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CHAPTER I

INTRODUCTION TO THE STUDY

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1.1 BACKGROUND OF THE STUDY

Inventories constitute the most significant part of current assets of most of the companies in

India. On an average, inventory held ups are approximately 60% of current assets in public

limited companies in India. Because of the large size of inventories maintained by many factory

concerns, a considerable amount of funds is required to be committed to them. It is absolutely

imperative to manage inventories efficiently and effectively in order to avoid unnecessary

investment. A manufacturing undertaking neglecting the management of inventories will be

jeopardizing its long run profitability and may go downward ultimately. It is possible for a

company to reduce its levels of inventories to a considerable degree, eg; 10 to 20%, without any

adverse effect on production and sales, by using simple inventory planning and control

techniques. The reduction in “excessive” inventories carries a favorable impact on a company’s

profitability.

The literary meaning of the work inventory is “stock of goods”. To a finance manager, inventory

means the value of raw materials, consumables, spares, work in progress, finished goods and

scrap in which a company’s fund has been invested.

The purpose of inventory management is to ensure availability of materials in sufficient quantity

as and when required and also to minimize investment in inventories. Raw materials, goods in

process and finished goods all represent various forms of inventory. Each type represents money

tied up until the inventory leaves the company as purchased products. Because of the large size

of the inventories maintained by firms, a considerable amount of funds is required to be

committed to them. It is therefore absolutely imperative to manage inventories efficiently and

effectively in order to avoid unnecessary investments. A firm neglecting the management of

inventories will be jeopardizing its long run profitability and may fail ultimately. The reduction

in excessive inventories carries a favorable impact on the company’s profitability.

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1.2 BACKGROUND OF THE PROBLEM

In BPCL a sustainable part of current asset is covered by inventories. In today completion it

become mandatory to keep large current asset in from of inventories so as to ensure smooth

production it is necessary to strike a balance between all the inventories required for the

production.

My study concentrates on the study of effectiveness and efficiency of the existing inventory

control system of BPCL and to suggest ways for reducing the inventory cost there by improving

the profitability of the firm.

1.3 INTRODUCTION TO THE COMPANY

1.3.1 INDUSTRY PROFILE

The word petroleum is a combination of two Latin words “Petra” which means rock and-

“oleum” which means oil. Petroleum is a fossil. It is called so because it was formed from the

remains of living organisms that sank to the bottom of the oceans. Here they were buried by

thousands of feet of sand and silt. Over time this organic mixture was subjected to enormous

pressure and heat as the layers increased. The mixture changed breaking down into compounds

made of hydrogen and carbon atoms. That is hydrocarbons. Finally an oil saturated rock much

like a wet household sponge was formed.

Petroleum was discovered while drilling for salt. People found it useful for illuminating lamps

and thus its demand increased. Samuel Kier, a Pittsburgh druggist bottled it and sold it as drug.

To market a deodorised variant he designed the first refinery in 1852 which was a huge

impoverished kettle, connected to a metal tank. Colonel Edwin Drake and Uncle Billy Smith

drilled a well with the specific objective of finding oil, and on 27th

August 1859, they struck oil

at Titus vale in North Western Pennsylvania, USA at a depth of 69.5ft. The 1860’s saw vast in-

dustrial development. A lot of petroleum industries came up. An important player in the market

was Burma Oil Company and later there emerged many new companies and new varieties of

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products out of petroleum. Since then the hydrocarbon industry has contributed substantially in

meeting the primary energy demand all over the world. The share of oil in the primary consump-

tion was all the high at 51% during 1970s and it started declining after the invention of newer

methods of energy. Today oil accounts for about 40% of world energy of consumption. The ever

increasing demand for energy has ensured sustained, if not dramatic development of the hydro-

carbon industry be it exploration of crude oil, production, refining or marketing of petroleum. Oil

and gas industry is the most important sector in any economy since it caters to a wide range of

industry. Oil and gas industry is the most important sector in any economy since it caters to a

wide range of industries including petrochemicals, fertilizers, automobiles etc. Thus, before us-

ing this energy source, the crude petroleum required to be refined in the petroleum refineries for

extracting various fractions for energy generation namely, petrol, natural gas, kerosene, asphalt

and many more.

In 1989 during vast industrial development, an important player in the South Asian market was

the Burmah Oil Company. Though incorporated in Scotland in 1886, the company grew out of

the enterprises of the Chef RohitOil Company, which had been formed in 1871 to refine crude

oil produced from primitive hand dug wells in Upper Burma.

In 1928, Asiatic Petroleum Company (India) started cooperation with Burma oil company. This

alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India

Limited. Burmah Shell began its operations with import and marketing of Kerosene.

On 24 January 1976, the Burmah Shell was taken over by the Government of India to form

Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation

Limited. It was also the first refinery to process newly found indigenous crude Bombay High.

In 2003, following a petition by the Centre for Public Interest Litigation, the Supreme Court

restrained the Central government from privatizing Hindustan Petroleum and Bharat Petroleum

CPIL, RajinderSachar and PrashantBhushan said that the only way to disinvest in the companies

would be to repeal or amend the Acts by which they were nationalized in the 1970s As a result,

the government would need a majority in both houses to push through any privatization.

The petroleum industry in India stands out as an example of the strides made by the country in

its march towards economic self-reliance. At the time of Independence in 1947, the industry was

controlled by international companies. Indigenous expertise was scarce, if not non- J existent.

Today, a little over 50 years later, the industry is largely in the public domain with skills 1 and

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technical know-how comparable to the highest international standards. The testimony of its

vigour and success during the past five decades is the significant increase in crude oil

production from 0.25 to 33 million tons per annum and refining capacity from 0.3 to 103

Million Metric Tons Per Annum (MMTPA).

A major boost to the oil industry came in pursuance of the Industrial Policy Resolution, 1956

that intended to promote growth of the vital sectors such as petroleum under the state con- 1

trol. ONGC, which was formed as a Directorate in 1955, became a Commission in 1956. Indian

Refineries Ltd., a Government company, was set up in 1958. In 1959, the Indian Oil Company

(IOC), again a wholly-owned Government company, was formed for marketing of petroleum

products. Indian Refineries Ltd. was merged with Indian Oil Company Ltd. to form Indian Oil

Corporation Ltd. in September, 1964.

Unlike at the time of Independence when there were no specialized petroleum bodies or

institutions worth mentioning to provide developmental support to the petroleum industry in the

country, there are today several such institutions such as the Indian Institute of Petroleum, Oil

Coordination Committee, Petroleum Conservation Research Association, Oil Industry Safety

Di- 1 rectorate, Centre for High Technology and Directorate General of Hydrocarbons. In

addition, oil I companies have set up research and development centres such as the one

established by the Indi- I an Oil Corporation in Faridabad which have done pioneering work in

formulation of lubricants I and greases

The real growth in exploration and production sector began after the discoveries by Burmah Oil

Company in the fifties prompting the Government to establish Oil & Natural Gas I Commission

in 1956 and Oil India Ltd. in 1959.

During the second decade of Independence (1957-67) a number of oil and gas-bearing -

structures were discovered by ONGC in Gujarat and Assam. Discovery of oil in large

quantities in Bombay High in February, 1974 opened up a new vista of oil exploration in

offshore areas.

During the period 1977-87, exploratory efforts by ONGC and OIL India yielded discoveries

of oil and gas in a number of structures in Bassein, Tapti, Krishna-Godavari-Cauvery basins,

Cachar (Assam), Nagaland, and Tripura. The indigenous production reached 30 million tons

by 1984-85, a self-sufficiency level of 70% of the country's requirements.

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The petroleum industry includes the global processes of exploration, extraction, refining,

transporting (often by oil tankers and pipelines), and marketing petroleum products. The largest

volume products of the industry are fuel oil and gasoline (petrol). Petroleum (oil) is also the raw

material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides,

and plastics. The industry is usually divided into three major components: upstream, midstream

and downstream. Midstream operations are usually included in the downstream category.

Petroleum is vital to many industries, and is of importance to the maintenance of industrial

civilization in its current configuration, and thus is a critical concern for many nations. Oil

accounts for a large percentage of the world’s energy consumption, ranging from as low of 32%

for Europe and Asia, up to a high of 53% for the Middle East. Other geographic regions

consumption patterns are as follows: South and Central America (44%), Africa (41%), and North

America (40%). The world consumes 30 billion barrels (4.8 km³) of oil per year, with developed

nations being the largest consumers. The United States consumed 25% of the oil produced in

2007.

Governments such as the United States government provide a heavy public subsidy to petroleum

companies, with major tax breaks at virtually every stage of oil exploration and extraction,

including for the costs of oil field leases and drilling equipment.

Natural History

Petroleum is a naturally occurring liquid found in rock formations. It consists of a complex

mixture of hydrocarbons of various molecular weights, plus other organic compounds. It is

generally accepted that oil is formed mostly from the carbon rich remains of ancient plankton

after exposure to heat and pressure in the Earth's crust over hundreds of millions of years. Over

time, the decayed residue was covered by layers of mud and silt, sinking further down into the

Earth’s crust and preserved there between hot and pressured layers, gradually transforming into

oil reservoirs.

Early History

Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in general

has been used since early human history to keep fires ablaze, and also for warfare.

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Its importance in the world economy evolved slowly, with whale oil used for lighting into the

19th century and wood and coal used for heating and cooking well into the 20th Century. The

Industrial Revolution generated an increasing need for energy which was fueled mainly by coal,

with other sources including whale oil. However, it was discovered that kerosene could be

extracted from crude oil and used as a light and heating fuel. Petroleum was in great demand,

and by the twentieth century had become the most valuable commodity traded on the world

markets.

Modern history

Imperial Russia produced 3,500 tons of oil in 1825 and doubled its output by mid-century. After

oil drilling began in what is now Azerbaijan in 1848, two large pipelines were built in the

Russian Empire: the 833 km long pipeline to transport oil from the Caspian to the Black Sea port

of Batumi (Baku-Batumi pipeline), completed in 1906, and the 162 km long pipeline to carry oil

from Chechnya to the Caspian.

At the turn of the 20th century, Imperial Russia's output of oil, almost entirely from the

Apsheron Peninsula, accounted for half of the world's production and dominated international

markets. Nearly 200 small refineries operated in the suburbs of Baku by 1884. As a side effect of

these early developments, the Apsheron Peninsula emerged as the world's "oldest legacy of oil

pollution and environmental negligence." In 1878, Ludwig Nobel and his Branobel company

"revolutionized oil transport" by commissioning the first oil tanker and launching it on the

Caspian Sea.

The first modern oil refineries were built by IgnacyLukasiewicz near Jasło (then in the dependent

Kingdom of Galicia and Lodomeria in Central European Galicia), Poland from 1854–56. These

were initially small as demand for refined fuel was limited. The refined products were used in

artificial asphalt, machine oil and lubricants, in addition to Lukasiewicz's kerosene lamp. As

kerosene lamps gained popularity, the refining industry grew in the area.

The first commercial oil well in Canada became operational in 1858 at Oil Springs, Ontario (then

Canada West). Businessman James Miller Williams dug several wells between 1855 and 1858

before discovering a rich reserve of oil four metres below ground. Williams extracted 1.5 million

litres of crude oil by 1860, refining much of it into kerosene lamp oil. Some historians challenge

Canada’s claim to North America’s first oil field, arguing that Pennsylvania’s famous Drake well

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was the continent’s first. But there is evidence to support Williams, not least of which is that the

Drake well did not come into production until August 28, 1859. The controversial point might be

that Williams found oil above bedrock while Edwin Drake’s well located oil within a bedrock

reservoir. The discovery at Oil Springs touched off an oil boom which brought hundreds of

speculators and workers to the area. The first gusher erupted on January 16, 1862, when local oil

man John Shaw struck oil at 158 feet (48 m). For a week the oil gushed unchecked at levels

reported as high as 3,000 barrels per day.

The first modern oil drilling in the United States began in West Virginia and Pennsylvania in the

1850s. Edwin Drake's 1859 well near Titusville, Pennsylvania, is typically considered the first

true modern oil well, and touched off a major boom. In the first quarter of the 20th century, the

United States overtook Russia as the world's largest oil producer. By the 1920s, oil fields had

been established in many countries including Canada, Poland, Sweden, the Ukraine, the United

States, Peru and Venezuela.

The first successful oil tanker, the Zoroaster, was built in 1878 in Sweden, designed by Ludwig

Nobel. It operated from Baku to Astrakhan. A number of new tanker designs were developed in

the 1880s.

In the early 1930s the Texas Company developed the first mobile steel barges for drilling in the

brackish coastal areas of the Persian Gulf. In 1937 Pure Oil Company (now part of Chevron

Corporation) and its partner Superior Oil Company (now part of ExxonMobil Corporation) used

a fixed platform to develop a field in 14 feet (4.3 m) of water, one mile (1.6 km) offshore of

Calcasieu Parish, Louisiana. In early 1947 Superior Oil erected a drilling/production oil platform

in 20 ft (6.1 m) of water some 18 miles off Vermilion Parish, Louisiana. It was Kerr-McGee Oil

Industries (now Anadarko Petroleum Corporation), as operator for partners Phillips Petroleum

(ConocoPhillips) and Stanolind Oil & Gas (BP), that completed its historic Ship Shoal Block 32

well in October 1947, months before Superior actually drilled a discovery from their Vermilion

platform farther offshore. In any case, that made Kerr-McGee's well the first oil discovery drilled

out of sight of land.

After World War II ended, the countries of the Middle East took the lead in oil production from

the United States. Important developments since World War II include deep-water drilling, the

introduction of the Drillship, and the growth of a global shipping network for petroleum relying

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upon oil tankers and pipelines. In the 1960s and 1970s, multi-governmental organizations of oil–

producing nations OPEC and OAPEC played a major role in setting petroleum prices and policy.

Oil Spills and their clean-up have become an issue of increasing political, environmental, and

economic importance.

1.3.2 COMPANY PROFILE

Bharat Petroleum Corporation Limited is a Central Public Sector Undertaking under the Ministry

of Petroleum & Natural Gas, Government of India. BPCL engages in petroleum refining and

marketing of petroleum products, Petro-chemical products and Lube oil. BPCL is a Fortune 500

Company occupying the 225th position in the listing of fortune 500 companies, with and equity

base of Rs.361.54 crores. BPCL currently have Refineries at Mumbai and Kochi with a capacity

of 12 Million Metric Tonnes Per Annum (MMTPA) and 9.5 MMTPA respectively for refining

crude oil. NRL, BPCL’s subsidiary at Numaligarh has a capacity of 3 MMTPA.

1.3.2.1 Strategic Business Units of BPCL

BPCL has 6 Strategic business units as detailed below:-

Refinery Strategic business unit

Retail Strategic business unit

LPG Strategic business unit

Industrial and commercial strategic business unit

Lubricants strategic business unit

Aviation strategic business unit

1.3.2.2 About Kochi Refinery

The Refinery has implemented world class technology and systems for operations and

enterprises Resource planning. It is an ISO 14001 Environmental Management Systems (EMS)

and ISO 9001 : 2000 Quality management system (QMS) accredited Company and has also

obtained the ISO 17025 (Testing methods in quality control) certification from NABL (National

Accreditation Board for Testing and Calibration of Laboratories). The Refinery has successfully

implemented the Occupational Health and Safety Management System (OHSAS) 18001:2007 in

the year 2009. It was incorporated as a Public Limited Company in September, 1963 with

technical collaboration and financial participation from Philips Petroleum Company of U.S.A

under the title of Cochin Refineries Limited (CRL). The Refinery situated at Ambalamugal,

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Kerala was commissioned in 1966. The name of the company was changed as Kochi Refineries

Limited (KRL) in May 2000.

M/s Bharat Petroleum Corporation Limited (BPCL) acquired Government of India’s entire

equity (54.81%) in Kochi Refineries Limited in March 2001. Pursuant to Order dated 18

August, 2006 issued by Ministry of Company Affairs the refinery has been merged with Bharat

Petroleum Corporation Ltd.

The Capacity Expansion cum Modernization Project (Phase-II) scheduled for completion in

December 2009 that would enhance the refining capacity of BPCL (KR) to 9.5 MMTPA and

equip it to produce auto-fuels conforming to Euro-III specifications. At present, the Refinery has

a refining capacity of 1,90,000 barrels per day producing all fuel based refinery products. With a

wide spectrum of activities, BPCL Kochi Refinery redefines the benchmarks in the technology

and market preferences. Seeing the sharp rise in demand for petroleum products Kochi Refinery

has envisaged a 6 MMTA capacity expansion with the utilization of available infrastructure like

the SPM and Shore Tank with an Integrated Refinery Expansion Project (IREP) This project

envisages cvapacity expansion, refinery modernization to produce auto-fuels conforming to

Euro-IV specifications and Residue up-grading facilities also. Kochi Refinery world then be

able to cater the product demand with ease to the Southern part of India.

1.3.2.3 Products

BPCL Kochi Refinery produces wide range of petroleum products, petro-chemicals, and lube oil

products. The following are important among them:

o Motor Spirit (MS)

o High Speed Diesel (HSD)

o Jet Propellant-5 (JP-5)

o Light Diesel Oil (LDO)

o Liquefied Petroleum Gas (LPG)

o Low Pour High Speed Diesel (LPHSD)

o Low Sulphur Heavy Stock (LSHS)

o Aviation Turbine Fuel (ATF)

o Bitumen (various grades)

o Furnace Oil

o Low Sulphur High Flash Diesel (LHFD)

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o Mineral Turpentine Oil

o Mixed Aromatics Solvent (MAS)

o Naphtha

o Poly IsoButene (PIB)

o Special Boiling Point Spirit (SBPS)

o Superior Kerosene Oil

o Benzene

o Toluene

1.3.2.4 Corporate Social Responsibility

As a socially responsible corporate citizen, the community welfare initiatives of the Refinery

concentrate on developing the weaker sections of society, particularly, the scheduled castes and

scheduled tribes and people below the poverty line in important sectors like health, education,

housing and women empowerment.

Kochi Refinery has always extended its helping hand to socially and economically backward

community. Some of the projects implemented/sponsored by BPCL Kochi Refinery for general

public over years are:

Insurance coverage for families below poverty line, living near BPCL Kochi Refinery (600

families insured)

Railway over bridges on approach road to BPCL KR

Installation and maintenance of traffic signal systems

Maintenance of public parks in and around Ernakulam.

Maintenance of prominent junctions in the city.

Tarring and maintaining public roads

Construction of primary health centers, community halls, police watch towers.

Renovation of Anganwadis (play home for children)

Donation of accessories like baby chairs, furniture, toys, meal plates to Anganwadis

Sanitation facilities to villages

Provision of drinking water

Extending support to old age homes

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1.3.2.5 Certifications

BPCL Kochi Refinery has been rated Level 8 in the International Safety Rating

System (ISRS) consolidating its place among the top companies and industrial units

audited by the independent foundation Det Norske Veritas (DNV).

BPCL Kochi Refinery received ISO 17025 certificate in Quality Control from

National Accreditation Board for Testing & Calibration Laboratories (NABL)

BPCL Kochi Refinery was accorded the ISO-14001 certification first in 2002 for

environmental standards by the international agency Bureau Veritas Quality International

(BVQI) and again in 2005.

M/s. Det Norske Veritas (DNV) has certified BPCL Kochi Refinery ISO 9001-2000 for

Quality Management System.

1.3.2.6 Awards

BPCL-KRL has won the second prize for Outstanding performance in Industrial Safety

in the Category of very large Industries by Department of Factories & Boilers, Govt of

Kerala for the year 2012.

BPCL – Kochi Refinery has been adjudged as Runner up for Outstanding Safety

Performance Award in the category of Very Large Industries in Kerala by National

Safety Council (Kerala Chapter) for the year 2012

BPCL – Kochi Refinery is proud to be the winner of CSR award, the Kerala Management

Association. KMA has been conferring the KMA Excellence Awards to Corporate to

recognize excellence in various spheres.

BPCL - Kochi Refinery is the winner of the Rotary Binani Zinc CSR excellence

awards. KR has been the winners of this prestigious award for its CSR initiatives for

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the past two consecutive years. The award comes under the category “Public Sector

Unit” for the year 2012-13.

BPCL –Kochi Refinery has achieved 30 milltion accident free man hours on 25.02.2013.

1.3.2.7 SWOT Analysis

Strengths

Highest capacity utilization

Wide experience in petroleum industry

Participative work culture conductive to team work

Adaptability to new technological changes

Weakness

Inability to change the products to take the advantages of prices due to the following

constraints:

Nature of raw materials

Government directions

Heavy dependence on imported crude countries

Opportunities

Deregulation in energy sector resulting in several business opportunities for

diversification and expansion

Deficit of the product like LPG continues in the supply zone of the Company.

The per capita oil consumption of India is much lower than the developed countries

and this will ensure the growth prospect in India.

Threats

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Volatility of the international prices of crude oil and petroleum products.

Excess refining capacity in the cart run and increased competition in the petroleum

sector.

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Chairman &Managing Director

D (F) D (R)

ED(RF) ED (KR)

DGM (FIN)

GM(HR) GM(TECH) GM(P) GM (O) DGM(E&AS) IC

DGM(L&D) DGM(P

&CS)

DGM(

E&C)

(E&C) DGM(T) DGM(PT)

DGM(P) DGM

(CEMPII)

DGM

(MFG)

DGM

(P&U)

DGM

(OM&S)

DGM

(MAINT)

1.3.1 Organization Chart – BPCL (Kochi Refinery)

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1.3 RESEARCH METHODOLOGY

1.3.1 RESEARCH DESIGN

The research design used in this project is Analytical in nature. The researcher used facts or

information already available, and analyze these to make a critical evaluation of the

performance.

1.3.2 OBJECTIVES OF THE STUDY

1.3.2.1 Primary Objective

To find out inventory optimization techniques of BPCL.

1.3.2.2 Secondary Objective

To evaluate inventory control techniques of BPCL

To suggest the ways to reduce the cash investment in the different item of the inventory.

To classify the various components based on its value and movements.

To suggest suitable techniques of inventory control and optimization in BPCL

1.3.3 DATA COLLECTION

1.3.3.1 Primary Data

1.All financial data are collected through personal interviews and discussion with Chief Manager

(Finance).

2. All inventory related data are collected from Manager (P&CS), who is in charge of inventory

section.

3. All warehouse related data are collected from Manager P&CS), who is in charge of Ware

house section.

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4.Personal discussions with staff members in inventory section, warehouse section, finance

section etc. are also used for collecting various data.

1.3.3.2 Secondary Data

1. All financial data are collected from the published annual financial statements of the company.

2.Inventory related data collected from Management reports maintained in inventory section of

P&CS Dept.

3.Data collected from company’s web site.

4. Books and journals pertaining to the topic.

1.3.4 TOOLS USED IN THE ANALYSIS

The following tools used for analysis of the data:

Economic Order Quantity

Trend analysis

ABC Analysis

FMSN Analysis

Inventory Turn Over Ratio

ECONOMIC ORDER QUANTITY

The answer to the question “How much is to order?' is the economic order quantity (EOQ). The

basic objective is to economize on the total cost of purchase. There are two major costs involved

in purchases:

Purchasing Cost: This is the cost incurred by the purchase department. It involve

The cost involved in calling for quotation

Scrutinizing the quotations

The clerical cost

Issuing purchase order

Stationary' cost

The sum total of all these costs is called the purchasing cost.

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Inventory Carrying Cost:

When stocks are carried in stores, various costs are incurred to maintain these stocks:

Interest on the money locked up on the materials stocked

Taxes payable

Insurance on goods

Rental for space occupied by the stores

Labor costs involved in the operation of the stores

Overheads like electricity, water and maintenance costs

All this added up together will constitute Inventory Carrying Cost.

The formula for finding the EOQ of an item is The formula used is

Where ,

A = annual consumption in units

P= Procurement cost per order

C = Inventory carrying cost expressed as a percentage

U = unit price

TREND ANALYSIS

It is the practice of collecting information and attempting to spot a pattern, or trend, in the

information. In some fields of study, the term "trend analysis" has more formally defined

meaning. Although trend analysis is often used to predict future events, it could be used to

estimate uncertain events in the past, such as how many ancient kings probably ruled between

two dates, based on data such as the average years which other known kings reigned.

In statistics, trend analysis often refers to techniques for extracting an underlying pattern of

behavior in a time series which would otherwise be partly or nearly completely hidden by noise.

A simple description of these techniques is trend estimation, which can be undertaken within a

formal regression analysis.

Q = √(2AP/UC)

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ABC ANALYSIS

ABC analysis is a basic analytical tool which enables management to concentrate its efforts

where results will be greater. The concept applied to inventory is called as ABC analysis.

Statistics reveal that just a few items account for bulk of the annual consumption of the

materials. These few items are called A class items which hold the key to business. The other

items known as B & C which are numerous in number but their contribution is less significant.

ABC analysis thus tends to segregate the items into three categories A,B & C on the basis of

their values. . Items up to 70%consumption value come under A class, next 20 % under B class

and the rest under C class.

FEATURES OF ABC ANALYSIS

A Class (High Value) B Class (Moderate Value) C Class (Low Value)

1.Tight control on stock

levels

2.Low safety stock

3.Ordered frequently

4.Individual posting in

stores

5.Weekly control reports

6. Continuous effort to

reduce lead time

1. Moderate control on stock

levels

2. Medium

3. Less frequently

4. Individual posting in stores

5. Monthly control

6. Moderate efforts

1.Less control

2. Large

3. Bulk ordering

4. Collective posting

5. Quarterly control

6. Minimum efforts

FSN ANALYSIS

All the items in the inventory are not required at the same frequency. Some are required

regularly, some occasionally and some very rarely. FSN analysis classifies items into fast

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moving, slow moving, non moving items. More control can be implemented on Fast Moving

items and Medium moving items etc. Similarly Orders can be limited in case of Slow moving

items and non-moving items.

INVENTORY TURNOVER RATIO

Kohler defines inventory turnover as “a ratio which measures the number of times a firm’s

average inventory is sold during a year”.

A higher turnover rate indicates that the material in question is a fast moving one. A low

turnover rate, on the other hand, indicates over-investment and locking up of working capital on

undesirable items.

Inventory turnover ratio may be calculated in different ways by changing the numerator, but

keeping the same denominator. For instance, the numerator may be materials consumed, cost of

goods sold or net sales. Based on any one of these, the ratio differs from industry to industry.

1.3.5 PERIOD OF STUDY

The study was carried out for a period of one month, from March 18 to April 18, 2012 at BPCL.

1.4 SCOPE FOR STUDY

Every organization needs inventory for the smooth runni11ng of its activities. It serves as a link among

production processes. The investment in inventories constitutes the most significant part of current assets

/ working capital in most of the undertakings, Thus, it is very essential to have proper control and

management of inventories. The purpose of inventory management is to ensure availability of materials

in sufficient quantity as an when required and also to minimize investment in inventories

Inventory turnover ratio = Net sales

Average Inventory

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1.5 LIMITATIONS OF THE STUDY

The entire analysis applied only to BPCL( Kochi Refinery), Ambalamughal, Cochin

Since there are around 67533 items in inventory, it is not possible to have an in-depth study of

all items.

The study takes into account only the quantitative data and the qualitative aspects were not taken

into account.

1.6 CHAPTERIZATION

Chapter I : INTRODUCTION TO THE STUDY

Chapter II : LITERATURE REVIEW

Chapter III : DATA ANALYSIS AND INTERPRETATION

Chapter IV : FINDINGS AND SUGGESTION

Chapter V : CONCLUSIONS

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CHAPTER II

LITERATURE REVIEW

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LITERATURE REVIEW

Literature review includes all paper works done by experts. There are a number of different

literature works which emphasized the importance of efficient inventory management practices.

The literature works related to study are listed below.

Kotler (2000)states that “inventory management refers to all the activities involved in developing

and managing the inventory levels of raw materials, semi-finished materials (work in- progress)

and finished good so that adequate supplies are available and the costs of over or under stocks

are low”.

Tersine (1988)states that “inventory can be defined as any idle resource or tangible asset which

can be seen, weighed, and counted. This includes supplies, raw materials, work in process (WIP),

and finished goods”.

Goldratt et al (1992)defined "inventory costs as the money the system invests in things that it

intends to sell: materials waiting to be processed, work in process, and finished goods".

As mentioned earlier, inventory management leads to inventory reduction, as is often the case

in JIT, where raw materials and parts are purchased or produced just in time to be used at each

stage of the production process. Several studies have found that this JIT inventory management

has a positive impact on firm performance. A study by Fullerton etal.(2003) provides

empirical support that firms that implement higher degrees of JIT manufacturing practices

should out perform competitors who do not; it was also found that a positive relationship exists

between firm profitability and the degree to which waste-reducing production practices, such as

reduced set-up times, preventive maintenance programs and uniform workloads and

implemented. These findings indicate that enterprises employing JIT manufacturing techniques

are consistently more profitable than their counterparts.

Another study suggesting a positive relationship between inventory management and

performance was Eroglu and Hofer (2011), which used the Empirical Leanness Indicator

(ELI) as a measurement for inventory management. They argued that inventory leanness is

the best inventory management tool. Lean production itself considers inventory as a form of

waste that should be minimized and it has become synonymous with good inventory

24

management. Their study on US manufacturing firms, covering the period of 2003–2008, found

that leanness positively affects profit margins. According toEroglu and Hofer (2011), firms

that are leaner than the industry average generally see positive returns to leanness. They found

that the effect of inventory leanness on firm performance is mostly positive and generally

non-linear. Their study also implies that the effect of inventory leanness concave, which is in

line with inventory control theory that there is an optimal degree of inventory leanness

beyond which the marginal effect of leanness on financial performance becomes negative.

On the other hand, a study by Cannon (2008) introduced contradictory findings. That study

focused on assessing the relationship between inventory performance and overall firm

performance and it was argued that inventory performance should not be measured as a robust

indicator of overall performance. In doing so, it tested the in corporation of firm’s annual

percentage change in inventory turnover as a measurement for inventory management towards

return on assets (ROA) as a measurement of performance. The study (Cannon, 2008)7

indicated that when the effects of time were taken in to account, turnover improvement on

average had a slightly negative effect on ROA. Additionally, turnover improvement exhibited

a prominent random effect, with result indicating that approximately95% of the firm’s

turnover-improvement slopes would fall within a negative range. This was interpreted as

evidence that substantial variability existed across firms with regard to turnover improvement

and its performance effects, with some turnover improvement associated with increased ROA

and other turnover improvement associated with decreased ROA. Moreover, Cannon (2008)

also further explored the turnover-ROA dynamic by including capital intensity as potential

source of variability. It was found that capital-intensive firms tended to be below average with

regard to ROA and the variable’s presence in the model did not significantly alter the

relationship between turnover improvement and ROA over time Hence, this lent additional

weight to the conclusion not to support the hypothesis that improved inventory performance

will be associated with improved overall firm performance .Consistent with Cannon (2008),

Another study Kolias et al., (2011) found that inventory turnover ratio (as a measurement

of inventory management), is negatively correlated with gross margin. Kolias et al.(2011)9 is

based on an econometric analysis conducted on a sample of financial data for Greek retail firms

for the period of 2000–2005. They found a negative relationship between gross margin and

inventory turnover. This implies that retailers’ trade off gross margin for inventory turns to

25

achieve similar return on inventory investment since, if inventory turnover ratio is lower than

targeted given the level of gross margin, then management should be alarmed with this

inefficiency. Consequently, it was likely that the coefficient of gross margin differs between

sectors.

According toCachon and Fisher (2000), the positive correlation between inventory turns and

capital intensity results from the nature of the investment. Capital investment includes

investment in warehouses, equipment, information technology (IT) and logistics management

systems. These capital investments lead to better inventory allocation as well as to a more

efficient implementation of customer orders, thereby increasing inventory turns. Additionally,

a positive influence of IT on inventory performance is well supported at the firm level.

For an instance, prior studies (Frohlich and Westbrook,2002; Vickery et al., 2003) found that

an increase in IT investment results in higher inventory returns and lower inventory holding

costs. Investments in IT have helped firms to cut back on the volume of inventory as a

precaution against glitches in their supply chain or a hedge against unexpected increase in

aggregate demand (Ferguson, 2001). In addition, IT investments may increase inventory turns

due to improvement in the replenishment process.

Clark and Hammond(1997) show that with the adoption of a continuous replenishment

process by food retailers, their inventory turnover increased by up to100%. However, automatic

replenishment is not limited to the grocery industry: apparel retailers utilized automatic

replenishing programs to improve inventory efficiency (King and Maddalena, 1998).

Another study (Kolias et al., 2011) on the Greek retail sector found that inventory turnover

was positively correlated with capital intensity. The coefficient in their study for the

supermarket sector is relatively higher than those for other sectors, indicating the

importance of the investments in IT in that sector where supermarkets may experience improved

product availability associated with the reduction of stock-outs and they can thereby carry

less backup inventory leading to lower inventory levels. Hence, with lower inventory

investment, inventory turnover may be higher.

26

Bern At De William (2008) his study tell us that the main focus of inventory management is on

transportation and ware housing. The decision taken by management depends on the traditional

method of inventory control models. The traditional method of inventory management is how

much useful in these days the author tell about it. He is also saying that the traditional method is

not a cost reducing ,it is so expensive .But the managing inventory is most important work for

any manufacturing unit.

Jon Schreibfeder (1992)said that it is easy to turn cash in to inventory , the challenge is to turn

inventory back in to cash. In early 1990’s many distributor recognize that they needed help

controlling and managing their largest asset inventory. In response to this need several

companies developed comprehensive inventory management modules and system. These new

packages include many new features designed to help distributors effectively managed

warehouse stock. But after implementing this many distributors do not feel they have gain

control of their inventory.

There is need for installation of a proper inventory control technique in any business

organization in developing country like Nigeria. According to Kotler (2000), inventory

management refers to all the activities involved in developing and managing the inventory

levelsof raw materials, semi-finished materials (work in-progress) and finished good so that

adequatesupplies are available and the costs of over or under stocks are low.

Rosenblatt (1977) says: “The cost of maintaining inventory is included in the final price paid by

the consumer. Good in inventory represents a cost to their owner. The manufacturer has the

expense of materials and labour. The wholesaler also has funds tied up”.Therefore, the basic goal

of the researchers is to maintain a level of inventory that will provide optimum stock at lowest

cost.

Morris (1995)stressed that inventory management in its broadest perspective is to keepthe most

economical amount of one kind of asset in order to facilitate an increase in the total value of all

assets of the organization – human and material resources.

Keth et al. (1994) in their text also stated that the major objective of inventory managementand

control is to inform managers how much of a good to re-order, when to re-order the good, how

frequently orders should be placed and what the appropriate safety stock is, for minimizing stock

27

outs. Thus, the overall goal of inventory is to have what is needed, and to minimize the number

of times one is out of stock.

Drury (1996) defined inventory as a stock of goods that is maintained by a business in

anticipation of some future demand. This definition was also supported by Schroeder (2000) who

stressed that inventory management has an impact on all business functions, particularly

operations, marketing, accounting, and finance. He established that there are three motives for

holding inventories, which are transaction, precautionary and speculative motives. The

transaction motive occurs when there is a need to hold stock to meet production and sales

requirements. A firm might also decide to hold additional amounts of stock to cover the

possibility that it may have under estimated its future production and sales requirements. This

represents a precautionary motive, which applies only when future demand is uncertain. The

speculative motive for holding inventory might entice a firm to purchase a larger quantity of

materials than normal in anticipation of making abnormal profits. Advance purchase of raw

materials in inflationary times is one form of speculative behavior.

Inventory models allowing for emergency orders have been developed under various

assumptions. Moinzadeh and Nahmias (1988) and Tagaras and Vlachos (2001) have performed a

thorough bibliographic review of these models. Moinzadeh and Nahmias (1988) present a

continuous review inventory model to find the optimal reorder point and order quantity for the

normal and emergency replenishments. This model was analyzed from a different perspective

by Johansen and Thorstenson (1998). They present an inventory model with normal and

emergency orders where normal orders are managed through a (Q,r) policy while emergency

orders are controlled by a reorder point and an order-up-to level which depend on the time

remaining until the normal order is received. Vlachos and Tagaras (2001) analyse a periodic

review inventory system with a main and an emergency supply mode.

Inventory models allowing for emergency orders have been developed under various

assumptions. Moinzadeh and Nahmias (1988) and Tagaras and Vlachos (2001) have performed a

thorough bibliographic review of these models. Moinzadeh and Nahmias (1988) present a

continuous review inventory model to find the optimal reorder point and order quantity for the

normal and emergency replenishments. This model was analyzed from a different perspective

by Johansen and Thorstenson (1998). They present an inventory model with normal and

emergency orders where normal orders are managed through a (Q,r) policy while emergency

28

orders are controlled by a reorder point and an order-up-to level which depend on the time

remaining until the normal order is received. Vlachos and Tagaras (2001) analyse a periodic

review inventory system with a main and an emergency supply mode.

The issuance of an emergency order in a cycle leads to a smaller lead time for the first delivery

in the cycle. This effect can also be achieved by expediting the normal order so that it is

delivered earlier. Lawson and Porteus (2000)consider order expediting in a multistage inventory

model, in which the delivery of expedited items is made instantaneously. Minner (2003)breviews

inventory models with multiple supply options and presents related inventory problems from the

field of multi-echelon systems.

Lead time usually comprises components such as order preparation, order delivery,

manufacturing and transportation (Tersine, 1994). In some cases, options exist for reducing the

duration of some of these components (Liao and Shyu, 1991; Ryu and Lee, 2003). For example,

there are cases in which transportation can be carried out in either a slower or a faster mode

(such as by air and by truck).

The problem of simultaneously determining pricing and inventory control strategies in the face

of return and expediting opportunities Toyota by Cook et al. (2005)and in Motorola

by Cederlund et al. (2007), respectively.

The coordination of pricing and inventory replenishment strategies in a dynamic environment

has been extensively studied in the literature. Whitin (1955) first addresses the newsboy problem

with the price-dependent demand. Thomas (1974) considers a model with a fixed ordering cost

and proposes a policy called (s, S, p) to control the system. For both the finite and infinite

horizon cases, ( [Chen and Simchi-Levi, 2004] and [Chen and Simchi-Levi, 2004b]) prove that

such a policy is indeed optimal when demand uncertainty is additive, but not necessarily so

under multiplicative demand uncertainty. Chen and Simchi-Levi (2006) extend the results to the

continuous review model.

Thowsen (1975) considers a model without the fixed ordering costs and shows that a base-stock-

list-price policy is optimal and that the optimal price is a decreasing function of the starting

inventory. Federgruen and Heching (1999) extend Thowsen’s work to a more general setting.

They show that the base-stock-list-price policy remains optimal with general stochastic

demands. Chao and Zhou (2006)analyze the infinite-horizon continuous-review stochastic

29

inventory model with Poisson demand process and price-dependent demand rate. They focus on

the structural results of the optimal policy and related computational issues. [Yin and Rajaram,

2007] and [Chao et al., 2008] study a joint pricing and inventory decision problem with a

Markovian demand and random supply capacity, respectively. [Chen et al., 2006] and [Song et

al., 2009] address the dynamic joint inventory-pricing control for the lost-sales model with an

additive demand and a multiplicative demand, respectively.

Author :-AsafAque Ahmed (October 12,2004)

(Article from mater requirement planning and master requirement production)

He said that most of the manufacturing company vendors have planning and scheduling product

which assume either infinite production capacity for calculating quantities of raw material and

WIP requirement or infinite quantities of raw material and WIP material for calculating

production capacity. There are many problems with this approach and how to avoid these by

making sure that the product you are buying indeed take in to account finite quantities of

required materials as well as finite capacities of work centers in your manufacturing facilities.

Author :-Silver ,Edward A (December 22,2002)

(Article from production and inventory management journal)

This article consider the context of a population of items for which assumption underlying the

EOQ derivation holds reasonably well. However as it frequently the cash in practices there is an

aggregate constraint that applies to the population as a whole.

Author :-Delaunay C,Sahin E,(2007)

A lot of work has been done but now if we have to go a head we must have good visibility upon

this field of research. That is why we are focused on frame work for an exhaustive review on the

problem of supply chain management with inventory inaccuracies. The author said that their aim

30

in this work is also to present the most important criterion that allows a distinction between

different types of managing the inventory.

Author:-D.Hoopman (April 7,2003)(Article from inventory planning and optimization)

In this article he said that inventory optimization recognize that different industry have different

inventory profiles and requirement .Research has indicated that solutions are priced in a large

range from 10 to 1000 of dollars to millions of dollars .In this niche market sector price is

definitely not an indicator of the quantity of solution, ROI and usability are paramount.

A multi criteria approach to the ABC classification problem in inventory control is presented.

The proposed method rates items on both qualitative and quantitative criteria. The model is

demonstrated through an example, using real data from the maintenance department stockroom

of a pharmaceutical company. A series of simulation experiments shows how the resulting

classification can benefit inventory control [Partovi, Fariborz Y; Burton, Jonathan (1993)]

The model aims to provide a holistic view of the supply chain as an integrated system by

analyzing inventory options to facilitate the decision-making process by business partners in the

system. In recent years, organizations have focused on incorporating both internal and external

business activities of their supply chain into an integrated system. The goal of integration of all

supply chain activities is to maximize total system performance while minimizing costs.

Literature review and professional experience in the field provided the foundation for the model

development in this research. The article demonstrates the usefulness of a decision support

model in analyzing and developing a cooperative environment among supply chain members in

order to reduce the cost of inventory as well as the cost of goods sold. The effects of utilizing

such tools as just-in-time and electronic business systems are illustrated and discussed. Research

limitations/implications - The proposed model demonstrates disadvantages of individual

optimization in an integrated supply chain system as well as the advantages of collaboration of

supply chain members in finding the minimum cost. The model uses one manufacturer with

multiple retailers and distributors. Future research in this area could expand the model to allow

multiple manufacturers. The decision support model allows decision makers along the supply

chain to employ a series of what-if analyses to evaluate different scenarios with regard to

lowering the cost of products reaching the consumer. The model developed in this paper

31

provides the foundation for future research as well as support for decision making when various

decision makers are involved.[Beheshti, Hooshang M.(2010)]

2.1 MEANING OF INVENTORY

Inventory generally refers to the materials in stock. It is also called the idle resource of a

company. Inventories represent those items which are either stocked for sale or they are in the

process of manufacturing or they are in the form of materials which are yet to be utilized.

It also refers to the stockpile of the products a firm would sell in future in the normal course of

business operations and the components that make up the product.

Inventory is a detailed list of those movable items which are necessary to manufacture a product

and to maintain the equipment and machinery in good working order.

2.2 TYPES OF INVENTORIES

A manufacturing firm generally carries the following types of inventories:

Raw Materials.

Bought out parts.

Work-in-process inventory (WIP).

Finished goods inventories.

Maintenance, repair and operating stores.

Tools inventory.

Miscellaneous inventory.

Goods in transit.

Goods for resale.

Scrap Material.

2.3 REASONS FOR HOLDING INVENTORY

To stabilize production.

To take advantage of price discounts.

To meet the demand during the replenishment period.

To prevent loss of orders.

32

To keep pace with changing market conditions.

2.4 INVENTORY CONTROL

The main objective of inventory control is to achieve maximum efficiency in production & sales

with minimum investment in inventory.

Inventory control is a planned approach of determining what to order, when to order and how

much to order and how much to stock, so that costs associated with buying and storing are

optimal without interrupting production and sales

.

2.5 BENEFITS OF INVENTORY CONTROL

The benefits of inventory control are:

Improvement in customers’ relationship because of the timely delivery of goods and

services.

Smooth and uninterrupted production and hence, no stock out.

Efficient utilization of working capital.

Economy in purchasing.

Eliminating the possibility of duplicate ordering.

33

REFERENCES

1. , G.P. and M.L. Fisher (2000). Supply Chain Inventory Management and the Value of Shared

Information. Management Science 46, 1032 – 1048.

2. Cachon Cannon, A.R. (2008). Inventory Improvement and Financial Performance.

International Journal of Production Economics 115, 581–593.

3. Cannon, A.R. (2008). Inventory Improvement and Financial Performance. International

Journal of Production Economics 115, 581–593.

4. Clark, T. and J. Hammond (1997). Reengineering Channel Reordering Process to Improve

Total Supply Chain Performance. Production Operation Management 6, 248–265.

5. Eroglu, C. and C. Hofer (2011). Lean, Leaner, Too Lean? The Inventory-Performance Link

Revisited. Journal of Operations Management 29, 356–369.

6. Eroglu, C. and C. Hofer (2011). Lean, Leaner, Too Lean? The Inventory-Performance Link

Revisited. Journal of Operations Management 29, 356–369.

7. Ferguson, R.W. (2001). Domestic Macroeconomic Developments:Past, Present and Future.

Remarks at the Bay Area Council 2001 Outlook Conference.SIU Journal of Management,

Vol.2, No.1 (June, 2012). ISSN: 2229-004472

8. Frohlich, M.T. and R. Westbrook (2002). Demand Chain Management in Manufacturing and

Services: Web-Based Integration, Drivers and Performance. Journal of Operations

Management 20, 729–745.

9. Jonsson, P. and Mattsson, S-A. 2003. The implication of fit between planning environments

and manufacturing planning and control methods. International Journal of Operations and

Production Management, 23 (8), 872-900.

10. Jonsson, P. and Mattsson, S-A. 2006. A longitudinal study of material planning applications

in manufacturing companies. Forthcoming in the International Journal of Operations and

Production Management

11. King, R. E. and R.P. Maddalena (1998). Replenishment Rules. Bobbin 39, 55–56.

12. Kolias, G.D., S.P. Dimelis and V.P. Filios (2011). An Empirical Analysis of Inventory

Turnover Behavior in the Greek Retail Sector: 2000-2005. International Journal of

Production Economics 133(1), 143–153.

34

13. Kolias, G.D., S.P. Dimelis and V.P. Filios (2011). An Empirical Analysis of Inventory

Turnover Behavior in the Greek Retail Sector: 2000-2005. International Journal of

Production Economics 133(1), 143–153.

14. Molinder, A. 1997. Joint optimization of lot-sizes, safety stocks and safety lead times in an

MRP system. International Journal of Production Research, 35 (4), 983-994.

15. Rosenfield, D. B. Disposal of Excess Inventory. Operations Research, v. 37-3, p. 404-409,

1989.

16. Tagaras and Vlachos (2001) A Binary Decision Model for the Stock Control of Very Slow

Moving Items. Journal of Operational Research Society, v. 34-3, p. 249-252, 2001

17. .“Investing in reduced setups in the EOQ model, Management Sciences, Vol. 31, pp.998- 1010” by

Lambert, Stock, &Ellram (1998).

18. .Foundations of inventory management. First Edition” by Rosenblatt (1977), pages 223-22.

19. Cachon, G.P. and M.L. Fisher (2000). Supply Chain Inventory Management and the Value of Shared

Information. Management Science 46, 1032 – 1048.

20. Cannon, A.R. (2008). Inventory Improvement and Financial Performance. International Journal of

Production Economics 115, 581–593.

21. Chen, H., M.Z. Frank and Q.W. Wu (2005). What Actually Happened to the Inventories of American

Companies between 1981 and 2000? Management Science 51(7), 1015–1031.

. WEB SITES :

http://bpcl.co.in

http://bpclkochirefineries.com

http://www.bharatpetroleum.com/EnergisingBusiness/KochiRefinery_Overview.aspx

http://inventorymanagementinterview.org/justintime/index

35

CHAPTER III

DATA ANALYSIS AND

INTERPRETATION

36

3.1.1 ABC ANALYSIS

ABC analysis is a basic analytical tool which enables management to concentrate its efforts

where results will be greater. The concept applied to inventory is called as ABC analysis. ABC

analysis tends to segregate the items into three categories A,B & C on the basis of their values. .

Items up to 70%consumption value come under A class, next 20 % under B class and the rest

under C class

Sl

No Items

Annual

usage (Rs)

Annual

usage

%

Cumulative

%

Categor

y

1 HIGH SPEED DIESEL

3,237,028.02

27.98

27.98 A

2 MOULD GLASS, DIA 35.5+/- 0.5MM DOTTED

591,878.67

5.12

33.09 A

3 CONVEYOR CHAIN AS PER DRAWING

340,094.40

2.94

36.03 A

4 MOULD GLASS 33.50MM +/- 0.50MM

245,093.48

2.12

38.15 A

5 INK CATRIDGE FOR VIDEOJET 1210

240,736.86

2.08

40.23 A

6 Mould holder Assembly(B type)- RRT

237,179.09

2.05

42.28 A

7 CAP CLOTH (GREEN COLOUR)

235,097.01

2.03

44.31 A

8 ASSEMBLY. MOULD HOLDER (W/O WASHER)

230,550.54

1.99

46.30 A

9 MASK FACE (COTTON)

173,901.79

1.50

47.81 A

10

FLAP CONDUCTIVE RUBBER 210 X 73 X 0.5

MM

135,556.42

1.17

48.98 A

11 GLASS MOULD (RITCHER)DIA-36.5

129,030.04

1.12

50.09 A

37

12

BRUSH BEAD LARGE ASPER DRG.HLL-B-171-

00

120,361.44

1.04

51.13 A

13 MOULD GLASS PLAIN RRT 32.5 +/- 0.5MMSIZE

114,010.70

0.99

52.12 A

14 FITTINGS YARD LIGHT LUMINARY 72W LED

113,574.84

0.98

53.10 A

15 BEARING ROLLER NK 15/16

110,880.00

0.96

54.06 A

16 TOP UP FOR INK JET PRINTER

110,046.93

0.95

55.01 A

17

ASSEMBLY SPINDLE FOR RRT M/CWITH

BEARING

109,058.40

0.94

55.95 A

18 STEAM TRAP BALLFLOAT,SLR&TV IBR 15NB

106,745.04

0.92

56.88 A

19 GLOVES (MEDIUM SIZE)

105,401.90

0.91

57.79 A

20 CIJ MEK INK BLACK 201-0001-601

99,309.38

0.86

58.65 A

21

PRESS JAW OF NEW 3 LINE BRT PKG

MACHINE

70,000.00

0.60

59.25 A

22 STEREO FLAT RUBBER XXXX

88,965.28

0.77

60.02 A

23 MOULD GLASS (PLAIN) 36.50 +/-0.50 MM

84,820.93

0.73

60.75 A

24 VALVE PVS AP-1125A, MODEL - E222B4

82,869.49

0.72

61.47 A

25 GLOVES (SMALL SIZE)

81,372.38

0.70

62.17 A

26 DIGITAL INDICATING PID CONTROLLER

80,838.15

0.70

62.87 A

27 MS PLATE CHEQUERED PLATE 6MM THICK

76,443.67

0.66

63.53 A

28 MOULD GLASS PLAIN RRT 35.5+/-0.5MMSIZE

A

38

68,978.52 0.60 64.13

29 TOP UP CATRIDGE FOR VIDEOJET 1210

65,462.34

0.57

64.69 A

30 BEARING UCP 204 J (NTN) 20 MM

64,867.35

0.56

65.25 A

31 SPONGE BOARD- C, DRG.NO.HLL-D-016-00

60,615.20

0.52

65.78 A

32 VIBRATOR FEEDER CONTROLLER

63,060.60

0.55

66.32 A

33 PIPE SS 304, 1 INCH SIZE

58,595.13

0.51

66.83 A

34 PIPE SEAMLESS SS 304 SCH.40 50 NB(2")

54,641.19

0.47

67.30 A

35

CONTROLLER TEMPERATURE JCD-33A-R/M-

BKA2

50,777.78

0.44

67.74 A

36 HOLDER MOULD (RRT) 32.5MM

53,314.38

0.46

68.20 A

37 KIT WASH SOLUTION - IMAJE 9020 MAKE

51,016.21

0.44

68.64 A

38 PIPE SEAMLESS SS304 SCH,40 65NB(2 1/2")

50,566.94

0.44

69.08 A

39 VALVE PVS AP-1120A,MODEL - E222B82

35,687.74

0.31

69.39 A

40

BRUSH BEAD SMALL ASPER DRG.HLL-B-172-

00

50,715.20

0.44

69.83 A

41 PIPE SEAMLESS SS 304 SCH40.40NB(1 1/2")

46,843.58

0.40

70.23 B

42 VALVE PVS-40A-210

47,697.66

0.41

70.64 B

43 BEARING UCP315D1

40,878.56

0.35

71.00 B

44 SHAFT FOR METAL MOULD (DRY EPT M/C.)

42,462.00

0.37

71.36 B

39

45 GEAR BOX FOR EPT MACHINE

43,674.23

0.38

71.74 B

46 GLASS MOULD (RITCHER) DIA-36.5

40,748.79

0.35

72.09 B

47 VALVE GATE F END 75MM SCREWAL END

39,659.07

0.34

72.44 B

48 INK FOR JET INKS - 500ML PART NO. CS602

37,957.91

0.33

72.76 B

49 LIGHT FITTINGS(YARD )LUMINARY 24W LED

38,059.56

0.33

73.09 B

50 CENTRIFUGE PUMP

36,382.50

0.31

73.41 B

51 TOP UP FOR JET INKS -500ML PART NO.CS603

34,492.19

0.30

73.70 B

52 VALVE BALL SS304 3 PCS ASA800 BSPT 40NB

32,176.50

0.28

73.98 B

53 PIPE SEAMLESS CS SCH.40 50NB

31,069.56

0.27

74.25 B

54 FAN CABIN

30,309.30

0.26

74.51 B

55

MOTORISED GEARBOX FOR RRT

DEHYDRATOR

26,185.45

0.23

74.74 B

56 ROLLER CUTTER

30,130.33

0.26

75.00 B

57

SPONGE BOARD B WITH DRG.NO HLL-D-007-

00

29,249.43

0.25

75.25 B

58 DIRECT ACTING SOLENOID VALVE

29,496.44

0.25

75.51 B

59 CONTROLLER- PLC MICRO LOGIX 1200

42,749.00

0.37

75.88 B

60

RACK SEGMENT AS PER DRG NO:HLL-B-061-

01

29,062.46

0.25

76.13 B

61 PIPE SEAMLESS CS SCH.80 IBR 50NB

B

40

27,899.74 0.24 76.37

62 OIL SHELL RIMULA X 15W/40,CH-4,CLASS

26,166.33

0.23

76.60 B

63 MOULD METAL BODY SIZE 40 MM

25,946.31

0.22

76.82 B

64

CHAIN CONVEYOR FOR SS PKG MACHINE

60x60

28,539.48

0.25

77.07 B

65 BRUSH BEADING RRT_D MACHINE

26,148.85

0.23

77.29 B

66 VALVE SS 304 BALL TWO PIECES BSPT 65NB

23,134.50

0.20

77.49 B

67 BRUSH BRASS WIRE

25,560.01

0.22

77.71 B

68

RACK-SEGMENT, DRG.NO HLL-B-061-

00,REV.01

24,403.43

0.21

77.92 B

69 SHEET MS 6'X4' 10 MM THICK

24,885.61

0.22

78.14 B

70 CONTROLLER- PLC MICRO TYPE

18,102.00

0.16

78.30 B

71 PIPE GI C CLASS WITH ISI MARK 50 NB

24,031.20

0.21

78.50 B

72

MOULD HOLDER OUTER COVER FOR 56MM

WIDTH

23,629.32

0.20

78.71 B

73

EDGE ROLLER GEARED MOTOR WITH VFD

DRIVE

28,234.26

0.24

78.95 B

74 VALVE BALL SS304 3 PCS ASA800 BSPT 25NB

23,221.60

0.20

79.15 B

75 BEND SHORT FORGED CS B/W SCH.80 IBR 2"

22,169.70

0.19

79.34 B

76 PIPE SEAMLESS SS 304 SCH,40 15 NB (1/2")

21,262.55

0.18

79.53 B

77 RACK STRAIGHT PRG NO HLL-B-011-00

21,202.03

0.18

79.71 B

41

78 CARTRIDGE MSA-USA MAKE MULTI GAS

20,834.80

0.18

79.89 B

79 BRUSH BODY SPECIAL WITH PP BASE

21,197.28

0.18

80.07 B

80 ELECTRODE MS WELDING (10G) 3.15 MM

19,966.76

0.17

80.25 B

81 BEARING-BALL 688 ZZ

19,864.64

0.17

80.42 B

82 THINNER N C FOR SPRAY PAINTING

19,345.46

0.17

80.59 B

83 LIGHT FITTINGS(YARD )LUMINARY 36W LED

19,162.50

0.17

80.75 B

84 PIPE SEAMLESS CS SCH. 80 IBR 25NB

18,722.26

0.16

80.91 B

85 GAS FREON 22

18,191.70

0.16

81.07 B

86 FLANGE FCS TABLE- F IBR ,2"(50NB)

17,980.91

0.16

81.23 B

87

PAINT POLYUERTHANE SUPERCOAT M

SKYBLUE

17,906.18

0.15

81.38 B

88 BEARING UCP 205 D1

17,380.80

0.15

81.53 B

89 BEARING-BALL 1202 E

16,636.12

0.14

81.67 B

90 PIPE GI HEAVY 100MM

16,837.61

0.15

81.82 B

91 COIL STEAM 15" (FH)x15" (FL)X2RD, 12FPI

25,035.41

0.22

82.04 B

92 COMMON SALT

16,770.00

0.14

82.18 B

93 BEARING UCP 206 D1

16,318.66

0.14

82.32 B

94 INMARCO INGREF GASKET SHEET3 MM

B

42

THICK 16,062.15 0.14 82.46

95 SENSOR OPTICAL FIBER SENSOR

15,577.81

0.13

82.60 B

96

VALVE GATE BRONZE HEAVY FLANGED ISI

65NB

19,393.71

0.17

82.76 B

97

HOSEPVC DUTRON DUCT FLEXIBLE

4'(100MM)

16,007.92

0.14

82.90 B

98 ANGLE MS ISA 40 X 40 X 3MM

15,927.31

0.14

83.04 B

99 FOIL UNWINDING CONTROL UNIT

13,914.29

0.12

83.16 B

100 BEARING UCP 313 D1

13,218.52

0.11

83.27 B

101

CONVEYOR CHAIN ASSEMBLY FORPACKING

M/C

18,258.00

0.16

83.43 B

102

VALVE GLOBE BRONZE STEAM,SCRWED IBR

15NB

15,475.16

0.13

83.57 B

103 BEARING 6308 2RS

14,794.92

0.13

83.69 B

104 SHEET SS 304 8"X 4" 18 SWG

14,734.67

0.13

83.82 B

105 BRUSH NECK SPECIAL WITH PP BASE

14,551.62

0.13

83.95 B

106 Valve C.S NRV(DCV) Table H - IBR 100 NB

11,059.75

0.10

84.04 B

107 CYLINDER AIR MODEL-CMK2-M-LB-40, 100-J

17,527.17

0.15

84.19 B

108 PIPE SEAMLESS CS SCH. 40 IBR 40NB

14,647.46

0.13

84.32 B

109 PIPE SEAMLESS CARBON STEEL IBR 80NB

14,894.25

0.13

84.45 B

110 RELAY PROGRAMMABLE (6 I/P PLC)

14,472.00

0.13

84.57 B

43

111 BEND SHORT FORGED SS304 S/W SCH80 2"

14,908.02

0.13

84.70 B

112 PIPE GI C CLASS WITH ISI MARK 40 NB

14,255.50

0.12

84.83 B

113 VALVE BALL SS304 3PCS. ASA800 BSPT 65NB

14,178.92

0.12

84.95 B

114 CARBON BRUSH-SLIP RING

14,070.41

0.12

85.07 B

115 FLANGE FCS TABLE- H, IBR 3"(80NB)

14,098.76

0.12

85.19 B

116 OIL SERVO MESH SP-320

13,906.88

0.12

85.31 B

117 OIL SERVOMESH EE 460

13,588.56

0.12

85.43 B

118 PIPE SEAMLESS CS SCH.40 15NB

13,416.64

0.12

85.55 B

119 SHEET GI 8'X4' 24 SWG

13,345.27

0.12

85.66 B

120 VALVE BALL SS304 3PCS ASA800 BSPT 20NB

13,609.16

0.12

85.78 B

121

PROXIMITY SENSOR-IMAGE PRINTER MAKE

9020

15,471.00

0.13

85.91 B

122 PAINT ENAMEL SKY BLUE

12,879.14

0.11

86.02 B

123 VALVE BALL SS304 1 PCS SCREWED 20NB

12,426.40

0.11

86.13 B

124 TEE FORGED SS304 ASA6OOO SCREWED 21/2'

15,094.24

0.13

86.26 B

125 EHT BLOCK FOR IMAJE 9020 PRINTER

-

-

86.26 B

126 BEARING UKF 205 D1 WITH SLEEVE

12,452.16

0.11

86.37 B

127 FLUID ROTO INJECT-2901 0522 00

B

44

17,808.15 0.15 86.52

128 FLAT BRASS 1/4" X 3/4"

11,619.30

0.10

86.62 B

129

MASK-FACE MSA-USA MAKE ADVANTAGE

HALF-

11,724.47

0.10

86.72 B

130 BRUSH VERTICAL CLEANING FORRRT M/C

12,511.69

0.11

86.83 B

131 GREASE MOBILE SERVOGEM-2

11,713.20

0.10

86.93 B

132 SWITCH PROXIMITY

10,349.00

0.09

87.02 B

133

THERMOCOL CUT SEC FOR 65NB PIPE 50MM

THK

11,350.40

0.10

87.12 B

134 Cotton waste

11,258.93

0.10

87.22 B

135 DIGITAL PRESSURE SENSOR

10,078.94

0.09

87.31 B

136 VALVE SS 304 BALL TWO PIECES BSPT 25NB

11,417.17

0.10

87.40 B

137

WASH DOWN FOR VEDEOJET INK JET

PRINTER

11,147.02

0.10

87.50 B

138 PIPE SEAMLESS CS SCH.40 40NB

10,975.16

0.09

87.60 B

139

TEMPERATURE CONTROLLER PID-

AUTONICS

11,498.09

0.10

87.70 B

140 PNEUMATIC SOLENOID VALVE MFH-5-1/8

11,489.01

0.10

87.79 B

141 LAMP FLUORESCENT TUBE 40W

10,849.89

0.09

87.89 B

142 MOTOR INDUCTION 3.7 KW 440V RPM 2850

12,910.00

0.11

88.00 B

143 PIPE SEAMLESS CS SCH. 80 IBR 20NB

10,651.31

0.09

88.09 B

45

144 BEARING-BALL 6206 2RS

10,485.60

0.09

88.18 B

145 FLAT BRASS 1/4" X 1/2"

10,545.20

0.09

88.27 B

146 ANGLE SS 304 ISA 50 X50X 5 MM

10,255.89

0.09

88.36 B

147 ADDITIVE KIT - IMAJE 9020 MAKE

11,442.34

0.10

88.46 B

148 PAINT ENAMEL GREY

10,085.19

0.09

88.55 B

149 ULTRASONIC PROXIMITY LEVEL SENSOR

-

-

88.55 B

150 RELAY LY4N,DC 24 OMRON

9,875.38

0.09

88.63 B

151 PIPE PVC 90MM

9,681.71

0.08

88.72 B

152 SPONGE SHEET - PER FOAM

9,706.43

0.08

88.80 B

153 PIPE SEAMLESS CS SCHEDULE40 25 NB

9,323.20

0.08

88.88 B

154 RING SLIP FOR PACKING MACHINE

9,398.88

0.08

88.96 B

155

VALVE FLOAT HEAVY GM PR.10BAR ISI

50NB

9,391.40

0.08

89.04 B

156 RTD - DRG. NO. HLL-D-036-00

10,225.69

0.09

89.13 B

157 BEARING-BALL 6205 2RS

9,166.74

0.08

89.21 B

158 MOULD GLASS,, RIBBED TYPE.36.50+/-0.50MM

9,180.00

0.08

89.29 B

159 FLANGE FORGED SS 304 11/2"

9,012.33

0.08

89.37 B

160 RTD MODULE. CAT: NO-1762-IR4

B

46

- - 89.37

161 PIPE SEAMLESS SS 304 SCH.40 20NB(3/4")

9,008.77

0.08

89.45 B

162

HEATER CARTRIDGE HIGH DENSITY

50MM,70W

9,052.16

0.08

89.53 B

163

POWER SUPPLY INPUT 230VAC,OUT PUT

24VDC

7,652.83

0.07

89.59 B

164 NIPPLE HEX FORGED SS304 ASA6OOO 2"

9,095.19

0.08

89.67 B

165 Filter oil 4000 Hrs – 2903752500

12,793.79

0.11

89.78 B

166 GREASE,BEARING

8,512.50

0.07

89.85 B

167 THERMOCOL SHEETS 100CM X 50 CM

8,250.00

0.07

89.93 B

168 CHAIN ROLLER SIMPLEX 3/4" X7/16"DIN Std

8,334.63

0.07

90.00 B

169 MOTOR PROTECTION CIRCUIT BREAKER

8,173.71

0.07

90.07 C

170 FLANGE FCS TABLE- F, IBR 1"(25NB)

8,091.96

0.07

90.14 C

171 THINNER -FOR ENAMEL PAINT

8,074.77

0.07

90.21 C

172 ROD BRIGHT SS 304 30 MM DIA

8,112.75

0.07

90.28 C

173 COUPLING FORGED SS 304 SCH80 2" BSP

8,030.31

0.07

90.35 C

174 TEE FORGED SS 304 ASA6000 11/2" BSP

8,506.38

0.07

90.42 C

175 FLANGE FCS TABLE- F IBR ,11/2"(40NB)

7,862.22

0.07

90.49 C

176 CIRCUIT BREAKER MCB 4 POLE 63 A

8,253.12

0.07

90.56 C

47

177 CHOKE FOR TUBE LIGHT CPR.40W

7,713.26

0.07

90.63 C

178 PIPE GI C CLASS WITH ISI MARK 25NB

7,638.90

0.07

90.69 C

179 CABLE FIBRE :MODEL: FD-620-10.

7,522.69

0.07

90.76 C

180 PAINT ENAMEL PISTA

7,444.89

0.06

90.82 C

181 VALVE BALL SS304 3 PCS,ASA800 BSPT 25NB

7,628.51

0.07

90.89 C

182 RELAY PROGRAMMABLE (12 I/P PLC)

10,954.59

0.09

90.98 C

183 GLOVES SEAMLESS HAND COTTON KNITTED

7,290.39

0.06

91.05 C

184 EPOXY SCOTCHKOTE 3M - 152LV

8,534.56

0.07

91.12 C

185 ELBOW FORGED SS 304 SCREWED 11/2 "

7,494.20

0.06

91.18 C

186 MCCB 100 A

7,054.34

0.06

91.25 C

187 SHOES SAFETY

7,140.00

0.06

91.31 C

188 SWITCH CAPACITIVE PROXIMITY

6,893.97

0.06

91.37 C

189 DIAPHRAGM FOR PUMP MODEL S 15,

6,779.54

0.06

91.43 C

190

VALVE GLOBE BRONZE STEAM,SCRWED IBR

20NB

6,192.76

0.05

91.48 C

191 FLANGE FORGED SS 304 TABLE-F 2"(50NB)

6,513.55

0.06

91.54 C

192 SOLENOID VALVE,CATALOGUE NO :E222E3

9,944.67

0.09

91.62 C

193 FLAT MS 25X6MM

C

48

6,490.77 0.06 91.68

194 V BELT B-39

6,446.27

0.06

91.73 C

195

THERMOCOL CUT SEC FOR 40NB PIPE 50MM

THK

6,465.50

0.06

91.79 C

196 SPROCKET FOR VULCANISING BARREL

5,814.90

0.05

91.84 C

197 BEND SHORT FORGED SS304 S/W SCH80 1"

6,533.45

0.06

91.90 C

198 CABLE FLEXIBLE 4 CORE 1.5 sqmm copper

6,366.71

0.06

91.95 C

199 FITTINGS TUBE LIGHT 40W BOX TYPE

6,286.72

0.05

92.01 C

200 ELECTRODE WELDING MS (10G) 3.15MM

6,335.85

0.05

92.06 C

201 SENSOR INDUCTIVE , IE5099

4,660.57

0.04

92.10 C

202 BEND SHORT FORGED SS304 S/W SCH80 21/2"

6,305.28

0.05

92.15 C

203 COUPLING FORGED SS 304 SCH80 11/2" BSP

6,108.80

0.05

92.21 C

204

BALLAST FOR 2X 24W T5 FLUORESCENT

TUBE

5,958.75

0.05

92.26 C

205

THERMOCOL CUT SEC FOR 25NB PIPE 50MM

THK

6,037.80

0.05

92.31 C

206 SPROCKET

6,529.76

0.06

92.37 C

207 BEARING ROLLER 22308 K WITH SLEEVE

6,721.73

0.06

92.43 C

208 VALVE SOLENOID CAT.NO. 20106-10-4G

4,383.51

0.04

92.46 C

209 CONTACTOR TP WITH AUXILARY CONTACTS

5,831.41

0.05

92.51 C

49

210

VALVE STEAM 25MM,GLOBE BRONZE

SCR/END

5,733.97

0.05

92.56 C

211 BEARING UCP 207 D1

5,707.92

0.05

92.61 C

212 BEARING-BALL 6204 2RS

5,648.85

0.05

92.66 C

213 SHEET SS304 24 SWG

5,605.15

0.05

92.71 C

214 STARTER- MANUAL MOTOR STARTER 2.5A

4,780.01

0.04

92.75 C

215 STATIONARY DOSING SYSTEM IN ST M/C

5,004.54

0.04

92.79 C

216 COUPLING FORGED SS 304 SCH80 1" BSP

5,422.49

0.05

92.84 C

217 WIRE COPPER SUPER ENAMELLED 32 SWG

5,329.50

0.05

92.89 C

218 TEE SS 20MM NB,304L THICKNESS 1.5MM

5,311.47

0.05

92.93 C

219 COUPLING FORGED SS 304 SCH80 21/2" BSP

4,550.56

0.04

92.97 C

220 CHANNEL MS ISMC 100X50 MM

5,302.19

0.05

93.02 C

221 MODULE OUTPUT ,CAT: NO-1762-OW16

-

-

93.02 C

222 BEARING-BALL 6306 2RS

5,296.45

0.05

93.06 C

223 COUNTER TOTAL SELF POWERED H7EC-NV-H

6,226.93

0.05

93.12 C

224

CYLINDER DOUBLE ACTING , STROKE ;

10MM

4,743.76

0.04

93.16 C

225 VALVE GATE SCREWED END 15MM

5,110.62

0.04

93.20 C

226 PINION DRG.NO.HLL-B-010-05

C

50

5,029.04 0.04 93.25

227 CAPACITOR POWER FOR PF CORRECTION

3,744.00

0.03

93.28 C

228 VALVE, STEAM 1.5" SCREWED WITH IBR

3,739.69

0.03

93.31 C

229 STREET LIGHT FITTINGS

4,658.13

0.04

93.35 C

230

GLAND PACKING INMARCO STYLE103-10 MM

DIA

3,682.01

0.03

93.38 C

231 PIPE PVC RIGID HEAVY PL:QLTY OD 90 MM

4,851.69

0.04

93.43 C

232

SWITCH DISCONNECTOR FUSE UNIT, 630

AMPS

-

-

93.43 C

233 BRUSH ROOT SPECIAL WITH PP BASE

4,963.28

0.04

93.47 C

234 PIPE GI B CLASS WITH ISI MARK 20 NB

4,878.42

0.04

93.51 C

235 PIPE SEAMLESS CS SCHEDULE40 20 NB

4,766.35

0.04

93.55 C

236 FLANGE FCS TABLE-F ,IBR 1/2" (15NB)

4,706.15

0.04

93.59 C

237 RTD, PT 100,L - 170MM X 6 MM, L SHAPE

4,996.72

0.04

93.64 C

238 CONTACTOR SIEMENS SICOP 3TF 45

3,496.22

0.03

93.67 C

239 CABLE FLEXIBLE 5 CORE 1.5 sqmm copper

4,635.28

0.04

93.71 C

240 WIRE COPPER SUPER ENAMELLED 27 SWG

4,304.41

0.04

93.74 C

241 BRUSH HOLDER FOR CARBON BRUSH

4,703.35

0.04

93.78 C

242 SPROCKET FOR DEHYDRATERAS

5,155.19

0.04

93.83 C

51

Table 3.1.1: ABC Analysis

Total annual usage (Rs): 1,15,70,468.75

243 BEND SHORT FORGED SS304 S/W SCH80 1/2"

4,474.79

0.04

93.87 C

244 VALVE CI BUTTERFLY 50NB PN 16

4,062.17

0.04

93.90 C

245 BEARING ROLLER 22310 K WITH SLEEVE

5,384.29

0.05

93.95 C

246 PNEUMATIC CYLINDER BORE 20X25

3,973.20

0.03

93.98 C

247

CIRCUIT BREAKER MOTOR PROTECTION 2.5

A

4,384.99

0.04

94.02 C

248

WASH DOWN FOR JET INKS-1000ML

P.NO.WL300

4,352.47

0.04

94.06 C

249 BEARING-BALL 6202 2RS

4,314.60

0.04

94.10 C

250 BRUSH ROLLING UP FOR EPT MACHINE

4,337.01

0.04

94.13 C

52

Figure 3.1.1: ABC Analysis Pie Chart

ANALYSIS AND INTERPRETATION

The above table shows the classification of various components as A, B & C classes using ABC

analysis techniques based on unit value. From the classification A classes are those whose

cumulative annual usage percentage up to 70 and constitutes 4% of total components. B classes

are those whose cumulative annual usage percentage is between 70-90 and constitutes 13% of

total of components and rest 83 % items are classified under C class.

4%

13%

83%

A

B

C

53

3.1.2 FSN ANALYSIS

All the items in the inventory are not required at the same frequency. Some are required

regularly, some occasionally and some very rarely. FSN analysis classifies items into fast

moving, slow moving, non moving items.

973 items were analyzed for FSN analysis. Out of which 723 items have been truncated for

convenience.

Sl.

No

Items Consumption

rate(/Month)

Cumulative

Consumption

rate

Cumulative

% Category

1 STEREO FLAT RUBBER XXXX 35,690.42

35,690.42

65.82 F

2 HIGH SPEED DIESEL 4,653.75

40,344.17

74.40 S

3 MASK FACE (COTTON) 2,552.25

42,896.42

79.11 S

4 CAP CLOTH (GREEN COLOUR) 2,173.42

45,069.83

83.12 S

5 GLOVES (MEDIUM SIZE) 952.75

46,022.58

84.88 S

6 GLOVES (SMALL SIZE) 861.08

46,883.67

86.46 S

7 TAG ALUMINIUM 2" X 4" 416.67

47,300.33

87.23 S

8

ASSEMBLY. MOULD HOLDER (W/O

WASHER) 334.33

47,634.67

87.85 S

9

MOULD GLASS 33.50MM +/-

0.50MM 208.58

47,843.25

88.23 S

10

SCREW ALLEN CAP FULL

THREADED M5 X 10 ) 195.83

48,039.08

88.59 S

11

LUG COPPER (RING TYPE) SIZE 4

MM2 166.67

48,205.75

88.90 S

54

12

FLAP CONDUCTIVE RUBBER 210 X

73 X 0.5 MM 165.25

48,371.00

89.21 S

13 PINION DRG.NO.HLL-B-010-05 152.75

48,523.75

89.49 S

14 BEARING ROLLER NK 15/16 147.42

48,671.17

89.76 S

15

SCREW ALLEN COUNTSUNK

M6X20MM 129.17

48,800.33

90.00 S

16

BOLT & NUT HEX HT M12X65MM

(FT) 127.08

48,927.42

90.23 N

17 WASHER PLATE HT STEEL 10MM 116.67

49,044.08

90.45 N

18

MS PLATE CHEQUERED PLATE

6MM THICK 115.42

49,159.50

90.66 N

19 Mould holder Assembly(B type)- RRT 111.08

49,270.58

90.87 N

20 WASHER PLATE HT STEEL 12MM 100.00

49,370.58

91.05 N

21 CHANNEL MS ISMC 75X40 MM 98.83

49,469.42

91.23 N

22 WASHER PLATE SS 304 6MM 91.67

49,561.08

91.40 N

23 CLIP SADDLE 3/4" 91.67

49,652.75

91.57 N

24 BEARING-BALL 688 ZZ 83.33

49,736.08

91.72 N

25 SPLIT PIN-B,DRG.NO.HLL-B-016-00 83.33

49,819.42

91.88 N

26

BOLT & NUT HEX SS 304

M12X25MM(FT) 83.00

49,902.42

92.03 N

27

MOULD GLASS PLAIN RRT 32.5 +/-

0.5MMSIZE 81.75

49,984.17

92.18 N

28 HOLDER MOULD (RRT) 32.5MM 76.42

N

55

50,060.58 92.32

29

ASSEMBLY SPINDLE FOR RRT

M/CWITH BEARING 68.75

50,129.33

92.45 N

30

GASKET FOR BALL FLOAT TRAP-

15 NB 66.67

50,196.00

92.57 N

31 EAR PLUG (IS: 9167 / 1979) 66.67

50,262.67

92.70 N

32 EAR PLUG WITH CORD 66.67

50,329.33

92.82 N

33 COPPER FERRULE 66.67

50,396.00

92.94 N

34

MOULD GLASS (PLAIN) 36.50 +/-

0.50 MM 62.50

50,458.50

93.06 N

35

BOLT & NUT HEX HT M10X50MM

(FT) 62.50

50,521.00

93.17 N

36 FLAT MS 50X6MM 60.00

50,581.00

93.28 N

37

BOLT & NUT HEX HT M6X50MM

(FT) 58.33

50,639.33

93.39 N

38

MOULD GLASS PLAIN RRT 35.5+/-

0.5MMSIZE 55.25

50,694.58

93.49 N

39 WASHER PLATE SS 304 8 MM 50.00

50,744.58

93.58 N

40 SLEEVE FIBRE GLASS 2MM 50.00

50,794.58

93.68 N

41

SCREW BRASS, SLOTTED R/HEAD

M4 X 25 MM 49.58

50,844.17

93.77 N

42 WASHER PLATE HT STEEL 15 MM 45.83

50,890.00

93.85 N

43

BOLT & NUT HEX HT M12X50MM

(FT) 41.67

50,931.67

93.93 N

44

SCREW COUNTER SUNK HT M5 X

25 MM 41.67

50,973.33

94.01 N

56

45 LUG COPPER OPEN TYPE 16 SQ.MM 40.00

51,013.33

94.08 N

46 SHEET MS 6'X4' 10 MM THICK 39.25

51,052.58

94.15 N

47 TOP UP FOR INK JET PRINTER 35.25

51,087.83

94.22 N

48 STARTER FOR TUBE LIGHT 40W 35.00

51,122.83

94.28 N

49

SCREW ROUND HEAD BRASS

M5X25MM 34.75

51,157.58

94.35 N

50

GLOVES SEAMLESS HAND

COTTON KNITTED 34.00

51,191.58

94.41 N

51

MOULD GLASS, DIA 35.5+/- 0.5MM

DOTTED 33.33

51,224.92

94.47 N

52 LUG COPPER 2.5SQMM 33.33

51,258.25

94.53 N

53

SOCKET COUNTER SUNK SCREW

M6X12MM 33.33

51,291.58

94.59 N

54 OIL SERVO SYSTEM 46 32.92

51,324.50

94.65 N

55

BEND SHORT FORGED CS B/W

SCH80 15NB 32.75

51,357.25

94.71 N

56

SHAFT FOR METAL MOULD (DRY

EPT M/C.) 28.08

51,385.33

94.77 N

57

MOULD GLASS RIBBED 35.5+/-

0.5MM DIAD 27.08

51,412.42

94.82 N

58 LAMP FLUORESCENT TUBE 40W 26.75

51,439.17

94.87 N

59 ANGLE MS ISA 40 X 40 X 3MM 26.50

51,465.67

94.91 N

60 LAMP CF 18 W 25.08

51,490.75

94.96 N

61 SLEEVE FIBRE GLASS 4MM 24.67

N

57

51,515.42 95.01

62 LUG COPPER 23.83

51,539.25

95.05 N

63 HOLDER FOR TUBE LIGHT SINGLE 23.17

51,562.42

95.09 N

64 TUBE SQUARE M.S.50 X 50 X 6 MM 22.75

51,585.17

95.13 N

65 FLANGE FORGED SS 304 1"(25NB) 22.00

51,607.17

95.18 N

66

TAPE TEFLON 15MM WIDTH 10M

LENGTH 21.83

51,629.00

95.22 N

67

BOLT & NUT HEX HT M8 X 50 MM

(FT) 20.83

51,649.83

95.25 N

68

SOCKET COUNTER SUNK SCREW

M5X12MM 20.83

51,670.67

95.29 N

69 CONDUIT FLEXIBLE PVC 16 MM 20.83

51,691.50

95.33 N

70

SCREW COUNTER SUNK HT

M6X20MM 20.83

51,712.33

95.37 N

71 GOGGLES CHEMICAL SPLASH 20.67

51,733.00

95.41 N

72 LUG COPPER 25 SQ.MM 19.58

51,752.58

95.44 N

73

BOLT AND NUT SS 8X25MM

1.25MM PITCH 19.17

51,771.75

95.48 N

74 GLASS MOULD (RITCHER)DIA-36.5 18.33

51,790.08

95.51 N

75 LAMP CF 2 PIN, 9W 18.33

51,808.42

95.55 N

76

CHAIN ROLLER SIMPLEX 1"X11/16"

DIN Std 17.95

51,826.36

95.58 N

77 FLANGE FORGED SS 304 1/2" 17.92

51,844.28

95.61 N

58

78

ADAPTOR STRAIGHT 1/8" BSP X

6MM OD 17.33

51,861.61

95.64 N

79 Cotton waste 17.08

51,878.70

95.68 N

80 COUPLING CONDUIT P.V.C 20MM 16.92

51,895.61

95.71 N

81 CASING AND CAPPING 32MM 16.83

51,912.45

95.74 N

82

CABLE FLEXIBLE 2 CORE 1.5 sqmm

copper 16.67

51,929.11

95.77 N

83

BOLT&NUT HEX SS304 M10X25MM

(FT) 16.67

51,945.78

95.80 N

84

NUT & BOLT (MS) WITH WASHER

12 * 50 MM 16.67

51,962.45

95.83 N

85

TUBE POLYURETHENE 2MM X

4MM 16.67

51,979.11

95.86 N

86 TUBE POLYURETHENE PUN-6X1 BL 16.67

51,995.78

95.89 N

87

BOLT & NUT HEX SS 304

M10X75MM(FT) 16.67

52,012.45

95.92 N

88 WASHER PLATE SS 304 10 MM 16.67

52,029.11

95.95 N

89 LUG TINNED COPPER 30A 16.67

52,045.78

95.98 N

90 LAMP CF 13 W 16.58

52,062.36

96.01 N

91 PLUG BASE 3 PIN 5 AMPS 16.42

52,078.78

96.04 N

92

BOLT&NUT HEX SS304 M6X40MM

(FT) 16.25

52,095.03

96.07 N

93 SLEEVE FIBRE GLASS, 6 MM 16.25

52,111.28

96.10 N

94 TUBING TYPE PU-6 PNO.9159

16.17

N

59

POLYURITHENE 52,127.45 96.13

95

BOLT & NUT HEX SS304

M8X50MM(FT) 16.17

52,143.61

96.16 N

96

BOLT & NUT SS304 HEX 1/4"X2"

(FT)BSW 16.00

52,159.61

96.19 N

97

REDUCER CONCENTRIC FCS ,B/W

IBR 1/2'X2" 15.83

52,175.45

96.22 N

98

BOLT&NUT HEX SS304 M10X30MM

(FT) 15.50

52,190.95

96.25 N

99 GRIP PLUG 6 x 30 MM 15.25

52,206.20

96.28 N

100 SLEEVE FIBRE GLASS, 3 MM 15.17

52,221.36

96.31 N

101 BRASS BAR BOX (200 AMPS):1 15.00

52,236.36

96.34 N

102

THINNER N C FOR SPRAY

PAINTING 14.58

52,250.95

96.36 N

103 BRUSH BRASS WIRE 14.25

52,265.20

96.39 N

104

LAMP COMPACT FLUORESCENT 11

W 14.17

52,279.36

96.41 N

105

SPONGE BOARD DRG NO-HLL-A-

004-01 13.92

52,293.28

96.44 N

106 LUG COPPER 35 MM3 13.75

52,307.03

96.47 N

107

FITTING TO SUIT4MM PU TUBE Size

M5x4 MM 13.33

52,320.36

96.49 N

108 UNIVERSAL TERMINAL BLOCKS 12.50

52,332.86

96.51 N

109

CHART PAPER FOR TEMP

RECORDER 0-200DEG.C 12.33

52,345.20

96.54 N

110

OIL SHELL RIMULA X 15W/40,CH-

4,CLASS 12.08

52,357.28

96.56 N

60

111

TRANSMISSION OIL FOR DIESEL

FORK LIFT 12.08

52,369.36

96.58 N

112 PAINT-ENAMEL-IVORY 12.00

52,381.36

96.60 N

113 ADAPTOR STRAIGHT 1/8" X 8MM 11.67

52,393.03

96.62 N

114

BOLT & NUT HEX HT M12X100 MM

(FT) 11.67

52,404.70

96.65 N

115 FLAT MS 25X6MM 11.42

52,416.11

96.67 N

116 HOLDER CONDOM 11.17

52,427.28

96.69 N

117

CABLE FLEXIBLE 4 CORE 1.5 sqmm

copper 11.08

52,438.36

96.71 N

118

BOLT&NUT HEX SS304 M12X50MM

(FT) 11.08

52,449.45

96.73 N

119 CARBON BRUSH-SLIP RING 10.92

52,460.36

96.75 N

120

SPONGE BOARD- C, DRG.NO.HLL-

D-016-00 10.58

52,470.95

96.77 N

121 SCREW WITH NUT M S M3X25 MM 10.00

52,480.95

96.79 N

122

SCREW SOKT.LOW HEAD CAP

SS304 FT M4X10MM 10.00

52,490.95

96.81 N

123 PAINT GP PRIME GUARD 235 9.92

52,500.86

96.82 N

124

MOULD HOLDER OUTER COVER

FOR 56MM WIDTH 9.75

52,510.61

96.84 N

125

THERMOCOL SHEETS 100CM X 50

CM 9.17

52,519.78

96.86 N

126 PIPE SS 304, 1 INCH SIZE 9.08

52,528.86

96.87 N

127 CHANNEL MS ISMC 100X50 MM 9.08

N

61

52,537.95 96.89

128 BEARING UCP 204 J (NTN) 20 MM 8.92

52,546.86

96.91 N

129 BEARING-BALL 6005 ZZ 8.83

52,555.70

96.92 N

130 ELBOW CONDUIT PVC 20 MM 8.83

52,564.53

96.94 N

131 OIL SERVO MESH SP-320 8.75

52,573.28

96.96 N

132 FUSE LINK HRC, OFF SET TAG 8.75

52,582.03

96.97 N

133 PIPE SEAMLESS CS SCH.40 15NB 8.67

52,590.70

96.99 N

134 BRUSH PAINTING 2" 8.67

52,599.36

97.00 N

135 BEND CONDUIT BEND, PVC 20 MM 8.67

52,608.03

97.02 N

136 FLAT MS 50X4MM 8.42

52,616.45

97.04 N

137

THERMOCOLE CUTSEC FOR 50NB

PIPE 2" THK 8.33

52,624.78

97.05 N

138

PIPE PVC RIGID HEAVY PL:QLTY

32 MM OD 8.33

52,633.11

97.07 N

139 PAINT GP GUARD 641 8.33

52,641.45

97.08 N

140 ROD FORGED EN8 70 MM DIA 8.33

52,649.78

97.10 N

141 CONDUIT FLEXIBLE PVC 25 MM 8.33

52,658.11

97.11 N

142 BOLT&NUT MS 15 X 75 MM 8.33

52,666.45

97.13 N

143

SCREW COUNTER SUNK HT

M8X20MM 8.33

52,674.78

97.14 N

62

144

SCREW ALLEN CAPLESS

M6X25MM 8.33

52,683.11

97.16 N

145

SPIDER FOR LOVEJOY COUPLING

L-110 8.00

52,691.11

97.17 N

146

LOCK FULL LINK,SIMPLEX CHAIN

1/2"X5/16" 7.92

52,699.03

97.19 N

147

BOLT & NUT HEX HT

5/8"X4"BSW(FT) 7.92

52,706.95

97.20 N

148 PIPE PVC 32MM 7.83

52,714.78

97.22 N

149

BEND SHORT FORGED CS B/W

SCH80 IBR11/2" 7.75

52,722.53

97.23 N

150

LOCK FULL LINK, SIMPLEX CHAIN

1"X11/16" 7.75

52,730.28

97.25 N

151

BOLT&NUT HEX SS304 M12X65MM

(FT) 7.67

52,737.95

97.26 N

152

TUBE POLYURETHENE 10 MM OD

X 8 MM ID 7.67

52,745.61

97.27 N

153 LUG COPPER 50 MM2 7.67

52,753.28

97.29 N

154 OIL SERVOMESH EE 460 7.58

52,760.86

97.30 N

155

PIPE GI B CLASS WITH ISI MARK

15 NB 7.58

52,768.45

97.32 N

156 V BELT B-39 7.50

52,775.95

97.33 N

157

QS PUSH-IN/THREADED T

CONNECTOR 7.50

52,783.45

97.34 N

158

TEE FESTO MAKE PUSH IN

CONNECTOR, 7.50

52,790.95

97.36 N

159 CONNECTOR STRAIGHT. QS-1/8-6 7.50

52,798.45

97.37 N

160 BOLT & NUT HEX HT M12X75MM

7.50

N

63

(FT) 52,805.95 97.39

161

PIPE SEAMLESS CS SCH. 80 IBR

25NB 7.33

52,813.28

97.40 N

162

DIAPHRAM FOR LATEX

DIAPHRAM PUMP 7.33

52,820.61

97.41 N

163 BRUSH PAINTING 4" 7.25

52,827.86

97.43 N

164

LOCK FULL LINK SIMPLEX

3/4"X7/16" 7.17

52,835.03

97.44 N

165 TUBE SQAURE MS 50 X50X5MM 7.08

52,842.11

97.45 N

166 PAPER EMERY NO.50 7.08

52,849.20

97.47 N

167

TOP UP CATRIDGE FOR VIDEOJET

1210 6.92

52,856.11

97.48 N

168

PIPE SEAMLESS CS SCH.80 IBR

50NB 6.92

52,863.03

97.49 N

169

HEATER CARTRIDGE HIGH

DENSITY 70MM,100W 6.92

52,869.95

97.50 N

170 PAPER EMERY NO.80 6.92

52,876.86

97.52 N

171 CIJ MEK INK BLACK 201-0001-601 6.75

52,883.61

97.53 N

172

SPONGE BOARD B WITH DRG.NO

HLL-D-007-00 6.67

52,890.28

97.54 N

173 GREASE MOBILE SERVOGEM-2 6.67

52,896.95

97.55 N

174

PIPE GI C CLASS WITH ISI MARK

15NB 6.67

52,903.61

97.57 N

175 WASHER PLATE HT STEEL 3/4" 6.67

52,910.28

97.58 N

176 SPARE FOR LUNG PROTECTOR 6.67

52,916.95

97.59 N

64

177

SCREW FLAT HEADED HT M4 X 10

MM 6.67

52,923.61

97.60 N

178 SHEET SS 304 8"X 4" 18 SWG 6.50

52,930.11

97.61 N

179 THINNER -FOR ENAMEL PAINT 6.50

52,936.61

97.63 N

180 GLOVES RUBBER 6.50

52,943.11

97.64 N

181 CHOKE FOR 10 W CF LAMP 6.50

52,949.61

97.65 N

182 GLASS MOULD (RITCHER) DIA-36.5 6.42

52,956.03

97.66 N

183

PIPE SEAMLESS CS SCH. 80 IBR

20NB 6.33

52,962.36

97.67 N

184

PAINT ALUMINIUM

HEATRESISTANT-400 0 6.25

52,968.61

97.69 N

185

THERMOCOL CUT SEC FOR 15NB

PIPE 2"THK 6.25

52,974.86

97.70 N

186

BEND SHORT FORGED CS B/W

SCH80 IBR 3/4' 6.25

52,981.11

97.71 N

187

PIPE SEAMLESS SS 304 SCH,40 15

NB (1/2") 6.17

52,987.28

97.72 N

188

PIPE PVC 20MM,OD,6 KG\SQ.CM -

ISI MARK 6.17

52,993.45

97.73 N

189 PIPE PVC 90MM 6.08

52,999.53

97.74 N

190 INK CATRIDGE FOR VIDEOJET 1210 6.00

53,005.53

97.75 N

191 PRIMER PAINT RED OXIDE 6.00

53,011.53

97.77 N

192 LUG ALUMINIUM 95 MM2 5.92

53,017.45

97.78 N

193 PIPE SEAMLESS CS SCH.40 50NB 5.83

N

65

53,023.28 97.79

194

HOSEPVC DUTRON DUCT

FLEXIBLE 4'(100MM) 5.83

53,029.11

97.80 N

195 CLIP-HOSE CLIP-3/4" 5.83

53,034.95

97.81 N

196 MALE THREADED ASSEMBLY 5.83

53,040.78

97.82 N

197

CONVEYOR CHAIN AS PER

DRAWING 5.75

53,046.53

97.83 N

198

BEND SHORT FORGED CS S/W

SCH80 IBR 1/2" 5.75

53,052.28

97.84 N

199 BEARING-BALL 6203 5.75

53,058.03

97.85 N

200 PAINT ENAMEL SKY BLUE 5.58

53,063.61

97.86 N

201

CABLE FLEXIBLE 5 CORE 1.5 sqmm

copper 5.58

53,069.20

97.87 N

202 BEARING-BALL 6302 5.50

53,074.70

97.88 N

203 V BELT A-64 5.50

53,080.20

97.89 N

204

BOLT&NUT HEX SS304 M12X30MM

(FT) 5.42

53,085.61

97.90 N

205 CLOTH DUNGRY 5.37

53,090.98

97.91 N

206

PIPE PVC RIGID HEAVY PL:QLTY

OD 50 MM 5.33

53,096.31

97.92 N

207 CELL TORCH LEAK PROOF 5.33

53,101.65

97.93 N

208

PAINT POLYUERTHANE

SUPERCOAT M SKYBLUE 5.25

53,106.90

97.94 N

209 SPONGE SHEET - PER FOAM 5.25

53,112.15

97.95 N

66

210

PIPE GI C CLASS WITH ISI MARK

50 NB 5.17

53,117.31

97.96 N

211 CHOKE FOR TUBE LIGHT CPR.40W 5.17

53,122.48

97.97 N

212 GREASE,BEARING 5.00

53,127.48

97.98 N

213

THERMOCOL CUT SEC FOR 25NB

PIPE 50MM THK 5.00

53,132.48

97.99 N

214

PIPE GI C CLASS WITH ISI

MARK20NB 5.00

53,137.48

98.00 N

215 PUSH BUTTON SWITCH GREEN 5.00

53,142.48

98.01 N

216

ELECTRODE WELDING MS (12G)

2.5MM 5.00

53,147.48

98.02 N

217

LUNG PROTECTOR FOR AMMONIA

LPR.90 5.00

53,152.48

98.03 N

218

FLANGE FCS TABLE- F IBR

,2"(50NB) 4.83

53,157.31

98.03 N

219

PIPE SEAMLESS CS SCH. 40 IBR

40NB 4.83

53,162.15

98.04 N

220 CAPACITOR 2.5 MFD 4.83

53,166.98

98.05 N

221

ELBOW GI HEAVY SCREWED ISI

MARK 3/4'BSP 4.83

53,171.81

98.06 N

222 FLANGE GI 15 MM 4.83

53,176.65

98.07 N

223 PUTTY METAL 4.77

53,181.41

98.08 N

224

TOP UP FOR JET INKS -500ML PART

NO.CS603 4.75

53,186.16

98.09 N

225

FLANGE FCS TABLE-F ,IBR 1/2"

(15NB) 4.58

53,190.75

98.10 N

226 THINNER-FOR POLY URETHENE

4.58

N

67

PAINT 53,195.33 98.10

227

PIPE GI B CLASS WITH ISI MARK

100 NB 4.55

53,199.87

98.11 N

228 ANGLE SS 304 ISA 50 X50X 5 MM 4.50

53,204.37

98.12 N

229

FLANGE FCS TABLE- F, IBR

1"(25NB) 4.50

53,208.87

98.13 N

230

COUPLING GI HEAVY SCREWED

WITH ISI 1/2" 4.50

53,213.37

98.14 N

231

PIPE SEAMLESS SS 304

SCH40.40NB(1 1/2") 4.42

53,217.79

98.15 N

232 SWITCH ROTARY 6 AMPS 1 POLE 4.42

53,222.21

98.15 N

233 COMMON SALT 4.33

53,226.54

98.16 N

234

HEATER CARTRIDGE HIGH

DENSITY 50MM,70W 4.33

53,230.87

98.17 N

235

COUPLING FCS SCREWED SCH80

IBR 3/4" 4.33

53,235.21

98.18 N

236 PAINT ENAMEL GREY 4.25

53,239.46

98.19 N

237

BOLT&NUT HEX SS304 M12X60MM

(FT) 4.25

53,243.71

98.19 N

238

THERMOCOL CUT SEC FOR 40NB

PIPE 50MM THK 4.17

53,247.87

98.20 N

239 LAMP CF 36 W 4.17

53,252.04

98.21 N

240

RELAY WITH SOCKET MY4N 220V

AC OMRON 4.17

53,256.21

98.22 N

241 ROD BRIGHT SS 304 20MM DIA 4.17

53,260.37

98.22 N

242 OIL SERVO SYSTEM 32 4.17

53,264.54

98.23 N

68

Table 3.1.2: FSN Analysis

Figure 3.1.2: FSN Analysis Pie Chart

0.10% 1.44%

98.46%

F

S

N

243 ADAPTOR STRAIGHT 1/4" X 8MM 4.17

53,268.71

98.24 N

244

PILLOW BLOCK WITH BEARI UCP

208J NTN40MM 4.17

53,272.87

98.25 N

245

LED MODULE PANEL INDICATION

30.5 MM 230V 4.17

53,277.04

98.25 N

246 ROD FORGED EN8 60 MM DIA 4.17

53,281.21

98.26 N

247 FLANGE FORGED SS 304 3/4" 4.17

53,285.37

98.27 N

248 ROD BRIGHT EN8 47 MM DIA 4.17

53,289.54

98.28 N

249 ROD BRIGHT EN8 25MM DIA 4.17

53,293.71

98.29 N

250 ROD FORGED EN8 105 MM DIA 4.17

53,297.87

98.29 N

69

ANALYSIS AND INTERPRETATION

The above table shows the classification of various components as FSN items using FSN

analysis techniques based on movements. From the classification F items are those which moves

fast and constitutes 0.1% of total components. S items are those which moves slowly constitute

1.44% of total components and N items are those which doesn’t move (Non-moving items).

According to data given, there are 98.46% of Non-moving items. It is not good, as the company

maintains low percentage in fast moving items.

70

3.1.3 ECONOMIC ORDER QUANTITY

The answer to the question “How much is to order?' is the economic order quantity (EOQ).

The basic objective is to economize on the total cost of purchase.

The formula for finding the EOQ of an item is

Where A = Annual Average consumption in units

O = Ordering cost per order (1500 per order)

C = Inventory carrying cost (30% of unit price)

U = Unit price

Q = √(2AO/UC)

71

Sl. No Item No. Items

Annual

usage

(Unit)

Unit

price

(Rs) EOQ

1 1211710004 HIGH SPEED DIESEL 55845 57.96 3,104

2 I121221014 MOULD GLASS, DIA 35.5+/- 0.5MM DOTTED 400 1479.7 52

3 I121111012 CONVEYOR CHAIN AS PER DRAWING 69 4928.9 12

4 1212210037 MOULD GLASS 33.50MM +/- 0.50MM 2503 97.92 506

5 1212711157 INK CATRIDGE FOR VIDEOJET 1210 72 3343.57 15

6 1212210081 Mould holder Assembly(B type)- RRT 1333 177.93 274

7 1212710282 CAP CLOTH (GREEN COLOUR) 26081 9.01 5,379

8 1212210059 ASSEMBLY. MOULD HOLDER (W/O WASHER) 4012 57.47 836

9 1214410013 MASK FACE (COTTON) 30627 5.68 7,344

10 1251610076 FLAP CONDUCTIVE RUBBER 210 X 73 X 0.5 MM 1983 68.36 539

11 1212210073 GLASS MOULD (RITCHER)DIA-36.5 220 586.5 61

12 1210710012 BRUSH BEAD LARGE ASPER DRG.HLL-B-171-00 9 13373.49 3

13 1212210042 MOULD GLASS PLAIN RRT 32.5 +/- 0.5MMSIZE 981 116.22 291

14 1251110397 FITTINGS YARD LIGHT LUMINARY 72W LED 11 10324.99 3

15 1210110216 BEARING ROLLER NK 15/16 1769 62.68 531

16 1211211039 TOP UP FOR INK JET PRINTER 423 260.16 128

17 1212210067

ASSEMBLY SPINDLE FOR RRT M/CWITH

BEARING 825 132.19 250

18 1213710015 STEAM TRAP BALLFLOAT,SLR&TV IBR 15NB 27 3953.52 8

19 1214410011 GLOVES (MEDIUM SIZE) 11433 9.22 3,522

20 1211211035 CIJ MEK INK BLACK 201-0001-601 81 1226.04 26

21 1211110230 PRESS JAW OF NEW 3 LINE BRT PKG MACHINE 1 70000 -

22 1212710244 STEREO FLAT RUBBER XXXX 428285 0.21 143,589

23 1212210039 MOULD GLASS (PLAIN) 36.50 +/-0.50 MM 750 113.09 258

24 1251610018 VALVE PVS AP-1125A, MODEL - E222B4 7 11838.5 2

25 1214410010 GLOVES (SMALL SIZE) 10333 7.88 3,622

26 1251510146 DIGITAL INDICATING PID CONTROLLER 7 11548.31 2

27 1212310459 MS PLATE CHEQUERED PLATE 6MM THICK 1385 55.19 501

28 1212210043 MOULD GLASS PLAIN RRT 35.5+/-0.5MMSIZE 663 104.04 252

29 1212711158 TOP UP CATRIDGE FOR VIDEOJET 1210 83 788.7 32

30 1210110449 BEARING UCP 204 J (NTN) 20 MM 107 606.24 42

31 1211610037 SPONGE BOARD- C, DRG.NO.HLL-D-016-00 127 477.29 52

32 1251510141 VIBRATOR FEEDER CONTROLLER 8 7882.58 3

33 1213211149 PIPE SS 304, 1 INCH SIZE 109 537.57 45

34 1213210739 PIPE SEAMLESS SS 304 SCH.40 50 NB(2") 49 1115.13 21

35 1251510006

CONTROLLER TEMPERATURE JCD-33A-R/M-

BKA2 5 10155.56 2

36 1212210009 HOLDER MOULD (RRT) 32.5MM 917 58.14 397

72

37 1251710014 KIT WASH SOLUTION - IMAJE 9020 MAKE 20 2550.81 9

38 1213210740 PIPE SEAMLESS SS304 SCH,40 65NB(2 1/2") 27 1872.85 12

39 1251610019 VALVE PVS AP-1120A,MODEL - E222B82 1 35687.74 1

40 1210710013 BRUSH BEAD SMALL ASPER DRG.HLL-B-172-00 5 10143.04 2

41 1213210741 PIPE SEAMLESS SS 304 SCH40.40NB(1 1/2") 53 883.84 24

42 1251610017 VALVE PVS-40A-210 5 9539.53 2

43 1210110052 BEARING UCP315D1 4 10219.64 2

44 1211610013 SHAFT FOR METAL MOULD (DRY EPT M/C.) 337 126 164

45 1212010011 GEAR BOX FOR EPT MACHINE 5 8734.85 2

46 1212210072 GLASS MOULD (RITCHER) DIA-36.5 77 529.21 38

47 1214010354 VALVE GATE F END 75MM SCREWAL END 8 4957.38 4

48 1212711194 INK FOR JET INKS - 500ML PART NO. CS602 23 1650.34 12

49 1251110417 LIGHT FITTINGS(YARD )LUMINARY 24W LED 11 3459.96 6

50 1260010860 CENTRIFUGE PUMP 1 36382.5 1

51 1212711195 TOP UP FOR JET INKS -500ML PART NO.CS603 57 605.13 31

52 1214010147 VALVE BALL SS304 3 PCS ASA800 BSPT 40NB 19 1693.5 11

53 1213210727 PIPE SEAMLESS CS SCH.40 50NB 70 443.85 40

54 1251110029 FAN CABIN 21 1443.3 12

55 1212010089 MOTORISED GEARBOX FOR RRT DEHYDRATOR 2 13092.73 1

56 I121111005 ROLLER CUTTER 8 3766.29 5

57 1211610035 SPONGE BOARD B WITH DRG.NO HLL-D-007-00 80 365.62 47

58 1251210003 DIRECT ACTING SOLENOID VALVE 23 1282.45 13

59 1251510009 CONTROLLER- PLC MICRO LOGIX 1200 1 42749 -

60 1212810126 RACK SEGMENT AS PER DRG NO:HLL-B-061-01 10 2906.25 6

61 1213210734 PIPE SEAMLESS CS SCH.80 IBR 50NB 83 336.14 50

62 1212510027 OIL SHELL RIMULA X 15W/40,CH-4,CLASS 145 180.46 90

63 1212210045 MOULD METAL BODY SIZE 40 MM 33 786.25 20

64 1211110115 CHAIN CONVEYOR FOR SS PKG MACHINE 60x60 4 7134.87 2

65 1210710015 BRUSH BEADING RRT_D MACHINE 3 8716.28 2

66 1214010358 VALVE SS 304 BALL TWO PIECES BSPT 65NB 3 7711.5 2

67 1212710102 BRUSH BRASS WIRE 171 149.47 107

68 1212810112 RACK-SEGMENT, DRG.NO HLL-B-061-00,REV.01 8 3050.43 5

69 1212310202 SHEET MS 6'X4' 10 MM THICK 471 52.84 299

70 1251510008 CONTROLLER- PLC MICRO TYPE 1 18102 1

71 1213210692 PIPE GI C CLASS WITH ISI MARK 50 NB 62 387.6 40

72 1212210074

MOULD HOLDER OUTER COVER FOR 56MM

WIDTH 117 201.96 76

73 1250210197

EDGE ROLLER GEARED MOTOR WITH VFD

DRIVE 2 14117.13 1

74 1214010152 VALVE BALL SS304 3 PCS ASA800 BSPT 25NB 8 2902.7 5

73

Table 3.1.3 EOQ

75 1213210044 BEND SHORT FORGED CS B/W SCH.80 IBR 2" 35 633.42 24

76 1213210738 PIPE SEAMLESS SS 304 SCH,40 15 NB (1/2") 74 287.33 51

77 1212810110 RACK STRAIGHT PRG NO HLL-B-011-00 20 1060.1 14

78 1214410024 CARTRIDGE MSA-USA MAKE MULTI GAS 33 631.36 23

79 1210710025 BRUSH BODY SPECIAL WITH PP BASE 19 1115.65 13

80 1211211016 ELECTRODE MS WELDING (10G) 3.15 MM 41 486.99 29

81 1210110257 BEARING-BALL 688 ZZ 1000 19.86 710

82 1213110002 THINNER N C FOR SPRAY PAINTING 175 110.55 126

83 1251110418 LIGHT FITTINGS(YARD )LUMINARY 36W LED 5 3832.5 4

84 1213210733 PIPE SEAMLESS CS SCH. 80 IBR 25NB 88 212.75 64

85 1210910031 GAS FREON 22 41 443.7 30

86 1213210425 FLANGE FCS TABLE- F IBR ,2"(50NB) 58 310.02 43

87 1213110057

PAINT POLYUERTHANE SUPERCOAT M

SKYBLUE 63 284.23 47

88 1210110010 BEARING UCP 205 D1 24 724.2 18

89 1210110059 BEARING-BALL 1202 E 41 405.76 32

90 1213211143 PIPE GI HEAVY 100MM 18 935.42 14

91 1211510017 COIL STEAM 15" (FH)x15" (FL)X2RD, 12FPI 1 25035.41 1

92 1212710207 COMMON SALT 52 322.5 40

93 1210110025 BEARING UCP 206 D1 19 858.88 15

94 1213010137 INMARCO INGREF GASKET SHEET3 MM THICK 10 1606.22 8

95 1251410014 SENSOR OPTICAL FIBER SENSOR 8 1947.23 6

96 1214010177

VALVE GATE BRONZE HEAVY FLANGED ISI

65NB 2 9696.86 1

97 1213210475 HOSEPVC DUTRON DUCT FLEXIBLE 4'(100MM) 70 228.68 55

98 1212310175 ANGLE MS ISA 40 X 40 X 3MM 318 50.09 252

99 1211110113 FOIL UNWINDING CONTROL UNIT 3 4638.1 3

100 1210110239 BEARING UCP 313 D1 2 6609.26 2

74

Figure 3.1.3: EOQ and Annual Usage

Analysis and Interpretation

In the above table the EOQ & the no. of orders purchased per year for various components are

calculated. The calculated EOQ is compared with the no. of units of each component purchased

in the organization. It is found that, there is a variation in the EOQ & no. of unit purchased.It is

understood that the company is not following EOQ for purchasing the materials & therefore the

inventory management is not satisfactory

-100000

0

100000

200000

300000

400000

500000

0 20 40 60 80 100 120

Annual usage (Unit)

EOQ

75

3.1.4 Inventory Turn Over Ratio

This ratio, also known as Stock turnover ratio, establishes the relationship between sales or cost

of goods sold to average inventory. This ratio reveals the number of times inventory is turned

over during a given accounting period. Higher the ratio, the better it is because it shows that

inventory is rapidly turned over. It is calculated as follows:

Inventory Turnover ratio = Sales/ Average Inventory

TABLE 3.1.4

INVENTORY TURN OVER RATIO

Year

Sales

(Rs. Crores)

Total Inventory (Rs.

Crores)

Inventory

Turnover Ratio

2007-08 22682.33 2969.96 8

2008-09 25233.09 1429.82 18

2009-10 21516.46 2369.00 9

2010-11 27987.78 3583.28 8

2011-12 40802.42 3907.81 10

76

Figure 3.1.4 Inventory Turnover Ratio

ANALYSIS AND INTERPRETATION

Inventory turnover is the ratio of cost of goods sold by a business to its average inventory during

a given accounting period. Inventory turnover ratio is used to measure the inventory management

efficiency of a business. In general, a higher value of inventory turnover indicates better

performance and lower value means inefficiency in controlling inventory levels. A lower

inventory turnover ratio may be an indication of over-stocking which may pose risk of

obsolescence and increased inventory holding costs. However, a very high value of this ratio

may be accompanied by loss of sales due to inventory shortage. Inventory turnover ratio is 8 in

2007-08, 2010-11 and in 2009-10 is 9%. It is increased to 18 in 2008-9 and to 10 in 2011-

12.This shows that the company is following a good inventory management policy. These ratios

show that the firm is able to manage its inventories very well.

8

18

9 810

2007-08 2008-09 2009-10 2010-11 2011-12

Inventory Turnover Ratio

Inventory Turnover Ratio

77

3.1.5 STOCK VELOCITY

Inventory conversion period or stock velocity is calculated by dividing the number of days in a year (360)

by inventory turnover ratio. This gives the days of inventory holdings. Days of Inventory conversion

period is calculated as follows:

Inventory Conversion Period = 360/Inventory Turnover Period

Table 3.1.5

INVENTORY CONVERSION PERIOD

Year No of days in a year

Inventory Turnover

Ratio

Inventory Conversion

Period (Days)

2007-08 360 8 45

2008-09 360 18 20

2009-10 360 9 40

2010-11 360 8 45

2011-12 360 10 36

78

Figure 3.1.4 Inventory Conversion chart

ANALYSIS &INTERPRETATION:

This analysis shows that the Inventory holding days varies from 20-45 days on an average. It was 45

days in the initial years and the company is able to reduce this to 20 days which shows a good position.

This is because of the assured demand of the product and the govt. control over the petroleum products.

0

50

100

150

200

250

300

350

400

2007-08 2008-09 2009-10

2010-11

2011-12

INVENTORY CONVERSION PERIOD No of days in a year

INVENTORY CONVERSION PERIOD Inventory Turnover Ratio

INVENTORY CONVERSION PERIOD Inventory Conversion Period (Days)

79

3.1.7 TREND ANALYSIS

MEANING

Regression means dependence and involves estimating the values of a dependent variable Y,

from an independent variable X.

Y= a + bx

Where a= y – b x; b = Σxy – n x y

Σx2- nx 2

Table 3.1.7

CALCULATION OF INVENTORY TREND

YEAR

(x)

Inventories

(Rs.)

Y

X = x-2010

X2

XY

(Rs)

2008 9,17,88,514 -2 4 -18,35,77,028

2009 8,66,68,300 -1 1 -8,66,68,300

2010 20,37,85,550 0 0 0

2011 17,58,61,213 1 1 17,58,61,213

2012 17,22,82,014 2 4 34,45,64,028

80

x = Σx/n = 0/5 = 0

y = Σy/n = 73,03,85,591/5 = 14,60,77,118.2

b = Σxy – n x y

Σx2- nx

2

= 25,01,79,913- 5 * 0 * 73,03,85,591 = 2,50,17,991.3

10-5*0

a = y – b x = 14,60,77,118.2 – 2,50,17,991.3 * 0 = 14,60,77,118.2

y = a + bx

= 14,60,77,118.2 + 2,50,17,991.3 x

The forecast of inventory for the year 2013 is computed by substituting x = 2013 in the above

equation.

=14,60,77,118.2 + 2,50,17,991.3 x

=14,60,77,118.2 + 2,50,17,991.3 (x-2010)

=14,60,77,118.2 + 2,50,17,991.3 (2013-2010)

=14,60,77,118.2 + 2,50,17,991.3 (3)

=14,60,77,118.2 + 7,50,53,973.9

=22,11,31,092.1

Therefore inventory for the year 2013 will be approximately Rs.22,11,31,100

81

Table 3.1.8

INVENTORIES PERCENTAGE

Years Inventories Percentage

2008 9,17,88,514 9.65

2009 8,66,68,300 9.15

2010 20,37,85,550 21.40

2011 17,58,61,213 18.50

2012 17,22,82,014 18.10

2013 22,11,31,100 23.20

TOTAL 95,15,16,691 100

82

Figure Trend analysis 3.1.7

ANALYSIS & INTERPRETATION :

In the above table shows the percentage of inventories increases from 9.65 to 18.10 in the year

2008-2012. the inventory for the year 2013 is expected to be 23.20 which is again in the

increasing trend. This infers that the inventory requirement is increasing in the future period also.

It shows satisfactory position of inventories as it implies increasing production & demand for the

product.

020406080

100120

9,1

7,8

8,5

14

8,6

6,6

8,3

00

20

,37

,85

,55

0

17

,58

,61

,21

3

17

,22

,82

,01

4

22

,11

,31

,10

0

95

,15

,16

,69

1

2008 2009 2010 2011 2012 2013 TOTAL

Percentage

Percentage

83

CHAPTER IV

FINDINGS AND SUGGESTIONS

84

4.1 FINDINGS OF THE STUDY

From the classification. A classes are those whose cumulative annual usage % up to 70

and constitutes 4% of total components. B classes are those whose cumulative annual

usage % between 70-90 constitutes 13% of total components and C classes are those

whose cumulative annual usage % between 90-100 constitutes 83% of total components.

So the inventory management is not effective.

From the classification, F items are those which moves fast and constitutes 0 .1% of total

components. S items are those which moves slowly constitute 1.44% of total components

and N items are those which doesn’t move (Non-moving items). According to data given,

there are 98.46% of total components. It is not good as the company maintains low

percentage in moving items. The cumulative percentage of STEREO FLAT RUBBER is

more compared to the rest of the items. So when calculating the FSN analysis, the rest of

the items is showing as Slow Moving / Non Moving compared to the STEREO FLAT

RUBBER item (which is classified as fast moving item)

From the calculation of EQQ, we are able to determine how much to order i.e; it is the

number of units that a company should add to inventory with each order to minimize the

total costs of inventory

The stock turn over ratios show that the firm is able to manage its inventories very well.

Inventory turn over ratio of the company ranges between 8 and 18 for different years. During

last periods it was lower, but now it is 10. This shows the ability of management in inventory

control activities. Similarly the stock velocity of the firm varies between 20-45 days which is

also a good position.

It was found that the percentage of inventories increases from 9.65 to 18.10 in the year 2008-

2012. the inventory for the year 2013 is expected to be 23.20 which is again in the increasing

trend

85

4.2 SUGGESTIONS AND RECOMMENDATIONS

Class A inventory is directly linked to the success of the company, it is important to

constantly monitor the demand for it and ensure stock levels match that demand. In this

case we have only 4% constituting to A class, which is not so great. So regular cycle

counts can be implemented to focus on Class A inventory.

According to FSN, the company must not go with the Non-moving items as far as

possible, because there will be unnecessary blocking of working capital. This would

hinder the other activities of the organization. Huge amount of working capital is invested in

non-moving items. Hence, these items may be reviewed for removing from stock. If obsolete,

items may be sold as scrap

According to EOQ Analysis, the company is not following EOQ for all of its purchasing. By

following EOQ for all purchases, company can reduce purchasing and carrying cost and thereby

increase the profit.

The inventory turnover ratio indicates whether investment in inventory is within proper

limit or not. It also measures how quickly inventory is sold. It requires to maintain a high

turnover ratio than lower ratio. A high ratio implies that good inventory management and

it also reflects efficient business activities.

The past data shows increase in inventory the company is also expecting more inventories for

future period i.e. 2008. The management is required to maintain the same inventory trend in the

forth coming year also.

The company may adopt new techniques of inventory control such as Just In Time (JIT),

etc. for minimizing investment in inventory.

86

CHAPTER V

CONCLUSION

87

5.1 CONCLUSION

A better inventory management will surely be helpful in solving the problems the company is

facing with respect to inventory and will pave way for reducing the huge investment. From the

analysis we can conclude that the Company can follow the Economic Order Quantity (EOQ) for

optimum purchase and it can maintain safety stock for its components in order to avoid stock-out

conditions & help in continuous production flow . This would reduce the cost and enhance the

profit. Also there should be tight control exercised on stock levels based on ABC analysis &

maintain high percentage in fast moving items in inventories as per on FSN analysis for efficient

running of the inventory. Since the inventory Turnover ratio shows a slight decreasing trend, but

there will be more demand for the products in the future periods. If they could properly

implement and follow the norms and techniques of inventory management, they can enhance the

profit with minimum cost.

88

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WEB SITES :

http://bpcl.co.in

http://bpclkochirefineries.com

http://www.bharatpetroleum.com/EnergisingBusiness/KochiRefinery_Overview.aspx

91

ANNEXURE

SL NO Item Unit Annual usage

(Unit)

Unit price

(Rs)

1 FILTER AIR ELEMENT-2914 9302 00 NO - 3,525.24 2 HACK SAW BLADE HSS 1" X 18" NO 5 175.84 3 SHEET SS304 24 SWG KG 33 169.85 4 VALVE SOLENOID AIR G1/8,MAKE:JANATICS NO 2 2,370.89 5 3 POLE MCB 100 A NO 1 2,768.33 6 ACTUATOR SELECTOR SWITCH 2 POSITION 230V NO 0 107.47 7 ADAPTOR ELBOW 3/8" X 10MM NO 1 80.55 8 ADAPTOR STRAIGHT 1/2" X 10MM NO 0 77.13 9 ADAPTOR STRAIGHT 1/4" X 8MM NO 50 51.60 10 ADAPTOR STRAIGHT 1/8" X 8MM NO 20 41.42 11 ADAPTOR STRAIGHT 1/8" BSP X 6MM OD NO 1 41.63 12 ADAPTOR TEE 8MM X 8MM X 8MM NO 13 105.78 13 ADDITIVE KIT - IMAJE 9020 MAKE KIT 3 3,814.11 14 AFTER COOLER NO 1 342.50 15 AIR CLEANER ELEMENT OUTER FOR 500 KVA NO 0 9,044.88 16 AMMETER 0 - 10 A NO 1 176.60 17 AMMETER 0 - 15 A NO 1 263.54 18 AMMETER 0 - 5 A NO 1 171.56 19 AMMONIA MASK CATRIDGE NO 4 612.00 20 ANGLE MS ISA 40 X 40 X 3MM KG 318 50.09 21 ANGLE MS ISA50X50X6MM KG 85 38.02 22 ANGLE SS 304 ISA 50 X50X 5 MM KG 54 189.92 23 ASSEMBLY SPINDLE FOR RRT M/CWITH BEARING NO 825 132.19 24 ASSEMBLY. MOULD HOLDER (W/O WASHER) NO 4012 57.47 25 AUTO DRAIN - BP(F) DRIP LEG DRAIN 15NB NO 1 2,025.10 26 AUTOFEEDER FORK ASSEMBLY NO 0 7,894.50 27 BALL BEARNG (PB) UCP-207 35MM NO 1 702.72 28 BALLAST FOR 2X 24W T5 FLUORESCENT TUBE NO 15 397.25 29 BEARING UCP 207 D1 NO 7 815.42 30 BEARING 1206 K WITH SLEEVE NO 4 482.03 31 BEARING 6308 2RS NO 38 389.34 32 BEARING BALL 6004 - 2RS NO 17 102.31 33 BEARING- BALL 6208 NO 4 184.59 34 BEARING- BALL 6208 1RS NO 2 284.41 35 BEARING BALL 6309 - 2RS NO 1 631.63 36 BEARING ROLLER 22308 K WITH SLEEVE NO 3 2,240.58 37 BEARING ROLLER 22310 K WITH SLEEVE NO 2 2,692.14 38 BEARING ROLLER NK 15/16 NO 1769 62.68 39 BEARING TAPER ROLLER 30305 NO 1 352.80 40 BEARING UC 206 D1 NO 2 481.89 41 BEARING UCP 204 J (NTN) 20 MM NO 107 606.24 42 BEARING UCP 205 D1 NO 24 724.20 43 BEARING UCP 206 D1 NO 19 858.88 44 BEARING UCP 209 D1 NO 1 1,260.78 45 BEARING UCP 305 DI NO 3 1,179.52 46 BEARING UCP 313 D1 NO 2 6,609.26 47 BEARING UCP315D1 NO 4 10,219.64 48 BEARING UCT 205 D1 NO 3 757.10 49 BEARING UKF 205 D1 WITH SLEEVE NO 14 889.44 50 BEARING-BALL 1202 E NO 41 405.76 51 BEARING-BALL 2304 NO 4 383.46

92

52 BEARING-BALL 2305 NO 2 456.36 53 BEARING-BALL 6001 ZZ NO 15 65.20 54 BEARING-BALL 6002 NO 3 60.75 55 BEARING-BALL 6003 ZZ NO 5 83.24 56 BEARING-BALL 6004 NO 2 74.22 57 BEARING-BALL 6005 ZZ NO 4 138.75 58 BEARING-BALL 6006 ZZ NO 2 219.09 59 BEARING-BALL 6200 ZZ NO 8 68.03