a summer training report front page
Post on 27-Oct-2014
48 Views
Preview:
DESCRIPTION
TRANSCRIPT
A SUMMER TRAINING PROJECT REPORT
ON
ANALYTICAL STUDY OF INVENTORY MANAGEMENT OF
SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF
MASTER OF BUSINESS ADMINISTRATION(FINANCE)
UNDER THE GUIDANCE OF UNDER THE SUPERVISION OFPROF. PRABHAKAR SHUKLA MR. R.B. PANDEY (FACULTY OF MANAGEMENT) HEAD (FINANCE)
SUBMITTED BYPUSHPAK TRIPATHI
ROLL NO. # 0817270071MBA (2008-10)
LLOYD INSTITUTE OF MANAGEMENT & TECHNOLOGY
PLOT NO. 11, KNOWLEDGE PARK- II, GR. NOIDA (U.P)
CONTENTS PAGE NO.
1- ACKNOWLEDGEMENT
2- PREFACE
3- EXECUTIVE SUMMARY
CHAPTER ONE: INTRODUCTION 1-95
LITERATURE REVIEW 2-93
CAMPANY’S PROFILE 2-17
INVENTORY MANAGEMENT - AN INTRODUCTION 18-42
MODERN INVENTORY CONTROL TECHNIQUES OF NTPC 42-50
INVENTORY STRUCTURE, ECONOMIC LOT SIZE MODEL AND
INVENTORY COST 51-61
PLACING FORMAL PURCHASE ORDER AND GOING TO FOLLOW
UP DELIVERY 62-76
AUTOMATION - REQUIREMENT OF STOCK CONTROL SYSTEM 77-93
PROJECT OBJECTIVE 94
NEED OF THE PROJECT 95
SCOPE OF THE PROJECT 95
CHAPTER TWO: RESEARCH METHODOLOGY 96-100
RESEARCH DESIGN 98
DATA COLLECTION SOURCES 98-99
DATA COLLECTION METHODS 99
DATA COLLECTION INSTRUMENTS 99
SAMPLING PLAN 99-100
ASSUMPTIONS OF THE PROJECT 100
CHAPTER THREE: FINDINGS & ANALYSIS 101-105
CHAPTER FOUR:
CONCLUSIONS AND REOMMENDATIONS 106-111
CONCLUDING WORDS 107-108
RECOMMENDATIONS 109-110
LIMITATIONS 111
CHAPTER FIVE: BIBLIOGRAPHY 112-113
BIBLIOGRAPHY 113
APPENDIX 114-117
QUSTIONNAIRE 115-117
ACKNOWLEDGEMENT
One of the most pleasant aspects of writing an acknowledgement is the opportunity to thank
all those who have contributed to it. Unfortunately, the list of expression of gratitude- no
matter how extensive – is always incomplete and inadequate. This acknowledgement is no
exception.
First of all, I wish to express my sincere thanks to Prof. Prabhakar Shukla -Faculty LIMT,
Greater Noida, for guiding me in the right direction in the course of this project, where his
valuable support and knowledge came handy to me in all respects. Because of his inspiring
guidance, motivation, positive criticism, continuous encouragement and untiring supervision
this work could be brought to its present shape.
I would like to thank all of them who in one way or the other have helped me.
Pushpak Tripathi
PREFACE
INVENTORY is a list of goods and materials, or those goods and materials themselves, held
available in stock by a business.
Inventory are held in order to manage and hide from the customer the fact that manufacture
delay is longer than delivery delay, and also to ease the effect of imperfections in the
manufacturing process that lower production efficiencies if production capacity stands idle
for lack of materials.
Inventories also play an important role in national accounts and the analysis of the business
cycle. Some short-term macroeconomic fluctuations are attributed to the inventory cycle.
I am very much grateful to Sri E.P.Das, General Manager Operations & Sri S. B. Singh,
DGM (P&A), NTPC for providing me opportunity for practical Training at Division –
Unchahar. I also extend my sincere gratitude for Sri R.B. Pandey, Head of Fin. & A/C.
EXECUTIVE SUMMARY
Inventories Companies hold inventories in the form of raw materials, work-in process and
finished goods. Inventories represent investment of a firm’s funds.
The objective of the inventory management should be the maximization of the value of the
firm. The firm should therefore consider: (a) costs, (b) return, and (c) risk factors in
establishing its inventory policy.
Transaction Motive to Hold Inventory for facilitating smooth production and sales
operation.
Precautionary Motive to Hold Inventory to guard against the risk of unpredictable
changes–in usage rate and delivery time.
Speculative Motive to Hold Inventory to take advantage of price fluctuations.
Ordering Costs requisition, placing of order, transportation, receiving, inspecting and
storing and clerical and staff services. Ordering costs are fixed per order. Therefore, they
decline as the order size increases.
Carrying Costs warehousing, handling, clerical and staff services, insurance and taxes.
Carrying costs vary with inventory holding. As order size increases, average inventory
holding increases and therefore, the carrying costs increase.
Economic Order Quantity (EOQ) The firm should minimise the total cost (ordering plus
carrying). The economic order quantity (EOQ) of inventory will occur at a point where the
total cost is minimum. The following formula can be used to determine
EOQ = (2 AO/C ) 1/2 =Q*
where A is the annual requirement, O is the per order cost, and c is the per unit carrying cost.
The economic order level of inventory, Q* , represents maximum operating profit, but it is
not optimum inventory policy.
Optimum Inventory Policy The value of the firm will be maximized when the marginal
rate of return of investment in inventory is equal to the marginal cost of funds. The
marginal rate of return (r) is calculated by dividing the incremental operating profit by the
incremental investment in inventories, and the cost of funds is the required rate of return
of suppliers of funds.
Reorder Point The inventory level at which the firm places order to replenish inventory is
called the reorder point. It depends on (a) the lead time and (b) the usage rate. Under
perfect certainty about the usage rate, and instantaneous delivery (i.e., zero lead time), the
reorder point will be equal to: Lead time x Usage rate.
Safety Stock In practice, there is uncertainty about the lead time and/or usage rate.
Therefore, firms maintain safety stock which serves as a buffer or cushion to meet
contingencies.
In that case, the reorder point will be equal to: Lead time x Usage rate + Safety stock.
The firm should strike a trade-off between the marginal rate of return and marginal cost
of funds to determine the level of safety stock.
Total Quality Management (TQM) System Large number of companies there days follow
the total quality management (TQM) System which requires companies to adopt JIT and
computerized system of inventory management.
top related