INVENTORY MANAGEMENT

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 
minimize 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 discussed