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INVENTORY MANAGEMENT APEX AUTO LTD.,
EXECUTIVE SUMMARY
G C T M Industry in India has trav!d ar !ss, n"# India is "n "$ th %ain &"tt"n
%anu$a&turin' ( )*"rtin' &"ttn in th in india. Th &"ttn in India is #ith %a+"r *!ayrs and
'ada' &" "*rativ %i!! Ltd is "n "$ !ar'st %anu$a&turr "$ &"ttn in India.
Invnt"ry is a &ntra! *r"&ss in Manu$a&turin' Unit. This Invnt"ry is &"n&rns t" a!!
d*art%nts i.., $r"% P!annin' D*art%nt t" !!in' D*art%nt in #hi&h it *asss th"u'hPr"du&ti"n D*art%nt, -R D*art%nt, L"'isti& D*art%nt, inan& D*art%nt, C"stin'
D*art%nt, and C"%%r&ia! D*art%nt t&. " %ana'in' "$ Invnt"ry is havin' #id &"*
in %anu$a&turin' C"%*any.
INVENTORY MANAGEMENT
Statement of the problem
/Invnt"ry %ana'%nt and its $$&ts "n #"r0in' &a*ita!1
Management problem
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Mana'%nt is $!in' that thir hu' a%"unt "$ #"r0in' &a*ita! is h!d u*, s" th
%ana'%nt #ants t" 0n"# #hthr thy &an rdu& it thr"u'h invnt"ry %ana'%nt.
Reear!h problem
As a4"v statd %ana'%nt *r"4!% th study #as &arrid t" 0n"# h"# invnt"ry
%ana'%nt h!*s in *r"*r %aintnan& "$ #"r0in' &a*ita!, s" th tit! "$ this study is /
invnt"ry %ana'%nt and its $$&t "n #"r0in' &a*ita!1
Ob"e!t#$e of the t%&'
3. T" study th invnt"ry %ana'%nt 4asd "n th rati"s
5. T" $ind "ut th i%*a&t "$ invnt"ry "n #"r0in' &a*ita!.
6. T" study th invnt"ry %ana'%nt and its $$&tiv &"ntr"! thr"u'h vari"us t&hni7us.
8. T" su''st th %asurs $"r i%*r"vin' th invnt"ry !v!.
S!ope of the t%&'
Invnt"ry %ana'%nt 4in' a vry i%*"rtant &"n&*t in a!! th &"%*any9s havin' a
v"id &"vra' "$tn &a!!s $"r th %ana'ria! attnti"n. In th %"drn ti%s invnt"ry
%ana'%nt has 4&"% th int'ra! *art "$ th a!! &"%*anis. " a!! th $ir% 'ivs s*&ia!
i%*"rtan& $"r invnt"ry %ana'%nt. Th %a+"r "4+&tiv "$ th study is t" )a%in th
$$&tivnss "$ invnt"ry %ana'%nt syst% ad"*td 4y A0ash industry: th study %ain!y
$"&uss "n th t&hni7us usd 4y th &"%*any t" &"ntr"! th invnt"ry. Th study a!s" &"vrs
"thr aras !i0 th $inan&ia! rati"s $"r th *ri"d "$ 5;;8 t" 5;;
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INVENTORY MANAGEMENT APEX AUTO LTD.,
.r#mar' ,ata*
3. Intra&ti"n #ith *rs"nn! "$ th &"%*any5. Dir&t O4srvati"n in Invnt"ry
Se!on&ar' ,ata*
3. 2a!an& ht
5. Turn"vr tat%nts
6. M"nth!y Invnt"ry tat%nts
8. C"%*any R&"rds
=. Intrnt
Tool Ue&>
M?E)&! has 4n usd $"r &a!&u!ati"ns.
IN,USTRY .RO/I-E
/A(RICATION
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INVENTORY MANAGEMENT APEX AUTO LTD.,
@hn usd as an industria! tr%, a**!is t" th 4ui!din' "$ %a&hins, stru&turs and "thr
7ui*%nt, 4y &uttin', sha*in' and ass%4!in' &"%*"nnts %ad $r"% ra# %atria!s. %a!!4usinsss that s*&ia!i in %ta! ar &a!!dfab shops.
t! $a4ri&ati"n sh"*s and %a&hin sh"*s hav "vr!a**in' &a*a4i!itis, 4ut $a4ri&ati"n
sh"*s 'nra!!y &"n&ntrat "n th %ta! *r*arati"n, #!din' and ass%4!y as*&t #hi! th
%a&hin sh"* is %"r &"n&rnd #ith th %a&hinin' "$ *arts.
META- /A(RICATION
Mta! $a4ri&ati"n is a va!u addd *r"&ss that inv"!vs th &"nstru&ti"n "$ %a&hins and
stru&turs $r"% vari"us ra# %atria!s. A $a4 sh"* #i!! 4id "n a +"4, usua!!y 4asd "n th
n'inrin' dra#in's, and i$ a#ardd th &"ntra&t #i!! 4ui!d th *r"du&t.
a4ri&ati"n sh"*s ar %*!"yd 4y &"ntra&t"rs, OEMBs Ori'ina! E7ui*%nt
Manu$a&turrs and VARBs Va!u?addd Rs!!r Ty*i&a! *r"+&ts in&!ud: !""s *arts,
stru&tura! $ra%s $"r 4ui!din's and havy 7ui*%nt, and hand rai!in's and stairs $"r 4ui!din's.
1. ENGINEERING
Th $a4ri&at"r %ay %*!"y "r &"ntra&t "ut st! dtai!rs t" *r*ar sh"* dra#in's, i$ n"t
*r"vidd 4y th &ust"%r, #hi&h th $a4ri&atin' sh"* #i!! us $"r %anu$a&turin'. Manu$a&turin'
n'inrs #i!! *r"'ra% CNC %a&hins as ndd.
2. RA0 MATERIA-S
tandard ra# %atria!s usd 4y %ta! $a4ri&at"rs ar:
2PATIL Page 8
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INVENTORY MANAGEMENT APEX AUTO LTD.,
P!at Mta!
"r%d And E)*andd Mta!
o Tu4 st"&0, CDM
o 7uar st"&0
o &ti"na! %ta!s I 4a%s, @ 4a%s, C?&hann!...
@!din' #ir
-ard#ar
Castin's
ittin's
12 CUTTING AN, (URNING
Th ra# %atria! has t" 4 &ut t" si. This is d"n #ith a varity "$ t""!s.
Th %"st &"%%"n #ay t" &ut %atria! is 4y harin' %ta!#"r0in':
*&ia! 4and sa#s dsi'nd $"r &uttin' %ta! hav hardnd 4!ads and a $d
%&hanis% $"r vn &uttin'. A4rasiv &ut?"$$ sa#s, a!s" 0n"#n as &h"* sa#s, ar si%i!ar t"
%itr sa#s 4ut #ith a st! &uttin' a4rasiv dis0. Cuttin' t"r&hs &an &ut vry !ar' s&ti"ns "$
st! with little effort.
2urn ta4!s ar CNC &uttin' t"r&hs, usua!!y natura! 'as *"#rd. P!as%a and !asr
&uttin' ta4!s, and @atr +t &uttrs, ar a!s" &"%%"n. P!at st! is !"add "n a ta4! and th
*arts ar &ut "ut as *r"'ra%%d. Th su**"rt ta4! is %ad "$ a 'rid "$ 4ars that &an 4 r*!a&d.
"% vry )*nsiv 4urn ta4!s a!s" in&!ud CNC *un&h &a*a4i!ity, #ith a &ar"us! "$ di$$rnt
*un&hs and ta*s. a4ri&ati"n "$ stru&tura! st! 4y *!as%a and !asr &uttin' intr"du&s r"4"ts t"
%"v th &uttin' had in thr di%nsi"ns ar"und th %atria! t" 4 &ut.
2PATIL Page =
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INVENTORY MANAGEMENT APEX AUTO LTD.,
32 /ORMING
-ydrau!i& 4ra0 *rsss #ith v?dis ar th %"st &"%%"n %th"d "$ $"r%in' %ta!. Th
&ut *!at is *!a&d in th *rss and a v?sha*d di is *rssd a *rdtr%ind distan& t" 4nd th
*!at t" th dsird an'!. @in' 4ra0s and hand *"#rd 4ra0s ar s"%ti%s usd.
Tu4 4ndin' %a&hins hav s*&ia!!y sha*d dis and %andr!s t" 4nd tu4u!ar s&ti"ns
#ith"ut 0in0in' th%.
R"!!in' %a&hins ar usd t" $"r% *!at st! int" a r"und s&ti"n.
En'!ish @h! "r @h!in' Ma&hins ar usd t" $"r% &"%*!) d"u4! &urvatur sha*s
usin' sht %ta!.
42 Ma!h#n#ng
a4 sh"*s #i!! 'nra!!y hav a !i%itd %a&hinin' &a*a4i!ity in&!udin': %ta! !aths,
%i!!s, %a'nti& 4asd dri!!s a!"n' #ith "thr *"rta4! %ta! #"r0in' t""!s.
52 0elng
@!din' is th %ain $"&us "$ st! $a4ri&ati"n. Th $"r%d and %a&hind *arts #i!! 4
ass%4!d and ta&0 #!dd int" *!a& thn r?&h&0d $"r a&&ura&y. A $i)tur %ay 4 usd t"
!"&at *arts $"r #!din' i$ %u!ti*! #!d%nts hav 4n "rdrd.
Th #!dr thn &"%*!ts #!din' *r th n'inrin' dra#in's, i$ #!din' is dtai!d,
"r *r his "#n +ud'%nt i$ n" #!din' dtai!s ar *r"vidd.
*&ia! *r&auti"ns %ay 4 ndd t" *rvnt #ar*in' "$ th #!d%nt du t" hat.
Ths %ay in&!ud r?dsi'nin' th #!d%nt t" us !ss #!d, #!din' in a sta''rd $ashi"n,
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INVENTORY MANAGEMENT APEX AUTO LTD.,
usin' a st"ut $i)tur, &"vrin' th #!d%nt in sand durin' &""!in', and strai'htnin' "*rati"ns
a$tr #!din'.
trai'htnin' "$ #ar*d st! #!d%nts is d"n #ith an O)y?a&ty!n t"r&h and is
s"%#hat "$ an art. -at is s!&tiv!y a**!id t" th st! in a s!"#, !inar s#*. Th st! #i!!
hav a nt &"ntra&ti"n, u*"n &""!in', in th dir&ti"n "$ th s#*. A hi'h!y s0i!!d #!dr &an
r%"v si'ni$i&ant #ar*a' usin' this t&hni7u.
t! #!d%nts ar "&&asi"na!!y anna!d in a !"# t%*ratur "vn t" r!iv rsidua!
strsss.
62 /INA- ASSEM(-Y
A$tr th #!d%nt has &""!d it is 'nra!!y sand 4!astd, *ri%d and *aintd. Any
additi"na! %anu$a&turin' s*&i$id 4y th &ust"%r is thn &"%*!td. Th $inishd *r"du&t is
thn ins*&td and shi**d.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
COM.ANY .RO/I-E
Na% "$ th &"%*any > A.EX AUTO -T,
Addrss "$ th -ad "$$i& > M?3 *has? VII, TATA 0andra %ain r"ad, industria!
ara ADITYAPUR, FAM-EDPUR?653;H INDIA.
a)> ;=
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INVENTORY MANAGEMENT APEX AUTO LTD.,
A(OUT ORGANI7ATION
Ape8 A%to -#m#te& 9:If 'o% !an #mag#ne #t; 0e !an fabr#!ate #t2:2 .eronnel ,epartment
This d*art%nt is a!%"st !i0 a hu%an 4rain, sin& it is th hu%an 4in's that "*rat it.
This d*art%nt is &"n&rnd #ith i%*!%ntati"n "$ th *!ans, #ith th #!$ar "$ th *!ant,
#ith th industria! r!ati"ns and a4"v a!! sa$ty and s&urity "$ th *!ant and th #"r0 $"r& is its
*ri% &"n&rns. This d*art%nt !""0s a$tr th su4sidiaris !i0 r&ruit%nt s!&ti"n trainin'
and indu&ti"n, &antn, &"%%unity dv!"*%nt dis&i*!inary a&ti"ns t&., #!$ar, s&urity,
'usth"us, %di&a! $a&i!ity t&., As *r Indian a&t"ris A&t 3H8.
Ta% A*) Pr"$ssi"na!!y %ana'd #ith a ri&h 4!nd "$ )*rin& and nthusiasti&
y"uth, En'inrs, Di*!"%a -"!drs, dra$t %n, ITI #!drs and $ittrs, Gas &uttrs, #"r0rs and
a4ri&ati"n E)*rts.
Lt9s '" thr"u'h th *r"&ss "$ th R&ruit%nt in A*) Aut" Ltd Unit II.
R&ruit%nt is *r"&ss "$ sar&hin' th *r"s*&tin' &andidat, sti%u!atin' and
n&"ura'in' th% t" a**!y $"r th +"4. Th a4"v %anin' says that vry "r'aniati"n #ants0i!!d #"r0rs s" A*) Aut" Ltd Unit II a!s" r&ruit &andidats as $"!!"#s , thy $irst!y &h&0
th "r'aniati"n &u!tur #hi&h ty* "$ %*!"ys ndd in "r'aniati"n and thy a!s" &h&0
%*!"y%nt &"nditi"n in unit.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Thy ar sar&hin' th &andidats in t#" #ays "n is Advrtis%nt and th "thr is
%anua! sar&hin'. In advrtis%nt thy 'iv $irst!y th ad9s !i0 Dra$t Adv, C!int rvi# advand P!a& adv, and thn thy r&iv th &a!!s thn a&&ss thir CV9s. In %anua! sar&hin'
*r"&ss thy sar&h th %*!"y in *!an sar&h, idntity sar&h, and &"nta&t sar&h, thn thy
&h&0 th &andidats intrst a$tr that thy arran' %tin' $"r s!&ti"n *r"&ss
Sele!t#on pro!e !&ti"n is a *r"&ss "$ &h&0in' th &andidat9s 0n"#!d',
4havi"r, 0i!!s, )*rin&, and 7ua!i$i&ati"ns t& t" s!&t and *!a& th&andidat thir &"rr&t
*"siti"n.
?2 Store ,epartment
Th ra# %atria!s ar st"rd s*arat!y undr %atria! &!! in *r"du&ti"n d*art%nt: as
*r th d%and this d*art%nt d"s th #"r0 "$ r&ivin' and issuin' "$ %atria!s.
12 .%r!hae ,epartment
A'ainst th a**r"vd *ur&has r7uisiti"n th d*art%nt *ur&hass "$ ra# %atria! s%i
$inishd '""ds and A&&ss"ris and "thr nds "$ th vari"us d*art%nts. In "rdr t" %a0 th
#"r0 $$i&int it has th syst% "$ su4 &"ntra&t"rs. " th *ur&has d*art%nt d"s th &rati"n
"$ su4 &"ntra&t"rs and vnd"rs. This d*art%nt is 'uidd 4y th %ain %"tt" th *!ant and "thr
d*art%nts #"r0in'. Lt9s hav a !""0 "n th $!"# &hart "$ th *ur&has "$ ra# %atria!s in
A*) Unit II
2PATIL Page 3
u"tati"ns r7ust t" "n "r %"r
vnd"rs a&&"rdin' t" r7uir%nt
u"tati"ns C"%*aris"ns
2st N'"tiati"n
Pur&has Ordr
&rati"n
Pur&has Ordr snd t"vnd"r su**!ir
"!!"# U* and *r"&ur th
%atria! $"r *r"du&ti"n
Matria! indntin'
As *r &ust"%r
s&hdu!
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INVENTORY MANAGEMENT APEX AUTO LTD.,
32 ,#pat!h ,epartment
Th dis*at&h "$ %atria!s and $inishd '""ds is d"n in a vry $$i&int #ay.
42.ro&%!t#on ,epartment
This d*art%nt ntrustd #ith th tas0 "$ th *r"du&ti"n "$ D"r 2!ad, L"adr
2u&0t, Narr"# 2u&0t, 2a&0 -" Main ra%, 2""%, Ar%, C"untr @i'ht, -avy Duty
2u&0t, Rv"!vin' ra% and Tra&0 ra%. r"% "ur vry in&*ti"n at Fa%shd*ur in 3HH and
at Dhar#ad in 3HHH, "ur in$rastru&tura! $a&i!itis hav 4n %ti&u!"us!y *!annd "ut #ith an y
t"#ards satis$yin' th )a&tin' standards "$ #"r!d &!ass *!ayrs in th Earth M"vin' Industry.
Lt9s hav a !""0 "n th *r"&ss "$ %anu$a&turin' *r"&ss in A*) Unit II, 4asi&a!!y this
&"%*any is havy $a4ri&ati"n &"%*any, thy ar %anu$a&turin' 2ACJ -OE LOADER
COMPONENTD ( EXCAVATOR COMPONENT. "!!"#in' ar th &"%*"nnts. F-ON
DEER FD 2""%, Ar%, L"adr Ar% and EXCAVATOR
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INVENTORY MANAGEMENT APEX AUTO LTD.,
/lo !hart of E8!a$ator H 6
2PATIL Page 5;
CONTINUE
5NDTAGE AEM2LYTE 5;
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INVENTORY MANAGEMENT APEX AUTO LTD.,
2PATIL Page 53
CONTINU
AEM2LY OUT O
IXTURETA ;;566;5
ETTING
LET OVER @ELDING
TA ;5665IT AND @ELD
RO2OT @ELDING
R+&ti"n
R&ti$i&ati"n
INPECTIONT"ta! !n'th 6
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INVENTORY MANAGEMENT APEX AUTO LTD.,
N"t O0
OJ
N"t O0
OJ
N"t O0
OJ
N"t O0
2PATIL Page 55
MAC-INING
DEPATC-
RECTIICATION
REFECTION
RECTIICATION
REFECTION
RECTIICATION
INPECTION
UT
TETING
DREING
INPECTION
INPECTIO
N
CONTINUE
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INVENTORY MANAGEMENT APEX AUTO LTD.,
OJ
Man%fa!t%r#ng pro!e of E86 (oom
Manu$a&turin' *r"&ss "$ E)?
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INVENTORY MANAGEMENT APEX AUTO LTD.,
6. 2EVELING O PLATE"% *!ats 4v!d 4y Unit I and th"s *!ats ar T"* r"!!in' *!atTA ;;566;3,
id 4nd *!at L-TA ;;566;
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INVENTORY MANAGEMENT APEX AUTO LTD.,
H. LUG ITTINGIn this *r"&ss Lu's ar $ittd t" th *r*ard &"%*"nnt #hi&h ar T"* !u' and
4"tt"% !u's and T"* #ashrs !u's and 2"tt"% #ashr Lu's. irst!y 4"tt"% !u's ar +"ind t"
a&h "thr and thn th"s !u's ar atta&hd t" th 4"tt"% "$ th *r*ard &"%*"nnt. A$tr
+"inin' th 4"tt"% !u's th t"* !u' is +"ind t" th t"* "$ *r*ard &"%*"nnt #ith r7uird
di%nsi"n "r s*a& s" as t" &"%*!t this *r"&ss.
3;. INPECTION
This is an i%*"rtant sta' in %anu$a&turin' *r"&ss. In this sta' thy &h&0 t"ta!
!n'th "$ th &"%*"nnt. T"ta! !n'th sh"u!d 4 6
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INVENTORY MANAGEMENT APEX AUTO LTD.,
E) S
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INVENTORY MANAGEMENT APEX AUTO LTD.,
INVENTORY MANAGEMENT
Mana'%nt "$ invnt"ry assu%s i%*"rtan& du t" th $a&t that invst%nt in
invnt"ry &"nstituts "n "$ th %a+"r invst%nts in &urrnt assts.
Th tr% invnt"ry r$rs t" th st"&0*i! "$ th *r"du&ts a $ir% is "$$rin' $"r sa! and
th &"%*"nnts that %a0 u* th *r"du&t. Th assts #hi&h $ir%s st"r as invnt"ry in
anti&i*ati"n "$ nd ar>
i Ra Mater#al>
Ths r*rsnt in*uts *ur&hasd and st"r t" 4 &"nvrtd int" $inishd *r"du&ts in
$utur 4y %a0in' &rtain %anu$a&turin' *r"&ss "n th sa%.
ii 0or #n .ro!e>
Ths r*rsnt s%i?%anu$a&turd *r"du&ts #hi&h nd $urthr *r"&ssin' 4$"r thy
&an 4 tratd as $inishd *r"du&ts.
iii /#n#he& Goo&>
Ths r*rsnt th $inishd *r"du&ts rady $"r sa! in th %ar0t.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
iv Store an& S%ppl#e>
Ths r*rsnt that *art "$ th invnt"ry, #hi&h d"s n"t 4&"% a *art "$ $ina! *r"du&t4ut ar r7uird $"r *r"du&ti"n *r"&ss. Thy %ay 4 in th $"r% "$ &"tt"n #ast, "i! and
!u4ri&ants, s"a*s, 4r""%s, !i'ht 4u!4s t&. N"r%a!!y, thy $"r% a vry %in"r *art "$ t"ta!
invnt"ry and d" n"t inv"!v si'ni$i&ant invst%nt.
Lt us hav a !""0 "n Di$$rnt Invnt"ry Mana'%nt Vi#s. Mans %*hasis r"! "$
Invnt"ry Mana'%nt in di$$rnt &t"rs.
2PATIL Page 5H
Physi&a! Invnt"ry
Mana'%nt
inan&ia! Invnt"ry
Mana'%nt
L"'isti& Invnt"ry
Mana'%nt
INVENTORY MANAGEMENTINVENTORY MANAGEMENT
1
V
I
E
0
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Invnt"ry Mana'%nt is &"nsistin' "$ 6 hands. Th $irst hand as sh"#n in th dia'ra%
is that Physi&a! Invnt"ry Mana'%nt, &"nd "n is inan&ia! Invnt"ry Mana'%nt and th
!ast "n third "n is L"'isti& Invnt"ry Mana'%nt.
Th ras"n 4hind "$ dividin' ths vi#s is> t" 'athr th in$"r%ati"n vry asi!y and
$"r asy t" undrstandin' "$ a&h vi# th"r"u'h!y. Lt us s th Manin's "$ a&h vi# "n 4y
"n.
.h'#!al In$entor' Management
Mean#ng>
/J*in' "$ '""ds is a!s" a ty* "$ %ana'%nt. @hnvr r7uir%nts &"%s $r"%
th *r"du&ti"n d*art%nt, *r"vidin' "$ th"s r7uird %atria!s in a *r"*r %annr ( *r"vidin'
th"s at th s*&i$id *ri"d, is th %ain %"tt" "$ Physi&a! Invnt"ry Mana'%nt.1
(enef#t for +olng In$entor'*
(enef#t #n .%r!ha#ng
(enef#t #n .ro&%!t#on
(enef#t #n 0or#n.ro!e
(enef#t #n Sale
Ob"e!t of In$entor' Management*
Usua!!y, th &"%*any is $a&d #ith th $"!!"#in' &"n$!i&tin' "4+&tivs in th ara "$
invnt"ry %ana'%nt>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
3. T" &arry %a)i%u% invnt"ry in "rdr t" $a&i!itat $$i&int and s%""th *r"du&ti"n
and sa!s "*rati"ns.
5. T" %ini%i invst%nt in invnt"ry $"r %a)i%i th *r"$ita4i!ity.
2"th "vr?invst%nt and undr invst%nt in invnt"ris is undsira4! as 4"th inv"!v th
&"ns7un&s. The o$er#n$etment #n$ol$e the !oneJ%en!e l#e>
i Unn&ssary 4!"&0in' "$ $unds in invnt"ry and hn& !"ss "$ *r"$it.
ii E)&ssiv st"ra' and Insuran& C"st.
i. Ris0 "$ !i7uidity. Th invnt"ris "n& *ur&hasd and st"rd ar n"r%a!!y di$$i&u!t t"
dis*"s "$$ at th sa% va!u.
The %n&er#n$etment #n$ol$e the !oneJ%en!e l#e>
4. I$ su$$i&int st"&0 "$ ra# %atria! and #"r0 in *r"&ss is n"t avai!a4!, it %ay rsu!t int"
$r7unt intrru*ti"ns in *r"du&ti"n.
&. I$ su$$i&int st"&0 "$ $inishd '""ds is n"t avai!a4! it %ay n"t 4 *"ssi4! $"r th
&"%*any t" srv th &ust"%rs *r"*r!y and thy %ay shi$t t" th &"%*tit"rs.
Thus, it &an 4 said that th "4+&tiv "$ invnt"ry %ana'%nt is t" %ini%i th
invst%nt in invnt"ry #ith"ut a$$&tin' *r"du&ti"n "r sa!s "*rati"ns.
Invnt"ry, as a &urrnt asst, di$$rs $r"% th "thr &urrnt assts 4&aus "n!y $inan&ia!
%ana'rs ar n"t inv"!vd. Rathr, a!! th $un&ti"na! aras, $inan&, Mar0tin', Pr"du&t (
Pur&hasin' ar inv"!vd.
Th +"4 "$ th $inan&ia! %ana'r is t" r&"n&i! th &"n$!i&tin' vi#*"ints "$ th vari"us$un&ti"na! aras r'ardin' th a**r"*riat invnt"ry !v!s in "rdr t" $u!$i!! th "vra!! "4+&tiv
"$ %a)i%iin' "$ "#nr9s #a!th.
To(#n S'tem>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Undr this syst%, th invnt"ry it%s ar 'r"u*d int" t#" &at'"ris. In "n 'r"u* "r
4in, su$$i&int 7uantity is 0*t t" %t th &urrnt r7uir%nts "vr a dsi'natd *ri"d "$ it%.In an"thr 'r"u* "r 4in, a sa$ty st"&0 is %aintaind t" %t th r7uir%nts "$ invnt"ry at
ti%s #hn th st"&0 in th $irst 4in is )haustd and r?"rdrin' "&&urs.
/#nan!#al In$entor' Management
Mean#ng>
/R&"rdin', %aintainin' and va!uatin' "$ st"&0s in a va!u tr%s is 0n"#n as inan&ia!
Invnt"ry Mana'%nt.1 In "thr #"rds va!uati"n "$ st"&0s, and &"ntr"!!in' "$ "rdrin' and
h"!din' &"sts and a!s" %aintainin' "$ su$$i&int va!ud st"&0s in Invnt"ry is 0n"#n as inan&ia!
Invnt"ry Mana'%nt.1
inan&ia! Invnt"ry Mana'%nt is a'ain dividd int" thr di$$rnt &at'"ris.
3 2asd "n Va!uati"n
5 2asd "n C"st Ana!ysis
6 2asd "n inan&ia! tat%nt
>< (ae& on Val%at#on
Thr ar nu%4r "$ 'nra!!y a&&*td %th"ds "$ dtr%inin' th &"st "$ invnt"ris at
th &!"s "$ th a&&"untin' *ri"d. Th s!&ti"n "$ a suita4! %th"d assu%s si'ni$i&an& in
vi# "$ th $a&t that it has a dir&t 4arin' "n th &"st "$ '""ds s"!d and &"ns7unt!y "n *r"$it.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Thr$"r, th %th"d sh"u!d 4 s!&td in th !i'ht "$ *r"4a4! $$&ts "n *r"$its "vr a *ri"d
"$ yars.
Note>
It %ay n"t 4 "ut "$ *!a& t" %nti"n that "n& a %th"d is s!&td, it %ust 4 usd
&"nsistnt!y and &ann"t 4 &han'd $r"% yar t" yar.
Th dis&ussi"n hr "$ th %th"ds t" va!u invnt"ry sh"u!d, thr$"r 4 vi#d in this
*rs*&tiv.
/#rt In /#rt O%t 9/I/O< Metho&>
Th IO %th"d "$ va!uati"n "$ invnt"ry is 4asd "n th assu%*ti"n that th invnt"ry
is &"nsu%d in &hr"n"!"'i&a! "rdr, that is, th"s r&ivd $irst ar issud&"nsu%d $irst and
va!u $i)d a&&"rdin'!y. Th %rit "$ IO %th"d is that th *hysi&a! $!"# "$ %atria!s
%at&hs th $!"# "$ &"st.
-at #n /#rt O%t 9-I/O< Metho&>
Undr th LIO %th"d, th &"st "$ '""ds s"!d and th va!u "$ &!"sin' invnt"ry &an 4
dtr%ind "n!y a$tr th $ina! !"t "$ th yar has 4n r&ivd. This is 4&aus "$ th
assu%*ti"n undr!yin' th va!uati"n "$ invnt"ry, a&&"rdin' t" this %th"d. As th na% LIO
su''sts, th us "$ invnt"ry is va!ud "n th 4asis "$ th invrs s7un& "$ r&i*ts. in&
th LIO %th"d assu%s that th !atst it% in is th $irst it% "ut, th &urrnt &"st "$ %atria!s
ar %at&hd #ith th &urrnt s!!in' *ri&&urrnt rvnus. This %at&hin' "$ &urrnt &"sts #ith
&urrnt rvnus is th ssn& "$ th ar'u%nt $"r th LIO %th"d.
A$erage Cot Metho&>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
A&&"rdin' t" avra' &"st %th"d, a&h *ur&has is addd t" invnt"ry and an avra'
&"st dtr%ind. Matria!s ar &har'd int" &"st "$ sa!s at this avra' unti! an"thr !"t isr&ivd, #hn a n# avra' unit invnt"ry &"st is &a!&u!atd.
N"t> Thr ar s" %any "thr than ths a4"v %th"ds 4ut %"st #id us$u!!y %th"ds ar
ths thr s" hr # dis&ussd th"s thr %th"ds "n!y.
?< (ae& on Cot Anal'#
Cot of +olng In$entor'*?
On "*ratin' "4+&tiv "$ invnt"ry %ana'%nt is t" %ini%i &"st. E)&!udin' th&"st "$ %r&handis, th &"sts ass"&iatd #ith invnt"ry $a!! int" t#" 4asi& &at'"ris> i
Ordrin' "r A&7uisiti"n "r t?u* C"sts, and ii Carryin' C"sts. Ths &"sts ar an i%*"rtant
!%nt "$ th "*ti%u% !v! "$ invnt"ry d&isi"ns.
>< Or&er#ng Cot>
It is th $i)d &"st "$ *!a&in' ( r&ivin' an invnt"ry "rdr. Li0 a Pr*arin' a *ur&has
"rdr "r r7uisiti"n $"r% ( 4 r&ivin', ins*&tin' ( r"rdrin' '""ds r&ivd t" nsur 4"th
7uantity ( 7ua!ity. It is a!s" &a!!d as stu* &"st.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
?< Carr'#ng Cot>
Th s&"nd 4r"ad &at'"ry "$ &"sts ass"&iatd #ith invnt"ry is th &arryin' &"sts. Thy ar
inv"!vd in %aintainin' "r &arryin' invnt"ry. Th &"st "$ h"!din' invnt"ry %ay 4 dividd
int" t#" &at'"ris.
>2 Thoe that Ar#e ,%e to the Stor#ng of In$entor'> Th %ain &"%*"nnts "$ this
&at'"ry "$ &arryin' &"sts ar i st"ra' &"st, that is, d*r&iati"n, insuran&,
%aintnan& "$ th 4ui!din' and uti!itis: ii insuran& "$ invnt"ry a'ainst $ir and th$t:
iii dtri"rati"n in invnt"ry 4&aus "$ *i!$ra', $ir, t&hni&a! "4s"!s&n&, sty!
"4s"!s&n& and *ri& d&!in: iv srvin' &"sts, su&h as !a4"ur $"r hand!in' invnt"ry,
&!ri&a! and a&&"untin' &"sts.
?2 The Opport%n#t' Cot of /%n&> This &"nsists "$ )*nss in raisin' $unds intrst "n
&a*ita! t" $inan& th a&7uisiti"n "$ invnt"ry. I$ $unds #r n"t !"&0d u* in invnt"ry,
thy #"u!d hav arnd a rturn. This is th "**"rtunity &"st "$ $unds "r th $inan&ia!
&"st &"%*"nnt "$ th &"st.
-#n#ng of Cot bae& an& .h'#!al (ae& In$entor' Management*
Th &arryin' &"sts and th invnt"ry si ar *"sitiv!y r!atd and %"v in th sa%
dir&ti"n. I$ th !v! "$ invnt"ry in&rass, th &arryin' &"sts a!s" in&ras and vi&?vrsa.
Total Cot>
Th su% "$ invnt"ry in&rass, th &arryin' &"sts r*rsnt th t"ta! &"st "$ invnt"ry.
This is &"%*ard #ith th 4n$its arisin' "ut "$ invnt"ry t" dtr%in th "*ti%u% !v! "$
invnt"ry.
E!onom#! Or&er %ant#t' 9EO
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INVENTORY MANAGEMENT APEX AUTO LTD.,
-"# %u&h invnt"ry sh"u!d 4 4"u'ht in a !"t h"u!d th 7uantity t" 4 *ur&hasd 4
!ar' "r s%a!! h"u!d th r7uir%nts "$ %atria! durin' a 'ivn *ri"d say %"nths "r 3yar 4 a&7uird in "n !"t "r sh"u!d it 4 a&7uird in insta!!%nts "r in svra! s%a!! !"ts
u&h invnt"ry *r"4!%s ar &a!!d Ordr 7uantity *r"4!%s.
Thr$"r EO is that !v! "$ invnt"ry at #hi&h t"ta! &"st "$ invnt"ry &"%*risin'
"rdrin' &"st ( &arryin' &"sts is th %ini%u%
/orm%lae for !al!%lat#ng E!onom#! Or&er %ant#t'>
EO 5AO
C
@hr,
A Annua! uantity
O Ordrin' C"st
C Carryin' C"st
A%mpt#on>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
>2 Th $ir% 0n"#s #ith &rtainty th annua! usa' &"nsu%*ti"n "$ a *arti&u!ar it% "$
invnt"ry.
?2 Th rat at #hi&h th $ir% uss invnt"ry is stady "vr ti%.
12 Th "rdrs *!a&d t" r*!nish invnt"ry st"&0s ar r&ivd at )a&t!y that *"int in
ti% #hn invnt"ris ra&h r".
Or&er .o#nt>
Reor&er .o#nt>
This is th *"int at #hi&h t" "rdr invnt"ry?)*rssd 7uati"n?a!!y as>
Lad Ti% in days Xdai!y usa'.
-ea& T#me>
It is th ti% n"r%a!!y ta0n in r&ivin' d!ivry a$tr *!a&in' "rdrs #ith su**!irs.
Safet' Sto!>
It i%*!is )tra invnt"ris that &an 4 dra#n d"#n #hn a&tua! !ad?ti% and"r usa'
rats ar 'ratr than )*&td.
6 (ae& on /#nan!#al Statement
"r havin' assistan& 4y 4an0s, 4an0rs sh"u!d $irst va!uat th $"!!"#in's>
3. C"!!atra! trn'th.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
?2 In$entor' .o#t#on
12 Some /#nan!#al Rat#o8. Pay%nt "$ a!! r7uir%nts !i0 In&"% Ta), @a!th Ta), Intrsts "n d4t t&.,
=. A'r%nt *a*rs "$ a!! auth"rid *rs"ns !i0 D4ntur h"!drs, harh"!drs t&.,
. A!! r7uird d"&u%nts.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
3 !&t th in$"r%ati"n r!vant t" th d&isi"n undr &"nsidrati"n $r"% th t"ta!
in$"r%ati"n &"ntaind in $inan&ia! stat%nt.5 Arran' th in$"r%ati"n in #ay t" hi'h!i'ht si'ni$i&ant r!ati"nshi*s.
6 Intr*rtati"n and dra#in' "$ in$rn&s and &"n&!usi"ns.
In 4ri$, $inan&ia! ana!ysis is th *r"&ss "$ s!&ti"n, r!ati"n and va!uati"n.
inan&ia! ana!ysis is th *r"&ss "$ idnti$yin' th $inan&ia! strn'ths and #a0nsss "$
th $ir% 4y *r"*r!y sta4!ishin' r!ati"nshi*s 4t#n th it%s "$ th 4a!an& sht and th
*r"$it and !"ss a&&"unt. inan&ia! ana!ysis &an 4 undr ta0n 4y %ana'%nt "$ th $ir%, "r 4y
*artis "ut sid th $ir%, vi., "#nrs, &rdit"rs, invst"rs and "thrs. Th natur "$ ana!ysis #i!!
di$$r d*ndin' "n th *ur*"s "$ th ana!yst.
Mana'%nt "$ th $ir% #"u!d 4 intrstd in vry as*&t "$ th $inan&ia! ana!ysis. It
is thir "vra!! rs*"nsi4i!ity t" s that th rs"ur&s "$ th $ir% ar usd %"st
$$&tiv!y and $$i&int!y, and that th $ir%9s $inan&ia! &"nditi"n is s"und.
Tradr &rdit"rs ar intrstd in $ir%9s a4i!ity t" %t thir &!ai%s "vr a vry sh"rt
*ri"d "$ ti%.
Invst"rs, #h" hav invstd thir %"ny in th $ir%9s shars, ar %"st &"n&rnd a4"ut
th $ir%9s arnin's.
u**!irs "$ !"n'?tr%s d4t, "n th "thr hand ar &"n&rnd #ith th $ir%9s !"n'?tr%
s"!vn&y and surviva!. Thy ana!y th $ir%9s *r"$ita4i!ity "vr ti%, its a4i!ity t"
'nrat &ash t" 4 a4! t" *ay intrst and r*ay *rin&i*a! and th r!ati"nshi* 4t#n
vari"us s"ur&s "$ $unds.
?2Rat#o Anal'# relate& to In$entor'
Rati" ana!ysis is a *"#r$u! t""! "$ $inan&ia! ana!ysis. A rati" is d$ind as /th indi&atd
7u"tint "$ t#" %ath%ati&a! )*rssi"ns1 and as /th r!ati"nshi* 4t#n t#" "r %"r thin's.1
In $inan&ia! ana!ysis rati" is usd as a 4n&h%ar0 $"r va!uatin' th $inan&ia! *"siti"n and
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INVENTORY MANAGEMENT APEX AUTO LTD.,
*r$"r%an& "$ a $ir%. Rati"s h!* t" su%%ari !ar' 7uantitis "$ $inan&ia! data and t" %a0
7ua!itativ +ud'%nt a4"ut t" $"r% a 7ua!itativ +ud'%nt th $"&us "$ $inan&ia! ana!ysis is "n th0y $i'urs in th $inan&ia! stat%nts and th si'ni$i&ant r!ati"nshi*s that )ist 4t#n th%.
T'pe of Rat#o*
a. Li7uidity Rati"s
4. A&tivity Rati"s
&. Pr"$ita4i!ity Rati"s
A. -#J%#t' Rat#o>
Li7uidity r$rs t" th a4i!ity "$ th $ir% t" %t its "4!i'ati"ns in th h"rt run, usua!!y
"n yar. Li7uidity rati"s %asur th a4i!ity "$ th $ir% t" %t its &urrnt "4!i'ati"ns.
Li7uidity rati"s 4y sta4!ishin' a r!ati"nshi* 4t#n &ash and "thr Currnt assts t" Currnt
"4!i'ati"ns *r"vid a 7ui&0 %asur "$ !i7uidity. A $ir% sh"u!d nsur that it d"s n"t su$$r
$r"% !a&0 "$ !i7uidity, and a!s" that it d"s n"t hav )&ss !i7uidity.
Thr$"r it is n&ssary t" stri0 a *r"*r 4a!an& 4t#n hi'h !i7uidity and !a&0 "$
!i7uidity. "!!"#in' ar s"% "$ th i%*"rtant !i7uidity rati"s>
3. Currnt Rati"
5. ui&0 Rati"
6. Nt #"r0in' Ca*ita! Rati"
2. A!t#$#t' Rat#o>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
A&tivity rati"s ar &"n&rnd #ith %asurin' th $$i&in&y in asst %ana'%nt.
"%ti%s, ths rati"s ar a!s" &a!!d $$i&in&y rati"s "r asst uti!iati"n rati"s. Th $$i&in&y#ith #hi&h, assts ar &"nvrtd int" sa!s. Th 'ratr th rat "$ turn"vr "r &"nvrsi"n, is th
%"r $$i&int th uti!iati"n. "r this ras"n, su&h rati"s ar a!s" dsi'natd as turn"vr rati"s.
Turn"vr is th *ri%ary %"d $"r %asurin' th )tnt "$ $$i&int %*!"y%nt "$ assts 4y
r!atin' th assts t" sa!s. An a&tivity rati" %ay, thr$"r, 4 d$ind as a tst "$ th
r!ati"nshi* 4t#n sa!s and vari"us assts "$ a $ir%. vra! a&tivity rati"s &an 4 &a!&u!atd
t" +ud' th $$&tivnss "$ asst uti!iati"n.
3. Invnt"ry Turn"vr
5. Assts Turn"vr
6. i)d Assts and Currnt Assts Turn"vr
Aet Mea%rement for fferent metho& of #n$entor' $al%at#on>
/I/O Metho&>
Undr this %th"d, as n"td ar!ir, invnt"ry is va!ud "n th assu%*ti"n "$
&hr"n"!"'i&a! &"st $!"#. This i%*!is that th unusduns"!d invnt"ry &"nsists "$ th %"st
r&nt *ur&hass and, thr$"r, &an 4 assu%d t" 4 va!ud at &urrnt &"st. Th va! "$
invnt"ry as sh"# in th 4a!an& sht #"u!d r$!&t th current cost, i$ IO %th"d #r usd.
-I/O Metho&>
A&&"rdin' t" this %th"d, "4vi"us!y, th invnt"ry $i'ur #"u!d n"t a**ar in th
4a!an& sht at th Currnt C"st. It #i!! r$!&t rathr th &"st "$ ra# %atria!s *ur&hasd in th
*ast yar. Assu%in' risin' *ri&s, th invnt"ry va!u 4asd "n th LIO %th"d #"u!d tnd t"
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INVENTORY MANAGEMENT APEX AUTO LTD.,
4 undervalued. "r )a%*! invnt"ry *ur&hasd as ar!y as si) yars "r %"r. In that
situati"n, th invnt"ry $i'ur in&!udd in th 4a!an& sht #"u!d 4 a&tua!!y th *ri& *aid "nth *ur&has "$ invnt"ry si) yars a'". In a *ri"d "$ risin' *ri&s, this va!u #"u!d natura!!y
4 'r"ss!y "ut "$ !in #ith th &urrnt!y *rvai!in' *ri&. This #"u!d i%*!y that th 4a!an&
sht #"u!d n"t r$!&t th &urrnt #"rth "$ th invnt"ry. That th invnt"ry va!u #i!! n"t 4
&"rr&t is an"thr #ay "$ sayin' that th 4a!an& sht #i!! *rsnt a dist"rtd *i&tur "$ th
a$$airs "$ th $ir%s.
A *"ssi4! s"!uti"n t" &"rr&t th a4"v dist"rti"n in th 4a!an& sht i%*!i&it in th
undr?va!uati"n "$ invnt"ry #ith th LIO %th"d is a %"di$idad+ustd LIO %th"d.
Th %"di$id %th"d #i!!, thus, srv th nds "$ &"rr&t in&"% dtr%inati"n as #!!
as &"rr&t asst %asur%nt. -"#vr, this is su4+&t t" a 7ua!i$i&ati"n, na%!y, th &urrnt
yar9s *ur&has units sh"u!d )&d th &urrnt yar9s &"nsu%*ti"n units. I$ $"r ras"ns su&h
as stri0!"&0"uts, trans*"rtati"n *r"4!%s, and s" "n, th &urrnt &"nsu%*ti"n )&ds th
&urrnt *ur&hass, *r"$its #i!! ris. Th in&ras #i!! d*nd u*"n th )tnt "$ !i7uidati"n "$
th *rvi"us yars9 invnt"ry. This in&ras in *r"$it is tr%d as !i7uidati"n *r"$it, #hi&h is
7ua! t" th di$$rn& 4t#n th &urrnt &"st "$ invnt"ry and th &"st "$ invnt"ry *ur&hasd
in th *ast.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
-og#t#! In$entor' Management
Mean#ng of -og#t#!>
L"'isti&s is th Or'aniati"n "$ rvi&s and u**!is. In "thr #"rds, !"'isti&s is
%a0in' and ta0in' th *r%issi"n $"r s!!)*"rtin' th &"%*any9s *r"du&ts in $"ri'n &"untris.
In $u!!y )*"rt?"rintd 4usinss this is "n "$ th %ain d*art%nt, #hr this
d*art%nt 'ts an a**r"va! t" s!! thir '""ds in $"ri'n &"untris. And a!s" thir %ain
intnti"n is t" %aintain a!! d"&u%nts "$ th"s that ar r!atd t" th )*"rtin' "$ thir *r"du&ts.
-og#t#! In$entor' Management>
Ys, a!rady # hav "4srvd a4"ut th %anin' "$ Invnt"ry Mana'%nt in th
Or'aniati"n. 2ut in $u!!y )*"rt "rintd 4usinss: Invnt"ry Mana'%nt is a vry i%*"rtant
&"n&*t. 2&aus vry )*"rtr "r i%*"rtr, thy d" n"t 0n"# a4"ut a&h "thr #h" ar stayin'
in "thr &"untris.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
" vry &"%*any, #hi&h ar )*"rtin' "r i%*"rtin' "$ %atria!s, thy sh"u!d
&"%%uni&at a&h "thr thr"u'h 4an0s "n!y. Ths 4an0s ar !istd 4y Cntra! 2an0 "$ thatNati"n. In "ur C"untry R2I is !ists s"% 4an0s $"r intr%diatin' *ur*"s and vry yar R2I
d&!ar s"% !istd 2an0s as a %diat"r.
"r *r"du&in' "$ %atria!s and s!!in' "$ th"s %atria!s, vry &"%*any4usinss sh"u!d
nd a @"r0in' Ca*ita!. This @"r0in' Ca*ita! &an a!s" $inan&d 4y 2an0s. @hi! in )*"rt
"rintd 4usinss it is s!i'ht!y di$$rnt tas0. -r 2an0s &an a&ts as $inan&ia! assistan& $"r Pr?
hi*%nt and $"r P"st hi*%nt "$ G""ds.
"r havin' an assistan& 4y 4an0s thy sh"u!d $irst va!uat $"!!"#in's>
3. C"!!atra! trn'th.
5. Invnt"ry P"siti"n
6. "% inan&ia! Rati"s
8. Pay%nt "$ a!! r7uir%nts !i0 In&"% Ta), @a!th Ta), Intrst t&.,
=. A'r%nt *a*rs "$ a!! auth"rid *rs"ns !i0 D4nturs, harh"!drs t&.,
. A!! r7uird d"&u%nts.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Ths 'uid!ins a**!y t" th &"%*anis tryin' t" rais th $unds 4y issuin' th CPs. As *r
ths 'uid!ins, a a &"%*any %ans a &"%*any as d$ind in s&ti"n 8=?Iaa "$ Rsrv 2an0"$ India A&t, 3H68. &ti"n 8=?Iaa "$ Rsrv 2an0 A&t, 3H68 d$ins a &"%*any as th
&"%*any as th &"%*any as d$ind in s&ti"n 6 "$ th &"%*anis A&t, 3H=.
In th Indian &ir&u%stan&s, 4an0s *!ay a vry %a+"r r"! in $inan&in' th #"r0in' &a*ita!
r7uir%nt "$ th "r'aniati"ns. @ #i!! &"nsidr th 4an0 as a s"ur& $"r $inan&in' th
#"r0in' &a*ita! r7uir%nt "$ th "r'aniati"ns undr th $"!!"#in' hads>
Amo%nt of A#tan!e
T" "4tain th 4an0 &rdit $"r $inan&in' th #"r0in' &a*ita! r7uir%nts, th &"%*any is
r7uird t" sti%at th #"r0in' &a*ita! r7uir%nt *r"*r!y. T" sti%at th r7uir%nt "$
#"r0in' &a*ita! r7uir%nt *r"*r!y, th &"%*any #i!! 4 r7uird t" sti%at its !v! "$
&urrnt assts and &urrnt !ia4i!itis *r"*r!y, as #"r0in' &a*ita! is th di$$rn& 4t#n &urrnt
assts and &urrnt !ia4i!itis.
"r this, th t&hni7us !i0 rati" ana!ysis, trnd ana!ysis t&., &an 4 usd 4y th
&"%*any. M"r a&&urat th sti%ati"n "$ th !v! "$ &urrnt assts and &urrnt !ia4i!itis, %"r
a&&urat th sti%ati"n "$ !v! "$ &urrnt &a*ita!. Thn, th &"%*any #i!! hav t" a**r"a&h th
4an0 a!"n' #ith th n&ssary su**"rtin' data. On th 4asis "$ sti%ats su4%ittd 4y th
&"%*any, th 4an0 %ay d&id th a%"unt "$ assistan& that &an 4 )tndd. @hi! )tndin'
th #"r0in' &a*ita! assistan&, th 4an0 %ay *rs&ri4 th %ar'in %"ny r7uir%nt. Th
%ar'in %"ny sti*u!ati"n is %ad 4y th 4an0s in "rdr t" nsur that 4"rr"#in' &"%*any9s "#n
sta0 in th 4usinss and a!s" t" *r"vid th &ushi"n a'ainst th *"ssi4! rdu&ti"n in th va!u
"$ s&urity "$$rd t" th 4an0. Th *r&nta' "$ %ar'in %"ny sti*u!ati"n %ay d*nd u*"n
th &rdit standin' "$ th 4"rr"#in' &"%*any, $!u&tuati"ns in th *ri& "$ s&urity and th
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INVENTORY MANAGEMENT APEX AUTO LTD.,
dir&tivs "$ R2I $r"% ti% t" ti%. Th 'nra! *rin&i*! a**!i&a4! #i!! 4, /%"r di&y th
natur "$ s&urity, hi'hr "$ s&urity, hi'hr #i!! 4 th %ar'in %"ny sti*u!ati"ns.1
/orm of A#tan!e>
A$tr d&idin' th a%"unt "$ "vra!! assistan& t" 4 )tndd t" th &"%*any, th 4an0 &an
dis4urs th a%"unt in any "$ th $"!!"#in' $"r%s>
3. N"n?und 2asd Lndin'5. und 2asd Lndin'.
Non /%n& (ae& -enng>
In &as "$ N"n?und 2asd Lndin', th !ndin' 4an0 d"s n"t &"%%it any *hysi&a! "ut$!"# "$
$unds. As su&h, th $unds *"siti"n "$ th !ndin' 4an0 r%ains inta&t. Th N"n?und 2asd
Lndin' &an 4 %ad 4y th 4an0s in t#" $"r%s>
a. 2an0 Guarants
4. Lttr "$ Crdit
/%n& (ae& -enng>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
In &as "$ N"n?und 2asd Lndin', th !ndin' 4an0 &"%%its th *hysi&a! "ut$!"# "$ $unds.
As su&h, th $unds *"siti"n "$ th !ndin' d"s n"t a$$&td. Th und 2asd Lndin' &an 4%ad 4y th 4an0s in $"!!"#in' $"r%s>
a. L"an
4. Ovrdra$t
&. Cash Crdit
d. 2i!!s Pur&hasdDis&"untd
. @"r0in' Ca*ita! Tr% L"ans
$. Pa&0in' Crdit
Se!%r#t' for A#tan!e>
Th 4an0 %ay *r"vid th assistan& in any "$ th %"ds as statd a4"v. 2ut n"r%a!!y n"
assistan& #i!! 4 avai!a4! un!ss th &"%*any "$$rs s"% s&urity in any "$ th $"!!"#in'
$"r%s.
3 -y*"th&ati"n.
5 P!d'
6 Lin
8 M"rt'a'
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INVENTORY MANAGEMENT APEX AUTO LTD.,
.ro!e of .h'#!al In$entor' Ma#ntenan!e #n Ape8 A%to -t&
Ea&h unit "$ A*) aut" !td has its "#n st"r d*art%nt that # &an &a!! it as 0or#n
pro!e #n$entor'.
This invnt"ry *r"&ss is $u!!y &"%*utrid and hr *a*r #"r0 is vry !ss. On!y
%aintainin' "$ d"&u%nts, #hi&h #r snt 4y su**!irs as !i0 &ha!!ans t&., ar "n!y hr t"
%aintain as *a*r d"&u%nts. Othr#is it is $u!!y &"%*utrid. Thr"u'h &"%*utrs "n!y t"r
D*art%nt r&ivs Pur&has Ordr and 4y &"%*utr "n!y thy snd d"&u%nts "$ issuin' "$
%atria!s t" %anu$a&turin' unit.
"r asy t" &"%%uni&at and *!annin' "$ *r"du&ti"n a&tivity, A*) Aut" Ltd Unit II has
havin' "n!y "n G"d"#n in Pr"&durs inv"!vd in r&ivin' and issuin' "$ %atria!s ar as
$"!!"#s>
3 G"d"#n #i!! $irst 't Pur&has Ordr N"..
.%r!hae Or&er N%mber*
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INVENTORY MANAGEMENT APEX AUTO LTD.,
This PO is &"%s $r"% Pur&has D*art%nt. This Pur&has D*art%nt 'ivs a nu%4r$"r th a&h "rdr %ad 4y Pur&has D*art%nt "n!y.
2$"r *!a&in' any "rdr t" su**!irs thy $irst &h&0s th %atria!s in invnt"ry as t"
0n"# a4"ut #hthr %atria!s ar avai!a4! in Invnt"ry "r n"t. I$ n"t avai!a4! in Invnt"ry
thn "n!y thy #i!! *!a& an "rdr a&&"rdin' t" th r7uir%nt.
In A*) Aut" Ltd Unit II, it is vry i%*"rtant t" n"t that> *ur&has d*art%nt a!#ays
*!a&s an "rdr t" th"s %atria!s #hi&h hav "rdrd 4y Cust"%rs4uyrs "$ A*) Aut" Ltd
Unit II.
", n"r%a!!y it d"s n"t hav any st"&0s in its invnt"ry. "r vry "rdr $r"% &ust"%rs
thy %a0 a $rsh Pur&has Ordr $"r *ur&hasin' "$ %atria!s. It %ans #hatvr th %atria!s
ar r7uirin' $"r *rsnt "rdrs, th"s %atria!s ar "n!y thy 0*t as st"&0s in Invnt"ry.
In s"% &ass, %atria!s %ay 4 in G"d"#n, #hi&h thy &a!! it as (%ffer Sto!2 I$
ths "!d st"&0 is %at&hs th r7uir%nts "$ *r"du&t #hi&h has "rdrd n"# 4y its &ust"%rs,
thn *ur&has D*art%nt #i!! snt a n"ti& t" Invnt"ry $"r issuin' "$ th"s %atria!s. Ths
"!d st"&0 %ay 4 in $"r% "$ Ra# Matria! "r in $"r% "$ $inishd '""ds. A*) Aut" Ltd Unit II
a!#ays *r"du&s %"r than its r7uir%nts. "r )a%*! i$ T!&"n has "rdrd $"r 5; EX?
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INVENTORY MANAGEMENT APEX AUTO LTD.,
@hn Invnt"ry r&ivs %atria!s it $irst ins*&ts s"% sa%*!s, s" $"r it, thy &a!! u* as
/Spot Inpe!t#on.1 -r thy ins*&t th $"!!"#in' *"ints>
a Is it "ur su**!ir "n!y and is this *ar&! is $"r us "n!y
d. Ar ths r&ivd %atria!s a&&"rdin' t" th Pur&has Ordr Li0
i. uantity
ii. Dat, t&.,
. Is it havin' a!! r7uird Cha!!ans "r Inv"i&s and a!s" d"s it a**r"vd 4y auth"rid
*rs"n
$. Is it havin' a!! r7uird d"&u%nts !i0 O&tr"i t&.,
'. Is that Cha!!an &"nsistin' th &"rr&t in$"r%ati"n "$ %atria!s
A$tr a**r"va! "$ %atria!s 4y sa%*! ins*&ti"n, invnt"ry d*art%nt *ut ths dtai!s
in %anua! 4""0, this d"&u%ntati"n is &a!!d as /,a' (oo.1 This day4""0 is &"nsistin' "$
in$"r%ati"n !i0 Cha!!an N"., P.O. N"., ty! N"., Ds&ri*ti"n "$ Matria!s, u**!ir9s Na%,
trans*"rtr9s Na%, and uantity.
A$tr &"%*!tin' "$ ths *r"&sss, %atria!s #i!! snd t" ins*&ti"n d*art%nt. In this
ins*&ti"n d*art%nt thy ins*&t in?dtai!s "$ %atria!s. A$tr a**r"va! 4y ins*&ti"n
d*art%nt, this invnt"ry d*art%nt %a0s "n d"&u%nt, #hi&h is thy &a!! it as /Goo&
Re!e#$e& ,o!%ment1.
This G""ds R&ivd D"&u%nt is &"nsistin' "$ GR N"., Dat, GRN Ty* In?st"r,
M"d "$ Trans*"rt, Cha!!an N"., Cha!!an Dat, tatus, Gat Entry N"., Gat Entry Dat, Pri"rityN"., a!! Dtai!s "$ Matria!s and r&ivd 7uantity and a&tua! 7uantity a!s" ntrs thr.
6. Issuin' "$ Matria!s
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Mr&handisin' D*art%nt #i!! snd "n &ard &a!!d /)ob Car&1 #hi&h it &"nsistin' "$
a!! dtai!s "$ %atria!s r7uirs t" *r"du& a *r"du&t. A&&"rdin' t" that Card Invnt"ryd*art%nt sh"u!d snd th %atria!s t" %anu$a&turin' d*art%nt.
A$tr r&ivin' "$ %atria!s 4y %anu$a&turin' d*art%nt $r"% invnt"ry d*art%nt
thy issu "n d"&u%nt a4"ut r&ivd "$ %atria!s, 7uantity, ds&ri*ti"n "$ %atria!s t&.
Manu$a&turin' D*art%nt uss ths %atria!s $"r %anu$a&turin' *ur*"s. In %anu$a&turin'
*r"&ss s"%ti%s it %ay ha**ns !i0 s"% %atria!s 't da%a's and s"% ar n"t $u!!y
%at&hs #ith r7uir%nts. Thn th"s %atria!s #i!! 4 rturn t" invnt"ry.
A$tr uti!iin' "$ a!! ths %atria!s 4y %anu$a&turin' d*art%nt thy #i!! snd "n
d"&u%nt &a!!d /Or&er Complet#on Report1 OCR. This r*"rt &"nsists th in$"r%ati"n "$
Pr&nta' "$ Uti!id Matria!s $"r *arti&u!ar "rdr and *r&nta' "$ #asta' "$ %atria!s.
This r*"rt #i!! snd t" invnt"ry and a!s" t" Mr&handisin' D*art%nt.
8. Rturn 2a&0 Matria!s $r"% Manu$a&turin' Units>
Invnt"ry ta0s th"s %atria!s, #hi&h ar rturn 4a&0 $r"% %anu$a&turin' units 4&aus
"$ )&ss "r sur*!us "&&urs #hi! %anu$a&turin' "$ *r"du&ts. This )&ss "r sur*!us )ists
4&aus "$ *ur&has d*art%nt, thy a!#ays "rdrs 5;K %"r than its r7uir%nt t" %t th
r7uir%nt "$ n)t %"nth. " ths %atria!s ar 0*t in Invnt"ry as na% it as /(%ffer
to!.1
Ths 2u$$r t"&0s #i!! 4 uti!i #hn &"%*any 't th sa% ty* "$ Ordr. Invnt"ry
issus ths %atria!s 2u$$r t"&0 "n!y #hn it r&ivs instru&ti"n $r"% Mr&handisin' and
*ur&hasin' D*art%nt.
=. R+&td Matria!s>
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INVENTORY MANAGEMENT APEX AUTO LTD.,
Ins*&ti"n d*art%nt %a0 th r+&ti"n "$ %atria!s, #hn %atria!s ar n"t as *r
r7uir%nts and n"t as *r th "rdr. Ths r+&td %atria!s ar 0*t in s*arat s&ti"n 4yInvnt"ry D*art%nt.
Invnt"ry d*art%nt in$"r% t" Pur&has D*art%nt and a!s" n"ti& t" u**!irs a4"ut
r+&ti"n "$ %atria!s. That is &a!!d /Re"e!t#on Car&.1 In this &ard it inv"!vs Na% "$
u**!ir, Ds&ri*ti"n "$ Matria!s, Cha!!an N"., Cha!!an Dat, Gat Entry N". ( Dat, N". "$
uantity r+&td, Ras"n $"r r+&ti"n t&.,
"% ti%s su**!ir %ay issu n# %atria!s in *!a& "$ r+&td %atria!s. Or h %ay
'iv s"% &"%*nsati"n $"r #r"n' su**!y and that is a$tr *ayin' "$ $u!! *ay%nt "$ %atria!s.
Se!t#on #n In$entor'>
Invnt"ry is a'ain dividd int" = s&ti"ns. Ea&h is s&ti"n hand!in' 4y "n!y "n *rs"ns,
#ith th h!* "$ 6 t" 8 assistants, #h" h!*s in %aintainin' "$ %atria!s at s*&i$i& ara. iv
s&ti"ns ar as $"!!"#s>
Se!t#on #n In$entor'
,?>
A!! 4"u'ht "ut it%s ar 4n st"rd hr and *r"&ssd t" th %anu$a&turin' as #hn r7uird
,??
A!! &"nsu%a4!s and t""!s and %aintnan& a&&ss"ris ar 4n st"rd in this s&ti"n
,?1
A!! ra# %atria!s !i0 dir&t, s%i $inishd '""ds ar st"rd in this s&ti"n and *r"&ssd t" th
%anu$a&turin' as #hn r7uird and "!d st"&0 and r+&td it%s ar a!s" st"rd in this s&ti"n.
,?3
Gas tan0 and &y!indrs is st"rd in this s&ti"n.
,?4
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INVENTORY MANAGEMENT APEX AUTO LTD.,
A!! $inishd '""ds ar st"rd in this s&ti"n
.%r!ha#ng .ro!e&%re of Mater#al
In A*) thy *ur&has %atria!s at $r"% a %u!ti*! u**!irs. Thr is a ras"n $"r
*ur&has %atria!s $r"% %u!ti*! su**!irs. Th ras"n is i$ "n su**!ir d!ays t" $u!$i!! th
su**!y thn thr %ust 4 a!trnativ su**!ir $"r it t" $u!$i!! th r7uir%nt. " thr %ust %
n" st"&0 "uts in th *r"du&ti"n *r"&ss
A*) a!#ays *ur&hass at 4u!0 4ut 4y s&hdu! #is. In "thr #"rds thy *ur&has
%atria!s at a ti% $"r s*&i$i& "rdr. Thy %a0 th a'r%nt "$ su**!yin' %atria!s "n!y at
"n&. And thy n'"tiat th *ri& "n!y at "n& that is 4$"r su**!yin' "$ %atria!s and "n&
thir a'r%nt is "vr thn thy *r"vid s&hdu! t" su**!ir t" su**!y th %atria!s at a
s*&i$i& ti% and at a s*&i$id 7uantity.
" it rdu&s th s*a&s, #hi&h "&&u*is in th G"d"#n. " this %th"d is suita4! $"r
this ty* "$ industry 4&aus "$ sa% "rdrs $r"% &ust"%rs.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
0I. Store
N"# # &"% t" th @IP t"r. As # hav a!rady sn that this A*) is havin' "n!y
"n G"d"#n and vry unit is havin' its "#n t"r D*art%nts. As # 0n"# that @"r0 In
Pr"&ss t"r %ans %i?$inishd G""ds, hr '""ds ar n"t &"%*!td yt and n"t ths ar in
$u!!y ra# %atria!s $"r%.
" in va!uati"n %attr it is havin' s!i'ht!y di$$rnt #ay. And in A*) it is as $"!!"#s>
Ys, ths '""ds ar in&!uds s"% !a4"ur &"st, s"% "thr &"sts. " in va!uati"n "$ @IP thy
va!uat at Ra# Matria! Pri& "$ that '""ds PLU in&urrd &"st t" *r"du& ti!! n"#.
/#n#he& Goo&
Va!uati"n "$ inishd G""ds in A*) is at 3;K !ss than !!in' Pri& "$ th"s $inishd
'""ds. inishd G""ds ar in th sns ths '""ds sh"u!d 4 rady t" dis*at&h.
Thr is n" s*arat G"d"#n $"r inishd G""dsPr"du&ts. Evry unit is havin' it9s "#n
inishd G""ds G"d"#n. In that G"d"#n "n!y thy st"r ths G""ds. And dis*at&hin' "$
ths *r"du&ts is dir&t!y 4y a&h unit. Thy d" n"t &"ns"!idat ths '""ds: thy dis*at&h ths
$inishd *r"du&ts dir&t!y 4y a&h unit.
A*) aut" !td Unit II has "n!y "n &ust"%r that is T!&"n. " thy dir&t!y su**!y
$inishd *r"du&ts t" its &ust"%rs. " it is n"t n&ssary t" hav an"thr G"d"#n $"r inishd
G""ds.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
-og#t#! In$entor' Management
Thr is a d*art%nt &a!!d L"'isti& D*art%nt in A*) Aut" Ltd, #hi&h is &"n&rnin'
a4"ut s!!in' "$ '""ds and %aintainin' "$ a!! d"&u%nts r!atd t" )*"rtin' "$ *r"du&ts and a!s"
ta0in' th *r%issi"n $r"% 4an0s t" s!! s*&i$i& *r"du&ts in s*&i$i& &"untris. " L"'isti&
D*art%nt is "n "$ th i%*"rtant $r"nt?"$$i& D*art%nts, !i0 Mar0tin' D*art%nt.
Mar0tin' D*art%nt is "n, #hi&h ta0s th "rdrs $r"% its &ust"%rs. And this is
ntir!y di$$rnt $r"% L"'isti& D*art%nt. L"'isti& D*art%nt is "n, #hi&h s!!s its *r"du&ts
and %aintains a!! d"&u%nts. 2ut Mar0tin' D*art%nt is &"%s int" *i&tur 4$"r *r"du&ti"n
*r"&ss starts. And L"'isti& D*art%nt &"%s int" *i&tur "n!y a$tr th *r"du&ti"n *r"&ss
&"%*!ts.
L"'isti& D*art%nt is n"t "n!y ta0in' th a**r"va! $"r s!!in' its *r"du&ts, 4ut a!s" it
#i!! &"n&rn $"r ta0in' !"an $"r its #"r0in' &a*ita!. 2an0s #i!! *r"vid ths #"r0in' &a*ita!
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INVENTORY MANAGEMENT APEX AUTO LTD.,
r7uir%nts in t#" snss> "n is "n Pr?hi*%nt L"an and an"thr "n is P"st?hi*%nt
L"an.
Thr ar s" %any #ays t" 't !"an $"r #"r0in' &a*ita! r7uir%nt. A*) 't !"an $"r
@"r0in' Ca*ita! r7uir%nt ithr thr"u'h C"%%r&ia! Pa*rs "r thr"u'h Lttr "$ Crdit.
A*) is ta0in' !"an $"r @"r0in' Ca*ita! R7uir%nts $r"% A)is 2an0.
0ho !an #%e the C.>
A &"%*any #i!! 4 !i'i4! t" issu th CP *r"vidd>
3. th tan'i4! nt #"rth "$ th &"%*any as *r !atst auditd 4a!an& sht is n"t !ss than
Rs. 8 Cr"rs.
Note:
Tan'i4! nt #"rth %ans shar &a*ita! *!us $r rsrvs du!y rdu&d 4y intan'i4!
assts !i0 a&&u%u!atd !"sss, d$rrd rvnu )*nditur t&. r Rsrvs in&!ud shar
*r%iu% and d4ntur rd%*ti"n rsrv 4ut d" n"t in&!ud rva!uati"n rsrv.
5. C"%*any has 4n san&ti"nd #"r0in' &a*ita! !i%its 4y 4an0s.
6. 2"rr"#d a%"unt "$ &"%*any is &!assi$id as a standard asst 4y th 4an0.
C"%%r&ia! Pa*r is an uns&urd *r"%iss"ry n"t issud at a dis&"unt. Th rat "$
dis&"unt is r7uird t" 4 d&idd 4y th issur and is n"t r'u!atd.
2$"r th &"%*any issus th CPs it is r7uird t" "4tain satis$a&t"ry &rdit ratin' $r"%
an a**r"vd &rdit ratin' a'n&y. Prsnt!y, $"!!"#in' &rdit ratin' a'n&is hav 4n
a**r"vin' 4y R2I $"r this *ur*"s.
a. Crdit Ratin' In$"r%ati"n rvi&s "$ India Ltd., CRIIL
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INVENTORY MANAGEMENT APEX AUTO LTD.,
4. Invst%nt In$"r%ati"n and Crdit Ratin' A'n&y "$ India Ltd., ICRA
&. Crdit Ana!ysis and Rsar&h Ltd., CARE
d. ITC- Ratin' India P Ltd.,
Th %ini%u% &rdit ratin' r7uird is P?5 "$ CRIIL. I$ th ratin' is 'ivn 4y any "thr
a'n&y, 7uiva!nt %ini%u% ratin' #i!! 4 r7uird. Th ratin' s" "4taind 4y th &"%*any
sh"u!d 4 &urrnt and sh"u!d n"t hav $a!!n du $"r rvi#.
0ho !an #n$et #n C.>
"!!"#in' *rs"ns &an invst in th CP
8. Individua!s
=. 2an0s
. C"r*"rat 2"dis in&"r*"ratd in India
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INVENTORY MANAGEMENT APEX AUTO LTD.,
It #i!! n"t 4 "ut "$ *!a& t" %nti"n hr that CP is n"t tratd as d*"sit as *r th *r"visi"ns
"$ Se!t#on 4BA of the Compan#e A!t; >D45.
.ro!e&%re for #%#ng the C.>
Evry &"%*any issuin' th CP sh"u!d a**"int a s&hdu!d 4an0 as th Issuin' and
Payin' A'nt IPA. It #i!! satis$y it?s!$ that &"%*any has "4taind satis$a&t"ry &rdit ratin'. It
sha!! a!s" vri$y th d"&u%nts su4%ittd 4y th issuin' &"%*any and issu a &rti$i&at that th
d"&u%nts ar in "rdr. IPA sh"u!d a!s" &rti$y that it has va!id a'r%nts #ith th issuin'
&"%*any.
Th issuin' &"%*any sha!! arran' t" *!a& th CPs "n *rivat *!a&%nt 4asis #ith th
invnt"rs. Th issuin' &"%*any sha!! dis&!"s t" th *"tntia! invst"r its $inan&ia! *"siti"n.
A$tr th da! is &"n$ir%d, th issuin' &"%*any sha!! issu *hysi&a! &rti$i&ats t" th invst"r.
Invst"rs sha!! 4 'ivn a &"*y "$ IPA &rti$i&at t" th $$&t that th issuin' &"%*any has a
va!id a'r%nt #ith th IPA and d"&u%nts ar in "rdr. Evry issu "$ CP sh"u!d 4 r*"rtd
t" R2I thr"u'h th IPA #ithin thr days $r"% th dat "$ &"%*!ti"n "$ issu.
A*) Aut" Ltd Unit II has stu* in T!&"n Pr%iss s" as # 0n"# ar!ir that A*)
Unit II is havin' "n!y "n &ust"%r that is T!&"n s" $"r sh"rt distan& thr is n" nd "$
!"'isti& d*art%nt in A*) Unit II it is hand!d 4y Pur&has d*art%nt in&har' is Par%"d
in'h.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
/#nan!#al In$entor' Management
A!rady # sa# a4"ut L"'isti& Invnt"ry Mana'%nt. Lt us s h"# A*) va!uats
th "!d and r+&td st"&0s in $inan&ia! tr%s and a!s" hav a !""0 "n th invnt"ry rati"s.
Val%at#on metho& for Ol& an& Re"e!te& Sto!>
Ol& Sto!>
This "!d st"&0 %ans )&ss "$ %atria!s $r"% s*&i$i& "rdr. As a!rady vi#d in
Physi&a! Invnt"ry Pr"&ss that, a!#ays *ur&has d*art%nt *ur&hass 5;K %"r than its
"rdr. " that r%aind "r )&ss %atria!s ar said t" 4 /2u$$r t"&01
Ths O!d st"&0 ar in th $"r% "$ Ra# Matria!s thn va!uat it a&&"rdin' t" *ur&hasin'
"$ th"s %atria!s. I$ ths "!d st"&0 ar a$tr inishin' "$ *r"du&ti"n *r"&ss. Thn ths ar
va!uatin' "n s!!in' *ri& "$ sa% *r"du&ts t" th &ust"%r.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
In asy #"rds it &an 4 said that i$ %atria!s ar Ra#, thn ta0in' as Pur&hasin' va!u $"r
va!uati"n *ur*"s. I$ %atria!s ar inishd G""ds thn ta0in' !!in' Pri& as a va!u $"rva!uati"n "$ O!d t"&0 in G"d"#n.
Re"e!te& Sto!>
A'ain ths ar divids int" thr *arts. R+&ti"n "$ Ra# Matria!s i.., 4$"r sndin'
t" Pr"du&ti"n Pr"&ss. R+&ti"n "$ Matria!s durin' th Pr"du&ti"n Pr"&ss and R+&ti"n "$
Matria!s a$tr th Pr"du&ti"n Pr"&ss that is, R+&ti"n "$ inishd G""ds.
R+&ti"n "$ Ra# Matria!s is va!uatin' "n Pur&has va!u "$ th"s %atria!s. R+&ti"n
"$ @IP Matria!s thn va!uat as Pur&has Va!u .l% its *art!y in&urrd C"sts !i0 La4"ur,
Ovrhad C"sts t&., And $"r R+&ti"n "$ inishd G""ds va!uat at Pur&has Va!u and u!!y
in&urrd C"sts as said n"#.
+olng or Or&er#ng Cot
Ths &"sts ar vry i%*"rtant in %anu$a&turin' &"%*anis t" %ini%i th &"st. This
is n"t a**!i&a4! t" A*) 4y virtu "$ its 2usinss a&tivitis. 2&aus, !t us hav a 4r"ad vi#
"n stat%nt 4y $"!!"#in' *"ints>
In A*), thy *ur&has th %atria!s "n!y $r"% %u!ti*! su**!ir.
2&aus t" $u!$i!! th r7uir%nts in r7uird ti% !i%it.
A*) "rdrs th %atria!s t" su**!irs "n!y at "n& and a&&"rdin' t" th s&hdu! su**!ir
#i!! su**!y th %atria!s.
Ys, D*ndin' "n h"rtr "rdr &y&! A*) &an h"!d ntir st"&0 #!! 4$"r "rdr starts
and a!s" A*) &an hav a $u!! st"&0 at a ti% 4$"r startin' *r"&ss "$ *r"du&t "$ that s*&i$i&
"rdr.
EO
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INVENTORY MANAGEMENT APEX AUTO LTD.,
EO a**!i&a4i!ity du t" th natur "$ 2usinss as a4"v said is n"t *"ssi4!.
Reor&er .o#nt>
This is th *"int is a!s" n"t havin' %u&h i%*"rtan& 4&aus "$ natur "$ 2usinss.
-ea& T#me
A*) *ur&hass %atria!s $r"% %u!ti*! su**!ir and 4y "n s&hdu! 4asis t" su**!y
%atria!s. " this is a!s" n"t a**!i&a4! in this ty* "$ 4usinss.
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INVENTORY MANAGEMENT APEX AUTO LTD.,
/#nan!#al Rat#o relate& to In$entor'2
Ra mater#al t%rno$er rat#o>
Ra# %atria! turn"vr rati" is v!"&ity at #hi&h ra# %atria! &"nvrtd int" '""ds rady
$"r sa!. I$ ra# %atria! turn"vr rati" is hi'h thn &"%*any is $$i&in&y &"nvrtin' int" $inishd
'""ds.
"r%u!a> Matria! &"nsu%dKAvra' ra# %atria!
2PATIL Page 5
Raw Material Turnover Ratio
Year Raw material consumed (Rs) Avg R.M Ratio
200
8 576!8!"22 5#608082 $0.75
200
7 #7$22#87# #6$#7266 $0.27
200
6 2#077"2#6 $#2002!"0 $.7!
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INVENTORY MANAGEMENT APEX AUTO LTD.,
"r% a4"v 'ra*h # &"% 0n"# that ra# %atria! turn"vr rati" is in&rasd ra*id!y in 5;; J. Ash#ata**a
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INVENTORY MANAGEMENT APEX AUTO LTD.,
0E(SITES
###.a*)aut"!td.&"%
###.'""'!.&"%
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