.350 in assets. When this method is used on older inventories, the companys balance sheet
can be greatly skewed. Consider the company that carries a large quantity of merchandise over a
period of 10 years. This accounting method is now using 10-year-old information to value its
assets.
WEIGHTED AVERAGE
Average Cost works out a weighted average for the cost of goods sold. It takes an average cost
for all units available for sale during the accounting period and uses that as a basis for the cost of
goods sold. To site our example again, we would calculate the cost of goods sold at [(200 x Rs.1)
+ (500 x Rs.75)]/700, or Rs.821 each. The remaining 400 units would also be valued at this rate
on the balance sheet in ending inventory.
SPECIFIC IDENTIFICATION
A less commonly used, but important method to valuation is called specific identification. This
method is used for high-end items that are more easily tracked. In some cases, this method can
be used for more common items, but less value is realized from this accounting method is such
cases. This is because powerful and detailed tracking software is required to employ specific
identification on large numbers of goods.
INFLATIONARY EFFECTS ON VALUATION
No matter how you look at it, you are still coming up with 700 widgets that cost you a total of
Rs.575. This would all be well and good if the value of money remained static. However, market
conditions change causing inflationary changes. When this happens, your accounting method can
have a strong impact on how healthy the business looks on income statements and balance
sheets. The affects cash flow when businesses seek credit to pay for ongoing operations.
RISING PRICES
When prices are rising, using FIFO will show a greater value on the balance sheet, thereby
increasing tax liabilities but also improving credit scores and the ability to borrow cash for
ongoing operations. Older inventory is being used to determine the cost of goods sold and newer
inventory is being used to report assets. LIFO decreases the value on the income statement, but
can reduce the level of depreciation you are able to take on assets. This is good for taxes but bad
for borrowing. Industries most likely to adopt LIFO are department stores and food retailers. The
method is rarely used in defences.
Inventories are equivalent to cash and they make up an important of the total cost.
STATEMENT OF PROBLEM
The current system in the company under inventory management system which doesnt
specify the safety stock which leads to scare for stocks at emergency.
The data are not properly updated at the end of each days work. Proper data
security system is not provided. Annual maintenance contract is not provided.
Records are not maintained properly.
INDUSTRY PROFILE
The perfume industry in India has come of age. From a cottage industry it has become fullfledged industry in the last two decades. The industry is growing at 125 percent annually. The
growth is attributed to an increase in disposable income.
WITH GLOBALIZATION, liberalization and the IT revolution, living standards of the Indians
have increased manifold. The demand for fashionable products has increased too. That is why;
all global players are eyeing the subcontinent for business purpose. The illegal flow of lifestyle
products confirm the great demand for these products in India. The affinity of the Indians for
foreign goods also compels the indigenous manufacturers to tie-up with international brands to
tap this segment of people.
The fragrances industry is big business, very big business. It includes much more than retail sales
of fragrances. Related industries such as chemical companies supply the chemicals and the
fragrances are made from it. Most fragrances chemicals are synthesized from petroleum
products. Some companies formulate fragrances and flavours for other companies. Marketing
and advertising are used to create and promote the image of a fragrance.
The perfume industry, basically, was just a cottage industry some two decades ago. But now, due
to the huge demand among the people, it has blossomed into a full-fledged industry. Recently,
Alcome Perfumes and Cosmetics, declared a plan to set up a Rs. 100 crore green field perfume
plant in and around Noida Special Economic Zone.
The domestic perfume market is estimated to be worth Rs.300 crore and is growing at around
125 percent annually. The forecast is that it may grow at a rate of 200 percent in the coming
years, with fast changing consumer behaviour and habits.
Geneva-base International Fragrance association has estimated that the global perfume market is
worth $ 40 billion, out of which the mass market has a 70 percent share. In this, India, China has
a considerable share.
With the growing demand for fragrance, the Indian perfume companies are planning to change
their strategies by utilizing their resources mainly for the domestic market and a meager portion
for exports. Apart from that these that these companies are also planning a multiple marketing
and distribution strategy to foray into a market with huge potential. The potential is immense as
the middle class is growing rapidly and disposable incomes are increasing.
originally the 18th century home of Louise de Mirabeau, houses a fine collection of Provencal
art. The 17th century Fragonard.
4.1988
Nov 25, 1988 - It is one of the 200 fragrance-related art objects currently on view in the
"Scents of Time" exhibit at the Museum of Science and Industry. The exhibit traces the history
and evolution of fragrance, connecting each phase with the social, political and cultural trends of
the time. ...
5. 1991
Feb 17, 1991 - Written in collaboration with Patricia Bayer, the book includes chapters on
Rene Lalique's life, the development of the perfume industry, the history of the Lalique
company, and collecting tips. An appendix provides information on dating bottles by the
signature .
6. 1999
Dec 9, 1999 - of newly fragrances remain on the shelf after a year of launching," says
international director for Antonio PUIG perfumes, Eugeni Majo. cosmetics industry is a dynamic
one. it's competitive and only companies that manage to create an product that differs from the
rest will remain"
7. 2000
Jun 20, 2000 - Halifax's eight-year-old "No Scents" policy is creating a big stink in the
perfume industry. Representatives from the American and Canadian perfume industry were in
Halifax Tuesday to launch a counter attack ad campaign as a way of stopping the campaign from
spreading.
8.2001
Nov 23, 2001 - hitherto unknown insights into the use of perfumes through the ages and
learn that "the history of perfume is often intertwined with the history ... But, it was the Arabs
who linked "the past and present of the perfume industry", says the portal. "The process of
extracting oils from flowers.
9.2002
Apr 11, 2002 - Scented oils and perfumes were stored in elaborate and beautiful pots and
jars throughout Egyptian history. ... "Never before has a series of exhibitions in Egypt and
abroad been devoted to a single industry, which has resulted in such a wide range of artistic and
utilitarian objects,"
10.2004
Sep 22, 2004 - It was a scent that changed the American position in the perfume
industry. Women across this nation began to forsake all of the costly and well- ... She offered her
vast store of perfume knowledge and its history with great generosity.
COMPANY PROFILE
SOMABHAI FULABHAI PATEL (SFP)
SFP Sons (India) Pvt. Ltd established in 1992 is one of the leading manufacturers of
Perfumes and cosmetics in India. SFP is located in Special Economic Zone, Chennai and was
Formerly known as S. F. Patel & Sons (India).SFP manufactures wide range of over 1000+
products under its own brands 'Ahsan', 'Tara', 'Taibah', 'Malaki', 'Salaam', 'Silent Valley' and
'Crazy Moments'. These products are widely available in more than 20 countries. Product
range includes Attars (concentrated perfume oils), Spray Perfumes (EDT, EDP, colognes and
body mists), Perfume Gels, Creams and Gels for Hair and body, Cleansing lotion, Shower
Gels, Shampoos, Hair Oil and Talcum powders.
SFP is a ISO 9001 certified company and is committed to manufacture quality products.
All products manufactured are skin friendly and abide by all international standards laid
down by governing bodies like IFRA, FDA et al.
SFP factory is spread over 100,000 sq. ft area and
employees over 400+ people. It houses a well equipped R & D laboratory and highly
qualified team to develop and manufacture high quality products. It has a sound
infrastructure and modern facilities which helps every activity and product of SFP fulfill its
brand promise and mantra
SFP processes are managed and controlled through SAP. The SFP team is skilled, trained and
equipped to meet and deliver all customer expectations.
VISION AND MISSION
Company vision becomes a globally leading company in perfumes and cosmetics
industry.
Company mission, delivers the quality product with protection of environment and protect
The health of customer.
SFP aims at attaining, commanding market position in supply of perfumery and
cosmetic product by meeting the needs and expectation of customers and enhancing their
satisfaction.
MANAGEMENT
SFP was started by its present Managing Director Mr. Dinesh S. Patel an entrepreneur with
dream and vision to make SFP a globally leading Company in perfumes and Cosmetics industry.
He believes hard work, commitment and passion combined can enrich every individual's life.
R & D Lab
SFP has well equipped laboratory and research section, equipped to carry out in-house
development and testing required as per laid down standards. Latest GC, refract meters, SG
meter, Ph meters, Viscometers and other Instruments are manned by trained personnel.SFP is
committed to quality through its strict quality control methods. Using latest technology every
component and product are tested as per international standards at all stages of manufacturing to
ensure high quality perfumes and cosmetics.
BLENDING
SFP also blends some of its
Own fragrances. It has 8 nos
of blending tanks of capacity
1 ton with cooling lines.
It has DM Water plant and a
RO water plant. SFP has two
tanks for alcohol storage which can hold 50000 liters.
COSMETIC MANUFACTURING
Cosmetic products manufacturing is done is well
equipped modern facilities. This plant has oil phase
vessel, water phase vessel and a main homogenizing
vessel of capacity 1 ton. SFP also has
DISTILLATION
SFP also houses a unique and traditional perfume oil
extraction unit from natural
ingredients. Here by distillation oils are extracted
which are used in fragrance blends.
WAREHOUSE
The newly constructed ware house has area of over
20000 sq. ft and is well arranged to monitor and
move material with ease. All products are bar-coded
for efficient identification. SFP is well connected by
road, sea and air to have excellent supply chain.
TRAINING
SFP Training Centre provides trainings to all its employees on regular basis. The training is
totally based on skill and personality development to drive individuals and the company forward.
SHOWROOM
The showroom within the factory premises
displays a range of products. It also displays
packaging material components. Here customers
can select items of their choice for their markets.
Credentials of SFP
Raad voor accreditatie, Netherland has licensed SFP Sons (India) Pvt. Ltd and listed
.HUMAN RESOURCE
Competence, awareness, training
Available competence level of each employee on the basis of his education skill and
experience is assessed and accordingly training needs are identified and provided competence
map is done for all those who are directly connected to the performance of conformity to
Manpower in SFP
Every department has a highly experienced and qualified team. Company has around 250
skilled workers. The company has 120 experienced hands in the line of sales and marketing
team. The company has a fully equipped training hall which accommodates 50 persons at a
time and regular training programs are held at different levels. The training is totally based on
skill and personality development to drive individuals and the company forward
ORGANISATIONAL CHART
MARKETING
SFP has organized tie-up in Dubai to fee the market in U.A.E. and distribution of the
premium attars to African countries like, Sudan, Egypt,
Somalia, Nigeria, Ghana, Uganda, Zambia, South Africa, Libya, Algeria, Mauritania,
morocco, Chad, and Cameroon.
In Saudi Arabia the company is having distribution tie-ups in Jeddah, Riyadh, Mecca,
Medina, etc.
Also the company is having distribution outlets in Kuwait, Muscat, Bahrain, Doha-Qatar,
Lebanon, Jordan, Syria, Iran, Iraq, and Afghanistan.
The company is also having export market in Sri Lanka, Singapore, Malaysia, Indonesia,
Thailand, Myanmar and Bangladesh.
In the west the company is having market in Atlanta, New York, New Jersey, Chicago,
Las Angeles, London, Spain, and France.
In India there are 750 distributors throughout the country.
PRODUCT PROFILE
Different Brands Manufactured by SFP :
OBJECTIVE OF STUDY:Primary objective:To analyze that the existing inventory management system in SFP
SONS India pvt.ltd.
Secondary objective:1. To verify the mismatch between the order and receipt of mate
2. To find out the impact of inventory on working capital.
3. To find out minimum stock level, how much stock should be order.
LITERATURE REVIEW
3) Machine
4) Market
5) Material
6) Management
6. Author:-Silver, Edward A
Dec22, 2002
(Article from production and inventory management journal)
This article considers the context of a population of items for
which the assumption underlying the EOQ derivation holds reasonably well.
However as is frequently the cash in practices there is an aggregate constraint that
applies to the population as a whole. Two common forms of constraints are:
1) the existence of budget to be allocated among the stocks of the items and
2) a purchasing production facility having the capability to process at most a certain
number of replenishment per year. Because of the constraint the individual
replenishment quantities cannot be selected independently.
5. Author:- Charles Atkinson
(A study on inventory management)
In the study by Mr. Charles Atkinson, he explained the inventory
management and assessment of inventory levels. As per this study inventory management
need to address two issue
Part I. How to optimize average inventory levels.
Part II. How to assess (evaluate) inventory levels.
This study tells about what the manager should do and not to do, and
how much amount should be order in one placed orders. Average inventory can be
calculated by simplistic method.
Average inventory = beginning inventory +end inv./2
8. Author:-Delaunay C , Sahin E,
2007.
RESEARCH METHODOGY
organization. SFP invests about 40% of total assets inventory should be analyzed their
records.
The analysis of inventory according to their data is available in the company. The data
collection of inventory for analysis is by the direct store department. I went to the all inventories
as raw material, work in progress inventory, finished goods inventory by the proper observation
of datas of the company.
The particular method for data collection used direct interview with assistants and
telephone interview with friends to known about annual investment of inventories and other
important data.
PERIOD OF STUDY:
The study was conducted in a period between January 2010 to April 2010 during which
the researcher studied the companys relationship with dealers and distributors and obtained their
view.
In managing inventories, the firms objective should be in consonance with the wealth
maximization principle. To achieve this, the firm should determine the optimum level of
(1)
(2)
Maximum stock Limit: This represents the quantity of inventory above which it should not
be allowed to be kept. The main object of fixing this limit is to ensure that unnecessary
working capital is not blocked in stores. The quantity is fixed keeping in view the
disadvantages of overstocking.
RE-ORDERING LEVEL (ORDERING LEVEL)
It is the point at which if the stock of the material in stores reaches, the storekeeper should
initiate the purchase requisition for fresh supply of material. This level is fixed somewhere
between maximum and minimum level is such a way that the difference of quantity of the
material between the reordering level and the minimum level will be sufficient to meet
requirements of production up to the time of fresh supply of the material. It is fixed after
taking into consideration the following factors:
ABC ANALYSIS:
ABC Analysis is a basic analytical management tool which enables top
management to place the effort where the result will be greatest. This technique,
popularly known as always better control or the alphabetical approach, has universal
applications in many areas of managing the inventory.
The technique tries to analyze the distribution of any characteristic by
money value of importance in order to determine its priority.
The annual consumption analysis of any organization would indicate that a handful of
top high value items less than 10% of total number will account for a substantial portion
of about 75% of the total consumption value and these few vital item are called A class items
which need careful attention of the materials manager. Similarly a large number of bottom
items over 70% of total number called the trival many account only for about 10% of the
consumption value and are known as the C class. The items that lie between the top and
bottom are called the B category item.
The following facts need to be noted with regard to ABC Analysis:
1. Through usually the inventory items are classified into three categories viz AB andC only,
but nothing prohihibits a firm to undertake the analysis on the basis of a larger
catagorisization.
2.It is necessary for an effective ABC analysis that all the items should be included for the
Classification.
3.Through according to ABC Analysis category C gets only a simple attention, the
management should nevertheless have to be vigilant in its approach. For example an items
may be of small value but may be critical in the sense that its non-availability hampers the
production process and its supply is irregular. The management has to be extra careful about
its inventory, even though the items figures in the category C. Thus the ABC analysis not the
ultimate exercise in inventory management, it needs supplementing with detailed knowledge
and monitoring.
4.Price of the items and their physical quantities shouldnt be made the basis of ABC
analysis. It is rather the usage value of the items which must be used for the purpose of
classification.
One of the major inventory management problems to be resolved is how much inventory should be
added when inventory is replenished. If the firm is buying raw materials, it has to decide lost in
which it has to be purchased on replenishment. If the firm is planning a production run, the issue is
how much production to schedule (or how much to make). These problems are called order
quantity problems, and the task of the firm is to determine the optimum or economic order quantity
(or economic lot size). Determining an optimum inventory level involves two type of costs: (a)
ordering costs and (b) carrying costs: The economic order quantity is that inventory level that
minimize the total of ordering and carrying costs.
VED ANALYSIS:
The VED analysis is used generally for spare parts. The requirement and urgency of spare parts is
different from that of materials. A-B-C analysis may not be properly used for spare parts. The
demand for spares depends upon the performance of the plant and machinery. Spare parts are
classified as: Vital (V), Essential (E) and Desirable (D). The vital spares are a must for running the
concern smoothly and these must be stored adequately. The non-availability of vital spares will
cause havoc in the concern. The E types of spares are also necessary but their stocks may be kept at
low figures. The stocking of D types of spares may be avoided at times. If the lead time of these
spares is less, then stocking of these spares can be avoided.
The classification of spares under three categories is an important decision. A wrong classification of
any spare will create difficulties for production department. The classification of spares should be
left to the technical staff because they know the need, urgency and use of these spares.
The procurement of inventory is totally depends on order/demand. In first step they get
the order from customer then they write a form that form called indent form by hand writing.
After getting order they will send the order to purchase department for buying of Raw
Material and Packaging material. Every time that causes the delay of delivery of goods to the
customer. After receiving the raw materials from supplier they check the quality, because quality
is more important for them. In whole production process 4-5 times they will check the quality
and after that quality check seal on product.
They are using FIFO method for delivery of good to the customers. First In First Out
(FIFO) means first order should deliver first and after that continue process. It is good way of
delivery that make the customer satisfied. Every inspection about available stock is on SAP
every one can know how much stock is available, and how much order should be placed. For
every order they keep the numbers for identification.
Warehouse arrangement
There is separate warehouse for keeping the different types of inventory like
Raw material, packaging material, semi finished good and finished good. Raw materials
includes the perfumery liquid, arranging of these things they have rack and rack numbers, and
unique code number for each and every liquid for identification. For talcum powder raw material
are the talc powder which they kept in plastic bags in production unit itself.
Packaging material include box, cap color, neck etc. which require after
filling the product in bottles. Finished goods and packaging material they are keeping in same
warehouse left side finished good and right side packaging material. Finished good order wise
and packaging material how to find easily.
Each and every data maintained in systems so it is very easy to get the information.
SCOPE OF STUDY
low value items. This study also gives the idea about industrial focus and addressal towards
maintaining inventory.
.
LIMITATION OF STUDY
It consumes more time and requires lots of expenditure. More time is needed to do
this study.
Study is based on secondary data only.
The quality of inventory is not compared in analysis.
The analysis is based on figures present in the internal records only.
The study is based on two year reports given by marketing and finance
EOQ(in units)
2010
320.76
2009
109.53
Interpretation:
It is infer that the Economic order quantity for the year2009 is 109.53 and 2010 is
320.76. Year 2010 EOQ is 2.9 times more than 2009 EOQ.
Chart no.5.1
Year
Sales (X)
Inventory(Y)
Ratio (X/Y)
2010
63130829.65
26297835.5
2.40
2009
81132216
26336975
3.08
TABLE NO.5.2
Interpretation:
It shows that the ratio of sales and inventory for the year 2009 is 2.4 and for the
year 2010 3.08. It shows that the inventory sales ratio of year 2009 is higher than year 2010.
Year
Raw material
Semi finished
good
Packaging
material
Finished good
Total inventory
2010
7403(in kg)
51026
458522
342912
859863
2009
8406(in kg)
43467
549409
301860
903142
Raw material
Semi finished
good
Packaging
material
2010
5182325
1275634
9170450
10630287
26258696
2009
6305141
1086692
9889368
9055774
26336975
Chart no.5.3
RM
PM
SM
FG
Total
inventory
2009
23.94%
37.54%
4.13%
34.38%
100%
2010
19.73%
34.92%
4.86%
40.48%
100%
Chart no.5.4
Year
Raw material
Total inventory
Percentage
2009
63,05,141
2,63,36,975
23.94%
2010
51,82,325
2,62,58,696
19.73%
Chart no.5.6
Year
Total inventory
Percentage
2009
1086692
26336978
4.13%
2010
1275634
26258696
4.86%
Chart no.5.7
Packaging material
Total inventory
Percentage
2009
988936
8
9170450
26336978
37.54%
26258696
34.92%
2010
Chart no.5.8
Year
Finished good
Total inventory
Percentage
2009
9055774
26336978
34.38%
2010
10630287
26258696
40.48%
Table no.5.10
ABC classification
Grade
No. of items
Percentage
57
31.66%
65
36.12%
58
32.22%
Total
180
100%
Chart no.5.10
CONSUMPTION
VALUES IN RS
GRADING
Apr-2008 - Quantity
Apr-2008 - Amount
Perfume Oils
1,02,024
1377038.87
Eau De Perfume
59,544
2301839.13
Eau De Toilette
10,176
362407.12
AHSAN
Total
1,71,744
4041285.12
Eau De Perfume
2,080
51452.12
Hair Oil
59,370
366167.65
Talcum Powder
3,24,528
2219257.5
3,85,978
2636877.27
2,664
130340.94
Lotions
192
9403.66
Total
2856
139744.6
TARA
Item Group
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
May 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
May-2008- Quantity
May-2008- Amount
GRADING
AHSAN
Perfume Oils
1,57,224
1588658.94
Eau De Perfume
19,524
956069.47
Eau De Toilette
4,320
157183.01
1,81,068
2701911.42
3,200
79157.11
Total
TARA
Item Group
Eau De Perfume
Hair Oil
8,856
149517.32
1,60,344
781462.82
1,72,400
1010137.25
Hair Oil
480
30100.41
Shower Gel
144
10593.68
Hair Gel
144
5535.82
Body Splash
504
24659.1
Shampoo
336
26603.93
Lotions
240
13576.62
1848
111069.56
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Cream
Total
June 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
June-2008- Quantity
June-2008- Amount
GRADING
AHSAN
Perfume Oils
1,17,576
1318419.85
Eau De Perfume
27,464
1130428.47
Eau De Toilette
2,784
104890.69
1,47,824
2553739.01
Total
TARA
Item Group
Eau De Perfume
480
11873.57
5,496
154637.41
Talcum Powder
47,232
497530.23
Eau De Toilette
72
6098.84
53280
670140.05
432
16607.46
3,600
176136.4
Shampoo
144
11401.69
Lotions
840
62980.09
5016
267125.64
Hair Oil
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Total
July 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
July-2008- Quantity
July-2008 -Amount
GRADING
AHSAN
Perfume Oils
97,488
1136365.16
Eau De Perfume
17,448
789353.05
Eau De Toilette
2,208
104389.2
1,17,144
2030107.41
800
19789.28
Total
TARA
Item Group
Eau De Perfume
Hair Oil
180
6860.69
Talcum Powder
32,736
384288.54
Eau De Toilette
144
12197.68
33860
423136.19
96
6020.08
144
13190.38
72
2582.85
312
21793.31
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
August 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
Aug-2008- Quantity
Aug2008-Amt
GRADING
AHSAN
Perfume Oils
Eau De Perfume
Eau De Toilette
Total
TARA
1,87,056
2232981
30,752
1351294.97
192
10781.02
2,18,000
3595056.99
Item Group
Eau De Perfume
1,600
39578.56
Hair Oil
1,416
31693.94
Talcum Powder
64,032
898033.68
Eau De Toilette
72
6098.84
67,120
975405.02
1,296
63409.11
360
16284.34
1656
79693.45
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
September 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
Sep-2008-Quantity
Sep2008-Amt.
GRADING
AHSAN
Perfume Oils
2,80,656
3643082.56
Eau De Perfume
57,548
2586300.76
Eau De Toilette
5,376
184313.35
3,43,580
6413696.67
Total
TARA
Item Group
Eau De Perfume
3,520
87072.86
Hair Oil
2,232
77912.2
50,472
359785.22
56,224
524770.28
504
24659.07
504
24659.07
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
October 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
Oct2008-Quantity
Oct-2008-Amt
GRADING
AHSAN
Perfume Oils
Eau De Perfume
Eau De Toilette
Total
1,09,836
1225240.16
31,020
1152276.45
672
24671.89
1,41,528
2402188.5
4,200
96434.71
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
1,16,088
562889.2
120288
659323.91
1,224
59886.38
1224
59886.38
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
November 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
Nov-2008-Quantity
Nov-2008-Amount
GRADING
AHSAN
Perfume Oils
65,520
759450.53
Eau De Perfume
40,324
1509870.84
Eau De Toilette
4,752
191725.56
1,10,596
2461046.93
800
19789.28
1,200
25847.91
56,976
261544.28
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
Eau De Toilette
Total
58976
307181.47
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
December 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
Dec-2008-Quantity
Dec-2008-Amt
GRADING
AHSAN
Perfume Oils
1,44,264
1843142.24
Eau De Perfume
29,584
1231266.38
Eau De Toilette
6,672
236237.42
1,80,520
3310646.04
960
22950.16
2,856
75511.28
1,35,480
692142.97
139296
790604.41
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
360
17025.11
360
17025.11
Hair Cream
Shampoo
Lotions
Total
January 2008
BRAND NAME
CONSUMPTION
VALUES IN RS
Jan2009-Quantity
Jan-2009-Amount
GRADING
AHSAN
Perfume Oils
1,01,376
1115789.03
Eau De Perfume
22,288
865498.76
Eau De Toilette
5,904
224110.99
1,29,568
2205398.78
960
22105.37
1,800
42702.46
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
1,12,656
539000.02
Eau De Toilette
72
5530.54
115488
609338.39
144
6439.27
144
6439.27
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
Feb 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Feb-2009-Quantity
Feb-2009-Amount
GRADING
AHSAN
Perfume Oils
60,408
727184.84
Eau De Perfume
25,176
1003806.8
Eau De Toilette
2,064
121175.39
87,648
1852167.03
2,400
49233.18
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
74,928
673110.8
Eau De Toilette
72
5530.54
77400
727874.52
240
14229.32
432
19317.8
672
33547.12
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
March 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Mar-2009-Quantity
Mar-2009-Amount
GRADING
AHSAN
Perfume Oils
84,624
955170.08
Eau De Perfume
19,708
719760.18
480
27802.96
1,04,812
1702733.22
4,320
95732.99
20,112
233482.55
24432
329215.54
Eau De Toilette
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
120
6909.44
216
9204.26
Shampoo
96
6748.67
Lotions
48
3669.66
480
26532.03
Shower Gel
Hair Gel
Body Splash
Hair Cream
Total
CONSUMPTION
VALUES IN RS
Apr-2009-Quantity
Apr-2009-Amt
GRADING
AHSAN
Perfume Oils
2,02,992
2388126.24
Eau De Perfume
55,416
2451502.23
Eau De Toilette
11,328
385100.27
2,69,736
5224728.74
480
10642.24
3,600
96400.8
1,18,968
791687.35
123048
898730.39
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
96
5527.68
2,664
113513.37
Shampoo
192
13497.6
Lotions
288
20644.29
3240
153182.94
Shower Gel
Hair Gel
Body Splash
Hair Cream
Total
May 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
May-2009-Amount
GRADING
AHSAN
Perfume Oils
1,47,312
1876017.9
Eau De Perfume
39,480
1511140.04
Eau De Toilette
1,536
49854.72
1,88,328
3437012.66
960
21283.2
7,620
170453.77
71,628
418572.12
80208
610309.09
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
June 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
June-2009-Qnty
June2009-Amt
GRADING
AHSAN
Perfume Oils
1,28,928
1338309.12
Eau De Parfum
6,456
269641.68
Eau De Toilette
1,488
53310.24
1,36,872
1661261.04
8,880
143501.2
70,320
518095.78
79200
661596.98
Total
TARA
Item Group
Eau De Parfum
Hair Oil
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
1,944
82812.7
1944
82812.7
Hair Cream
Shampoo
Lotions
Total
July 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
July-2009-Qnty
July-2009-Amt
GRADING
AHSAN
Perfume Oils
3,44,772
4730478.96
Eau De Perfume
39,816
1629457.42
Eau De Toilette
5,376
197208.48
3,89,964
6557144.86
Eau De Perfume
4,800
107232
Hair Oil
9,972
215067.96
1,71,120
1370713.79
1,85,892
1693013.75
Total
TARA
Item Group
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
96
5559.36
1,440
61948.8
96
6803.52
144
10444.32
1776
84756
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
August 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Aug-2009-Qnty
Aug-2009-Amt
GRADING
AHSAN
Perfume Oils
3,08,381
3675631.15
Eau De Perfume
46,008
1924019.52
Eau De Toilette
8,352
280743.36
3,62,741
5880394.03
Eau De Perfume
1,920
42892.8
Hair Oil
3,300
82202.92
83,064
751192.91
88,284
876288.63
Total
TARA
Item Group
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
144
8339.04
3,240
139384.8
96
6803.52
3480
154527.36
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
September 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Sept-2009-Qnty
Sept-2009-Amt
GRADING
AHSAN
Perfume Oils
1,81,512
2257750.08
Eau De Perfume
38,064
1300500.57
Eau De Toilette
5,424
180467.52
2,25,000
3738718.17
948
29043.51
57,600
321958.58
Total
TARA
Item Group
Eau De Perfume
Hair Oil
Talcum Powder
Eau De Toilette
Total
58548
351002.09
3,672
157969.44
3672
157969.44
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
October2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Oct-2009-Qnty
Oct-2009-Amt
GRADING
AHSAN
Perfume Oils
1,74,588
2064442.37
Eau De Parfum
52,320
1842301.85
Eau De Toilette
6,192
184397.76
2,33,100
4091141.98
3,888
96082.56
Talcum Powder
1,09,200
622351.11
Eau De Toilette
288
21205.44
113376
739639.11
Total
TARA
Item Group
Eau De Parfum
Hair Oil
Total
SILENT VELLY
Item Group
Hair Oil
240
13898.4
Shower Gel
192
12706.56
432
26604.96
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
Total
November 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Nov-2009-Qnty
Nov-2009-Amt
GRADING
AHSAN
Perfume Oils
1,15,104
1394237.39
Eau De Parfum
26,496
1147129.2
Eau De Toilette
1,872
55748.16
1,43,472
2597114.75
500
13160
1,680
45901.54
29,184
310958.79
31364
370020.33
Total
TARA
Item Group
Eau De Parfum
Hair Oil
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
360
12110.4
Body Splash
144
6194.88
Shampoo
192
13607.04
Lotions
144
4368.96
Total
840
36281.28
Hair Cream
December 2009
BRAND NAME
CONSUMPTION
VALUES IN RS
Dec-2009-Qnty
Dec-2009-Amt
GRADING
AHSAN
Perfume Oils
1,72,064
1907591.01
Eau De Perfume
55,660
2106838.02
Eau De Toilette
6,864
237369.6
2,34,588
4251798.63
Eau De Perfume
5,040
234864
Hair Oil
5,184
147699.05
18,000
280614.5
28,224
663177.55
Total
TARA
Item Group
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
2,592
111442.03
2592
111442.03
Hair Cream
Shampoo
Lotions
Total
January 2010
BRAND NAME
CONSUMPTION
VALUES IN RS
Jan-2010-Qnty
Jan-2010-Amt
GRADING
AHSAN
Perfume Oils
1,08,288
1063524.96
Eau De Perfume
27,044
1055093.44
Eau De Toilette
3,552
115244.16
1,38,884
2233862.56
Eau De Parfum
6,240
290784
Hair Oil
4,560
107697.73
78,600
787035.53
89,400
1185517.26
1,944
83671.21
Total
TARA
Item Group
Talcum Powder
Eau De Toilette
Total
SILENT VELLY
Item Group
Hair Oil
Shower Gel
Hair Gel
Body Splash
Hair Cream
Shampoo
Lotions
2,160
68673.41
Total
4104
152344.62
FINDINGS
SUGGESTIONS
There can be a system where in periodical review (twice in a month) of inventory could
be carried out so that the inventory can be kept under control.
There should be periodical review of movement of items so that any non moving
items can be identified and suitable action can be done.
At present the company is maintaining zero safety stock for all items, if the safety
stock is maintained for important items, delay in production can be eliminated and orders
can be supplied in time which will result in a better credibility in both international and
domestic market.
It has been predicted that if company is planning to achieve more sale it may require huge
amount of inventory in future. So the company has to arrange capital to meet future
requirement.
It is suggested that they can have close monitoring of receipts and issue for A
class items in order to have control of inventory.
To increase the inventory turnover ratio by increasing the sales level and maintaining
the required level of inventory.
To maintain the Re-order level, Min-stock level and Economic order quantity
company should consider the demand of the product.
There is one warehouse for keeping the finished good and packaging material and
packaging material are not arranged in good manner so it should be in order wise.
CONCLUSION
Inventory control is exercise when you order an item. If you do a poor job then everything after
is inventory correction
GORDON GRAHAM
Inventory is the physical asset of a company that can create problem if there is shortage, while in
production and also if its in excess even after production. Inventory is constantly changing as
quantities are sold and replenished.
Hence it can be understood that efficient inventory management can take the company to new
heights and inefficient inventory management can ruin the company.
Company is highly concentrated on domestic market, it increase the market level of company
because trend of domestic market is changing.
The study on Inventory management in SFP Sons (India) Pvt. Ltd about A BC analysis for items
is predicting future inventory requirements etc.
From the study it is predicted that future sales have to be achieved and inventory level have to be
maintained.
ABC Analysis was carried out to identify the fast moving and important items.
The company has to periodically review the inventory to avoid production loss.
The results of the study can be further extended for future research.
BIBLIOGRAPHY
WWW.INVENTORY .COM
WWW.INVESTOPEDIA.COM
WWW.WISEGEEK.COM
www.mbaguys.net
Product Profile
Pour Homme
Pour Femme
Magic
Night
Body Mist
Clean Effect
In Control
Coconut
Herbal
Dazzling
Podium
Mega Hold
Stressed Out
Regular Hold
Wake Up
Styling
Fresh Up
Wet Look
Nutritious
Shower Gels
Aleo Vera
Lotion
Energizing Rose
Lemon
Firming Olive
Herbal
Rose
Revitalizing Almond
Toning Musk
Almond
Rose
Cleansing Lotion
Shampoos
Aloe Vera
Anti Dandruff
Hair Gels
Extra Hold
Urban Colours
Dazzling
Creams
Antidandruff
Herbal
Lemon
Hair Oils
Jasmine
Amla
Herbal
Coconut
20ml Spray
Blossom Cool
Blossom Love
Blossom Nature
Blossom Pleasure
Blossom Romance
30ml Spray
Golden Magnet
Pleasures for Men
Pleasures for Women
Romantic for Men
Romantic for Women
Sandal
White Flower
50ml Spray
Ahsan for Men
Charm 16
Only Ahsan
Pearl for Women
60 ml Spray
New Man
New Women
Attraction
Freedom
Ajooba
Perpetuity
Fresh