A

PROJECT REPORT
ON
Effectiveness Of Inventory Control Management.
Master of Business Administration
By
Ms. B.VIJAYA LAKSHMI
(226010672049)







TKR INSTITUTE OF MANAGEMENT AND SCIENCE
(AFFLIATED TO OSMANIA UNIVERSITY)
Medbowli, Meerpet, Saroornagar, Hyderabad-500079.
2010-2012




A STUDY ON EFFECTIVENESS OF INVENTORY CONTROL
MANAGEMENT
WITH SPECIFIC REFRENCE TO
FACTSET SYSTEMS INDIA PVT. LTD
By
B. VIJAYA LAKSHMI
(Hall Ticket No: 226010672049)



Project submitted in partial fulfillment for the award of the degree of
MASTER OF BUSI NESS ADMI NI STRATI ON
By
Osmania University, Hyderabad-500007.
2010-2012.




DECLARATION

I hereby declare that this project report titled A STUDY ON EFFECTIVENESS
OF INVENTORY CONTROL MANAGEMENT submitted by me to the Department of
Business Management, O.U Hyderabad, is a bonafide work undertaken by me and it is not
submitted to any other University or Institution for the award of any degree diploma/certificate
or published any time before.


Name & Address of the student: Signature of the Student
B.VIJAYA LAKSHMI,
H.NO.:-12-1-1119/293,
INDIRA NAGAR COLONY,
NORTH LALLAGUDA,
SECUNDERABAD.

Date:
Place:


Certificate
This is to certify Ms. B.VIJAYA LAKSHMI student of MBA Finance bearing Roll
No. 226010672049 from TKR Institute of Management & Science, Osmania University has
successfully completed her project work on A STUDY ON EFFECTIVENESS OF
INVENTORY CONTROL MANAGEMENT as partial fulfillment of her masters degree in
Business Administration for a period of 45 Days.
During her tenure, we found her sincere and hard working. We wish her all success for all
her future Endeavors.














CERTIFICATION

This is to certify that the Project Report title A STUDY ON EFFECTIVENESS OF
INVENTORY CONTROL MANAGEMENT Submitted in partial fulfillment for the award of
M.B.A Programme of Department of Business Management, O.U., Hyderabad, was carried out
by B.VIJAYA LAKSHMI (H.T.No:226010672049) under my guidance. This has not been
submitted to any other University or Institution for the award of any degree/diploma/certificate.


Name and address of the Guide: Signature of the Guide
Mrs. T.S. ARCHANA,
Assistant Professor,
TKRIMS,
Hyderabad.









ABSTRACT
Every enterprise needs inventory for smooth running of its activities. It
serves as a link between the production and distribution process. The greater a time
lag, the higher the requirement of inventory the unforeseen fluctuation of inventory
demand supply of goods, fluctuation inventory prices, necessitate the need for
inventory management. Every industry on average spends 70% on raw materials
(inventory). Therefore there is a need to know the raw material cost and also there
is a great important to understand the inventory management system of this
industry. The study helps a log to various departments to take step to control the
inventory process.
The study is based on primary and secondary data. The primary data has
been collected by interaction with the Accounts and divisional managers. The data
regarding the present systems of controlling inventory is collected. The secondary
data is obtained from the past records and files, annual reports, periodicals, books,
manuals, journals, magazines, newspaper and internet.
The financial information obtained was analyzed using the appropriate
techniques and it was found that the inventory management technique deployed by
the company is efficient. The company also maintains positive correlation between
sales and inventory. It maintains good relationship their distributors, vendors and
sales executives. Further, it was found that the debtor turnover ratio and the work
in progress decreased. It is suggested to the company to arrange capital to meet
future requirement since it requires huge amount of inventory in order to achieve
more sales. Also, periodical review of the inventory should be carried out for its
proper control. Proper communication should be maintained between purchases
and production department and also the inventory turnover ratio and the debtor
turnover ratio.

ACKNOWLEDGEMENTS


I am grateful to Mr.RAM DEV, Financial consultant of FACTSET, for his guidance at every
stage of the project.
I would like to convey my heartiest thanks to my guide Mrs.T.S.Archana, Assistant professor
and Dr.J.VaraPrasad Reddy, Director, T K R Institute of Management & Science, for his
continuous support in making my project a success.
I thank my family and friends for being a source of inspiration and support.




(B.VIJAYA LAKSHMI)












TABLE OF CONTENTS
CONTENTS PAGE NUMBERS
List of Tables i
List of Figures ii
1. INTRODUCTION 1-3
2. REVIEW OF LITERATURE 4-24
3. INDUSTRY PROFILE 25-40
4. DATA ANALYSIS 41-53
5. SUMMARY & CONCLUSIONS 54-56
6. BIBLIOGRAPHY 57
7. APPENDICES 58-60







LIST OF TABLES

TABLES PAGE NUMBERS

1. RAW MATERIAL AT COST 42
2. WORK IN PROGRESS AT COST 43
3. INVENTORY TURNOVER RATIO 45
4. WORKING CAPITAL TURNOVER RATIO 46
5. CURRENT RATIO 47
6. QUICK RATIO 48
7. INVENTORY TO NETWORKING CAPITAL 50
8. WORK-IN-PROGRESS TO IVENTORY 51
9. CURRENT ASSET TO INVENTORY RATIO 52
10. DEBTORS TURNOVER RATIO 53













LIST OF FIGURES


FIGURES PAGE NUMBERS

1. INVENTORY CLASSIFICATION 5
2. THE RE-ORDER LEVEL 22
3. RAW MATERIAL AT COST 42
4. WORK IN PROGRESS AT COST 43
5. INVENTORY TURNOVER RATIO 45
6. WORKING CAPITAL TURNOVER RATIO 46
7. CURRENT RATIO 47
8. QUICK RATIO 48
9. INVENTORY TO NETWORKING CAPITAL 50
10. WORK-IN-PROGRESS TO INVENTORY 51
11. CURRENT ASSET TO INVENTORY RATIO 52
12. DEBTORS TURNOVER RATIO 53