Inventory Management

1. What are the Inventory Items your company have?

Ans - As the firms chosen by us are involved into the agricultural products so their inventory items
are seeds , pesticides , fertilisers and agricultural machinery
2. What is the unit of measurement used?
Ans - The unit of measurement is Quintal .
3. What is the receiving location of the items?
Ans - The receiving location for these items is Muzaffarnagar , UP
4. Describe in detail, the purchasing information If Any?
Ans -
5. What are the normal classification methods your company uses to classify the Inventory?

· ABC Classification
· Inventory in any organization can run in thousands of part numbers or classifications
and millions of part numbers in quantity. Therefore, inventory is required to be classi-
fied with some logic to be able to manage the same.
· In most of the organizations inventory is categorized according to ABC Classification
Method, which is based on pareto principle. Here the inventory is classified based on
the value of the units. The principle applied here is based on 80/20 principles. Ac-
cordingly, the classification can be as under:
· A Category Items Comprise 20% of SKU & Contribute to 80% of $ spend.
· B Category Items Comprise 30% of SKU & Contribute to 15% of $ spend.
· C Category Items Comprise 50% of SKU & Contribute to 5% of $ spend.

6. How does your company group the items?

(a) By Region - 90%
(b) Local - 10%
(c) Imports - NA
7. How do you keep the track of cost information on the items?
Ans - Through Excel and Rate Card provided .
8. What is the storage location for your Items and what is the storage cost?
Ans - The storage location for the items are Sadar Bazar, Muzaffarnagar and the cost of storage is 20-
30k per month depending on the season .
9. Do your items come with an expiry date? What do you do with the items that are purchased or
sold, if they are expired?
Ans - Yes some of the items comes with an expiry date , expired items are discarded .
10. Explain the process of distribution of goods from the inventory?
Ans - There are two modes of distribution as they are involved in wholesale as well as retail .
 11. What are the valuation methods you use for inventory management?
Ans - FIFO
12. Do you use a computerised inventory system?
Ans - Tally
Cash Management
1) From where does the business obtain funds for financing?
Ans - Savings and Bank Loan
2) How did the business intend to use the financing that was requested?
Ans - Mostly for the purchase of the inventory and other expenses .
3) Cash Sales percentage/amount of total sales?
Ans - 20% of cash sales
4) What were the day-to-day expenses and other finance costs?
Ans - Day to day expenses involve
5) How much cash is kept as reserve for contingencies?
Ans - 200,000
6) Do you give any cash discounts for early payment or on the spot payments?
Ans - 2% discount is provided sometime .
7) Do you accept UPI and make e-payments?
Ans - Yes they accept UPI as well as e-payments
Debtors/Payables Management
1) Credit sales percentage/amount of total sales?
Ans - 80% of total sales is credit sales .
2) Time allowed to debtors to make the payment.
Ans - They provide 15-30 days to the debtors to make the payment .
3) Discount allowed to debtors for early payment.
Ans - They provide discount of 2% in case of cash payment .
4) Bad debts percentage/amount in a year
Ans - 10,00,000 lakh early
5) Incentives allowed to debtors for making early payment or to the bad debts to recover
some of the money.
Ans - 5%
 Creditors/Receivables Management

1) Credit purchases?
Ans - 20% of the purchases are credit purchases
2) How many credit suppliers?
Ans - They have credit 8-10 suppliers .
3) Time allowed by the credit suppliers to make the payment.
Ans - Creditors provide 45-90 days to make the payment .
4) Discount received for early payment or bulk sales (trade or cash)
Ans -
• In case of advance payment discount received is 6%
• Payment made within 10 days then discount received is 4%
• Payment made within 10-20 days then discount received is 2%

5) Interest charged by the suppliers for making the late payment.

Ans - Suppliers provide 45-90 days for making payment if the businessman fails to make the payment
within the dew time then he is charged interest for 18% per annum .