INTRODUCTION Inventory management theory was first developed in 1915 on scientific line when several authors acting independently

developed an economic lot size equation which minimised the sum of carrying and holding costs for cases where demand was known and constant. Earlier to the inventory management theory one statistical approach was developed by R.H.Wilson to determine the re-order points and it was presented and published in Harvard Business Review (HBR). But the early models of inventory management and control had little application in those days. From the period of post-world war-II operations research techniques were immensely required due to the advances in technology and hence, an extensive development of inventory theory and its application was introduced to solve the problems from post-world war-II. In 1950s the electronic advancement (computers) were taken place in solving the inventory control problems. In India inventory control techniques were developed in 1960s. But, from 1970s only new models have been developed in our country. Technological innovations were taken place in large-scale organisations which are being used for inventory control. The increased scope of industrialisation in India and globalisation can be identified the number of management problems, inventory as one of the important management problem. Meaning and Definition: Inventory refers to a stock of goods. The material held in stock point indicates volume and value which can be ascertained by enumeration is called as physical inventory. Inventories enable the organisations to perform effectively the functions of buying, manufacturing and selling at different rates and at different time. Amount of inventory to be kept at a certain time depends upon the nature and size of the organisation, rate of turnover, terms on which goods are sold and purchased, and time required to procurement.

1. Fred Hansman defined the inventory as an idle resource of any kind, provided that

such resources has economic value. 2. Inventory in accounting sense may be defined as the goods and services required or procured by an enterprise for the purpose of subsequent sales but not yet transferred in the hands of the customer. gopalakrishnan.p & M.S.Sandilya The term inventory management involves a trade-off between cost and benefits of inventory. In a systematic approach to inventory management, a financial manager has to identify following important points. i.
ii.

The items that are more important than others The size of each order for different items.

The objectives of inventory management are to determine the optimum level of inventory, and to maximise the wealth of shareholders and to minimise the cost of holding inventories. There are some risks involved in the investment on inventories. The market value of inventory may fall below the price which was paid on the previous purchase. The market value below the earlier price causes inventory losses. To avoid the losses arising due to the change in the prices of inventory there must be proper inventory management for all the large scale organisations NEED AND IMPORTANCE OF RESEARCH PROBLEM: Transport, communication and energy play an important role in the economic development of a nation. Shortage of any of these basic infrastructural ingredients of development will automatically slow down the process of progress. The modern economy cannot sustain without an efficient system of transport. Broadly the transport can be of two categories viz: Goods and passenger transport, passenger transport plays a vital role in the prosperity of society. The passenger bus transport has the special nature of easy operation, economical, safe, convenient, flexible and reliable service. These characteristics therefore lead to the importance of passenger bus transport in India, particularly in view of the complexity of demographical features of the country.

In any transport undertaking, inventory management constitute important department of the organisation. The efficiency of the transport undertaking can be judged on the basis of rendering services to the passengers. Vehicles (buses) must be repaired and maintained intime; otherwise it cannot serve the public. For proper maintenance of buses separate stores and spares, and purchase departments and workshops at central, regional and divisional level are to be organised in all the transport undertakings. Inventory management is a comprehensive approach to plan, purchase, and store and distribute the materials. To manage inventory at all levels transport undertakings normally employs various quantitative techniques in planning and control of its inventory. Larger the material inventories causes the requirement of huge capital. For this purpose inventory control forms the inventory management function which involves in striking the balance between carrying large inventory to allow flexibility and costs associated with carrying such large inventory. Finally, the important purpose of the current research study is to attempt to study the innovative inventory management practices of Andhra Pradesh State Road Transport Corporation. OBJECTIVES OF THE STUDY: 1. To study the current inventory management practices of APSRTC.
2. To examine the uncertainties involved in purchasing and proper utilisation of

inventory at all levels. 3. To study the present inventory control system and procedure in APSRTC 4. To study the current practices for analysing the stores and spares information with its operational difficulties.
5.

To evolve the technique of Economic Order Quantity (EOQ) which minimises the cost involved in ordering and carrying the inventory of central stores of Andhra Pradesh State Road Transport Corporation.

6. To suggest optimal statistical forecasting method for calculation of Safety stock, Re-order level, Maximum level and Danger level of central stores of Andhra Pradesh State Road Transport Corporation.
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METHODOLOGY:

The methodology adopting for my research study is based on the available information from the official website of Andhra Pradesh State Road Transport Corporation and the information which is to be obtained from the central stores of the APSRTC. For the purpose of collection of data from various other sources a detailed separate questionnaires will be prepared according to various levels of management who are responsible for inventory either directly or indirectly. Once the questionnaire is finalised, it is to be sent to various levels and planning to conduct thorough personal interviews with the stores officer, Assistant stores officer, Store keepers at various categories for further collection of data.

Personal interviews will be frequently conducted for classification of inventory items on the basis of various approaches like ABC analysis, HML analysis and VED analysis.

While collecting data required for the research study Im planning to approach various organisations like Association of Road Transport Corporations and Central Institute of Road Transport etc.,

The period of study considered for the research work is the financial statements of APSRTC starting from 2007-08 to 2011-12. The financial statements and annual reports to be collected from finance department and inventory records to be collected from the central stores of APSRTC.

SAMPLE:

The present research study constitutes inventory management of Andhra Pradesh State Road Transport Corporation only. Samples of other state road transport undertakings would not be considering for my research work. But a comparative financial analysis of few road transport undertakings will be conducted with the financial statements since 2007.