Need of the study

Every organization desires inventory for swish running of its activities. It serves as a link
between production and distribution processes. The investment in inventories
constitutes the foremost important a part of current assets/working capital in most of
the undertaking it's terribly essential to possess correct management and management
of inventories the aim of inventory management is to confirm accessibility of materials
in enough amount as and once needed and additionally to attenuate investment in
inventories. So, so as to know the character of inventory management of the
organization and compare it with different organization to raised understanding
however inventory management impacts on company performance, I took this
Inventory Management as a subject for my project, to relinquish findings and
suggestions by adopting and analyzing totally different internal control techniques.

Scope of the study

Inventory management being a really vital conception altogether the company’s having a
void coverage usually entails the social control attention. within the nowadays inventory
management has become the integral a part of the all firms
Disadvantages of inventory

Every firm has got to maintain best level of inventories. It not the subsequent
will be the end in kind of losses.
 cost : each firm has got to maintain inventory for that some
investment is required it's referred to as cost and handle the
investment in inventory ar additional the funds ar blocks up with inventory
 Excessive inventories: it'll result in firm losses owing to excessive carrying
costs the chance of liquidity. it's conjointly referred as danger level.
 Inadequate Inventory: it's another danger which ends is production
holds-up and failure to fulfill delivery commitments. In adequate raw
materials and work - in - method inventors can leads to frequent production
interruptions. It finished merchandise aren't sufficient customers might shifts to
 Danger owing to physical decoration: it's one in all the rationale with the
inventories owing to maintaining stocks at high levels they're going to be deteriorated
due to passage of your time, typically owing to mishandling or improper storage
facilities.

Cost per item and the other direct price related to obtaining item to the plant holding
cost: holding price is related to keep and maintain inventory in storage. It includes
rental charges, insurance, interest paid on capital, alternative direct expenses.
Capital price
The higher of price of capital or cost for company.
Risk cost
Risk price includes degeneration, deteroiation.theft, taxes related to amount of
inventory.
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Ordering cost:
Ordering price coupled to putting order with provider or in engineered production. It
includes cost of issue quotations, monitor and receiving of physical stock.
Penalty cost:
The penalty price is price per unit related to discontentment of order once it
received. it will sort of a likelihood of uncomprehensible profit. it occur due
 Back order
 Lostsale

Have no text to check? haven't any text to check? Click "Select Samples".4.1 TOOLS AND
TECHNIQUES OF INVENTORY MANAGEMENT
A proper internal control not solely helps in resolution the acute downside of liquidity
however
also will increase profit and causes substantial reduction within the assets of the
concern.
The following ar the vital tools and techniques of inventory management and
control.
4.1.1 Determination of stock levels:
Carrying of an excessive amount of and insufficient of inventory is prejudicious to the firm.
If the
inventory level is just too very little, the firm can face frequent stock outs involving
significant
ordering price and if the inventory level is just too high it'll be spare holdup of capital. AN
economical inventory management needs that a firm ought to maintain AN
optimum level of inventory wherever inventory prices ar the minimum and at a similar
time there's no stock out which can lead to loss or sale or shortage of production
 Minimum stock level:
It represents the amount below its stock of any item mustn't be allowed to
fall.
 Lead time: A buying firm needs someday to method the order and
time is additionally needed by the activity firm to execute the order. The time in
processing the order so death penalty it's called time interval.

Manpower
. The company has a fully equipped training hall which accommodates
40
50 persons at time and regular training programs are held at different levels. The
training is totally based on skill and personality development to drive individuals and
the company forward.