MAJOR PROJECT REPORT

ON

“INVENTORY MANAGEMENT OF ZOPSHOP”

BACHELOR OF BUSINESS ADMINISTRATION

(2017-2020)
Under the guidance of
MS.SIMRANJEET KAUR

Submitted By
GURSIMARJEET SINGH
Enroll no.: 01491101717
(2017-2020)

SRI GURU TEGH BAHADUR INSTITUTE OF MANAGEMENT

AND INFORMATION TECHNOLOGY (Affiliated to GGSIPU)

1
 DECLARATION

I, hereby declare that the project work entitle “INVENTORY MANAGEMENT

OF ZOPSHOP” submitted to GURU GOBIND SINGH INDRAPRASTHA
UNIVERSITY is a record of an original work done by me under the guidance
of MS.SIMRANJEET KAUR, faculty member at Sri Guru Tegh Bahadur
Institute of Management and Information Technology.

……….…………………………..
(Signature of the Scholar)
Place: Delhi Name of scholar:
GURSIMARJEET SINGH
Date: Enrolment number: 01491101717

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 CERTIFICATE

This is to certify that GURSIMARJEET SINGH, student of Sri Guru Tegh

Bahadur Institute of Management & Information Technology of course
BBA (General) has completed project work title “INVENTORY
MANAGEMENT OF ZOPSHOP” under my guidance and supervision.
This work is genuine.

………………………….
Signature of Project-in-charge

………………………….
Signature of guide
Ms. SIMRANJEET KAUR

………………………….
Signature of the Scholar
Place: Delhi Name of Scholar:
GURSIMARJEET SINGH
Date: Enroll. number: 01491101717

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 ACKNOWLEDGEMENT

I would like to take the opportunity to thank and express my deep sense of
gratitude to my mentor MS.SIMRANJEET KAUR. I am greatly indebted to
her for providing their valuable guidance at all stages of the study, advice,
constructive suggestions, positive and supportive attitude and continuous
encouragement, without which it would have not been possible to complete the
project.

………….……………………….
(Signature of the Scholar)
Name of Scholar :
GURSIMARJEET KAUR
Enrolment number:01491101717

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 TABLE OF CONTENTS

SERIAL TOPIC PAGE

NO. NO.

DECLARATION 2

CERTIFICATE(COLLEGE) 3

ACKNOWLEDGEMENT 4

1. CHAPTER-1 INTRODUCTION TO 7-12

INVENTORY MANAGEMENT
1.1 ZOPSHOP
1.2 ZOPSHOP PRODUCTS
1.3 Milestone
2. CHAPTER-2 COMPANY PROFILE 13-23

2.1 Reasons for Keeping Inventories

2.2 Meaning of inventory control
2.3 Objectives of inventory control
2.4 Benefits of inventory control
2.5 Techniques of inventory control

3. CHAPTER-3 RESEARCH AND METHDOLOGY 24-28

3.1 OBJECTIVES

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 3.2 TYPES OF RESEARCH
3.3 SAMPLING DESIGN
3.4 DATA COLLECTION METHOD
3.5 LIMITATIONS
4. CHAPTER-DATA ANALYSIS AND
INTERPRETATIONS 29-35

5. CHAPTER-5 FINDINGS 36-37

6. CHAPTER-6 CONCLUSION 38
7 CHAPTER-7 RECOMMENDATIONS AND 39-40
SUGGESTIONS
8 BILIOGRAPHY 41
9 ANNEXURE 42-47

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 CHAPTER 1
COMPANY INTRODUCTION

COMPANY PROFILE
1.1 ZOPSHOP:

ZOPSHOP
FASHION & GROOMING

ZOPSHOP Profile

ZOPSHOP (India) Limited, is an online registered frim. We sell online products

related to fashion and grooming.

The firm located in India Delhi (in GEETA COLONY) is all ISO 9001: 2015
certified. ZOPSHOP has established over 1300 Distributors and dealers networks
across DELHI. We sell approx 200 items per day to over 1000 consumers or more .
Our customers all over the INDIA prefer our products as it means value for their
money in terms of all aspects of the product, services etc.

“ZOPSHOP” brings its rich experience and legacy of fashion & grooming also a
quality in Hand Tools category which includes a wide variety of
jeans,watches,shoes,shirts

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ZOPSHOP GEETA COLONY
Established in 2015
it is currently the newest firm and a kind of start up India. It is also the largest
seller of products like shoes,watches,sunglasses and so on. It is strategically
located with all the means of transportation rail, road, within 5 KM radius of the
firm.

 General Information:
 Name: - ZOPSHOP(INDIA)
 Scale: - Small Scale
 Date of Established: - 2015
 Website: - www.zopshop.com

1.2 ZOPSHOP GEETA COLONY PRODUCTS

Products
· Jeans
· Shoes
· Sunglasses
· Wachtes

1.3Milestone
Culture
· Fair & Transparent
· Performance Driven
· Passion & Energy

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· Fun Place to work
· Collaborative
· Learning

· Fair & Transparent :-

Transparency is operating in such a way that it is easy for others to see what
actions are been performed.

Financial management is that managerial activity, which is concerned with the

planning and controlling of the company’s financial resources. So, finance is the
life blood of every organization. Without effective finance management company
cannot survive for the long time.

Finance management has to sell shares and securities to investors in capital market
to raise necessary funds to fetch money from the market. Finance management also
raises funds by borrowing from bank, financial institutions and other resources.
The exist and inseparable relation between finance function on one hand of
business activity, directly or indirectly it involve the acquisition and use of money.

“Financial management is the process of organising the flow of funds, so that the
business can carry out its objectives in the most efficient manner to meets its
obligation as they fall due.” This definition of financial management reflects the
importance of finance department in a company. Financial management refers to
the efficient and effective management of money (fund) in such a manner as to
accomplish the objective of the organization. It is the specialized function directly
associated with the top management. The significance of this function is not only
seen in the ‘Line’ but also in the capacity of ‘Staff’ in overall administration of a
9
company. It has been defined differently by different expert in the field. Finance is
rightly called as “THE LIFE BLOOD OF BUSINESS.”

Finance is needed at each and every stage of the company. Mainly the sections are
Banking and Fund Raising sections, insurance section, central accounting sections,
concurrence section, store accounting section, etc. The whole system is
computerized and this has helped the department to perform the work fast and
more efficiently.

 Major Functions of Finance Department

Financial Budgeting
1. Maintenance of recorded required by other Department.
2. Liaison with Financial institution and other bodies.
3. Payments of wages & salaries
4. Preparation of balance sheet of the company.
5. Financial Projection for Expansion and Diversifications.

 OPERATION MANAGEMENT:

Operation Management covers all daily payment. Payments are made through
cheques.
Operation management covers two basic functions:
 Cash Operation
 Bank Operation

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  Cash Operation:

All routine payment like traveling, conveyance allowances, medical allowances,

halting allowances etc.

 Bank Operation:

Bank operation covers all the major payment like payment to parties, Interest
payments, Dividend payments, Income tax etc.

BILLS PAYMENT SECTION

In JK FILES bills payment section deals with making payments as per bills and
sending them to respective banks. Thus, bills payment section is the link between
the payee and payer.

· RAW MATERIAL PAYMENT.

· WORKS OR PROCESSORS PAYMENT
· SERVICE PROVIDER PAYMENT

CENTRAL ACCOUNT SECTION

Depreciation on Fixed Assets is charged against the wear and tear with passage of
time. JK Files (I) Limited uses Written Down Value (WDV) method for charging
depreciation in the books. SAP system is used in the plant for all departments
except HR. SAP has various modules such as FICO, MM, SD etc.
All accounting entries are passed in the FI module throughout the month and books
are closed for monthly reporting purpose by month end closing entries of deferred
expenses, provisions etc. Books of accounts are audited by the internal and
statutory auditors.
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SAP System history:-
SAP SE (Systems, Applications & Products in Data Processing) is a
German multinational software corporation that makes enterprise software to
manage business operations and customer relations. SAP is headquartered
in Walldorf, Baden-Württemberg, Germany, with regional corporate offices in the
United States and Canada.[3]
The company has developed several independent software products to help
business better meet their customer needs [enterprise resource planning] an
application systems and management known as (SAP ERP), its enterprise data
warehouse product – SAP Business Warehouse (SAP BW), Materials Management
[MM] module software, a Sales and Distribution [SD] application that aids the
company in adding customer sales transactions, Controlling [CO] module when a
company needs internal reporting. All of these software applications can be
purchased à la carte or in a software package know as SAP Enterprise Central
Component [ECC] system. A new feature recently added to the SAP functionality
is Sybase mobile products and the in-memory computing appliance SAP
HANA that allows users to access SAP on their mobile device.
SAP FICO Module:-
SAP FICO stands for FI (Financial Accounting) and CO (Controlling). SAP FICO
is the important module of ERP and both FI and CO Modules store the financial
transactions data.
· Ii is the important module of all SAP implementations
· It is used for external reporting i.e. Balance Sheet, Profit and Loss Statements.
· SAP FICO Modules such as MM (Materials Management), SD (Sales and
Distribution), PP (Production Planning), PM (Plant Maintenance), and PS (Project
System).

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· SAP FI (Financial Accounting) Module receives postings from various other
modules such as Material Management, Sales and Distribution, Human Resources
through integration.
· All Accounting-relevant transactions which are made in Logistics (LO) are
Posted real time to financial Accounting by automatic account determination. This
data can also be passed on to Controlling (CO).

SAP FI Modules contains the following sub-modules

 General Ledger Accounting
 Accounts Receivables
 Accounts Payable
 Asset Accounting
 Consolidation
 Special Purpose Ledger
 Travel Management

General Ledger Accounting:-

The general ledger accounting is to provide a complete report for external and
internal accounting i.e. Accounts, journals, monthly debits and credit, Balance
sheet and Recording all business transactions.

 Accounts Payable:-

The accounts payable records and managers all accounting data related to vendors.

13
  Accounts Receivables:-

The accounts receivable records and manages all accounting data related to
customers.

 Asset Accounting:-

Asset Accounting is utilized for managing your company’s assets. SAP allows you
to categorize assets and to set values for depreciation calculations in each asset
class.

 Bank Accounting:-

Bank accounting is used to manage the bank transactions in the system including
cash management.

Consolidation:-Consolidation enables the combining of financial statements for

multiple entities within an organization. These financial statements provide an
overview of the financial position of the company as a whole.

 Fund Management:-

Fund Management manages budgets for revenues and expenses within your
company as well as tracks these in the area of responsibilities.

Special Purpose Ledger:-

Special Purpose ledger is used to define ledgers for reporting purpose.

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  Travel Management:-

Travel management provides management of all travel activities including booking

trips and handling of expenses associated with travel.
SAP CO Module:-
SAP Controlling plays an important role for the management decisions making and
CO Module is used for the internal reporting propose. Controlling Area is the
organisation unit used to represents the controlling activities of cost centre
accounting, Profit Centre Accounting, Product Costing, and Profitability etc.

SAP CO Module contains the following sub-modules:-

 Cost Element Accounting
 Cost Centre Accounting
 Profit Centre Accounting
 Internal Orders
 Product Cost Controlling
 Profitability Analysis

 STORES ACCOUNTING SECTION

Inventory section is responsible for making all accounting entry related to stores
and valuation of inventories. Stores department when receives any material they
send Material Receiving Report (MRR) to stores section.

When stores department issues material to users department they inform stores
accounts section. Sometimes the users department returns the issued material, than
the store account section makes the reverse entry for that.
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Stores accounts section prepares inventory ledger by the weighted average method
which shows how much stores material is issued, how much is returned by the
users department etc. stores accounts section also prepares final account store.

BUDGET & COSTING SECTION

 Budget section

“Budget is process of estimating the future expenses incurred to achieve decided

goals and comparing actual cost with the predetermined one with a view to take
corrective action so that decided goal can be achieved in time with least cost and
least time.”

A budget is a comprehensive & coordinated plan, expressed in financial terms for

the operations & resources of enterprise for some specific period in future. Budget
is plan of future.

Budget section prepares budget in starting of accounting year for whole year & get
approval of board of directors.

 Budget manual

In ZOPSHOP, while budget is prepared, all the estimated sales, etc. are taken in to
account. So all departments concern with different estimations are budget manual
like marketing, personnel.

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  Budget control

Budget control is controlling of the expenses by controlling consumption norms.

Every month the expenditure data of each department is provided to the budget
controller. Controlling of the expenses is basically by controlling the consumption
norms. Budgetary control is a process through which a budget is implemented for
attaining the budgetary targets by constantly monitoring the performance of budget
centers on the basic of norms and all allocation.

 Cost section

Product cost helps management to decide the production level market price or
selling price and other parameter. It also helps the management to renew the
product mix of various products of ZOPSHOP.Management can decide the
production level as well its rolling price.
This section prepares cost sheets, which provides the data on consumption norms
per unit of product. It also helps to monitor the production level and cost ratio.

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 CHAPTER-2

INTRODUCTION TO INVENTORY CONTROL

MANAGEMENT

Inventory control is vitally important to almost every type of business, whether

product or service oriented. Inventory control touches almost every facets if
operations. A proper balance must be struck to maintain proper inventory with the
minimum financial impact on the customer. Inventory control is the activities that
maintain stock keeping items at desired levels. In manufacturing since the focus is
on physical product, inventory control focus on material control.

“Inventory” means physical stock of goods, which is kept in hands for smooth and
efficient running of future affairs of an organization at the minimum cost of funds
blocked in inventories. The fundamental reason for carrying inventory is that it is
physically impossible and economically impractical for each stock item to arrive
exactly where it is needed, exactly when it is needed.

Inventory management is the integrated functioning of an organization dealing with

supply of materials and allied activities in order to achieve the maximum co-
ordination and optimum expenditure on materials. Inventory control is the most
important function of inventory management and it forms the nerve center in any
inventory management organization. An Inventory Management System is an
essential element in an organization. It is comprised of a series of processes, which
provide an assessment of the organization’s inventory. Inventory control or stock

18
 control can be broadly defined as "the activity of checking a shop’s
stock.’’ However, a more focused definition takes into account the more science-
based, methodical practice of not only verifying a business' inventory but also
focusing on the many related facets of inventory management (such as forecasting
future demand) "within an organisation to meet the demand placed upon that
business economically."Other facets of inventory control include supply chain
management, production control, financial flexibility, and customer satisfaction. At
the root of inventory control, however, is the inventory control problem, which
involves determining when to order, how much to order, and the logistics (where)
of those decisions.

An extension of inventory control is the inventory control system. This may come
in the form of a technological system and its programmed software used for
managing various aspects of inventory problems, or it may refer to a methodology
(which may include the use of technological barriers) for handling loss
prevention in a business.

2.1 Reasons for Keeping Inventories

1. To stabilize production:
The demand for an item fluctuates because of the number of
factors, e.g., seasonality, production schedule etc. The inventories (raw materials
and components) should be made available to the production as per the demand
failing which results in stock out and the production stoppage takes place for
want of materials. Hence, the inventory is kept to take care of this fluctuation so
that the production is smooth.
2. To take advantage of price discounts:
Usually the manufacturers offer discount for bulk buying and to gain this price

19
 advantage the materials is bought in bulk even though it is not required
immediately. Thus, inventory is maintained to gain economy in purchasing.
3. To meet the demand during the replenishment period:
The lead time for procurement of materials depends upon many factors like
location of the source, demand supply condition, etc. So inventory is maintained
to meet the demand during the procurement (replenishment) period.
4. To prevent loss of orders (sales):
In this competitive scenario, one has to meet the delivery schedules at 100 per
cent service level, means they cannot afford to miss the delivery schedule which
may result in loss of sales. To avoid the organizations have to maintain
inventory.
5. To keep pace with changing market conditions:
The organizations have to anticipate the changing market sentiments and they
have to stock materials in anticipation of non-availability of materials or sudden
increase in prices.
6. Sometimes the organizations have to stock materials due to other reasons like
suppliers minimum quantity condition, seasonal availability of materials or
sudden increase in prices.

2.2 Meaning of Inventory Control

Inventory control in Operations Management

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

order and how much to order and how much to stock so that costs associated with
buying and storing are optimal without interrupting production and sales. Inventory
control basically deals with two problems:

20
1. When should an order be placed? (Order level), and
2. How much should be ordered? (Order quantity).
These questions are answered by the use of inventory models. The scientific
inventory control system strikes the balance between the loss due to non-
availability of an item and cost of carrying the stock of an item. Scientific
inventory control aims at maintaining optimum level of stock of goods required by
the company at minimum cost to the company.

2.3 Objectives of Inventory Control

1. To ensure adequate supply of products to customer and avoid shortages as far as
possible.
2. To make sure that the financial investment in inventories is minimum (i.e., to
see that the working capital is blocked to the minimum possible extent).
3. Efficient purchasing, storing, consumption and accounting for materials is an
important objective.
4. To maintain timely record of inventories of all the items and to maintain the
stock within the desired limits.
5. To ensure timely action for replenishment.
6. To provide a reserve stock for variations in lead times of delivery of materials.
7. To provide a scientific base for both short-term and long-term planning of
materials.
2.4 Benefits of Inventory Control
It is an established fact that through the practice of scientific inventory control,
following are the benefits of inventory control:
1. Improvement in customer’s relationship because of the timely delivery of goods
and service.
2. Smooth and uninterrupted production and, hence, no stock out.

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3. Efficient utilization of working capital. Helps in minimizing loss due to
deterioration, obsolescence damage and pilferage.
4. Economy in purchasing.
5. Eliminates the possibility of duplicate ordering.

2.5 Techniques of Inventory Control

In any organization, depending on the type of business, inventory is maintained.
When the number of items in inventory is large and then large amount of money is
needed to create such inventory, it becomes the concern of the management to
have a proper control over its ordering, procurement, maintenance and
consumption. The control can be for order quality and order frequency. The
different techniques of inventory control are: (1) ABC analysis, (2) HML analysis,
(3) VED analysis, (4) FSN analysis, (5) SDE analysis, (6) GOLF analysis and (7)
SOS analysis. The most widely used method of inventory control is known as ABC
analysis. In this technique, the total inventory is categorized into three sub-heads
and then proper exercise is exercised for each sub-heads.
1. ABC analysis:
In this analysis, the classification of existing inventory is based on annual
consumption and the annual value of the items. Hence we obtain the quantity of
inventory item consumed during the year and multiply it by unit cost to obtain
annual usage cost. The items are then arranged in the descending order of such
annual usage cost. The analysis is carried out by drawing a graph based on the
cumulative number of items and cumulative usage of consumption cost.
2.HML analysis:
In this analysis, the classification of existing inventory is based on unit price of
the items. They are classified as high price, medium price and low cost items.

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3.VED analysis:
In this analysis, the classification of existing inventory is based on criticality of
the items. They are classified as vital, essential and desirable items. It is mainly
used in spare parts inventory.
4.FSN analysis:
In this analysis, the classification of existing inventory is based consumption of
the items. They are classified as fast moving, slow moving and non-moving
items.
5.SDE analysis:
In this analysis, the classification of existing inventory is based on the items.
6.GOLF analysis:
In this analysis, the classification of existing inventory is based sources of the
items. They are classified as Government supply, ordinarily available, local
availability and foreign source of supply items.
7.SOS analysis:
In this analysis, the classification of existing inventory is based nature of supply
of items. They are classified as seasonal and off-seasonal items. For effective
inventory control, combination of the techniques of ABC with VED or ABC with
HML or VED with HML analysis is practically used.

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 CHAPTER-3
RESEARCH AND METHODOLOGY
Research in a common parlance refers to a search for knowledge. One can also
define research as a scientific and systematic search for pertinent information on a
specific topic. Research is an art of scientific investigation. Research is an
academic activity and as such the term should be used in a technical sense. the
term research refers to systematic method consist of enunciating the problem
,formulating a hypothesis, collecting the data, analysis the facts and reaching
certain conclusion either in a form of solution towards the concerned problem or in
certain generalization for some theoretical formulation. The system of collecting
data for research projects is known as research methodology. Research
Methodology represents the design of the research work.

3.1 OBJECTIVES OF THE STUDY

To keep things in mind that as the ever changing competitive business

environment. New thoughts and ideas should pour into its, research and
development to innovate its existing products which should be beyond competitors
comprehension. This study enables the user with answer to formulate an effective
marketing mix strategy with a broader prospective to tap areas where it did not feel
the need earlier, hence the decision of whether to penetrate this section or not can
be found out at the data analysis. It also gives an idea of the potential of our
business in the future & the fluctuation in prices from time to time & from product
to product.

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  To learn how the company manage various levels of inventory within the
firm.
 To analyze changes in the stock of RM, WIP, FG.
 To study the various inventory ratio.
 To analyze the inventory management techniques used in the company.
 To study the Inventory Control Techniques of the company.

3.2 TYPES OF RESEARCH

Following are the types of research:

1. Basic Research: Basic research is mostly conducted to enhance knowledge.

It covers fundamental aspects of research. The main motivation of this
research is knowledge expansion. It is a non-commercial research and
doesn’t facilitate in creating or inventing anything. For example, an
experiment is a good example of basic research.

2. Applied Research: Applied research focuses on analyzing and solving real-

life problems. This type of research refers to the study that helps solve
practical problems using scientific methods. This research plays an
important role in solving issues that impact the overall well-being of
humans. For example, finding a specific cure for a disease.

3. Problem Oriented Research: As the name suggests, problem-oriented

research is conducted to understand the exact nature of the problem to find
out relevant solutions. The term “problem” refers to having issues or two
thoughts while making any decisions.
25
For example, Revenue of a car company has decreased by 12% in the last year.
The following could be the probable causes: There is no optimum production, poor
quality of a product, no advertising, economic conditions etc.

4. Problem Solving Research: This type of research is conducted by

companies to understand and resolve their own problems. The problem-
solving research uses applied research to find solutions to the existing
problems.

5. Qualitative Research: Qualitative research is a process that is about inquiry

,that helps in-depth understanding of the problems or issues in their natural
settings. This is a non- statistical research method .Qualitative research is
heavily dependent on the experience of the researchers and the questions
used to probe the sample. The sample size is usually restricted to 6-10
people in a sample. Open-ended questions are asked in a manner that one
question leads to another. The purpose of asking open-ended questions is to
gather as much information as possible from the sample.

6. Quantitative Research: Qualitative research is a structured way of

collecting data and analyzing it to draw conclusions. Unlike qualitative
research, this research method uses a computational statistical and similar
method to collect and analyze data. Quantitative data is all about numbers.

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Data sources Primary and Secondary
Data approaches Questionnaire
Sample size 50
Sample procedure Convenience sampling
Area of survey Delhi and NCR regions
Data analysis method Pie charts

3.3Sampling design:
I. Sample Unit:
We Checks comments of general public to know how much satisfied they
are from ZOPSHOP
II. Sample size:
The sample size of the report is 50 in numbers

3.4 Data collection method:

Primary data:
The primary data are those which are collected afresh and for the first time, and
thus happened to be original in character. There are several methods of collecting
primary data particularly in surveys.
For the study : Online Questionnaire method is used for collecting the data while
conducting the research.

27
Secondary data:
The secondary data are those which have already been collected by someone and
which have already been passed through the statistical process. Secondary data
may either be published data or un- published data.
For the study : Internet & Books are used for collecting the data while conducting
the research.

3.5 LIMITATIONS
 The study was done for a short period of time, which might not hold true in a
long run.
 The study is only limited to limited areas of Delhi and NCR.

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 CHAPTER-4
DATA ANALYSIS AND INTERPRETATION

Total Inventory
(figures in thousands)

Particular Apr 15 May 15 Jun 15 July 15 Aug 15 Sep 15

Total 693.52 749.27 762.16 77.69 727.43 844.26
Inventory
Value

Interpretation-
The above chart indicates the amount of inventory with the company.
The lower the amount the higher will be the profit but higher the amount the lower
will be profit. There is inverse relation between profit and inventory. From the
above chart it can be seen that in September 2014 the amount of inventory is
Rs. 844.26 due to which the profit also reduced and so the profit is low in
September 2014 total inventory is highest in the month of September and lowest in
the month April which indicate that there are higher profits in month of April and
in the month of September the profits are low.

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 Stock of Raw Material
(figures in thousands)

Particulars Apr 15 May 15 Jun 15 July 15 Aug 15 Sep 15

Raw 2.74 3.32 3.53 4.03 2.67 3.21
Material
Qty.
Raw 127.55 156.00 149.18 155.82 139.07 139.76
Material
Value

Interpretation- It can be clearly observed in the above chart that the quantity of
raw material has increased in the month of May i.e. 3.32 as compared to that of
April i.e. 2.74 and the amount has also increased which is highest as compared to
all other months.
In the month of July the qty has increased to 3.53 as compared to that of past 2
months but the amount has decreased to 149.18 as compared to last months. In the
month of July the qty of raw material is highest but in the month of august and
September the qty and the amount further decreased, but it can be observed that the
amount in the month of August and September is somewhat same i.e. 139.
When total expenditure on raw material is been taken into consideration it can
clearly observed that in the month of July the expenditure on inventory is highest
i.e. 627.95 due to which the company’s profit will decline as the company cannot
increase the price of products. Whereas the company’s profit will be highest in the
month of August as the expenditure on inventory is low i.e. 371.31 in that month.

30
 Work in Progress

(figures in thousands)

Particulars April May 15 Jun 15 July 15 Aug 15 Sep 15

15
Work in 6.77 7.78 7.67 8.99 7.80 9.86
Progress
Qty.
Work in 158.65 187.60 197.10 198.08 185.09 234.68
Progress
Value

Interpretation- Above chart represent that the qty of work in progress has
increased in month of May i.e. 7.78 as compared to that of April i.e. 6.77 and the
amount of also increased but in the month of June the qty went down to 7.67 but
the amount has increased to 197.10 as compared to that of past 2 months. In the
month of July the qty and the amt both increased but in the coming month i.e.
August the qty again went down to 185.09 so did the amount. But it can be seen
that the qty and the amt are the highest in the month of September i.e. 9.86 and
234.68 respectively as compared to that of past month.
When total work in progress are taken into consideration it is been observed that
the expenditure on work in progress is lowest in the month of august i.e. 1443.70
and highest in the month of September i.e.2313.94 which indicates that the profits
are highest in the month of August and lowest in the month of September.

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Inventory Net Assets Ratio:-

The formula for calculation of this ratio is given below:

Inventory Net Assets Ratio=Stock / Working capital

(figures in thousands)

Particular 2015-2016 2015-2016 2015-2016

Stock 618.43 654.94 721.82
Working 762.54 687.78 550.64
Capital
Inventory 0.81 0.95 1.31
Net Asset
Ratio

The above table is been represented with the help of chart:-

Interpretation:-
In the above table it is been observed that the inventory to net asset ratio is going
on increasing in the year 2011-12 it was 0.81 which increased to 0.95 in the year
2012-13 further it increased to 1.31 in the year 2014-15, which indicates that the
inventory net asset ratio has a upward moving slope

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Inventory Turnover Ratio:-

Inventory turnover is an efficiency ratio that shows how efficiently ratio that shows
how efficient inventory is managed by comparing sales with closing inventory for
a period. This measures how many times a company sold its total average
inventory rupee amount during the year.

The formula for calculation of theses ratio is given below:

Inventory Turnover Ratio = Net Sales/ Closing

Inventory

(figures in thousands)

Particular 2015-2016 2015-2016 2015-2016

Sales 4532.74 4688.54 4611.90
Closing 618.43 654.94 721.82
Inventory
Inventory 7.33 7.16 6.39
Turnover
Ratio

The above table is been represented with the help of chart:-

33
Interpretation:-

In the above chart it can be clearly observed that there is a downward slope in the
inventory turnover ratio i.e. inventory turnover ratio is going on decreasing year
after year in the year 2011-12 it was 7.33 which went down to 7.16 in the
year2012-13 further it decreased to 6.39 in the year 2013-14 which indicate that a
large amount of inventory is been purchased but the company is unable to sell
greater amount of inventory to improve its turnover, it will incur storage costs and
other holding costs.

Inventory Holding Period:-

This formula is used to determine how quick a company is converting their
inventory into sales.
The formula for calculation of theses ratio is given below:

Inventory Holding Period = 365 Days / Inventory

Turnover Ratio

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 (figures in thousands)

Particular 2015-2016 2015-2016 2015-2016

Days 365 365 365
Inventory 7.33 7.16 6.39
Turnover
Ratio
Inventory 49.80 50.98 57.12
Holding
Period

The above table is been represented with the help of chart:-

Interpretation:-
The above chart represent that days of inventory on hand is increasing year after
year in the year 2011-12 the inventory on hand was 49.80 days which increased to
50.98 days in the year 2012-13, where as in the year 2013-14 it went up to 57.12
days which is quite high as compared to past years which indicate that company is
not moving its inventory fast. This could be a sign of low demand for the products.

35
 CHAPTER-5
FINDINGS AND DISCUSSIONS

In review this internship has been an excellent and rewarding experience. I have
been able to meet and network with so many people that I am sure will be able to
help me with opportunity in the future.

1. The total inventory is highest in the month of September where as lowest in the
month of August

2. The qty of raw material is highest in the month of July where as lowest in the
month of August, but the amount of raw material is lowest in month of April and
highest in the month of May

3. When total expenditure on raw material is taken into consideration profit is

lowest in the month of July and high in the month of August.

4. The qty of work in progress is lowest in the month of April and highest in the
month of Sep., but the amount of work in progress is also lowest in the month of
April and in the month of Sep.

5. When total expenditure on work in progress is taken into consideration profit is

lowest in the month of September and high in the month of August.

6. The qty of finished goods is lowest in the month of April and highest in the
month of Sep. but the amount is lowest in Aug. and the highest amt in the month of
September.
36
7. When total expenditure on finished goods is taken into consideration profit is
lowest in the month of April and high in the month of September.

8 .Company has purchased large amount of inventory but it is unable to sell greater
amount of inventory to improve its turnover, which incur storage costs and other
holding costs.

9. Company is not moving its inventory fast. This could be a sign of low demand
for the products.

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 CHAPTER-6

CONCLUSION

In any business, make it big or small, we must understand that taking good care of
our inventory is very important. If we as managers do not understand the concept
of good inventory management, we must learn to be familiar with it and its
applications. One of the reasons for the failure of a business is its inventory
management. There are many ways to fight failure, and we can do is start from
here. There are new technology that can help us maintain and supervise our
inventory. What we can do is learn, implement and evaluate our business. And you
can start with your INVENTORY.

ZOPSHOP has truly changed the face of e-commerce and online sellimg..
ZOPSHOP is both a philosophy and collection of management methods and
techniques used to eliminate waste (particularly inventory)
The company’s Inventory management is effective, company should make a
classification of its inventory in minimum categories.

38
 CHAPTER-7
RECOMMENDATION AND SUGGESTIONS

Consider inventory optimization tools

Inventory optimization tools have been gaining ground as companies seek to

evaluate their entire network and determine the best inventory policies for each
product at each node in their supply chain. There are typically stand-alone software
tools that use data from WMS and ERP systems.

 Employ business solutions that use real-time analytics under one

Powerful sales and operations planning solutions are now using real-time analytics
that take a unified data model of demand, supply chain and financial data, analyze
them at any level of granularity and instantly provide responses.
 Don’t treat all SKUs the same

There is no such thing as a one-size-fits-all solution. “Each and every product does
not have the same supply and demand variability patter”. Focus on those 20% that
statistically make up 80% of the volume and manage that inventory really well, so
you maximize sales and profits

 Keep an eye on your suppliers

There are suppliers that don’t necessarily stick to their schedule or deliver on their
commitments

39
  Track essential attributes

Over the past few years, tracking product genealogy and traceability are at the top
of inventory managers must-have lists.

 Leverage mobile devices

Mobile devices allow quick access to accurate information and data so that
managers can act quickly on their inventory decisions.

 Be smart about your slow-moving and obsolete items

While it makes sense to focus on your more profitable fast movers, you can’t
ignore your slower-moving merchandise

 Lastly, don’t neglect slotting

Proper slotting not only delivers much needed space, but appropriately locates the
fastest-moving items closer to docks and more accessible locations, minimizing
travel distance and maximizing overall throughput and productivity. Unfortunately
many companies tend to neglect their slotting.

40
 BIBLIOGRAPHY

 Books
M. Pandey, Financial Management, Vikas Publishing Pvt, Ltd, (9th Edition) Pg
no: 524, 525, 624 to 63

 Websites
 http://www.jkfilesandtools.com
 http://www.google.com
 http://www.raymond.in
 http://www.moneycontrol.com
 http://www.slideshare.net
 http://www.wikipedia.com

41
 ANNEXURE

Q1.Do you shop online?

Yes
No

Q2.Which do you prefer, shopping online or in stores?

Online shopping
Shopping in stores

Q3.How often do you shop online?

Extremely often
Moderately often
Slightly Often
Not at all

Q4.How much do you typically spend on online shopping per month?

£0-100
£101-200
£201-300
£301-400
£401-500
£500+
Q5.What types of products do you usually buy online?
Books/Magazines
Food

42
 Computer Software
Makeup
Music, CDs
Videos/DVDS
Games/ Video games
Home electronics
Travel (Hotels, holidays etc.)
Clothing
Tickets (Movies, concerts, theatres etc.)
Services (legal, insurance etc.)

Other, please specify:

Q6.What are the top 5 clothing items your purchase online?.

Jeans
Shoes
T-Shirts
Polo Shirts
Dress
Accessories (Belts, watches, bags, etc.)
Suits
Jackets/Coats
Swimwear
Sportswear
Lingerie
Nightwear
Skirts

43
 Shorts
Leggings/Trousers
Underwear
I purchase clothes in-store exclusively

Q7.Which online websites do you usually use?

Amazon
Ebay
ASOS
AliExpress
Topshop
Debenhams
Miss Guided
Boohoo
Dorethy Perkins
Selfridges
Harrods
Next
Etsy
Argos

Q8.Please tell us if you agree or disagree with each of the following statements
Strongly Strongly
Disagree Agree
Disagree Agree

Online shopping is convenient to shop

44
 Strongly Strongly
Disagree Agree
Disagree Agree

Online shopping has a wider variety

Online shopping has cheaper goods

Online shopping saves time and energy

Online shopping delivers your goods to

your home without the need for travel

Online shopping can be done from the

comfort of your own home/anywhere

Q9.What are the disadvantages of online shopping? Please tell us if you agree
or disagree with each of the following statements
Strongly Strongly
Disagree Agree
Disagree Agree

Security concerns surrounding

payment by credit card over the
Internet

Not being able to physically inspect

the goods before purchase

Q10.How comfortable are you with shopping online?

Extremely comfortable

45
 Quite comfortable
Moderately comfortable
Not at all comfortable

Q11.How comfortable are you about your personal information being kept
confidential when buying products online?
Extremely comfortable
Quite comfortable
Moderately comfortable
Not at all comfortable

Q12.Do you have to fill in card details every time you shop online or does it do
it automatically
Yes - I set all sites to remember my payment details
Yes - I set most sites to remember my payment details
Yes - I set some sites to remember my payment details (but not most)
Yes - but I have only one site set to remember my payment details
No - no sites are set to remember my payment details
Q13.Are you confident that your payment information is kept secure?
Extremely confident
Quite confident
Moderately confident
Not at all confident

Q14.Do privacy concerns stop you from online shopping?

Yes

46
 No
Sometimes
*Next step for the respondent : Next Page

Q15.Which payment method do you usually use when purchasing products

online?
PayPal
Credit Card
Debit card

Other, please specify:

47