A study on inventory management in Amara

Raja Batteries Ltd

January 1, 2012 TechShristi

Rationale

For any manufacturing concern, production is the basic function on which the whole business
is built on. Production function involves procurement of raw materials, storage of raw materials, a
semi finished goods and conversion of material into finished product. During this process, storage of
raw materials an management of the materials. (otherwise known as inventory management) has an
important role to ply. Management of inventory is an important activity in a manufacturing concern.
Analyzing the economic order quantity, the reorder level, minimum storage level, maximum storage
level, the reordering quantity of the materials have to be known. Since production is the basic
function of a manufacturing concern and management of inventory is inevitable in production
function, a study on inventory management in order to improve the efficiency and effectiveness of
the organization has become imperative.

About the Company

Amara Raja Batteries Private Limited (ARBL) A company incorporated under the companys
act, 1956 in 13th February 1985, and converted into public limited company on 6th September 1990.

Sri Galla Ramachandra Naidu who is an electrical engineer with an experience promoted
Amara Raja ARBL is the first company in India to manufacture VRLA (Value Regulated Lead Acid)
batteries. The main objective of the company is manufacturing of good quality of SEALED
MAINTENANCE FREE acid batteries (SMF). The company is setting up to Rs.1970 lacks plant is in
18 acres in karakambadi village, Renigunta Mandal. The project site is a noticed under B category.

The company has the clear-cut policy of direct selling without any intermediate. So they have
set up six branches are operated by corporate operations office located in Chennai. The company
has virtual monopoly in higher. A.H(Amp Hour) rating Market its product VRLA. It is also having the
facility for industrial and automotive batteries.

Period of the Study

From December 2003 to March 2004

Objectives of the study

To study about inventory management of Amara Raja Batteries Ltd.,

To recommend proper inventory management techniques
To maintain sufficient inventory for smooth sales operation and efficient customer service.

Scope of the Study

Raw materials contributes a single largest expenditure items which account for nearly 70% of
total value. The improvement of the inventory management lies in the fact that in significant
contribution made in reducing materials cost through proper control will go along way in improving
the profitability and R.O.I.

Limitations of the Study

v EOQ is calculated for main raw materials like lead alloys and separators. The company using more
than two hundred raw materials.

v In the calculation of various stock levels daily usage is considered as average consumption is
calculated 25% more on the average consumption.

Research Methodology
Research methodology is a way to systematic solve the research problem. It may be
understood as a science of studying how research is scientifically. The scope of the research
methodology is wider than that of research methods.

Data Collection
The secondary data will be collected from the annual reports of the company

v Annual Reports
v Journals

v Magazines
v Inventory Department Records
v Other Information given by them

Tools

ABC Analysis

EOQ (Economic Order Quantity)

Stock Levels

Conclusion

Concluding to recommend our findings to company