Mahesh's Project

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INVENTORY MANAGEMENT

1.1 INDUSTRY PROFILE

INTERIOR DESIGN INDUSTRY

INTRODUCTION

Interior design concerns itself with more than just the visual or ambient

enhancement of an interior space, it seeks to optimize and harmonize the

uses to which the interior environment will be put.

Many factors come into play in formulating the design solution. There is the

space itself--its dimensions and construction--with its potential and its

limitations. There is how the space will be used--for work or leisure,

entertainment or worship, healing or learning. There is the meaning of the

space, what it signifies--be it power, authority, security, wisdom,

achievement, playfulness or serenity. There are practical considerations, like

ease of access, amount of light, acoustics, seating and places to store or set

things down. There are health and safety considerations, attention to special

needs and more.

Design

Designers often specialize in one or more specific types of interior design.

Some designers specialize in only residential or commercial (or, contract)

projects, but many designers do both residential and commercial projects of

various kinds.

KARNATAKA STATE OPEN UNIVERSITY Page 1


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Approaches

conversely, many designers approach projects from different perspectives.

These approaches to design cut across specialties.

Design Specialties and Approaches

Accessible Design

Commercial Design

Design Web Sites

Health & Safely Issues

Residential Design

Sustainable/Green Design

Protecting health, safety and welfare is the professional responsibility of

every interior designer. Every decision an interior designer makes in one

way or another affects the health, safety and welfare of the public. Those

decisions include specifying furniture, fabrics and carpeting that meet or

exceed fire codes and space planning that provides proper means of egress.Additionally, designers deal with accessibility issues, ergonomics, lighting,

acoustics and design solutions for those with special needs.

http://www.asid.org/designservices/basics/accessible/http://www.asid.org/designservices/basics/commercial/http://www.asid.org/designservices/basics/designsites/http://www.asid.org/designservices/basics/health/http://www.asid.org/designservices/basics/residential/http://www.asid.org/designservices/basics/commercial/http://www.asid.org/designservices/basics/designsites/http://www.asid.org/designservices/basics/health/http://www.asid.org/designservices/basics/residential/http://www.asid.org/designservices/basics/accessible/


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Interior materials play a major part in supporting flames or toxicity.

Statistics prove that more people die in fires from inhaling fumes and

smoke than the flames themselves. Interior designers are specially

trained in interior materials and properties, including flammability and

toxicity, and are uniquely qualified to select interior finishes that meet

or exceed local, state and national fire codes. They also are charged

with establishing and maintaining proper means of egress that meet or

exceed code.

Trained and qualified interior designers study and implement

accessibility codes and guidelines. In space planning, interior detailing

and interior specifications, the implementation of accessibility codes

and guidelines is essential.

The issue of public welfare, within the realm of professional interior

design, includes the responsibility of considering the greater whole,

which involves, among other things, employing environmentally

friendly materials and practices to ensure a sustainable environment

for future generations.

In addition to designing environments that reduce stress, promote

healing and are safe, interior designers need to apply their skills to

create spaces that foster self-realization and unleash human potential.

Designers also must ensure the ecological soundness of the interior

environment and the ripple effect on the external environment.



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Qualified interior designers design workplaces that are ergonomic and

functional. An environment that provides the occupant with the ability

to adjust his/her space to meet his/her own needs can prevent

problems such as repetitive motion strain.

A decorator fashions the "look" of a space and its outward decoration

paint, fabric, furnishings, light fixtures and other materials. In addition to

enhancing the total visual environment, an interior designer creates a space

that is functional, efficient and safe.

Among the many areas of expertise a professional designer commands are

Space planning and utilization, including organizational and storage

needs

Long-term project and lifestyle planning

National, state and local building codes

Safety and accessibility

Ergonomics

Design for people with special needs

Conservation and green design

Historic restoration

Interior detailing of background elements, such as wall and ceiling

designs

Custom design of furniture, drapery and accessories Selection of appliances, plumbing fixtures and flooring materials

Acoustics and sound transmission



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Audiovisual and communication technology

Construction documents and specifications

During the 1830s, interior decorators were responsible for the revival

of interest in Gothic and Rococo styles in England. By the late 19th century,

some firms set themselves apart as "art furnishers."

Home Dcor Products was founded in November 2000 with the acquisition

of Bathopia, a bath and kitchen e-tailer. Bathopia was best known for

operating BathClick.com, a high-end bath and kitchen fixtures retailer.

Bathopia was relaunched as HomeClick.com, primarily an onlineretailer of bath and kitchen products, with the purpose of allowing the

average consumer to purchase items directly online that were typically

only available in various showrooms scattered about the country.

In subsequent years, Home Dcor Products expanded its online

presence by launching several other websites to leverage its growing

product assortment and cater to more consumer segments. Specialty

sites such as Barbecues.com, KnobsandThings.com and Poolclick.com

followed the launch of AbsoluteHome.com in 2004. In October 2005,

Home Dcor Products made a notable acquisition by buying the brand

name of big-box retailer Hechinger, a brand known for pioneering the

do-it-yourself DIY) movement. HDPI also acquired the assets of DIYbrand Builders Square, relaunching it as a vertical comparison



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shopping engine that exclusively targeted the home & garden market.

Specializations

SPECIALISATION

Interior designers can specialize in a particular interior design discipline,

such as residential and commercial design, they can also help with making

rooms in the hospital and even work with schools to make offices or another

things with some developing expertise within a niche design area such as

hospitality, health care and institutional design. In jurisdictions where the

profession is regulated by the government, designers must meet broadqualifications and show competency in the entire scope of the profession,

not only in a specialty. Designers may elect to obtain specialist certification

offered by private organizations. Interior designers who also possess

environmental expertise in design solutions for sustainable construction can

receive accreditation the specialty areas that involve interior designers are

limited only by the imagination and are continually growing and changing.

With the increase in the aging population, an increased focus has been

placed on developing solutions to improve the living environment of the

elderly population, which takes into account health and accessibility issues

that can affect the design. Awareness of the ability of interior spaces to

create positive changes in people's lives is increasing, so interior design is

also becoming relevant to this type of advocacy.



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BLINDS

A window blind is a window covering composed of long strips of fabric or

rigid material. Examples include shutters, Venetian blinds, roller shades and

curtain-like track blinds. In Britain awnings are also considered blinds. A

blind limits observation and thus blinds the observer to the view. The

main types are slat blinds which can be opened in two ways and solid blinds.

Slat blinds have long strips called slats. These can be rotated to open the

blind while it is still covering the window. In track blinds the slats hang

vertically from one end. In Venetian blinds and mini blinds the slats are

suspended horizontally on cords. A slat blind can also be opened so it is no

longer covering the window.

Solid blinds can only be raised or lowered and are often called shades. In

some such as Holland blinds and woven-wood blinds there are small spaces

between the slats. In others such as pleated shades there are no spaces

because the slats are sewn inside fabric.

Window blinds reduce the heat from sunlight. Ancient Egyptian pharaohs

had blinds made of reeds. The most inexpensive blinds in the 1800s were

home-made roller shades, made of cloth.



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Window blinds can be manually drawn or automated through motorization,

controlled from a wall switch or keypad, remote control, or a personal

computer, thus eliminating the hazard of dangling cords.

Materials

A window blind is a means of screening a window, achieving similar results

to those obtained by fitting curtains. Blinds are typically the same width and

height as the window itself or slightly wider and taller - depending on

whether they are fixed inside or outside the windows reveal (i.e. the wall

recess within which the window itself is fixed).

Window blinds have varying thermal effects: they can block unwanted heat

of the summer sun and they can keep in heat in cold weather. But in both of

these applications, they also reduce light to varying degrees, depending on

the design. Many kinds of blinds attempt varying balances of privacy and

shade. Blinds can be made of a number of different materials and

manufactured in a number of different ways. This usually determines the

name by which the blind is commonly known.

Fabric

Blinds made of fabric can either roll up around a metal batten (roller blinds),

fold up thanks to a thin cord and small horizontal slats (Roman blind),

folding blinds with no horizontal slats create a less structured look (Austrian

blinds).



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Wood

Wooden blinds are generally known as Venetian blinds. A number of

horizontal wooden slats are joined together by corded pulleys which can

either gather all the slats at the top of the window to reveal the view or

simply angle the slats while allowing some light to travel through the blind

yet retaining some level of privacy. Wooden blinds come in a number of

finishes (determined by the type of wood used, which ranges from painted to

most types of solid oak varieties) and sizes (determined by the width of each

slat which is usually available in one of three widths - 25 mm, 35 mm or

50 mm). Wooden Venetian blinds are also available as vertical blinds. These

are usually made up of wider slats and operate in virtually the same way as

their horizontal counterparts (i.e. instead of being drawn upwards to reveal

the window, the draw to one side gathering in a vertical bunch).

Pinoleum blinds are made up of small wooden twigs laid horizontally which

are joined together by vertical threading. The resulting weave is, as a result,

only flexible vertically and can be drawn upwards once manufactured as a

roller blind or in a similar fashion to a Venetian blind. Conservatory blinds

are often made with Pinoleum. Drawings in ancient Egyptian tombs of reed

blinds have been reportedand a common window blind during the 1800s is

said to have been the home-made roller shade.

Other materials

Venetial blinds, both horizontal and vertical, are available in a number of

man-made materials (either resembling wood or metal or simply plastic).



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These are better suite to areas where moisture or direct contact with water is

likely to cause a problem, such as bathrooms and kitchens. These blinds are

often available with micro slats (as small as 16 mm or less). The result of

smaller slats is that more have to be used to obscure the window completely.

Conservatory blinds (i.e. ceiling fixed via a number of horizontal pulleys)

are often made of man-made materials.

WINDOW SCREENS

A window screen, insect screen or bug screen is a metal wire, fiberglass, or

other synthetic fiber mesh, stretched in a frame of wood or metal, designed

to cover the opening of an open window. Its primary purpose is to keep

insects, leaves, debris, birds, and other animals from entering a building or a

screened structure such as a porch, while permitting fresh air-flow. Most

houses in Australia, the United States and Canada have screens on all

operable windows, which are most useful in areas that have large mosquito

populations. Screens in North America were traditionally replaced with glass

"storm windows" in cold climates to insulate the window during the winter,

but frames combining both storm and screen panels have become the most

common type of screen currently used in cold climates.

The most common materials used for insect screening material are

aluminum and fiberglass. Aluminum is generally available in natural

aluminium or in an applied charcoal color. The charcoal is much less visible

and should be preferred where the view through the screens as well as the

external appearance of the windows is important considerations. Fiberglass

is available in light gray as well as charcoal colors, the charcoal again



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offering better viewing and appearance. Fiberglass is less expensive, and has

the advantage of not "denting" when hit or pushed. However, the fiberglass

mesh is somewhat more opaque than aluminium mesh, which darkens the

external appearance of the window and reduces the amount of light

transmitted from outside. For applications requiring greater strength, such as

screened doors, nylon, and polyester screening is also available.

The premier material for insect screening is bronze. Bronze will give much

longer service than either aluminium or fiberglass. When first installed, it

has an unattractive gold color which weathers to an unobtrusive dark

charcoal within a year or less. Bronze is somewhat more resistant to denting

than aluminium. The very high cost of bronze screening explains why it is

not more commonly used. Less common screen fabrics include copper,

brass, stainless steel and galvanized steel.



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1.2 COMPANY PROFILE

BACKGROUND AND INCEPTION OF THE COMPANY

The history of Swril Infotech Pvt Ltd is the history of window blinds

production in South India. It all began in 1986 when Mr. George started a

small window matts production unit in Bangalore. His aim was to

manufacture and export high quality window matts and market them at

reasonable price.

Swril Infotech is a market challenger in the state of Karnataka. Swril

Infotech specialize in window blinds .SWRIL INFOTECH Blinds have

become a powerful Brand name in Wooden/Bamboo/Reed/Exterior Blinds

and they have established a national presence through their trade partners.

Swril Infotechoffer countless designs including the one you have in mind

.They are importing raw materials from Malaysia (Bamboo

blinds),Netherland(Roller fabrics),Germany(Mosquito items),and U S

A(Mesh).The main suppliers of mesh are Jindal Aluminium, plamotec etc.

NATURE OF THE BUSINESS CARRIEDSWRIL INFOTECH Blinds match your lifestyle perfectly. They can

transform your interiors like nothing else can .They are made using only



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quality material treated and polished with the superior coats from the best in

the industry. They would make any room look a shade more elegant,

naturally. These blinds are available in so many designs that you will wish

your home had as many windows. They are so acquisitively designed and

finely fabricated that they lend the right amount of elegance and

sophistication to homes, corporate offices, hotels resorts and hospitals. We

understand that wooden blinds are currently a range world over pioneered

them in the country.

SWRIL Roller insect screen system yet another product from mattscorner

ensure that you bid bye to insects keeping intact the aesthetics of your

home .It helps to retrieve 100%natural light and fresh air .Of course it

protects your family from the insects .The SWRIL roller insect screen

system is supported with the worlds one of the best fiberglass mesh from

Hanover Wire cloth, U.S.A.The system is engineered with the best quality

materials and is user friendly. It is available in colours suiting your

interior .The system is unique in its product segment.

SWRIL ins-frame system again a product pioneered by Mattscorner with

sleek aluminum channels, Hanover fiberglass and aluminum mesh, caters to

the middle income and upper middle income household.

The clientele list of our above products is so huge that they installed them

across the breadth and length of the country and across all sections of



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households. They have again exported their insects screen accessories to

Colombo and exploring other Asian countries also.

VISION, MISSION AND QUALITY POLICY

VISION

The major vision of Swril Infotech is to is to make it known worldwide in

such a way that when it comes to deciding on window blinds, the first name

that should come to the mind of the customer is SWRIL CORNER

MISSION

The mission is to give customers the best products and extend prompt after

sales service. The customers requirements are reviewed for adequacy before

taking up any job customer satisfaction is monitored regularly to meet the

Quality policy .Customer requirements are documented on order form and

communicated to process owners to ensure to meet the customer

requirements

QUALITY POLICY

Mattscorner manufactures of vertical blinds and insects screen will strive to

continue to be one of the leading suppliers by deriving customer satisfaction

through on time delivering supply of quality products at competitive pricing

and continually improving our quality management system



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It is our policy to manufacture and market goods which comply with the

customers requirements. We consider customer satisfaction as the basic

philosophy of the organization.

Their Quality Objectives:

To maintain an effective management system through an active

involvement of all employees to ensure timely delivery of goods to reflect

the quality in all our activities

1. Aim for 100% delivery performance

2. Aim for zero customer complaints

3. Aim for 85% customer satisfaction

PRODUCT PROFILE

Matts products cater in to

A.BLINDS

1. Bamboo blinds

2. Printed bamboo blinds

3. PVC blind

4. Vertical blinds

5. Venetian blinds

6. Roller fabric blinds

B.INS SCREEN

1. INS Frame for window and door2. Roller system vertical for window

3. Roller system horizontal for door



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4. Slow drive system

5. Plisee system

6. Barrier system

HANOVER FIBRE GLASS MESH

NEWYORK WIRE MESH

SWRIL ROLLER INSECT SCREEN

PRODUCT PROFILE

BLINDS

SWRIL-Y01 SWRIL-Y02 SWRIL-Y03 SWRIL-Y

SWRIL-500 SWRIL-502 SWRIL-503 SWRIL-50

Polymer Blinds

S.No Products Color Make Model Size Max/Width Mounting

1 EX 700Deep

OrangePolymer Roman/Roller Customized 183 cms

Recess /Surface

2 EX 701CoffeeBrown

Polymer Roman/Roller Customized 183 cmsRecess /Surface

3 EX 702 DarkGreen Polymer Roman/Roller Customized 183 cms Recess /Surface

4 EX 703Tan

BrownPolymer Roman/Roller Customized 183 cms

Recess /Surface



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5 EX 704Creamy

IvoryPolymer Roman/Roller Customized 183 cms

Recess /Surface

6 EX 705Creamy

Ivory(B)

Polymer Roman/Roller Customized 183 cmsRecess /Surface

INSECT SCREENS

Fibre Glass Mesh

S.No Products Color Width Length Unit Package

1 Fibre GlassInsect

Screens

BLACK 3' / 4' / 5' /6'

30.4/100 mtr/ft 1 Roll

2 GREY 3' / 4' / 5' /6'


3 WHITE 3' / 4' / 5' /

6'


4 BROWN 3' / 4' / 5' /6'


5 IVORY 3' / 4' / 5' 30.4/100 mtr/ft 1 Roll

6 DECOR 3' / 4' / 5' 30.4/100 mtr/ft 1 Roll

Horizontal retractable single door



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Spring loaded retractable system, Convenient, easy to install,easy to operate.Offers complete protection from insects, and is very easy to maintain.Retrieves 100% natural light and fresh air.

SpecificationsCassette Size : 40mm x 50mm

Side Guides : 18.5mm x 35mm

Net Size Range : 1600mm width x 2500mm height max.

Standard :

Typical cross-section of a roll screen assembly usingUltrafab USA New Angle Pile (holds screen in place)

Installation : Surface or recess mounting

Fiberglass Mesh : Colours - Grey, Black, White and Brown

Frame Colours : Off-white, Black, Brown (powder coated)

Special Colours on request Width adjustable



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SUN SCREENS

Sun screens BASDEN 2000 SERIES

Products Series 2000 Series

Composition 30% Polyester, 70% Vinylon Polyester

Roll Length (m) 30

Standard Width (m) 1.83/2.50

Yarn Diameter (in.) 0.013 Warp. 0.013 Fill

Thickness(mm) 0.60

Mesh/in. 48 Warp. 48 Fill

Openness Factor (%) Appr. 5%

UV Blockage Appr. 95%

Mesh Weight (g/m2) 410

Breaking Strength (LB/5cm) 330x330 (ATSM D5035)

Abrasion Resistance >10000 (ASTM D4966)

Flame RetardantNFPA701 & Grade B1(GB8624-1997)



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HarmfulSubstances

Soluble Lead(mg/m3)

0

2002 (White/Beige)

2005 (White/Pearl Grey)

2101 (Light Grey/Light Grey)

Sun screens BASDEN 4200 SERIES



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Products Series 4200 Series

Composition30% Polyester, 75% Vinylon Polyester

Roll Length (m) 30

Standard Width (m) 1.83/2.50

Yarn Diameter (in.) 0.013 Warp. 0.013 Fill

Thickness(mm) 0.80Mesh/in. 38 Warp. 38 Fill

Openness Factor(%) Appr. 8%

UV Blockage Appr. 92%

Mesh Weight (g/m2) 520

Breaking Strength (LB/5cm) 330x330 (ATSM D5035)

Abrasion Rasistance >10000 (ASTM D4966)

Flame RetardantNFPA701 & Grade B1(GB8624-1997)

HarmfulSubstances

ChoroethyleneMonomer(mg/kg)

0



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4201 (White/White)

4202(White/Beige)

4205 (White/Pearl Grey)

4211(Black/Brown)

AREAS OF OPERATION

They distribute their products in Regionally, Nationally, and globally

1. Mannal Delhi

2. Global marketing Coimbatore

3. Veeva enterprises Chennai

4. Shalini marketing Hyderabad

5. Srilanka.

COMPETITOR INFORMATION

1. Spectra

2. Satkal

3. Mantharalayam



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4. Garden fencing

5. Alembie

OWNERSHIP PATTERN

1. Mr. George Mathew

2. Mrs. Regha George

WORKFLOW MODE Stage 1.

Stage2.

Selecting the raw materialsas per customer needs



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Stage 4.

Stage 3.

Stage 5 Stage 6

Stage 7. Stage 8. Stage

9.

INFRASTRUCTURAL FACILITIES


Height cutting

Cord locking process

Width cutting

Quality checkingMeasurement checking

Labeling Sealing Packing

Dispatching

Stage 10


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Managing

Director

Directors

Finance Purchase Production Marketing Accounts

Human

Resource


SWRIL seeks to provide a safe and environment friendly work

atmosphere. They are providing good canteen facility to the workers in the

company. Managing director is responsible for providing good house

keeping and such facilities like wooden/plastic containers and handling

equipments required to protect product quality the employees are trained to

keep their work place clean.

ORGANISATION STRUCTURE

Organisation structure of the Swril Infotech Pvt Ltd.



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ACHIEVEMENTS AND AWARDS IF ANY

Inside outside Mega Show 2008

1.1st price-CHENNAI

2.2nd price-HYDERABAD

FUTURE GROWTH AND PROSPECTUS

The first and the foremost objective of the firm is to maintain the

quality of product...To be the leader in the Window blind industry, this is the

major goal of Mattscorner India pvt ltd.

To expand operations to foreign countries

To acquire the North Indian market

To maintain the quality of products

To maintain good relations with suppliers

To maintain a healthy competition with the competitors

To regulate production process without damages/defects



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1.3 INTRODUCTION


MEANING OF INVENTORIES:

The term inventory refers to materials lying in store. Inventory may

be defined as the raw-materials , work in progress or finished goods held for

ultimate use in manufacturing process or for resale purpose.

For manufacturing concern, inventories may consists of raw materials, semi-

finished products store and spares materials such as cotton, waste, lubricants

oil, brush etc. whereas trading concerns inventory includes goods for

ultimate resale.

Inventory constitutes most significant part of current asset of a large

majority of the cost in India. On the average, inventories are approximately

60% of the current assets in public companies in India. Because the large

size of inventories maintained by firms a considerable amount of fund is

required to be committed in them.

Inventories can be reviewed as idle source of any kind having an economic

value they are these goods which are procured stored and used for the day to

day functioning of an organization.



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Different managers view inventories in different angles:

Production manager: he like to have adequate stock of raw materials

and would like to produce economic batches of size. So that

production line is not idle and optimum capacity is utilized.

Purchase manager: He would like to order in charge valume as it

involves lesser number of order and consequently lesser work and

cost.

Finance manager; He would invest insist on low inventories, because

for him goods are working capital and cash flow gets affected by

large inventory.

However high inventories mean lesser profits and these days no company

can afford high inventories. The reduction of excessive inventories carries a

favorable impact on the companys profitability.

COMMON CHARACTERSTICS OF INVENTORIES:Inventories shares the following characteristics

1. Inventories represent a financial investment for the company.

2. Inventories become part of the cost of goods sold and are therefore a

business expenses.

3. Inventories use storage space, require handling, incur tax, require

insurance and sometimes deteriorate, become absolute or get lost or

stolen.



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4. The availability of the right items at the right time is necessary for

operating any production process or satisfies a demand by customers

for a finished products.

5. Inventories are not self-correcting. They must be managed and

effective management requires appropriate measures of performance.

All profit oriented organization carries inventories with these

characteristics.

NATURE OF INVENTORIES:

Inventories are the stock of the product of a company is

manufacturing for sale and components that make up the products.

The various forms in which inventories exists in a manufacturing

company are,

A) Raw Material

B) Work in progress

C) Finished goods

D) Store and supply

A ) Raw material :

Raw material are those basic inputs that are converted into finished

product through the manufacturing process. Raw material inventories

are those units which have purchased and stored for future

productions.

B)Work in progress:



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Work in progress inventories are semi manufactured products they

represent products that need more before they become finished goods.

C)Finished goods:

Finished goods inventories are those completely manufactured

products which are ready for sale. Stock of raw material and work in process

facilities production, while stock of finished goods are required to smooth

marketing operation thus inventories serve link between production and

consumption of goods.

D)Spares and parts:

Firm also maintains a forth kind of inventories, suppliers stores or

stores and spares. Supplies include office and plant cleaning, materials

like soap brooms, oil, light and bulbs etc.

NEED TO HOLD INVENTORIES:

The questioning of managing the inventories arises only when the company

holds inventories. Maintaining inventories involve typing up the companys

funds and incurrence of string and handling costs. If it is expensive to

maintain inventories why do companies hold inventories? There are three

motives for thr holding of inventories:

Transaction motive emphasis need to maintain inventories to facilitate

smooth production and sales operations.



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Precautionary motive necessitates holding of inventories to guard

against the risk of unpredictable changes in demand and supply forces

and other factors.

Speculative motive influences the decision to increase or decrease

inventory level to take advantage of price fluctuations.

Objectives:

The main objectives of the inventory management are as follows

To maintain a large size of inventory for efficient and smooth

production and sales operation.

To maintain a minimum investment in inventory to maximize the

profitability.

The objective of inventory management should be to determine and

maintain optimum level of inventory investment.

The objectives of inventory management are as follows:

To ensure the timely supply of raw material finished products

and other spares in required quantity for production purpose and to meet

frequent varying demands of the customers.

To utilize available storage capacity economically by fixing the stock

level.

To minimize as for as possible investment in inventories inventory

carrying cost and likely obsolescence loss.



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To eliminate possible losses due to pilferage carless handling theft

deterioration in quality etc.

To obtain economies of large scale buying.

To know the comparative cost and consumption of materials over

different periods.

To achieve wealth maximization objectives.

COST ASSOCIATED WITH INVENTORIES

Carrying cost:

Cost of capital tied up

Storage and handling costs

Insurance

Property tax

Depreciation and obsolescences.

Ordering shipping and receiving cost:

Cost of placing order, include production and set up costs.

Shipping and Handling costs.

Cost of running stock/stock output

Loss of sales varies

Loss of customer go will varies

Disruption of production varies.

ACQUISITION COSTS:



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Acquisition cost encompass cost incurred in requisitioning

purchase ordering setting up, tracking receiving and storage placement. The

more frequently acquisition inventory are made the higher firms acquisition

cost will be relatively small. So acquisition cost decrease with increasing

inventory size other thing being equal.

SCOPE OF INVENTORY MANAGEMENT:

Inventory constitutes one of important current assets to a firm

holds. Inventories establish link between production and sale of products.

Larger inventories give flexibility in operation. Holding of adequate of raw

material, finished goods, spare parts etc., ensure smooth and unrestricted

flow of production as well as selling activities.

If the inventory is inadequate then

It may hamper the production activities during the period of

scarcity. Trading firm may forego the possible anticipated profit if, it does

not hold sufficient quantity of goods in stock to meet the increasing demand

of the customers.

If the inventory is more then,

Increased total cost incurred

Storage and Handling cost will also increase.

Required return on capital being tied up in the inventory.

Therefore,



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A perfect balance should be struck between investment made on the

inventory and benefits to be obtained there from.

Inventory management includes the determination of quantity of inventory

to be carried, fixing timing schedules, determining minimum stock levels,

procuring, disbursing, storing material, assigning inventory control

responsibilities and supervision.

Thus, inventory management is concerned with proper planning and

controlling of raw materials, finished goods, and store materials in stock for

efficient production or ultimate selling purpose.

Finance managers Role in Inventory Management:

For a majority of the companies, the inventory represents a substantial

investment. The inventory program , is part of the planning budget

which often falls within the financial area.

As management becomes increasingly aware of the necessity ofinventory control, ultimate responsibility is placed more and more in

the hand of the financial manager who playing increasingly important

role in determine the nature of control involved exercised the

methods of balancing the relative cost involved and measurement of

performance of inventory control. He may be having supervisory

authority in this area or he may be a member of policy committee with

board responsibilities. In smaller firm, he often participates even more

directly in the management of inventories.



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Though the corporate financial officer may not be directly concerned

with inventory policies. The inventory policies have a direct and

important bearing on the financial need of the firm. The financial

officer can do good job of anticipating change in the need for funds if

he thoroughly understands the implication of changing inventory

policies where financier are a limiting factor.

TECHNIQUES OF INVENTORY

ABC Technique

Organization can classify inventories on the basis of amount

spent on purchasing various items. The comparatively costlier items can

be kept in one class and moderate cost items can be put into another.

Comparatively cheaper items forming the bulk of inventories can be

designated as A Class with moderately costly items as B class and

cheaper items in C class. This is the simple ABC technique of

managing inventories.

The procedure of ABC classification ia as follows Classify the inventories determine the expected use in units and

the price per unit for each items.

Determine the total value of each item by multiplying the expected

units by its unit price.

Rank the items in accordance with the total value giving first rank

to the item with the highest total value and so on.



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Compute the ratio of number of units of each item to total value

of all items.

Combine items on the basis of their relative value to form

categories A,B and C.

For Example,

ITEMS CATEGORY TOTAL INVENTORY VALUE

A 70%

B 20%

C 10%

TOTAL 100%

Table showing features of ABC analysis

Pareto analysis:

Pareto analysis (some times referred as 80/20 rule and as ABC

analysis) is a method of classifying items, events, or activities according to

their relative importance. It is frequently used in inventory management

where it is used to classify stock items into groups based on the annual

expenditure for, or total stock holding cost of each item. Organization can



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concentrate on the high VALUE/ IMPORTANT items. Pareto analysis is

used to arrive at this prioritization.

Taking inventory as an example, the first step in the analysis is to identify

those criteria which make a significant level of control important for any

item. Two possible factors are the usage rate for any item and its unit value.

VED Technique:

This will be made on the principle of classification, which classifies the

inventory items depending on whether an item is vital, Essential and

desirable (VED) for the business activities. The items identified as vital

require more attention.

FSN Technique:

F-S-N analysis is based on the consumption figures of the items. The

items under this analysis are classified into three groups: Fast moving(F),

Slow moving(S) and Non moving(N).

To conduct the analysis, the last date of receipt or the last date of issue

whichever is later is taken into account and the period, usually in terms of

number of months, that has elapsed since the last movement is recorded.

Such an analysis helps to identify:

Active items which require to be reviewed regularly

Surplus items whose stocks are higher than their rate of

consumption; and

Non moving items which are not being consumed.



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EOQ Technique:

Economic order quantity(EOQ) is that size of the order which gives

maximum economy in purchasing any material and ultimately contributes

towards maintaining the materials at the optimum level and at the minimum

cost.

In other words, the economic order quantity(EOQ) is the amount of

inventory to be ordered at one time for purpose of minimizing annual

inventory cost.

The quantity to order at a given time must be determined by balancing

two factors: (1) the cost of possessing or carrying materials and (2) the cost

of acquiring or ordering materials. Purchasing larger quantities may decrease

the unit cost of acquisition, but this savings may not be more than offset by

the cost of carrying materials in stock for a longer period of time.

The carrying cost of inventory may include:

Interest in investment of working capital

Property tax and insurance

Storage cost, Handling cost

Deterioration and shrinkage of stocks.

Formula for EOQ:

The different formulas have been developed for the calculation of of

economic order quantity (EOQ). The following formula is usually used for

the calculation EOQ.



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EOQ= where,

A=Demand for the year

Cp= Cost to place a single order

Ch= cost to hold one unit of inventory for a year

JIT Technique:

JIT focuses on ordering inventories as and when the need arises. It

focuses on reduction in investment in inventories carrying cost. It improves

return on investment as the amount blocked in inventories is minimized.

However, the success of JIT depends in faster communication with suppliers

and the seat lead time of various items. This technique is successful when

the organization has easy geographical approach and is near to the sources of

inputs materials.

LEVELS OF INVENTORY:

Minimum stock level

Maximum stock level

Re-order level

Danger level

Minimum stock level:



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This represents the minimum quantity of stock that should be maintained in

a firm; stock level is normally not allowed below this level. This level of

stock is a buffer stock during emergencies. fall of stock level below

minimum level will indicate potential danger to this business. Thus extra

efforts have to be taken to expedite the supply.

Maximum stock level:

Maximum level indicates maximum quantity of an item of material. This is

the level above which stocks are not allowed to rise. Maximum level can be

calculated as

Maximum level = Re-order level + ( Re-ordered quantity minimum

consumption * minimum re-order period)

The factors to be considered to maintain minimum requirement stock level

are:

Maximizing requirement of the stock for production at any point of time

Storage space available

Storage and investment costs

Availability and insurance cost

Price advantage arising out of bulk purchases

Economic ordered quantity also affects the maximum level

Government restriction on import

Possibility of price fluctuation

Re-ordered quantity (EOQ):

It refers to the quantity to purchase in a single purchase order. It is nothing

but Economic ordered quantity.



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Danger level:

This level is fixed usually below the minimum level, emergent purchase

action are initiated if stock falls below danger level.

Danger Level= average consumption*maximum re-order period for

emergency purchase

LIMITATIONS:

A detailed analysis of the inventory management by considering each items

of materials could not be done due to lack of item.

Secondary regarding the data provided by the company mostly secondary

i.e. it may have been audited by the organization.

The firm does not allow the project training into the stores about the

inventory stores because it is company policy.

INVENTORY VALUATION:

Many methods of materials costing and inventory has come into use among

the more common methods of costing materials and valuing inventories are:

First in First out(FIFO)

Last in first out(LIFO)

Weighted average method(WAM)



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FIRST IN FIRST OUT (FIFO):

Here the earliest acquired stock is measured to be used first. The

stock which is bought first is issued first in order words the principle is that

the materials are issued in this order and at the price of their original

purchase.

This method is claimed to accurate for the reason that the materials are

charged into production at annual cost in the order of receipt. The closing

inventories are valued at most recent prices. If the closing inventory balance

include materials at several different prices the problems of considerable

clerical work is involved.

It is a method which materials are issued according to their

incoming time i.e. whichever is come first that should be issued to

manufacturing department first. This method is very reliable to the company

for full and efficient utilization of materials. And some are remained lastly

without issuing they are known as SHELF LIFE ITEMS.

LAST IN FIRST OUT (LIFO):

Not withstanding its deferred tax advantage, a LIFO inventory

system can lead to LIFO liquidation, a situation where in the absence of new

replacement inventory or a search for increased profits, older inventory is

increasingly liquidated (or sold). If prices have been rising, for example

through inflation, this older inventory will have a lower cost, and its

liquidation leads to recognition of higher net income and the payment of



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higher taxes, thus reversing the deferred tax advantage that initially

encouraged the adoption of a LIFO system.

WEIGHTED AVERAGE COST METHOD:

Under this method issues are priced at the weighted average cost

of materials in stock to get an into data weighted average cost figures a new

weighted average cost is calculated each times a delivery is received.



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1.4 REVIEW OF LITERATURE

Are You Communicating Purchasing's Benefits?

Because it can be difficult to gain "buy-in" from functional

departments when trying to get them to accept Purchasing's involvement, it

is important to have a list of reasons why it will benefit them to work with

Purchasing. So I encourage you to develop such a list - a Purchasing

Manifesto, if you will - to aid in your efforts to "sell" the value of working

with Purchasing.

Here is an example of four points you can include in your Purchasing

Manifesto.

1. Purchasing's Involvement Allows You To Focus On Your Core

Competency. You have a very important role in the organization.

Your expertise in your function makes you valuable. With Purchasing

handling your procurement activities, you'll be able to spend more of

your time on what you do best.

2. Purchasing's Involvement Helps You Avoid Last Minute Crises.

Your department is very busy with many competing priorities. In

many departments that meet that same description, procurement



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activities are often put off until the last minute. This results in failure

to find the best value in the market, paying expediting shipping

charges, or, worst of all, not obtaining goods and services on-time.

Purchasing can help you avoid these headaches.

3. Purchasing's Involvement Gets The Most Out Of Your Budget.

Unless your department invests in negotiation training for its staff and

gives them the daily opportunity to negotiate with suppliers, suppliers

may have an advantage in bargaining. Because the purchasing staffregularly receives negotiation training, negotiates daily, and keeps up

to date with the latest cost saving techniques, Purchasing can help

save your department money and alleviate some of your budget

constraints.

4. Purchasing's Involvement Can Uncover Unforeseen Obstacles.

Whether it be seeing the warning signs of a supplier in financial

trouble, identifying a material in short supply, or just knowing the

typical timelines associated in getting the goods or services you need,

Purchasing reduces risks to your department's operations.



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1.5 STATEMENT OF PROBLEM

TITLE OF THE STUDY:

Inventory Management in Swril Infotech Pvt Ltd.

One of the most important areas in the day-to-day management of the

firm is the management of the inventory. Inventory management is the

functional area of finance that covers the efficiency of a manufacturing firm.

It is concerned with the management of inventories as well as efficiency in

cost reduction. The study helps in evaluating efficiency of inventory

management of Swril Infotech Pvt Ltd.

1.6 OBJECTIVES OF STUDY

The main objectives of the study are,1. To understand the various techniques of inventory management and

its control.

2. To understand the effectiveness of inventory management through

various techniques.

3. To analyze the function, procedures in inventory management.

4. To study the control measures in inventory management.

5. To make a comparative study of inventory management in the last

three years.



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6. To introduce stock levels for the proper management of the

department.

1.7 NEED FOR STUDY

Inventory Management must be designed to meet the dictates ofmarket place and support the companys Strategic Plan. The many changes

in the market demand, new opportunities due to worldwide marketing,

global sourcing of materials and new manufacturing technology means many

companies need to change their Inventory Management approach and

change the process for Inventory Control. This system provides information

to efficiently manage the flow of materials, effectively utilize people and

equipment, coordinate internal activities and communicate with customers.

Inventory Management does not make decisions or manage operations; they

provide the information to managers who make more accurate and timely

decisions to manage their operations.

To know the effectiveness of inventory management in the company.

To know the importance of inventory management.

How to maintain average inventory level in an organisation.

For finding the inventory conversion period.

To study the overall inventory transactions done in a company.



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1.8 SCOPE OF THE STUDY

The first step in developing a system for materials management is to

choose the right type of classification for the materials and then apply

appropriate techniques such as:

The economic order quantity (EOQ) formula

Bulk ordering with time phased delivery

A fixed order quantity system

A fixed order period system

A probability based trade off matrix

Speculative consideration

All these controls are applicable to inventory management in all industry,

but since the time allowed for this project is limited. The assessments are

included under the heading analysis and interpretation of the data

1.9 RESEARCH METHODOLOGY

Research methodology simply refers toa methodical study in order to

prove a hypothesis or answer a specific question. Finding a definitive answeris the central goal of any experimental process.



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RESEARCH DESIGN

Research design means a search of facts, answers to question and

solution to the problems. It is a prospective investigation. Research is a

systematical logical study of an issue or problem through scientific method.

It is a systematic and objective analysis and recording of controlled

observation that may lead to the development of generalization, principles,

resulting in prediction ultimate control of events.

Research design is the arrangement of conditions for the collection

and analysis of data in manner that aims to combine relevance to the

research purpose with relevance to economy. There are various designs,

which are descriptive and helpful for analytical research.

In brief a research design contains

A clear statement of the research problem.

A specification of data required

Procedure and techniques to be adopted for data collection.

A method of processing and analysis of data.

Identifying the statement of the problem.

Collection of the companys specific literature i.e., annual reports for

the study period and the profile of the company.



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Scanning through standard books to understand the theory behind the

financial performance evaluation

Collection of information from various journals to understand the

industrial background of the study.

Sources of data:

There are two sources of data. They are as follows

1. Primary data

2. Secondary data

3.Primary data

This data was collected through discussion with concerned officers by sitting

with them in free time.

Secondary data

It is reviewing of relevant information, which is already collected and

making inferences based on the information collected

The secondary data used in the study are

1. Annual Report of the company

2. Financial records of the company

3. By viewing how they place order

Tools and Techniques:



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A financial analyst can adopt the following tools for analysis of the

financial statements. These are also termed as methods of Financial

Analysis. The tool and techniques used in the study are following

1. Inventory analysis and interpretation.

2. current ratio and quick ratio analysis.

3. statistical techniques.

1.10 LIMITATIONS OF THE STUDY

1. Time constraint.

2. All the informations required could not be made public by the

organization.

3. A thorough discussion with all officials was not possible due to their

busy schedules.

4. The study covered a wide concept and owing to the above constraints,

wide collection and coverage of information was not possible.

5. Financial statements are essentially interim reports:

6. Influence of personal judgment.



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CHAPTER-2

ANALYSIS AND INTERPRETATION

Plan of Analysis

The data collected through primary and secondary sources were

processed and presented in the chapter. Data analysis by charts in respect of

stock of raw materials, sales, inventory control procedures and thus to draw

conclusion from the analysis done.

Data Analysis

Evolution of Primary Data: Data collected through discussion with top

management and other departments like, Accounts, stores etc. From the

discussion, I came to know that the Swril Infotechhas both types of

inventories.ie, Physical and value based inventories.

The inventory system here is fully computerized. Purchasing department is

supplying the raw materials required by the production or service unit.

The company is following Determination of stock level inventory

management technique.

It Includes:

1. Maximum Level.



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2. Minimum Level.

3. Re-order Level.

4. Danger Level.

Inventory turn over ratio:

Concept:

This ratio indicates the speed at which the inventory is converted into sales,

which contributed, to the profit of the organization. Higher the ratio better

will be the efficiency.

Inventory turn over ratio = cost of sales / Average inventory

Table showing cost of sales, average inventory and inventory turn over ratio.

Table-2.1 Inventory Turn Over Ratio.

Year Cost of Sales

Average

Inventory

Inventory Turn Over

Ratio

2009-2010 9689186 543222 17.83651251

2010-2011 7564020 478765 15.79902457



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2011-2012 8041837 497557 16.16264468

Source: Annual Report

Chart-2.1 Inventory Turn Over Ratio



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Analysis

Inventory turn over ratio in 2009-10 is 17.83 and it decreased to 15.79 in

2010-11 and in the year 2011-12 it increased to 16.16.

Interpretation

The inventory turn over ratio is 39.00 times on an average. This is because

the cost of sales increases more proportionately than the average inventory.

The higher the ratio better will be the efficiency; company should try to

reduce average inventory and increase sales.

Inventory Conversion Period

Concept:

This ratio indicates the number of days taken to convert the

inventory. This ratio is very useful in deciding the organizations efficiency.

This ratio helps the organization in knowing its own efficiency to improve

and also to show the financing institutions about its capacity and its

utilization, to obtain finance from the institutions mainly from banks.

Inventory Conversion Period = 365 days/Inventory turn over ratio.

Table Showing the Inventory Conversion Period.

Table-2.2 Inventory Conversion Period



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Year No Of Days Inventory Turn Over Ratio Inventory Conversion Period

2009-2010 365 17.83651251 20.46364163

2010-2011 365 15.79902457 23.10269209

2011-2012 365 16.16264468 22.5866337


Chart-2.2 Inventory Conversion Period



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Analysis

Inventory conversion period during the year 2009-10 was 20 days while it

increased to 23 days in 2010-11 and it decreased to 22days in 2011-12.

Interpretation

The inventory conversion period increased because of less inventory turn over

ratio in the year 2010-11, which is favourable to the company.

Raw Material Turn Over Ratio:

Concept:

Raw material turn over ratio is the velocity at which the raw materials are

converted in to goods ready for sales. If the raw material turn over ratio is

high then the company is efficiently converting the raw materials in to

finished goods.

[Raw material turn over ratio = Cost of goods sold / Average raw material]

Table showing cost of sales, average raw material and raw material turn over

ratio.

Table-2.3 Raw Material Turn Over Ratio



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YearCost of

Sales Average Raw Material Raw Material Turn Over Ratio

2009-2010 9689186 736127 13.16238366

2010-2011 7564020 885069 8.546248937

2011-2012 8041837 1177717 6.828327179


Chart-2.3 Raw Material Turn Over Ratio



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Analysis:

Raw material turn over ratio in the year 2009-10, 13.16:1 Times, which

decreased to 8.54:1 Times in the year 2010-11 and it decreased to 6.82:1Times in the year 2011-12.

Interpretation

The raw material turn over ratio is high in initial year then it has gradually

decreased in the next year due to gradually increase in average raw material

and decrease in the cost of sales which indicates an unfavorable raw material

turn over ratio.

Work In Progress Turn Over Ratio:

Concept

Work-in-progress turn over ratio indicates the speed at which the

work-in-progress is converted into the finished goods. This helps the

organization to know the working capital requirement of the organization

that helps in planning.

Work-in-progress turn over ratio = Cost of goods sold / Average work in

progress.



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Table-2.4 Work-In-Progress Turn Over Ratio

YearCost of

SalesAverage work -in-progress

Work in progressturn over ratio

2009-2010 9689186 475667 20.36968299

2010-2011 7564020 354355 21.34588195

2011-2012 8041837 343654 23.40097016


Chart-2.4 Work-In-Progress Turn Over Ratio



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Analysis:

Here it is revealed that work in progress turn over ratio in 2009-10 was

20.36 and is increased to 21.34 in the next year,and again increased to 23.40

in the last year 2011-12.

Interpretation:

Work in progress turn over ratio has increased gradually in all the years

because of the proportionate change in the cost of goods sold.

Duration Of Work-in-Progress Stage:

Concept:



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This indicates the number of days taken to convert the work in

progress stock into finished goods; this helps the organization to know the

current requirement of stock of other items like consumable for the further

process in the production.

Duration of Work-in-Progress Stage = 365 / work in progress turn over ratio

The table showing work in progress turn over ratio and its duration.

Table-2.5 Duration Of Work-in-Progress Stage

YearNo Of Days in a

yearWork in progress turn overratio Days

2009-2010 365 20.36968299 17.91879

2010-2011 365 21.34588195 17.09932

2011-2012 365 23.40097016 15.59764


Chart-2.5 Duration Of Work-in-Progress Stage



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Analysis:

The duration of converting work in progress to finished in 2009-10 was

17days and in next year also 17 days were in 2011-12 it decreased to 15

days.

Interpretation:

There is a gradual decreased in work in progress turn over ratio conversion

period because of increase in work in progress turn over ratio

Inventory to Current Asset Ratio



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Inventory to current assets ratio indicates the relationship between the

inventory and current assets; it shows the percentage of inventory to current

assets, which helps the organization in deciding the current asset policy,

which also affect the liquidity position of the organization.

Inventory to current asset ratio = Inventory/ current assets

Table showing current assets, inventory and percentage of inventory to

current assets.

Table-2.6 Inventory to Current Asset Ratio.

Year

Inventory Current Assets Percentage

2009-

2010 2430704 5959565 0.40786601

2010-

2011 3099915 8565154 0.361921689

2011-

2012 8259400 14520339 0.568815921


.

Chart-2.6 Inventory to Current Asset Ratio



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Analysis

The inventory to current asset ratio in the year 2009-10 was 0.407% and it

decreased to 0.361% in the year 2010-11.And in 2011-12 it is 0.568% and is

high compare to previous years.

Interpretation

This ratio indicates the inventory components in the current assets. The

inventory component in 2010-11 was least which shows less funds blocked

in current assets in form of stock. But in next year it started increasing which

clearly indicates that more portion of the inventory has blocked in current

asset, at present is much higher in these period.

Inventory to Total Assets (Percentage of total assets):



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Concept:

Inventory to total assets indicates the relationship between the inventory and

total assets. The significance of this ratio is it reflects the portion of the

inventory as a percentage of the total assets, which helps the management in

deciding the utilization of remaining resources profitably. Since the

inventory will lock up the huge funds and reduces the profitability of the

organization.

Inventory to total assets = (Inventory / total assets) x 100

Table showing inventory, Total assets and its percentages.

Table-2.7 Inventory To Total Assets

Year

Inventory Total Assets Percentage

2009-

2010 2430704 12265929 19.81671343

2010-

2011 3099915 15840910 19.56904622

2011-

2012 8259400 22257003 37.10921906




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Chart-2.7 Inventory To Total Assets

Analysis:

During the year 2009-10the ratio of inventory total assets was 1/5 th and a

slight decrease in the year 2010-11. In 2011-12 it increased to more than

1/3rd which is a high increase in total asset.

Interpretation:

The inventory to total assets ratio indicates that what percentage of inventory

is involved in the total stock. It was least in the year 2010-11.And the high

increase in 2011-12 is because of increase in inventory in the total asset.

Inventory to total capital employed:



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Concept

This ratio indicates the relationship between the total capital employed and

inventories; it shows how much capital utilized to invest in the inventories

other than the other assets.

Inventory to capital employed ratio = Inventory / capital employed.

Capital employed = share capital + preference shares + reserves and surplus

+ long term debt.

Table-6

Table showing inventory and total capital employed and its ratio.

Table-2.8 Inventory to total capital employed:

Year

Inventory

Capital

Employed(In lacs.) Ratio {In Times}

2009-2010 2430704 1908333 1.273731576

2010-2011 3099915 2597732 1.193315939

2011-2012 8259400 4930399 1.675199107




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Chart-2.8 Inventory to capital Employed Ratio

Analysis

In the year 2009-10 the inventory to capital employed was 1.27 times, the

ratio is decreased in next year and a high increase in the year 2011-12 to

1.67 times.

Interpretation

The increase in capital employed shows that capital utilised for the stocks

have increased. Hence more portion of capital employed is invested in

inventory which be clearly shown in the chart.

Inventory to working capital Ratio



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Concept:

The relationship between inventory to working capital indicates the amount

of inventory included in the working capital. And it also shows the

efficiency of inventory management.

Inventory to working capital ratio = Inventory / working Capital

Table Showing inventory, working capital and its ratio

.

Table-2.9 Inventory To Working Capital Ratio

Year

Inventory

Working

Capital Ratio {In Times}

2009-2010 2430704 583607 4.164967178

2010-2011 3099915 1212814 2.555969011

2011-2012 8259400 7709709 1.071298541




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Chart-2.9 Inventory to working capital

Analysis

The companys inventory to working capital ratio was 4.16 times in the year

2009-10 then it decreased in the next two years respectively.

Interpretation

The inventory to working capital ratio has decreased in these periods which

indicate that working capital is involves less in inventory. So non-liquid

assets are less than liquid assets.

Current Ratio:



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Concept:

Current ratio is a more dependable indication of solvency than working

capital. It is the difference between current assets and current liabilities.

Current Ratio = current asset / current liability

Table showing current ratio of the company.

Table-2.10 Current Ratio

Year Current Assets

Current

Liabilities Ratio {In Times}

2009-2010 8959565 8375958 1.069676448

2010-2011 8565154 7352340 1.164956191

2011-2012 14520339 6810630 2.132011136


Chart-2.10 Current Ratio



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Analysis

The current ratio of the company has increased from 1.06 to 2.13 in the

periods 2009 to 2012.

Interpretation

The current ratio of the company is high in these periods which mean that

the current position of the company is good with respect to current

liabilities.

Inventory To Sales Ratio:



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Concept

Inventory to Sales indicates the relationship between the inventory and sales.

It shows how much of the inventories should be sold in a year with

regarding to total inventory, it shows companies sales of inventory.

Inventory to sales ratio = (Inventory / Sales) x 100

Table Showing Inventory, Sales and Inventory to sales Ratio

Table-1.11 Inventory To Sales Ratio

Year Inventory Sales Inventory to sales ratio

2009-2010 2430704 5468867 44.44620796

2010-2011 3099915 5858555 52.91262094

2011-2012 8259400 10774733 76.65526375


Chart-1.11 Inventory To Sales Ratio



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Analysis:

In the above table it shows in 2009-10 the inventory to sales ratio was 44.44

% and in the next two years it is increasing to 52.91% and 76.65%

respectively.

Interpretation:

Here it is the increasing of inventory to sales because of increase in

inventory.Its is best for more inventory more sales and high will be the

return.

Purchase to Inventory Ratio:



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Concept:

Purchase to inventory shows the relationship between purchase and

inventory. The formula to find purchase to inventory ratio is,

Purchase to inventory ratio = purchase / inventory

Table Showing purchase, Inventory and purchase to inventory ratio.

Table-2.12 Purchase To Inventory Ratio

year PurchaseInventory Purchase to inventory ratio

2009-2010 7257446 2430704 2.985738288

2010-2011 7644266 3099915 2.465959873

2011-2012 8757648 8259400 1.060324963


Chart-2.12 Purchase To Inventory Ratio



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Analysis:

It is the purchase to inventory ratio in 2009-10 as 2.98%, which

decreased to 2.46% in 2010-11, which again decreased to 1.06% in

2011-12.

Interpretation:

The decrease in the purchase to inventory ratio shows the decrease in

profit.

SUMMARY AND FINDINGS



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1. It is noted that Inventory turn over ratio in 2009-10 is 17.83 and it

decreased to 14.37 in 2010-11 and in the year 2011-12 it increased

to 16.16.

2. Inventory conversion period during the year 2009-10 was 20 days

while it increased to 25 days in 2010-11 and it decreased to 22days

in 2011-12.

3. About 3/4th of the customers are thinks that processing time and

processing cost of the company is reasonable, but some customers

hints that processing time is high.

4. Here the raw material turn over ratio in the year 2009-10, 13.16:1

Times, which decreased to 1.76:1 Times in the year 2010-11 and it

increased to6.82:1 Times in the year 2011-12.

5. It can be seen that majority feels that there is a friendly approach

from the employee towards the customers, but still considerable

number of customers feels that employee approach is unfriendly.

6. The inventory to current asset ratio in the year 2009-10 was 0.407%

and it decreased to 0.361% in the year 2010-11.And in 2011-12 it is

0.568% and is high compare to previous years.

7. During the year 2009-10 the ratio of inventory total assets was

19.81% and a slight decrease to19.56% in the year 2010-11. In

2011-12 it increased to 37.10% which is a high increase in total

asset.



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8. In the year 2009-10 the inventory to capital employed was 1.27

times, the ratio is decreased in next year and a high increase in the

year 2011-12 to 1.67 times.

9. Working capital turnover ratio indicates that the company does not

have an efficient control over the working capital.

10.The companys inventory to working capital ratio was 4.16 times in

the year 2009-10 then it decreased in the next two years

respectively.

11.The current ratio of the company has increased from 1.06 to 2.13 in

the periods 2009 to 2012.

12.For more than half of the respondents quality seems to be the factor

that attracted the public to purchase the brand they are experienced.

13. Majority of respondents holds the view that TV is an effective

medium for advertisements.

A sincere effort has been made by the researcher to know the position

of inventory. The inventory position thus known from this helps the manager

to take good decision in the organization. Suggestions have also been given

for the betterment of the company.



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SUGGESTIONSThe major finding of the study paves a way for the researcher to

provide the following suggestions to improve and develop inventory

management in Swril Infotech Pvt Ltd.

1. As the inventory turnover rate is low, the inventory is high. The

efficiency of utilizing the inventory can be enhancing by reducing the

stock levels to the required level only.

2. Inventory to total capital employed increased shows that much of the

capital is utilized in inventories. The company can try to maintain a

low ratio in this regard.

3. As the raw material turnover ratio is high it indicates excessive raw

material stock lying idle, this can be reduced by purchasing the raw

material when it is required.

4. The material can be purchased from the suppliers as and when

required to avoid unnecessary blockage of funds in idle stock.

5. Proper training to be given to workers for increasing efficiency in

production process.

6. The bin card system should be monitored to ensure the availability of

right quantity materials at the right time.



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7. Current ratio of the company is increasing and needs to maintain it

that the liquidity position of the firm can be maintained.

8. In order to improve the brand awareness various activities like

sponsorships etc should be undertaken or should be continued.

9. A frequent audit should be made with the team by the

management.

10. Special consideration should be given for employees

who work in extra time.



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3.1 CONCLUSION

Finally it can be concluded that on whole the inventory position

in Swril Infotech Pvt Ltd is improving over the years. But still it has

to concentrate on the reduction of raw material holding period and

inventory conversion period which is the main cause of blockage of

funds. So apart from this the inventory control techniques and

procedures followed are satisfactory. A period of one month is taken

for the study. For the particular study a simple survey was conducted

at an initial stage. After analyzing the data the study has further shown

the significance of media advertisements as a factor influencing upon

the customer buying decisions. The study has brought out that any few

improvement steps on the part of management can bring a lot of



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benefits to the product in the coming future, since the target market

for the product is quite high.

3.2 ANNEXURES

Over the years, Swril Infotechrealized that people are as

different as they are similar. Different needs, different lives, different

needs. With the depth of knowledge Matts corner, today, is poised to

fulfill the hopes and aspirations of people across the length and

breadth of the economy.

BIBLIOGRAPHY

1. Kothari. C.R. ,Research Methodology Methods and Techniques,

Wishwa Prakashan, 2e,2002

2. Khan. M. Y & Jain. P. K.,Financial Management, Tata Swril

InfotechGraw Hill, 4e, 2004.



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3. K. Aswathappa & K. Sridhar Bhatt,Production and Operations

Management 9th Edition, 2007.

WEBSITES

1. www.swrilinfotech.net

2. www.swrilmatts.in

3. www.google.com

4. www.wikipedia.com

WEEKLY REPORT

First week

I got permission to do a project in Swril Infotech

Pvt Ltd. Later I informed the research topic and

went through the overview of the company.

Second week

I referred the research methodology books for

reference.



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Third week

This week I collected secondary data related to

inventory analysis. Collected company balancesheet and P&L a/c (for 3 years).

Fourth week

This week I started analyzing data using financial

tools such as tables graphs and chart of the

analyzed data and interpreting the data, with the

help of tables and chart.

Fifth week

I approached my guide for his opinion and

guidance for drawing conclusion.

Sixth week

I took the soft copy and showed it to the external

guide.

Documents

Mahesh's Project