SYNOPSIS

“A STUDY ON INVENTORY MANAGEMENT AT ANDHRA PRADESH

SOUTHERN POWER DISTRIBUTION COMPANY LTD, TIRUPATHI

Internal guide presented by External Guide

Mr. S.Raja MBA (Ph.D.) T.Charan Kumar Reddy. Ms.A.Radha Jayasree,
Associate Professor 3rd Semester Joint secretary/HRD
Accord Business School Accord Business School. APSPDCL, TIRUPATI

INTRODUCTION:
MEANING:
The dictionary meaning of word inventory is “ detailed list of movable goods “But in
management inventory is used to designate the aggregated of those items of tangible
property, which are held for sale ordinary course of business thus the inventory Means
stock of items kept in reserve for certain period of times. It includes raw materials,
Maintenance of equipment, etc.

DEFINTION:
John Hampton treats inventories, as “locked, up capital”. Inventory measured by Rupee value
constitutes the major element in the “working capital” (approximately 60%of current assets)
‘good inventory management is nothing but good financial management “According to
S.C.KUCHAL
INDUSTRY PROFILE:
Power is an important tool for economic growth of the country. Power is vital for every form
of human activity-domestic, agriculture and industrial infrastructure such as
telecommunication and transport. The demand for electricity in India is enormous and is
growing steadily. The growth has been slower than country’s economic growth. The big
challenge in front of the power industry is to balance the demand and supply of electricity.
There exists a link between economic growth and per capita consumption of electricity.
COMPANY PROFILE:

 NAME : APSPDCL
 HEAD QUARTER : Tirupati
 INCORPORATED : 1956
 KEY PEOPLE :Mr.H.Haranatha Rao
Mr.M.venkatesulu
Mr.K.Sitharamaraju
 BRANCHES. : Chittoor, Kadapa, Krishna, Prakasam,Nellore.

REVIEW OF LITERATURE:
In financial parlance, inventory is defined as the sum of the value of raw materials, fuels and
lubricants, spare parts, maintenance consumables, semi-processed materials and finished
goods stock at any given point of time. The operational definitions of inventory would be;
the amount of raw materials, fuel and lubricants, spare parts and semi-processed material to
be stocked for materials management department is expected to provide this operational
convenience with a minimum possible investment in inventories. The objectives of inventory
operational and financial, needless to say, are conflicting. The materials department is
accused of both stock-outs as well as large investment in inventories. The solution lies in
exercising a selective inventory control and application of inventory control techniques the
smooth running of the plant. Since these resources are idle when kept in stores, inventory is
defined as an idle resource of any kind having an economic value

RESEARCH METHODOLOGY:
Sources of Data
Both primary and secondary data were used to obtain the required information.
Methodology of Data Collection

The methodology involves collection of data from primary and secondary sources.
The data so collected id subjected to analysis using the necessary tools that are relevant.
Inference is drawn incorporating both quantitative and qualitative data available at the
research disposal. Based on inferences, conclusions are drawn and recommendations are
made to enhance the study on inventory management of APSPDC LTD, Bangalore complex.
The relevant to the study was collected through both primary and secondary data.

Primary Data

It is nothing but discussion with higher authorizes and various managers regarding the
procedures of receiving and issuing to stock and other functions performed by them in the
organization and personal visits to the stores department. An interview schedule also helped
in the collection of data.

Secondary Data

Secondary data was collected from magazine, journals, APSPDCL official website,
records of the company and annual reports.

 Secondary data is collected from different published sources.

 Collection of data through company annual reports, company manuals and other
relevant documents.
 By textbooks, journals &websites.
Collection of data through the literature provided by the company.
NEED FOR THE STUDY

 To study the inventory management in APSPDCL

 To study the techniques followed for inventory management
 To study the clarification of inventory & suggest the good inventory methods of
inventory management
OBJECTIVE OF THE STUDY

 To know inventory turnover position of the APSPDCL.

 To understand and measure Economic Order Quantity and ABC analysis for the
inventory.
 To analyse the efficiency of inventory management of APSPDCL

SCOPE OF THE STUDY:

 The scope is limited to the operation of APSPDCL.
 The study is based on the inventory management of APSPDCL.
 The study is related which various aspects of inventories
LIMITATIONS OF THE STUDY:
 Detail study about all the material was not possible because of time limit.
 Some of the information was kept confidential by the stories department.
 Study was confined only to the selected components in the stores department
DATA ANALYSIS AND INTERPRETAION:
ECONOMIC ORDER QUANTITY FROM (2013-14TO 2017-18)

S NO DESCRIPTION 2013-14 2014-15 2015-16 2016-17 2017-18

1 IRON 281 317.64 312 365 311
2 COPPER 39 38.73 156 62 239
3 CABLE 214 212.11 327 229 273
WIRES
4 CERAMIC 12 38.99 52 37 26
5 ALUMINIUM 223 343.27 209 223 233

FINDINGS:
The growing competition and technological developments in this sector are having
inevitable effects on the Indian machine tool industry as a whole. The APSPDC machine tool
limited is facing typical problems in the emerging globalization scenario as under:

 It is found that, there is a variation in the EOQ & no. of unit purchased. It is understood that
the company is following EOQ for purchasing the materials. So, the inventory management is
satisfactory.
 From calculation of safety stock, we can able to determine how much the company can hold
the inventory in reserve stock per annum.
 From the classification A classes are those whose unit value is more than Rs.100 and
constitutes 45% of total components. B classes are those whose unit value is between Rs.25-
 100 constitutes 35% of total components and C classes are those whose unit value is less than
Rs.25 constitutes 30% of total components. It is good that the company maintains its
inventories based in its value using controlling techniques.

SUGGESTIONS:
 The company must not go to the Non moving items as far as possible, because there
will be unnecessary blocking of working capital. This would hinder the other
activities of the organization. According to EOQ, as the company follow EOQ for its
purchasing, the company can be adjusted to order material. This will reduce the cost
& help to enhance the profit of the company.
 The company is required to maintain safety stock for its components in order to avoid
stock- out conditions & help in continuous Distribution flow.
 Under ABC analysis, the management must have more control on A than B&C,
because A class constitutes more (45%0 of higher values. There should be tight
control exercised on stock levels, to avoid deterioration. This is done through
maintaining low safety stock, continuous check on schedules & ordered frequently in
inventories, in order to avoid over investment of working capital.
 The past data shows increase in inventory the company is also expecting more
inventories for future period i.e.2014. the management is required to maintain the
same inventory trend in the fourth coming year also.

CONCLUSION:
A better inventory management will surely be helpful in solving the problem the company
is facing with respect to inventory and will have way for reducing the huge investment or
blocking of money in inventory. From the analysis we can conclude that the company can
follow the Economic Order Quantity (EOQ) for optimum purchase and it can maintain safety
stock for its components in order to avoid stock out conditions &help in continuous
Distribution flow. This would reduce the cost and enhanced the profit. Also there should be
tight control exercised in stock levels based on ABC analyses for efficient running of the
inventory.