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1 INTRODUCTION
Inventory represents the second largest asset category for manufacturing companies,
next only to plant and equipment.Given substantial investment in inventories, the importance
of inventory management cannot be overemphasized.
Primary executives in production, purchasing and marketing departments, take decisions
relating to inventories. Usually, purchasing raw material policies and production executives
and production and marketing executives evolve finished goods inventory policy. inventory
management has important operational implications, the operation manager has the
responsibility to ensure that inventories are properly monitored and controlled. He has to
emphasize the operational point of view and initiate programmers with the participation and
involveinvolvement of others for effective management of inventories
Definition of 'Inventory
The raw materials, work-in-process goods and completely finished goods that are considered
to be the portion of a business's assets thatare ready or will be ready for sale. Inventory
represents one of the most important assets that most businesses possess, because the
turnover of inventory represents one of the primary sources of revenue generation and
subsequent earnings for the company's shareholders/owners.
The main functions of inventory are summarized below
Inventory analysis
Careful inventory management is critical to the financial health of businesses whose primary
venture is manufacturing or retailing. In retail and manufacturing companies, huge amounts
of time and money are pended in keeping and managing inventory. The assumption of basic
inventory model.
Types of inventory:
There are three basic types of inventory - raw materials, work-in-process, finished good.
based on their uses, inventory can be classified as - cycle inventory, safety stock, anticipation
inventory, and in-transit inventory.
You may have also heard about independent and dependent demand inventories. We will
work with independent demand in our analysis. Independent demand is most frequently
associated with finished goods where the demand is more or less unknown. Dependent
demand inventory is associated with MRP systems and bills of materials.
Cost involved in inventory analysis:
Ordering cost:
Ordering cost is referred to as the cost of placing an order and securing the supplies. It varies
from time to time and also from industry to industry.
Carrying cost:
Carrying cost refers to the cost of keeping the materials in the storehouse which include (1)
capital cost, (2) cost of storage and handling, (3) cost of deterioration and obsolescence, and
(4) other kinds of expenses and losses during storage.
Definition of Supply Chain Management
SCM is the management of a network of all business processes and activities involving
procurement of raw materials, manufacturing and distribution management of Finished
Goods. SCM is also called the art of management of providing the Right Product, At the
Right Time, Right Place and at the Right Cost to the Customer.
Why SCM strategy is important for an Organization
Inventory control and inventory visibility are two very critical elements in any operations for
these are the cost drivers and directly impact the bottom lines in the balance sheet. Inventory
means value and is an asset of the company. Every business has a standard for inventory
turnaround that is optimum for the business. Inventory turnaround refers to the number of
times the inventory is sold and replaced in a period of twelve months. The health of the
inventory turn relates to the health of business.
In a global scenario, the finished goods inventory is held at many locations and distribution
centres, managed by third parties. A lot of inventory would also be in the pipeline in
transportation, besides the inventory with distributors and retail stocking points. Since any
loss of inventory anywhere in the supply chain would result in loss of value, effective control
of inventory and visibility of inventory gains importance as a key factor of Supply Chain
Management function.
Although pottery and ceramic industry is of prehistoric origin in India, the HT insulator
industry has a recent origin. The first unit was set up in the fifties at Bangalore. Some units
were set up in the sixties but the main expansion of the industry took place in the seventies
are used in electrical transmission lines, substations and electrical equipment. Different types
of industry are used for each application.
There has been up gradation of transmission voltage and plans are afoot to install 765 KV AC
transmission lines. The industry would need to develop and produce HT insulators of higher
ratings for transmission lines, substations and equipment.
There are 14 units manufacturing electro porcelain high tension insulators. Two of these units
are in small scale sector. These have installed capacity of 85,050 tonnes per annum one small
scale and one organized sector unit have stopped production of insulators. The capacity of
these two units is 5000 tonne per annum.
The demand and average production of the HT Insulators during the last nine year have been
around 31,000 tonne per annum.
More than 60% of the installed capacity is lying idle with the industry due to lack of domestic
demand. With the implementation of the approved projects, the unutilized capacity would
increase from 60,000 tonne to 1,00,000 tonne approximately. Since the domestic is not likely
to increase proportionately at least for the next five years, the only possible way for
improving the efficiency of the industry is to enter the world export market.
All the units in the organized sector have been set up with foreign technology through foreign
collaborations were entered into initially to set up the projects and number of 1 unit
subsequently had entered into supplementary collaborations to upgrade and enhance the
product range. Each unit in the industry has been acting as a sealed compartment and centre
of an exclusive secret technology. There has been very little exchange of technological
information amongst the units of the industry.
The industry has done well to adapt the foreign technology. Over the past decade, it has
produced major equipment and testing equipment on their, own. Porcelain insulator industry
in India has substantially matured and even is in a position to pass on technology to any third
country who may want to set up such a plant in association with them.
Electro porcelain and toughened glass are the two types of insulators that are being used for
high tension transmission lines and equipment throughout the world. The world market
comprises of the power project being set up mainly in the under developed and developing
countries using electro porcelain and toughened glass insulators.
In India also toughened glass insulators are being used in transmission lines. However, it may
be noted that this comparison is not exhaustive, as complete data on properties and
performance of glass insulators is not available due to its limited use so far. Toughened glass
insulator technology acquisition and adaptation has not received sufficient attention so far in
the country. The only unit which has been given the license for manufacture of toughened
glass insulator has set up an assembly line. Production of glass shell which indeed is the real
technology is yet to start.
Generally glass tends to deteriorate in outdoor application as it is not crystalline. It is
amorphous and also in a Metastable state. Also surface damage in glass insulators leads to
shattering, while porcelain insulators can withstand reasonable degree of surface demand.
Performance of glass is yet to be proved in EHV system trial in tropical countries. Long rod
porcelain insulators have been developed and are being used along with disc insulator strings.
tests. Apart from the routine tests, samples from each lot are subjected to acceptance tests in
line with the relevant standards
Suspension Insulators
Service environments necessitate the use of the proper profile of the insulator, to ensure
hassle-free operation under severe site conditions. To cater to the needs of the customers WSI
manufactures three different profiles catering to site conditions ranging from lighting /
moderate pollution to severe sand pollution.
Every insulator manufactured is subjected to an array of thermal, electrical and mechanical
tests. Apart from the routine tests, samples from each lot are subjected to acceptance tests in
line with the relevant standards.
Insulators for substations and apparatus require a high degree of safety and service reliability.
These insulators may be subjected to high degree of static and dynamic loading, severe
climatic conditions and very heavy levels of pollution.
"Suspension" and "Strain" insulators are the same thing; when used in the vertical position
(with the conductor hanging below) they are called "suspension"; when used in the
horizontal, to dead-end a conductor, they are called "strain".
There are two basic types of suspension insulators: Unipart and multipart.
Multiparts are no longer produced, and original units are rare today. There are only two
known styles: Cochrane and Byllesby, both dating from the late 1910s.
Uniparts (see left and right) were first developed in the 1910s and are the common style still
in production today. Each unit has a single glass shell bonded to a steel cap (above) and a
steel pin (below). The modular units connect with each other cap-to-pin, forming a chain or
"string".
The mechanical strength of a string is determined by the rating of the metal parts of a single
unit, but the electrical rating can be increased by simply adding more units. This system
allows for much higher insulation value than any pin-type insulator: the largest one-piece pintype power insulator ever made in the U.S. was the Corning Pyrex No. 701, which is rated at
only 70,000 volts, while a string a suspension insulators could be assembled that stands off
1,000,000 volts or more.
There are three basic styles of Unipart suspension insulator shells: (1) "sombrero" (so-called
by collectors), which is flat, with multiple ridges or "skirts" on the under-side which increase
the leakage distance; (2) fog or "bell", in which the disk is curved into a bell or nearly
hemispheric shape, the indent being to keep the ridge less underside from being wetted as
easily; and (3) aero(dynamic) style, a wide flat disc (also with no ridges) which presents little
cross-section and so is least affected by high winds.
Ceramic
Disc
Suspension
Insulator/Porcelain
Suspension
Insulator/Suspension
Insulator
Ceramic Disc Suspension Insulator/Porcelain Suspension Insulator/Suspension Insulator
Disc Suspension Porcelain Insulator is used for insulation and supporting in high voltage
overhead transmission and distribution lines. They are usually connected and assembled into
insulator string and used on different levels of line voltage.
Connected
fitting
type:
ball
&
socket
type;
clevis
&
tongue
type
Strength can be 40 KN, 45KN, 60KN, 70KN, 80KN, 100KN, 110KN, 120 KN,
125KN,160KN, 210KN, 300KN
According to different use environment and region, the insulator can be divided into standard
type and anti-pollution type.
10
ANSI type:
52-1, 52-2, 52-3, 52-4, 52-5, 52-6, 52-8, 52-9 according to ANSI C29.2
EC type:
U70BL, U70BS, U100B, U120B, U160B, U210B, U300B according to IEC383, BS137
The fog type has big creep age distance. According to the shed shape and structure, the fog
type disc suspension insulator can be divided into double-shed anti-pollution insulator, trished anti-pollution insulator, aerodynamic suspension porcelain insulator and bell-type antipollution suspension insulator
11
According to connected way, the suspension insulator can be divided into ball and socket
type & clevis and tongue type. The surface of the cap and pin ball of insulator should be hot
dip galvanized. If the area is highly polluted, the pin ball can be added the zinc sleeve. The
locking device of W and R spring split is made of bronze or stainless steel. They have good
flexibility and anti-corrosion nature.
12
13
This electrical insulator is an insulator of generally columnar shape, and it consists of one
post insulator unit or an assembly of such units and is intended to give rigid support to a live
part which is insulated from earth or from another live part.
Solid-core station post insulator may be manufactured according to IEC, ANSI, BS and other
standards, with cantilever strength from 4kN to 18kN, which is used on 15kV to 750kV
station and substation.
There are two types for this series, normal type and anti-pollution type.
Station Post Insulators including:
Solid-Core Station Post Insulators to meet ANSI C29.9:
TR-202, TR-205, TR-208, TR-210, TR-214, TR-216, TR-286, TR-287, TR-288, TR-289, TR291, TR-304, TR-312, TR-362, TR-369, TR391
Station Post Insulators to meet IEC 273:
C4-125, C4-150, C4-170, C4-200, C4-250, C6-325, C6-450, C6-550, C6-650, C8-750, C10950, C10-1050, C12.5-1550, C10-1675C C10-1800, C10-2100, C10-2550.
Cut-out Insulator:
14
Reliability of service
4.
5.
Every insulator manufactured is subjected to an array of tests. Apart from the routine tests,
samples from each lot are subjected to acceptance tests in line with the relevant standards.
Insulators comply with relevant IEC / ANSI standards.
15
The hollow insulator, porcelain bushings are used extensively in electrical apparatus.
Porcelain bushing is the device that enables one or several conductors to pass through a
partition such as a wall or tank and insulates the conductors from it. The means of attachment
to the partition, such as flange or other fixing device, forms part of the bushing.
Big
Upside
porcelain
down
bushing,
transformer
bushing
bushing
SF6
bushing
current
transformer
16
17
18
Primary objective
Secondary objective
19
20
21
22
J F Dong, L H Wang, J X Wang in their thesis titled Research on reverse logisticsoriented multi sources inventory control modelto improve enterprise inventory control
strategy and optimize control parameters of inventory including external and interior reverse
logistics, through applying periods' inventory checking strategy, a multi-sources inventory
control model helpful to simulate the real logistics operations was proposed. Based on the
arrival time of returned products following Poisson distribution, the returns production with
lot-size processing method and the nonzero lead time of a rational cost function of inventory
control was established. Then the genetic algorithm was used to solve the inventory cost
function so as to obtain the optimum solution of inventory checking periods, safe inventory
point, production lot-sizes and processing lot-sizes of returns production. An example was
presented to prove the feasibility and validity of the proposed method, and the proposed
model can help the enterprises to implement multisource inventory control strategy.
23
Keenan D Yoho, James A Rappold in their thesis titled Beyond lean : Production and
inventory policy for the old economy Lean manufacturing has fundamentally changed the
way business leaders think about the production of manufactured goods and services. Over
the past three decades, firms have dedicated considerable resources to reducing production
setup times, shrinking inventories, and organizing work into cellular flows. Discrete parts
manufacturing has benefited from production planning schemes that smooth production and
level- load the plant to reduce idle time and overtime. But in the process industries, where
production occurs 24 hours a day, seven days a week, what does it mean to level-load the
production facility? In those industries, capacity stabilization is defined as creating
production cycles that are predictable, and level-loading consists of stabilizing manufacturing
lead times. In this article, we describe the differences between what we call inventory-centric
versus capacity-centric modes of production and inventory control, and we present data
collected from a large chemical plant operation that illustrates a mismatch between inventory
policy and capacity characteristics. We also describe policies appropriate for old economy
firms in the face of increasing consolidation and pressures to reduce costs and increase
responsiveness
J F A B Zhao, in their titledA New Kind Of Supply Chain Management Inventory
Optimization Model Based On Cooperation And Coordination Mechanisms did a
research on Cooperation and coordination problem is one of the main problems of supply
chain inventory optimization controlling currently. The MTP (matter, thing and people)
ideology was introduced and used to optimize the traditional F.Harris inventory model. On
this basis, a new kind of supply chain management inventory optimization batch Elasticity
model based on cooperation and coordination mechanisms was established. Optimizing
results were analysed through batch flexibility theory based on coordination mechanisms. A
new and feasible method to optimize inventory management was provided. In this thesis, the
inventory optimization problems were discussed from the quantitative study perspective
andbased on cooperation and coordination mechanisms using MTP ideology and combining
with F.Harris inventory model.
24
Ibeas A Herrera J Vilanova R Garcia C A, in their thesis titled A New Kind Of Supply
Chain Management Inventory Optimization Model Based On Cooperation And
Coordination Mechanisms did a research on inventory management, In this paper, an
Internal Model Control (IMC) scheme is incorporated in production inventory control
systems in a complete supply chain. This control scheme presents a good target inventory
tracking under the perfect knowledge of the system. Furthermore, the inventory tracking and
load disturbance rejection control problems can be tackled separately.
However, the closed-loop performance of the IMC scheme may be degraded due to a
mismatch between the modelled and actual delay or to the fact that delays may be timevarying. Thus, the IMC control scheme is enhanced in this work with a novel method for the
online identification of lead times based on a multimodel scheme. In this way, all benefits of
the IMC scheme can be exploited. A detailed discussion of the proposed production inventory
system is provided including stability and performance analysis as well as the identification
capabilities of the algorithm. Several simulation examples illustrate the efficiency of the
approach
D L Olson, M Xie, in their thesis titled A Comparison Of Coordinated Supply Chain
Inventory Management System did a research on Supply chain operations are widely
used, as they have proven very effective in contemporary business environments. Traditional
supply chain coordination has suffered from well-known bullwhip effects, which have been
alleviated in part through greater information exchange from Efficient Consumer Response
(ECR) and more coordinated systems such as Vendor-Managed Inventory (VMI). The
refinements of VMI include Continuous Replenishment (CR) and Collaborative Planning,
Forecasting and Replenishment (CPFR). This paper reviews the definitions of these variant
supply chain inventory management systems. Simulation studies of VMI have studied the
expected impact on supply chain operations. This paper evaluates the relative benefits and
costs of alternative supply chain inventory systems and provides an analysis of the conditions
for which coordinated inventory management systems are appropriate.
Huafei Chen.in their thesis titled Research On Uncertainty Demand Inventory Control
In Supply Chain. did a research on overall operations of supply chain are affected by the
25
26
RESEARCH
Research is a process in which the researcher wishes to find out the end result for
the given problems and thus the solutions help in future course of action.
RESEARCH DESIGN
Research design is an arrangement of condition for collection and analysis of data
in a manner that aims to combine relevance to the research purpose with economy in
procedure.
A plan outlining how information is to be gathered for an assessment or evaluation that
includes identifying the data gathering method(s), the instrument to be used/created, how the
instruments will be administered, and how the information will be organized and analysed.
The design used in this study is the analytical research.
NATURE OF THE RESEARCH
ANALYTICAL RESEARCH
In the analytical research, the research uses the facts or information already available
and analysis the existing data to make a critical evaluation of the material. The research
method used for the project involves an analytical research, which has been carried out
respect to the existing system in the company and a critical evaluation of the same is made. In
this type of research has to use facts or information already available, and analyse these to
make a critical evaluation of the material. The researcher depends on existing data for his
research work. The analysis revolves round the material collected/ or available.
SOURCES OF DATA
27
It is collected from the internal records of the company such as library records, trade journals,
various manuals of the company; it is also conducted from the officials of the pursed
department in the factory. Secondary data provides a better view of the problem study, tools
and other references were also mean important in this study.
The data collected for the purpose of this analysis is secondary. Secondary data refer to
information gathered from sources already existing. Some source of secondary data are data
available from previous research, information available from any published or unpublished
sources available either within or outside the organization, library records, online data,
websites and the internet.
There was no need for collecting primary data as the study involves analysis of data
available. The data has been collected through the annual report and statements available with
the company.
ANALYTICAL TOOLS
In order to extract meaningful information from the data collected, the data
analysis is carried out. The analysis is basically aimed at giving inferences of associations or
difference between the various variables present in the research. The data collected was
edited, coded and tabulated for analysis. The analysis can be conducted using analytical tools.
The analytical tools comprise of both statistical and financial tools. In this survey only three
of the statistical tools were used.
TOOLS & TECHNIQUES
To analyse the secondary data:
1. ABC analysis:
Always better control is the technique used for analysing the inventory. The
material are classified and controlled according to the value of the material involved. It is
also called proportional part value analysis.
Thus, high value items are paid more attention that low value items. The material are
classified under A, B or C designation on the basis of their value and importance. A category
consists of a few items of high value. Category B includes more items of medium value and
category C includes all other materials of small value.
28
PARETO CURVE
Class A materials these are usually the most expensive, highly important items and main
raw materials in the production. A class items need tight monitoring and control. They should
be managed by JIT (Just in Time) since its close management is most cost-effective.
Class B materials these materials are usually the medium expensive items that still require
more control and some management effort. They may not require a micromanagement by JIT,
but they should also be tracked methodically.
Class C materials these items have low value and lower importance. C class items require
the minimum controls and they generally consist of the largest volume of the inventory. They
are mostly managed by two bin system. When a bin is empty or when the system sends a
signal of reaching a minimum stock level, an order is placed.
ECONOMIC ORDER QUANTITY:
Economic order quantity is referred to as the size of the order that gives maximum economy
in purchasing the materials.
Economic order quantity for Q system:
In this system of inventory, whenever the stock level touches the reorder level, an order is
placed for a fixed quantity which is equal to EOQ.
Economic order quantity for P system:
In this system of inventory, the stock position is reviewed once in a fixed period and an order
is placed depending on the stock position, unlike a fixed quantity in the Q system of
inventory. The review period is approximately equal to EOQ/D.
WS insulators industries using P system for calculating economic order quantity.
30
31
Com No
Description
Price/Unit
Code
(in Rs.,)
C01
Bushing Insulators 3.434.0A-B
C02
Bushing Insulators 3.542.0A-B
C03
Bushing Insulators 4.1008/3A-B
C04
Bushing Insulators 4.1099.0A-B
C05
Bushing Insulators 4.173/3J-B
C06
Bushing Insulators 4.529/3A-B
C07
Bushing Insulators 4.684.0A-B
C08
Bushing Insulators 4.691/3A-B
C09
Bushing Insulators 4.760/2A-B
C10
Bushing Insulators 4.935.0A-B
C11
Bushing Insulators 4.936.9A-B
C12
Bushing Insulators 4.968/3A-B
C13
Bushing Insulators
5.3023.0A
3.2.1 TABLE SHOWING ABC ANALYSIS
Annual
Unit/Year
Consumption
(in Rs.,)
4695
76
356820
3200
100
320000
72455
15
1086825
36390
1
36390
51000
5
255000
90000
8
720000
32740
19
622060
100000
3
300000
31000
21
651000
26940
11
296340
29570
12
354840
52433
1
52433
3020
15
45300
OF BUSHING INSULSTORS (APRIL 2011
TO MARCH 2012)
Com
No
Description
Code
Price/Unit
(in Rs.,)
32
Unit/Year
Annual
Cumulative
Consumptio
Consumptio
Class
C03
C06
C09
C07
C01
C11
C02
C08
C10
C05
C12
C13
C04
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
Bushing Insulators
4.1008/3A-B
4.529/3A-B
4.760/2A-B
4.684.0A-B
3.434.0A-B
4.936.9A-B
3.542.0A-B
4.691/3A-B
4.935.0A-B
4.173/3J-B
4.968/3A-B
5.3023.0A
4.1099.0a-B
Class
A
B
C
72455
90000
31000
32740
4695
29570
3200
100000
26940
51000
52433
3020
36390
% of items
38
31
31
15
8
21
19
76
12
100
3
11
5
1
15
1
(in Rs.,)
1086825
720000
651000
622060
356820
354840
320000
300000
296340
255000
52433
45300
36390
(in Rs.,)
1086825
1806825
2457825
3079885
3436705
3791545
4111545
4411545
4707885
4962885
5015318
5060618
5097008
% of values
67
25
8
33
A
A
A
A
A
B
B
B
B
C
C
C
C
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
INTERPRETATION:
It is inferred that the percentage of a items is high so the inventory should be minimized.
34
Com No
C01
C02
C03
C04
C05
C06
C07
C08
C09
C10
C11
Description
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Code
Price/Unit
(in Rs.,)
Annual
Unit/Year
Consumption
(in Rs.,)
1.001.0Q
465
3220
1497300
1.001.0Q
500
7872
3936000
1.009.0Q
570
11000
6270000
1.033.0Q
475
16002
7600950
1.059.0Q
400
300
120000
1.093.0Q
600
12868
7720800
1.204.0Q
560
12500
7000000
1.228.0Q
850
39713
33756050
1.256.0Q
350
250
87500
1.289.0Q
1300
668
868400
1.299.0Q
1550
1801
2791550
35
Com No
C08
C06
C04
C07
C03
C02
C11
C01
C10
C05
C09
Descriptio
n
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Hot Press
Insulators
Class
A
B
C
Price/Uni
Code
t
(in Rs.,)
Annual
Cumulative
Unit/Yea
Consumptio
Consumptio
(in Rs.,)
(in Rs.,)
Class
1.228.0q
850
39713
33756050
33756050
1.093.0q
600
12868
7720800
41476850
1.033.0q
475
16002
7600950
49077800
1.204.0q
560
12500
7000000
56077800
1.009.0q
570
11000
6270000
62347800
1.001.0q
500
7872
3936000
66283800
1.299.0q
1550
1801
2791550
69075350
1.001.0q
465
3220
1497300
70572650
1.289.0q
1300
668
868400
71441050
1.059.0q
400
300
120000
71561050
1.256.0q
350
250
87500
71648550
Percentage of items
27
19
54
36
Percentage of values
68
19
13
120
100
80
percentage of consuption
60
40
percentage of
consumption values
20
0
percentage of no items
INTERPRETATION:
It is inferred that the percentage of a items is high so the inventory should be minimized.
37
Com No
Description
Price/Unit
Code
(in Rs.,)
Annual
Unit/Year
Consumption
C01
C02
C03
C04
C05
C06
C07
C08
C09
C10
C11
5.6080.0Q
5.6102.0Q
5.6105.0Q
5.6264.0Q
5.6401.0Q
5.6446.0Q
5.6464.1Q
5.6483.0Q
5.6483.1A-B
5.6483.2A-B
5.6498.0Q
5500
8000
12750
16000
45000
5500
6700
32500
10000
12000
16500
23
1
18
72
36
4
9
9
1
9
8
(in Rs.,)
126500
8000
229500
1152000
1620000
22000
60300
292500
10000
108000
132000
C12
5.6676.1Q
5500
5500
38
Description
Code
Annual
Unit/Year
(in Rs.,)
C05
C04
C08
C03
C11
C01
C10
C07
C06
C09
C02
C12
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Solid Core
Insulators
Class
A
B
C
Consumption
(in Rs.,)
Cumulative
Consumptio
Clas
(in Rs.,)
5.6401.0Q
45000
36
1620000
1620000
5.6264.0Q
16000
72
1152000
2772000
5.6483.0Q
32500
292500
3064500
5.6105.0Q
12750
18
229500
3294000
5.6498.0Q
16500
132000
3426000
5.6080.0Q
5500
23
126500
3552500
5.6483.2A-B
12000
108000
3660500
5.6464.1Q
6700
60300
3720800
5.6446.0Q
5500
22000
3742800
5.6483.1A-B
10000
10000
3752800
5.6102.0Q
8000
8000
3760800
5.6676.1Q
5500
5500
3766300
Percentage of items
16
34
50
39
Percentage of values
73
21
06
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
INTERPRETATION:
It is inferred that the percentage of a items is high so the inventory should be minimized.
40
41
Com
No
C01
C02
C03
C04
C05
C06
C07
C08
C09
Description
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Free Hot Press
Insulators
Code
Price/Unit
(in Rs.,)
Annual
Unit/Year
Consumption
(in Rs.,)
1.009.0Q
550
217
119350
1.009.0Q
570
135
76950
1.027.0Q
700
98
68600
1.033.0Q
510
916
467160
1.040.0Q
615
1112
683880
1.059.0Q
430
651
279930
1.059.0Q
450
157
70650
1.064.0Q
775
263
203825
1.228.0Q
925
5550
42
Com
No
C05
C04
C06
C08
C01
C02
C07
C03
C09
Description
Class
A
B
C
Price/Unit
Code
(in Rs.,)
Annual
Unit/Year
Consumption
(in Rs.,)
Cumulative
Consumptio
n
Class
(in Rs.,)
1.040.0Q
615
1112
683880
683880
1.033.0Q
510
916
467160
1151040
1.059.0Q
430
651
279930
1430970
1.064.0Q
775
263
203825
1634795
1.009.0Q
550
217
119350
1754145
1.009.0Q
570
135
76950
1831095
1.059.0Q
450
157
70650
1901745
1.027.0Q
700
98
68600
1970345
1.228.0Q
925
5550
1975895
Percentage of items
34
33
33
Percentage of values
72
20
08
43
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
44
INTERPRETATION:
It is inferred that the percentage of a items is high so the inventory should be minimized.
Price/Uni
Com No
Description
Code
C01
C02
C03
C04
C05
C06
C07
C08
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
1.009.0Q
1.014.0Q
1.025.0Q
1.027.0Q
1.059.0Q
1.064.0Q
1.074.0Q
1.093.0Q
(in Rs.,)
550
225
534
700
400
775
255
550
45
Annual
Unit/Year Consumption
93392
3072
1843
31000
60
30000
4953
1100
(in Rs.,)
51365600
691200
984162
21700000
24000
23250000
1263015
605000
C09
C10
C11
C12
C13
C14
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
VAP Insulators
1.168.0Q
1.204.0Q
1.256.0Q
1.351.0Q
1.355.0Q
1.377.0Q
655
500
350
180
515
33
995
66
69
640
120
7584
651725
33000
24150
115200
61800
250272
Com
No
C01
C06
C04
C07
C03
C02
C09
C08
Description
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
Code
Price/Unit
(In Rs.,)
Annual
Unit/Year
Consumption
(in Rs.,)
Cumulative
Consumptio
n
Class
(in Rs.,)
1.009.0Q
550
93392
51365600
51365600
1.064.0Q
775
30000
23250000
74615600
1.027.0Q
700
31000
21700000
96315600
1.074.0Q
255
4953
1263015
97578615
1.025.0Q
534
1843
984162
98562777
1.014.0Q
225
3072
691200
99253977
1.168.0Q
655
995
651725
99905702
1.093.0Q
550
1100
605000
100510702
46
C14
C12
C13
C10
C11
C05
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
VAP
INSULATORS
1.377.0Q
33
7584
250272
100760974
1.351.0Q
180
640
115200
100876174
1.355.0Q
515
120
61800
100937974
1.204.0Q
500
66
33000
100970974
1.256.0Q
350
69
24150
100995124
1.059.0Q
400
60
24000
101019124
Class
A
B
C
Percentage of items
14
07
79
Percentage of values
73
22
05
47
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
48
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
49
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
50
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
120
100
80
percentage of consuption
60
percentage of
consumption values
40
20
0
percentage of no items
51
INTERPRETATION:
It is inferred that the percentage of a items is high so the inventory should be minimized.
52
CARRI
DEM
S
DESCRIP
AND
NO
TION
IN
TONS
ORDER
YING
PURCH
ING
COST
ASE
COST
PER
PRICE
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
1
THAN
CLAY
450
400
15%
575
2 c oD
PC C
53
= (52/7) * 400 +
7 )
( 450
52
/2*575*.15
= (52/8) * 400 +
8 )
( 450
52
/2*575*.15
INTERPRETATION:
The about calculation show that total cost is minimum when the review period is 7 weeks.
Hence, select the review period as 7 weeks.
54
CARRIYI
DEMA
S
DESCRIPT
ND
NO
ION
IN
TONS
ORDERI
NG
PURCH
NG
COST
ASE
COST
PER
PRICE
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
1
FELDSPAR
POWDER
2184
1700
10%
2 c oD
PC C
4160
= (52/2) * 1700 +
2 )
( 2184
52
/2*4160*.10
= (52/3) * 1700 +
3 )
( 2184
52
INTERPRETATION:
56
/2*4160*.10
The about calculation show that total cost is minimum when the review period is 3 weeks.
Hence, select the review period as 3 weeks
CARRIY
DEMA
S
DESCRIPT
ND
NO
ION
IN
TONS
ORDERI
ING
PURCH
NG
COST
ASE
COST
PER
PRICE
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
1
QUARTZ
POWDER
2112
2000
10%
57
5096
2 c oD
PC C
= (52/2) * 2000 +
2 )
( 2112
52
/2*5096*.10
= (52/3) * 2000 +
58
3 )
( 2112
52
/2*5096*.10
= 34667+31046 = 65713.
INTERPRETATION:
The about calculation show that total cost is minimum when the review period is 3 weeks.
Hence, select the review period as 3 weeks
59
CARRIY
DESCRIPT
NO
ION
ORDERI
ING
PURCH
DEMA
NG
COST
ASE
ND IN
COST
PER
PRICE
TONS
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
1
PLASTER
OF PARIS
120
400
15%
2 c oD
PC C
6000
= (52/3) * 400 +
3 )
( 120
52
/2*6000*.15
= 6934+3115= 10049
Total cost when the review period = 4 week:
Total cost = ordering cost + carrying cost
= (52/4) * 400 +
4 )
( 120
52
= 5200+4154= 9354
INTERPRETATION:
61
/2*6000*.15
The about calculation show that total cost is minimum when the review period is 4 weeks.
Hence, select the review period as 4 weeks
62
CARRIY
DESCRIPT
NO
ION
ORDERI
ING
PURCH
DEMA
NG
COST
ASE
ND IN
COST
PER
PRICE
TONS
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
LILITE
1
CHINA
7200
4000
5%
CLAY
2 c oD
PC C
63
5200
64
= (52/2) * 4000 +
2)
( 7200
52
/2*5200*.05
= 104000+36000= 140000
Total cost when the review period = 3 week:
Total cost = ordering cost + carrying cost
= (52/3) * 4000 +
3 )
( 7200
52
/2*5200*.05
= 69334+54000= 123334
INTERPRETATION:
The about calculation show that total cost is minimum when the review period is 3 weeks.
Hence, select the review period as 3 weeks
65
66
CARRIYI
DESCRIPTI
NO
ON
ORDERI
NG
PURCH
DEMA
NG
COST
ASE
ND IN
COST
PER
PRICE
TONS
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
CHINA
1
CLAY(ORIS
1360
1000
10%
SA)
2 c oD
PC C
67
2800
68
= (52/3) * 1000 +
3 )
( 1360
52
/2*2800*.10
= 17334+10984 = 28318
Total cost when the review period = 4 week:
Total cost = ordering cost + carrying cost
= (52/4) * 1000 +
4 )
( 1360
52
/2*2800*.10
= 13000+14646 = 27646
INTERPRETATION:
The about calculation show that total cost is minimum when the review period is 4 weeks.
Hence, select the review period as 4 weeks.
69
70
CARRI
DEM
S
DESCRIP
AND
NO
TION
IN
TONS
ORDER
YING
PURCH
ING
COST
ASE
COST
PER
PRICE
PER
UNIT
PER
ORDER
PER
UNIT
YEAR
1
BALL
CLAY
4200
2000
10%
1250
2 c oD
PC C
72
= (52/4) * 2000 +
4 )
( 4200
52
/2*1250*.10
= 26000+20192 = 46192.
Total cost when the review period = 5 week:
Total cost = ordering cost + carrying cost
= (52/5) * 2000 +
5 )
( 4200
52
/2*1250*.10
= 20800+25240 = 46040.
INTERPRETATION:
The about calculation show that total cost is minimum when the review period is 5 weeks.
Hence, select the review period as 5 weeks
73
74
3.2.13 TABLE SHOWING EOQ VALUES FOR GIJRI T.P LAVIGATED CLAY
(APRIL 2011 TO MARCH 2012)
ORDERI
S NO
DESCRIPTION
DEMA
NG
ND IN
COST
TONS
PER
ORDER
CARRIYI
NG COST
PER
UNIT
PER
YEAR
PURCH
ASE
PRICE
PER
UNIT
GIJRI T.P
1
LAVIGATED
10800
5000
10%
CLAY
2 c oD
PC C
75
1500
76
= (52/3) * 5000 +
3 )
( 10800
52
/2*1500*.10
= 86667+46730 = 133397.
Total cost when the review period = 4 week:
Total cost = ordering cost + carrying cost
= (52/4) * 5000 +
4 )
( 10800
52
/2*1500*.10
= 65000+62307 = 127307
INTERPRETATION:
The about calculation show that total cost is minimum when the review period is 4 weeks.
Hence, select the review period as 4 weeks
77
78
3.3FINDINGS
From the 13 items considered for the study, 5 items found to be 30 %,( A category)
which is item very important. 4 items found to be 31%, (B category) which is items
important.
From the 12 items considered for the study, 2 items found to be 16%, (A category)
which is items very important. 4 items found to be 34%, (B category) which is items
important. 6 items found to be 50 %,( C category) which is items marginally
important.
From the 9 items considered for the study, 3 items found to be 34%, (A category)
which is items very important. 3 items found to be 33%, (B category) which is items
important. 3items found to be 33 %,( C category) which is items marginally
important.
From the 14 items considered for the study, 2 items found to be 14 %,( A category)
which is items very important. 1 items found to be 07 %,( B category) which is items
important. 11 items found to be 79 %,( C category) which is item marginally
important.
For theabove calculation it is found that cost is 5583 for 7 week and 5583 for 8 week.
From the above calculation it is found that cost is 61672 for 2 week and 55674 for 3
week.
From the above calculation it is found that cost is 72697 for 2 week and 65713 for 3
week.
From the above calculation it is found that cost is 10049 for 3 week and 9354 for 4
week.
From the above calculation it is found that cost is 140000 for 2 week and 123334 for
3 week.
From the above calculation it is found that cost is 28318 for 3 week and 27646 for 4
week.
From the above calculation it is found that cost is 46192 for 4 week and 46040 for 5
week.
79
From the above calculation it is found that cost is 133347 for 3 week and 127307 for
4 week.
80
The company should take some measures for controlling wastage of raw material.
The class change according to the number of items
For ex a product of 13 items are bought it comes under one class say A class items
and the some product is purchased now the number of item purchased is 1 then it will
come under B/C class items. Hence the combination of XYZ analysis helps in case
of such items.
A revised system has to be horizontally deployed to all the material i.e. all the direct
materials have to be classified into A,B,C category items and scheduling should be
inventory
The safety stock should be calculated and main tainted to meet the customer demand.
The review period must be followed for ordering the raw materials
81
3.5 CONCLUSION
The inventory management technique is more useful in determine the optimum level of
inventory and finding answers inventory control and to problems of safety stock and lead
time. WS industries using maintain strict inventory control and will utilize in many areas.
There by any become concept leaders in the near future.
82
APPENDIX
S NO
DESCRIPTION
1 THAN CLAY
DEMAN
D
ODERI
NG
COST
CARRIYI
NG
COST
PURCHASE
PRICE
review
period(ye
ar)
review
period(i
n
week)
0.144444 7.5111
11
450
400
15%
575
65
2 FELDSPAR
POWDER
2184
1700
10%
4160
134
0.061355
3.1904
76
3 QUARTZ
POWDER
2112
2000
10%
5096
128
0.060606
3.1515
15
120
400
15%
6000
10
0.083333
4.3333
33
5 LILITE CHINA
CLAY
7200
4000
5%
5200
470
0.065278
3.3944
44
6 CHINA
CLAY(ORISSA)
1360
1000
10%
2800
99
0.072794
3.7852
94
7 BALL CLAY
4200
2000
10%
1250
366
0.087143
4.5314
29
10800
5000
10%
1500
849
0.078611
4.0877
78
4 PLASTER OF
PARIS
8 GIJRI T.P
LAVIGATED CLAY
83
BIBLIOGRAPHY
Books :
delhi
Material management, Robert B.ballot, 11th edition, pearson education.
Supplier and material management, H.K. Compton
Production and operation management, R.panneerselvam
Introduction to material management, J.R.Tony Arnold, Stephen N.chapman, R.V.
Ramakrishnan.
Websites:
www.sciencedirect.com
www.mendely.com
www.engineeringletter.com
www.google.com
84