Zuari Project Report-Mahesh

A STUDY ON “INVENTORY MANAGEMENT”
IN
ZUARI CEMENT LTD (HEIDELBERG GROUP)
YERRAGUNTLA,KADAPA.
A project report submitted in partial fulfilment of the requirement
for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by
M.MAHESWARA REDDY
(REGD NO: 0012020027)
Under the guidance of
DR.A.AMRUTH PRASAD REDDY ASSOCIATE PROFESSOR
M.Com, MBA ,PH.D.
Submitted to
DEPARTMENT OF BUSINESS MANAGEMENT
YOGI VEMANA UNIVERSITY
VEMANAPURAM, YSR KADAPA-516005
2020-2022
INVENTORY MANAGEMENT
DECLARATION
I hereby declare that this Project Report titled “A STUDY ON

INVENTORY MANAGEMENT IN ZUARI CEMENT LTD ,YERRAGUNTLA,KADAPA”
,submitted by me to the Department of Business Management, YOGI VEMANA
UNIVERSITY, is a bonafide work undertaken by me and it is not submitted to any
other University or Institution for the award of any degree/diploma/certificate
or published any time before.
Date:
Place:
M.MAHESWARA REDDY
(REG NO: 0012020027)
YOGI VEMANA UNIVERSITY Page 2

YOGI VEMANA UNIVERSITY:KADAPA
DEPAARTMENT OF BUSINESS MANAGEMENT
This is to certify that MR M.MAHESWARA REDDY, Regd.No.0012020027,

has successfully completed the project entitled " INVENTORY MANAGEMENT
IN ZUARI CEMENT, YERRAGUNTLA " in partial fulfilment of the requirement for
the award for the award of the degree of MASTER OF BUSINESS
ADMINISTRATION from YOGI VEMANA UNIVERSITY during the academic year
2020-2022
Date:
Place:
Dr.S.V.SUBBA REDDY,Ph.D, DR.A.AMRUTH PRASAD REDDY

(CO-ordinator) project guide

Certificate
This is to certify that a project titled “ A STUDY ON INVENTORY
MANAGEMENT” in Zuari cement has been carried out by name:
M.MAHESWARA REDDY(reg.no 0012020027) belonging to YOGI VEMANA
UNIVERSITY,KADAPA at ZUARI CEMENT LIMITED, KRISHNA
NAGAR,YERRAGUNTLA.
During the period (from 16.05.2022 to 30.06.2022) of the project her and
conduct and character were found to be satisfactory
ASHISH REDDY
GM-HR&ADMIN

ACKNOWLEDGEMENT
I, the researcher would like to express my thanks to all those who

helped me directly or indirectly to complete this project.
First, I take this to our opportunity to express my sincere thanks

to Principal K.Krishna Reddy sir, and the college management for
providing an opportunity and facility in successful completion of my
project.
I would like to thanks to Dr.SV.SUBBAREDDY sir, HOD of MBA
department, YOGI VEMANA UNIVERSITY for giving more support to
complete this project.
I would like to thanks Dr.A.AMRUTH PRASAD REDDY sir,

Yogi Vemana University, Kadapa for his constant guidance and
valuable advice.
My heartful thanks to the Mr. ASHISH REDDY Sir GM-

HR&ADMIN sir, who showed infinite interest and helped me at all
times withvaluable suggestions and kind co-operation without whom
I could not draw multifarious sketch for my Project work.
Finally, I am thankful to my parents who helped me directly in

my phase of completion of this project work.
M.MAHESWARA REDDY

TABLE OF CONTENTS
S.NO PARTICULARS PAGE NO
CHAPTER-1 INTRODUCTION
CHAPTER-2 INDUSTRY PROFILE
CHAPTER-3 COMPANY PROFILE
CHAPTER-4 RESEARCH METHADLOGY
CHAPTER-5 DATA ANALYSIS & INTERPRETATION
CHAPTER-6 FINDINGS, SUGGESTIONS &

CONCLUSION
ANNEXURES
BIBLIOGRAPHY

INTRODUCTION

Definitions of Inventory:
John Hampton treats inventories, as “Locked up capital". Inventory

measured by rupee constitutes the major element in the "Working capital"
(approximately 60% of current assets}.
"Goods inventory management is nothing but good financial management"
According to S.C.KUCHAL.
❖ Inventory: A physical resource that a firm holds in stock with the
intent of selling it or transforming it into a more valuable state
❖ Inventory System: A set of policies and controls that monitors levels
of inventory and determines what levels should be maintained, when
stock should be replenished, and how large orders should be.
Other characteristics of inventory situations

Besides the various types of costs involved, there are other characteristics
of the situation that vary among types of inventory and must be captured
if the decision model is to be an accurate representation of the physical
circumstances.
Lead times
Obtaining inventory usually requires a lag from the initiation of the process
until the inventory starts to arrive. This lead-time may be a few minutes or
it may be a few minutes or it may be many months, and depends in part
on whether the firm is producing goods for its inventory or is ordering
these goods from another firm. To produce goods for its own use, the firm
must schedule, set up and adjust manufacturing equipment.

Sources and levels of risk
Uncertainities play a significant role in inventory situations. Uncertainities
usually involve lead times and demand times and demand levels, but
situations where other variables are uncertain also occur. Where are
substantial uncertainities and where the costs of stock out are important
strategies for addressing risk must be formulated?
Static versus dynamic problems

The Inventory problems are usually divided into two types based on
characteristics of the goods involved. In static inventory problems, the
goods have one-period life; there can be carrying over of goods from one
period to the next. Inventory situations where decisions involve the
number of newspapers to print, the number of greeting cards to purchase
or the number of calendars to produce are static inventory problems. In
dynamic inventory problems, the goods have value beyond the initial
period; they do not lose their value completely over time.
Replenishment rate
Once goods start to be received from a vendor or from the firms own
production processes, there are differences among goods in the rate at
which they are received. Small orders from vendors are likely to by receive
at once. For example, assume that a firm has placed in order for 10 cases
of paper towels. For such a small order the rate of replenishment is infinite;
the firm's inventories well go up 10 cases in a very short time as the goods
are quickly unloaded.

For large order from vendors, or for inventory produced with in the firm,
the replenishment may be slower.
TYPES OF INVENTORY
Inventories can be classified into five basic types on the basis of their
production. These various types of inventories cannot be identified and
segregated within the organization. These five types are
1. Management Inventory
They are needed because of the time required to move stocks from place
to another place.
2. Lot size Inventories

These are as a result of buying materials in quantities larger than the 2203
immediate requirement, with a view to minimizing cost of transportation,
buying, receipt and handling and to obtaining quantity discount.
3. Fluctuation Inventories
These are carried to ensure ready suppliers to consumer even when these
are irregular and unpredictable fluctuations in their demand.
4. Anticipation Inventories
These are usually maintained to meet predictable but changing pattern of
future demand.
YOGI VEMANA UNIVERSITY P a g e 10

5. Cycle Inventories
These result from managements attempt to minimize the total cost of
carrying and ordering inventory. They arise from ordering in batches or
lots, rather from needed basis.
Inventories can be further classified into production inventories
maintenance repair and operation (MRO) inventories, in-process
inventories and finished goods inventories.
❖ Production inventory consists of raw materials parts and
components which are used in the production process forming parts
of the final product.
❖ Maintenance, repair and operation supplies which are used in the
production of goods or services but do not become part of the
product.
❖ In-process inventories are semi-finished materials, parts and
assemblies found at various stages in the production operation.
Finished goods inventory consists of completed products ready for sale.
Importance of Inventory Management

Inventory management is concerned with keeping enough products on
hand to avoid running out while at the same time maintaining a small
enough inventory balance to allow for a reasonable return on investment.
Proper inventory management is important to the financial health of the
corporation; being out of stock forces customers turn to competitors or
results in a loss of sales. Excessive level of inventory however, results in
large carrying costs, including the cost of capital tied up in inventory
warehouse fees, insurance etc.
A major problem with managing inventory is that the demand for a
corporation's product is to a degree uncertain. The supply of the raw
materials used in its production process is also somewhat uncertain. In

addition the corporations own production contains some degree of
uncertainty due to possible equipment breakdowns and labor difficulties.
Because of these possibilities, inventory acts as a shock absorber between
product demand and product supply. If product demand is greater than
expected, inventory can be depleted without losing sales until production
can be stepped up enough to select the unexpected demand.
However inventory is difficult to manage because it crosses so many lines
of responsibility. The purchasing manager is responsible supplies of raw
material and would like to avoid shortages and to purchases in bulk order
take advantages of quantity discounts.
The production manager is responsible for uninterrupted production and
wants to have enough raw materials and work in progress, inventory on
hand to avoid disruption in the production process. The marketing
manager is responsible for selling the product and wants to minimize the
chances of running out of inventory. The financial manager is concerned
about achieving an appropriate overall rate of return. Funds invested in an
inventory are idle and do not earn a return.
Nature of Inventories
Inventories are stock of the product a company is manufacturing for sale

and components that make up the product. The forms in which inventories
that exist in manufacturing company are
➢ Raw materials
➢ Work-in-process
➢ Finished goods
Raw materials
These are those basic inputs that are converted into finished product
through the manufacturing process. Raw materials inventories are those
units which have been purchased and stored for future production.

Work-in-process
These inventories are semi-manufacture products. They represent
products that need more work before they became finished for sale.
Finished goods
These inventories are those completely manufactured products which are
ready Stocks of raw materials and work-in-process facilitate production
while stock of finished goods is required for smooth marketing operations.
Thus, inventories serve as link between the production and consumption
of good.
Need to hold inventories
Maintaining of inventories involves trying up the companies and
incurrence of storage and handling cost. There are three general motives
for holding inventories.
Transaction motive
It emphasizes the need to maintaining inventories to facilitate smooth
production and sales operation.
Precautionary motive
It necessitates the holding of inventories to guard against risk of
unpredictable changes in demand and supply force and other factors.
Speculative inventories
It influences the decision to increase or reduce inventory level to take
advantage of price fluctuations.
The firm should always avoid a situation of over investment or under
investment in inventories.
The major dangers of over investment in inventories are

i. Unnecessary tie up of the funds and loss of profits.
ii. Excessive carrying cost.
iii. The risk of liquidity.
The consequences of under investment in inventories are
i. Production hold-ups.
ii. Failure to meet delivery commitments, inadequate raw materials.
iii. Work-in-process will result in frequent in production interrupts.
An efficient inventory management should
❖ Ensure a continuous supply of raw materials to facilitate
uninterrupted production.
❖ Maintain sufficient supply of raw materials in periods of short supply
and anticipate price changes.
❖ Maintain sufficient finished goods inventory for smooth sales
operation and efficient customer service.
❖ Minimize the transportation cost on time.
❖ Control investment in inventories and keep it at an optimum level
Cost of holding inventories

The determination of inventory cost is essentially an income measurement
problem, a means whereby there is rational orderly, systematic
interpretation of the effect on the economic progress of the company of
expenditures involved acquiring goods or in maintaining and operating
productive facilities. Ability to quantify and develop rigorous models of
most managerial problems is dependent on the determination behavior of
relevant costs. The practical application of such models is also dependent
on ability to obtain the cost data. Relevant inventory costs which change
with level of inventory are listed.

Inventory Management is concerned with keeping enough product on
hand to avoid running out while at the same time maintaining a small
enough inventory balance to allow for a reasonable return on investment.
Proper inventory management is important to the financial health of the
corporation. Excessive level of inventory, results in large inventory carrying
cost, including the cost of capital tied up in inventory warehouse fees,
insurance etc.
Inventory is needed for the definite consumption demand of materials, and

to take care of the uncertainty involved in the usage or availability of the
materials. Sometimes other authors described as the "decoupling
function" of the inventory of materials is maintained at the different stages
of production. The inventory taking care of the normal consumption
requirements i.e., "depending upon the average consumption rates and
average lead times for procurement/manufacture of the material,
inventories are kept at the appropriate times" is called the "normal
inventory" and the inventory taking care of "a production process,
however continuous it maybe, is bound to have some interruptions; it may
also have imbalances in the consumption and production rates of the
materials at different stages.
These interruptions and imbalances make it necessary to keep stocks of
inventory between the different stages of the operations" the aspect of
this uncertainty is called the "safety stock" or "buffer stock" of inventory.
Techniques of inventory management
1) ABC Analysis
The ABC method is an analytical method of stock control which aims at
concentrating efforts on those items where attention is needed most. It is
based on the premise that a small number of the items in inventory may

typically represent the bulk money value of the total materials used in
production process. While a relatively large number of items may
represent a small portion of the money value of stores used and that small
number of items should be subject to the greatest degree of continuous
control.
Under this system, the materials stocked may be classified into a number
of categories according to their importance i.e., their value and frequency
of replenishment during a period. The first category, we may call it the
group of 'A' items, may consist of only a small percentage of total items
handled but its combined value may be a large portion of the total stock
value.
The second category, naming it as group of 'B' items, may be relatively less
important. In the third category consisting of 'C' items, all the remaining
items of stock may be included which are quite large in number but their
value is not high.
Categories of ABC analysis
In ABC analysis the items are classified in three main categories based on
their respective consumption value.
1. Category 'A' items:
The items, which are most costly and valuable, are classified as 'A'
nearly 10% of the total number of items stored will account for 70%
of total value of all items stocked.
2. Category B' items:
The items having average consumption value are classified as 'B'
nearly 20% of total number of items will account for 20% of total
value. Statistical sampling is general useful to control them.
3. Category 'C' items:
The items having low consumption value are put in category 'C'
nearly 70% of total number as items will account for 10% total value.
Generally these items are slow and non-moving items in the stores,
which are frequently used for production process but with more
quality.
2) VED classification
This analysis is based on criticality of inventory, it is used to determine the
criticality of the item and its effect on production and other services. It is
specially used for classification of spare parts. If a part is vital, it is given V
classification. If essential, then it is given E classification and if it is not
essential the part is given D classification. For V items, a large stock of
inventory is generally maintained, these item have immediate effect on
production more attention paid for this item.
3) ECONOMIC ORDER QUANTITY

The economic order quantity is that inventory level, which minimizes the
total of ordering cost and carrying costs.
It is the question, how much to order the quantity is replenished. If the firm
is buying raw materials, the question is to purchase the quantity of; each
replenishment and if it has to plan for production run, it is how much
production to schedule. It may be solved through EOQ.
COST OF HOLDING INVENTORIES
The determination of inventory costs is essentially an income
measurement problem, a means whereby there is a rational, orderly,
systematic interpretation of the effect on the economic progress of the
company of expenditures involved in acquiring goods or in maintaining and
operating productive facilitates. Ability to quantify and develop rigors
models of most managerial problems is dependent on the determination

of the behavior of relevant costs. The practical application of such models
is also dependent on ability to obtain the cost data. Relevant inventory
costs which change with the level of inventory are listed below:
Ordering cost
Every time an order is placed for stock replenishment, certain costs are
involved. The ordering cost may vary, dependent upon the type of item.
However, an estimate of ordering cost can be obtained for a given range
of items.
1. Paper work costs, typing and dispatching an order.
2. Follow up costs the follow up required to ensure timely supplies
include the travel cost for purchase follow up, telephone, telex and
postal bills.
3. Cost involved in receiving the order inspection, checking and
handling to the stores.
4. Any set up cost of machines if charged by the supplier, either directly
indicated in quotations or assessed through quotations for various
quantities.
5. The salaries wages to the purchase department are relevant for
consideration if the purchasing function is carried out at the same
decreases significantly, obviously a proportional amount of
personnel will be transferred to other departments.
Carrying Costs:
Carrying costs constitute all the costs of holding items in inventory for a
given period of time. They are expressed either in rupees per unit per
period or as a percentage of the inventory value per period. Components
of this cost include the following.

1. Storage and Handling costs: It includes the cost of warehouse space

2. Obsolescence and deterioration costs: "Obsolescence costs"
represent the decline in inventory value caused by technological or
style changes that make the existing product less salable.
"Deterioration costs" represent the decline in value caused by
changes in the physical quality of the inventory, such as spoilage and
breakage.
3. Insurance: The inventory against losses due to the theft, fire and
natural disaster.
4. Taxes: A company must pay any "personal property taxes and
business taxes" required by local and state governments on the value
of inventory.
5. The cost of funds invested in inventories: It is measured by the
"required rate of return" on these funds. Because inventory
investments are likely to be of "average risk" the overall weighted
cost of capital should be used to measure the cost of these funds.
EOQ for an item is arrived on the following assumptions
1. Demand is continuous at a constant rate.
2. No constraints are imposed on quantities ordered, storage capacity,
budget etc.,
3. Replenishment is instantaneous.
4. All costs are time invariant.
5. Units are not available.
EOQ for an item is arrived by the following formula
EOQ = √2A0/C
Where
EOQ- economic order quantity

O= cost of ordering an order
A= annual consumption of an item
C= cost of carrying one unit/yr.
2. HML classification
The high and medium and low (HML) classification follows the same
procedure as is adopted in ABC classification. Only difference is that in
HML, the classification unit value is the criterion and not the annual
consumption value. The item of inventory should be listed to the
descending order of unit value and it is up to the management to fix limits
for the three categories. For example, the management may decided that
all units with unit value of Rs.2000 and above will be H items, Rs. 1000 to
2000 M items and less than Rs. 1000 items. The HML analysis is useful for
keeping control over consumption at department levels for deciding the
frequency of physical and for controlling purchases.
3. SDE classification
The SDE classification is based upon the availability of items and is very
useful in the context of scarcity of supply. In this analysis, S refers to scarce
items, generally imported, and those which are in short. D refers to difficult
items, which are available indigenously but are difficult items to procure.
Items which have to come from distance places or for which reliable
suppliers are difficult to come by, fall in D category. E refers to items which
are easy to acquire and which are available in the local strategies. The SDF
classification based on problems faced in procurement, is vital to the lead-
time analysis and in deciding on purchases strategies.

4. MINIMUM-MAXIMUM TECHNIQUE
The minimum-maximum system is often used in connection with manual
inventory control system. The minimum quantity is established in the same
way as any re-order point. The maximum is the minimum quantity plus the
optimum lot-size. In practice, a requisition is initiated when, a withdrawal
reduces the inventory below the minimum level, and the order quantity is
the maximum minus the inventory status after the withdrawal. If the final
withdrawal reduce the stock substantially below the minimum level, the
order quantity will be higher than the calculated EOQ. The effectiveness of
a minimum system is determined by the method and precision with which
the minimum and maximum parameters are established.
5. TWO BIN SYSTEM

One of the oldest systems of inventory control is the two-bin system, which
is mainly adopted to control C group inventories. In the two-bin system,
stock of each item is separated into two bins. One bin contained stock; just
enough to last from the date a new order is placed until it is received in
inventory. The other bin contains a quantity of stock. Enough to satisfy
probable demand during the period of replenishment to start with, the
stock is issued from the first bin. When the first bin is empty, an order for
replenishment is placed, and the stock in the second bin is utilized until the
order material is received.

INDUSTRY PROFILE

Global scenario:
Cement is a key infrastructure company. It has been decontrolled from price
and distribution on 1st march, 1989 and deli censed on 25th July, 1991.
However, the performance of industry and prices of cement are monitored
regularly. The constraints faced by the industry are reviewed in the
infrastructure coordination committee meetings faced in the cabinet
secretariat under the chairmanship of secretary (coordination). Its
performance is also reviewed by the cabinet committee on infrastructure.
Global bigwigs in cement
➢ La farge, France
➢ Holcim, Switcher land
➢ Vicat, France
➢ Cemex, Mexico
➢ Italcement, Italy
➢ Heidelberg cement, Germany
Industry Outlook
The global cement market size was valued at USD 355.6 billion in 2016. It is
expected to register a CAGR of 7.8% from 2017 to 2025. Increasing
investments in the infrastructure sector are one of the key trends escalating
market growth. As per the World Bank in 2016, the global infrastructure
investment is likely to reach nearly USD 94 trillion by 2040.

Growing requirement for the construction of institutional buildings for

education and healthcare sectors is anticipated to drive the market in the
coming years. Healthcare sectors in developing countries such as India,
Malaysia, Indonesia, etc. are registering strong growth, which, in turn, is
estimated to benefit the growth of the market in the coming years. For
instance, the healthcare sector in India is projected to grow by nearly USD 120
billion from 2017 to 2020, exhibiting strong demand for construction activities.
Asia Pacific is known as the global growth engine for the construction sector.
The market is, thus, poised to experience tremendous growth in the region.
Countries such as China and India, among others, have observed significant
growth in their construction output in recent years. The construction sector
output in China has increased by nearly USD 1,168 billion from 2014 to 2017.
In India, steady development of metro projects and enhancement of the
existing railway network to connect ports across the country are expected to
generate staggering demand for the product in the coming years. The
government of India has allocated nearly USD 8 billion for the development of
railways.
Similarly, China’s 13th five-year plan (2016-2020) has allocated nearly USD 529
billion for development of the railway sector. The government plans to connect
80% of the cities in the country to enable the efficient flow of trade and
expand its economy.

Indian scenario:
INTRODUCTION
India is the second largest producer of cement in the world. It accounts for
more than 7% of the global installed capacity. India has a lot of potential for
development in the infrastructure and construction sector and the cement
sector is expected to largely benefit from it. Some of the recent initiatives,
such as development of 98 smart cities, is expected to provide a major boost to
the sector.
Aided by suitable Government foreign policies, several foreign players such as

Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in
the recent past. A significant factor which aids the growth of this sector is the
ready availability of raw materials for making cement, such as limestone and
coal.
India’s overall cement production accounted for 294.4 million tonnes (MT) in
FY21 and 329 million tonnes (MT) in FY20.
MARKET SIZE
Cement production reached 329 million tonnes (MT) in FY20 and is projected
to reach 381 MT by FY22. However, the consumption stood at 327 MT in FY20
and will reach 379 MT by FY22. The cement demand is estimated to touch
419.92 MT by FY 2027. As India has a high quantity and quality of limestone
deposits through-out the country, the cement industry promises huge
potential for growth.
As per ICRA, in FY22, the cement production in India is expected to increase by
~12% YoY, driven by rural housing demand and government’s strong focus on
infrastructure development.
As per Crisil Ratings, the Indian cement industry is likely to add ~80 million
tonnes (MT) capacity by FY24, the highest since the last 10 years, driven by
increasing spending on housing and infrastructure activities.
Higher allocation for infrastructure – US$ 26.74 billion in roads and US$ 18.84
billion in railways in union budget of FY23, is likely to boost demand for
cement.
According to CLSA (institutional brokerage and investment group), the Indian

cement sector is witnessing improved demand. Key players reported by the
company are ACC, Dalmia and Ultratech Cement. In the second quarter of
FY21, Indian cement companies reported a sharp rebound in earnings and
demand for the industry increased, driven by rural recovery. With the rural
markets normalising, the demand outlook remained strong. For FY21, CLSA
expects a 14% YoY increase in EBITDA in the cement market for its coverage
stocks.
INVESTMENTS
As per DGCIS, India’s export of portland cement, aluminous cement, slag

cement, supersulphate cement and similar hydraulic cements stood at US$
118.15 million in FY21. FDI inflows in the industry, related to the
manufacturing of cement and gypsum products, reached US$ 5.24 billion
between April 2000-September 2021.

In 2021, working remotely is being adopted at a fast pace and demand for
affordable houses with ticket size below Rs. 40-50 lakh (US$ 53,694-67,118) is
expected to rise in Tier 2 and 3 cities, leading to an increase in demand of
cement.
Private equity investments in real estate surged 24% YoY to US$ 477 million
between July 2021 to September 2021.
Some of the major investments and development in Indian cement industry

are as follows:
• In February 2022, ACC Limited, announced the successful commissioning of a

1.6 MTPA Grinding Unit (GU) at Tikaria in Uttar Pradesh.
• In November 2021, UltraTech Cement announced its commitment to the

Global Cement and Concrete Association (GCCA) 2050 Cement and Concrete
Industry Roadmap to produce carbon-neutral concrete by 2050.
• In November 2021, Dalmia Cement announced plans to produce 100% low

carbon cement by 2031. The company has a US$ 405-million carbon capture
and utilisation (CCU) investment plan to help it realise its goal.
• Dalmia Cement plans to spend US$ 1.35 billion to increase its installed cement
capacity by 52% to 50MT/yr from 33MT/yr before the FY2024.
• In November 2021, Dalmia Cement announced plans to invest US$ 70.1 million
for setting up its upcoming 2MT/yr cement plant in Bokaro, Jharkhand.
• In October 2021, JK Cement Ltd. signed a long-term strategic Memorandum of

Understanding (MoU) with Punjab Renewable Energy Systems Private Limited
(PRESPL). The MoU is part of JK Cement’s attempts to decarbonize its
operations and significantly scale-up the use of biomass-based and alternate
fuels as replacements to fossil fuels, like coal, in its manufacturing operations.
• In October 2021, JSW Group collaborated with Salesforce to support an

ambitious digital strategy. Using Salesforce’s Sales Cloud and Service Cloud,
JSW Group will offer a single group interface, enhancing distribution, customer
experience and supply chain for the large project division across its steel and
cement businesses.

• In October 2021, Hyderabad-based Penna Cement Industries, received
approval from the capital markets regulator Securities and Exchange Board of
India (SEBI), to go ahead with its Rs. 1,550 crore (US$ 206.75 million) initial
public offering (IPO).
• In September 2021, Ambuja Cement launched ‘Concrete Futures Laboratory’, a

one-stop solution that will enable budding professionals to test, learn and
experience various aspects of cement and concrete.
• In September 2021, the Odisha government approved Ramco Cements

expansion plan with an additional grinding capacity of 0.9 MTPA capacity at
Haridaspur in Jajpur with an investment value of Rs.190 crore (US$ 25.5).
• In August 2021, Ramco Cement plans to invest additional Rs. 601.2 crore (US$
80.8) to upgrade cement plants that will be completed by March 2022. In April
2021, the company had invested Rs. 401 crore (US$ 53.9) for upgrades.
• In August 2021, Dalmia Cement will invest Rs. 773.8 Crore (US$ 104 million) to
expand its cement operations in Jharkhand.
• In August 2021, UltraTech Cement announced plans to increase cement

capacity by 19.8 MTPA between 2022 and 2023. Upon completion of the
project, which is valued at Rs. 6,510 crore (US$ 875 million), the capacity would
rise to 136.3 MTPA.
• In September 2021, Shree Cement launched three projects that were valued at
Rs. 4,806 crore (US$ 646 million). Of this, Rs. 3,541 crore (US$ 476 million) will
be used to establish 3.8 MTPA cement plant in Rajasthan, while the remaining
amount will be spent on establishing a grinding plant in West Bengal and
installing solar power plants at various cement plants across the country that
are valued at Rs. 759 crore (US$ 102 million) and Rs. 506 crore (US$ 68 million),
respectively.
• In September 2021, Ambuja Cement introduced Concrete Futures Laboratories

to test various aspects of cement and concrete.
• In August 2021, Ambuja Cement announced to invest Rs. 310 crore (US$ 41.82
million) to expand its manufacturing capacity in Ropar Unit, Punjab and cater
to the rising demand from manufacturing sector for housing construction and
public infrastructure development. The expansion activities are expected to be
completed by June 2023.
• In July 2021, Ramco Cements launched Ramco Super Plaster, a plastering
solution for brick work and plastering applications.
• In July 2021, Vedanta announced that its aluminium unit invited bids for
alliances from cement manufacturing companies such as JK Cement, ACC and
UltraTech Cement to utilise fly ash, a by-product, to produce low-carbon
cement.
• In July 2021, Ramco Cements announced its plan to invest US$ 64 million in
capacity expansion and modernisation activities of its plant unit in Tamil Nadu.
• In July 2021, Dalmia Bharat Ltd. announced its plan to raise the company’s
production capacity to 110-130 million tonnes per annum by 2031.
• In July 2021, JSW Cement signed an agreement with Synergy Metals

Investments Holding Ltd. and Apollo Global Management Inc. to raise
investment funds worth Rs. 1,500 crore (US$ 202.35 million) and expand its
production capacity to 25 million tonnes from 14 million tonnes.
• In June 2021, Ambuja Cements and ACC announced to invest in Industry 4.0
under its ‘Plants of Tomorrow’ programme, which aims to boost cement
manufacturing through enhanced plant optimisation, improved plant
availability and a safer operational environment.
• In June 2021, Ramco Cements Limited commissioned the Line III of its
Jayanthipuram Plant, with a clinker manufacturing capacity of 1.50 million
tonnes per annum.
• In June 2021, JSW Cement entered construction chemical business with the
introduction of an exclusive green product range.
GOVERNMENT INITIATIVES
In order to help private sector companies, thrive in the industry, the

Government has been approving their investment schemes. Some of the
initiatives taken by the Government off late are as below:
• In October 2021, Prime Minister, Mr. Narendra Modi, launched the ‘PM Gati
Shakti - National Master Plan (NMP)’ for multimodal connectivity. Gati Shakti
will bring synergy to create a world-class, seamless multimodal transport
network in India. This will boost the demand for cement in the future.

• In July 2021, the government established a council of 25 members
(comprising UltraTech Cement MD Mr. K C Jhanwar, Dalmia Bharat Group
CMD Mr. Puneet Dalmia) for the cement industry to reduce waste, achieve
maximum production, enhance quality, reduce costs and encourage
standardisation of products.
• Under the housing for all segment, 8 million households will be identified
according to the Budget 2022-23 with Rs. 48,000 crore (US$ 6.44 billion) set
aside for PM Awas Yojana.
• As per the Union Budget 2022-23, the government approved an outlay of Rs.
1,99,107 crore (US$ 26.74 billion) for the Ministry of Road Transport and
Highways, and this step is likely to boost the demand for cement.
• As per Invest India, National Infrastructure Pipeline (NIP) expanded to 9,305

projects from 7,400 projects.
• The Union Budget allocated Rs. 13,750 crore (US$ 1.88 billion) and Rs. 12,294
crore (US$ 1.68 billion) for Urban Rejuvenation Mission: AMRUT and Smart
Cities Mission and Swachh Bharat Mission.
ROAD AHEAD
The eastern states of India are likely to be the newer and untapped markets for
cement companies and could contribute to their bottom line in future. In the
next 10 years, India could become the main exporter of clinker and gray
cement to the Middle East, Africa, and other developing nations of the world.
Cement plants near the ports, for instance the plants in Gujarat and
Visakhapatnam, will have an added advantage for export and will logistically be
well armed to face stiff competition from cement plants in the interior of the
country. India’s cement production capacity is expected to reach 550 MT by
2025.
Due to the increasing demand in various sectors such as housing, commercial

construction and industrial construction, cement industry is expected to reach
419.92 million tonnes per annum (MTPA) by the FY 2027.
A number of foreign players are also expected to enter the cement sector
owing to the profit margins and steady demand.

Technology Up-gradation
The cement industry in India is going through a technological change as many
up gradations and Assimilation is taking place. Almost 93% of the total capacity
is based entirely on the modern dry process, which is considered more
environment-friendly. Only the rest, 7%, uses old wet and semi-dry process
technology. There is also a vast scope of waste heat recovery in the cement
plants, reducing the emission level and improving the environment.
Major Players in Indian Cement Industry

Several players are prevailing in the cement industry in India. However, around
20 big names account for more than 70% of the total cement production in
India. The total installed capacity is distributed over around 129 plants owned
by 54 major companies across the nation.
Mergers and Acquisitions in Cement Industry in India

1. UltraTech Cement purchased 3B Binani Glass Fibre Sarl Luxembourg, a
subsidiary of Binani Industries in March 2021
2. World's leading foreign funds like HSBC, ABN Amro, Fidelity, Emerging Market
Fund and Asset
3. Management Fund have together acquired 7.5% of India Cements (ICL) for US$
124.91 million
4. IBM partnered with Shree Cement in February 2021 to operate their database
and critical business applications using AIX and Red Hat on IBM POWER9-based
IBM Power Systems.
5. ACC released the expansion plan of its grinding unit in Tikaria with a 1.6 MTPA
cement capacity in April 2021
6. Cimpor, a Cement company of Portugal, has bought a 53.63% stake that Grasim
Industries had in Shree Digvijay Cement.
7. French cement company Vicat SA bought a 6.67% share of Sagar Cement for
US$ 14.35 million.
8. Holcim now holds a 56% stake in Ambuja Cement. Previously, it had 22% of the
stake. The company

9. utilized various open market transactions to increase its stakes. It invested US$
1.8 billion for that.
10. Dalmia Cement issued a capacity addition of 2.3 MTPA at its Bengal Cement
Works (BCW) unit in West Midnapore with Rs 360 crores (US$ 49.47 million)
investment in December,2020.
Cement clusters in India
• Rajasthan
• Tamil Nadu
• Andhra Pradesh
• Chhattisgarh
• Madhya Pradesh
• Orissa
Top 10 cement companies in India, ranked by revenue and market share
1. UltraTech Cement
2. Shree Cement
3. Ambuja Cements
4. ACC
5. Dalmia Bharat
6. JK Cement
7. Ramco Cement
8. Birla Corp
9. Heidelberg Cement
10. Star Cement

COMPANY PROFILE

ZUARI CEMENT LTD (HEIDELBERG GROUP)
Our Vision
To be a premium metals major, global in size and reach, with a

passion for excellence.
Our Mission
To relentlessly pursue the creation of superior shareholder value

by exceeding customer expectations profitably, unleashing
employee potential and being a responsible corporate citizen
adhering to our values.
Our Values
Integrity
Commitment
Passion
Seamlessness
Speed

Awards and Certificates
Zuari Cement' Wins the Prestigious Award 'Outstanding Company in Cement

Sector'
Zuari Cement is awarded as an 'Outstanding Company in Cement Sector', as part

of the 4th EPC World Awards 2013. It is indeed a recognition for excellence; as Zuari
Cement has been honored as the company outperforming its peers in its division,
blending novelty and state-of-the-art affairs in its performance.
This award becomes special as Zuari Cement repeated this feat winning this unique
recognition earlier in 2011.
Now in its 4th year, the EPC World Awards is the foremost in its category, that
acknowledges the achievements of the companies and individuals from infrastructure,
construction and real estate sectors. Over the years, EPC World Awards have evolved
as the national platform and recognized as one of the best industry recognition awards
in India.

India’s Most Trusted Brand by International Brand Consulting Corporation, USA
Best Performance award by Chennai Port Trust
Best Performance award by Chennai Port Trust
World’s Most Trusted Brand- Asia 2016 by United Research Services

Brand of the Year 2016-17 – Emerging No.1 by WCRC
Global Marketing Excellence Award for Cement Industry by World Marketing Congress
International Leadership innovation excellence award by IES
Brand of the Year 2016-17 – Emerging No.1 by WCRC

Introduction:
Zuari Cement is part of the worldwide HeidelbergCement Group, a global
construction material major Number 1 in aggregates and number 2 in cement,
and number 3 in ready-mixed concrete globally.
Zuari Cement has a total cement manufacturing capacity of 7.1 million tons
in India, which includes two manufacturing units at Sitapuram and Yerraguntla,
along with two grinding centres at Chennai and Solapur and a cement terminal at
Kochi, Kerala. This makes Zuari Cement a formidable brand in the South Indian
Cement Market with more than 5% market share. The states of Karnataka,
Andhra Pradesh, Telengana, TamilNadu & Kerala form the core markets for
Zuari Cement with a notable footprint in Maharashtra, Orissa & Chattisgarh.
In line with Groups' global focus on quality and environment, Zuari Cement's
manufacturing units are ISO 50001:2011, ISO: 9001 and ISO: 14001 Certified.
Zuari Cement has in its growth strategy has chalked out ambitious plans for the
future.
Adjudged “Power Brand” in 2012 & 2013, in the year 2016, among the accolades
Zuari Cement amongst other have won the other accolades, are “India’s Most
Trusted Brand 2016” by Consumer Survey Report-MRG, “Best Brands 2016 -
Emerging No1 category”, by WCR and “Greenco Gold Certification by Green
Company Rating system 2016. In previous years Zuari Cement won “Asia
Manufacturing Excellence Award for Safety 2015”, CII “National Award for
Excellence in Energy Management” and “Excellence Award” by IES. Our Whole
Time Director won the “Udyog Ratan” Award by IES for 2015.
Strength lies in our People
Zuari Cement has an extensive human resource an empowered team of talent pool
with strong skills set of expertise in their respective fields. Our diverse work force
is spread across a wide geographical area across India.
Zuari Cement provides employment to over 3000 people and provides indirect
employment to over 5600 people for material handling, godown operations and
transportation.
COMPANY NETWORK – ZUARI CEMENT LTD

Zuari Cement Products

Zuari Cement products are preferred by professionals throughout all
disciplines of the construction industry. Wheather sparked by an
architect a owner or a building engineer, any project's vision is only as
realistic as access to materials capable of achieving precise details in
their purest form. At Zuari, we are proud to provide materials that are
uncompromising in creative breadth, technical quality and practical
applicability.
uncompromising in creative breadth, technical quality and practical
applicability.

OPC Cement(43 and 53 grade)
What if one cement is the answer to all your construction

requirements?
PPC cement
What if Cement can provide durable Eco friendly construction ?
PSC cement
Technical assistance: mobile technical services

Zuari Cement Ltd. has a fully functional technical service team, which provides
complete Techno-Commercial support to customers.
Our Mobile Technical vans are present at all important market locations and
regional marketing offices to assist and guide customers on queries with regard
to, cement & concrete technology.
Our motto has always been to have a concrete approach to quality. Keeping in
line with this belief, and to answer the growing demand of our esteemed
customers, Zuari Cement has Mobile Technical Van (MTV) service in all

major areas of operation along with forthcoming innovative services
like Maturity Meter.
The Mobile Laboratory provides a customized approach of customer service, by
providing immediate answers through the investigating and testing of the
properties and applications of materials produced at Zuari Cement; Yerraguntla,
Sitapuram, Chennai, Solapur and Cochin plants.
This unique customer service initiative allows the technical support
representatives to work directly with customers by:
• Testing products at Construction sites.

• Training of laboratory technicians for customers' production facilities.
Our Plants
PROCESS TECHNOLOGY, THE SOLID FOUNDATION
The culture of quality which prevails in Zuari Cement's manufacturing

facilities is best exemplified in the process technology employed.
Centralized online process control
Advanced technology methods are used to ensure that a high level of
quality is attained and sustained right through the manufacturing
process. Yet, these high standards are constantly improved upon by an
experienced and dedicated R&D team to attain performance oriented
cement.
Advantages of process technology

Complete homogenisation of limestone is achieved by stacking the
limestone in stock-plies with the use of stackers and reclaiming it
through reclaimers.The optimum ratio of raw mix is attained by the use
of X-ray analyser and automatic weigh feeder which are linked to the
centralized computers control room.
Reduced variability in kiln feed and complete homogenisation of raw

meal is attained through Continuous Flow Silo. This ensures that every
grain of cement is of consistent quality.
• The totally computerised monitoring system enables quality

clinkerisation. It dictates the optimum retention time in the
precalciner and the kiln. Equipped with a six stage double stream
pre-heater cyclone system, the precalciner only adds to the quality.
• The modern closed grinding units have a high efficiency separator
that produces finer particles of cement. This yields cement matrix

with a lower pore diameter. This in turn gives concrete of higher
density and lower permeability.
Ventomatic Electronic Packing

Zuari Cement employs Ventomatic packers to ensure that the customer
gets exactly 50 kgs per bag. To minimize damages during transport,
advanced loading techniques are used. These steps reflect Zuari
Cement's commitment to offer the best quality and correct quantity to its
customers.
Environment-Friendly Technology
To minimise dust emission, Zuari Cement has installed the latest
pollution control equipment such as electrostatic precipitators in the kiln,
raw mills, coal mills and cement mills. this environmental friendly aspect
of Zuari's process technology has resulted in abundance of greenery
and clean air in the factory premises.
ZUARI CEMENT - YERRAGUNTLA WORKS
Zuari Cement - Yerraguntla works is located at Krishnanagar which is 7

km away from yerraguntla Railway station.Yerraguntla is one of the
leading industrial towns in the Rayalaseema region in Cuddapah district
of Andhra Pradesh.
The present plant capacity is 46 lac Tons Per Annum. The Plant was
commissioned in the year 1985 and further expanded in years 1998 and
2010.The main raw material ie. lime stone is sourced from the
company’s 1000 acre mine which is situated nearby.

Zuari Cement produces OPC 43 and 53 Grade and PPC and PRIMO
Concrete cement, a special cement for roofing segment. It caters to
every construction need - be it residential, commercial and multi-
storeyed buildings and complexes.
The company believes in customer satisfaction through continuous
quality improvement. This belief reflects in the group's Quality
Management System that complies with ISO 9001:2000 standards.
The best quality of cement grade limestone is used in
manufacturing Zuari cement which is sourced from the mine within the
plant. The limestone is mixed with additive(s) such as Laterite, Bauxite
and Ion Ore. Zuari cement contains tricalcium silicate to give added
strength to structures.
State-of-the-art technology
Located at Yerraguntla, Kadapa district of Andhra Pradesh, Zuari
Cement Works uses the latest dry process technology, and state-of-the-
art control equipment like Programmed Logic Control and Precalcinor for
strong cement ensuring consistent quality through in every batch.

Sustainable Development Initiatives

Zuari Cement is aware of its social role and promotes socially responsible
behavior among all its employees and subsidiaries. We believe that Sustainable
Development, as a combination of economic prosperity, environmental
protection and social responsibility, is the basis of our own future.
As a corporate citizen, Zuari Cement is also acutely aware of its responsibilities
towards the near-by communities. As a part of this responsibility and in an
effort to strengthen its relationship with the villages around the factory, the
Company has undertaken and carried out many initiatives.
OVERVIEW
• Sustainable business practices and trusting relations with our neighbors,

business partners, and employees have remained the prime drivers of
Success of HeidelbergCement Globally.
• At HeidelbergCement India Ltd. sustainable management means pursuing
revenue opportunities that ensure sustained growth of our business. We
are consistently pursuing activities that cure the negative impact arising
out of operations.
• We are fully conscious of the fact that we can be successful as a company
only if we maintain cordial and cooperative relationships with the various
stakeholders in our society. That’s why we place great value on open
communication that directly addresses problems and maintains a
constructive dialogue with all the relevant stakeholder groups.
• Taking into account the expectations of our external and internal
stakeholders, the company builds its sustainability plans and accordingly
deploys resources.
• HeidelbergCement India Ltd. is also a member of associations and forums
such as WBCSD CSI, National Safety Council (NSC) and Confederation of
Indian Industry (CII) that represent their members’ interests through a
continual dialogue with governments, businesses and the general public

RESEARCH
METHADOLOGY

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research
problem. It may be understood as a science of studying how research is done
systematically. In that various steps, those are generally adopted by a
researcher in studying him problem along with the logic behind them.
It is important for research to know not only the research method but
also know methodology. The procedures by which researcher go about their
work of describing, explaining and predicting phenomenon methodology.
Methods comprise the procedures used for the researcher to design his
methodology for his problem as the same may differ from problem to
problem.
Data collection is important step in any project and success of any project will
be largely depend upon now much accurate you much accurate you will be
able collect and how much time, money and effort will be required to collect
the necessary data, this is also important step.
Data collection plays an important role in research work. Without proper data
available for analysis you cannot do the research work accurately.
Research Design
SOURCES OF DATA:
• PRIMARY DATA
• SECONDARY DATA
Primary data comprises of information obtained during discussions with the
officers and staff in the finance department.

Secondary data was collected from already published sources such as annual
reports, returns and internal records.
The data collection includes :

o Data collected from annual reports of ZUARI CEMENT (Heidelberg
Group)
o Reference from text books relating to financial management.
RESEARCH TOOLS: comparative statements, common size statements,
trend analysis.
NEED FOR THE STUDY

A Company should maintain adequate stock of raw materials for a
continuous supply to the factory for an uninterrupted production. It is not
possible for a company to procure raw material whenever it is needed a time
lag exists between demand for materials and its supply.
OBJECTIVES OF THE STUDY

• To study the present inventory control techniques in Zuari cements on
raw materials and consumables.
• To study the inventory turnover ratio.
• To study the inventory conversion period.
• To study about the inventory levels for the important components of
inventory in Zuari Cements.
• To offer suitable suggestions for the improvement of inventory
management practices.

LIMITATIONS OF THE STUDY
• The information used primarily from historical annual reports available
to the public and same does not indicate the current situation of the
firm.
• This study is based on 5 years financial information of the Zuari cements.
• Since financial matters are sensitive in nature the same could not be
acquired easily.
• The study is based on the extent of data given by the finance
department which has its own limitations.

DATA ANALYSIS &

INTERPRETATION

DATA ANALYSIS AND INTERPRETAION
RATIO ANALYSIS
1. Inventory Turnover Ratio:
This ratio indicates the number of times the stock has been turned over during
the period & evaluated the efficiency with which a firm is able to manage its
inventory. This ration is calculated by applying the following
Inventory Turnover Ratio =Cost of goods sold/Average inventory
YEAR Costs of goods sold Avg. inventory Inventory

Turnover ratio
2016-2017 36172.58 3430.26 10.54
2017-2018 46374.89 5021.18 9.24
2018-2019 40613.42 5224.89 7.77
2019-2020 45948.33 6719.52 6.84
2020-2021 41353.41 9591.41 4.31

50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
cost of goods sold Avg. inventory Inventory turnover ratio
Interpretation:
1. The performance of Zuaricement ltd in inventory turnover ratio is
during the year 2016-2017 is better because inventory turnover
ratio is 10.54 times.
2. 2. In the year 2020-2021 inventory turnover ratio is not sufficient
because the ratio is of 4.31 times
3. When inventory turnover ratio is less times it indicates poor
performance of the company and vice-versa.

2. Inventory Conversion Period:
It may also be of interest to see average time taken for clearing the stocks. This
can be possible by calculating inventory conversion period. This period is
calculated by dividing the numbers of the days by inventory turnover. This
formula may be as:
Inventory Conversion Period =Days in a year (365 days)/inventory turnover
ratio.
year Cost of goods Avg. inventory ratio ICP(days)

sold
2016-2017 36172.58 3430.26 10.54 35
2017-2018 46374.89 5021.18 9.24 40
2018-2019 40613.42 5224.89 7.77 47
2019-2020 45948.33 6719.52 6.84 53
2020-2021 41353.41 9591.41 4.31 85

90
80
70
60
50
40
30
20
10
0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Inventory ratio inventory conversion period
Interpretation:
1. The inventory conversion period during 35 days during the year 2016-2017,
which indicates the inventory is converted in to sales in less time.
2. When inventory is converted into sales in less time, it indicates company
performance is better.
3. Inventory conversion period of Zuari is 85 days during the year 2020-2021; it
indicates company performance is not sufficient.
4. From the above table I absorbed that Zuaricement ltd performance was
insufficient during the year 2020-2021 and performance was better during the
remaining 4years.

3. Percentage of Inventory Turnover to Current Assets:
In order to know the percentage of inventory over current assets the ratio of
inventory to current assets is calculated and which is presented in the
following table.
Inventory turnover current assets ratio=inventory/current assets* 100
year Inventory Current assets Ratio(%)
2016-2017 3971.01 27336.10 14.57
2017-2018 6071.35 24288.00 24.99
2018-2019 4378.43 36866.00 11.88
2019-2020 9061.61 29245.94 30.98
2020-2021 9521.21 29584.86 32.18

40000
35000
30000
25000
20000
15000
10000
5000
0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Inventory Current assets Ratio(%)
Interpretation:
1. The % of inventory in current assets is more during year 2020-2021 that is
32.18%
2. Increasing the % of inventory in current asset is not good for Zuari.
3. The lowest % of inventory over current asset is recorded in the year 2016-
2017 as 14.57% it indicates good position of the company.

4. Current ratio
In order to know the current ratio the percentage of current assets to current
liabilities is calculated and which is presented in the following table.
Current ratio=current assets/current liabilities
year Current Current Ratio

assets liabilities
2016-2017 27336.10 14506.15 1.88
2017-2018 24288.00 25214.04 0.96
2018-2019 36866.00 24366.35 1.51
2019-2020 29245.94 32118.16 0.91
2020-2021 29584.86 36840.63 0.80

40000
35000
30000
25000
20000
15000
10000
5000
0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
current assets current liabilities Ratio
Interpretation:
1) From the above table it can be interpreted that 1.88 % of current assets over
current liabilities ratio i.e., current ratio was showing a decreasing trend from
year 2016-2017.
2) Lower the current ratio indicates current assets are lower than the current
liabilities in Zuari cement.

5. EOQ Analysis:
The economic order quantity is that inventory level, which minimizes the total
of ordering cost and carrying costs.
EOQ for an item is arrived by the following formula
EOQ = √2AO/C
Where
EOQ economic order quantity
0= cost of ordering an order
A= annual consumption of an item
C= cost of carrying one unit/yr
Given below information is collected from annual reports and stock ledgers in
the company.

Year Annual Ordering cost Carrying cost EOQ
requirement
2016-2017 98500 224 1.565 5310
2017-2018 101000 239 1.824 5144
2018-2019 82200 216.5 1.439 4973
2019-2020 111500 224 1.648 5504
2020-2021 113500 229 2.035 5054
120000
100000
80000
60000
40000
20000
0
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
Annual requirement EOQ
Interpretation:
1) From the above table it can be interpreted that Economic Order Quantity
decreases from 2016-2017 (5310 tonnes) to 2018-2019(4973tonnes). And in
2019-2020(5504 tonnes) it again increases and then decreases in last year
2020-2021(5054 tonnes).

FINDINGS,
SUGGESTIONS &
CONCLUSION

FINDINGS
1. Through ABC analysis for five years, it is found that LIME STONE has
more Annual Consumption value of 52% in the total Annual
consumption value and POTASSIUM OXIDE has less Annual
consumption value of 20% of its total Annual consumption value.
2. From Ratio Analysis, Inventory turnover ratio decreases from 2016-
2017(10.54%) to 2020-2021 (4.31%) gradually, this indicates poor
performance of the company.
3. Inventory conversion period (ICP) increases from 2016-2017(35
days) to 2020-2021 (85 days) gradually, this also indicates the poor
performance of the company.
4. Inventory ratio over current assets is increased from 2016-2017
(14.57%) to 2020-2021 (32.18%), this indiacates blocking of stock in
godown and also blocking of money conversion.
5. EOQ analysis for the year 2016-2017 (5,310 tonnes) to 2020-2021
(5,054 tonnes) is decreased from year to year. This indicates that
optimum level of stock maintainance decreases.
6. The sales of the company is increased up to 2017-2018 (
Rs.1,17,521.84 lakhs) and in the last 3 years from 2018-2019(Rs.
1,08,728.55 Lakhs), 2019-2020 (Rs. 1,01,677.84 Lakhs), 2020-2021 (
Rs.92,045.17 lakhs) it is going to decreased continuously which is not
a favorable sign.
7. Cost of goods sold have increased continuously from 2016-2017
(Rs.36172.58Lakhs) upto 2017-2018 (Rs.46,374.89 lakhs), in 2018-
2019 (Rs. 40,613.42 lakhs) it is decreased but in 2019-
2020(Rs.45,948.33 lakhs) it again increased and in the last year 2020-
2021 (Rs.41,353.41 lakhs) it is decreased due to increase the
expenses.

SUGGESTIONS
❖ From the above observations it is suggested that company has to
implement the techniques of cost control and cost reduction.
❖ Company has to introduce the new trend method, JUST IN TIME
APPROACH.
❖ Or the firm has to concentrate on selective inventory control measures
like ABC ANALYSIS which makes the firm to concentrate on those items,
which are having percentage usage value.
❖ The company is required to maintain safety stock for its components in
order to avoid stock-out condition and help in continuous production
flow.
❖ The company has to mainly concentrate on to decrease the operating
expenses and increase sales, gross profit and net profit.

CONCLUSION
Finally, I conclude that, ZUARI CEMENTS LTD company needs inventory

for smooth running of its activities. From the analysis we can conclude that the
company can follow the Economic Order Quantity (EOQ) for optimum purchase
and it can maintain safety stock for its components in order to avoid stock-out
conditions and helps in continuous production flow. This would reduce the cost
and enhance the profit.
Also there should be tight control exercised on stock level based on ABC
analysis and maintain high percentage in fast moving items in inventories as per
on ABC analysis for efficient running of the inventory. The ZUARI CEMENTS LTD
maintain high closing balances of inventory its leads to over expenditure so
company should control over expenditure to maximize profits.

ANNEXURES

ANNEXURE
COMPARATIVE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 ST
DEC,2017
(Rupees in lakhs)
particulars 2017 2016
income
sale of manufactured goods 1,16,900.24 47905.48
less: Excise Duty 17,521.32 6388.76
99,378.92 41516.72
sale of traded goods 2404.44
other income 1832.29 432.61
1,01,211.21 44353.77
expenditure
cost of goods sold 36172.58 16825.32
personal cost 3604.81 1777.2
other expenses 25119.28 9234.53
Depreciation 5204.23 2200.41
Amortilization of goodwill 1799.2
Interest and other financial cost 950.93 871.49
72851.03 30908.95
profit before tax 28,360.18 13444.82

provision for tax
current tax 6542.84 982
MAT credit of earlier years -982
MAT credit for the year -713.59
fringe benefit tax 115.83 28
deferred tax charge 5339.36
profit for the year 18057.74 12434.82
-
debit balance in profit and loss account brought forward -1909.25 14344.07
Balance in profit and loss acount 16148.49 -1909.25

Comparative balance sheet as on 31st Dec 2017
(Rupees in lakhs)
1.sources of funds
share capital 42796.14 42796.14
Reserve& surplus 38050.42 21901.93
80846.56 64698.07
loans funds:
secured loans 4168.45 6760.49
unsecured funds 12286.48 8943.65
deferred tax liability 5659.36
total 102960.9 80402.21
2.Application of funds:
fixed assets
gross block 89683.71 53811.03
depreciation 29850.93 24043.25
Net block 59832.78 29767.78
capital work in progress 20247.06 3453.6

80079.84 33221.38
investments 10051.06 42083.62
current assets,loans& advances

inventories 3971.01 2889.51
sundry debtors 2531 1866.11
cash& bank balances 12012.16 1576.48
loans& advances 8821.93 3442.81
27336.1 9774.91
current liabilities& provisions

current liabilities 13132.52 6020.09
provisions 1373.63 566.86
14506.15 6586.95
net current assets 12829.95 3187.96

profit& loss account 1909.25
Total 102960.9 80402.21

DEC,2018
(Rupees in lakhs)
income
less: Excise Duty 20,207.11 17521.32
sale of manufacturing goods,net 1,17,521.84 99378.92
other income 1807.18 1832.29

1,19,329.02 101211.21
expenditure
other expenses 29017 25298.76
Amortilization of goodwill 1799.2 1799.2
87133.05 72851.03

provision for tax
current tax 12881.45 6542.84
MAT credit of earlier years -982
MAT credit for the year -713.59
fringe benefit tax 60 115.83
deferred tax charge -518.2 5339.36
debit balance in profit and loss account brought forward 16148.49 -1909.25
Balance in profit and loss acount 35921.21 16148.49

(Rupees in lakhs)
1.sources of funds
share capital 42796.14 42796.14
100619.3 80846.56
loans funds:
secured loans 10342.31 4168.45
deferred tax liability 5141.16 5659.36
total 130708.7 102960.9
fixed assets
gross block 91539.87 89683.71
Net block 55186.77 59832.78

126534.7 80079.84
investments 5100 10051

sundry debtors 2640.09 2531
24288 27336.1

provisions 2734.18 1373.63
25214.04 14506.15
net current assets -926.04 12829.95

profit& loss account
Total 130708.7 102960.8

COMPARATIVE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST
DEC,2019
(Rupees in lakhs)
income
less: Excise Duty 12,218.19 20207.11

1,09,524.85 119329.02
expenditure
81805.61 87135.02
profit before tax 27,719.24 32194

provision for tax
current tax 11520 12879.48
fringe benefit tax 16.45 60

deferred tax charge -781.16 -518.2
debit balance in profit and loss account brought forward 35921.21 16148.49

(Rupees in lakhs)
1.sources of funds
share capital 42796.14 42796.14
117583.2 100619.3
loans funds:
secured loans 43190.95 10342.31
deferred tax liability 4360 5141.16
total 181385.5 130708.7
fixed assets
gross block 94463.86 91539.87
Net block 50831.08 55186.77

152121.7 126534.7
investments 16764.09 5100

sundry debtors 3922.79 2640.09
36866 24288

provisions 4921.17 2734.18
24366.35 25214.04
net current assets 12499.65 -926.04

Total 181385.5 130708.7

DEC,2020
(Rupees in lakhs)
income
less: Excise Duty 15,059.29 12218.19

1,03,633.77 109524.85
expenditure
98570.89 81805.61

provision for tax
current tax 1031 11520
findge benefit tax 16.45
deferred tax/ charge 3000 -781.16
MAT entitlement credit -1031


(Rupees in lakhs)
1.sources of funds
share capital 42796.14 42796.14
119646.1 117583.2
loans funds:
secured loans 42501.93 43190.95
deferred tax liability 7360 4360
total 188043 181385.5
fixed assets
gross block 193075.7 94463.86
Net block 139205.6 50831.09

184064.9 152121.7
investments 6850.27 16764.1

29245.94 36866

32118.16 24366.35
net current assets -2872.22 12499.65

Total 188043 181385.5

DEC,2021
(Rupees in lakhs)
income
less: Excise Duty 8,829.12 15059.29
sale of manufacturing goods,net 92,045.17 101677.843
other income 1760.34 1955.93

93,805.51 103633.773
expenditure
96452.23 98570.89

provision for tax
current tax 1010.38 1031
findge benefit tax -2434.04
deferred tax/ charge 3060 3000
0
MAT entitlement credit -1423.66 -1031
profit for the year 2,434.04 2062.883

(Rupees in lakhs)
1.sources of funds
share capital 42796.14 42796.14
121414.3 119646.1
loans funds:
secured loans 42501.93 42501.93
deferred tax liability 7433.6 7360
total 188884.7 188043
fixed assets
gross block 187075.7 193075.7
Net block 136105.6 139205.6

178864.9 184064.9
investments 7850.27 6850.27

loans& advances 11944.12 11510.12
29584.86 29245.94

36840.63 32118.16
net current assets -7255.77 -2872.22

profit& loss account 9425.34
Total 188884.7 188043

BIBLIOGRAPHY

BIBLIOGRAPHY
I.M.PANDAY, Financial management, 9th edition, VIKAS publishing house pvt

New Delhi, 1995.
S.N.MAHESWARY, Financial management, 4th edition, sultan chand& sons,
New Delhi, 1997.
PRASANNA CHANDRA, Financial management, 3rd edition, Tata McGraw-Hill
publishing co. ltd, New Delhi, 1984.
M.Y.KHAN & P.K.JAIN, Financial management, 2nd edition, Tata McGraw-Hill
publishing co. ltd, New Delhi.
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A STUDY ON “INVENTORY MANAGEMENT”

I hereby declare that this Project Report titled “A STUDY ON

YOGI VEMANA UNIVERSITY Page 2

This is to certify that MR M.MAHESWARA REDDY, Regd.No.0012020027,

Dr.S.V.SUBBA REDDY,Ph.D, DR.A.AMRUTH PRASAD REDDY

YOGI VEMANA UNIVERSITY Page 3

YOGI VEMANA UNIVERSITY Page 4

I, the researcher would like to express my thanks to all those who

First, I take this to our opportunity to express my sincere thanks

I would like to thanks Dr.A.AMRUTH PRASAD REDDY sir,

My heartful thanks to the Mr. ASHISH REDDY Sir GM-

Finally, I am thankful to my parents who helped me directly in

YOGI VEMANA UNIVERSITY Page 5

S.NO PARTICULARS PAGE NO

CHAPTER-2 INDUSTRY PROFILE

CHAPTER-3 COMPANY PROFILE

CHAPTER-4 RESEARCH METHADLOGY

CHAPTER-5 DATA ANALYSIS & INTERPRETATION

CHAPTER-6 FINDINGS, SUGGESTIONS &

YOGI VEMANA UNIVERSITY Page 6

YOGI VEMANA UNIVERSITY Page 7

John Hampton treats inventories, as “Locked up capital". Inventory

Other characteristics of inventory situations

YOGI VEMANA UNIVERSITY Page 8

Static versus dynamic problems

YOGI VEMANA UNIVERSITY Page 9

2. Lot size Inventories

YOGI VEMANA UNIVERSITY P a g e 10

Importance of Inventory Management

YOGI VEMANA UNIVERSITY P a g e 11

Inventories are stock of the product a company is manufacturing for sale

YOGI VEMANA UNIVERSITY P a g e 12

YOGI VEMANA UNIVERSITY P a g e 13

Cost of holding inventories

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Inventory is needed for the definite consumption demand of materials, and

YOGI VEMANA UNIVERSITY P a g e 15

3) ECONOMIC ORDER QUANTITY

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1. Storage and Handling costs: It includes the cost of warehouse space

YOGI VEMANA UNIVERSITY P a g e 19

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5. TWO BIN SYSTEM

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YOGI VEMANA UNIVERSITY P a g e 23

Growing requirement for the construction of institutional buildings for

YOGI VEMANA UNIVERSITY P a g e 24

Aided by suitable Government foreign policies, several foreign players such as

According to CLSA (institutional brokerage and investment group), the Indian

As per DGCIS, India’s export of portland cement, aluminous cement, slag

YOGI VEMANA UNIVERSITY P a g e 26

Some of the major investments and development in Indian cement industry

• In February 2022, ACC Limited, announced the successful commissioning of a

• In November 2021, UltraTech Cement announced its commitment to the

• In November 2021, Dalmia Cement announced plans to produce 100% low

• In October 2021, JK Cement Ltd. signed a long-term strategic Memorandum of

• In October 2021, JSW Group collaborated with Salesforce to support an

YOGI VEMANA UNIVERSITY P a g e 27

• In September 2021, Ambuja Cement launched ‘Concrete Futures Laboratory’, a

• In September 2021, the Odisha government approved Ramco Cements

• In August 2021, UltraTech Cement announced plans to increase cement