INTRODUCTION

INVENTORY MANAGEMENT The investment in inventory is high in most of the undertakings engaged manufacturing, whole-sale and retail trade. The amount of investment is sometimes more in inventory than in other assets. About 90 per cent part of working capital invested in inventories. It is necessary for every management to give proper attention to inventory management. A proper planning of purchasing, handling, storing and accounting should form a part of inventory management. An efficient system of inventory management will determine: What to purchase. How much to purchase. From where to purchase. Where to store etc.

Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also 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.

Involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check.

Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status.

Handles all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle counting support etc.

Management of the inventories, with the primary objective of determining. Controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs.

In business management, inventory consists of a list of goods and materials held available in stock.

An inventory can also be a self examination, a moral inventory.

INDUSTRY PROFILE

Essar Oil's assets include developmental rights in proven exploration blocks, a 18 MMTPA refinery on the west coast of India and over 1,400 Essar-branded oil retail outlets across India. Plans are underway to increase its exploration acreage in various parts of the globe and expand its refinery capacity to 20 MMTPA. Essar has a global portfolio of onshore and offshore oil and gas blocks, with about 45,000 sq km available for exploration. We have over 750,000 bpsd (barrels per stream day) of global cruderefining capacity (Vadinar+Stanlow+Kenya), which includes the 80,000-bpsd refinery of Kenya Petroleum Refineries (Essar-owned 50-per cent controlling stake).

Global exploration portfolio Essars exploration and production business has 2.1 billion barrels of oil equivalent of reserves and resources. Of this, approximately 150 million barrels are 2P and 2C resources, 1 billion barrels are prospective resources and 1 billion barrels are unrisked, in-place resources.

Largest CBM player in India We have an acreage of over 2,700 sq km in India, which gives us the largest CBM acreage in the country. Our CBM block in Raniganj is close to commercial production and has signed customer contracts with several companies.

Large refining capacity We have a 18 MTPA refinery at Vadinar in Gujarat, which started commercial production on May 1, 2008. It has been built with state-of-the-art technology and has the capability to produce petrol and diesel suitable for use in India as well as advanced international markets.

The refinery produces LPG, Naphtha, light diesel oil, Aviation Turbine Fuel (ATF) and
3

kerosene. It has been designed to handle a diverse range of crude from sweet to sour and light to heavy. It is supported by an end-to-end infrastructure setup including SBM (Single Buoy Mooring), crude oil tankage, water intake facilities, a captive power plant (currently 380 MW, being expanded to 890 MW), product jetty and dispatch facilities by both rail and road.

We have made substantial investments in installing the most advanced equipment and units in our refinery. At 97 m, the refinerys crude column is Asias tallest and capable of enhanced separation of petroleum products. The DHDS reactor is also the largest in its category capable of producing Euro V-compliant diesel. The refinery is, in fact, unique in its complexity and its ability to produce value-added products. All units have operated many notches over their rated capacities with the crude unit achieving over 14 million tonnes (300,000 bpsd) in the very first year of operation. This is a first for any refinery in India. The refinery capacity was expanded to 18 million tonnes with an increase in its complexity from 6.1 currently to 11.8 on the Nelson index in 2012, making it India's second largest single-location refinery. As part of a continuous optimisation programme, the company has decided to further expand the refinerys capacity by 2 million tonnes to 20 million tonnes (405,000 bpsd) by September 2012.

Until date, our Vadinar refinery has successfully processed more than 50 varieties of crude from across world, including some of the toughest crudes.

Company profile

Agriculture Products - Manufacturer, Export / Import, Pvt. Ltd. Firm since 1995 Established in the year 1989, Sri Kaliswari Metal Powders Private Limited, are a reputed company engaged in the manufacturing and exporting of a wide range of Air Atomized Aluminum powder, Pyrotechnic Aluminum powder, Cellular concrete Aluminum powder and Aluminum pastes (Leafing & Non-leafing Grades).By making use of advanced ERP System, we are instrumental in offering our range of metal powders as per the international standards prescribed by the industry

The success story began with the establishment of the Kaleesuwari Refinery Pvt. Ltd. in 1995. Since then, the company has made incredible strides in the edible oil market with its flagship brand "Gold Winner". Driven by the goal to provide quality sunflower oil at competitive prices, Gold Winner within a short span of time, has become the most preferred brand.

Gold Winner is a sunflower oil brand produced by Kaleesuwari Refinery Pvt Ltd. The early history of the company goes back to 1970s with a small grocery store started by G. Munusamy. He bought Kaleesuwari Refinery Private Limited near Chennai] in 1993 and has markets in India, Singapore, Malaysia, Brunei, Kuwait, Dubai, Australia, UK and SriLanka.The company also sells other products such as vanaspati, soybean oil and groundnut oil. In 2005, it has received HACCP (Hazard Analysis Critical Control Points) certification which certifies that the oil does not have any physical, chemical or biological contamination and valid for 5 years. It was also awarded ISO 9001:2000 for its oil manufacturing plant atVengaivasal, near to Chennai by TUV Management Services Gmbh, Germany.

In 2007, the company signed a memorandum of understanding with U.S. Consultant Robert M. Pierce, Fats & Oils Refining Consultant. The consultant is expected to suggest ideas to improve the current product and produce new products.

CHENNAI: Kaleesuwari Refineries has signed an MoU with a leading U.S. Consultant Robert M. Pierce, Fats & Oils Refining Consultant, to add value to the Gold Winner sunflower oil brand. According to a release, the consultant will suggest ways to improve the existing process and develop new products.

NEED OF THE STUDY

To identify overall reduction in unit cost. To right product/material in right quantity at right time. To meeting the material/product requirement efficiently. To maintain optimum inventory level. In order to reduce cost of stock in hold by maintaining optimum level of inventory.

SCOPE OF THE STUDY

Inventory systems include valuing the inventory, measuring the change in inventory and planning for future inventory levels. The value of the inventory at the end of each period provides a basis for financial reporting on the balance sheet. Measuring the change in inventory allows the company to determine the cost of inventory sold during the period. The inventory level and changes allow the company to plan for future inventory needs. The study uses the annual report of kaleesuwari refinery for the past five years

OBJECTIVE OF THE STUDY Primary Objectives:

A study on inventory management in KALEESUWARI REFINERY PRIVATE LIMITED, CHENNAI.

Secondary Objectives:
To calculate the EOQ for various products To calculate the ABC analysis has helped in reduce their clerical costs and improved inventory turnover. Management of inventory is designed to regulate the volume of investment in goods. In inventory, include raw materials, finished goods, work in progress, supplies and other accessories. The analysis has calculated for last five year statement.

RESEARCH METHODOLOGY: Research design; Analytical research design:

The research design is the conceptual structure within which the research is conducted, it constitute the blue print for the collection measurement an analysis of data. This study is an Analytical Research. The analysis of inventory according to their data available in the company. The data collection of inventory for analysis by the direct store department. We should record primary and secondary data by the helps of assistants ledger books. We went to all inventories as raw material, work in progress inventory, finished goods inventory by the proper observation of datas of the company. SOURCES OF DATA: Primary data are those data that are originated very first time or fresh data with the help of primary data formulated the research objectives. Primary data are the accurate attainable reliable and useful data.

TOOLS AND TECHNIQUES FOR ANALYSIS: Various tools and techniques are used for the analysis are as follows:

1. ABC Analysis 2. Economic Order Quantity 3. Correlation Analysis

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Economic order quantity (EOQ)

Is that size of the order which gives maximum economy in purchasing any material and ultimately contributes towards maintaining the materials at the optimum level and at the minimum cost. In other words, the economic order quantity (EOQ) is the amount of inventory to be ordered at one time for purposes of minimizing annual inventory cost.

The carrying cost of inventory may include:

Interest on investment of working capital Property tax and insurance Storage cost, handling cost Deterioration and shrinkage of stocks Obsolescence of stocks. Economic Order Quantity= 2*quantity required*ordering cost Carrying cost

EOQ= 2AO C

11

CORRELATION ANALYSIS:
Correlation is the study of the degree of relationship between two variables. In statistical analysis the study on two variables where in the change in the value of one variable produces a change in the value of the other variable.

XY - X* Y _________ N r = _______________________________________________

X2- (X)2
N

Y2- (Y)2
N

Positive correlation:
Two variables are said to be positively correlated if for an increase in the value of one variable is also an increase in the value of the other variable or for a decrease in the value of one variable there is also an decrease in the value of the other variable; that is the two variable change in the same direction.

Negative correlation:
Two variables are said to be negatively correlated if for an increase in the value of one variable there is a decrease in the value of the other variable; that is; the two variables change in opposite direction
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LIMITATIONS OF THE STUDY

The study is based on the secondary data. So the reliability of the data may not be accurate. The study is limited to the past five-years data only. The time period is being limited and is not possible for analyzing the overall performance of inventory system in KALEESUWARI REFINERY PRIVATE LIMITED

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REVIEW OF LITERATURE INVENTORY MANAGEMENT

Author(S): David Waller and Barbara Rosenbaum An inventory is a detailed, itemized list or record of goods and materials in a company's possession. "The main components of inventory, wrote Transportation and

Distribution contributors David Waller and Barbara Rosenbaum, "are cycle stock: the order quantity or lot size received from the plant or vendor; in-transit stock: inventory in shipment from the plant or vendor or between distribution centers; [and] safety stock: each distribution center's inventory buffer against forecast error and lead time variability." Author(S): Howard J. Weiss and Mark E. Gershon Writing in Production and Operations Management, Howard J. Weiss and Mark E. Gershon observed that, historically, there have been two basic inventory systems: the continuous review system and the periodic review system. With continuous review systems, the level of a company's inventory is monitored at all times. Under these arrangements, businesses typically track inventory until it reaches a predetermined point of "low" holdings, whereupon the company makes an order (also of a generally predetermined level) to push its holdings back up to a desirable level. Since the same amount is ordered on each occasion, continuous review systems are sometimes also referred to as event-triggered systems, fixed order size systems (FOSS), or economic order quantity systems (EOQ). Periodic review systems, on the other hand, check inventory levels at fixed intervals rather than through continuous monitoring.

References
Allen, Kelley L. "Lose that Inventory Baggage." Across the Board. January 2000. Gleckman, Howard. "A Tonic for the Business Cycle." Business Week. April 4, 1994. 14

Haire, Kelvin C. "Keeping the Merchandise Moving." Baltimore Business Journal. August 2, 1996. Krupp, James A. "Measuring Inventory Management Performance." Production and Inventory Management Journal. Fall 1994. Scanlon, Patrick C. "Controlling Your Inventory Dollars." Production and Inventory Management Journal. Fall 1993. .Valero, Greg. "Minimize Inventory for Maximum Success." U.S. Distribution Journal. JulyAugust 1997. Waller, David G., and Barbara A. Rosenbaum. "Plan Inventory Decisions to Cut Costs." Transportation and Distribution. November 1990.

INVENTORY MANAGEMENT TECHNIQUES

Author(s): by John H. Blackstone, James F. Cox

Abstract: Small businesses, both manufacturers and retailers, now have the opportunity to reduce inventory-related costs significantly through the use of various inventory techniques implemented on a micro- or mini-computer. Inventory techniques are divided into two categories--those for independent demand items (finished goods) and those for dependent demand items (manufacturing-in-process items and raw material). The use of micro-computers is growing rapidly, with material requirements planning (MRP) systems currently available for use on microand mini-computers. These MRP systems assist the small manufacturer in planning and controlling inventory levels of dependent demand items and in scheduling work centers (for example, see Cox and Clark).1 Several techniques offer potential for savings with independent demand items. Independent demand item techniques are subdivided into continuous review models, periodic review models, and mixed models. 15

References

James F. Cox and Steven J. Clark, "Material Requirements Planning System Development,' Computers and Industrial Engineering, vol. 2 (1978), pp. 123-139.

W. E. Dollan, Purchasing Management and Inventory Control for Small Business, Small Business Management Series No. 41, U.S. Small Business Administration (1980).

E. Lin, "Inventory Control Systems for Small Business,' American Journal of Small Business (spring 1980), pp. 11-19.

The continuous review technique, while very practical for a computerized inventory system collecting point-of-sale data, is not practical for manual systems handling numerous different items.

CONTINUOUS REVIEW MODEL

There are dozens of variations of the continuous review inventory model.4 the version discussed here is derived from the following assumptions: 4 This article discusses only the simplest model. More complete discussions can be found in Rein Peterson and Edward A. Silver, Decision Systems for Inventory Management and Production Planning (New York: John Wiley & Sons, 1979), and E. Naddor, Inventory Systems (New York: John Wiley & Sons, 1966).

16

The item under consideration is independent of all other items (no joint replenishment). Demand for the item varies (is random), but the average demand is constant over time. Lead time is known and constant. Holding costs and replenishment costs are known and constant. The inventory position is maintained at all times

The effect of inventory management on firm performance

Author(s): Dimitrios P. Koumanakos, (Industrial Management and Information Systems Laboratory, Department of Mechanical Engineering and Aeronautics, University of Patras, Rio, Greece)

Citation: Dimitrios P. Koumanakos, (2008) "The effect of inventory management on firm performance", International Journal of Productivity and Performance Management, Vol. 57 Iss: 5, pp.355

Keywords: , Inventory management, Lean production, Organizational performance

Publisher: Emerald Group Publishing Limited

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Abstract: Purpose Lean management is getting more and more attention in today's highly competitive environment. In this context, the aim of this study is to test the hypothesis that efficient (lean) inventory management leads to an improvement in a firm's financial performance Design/methodology/approach Data for the analysis came from the ICAP database, which contains financial information on all medium to large Greek firms. The sample period extended from 2000 to 2002. For each year all manufacturing firms with the corporate form of societies anonyms operating in any one of the three representative industrial sectors in Greece: food, textiles and chemicals were selected. Findings Preliminary results, obtained by cross-section linear regressions, reveal that the higher the level of inventories preserved (departing from lean operations) by a firm, the lower its rate of returns. Findings are additionally tested by the use of pseudolikelihood ratio test which constitutes a more reliable tool, thus verifying the robustness of the linearity of the relationship Research limitations/implications Given the great number of the possible determinants of performance it is difficult to isolate the effect of inventories even by using large samples and advanced methodologies. Originality/value Since the results from other empirical studies on the microeconomic determinants and consequences of inventories are somewhat contradictory, this study sheds more light to this issue by employing more sophisticated statistical tests applied to a large and recent sample of Greek manufacturers across different industries.

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Inventory management research in major logistics

Author(s): Brent D. Williams, (Department of Marketing and Logistics, Sam M. Walton College of Business, University of Arkansas, Fayetteville, Arkansas, USA), Travis Tokar, (The Ohio State University, Fisher College of Business, Marketing and Logistics, Columbus, Ohio, USA)

Citation: Brent D. Williams, Travis Tokar, (2008) "A review of inventory management research in major logistics journals: Themes and future directions", International Journal of Logistics Management, the, Vol. 19 Iss: 2, pp.212 232

Keywords: Inventory management, Research, Supply chain management

Publisher: Emerald Group Publishing Limited

Abstract: Purpose The purpose of this paper is to provide a review of inventory Management articles published in major logistics outlets, identify themes from the Literature and provide future direction for inventory management research To be published in logistics journals

19

Design/methodology/approach Articles published in major logistics articles, beginning in 1976, which contribute to the inventory management literature are reviewed and

cataloged. The articles are segmented based on major themes extracted from the literature as well as key assumptions Findings Two major themes are found to emerge from logistics research focused on inventory management. First, logistics researchers have focused considerable attention on integrating traditional logistics decisions, such as transportation and warehousing, with inventory management decisions, using traditional inventory control models. Second, logistics researchers have more recently focused on examining inventory management through collaborative models

20

ABC ANALYSIS Table No: Table Showing the ABC Analysis Of 2007

S NO 1 2 3 4 5

PARTICULAR TOP UP 1 INK I 2 TOP UP 3 INK I 1 TOP UP 2 WASH DOWN WD 2 WASH DOWN WD 3 INK I 3 INK I 5 TOP UP 4 TOP UP 8 WASH DOWN WD 1 WASH DOWN WD 6

UNIT PRICE 53 50 45 40 38

ANNUAL CONSUMPTION 2200.00 2304.00 2200.00 2304.00 2202.00

VALUE OF CONSUMPTION 116600.00 115200.00 99000.00 92160.00 83676.00

CUM 116600.00 231800.00 330800.00 422960.00 506636.00

CUM% 16.73% 33.27% 47.48% 60.70% 72.71%

CLASS A A A A B

62

636.00

39432.00

546068.00

78.37%

7 8 9 10 11

60 15 10 8 8

636.00 2304.00 2304.00 2202.00 2200.00

38160.00 34560.00 23040.00 17616.00 17600.00

584228.00 618788.00 641828.00 659444.00 677044.00

83.85% 88.81% 92.12% 94.64% 97.17%

B B C C C

12

25

636.00

15900.00

692944.00

99.45%

13

636.00

3816.00

696760.00

100%

21

Chart No: Chart Showing the ABC Analysis Of 2007

CONSUMPTION VALUE 2007 %

38%

31% A B C

31%

Inference:
The above chart clearly shows the category of products in A is 31%, B is 31%, and C is 38%. It inferred from above table for 2007 it was identified that the C class item as high consumption. Category A and B consumption is less compare to the C class item, consumption level of class A and B is compare the other class.

22

ABC ANALYSIS Table No: Table Showing the ABC Analysis Of 2008

S NO 1 2 3 4 5 6 7 8 9 10 11 12 13

PARTICULAR INK I 2 INK I 15 TOP UP 16 INK I 18 TOP UP 1 TOP UP 26 TOP UP 7 INK I 3 TOP UP 19 INK I 1 WASH DOWN WD 3 TOP UP 4 TOP UP 3 WASH DOWN WD 17 WASH DOWN WD 5 TOP UP 5 WASH DOWN WD 6 WASH DOWN WD 4

UNIT PRICE 34 30 32 18 28 26 21 12 19 11 54 16 15

ANNUAL VALUE OF CONSUMPTION CONSUMPTION 4302.00 4302.00 2662.00 4302.00 2662.00 2662.00 2662.00 4302.00 2660.00 4302.00 826.00 2660.00 2660.00 146268.00 129060.00 85184.00 77436.00 74536.00 69212.00 55902.00 51624.00 50540.00 47322.00 44604.00 42560.00 39900.00

CUM 146268.00 275328.00 360512.00 437948.00 512484.00 581696.00 637598.00 689222.00 739762.00 787084.00 831688.00 874248.00 914148.00

CUM% 14.80% 27.85% 36.47% 44.30% 51.84% 58.84% 64.50% 69.72% 74.83% 79.62% 84.13% 88.44% 92.47%

CLASS A A A A A A A A B B B B C

14 15 16 17 18

34 20 5 12 8

826.00 826.00 2660.00 826.00 826.00

28084.00 16520.00 13300.00 9912.00 6608.00

942232.00 958752.00 972052.00 981964.00 988572.00

95.31% 96.98% 98.33% 99.33% 100%

C C C C C

23

Chart No: Chart Showing the ABC Analysis Of 2008

CONSUMPTION VALUE 2008 %

33% 45% A B C 22%

Inference:
The above chart clearly shows the category of products in A is 45%, B is 22%, and C is 33%. It inferred from above table for 2008 it was identified that the A class item as high consumption. Category B consumption is less compare to the A and C class item, consumption level of class B is less compare to the other class.

24

ABC ANALYSIS Table No: Table Showing the ABC Analysis Of 2009

S NO 1 2 3 4 5 6 7 8 9 10

PARTICULAR INK I 15 INK I 2 INK I 18 TOP UP 16 INK I 3 TOP UP 26 INK I 1 TOP UP 1 TOP UP 19 WASH DOWN WD 3 WASH DOWN WD 17 TOP UP 4 TOP UP 3 TOP UP 7 WASH DOWN WD 5 TOP UP 5 WASH DOWN WD 4 WASH DOWN WD 6

UNIT PRICE 45 30 18 32 15 26 11 22 19 51

ANNUAL VALUE OF CONSUMPTION CONSUMPTION 5302.00 5304.00 5302.00 2599.00 5304.00 2592.00 5304.00 2577.00 2599.00 936.00 238590.00 159120.00 95436.00 83168.00 79560.00 67392.00 58344.00 56694.00 49381.00 47736.00

CUM 238590.00 397710.00 493146.00 576314.00 655874.00 723266.00 781610.00 838304.00 887685.00 935421.00

CUM% CLASS 21.94% 36.57% 45.35% 53% 60.31% 66.51% 71.88% 77.09% 81.63% 86.02% A A A A A A B B B B

11 12 13 14 15 16 17 18

34 12 12 7 15 5 8 6

936.00 2592.00 2577.00 2592.00 934.00 2592.00 931.00 934.00

31824.00 31104.00 30924.00 18144.00 14010.00 12960.00 7448.00 5604.00

967245.00 998349.00 1029273.00 1047417.00 1061427.00 1074387.00 1081835.00 1087439.00

88.95% 91.81% 94.65% 96.32% 97.61% 98.80% 99.48% 100%

25

B C C C C C C C

Chart No: Chart Showing the ABC Analysis Of 2009

CONSUMPTION VALUE 2009 %

39%

33% A B

C
28%

Inference:
The above chart clearly shows the category of products in A is 33%, B is 28%, and C is 39%. It inferred from above table for 2009 it was identified that the C class item as high consumption. Category A and B consumption is less compare to the C class item, consumption level of class B is compare to the other class.

26

ABC ANALYSIS Table No:

Table Showing the ABC Analysis Of 2010

S NO 1 2 3 4 5 6

PARTICULA R INK I 2 INK I 1 TOP UP 1 TOP UP 3 INK I 3 TOP UP 2 WASH DOWN WD 2 WASH DOWN WD 3 INK I 5 WASH DOWN WD 1 TOP UP 8 TOP UP 4 WASH DOWN WD 6

UNIT PRICE 70 46 73 45 21 38

ANNUAL CONSUMPTIO N 5304.00 5304.00 2600.00 2600.00 5304.00 2600.00

VALUE OF CONSUMPTIO N 371280.00 243984.00 189800.00 117000.00 111384.00 98800.00

CUM 371280.00 615264.00 805064.00 922064.00 1033448.00 1132248.00

CUM% 27.07% 44.86% 58.69% 67.22% 75.34% 82.55%

CLA SS A A A A B B

92

936.00

86112.00

1218360.00

88.82%

8 9

60 5

936.00 5304.00

56160.00 26520.00

1274520.00 1301040.00

92.92% 94.85%

C C

10 11 12

25 8 8

936.00 2600.00 2600.00

23400.00 20800.00 20800.00

1324440.00 1345240.00 1366040.00

96.56% 98.07% 99.59%

C C C

13

936.00

5616.00

1371656.00 100.00%

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Chart No: Chart Showing the ABC Analysis Of 2010

CONSUMPTION VALUE 2010 %

31% 46% A B

C
23%

Inference:
The above chart clearly shows the category of products in A is 31%, B is 23%, and C is 46%. It inferred from above table for 2010 it was identified that the C class item as high consumption. Category A and B consumption is less compare to the C class item, consumption level of class B is compare to the other class.

28

ABC ANALYSIS Table No:

Table Showing the ABC Analysis Of 2011

S NO 1 2 3 4 5

PARTICULA R INK I 2 INK I 1 TOP UP 1 TOP UP 3 INK I 3 WASH DOWN WD 2 WASH DOWN WD 3 INK I 4 TOP UP 2 WASH DOWN WD 5

UNIT PRICE 16 11 18 15 6

ANNUAL CONSUMPTIO N 5304.00 5304.00 2600.00 2600.00 5304.00

VALUE OF CONSUMPTI ON 84864.00 58344.00 46800.00 39000.00 31824.00

CUM 84864.00 143208.00 190008.00 229008.00 260832.00

CUM% 24.44% 41.24% 54.72% 65.95% 75.11%

CLAS S A A A A B

24

936.00

22464.00

283296.00

81.58%

7 8 9

24 4 6

936.00 5304.00 2600.00

22464.00 21216.00 15600.00

305760.00 326976.00 342576.00

88.05% 94.16% 98.65%

B C C

10

936.00

4680.00

347256.00

100.00%

29

Chart No: Chart Showing the ABC Analysis Of 2011

CONSUMPTION VALUE 2011 %

30%

40%

A B C

30%

Inference:
The above chart clearly shows the category of products in A is 40%, B is 30%, and C is 30%. It inferred from above table for 2011 it was identified that the A class item as high consumption Category B and C consumption is less compare to the A class item, consumption level of class B and C is compare to the other class.

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Table showing EOQ Analysis INK I 1

YEAR 2007 2008 2009 2010 2011

ANNUAL MATERIAL 32 38 40 125 25

ORDERING COST 5304 5304 5304 5304 5304

CARRYING COST 10 12 16 18 20

EOQ 33945.60 33592.00 26520.00 73666.67 13260.00

Chart showing EOQ Analysis INK I 1

80000 70000 60000 50000 40000 30000 33946.6

73666.67

33592
26520 13260

20000
10000 0 2007 2008 2009
.

2010

2011

31

Inference:
In this table it clearly shows that the EOQ analysis is increased continuously. In the year 2007 range is 33946.6. It has been increased to 13260 in the year 2011.

32

Table showing EOQ Analysis WASH DOWN WD 1

YEAR 2007 2008 2009 2010 2011

ANNUAL MATERIAL 120 90 80 67 40

ORDERING COST 936 936 936 936 936

CARRYING COST 10 12 16 18 20

EOQ 22464.00 14040.00 9360.00 6968.00 3744.00

Chart showing EOQ Analysis WASH DOWN WD 1

25000
20000 15000 10000

22464

14040 9360 6968 3744

5000
0 2007 2008 2009 2010

2011

33

Inference:

In this table it clearly shows that the EOQ analysis is increased continuously. In the year 2007 range is 22464. It has been increased to 3744 in the year 2011.

34

Table showing EOQ Analysis TOP UP 1

YEAR 2007 2008 2009 2010 2011

ANNUAL MATERIAL 336 420 295 661 154

ORDERING COST 2600 2600 2600 2600 2600

CARRYING COST 10 12 16 18 20

EOQ 174720.00 182000.00 95875.00 190955.56 40040.00

Chart showing EOQ Analysis TOP UP 1

250000 190955.56

200000

174720.00

182000.00

150000 95875.00

100000

50000

40040.00

0 2007 2008
. 2009

2010

2011

35

Inference:

In this table it clearly shows that the EOQ analysis is increased continuously. In the year 2007 range is 174720. It has been increased to 40040 in the year 2011.

36

CORRELATION BETWEEN INVENTORY AND SALES Table No:

Table showing Correlation between Inventory and Sales (RS.In Crores)

Inventory (X) Year 2007 2008 2009 2010 2011 TOTAL 106 211 134 237 956 1644

Sales (Y) 1055 1140 1387 1634 1756 6972 X2 11236 44521 17956 56169 313936 1043818 Y2 1113025 1299600 1923769 2669956 3083536 10089886 XY 111830 240540 185858 387258 1678736 2604222

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 XY= 2604222, X=1644, Y=6972, X2=1043818, Y2=10089886,

XY - X* Y _________ N r = _______________________________________________

X2- (X) 2
N

Y2- (Y) 2
N

38

2604222-(1644*6972) 5 r= 1043818-(1644)2 5 10089886-(6972)2 5

2604222-2292393.6 r= 503270.8 * 368129.2 =

311828.4

709.4*606.7

311828.4 r= 430392.98

r = 0.72

39

Inference:

The above calculation reveals that inventory and sales are positively related. It shows that the value of inventory increase, the sales value also increase and vice-versa.

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CORRELATION ANALYSIS

Correlation or co-relation refers to the departure of two variables from independence, although correlation does not imply causation. In this broad sense there are several coefficients, measuring the degree of correlation, adapted to the nature of data. The correlation is defined only if both of the standard deviation are finite and both of them are non- zero. It is a corollary of the Cauchy-Schwarz inequality that the correlation cannot exceed 1 in absolute value.

Table No.10

Correlations X-Annual consumption Y-Value consumption

annual annual Pearson Correlation Sig. (2-tailed) N value Pearson Correlation Sig. (2-tailed) N 13 .491 .089 13 1

value .491 .089 13 1

13

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**.

Correlation is significant at the 0.01 level (2-tailed).

INFERENCE:

Thus there exists a Positive Correlation between Income and Expenditure. From the above calculation it can be inferred that annual consumption and value of consumption are highly correlated. Thus increase in annual leads to increase in profit and vice versa.

Table No.11

Regression
Model Summary Adjusted R Model 1 R .491
a

Std. Error of the Estimate

R Square .241

Square .172

705.31379

a. Predictors: (Constant), value

ANOVA Model 1 Regression Residual Total Sum of Squares 1735597.969 5472142.954 7207740.923 df

Mean Square 1 11 12 1735597.969 497467.541

F 3.489

Sig. .089
a

a. Predictors: (Constant), value b. Dependent Variable: annual

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Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) value a. Dependent Variable: annual B 1257.222 .009 Std. Error 328.896 .005 .491 Coefficients Beta t 3.823 1.868 Sig. .003 .089

Case Processing Summary N Total Cases Excluded Cases

a

13 0 0 0

Forecasted Cases Newly Created Cases a. Cases with a missing value in any variable are excluded from the analysis.

Variable Processing Summary Variables Dependent annual Number of Positive Values Number of Zeros Number of Negative Values Number of Missing Values User-Missing System-Missing 13 0 0 0 0 Independent value 13 0 0 0 0

Model Summary and Parameter Estimates Dependent Variable:annual Model Summary Equation Linear R Square .241 F 3.489 df1 1 df2 11 Sig. .089 Parameter Estimates Constant 1.257E3 b1 .009

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Model Summary and Parameter Estimates Dependent Variable:annual Model Summary Equation Linear R Square .241 F 3.489 df1 1 df2 11 Sig. .089 Parameter Estimates Constant 1.257E3 b1 .009

The independent variable is value.

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CHART NO.10 CHART SHOWING THE RELATION BETWEEN THE ANNUAL CONSUMPTION & VALUE OF CONSUMPTION

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Table No.12

Chi-Square Test
annual Observed N 636 2200 2202 2304 Total 4 3 2 4 13 Expected N 3.2 3.2 3.2 3.2 Residual .8 -.2 -1.2 .8

value Observed N 3816 15900 17600 17616 23040 34560 38160 39432 83676 92160 99000 115200 116600 Total 1 1 1 1 1 1 1 1 1 1 1 1 1 13 Expected N 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Residual .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0

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Test Statistics annual Chi-Square Df Asymp. Sig. .846

a

value .000
b

3 .838

12 1.000

a. 4 cells (100.0%) have expected frequencies less than 5. The minimum expected cell frequency is 3.3. b. 13 cells (100.0%) have expected frequencies less than 5. The minimum expected cell frequency is 1.0.

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FINDINGS
Its clearly shows the category of products in A is 31%, B is 31%, and C is 38%. It inferred from above table for 2007 it was identified that the C class item as high consumption. Category A and B consumption is less compare to the C class item, consumption level of class A and B is compare the other class. Its clearly shows the category of products in A is 45%, B is 22%, and C is 33%. It inferred from above table for 2008 it was identified that the A class item as high consumption. Category B consumption is less compare to the A and C class item, consumption level of class B is less compare to the other class. Its clearly shows the category of products in A is 33%, B is 28%, and C is 39%. It inferred from above table for 2009 it was identified that the C class item as high consumption. Category A and B consumption is less compare to the C class item, consumption level of class B is compare to the other class. Its clearly shows the category of products in A is 31%, B is 23%, and C is 46%. It inferred from above table for 2010 it was identified that the C class item as high consumption. Category A and B consumption is less compare to the C class item, consumption level of class B is compare to the other class.

Its clearly shows the category of products in A is 40%, B is 30%, and C is 30%. It inferred from above table for 2011 it was identified that the A class item as high consumption. Category B and C consumption is less compare to the A class item, consumption level of class B and C is compare to the other class.

It clearly shows that the EOQ analysis is increased continuously. In the year 2009 range are 26520 it has been increased to 13260 in the year 2011.
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It clearly shows that the EOQ analysis is increased continuously. In the year 2009 range are 9360. It has been increased to 3744 in the year 2011.

It clearly shows that the EOQ analysis is increased continuously. In the year 2009 range is 95875. It has been increased to 40040 in the year 2011.

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SUGGESTIONS

The company can concentrate more on reducing further the level of stocks maintained and thereby reduce the holding cost The inventory control can be improved by reducing the inventory holding of C class items while, at the same increasing the level of B class item. This is on the basis of control of Vital Few and relaxing the control of trivial many.

The company can concentrate more on A and B class items inventory control and relax the control on C class items without affecting the value of inventory holdings.

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CONCLUSION
A study on inventory management in KALEESUWARI REFINERY PRIVATE LIMITED, CHENNAI. Showed that the company was very sound in managing its inventory and is capable of meeting the future needs and demands of the customers requirements. In inventory maintenance two types of costs are involved carrying cost & ordering costs the firm should minimize the total cost (carrying plus ordering cost). The firm follows inventory control techniques as A-B-C technique EOQ technique for better holding inventories. The study gave a detailed picture of the various inventories the company possessed and technique it used to manage the same. This study was very useful for both the researcher and the company for their future activities.

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BIBLIOGRAPHY Websites: www.google.com www.kaleeswari.com

Books Referred: Book name Financial management Production author I.M.pandy

- R.panneerselvam

and operations management

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