Objective of the

study
1. To understand the practical concept of inventory
management
2. To understand the various kinds of inventory and also
the receipt procedure of inventory .
3. To know and analyse the management technique
used
in the managing inventory .
4. To study the role of management in inventory
management and minimization of inventory carrying
cost thereby increasing the profit of the organisation .

Scope of the study

The scope of the project was related to inventory
management . In this study , I analyze the inventory
control technique using ABC analysis ,FSN analysis ,
KANBAN and just in time technique .
As a part of the study Ialso analysed the balance sheet
of the company . The aim of the study was to know ,
how an organisation manages their inventory .
Analysis of the data and interpretation of information
has been done with the help of table and graph .
 Research
Methodology

• Primary data :
• The data is collected from the concerned staff of the company
from the account department of the organisation by
interviewing them personally .

• Secondary Data:
• Secondary data is provided by the organisation in various form . It
include referring of the manual of the company , from the
previously recorded information in the account department local
interact facility provided by the organisation and from the
internet .

• Nature of the inventory

•Inventories are the stock of the product a company is
manufacturing for sale and components that make up the
product . The various form in which inventory exist in
manufacturing raw material , work in progress and finished goods .

• RAW MATERIAL :
•Raw materials are those inputs that are converted into finished
goods through the manufacturing process . Raw
material inventories are those units which have been
purchased and stored for the future option .

WORK IN PROGRESS :
The inventories are semi-manufactured products .
They represent products that need more work before
they become finished product for sale .

FINISHED GOODS :
Finished goods inventories are those completely
manufactured product which are ready for sale . stock of
raw material and work in progress facilitate production .
While stock of finished good is required for smooth
marketing operation . Thus inventories serve as link
between the production and consumption of goods .
ADVANTAGES OF INVENTORY
CONTROL

1. 1. Reduction in investment in inventory

2. 2. Proper and efficient use of raw material .

3. 3. Improvement in production sale .

4.
5. 4. Efficient and optimum use of physical as well
6. as financial resources .

7. 5. Ordering cost can be reduced if a firm places a

few large order in place of numerous small order
INVENTORY CONTROL
TECHNIQUES
• Inventory control techniques are employed by the
inventory control organization within the framework of
one of the basic inventory model . Fixed order quantity
systems or fixed order period system . Inventory
control techniques represent the operational aspect of
inventory management and help realize the objective
inventory management and control .
• Several techniques of inventory control are in use and
it depends on the convenience of the firm to adopt of
the techniques . What should be stressed , however is
the need to cover all items of inventory and all stages .

• The techniques are most commonly used are the

following ,
• 1. Always better control (ABC) Analysis
• 2. Fast moving , slow moving , and non –moving (FSN)
Analysis .
• 3. Economic order quantity (EOQ)
• 4. Maximum – Minimum Technique .
• 5. Bin card system (KAN – BAN )
• 6. Materials requirement planning (MRP)
• 7. Just in time (JIT )
ABC ANALYSIS

• A firm may use different types of inventories . Some

items may be very costly and or slow moving
whereas others are inexpensive . For effective
inventory management it is desirable to exercise
rigorous control over those items whose value is the
highest or slowest moving and pay little attention to
relatively less costly items . This approach of
selective control is popularly known as ABC Analysis
or “ Always better control “Analysis .
• The following procedure is suggested for developing
ABC Analysis :
• 1. List each item carried in inventory by number or
some other designation .
• 2. Determine the annual volume of usage by its rupee
value of each item .
• 3. Multiply each item annual volume of usage by its
rupee value .
• 4. compute each items percentage of the total
inventory in terms of annual usage in rupees .
• 5. select the top ten of all items , which have the
highest rupee percentage and classify them as ‘A ‘
items .
ABC ANALYSIS
ABC analysis is a basic analytical material
management technique which enables top
management to gear the efforts . So that output
will be maximized this technique is always known
as “always better control “ .
In Bosch company ABC it is based on the value
based technique . The ABC categorization of raw
material it is a depends upon the value of raw
material . As per the Bosch LTD . The top 70% of
the total stock value is considered to be the “A”
class items e.g. Aluminium , Ferro , liners, back
spares , etc. The next 20% of the total stock value
of the items is the “B” class items e.g. spring
stickers rubber components plastic etc. Whereas
the remaining 10% of the items are considered to
be the “C” class . Items e.g . Washer nut
bolt ,springs .
ABC ANALYSIS IN BOSCH
Item stock code Annual value in Material
Rs . Category
P1500306
P1500570
P1509173
P1550974
P1551514
P6022916
P6022935
P6023011
P6023030
P6201209P