International Journal of Advanced Information in Engineering Technology (IJAIET) ISSN: 2454-6933

Vol.5, No.1, January 2018

Inventory Management:A Case Study In Ultratech Cement

1
T.Karnakar, 2K.Neeraja
1
Research scholar,2 Assistant Professor,
1,2
Department of MBA,
Malla Reddy Engineering College (A), Maisammaguda, Dhulapally, Secunderabad.

ABSTRACT Nations. A precondition for such credit is that banks

Stock or stock is the merchandise and materials that a must be certain that the put away item will be
business holds for a definitive objectives to have a accessible on the off chance that they have to
motivation behind resale (or repair).Inventory approach the insurance; this suggests the presence of
administration is a teach principally about indicating a dependable system of affirmed distribution centers.
the shape and situation of loaded products. It is Banks additionally confront issues in esteeming the
required at various areas inside an office or inside stock. The manufacturing inventory has been
numerous areas of a supply system to go before the subdivided into three types. These,
standard and arranged course of creation and load of 1. Raw materials,
materials. Stock constitutes the hugest piece of current 2. Work in process,
resources of bigger greater part of Indian glass 3. Finished goods.
fabricating enterprises. The primary destinations to  Raw materials: Everything the crafter buys to
know the money related execution on stock make the product is classified as raw materials.
administration. The examination utilized Economic That includes leather, dyes, snaps and grommets.
Order Quantity (EOQ) model and chi-square The raw material inventory only includes items
technique. Thus, proposals on the correct amount, that have not yet been put into the production
quality and timing of material and no more good cost process.
finish up the examination consider.  Work in process: This includes all the leather raw
Keywords: inventory, economic order levels, materials that are in various stages of
demand, materials, sales and production. development. For the leather crafting business, it
would include leather pieces cut and in the process
1. INTRODUCTION of being sewn together and the leather belts and
Stock administration is principally about indicating purse etc. that are partially constructed.
the size and position of supplied products. Stock In addition to the raw materials, the work in
administration is repeated at various areas inside an process inventory includes the cost of the labor
office or inside numerous areas of a supply or system directly doing the work and manufacturing
to secure the consistent and arranged course of overhead. Manufacturing overhead is a catchall
creation against the arbitrary unsettling influence of phrase for any other expenses the leather crafting
coming up short on materials or products. The extent business has that indirectly relate to making the
of Inventory administration likewise concerns the products. A good example is depreciation of
scarce differences between recharging lead time, leather making fixed assets.
conveying expenses of stock, resource administration,  Finished goods: When the leather items are
Inventory gauging , physical stock, accessible completely ready to sell at craft shows or other
physical space for Inventory, quality administration, venues, they are finished goods. The completed
returns and deficient products and request and merchandise stock likewise comprises of the
estimating. Stock credit alludes to the utilization of cost of crude materials, work and assembling
stock, or stock, as guarantee to raise fund. Where overhead, now for the whole item.
banks might be hesitant to acknowledge conventional OBJECTIVES OF THE STUDY
guarantee, for instance in creating nations where  To study the inventory management
arrive title might need, stock credit is a possibly practices of the ultra tech cement
imperative method for beating financing  To analyze the impact of inventory
requirements. This is not another idea; archeological management practice on liquidity and
confirmation proposes that it was polished in Ancient profitability of Ultra tech cement
Rome. Getting fund against loads of an extensive
variety of items held in a fortified stockroom is basic 2. REVIEW OF LITERATURE:
in a great part of the world. It is, for instance, utilized Bern at de William (2008) the study tells that the
with Parmesan cheddar in Italy. Stock credit on the primary concentrate of stock administration is in
premise of put away agrarian create is broadly utilized transportation and warehousing. The choice taken by
as a part of Latin American nations and in some Asian administration relies on upon the conventional
12
International Journal of Advanced Information in Engineering Technology (IJAIET) ISSN: 2454-6933

Vol.5, No.1, January 2018

technique for stock control models. The customary interview with the key personnel in the stores,
technique for stock administration is how much purchase, production and inventory department of the
valuable in nowadays the creator tells about it he is company. The record analysis was obtained from the
likewise saying that the conventional strategy is not a annual reports, schedules, store, ledgers, budgets and
cost lessening. It is so much costly. In any case, the purchase orders. The best known and most
dealing with the stock is most vital work for any fundamental inventory decision model EOQ and chi-
assembling unit. square test is taken for the analysis.
Delaunay C, Sahin E (2007) His review explains a
bunch of work has been done yet now on the off 5. DATA ANAYLSIS & HYPOTHESIS
chance that we need to proceed we should have great TESTING
permeability upon this field of research. That is the The data in table 1, 2, 3 show the usage rate of
reason we are centered around casing work for a ULTRATECH CEMENT Company’s raw material
comprehensive survey on the issue of production (clay ash, lime stone and bauxite). The data were used
network administration with stock errors. The creator the economic order quantity (EOQ) formula. The
said that their point in this work is additionally to expected frequency was determined at 5% confidence
introduce an essential basis that permits a level and 4 degree of freedom, see table 1, 2 & 3.
qualification between the distinctive kind of dealing CALCULATION OF EOQ:
with the stock. Clay Ash:
Asfaque Ahmed (October 12, 2004) He said that the
vast majority of the assembling organization sellers Yea Total orderin carryin EOQ
have arranging and planning item which expect either r Deman g cost g cost
d
endless generation limit with regards to computing 201 14000 42 2 588000 766.8115
amounts of crude material and work in advance 3
prerequisites or unending amounts of crude material 201 16500 55 1.55 117096.7 1082.11
and WIP material for ascertaining creation limit. 4
There are numerous issues with this approach and 201 15000 38 1.75 651428.5 807.11
how to maintain a strategic distance from these by 5 7
ensuring that the item you are purchasing surely 201 14000 40 1.5 746667 864.098
considers limited amounts of required materials and in 6
addition limited limits of work focuses in your 201 12000 38 3 304000 551.36
assembling offices. 7
Silver, Edward A (dec22, 2002) his research makes
an attempt in setting of a mainstream of things for
which the supposition fundamental the EOQ Lime Stone
determination holds sensibly well. However as is as
Yea Total orderin carryin EOQ
often as possible the trade out practices there is a total r Deman g cost g cost
requirement are the presence of spending plan to be d
designated among the supply of the things and A 201 15000 40 1.25 960000 979.79
buying generation office having the ability to handle 3 5
at most a specific number of recharging every year. In 201 13500 41 2 553500 743.97
4 5
view of the requirement, the individual renewal
201 13500 36 1.5 648000 804.98
amounts can't be chosen freely. 5
201 12500 37 1.75 528571.4 727.02
3. RESEARCH HYPOTHESIS 6 2 9
The following hypothesis was tested in this research 201 13500 35 1.25 756000 869.48
work. 7 2
H0: ULTRATECH CEMENT manufacturing industry
does not make use of economic order quantity [EOQ] Bauxite
optimization model to evaluate their inventory.
H1: ULTRATECH CEMENT manufacturing industry Total orderin carryin EOQ
makes use of economic order quantity [EOQ] Deman g cost g cost
Yea d
optimization model to evaluate their inventory r
201 11500 36.5 1.5 559667 748.10
4. RESEARCH METHODOLOGY 3 8
This study was conducted by using primary and 201 11000 37 2.5 325600 570.6
4
secondary data with the time period of 5 years (2013-
201 11200 36.5 1.7 467200 683.52
2017). The sources of data includes personal 5

13
International Journal of Advanced Information in Engineering Technology (IJAIET) ISSN: 2454-6933

Vol.5, No.1, January 2018

201 17000 37 1 1258000 1121.6 quantity (EOQ) optimization model to evaluate their
6 0 inventory using lime stone as parameter for
201 18000 39 2.57 510545.4 714.52
7 5 measurement

CALCULATION OF Chi-Square test

Table1: Clay Ash Table 3: Bauxite

0 (O- (0- YEARS 0 E (O-E)2 (0-E)2/E

YEARS (EOQ) E E)2 E)2/E (EOQ)

2013 767 814.8 2285 2.8043 2013 748 814.8 4462 5.4761

2014 1082 814.8 71396 87.6239 2014 571 814.8 59438 72.9479

2015 807 814.8 61 0.0748

2015 684 814.8 17109 20.9977

2016 867 814.8 2421 2.9712

2016 1121 814.8 93758 115.0687

2017 551 814.8 69590 85.4074

2017 715 814.8 9960 12.2238
2
X = 178.8816

INTERPRTATION: X2 = 226.7142
Using Clay ash as parameter, table 1 depicts the X2
calculated value of 178.8816 which of course is the INTERPRETATION:
lower when compared with table value of chi-square Using Bauxite as parameter, table 3 depicts the X2
(X2) of 9.488. The null hypothesis was thus accepted calculated value of 226.7142 which of course is the
ultratech cement company does not make use of lower when compared with table value of chi-square
economic order quantity (EOQ) optimization using (X2) of 9.488. The null hypothesis was thus accepted
soda ash component as a parameter for measurement. ultratech cement company does not make use to
evaluate their inventory using bauxite as parameter for
Table 2: Lime Stone measurement.
FINDINGS & RECOMMENDATION:
YEARS 0 (O- (0-E)2/E The findings as presented above in all the three cases
(EOQ) E E)2
show that we should reject the alternative hypothesis
2013 980 814.8 27291 and accept the null hypothesis. The study analysis
33.4941 shows that the company operates a policy of making
2014 744 814.8 6.1524
order on quarterly basis within a period of one year
5013 provided, every one week stock has to be verified and
inform to the store department. The study observed
2015 805 814.8 96 0.1178 that the company adopts the EOQ model in placing
order for its raw materials. It also observes that there
2016 727 814.8 7709 9.4612 is a positive correlation between sales and inventory
usages. The study concludes that inventory usage
2017 869 814.8 54 0.0662 depends on sales which means when sales increases,
inventory usages should increase.
Therefore, inventory management is a must for the
continuity and survival of any goal focused
manufacturing organization.
X2 = 49.2917 First, the material will be ordered by reaching the
minimum stock level, material management unit
INTERPRETATION: should also pay attention to sales growth over the
years.
Using lime stone as parameter, table2, depicts the X2 Secondly, in the analysis we also mentioned that there
calculated value 49.2917 which of the course is lower was a negative relationship between the inventory and
when compared with table value of chi-square (X2) of sales and inventory cost and production cost. This
9.488. Company does not make use of economic order
14
 International Journal of Advanced Information in Engineering Technology (IJAIET) ISSN: 2454-6933

Vol.5, No.1, January 2018

implies that inventory automatically determines

production cost or sales and vice-versa.
Lastly, emphasis should be normally placed on the
economic order quantity model because it was seen to
be in the best interest of manufacturing companies to
maintain an optimal level of materials in store, the
level that minimizes total cost of investment in
inventory.
6. CONCLUSION:
The inventory management technique is more useful
to determine the optimum level of inventory and
finding answers to problem of safety stock and lead
time. Inventory management is an important activity
in manufacturing concern. And since the production
of glass involves different raw materials like clay ash,
bauxite and lime stone etc. The results of the analysis
show that the efforts to increase efficiency of
inventory used must be directed towards several
directions: speeding inventory rotation because by
shortening its stationing period within the economic
cycle it transforms rapidly into money; increasing
turnover to the level demanded by the market;
improving the whole trading system for products;
reducing specific consumptions, etc.

REFERENCE:

1) Atrill, P. (2006). Financial management for decision makers,

(4th Ed), Prentice Hall.
2) Baron, O., Berman, O., and Perry, D. (2010). Shelf Space
Management When Demand Depends on the Inventory
Level Production and Operations Management. pp. 1–13,
2010 Production and Operations Management Society
3) Basuroy, S., Mantrala, M., and Walters, G. (2001). The
impact of category management on retailer prices and
performance: theory and evidence. Journal of Marketing, 65
(4),16-33.
4) Borin, N., Farris, P. W., and Freeland, J.R. (1994). A model
for determining product category assortment and shelf space
allocation, Decision Sciences, 25 (3),359-84.
5) Bowen, M., Morara, M., and Mureithi S. (2009).
Management of business challenges among small and micro
enterprises in Nairobi-Kenya. KCA Journal of Business
Management 2(1),
6) Cachon, G. P., and Olivares, M. (2010). Drivers of finished-
goods inventory in the US automobile industry. Journal of
Management Science, 56 (1), 202-216.

15