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RAKESH CHOUBEY

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Larsen & Toubro (L&T) IS THE LARGEST

CUSTOMER OF TATA STEEL LONG PRODUCT

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SOME BASIC DEFINITION

When the buying and selling process steps forward and the customer is not

able to pay the total amount, the amount which they are not able to pay at

the same time of buying the amount is known as DEBT.

In the balance sheet of companies those customers are DEBTORS. In their

balance sheet company is a CREDITOR

On the basis of market performance and credit rating company decides thetime period of payback of the amount. This time period is known as

CREDIT PERIOD

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OS & OD

The total amount called as debt is called asOUTSTANDING. When this totaloutstanding is not paid within the credit

period the amount remained to be collected is

called as OVERDUE

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Outstanding payment and overdue

payment

When sales are made on credit, the entire

amount of sales is outstanding as on the date

of sales. The payment for the same needs to

be made when the credit limit expires

If payment is still not received with the expiry

of the credit limit, the amount becomes

overdue in the name of the customer

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CAM (Customer Account Manager).

Each manager was

made responsible for

the sales of a

particular territoryand customer

The CAMs along with

his distributors andsales team conduct

monthly retail sales

reviews & payment

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Tata Steel has to continuously decide as to

how much credit should be given to its

customers and also the credit limit and their

maximum exposure. Prior to given credit, the

credit department analyses the credit

worthiness of the customers based on theirfinancial parameters.

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Control Charts

The three standard deviations are sometimes identified by zones. Each zones

dividing line is exactly one-third the distance from the centerline to either the

upper control limit or the lower control limit

Zone A is defined as thearea between 2 and 3

standard deviations from

the centerline on both

the plus and minus sides

of the centerline

Zone B is defined asthe area between 1

and 2 standard

deviations from the

centerline on both

sides of the centerline

Zone C is defined as thearea between the

centerline and 1

standard deviation from

the centerline, on both

sides of the centerline.

Benefits of using Control Charts in Daily Management

Monitor process variation over time.

Differentiate between special cause and common

cause variation.

Assess the effectiveness of changes to improve a

process.

Communicate how a process performed during aspecific period.

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UCL 1,083

CL 604

LCL 1250

500

1000

1500

Sumo

fOS

Date/Time/Period

X Sum of OS jul,aug,sep 11

UCL 588.3457537

CL 180.0874667

0

200

400600

800

1000

Range

Date/Time/Period

mR Sum of OS jul,aug,sep 11

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UCL 123

CL 72

LCL 20

-15

10

35

6085

110

135

160

185

Sumo

fOD

Date/Time/Period

X Sum of OD jul,aug,sep 11

UCL 63

CL 19

-1510356085

110135160

185

Range

Date/Time/Period

mR Sum of OD jul,aug,sep 11

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L&T

UCL 703.7637283

CL 392.1404473

LCL 80.51716630

200

400

600

800

1000

Sumo

fos

Date/Time/Period

X Sum of os MAY & JUNE 12

UCL 773.1228387

CL 479.7350955

LCL 186.3473522

-25

175

375

575

775

975

Sumof

os

Date/Time/Period

X Sum of os MAY

UCL 594.8391825

CL 294.8130605

LCL -5.2130616-105

95

295

495

695

Sumo

fos

Date/Time/Period

X Sum of os JUNE

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L&T

UCL 382.7343079

CL 117.1516094

0

100

200

300

400

500

Range

Date/Time/Period

mR Sum of os MAY & JUNE 12

UCL 360.3375027

CL 110.2961441

0

100

200

300

400500

Range

Date/Time/Period

mR Sum of os MAYUCL 368.4907296

CL 112.7917752

0

100

200

300

400

Range

Date/Time/Period

mR Sum of os JUNE

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L&T

UCL 27.3975056

CL -16.8363832

LCL -61.0702720-77

-27

23

73

Sumo

fod

Date/Time/Period

X Sum of od MAY & JUNE 12

UCL 11.6746296

CL -20.2520951

LCL -52.1788198

-72

-52

-32

-12

8

28

48

Sumo

fod

Date/Time/Period

X Sum of od MAY

UCL 37.9561716

CL -13.0411477

LCL -64.0384670

-81

-31

19

69

Sumo

fod

Date/Time/Period

X Sum of od JUNE

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L&T

UCL 54.3278627

CL 16.6292815

0

20

40

60

80

Range

Date/Time/Period

mR Sum of od MAY & JUNE 12

UCL 39.2122593

CL 12.0025281

0

20

4060

80

Range

Date/Time/Period

mR Sum of od MAY

UCL 62.6346775

CL 19.1719245

0

10

20

30

40

50

60

70

Range

Date/Time/Period

mR Sum of od JUNE