A STUDY ON INVENTORY MANAGEMENT

INTRODUCTION
As every business concern irrespective of its size, nature and age needs an adequate level of inventory to carry out business operations and survive, inventory becomes an integral and important part of business. Inadequate inventory means interruption of production and sales operation whereas excessive inventories mean accumulation of idle and increase in carrying cost. Therefore to manage inventory in any sector is a challenging job. Inventory management is primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The project report titled A study of Inventory management in AR.A.S.P.V.P.V dealers of TATA MOTORS AND FIAT deals with this matter and is based on the final year main project at AR.A.S.P.V.P.V, pertaining to the requirement for the Master of Business Administration from Anna University Chennai. Inventory consists of raw material, packing material, consumables, stores and spares, work in progress, and finished goods. The raw material, work-in-progress and completely finished goods that are considered to be the portion of business assets that are ready or will be ready for sale. Inventory represents one of the most important assets that most businesses posses, because the turnover of inventory represents one of the primary source of revenue generation and subsequent earnings for the companys share holders. The inventory management concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods, and demand forecasting. Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment. Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, delivering, handling, and related costs are kept in check. It also involves systems and processes that identify inventory requirements, set targets, provide

replenishment techniques, report actual and projected inventory status and handle all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. It also may include ABC analysis, lot tracking, cycle counting support, etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution system, functions to balance the need for product availability against the need for minimizing stock holding and handling costs. Unless organization learn to manage its inventory, success, will be elusive. Thus the effectiveness of the organization depends much on the strength of its inventory management which is an important part of the whole system. Every organization needs inventory for smooth running of its activities. Its serves as a link between production and distribution processes. The investment in inventories constitutes the most significant part of current assets/working capital in most of the undertaking. Thus, it is very essential to have proper control and management of inventories. All this has been done to get a clear view of techniques of inventory management in AR.A.S.P.V.P.V.

NEED OF THE STUDY

Inventories are equivalent to cash and they make up an important of the total cost. It is essential that inventories should be properly safeguard and correctly accounted. Proper control of inventory can make a substantial contribution to the efficiency of a business. The success of a business concern largely depends upon efficient purchasing, storage, consumption and accounting.

OBJECTIVES OF THE STUDY

The various objectives of the study have been enlisted as follows: * To study the inventory management as it exists in AR.A.S.P.V.P.V * To study the effectiveness of inventory management over the past few years by concluding techniques * To know the inventory performance by analyzing the data using tables, graph, ratio * To know the overall performance of the company. * To offer suggestions for improving the efficiency in inventory management.

SCOPE OF THE STUDY

Inventory management is a very simple concept. Since there can be substantial costs involved in straying above and below the optimal range, careful inventory management can make a huge difference in the profitability of a business. Although the concept is simple, the process of getting the right balance can be quite a complex and time consuming task without the right technology. It enables the business to meet or exceed expectations of the customer by making the product readily available. LIMITATIONS OF THE STUDY As this is a study undertaken to fulfill the academic requirement it is bound to have certain limitation. Study was bounded for only accounts department. Detail study about all the materials was not possible. Some of the information was kept confidential.

RESEARCH METHODOLOGY
Research is serious academic activity with the set of objectives to explain or analyze or understand a problem or finding a solution for the problem by adopting a systematic approach in collecting organizing the information relating to the problem. Research is defined as human activity based on intellectual application in the investigation of matter. The primary aim of applied research is discovering, interpreting, and the developments of methods and systems for the advancements of human technology on a wide variety of scientific matters of our world and the universe. It is exploratory and often driven by the researchers curiosity, interest and intuition. It is conducted without any practical end in mind, although it may have unexpected results pointing to practical applications. Research means search for knowledge sometimes it may refer to a scientific and systematic search for pertinent information on a specific topic. In fact research is an art of scientific investigation.

SOURCES OF DATA
Methodology is a systematic procedure of collecting information in order to analyze and verify a phenomenon. The collection of information is done by principle sources viz. Primary Data Secondary Data

Primary sources Primary data or fresh data are those data that are originated very first time with the help of primary data we formulated the research objectives. Primary data are the accurate, attainable, reliable and useful data. This data has been collected through the details from the accounts department staff members and the manager. At the same time I had visited various departments for collecting the data. Secondary Sources

Apart from the primary data certain secondary data were required for this project. Following are the sources of secondary data. Annual Report (2009-2012) Inventory statement Company manuals And some information collected from internet and text sources.