Download the original attachment

Introduction
1.1INVENTORY

The dictionary meaning of ‘Inventory’ is ‘A detailed list of stock of goods’.

A practical definition from the Materials Management angle would be ‘items of
stores or materials kept in stock to meet future demands of production, repairs,
maintenance, and construction etc.’

In financial parlance, inventory is defined ‘As the sum of the value of raw
materials, fuels and lubricants, spare parts, maintenance consumables, semi-
processed materials and finished goods stock at any given point of time’.

The operational definition of inventory would be ‘The amount of raw

materials, fuel and lubricants, spare parts and semi-processed materials to be
stocked for the smooth running of the plant’.

ORIGINS OF THE WORD INVENTORY

The word inventory was first recorded in 1601. The French term inventories, or
"detailed list of goods," dates back to 1415. Inventory management is primarily
about specifying the size and placement of stocked goods. Inventory
management is required at different locations within a facility or within
multiple locations of a supply network to protect the regular and planned course
of production against the random disturbance of running out of materials or
goods. The scope of inventory management also concerns the fine lines
between replenishment lead time, carrying costs of inventory, asset
management, inventory forecasting, inventory valuation, inventory visibility,
future inventory price forecasting, physical inventory, available physical space
for inventory, quality management, replenishment, returns and defective goods
and demand forecasting.
Other definitions of inventory management from across the web:

Involves a retailer seeking to acquire and maintain a proper merchandise

assortment while ordering, shipping, handling, and related costs are kept in
check.

Systems and processes that identify inventory requirements, set targets, provide
replenishment techniques and report actual and projected inventory status.

Handles all functions related to the tracking and management of material. This
would include the monitoring of material moved into and out of stockroom
locations and the reconciling of the inventory balances. Also may include ABC
analysis, lot tracking, cycle counting support etc.

Management of the inventories, with the primary objective of determining.

Controlling stock levels within the physical distribution function to balance the
need for product availability against the need for minimizing stock holding and
handling costs.

In business management, inventory consists of a list of goods and materials

held available in stock.

An inventory can also be self-examination, a moral inventory.

Labels: Inventory Management, Procurement, Supply Chain, Supply Chain

Management

INVENTORY MANAGEMENT:

Inventory Management is the function responsible for the co-ordination of

planning, sourcing, purchasing, moving stores and controlling materials in an
optimum manner so as to provide a pre-decided service to the customer at a
minimum cost.

Management of Inventory is designed to regulate the size of the investment

in goods on hands, the types of goods, carried in stock and turnover rates.

Adequate stock of goods, proper quality to meet the needs of production and
sales must be maintained, while at the same time the investment in them is to
be kept at a reasonable level.
 The Inventory Management is used in two ways – quantity control and
value control.

Production and purchase officials use this word in terms of quantity control
whereas in accounting this word is used in terms of value control.

INVENTORY CONTROL:

Inventory Control ensures that the optimum amount of inventory is held by

a company so that its internal and external demand requirements are met
economically.

WHY INVENTORIES EXISTS:

The Function of Inventory

Some functions of the firm, such as the purchase of raw materials, processing,
and having finished goods available for sale, have a sequential, physical
dependency. Maintenance of inventories allows the firm to decouple these
functions so that each can be planned, scheduled, and operated independently.
For retail firms, inventory provides customers with selection choices and
decouples the purchasing function from the selling function.

NEED TO HOLD INVENTORIES

The question of managing inventories arises only when the company holds
inventories. Maintaining inventories involves typing up of the company’s
funds, storage and handling costs.

There are three general motives for holding inventories:

1. The transactions motive which emphasizes the need to maintain

inventories to facilitate smooth production and sales operations.
2. The precautionary motive which necessitates holding of
inventories to guard against the risk of unpredictable changes in
demand and supply forces and other factors.
3. The speculative motive which influences the decision to increase
or reduce inventory levels to take advantage of price fluctuations.
 A company should maintain adequate stock of materials for a
continuous supply to the factory for an uninterrupted production.

The procurement of materials may be delayed because of such factors

like strike, transport disruption, short supply etc. Therefore, the firm should
maintain sufficient stock of raw materials at a given time to streamline the
production.

The work-in-process inventory builds up because of the production

cycle. Production cycle is the time span between the introduction of raw
materials into production and the emergence of finished product at the
completion of production cycle. Till the production cycle completes, the
stock of work-in-process has to be maintained.

The stock of finished goods has to be held because production and

sales are not instantaneous. A firm cannot produce immediately when
the goods are demanded by customers. Therefore, to supply finished
goods on a regular basis, their stock has to be maintained.

1.2 INDUSTRY PROFILE

This category covers companies that primarily make industrial and commercial
electric apparatus, such as fixed and variable capacitors and rectifiers for
industrial applications.

Product examples in the miscellaneous electrical industrial apparatus industry

include battery chargers, non-electronic condensers, non-electronic rectifiers,
surge suppressors, and thermoelectric generators. Companies that make
capacitors and rectifiers are classified elsewhere.

NAICS Code(s)

335999(All other miscellaneous electrical instrument and component

manufacturing)

Non electric rectifying apparatus used to convert alternating current to direct

current accounted for about 50 percent of industry output. Nonelectric capacitor
equipment made up about 12 percent of revenues. Other major product groups
included coil windings (3.7 percent of sales), solenoids (2.5 percent), and
catholic protection equipment (1.7 percent). About 50 percent of output was
sold to other manufacturing industries, and 30 percent was made for the us
military. Federal non-defense purchases contributed 10 percent of revenues.
The remaining output went to other sectors, such as the automotive repair and
communications industries.

According to the U.S.Census Bureau’s statistics of US Businesses, 979

establishments operated in this category for some or all of 2001. Industry-wide
employment totaled 42.546 paid workers receiving a payroll of more than
$1.78 billion.

The beginning of practical electronics applications was marked by

American Lee Deforest’s patent of an electrical vacuum tube in 1906, based on
a design by Thomas Edison. Technological breakthroughs during both world
wars also broadened the scope of the electronics industry. As electrical
apparatus sales surged during the U.S economic boom after World War II,
miscellaneous electrical industrial apparatus shipments swelled. By the
beginning of the 1980’s the industry was generating revenues of about $1.1
billion per year and employing a workforce of more than 16.000.

Industry growth lagged during the 1980’s due in part of foreign import.
Also, more popular solid-state components reduced demand for traditional
electromechanical equipment produced by this industry. Even greater U.S
defense spending did not bring much growth. Sales increased to just $1.5
billion by 1990, reflecting a decline in inflation adjusted revenues since 1980.
The industry emerged from a U.S. recession in the mid-1990 with a healthy
forecast.

The industry leader is American Power Conversion Corp (apc).

As with many manufacturing industries, the challenge in the 2000’s was to

create new products that were more efficient, cost-effective and automated.

CHAPTER 2
 PROJECT PROFILE
TITLE OF THE PROJECT;

“A STUDY ON INVENTORY ANALYSIS TOWARDS ITS FUTURE

REQUIREMENTS”

NEED FOR THE STUDY;

This research will enhance the further understanding about the inventory
status of Best & Crompton (pumps).

This research will enhance and help to regulate the size of the investment
in goods on hands, the types of goods, carried in stock and turnover rates.

Inventory Control ensures that the optimum amount of inventory is held by

a company so that its internal and external demand requirements are met
economically

OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVES:
1. A study on Inventory analysis towards its future requirement in best and
Crompton Engineering Private Limited.

SECONDARY OBJECTIVES:
 1. To identify a minimum investment in inventories to maximize
profitability.
2. To find out side of inventories of raw materials and work in
progress for efficient and smooth production and finished goods.
3. To find out of the optimum level of inventory in Best and
Crompton Engineering Private Limited.
4. To determine reorder point of Inventory.

SCOPE OF THE STUDY:

1. The scope of the study is nothing but the secondary objectives that
arise as an effect of the primary objective.
2. Various advantages arise as a result of achieving these objectives.
3. Elimination of duplication, reduction of paper work, Reduction
time consumption, faster reporting services, Easier flow and
storage of data, cutting down of Man Power and man hours.
4. There are various areas in the system that can be modified to
improve the efficiency of the system as a whole.
5. There are many improvement are also possible in the store
inventory system.

3. COMPANY PROFILE

3.1 INCEPTION OF THE COMPANY

Best & Co. was founded in 1879 as a partnership firm in Madras by

Andrew Vans Dunlop Best and the company was incorporated as a Private
Company in 1911. The name of the company was changed to Best & Co. Pvt.
Ltd., 1st May, 1975 with the consequential change in the name to Best & Co.
Ltd.

The subsidiaries of the company are krest Development & Leasing Ltd.,
Beacon Weir Ltd., Best & Crompton (Jersey) Ltd., Kone Elevator India Ltd.,
Air Control and Chemical Engineering Company Ltd., Beacon Tileman Ltd., &
Beacon Neyrpic Ltd.

3.2 NATURE OF BUSINESS

BEST & CROMPTON PUMPS DIVISION formerly known as Beacon

Weir Ltd. was a joint venture company between Best & Crompton Engg.
Limited. , Chennai, and Weir Pumps Ltd., U.K. This Company was established
in 1982 for manufacturing Centrifugal Pumps of the highest quality.

B&C Pump’s division has its Head Office and manufacturing facilities in
Chennai with Regional Offices in Delhi, Mumbai and Kolkata.

The pumps manufactured by B&C Pumps division, service the various

Sectors of Water, Energy, Urban Development, Environment Infrastructure,
Navy, Engineering, Fertilizer, Sewage, etc. B & C Pump’s division has also
assimilated the technology of Ochsner/Austria, for manufacturing Chemical
and Process Pumps.

3.3 BOARD OF DIRECTORS

Mr. S. V. Venkatesan - Chairman

Non - Executive
Director

Mr. N. Srinivasan

Non - Executive
Director

Mr. A.Annamalai

Non - Executive
 Director

Mr. K. Prakash

Whole Time Director

3.4 BUSINESS OPERATIONS

Projects
Transmission Lines
Best & Crompton have executed 33300 ckt km of transmission lines both in
India and abroad.

High Voltage substations

Best & Crompton is a pioneer in the field of High Voltage Substations in

India and abroad.

Railway Electrification

Best & Crompton having entered the field of Railway Electrification in the year
1959 are now leaders in the field in India, offering services on a turnkey basis.

ENGINEERING CONSULTANCY

Best & Crompton, with sixty years of experience in the priority areas of
industrial development set up its high-tech consultancy unit- Esquire Engineers
and Consultants now a wholly owned subsidiary of the Group.

InfoTech
BEACON SOFTWARE SYSTEMS LTD (Beaconsoft) has been promoted by
Crombes Holding, India and Factory Systems Ptv Ltd, Singapore. Beaconsoft is
situated at Chennai, South India.

Manufacturing
Pumps
The manufacture of Centrifugal Pumps is an important activity of Best &
Crompton. The company has achieved pioneer status in this area through
adaptation and assimilation of three well known Pump Technologies.

3.5 PRODUCT/SERVICE PROFILE

PRODUCT PROFILE:

PUMPS:

Best & Crompton pumps are manufactured and marketed under the brand
names of "BEACON" and "BEACON WEIR"

BEACON PUMPS HAVE THE FOLLOWING RANGE:

• Beacon Monoblocs
• End Suction Coupled DIN 24255
• Beacon Chemical and Process Pump DIN 24256 ISO 2858
• Vertical Sump pumps
• Transformer oil pumps(Centrifugal and Axial)
• Slurry Pumps (Single and Twin Casing)

Beacon Standard Pumps Group Products are produced for Dealers' Stocking
and supplied from On-the-Shelf basis. These items, especially Monoblocs can
be supplied from ready stock. End-Suction coupled units are manufactured in a
franchised outlet and can be delivered within four/six weeks’ time.

SPECIAL PUMPS -Transformer Oil Pumps and Slurry Pump Units require 4-
20 weeks lead time. Beacon Weir Pumps have the following range:

• Split case
• Non-Clog
• Ring section Multistage
• Marine: Naval Ships
• Paper Stock Pumps

Beacon Weir products normal delivery periods: For Split-case unit upto
250 mm : Delivery - 8 weeks For Split-case unit above 250 mm :
Delivery - 20 - 24 weeks depending on sizes and materials of
construction
3.6 MARKET SHARE

BEST & CROMPTON Engg. Ltd.

Best & Crompton Engineering Limited is an India-based company. The

Company is engaged in the manufacture of engineering and electrical
components. It operates under six segments: fabrication, castings, pumps,
machinery manufacturing division, projects and sale of real estate. Its products
include electrical contracting elec-motors and alternator.

The Company's subsidiaries include Beacon Neyrpic Limited, Beacon

'Pumps (India) Limited, Best & Crompton Engineering Projects Limited, Three
C Systems Limited, Beacon Carbons & Electricals (India) Ltd., Beacon
Tileman limited, Best & Crompton Apparels Limited, Best & Crompton Global
Electronics Solutions Limited and Bestai Precast Buildings Limited.

3.7 COMPETITORS

• MATHER + PLATT PUMPS LTD

• Kirloskar Brothers Limited (KBL)
• SAM TURBO INDUSTRY LIMITED
• The KSB Group
• WPIL Limited
• FLOWMORE
• JYOTI LTD

3.8FUTURE PROSPECTS AND GROWTH

Create capabilities in basic and mutually interdependent business

sectors. Seek and build technologically cutting edge products and
processes and integrate them with present and future offerings. Scale
up for potentially global markets, while generating cost advantages
through compressive business applications.
 CHAPTER 4

REVIEW OF LITERATURE

The dictionary meaning of ‘Inventory’ is ‘A detailed list of stock of goods’.

A practical definition from the Materials Management angle would be ‘items of
stores or materials kept in stock to meet future demands of production, repairs,
maintenance, and construction etc.

A number of studies have been done in the field of inventory

management by various researchers. Some of these are summarized below:

MANAGING INVENTORY BY WOLFE BAGBY;

In his study Mr. WOLFE BAGBY explains that by managing the inventory it
becomes easier for the organization to meet profit goals, shorten the cash cycle,
avoid inventory shortage, avoid excessive carrying costs for unused inventory,
improve profitability by decreasing cash conversion, and adopt a JIT
system. According to this study companies need to get smart about their
inventory.

For this the company needs to maximize the cash flow and profitability
and this includes keeping a watchful, discerning eye on change in supply and
demand, which means simultaneously scrutinizing external factors that might
affect supply and demand. The study also states that profitability needs to be
improved by decreasing the cash conversion time.

Boosting financial performance is another benefit that comes from better

inventory management .In fact, a large number of manufacturers enjoy
significant savings and better performance by choosing the approach of
inventory reduction. One vital measurement for determining how effectively a
manufacturer’s inventory management system is operating is referred to as
inventory turnover. Essentially, it measures how efficiently inventory moves
through the organization. In fact, manufacturing executives are told never to
underestimate the importance of inventory turnover. Gaining better control over
accounts receivables policies is another popularly reported approach for using
inventory to improve profitability. Depending upon the nature of business,
early or on time payment discounts can be the incentive for moving
inventory faster.

The study also states that organizations also need to follow Just in Time
inventory management. For years, American manufacturers have strived for
improved inventory management systems. The closer they get to carry zero
inventories, the closer they get to reach the manufacturing efficiency. Such
thinking, combined with today’s available technology, has brought inventory
management systems to a new level. Manufacturers can now
meet their customers’ demand without incurring the costs and burdens that
come from stocking excess inventory .Features such as effective forecasting,
vendor management and data management control make it possible for
manufactures to achieve a much higher rate of efficiency. This enables
manufacturers to manage inventory as a financial investment, as well as a
method for putting more money in their pockets.

A STUDY ON INVENTORY MANAGEMENT BY CHARLES

ATKINSON:

In the study by Mr. CHARLES ATKINSON, he explains inventory

management and assessment of inventory levels. As per this study inventory
management needs to address two issues.

Part I: How to Optimize Average Inventory Levels?

This part provides a brief description for how optimal inventory levels
for materials are kept. Essentially, this section can serve as a starting point for
inventory managers. The first thing the inventory manager needs to do is to
determine the ideal inventory levels that is a material’s Economic Order
Quantity (EOQ). This is the amount one should be ordering when one
places orders.

Next he needs to determine the Safety Stock (SS). This is the amount that one
should have as balance when the EOQ, arrives. This should be intuitive because
safety stock is what one has till the shipment arrives and when the order arrives
it gets added to the safety stock. On an average one should have the safety
stock amount when one receives shipments.

Part-II: How to assess (evaluate) Inventory Levels?

Average Inventory can be calculated by Simplistic Method.

Avg. Inventory = (Beginning Inventory + (Beginning Inventory + Units

Produced - Units Sold)) / 2

Or

Avg. Inventory = (Beginning Inventory + Ending Inventory) / 2

BENEFITS OF HOLDING INVENTORIES:

Ø Avoiding Lost Sales:

Without goods on hand which are ready to be sold, most

firms would lose business. Some customers are willing to wait,
particularly when an item must be made to order or it is not widely
available from competitors. In most cases, however, a firm must be
prepared to deliver goods on demand. Shelf stock refers to items that are
stored by the firm and sold with little or no modifications to customers.
An automobile is an item of shelf stock. Even though customers any
specify minor variations, the basic item leaves a factory and is sold as a
standard item. The same situation exists for many items of heavy
machinery, customer products and light industrial goods.

Ø Gaining Quantity Discounts

In return for making bulk purchases, many suppliers will

reduce the price of supplies and component parts. The willingness to
place large orders may allow the firm to achieve discounts on regular
prices. These discounts will reduce the cost of goods sold and increase
the profits earned on sale.

Ø Reducing Order Costs:

 Each time a firm places an order, it incurs certain expenses,
forms have to be completed, approvals have to be obtained and good that
arrive must be accepted, inspected and counted. Later, an invoice must
be processed and payment made. Each of these costs will vary with the
number of orders placed. By placing fewer orders, the firm will pay less
to process each order.

Ø Achieving Efficient Production Runs:

Each time a firm sets up workers and machines to produce an

item, starts up costs are incurred. These are then absorbed as production
begins. The longer the run, the smaller the costs to begin producing the
goods. Frequent setups produce high start up costs; longer runs involve
lower costs. These benefits arise because inventories provide a ‘buffer’
between purchasing, producing and marketing goods. Raw materials and
other inventory items can be purchased at appropriate times and in
proper amounts to take advantage of economic conditions and price
incentives. The manufacturing process can occur in sufficiently long
production runs and with pre-planned schedules to achieve efficiency
and economies. The sales force can respond to customer needs and
demands based on existing finished goods. To allow each area to
function efficiently, inventory separate the three functional areas
facilitates the interaction among them. This role of inventory is
explained in DIAGRAM NO.2.1.

Ø Reducing Risk of Production Shortages:

Manufacturing firms frequently produce goods with

hundreds or even thousands components. If any of these are missing, the
entire production operation can be halted, with consequent heavy
expenses. To avoid starting a production run and then discovering the
shortage of a vital raw material or other component, the firm can
maintain larger than needed inventories.

TYPES OF INVENTORY:

Ø Raw Material:

To hold stocks of raw materials, an organization deploys its

primary production sections or processes to obtain raw materials from
manufactures and stockiest.
 Ø Work-in-Progress:

The holding of both raw materials and stock finished goods is

generally a planned activity. In-process stocks, however, are likely to
exist in any manufacturing organization, whether they are planned for or
not.

Ø Finished Goods:

The stock of finished goods provides a buffer between customer

demand and the manufacturer’s supplies.

Ø Flabby Inventory:

It comprises finished goods, raw materials and stores held

because of poor working capital management and inefficient
distribution.

Ø Safety Inventory:

It provides for failures in supplies, unexpected spurt in

demand etc., although there may be an insurance cover.

Ø Normal Inventory:

It is based on production plan, lead time of supply and

economic ordering levels. Normal inventories fluctuate primarily with
change in production plan. Normal inventory also includes a reasonable
factor of safety.

Ø Excessive Inventory:

Even an efficient management may be compelled to build

an excessive inventory for reasons beyond its control, as in the case of a
strategic import or as a measure of government price support of a
commodity.
 CHAPTER 5

RESEARCH METHODOLOGY

“Marketing Research is a systematic gathering and analyzing of data about the

problems related to the marketing of goods and services”.

- American Marketing
Association.

Research is a systematic design collection of analysis and reporting of data and

finding relevant to specific marketing situation of the company.

1. Research methodology is a way to systematically solve the research

problem.

2. It may be understand as a science of studying

3. In this we study various steps that are generally adopted by a research in

studying his research problem along with logic behind them.

4. It is necessary for the researcher to know not only the research

methodology or re search Techniques to design his methodology for his
problem. The scope of Research Methodology is wider than that of
research methodology.

RESEARCH DESIGH
 1. Research Design is a plan of action that guides the entire research.

2. The formidable problem that shows to be task of defining the research

Problem are the preparation of the design of the research project
popularly known as the “Research Design”.

3. The present study is done on the base of “Analytical Research Design”.

METHOD OF DATA COLLECTION:

To achieve the objectives of the study both primary and secondary data
were used. The primary data for the study was collected through the
interactions and discussions made in the course of the study with the staff in the
Finance and Accounts Department of Best and Crompton (pumps).

Secondary data was collected from the reports of the company for the year
from the company website www.best&crompton.com and also from the
company books and records.
 ANALYSIS TOOLS;
ABC Analysis ;

The ABC system is a widely used classification technique to identify

various items of inventory for the purpose of inventory control. On the
basis of unit cost involved, the various items are classified into 3
categories:

1. A, consisting of items which are high in value but less in number

2. C, with relatively small value but fairly large number of items and
3. B, which stands mid-way between category of A&C

Category A needs the most rigorous control, C requires minimum attention and
B deserves less but more than C.

Economic order quantity;

Economic Order Quantity is the inventory management technique for

determining optimum order quantity, which minimizes the total of its order and
carrying costs. This is the quantity of materials which can be purchased at
minimum costs. Generally economic order quantity is the point at which
inventory carrying costs are equal to order costs. In determining economic
order quantity it is assumed that cost of managing inventory is made up solely
of two parts i.e., ordering costs and carrying costs.

Ordering Costs. These are the costs which are associated with the purchasing
or ordering of materials.

Carrying Costs. These are the cost for holding the inventories. These costs will
not be incurred if inventories are not carried.

Time Series Analysis;

The most important task before economist & business these days is to make
estimates for the future. The first step in making estimates for the future
consists of gathering information from the past. Such data are generally
referred to as “time series”. In the analysis of time series , time is the most
important factor because the variable is related to time, which may be either
year, month, day, hour or even minutes or seconds. A time series may be
defined as “a collection of magnitudes belonging to different time periods of
some variables or composite of variables, such as production of steels, per
capita income and gross national product.

Utility of time series analysis:-

1. It helps in understanding past behaviour by observing data over a period

of time and the changes that have taken place in that period. It is helpful
in predicting the future behaviour.
2. It helps in planning future operations if the regularity of occurrence of
any feature over a sufficient long period could be clearly established
within limits.
3. Time series helps in evaluating current accomplishments by comparing
the actual performance with the expected performance & the cause of
variation analyzed.

Before beginning the actual work of analyzing a time series, it is necessary

to make certain preliminary adjustments in the raw data.

Procedure followed:-

Following is the procedure adopted in time series analysis to forecast the

value of any variable for a future period.

The trend line to be obtained is: y= a + bx

The normal equations are:-

ε Y = na + bεX -------- (1)

ε XY = a εX + b εX2 ------------(2)

where bεX and aεX are zero

The variables a and b are obtained as:-

From (1) a = ε Y / n

From (2) b = ε XY / ε X2

Therefore the trend line fitted is: y = a + bX

Where X = (x –Base Year) 2

 CHAPTER 6
DATA ANALYSIS &INTERPRETATION

ABC ANALYSIS
6.1.1 ABC CLASSIFICATION FOR APRIL 2009
S.No ITEMS ITEMS UNIT COST TOTAL COST % OF COST
1 A 4 C.I. CASTINGS 10750 729.198 7838879 29.55327
2 A 7 BOUGHTOUT&FASTENERS 187133 23.48 4393878 16.56531
3 A 6 BALL BEARINGS 1786 2267.696 4050105 15.26926
61.38784
4 B 3 STEEL CASTINGS 736 4265.813 3139638 11.83672
5 B 2 S.S. RODS 20943.5 107.329 2247840 8.474556
6 B 8 S.F.COMPONENTS/C.I. 1567 1284.943 2013506 7.591096
7 B 5 NON FERROUS CASTINGS 346 3032.072 1049097 3.955189
8 B 9 S.F.COMPONENTS/C.I. 4892 163.684 800742.1 3.018869
34.87643
9 C 1 S.F.COMPONENTS/C.I/NON-FER 409 688.042 281409.2 1.060938
10 C 10 M.S.RODS 4622.29 46.325 214127.6 0.80728
11 C 13 FINESHED COMPONENT/NON- 37 4827.464 178616.2 0.673399
FER
12 C 14 SUB ASSUMBLIES 538 315.688 169840.1 0.640312
13 C 12 FINISHED COMPONENT/C.I 2556 41.946 107214 0.404206
14 C 11 FINISHED COMP/STEEL 196 202.448 39679.81 0.149596
3.735732
236512 26524571
 6.2.1 PIE CHART FOR ABC MATERIALS ON APRIL 2009

INTERPRETATION:

• From the above table the 4,7,6th items are come under the ‘A’ classification
which takes the major portions of 61.387 %.
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the total
cost of those items are 34.876 %.
• Items 1,10,13,14,12,11th are comes under the ‘C’ classification because of its
low cost percentage of 3.73%

6.1.2 ABC CLASSIFICATION FOR MAY 2009

S.No ITEM DESCRIPTION OF GOODS UNIT COST TOTAL COST % OF COST
1 A 4 C.I. CASTINGS 10395 726.872 7555834 28.22817
2 A 7 BOUGHTOUT&FASTENERS 188007 24.816 4665577 17.43033
3 A 6 BALL BEARINGS 1625 2405.34 3908678 14.6026
60.2611
4 B 3 STEEL CASTINGS 741 4354.19 3226455 12.05385
5 B 2 S.S. RODS 22539.8 111.556 2514445 9.393827
6 B 8 S.F.COMPONENTS/C.I. 1560.8 1319.258 2059098 7.692674
7 B 5 NON FERROUS CASTINGS 378 2806.099 1060705 3.962736
8B 9 S.F.COMPONENTS/C.I. 4714 165.473 780039.7 2.914185

9 B 1 S.F.COMPONENTS/C.I/NON-FER 389 497.263 193435.3 0.722663

36.01727
10 C 10 M.S.RODS 4896.59 53.267 260826.7 0.974434
11 C 13 FINESHED COMPONENT/NON-FER 52 3516.158 182840.2 0.683081
12 C 14 SUB ASSUMBLIES 555 292.852 162532.9 0.607214
13 C 12 FINISHED COMPONENT/C.I 2873 49.138 141173.5 0.527416
14 C 11 FINISHED COMP/STEEL 194 285.35 55357.9 0.206814
 3.721622
238920 26766998

6.2.2 PIE CHART FOR ABC MATERIALS ON MAY 2009

INTERPRETATION:

• From the above table it is inferred that the ‘A’ classification has only 60%
of total cost percentage which is 1% less then last month.
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 36%.
• Items 1,10,13,14,12,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 4%.

S.No ITEM DESCRIPTION OF GOODS UNIT COST TOTAL COST % OF COST

1 A 4 C.I. CASTINGS 10143 759.229 7700860 28.21069
2 A 7 BOUGHTOUT&FASTENERS 193550 24.837 4807201 17.6103
3 A 6 BALL BEARINGS 1736 2291.102 3977353 14.5703
60.39129
4 B 3 STEEL CASTINGS 759 4628.552 3513071 12.86949
5 B 2 S.S. RODS 19330 111.04 2146403 7.862955
6 B 8 S.F.COMPONENTS/C.I. 1672 1220.491 2040661 7.475588
7 B 5 NON FERROUS CASTINGS 347 3006.94 1043408 3.822335
8 B 9 S.F.COMPONENTS/C.I. 4891 182.6 893096.6 3.271696
35.30206
9 C 10 M.S.RODS 8396 48.113 403956.7 1.479822
10 C 1 S.F.COMPONENTS/C.I/NON-FER 375 556.26 208597.5 0.764159
11 C 13 FINESHED COMPONENT/NON-FER 68 2765.952 188084.7 0.689014
12 C 14 SUB ASSUMBLIES 574 307.323 176403.4 0.646222
13 C 12 FINISHED COMPONENT/C.I 2860 53.538 153118.7 0.560922
14 C 11 FINISHED COMP/STEEL 201 226.126 45451.33 0.166503
 4.306641
244902 27297666

6.1.3 ABC CLASSIFICATION FOR JUNE 2009

6.2.3 PIE CHART FOR ABC MATERIALS ON JUNE 2009

INTERPRETATION:

• From the above table the 4,7,6th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 61%.
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 35%.
• Items 1,10,13,14,12,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 4%.
• There is no similar difference in cost for this month.

S.No ITEM DEASCRIPTION OF GOODS UNIT COST TOTAL COST % OF COST

1 A 4 C.I. CASTINGS 10305 789.754 8138415 28.6954
2 A 7 BOUGHTOUT&FASTENERS 197424 25.069 4949222 17.45056
3 A 6 BALL BEARINGS 1786 2289.27 4088636 14.4162
60.56217
4 B 3 STEEL CASTINGS 795 4162.897 3309503 11.66904
5 B 2 S.S. RODS 18640 117.331 2187050 7.711363
6 B 8 S.F.COMPONENTS/C.I. 1802 1168.25 2105187 7.422719
7 B 5 NON FERROUS CASTINGS 374 3554.147 1329251 4.686833
8 B 9 S.F.COMPONENTS/C.I. 5187 205.599 1066442 3.760189
27.82743
9 C 1 M.S.RODS 7736 49.237 380897.4 1.343014
10 C 10 S.F.COMPONENTS/C.I/NON-FER 466 550.683 256618.3 0.904816
11 C 13 FINESHED COMPONENT/NON-FER 73 2565.506 187281.9 0.660341
12 C 14 SUB ASSUMBLIES 570 276.525 157619.3 0.555753
13 C 12 FINISHED COMPONENT/C.I 2797 55.657 155672.6 0.548889
14 C 11 FINISHED COMP/STEEL 208 238.443 49596.14 0.174872
4.187685
248163 28361392

6.1.4 ABC CLASSIFICATION FOR JULY 2009

6.2.4 PIE CHART FOR ABC MATERIALS ON JULY 2009

INTERPRETATION:

• From the above table the 4,7,6th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 60%
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 35%.
• Items 10,1,13,14,12,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 5%.

6.1.5 ABC CLASSIFICATION FOR AUGUST 2009

S.No ITEMS DESCRIPTION OF GOODS UNIT COST TOTAL % OF COST
COST
1 A 4 C.I. CASTINGS 9152 833.715 7630160 27.71207
2 A 7 BOUGHTOUT&FASTENERS 197391 26.163 5164341 18.75643
3 A 3 STEEL CASTINGS 821 4261.39 3498601 12.70661
58.99342
4 B 6 BALL BEARINGS 1631 2114.392 3448573 12.52492
5 B 2 S.S. RODS 18297 121.72 2227111 8.088671
6 B 8 S.F.COMPONENTS/C.I. 709 3080.686 2184206 7.932846
7 B 5 NON FERROUS CASTINGS 346 3582.217 1239447 4.501563
8 B 9 S.F.COMPONENTS/C.I. 5033 202.861 1020999 3.70818
36.93787
9 C 1 M.S.RODS 6344 50.56 320752.6 1.164945
10 C 10 S.F.COMPONENTS/C.I/NON-FER 468 555.811 260119.5 0.944731
11 C 13 FINESHED COMPONENT/NON- 71 2560.824 181818.5 0.660349
FER
12 C 12 SUB ASSUMBLIES 565 271.914 153631.4 0.557976
13 C 14 FINISHED COMPONENT/C.I 2716 60.267 163685.2 0.59449
14 C 11 FINISHED COMP/STEEL 187 215.291 40259.42 0.146219
2.916244
240306 27533705

6.2.5 PIE CHART FOR ABC MATERIALS ON AUGUEST 2009

INTERPRETATION:

• From the above table the 4,7,3th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 60%.
• Items 6,2,8,5,9th are comes under the ‘B’ classification because consists of

37% which is higher than the past month cost.

• Items 10,1,13,12,14,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 3%

6.1.6 ABC CLASSIFICATION FOR SEPTEMBER

2009
S.No ITEM DESCRIPTION OF GOODS UNIT COST TOTAL %OF TCOST
COST
1 A 7 BOUGHTOUT&FASTENERS 194630 31.726 6174831 24.7486
2 A 4 C.I. CASTINGS 8424 577.882 4868078 19.51116
3 A 6 BALL BEARINGS 1535 2069.323 3176411 12.73099
56.99074
4 B 3 STEEL CASTINGS 799 3420.818 2733234 10.95474
5 B 2 S.S. RODS 17810 122.431 2180496 8.739384
6 B 8 S.F.COMPONENTS/C.I. 1819 1182.573 2151100 8.621566
7 B 5 NON FERROUS CASTINGS 418 3635.722 1519732 6.091054
8 B 9 S.F.COMPONENTS/C.I. 5113 208.827 1067732 4.27945
38.6862
9 C 1 M.S.RODS 5150 51.275 264066.3 1.058372
10 C 10 S.F.COMPONENTS/C.I/NON-FER 437 544.111 237776.5 0.953003
11 C 13 FINESHED COMPONENT/NON- 71 2576.75 182949.3 0.733257
FER
12 C 14 SUB ASSUMBLIES 571 287.258 164024.3 0.657406
13 C 12 FINISHED COMPONENT/C.I 2581 63.011 162631.4 0.651823
14 C 11 FINISHED COMP/STEEL 204 329.24 67164.96 0.269196
4.323058
236981 24950227

6.2.6 PIE CHART FOR ABC MATERIALS ON SEPTEMBER 2009

INTERPRETATION:

• From the above table the 4,7,3th items are come under the ‘A’ classification
and it as only 57% of cost which is 3 times lower when compare with past
month.
• Items 6,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 39%.
• Items 10,1,13,12,14,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 4%.

6.1.7ABC CLASSIFICATION FOR OCTOBER 2009

S.No DESCRIPTION OF GOODS UNIT COST TOTAL %OF TCOST
ITEM COST
1 A 7 BOUGHTOUT&FASTENERS 197808 31.116 6154994 24.63024
2 A 4 C.I. CASTINGS 8286 601.181 4981386 19.93385
3 A 6 BALL BEARINGS 1510 1959.834 2959349 11.84233
56.40642
4 B 3 STEEL CASTINGS 814 3099.157 2522714 10.09506
5 B 2 S.S. RODS 18171 119.363 2168945 8.679398
6 B 8 S.F.COMPONENTS/C.I. 1854 1238.511 2296199 9.188627
7 B 5 NON FERROUS CASTINGS 396 3479.171 1377752 5.513305
8 B 9 S.F.COMPONENTS/C.I. 4976 252.89 1258381 5.035621
38.51201
9 C 1 M.S.RODS 8777 47.099 413387.9 1.654241
10 C 10 S.F.COMPONENTS/C.I/NON-FER 483 610.744 294989.4 1.180449
11 C 13 FINESHED COMPONENT/NON- 71 2661.656 188977.6 0.756225
FER
12 C 14 SUB ASSUMBLIES 545 324.018 176589.8 0.706654
13 C 12 FINISHED COMPONENT/C.I 2350 63.071 148216.9 0.593115
14 C 11 FINISHED COMP/STEEL 190 251.051 47699.69 0.190878
5.081563
246231 24989581

6.2.7 PIE CHART FOR ABC MATERIALS ON OCTUMBER 2009

INTERPRETATION:

• From the above table the 4,7,6th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 56%.
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 39%.
• Items 10,1,13,12,14,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 5%.
 6.1.8 ABC CLASSIFICATION FOR NOVEMBER 2009
S.No DESCRIPTION OF GOODS UNIT COST TOTAL %OF
ITEM COST TCOST
1 A 7 BOUGHTOUT&FASTENERS 198807 2.932 582902.1 19.69101
2 A 4 C.I. CASTINGS 7649 680.84 5207745 24.75528
3 A 6 BALL BEARINGS 1607 1982.29 3185540 12.04484
56.49113
4 B 3 STEEL CASTINGS 837 3640.807 3047355 11.52235
5 B 2 S.S. RODS 16003 115.551 1849163 6.991868
6 B 8 S.F.COMPONENTS/C.I. 1925 1167.862 2248134 8.500420
7 B 5 NON FERROUS CASTINGS 412 3724.5 1534494 5.802075
8 B 9 S.F.COMPONENTS/C.I. 4883 301.41 1471785 5.564966
38.38168
9 C 1 M.S.RODS 7662 46.46 355976.5 1.737902
10 C 10 S.F.COMPONENTS/C.I/NON-FER 479 616.2 295159.8 1.44099
11 C 14 SUB ASSUMBLIES 509 507.53 258332.8 1.261198
12 C 13 FINESHED COMPONENT/NON- 74 2536.9 187730.6 0.916514
FER
13 C 12 FINISHED COMPONENT/C.I 2193 70.6 154825.8 0.75587
14 C 11 FINISHED COMP/STEEL 213 488.155 103977 0.507623
6.620097
241060 20483121

6.2.8 PIE CHART FOR ABC MATERIALS ON NOVEMBER 2009

INTERPRETATION:
 • From the above table the 4,7,6th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 72.822.
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 49.557.
• Items 10,1,13,12,14,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 6.620.

6.1.9 ABC CLASSIFICATION FOR DECEMBER 2009

S.No DESCRIPTION OF GOODS UNIT COST TOTAL %OF
ITEM COST TCOST
1 A 7 BOUGHTOUT&FASTENERS 195553 34 6648802 23.06665
2 A 4 C.I. CASTINGS 7341 693.158 5088473 17.65341
3 A 3 STEEL CASTINGS 828 4171.245 3453791 11.98222
52.70228
4 B 6 BALL BEARINGS 1616 1914 3093024 10.73061
5 B 2 S.S. RODS 19518 121.81 2377488 8.248204
6 B 8 S.F.COMPONENTS/C.I. 1890 1231.086 2326753 8.07219
7 B 5 NON FERROUS CASTINGS 543 3330.59 1808510 6.274255
8 B 9 S.F.COMPONENTS/C.I. 5583 225.15 1257012 4.360946
37.68621
9 C 10 S.F.COMPONENTS/C.I/NON-FER 466 623.116 290372.1 1.007386
10 C 1 M.S.RODS 6254 49.636 310423.5 1.076951
11 C 13 FINESHED COMPONENT/NON- 105 70.403 7392.315 0.025646
FER
12 C 14 SUB ASSUMBLIES 498 1962.474 977312.1 3.390583
13 C 12 FINISHED COMPONENT/C.I 2233 480.156 1072188 3.719737
14 C 11 FINISHED COMP/STEEL 231 488.155 112763.8 0.391211
9.611514
242659 28824305

6.2.9 PIE CHART FOR ABC MATERIALSON DECEMBER 2009

INTERPRETATION:

• From the above table the 4,7,3th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 53%.
• Items 6,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 38%.
• Items 10,1,13,12,14,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 9%.

6.1.10 ABC CLASSIFICATION FOR JANUARY 2009

S.No DESCRIPTION OF GOODS UNIT COST TOTAL %OF
ITEM COST TCOST
1 A 7 BOUGHTOUT&FASTENERS 199616 33.55 6697117 25.70938
2 A 4 C.I. CASTINGS 7208 664.576 4790264 18.38922
3 A 6 BALL BEARINGS 1464 1934.19 2831654 10.87036
54.96896
4 B 3 STEEL CASTINGS 854 2551.452 2178940 8.364674
5 B 2 S.S. RODS 17014 122.672 2087141 8.012271
6 B 8 S.F.COMPONENTS/C.I. 1909 1376.85 2628407 10.09012
7 B 5 NON FERROUS CASTINGS 503 4165.144 2095067 8.042698
8 B 9 S.F.COMPONENTS/C.I. 5545 247.32 1371389 5.26459
39.77435
9 C 10 S.F.COMPONENTS/C.I/NON-FER 471 728.88 343302.5 1.317895
10 C 1 M.S.RODS 5366 47.731 256124.5 0.98323
11 C 13 FINESHED COMPONENT/NON- 83 2444.55 202897.7 0.778898
FER
12 C 14 SUB ASSUMBLIES 495 563.6 278982 1.070977
13 C 12 FINISHED COMPONENT/C.I 2201 72.22 158956.2 0.610213
14 C 11 FINISHED COMP/STEEL 236 546.9 129068.4 0.495477
5.256689
242965 26049311
 6.2.10 PIE CHART FOR ABC MATERIALS ON JANUARY 2009

INTERPRETATION:

• From the above table the 4,7,6th items are come under the ‘A’ classification
because the percentage of the total cost of those items are 55%.
• Items 3,2,8,5,9th are comes under the ‘B’ classification because the
percentage of the total cost of those items are 40%.
• Items 10,1,13,12,14,11th are comes under the ‘C’ classification because the
percentage of the total cost of those items are 5%.

7.1 EOQ ANALYSIS

7.1.1 EOQ FOR C.I. CASTINGS
RATE S.No MONTH UNIT ORDER COST STORAGE COST EOQ
A 1 APRIL 10750 36.46 14.584 231.84
A 2 MAY 10395 36.341 14.536 227.983
A 3 JUNE 10143 37.965 15.186 225.26
A 4 JULY 10305 39.488 15.795 226.993
A 5 AUGUST 9152 41.686 16.686 213.918
A 6 SEPTEMBER 8424 28.894 11.558 205.228
A 7 OCTOMBER 8286 30.059 12.024 203.54
A 8 NOVEMBER 7649 34.042 13.042 195.562
A 9 DECEMBER 7341 34.658 13.863 191.587
A 10 JANUARY 7208 33.229 13.291 189.846
 7.2.1 LINE CHART FOR ‘A’ CLASS ITEMS

INTERPRETATION:

In this above table the economic order quantity of C.I. Casting had been
declain as a month pass, This shows that if there is reduce in the unit purchase,
order & carrying cost. There will be reduction in the level of EOQ.

7.1.2 EOQ FOR BOUGHTOUT&FASTENERS

RATE S.No MONTH UNIT ORDER COST STORAGE COST EOQ

A 1 APRIL 187132 1.174 0.47 966.88
A 2 MAY 188006 1.241 0.496 969.94
A 3 JUNE 193550 1.242 0.497 983.544
A 4 JULY 197424 1.253 0.501 993.737
A 5 AUGUST 197391 1.308 0.523 993.646
A 6 SEPTEMBER 194630 1.586 0.634 986.794
A 7 OCTOMBER 197808 1.556 0.622 994.824
A 8 NOVEMBER 198807 1.647 0.659 996.861
A 9 DECEMBER 195553 1.7 0.68 988.82
A 10 JANUARY 199616 1.678 0.671 999.188
 7.2.2 LINE CHART FOR
BOUGHTOUT&FASTENERS

INTERPRETATION:

From this above table the EOQ OF Boughtout & Fasteners were increased
and in the middle there is an fluctuation this shows that the demand for the this
product been changing according to the needs.

7.1.3 EOQ FOR BALL BEARINGS

RATE S.No MONTH UNIT ORDER COST STORAGE COST EOQ
A 1 APRIL 1786 113.385 45.354 94.499
A 2 MAY 1625 120.267 48.107 90.138
A 3 JUNE 1736 114.555 45.822 93.166
A 4 JULY 1786 114.463 45.785 94.499
B 5 AUGUST 1631 105.72 42.288 90.305
A 6 SEPTEMBER 1535 103.466 41.386 87.607
A 7 OCTOMBER 1510 97.969 39.188 86.89
A 8 NOVEMBER 1607 99.114 36.646 93.235
B 9 DECEMBER 1616 95.704 38.281 89.889
A 10 JANUARY 1464 96.709 38.684 85.557

7.2.3 LINE CHART FOR BALL BEARING

INTERPRETATION:

From the above table the Order Quantity for BALL BEARING has been
reducing from 94.5 to 85.56.

7.1.4 EOQ FOR STEEL CASTINGS

RATE S.No MONTH UNIT ORDER COST STORAGE COST EOQ
B 1 APRIL 736 213.291 85.316 60.661
B 2 MAY 741 217.709 87.084 60.865
B 3 JUNE 759 231.428 92.571 61.624
B 4 JULY 795 208.145 83.258 63.048
A 5 AUGUST 821 213.069 85.228 64.07
A 6 SEPTEMBER 799 171.041 68.416 63.206
B 7 OCTOMBER 814 154.958 61.983 63.797
B 8 NOVEMBER 837 182.04 72.816 64.691
A 9 DECEMBER 828 208.562 83.425 64.343
B 10 JANUARY 854 127.573 51.029 65.345
 7.2.4 LINE CHART FOR STEEL CASTINGS

INTERPRETATION:

The economic order quantity for steel castings is creeping up in the month
of April to January due to high consumption of materials.

7.1.5 EOQ FOR S.S RODA

RATE S.No MONTH UNIT ORDER COST STORAGE COST EOQ
B 1 APRIL 20943 5.366 2.146 323.631
B 2 MAY 22539 5.578 2.231 335.715
B 3 JUNE 19330 5.552 2.221 310.871
B 4 JULY 18640 5.866 2.347 305.248
B 5 AUGUST 18297 6.086 2.434 302.49
B 6 SEPTEMBER 17810 6.121 2.449 298.375
B 7 OCTOMBER 18171 5.967 2.387 301.409
B 8 NOVEMBER 16003 5.777 2.311 282.857
B 9 DECEMBER 19518 6.09 2.436 312.39
B 10 JANUARY 17014 6.134 2.453 291.703

7.2.5 LINE CHART FOR S.S RODS

INTERPRETATION:
 From the above table the material S.S RODS order quantity demand is
coming down from 323.631 to 291.703

TREND ANALYSIS FOR TOP 5 RATED ITEMS

8.1.1 TREND ANALYSIS OF BOUGHT OUT& FASTERS

MONTH X Y XY X^2 Y^2

APRIL -4 966.885 -3867.54 16 934866.6
MAY -3 969.944 -2909.83 9 940791.4
JUNE -2 983.544 -1967.09 4 967358.8
JULY -1 993.737 -993.737 1 987513.2
AUGUST 0 993.646 0 0 987332.4
SEPTEMBER 1 986.794 986.794 1 973762.4
OCTOMBER 2 994.824 1989.648 4 989674.8
NOVEMBER 3 996.861 2990.583 9 993731.9
DECEMBER 4 988.821 3955.284 16 977767
JAN 5 999.188 4995.94 25 998376.7
9874.244 5180.052 85 9751175

Y=a+x a=987.424

a=Σy/n
b = Σxy/ Σx^2 b =60.942
 8.2.1 BAR DIAGRAM FOR BOUGHT OUT& FASTERS

INTERPRETATION:

FEATURE REQUIREMENT UNITS

FEBERARY 1353.076
MARCH 1414.018
APRIL 1474.96
MAY 1535.902
JUNE 1596.844
JULY 1718.728
AUGUST 1779.67
SEPTEMBER 1840.612
OCTOBER 1901.554
NOVEMBER 1962.496
DECEMBER 2023.438

8.1.2 FUTURE REQUIREMENTS OF CI CASTING

MONTH X Y XY X^2 Y^2
APRIL -4 231.84 -927.36 16 53749.79
MAY -3 227.983 -683.949 9 51976.25
JUNE -2 225.26 -450.52 4 50742.07
JULY -1 226.993 226.993 1 51525.82
AUGUST 0 213.918 0 0 45760.91
SEPTEMBER 1 205.228 205.228 1 42118.53
OCTOMBER 2 203.54 407.08 4 41428.53
NOVEMBER 3 195.562 586.686 9 38244.5
DECEMBER 4 191.587 766.348 16 36705.58
JAN 5 189.846 949.23 25 36041.5
2111.757 625.75 85 448293.5
 Y=a+bx

a=ΣY/n a=211.176

b = Σxy/ b =
Σx^2 7.362

8.2.2 BAR DIAGRAM FOR CI CASTING

INTERPRETATION:

FEATURE REQUIREMENT UNITS

FEBERARY 255.348
MARCH 262.71
APRIL 270.072
MAY 277.434
JUNE 284.796
JULY 292.158
AUGUST 299.52
SEPTEMBER 306.882
OCTOBER 314.244
NOVEMBER 321.606
DECEMBER 328.968
8.1.3 FUTURE REQUIREMENTS OF SS ROAD
MONTH X Y XY X^2 Y^2
APRIL -4 323.631 -1294.52 16 104737
MAY -3 335.715 -1007.15 9 112704.6
JUNE -2 310.871 -621.742 4 96640.78
JULY -1 305.248 -305.248 1 93176.34
AUGUST 0 302.49 0 0 91500.2
SEPTEMBER 1 298.375 298.375 1 89027.64
OCTOMBER 2 301.409 602.818 4 90847.39
NOVEMBER 3 282.857 848.571 9 80008.08
DECEMBER 4 312.39 1249.56 16 97587.51
JAN 5 291.703 1458.515 25 85090.64
3064.689 1229.18 85 941320.2

Y=a+bx

a =Σy/n a=306.469

b = Σxy/ Σx^2 b =14.461

 8.2.3 BAR DIAGRAM FOR SS ROAD

INTERPRETATION:

FEATURE REQUIREMENT UNITS

FEBERARY 393.265
MARCH 407.726
APRIL 422.187
MAY 436.648
JUNE 451.109
JULY 465.57
AUGUST 480.031
SEPTEMBER 494.492
OCTOBER 508.953
NOVEMBER 523.414
DECEMBER 537.875

8.1.4 FUTURE REQUIREMENTS OF STEEL

CASTING
MONTH X Y XY X^2 Y^2
APRIL -4 60.661 -242.644 16 3679.757
MAY -3 60.868 -182.604 9 3704.913
JUNE -2 61.624 -123.248 4 3797.517
 JULY -1 63.048 -63.048 1 3975.05
AUGUST 0 64.07 0 0 4104.965
SEPTEMBER 1 63.206 63.206 1 3994.998
OCTOMBER 2 63.797 127.594 4 4070.057
NOVEMBER 3 64.691 194.073 9 4184.925
DECEMBER 4 64.343 257.372 16 4140.022
JAN 5 65.345 326.725 25 4269.969
631.653 357.426 85 39922.17

Y=a+x

a=Σy/n a=63.165

b = Σxy/ Σx^2 b =4.205

8.2.4 BAR DIAGRAM FOR STEEL CASTING

INTERPRETATION:
 FEATURE REQUIREMENT UNITS
FEBERARY 88.395
MARCH 92.6
APRIL 96.805
MAY 101.01
JUNE 105.215
JULY 109.42
AUGUST 113.625
SEPTEMBER 117.83
OCTOBER 122.035
NOVEMBER 126.24
DECEMBER 130.445

8.1.5 FUTURE REQUIREMENTS OF BALL

BEARING
MONTH X Y XY X^2 Y^2
APRIL -4 94.499 -377.996 16 8930.061
MAY -3 90.138 -270.414 9 8124.859
JUNE -2 93.166 -186.332 4 8679.904
JULY -1 94.499 -94.499 1 8930.061
AUGUST 0 90.305 0 0 8154.993
SEPTEMBER 1 87.607 87.607 1 7674.986
OCTOMBER 2 86.89 173.78 4 7549.872
NOVEMBER 3 93.235 279.705 9 8692.765
DECEMBER 4 89.889 359.556 16 8080.032
JAN 5 85.557 427.785 25 7320
905.785 399.192 85 82137.53
 Y=a+bx

a =Σy/n a=90.579

b = Σxy/ Σx^2 b =4.696

8.2.5 BAR DIAGRAM FOR BALL BEARING

INTERPRETATION:

FEATURE REQUIREMENT UNITS

FEBERARY 118.755
MARCH 123.451
APRIL 128.147
MAY 132.843
JUNE 137.539
JULY 142.235
AUGUST 146.931
SEPTEMBER 151.627
OCTOBER 156.323
NOVEMBER 161.019
DECEMBER 165.715
FINDINGS;
From the above data verification I found the following facts;

• In the month April, March, June, July, September & November 2009
items comes under the ‘A’ classification are C.I. CASTINGS,
BOUGHTOUT & FASTENERS, BALL BEARING which consist of
mean percentage of around 60%.

• In the month of August & December there has been some light changes
in ‘A’ class classification due to increase in the cost of STEEL
CASTINGS its percentage of also increased from 10% to 12% in this
month’s respectively.

• Item like S.S. RODS, S.F.COMPONENTS & NON FEROUS

CASTING are comes under ‘B’ classification with the cost percentages
of around 12%.

• Finally ‘C’ classification items are M.S.RODS, FINESHED

COMPONENTS & SUB ASSUMBLIES which as low cost percentage
which are around 2 to 4% respectively.

• For the month April to January the EOQ for C.I CASTING is reducing
from 231.8 to 189.8.

• For the month of April to January BOUGHTOUT & FASTENERS order

quality is moving upwards from 966.9 to 999.2.
• In the month of May & October the order quantity is raising from 90.14
to 94.31 but finally it demand falls its EOQ also falls to 85.56.

• For the month April to January material STEEL CASTINGS order

quantity is peeping up from 60.661 to 65.345.

• For the month of April to January the material S.S RODS order
quantity demand is coming down from 323.631 to 291.703.

• In the future the requirements for BOUGHT OUT& FASTERS will be

increase the order quantity for the next on coming months.

• In the future the requirements for C.I. CASTINGS will be increase the
order quantity in the ratio of 10 for the future months.

• In the future the requirements for S.S RODS will be increase the order
quantity gradually from 363.265 to 523.414 in the future.

• In the future the requirements for STEEL CASTING will be increase the
order quantity from 88.396 to 130.445 in future months.

• In the future the requirements for BALL BEARING will be increase the
order quantity for the next on coming months.
SUGGESTIONS;

Most of the findings reveal that the demand for rare materials will have
more in future months, some of the suggestions regarding this are

• The usage of rare materials should be made most efficiently and

effectively.
• Proper planning should be made on to reduce the cost of purchasing
materials in future period.
• If possible order should be made in bulk quantity to avoid the risk of
price fluctuation.

CONCLUSION;

Managing the inventories is one of the challenging job it includes lot of

predictions and care in handling those materials.

This project reveals that The Department of Inventory Management and

Financial Management doing it in wonderful manner by involving themselves
in lot of strategic analysis regarding managing and controlling the items.

It also reveals that the present conditions will become more effective if the
management taken into consideration some of the above suggestions.
REFERACE;

• The First Steps to Inventory Management

• Kieso, , DE; Warfield, TD; Weygandt, JJ (2007). Intermediate
Accounting 8th Edition.
• Professional Inventory Management
• Tempelmeier, Horst, Inventory Management in Supply Networks, 2006,
• Business Inventories monthly report
• Inventory Optimisation
• A very basic guide to setting up an inventory system.
• Optimizing Retail Inventory Service Level & Turnover in Excel
• Cannella S., Ciancimino E. (2010) Up-to-date Supply Chain
Management.

WEBSITES;

http://www.specialinvestor.com/terms/1072.html,

http://www.inventorymatters.co.uk.noisegate2.webhoster.co.uk//userFiles/extending_the_
pareto_principle.pdf

http://www.inventorymatters.co.uk.noisegate2.webhoster.co.uk//userFiles/mk_kcurve_ca
se_study.pdf

^aspenONE® Supply & Distribution for Refining & Marketing

WWW.BESTCROMPTON.COM