A Study on Inventory Management

Paavai Engineering College

A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD

CEMENT CORPORATION LIMITED, KARUR

PROJECT REPORT

Submitted by

S.GOKUL

Register No: 108001612014

In partial fulfillment for the award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

In

DEPARTMENT OF MANAGEMENT STUDIES

PAAVAI ENGINEERING COLLEGE

PACHAL, NAMAKKAL-637 018

JUNE 2012

Chettinad Cement Corporation Limited


BONAFIDE CERTIFICATE

PAAVAI ENGINEERING COLLEGE

DEPARTMENT OF MANAGEMENT STUDIES

PROJECT REPORT

JUNE 2012

This is to certify that the project A STUDY ON INVENTORY MANAGEMENT IN

CHETTINAD CEMENT CORPORATION LIMITED, KARUR

Is the bonafied record of project done by

S.GOKUL

Register No: 108001612014

Of MBA during the year 2011-2012

--------------------------- -------------------------

Project Guide HOD

Submitted for the Project Viva-Voce examination held on ----------------------------

----------------------------- --------------------------

Internal Examiner External Examiner



DECLARATION

I affirm that the project work entitled A STUDY ON INVENTORY MANAGEMENT

IN CHETTINAD CEMENT CORPORATION LIMITTED, KARUR being submitted in

partial fulfillment for the award of Master of Business Administration (MBA) is the original

work carried out by me. It has not formed the part of any other project work submitted for award

of any degree or diploma, either in this or any other University.

Signature of the Candidate

I certify that the declaration made above by the candidate is true

Signature of the Guide



ACKNOWLEDGEMENT

I would like to express my gratitude to Shri.CA. N. V. Natarajan, B.Com., FCA.,

Chairman and Smt. Mangai Natarajan, M.Sc., Correspondent, Paavai Institutions, Namakkal

for giving me an opportunity and facility to complete this project.

I wish to place my deep sense of gratitude to

Dr. K. K. Ramaswamy, M.E., Ph.D., Director Admin. Paavai institutions and I would like

to express my gratitude to Dr. C. Jegadheesan, M.E., MS., Ph.D., Principal, Paavai

Engineering College, Namakkal.

I offer my profound gratitude to Dr.G.Gopalakrishnan, M.B.A, M.Phil, Ph.D

Head, Department of Management Studies, Paavai Engineering College, Namakkal, for his entire

support to complete this project report.

I owe my boundless gratitude to my faculty guide, Dr.A.Arumugam.M.Com, M.Phil,

M.B.A., Ph.D Professor of MBA Department, for his guidance and supervise of this project for

successful completion.

I sincerely thank to Mr.Thirunavukarasu, HR manager, Chettinad Cement

Corporation limited, Karur for giving me permission to do this project at their concern.

I express my sincere thanks to my beloved parents, friends and the staff member for

and those who are encouraged and supported for completion and this project report.

S.GOKUL



TABLE OF CONTENTS

CHAPTER NO DESCRIPTION PAGE NO

LIST OF TABLES

LIST OF CHARTS

ABSTRACT

I

INTRODUCTION1.1 About the study1.2 Scope of the study1.3 Statement of the problem1.4 Objectives of the study1.5 Research methodology

II

INDUSTRY AND COMPANY PROFILE 2.1 Industry profile 2.1.1 Cement industry in Global 2.1.2 Cement industry in India 2.1.3 Cement industry in Tamilnadu 2.1.4 Cement company in Karur 2.2 Company profile

III

CONCEPTUAL AND THEORETICAL FRAME WORK 3.1 Conceptual and theoretical frame work of inventory management 3.2 Review of literature

IVANALYSIS OF INVENTORY MANAGEMENT 4.1 Analysis Part-1 Ratio Analysis(Inventory) 4.2 Analysis Part-2 EOQ Analysis

V

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION 5.1 Findings 5.2 Suggestions 5.3 ConclusionBIBLIOGRAPHY



LIST OF TABLES

Table No. Description Page No.

4.1.1 Level of inventory

4.1.2 Inventory turnover Ratio

4.1.3 Inventory conversion period

4.2.1 EOQ analysis for the year 2006-07





LIST OF CHARTS

Chart No. Description Page No.

4.1.1 Level of inventory

4.1.2 Inventory turnover ratio

4.1.3 Inventory conversion period








ABSTRACT

The purpose of inventory management is to ensure availability of raw material in

sufficient qualities as and when required and also minimize investment in inventories. There is

an essential to manage inventories efficiently and effectively in order to avoid excess investment.

It is possible for a company to reduce the level of inventories to a considerable extent without

any adverse effect on production and sales by using simple inventory planning and control

techniques. The reduction of excessive inventories will create a favorable impact on the company

profitability. Inventory turnover ratio, inventory conversion period are very helpful to know how

effectively plays and control in the organization EOQ analysis will enables the organization to

use of EOQ analysis is very effective and useful tool for classifying, monitoring and control of

inventories.



CHAPTER-I

INRODUCTION

1.1 ABOUT THE STUDY



Inventory management is primarily about specifying the size and placement of stocked

goods. Inventory management is recurred at different locations within a facility or within

multiple locations of a supply or network to protect the regular and planned course of production

against the random disturbance of running out of materials or goods. The scope of Inventory

management also concerns the fine lines between replenishment lead time, carrying costs of

inventory, asset management, Inventory forecasting, physical inventory, available physical space

for Inventory, quality management, returns and defective goods and demand and forecasting.

Types of inventory

Normally the inventory has divided into two types. These,

1. Merchandising inventory,

2. Manufacturing inventory.

The manufacturing inventory has been subdivided into three types. These,

1. Raw materials,

2. Work in process,

3. Finished goods.

Raw materials: Everything the crafter buys to make the product is classified as raw

materials. That includes leather, dyes, snaps and grommets. The raw material inventory

only includes items that have not yet been put into the production process.

Work in process: This includes all the leather raw materials that are in various stages of

development. For the leather crafting business, it would include leather pieces cut and in

the process of being sewn together and the leather belts and purse etc. that are partially

constructed.

In addition to the raw materials, the work in process inventory includes the cost of the

labor directly doing the work and manufacturing overhead. Manufacturing overhead is a

catchall phrase for any other expenses the leather crafting business has that indirectly



relate to making the products. A good example is depreciation of leather making fixed

assets.

Finished goods: When the leather items are completely ready to sell at craft shows or

other venues, they are finished goods. The finished goods inventory also consists of the

cost of raw materials, labor and manufacturing overhead, now for the entire product.

1.2 SCOPE OF THE STUDY

The study helps the management to improve its profitability through a reduction in non-

moving inventory.

It develops the policies for both continuous review of inventory management system.

The study helps to show the level of the inventory in the organization. The company will

make the proper inventory methods from the suggestions of the study.

1.3 STATEMENT OF THE PROBLEM

There are a number of problems that can cause havoc with inventory management. Some

happen more frequently than others. Here are some of the more common problems with

inventory systems.

Unqualified employees in charge of inventory, Using a measure of performance for their

business that is too narrow, Not identifying shortages ahead of time, Bottlenecks and weak points

can interfere with on-time product delivery, Too much distressed stock in inventory, Excessive

inventory in stock and unable to move it quickly enough, Computer assessment of inventory

items for sale is inaccurate, Computer inventory systems are too complicated , Items in-stock gets

misplaced, Not keeping up with the rising price of raw materials.

1.4 OBJECTIVES OF THE STUDY

To analyze the inventory those are sufficient to perform production and sales

activities smoothly.



To study the inventory management followed in chettinad cement.

To identify the existing inventory management and its effectiveness.

To calculate analysis for their performance in inventory management.

1.5 RESEARCH METHODOLOGY

Research Design

The Descriptive type of research has been applied in the study . This research the

researcher has no control over the variables. Only reports what has happened or what is

happening. The research can only discover causes but cannot control the variables.

Data collection

This study purely based on secondary sources of information. The necessary data

calculated from annual report, books, journals and websites.

Period of study

This study covers a period of five years from 2006 – 2007 to 2010 – 2011. The

accounting year commenced from April and ending with March of the next year.

Area of study

This study was conducted in Chettinad cement corporation limited, Puliyur, Karur

District.

Tools for analysis

The following tools have been applied in the present study.



They are listed below

Ration analysis (inventory) and

EOQ analysis

Ratio Analysis (Inventory)

The percentage of a mutual fund or other investment vehicle's holdings that have

been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its

investment objective and/or the portfolio manager's investing style will play an important role in

determining its turnover ratio.

Economic Order Quantity (EOQ)

Economic order quantity is that level of inventory that minimizes the total of

inventory holding cost and ordering cost. The framework used to determine this order quantity is

also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913 .The most

economical quantity of a product that should be purchased at one time. The EOQ is based on all

associated costs for ordering and maintaining the product. EOQ refers to the size of the order

which gives maximum economy in punches of materials.

EOQ=√ 2 AoC 1

Where

A=Annual usage∈unit

O=Ordering cost

C 1=Carriyingcost



CHAPTER-II

INDUSTRY AND COMPANY PROFILE

2.1 INDUSTRY PROFILE

History of the origin of cement



It is uncertain where it was first discovered that a combination of hydrate non-hydraulic

lime and a pozzolan produces a hydraulic mixture, but concrete made from such mixture was

first used on large scale by roman engineers. They used both natural pozzolans (trass or pumice)

and artificial pozzolans (ground brick or pottery) in the concretes. Many excellent examples of

structures made from these concretes are still standing. Notably the huge monolithic dome of the

pantheon in Rome and the massive Bath of Caracalla. The vast system of roman aqueducts also

made extensive use of hydraulic cement. The use of structural concrete disappeared in medieval

Europe. Although weak pozzolanic concretes continued to be used as a core fills in stone walls

and columns.

Modern cement

Modern hydraulic cement began to be developed from the start of the industrial Revolution

(around 1800) ,driven by three main needs: Hydraulic renders for finishing brick buildings in wet

climates Hydraulic mortars for masonry construction of harbor works etc , in contact with sea

water.

Varieties of the cement

There are some varieties in cement that always find good demand in the market. To

known their characteristics and in which area they are most required, it will be better to take a

look at some of the details given below.

Portland blast furnace slag cement (PBFSC)

The rate of hydration heat is found lower in this cement type in comparison to PPC. It is

most useful in massive construction projects, for example-dams.



Sulphate resisting Portland Cement (SRPC)

This cement is beneficial in the areas where concrete has an exposure to seacoast or sea

water or soil or ground water. Under any such instances, the concrete is vulnerable to sulphates

attack in large amounts and can damage to the structure. Hence, by using this cement one can

reduce the impact of damage to the structure. This cement has high these cement one can reduce

the impact of damage to the structure. This cement has high demand in India.

Rapid hardening Portland Cement (RHPC)

The texture of this cement type is quite to that OPC. But, it is bit more fine than OPC and

possesses immense compressible strength, which makes casting work easy.

Ordinary Portland Cement (OPC)

Also referred to as grey cement or OPC, it is of much use in ordinary concrete

construction. In the production of this type of cement in India, Iron (fe2O3), Magnesium (MgO),

Silica (SiO2), and Sulphur, trioxide (SO3) components are used.

Portland Pozolona Cement (PPC)

As it prevents cracks, it is useful in the casting work of huge volumes of concrete. The

rate of hydration heat is lower in this cement type. Coal waste or waste or burnt clay is used in

the production of this category of cement. It can be availed at low cost in comparison to OPC.

Oil Well Cement (OWC)

Made of iron, coke, limestone and iron scrap, Oil Well Cement is used in constructing or

fixing oil wells. This is applied on both the off-shore and on-shore of the wells.

Clinker Cement (CC)



Produced at the temperature of about 1400 to 14560 degree Celsius, Clinker cement is

needed in the construction work of complexes, houses and bridges. The ingredients for this

cement comprise iron, quartz, clay, limestone and bauxite.

A part from these, some of the other types of cement that are available in India can be

classified as:

Low heat cement,

High early strength cement,

Hydrophobic cement,

High aluminum cement and

Masonry cement.

2.1.1 Cement Industry in Global

Cement is a basic ingredient for the construction industry. It is estimated there are 1500

integrated cement production plants in the world. Although the players such a Lafarge or

CEMEX, the share of the four largest firms account only for 23% of the overall demand.

Demand

World cement demand was 2,283MT in 2005, with China accounting for 1,064MT (47%

of total). The expected demand for 2010 is estimated at 2,836 MT. China will increase its

demand by 250MT during the period, an increase higher than the total yearly European demand.

The Demand of Cement



Demand for cement in MT 2005 2010 Growth rate

North America 170 200 2.9%

Western Europe 208 236 2.2%

Asia/Pacific 1500 1900 5.2%

Other regions 405 500 4.7%

World cement demand 2283 2836 4.7%

Source: www.cementhistory.com, www.google.com.

Top 25 Cement companies in the world


http://www.cementhistory.com/


S.NO Name of the Company Name of the Country1. Aditya Birla Group-Grasim India

2. Al-Ghurair Group Dubai

3. Ambuja Cements Limited India

4. Anhui Conch Cement Company China

5. Arabian Cement Company Egypt

6. Ararat Cement Co. South Africa

7. Cement Cruz Azul Cement Co. Armenia

8. CEMEX Co. U.S.A

9. China National Cement Materials Group Corporation China

10. Cimpor Cement corp. China

11. Companhia Siderurgical National S.A Brazil

12. Concrete Casting Cement Company Pacific Alloy

13. CRH plc America

14. Eagle Materials Inc U.S.A

15. Heidelberg Cement Company Germany

16. James Hardie Cements U.S.A

17. Lafarge India

18. Libyan Cement Company Libya

19. Monarch Cement Ltd. U.S.A, California

20. Norcem Germany

21. Pretoria Portland Cement Company South Africa

22. Ready Mix Inc India

23. Rinker Group Australia

24. Semapa Group Europe

25. Smith-Midland Cement Company U.S.A, Milford

Cement industry in India

2.1.2 Cement Industry in India


http://en.wikipedia.org/wiki/Armenia


The cement industry in India has undergone a major shift over the last 6 years. The

Indian cement industry is the second largest producer of quality cement. Indian cement industry

is engaged in the production of several varieties of cement such as, ordinary Portland cement

(OPC), Portland pozzoland cement (PPC), Portland blast furnace slag Portland cement

(PBFSPC), sulfate resistance Portland cement (SRPC), white cement, etc,. They are produce

strictly as per the Bureau of Indian standards (BIS) specifications and their quality is comparable

with the best in the world.

The industry occupies an important place in the national economy because of its strong

linkage to other sectors such as, construction, transportation, coal and power. The cement

industry is also one of the major contributors to the exchequer by way of indirect taxes.

S.NO Name of the company Details of the company

1. ACC Limited

Year of establishment

Head quarters

Web site

1994

Maharashtra

www.acclimited.com

2. Ambuja Cements Limited


Head quarters

Web site

1981

Gujarat

www.ambujacement.com

3. Andhra Cements Ltd


Head quarters

Web site

1936

Andhra Pradesh

www.andhracements.com


http://www.andhracements.com/

http://www.ambujacement.com/

http://www.acclimited.com/

http://www.linkedin.com/

http://www.ask.com/

http://www.google.com/


4. Barak Valley Cements Ltd


Head quarters

Web site

1999

Assam

www.barakcement.com

5. Bheema Cements Ltd


Head quarters

Web site

1978

Andhra Pradesh

www.bheemacement.com

6. Binani Cement Ltd


Head quarters

Web site

1996

West Bengal

www.binani.com

7. Birla Corporation Limited


Head quarters

Web site

1919

West Bengal

www.grasim.com

8. Burnpur Cement Ltd


Head quarters

Web site

1986

West Bengal

www.burnpurcement.com

9.Chettinad Cement Corporation

Limited


Head quarters

Web site

1962

Tamil Nadu

www.chettinadcement.com

10.Dalmia Cement (Bharat)

Limited


Head quarters

Web site

1951

Tamil Nadu

www.dalmiacement.com


http://www.dalmiacement.com/

http://www.chettinadcement.com/

http://www.burnpurcement.com/

http://www.grasim.com/

http://www.binani.com/

http://www.bheemacement.com/

http://www.barakcement.com/


11. Deccan Cements Ltd


Head quarters

Web site

1979

Andhra Pradesh

www.deccancem.com

12. Everest Industries Ltd

Year of establishment Head quarters

Web site

1934

Maharashtra

www.everestind.com

13. Grasim Industries Limited


Head quarters

Web site

1948

Madhya Pradesh

www.grasim.com

14. Gujarat Sidhee Cement Ltd


Head quarters

Web site

1973

Gujarat

www.gujaratsidhee.com

15. Heidelberg Cement India Ltd


Head quarters

Web site

1958

Karnataka

www.mycemco.com

16. Hyderabad Industries Ltd


Head quarters

Web site

1946

Andhra Pradesh

www.hil.in

17.Indian Hume Pipe Company

Ltd


Head quarters

Web site

1962

Maharashtra

www.indianhumepipe.com

18. J. K. Cement Limited


Head quarters

Web site

1994

Uttar Pradesh

www.jkcement.com

19. JK Lakshmi Cement Ltd Year of establishment 1938


http://www.jkcement.com/

http://www.indianhumepipe.com/

http://www.hil.in/

http://www.mycemco.com/

http://www.gujaratsidhee.com/

http://www.grasim.com/

http://www.everestind.com/

http://www.deccancem.com/


Head quarters

Web site

Rajasthan

www.jklcem.com

20. Kalyanpur Cements Ltd


Head quarters

Web site

1937

West Bengal

www.kalyancemenet.com

21. Katwa Cements Ltd


Head quarters

Web site

1993

Karnataka

www.katwagroup.com

22. Kesoram Industries Ltd


Head quarters

Web site

1919

West Bengal

www.kesocorp.com

23. Madras Cements Limited


Head quarters

Web site

1954

Tamil Nadu

www.madrascements.com

24. Mangalam Cement Ltd


Head quarters

Web site

1976

Rajasthan

www.mangalamcement.com

25. NCL Industries Ltd


Head quarters

Web site

1979

Andhra Pradesh

www.nclind.com

26. Nirman Cements Ltd


Head quarters

Web site

1983

Bihar

www.nirmancements.com

27. OCL India Ltd Year of establishment

Head quarters

1949

Orissa


http://www.nirmancements.com/

http://www.nclind.com/

http://www.mangalamcement.com/

http://www.madrascements.com/

http://www.kesocorp.com/

http://www.katwagroup.com/

http://www.kalyancemenet.com/

http://www.jklcem.com/


Web site www.ocl.in

28.Panyam Cements & Mineral

Inds Ltd


Head quarters

Web site

1955

Andhra Pradesh

www.panyamcements.com

29. Prism Cement Ltd


Head quarters

Web site

1992

Andhra Pradesh

www.prismcement.com

30. Rose Zinc Ltd


Head quarters

Web site

1990

Rajasthan

www.rosezinc.com

31. Sagar Cements Ltd


Head quarters

Web site

1981

Andhra Pradesh

www.sagarcements.in

32. Sainik Cement Inds. Ltd


Head quarters

Web site

1991

Delhi

www.sainikcem.in

33. Sanghi Industries Ltd


Head quarters

Web site

1985

Andhra Pradesh

www.sanghicement.com

34. Saurashtra Cement Ltd


Head quarters

Web site

1956

Gujarat

www.saurashtra.com


http://www.saurashtra.com/

http://www.sanghicement.com/

http://www.sainikcem.in/

http://www.sagarcements.in/

http://www.rosezinc.com/

http://www.prismcement.com/

http://www.panyamcements.com/

http://www.ocl.in/


35. Shiva Cement Ltd


Head quarters

Web site

1985

Orissa

www.shivacement.com

36.Shree Digvijay Cement

Company Ltd


Head quarters

Web site

1983

Gujarat

www.digvijaycement.com

37. Somani Cement Company Ltd


Head quarters

Web site

1983

Andhra Pradesh

www.anjanicement.com

38. Sri Vasavi Inds. Ltd


Head quarters

Web site

1985

Andhra Pradesh

www.srivasavi.com

39. Sri Chakra Cements Ltd


Head quarters

Web site

1981

Andhra Pradesh

www.chakracement.com

40. Stresscrete India Ltd


Head quarters

Web site

1983

Maharashtra

www.stresscrete.com

41. The India cements Ltd


Head quarters

Web site

1946

Tamil Nadu

www.ramcocement.in


http://www.ramcocement.in/

http://www.stresscrete.com/

http://www.chakracement.com/

http://www.srivasavi.com/

http://www.anjanicement.com/

http://www.digvijaycement.com/

http://www.shivacement.com/


42. Udaipur Cement Works Ltd


Head quarters

Web site

1993

Rajasthan

www.udaipurcement.com

43. UltraTech Cement Limited


Head quarters

Web site

2000

Maharashtra

www.ultratechcement.com

44. Vinaycements Ltd


Head quarters

Web site

1986

Assam

www.vinaycements.com

45. Visaka industries Ltd


Head quarters

Web site

1981

Andhra Pradesh

www.visaka.org

46. Zuari cement corporation Ltd


Head quarters

Web site

1985

Andhra Pradesh

www.zuaricement.com

Source: www.google.com, info.shine.com, www.indiacatalog.com


http://www.zuaricement.com/

http://www.visaka.org/

http://www.vinaycements.com/

http://www.ultratechcement.com/

http://www.udaipurcement.com/


2.1.3 Cement Industry in Tamilnadu

The cement industry of India hopes the most in Tamilnadu. The Tamilnadu is the state

which has produces the quality cement in India.

The Tamilnadu government was formed a company name is “Tamilnadu cement

corporation limited (TANCEM) in the February 1976 as public limited company. The TANCEM

was formed two cement plants in Tamilnadu. These,

1. Alangulam cement works. Alangulam, virudhunagar districts.

2. Ariylur cement works. Ariyalur, perambalur districts.

The following table shows the details of cement companies in districts of Tamilnadu. These,

S.No Name of the company

1Chettinad Cement Corporation Limited


1962

Corporate office Chennai

Plant PlacesKarur, Dhindukal, Ariyalur

Brand name Chettinad.

2 The India cements Ltd


1946

Corporate office Chennai.

Plant PlacesRamanathapuram, Sangakiri, Ariyalur.

Brand nameSankar cement, Coromandel cement.


Details


3 Madras cement Ltd


1950

Corporate office Chennai.

Plant place Ariyalur.

Brand name Ram co cement.

4Tamilnadu cements corporation Ltd


1979

Corporate office Chennai (Govt).

Plant place Ariyalur.

Brand name Arasu cement

5 Janathacem industries limited


1976

Corporate office Madurai.

Plant place Rajapalayam,madurai.

Brand nameJanatha cement, agsar cement.

Source: www.indiacatalog.com, www.ask.com, en.wikipedia.com

2.1.4 Cement Company in Karur District


http://www.ask.com/

http://www.indiacatalog.com/


Chettinad Cement Corporation limited, karur is the one of most popular cement

manufacturer in Tamilnadu. The Chettinad cement work plants other than karur district,

1. Karikalini cement works, Dhindukal district,

2. Ariyalur cement works, Ariyalur district,

The Chettinad cement corporation limited, Karur is the head company in Chettinad cement

companies. They are produced 5,00,000 tons of cement per year. They are used those cement for

their own company use such as,

1. Chettinad builders pvt ltd,

2. Chettinad house pvt ltd,

3. Chettinad group of companies.

2.2 COMPANY PROFILE

History of the company

The history of the group house of chettinad is linked with the 9 decades old saga. In

1912 took birth the House of Chettinad through a visionary idealist, born entrepreneur Dr. Rajah

Sir Annamalai Chettiar who believed in Social Transformation through business. The founder of

the House of Chettinad envisioned, his companies providing the stimulus for Industrial Growth

and conceived business as a means of improving the living standards of people.

The corporate credo of the House of Chettinad “STRIVE, SAVE AND SERVE” is the

very thought of our founder. IN order to continue fulfilling his dreams and aspirations. To reach

greater heights and the reins were taken over by equally visionary businessmen his son, Dr.

Rajah Sir Muthiah Chettiar and grandson Dr. MAM. Ramaswamy. The house of Chettinad

reached new heights with generations of hard work, dedications and remains the stamp of

quality, integrity and reliability under the versatile, pragmatic and visionary leaderships.

Present position of the company



Today, a 8500 million business group has ventured and diversified in varying fields

including manufacturing (Cement, Silica, Quartz, Grits), services (construction Transports, Steel

fabrication, Ship management and stevedoring. Clearing and forwarding) Trading, power

generation, plantation, farms, logistics. Education, sports management, literature, art and music

fields have also been contributed vastly. It is a matter of great pride and satisfaction that the

group finds worldwide patronage and earns precious foreign exchange for the country.

The group aims to broaden its horizons and reach and the zenith in this millennium under

the yond, dynamic, enthusiastic, able leadership of Mr. MAMR Muthiah. The future of the

companies in the house of chettinad is based on the time tested and proved guidelines of total

customer orientation, technology in the service of man and business as an instrument of social

service. To these timeless truths, we remain stead fast forever.

Management of Chettinad Cement Corporation Limited



CHAIRMAN : MR.M.A.M.RAMASWAMY

MD : SRI.M.A.M.R.MUTHAIAH

STARTED : 1962

DIRECTORS : SRI.RAMANATHAN PALANIAPPAN

SRI.R.KRISHNA MOORTHY

SRI.SP.S.T.PALANIAPPAN

SRI.K.GANAPATHY&C.S.PARI

Dr.T.PRABHAKARA RAO, IAS (TIIC

NOMINEE)

COMPANY SECRETARY : SRI.S.HARIHARAN

TYPE : PUBLIC

CO-SECRETARY : SRI.S.HARIHARAN

AUDITORS : M/S.P.B.VIJAYARAGRAN&CO

M/S V.SOUNDARARAJAN&CO

M/S KRISHAAN &CO

REGISTERED OFFICE : Chettinad Cement Corporation Ltd,

5th Floor, Rani Seethai Hall,

603 Anna Salai, Chennai - 600 006.

Telephone No: +91-44-28292727

Fax No : +91-44-28291594

e-mail : [email protected]

PRODUCTION PLANTS : PULIYUR, KARIKKALI, ARIYALORE.

WEBSITE : www.chettinad.com

VISION


http://www.chettinad.com/


With almost a century of continuous growth and prosperity behind us we envisage our

future as another opportunity to which greater heights and to perfect the art of perfectionism

upholding the vision of our founder Dr. Rajah sir Annamalai Chettiar STRIVE, SAVE AND

SERVE. The nature ethics and style of business believe that nothing can supplement the idealism

which motivates the business we fall back on the time tested. Principles of total customers

orientation technology in service of man and business as an instrument of social service to this

timeless truth we remind steady fast forever.

MISSION

To achieve & sustain cost leadership in the cement market. The harness technology to its

full potential in a safe & clear environment in the entire business cycle & integrate quality with

continuous improvement. To became a vibrant learning organization by building skills and

competitiveness of employees for growth. To be the best and most respectable corporate citizen.

Product profile of Chettinad Cement Corporation Ltd.

Pavithram: Unique cement manufactured at Puliyur works having high quality for

special concrete applications.

Chettinad Grade 53: Superior finely ground cement, suitable for plastering works,

giving a silky finished look. For RCC applications laser controlled manufacturing would

yield best result.

Chettinad Grade 43: Multipurpose cement, suitable for plastering and binding.

Chettinad PPC: A finely blended cement, providing very fine result for plastering work,

devoid of hair line cracks and giving excellent appearance to the building.

Sulphur Resistant Cement: Finds applications in the construction activity in the coastal

areas to save from corrosiveness due to salty environment.

Organizational chart of Chettinad Cement Corporation Ltd.




Board of directors

President

Vice president

Senior general manager

Additional General Manager

Chairman

Managing Director


MANUFACTURING DETAILS


Senior Manger

Senior Assistance Manager

Supervisor

Deputy General Manager

Sales Officer

Chief Security Officer

Vigilance Officer

Accounts Officer

Junior Officers


Mines-Puliyur Works

Limestone is sourced from our mines at palayam which is located 40kms from the

factory. The mines are equipped with the latest machinery and technology including for

sequential blasting. The mined limestone is then crushed through primary and secondary crusher.

Mines-Karikkali works

Limestone Mines are located at about 3 kms. from the factory. The mines are fully

mechanized and have also a terminator for mechanized breaking of individual boulders. The

Crusher is located at Mines and crushed limestone is transported by long belt conveyors to

factory.

Stacker and Reclaimer-Puliyur Works

The crushed limestone is then sent through the X-Ray analyzer and approved for further

process only on meeting quality standards backbone of the quality control.

Stacker and Reclaimer- Karikkali works

The entire quantity of crushed limestone passes through the online cross belt analyzers’

and is stacked at the pile in the factory. Three numbers of separate stacker-reclaimer are

available with truck tipplers for proper stacking and

Reclaiming of corrective raw materials, fuels and additives. Stacker Reclaimers help to achieve

high degree of stacking and ensure maximum level of consistency for the input materials to raw

mill, coal mill and cement mill.

Raw Mill-Puliyur Works



The limestone from the reclaimed is mixed with additive of bauxite and Iron ore and

transported to the vertical roller mill through weigh feeders (which control the additive addition).

The operator takes corrective steps on viewing any deviation. The loesche-German make vertical

roller mill is similar in principle to the tilting grinder with gigantic roller and operated by the

hydraulic system, to give fine blended raw material. From the loesche mill the raw material is the

taken to two silos to produce Varity of cement.

Raw Mill- Karikkali works

Pre-stacked limestone of stockpile is ground in the VRM along with corrective materials

with required ratios are made to produce raw meal and that is stored in Blending cum Storage

Silo. There are separate hoppers with weigh feeders for continuous and regulated addition of

each raw material. The mix passes through the cross belt analyzers which analyze the mix

chemistry and solve the mix ratio every minute to have very good consistency in the raw mix.

Kiln-Puliyur Works

The finely grounded blended raw material is sent to a five stage kiln. Kiln is a key

process in the manufacture of cement where the calcinations & chemical reaction take place.

Coal fired burner (Controlled through latest solid & low feeder) is used to heat the air to 1400°c

and is fed from one end of the kiln. The data accusation and control center meticulously monitor

the entire process including the temperature.

Kiln- Karikkali works

Raw meal extracted from silo is fed to the kiln where it is sintered at about 1400o C to

clinker. This process is called preprocessing which consists of a five stage suspension heaters

with precalciner, the kiln and the clinker cooler. Clinker cooler with CIS and CFG for maximum

heat recuperation and the cooled clinker is transported to a storage silo.

Cement Mill-Puliyur Works



The clinker is then ground, depending upon the grade, the additive is added. For all

grades of cement 5% gypsum is added to control setting of cement we use Japanese technology

in fine grinding with vertical roller mill from anode Kobe, Japan, laser practical size analyzer is

used to monitor fineness of the cement for yielding very good quality cement.

Cement Mill- Karikkali works

Finally, grinding is done in OK Vertical Roller Mill for optical particle size distribution

and less power consumption with excellent ease of operation for feeding, grinding and

classification. To maintain quality of various types/grades of cement, there are separate hoppers

with weigh feeders for the addition of fly ash, gypsum, etc. Quality of final product is monitored

and controlled every hour by testing samples in the XRF analyzer. Final products are stored in

cement silos.

Packing House - Puliyur woks

The four automatic packing machines have been installed, together they have the capacity

to deliver 4800 tons per day of packed cement. These packing equipments are very accurate and

any fault can be rectified as each bag is verified before the next is filled. These are also cross-

checked by the Electronic weighing scale used to note the load carried by the Lorries.

Packing House - Karikkali works

There are 2 nos. of Electronic Rot packer which automatically pack cement in bags, each

with a capacity of 150 tons/hour. Packed cement is loaded into trucks/wagons with automatic

loading machines.

WET PROCESS TECHNOLOGY




Calcareous Material

Limestone

Crushing

Argilseeous

Material Clay

Water Washing

Storage Tank Storage Tank

Mixing IN Correct Production

Slurry Formation

Correction Basin

Pumping

CoalDust

Rotary Kiln

Formation Of Clinker


DRY PROCESS TECHNOLOGY


Clinker Cooler

Grinding In Ball and Tube Mill

Gypsum

Storage In silos

Weighing and packaging in Bags

Distribution



Calcareous Material

Limestone

Crushing

Grinding

Storage

Argilseeous

Material Clay

Crushing

Grinding

Storage

Mixing In Correct Proportion

Rotary Kiln

CoalDust

Formation of Clinker

Storage of raw materials


ACHIEVEMENTS OF CHETTINAD CEMENT CORPORATION LTD.

S.No AWARDS YEAR


Grinding In Ball and Tube Mill

Gypsum

Storage in Silos

Weighing and Packing in bags

Distribution

Clinker Cooler


1

National Safety Award (for outstanding performance in Industrial Safety in

achieving lowest frequency rate in Industry)

Runners up Highest % reduction in frequency rate

1976

1977

2 Merit Awards from Regional Directorate of Workers Education 1972

3 Tamil Nadu Film Arts Association, Chennai Shield 1978

4

National Productivity Award (Best Productivity Performance in Cement

Industry issued by NPC)

Second Best

Best

Best

Second Best

1985

1986

1995

1996

1997

5

National Safety Award (Mines)-(for lowest injury frequency rate Metal Mines

Mechanized Open Cast).

Longest Accident Free Period.

Best performance of the year.

1986

1986

1989

6Conservationist of the year (for outstanding progress in the field of

Conservation of Energy, Metal Components & Machinery) 1987

7

NCBM National Awards (Improvement in Energy Performance).

Second Best

Best

Best

1994

1995

1998

8TNEB Energy Conservation Award - (One among the 15 Energy Efficient

H.T. Industries of 2000 KVA) 1998

9NCBM National Award

Second Best for Energy Efficiency Performance 1998

MILESTONES OF CHETTINAD CEMENT CORPORATION LIMITED

Sl. No. MILESTONES YEAR


Source: Annual report of Chettinad Cement Corporation Limited


10.4 MTPA cement production capacity with wet process plant installed at

Puliyur.1967

2

Modernized into dry process plant to a capacity of 0.8 MTPA with a kiln

capacity of 2000 TPD commissioned with modern vertical roller mills for

fuel & limestone grinding.

1989

3 2 Nos. of 5.4 MVA Capacity WARTSILA DG set installed. 1990

466 Nos. of wind electric Generator of total capacity 17.3 Mw installed at

Poolavadi Udumaplet Taluk.1994

5 ISO – 9002 Certificate received. 1995

6 Stacker & Re-claimer for Limestone installed. 1996

7 Belt Elevator for Raw mill and Kiln feed installed. 1996

8A) Impact Crusher for lime stone crushing at mines installed.

B) Bag filter for coal mill grinding system. 1997

9Vertical roller mill for cement grinding installed. Additional ESP installed

for Kiln/ Raw mill to handle excess process gases. 1998

10

CIS/CFG Cooler installed. Low pressure cyclone installed. Latest

Technology LV-Tech classifier installed in Raw Mill. The plant capacity

increased to 1.2 MTPA cement.

2000

11Green field Cement plant with capacity of 0.9 MTPA was commissioned at

Karikkali.2001

12 Rock breaker (Terminator) installed in mines. 2001

13 ISO 14001:2004 is implemented. 2003

14 Environment Management Service Certificate option. 2004

151 No. 15MW Coal based Captive Power Plant commissioned in 12 Months

at Karikkali.2004

16 Fly Ash Silo construction work completed at Puliyur and Karikkali. 2005

17 Roller press with ball mill for cement grinding with capacity 0.7

MTPA installed at Karikkali. 2006

18 Vertical roller mill for cement grinding installed. Additional ESP installed 2006



for Kiln/ Raw mill to handle excess process gases.

19Karikkali plant capacity increased to 2.0 MTPA by increasing of blended

cement production.2007

20Bag House installed in Raw Mill/Kiln Circuit in addition to the existing ESP

at Puliyur.2007

21Energy dispersive X-Ray specto meter was put into service for increasing

the output and economical mines operation & conservation of minerals. 2007

22

Advance Research laboratories, Switzerland make X-Ray Spectrometer –

Sequential type was commissioned for augmenting clinker production and

its quality.

2007

23Seethainagar Mines crusher capacity was upgraded for supply of 40%

Karikkali plant requirement of limestone. 2007

24Coal based 15 MW capacity CPP was commissioned during Feb-2008 at

Puliyur Works.2008

25Automation & control sections PLC's OS software up gradation and PLC's

capacity.2008

26KHD make Burner Management System for kiln operation to improve

quality of clinker and to save thermal energy.2008

27Coal based 2 x 15 MW capacity CPP was commissioned during Sep-2008 at

Ariyalur.2008

28Green field Cement plant with capacity 2.75 MTPA was commissioned

during Dec-2008 at Ariyalur.2008

29

Video conferencing facility was commissioned between Puliyur, Karikkali,

Ariyalur and Head Office for more effective and faster communications and

project monitoring.

2008

30Brown field Cement plant with capacity 2.75 MTPA was commissioned at

Ariyalur during October-2009.2009

31 Coal based 1 x 15 MW capacity CPP was commissioned during Jan-

2010 Erection and Commissioning of 2 Cement Plants in World Record time

at ariyalur – 30 months from Bhoomi Pooja to commissioning highest

2010



production capacity for cement in a single location at Ariyalur Three No. 15

MW coal based captive power plants commissioned in 18 months at

Ariyalur Chettinad Cement Technical team rated No1 by FLS Denmark at

Ariyalur.

32Roller press with ball mill for cement grinding with capacity 0.5 million

commissioned during February -2010 at Puliyur.2010

33

Brown field Cement Plant with capacity of 2.5 MTPA was commissioned at

Karikkali in March 2011 along with coal based 30MW captive power plant

within the same premises

2011

34

Work is under progress for a new Green field production line of 2.5 MTPA

cement with 1 No. of 30MW Coal based captive power plant in Kallur

Village, Chincholi Taluk and Gulburga Dist of Karnataka state and expected

to be commissioned in year 2012.

2011



CHAPTER-III

CONCEPTUAL AND THEORITICAL FRAME WORK

3.1. CONCEPTUAL AND THEORITICAL FRAME WORK OF

INVENTORY MANAGMENT

Inventory management is a process of evaluating and controlling method for

inventory or stock level of the company. The purpose of inventory management is to diagnose

the information contained in the stock book of the company, so as to judge the stock level and

control methods of the firm. The analysis and interpretation of inventory management is essential

to bring out the stock needed. The inventory management is an attempt to determine the stock



and meaning of the stock book statement data so that forecast may be made of the future cost

control of the company. The stock evaluation helps to understand how best the organization is

functioning with good stock control.

The analytical tools generally available to an analyst for this purpose are as follows,

Inventory turnover analysis

EOQ analysis

OBJECTIVES OF INVENTORY TURNOVER ANALYSIS, EOQ ANALYSIS

The objectives of inventory turnover analysis EOQ analysis is to provide information

about the stock level and control when purchase of raw materials of an enterprise that is useful to

a wide range of purchasing power of raw materials. We have discussed in the previous

paragraphs the utility of the components of inventory turnover and EOQ. Later we will us

discussing how they are made use of by stock department

o To study the stock book of the company

o To evaluate the stock position of the company.

o To find out the efficiency in utilization of stock materials to produce the goods.

USES OF INVENTORY TURNOVER ANALYSIS, EOQ ANALYSIS

It is helpful in assessing the stock position and productivity position of a concern. The

main objectives of a inventory turnover analysis are to assess

The present and future stock capacity of a concern.

To give corrective solution for the inventory problem.



To differentiates the investment with EOQ and invest without EOQ for purchasing of the

raw material

INVENTORY TURNOVER RATIOS

Inventory turnover ratio

A ratio showing how many times a company's inventory is sold and replaced over a period.

Inventory turnover period

How often interest is calculated and added on to your investment. If you have two conversion

periods, it means that interest is calculated every six months. The inventory conversion period

for calculate the interest for credit sales to their agents

ECONOMIC ORDER QUANTITY

Economic order quantity is that level of inventory that minimizes the total of

inventory holding cost and ordering cost. The framework used to determine this order quantity is

also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most

economical quantity of a product that should be purchased at one time. The EOQ is based on all

associated costs for ordering and maintaining the product. EOQ refers to the size of the order

which gives maximum economy in punches of materials.

EOQ=√ 2 AoC 1

Where

A=Annual usage∈unit

O=Ordering cost

C 1=Carriyingcost

3.2 REVIEW OF LITERATURE

Bharathi pathak 1991 The bulk of the banking business in the country is in the public

sector comprising the state bank of India and its seven associated banks and twenty nationalized

commercial banks till 1991, the Indian banking industry was operating in a highly regulated and

protected regime. But with the acceptance of Norseman committee recommendation, competition

has been injected into the banking industry in two forms.



The study has been found that HDFC Bank emerged as a leader in this financial analysis

of the year ended 2000-01. It closest competitor was ICICI Bank. Financial performance of the

other three, no doubt, lagged behind them, but it by no means, depressing. These Bank

obviously, have to focus more improving parameters like credit quality and cost control for the

emerge as the top performance.

R. Hamsalakshmi-M.Manicham 2000 “The study, it has been found the liquidity position

and working capital positions were favorable and good during period of study. Regarding

turnover ratio, efficiency in management of fixed assets and total assets must be increased.

Regarding return on investment and return on equity was proved that the overall profitability

position of the software companies had been increasing at a moderate way.

Dr R.Dharmaraj 2003 ”The study airtical “positing in Indian management industry ’’ have

concluded that for the last five year, there has been proliferation of international and domestic

providence of mutual funds. He says that this increased growth is due to the increasing cash

flows among innovative young companies through India.

.Bharathi pathak, Finance India Dec 2003

R. Hamsalakshmi-M.Manicham, Finance India Sep2 2009

Dr R.Dharmaraj Indian journal of finance volume4 Allen and Carolinian (2003)

Dr Harish kumar 2008 A capital adequacy ratio was constant over a period of time. During

the study period. It was observed that the return on net worth had negative correlation with the

debt equity ratio. Inters income to working funds also had a negative association with interest

coverage ratio and the non performing to net advance was negatively correlated with interest

coverage ratio.

J R Raiyani 2009 During the periods of high inflation depending on conventional

accounting wisdom. May results in firm’s financial information losing its meaning and creation

of unrealistic expectation among information users.



Dr.Kavitha Chavvali 2009 Inventory analysis of gold exchange trade funds. Mathew

T.Jones and Maurice ousted (2007) revised and evaluated pre world war ii current date for

countries by treating gold follows on a continuous basis. The historical data of saving and

investment was taken over a time period of 1850- 1945.

N.Prasanna 2009 Stock performance Aitkin 1997 the external effect foreign direct

investment on export with example of Bangladesh where entry of a koala multinational in

garment exports led establishment of a member of domestic export firms creating the country’s

largest export industry.

Awedh 2005 defend that inflator does not have really an effect on the profitability

measured by return on equity of foreign banks exerting in Lebanon. In the same way, the author

steers that the level of inflation affect more than the return on assets of Lebanese bank than

foreign banks in Lebanon.

Dr Harish kumar single,The icfai journal of inventory management (vol vii Feb. 2008)

J R Raiyani, The infaciS university journal of inventory research (vol viii, No 2 Feb. 2009)

Dr.Kavitha Chavvali, Indian journal of inventory (vol 3 No: 2 dec 2009)

N.Prasanna, Indian journal of inventory (vol 5 No: 1 Jan 2008)

Dr.R.B.Bhatasna, Indian journal of inventory (vol 5 No: 2 Feb 2011)

Dr Sushil kumar Mehta 2010 The financial performance mutual funds schemes. Jayadew

(1996) attempted of evaluate the performance of two growth oriented mutual funds on the basis

of monthly return. It was found that master gain performed better according to Jensen and trey

nor measures and basis of sharps ratio.

Monika uppal 2010 Financial performance factors a survey of the literature shows that the

foreign bank performance is affected by factors like the economic and financial environment.

Among these factors one can equate the growth rate of gross domestic product, monetary market

rate, inflation rate and foreign exchange rate. (Williams 1998).



Dr Sushil kumar Mehta, Indian Journal of inventory vol: 4 No: 2 Feb, 2010

Monika uppal, Indian Journal of inventory vol: 5 No: 1 Jan 2011



CHAPTER-IV

ANALYSIS OF INVENTORY MANAGEMENT



ANALYSIS PART-1

RATIO ANALYSIS (INVENTORY)

TABLE - 4.1.1

LEVEL OF INVENTORY

S.No Particulars 2006-07 2007-08 2008-09 2009-10 2010-11



1

Raw materials

Lime stone

(stacker 60 Per cent)

Iron ore


Clay ash


3330.80

1387.83

832.70

5169.86

2154.11

1292.47

8392.21

3496.76

2098.05

11109.76

4629.10

2777.44

11265.50

4693.96

2816.40

TOTAL(clinker) 5551.33 8616.44 13937.02 18516.26 18775.86

2 Work in process 5386.48 8451.74 13822.02 18351.46 18611.09

3 Finished goods 6251.55 9316.59 14522.32 19216.54 19416.11

Total 17189.36 26384.77 42331.36 56084.26 56803.06

The inventory level was found to be increased trend from 2006-2007 to 2010-2011. The

overall inventory level position for the five years is satisfactory.

CHART - 4.1.1

LEVEL OF INVENTORY


Qty in thousand tones



2006-07 2007-08 2008-09 2009-10 2010-110

5000

10000

15000

20000

25000

Raw materials Work in process

Finished goods

INVENTORY LEVEL OF THE COMPANY(in thousand tons)

INVENTORY TURNOVER RARIO

. The inventory turnover ratio measures the number of times a company sells its inventory

during the year.



Inventory turnover ratio= Cost of salesAverage stock

Cost of sales=sales−Gross profit

Average stock=Openingstock+Closing stock2

TABLE - 4.1.2

INVENTORY TURNOVER RARIO

S.No YearCost of goods sold

(` in lakhs)Average stock (in tones) Inventory turnover ratio

1 2006-07 2663028 487428 5.46 per cent

2 2007-08 2844494 503184 5.65 per cent

3 2008-09 3094850 819401.5 3.78 per cent

4 2009-10 4010580 945491.5 4.24 per cent

5 2010-11 4521886 822538.5 5.50 per cent

Source: Annual reports of Chettinad Cement Corporation Limited

The inventory turnover ratio was high in the year 2006-07 after that 2007-08 the inventory turnover ratio was decreased. The present value of inventory turnover ratio is good.

CHART - 4.1.2

INVENTORY TURNOVER RATIO



2006-07 2007-08 2008-09 2009-10 2010-110

1

2

3

4

5

6

5.463428444816475.65298976120067

3.77696404021716

4.24179381834739

5.49747640991881

INVENTORY CONVERSION PERIOD

The inventory conversion period is the time required to obtain materials for a product,

manufactured it, sell it.



Inventory conversion period= No . of days∈the yearInventory turnover ratio

TABLE – 4.1.3


S.No Year No. of days Inventory turnover ratioInventory conversion

period (in days)

1 2006-07 365 5.46 per cent 66

2 2007-08 366 5.65 per cent 64

3 2008-09 365 3.78 per cent 96

4 2009-10 365 4.24 per cent 86

5 2010-11 365 5.50 per cent 65

Source: Annual reports of Chettinad Cement Corporation Limited

The inventory conversion period is normally indicates the wealth of the company. The

company wants to concentrates with its inventory conversion period.

CHART – 4.1.3




2006-07 2007-08 2008-09 2009-10 2010-110

20

40

60

80

100

120

6664

96

86

65



ANALYSIS PART-2

EOQ ANALYSIS

TABLE-4.2.1

EOQ ANALYSIS FOR THE YEAR 2006-07



ItemAnnual

requirementO C P EOQ

Total investment with EOQ

Total investment

without EOQ

Saving inventory

cost

Iron Ore 31500 36 1.5 65 1230 81794 138615 56821

Lime Stones 15000 40 1.25 144 980 142345 145225 2880

Clay Ash 14000 42 2 144 767 111982 135915 23933

Sulphur 13000 34.5 1.75 153 716 110801 133927 23136

Gypsum 13500 35 1.25 144 869 126223 130688 4465

Bauxite 11500 36.5 1.5 150 748 113322 116173 2851


The company’s annual requirement for the year 2006-07 is 101000 tons of raw materials.

They using investment with EOQ spent ` 787168. When the same in without investing EOQ is

` 882551. So the company saved ` 169432 in the year 2006-07.

CHART-4.2.1




Iron Ore Lime Stones Clay Ash Sulphur Gypsum Bauxite0

20000

40000

60000

80000

100000

120000

140000

160000

81794

142345

111982 110801

126223

113322

138615

145225

135915 133927130688

116173


Total investment without EOQ

TABLE-4.2.2




ItemAnnual



Total investment

without EOQ

Saving inventory cost

Iron Ore 33500 35 1.5 75 1250 95626 169675 74049

Lime Stones 13500 41 2 154 744 116064 140115 24051

Clay Ash 16500 551.55

154 1100 171050 171050 0

Sulphur 14000 35 1.5 163 808 132916 153304 20388

Gypsum 12500 36 2 154 671 104676 153304 20388

Bauxite 11000 37 2.5 160 571 92787 118752 25965





CHART-4.2.3





20000

40000

60000

80000

100000

120000

140000

160000

180000

95626

116064

171050

132916

104676

92787

169675

140115

171050

153304 153304

118752



TABLE-4.2.3




ItemAnnual



Total investment

without EOQ

Saving inventory

cost

Iron Ore 13500 34 1.5 65 1260 83789 153905 7046

Lime Stones 13500 36 1.5 167 805 135642 151515 15873

Clay Ash 15000 381.75 165 807 134567 166445 13878

Sulphur 14000 371.75 164 769 127462 154384 26922

Gypsum 15000 35 2.5 165 648 108540 166775 58235

Bauxite 11200 36.51.75 170 684 117476 128191 10715





CHART-4.2.3





20000

40000

60000

80000

100000

120000

140000

160000

180000

83789

135642 134567127462

108540

117476

153905 151515

166445

154384

166775

128191



TABLE-4.2.4




ItemAnnual

requirement

O C P EOQTotal

investment with EOQ

Total investment

without EOQ


Iron Ore 34000 36 1.5 95 1271 123231 217605 94374

Lime Stones 12500 371.75 174 727 127770 146226 18456

Clay Ash 14000 40 1.5 175 864 152496 164575 12079

Sulphur 16000 381.75

174 834 146575 187161 40586

Gypsum 18000 36 2.75 175 686 121938 212190 90252

Bauxite 17000 37 1 180 1122 203082 205062 1980



They using investment with EOQ spent `875092. When the same in without investing EOQ is

`1132819. So the company saved `2577276 in the year 2009-10.

CHART-4.2.4





50000

100000

150000

200000

250000

123231 127770

152496146575

121938

203082

217605

146226

164575

187161

212190 205062



TABLE-4.2.5




ItemAnnual



Total investment

without EOQ


Iron Ore 38000 371.75

105 1268 135358 268736 133378

Lime Stones 13500 351.25 185 869 161852 167588 5736

Clay Ash 12000 38 3 195 551 109099 157770 48671

Sulphur 15000 40 3.25 185 608 114455 187225 72770

Gypsum 17000 401.25 194 1043 203646 221110 17464

Bauxite 18000 39 2.75 200 715 144965 242235 97270





CHART-4.2.5





50000

100000

150000

200000

250000

300000

135358

161852

109099114455

203646

144965

268736

167588157770

187225

221110

242235





CHAPTER-V

SUMMARY OF FINDINGS,

SUGGESTIONS AND CONCLUSION

5.1 FINDINGS




In inventory level of the company, the in inventory level has been increased year

by yea. There is no problem in the inventory level of the Chettinad Cement

Corporation Limited.

In inventory turnover ratio the ratios of the year has been finded as low in the

years of 2008-09 and 2009-10. After those periods the inventory turnover ratio

has slightly increased in the year 2010-11. Even though that level is quite low

when compare with 2007-08.

In inventory conversion period is finded as good level. Even though they wants to

keep the inventory conversion period as low.

EOQ ANALYSIS

In EOQ analysis for the year 2006-07 to 2010-11 is good. For this year they

followed EOQ with investment for purchase of goods.





In EOQ analysis for the year 2009-10 to 2010-11 is good. In this year the EOQ

with investment and EOQ without investment are same.

In EOQ analysis for the year 2010-11 to 2010-11 is good. All years of EOQ is

followed only investment with EOQ.

5.2 SUGGESTION




In inventory level of the company shows the increase of the raw materials, work-

in-process and finished goods. The inventory level of Chettinad Cement

Corporation Limited is well.

In inventory turnover ratio finded some problems. They want sell their product to

outside also. Now they use their cement which are produced in Chettinad Cement

Corporation Limited for their own purpose. They want to sell that to others also

then only the ratio will be increased.

Chettinad Cement Corporation Limited sells the 25 per cent of the cements

produced, remaining they used for own purpose. For sales to others they allowed

more days as credit to their agents.

EOQ ANALYSIS

In EOQ analysis there is no problems finded in findings for the Chettinad Cement

Corporation Limited. Even though they want to keep that situation in upcoming

years also. Then only they can retain position.








Corporation Limited. The EOQ was finded as same in the concept of EOQ with



investment and EOQ without investment, even though they followed EOQ with

investment.




5.3 CONCLUSION



The study covers the inventory management for effective inventory control. I have used a

technique Economic Order Quantity Analysis named as EOQ Analysis for find out the

rate with EOQ and without EOQ investment for purchasing of good in the manufacturing

the cement in Chettinad Cement Corporation Limited. Hence the inventory management

of the organization quite good. During the year 2006-2011 from this study I concluded

that organization would be efsfective inventory management. The study will be use for

Chettinad Cement Corporation Limited in various ways.



BIBLIOGRAPHY

BIBLIOGRAPHY



BOOKS

Asohok Banerjee - Financial Accounting – A Managerial Emphasis – Excel

Books – 2005

Collis – Business Accounting – Palgrave Macmillan – 2007

Khan MY Jain P.K – Management Accounting : Text, problems and cases 4th

Edition – Tata McGraw Hill – 2007

Pandikumar – Management Accounting – Excel Books – 2007

Ramachandran N Kakani Kumar Ram – Financial Acccounting For Management –

Tata McGraw Hill – 2006

Robert N.Anthony David F.Hawkins Kenneth A.Merchant – Accounting Text and

Cases – Tata McGraw Hill – 2007

S.K Bhattacharyya Jhon Dearden – Costing for Management – Vikas Publishing –

2002

S.N Maheswari S.K Maheswari – Accounting for Management – Vikas Publishing

– 2006

WEBSITES

en.wikipedia.com

Info.shine.com

www.ask.com

www.chettinad.com

www.google.com

www.indiacatalog.com

www.inventoryquzz.com

www.reportjunction.com

www.scribed.com

www.yahoo.com


http://www.scribed.com/

http://www.reportjunction.com/

http://www.inventoryquzz.com/

http://www.indiacatalog.com/

http://www.google.com/

http://www.chettinad.com/

http://www.ask.com/

http://www.wikipedia.com/

A Study on Inventory Management

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