Research Project Report

On
“A Study on Inventory Management”

Submitted in partial fulfilment for the

requirement of the award of Post-graduate
Degree of Masters of Business
Administration
(Batch 2016-17)

Submitted by: Supervisor:

Mohd Faisal Ms. Shweta
MBA IV Semester Assistant Professor
Roll N0: 150702530400036 AVGSIMC

Submitted to:
Acharya Vishnu Gupt Subharti Institute of Management & Commerce
SWAMI VIVEKANAND SUBHARTI UNIVERSITY, MEERUT

1
 DECLARATION

I hereby declare that the Research Project report titled ‘A Study on Inventory
Management’ submitted to Acharya Vishnu Gupt Subharti Institute of Management &
Commerce, SVSU, Meerut(UP) in the partial fulfilment for the award of MBA in session
2015-16 is an authentic record of my work.

I declare that the work has not been submitted for the award of degree or diploma
anywhere else.

Mohd Faisal
Roll No. 150702530400036
Date: / 07/2017
Place:
AVGSIMC
 ACKNOWLEDGEMENT

We have immense pleasure in successful completion of this work titled “REPORT

PROJECT ON INVENTORY MANAGEMENT” I owe a lot to my college, the special
environment at AVGSIMC, Meerut that always supported educational activities, facilitated
my work on this project.

I offer my profound gratitude to my project mentor Ms. Shweta for giving me elderly
affection and practical wisdom that enabled me to complete my project.

I have derived the contents and approach of this study paper through discussions with
company workers and internet as well as with the help of various Books, Magazines and
Newspapers etc.

I would like to give my sincere thanks to all those who helped me enormously including my
parents. Apart from this, I hope this study would stimulate the need of thinking and
discussions on the topics like this one.
 ABSTRACT

Every organization needs inventory for smooth running of its activities. It 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 undertakings. Thus,
it is very essential to have proper control and management of inventories. The purpose of
inventory management is to ensure availability of materials in sufficient quantity as and when
required and also to minimise investment in inventories. Raw materials, goods in process and
finished goods all represent various forms of inventory. Each type represents money tied up
until the inventory leaves the company as purchased products. Because of the large size of the
inventories maintained by firms, a considerable amount of funds is required to be committed
to them. It is therefore absolutely imperative to manage inventories efficiently and effectively
in order to avoid unnecessary investments. A firm neglecting the management of inventories
will be jeopardizing its long run profitability and may fail ultimately. The reduction in
excessive inventories carries a favorable impact on the company’s profitability.
The study starts with an introduction to inventory management, Company’s
profile, its Vision & Mission, Achievements and also the need for study, review of literature
and objectives are set out for the study. Research methodology, Data analysis & Interpretation,
Findings and Suggestions of the study follow.
One of the main areas of the project is the analysis part, where the data are
analysed & interpreted, to find out how the inventories were managed. Some of the tools used
in inventory are regarding to:
 Economic Order Quantity
 Safety Stock
 ABC Analysis
 FSN Analysis
 Trend Analysis and
 Inventory Turnover Ratio.
And then conclusions, limitations & scope for further study were discuss .
 CONTENTS

CHAPTER TITLES PAGE NO.

INTRODUCTION 6
PROBLEM DEFINITION 13
I
OBJECTIVE OF THE STUDY 14
NEED FOR THE STUDY 15

II COMPANY PROFILE 16

III LITERATURE REVIEW 29

IV RESEARCH METHODOLOGY 41

V DATA ANALYSIS AND INTERPRETATION 44

FINDINGS 56
VI
SUGGESTIONS 57

VII CONCLUSION 58

VIII LIMITATION 59

IX BIBLOGRAPHY 60

QUESTIONNAIRE 61
X
PLAGIARISM 64
 CHAPTER I

1.1 INTRODUCTION

Inventory control is a major element of an efficient operations for any business that
buys and resells goods. Typical goals of inventory management include maintaining low
inventory holding costs while also meeting all customer demand for goods. Many companies
rely on computer software programs for inventory management.
“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
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.
Inventories constitute the most significant part of current assets of a large majority of
companies in India. On an average, Inventories are approximately 60% of current assets in
public limited companies in India. Because the large size of inventories maintained by firms, a
considerable amount of feuds is required to be committed to them. It is therefore, absolutely
imperative to ménage inventories efficiently and efficiently in order to avoid unnecessary
investment. A firm neglecting the management of inventories will be jeopardizing its long run
profitability and may fail ultimately. It is possible for fore a company to reduce its levels of
inventories to a considerable degree e.g. 10 to 20 percent, without any adverse effect on
production and sales, by using simple inventory planning and control techniques. The
reduction in excessive inventory carries a favorable impact on a company’s profitability.
Organizations are keen to managing inventory as a step towards minimizing
operational costs. In order for an organization to survive and be effective in a meeting their
market demand, the organization must be cognizant of its supply chain management for better
performance and sustained survival. Inventory management aims at efficient purchasing,
storage and use of the materials. Inventory management practices plays a major role in the
operations of many business and many companies. In manufacturing, inventories of raw
materials allow companies to operate independently of their sources of supplies.
The optimum inventory level lies between the inadequate inventories. Competitiveness
is a strategy that defines the set of customer needs that it seeks to satisfy through its product
and services. Competitive strategy targets one or more customer segments and aims to provide
products and services that will satisfy these customers needs. Inventory management involves
ensuring a constant supply of stock to avoid stock out and have uninterrupted sales and
efficient customer service, maintaining sufficient stock, controlling investment in inventories
by keeping at an optimum level of production while minimizing carrying cost and time. The
objective of inventory management is to insure sufficient level of stock which maintains and
acceptable level of available demand while minimizing the related holding, administrative and
stock out cost. Several activities and undertaken within the sphere of inventory management
these includes purchasing, classification, inspection, codification, store keeping, competition
in the current markets which has led to the need for coming up with better methods of
managing and measuring how resources are utilized by various jobs or products, and therefore
eliminate any wastage into supply chain.

Meaning of inventory
Inventory is a physical stock of goods maintained in an organization for its smooth
sunning. In accounting language it may mean stock of finished goods only. In manufacturing
concern, it may include raw materials, work in progress and stores etc. in the form of material
and supplies to be consumed in the production process or in the rendering of services. In brief,
inventory is unconsumed or unsold goods purchased for manufactured.

Nature of inventories
Inventories are stock of the product a company is manufacturing for sale and
components that make up the product. The various forms in which the inventory exist in a
manufacturing company is a raw materials, work in progress and finished goods.
Management of inventory assumes importance due to the fact that investments in inventory
constitutes one of the major investments in current assets.
The term inventory refers to the stockpile of the products a firm is offering for sale and the
components that make up the product. The assets which firms store as inventory in
anticipation of need are:
1. Raw material
Raw materials are those inputs which are converted into finished goods product
though the manufacturing process. Raw materials inventories are those units which
have been purchased and stored for future consumption or for future production of
goods.
2. Work in progress
These inventories are semi manufactured products or units. They represents
product that need more work before they become finished product for sales.
3. Finished goods
Finished goods inventories are those completely manufactured products which
are ready for sale. Stock of raw materials and work in progress facilitate production.
While stock of finished goods required for smooth marketing operations. Thus,
inventories serve as a link between the production and consumption of goods.
The levels of three kinds of inventories for a firm depend on the nature of the
business. A manufacturing firm will have very high and no raw material and work in
progress inventories. Within manufacturing firms, there will be differences. Large
heavy engineering companies produce long production cycle products, therefore they
carry large inventories. On the other hand, inventories of a consumer product company
will not be large, because of short production cycle and fast turn over. Firms also
maintain a fourth kind of inventory, supplies or store and spares.
4. Supplies
It includes office ad plant cleaning materials like soap, brooms, oil, fuel,
light, bulbs etc. These materials do not directly enter production, but are
necessary for production process. Usually, these supplies are small part of the
total inventory and do not involve significant investment. Therefore, a
sophisticated system of inventory may not be maintained for them.
 MANAGEMENT OF INVENTORY

Inventories constitute the principal item in the working capital of the majority of trading and
industrial companies. In inventory, we include raw materials, finished goods, work in
progress, supplies and other accessories. To maintain the continuity in the operations of
business enterprise, a minimum stock of inventory required. However, the physical control of
inventory is the operating responsibility of stores superintendent and financial personal have
nothing to do about it but the financial control of these inventories in all lines of activity in
which they comprise a substantial part of the current assets is the frequent problem in the
management of working capital. Management of inventory is designed to regulate the volume
of investment in goods on hand, the types of goods carried in stock to meet the needs of
production, and sales while at the same time, the investment in then is to be kept at reasonable
level.

CONCEPT OF INVENTORY MANAGEMENT

The term inventory management is used in two ways unit control and value control.
Production and purchase official used this word in term unit control where as in accounting
this word is used in term of value control. As investment in inventory represents in many
cases, one of the largest assets item of business enterprises particularly those engaged in
manufacturing, wholesale trade and retail trade. Sometimes the cause of material used in
production surpasses the wages and production over head. Hence, the proper management and
control of capital invested in the inventory should be the prime responsibility of the
accounting department because resources invested in inventory are not earning a return for the
company. Rather, on the other hand, they are costing the firm money both in terms of capital
cost being incurred and loss of opportunity income that is being foregone.

OBJECTIVES OF INVENTORY MANAGEMENT

The basic managerial objective of inventory control are two fold, first the avoidance
overinvestment or under investment in inventories and second to provide a right quantity of
standard raw material to the production department at the right time. In brief, the objectives of
inventory control may be summarized as follows:
A. Operating objectives:

1) Insuring availability of material: There should be a continuous availability of all

types of raw materials in the factory so that the production may not be help up wants
of any material. A minimum quantity of each material should be held in store to permit
production to move on schedule.

2) Avoidance of abnormal wastage: there should be minimum possible wastage of

materials while these are being stored in the godowns or used in the factory by the
workers. Wastage should be allowed upto a certain level known as the normal
wastage. To avoid any abnormal wastage, strict control over the inventory should be
exercised. Leakage, theft, embezzlements of raw material and spoilage of material due
to rust, bust should be avoided.

3) Promotion of manufacturing efficiency: If the right type of raw material is

available to the manufacturing department at the right time there manufacturing
efficiency is also increased. Their motivation level is rises and moral is improved.

4) Avoidance of out of stock danger: information about availability of materials should

be made continuously available to the management so that they can do planning for
procurement of raw materials. It maintains the inventories of the optimum level
keeping in view the operational requirement. It also avoids the out of stock danger.

5) Better service to customer: sufficient stock of finished goods must be maintained too
much reasonable demand of the customers for prompt execution of their orders.

6) Highlighting slow moving and obsolete items of materials

7) Designing poorer organization for inventory management: clear cut

accountability should be fixed at various levels of organization.

B. Financial objectives:
 1) Economy in purchasing: a proper inventory control bring certain
advantages and economy in purchasing also every attempt has to make to
affect economy in purchasing through quantity and taking advantage to
favorable markets.

2) Reasonable price: while purchasing materials, it is to be seen that right quality

of material is purchased at reasonably low price. Quality is not to be sacrificed
at the cost of lower price. The material purchased should be of the quality
alone which is needed.

3) Optimum investing and efficient use of capital: the basic aim of inventory
control from the financial point of view is the optimum level of investment in
inventories. There should be no excessive investment in stock, etc. investment
in inventories must not tie up funds that could be used in an other activity.
The determination of maximum and minimum level of stock attempt in this
direction.

TYPES OF INVENTORY

1. Movement inventories:- movement inventories are also called transit or pipeline

inventories. Their existence owes to the fact that transportation time is involved in
transferring substantial amount of resource.
2. Buffer inventories:- in buffer inventories are held to protect against the uncertainties
of demand and supply. An organization generally knows the average demand for
various items that it needs.

3. Anticipation inventories:- anticipation inventories are held for the reason that future
demand for the product is anticipated. Production of specialized items like crackers
well before dewily, umbrellas and rain coats before taints sets in, fans while summers
are approaching; or the pilling up of inventory stocks when strikes is on the anvil, are
all examples of anticipation inventories.

Inventory is a central process in Manufacturing Unit. This inventory is concerns to

all departments i.e., from Planning Department to selling Department in which it
passes through Production Department, HR Department, Logistics Department,
Finance Department, Costing Department, and Commercial Department etc. So
managing of inventory is having wide scope in manufacturing company.

Therefore, every organization needs inventory for smooth running of its activities. It
serves as a link between production and distribution processes. The investment of
inventories constitutes the most significant part of current assets/ working capital in
most of the undertakings. Thus, it is very essential to have proper control and
management of inventories.

The purpose of inventory management is to ensure availability of materials in

sufficient quantity as and when required and also to minimize investment in
inventories. Raw material, goods in process and finished goods all represent various
forms of inventory. Each type represents money tied up until the inventory leaves the
company as purchased products. Because of the large size of the inventories
maintained by firms, a considerable amount of funds is required to be committed to
them. It is therefore absolutely imperative to manage inventories efficiently and
effectively in order to avoid unnecessary investments. A firm neglecting the
management of inventories will be jeopardizing its long run profitability and may fail
ultimately. The reduction in excessive inventories carries a favorable impact on the
company’s profitability.

The study starts with an introduction to inventory management, Company’s profile,

Achievements and also the need for the study, review of literature and objectives are
set out for the study. Research methodology, Data analysis and interpretation, Findings
and Suggestions of the study follow.
Statement of the problem

Inventory constitutes the most significant part of current assets in any organization
and because of the relative largeness of inventories maintained by most organization: a
considerable sum of an organization fund is being committed of them. According to Dimitrios,
inventories management practice has come to be recognized as a vital problem area needing
top priority. For tangible result on sustained the basic cause at root of the problem need to be
identified and tackled with efficiency. Inventory management practice this deserve utmost
attention. The reason of carrying inventory management practice is to unsure regular supply of
materials as and when required. In sufficient inventories hamper production process and
mitigate sale volume. On the other hand Rajeev (2010) denote the excessive inventories tie up
working capital and boost up carrying cost.
In most organization direct material represent upto 50% of the total product cost as a result of
the money and trusted on inventory there by affecting the profitability of the organization
according to sender Matthias and Geoff (2010) historically however organization ignored the
potential saving from proper inventory management treating inventory as a necessary evil and
not as a assets requiring management. As a result many inventory systems are based on
arbitrary rules. Inventory management according to on Onyango (2013) is a fundamental clerk
in a organization and it should be taken seriously. Some of the goods and services required
may not be readily available within the country thus global sourcing may have to be applied.
Due to this a robust inventory management is required to be in plays to insure timely delivery
and quality standard are observed.
 1.2 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE

 To analyze the efficiency of Inventory Management of Whirlpool of India Ltd.

SECONDARY OBJECTIVE

 To identify optimum level of inventory which minimizes the cost.

 To identify the safety stock level for various components.
 To classify the various components based on its value and movements.
 To identify inventory requirement of the company for the next year.
 1.3 NEED FOR THE STUDY

Every organization needs inventory for smooth running of its activities. In any
business or organization, all functions are interlinked and connected between each other and
are often overlapping. Some key aspects are logistics, supply chain and inventory are the
backbone of the business. Therefore these functions are the most important functions of the
business. Inventory management is one of the more important functions of the business or
organizations it helps the supply and demand of the product. It 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 undertakings. Thus, it is very
essential to have proper control and management of inventories. The purpose of inventory
management is to ensure availability of materials in sufficient quantity as and when required
and also to minimize investment in inventories. So, in order to understand the nature of
inventory management of the organization, I took this Inventory Management as a topic for
my project, to give findings and suggestions by adopting and analyzing different inventory
control techniques.
Inventory is always dynamic. Inventory management requires constant and careful
evaluation of external and internal factors and control through planning and review. Most of
the organizations have a separate department or job functions called inventory planners who
has to monitor continuously and control inventory and interface with production procurement
and finance departments.
 CHAPTER II

COMPANY PROFILE

1.2.1 WHIRLPOOL CORPORATION

Whirlpool Corporation is an American multinational world’s leading manufacturer

and marketer of home appliances. The company manufactures in 13 countries on 4 continents
name :-- Mexico, France, Canada, Sweden, Germany, South Africa, Brazil, Argentina, United
States, Italy, Slovakia , China and India and markets products in more than 170 countries
under major Brands (26 including Affiliates) names such as Whirlpool, Kitchen Aid, Crolls,
Estate, Bauknechts, Gladiator Garage work, Laden, Inglis, Brastemp , Roper, Hotpoint,
Amana and Consul. Headquater is in Benton charter township of michingan, united states. In
the U.S.,whirlpool has eight manufacturing facilities: Amana, Lowa ;Tulsa, Okalama;
Cleveland, Tennessee; Clyde, Ohio; Findlay, Ohio; Greenville, Ohio; Marion, Ohio and
Ottawa, Ohio. Whirlpool is also the principal supplier to Searo, Roebuck. Whirlpool
Corporation is the world’s leading manufacturer and marketer of home appliances. Washing
Machines, Micro-wave Ovens, Refrigerators, Dryer, Cookers , Dish-washers, Freezers, Room
air-conditioners, Small Kitchen Appliances, etc.,

Whirlpool of India Limited, a fully owned by Whirlpool Inc, US, ($20.9 billion
2015), a leading global consumer durable player. Whirlpool of India limited marketers and
manufactures of home appliances. The company has diversified its product range into Air
Conditioners and Microwave Ovens. The growth in the consumer durable industry has slowed
down due to lack of demand. The year 2000 has been a bad year for the industry as the overall
growth was flat. The refrigerators registered a flat growth; washing machines saw a negative
growth while the air conditioner segment performed well exhibiting a growth rate of 20%.
Whirlpool Corporation has a management system called WES (Worldwide Excellence
System) and a value to aged performance system called HPC (High Performance Culture),
which drives, are the actions and initiatives of unit.

1.2.2 WHIRLPOOL CORPORATION TODAY

 BUILDING CUSTOMER LOYALTY WORLDWIDE

Whirlpool Corporation arrived in the new century and millennium as the world’s
leading manufacturer and marketer of major home appliances. Today, Whirlpool’s global
platform provides our operations with resources and capabilities no other manufacturer can
match and with brands that consumers trust.
To sustain the productivity savings that is being achieved by our operations, they
have embedded their Operational Excellence Process - based on Six-Sigma and lean
manufacturing skills and capabilities - within each of their worldwide manufacturing facilities.
The company’s global information technology organization provides Internet tools that cut the
complexity and costs of doing business for Whirlpool and its trade partners. Whirlpool’s
unique global platform allows the company to transfer key innovations and processes across
regions and brands. Based on the continuing success of the company’s global innovation
process, which began in 1999, Whirlpool has introduced unique product innovations to
consumers worldwide.
Inspired by their bold innovations and designs, increasing numbers of customers
around the globe are trusting Whirlpool to make their lives easier. More than ever before,
Whirlpool Corporation employees and brands are connecting with customers in ways that will
last a lifetime.

 IMPROVING FUNCTION AND PERFORMANCE

 At Whirlpool Corporation, They take pride in the quality of appliances to market and
manufacture. Their commitment to quality begins in the concept stages and continues
throughout the lifetime of the appliance. They are committed to building products that
consumers around the world can depend on to meet their daily needs. They are constantly
seeking out new and unique ways to improve the function, performance and sustainability of
our products. They want our brands to be the brands customers trust in every home …
everywhere.

1.2.3 (a) HISTORY OF WASHING MACHINE

Ancient peoples cleaned their clothes by pounding them on rocks or rubbing them with
abrasive sands and washing the dirt away in local streams. Evidence of ancient washing soap
was found at Sapo Hill in Rome, where the ashes containing the fat of sacrificial animals was
used as soap.

The earliest washing machine was the scrub board invented in 1797. American, James
King patented the first washing machine to use a drum in 1851, the drum made King's
machine resemble a modern machine, however it was still hand powered. In 1858, Hamilton
Smith patented the rotary washing machine. In 1874, William Blackstone of Indiana built a
birthday present for his wife. It was a machine, which removed and washed away dirt from
clothes. The first washing machines designed for use in the home. Mighty Thor was the first
electric powered washing machine. Introduced in 1908 by The Hurley Machine Company of
Chicago, Illinois introduced the first electric-powered washing machine (the Thor) in 1908.
The inventor of the Thor machine was Alva J. Fisher. The machine was a drum type with a
galvanized tub and an electric motor, for which a patent was issued on Aug. 9, 1910. View
patent number #966677.

The Whirlpool Corporation started in 1911 as the Upton Machine Company., founded
in St. Joseph, Michigan, to produce electric motor-driven wringer washers. US electric
washing machine sales increased after World War I, reaching 913,000 units in 1928. The main
reason why so many people bought the washing machine was because it saved people lots of
time in domestic tasks, and the result was that society's expectations for cleanliness went up.
 In 1951, production of Europe's first automatic washing machines started. In 1978, the
first microchip-controlled automatic washing machines were produced. Washer design
improved markedly during the 1930s; the mechanism was now enclosed within a cabinet;
more attention was paid to electrical safety; spin dryers were introduced, to replace the
dangerous power wringers of the day.

Bendix was an American manufacturing and engineering company. who introduced

the first automatic washing machine in 1937, having applied for a patent in the same year.
General Electric introduced the first top loading automatic also in 1947. This machine had
many of the features that are incorporated into modern machines. A large number of US
manufacturers introduced competing automatic machines (mainly of the top loading type in
the late 1940’s early 1950s. Several manufacturers even produced semi-automatic machines,
where the user had to intervene at one or two points in the wash cycle.

In the UK, electric washing machines did not become popular until the 1950s. The
early electric washers were single tub, wringer-type machines, automatic washing machines
being extremely expensive. During the 1960s, twin tub machines briefly became very popular,
helped by the low price of the Rolls Razor washers. In the late 1990s, the British inventor
James Dyson launched a type of washing machine with two cylinders rotating in opposite
directions; which, it is claimed, reduces the wash time and produces cleaner results; however,
this machine is not currently in production.

1.2.3 (b) HISTORY OF WHIRLPOOL

 1911 Louis Upton founded the Upton Machine in this year to produce motor-driven
wringer washers.

 1916 First order of washers was sold to Sears, Roebuck & Co.

 1929 Upton Machine Company merged with Nineteen Hundred Washer Company of
New York.
 1948: First 'Whirlpool' brand automatic washer with dual distribution was introduced.
It included two product lines one each was distributed through Sears and Nineteen
Hundred.

 1957: The Company was rechristened as ' The Whirlpool Corporation.'

 1958: the Company moved out of country for the first time and invested in Brazilian
appliance market through purchase of equity in Multibras S.A.

 1968: The Elisha Gray II Research & Engineering Center was completed in Benton
Harbor. In the same year the company's revenues crossed the legendary $1 Billion
mark for the first time.

 1978: Within a decade company doubled its feat of $1 Billion mark and reached the $2
billion revenue level.

 1986: The 'Kitchen Aid' division of Hobart Corporation was purchased.

 1987: Whirlpool tied-up with Sundaram Clayton Ltd. of India to form TVS Whirlpool
Ltd.

 1989: This was a historic year since the revenues catapulted to heights of over $6
Billion mark. Also, the joint venture with N.V.Philips of Netherlands called Whirlpool
Europe B.V. was formed to manufacture and market appliances in Europe.

 1990: Company established joint venture with Matsushita Electric Company of Japan
to produce vacuum cleaners for the North American market.

 1991: The Company introduced and committed globally to its Worldwide Excellence
System, which is a TQM program dedicated to exceeding customer expectations. The
vision to globalize 'Whirlpool Corp'. was realized in the same year.
  1993: First time Whirlpool became the No.1 stand-alone brand in UK, Ireland,
Netherlands and Belgium

 1995: Whirlpool Corp. acquired majority of stake in the TVS Whirlpool Ltd. The DC
manufacturing facility of Kelvinator India was also acquired.

 1996: Whirlpool Washing Machines Ltd. and Kelvinator India Ltd. merged together to
form Whirlpool of India Ltd.

 1998: This year gave birth to a new company vision that says, "Every Home
Everywhere with Pride, Passion & Performance."

 1999: Whirlpool of India crossed the milestone of 1 million sales of appliances.

 2002: The ' Whirlpool Strategic Architecture ' was launched as a framework to achieve
the vision. The revenues of Whirlpool Corp. soared to $10.5 Billion.

 2001: Whirlpool India registered profit & sold 1.2 million appliances. It also achieved
the No.1 position in DC & FA.

 2015: The Aircon range was successfully launched and the Whirlpool of India
acquired 6% market share.

 2016: A new mission statement of "Everybody creating loyal customers for life" was
adopted.

 2017: Whirlpool Corporation acquires Maytag and become the Worlds largest white
goods company.

1.2.4 BOARD OF DIRECTORS

  Mr. Arvind Uppal (Chairman & Executive Director)
 Mr. Sunil A. D’souza (Managing Director)

 Mr. Anil Berera (Whole Time Director )

 Mr. Vikas Singhal (Whole Time Director )

 Mr. Sanjeev Verma (Non Executive & Independent Director )

 Mr. Anand Bhatia (Non Executive & Independent Director )

 Mrs.Sonu Bhasin (Non Executive & Independent Director )

1.2.5 (a) WHIRLPOOL VISION STATEMENT

Every Home… Everywhere. With Pride, Passion, Performance

Will create the world’s best home appliances, which makes Life easier and more enjoyable for
all people. Their goal is a Whirlpool product in every home, everywhere.
They will achieve this by creating: -
Pride in their work and each other
Passion for creating unmatched customer loyalty for their brands
Performance results that excite & reward global investors with superior returns
They will bring this dream to life through the power of unique global & their
Outstanding people……. working together……. everywhere.

1.2.5 (b) WHIRLPOOL MISSION STATEMENT

The mission of the corporate is that the demand of their selves so as to care their
customers and they will serve with pride in every home and bring prosperity to their investors
and customers. They are prepared to change the standards of their industry and be the Envy of
their competitors. They will be leaders in home appliances, which all others start to emulate.
1.2.6 CORE COMPETENCIES

 Innovation: Unique and compelling solutions valued by our customers and aligned to
our brands create competitive advantage and differentiated shareholder value.
 Operational Excellence (OPEX): A methodology for solving problems & continuous
improvement of products & processes through pursuit, acquisition, and utilization of
knowledge using critical thought and planned experimentation helps us achieve
operational excellence.

 Customer Excellence: Excelling the customer expectation from the company, its
brands, products and services are a three-step process. The three steps are: Know a
customer, Be a customer, Serve a customer.

Knowing a customer helps us know who our customers are, how to treat them, how we
add value, and what the drivers of brand loyalty are. This information is gathered from the
customer's data base history. This way we are better able to customize products for them and
recommend the right product to solve problems. Being a customer is important to share
customer knowledge and insights, drive actions based on customer insights, be passionate
about our brands and customer loyalty and provide a positive voice for our brands. We show
empathy for customers and seek to resolve their problems by creating consistent customer
touch-points, with our endeavor always being to provide unique solutions for the customer.

1.2.7 PRODUCTION

MANUFACTURING FACILITIES IN INDIA

Whirlpool has invested a lot in its manufacturing facilities in India. While the factories
in Faridabad and Puducherry have been upgraded to meet the exact world class standard of
Whirlpool, the one under the construction at Ranjangaon, Pune will set the standards as one of
the world’s front runners in environmental sensitive and eco-friendly manufacturing units.

 FARIDABAD
 The refrigerator facilitated at Faridabad in Haryana manufactures direct cool.
Refrigerators ranging from 165 liters to 310 liters. Infusion of technology and up gradation of
machinery along with streamlining of processed has enhanced the plant capacity from
7,00,000 units to 8,50,000 units annually. Whirlpool’s focus at this plan in on manufacturing
refrigerators that are made to suit Indian conditions and requirements, while matching
Whirlpool global quality standard.

 PUDUCHERRY

The washer’s facility at Puducherry on the East coast, manufacturers semi automatic
and automatic washing machines. Constant feedback from consumers has resulted in
improved product quality and styling, leading to an improved market share. This unit was
awarded the coveted ISO 9001 certification in 1994 and ISO 14001 certification in 1996.

 RANJANGAON

A state of art gallery for the manufacturers of the Global No Frost refrigerator at
Ranjangaon near Pune, this Rs. 300 crore plant built to exacting world-class standards,
underlines Whirlpool’s commitments to India. It has been designed in accordance with the
ecological and environmental criteria that have become such a concern in today’s scenario the
world over.

1.2.8 WHIRLPOOL BRANDS

 North American Brands

United States : Whirlpool, Kitchen Aid, Roper, Estate,
Gladiator. Mexico : Whirlpool, Acros, Supermatic, Scrolls.
Canada : Whirlpool, Inglis, Kitchen Aid.

 Principal Products
 Air Purifiers, Microwave Ovens, Automatic Dryers, Room Air Conditioners,
Automatic Washers, Built-in Ovens, Dehumidifiers, Hot Water Heaters, Dishwashers ,Trash
Compactors, freezers, HVAC, Ranges (Gas and Electric, Freezers, Side-by-Side), washers.

 Kitchen Aid Products

Hand Mixers, Coffee Makers, Hot-water Dispensers, Blenders, Stand Mixers, Toasters,
Food Processors, Juicers.

 Primary Markets Served

Canada, Mexico and United States,

 Principal Products
Cookers (Gas and Electric, Freestanding, Built-in and Surface Units), Microwave
Ovens, Dryers, Freezers (Upright and Chest), Built-in Ovens, Dishwashers, Refrigerators
(Built-in, Combis and Side-by-Side), Washers (Front and Top Loading).

 Primary Markets Served

Europe, Asia Pacific, Africa, Middle East.

 Principal Products
Refrigerators, Freezers, Room Air Conditioners, Gas and Electric Ranges, Micro
Ovens, Washers, Compressors.

1.2.9 WHIRLPOOL OF INDIA LIMITED – Gurugram

Whirlpool of India Limited is a fully owned company by Whirlpool Corporation, USA

Head quarters at Benton Harbor, Michigan USA. Whirlpool Corporation is the worlds leading
manufacturers and marketer of home appliances. Washing Machines, Dryers, Dish Washers,
Refrigerators, Freezers, Cookers, Microwave Ovens, Room Air Conditioners, Small kitchen
Appliances, etc.
 Whirlpool of India limited, washer unit, Puducherry was the first manufacturing
venture of the Whirlpool Corporation, USA, the world’s largest manufacturer of home
appliances. In 1987, this unit was formed as a joint venture with M/s Sundaram Clayton
limited, a TVS group companies and was named as TVS Whirlpool Limited. This unit is
located on a 100 acre sprawling area manufacturing automatic and semi automatic washing
machine. This unit is certified ISO 9001 facility by UL. It has also been cleared for “S” mark
certification from Japanese Quality standards for Exports to Japan after our facility approval.
In WOIL, washer unit has a total of 11 departments comprising of 220 employees on the
whole. Out of which 67 is management executives and rest 153 are production operators.

The various departments in the company are

 Administration Department
 Finance Department
 Human Resource Department
 Materials Department
 Production Department
 Medical Department
 Stores Department
 Plant Maintenance Department (PMD)
 Regional Technology Center (RTC)
 Process Engineering Development (PED)
 Quality Assurance Department (QAD)
Semi Automatic Fully Automatic Horizontal Axis

Whitemagic H 70 | 7 kg H 65 | 6 Kg Sensation EX | 6.5 Kg

Whitemagic S 70 | 7 kg F-65 | 6 Kg Sensation EM | 6.5 Kg
Whitemagic Super-Soak | 6.2 Kg FP 65 | 6 Kg
Whitemagic E 65 | 6.2 Kg FP 60 DLX | 6 Kg
Whitemagic S60-Buzz | 6 Kg FP Splash | 5 Kg
Whitemagic SI 60 | 6.2 Kg
1.2.10 CLASSIFICATION OF WASHING MACHINE

1.2.11 ACHIEVEMENTS

Whirlpool came to India on the crest of a long trail of achievements and has since
furthered this record. By end-1999, Whirlpool became the largest selling appliance brand in
the country. A couple of years later, it also became the largest exporter of home appliances
from India. In the course of this growth and development, Whirlpool has also achieved
immense brand equity in the Indian market. Whirlpool has successfully established new rules
of marketing and branding in the home-market sector. Its rivals have adopted the new
practices, but the Whirlpool brand stands out to the extent that authoritative surveys reported it
to be the most preferred brand in refrigerators and washing machines in 2003. (Millward
Brown Brand Track).

Whirlpool of India exports to more than 50 high-value markets in Asia and other parts
of the world as well. Its products are customized to the local standards and different needs of
each of these markets. These qualities of Whirlpool are exemplified in its Indian sales as well.
The company has set up a highly equipped product development centre in Pune, which
provides global design services to three other Whirlpool research and development facilities
based in Brazil, Italy and the US. Indeed, the Indian operations of Whirlpool are a very
important contributor to its global vision of "Being in every home, everywhere". In washer
products, Whirlpool was again the first to come out with a Combimatic – a single tub semi
automatic washing machine that did away with the hassle of shifting clothes from one tub to
another.
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CHAPTER-III
REVIEW OF LITERATURE

2.1 MEANING OF INVENTORY

Inventory generally refers to the materials in stock. It is an idle stock of physical goods
that contain economic value and are held in various forms by an organization in its custody
awaiting packing, processing, transformation, use or sale in a future point of time.
It is also called the idle resource of a company. Inventories represent those items
which are either stocked for sale or they are in the process of manufacturing or they are in the
form of materials which are yet to be utilized.
It also refers to the stockpile of the products a firm would sell in future in the normal
course of business operations and the components that make up the product.
Inventory is a detailed list of those movable items which are necessary to manufacture
a product and to maintain the equipment and machinery in good working order.
Inventory is a complete list of items such as property, goods in stock or the contents of a
building.
Inventory is an itemized catalog or a list of tangible goods and property or the
intangible attributes or qualities

2.2 TYPES OF INVENTORIES

An organization generally carries the following types of inventories:

29
  Raw Materials.
 Bought out parts.
 Maintenance, repair and operating stores.
 Work-in-process inventory (WIP).
 Production waste and scrap.
 Miscellaneous inventory.
 Finished goods inventories.
 Packing materials.
 Goods for resale.
 Goods in transit.

2.3 REASONS FOR HOLDING INVENTORY

 To stable the production.

 To take advantage of price discounts.
 To protect against unforeseen variation in supply/demand .
 To avoid stock out and keep customer service
 To keep pace with changing market conditions.
 To compensate forecast insecurities (only in case demand is bigger than the forecast)
 To prevent disruptions in manufacturing or deliveries

2.4 MOTIVES OF HOLDING INVENTORIES

 The Transaction Motive which facilitates continuous production and timely execution
of sales orders.in this motive an organization maintains inventories to avoid
bottlenecks in production and sales of the product. In this business organization must
insure that the production did not get affected or interrupted for the want of raw
material.
 The Precautionary Motive which necessities the holding of inventories for meeting the
unpredictable changes in demand and supplies of materials. This motive has been held
 in inventory to have a cushion against the unpredicted business in the organization.
There may be a sudden spurt/slump in demand/ supply of raw material/finished goods
at times that’s why in both the cases a perfect business have some cushion to protect
their business from fall
 The Speculative Motive which induces to keep inventories for taking advantage of
price fluctuations, saving in re-ordering costs and quantity discounts etc.,. this motive
helps the business in the time of price fluctuations

2.5 COSTS ASSOCIATED WITH INVENTORY

 Production cost.
 Ordering cost.
 Capital cost.
 Carrying cost.
 Shortage cost.
 Warehousing cost.
 Exchange rate.
 Damage cost.
 Stock out cost

2.6 INVENTORY CONTROL

The fact or process of ensuring that appropriate amounts of stock are maintained by the
business , so as to able to meet the consume demand without getting delayed while keeping
the costs associated with holding stock to a minimum.
(Manufactures are using these bar codes for inventory control)
The main objective of inventory control is to achieve maximum efficiency in production
& sales with minimum investment in inventory.
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.
2.7 BENEFITS OF INVENTORY CONTROL

The benefits of inventory control are:

 Improvement in customers’ relationship because of the timely delivery of goods and

services.
 Smooth and uninterrupted production and hence, no stock out.
 Efficient utilization of working capital.
 Economy in purchasing.
 Eliminating the possibility of duplicate ordering.
 Protects from fluctuations in demand.
 Reduces the risk of loss.
 Facilitates cost accounting activities.
 Tries to protect fluctuations in output.

2.8 PRINCIPLES OF INVENTORY CONTROL

 Inventory is only created by spending money for materials and the labour and
overhead to process the materials.
 Inventory turns/stock rotation
 Defining the success level for stock rotation is critical to analyzing your demand
forecasting and warehouse flow.
 Demand fore casting.
 Inventory is reduced through sales and scrapping.
 Accurate sales & production schedule forecasts are essential for efficient purchasing,
handing & investment in inventory.
 Warehouse flow.
  Management policies which are designed to effectively balance size and variety of
inventory with cost of carrying that inventory are the greatest factor in determining
inventory investment.
 Cycle counting.
 Forecasts help determine when to order materials. Controlling inventory is
accomplished through scheduling production.
 Records do not produce control.
 Control is comparative & relative, not absolute. It is exercised through people with
varying experiences and judgment rules & procedures establish a base from which the
individuals can make evaluation and decision.
 With the consistent practices being followed, inventory control can become predictable
and properly related to production and sales activity.

2.9 INVENTORY CONTROL – TERMINOLOGY

 Demand
It is the number of items required per unit of time. The demand may be either
deterministic or probabilistic in nature.

 Order cycle:
The time period between two successive orders is called order cycle.

 Batch picking:
The act of obtaining products from a warehouse to complete a group of orders made
by customers.

 Cycle counting:
The act of checking the number of products currently in stock in a warehouse ,
usually done on a daily or weekly basis
 Lead time:
The length of time between an item is ordered and when that item is added to a
company’s or organizations inventory. That receipts of items is called lead time.

 Safety stock:
It is also called buffer stock or minimum stock. It is the stock or inventory needed to
account for delays in materials supply and to account for sudden increase in demand due to
rush orders.

 Inventory turnover:
If the company maintains inventories equal to 3 months consumption. It
means that inventory turnover is 4 times a year i.e., the entire inventory is used up and
replaced 4 times a year.

2.10 INVENTORY COST RELATIONSHIPS

There are two major cost associated with inventory. Procurement cost and carrying
cost. Annual procurement cost varies with the numbers of orders. This implies that the
procurement cost will be high, if the item is procured frequently in small lots. The annual
procurement cost is directly proportional to the quantity in stock. The inventory carrying cost
decreases, if the quantity ordered per order is small. The two costs are diametrically opposite
to each other. The right quantity to be ordered is one that strikes a balance between the two
opposition costs. This quantity is referred to as “Economic Order Quantity”.

2.11 ECONOMIC ORDER

QUANTITY MEANING

The economic order quantity (EOQ) is the number of units that the company should
add to inventory with each order to minimize the total costs of inventory such as holding cost
,
order cost, and shortage cost. The EOQ is used as a part of a continuous review inventory
system in which the level of inventory system in which the level of inventory is monitored at
all times and a fixed quantity is ordered each time the inventory level reaches a specific
reorder point.
The EOQ model assumes that the demand is constant and that inventory is depleted at
a fixed rate until it reaches zero. At that point, a specific number of items arrive to return the
inventory to its beginning level. Since the model assumes instantaneous replenishment, there
are no inventory shortages or associated cost.
A decision about how much to order has great significance in inventory management.
The quantity to be purchased should neither be small nor big because costs of buying and
carrying materials are very high. Economic order quantity is the size of the lot to be purchased
which is economically viable. This is the quantity of materials which can be purchased at
minimum costs. Generally economic order quantity is the point at which inventory carrying
costs are equal to order costs. In determining economic order quantity it is assumed that cost
of managing inventory is made up solely of two parts i.e., ordering cost and carrying cost. The
cost relationships are shown in below figure.

FORMULA FOR CALCULATING ECONOMIC ORDER QUANTITY (EOQ)

Economic Order Quantity

Costs Annual Total

Cost
Annual Inventory Carrying Cost

35
 Annual Ordering Cost

Q* Economic Order Quantity

Order Quantity

2.12 SAFETY STOCK

MEANING
Safety stock term used by logisticians to describe a level of extra stock that is
maintained to mitigate risk of stockouts due to uncertainties in supply and demand. Adequate
safety stock levels permit business operations to proceed according to their plans safety stock
is held when there is uncertainty in demand, supply, or manufacturing yield ; it sreves as an
insurance against stockout.
Safety stock is an additional stock kept in an inventory in order to reduce the risk that
the item will be out of stock, safety stock act as a buffer stock in case the sales are better than
the planned and or the supplier is unable to deliver the additional units at the expected time.
The economic order quantity formula is developed based on assumption that the
demand is known and certain and that the lead time is constant and does not vary. In actual
practical situations, there is an uncertainty with respect to the both demand as well as lead
time. The total forecasted demand may be more or less than actual demand and the lead time
may vary from estimated time. In order to minimize the effect of uncertainty due to demand
and the lead time, a firm maintains safety stock, reserve stocks or buffer stocks.

The safety stock is defined as “the additional stock of material to be maintained in

order to meet the unanticipated increase in demand arising out of uncontrollable factors”.

36
 In simple it is tells about which is used to protect against uncertainties.

Because it is difficult to predict the exact amount of safety stock to be maintained, by

using statistical methods and simulation, it is possible to determine the level of safety stock to
be maintained.

DETERMINATION OF SAFETY STOCK

If the level of safety stock is maintained is high, it locks up the capital and there is a
possibility of risk of obsolescence. On the other hand, if it is low, there is a risk of stock out
because of which there may be stoppage of production. When the variation in lead time is
predominant, the safety stock can be computed as:

Safety Stock = (Maximum Lead time- Normal Lead time) * Demand

SAFETY STOCK

The service level of inventory thus depends upon the level safety stocks. Large the
safety stocks, there is a lesser risk of stock out and, hence, higher service level. Sometimes
higher service levels are not desirable as they result in increase in costs, thus, fixing up a
safety stock level is critical. Using past date regarding the demand and lead time data,
reliability of suppliers and service level desired by management, safety stock can be
determined with accuracy.

2.13 ABC ANALYSIS

MEANING
The ABC analysis is an inventory management technique often used for the material
management wherein accuracy and control decreases from A to C.

KEY POINTS
 A items: very tight control and accurate records; B items :less tightly controlled and
good records ; C items: simplest controls possible and minimal records.
 The ABC analysis provides a mechanism for identifying items that will have a
significant impact on overall inventory cost while also providing a mechanism for
identifying different categories of stock that will require different management and
control.
 ABC analysis suggests that inventories of an organization are not of equal value.
The inventory of an organization generally consists of thousands of items with varying
prices, usage rate and lead time. It is neither desirable nor possible to pay equal attention of all
items.
ABC analysis is a basic analytical tool which enables management to concentrate its
efforts where results will be greater. The concept applied to inventory is called as ABC
analysis.
Statistics reveal that just a few items account for bulk of the annual consumption of the
materials. These few items are called A class items which hold the key to business. The other
items known as B & C which are numerous in number but their contribution is less significant.
ABC analysis thus tends to segregate the items into three categories A,B & C on the basis of
their values. The categorization is made to pay right attention and control demanded by items.
FEATURES OF ABC ANALYSIS
A Class (High Value) B Class (Moderate Value) C Class (Low Value)
 1. Tight control on Moderate control Less control
stock levels
2. Low safety stock Medium Large
3. Ordered frequently Less frequently Bulk ordering
4. Individual posting in Individual Collective posting
stores
5. Weekly control Monthly control Quarterly control
reports
6. Continuous effort to Moderate efforts Minimum efforts
reduce lead time

ADVANTAGES

 This approach helps the manager to exercise selective control & focus his attention
only on a few items.
 By exercising strict control on A class items, the materials manager is able to show the
results within a short period of time.
 It results in reducer clerical costs, saves time and effort and results in better planning
and control and increased inventory turnover.
 ABC analysis, thus, tries to focus and direct the effort based on the merit of the items
and, thus, becomes an effective management control tool.

2.14 FSN ANALYSIS

All the items in the inventory are not required at the same frequency. Some are required
regularly, some occasionally and some very rarely. In this items classified according to their
rate of consumptions. FSN analysis classifies items into three categories: fast moving, slow
moving, non moving items.

2.15 INVENTORY TURNOVER RATIO

 The inventory turnover ratio is calculated by dividing the cost of goods sold for a
period of time by the average inventory for that period. Average inventory is used instead of
ending inventory because many companies merchandise fluctuates greatly throughout the
year.

Kohler defines inventory turnover as “a ratio which measures the number of times a
firm’s average inventory is sold during a year”.

A higher turnover rate indicates that the material in question is a fast moving one. A
low turnover rate, on the other hand, indicates over-investment and locking up of working
capital on undesirable items.

Inventory turnover ratio may be calculated in different ways by changing the

numerator, but keeping the same denominator. For instance, the numerator may be materials
consumed, cost of goods sold or net sales. Based on any one of these, the ratio differs from
industry to industry.
Stock turnover is measured in terms of the ratio of the value of materials consumed to
the average inventory during the period. the ratio indicates the number of times the average
inventory is consumed and replenished. By diving no. of days in a yeat by turnover ratio, the
number of days for which the average inventory is held, can be ascertained.

Comparing the no. days in the case of two different materials, it is possible to know
which is fast moving & which is slow moving. On that basis, attempt may be made to reduce
the amount of capital locked up, and prevent over-stocking of slow moving items.

Net sales
Inventory turnover ratio =
Avg. inventory

No. of days in a year

Inventory velocity =
Inventory turnover
 CHAPTER-IV

RESEARCH METHODOLOGY

Research methodology is the way to systematically solve the research problem.

Objective of research study is analysis of inventory of Whirlpool Private Ltd. Analyzing of
inventory, we determine following inventories:

1. Raw materials inventory.

2. Work in progress inventory.
3. Finished goods inventory.
4. Supplies inventory.

In this section of inventories, we should analyze the annual investment in

inventories, valuation of inventory after closing balance of items in inventory. In this
manner we calculate reorder point, safety stock levels, minimum & maximum levels of
inventory.
Working hypothesis of the objective is that inventories are the stock piles of
goods. The all organizations on their inventories, Whirlpool invests about 60% of total
assets inventory should be analyzed their records.
 The analysis of inventory according to their data available in the company,
The data collection of inventory for the analysis by the direct store department. We
should record primary and secondary data by the help of assistant ledger books M R N
etc. we went to the all inventories as a raw material, work in progress inventory,
finished goods inventory by the proper observation of data’s of the company.

4.1 RESEARCH

Research is a process in which the researcher wishes to find out the end result for a given
problem and thus the solution helps in future course of action. The research has been defined
as “A careful investigation or enquiry especially through search for new facts in branch of
knowledge”

4.2 RESEARCH DESIGN

An Analytical Research design method is applied in the study. Primary data and
Secondary data has been also used for the purpose of this study.

4.3 DATA COLLECTION

In analysis of inventory of Whirlpool. We collect the data by the different sources. We
collected through the primary and secondary sources.

 Primary Sources
Primary data are those data that are originated very first time or fresh data, with
the help of primary data formulated the research objectives. Primary data are the accurate
attainable reliable and useful data.

1. Data are collected through interviews and discussion with

Finance- Executive and the workers.
2. Data are collected through interviews and discussion with Material
 Planning- Deputy Manager.

 Secondary Sources

1. The data are collected from the annual reports maintained by the company for
the past six years viz., 2011-2016
2. Data are collected from the company’s website.
3. Books and journals pertaining to the topic.

The method adopted to study about the inventory control in Whirlpool

1. The Field Study: The Field study was conducted at Whirlpool
2. Sample Size: 25
3. Sampling Method: Random Sampling method

 Tools used:
MS-Excel has been used for calculations.
 CHAPTER V
DATA ANALYSIS AND INTERPRETATION

1. Are you aware about inventory management System?

a) Yes 75%
b) No 17%
c) Do not know 08%

Interpretation:
 From the above diagram, The awareness level among the company officials
regarding the existence, functioning and applicability of invertory management
system is high that is 75%, as per the result of the study.

2. Do you know that your company has an inventory management system?

a) Yes 72%
b) No 20%
c) Do not know 08%

Interpretation:
From the above diagram, we come to know that the company officials are
aware about their company having an inventory management system. 72% of
 the respondents do have this awareness as against 20% + 08% of the
respondents who are either not aware or not able to provide any information in
this regard.

3. Do you agree that there should be an inventory management system in

place in any organization or company?
a) Agree 68%
b) Disagree 12%
c) Do not know 20%

Interpretation:
 From the above diagram, we come to know that according to the response to
the above questions, it appears that every company/organization should have
system or mechanism in place for managing their inventory.

4. For what reasons do you feel that there should be an inventory

management system?
a) To smoothen operational requirement 27%
b) To save time 22%
c) To maintain accountability and transparency 30%
d) Other reasons 15%
e) Do not know 06%
 Interpretation:
To everyone’s surprise, 30% of the respondents feel that it is for accountability
and transparency purpose that inventory records are maintained and hence the
need for an invertory management system. This is followed by the need for
saving time and the requirement of operational smoothness.

5. Do you agree that the inventory management system in your company

has fulfilled the needs for which it was evolved?
a) Strongly/ Agree 20%
b) Agree 47%
c) Disagree 15%
d) Strongly Disagree 07%
e) Do not know 11%

Interpretation:
 From the above response, it appears that the invertory management system has
more or less achieved its objective for which it was in place. This s evident
from the 67% of the respondents opinion who have either agreed or strongly
agreed in favor of this proposition. However the response of 22% of the
respondents who think otherwise also speaks something.

6. What according to you is the major benefit of going for an inventory

management system by your company?
a) It has made storage and retrieval of material easier 37%
b) Improved Sales Effectiveness 26%
c) Reduced Operational Cost 18%
d) Other Benefits 10%
e) Do not know 09%

Interpretation:
 As regards the benefits of having an inventory management system by the
company, the respondents of the opinion that the major benefit lies in
relaxation in terms of storage and retrieval of material. This is followed by
increasing sales effectiveness and reduction in operation cost. However, all
these benefits are interlinked and the spearing between them is more analytical
than anything else.

7. Do you have skilled professionals in your company for inventory

management?
a) Yes 48%
b) No 30%
c) Do not know 22%

Interpretation:
From the above diagram, we come to know that Recruitment of skilled
professionals well vesed with latest inventory management technology,
 prticularly in chemicals and paint industry is a concern for the company as it
appears that it lacks in this domain.

8. What category of professionals is managing your company inventory?

a) Skilled and trained 32%
b) Only skilled but not trained 16%
c) Non skilled but trained professionals 20%
d) Non skilled and non trained professionals 25%
e) Others 07%

Interpretation:
 As already stated above in the earlier question, availability of trained and
skilled professionals for inventory management needs serious attention of the
company.

9. Do you agree that your company gives more emphasis on software than
skilled manpower with regard to inventory management?
a) Strongly Agree 18%
b) Agree 52%
c) Disagree 15%
d) Strongly Disagree 07%
e) Do not know 08%

Interpretation:
 The above response gives an impression that the company puts greater
emphasis on software than skilled manpower for inventory details
management.

10.Do you think that the software used by your company is according to
the design and needs of the system?
a) Yes 86%
b) No 10%
c) Do not know 04%

Interpretation:
The company appears to be using the software according to the system
requirements and design and according to the customer needs.
11. What is the prime challenge before your company with regard to
inventory management?
a) Lack of trained professionals 42%
b) Maintenance cost 21%
c) Changing requirements of customers 27%
d) Other problems 06%
e) Do not know 04%

Interpretation:
 Lack of availability of trained professionals occupied with maintenance cost
and changing needs of the customers are perceived to be the inventory
challenges before the company.

12. What is the future of inventory management system in your company?

a) Will continue as a successful mechanism 43%
b) May change according to time 33%
c) Shall collapse 12%
d) Do not know 12%

Interpretation:
The future of inventory management system at the company appear to pretty
good, going by the response of our study.
 CHAPTER-VI

6.1FINDINGS OF THE STUDY

1) Only 75% of the employees are aware about the Inventory management system.
2) 20%+08% employees do not know about that the company has
Inventory management system.
3) 30% of the employees think that there should be an inventory management
system to maintain accountability and transparency.
4) The major benefit of going for an inventory management system by
the company is that it has made storage and retrieval of material easier.
5) 48% of the only employees think that there are skilled professionals for
inventory management.
6) Only 32% of the skilled and trained professionals are managing the Inventory.
7) There is no proper sequence and acknowledgement board for certain items in
store department. It is not good when external auditing held in company.
8) Organization has no record of wastage items. It is not good for operating
profit of the company.
6.2 SUGGESTIONS AND RECOMMENDATIONS

 According to EOQ, as the company does not follow EOQ for its purchasing, the
company can be adjusted to order materials. 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 production flow.

 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.

 The past data shows increase in inventory the company is also expecting more
inventories for future period i.e. 2017. The management is required to maintain the
same inventory trend in the forth coming year also.

 The inventory turnover ratio indicates whether investment in inventory is within proper
limit or not. It also measures how quickly inventory is sold. It requires to maintain a
 high turnover ratio than lower ratio. A high ratio implies that good inventory
management and it also reflects efficient business activities.

CHAPTER-VII

CONCLUSION

A better inventory management will surely be helpful in solving the problems the
company is facing with respect to inventory and will pave 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 production flow. This would reduce the cost and enhance the profit. Also there
should be tight control exercised on stock levels based on ABC analysis & maintain high
percentage in fast moving items in inventories as per on FSN analysis for efficient running of
the inventory. Since the inventory Turnover ratio shows the increasing trend, there will be
more demand for the products in the future periods. If they could properly implement and
follow the norms and techniques of inventory management, they can enhance the profit with
minimum cost.
 CHAPTER-VIII

8.1 LIMITATIONS OF THE STUDY

 The entire analysis applies only to Whirlpool India Ltd.

 The study takes into account only the quantitative data and the qualitative aspects were not
taken into account.
 The assumption made in the EOQ and Safety stock formulas restrict the use of the
formula. In practice, unit cost, lead time, requirements of inventory items are not
accurately predictable. Rate of consumption varies in many cases. As such application of
the formula often becomes a difficult and complicated matter.
 ABC analysis is not one time exercise and items are to be reviewed and
recategorised periodically.

8.2 SCOPE FOR THE FURTHER STUDY

 To give plan to the company what to order, when to order and how much to order.
 It is useful for deciding operating policy & volume of inventory.
 It helps to develop the policies for the executives in inventory.
 It helps the company what items goods are categorized.
 Project helps to deal with future planning in inventory.

CHAPTER IX
BIBLIOGRAPHY

 REFERENCES BOOKS

 “Financial Management” Tata McGraw Hill.

 “Management Accounting” S Chand & Co.
 “Industrial Engineering & Production Management” S Chand & Co.
 “Operations Research” Prentice hall Of India Private Ltd.
 “Cost Accounting” Prentice hall Of India Private Ltd.
 “Cost & Management Accounting” Sultan Chand & Sons.
 “Warehouse & Inventory Management” Indian Institute of Logistics

 WEB SITES

 www.whirlpoolindia.com
 www.inventorymanagementreview.org/2005/06/safety_stock
 www.inventorymanagementreview.org/inventory_basics/index
 www.inventorymanagementreview.org/justintime/index
  www.inventorymanagementreview.org/inventory_control/index
 www.wikipedia.com/Inventory management
 www.investopedia.com/inventory management
 www.scribd.com/Inventory management

CHAPTER X
Questionnaire

1) Are you aware about inventory Management System?

a) Yes
b) No
c) Do not know
2) Do you know that your company has an inventory management system?
a) Yes
b) No
c) Do not know
3) Do you agree that there should be an inventory management system in place in any
organization?
a) Agree
b) Disagree
c) Do not know
4) For what reasons do you feel that there should be an inventory management system?
a) To smoothen operational requirement
b) To save time
 c) To maintain accountability and transparency
d) Other reasons
e) Do not know
5) Do you agree that the inventory management system in your company has fulfilled
the needs for which it was evolved?
a) Strongly agree
b) Agree
c) Disagree
d) Strongly Disagree
e) Do not know

6) What according to you is the major benefit of going for an inventory management
system by your company?
a) It has made storage and retrieval of material easier
b) Improved Sales Effectiveness
c) Reduced Operational Cost
d) Other Benefits
e) Do not know
7) Do you have skilled professionals in your company for inventory management?
a) Yes
b) No
c) Do not know
8) What category of professionals is managing your company inventory?
a) Skilled and trained
b) Only skilled but not trained
c) Non skilled but trained professionals
d) Non skilled and non trained professionals
e) Others
9) Do you agree that your company gives more emphasis on software than skilled
manpower with regard to inventory management?
 a) Strongly agree
b) Agree
c) Disagree
d) Strongly disagree
e) Do not know
10) Do you think that the software used by your company is according to the design and
needs of the system?
a) Yes
b) No
c) Do not know

11) What is the prime challenge before the company with reheard to inventory
management?
a) Lack of trained professionals
b) Maintenance cost
c) Changing requirements of customers
d) Other problems
e) Do not know
12) What is the future of inventory management system in your company?
a) Will continue as a successful mechanism
b) May change according to time
c) Shall collapse
d) Do not know
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CHAPTER-IV RESEARCH METHODOLOGY Research methodology is the way to

systematically solve the research problem. Objective of research study is analysis of inventory
of Whirlpool Private Ltd. Analyzing of inventory, we determine following inventories: Raw
materials inventory. Work in progress inventory. Finished goods inventory. Supplies
inventory.

In this section of inventories, we should analyze the annual investment in inventories,

valuation of inventory after closing balance of items in inventory. In this manner we calculate
reorder point, safety stock levels, minimum & maximum levels of inventory. Working
hypothesis of the objective is that inventories are the stock piles of goods.

The all organizations on their inventories, Whirlpool invests about 60% of total assets
inventory should be analyzed their records. The analysis of inventory according to their data
available in the company, The data collection of inventory for the analysis by the direct store
department. We should record primary and secondary data by the help of assistant ledger
books M R N etc.

we went to the all inventories as a raw material, work in progress inventory, finished goods
inventory by the proper observation of data’s of the company. 4.1 RESEARCH Research is a
process in which the researcher wishes to find out the end result for a given problem and thus
the solution helps in future course of action. The research has been defined as “A careful
investigation or enquiry especially through search for new facts in branch of knowledge” 4.2

RESEARCH DESIGN An Analytical Research design method is applied in the

study. Primary data and Secondary data has been also used for the purpose of this
study.