Inventory Management

Name:                 Tinku  Ujjawal (2006 – 2008)

Title:                    Inventory Management

Summary

The projects were undertaken with an objective of understanding the concept of net operating cycle, working capital analysis and inventory management techniques for cost minimization , respectively. For this study the financial statements for the years 2004 and 2005 of GEMI were analyzed. These financial ratios of GEMI were compared to the corresponding ratios for Baldor Electric Company. Also the various cost associated with managing inventory were calculated and measures were suggested accordingly. During its course I was able to cover a lot of concepts that were theoretical as well as practical in nature. It has helped me understand the concepts and their application.

From the findings of study, following recommendations are suggested :

1. The storage space area should be improved keeping in mind the requirements.
2. Should work on Stock replenishment planning system to reduce the forecasting errors.
3. For better inventory management an average EOQ should be         35,632,284 units.
4. And the no. of orders should have been 19, 4 and 3 in Jan, Feb and March respectively.

Various limitations faced during the completion of the project are :

1. For inventory management, only raw material was considered. WIP and finished goods were not taken into count due to time constraints.
2. More dependence on secondary sources of information.
3. The primary data collected may be biased.
4. Many of the assumptions have been implicitly made in developing the EOQ formula. One key assumption is that the demand is level throughout the year. No seasonality, trend or lumpiness in demand is not allowed for. Although not many real situations can meet this assumptions, we should not reject the EOQ formula as unrealistic yet.
5. Another assumption that I have assumed is that there are no quantity discounts.

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The above article is a summary extract from the dissertation projects of the MBA and BBA students of Skyline College. Skyline, situated in Delhi and Gurgaon (NCR) is a premier institute providing management education specialising in MBA and BBA degrees and specialist courses for travel and tourism as well as mass communication.