27-09-2014, 11:10 AM
A STUDY ON INVENTORY MANAGEMENT IN SUJANA METAL PRODUCTS LIMITED PROJECT REPORT
INVENTORY MANAGEMENT.pdf (Size: 375.68 KB / Downloads: 513)
INTRODUCTION
Financial Management is concerned with the duties of the finical manager in the business
firm. Financial managers actively manage the financial affairs of any type of business, namely
financial and non-financial, private and public, large and small, profit seeking and non-profit.
They perform such varied task, as budgeting, financial forecasting, cash management, credit
administration, investment analysis, funds management and inventory management.
A term inventory refers to the stock file of the products a firm is offering for sale and the
components that make up the product. In other words, inventory is composed of assets that will be
showed in future in the normal course of the business operations. The assets which firms store as
inventory in anticipation of need are:
SCOPE OF THE STUDY
Inventory management is a simple concept-don’t have too much stock and don’t have too
little. Since there can be a substantial costs involved in staying above and below the optimal
range, careful inventory management can make a huge difference in the right balance can be quite
a complex and time consuming task without the right technology.
Inventory management is very important for “SUJANA METAL PRODUCTS LTD”. It
enables the business to meet or exceed expectations of the customers by making the products
readily available/
The scope of the study includes the ABC Analysis of Raw Materials, work in progress and
finished goods for four financial years.
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 4 years
RESEARCH METHODOLOGY
The data has been gathered through interaction and discussions with the executives working
in the division.
Some important information has been gathered through couple of unstructured interviews of
executive.
Annual reports and other magazines published by the company are used for collecting the
required information
FUTURE DEMAND
Indian steel industry plays a significant role in the country’s economic growth. The major
contribution directs the attention that steel is having a stronghold in the traditional sectors, such as
infrastructure & construction, automobile, transportation, industrial applications etc. moreover,
steel variant stainless steel is finding innovative applications due to its corrosion resistive
property. Indian is the fifth largest steel producer at the global front and struggling to become the
second producer in the coming years.
GLOBAL STEEL SCENARIO:
It is interesting to note that the world’s total crude steel production grew at a much slower
rate during the first half of the century and the growth rate picked up at a significance rate after II
World War, with a meager production level of 28.3 MT in 1900, the production crossed the first
hundred mark in 1927 (101.8 MT). The production in 1943 was 159.6 MT and then it sharply fell
to 111.6 MT in 1946. Then the growth 529.8 MT in 1968, 650.7 MT in 1972, 703.8 MT in 1974
and the highest ever production of 764.4 MT in 1979. During the 70’s it witnessed one of the
most severe economic crisis on account of petroleum oil. This had a pronounced impact on
overall economy of the world and particularly steel industry. The world production of steel started
declining to 644.4 MT in 1982. The production improved to 683.7 MT in 1983, 710.2 MT in
1984, 719.1 MT in 1985, and 714.2 MT in 1986.
World Demand:
Total demand for steel in the world is expected to grow at an annual rate of 1.7% between 1935
and 2000 according to a study by chase econometrics. According to this estimate, total demand in the
year 2000 is expected to be 913 MT of crude steel. The world growth rate of 1.7% per annum
disguises dramatic differences in steel demand growth. Within the non-socialistic world, steel
demand in advance industrial countries at a whole are expected to grow at 0.6 % annual rate
following a 2.2% annual rate between 1974 and 1984. Steel demand in less developed countries as a
whole is expected to grow at a 5.5% annual rate up to 2000 following a 3.1% annual growth rate
between 1974 and 1984. Within the centrally planned economies category, the Eastern Europe
erstwhile USSR region may have a 0.3% annual steel demand growth during the period 1974–84.
Steel Demand rate up to the end of this century after a 7.8% per annum growth during 1974 – 84.
Materials returned to Stores
Where materials are issued in excess of requirement the excess quantity is return to the
stories together with materials return note.
Since the materials return to store form a works order is a reduction in the amount recorded
as issued, the preferable entry is to enter the number of units and the value of materials returned
and received in a different work in the issue column of the stores ledger account.
These values are deducted from total issues, and amount returned by each department as
shown by materials return note is deducted where return of materials to stores return of material to
stores is a major problem it is customary to use a materials and supplies journal for keeping
records of items
CONCLUSION
Inventory management has to do with keeping accurate records of finished goods that are
ready for shipment. This often means posting the production of newly completed goods to the
inventory totals as well as subtracting the most recent shipments of finished goods to buyers. When
the company has a return policy in place, there is usually a sub-category contained in the finished
goods inventory to account for any returned goods that are reclassified or second grade quality.
Accurately maintaining figures on the finished goods inventory makes it possible to quickly convey
information to sales personnel as to what is available and ready for shipment at any given time.
Inventory management is important for keeping costs down, while meeting regulation. Supply and
demand is a delicate balance, and inventory management hopes to ensure that the balance is
undisturbed. Highly trained Inventory management and high-quality software will help make
Inventory management a success. The ROI of Inventory management will be seen in the forms of
increased revenue and profits, positive employee atmosphere, and on overall increase of customer
satisfaction