CENTRE FOR DISTANCE LEARNING

GANDHI INSTITUTE OF TECHNOLOGYAND

MANAGEMENT (GITAM)
VISAKAPATNAM

MASTER OF BUSINESS ADMINISTRATION

(FM)

SYNOPSIS
A STUDY ON INVENTORY MANAGEMENT
AT
SUPER SPINNING MILLS LTD., HINDUPUR

NAME: B. INDRATEJ
HALL TICKET NO: A19MB1550009
INTRODUCTION
INVENTORY MANAGEMENT

Finance is one of the basic foundations of all kinds of economic activities. It

is the master key, which provides access to all the sources for being employed in
manufacturing. Hence it is rightly said that finance is lifeblood of any enterprise,
besides being the scarcest elements, it is also the most indispensable requirement.
Without finance neither any business can be started nor successfully run. Provision of
sufficient funds the required time is the key to success of concern. As matter of fact
finance may be said to be the circulatory system of economic body, making possible
the needed co-operation among many units of the activity.

FINANCIAL MANAGEMENT

Financial management emerged as a distinct field of study at the turn of this

Century. Many eminent persons defined it in the following ways.

DEFINITIONS

According to GUTHMANN AND DOUGHAL: “Business Finance can

broadly be defined as the activity concerned with planning, rising, controlling and
administering of funds used in the business”.

INTRODUCTION TO INVENTORY

Inventory in wider sense, is defined as any idle resource of an enterprise. It is

a physical stock of goods kept dept. for the purpose of future affairs. The term is
generally used to indicate raw materials in process, finished products, packing, spares
and others – stocked in order to meet expected demand or distribution in the future.
Though inventory of materials is an idle resource –it is not meant for immediate use –
it is almost essential to maintain some inventories for the smooth functioning of an
enterprise.

INDUSTRY PROFILE
India Textile Industry:

India Textile Industry is one of the leading textile industries in the world.
Though was predominantly unorganized industry even a few years back, but the
scenario started changing after the economic liberalization of Indian economy in
1991. The opening up of economy gave the much-needed thrust to the Indian textile
industry, which has now successfully become one of the largest in the world.

Various categories:

Indian textile industry can be divided into several segments, some of which can be
listed as below:

• Cotton Textiles
• Silk Textiles
• Woollen Textiles
• Readymade Garments
• Hand-crafted Textiles
• Jute and Coir

COMPANY PROFILE
In modern fashion technology, the demand for perfection begins right at the
birth of the raw material, permeates through every single process, till the highly
discerning customer dons the finished garment. It is this demand for perfection that
has spurred the growth of an organization and its corporate philosophy. Those who
can furnish clients with the best quality, competitive price, and excellent customer
services and prompt delivery can only survive in the market. Super Spinning Mills
Ltd takes immense pride in perceiving its role as the comprehensive architect of every
single yarn and garment that its produces
GROUP OF COMPANIES
ELGI ELECTRIC & INDUSTRIES LTD.
ELGI EQUIPMENTS LTD.
ELGI SOFT WARE & TECHNOLOGIES LTD.
ELGI BUILDING PRODUCTS LTD.
L.G.BALAKRISH NAN & BROS.LTD.
ELGI ULTRA INDUSTRIES LTD.
ELGI TYRE AND TRADES LTD.
ELGI FINANCE LTD.
REVIEW OF LITERATURE
Static versus dynamic problems
Inventory problems are usually divided into two types based on the
characteristics of the goods involved. In static inventory problems, the goods have
one-period life; there can be carrying over of goods from one period to the next.
Inventory situations where decisions involve the number of news papers to print, the
number of greeting cards to purchase or the number of calendars to produce are static
inventory problems. In dynamic inventory problems, the goods have value beyond
the initial period; they do not lose their value completely over time.
NEED FOR THE STUDY
This project work is an attempt to get acquainted with various facts of short-time
finance management.
This project work is an endeavor to note, absorb and imbibe the style of the
corporate sector, far from the academic exercise.
It is necessary to study the financial management practices in Super Spinning Mills
Ltd .

SCOPE OF THE STUDY

• To study the inventory management of Super Spinning Mills Ltd

• To analyze the inventory control techniques of Super Spinning Mills Ltd

• To know the effective utilization of inventory.

• To know how the procurement of material is done.

OBJECTIVES OF THE STUDY

• To study about inventory management of Super Spinning Mills Ltd.,
• To study various costs involved in inventory management.
• To find out economic order quantity for Super Spinning Mills Ltd.,
• To study the reorder level for the raw materials.
RESEARCH METHODOLOGY
Sources of data
Secondary Data
Secondary data refers to the which is already collected by other persons ie
, existing data . the study is based on secondary data . the secondary data has been
collected from the company annual reports , records from purchase department.

• Annual reports of the units

• Other reports of the units
• House magazine of the units
• internet
LIMITATIONS OF THE STUDY

• The information used is primarily from historical annual reports to the

public and the same does not indicate the current situation of the firm.

• Detailed analysis could not be carried for the project work because of the
limited time span.

• Since financial matters are sensitive in nature the same could not be
acquired easily.
FINDINGS
• The company is maintaining less stock of raw materials because all the
materials are available in local market.
• In the raw materials list there are very few items ’A’ class and ‘B’ class but
they give equal priority for all the raw materials and the inspection and stores
check procedures.
• Carrying cost of walls is low compared to other materials.
• The control levels of inventory are not maintained accurately.

SUGGESTIONS
• It has suggested that the company may follows computerized inventory control
system, which control the inventory in a better way.
• It is suggested the company may maintain the inventory as per Re-order level
than maximum level.
 • The company reduces ordering cost per order and carrying cost per order by
proper inventory management techniques.
CONCLUSION
Super Spinning Mills limited was doing well. The management performance
was good in organization but operating and carrying cost of inventory were very high
so it is better for the company to reduce the inventory holding cost in order to have
good working capital management in the organization.