a study on inventry of hsc silk plast.doc

7/30/2019 a study on inventry of hsc silk plast.doc

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INTRODUCTION

Inventories are maintained basically for the operational smooth less which they can be affected

by uncoupling successive stages of production, whereas the monetary value of the inventoryserves as a guide to indicate the size of the investment made to achieve this operational

convenience. The materials management department primary function is to provide this

operational convenience with a minimum possible investment in inventories. The solution lies in

exercise a selective inventory control and application of inventory control techniques.

Inventories build to act as a cushion between supply and demand.

The size of the inventory depends upon the factors such as size of industry internal lead time for

purchase, suppliers lead time, vendor relations availability of the materials, annual consumption

of the materials. Inventory cost can be controlled by applying Modern Techniques viz., ABC

analysis, SDE, ESN, HMC, VED etc. techniques can be used effectively with the help of

computerization.

INVENTORY

The investment in inventories constitutes the most significant part of current assets / workingcapital 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 and when required and also to minimize investment in inventories.

Meaning and nature of inventory

In accounting language, inventory may mean the stock of finished goods only. In a

manufacturing concern, it may include raw materials, work-in-progress and stores etc.

Definition of Inventory Management: Inventory management is concerned with the

determination of optimum level of investment for each components of inventory and the

operation of an effective control and review of mechanism.


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The main objectives of inventory management are operational and financial.

The operational objective mean that the materials and spares should be available in sufficient

quantity so that work is not disrupted for want of inventory.

The financial objective means that inventory should not remain idle and minimum working

capital should be locked in it.

The following are the objectives of inventory management

1. To ensure continuous supply of materials, spares and finished goods so that production

should not suffer at any time and the customers demand should also be met.

2. To avoid both over-stocking and under-stocking of inventory.

3. To maintain investment in inventories at the optimum level as required by the operationaland sales activities.

4. To keep material cost under control so that they contribute in reducing the cost of

production and overall costs.

5. To eliminate duplication in ordering or replenishing stocks. This is possible with the help

of centralizing purchases.

6. To minimize losses through deterioration, pilferages, wastages and damages.

7. To ensure perpetual inventory control so that materials shown in stock ledgers should be

actually lying in the stores.

8. To ensure right quality goods at reasonable prices. Suitable quality standards will ensure

proper quality of stocks. The price-analysis, the cost analysis and value-analysis will

ensure payment of proper prices.

9. To facilitate furnishing of data for short-term and long-term planning and control of

inventory.


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NEED FOR THE STUDY

Every industry on average spends 70% on raw materials (inventory). Therefore there is a need to

know the raw material cost and also there is a great importance to understand the inventorymanagement system of this industry.

The study helps a log to various departments to take steps to control the inventory process.

In this competitive business world each and every business organization need inventory

management system for determining what to order, when to order, where and how much to order

so that purchasing and storing costs are the lowest possible without affecting production and

sales. Thus, inventory management control incorporates the determination of the optimum size

of the inventory-how much to be order and when after taking into consideration the minimum

inventory cost.


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SCOPE OF THE STUDY

The project report on inventory management covers collection of data, Analysis of the data,

interpretation and suggestions.

Inventory statements are prepared on the basis of the financial Statements are prepared on the

basis of the financial statement of HSC silk plast.


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OBJECTIVE OF THE STUDY

To examine the organization structure of inventory management in the Hsc silk plast.

To discuss pattern, levels and trends of inventories in HSC SILK PLAST.

To understand the various inventory control techniques followed by studied by HSC

SILK PLAST.

To access the performance of inventory management of the HSC SILK PLAST by

selected accounting ratios.

To know the inventory control techniques of HSC SILK PLAST.

Purchasing procedure of the inventories.

Analyze the records of stock levels.

Analyze the inventory turnover ratio.

To know inventory Control at the company


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METHODOLOGY OF THE STUDY

The study is based on both primary and secondary data.

The primary data has been collected through structured questionnaire reflecting inventory

management practices of HSC SILK PLAST. The collected data is tabulated and suitable

interpretation had been made by considering the data collecting through secondary data like

annual reports purchase registers, storage records of the organization.

RESEARCH METHODOLOGY

The system of collecting data for research project is known as research methodology the data

may be collected for eithier theoretical or practical research methodology. Some important

factors in research methodology include validity of research data ethics and the measures

reliability.

PRIMARY DATA

The primary data is collected by interacting with the finance manager and other concerned

executives at the administrative office of the company.

SECONDARY DATA

All the secondary data used for the study has been extracted from the annual reports, manuals

and other published material of the company.


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LIMITAIOINS OF THE STUDY

The study has the following limitations;

The study is limited only for a period 5 years i.e., from 2007-08 or 2011-12.

The limitations of ratio analysis can be applicable of the study.

There may be approximation in calculating ratios and taking the figure from the annual

reports

The limitations of ratio analysis can be applicable of the study.

There may be approximation in calculating ratios and taking the figures from the annual

reports.


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COMPANY PROFILE

Silk Plaster liquid wall covering is a unique opportunity to create individual, cozy design of your

apartments. Any interior from minimalism and classic to luxury becomes possible. Variety of

positive characteristics combined with the attractive reasonable price.

Everybody can afford Silk Plaster liquid wall covering (liquid silk wall paper). We have been

manufacturing Silk Plaster liquid wall covering for more than 11 years and since that time we

have strong and pleasure growth of Silk Plaster sales! Our factory is located in Moscow, Russian

Federation.

We have modern and absolutely unique manufacture of wall finishes (liquid silk wall paper).

During past years Silk Plaster liquid wall paper had been constantly improving its composition,

textures and colors.

Silk Plaster

Silk Plaster liquid wall covering is a unique opportunity to create individual, cozy design of your

apartments. Any interior from minimalism and classic to luxury becomes possible. Variety of

positive characteristics combined with the attractive reasonable price. Everybody can afford Silk

Plaster liquid wall covering (liquid silk wall paper).

We have been manufacturing Silk Plaster liquid wall covering for more than 11 years and since

that time we have strong and pleasure growth of Silk Plaster sales! Our factory is located in

Moscow, Russian Federation. We have modern and absolutely unique manufacture of wall

finishes (liquid silk wall paper). During past years Silk Plaster liquid wall paper had been

constantly improving its composition, textures and colors.

Testimonials

This amazing new wall covering materials comes in various colours and designs. It is make of

natural cottons ansd fibre which apply to walls and ceiling can enchance the beauty and


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atmosphere of your home, office and more. It can be apply to a variety on interior surfaces and

adds a special touch of elegance to any room. It is non toxics, odorless and is an eco friendly.

Why Silk Plaster is better than any other finishes?

Silk Plaster is DIY or DO IT YOURSELF product!

Silk Plaster is Quick and Easy to apply!

Silk Plaster is natural, odorless material!

Silk Plaster makes NO JOINTS!

Silk Plaster is very elastic material!

Silk Plaster is READY TO USE! Just add water!

Silk Plaster hides uneven, old and faded walls!

Silk Plaster allows partially repair!

Silk Plaster is perfect for new building, NO CRACKS!

Silk Plaster is long lasting material!

Silk plaster is antistatic, does not attract DUST & DIRT!

Silk Plaster is additional insulation of heat, moisture and sound!

Silk Plaster is permeable (allows walls to breathe)!

Silk Plaster is available in a large variety of natural and vibrant colors, shades and

different textures!

Silk Plaster is excellent quality, stainless finishing material and unique price!

Wall Preparation

Important: The wall should be freshly plastered. It should become completely dry, clean and

flat. New Walls: just prime it with any waterproof primer or any waterproof emulsion paint. Note

that the wall should be uniformly white color. We recommend using the original manufacturers

primer SILK PLASTER.

Old Walls: if the surface is old (more than 5 years), or dump, or made from wood or have metal

inside of it (nails for example), then we recommend coating it first with any oil-based paint,

white color. Then coat it with usual emulsion paint for good adhesion. Then apply Silk Plaster.


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Oil-based paint is needed to make the seal between Silk Plaster and the wall. Our material is

water-based and can absorb all the negative things from the wall, like rusting for example. So

you have to protect Silk Plaster from what is inside of the wall. Oil-based paint is the best

protection.

Otherwise, instead of oil-based paint, prime the surface with the mixture of PVA adhesive and

any water resistant emulsion paint for front walls (masonry paint) in proportion 1:2. Please,

apply 2-3 layers of the primer till you get homogeneous white color. Make sure the wall is white,

dry, clean and flat before applying Silk Plaster.

Places where rust may occur (bolts, screws, nails, tacks and etc.) should be covered pointwise

with oil-based paint to prevent rusting.

Recommendation: If you still doubt in cleanness of the surface please cover it with white oil-

based paint before applying Silk Plaster!

Meteraial Preparation

SILK PLASTER is a DIY (DO-IT-YOURSELF) product! You don`t need any professional skills

or equipment to coat the wall with Silk Plaster.

If you plan to create a picture with Silk Plaster, first you need to draw the sketch.

1. You will need a plastic tub, plastic trowel, water and pack with Silk Plaster! Pour out 6 liters

of warm (not hot!) water into a plastic tub. Add sparkles into the water and mix.

Note:4.5 liters per packare needed forEastand Nord.

DO NOT EXCEED THE WATER CONSUMPTION!

2. Shake the pack with Silk Plaster and put the material into the same plastic tub. Knead well by

hands.


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3. Leave the kneaded material lying for 12 hours before applying. Advice: For keeping the

soaked material use the original pack of Silk Plaster.

Knead it manually (hand mixing), straining through the fingers, one more time to avoid clotting

of glue.

4. Add up to 1 litter of water for easier application.

5. Taking small portions, apply the kneaded material very thin (2 mm) and flat by plastic trowel

from one corner to another. The quantity to be used should be mixed together at one time.

6. For perfect applying smooth out the surface by constantly wet trowel in 1-2 hours. Use also

side lighting.

7. It is also possible to apply Economy by sprayer (pressure 4 atmosphere, nozzle from 4 mm).

Stick to the specified material consumption (5-8 sqm/1 package).

Note: To avoid roughness of the surface please follow the specified material consumption.

Economy 4.5 5 sq.m Elite 3 3.5 sq.mStandard 4,5 5 sq.m Airline 3.5 4 sq.m

Glitter 3.5 4 sq.m Nord 3.5 4 sq.m

Relief 3.5-4 sq.m West 3.5 4 sq.m

Prestige 3.5 4 sq.m South 3.5 4 sq.m

Silk-Mono 3 3.5 sq.m East 4 4.5 sq.m

Silk-Decor 3 3.5 sq.m Eco-Decor 3.5 sq.m

Victoria 4 sq.m

Do not apply Silk plaster if the temperature indoors is below 15 C. The water content should be

normal.

Important: East and Nord types should be mixed with 4.5 liters per pack.

Drying: Between up to 48 hours depending on temperature and humidity indoors.


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INDUSTRY PROFILE

Silk Plaster liquid wall covering had been invented in Russia in year 1997, during past 16 years

of production we have had a stable, strong and successful growth of Silk Plaster sales. Nowadayswe deliver Silk Plaster liquid wall covering to many countries in Europe, Middle East, Asia,

Africa, Canada and Australia. We achieved solid positions across the world through high quality,

amazing colors and affordable price of Silk Plaster liquid wall coating.

SILK PLASTER IS A GREEN PRODUCT!

All used components are natural and that is why Silk Plaster liquid wall covering is

environmentally safe for residential and commercial structures. Russian Health Institute has

approved Silk Plaster liquid wall covering as health care product and recommended its use.

We offer more than 110 colors with different textures, colors and looking.

People are tired from common wall papers and paint and that is why it is our mission now to

substitute borin boring and non-ecological materials with Silk Plaster liquid wall paper. We offer

ecological material from SILK which looks luxury on the walls and create very expensive

interior but per small investments. People prefer to have exclusive design of their apartment.

So what is Silk Plaster liquid wallpaper and why it is better than any other wall coating?

Building technology had reached its climax, offering consumers a wide range of decorative

materials and finishes, wall paper and paints, one might as well get lost. Everyone tries to choose

for himself what is not only pleasing to the eye by appearance, but also have many other

advantages. These wall coatings, of course, include liquid silk wallpapers - feedbacks from

satisfied customers are the best proof of their unmatched quality.

Silk Plaster liquid wallpaper is a wall and ceiling coating, which consists of only natural

products: silk and cellulose fibers, decorative mineral additives and adhesive. Thanks to these

components, Silk Plaster liquid wall covering is environmentally friendly, which is extremely

important these days. In dry mixture Silk Plaster takes the form of flakes of various sizes and

colors which after the application to the surface make the effect of a monolithic decorative wall


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coating. The absence of joints eliminates the need to match the image, which is the problem of

ordinary wallpapers. This is one of the reasons due to which the Silk Plaster liquid wallpaper got

such great reviews.

You can use Silk Plaster liquid wall coating, not only for homes but for offices Silk Plaster will

always look great. We have more than 100 colors of Silk Plaster liquid wall coverings which

allow combining them with any interior. Gold or silver glitters in the form of small dots or thin

filaments will add the solemnity and luxurious looking to any apartment.

Considering all aforesaid, it is not surprising that at different sites or forums Silk Plaster liquid

wall covering receive enthusiastic reviews. Silk Plaster liquid wallpaper popularity is growing

every day. In addition to aforesaid the liquid wallpaper price is acceptable.

Components of Silk Plaster liquid wallpaper:

As raw ingredients we use only naturally extracted products such as SILK and CELLULOSE,

decorative mineral additives and adhesive that is why SILK PLASTER IS A GREEN

PRODUCT!

All used components are natural and that is why Silk Plaster liquid wall covering

is environmentally safe for residential and commercial structures. Russian Health

Institute has approved Silk Plaster liquid wall covering as health care product and recommended

its use. Silk Plaster liquid wall covering has been also granted with CE mark, confirming that

Silk Plaster is produced according to European standards of qualtity.

Scope of Silk Plaster liquid wallpaper:

Judging by the numerous photos, Silk Plaster liquid wallpaper provides unlimited opportunities

for any change in the interior. Silk Plaster liquid wallpaper can be used to implement any design

ideas on the walls and ceiling, experimenting with different textures and colors. Amazing beauty

pictures and applications - all this is possible to create, having at hand such a miracle as liquid

wall covering Silk Plaster. Video lessons will help any beginner in this.


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The advantages of Silk Plaster liquid wallpaper:

Why should Silk Plaster liquid wall covering be used for walls and ceilings? As a rule, our walls

and ceilings are far from ideal. One of the advantages of Silk Plaster liquid wall covering is also

the ability to fill gaps in areas adjoining frames, casings, baseboards, electrical outlets and

switches.

Numerous reviews of Silk Plaster liquid wallpaper point to other advantages of Silk Plaster.

Because of its color fastness Silk Plaster decorative liquid wall coating does not fade under

ultraviolet light. Silk Plaster liquid wall coating doesn t not afraid of temperature fluctuations,

does not absorb odors. The elasticity of Silk Plaster allows the use our silk liquid decorative

plaster in new homes because it does not shrink. Silk Plaster liquid wallpaper meets the current

standards of fire safety without separating the combustion of toxic gases. Microporous surface

texture, soft to the touch, makes additional heat and sound insulation, improve acoustics.

Because of antistatic additives Silk Plaster wall coating does not attract dust.

Another definite plus of Silk Plaster liquid wall material, prompting to choose Silk Plaster for the

walls is the possibility of partial restoration. When damaged, simply wet the affected area with

warm water and remove part of the liquid wall coating. In this place put "patch" left after repair.

In any case, the surface will look like new without any flaws or joints. Therefore, Silk Plasterliquid wallpaper can be safely used in children's rooms, without fear of Arts of young talents.

Silk Plaster wall covering is especially attractive for those who:

- do not want to pay much but desire to have a luxury design of apartments

- are tired from common paints and obsolete wallpapers and seek for new approach to

apartments design

- take care of time and choose easy to apply and ready for use products - worry about health

and prefer ecologically safe products.

Silk Plaster liquid wall covering is supplied in packs and ready for use! Just add water! There is a

pack with glitters in each Silk Plaster wall covering pack. You can add glitters by desire. We are


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very focused on broadening our distribution and establish strong relations with new partners all

over the world and we welcome new distributors and dealers worldwide to market Silk Plaster

liquid wall covering in open territories.

BENEFITS OF LIQUID WALLPAPER:

Silk Plaster liquid wallpaper is DIY or DO IT YOURSELF product!

Silk Plaster liquid wallpaper is Quick and Easy to apply!

Silk Plaster liquid wallpaper is natural, odorless material!

Silk Plaster liquid wallpaper makes NO JOINTS!

Silk Plaster liquid wallpaper is very elastic material!

Silk Plaster liquid wallpaper is READY TO USE! Just add water!

Silk Plaster liquid wallpaper hides uneven, old and faded walls.

Silk Plaster liquid wallpaperallows partially repair!

Silk Plaster liquid wallpaper is perfect for new building, NO CRACKS!

Silk Plaster liquid wallpaper is long lasting and durable material!

Silk plaster liquid wallpaper is antistatic, so NO DUST & DIRT!

Silk Plaster liquid wallpaper is additional insulation of heat, moisture and sound!

Silk Plaster liquid wallpaper is permeable (allows walls to breathe)!


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Silk Plaster liquid wallpaper vs other decoration materials

Performance

attributesSilk Plaster Ordinary

wallpapers

Venetian

plasterPaint

Natural, ECO

material

No odour

No cracks, elastic

Partial repairing

No joints

Do it yourself

Extra sound and heat

insulation


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Applicable for relief

surfaces: columns

pillars, arches

Hide uneven surface

INVENTORY MANAGEMENT


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DEFINITIONS AND PURPOSE OF INVENTORY:

Inventory is the stock of any item or resource used in an organization. An inventory

system is the set of policies and controls that monitor levels of inventory and determine what

levels should be maintained, when stock should be replenished.

All firms keep a supply of inventory for the following reasons:

1. To maintain independence of operations

2. To meet variation in product demand

3. To allow flexibility in production scheduling4. To provide a safeguard for variation in raw material delivery time.

5. To take advantage of economic purchase order size

NATURE OF INVENTORIES:

Inventories are stock of products a company is manufacturing for sale and

components that make up the products. The various forms in which inventories exist in a

manufacturing company are:

Raw Materials

Raw Materialsare those basic inputs that are converted into finished product through the

manufacturing process. Raw material inventories are those units which have been purchased and

stored for future productions.

Work-in-progress

Inventories are semi-finished products. They represent products that need more work

before they become finished products for sale.

Finished goods


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Inventories are those completely manufactured products which are ready for sale. Stocks of raw

material and work-in-progress facilitate production while stock of finished goods is required for

smooth marketing operations. Thus, inventories serve as a link between the production and

consumption of goods.

The level of three kinds of inventories for a firm depends on the nature of business. A

manufacturing firm will have substantially high levels of all three kinds of inventories, while a

retail or wholesale firm will have a very high level of finished goods inventories and no raw

material and work-in-progress inventories.

Firms also maintain a fourth kind of inventory, supplies or stores and spares. These materials do

not directly enter production, but are necessary for production process. Usually these supplies are

small part of the total inventory and do not involve significant investment.

OBJECTIVES OF INVENTORY MANAGEMENT:

Inventory management in a firm is faced with problem of meeting two conflicting needs:

To maintain a large size of inventories for efficient and smooth production, uninterrupted

operations and sales.

To maintain a minimum investment in inventories to maximize profitability.

Both excessive and inadequate inventories are not desirable. The objective of inventory

management is to maintain optimum level of inventory investment. The optimum level of

inventory will lie between the two danger points of excessive and inadequate inventories.

The firm should always avoid a situation of over investment or under-investment in

inventories. The major dangers of over investment are:

Unnecessary tie-up of the firms funds and loss of profit

Excessive carrying cost

Risk of liquidity


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The excessive level of inventories consumes funds of the firm, which cannot be used for any

other purpose and thus it involves an opportunity costs. The carrying costs, such as the costs of

storage, handling, insurance, recording and inspection, also increase in proportion to the volume

of inventory.

These costs will impair the firms profitability further. Excessive inventories carried for long-

period increase chance of loss of liquidity.

Maintaining an inadequate level of inventories is also dangerous. The consequence of

under investment in inventories is

Production hold-up

Failure to meet delivery commitment

The aim of inventory management thus, should be to avoid excessive and adequate

levels of inventories and to maintain sufficient inventory for the smooth production and sales

operations. Efforts should be made to place an order at the right time with the right source to

acquire the right quantity at the right price and quality. The effective inventory management

should

Ensure a continuous supply of raw materials to facilitate uninterrupted production

Maintain sufficient stocks of raw materials in period of short supply and anticipate price

changes

Maintain sufficient finished goods inventory for smooth sales operation and efficient

customer services.

Maintain the carrying cost and time

Control investment in inventories and keep it at an optimum.

INVENTORY MANAGEMENT TECHNIQUES:

In managing inventories, the main objective for a firm to determine the

optimum level of inventory. Inefficient inventory control results in unbalanced inventory and


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inflexibility-the firm may sometimes run out of stocks and sometimes may pile up unnecessary

stocks.

To manage inventories efficiently, answers should be sought to the following two question

How much should be ordered?

When should it be ordered?

The first question, how much to order, related to problem of determining

Economic Order Quantity. The second question. When to order, arises because of uncertainty

and is a problem of determining the re-order point

Economic Order Quantity (EOQ):

One of the major inventory management problems to be resolved is how much

inventory should be added when inventory is replenished. This problem is called order quantity

problem, the solution involves determining the optimum or economic order quantity ( or

economic Lot Quantity ELQ). Determining an optimum inventory level involves two types of

costs

Ordering Costs

Carrying/holding cost

The term Ordering Cost is used in case of raw materials (or supplies) and includes the entire

costs of acquiring raw materials. They include costs incurred in the following activities:

requisitioning, purchase ordering, transportation, receiving, inspecting and storing. Ordering

costs increase in proportion to the number of orders placed.

Carrying Costs incurred for maintaining a given level of inventory. They include storage,

insurance, taxes, deterioration and obsolescence.

The storage costs comprise cost of storage space(warehouse cost), stores handling

costs and clerical and staff service and other overheads.


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Annual cost of stocking

Annual Ordering Cost

Annual carrying cost

Annual Stocking cost

EOQ

Min. Total annualstocking costs

Q=Quantity of Material per order


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Fig: 3 balancing carrying costs against ordering costs

Materials are ordered so that costs of ordering too little is balanced against

the cost of ordering too much on each order. From the graph above, carrying cost represent all

the annual costs associated with ordering too much.

These costs climb as order quantities rise because average inventory

levels rise as order quantity rise. Ordering cost represent all the annual costs associated with

ordering too little. These costs fall as order quantities rise because the number of annual Orders

falls and average inventory levels rise as order quantities rise.

When the annual carrying cost is added to the annual ordering cost curve, an annual total

stocking costs curve results. This total costs curve demonstrates an important concept in

inventory planning: There exists for every material held in inventory an optimal order quantity

where total annual stocking costs are at a minimum. This is called Economic OrderQuantity.

ECONOMIC ORDER QUAUNTITY:

EOQ = 2 CO/O

C=Consumption of the material in units during the year

O= Ordering cost

I=Carrying cost or interest payment on the capital.

Re-Oder point:

The reorder point is that inventory level at which an order should be places to replenishthe inventory. To determine the reorder point under certainty,

a) lead time

b) Average usage

c) Economic order quantity should be determined.


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Lead Time:

It

is

the time

normally taken in

replenishing inventory after the

order has been placed. By

certainty, assume that usage and lead time do not fluctuate. Under such condition,

reorder point is simply that inventory level which will be maintained for

consumption during the lead time:

Reorder point= lead * average usage

Safety Stock:

It is difficult to predict usage and lead time accurately. The demand for material may fluctuate

from day-to-day or from week-to-week. Similarly, the actual delivery time may be different from

the normal lead time. If the actual usage increases or the delivery of inventories is delayed, the

firm can face a problem of stock-out which can prove to be costly for the firm. Therefore, in

order to guard against the stock-out, the firm may maintain a safety-stock some minimum or

buffer inventory as cushion against expected increase usage and/or delay in delivery time.

Thus, to determine the reorder point when safety stock is maintained is

Reorder point= lead *average usage + safety stock

StockReorder pointAvg. inventory

Max InventoryAvg. usage


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Fig: 3.1 Reorder point

INVENTORY CONTROL SYSTEMS:

To effectively manage inventory, it is necessary to establish adequate controls over

inventory on order and inventory in stock. There are several methods for inventory control which

range from simple systems to very complicated systems.

ABC Inventory Control System:

Large numbers of firms have to maintain several types of inventories. It is

not desirable to keep the same degree of control on all the items. The firm should pay maximum

attention to those items whose value is the highest. The firm should, therefore, classifyinventories to identify which items should receive the most effort in controlling. This analytical

approach is called ABC analysis to measure the significance of each item of inventories in terms

of its value.

The high- value items are classified as A items and would be under the tightest

control. C items represent relatively least value and would be under simple control. B items

fall in between these two categories and require reasonable attention of management. The ABC

analysis concentrates on important items and is also known as control by importance and

exception. This approach is also known as Proportional value analysis.

Just-In-Time (JIT) Systems:

In a JIT systems material or the manufacturing components and parts arrive to the

manufacturing sites or stores just few hours before they are put to use. The delivery of materials

is synchronized with the manufacturing cycle and speed. JIT systems eliminate the necessity of

carrying large inventories and thus save carrying and other related costs to the manufacturer. The

systems require perfect understanding and coordination between the manufacturer and supplier

in terms of the timing of delivery and quality of the material. The JIT inventory system

complements the Total Quality Management (TQM).

Computerized Inventory Control Systems:


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A Computerized inventory control system enables a company to easily track large

items of inventories. It is an automatic system of counting inventories, recording withdrawals

and revising the balance. There is an in-built system of placing order as the computer notices that

the reorder point has been reached.

THE PURCHASING PLAN:

One of the most important aspects of inventory control is to have the items in stock

at the moment they are needed. This includes going into the market to buy the goods early

enough to ensure delivery at the proper time. Thus, buying requires advance planning to

determine inventory needs for each time period and then making the commitments without

procrastination.

Part of purchasing plan must include accounting for the depletion of the inventory.

Before a decision can be made as to the level of inventory to order, duration of inventory stock

must be determined. For instance, a retail firm must formulate a plan to ensure the sale of the

greatest number of units. Likewise, a manufacturing business must formulate a plan to ensure

enough inventories is on hand for production of a finished product. In summary, the purchasing

plans details:

1. When orders should be placed;

2. When the first delivery should be received;

3. When the inventory should be peaked;

4. When reorders should no longer be placed; and

5. When the item should no longer be in stock.

Well planned purchases affect the price, delivery and availability of products for sale.

SUCCESSFUL INVENTORY MANAGEMENT:

Successful inventory management involves balancing the costs of inventory with the

benefits of inventory. Many small business owners fail to appreciate fully the true costs of

carrying inventory, which include not only direct costs of storage, insurance and taxes, but also


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the cost of money tied up in inventory. This fine line between keeping too much inventory and

not enough is not the manager's only concern. Others include:

Maintaining a wide assortment of stock

Increasing inventory turnover (but not sacrificing the service level),

Keeping stock low (but not sacrificing service or performance)

Obtaining lower prices by making volume purchases

Having an adequate inventory on hand

The degree of success in addressing these concerns is easier to gauge for some than for others.

For example, computing the inventory turnover ratio is a simple measure of managerialperformance. This value gives a rough guideline by which managers can set goals and evaluate

performance, but it must be realized that the turnover rate varies with the function of inventory,

the type of business and how the ratio is calculated (whether on sales or cost of goods sold).

Average inventory turnover ratios for individual industries can be obtained from trade

associations.

DEVELOPMENTS IN INVENTORY MANAGEMENT:

In recent years, two approaches have had a major impact on inventory management:

Material Requirements Planning (MRP) and Just-In-Time (JIT and Kanban).

A material requirement planning:

A material requirement planning is basically an information system in

which sales are converted directly into loads on the facility by sub-unit and time period.

Materials are scheduled more closely, thereby reducing inventories, and delivery times become

shorter and more predictable. Its primary use is with products composed of many components.


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MRP systems are practical for smaller firms. The computer system is only one part of the total

project which is usually long-term, taking one to three years to develop.

Just-in-time: Inventory management is an approach which works to eliminate inventories rather

than optimize them. The inventory of raw materials and work-in-process falls to that needed in a

single day. This is accomplished by reducing set-up times and lead times so that small lots may

be ordered. Suppliers may have to make several deliveries a day or move close to the user plants

to support this plan.

INVENTORY MANAGEMENT AT HSC:

Inventory management covers important issues to maintain optimum level of inventory by

applying various inventory control techniques or combination of techniques depending on the

nature of the item worth respect to its value, criticality, market availabity and other consumption

patterns.

OBJECTIVES:

Classification of items for management reporting and fixation of the norms.

Elaborate inventory control techniques and procedural guidelines for their application.

Materials planning and indenting, using the tools of the above stated techniques or

combination of techniques.

Fixation of responsibility for undertaking various inventory analysis.

Review and monitoring inventory status with respect to norms and levels for various

items or category of items.


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Inventory management is an area where integrated Management approach involving

departments is the primary requisite to incorporate inventory objectives. According to HSC,

unless cooperation is forthcoming from O&M/user departments as and when needed, the

objective of achieving high service level is and at the same time optimizing inventory will be

far from achieving.

A-B-C Analysis: (Always better control analysis):

Under A-B-C analysis the materials are divided into 3 categories viz.., A, B and C.

Almost 10% of the items contribute to 70% of value of consumption and this category is called

A category.

About 20% of the items contribute about 20% of value of category C covers about 70% of

items of materials which contribute only 10% of value of consumption.

INVENTORY VALUATION AND COST FLOWS:

What is the cost of inventory?

One can readily visualize the determination of inventory quantities by physical

count or by use of perpetual inventory records. When this quantity is determined, it must be

multiplied by a unity cost in order to determine the inventory value that is used on financial

statement.

Trade and quantity discount are to be exclude from unit cost since these discount exist

for the purpose of defining the true invoice cost of merchandise. Cash discounts, on the other

hand, have been considered as a reward for early payment and as a penalty for late payment. The

reward has often been interpreted as a loss rather than as a part of unit cost. Thus in would not

be difficult to find difference of opinion as to whether invoice cost includes or excludes cash

discount.

When the current replacement cost of material on hand at the close of a year is less than the

actual cost, the inventory value is reduced to replacement cost (current market price). Thus the


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acceptable basis inventory valuation is he lower of cost or marker or more properly the lower

of actual cost or replacement cost.

The determination of inventory values is very important from the point of view of

the balance sheet and the income statement since costs not included in the inventory (the balance

sheet) are considered to be expensive and are thus included in the income statement.

Valuation of inventories method of determination:

Although the prime consideration in the valuation of inventories is cost, there are a

number of generally accepted methods of determining the cost of inventories at the close of an

accounting period. The most commonly used methods are first in first out (FIFO) average, and

last in first out (LIFO). The selection of the method for determining cost for inventories

valuation is important for it has a direct bearing on the cost of goods sold and consequently on

profit. When a method is selected, it must be used consequently and cannot be change from year

to year in order to secure the most favorable profit for each year.

THE FIFO METHOD (FIRST-IN FIRST- OUT METHOD):

Under this method it is assumed that the materials or goods first received are the first to be issued

or sold. Thus, according to this method, the inventory on a particular date is presumed to be

composed of the items which were acquired most recently.

The value inventory would remain the same even if the perpetual inventory system is

followed.

Advantage: -

The FIFO method has the following advantages.

1) It values stock nearer to current market prices since stock is presumed to be consisting of

the most recent purchases.

2) It is based on cost and, therefore, no unrealized profit enters in the financial accounts of

the company.


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3) The method is realistic since it takes into account the normal procedure of utilizing or

selling those materials or goods which have been longer in stock.

Disadvantages:

The method suffers from the following disadvantages.

1) It involves complicated calculations and hence increases the possibility of clerical errors.

2) Comparison between different jobs, using the same type of material becomes sometimes

difficult. A job commenced a few minutes after another job may have to bear an entirely

different change for materials because the first jobs completely exhausted the supply of

materials of the particular lot.

3) The FIFO method of valuation of inventories is particularly suitable in the following

circumstance.

I. The materials of goods are of a perishable nature.

II. The frequency of purchase is not large.

III. There are only moderate fluctuations in the prices of materials or goods purchased.

IV. Materials are easily identifiable as belonging to a particular purchase lot.

THE LIFO METHOD (LAST IN FIRST OUT METHOD):

This method is based on the assumption that last item of material or goods

purchased are the first to be issued or sold. Thus, according to this method, inventory consists of

items purchased at the earliest cost.

Advantages:


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This method has the following advantages.

1. It takes not account the current market conditions while valuing materials issued to

different jobs or calculating the cost of goods sold.

2. The method is based on cost and, therefore, no unrealized profit or loss is made on

account of use of this method.

The method is most suitable for materials which are of bulky and non-perishable type.

Base stock Method:

This method is based on the contention that each enterprise maintains at all times a

minimum quantity of materials or finished goods in its stock. This quantity is termed as base

stock. The base stock is always valued at this price and is carried forward as a fixed asset. Any

quantity over and above the base stock is valued in accordance with any other appropriate

method. As this method aims at matching current costs to current sales,

The LIFO method will be most suitable for valuing stock of material of finished

goods other than the base stock. The base stock method has advantage of charging out material /

goods at actual cost. Its other merits or demerits will depend on the method which is used for

valuing materials other than the base stock.

Weighted average price method:

This method is based on the presumption that once the materials are put

into a common bin, they lose their identify. Hence, the inventory consists of no specific batch of

goods. The inventory is thus priced on the basis of average priced on the quantity purchased at

each price.

Weighted average price method is very popular on account of its being based

on the total quantity and value of materials purchased besides reducing number of calculations.


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As a matter of fact the new average price is to be calculated only when a fresh

purchase of materials is made in place of calculating it every now then as is the case with FIFO,

LIFO method. However, in case of this method different prices of materials are charged from

production particularly when the frequency of purchase and issues/sales is quite large and the

concern is following perpetual inventory system.

Valuation of inventories impact on the flow of costs:

As should be quite evident, the different methods of calculating inventory values

will all have their impact on the flow of costs through the balance sheet into the income

statement.

The dollars that are paid to acquire inventory are always divided between the

balance sheet (inventories) and the income statement (costs of goods sold), there is not other

place to put them. Thus if the different methods of calculating inventory produce differing

inventory values, they will also produce differing cost of goods sold figures, and the differing

cost of goods sold will naturally produce differing profit figures.

In order show the impact of inventory valuation on cost flows, the preceding

exhibits are summarized. Each method produces a different figure for the transfer of raw

materials to work in process. The differences appear small, but the only reason for this is that the

dollar amounts have been kept small to make the illustration workable.

With the transfer of materials to work in process, the cost flow or transfer with have

its impact on the work in process inventory and the transfer of completed merchandise to

finished goods. Ultimately when goods are sold the varying methods of valuing inventories will

have their impact on cost of goods sold and these profits. The effects of the cost flows on cost of

goods sold and profits can be accentuated further it the differing methods of valuing inventoriesare applies to work in process and finished goods.

Evaluation of methods (LIFO) What causes the differences?


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The differences in inventory values and flows for each of the method illustrated result from

only one factor, that it, changing purchases prices or unit costs. If purchase prices had remained

stable or unchanged, each method would have produced the same inventory value and cost flow.

Costs flows and inventory are exactly the some under stable prices. With a falling

price level, the LIFO method produces the highest cost flow and the lowest inventory. With a

falling price level, the LIFO method produces the lowest cost flow and highest inventory. The

cost flow under LIFO follows the price level, LIFO produces larger cost flows when prices are

rising and smaller cost flows when prices are falling. A final item to consider is that the average

method produces results which fall between the extremes of LIFO and FIFO.

Evaluation of methods (FIFO) can we justify the differences?

The best method of inventory valuation might be specific identification, that is,

the units in inventory should be identified with the specific invoices and thus specific unit costs

to which they apply.

Fortunately, the FIFO method constitutes a very useful approximation to the specific

identification method if one can reasonably assume that the actual flow of materials is first-in

first-out. This assumption is not unreasonable and thus we have stated the main argument for the

FIFO inventory scheme, that is, the physical flow of materials would match the flow of costs

under the first-in first-out method.

When the units in inventory are identical, interchangeable and do not follow any specific

pattern of physical flow, the average cost system would seen to appropriate.

The primary difference between the FIFO and average methods is centered on the

physical flow since both methods could involve identical and interchangeable units. The FIFO

methods fit a first-in first-out physical flow.

The average method fits a system which has no specific pattern of physical flow. Finding

a situation where there is no specific pattern of physical flow should be quite difficult because of

the fact that most inventory items are subject to deterioration by instituting a person would

attempt to reduce such deterioration and any reasonable person would attempt to reduce such


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deterioration by instituting a physical flow approximating first-in first-out. The major reason for

the use of the average method is something other than the lack of specific physical flow.

Ordinarily the LIFO method cannot be justified on the basis of the physical flow of

material. Under conditions of changing prices, the advocate of LIFO says that the only method

which matches costs and revenues is the LIFO method. The LIFO method assumes that the latest

item is the first item out, and thus the current costs of materials are matched with the other hand,

assumes that the first item in is the first item out, and thus the non-current costs of matching

currents costs with current revenues is the essence of the argument for the LIFO method.

As can be seen by the above comments, there is no one best method of valuing

inventories. The method chosen should fir the situation. A physical flow pattern comparable to

FIFO would force one to consider the FIFO method. The lack of discernible physical flow

pattern would force one to consider the average method. Concentration on cost flows, as distinct

from physical flows, would force to consider the LIFO method especially where there appears to

be a discernible trend towards rising prices for falling prices as has been the case in our economy

during recent years.

Inventories valued at standard cost:

A very useful method of valuing inventories is at a standard cost. With a standard

cost system is no need for spending a great deal of time and money tracing unit costs through

perpetual inventory record.

PERPETUAL INVENTOTY CARD UNDER A STANADARD COST

SYSTEM


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As shown above, there is need only for physical quantities since the inventory values

is the physical quantity multiplied by the standard cost. With the cost and value columns

disposed off, a perpetual inventory card can include additional data such as quantities on order,

quantities reserved, and quantities available. These additional data are very useful for inventory

and production control purpose. On the basis of a few calculations concerning into inventories on

a FIFO, a LIFO, or an average cost basis.

Inventory of obsolescence:

Obsolete inventories cannot be used or disposed off at values carried on the books.

Frequent reviews should be made of all inventories, and when obsolescence is indicated a

request for revaluation should be prepared for approval by management. The difference between

original and obsolete value should be recorded by a change to an operating account. Inventory

obsolescence, and a credit to inventory. If the material is scrapped, this will be for the full

inventory value or used in areas where it will be work less that its original value; the entry would

Perpetual inventory plant:. Standard cost: ..

Location:.. Order Quantity:

Order Point: ..

Date Description On order Received Issued Available

On order On hand


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be only for the amount of write down. Some companies carry a salvage inventory and transfer to

it materials which may be sold or used at reduced values.

Where this is done the entry would be:

Dr. Salvage inventory

Dr. Inventory obsolescence. Cr. raw material inventory or supplies inventory.


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CHAPTER-IV

ANALYSIS & INTERPRETATIONS

RATIO ANALYSIS

The investment on raw material over a period of 5 year form 2007-08 to 2011 -12 is presented in

the following table.

Investment on Raw materials:


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Year Raw material (in lacks)

2007-2008 11690.67

2008-2009 49950.88

2009-2010 42950.66

2010-2011 46087.45

2011-2012 93605.78


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Fig 4: Investment on Raw materials

Investment on Raw materials

1) Form the above table it can be understood that the inventory of HSC was recorded at

13,386.80 during the year 2007-08 and it is increased to 11690.67 during the yr 2011-12.2) It shows that there is on increase in the inventory to the more extent of 80218.98

3) The average inventory of HSC was recorded at Rs.42945.41

4) The highest investment in inventory was recorded in the year 2011-12


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Trend analysis:

Trend analysis technique is applied to know the growth rate in investment of raw

material of HSC over the review period which is shown in the following table.

Trend analysis:

Fig: 4.1 Trend analysis techniques is applied to know the growth rate in investment

Year Raw material (in lacks) Trend (%)

2007-2008 11690.67 87%

2008-2009 49950.88 373%

2009-2010 42950.66 315%

2010-2011 46087.45 344%

2011-2012 93605.78 699%


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Interpretation:

1) The investment on investment has increased in the year 2011-12. And the lost year

investment has declared continuously. The percentage in 2007-08 was 315% as compared

to years 2009-10 to 2011-12.

2) The trends in inventories show that inventory have been more in the year 2011-12 and

then it has shown a downward trend and again it increased to some extent.


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3) The investment in inventories has sown fluctuating trend is initial years and then it raised

to 699 %and again showing fluctuating trend.

Inventory Turnover Ratio:

This ratio indicates the number of times the stock has been turned over during the

period & evaluated the efficiency with which a firm is able to manage its inventory. This ration

is calculated by applying the following formula.

Cost of goods sold

Inventory turnover ratio =

Average inventory

Inventory Turnover Ratio


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Fig: 4.2 Inventory Turnover Ratios

Year Cost of goods sold Avg.inventory Ratio

2007-2008 59021.41 37975.30 1.55

2008-2009 121551.71 95065.28 12.79

2009-2010 127533.58 12390.06 10.29

2010-2011 130392.68 13338.01 9.78

2011-2012 211636.92 160035.93 1.32


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Interpretation:

1) In the year 2008-09 it is clear that the ratio is very less i.e., his stock is not turned in to

sales quickly.

2) As compared to all the years the ratio is very less in 2011-12.

3) The average inventory turnover ratio was recorded at 7.3 times during the review period.

Inventory Conversion Period:

It may also be of interest to see average time taken for clearing the stocks. This can be

possible by calculating inventory conversion period. This period is calculated by dividing the

numbers of the days by inventory turnover. This formula may be as:

Days in a year

Inventory conversion period =

Inventory turnover ratio

Inventory Conversion Period: (in corers)


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Fig:4.3 Inventory Conversion Period

Interpretation:

From the above table 2007-2008 it can be observed that

Year Cost of goods sold Avg. inventory Ratio ICP(days)

2007-2008 59021.41 37975.30 1.55 232

2008-2009 121551.71 95065.28 12.79 28

2009-2010 127533.58 12390.06 10.29 34

2010-2011 130392.68 13338.01 9.78 36

2011-2012 211636.92 160035.93 1.32 272


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(1) Inventory conversion period was 232 days during 2007-08 but it decreased to 28 during

2008-09, which indicates that the stock has been very quickly converted into sales which mean

the company is managing the Interpretation:

From the above table 2004 it can be observed that (1) inventory turnover ratio is 8.13 during

2007-08 and its gradually decreased to 1.55 during 2008-09.Efficiently.

2) The lowest inventory conversion period was recorded at 28 days in the year 2009-2011

04 and the highest inventory conversion were recorded at 272 days in the year 2011-12.

3) The average inventory conversion period was recorded at 107 days during the review period.

Percentage of Inventory Turnover Current Assets:

In order to know the percentage of inventory over current assets the ratio of

inventory to current assets is calculated and which is presented in the following table.

Inventory

Inventory turnover current assets ratio= * 100

Current ratio


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Year Inventory Current assets Ratio (%)

2007-2008 11690.67 28770.78 40%

2008-2009 49950.88 53063.75 94%

2009-2010 42950.66 45598.02 92%

2010-2011 46087.45 46713.32 92%

2011-2012 93605.78 86811.49 107%


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Fig: 4.4 Inventory turnover current assets ratio

Interpretation:

1) From the above table it can be understand that the 40% of inventory over current assets

ratio was showing trend for two years 2007-08.

2) However from the year 2011-12 it is showing an increasing trend.

3) The average inventory over current assets ratio was recorded at 80%

Percent of Inventory over total current assets & fixed assets:

Inventory / current + fixed assets


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Fig: 4.5 Inventory over total current assets & fixed assets

Year Inventory Current assets Ratio

2007-2008 11690.67 87468.76 13.36%

2008-2009 49950.88 117985.89 42.33%

2009-2010 42950.66 112647.26 37.50%

2010-2011 46087.45 112637.07 40.91%

2011-2012 93605.78 197330.5 47.43%

0

50000

100000

150000

200000

250000

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Inven ory

Current assests


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Interpretation:

1) During the year 2007-08 the ratio was 13.36% on its declined to 15.35% in the year

2007-08.

2) From the year 2008-09 it is showing fluctuating trend but as compared to above 2 years it

is increasing.

3) The lowest Inventory over total assets ratio was recorded at 13.36% during the year

2007-08 and the highest Inventory ratio was recorded at 43.43% during the year 2011-12.

4) The average Inventory to total assets ratio was recorded at 32.81% during the review

period.

Percent of Inventory over total current liabilities

In order to know the percentage of Inventory over current liabilities the ratio of

Inventory to current liabilities is calculated and which is presented in the following table.

Inventory

Percent of Inventory over total current liabilities ratio = X 100

Current liabilities

Percent of Inventory over total current liabilities


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Fig:4.6 Inventory over total current liabilities

Year Inventory Current liabilities Ratio

2007-2008 11690.67 8042.62 145%

2008-2009 49950.88 16204.14 308%

2009-2010 42950.66 14876.45 284%

2010-2011 46087.45 17728.22 259%

2011-2012 93605.78 36253.41 258%


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Interpretation:

1) From the above table it can be understand that During the year 2007-2008 the ratio was itgradually increased to 145 and there is a net increase to the extent of 128.

2) The lowest Inventory over total amounts ratio was recorded at 14 during the year 2006-

2007.

3) The highest Inventory to current liabilities ratio was recorded at 308 during the year

2008-09.


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Current ratio

In order to know the current ratio the percentage of current assets to current liabilities is

calculated and which is presented in the following table.

Current assets

Current ratio =

Current liabilities

Calculation of Current ratio

Fig: 4.7 the percentage of current assets to current liabilities

Year Current assets Current liabilities Ratio

2007-2008 28770.78 8042.62 3.57%

2008-2009 53063.75 16204.14 3.27%

2009-2010 45598.02 14876.45 3.06%

2010-2011 49713.32 17728.22 2.80%

2011-2012 86811.49 36253.41 2.39%


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Interpretation:

1) From the above table it can be interpreted In the year 2007-08 the ratio was 3.57 and has

decreased to 3.27 in the 2008-09.2) The lowest current ratio was recorded at 2011-12 which is 2.39% and the highest ratio

was recorded at 3.57 during the year 2007-08.

3) The average current ratio was recorded at 3.02 during the review period.


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Quick ratio

The quick ratio is the relationship between quick to current liabilities quick assets is more

rigorous test of liability position of a firm it is computed by applying the following formula.

Quick ratio= current assets-current liability

Where quick assets = current assets- inventory

Year Quick assets Current liabilities Ratio

2007-2008 17080 8042.62 2.12%

2008-2009 3112 16204.14 0.02%

2009-2010 3347 14876.45 0.22%

2010-2011 3625 17728.22 0.20%

2011-2012 3207 36253.41 0.08%


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Fig: 4.8 the quick ratio is the relationship between quick to current liabilities

Interpretation:

From the above table it can be understand as that the % of quick assets to current liabilities i.e.,

the quick ratio was 0.02 in 2008-09 and from that year it is showing increasing trend.

1) The highest quick ratio was recorded at 2.12 during the year 2007-08 and the lowest

quick ratio was recorded at 0.02 during the year 2008-09.

2) The average quick ratio was recorded at 0.66 during the review period.


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CHAPTER-V


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FINDINGS

1. Over all the inventory of HSC is up to the mark.

2. The average inventory of HSC was recorded at 42945.41. in the year 2008-2009

3. The investment on investment has in increased in the year 2008-09. And the

lost year investment has declared continuously. The percentage in 2009-10 was

315% as compared to years 2007-08.

4. The year 2007-08 ratio was 13.36% on its increased to 42.33% in the year 2008-2009.

5. The highest inventory to current ratio was recorded at 308 during the year 2008-09.

6. The year 2007-08 the ratio was 3.57 and as decreased to 3.27 in the year 2008-09.


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SUGGESTIONS

1. Though the production is higher is the year 2007-08 and the sales were very high i.e.,

as per inventory conversion period it took 272 days. This shows that there is demand

for cement and the funds unnecessarily tied up. So, proper demand forecasting should

be done and according to that it may be manufactured.

2. The investment on raw material should be made as per the requirement. Unnecessary

investment may block up the funds.

3. Neither too high nor too may inventory turnover ratios reduce profit and liquidity

position of the industry. So, proper balance should be made to increase profits and to

ensure liquidity.

4. The raw material should be acquired from the right source at right quality and at right

cost.

5. The process that was being used by HSC with the purchasing department should

undergo changes, so that, it seeks enhance the celerity of the delivery of a product

without compromising its quality by improving the utilization of material labor and

equipment.

6. To reduce the work, the purchasing department may enter the purchasing order into a

database and did not send a copy to anyone. When the merchandise arrived, the

receiving clerk would enter the database and determine whether the order agreed with

the electronic purchase order.


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CONCLUSIONS

1. The inventory turnover ratio indicates that conversion of the inventory of the cash in very

fast through the study. It is increasing trend.

2. The turnover has been decreased has compared previous year. it shows the operating

efficiency of the company.

3. The raw material should be acquired from the right source at right quality and at right

cost.

4. It charges high cost when we make orders monthly, it means of transport cost inventory

charges, and other expenditures.

5. My conclusion is of make orders annually to avoid unnecessary expenditure.


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BIBLIOGRAPHY

JOURNALS:

I.M.PANDEY : FINANCIAL MANAGEMENT

PRASANNA CHANDRA : FINANCIAL MANAGEMENT

S.P. JAIN&K.L.NARANG : FINANCIAL ACCOUNTING &ANALYSIS

WEBSITES: WWW.HSCSILKPLAST.COM
http://www.hscsilkplast.co/http://www.hscsilkplast.co/

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