PROJECT SYNOPSIS

Roll No: PMIR-XXXIV-39

HYDERABAD

PROJECT TITLE:

A STUDY ON INVENTORY MANAGEMENT PRACTICES OF KCP CEMENT.

1) INTRODUCTION:

Inventory management is the process of efficiently overseeing the constant flow of

units into and out of an existing inventory. This process usually involves controlling the

transfer in of units in order to prevent the inventory from becoming too high, or dwindling to

levels that could put the operation of the company into jeopardy. Competent inventory

management also seeks to control the costs associated with the inventory, both from the

perspective of the total value of the goods included and the tax burden generated by the

cumulative value of the inventory.

Balancing the various tasks of inventory management means paying attention to three

key aspects of any inventory. The first aspect has to do with time. In terms of materials

acquired for inclusion in the total inventory, this means understanding how long it takes for a

supplier to process an order and execute a delivery. Inventory management also demands that

a solid understanding of how long it will take for those materials to transfer out of the

inventory be established. Knowing these two important lead times makes it possible to know

when to place an order and how many units must be ordered to keep production running

smoothly.

Inventory management is not limited to documenting the delivery of raw materials

and the movement of those materials into operational process. The movement of those

materials as they go through the various stages of the operation is also important. Typically

known as a goods or work in progress inventory, tracking materials as they are used to create

finished goods also helps to identify the need to adjust ordering amounts before the raw

materials inventory gets dangerously low or is inflated to an unfavorable level.

The overseeing and controlling of the ordering, storage and use of components that a

company will use in the production of the items it will sell as well as the overseeing and

controlling of quantities of finished products for sale. A business's inventory is one of its

major assets and represents an investment that is tied up until the item is sold or used in the

production of an item that is sold. It also costs money to store, track and insure inventory.

Inventories that are mismanaged can create significant financial problems for a business,

whether the mismanagement results in an inventory glut or an inventory shortage.

2) COMPANY PROFILE:

Value services is a one of the reputed research firms in Hyderabad which conducts research

work related to industry, company in the areas of marketing, finance, HR and operations in

the field of management and also undertakers research work on it related projects.

Value services is a qualitative, fast growing training, development, placement and consulting

firm that is actively engaged in providing training, development and placements at all levels

across sectors.

It is headed by team of professionals having combined corporate experience of 20 years. We

specialize in offering customized solutions that are rendered with a quality-oriented approach

for a variety of industries and candidates requiring training/development and manpower.

Besides value services also has now entered into consulting along with overseas education/

overseas jobs with our assessments and training partners. Ethics, integrity and quality is our

governing values.

Value services, one of the fast growing end-to-end recruitment & staffing solutions

consultants in India. Value services provides a comprehensive, end-to-end recruitment

solution, HR solutions, research solutions that covers every need of the customer, throughout

the business cycle.

our team of experts, with over a decade of experience, brings the best practices &

methodologies in the industry. This helps us deliver the optimal solutions for even the most

complex challenges to our global customers across industries. Value servies leverages

technological advance to bring speed, agility and cost efficiency to the whole gamut of

processes.

3) NEED FOR THE STUDY:

Inventory is a list of goods and materials or those goods and materials themselves

held available in the stock. Materials are equivalent to cash and they make up an important

part of the total cost. It is essential that materials should be properly safeguarded and

correctly accounted. The success of a business concern largely depends upon efficient

purchasing, storage, consumption and accounting. The present study helped to collect the

information on existing inventory Management practices at KCP Cement Company.

4) SCOPE OF THE STUDY:

The scope of this study concerns the fine lines between replenishment lead time, carrying

costs of inventory, asset management, inventory forecasting, inventory valuation, inventory

visibility, future inventory price forecasting, physical inventory, available physical space for

inventory, quality management, replenishment, returns and defective goods, and demand

forecasting. Balancing these competing requirements leads to optimal inventory levels, which

is an on-going process as the business needs shift and react to the wider environment.

The study is confined to stores department of KCP Cement factory at Hyderabad.

The following aspects will be considered:

Determination of the type of control required,

The basic economic order quantity,

The recorder point, and

Safety stocks.

5) OBJECTIVES OF THE STUDY:

To know the inventory management procedures followed at KCP Cements at

Hyderabad division

To review the ABC Analysis and understand the impact of business dynamics on

inventory.

To know the relationship between raw materials and sales.

To suggest the company for improving current practices and using alternative

inventory management procedures.

6) RESEARCH METHODOLOGY:

DATA SOURCES:

The Study is based on Secondary data only. The data will be collected from the

Secondary data to be collected from the stores department of KCP Cements. The data will

be taken from past five year’s i.e. 2007-2012 from company inventory reports and cost

accounts.

DATA ANALYSIS:

The data will be analyzed using ABC Analysis and inventory ratios.

7) LIMITATIONS OF THE STUDY:

1) The data will be collected using secondary data sources of last four years only.

2) The study is limited to 45 days only

3) The Study is bounded for only stores department

4) Some of the information may be kept confidential by company.

8) ANTICIPATED OUTCOMES OF THE STUDY:

Inventory, as a current asset, differs from other current assets because only financial

managers are not involved. Rather, all the functional areas finance, marketing, production,

and purchasing, are involved. The views concerning the appropriate level of inventory would

differ among the different functional areas. The Conflicting view points of the various

functional areas regarding the appropriate inventory levels in order to fulfill the overall

objective of maximizing the owner’s wealth. This study provides insight to the management

of High Value items and also brings attention of management towards movement of ‘A’ class

items over period of last five years. .