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CARLTON BUSSINESS SCHOOL6

a STUDY ON INVENTORY MANAGEMENT IN ZUARI CEMENT PRIVATE LIMITED, YERRAGUNTLAPROJECT REPORTSubmitted by

BHASKAR NAIDU .MRegister No: CB12HPGDM017In partial fulfillment for the award of the degreeOf

Post Graduate Diploma in Management

In

DEPARTMENT OF MANAGEMENT STUDIESCARLTON BUSSINESS SCHOOLHYDERABAD

MAY 2014

TABLE OF CONTENTSCHAPTER NODESCRIPTIONPAGE NO

LIST OF TABLES

LIST OF CHARTS

ABSTRACT

I

INTRODUCTION1.1 About the study

1.2 Scope of the study

1.3 Statement of the problem

1.4 Objectives of the study

1.5 Research methodology

IIINDUSTRY AND COMPANY PROFILE 2.1 Industry profile 2.1.1 Cement industry in Global 2.1.2 Cement industry in India

2.2 Company profile

IIICONCEPTUAL AND THEORETICAL FRAME WORK 3.1 Conceptual and theoretical frame work of inventory management

3.2 Review of literature

IVANALYSIS OF INVENTORY MANAGEMENT 4.1 Analysis Part-1 Ratio Analysis(Inventory)

4.2 Analysis Part-2 EOQ Analysis

VSUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION 5.1 Findings

5.2 Suggestions

5.3 Conclusion

BIBLIOGRAPHY

LIST OF TABLESTable No.DescriptionPage No.

4.1.1Level of inventory

4.1.2Inventory turnover Ratio

4.1.3Inventory conversion period

4.2.1EOQ analysis for the year 2009-10





LIST OF CHARTSChart No.DescriptionPage No.

4.1.1Level of inventory

4.1.2Inventory turnover ratio

4.1.3Inventory conversion period






ABSTRACT

The purpose of inventory management is to ensure availability of raw material in sufficient qualities as and when required and also minimize investment in inventories. There is an essential to manage inventories efficiently and effectively in order to avoid excess investment. It is possible for a company to reduce the level of inventories to a considerable extent without any adverse effect on production and sales by using simple inventory planning and control techniques. The reduction of excessive inventories will create a favorable impact on the company profitability. Inventory turnover ratio, inventory conversion period are very helpful to know how effectively plays and control in the organization EOQ analysis will enables the organization to use of EOQ analysis is very effective and useful tool for classifying, monitoring and control of inventories.

HAPTER-IINRODUCTION

1.1 ABOUT THE STUDYInventory management is primarily about specifying the size and placement of stocked goods. Inventory management is recurred at different locations within a facility or within multiple locations of a supply or network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of Inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, Inventory forecasting, physical inventory, available physical space for Inventory, quality management, returns and defective goods and demand and forecasting.Types of inventoryNormally the inventory has divided into two types. These,1. Merchandising inventory,2. Manufacturing inventory.The manufacturing inventory has been subdivided into three types. These,1. Raw materials,2. Work in process,3. Finished goods. Raw materials:Everything the crafter buys to make the product is classified as raw materials. That includes leather, dyes, snaps and grommets. The raw material inventory only includes items that have not yet been put into the production process. Work in process:This includes all the leather raw materials that are in various stages of development. For the leather crafting business, it would include leather pieces cut and in the process of being sewn together and the leather belts and purse etc. that are partially constructed.

In addition to the raw materials, the work in process inventory includes the cost of the labor directly doing the work and manufacturing overhead. Manufacturing overhead is a catchall phrase for any other expenses the leather crafting business has that indirectly relate to making the products. A good example is depreciation of leather making fixed assets. Finished goods:When the leather items are completely ready to sell at craft shows or other venues, they are finished goods. The finished goods inventory also consists of the cost of raw materials, labor and manufacturing overhead, now for the entire product.1.2 SCOPE OF THE STUDYThe study helps the management to improve its profitability through a reduction in non- moving inventory.It develops the policies for both continuous review of inventory management system.The study helps to show the level of the inventory in the organization. The company will make the proper inventory methods from the suggestions of the study.1.3 STATEMENT OF THE PROBLEMThere are a number of problems that can cause havoc with inventory management. Some happen more frequently than others. Here are some of the more common problems with inventory systems.Unqualified employees in charge of inventory, Using a measure of performance for their business that is too narrow, Not identifying shortages ahead of time, Bottlenecks and weak points can interfere with on-time product delivery, Too much distressed stock in inventory, Excessive inventory in stock and unable to move it quickly enough, Computer assessment of inventory items for sale is inaccurate, Computer inventory systems are too complicated, Items in-stock gets misplaced, Not keeping up with the rising price of raw materials.1.4 OBJECTIVES OF THE STUDY To study the inventory management followed in Zuari cement cement. To identify the existing inventory management and its effectiveness. To calculate analysis for their performance in inventory management.1.5 RESEARCH METHODOLOGYResearch DesignThe Descriptive type of research has been applied in the study . This research the researcher has no control over the variables. Only reports what has happened or what is happening. The research can only discover causes but cannot control the variables.Data collectionThis study purely based on secondary sources of information. The necessary data calculated from annual report, books, journals and websites. Period of studyThis study covers a period of five years from 2006 2007 to 2010 2011. The accounting year commenced from April and ending with March of the next year.Area of studyThis study was conducted in Zuari cement Private limited, Yerraguntla, Kadapa District.

Tools for analysis The following tools have been applied in the present study. They are listed below Ration analysis (inventory) and EOQ analysis

Ratio Analysis (Inventory)The percentage of a mutual fund or other investment vehicle's holdings that have been "turned over" or replaced with other holdingsin a given year.The type ofmutual fund, its investment objective and/or the portfolio manager's investing style will play an important role in determining its turnover ratio.

Economic Order Quantity (EOQ)Economic order quantity is that level of inventory that minimizes the total ofinventory holding cost and ordering cost. The framework used to determine this order quantity is also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most economical quantity of a product that should be purchased at one time. The EOQ is based on all associated costs for ordering and maintaining the product. EOQ refers to the size of the order which gives maximum economy in punches of materials.

Where

CHAPTER-IIINDUSTRY AND COMPANY PROFILE

2.1 INDUSTRY PROFILEHistory of the origin of cementIt is uncertain where it was first discovered that a combination of hydrate non-hydraulic lime and a pozzolan produces a hydraulic mixture, but concrete made from such mixture was first used on large scale by roman engineers. They used both natural pozzolans (trass or pumice) and artificial pozzolans (ground brick or pottery) in the concretes. Many excellent examples of structures made from these concretes are still standing. Notably the huge monolithic dome of the pantheon in Rome and the massive Bath of Caracalla. The vast system of roman aqueducts also made extensive use of hydraulic cement. The use of structural concrete disappeared in medieval Europe. Although weak pozzolanic concretes continued to be used as a core fills in stone walls and columns.Modern cementModern hydraulic cement began to be developed from the start of the industrial Revolution (around 1800) ,driven by three main needs: Hydraulic renders for finishing brick buildings in wet climates Hydraulic mortars for masonry construction of harbor works etc , in contact with sea water.Varieties of the cementThere are some varieties in cement that always find good demand in the market. To known their characteristics and in which area they are most required, it will be better to take a look at some of the details given below.

Portland blast furnace slag cement (PBFSC)The rate of hydration heat is found lower in this cement type in comparison to PPC. It is most useful in massive construction projects, for example-dams.Sulphate resisting Portland Cement (SRPC)This cement is beneficial in the areas where concrete has an exposure to seacoast or sea water or soil or ground water. Under any such instances, the concrete is vulnerable to sulphates attack in large amounts and can damage to the structure. Hence, by using this cement one can reduce the impact of damage to the structure. This cement has high these cement one can reduce the impact of damage to the structure. This cement has high demand in India.Rapid hardening Portland Cement (RHPC)The texture of this cement type is quite to that OPC. But, it is bit more fine than OPC and possesses immense compressible strength, which makes casting work easy.Ordinary Portland Cement (OPC)Also referred to as grey cement or OPC, it is of much use in ordinary concrete construction. In the production of this type of cement in India, Iron (fe2O3), Magnesium (MgO), Silica (SiO2), and Sulphur, trioxide (SO3) components are used.Portland Pozolona Cement (PPC)As it prevents cracks, it is useful in the casting work of huge volumes of concrete. The rate of hydration heat is lower in this cement type. Coal waste or waste or burnt clay is used in the production of this category of cement. It can be availed at low cost in comparison to OPC.Oil Well Cement (OWC)Made of iron, coke, limestone and iron scrap, Oil Well Cement is used in constructing or fixing oil wells. This is applied on both the off-shore and on-shore of the wells.Clinker Cement (CC)Produced at the temperature of about 1400 to 14560 degree Celsius, Clinker cement is needed in the construction work of complexes, houses and bridges. The ingredients for this cement comprise iron, quartz, clay, limestone and bauxite.A part from these, some of the other types of cement that are available in India can be classified as: Low heat cement, High early strength cement, Hydrophobic cement, High aluminum cement and Masonry cement.

2.1.1 Cement Industry in GlobalCement is a basic ingredient for the construction industry. It is estimated there are 1500 integrated cement production plants in the world. Although the players such a Lafarge or CEMEX, the share of the four largest firms account only for 23% of the overall demand.DemandWorld cement demand was 2,283MT in 2005, with China accounting for 1,064MT (47% of total). The expected demand for 2010 is estimated at 2,836 MT. China will increase its demand by 250MT during the period, an increase higher than the total yearly European demand.

The Demand of CementDemand for cement in MT20052010Growth rate

North America1702002.9%

Western Europe2082362.2%

Asia/Pacific150019005.2%

Other regions4055004.7%

World cement demand228328364.7%

Source: www.cementhistory.com, www.google.com.

Top 25 Cement companies in the worldS.NOName of the CompanyName of the Country

1.Aditya Birla Group-GrasimIndia

2.Al-Ghurair GroupDubai

3.Ambuja Cements LimitedIndia

4.Anhui Conch Cement CompanyChina

5.Arabian Cement CompanyEgypt

6.Ararat Cement Co.South Africa

7.Cement Cruz Azul Cement Co.Armenia

8.CEMEX Co.U.S.A

9.China National Cement Materials Group CorporationChina

10.Cimpor Cement corp.China

11.Companhia Siderurgical National S.ABrazil

12.Concrete Casting Cement CompanyPacific Alloy

13.CRH plcAmerica

14.Eagle Materials IncU.S.A

15.Heidelberg Cement CompanyGermany

16.James Hardie CementsU.S.A

17.LafargeIndia

18.Libyan Cement CompanyLibya

19.Monarch Cement Ltd.U.S.A, California

20.NorcemGermany

21.Pretoria Portland Cement CompanySouth Africa

22.Ready Mix IncIndia

23.Rinker GroupAustralia

24.Semapa GroupEurope

25.Smith-Midland Cement CompanyU.S.A, Milford

Cement industry in IndiaSource: www.google.com, www.ask.com, www.linkedin.com, en.wikipedia.com

2.1.2 Cement Industry in IndiaThe cement industry in India has undergone a major shift over the last 6 years. The Indian cement industry is the second largest producer of quality cement. Indian cement industry is engaged in the production of several varieties of cement such as, ordinary Portland cement (OPC), Portland pozzoland cement (PPC), Portland blast furnace slag Portland cement (PBFSPC), sulfate resistance Portland cement (SRPC), white cement, etc,. They are produce strictly as per the Bureau of Indian standards (BIS) specifications and their quality is comparable with the best in the world.The industry occupies an important place in the national economy because of its strong linkage to other sectors such as, construction, transportation, coal and power. The cement industry is also one of the major contributors to the exchequer by way of indirect taxes.S.NOName of the companyDetails of the company

1.ACC LimitedYear of establishmentHead quartersWeb site1994Maharashtrawww.acclimited.com

2.Ambuja Cements LimitedYear of establishmentHead quartersWeb site1981Gujaratwww.ambujacement.com

3.Andhra Cements LtdYear of establishmentHead quartersWeb site1936Andhra Pradeshwww.andhracements.com

4.Barak Valley Cements LtdYear of establishmentHead quartersWeb site1999Assamwww.barakcement.com

5.Bheema Cements LtdYear of establishmentHead quartersWeb site1978Andhra Pradeshwww.bheemacement.com

6.Binani Cement LtdYear of establishmentHead quartersWeb site1996West Bengalwww.binani.com

7.Birla Corporation LimitedYear of establishmentHead quartersWeb site1919West Bengalwww.grasim.com

8.Burnpur Cement LtdYear of establishmentHead quartersWeb site1986West Bengalwww.burnpurcement.com

9.Zuari Cement Corporation LimitedYear of establishmentHead quartersWeb site1962Tamil Naduwww.Zuaricement.com

10.Dalmia Cement (Bharat) LimitedYear of establishmentHead quartersWeb site1951Tamil Naduwww.dalmiacement.com

11.Deccan Cements LtdYear of establishmentHead quartersWeb site1979Andhra Pradeshwww.deccancem.com

12.Everest Industries LtdYear of establishment Head quartersWeb site1934Maharashtrawww.everestind.com

13.Grasim Industries LimitedYear of establishmentHead quartersWeb site1948Madhya Pradeshwww.grasim.com

14.Gujarat Sidhee Cement LtdYear of establishmentHead quartersWeb site1973Gujaratwww.gujaratsidhee.com

15.Heidelberg Cement India LtdYear of establishmentHead quartersWeb site1958Karnatakawww.mycemco.com

16.Hyderabad Industries LtdYear of establishmentHead quartersWeb site1946Andhra Pradeshwww.hil.in

17.Indian Hume Pipe Company LtdYear of establishmentHead quartersWeb site1962Maharashtrawww.indianhumepipe.com

18.J. K. Cement LimitedYear of establishmentHead quartersWeb site1994Uttar Pradeshwww.jkcement.com

19.JK Lakshmi Cement LtdYear of establishmentHead quartersWeb site1938Rajasthanwww.jklcem.com

20.Kalyanpur Cements Ltd Year of establishmentHead quartersWeb site1937West Bengalwww.kalyancemenet.com

21.Katwa Cements LtdYear of establishmentHead quartersWeb site1993Karnatakawww.katwagroup.com

22.Kesoram Industries LtdYear of establishmentHead quartersWeb site1919West Bengalwww.kesocorp.com

23.Madras Cements LimitedYear of establishmentHead quartersWeb site1954Tamil Naduwww.madrascements.com

24.Mangalam Cement LtdYear of establishmentHead quartersWeb site1976Rajasthanwww.mangalamcement.com

25.NCL Industries LtdYear of establishmentHead quartersWeb site1979Andhra Pradeshwww.nclind.com

26.Nirman Cements LtdYear of establishmentHead quartersWeb site1983Biharwww.nirmancements.com

27.OCL India LtdYear of establishmentHead quartersWeb site1949Orissawww.ocl.in

28.Panyam Cements & Mineral Inds LtdYear of establishmentHead quartersWeb site1955Andhra Pradeshwww.panyamcements.com

29.Prism Cement LtdYear of establishmentHead quartersWeb site1992Andhra Pradeshwww.prismcement.com

30.Rose Zinc LtdYear of establishmentHead quartersWeb site1990Rajasthanwww.rosezinc.com

31.Sagar Cements LtdYear of establishmentHead quartersWeb site1981Andhra Pradeshwww.sagarcements.in

32.Sainik Cement Inds. LtdYear of establishmentHead quartersWeb site1991Delhiwww.sainikcem.in

33.Sanghi Industries LtdYear of establishmentHead quartersWeb site1985Andhra Pradeshwww.sanghicement.com

34.Saurashtra Cement LtdYear of establishmentHead quartersWeb site1956Gujaratwww.saurashtra.com

35.Shiva Cement LtdYear of establishmentHead quartersWeb site1985Orissawww.shivacement.com

36.Shree Digvijay Cement Company LtdYear of establishmentHead quartersWeb site1983Gujaratwww.digvijaycement.com

37.Somani Cement Company LtdYear of establishmentHead quartersWeb site1983Andhra Pradeshwww.anjanicement.com

38.Sri Vasavi Inds. LtdYear of establishmentHead quartersWeb site1985Andhra Pradeshwww.srivasavi.com

39.Sri Chakra Cements LtdYear of establishmentHead quartersWeb site1981Andhra Pradeshwww.chakracement.com

40.Stresscrete India LtdYear of establishmentHead quartersWeb site1983Maharashtrawww.stresscrete.com

41.The India cements LtdYear of establishmentHead quartersWeb site1946Tamil Naduwww.ramcocement.in

42.Udaipur Cement Works LtdYear of establishmentHead quartersWeb site1993Rajasthanwww.udaipurcement.com

43.UltraTech Cement LimitedYear of establishmentHead quartersWeb site2000Maharashtrawww.ultratechcement.com

44.Vinaycements LtdYear of establishmentHead quartersWeb site1986Assamwww.vinaycements.com

45.Visaka industries LtdYear of establishmentHead quartersWeb site1981Andhra Pradeshwww.visaka.org

46.Zuari cement corporation LtdYear of establishmentHead quartersWeb site1985Andhra Pradeshwww.zuaricement.com

Source: www.google.com, info.shine.com, www.indiacatalog.comCompany profleTHE COMPANY The Zuari cement was started in 1994 to operate the cement plant of Texaco ltd., under a working arrangement. Subsequently Texacos cement business was taken over by the company in 1995. Today Zuari Cements manufacturing facility at yerraguntla in Andhra Pradesh is one of the largest in South India. In the year 2000 Zuari enters in to a joint venture with the italcementi group the second largest cement produce in Europe and Zuari Ltd. Lived off of a separate company. The Zuari Cement is strategically located at Yerraguntla. The plant location existence of 6km from Yerraguntla. It is connected to the railway station on by a railway track of 7km length and is having an exchange plant inside the factory. Plant is connected to the nearest highway by 0.2km land private road.PROMOTER OF THE COMPANYThis investment was initially made through a 50:50 joint venture with the KK Birla group in Zuari Cement Ltd., but subsequently in May 2006. Italicement group acquired the full central of the company. Now Company is under joint venture having rated capacity of 17 Lakhs per annum company for that diversified that production of the cement making EPC along with OPC.

FINANCIAL SUPPORT The required finances for the cement co., are provided by several financial institutions like S.B.I BNP Paribas, Andhra Bank, Standard Charted Bank.TECHNOLOGY ADOPTEDThe technology adopted in the plant is an open pre-blending stockpiles system for limestone and clinker. This is a special feature compared to the conventional system of storage which has its own weakness on the case of the failure of cranes.EXPANSION OF CAPACITY The expansion of clinker capacity at Yerraguntla by way of new line with a capacity of 5500 tons per day and new grinding unit at Chennai with a capacity of 0.8 million have been finalized with an estimate capital outlay of MINR 6760. Major permits and clearness requires for the projects have been obtained and the supply contract for main equipment for Yerraguntla new line are finalized with M/s F.L.Smith Limited. M/s Clauduis Peter Technologies, M/s Maag Gear AG and M/s Honeywell Automation India Limited. For Chennai grinding unit main equipment are finalized with M/s Walchandnagar Industries limited, including contracts for erection and commissioning. On implementation of these projects the total capacity of the company will increase to 5 million tons. Quality customer service In an effort to reach out to customers better, Zuari cement had setup a technical cell named Zuari home partner. This cell gives guidance in the field of building. Technology, architecture, housing finance and economical usage of the high quality cement. Technology experts provide the assistance according to individual requirements. So that customers get the best value for the investment they have made.

DEVELOPMENT ACTIVITIESThe plant in Yerraguntla had adopted four near by villages as part of its program of corporate social responsibility towards the local community. These villages are Thumallapalli, Yalasapalli, Koduru and Peddanapadu, part of the Kadapa district of Andhra Pradesh State. In particular, the planet intends to contribute to the improvement of living standards of the people in the surrounding villages. The strategy focuses on three basis areas: health and hygiene, education and sustainable livelihoods.Italcementi group Italcemanti Group, with a production capacity of approximately 70 million tons of cement annually, is the fifth largest cement producer in the world with leadership in the Mediterranean area. Italcementi, one of the 10 largest Italian industries companies is included in S&P/MIB Index of Italian Stock Exchange. The core business cement (over 65% of sales) is conbined with the production of ready mixed concrete and aggregates, Italcementi Group, with 2007 annual sales amounting to 5,854 million Euro and a net income of 651 million Euro, combines the expertise, knows how and cultures of 19 countries. With over 22,850 employees, the Group boasts, as at 31 December 2007, an industrial network of 62 cement plants, 15 grinding centers, 3 terminals, 152 aggregate quarries and 588 concrete, batching units Italcement group in India Italcement group made its debut in India in January 2001, through the partial acquisition of the 2.1 MnT Yerragunta Cement plant, located in the southern part of Andhra Pradesh State. The plant supplies material to south India that accounts for one fourth of the entire population of the country. The plant is strategically located to cater to the major markets of Banglore and Chennai.

In January 2002, Zuari cement took over another company, Sri Vishnu Cement Limited (SVCL) whose 1.3 MnT plant is situated at Sitapuram, Andhra Pradesh State, near the capital, Hyderabad, 3rd highest consumption center of the South.

Until now, Italcement group has invested around 200 million euro in India, the Group actually counts on 3.4 MnT production capacity, with net sales of about 116 million euro in 2006.COMPETITORS FOR ZUARI CEMENT LIMITED CORAMANDAL CEMENT PENNA CEMENT ULTRA TECH CEMENT PRIYA CEMENT MAHA CEMENT NAGARJUNA CEMENT LANCO CEMENT BHARATHI CEMENT

Organizational chart of Zuari Cement private Ltd.

LOCATION OF THE PLANT Cement and its raw materials namely coal and lime stone, are all bulky that make transportation difficult and uneconomical. Given this, cement plants are located close to both sources of raw materials and markets. Location of the plant at this place is having the following advantages. Location in industrial belt of Rayalaseema with sophisticated facilities like water.

Present of best suited limestone proved scientifically for cement. Low free limestone to ensure reduce surface cracks. Low heat of hydration from better soundness. Low magnesia content to ensure reduced tensile cracks. Specially designed setting time to suit Indian working conditions.PRODUCTION Cement production during the period has also increased from about 72.23 million tons about 90 million tons in 2006-2007 excluding the contribution of mini cement plants.

RAW MATERIALS The actual requirements of raw material at 100% capacity utilization would be; 12.5 million tons of limestone per annum. 70000 tons of Gypsum per annum. 39000 tons of Bauxite per annum. 20000 tons of Iron ore per annum. The limestone is major component required for the plant is net from the mines located adjacent to the proposed site. Gypsum is procured from fertilizer factories at Madras and Cochin. Iron is soured partly from mini steel plants located at Tirupathi and partially from Bellary. Bauxite is procured from Goa, Karnataka and Maharashtra.

POWER Maximum estimated power demand is 45 M.V. The company has an existing contract 50 M.V demands APSEB, the plant presents has D.G sets with an aggregate general capacity of 12.6 M.V.

WATER Water is required for seeds of consumption make for plant and machinery for general need in plant. Company has a pumping station and underground bore wells near Hanuman Gutta village at Penna River to tap the undergrounds water in riverbed.

TRANSPORTRail. The plant is connected to the nearest state highway to Bangalore, Hyderabad and Chennai. The factory is when connected to different part of the country through rail and road facilities is near to Yerraguntla railway station and has a railway lint to the factory with an extern point within the factory premises 605 of the cement is dispatched by rail gal is received through

MAN POWER Existing plant has a total of 500 employees. After and addition of employees may be required.QUARRY It is situated adjacent to the factory. It constituted limestone, one of the major materials for cement industry. The quarry has a mining base area of 1027.56 acres. Here are 6 of the many reasons why Zuari 53 grade and 43 grades cement edges out its competitors. High compressive strengths. Low heat of hydration. Better soundness. Lesser consumption of cement for M-20 concrete grade and above. Faster de-shuttering of formed work. Reduced construction time. With a superior and wide range of cement catering to very conceivable building need, Zuari cement is a formidable player in the cement market.

Here are just a few reasons why Zuari cement is chosen by millions in India. Ideal raw materials Low time and magnesia content and high proportion of silicates Greater fineness Slow initial and fast final setting Wide range of applications Quality customer serviceA WIDE RANGE TO ADDRESS EVERY NEED: Residential, commercial, multistoried buildings and complex. Mass concreting-dams, canals, spillways Construction and repair of pavements, roads, flyovers and runways. Spun pipes and poles manufacturing Cold weather concreting Pre-fabricated elements such a pipes, sleepers, windows, door frames etc.QUALITY /CUSTOMER SERVICE In an effort to reach out to customers better, Zuari cement as set up a technical cell named Zuari home partner. This cell gives guidance in the field of building. Technology, architecture, housing finance and economical usage of the high quality. Technical experts provide the assistance according to the individual requirements. So that customers get the best value for the investment they have made.

PRODUCTS Zuari Cement manufactures and distributes its own main product lines of cement .Its aim is to optimize production across all of our markets, providing a complete solution for customer's needs at the lowest possible cost, an approach and it is called as strategic integration of activities. Cement is made from a mixture of 80 percent limestone and 20 percent clay. These are crushed and ground to provide the "raw meal, a pale, flour-like powder. Heated to around 1450 C (2642 F) in rotating kilns, the meal undergoes complex chemical changes and is transformed into clinker.

PROCESS TECHNOLOGY, THE SOLID FOUNDATIONThe culture of quality that has always prevailed in Zuari Cement's manufacturing facilities is best exemplified in the process technology employed. Advanced technology methods are used to ensure that a high level of quality is attained and sustained right through the manufacturing process. Yet, these high standards are constantly improved upon by an experienced and dedicated R&D team to attain performance oriented cement.

Centralised On-line Process Control\

The process Technology Advantages Complete homogenisation of limestone is achieved by stacking the limestone in stock-plies with the use of stackers and reclaiming it through reclaimers. The optimum ratio of raw mix is attained by the use of X-ray analyser and automatic weigh feeder which are linked to the centralized computers control room.

Reduced variability in kiln feed and complete homogenisation of raw meal is attained through Continuous Flow Silo. This ensures that every grain of cement is of consistent quality. Online X-ray Analyser Stacker and Reclaimer Vertical Raw Mill Continuous Fluidized Silo The totally computerized monitoring system enables quality clinkerisation. It dictates the optimum retention time in the precalciner and the kiln. Equipped with a six stage double stream pre-heater cyclone system, the precalciner only adds to the quality. The modern closed grinding units have a high efficiency separator that produces finer particles of cement. This yields cement matrix with a lower pore diameter. This in turn gives concrete of higher density and lower permeability.Ventomatic Electronic Packing Zuari Cement employs Ventomatic packers to ensure that the customer gets exactly 50 kgs per bag. To minimize damages during transport, advanced loading techniques are used. These steps reflect Zuari Cement's commitment to offer the best quality and correct quality to its customers.

Environment-Friendly Technology To minimize dust emission, Zuari Cement has installed the latest pollution control equipment such as electrostatic precipitators in the kiln, raw mills, coal mills and cement mills. this environmental friendly aspect of Zuari's process technology has resulted in abundance of greenery and clean air in the factory premises.

WET PROCESS TECHNOLOGYCalcareous MaterialArgilseeous

LimestoneMaterial Clay

CrushingWater Washing

Storage Tank

Storage Tank

Mixing IN Correct Production

Slurry Formation

Correction Basin

Pumping

CoalDustRotary Kiln

Formation Of Clinker

Clinker Cooler

GypsumGrinding In Ball and Tube Mill

Storage In silos

Weighing and packaging in Bags

Distribution

DRY PROCESS TECHNOLOGYCalcareous Material

Argilseeous

Limestone Material Clay

Crushing Crushing

Grinding Grinding

Storage Storage

Mixing In Correct Proportion

CoalDustStorage of raw materials

Rotary Kiln

Formation of Clinker

Clinker Cooler

Gypsum

Grinding In Ball and Tube Mill

Storage in Silos

Weighing and Packing in bags

Distribution

CHAPTER-IIICONCEPTUAL AND THEORITICAL FRAME WORK3.1. CONCEPTUAL AND THEORITICAL FRAME WORK OF INVENTORY MANAGMENT Inventory management is a process of evaluating and controlling method for inventory or stock level of the company. The purpose of inventory management is to diagnose the information contained in the stock book of the company, so as to judge the stock level and control methods of the firm. The analysis and interpretation of inventory management is essential to bring out the stock needed. The inventory management is an attempt to determine the stock and meaning of the stock book statement data so that forecast may be made of the future cost control of the company. The stock evaluation helps to understand how best the organization is functioning with good stock control.The analytical tools generally available to an analyst for this purpose are as follows, Inventory turnover analysis EOQ analysis OBJECTIVES OF INVENTORY TURNOVER ANALYSIS, EOQ ANALYSISThe objectives of inventory turnover analysis EOQ analysis is to provide information about the stock level and control when purchase of raw materials of an enterprise that is useful to a wide range of purchasing power of raw materials. We have discussed in the previous paragraphs the utility of the components of inventory turnover and EOQ. Later we will us discussing how they are made use of by stock department To study the stock book of the company To evaluate the stock position of the company. To find out the efficiency in utilization of stock materials to produce the goods.

USES OF INVENTORY TURNOVER ANALYSIS, EOQ ANALYSISIt is helpful in assessing the stock position and productivity position of a concern. The main objectives of a inventory turnover analysis are to assess The present and future stock capacity of a concern. To give corrective solution for the inventory problem. To differentiates the investment with EOQ and invest without EOQ for purchasing of the raw materialINVENTORY TURNOVER RATIOSInventory turnover ratioA ratio showing how many timesa company'sinventory is sold and replaced over a period.Inventory turnover periodHow often interest is calculated and added on to your investment. If you have two conversion periods, it means that interest is calculated every six months. The inventory conversion period for calculate the interest for credit sales to their agentsECONOMIC ORDER QUANTITYEconomic order quantity is that level of inventory that minimizes the total ofinventory holding cost and ordering cost. The framework used to determine this order quantity is also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most economical quantity of a product that should be purchased at one time. The EOQ is based on all associated costs for ordering and maintaining the product. EOQ refers to the size of the order which gives maximum economy in punches of materials.

Where 3.2 REVIEW OF LITERATURE

CHAPTER-IVANALYSIS OF INVENTORY MANAGEMENT

ANALYSIS PART-1RATIO ANALYSIS (INVENTORY)

TABLE - 4.1.1LEVEL OF INVENTORY

S.NoParticulars2012-132013-142011-122012-132013-14

1Raw materialsLime stone(stacker 60 Per cent)Iron ore(stacker 25 Per cent)Clay ash(stacker 15 Per cent)3330.80

1387.83

832.705169.86

2154.11

1292.478392.21

3496.76

2098.0511109.76

4629.10

2777.4411265.50

4693.96

2816.40

TOTAL(clinker)5551.338616.4413937.0218516.2618775.86

2Work in process5386.488451.7413822.0218351.4618611.09

3Finished goods6251.559316.5914522.3219216.5419416.11

Total17189.3626384.7742331.3656084.2656803.06

Qty in thousand tones

The inventory level was found to be increased trend from 2006-2007 to 2010-2011. The overall inventory level position for the five years is satisfactory.Source: Annual report of Zuari Cement Corporation Limited

CHART - 4.1.1LEVEL OF INVENTORY

INVENTORY TURNOVER RARIO. The inventory turnover ratio measures the number of times a company sells its inventory during the year.

TABLE - 4.1.2INVENTORY TURNOVER RARIO

S.NoYearCost of goods sold (` in lakhs)Average stock (in tones)Inventory turnover ratio

12012-1326630284874285.46 per cent

22013-1428444945031845.65 per cent

32011-123094850819401.53.78 per cent

42012-134010580945491.54.24 per cent

52013-144521886822538.55.50 per cent

Source: Annual reports of Zuari Cement Corporation LimitedThe inventory turnover ratio was high in the year 2012-13 after that 2013-14 the inventory turnover ratio was decreased. The present value of inventory turnover ratio is good.

CHART - 4.1.2INVENTORY TURNOVER RATIO

INVENTORY CONVERSION PERIODThe inventory conversion period is the time required to obtain materials for a product, manufactured it, sell it.

TABLE 4.1.3INVENTORY CONVERSION PERIODS.NoYearNo. of daysInventory turnover ratioInventory conversion period (in days)

12012-133655.46 per cent66

22013-143665.65 per cent64

32011-123653.78 per cent96

42012-133654.24 per cent86

52013-143655.50 per cent65

Source: Annual reports of Zuari Cement Corporation LimitedThe inventory conversion period is normally indicates the wealth of the company. The company wants to concentrates with its inventory conversion period.

CHART 4.1.3INVENTORY CONVERSION PERIOD

ANALYSIS PART-2EOQ ANALYSIS

TABLE-4.2.1EOQ ANALYSIS FOR THE YEAR 2012-13ItemAnnual requirementOCPEOQTotal investment with EOQTotal investment without EOQSaving inventory cost

Iron Ore31500361.56512308179413861556821

Lime Stones15000401.251449801423451452252880

Clay Ash1400042214476711198213591523933

Sulphur1300034.51.7515371611080113392723136

Gypsum13500351.251448691262231306884465

Bauxite1150036.51.51507481133221161732851

Source: Annual report of Zuari Cement Corporation LimitedThe companys annual requirement for the year 2012-13 is 101000 tons of raw materials. They using investment with EOQ spent ` 787168. When the same in without investing EOQ is ` 882551. So the company saved ` 169432 in the year 2012-13.

CHART-4.2.1EOQ ANALYSIS FOR THE YEAR 2012-13


Iron Ore33500351.57512509562616967574049

Lime Stones1350041215474411606414011524051

Clay Ash16500551.5515411001710501710500

Sulphur14000351.516380813291615330420388

Gypsum1250036215467110467615330420388

Bauxite11000372.51605719278711875225965

Source: Annual report of Zuari Cement Corporation Limited

The companys annual requirement for the year 2013-14 is 103700 tons of raw materials. They using investment with EOQ spent ` 590000. When the same in without investing EOQ is ` 921215. So the company saved ` 195739 in the year 2013-14.



Iron Ore13500341.5651260837891539057046

Lime Stones13500361.516780513564215151515873

Clay Ash15000381.7516580713456716644513878

Sulphur14000371.7516476912746215438426922

Gypsum15000352.516564810854016677558235

Bauxite1120036.51.7517068411747612819110715

Source: Annual report of Zuari Cement Corporation Limited

The companys annual requirement for the year 2011-12 is 98500 tons of raw materials. They using investment with EOQ spent ` 68646. When the same in without investing EOQ is ` 800543. So the company saved ` 114076 in the year 2011-12.



Iron Ore34000361.595127112323121760594374

Lime Stones12500371.7517472712777014622618456

Clay Ash14000401.517586415249616457512079

Sulphur16000381.7517483414657518716140586

Gypsum18000362.7517568612193821219090252

Bauxite1700037118011222030822050621980

Source: Annual report of Zuari Cement Corporation LimitedThe companys annual requirement for the year 2012-13 is 111500 tons of raw materials. They using investment with EOQ spent `875092. When the same in without investing EOQ is `1132819. So the company saved `2577276 in the year 2012-13.



Iron Ore38000371.751051268135358268736133378

Lime Stones13500351.251858691618521675885736

Clay Ash1200038319555110909915777048671

Sulphur15000403.2518560811445518722572770

Gypsum17000401.25194104320364622111017464

Bauxite18000392.7520071514496524223597270

Source: Annual report of Zuari Cement Corporation LimitedThe companys annual requirement for the year 2013-14 is 113500 tons of raw materials. They using investment with EOQ spent ` 869375. When the same in without investing EOQ is ` 1244664. So the company saved ` 375289 in the year 2013-14.


CHAPTER-VSUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

5.1 FINDINGSRATIO ANALYSIS (INVENTORY) In inventory level of the company, the in inventory level has been increased year by yea. There is no problem in the inventory level of the Zuari Cement Corporation Limited. In inventory turnover ratio the ratios of the year has been finded as low in the years of 2011-12 and 2012-13. After those periods the inventory turnover ratio has slightly increased in the year 2013-14. Even though that level is quite low when compare with 2013-14. In inventory conversion period is finded as good level. Even though they wants to keep the inventory conversion period as low.EOQ ANALYSIS In EOQ analysis for the year 2012-13 to 2013-14 is good. For this year they followed EOQ with investment for purchase of goods. In EOQ analysis for the year 2013-14 to 2013-14 is good. For this year they followed EOQ with investment for purchase of goods. In EOQ analysis for the year 2011-12 to 2013-14 is good. For this year they followed EOQ with investment for purchase of goods. In EOQ analysis for the year 2012-13 to 2013-14 is good. In this year the EOQ with investment and EOQ without investment are same. In EOQ analysis for the year 2013-14 to 2013-14 is good. All years of EOQ is followed only investment with EOQ.5.2 SUGGESTIONRATIO ANALYSIS (INVENTORY) In inventory level of the company shows the increase of the raw materials, work-in-process and finished goods. The inventory level of Zuari Cement Corporation Limited is well. In inventory turnover ratio finded some problems. They want sell their product to outside also. Now they use their cement which are produced in Zuari Cement Corporation Limited for their own purpose. They want to sell that to others also then only the ratio will be increased. Zuari Cement Corporation Limited sells the 25 per cent of the cements produced, remaining they used for own purpose. For sales to others they allowed more days as credit to their agents.EOQ ANALYSIS In EOQ analysis there is no problems finded in findings for the Zuari Cement Corporation Limited. Even though they want to keep that situation in upcoming years also. Then only they can retain position. In EOQ analysis there is no problems finded in findings for the Zuari Cement Corporation Limited. Even though they want to keep that situation in upcoming years also. Then only they can retain position. In EOQ analysis there is no problems finded in findings for the Zuari Cement Corporation Limited. Even though they want to keep that situation in upcoming years also. Then only they can retain position. In EOQ analysis there is no problems finded in findings for the Zuari Cement Corporation Limited. The EOQ was finded as same in the concept of EOQ with investment and EOQ without investment, even though they followed EOQ with investment. In EOQ analysis there is no problems finded in findings for the Zuari Cement Corporation Limited. Even though they want to keep that situation in upcoming years also. Then only they can retain position.

5.3 CONCLUSIONThe study covers the inventory management for effective inventory control. I have used a technique Economic Order Quantity Analysis named as EOQ Analysis for find out the rate with EOQ and without EOQ investment for purchasing of good in the manufacturing the cement in Zuari Cement Corporation Limited. Hence the inventory management of the organization quite good. During the year 2006-2011 from this study I concluded that organization would be efsfective inventory management. The study will be use for Zuari Cement Corporation Limited in various ways.

BIBLIOGRAPHY

BIBLIOGRAPHYBOOKS Asohok Banerjee - Financial Accounting A Managerial Emphasis Excel Books 2005 Collis Business Accounting Palgrave Macmillan 2007 Khan MY Jain P.K Management Accounting : Text, problems and cases 4th Edition Tata McGraw Hill 2007 Pandikumar Management Accounting Excel Books 2007 Ramachandran N Kakani Kumar Ram Financial Acccounting For Management Tata McGraw Hill 2006 Robert N.Anthony David F.Hawkins Kenneth A.Merchant Accounting Text and Cases Tata McGraw Hill 2007 S.K Bhattacharyya Jhon Dearden Costing for Management Vikas Publishing 2002 S.N Maheswari S.K Maheswari Accounting for Management Vikas Publishing 2006WEBSITES en.wikipedia.com Info.shine.com www.ask.com www.Zuari.com www.google.com www.indiacatalog.com www.inventoryquzz.com www.reportjunction.com www.scribed.com www.yahoo.com

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