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“A STUDY OF INVENTORY CONTROL”

SUMMER INTERSHIP

2011

A REPORT ON

3rd SEMESTER (MBA 2009-11)

INTERNATIONAL INSTITUTE OF BUSINESS STUDIES

SUBMITTED BY:

NISHA GOSWAMI

Roll NO: 9215990096

Institute’s Certificate

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This is to certify that Mr.NISHA GOSWAMI

has completed his TWO Months Summer Internship Training Programme at Purple Wave Infocom Pvt. Ltd.

Mr.Manoj Singh

Managing Director

(Dwarka)

PREFACE

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The MBA programme is well structured and integrated course of business studies. The main objective of practical training at MBA level is to develop skill in student bySupplement to the theoretical study of business management in general.

Industrial training helps to gain real life knowledge about the industrial environment and business practices. The MBA programme provides student with a fundamentalknowledge of business and organizational functions and activities, as well as an exposure to strategic thinking of management.In every professional course, training is an important factor. Professors give usTheoretical knowledge of various subjects in the college but we are practically exposed of such subjects when we get the training in the organization. It is only the training through which I come to know that what an industry is and how it works. I can learn about various departmental operations being performed in the industry, which would, in return, help me in the future when I will enter the practical field.

Training is an integral part of MBA and each and every student has to undergo thetraining for 6 weeks in a company and then prepare a project report on the same after the completion of training. During this whole training I got a lot of experience and came to know about the management practices in real that how it differs from those of theoretical knowledge and the practically in the real life.

In today’s globalize world, where cutthroat competition is prevailing in the market,theoretical knowledge is not sufficient so far. Beside this one need to have practicalknowledge about market, which would help an individual in his/her carrier activitiesand it is true that “Experience is best teacher”.

DECLERATION

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I hereby declare that the mentioned information in the project is correct up to my knowledge and I bear the responsibility for the correctness of the mentioned particulars.

(NISHA GOSWAMI)

ACKNOWLEDGEMENT

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With immense pleasure, I would like to present this project report for PURPLE WAVE INFOCOM. It has been an enriching experience for me to undergo my summer training at PURPLE WAVE (DWARKA) which would not have possible without the goodwill and support of the people around me. As a student of that web I would like to express my sincere thanks to all those who helped me during my practical training programme.

Words are insufficient to express my gratitude toward Mr. Manoj Singh and Mrs. Sandhya Singh area head of Purple Wave Infocom(Dwarka) who permitted me to get training. I am very grateful to our Director Mr. Manoj Singh for providing me an opportunity for this training. I am very thankful to Mr. Bhavuk Garg who helped me at every step whenever needed.

At last but not least my grateful thanks are also extended to all my faculty membersfor the proper guidance and assistance extended by them. I am also grateful to my parents, friends for encourage & giving me moral support. However, I accept the sole responsibility for any possible error of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.

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who permitted me to get training. I am very grateful to our Director Mr. Manoj Singhfor providing me an opportunity for this training. I am very thankful to Mr. Bhavuk Gargwho helped me at every step whenever needed.

At last but not least my grateful thanks are also extended to all my faculty membersfor the proper guidance and assistance extended by them. I am also grateful to my parents, friends for encourage & giving me moral support. However, I accept the sole responsibility for any possible error of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.

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TABLE OF CONTENT

Sr. No CHAPTER Page.No

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INTRODUCTION 9-10

MAJOR INDIAN RETAILOR 11-13

ABOUT PUNE CENTRAL 14-14

1 CHAPTER I :-

ORGANISATIONAL PROFILE OF INDUS LEAGUE 15-20

BRAND UNDER THE INDUS LEAGUE 21-32

FUTURE GROUP MANIFESTO 33-36

FUTURE GROUP AWARDS 37-40

2 CORPORATE TIEUP 41-43

STATEMENT OF THE PROBLEM 44-44

NEED OF STUDY 45-45

SCOPE OF STUDY 46-46

OBJECTIVE 47-47

3 CHAPTER II :-

RESEARCH METHODOLOGY & RESEARCH DESIGN 48-49

SAMPLE DESIGN 50-51

SAMPLING METHOD 52-54

LIMITATIONS 55-55

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Page.No

4 CHAPTER III :-

DATA ANALYSIS & INTERPRITATION 56-73

5 CHAPTER IV :-

FINDINGS 74-75

6 CHAPTER V :-

CONCLUSIONS 76-76

8 CHAPTER VI :-

RECCOMENDATIONS 77-77

QUESTIONNAIRE 78-79

BIBLIOGRAPHY

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LIST OF TABLES

Sr.No Table.No Title Page.No

3 RESEARCH DESIGN AND METHODOLOGY

3.1 People visiting for the first time 57

3.2 Frequency of visit 58

3.3 Frequency age group wise 59

3.4 Frequency gender wise 60

3.5 Promotions stimulating people 61

3.6 Influences of the promotional activities 62

3.7 Influence of the promotions occupation wise 63

3.8 Number of people exposed to communication of Indus League 64

3.9 Exposure of the communication age group wise 65

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3.10 People exposed to instore communication 66

3.11 People liking the communication 67

3.12 Ratings for IndusLeague 68

3.13 People’s opinion on the offer 69

3.14 Opinions of the people on offers, age-group wise. 70

3.15 Shopping experiences 71

3.16 Shopping experiences, age-group wise 72

3.17 Shopping experiences, gender wise 73

EXECUTIVE SUMMARY

The legendary Indian, Mahatma Gandhi expressed the importance of the customer in any industry by stating:

“Customer is the most important visitor to our premises. He is not dependent on us. We are

dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an

outsider on our Business. He is part of it. We are not doing him a favor by serving him. He is

doing us a favor by giving us an opportunity to do so.” To understand this quote and to

adhere to its wisdom can increase success by obtaining, retaining and satisfying customers. Satisfying our customers is an essential element to staying in business in this modern world of global competition. We must satisfy and even delight our customers with the value of our products and services to gain their loyalty and repeat business. Here in this project need to identify the needs and thus able to target the niche market customers (service industry) for in- house apparel market of Future Group.

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The project title is “A Study Of Inventory Control ”(Purple Wave Infocom Pvt. Ltd.)that

identify The Stock Of Material Held For Sale For Purple Wave Infocom Pvt. Ltd.

In various service organisations such as IT companies, Hotels, Colleges for their employees and

students. It also aims to determine how to position various in-house for equipment in corporate

sector. This project reveals that Purple Wave Infocom Pvt. Ltd. should position itself i.e. create

unique slot in clients mind, here clients are various organisations as high quality at low price for

highest quality.

Suggestions like more emphasis on promotional activities such as corporate

discounts and other promotional schemes, regularity in supplying of Equipment order,

provide high end customisation to clients in terms of patterns, post purchase service in terms

of alteration help in increasing market share in this niche market. The above suggestions will

enable the company to enhance the sales activities and hence it will help to take a company to

greater heights.

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CHAPTER I

ORGANISATION PROFILE

PURPLE WAVE INFOCOM PVT.LTD.

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THE HIGHEST QUALITY OF WEB DEVELOPMENT

• Vision & Mission

• So far…

• Today…

• Management Team

OUR VISION

• We are passionate about building New technique.

• We are searching different companies which are providing better equipment.

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• We seek success internationally. The world will be our sourcing base and our

market.

• The following principles will be our guiding light .

• Define the customer satisfaction.

• Focus on services and quality.

• Build the fabric of our business:

• We will strive to be the most admired company by continually benchmarking against

the best in class

• We are looking forward to work and business .

• We recognize that profitability is fundamental to our success.

• We will provide a great work environment and we treat each other with respect and

dignity.

• Wealth creation for employees, associates and society is the cornerstone of our

business.

PROFILE OF PURPLE WAVE INFOCOM PVT.LTD.

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Purple Wave Infocom Pvt Ltd., was founded on the 1st November 2008 By Pete

Roberts, Director of Purple Wave Infocom in UK.

First company ever to be established with venture capital funding .

Purple Wave Infocom set standards for employee work satisfaction and offered to

share the profit earned.

.

KEY MILESTONES

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• Purple Wave established -1st November 2008

• Found extended internet-15 December 2009

• Bhopal Branch established-2009

• Purple Rain Wave , Prince Found-1985

• Purple Wave found as best care daisy-24th September 1994

• Purple Wave Auction Co. Based in Manhattan-14th November 2004

• Audio Visual Hire -1st November2008

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TODAY

• Purple Wave Is better quality provider in the country and a proud member of the largest

group-the “FUTURE GROUP”

• Purple Wave is a company which is having different products and it supplies

different product to the customers.

• Purple Wave is working as a co-ordinator company. It is working as a third party.

• Has been growing at 60% for the past three years and currently has a turnover of Rs.

100cr.at the bottom line of profits.

• Having partnership with different companies like

Adobe,Headstrong,Metlife,Hindware,Samsung,Acer,Pro FX,Canon and more

companies. These companies have provided their products to Purple Wave and then it

supplies to customers.

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PURPLE WAVE INFOCOM MANAGEMENT TEAM

• Mr. Manoj Singh- Managing Director

• Mrs. Sandhya Singh-Director

• Mr. Prince Srivastava-Project Implementation Manager

• Mr. Bhavuk Garg-Finance,CA with 15years experience

• Mr. Abhijit Srivastava-Manager ,experience in sales and operations profiles.

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Company Brief

Purple Wave provides a comprehensive suite of audiovisual solution for corporate and campus, IT professional, facility Manager and Meeting Room users looking for a way to manage, monitor and schedule meeting rooms and their associated electronic devices. Purple Wave strive to perfect the idea and present highly professional with visually beautiful designs that blend into the feel of the environment .It expertise in room design and customize room control system. It ensures the successful integration of audio, video and data presentation tools. This tool translate into functional and easy to use meeting facilities. These systems are designed, engineered, integrated and installed by a highly skilled industry certified team of professionals. Purple Wave frequently work with strategic partners, corporate and Government customers where they need the AV and Integration skills in this field to add value to the expertise.

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INVENTORY CONTROL

WHAT IS INVENTORY CONTROL?

Inventory Control means keeping the overall costs associated with having inventory as low as possible without creating problems. This is also sometimes called stock control .it is an important part of any business that has stock of products or items on hand. Correctly managing inventory control is a delicate balance at all times between having too much and too little in order to maximize profits. The costs associated with holding stock , running out of stock, and placing orders must all be looked at and compared in order to find the right formula for a particular business.

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It is impossible to have an unlimited supply on hand, for a number of different reasons. Many businesses simply do not have enough money to keep excessively large inventories. There are costs associated with purchasing the items as well as storing them, and having too many products leads to further losses when they do not move off of the shelves.

At the same time, there are issues with inventory control when there is not enough stock on hand. One common problem is running out of inventory.which is caused by trying to reduce inventory costs too much. This is something that no business wants to have happen, but it happens to virtually all of them at some point. Even the largest stores run out of certain products of time to time when they sell or use more than they excepted. This can cause financial losses when inventory is not available for customers to purchase.Part of inventory control is trying to minimize shortages these are rare occurrences. Most businesses expect they will have shortages on occasion and they have calculated that the small losses worth the money saved by not having an over stock.

Another important element of inventory control is called reorder point. Businesses need to think ahead and calculate the best time for recording the products. Doing so too soon may cause financial difficulties or running out of space. On the other hand , waiting too long to reorder will result in a shortage and running out of inventory before the next shipment arrives.When figuring out or reorder point , it is necessary to calculate how long it will take the shipment to arrive and the amount of demand for a particular item.The overhead costs , fees , and shipping expenses of ordering large versus small quantities should also be looked at.

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INTRODUCTION

Stock control, otherwise known as Inventory Control, is used to show how much stock you have at any one time,and how you keep track of it.

It applies to every item you use to produce a product or service , from raw materials to finished goods.It covers stock at every stage of the production process from purchase and delivery to using and reordering the stock.

Efficent stock control allows you to have the right amount of stock in the right place at the right time. It ensures that capital is not tied up unnecessarily, and protects productions if problem arise with the supply chain.

Purple Wave is a company which can conduct the best way of using the items in the customers need. It also identifies the inventory and try to maintain that as possible.

Inventory is a stock of material held for sale. It is necessary to maintain sufficient inventory level to avoid the shortage and surplus of material in the stores.

INVENTORY CONTROL SYSTEM:

Inventory is a stock of goods and resources that are stored for future production or for meeting future demand. The various items that are included in the inventory are raw materials , semi-finished goods and finished goods.Raw material is to be purchased in bulk so that there is no shortage in the off-season. These materials are purchased and stored as inventories.

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DEFINITION :

According to American Production And Inventory Society (APICS) “Inventory management is the branch management concerned with planning and controlling inventories.”

According to J. David Viale “ Inventory is a very expensive asset that can be replaced with a less expensive asset called information .In order to do this , the information must be timely , accurate, reliable, consistent. When this happens , you carry less inventory, reduce cost and get products to customers fasters.”

CLASSIFICATION OF INVENTORIES

Direct Inventories:

Those items that play a direct role in the manufacturing of goods and services . Direct inventories include:

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Raw Materials

Work In Progress

Finished Goods

Indirect Inventories:

Those items that are not the part of finished products but are necessary in the process of production. There are some types of indirect :

Transit or Pipeline Inventories

Buffer Inventories

Lot Size Inventories

Decoupling Inventories

Seasonal Inventories

Fluctuation Inventories

Maintenance , Repair and Operating(MRO)Inventories and Services:

This category includes office and general supplies such as Xerox papers, pens , papers, towels and light bulbs. Additionally , services such as equipment maintenance, cleaning services and facilities repair are also included.

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OBJECTIVES OF INVENTORY CONTROL

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1. Services to The Customers

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2.Continuity of Productive Operations

3.Effective Use of Capital

4.Economy in Buying

5.Reduction of Risk of Loss

6.Reduction of administrative workload

7.Administrative Simplicity

8.Reduction in Financial Investment

9.Allow Flexibility

10.Reduction in Surplus Stock

11.Repair The Equipment

12.Control The Capital

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FACTORS AFFECTING INVENTORY CONTROL

1.Space

2.Insurance

3.Capital

4.General Administration

5.Spoilage

6.Transportation Cost

7.Quantity Discount

8.Procurement Cost

9.Demand During Lead Time

10.Variable Demand

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INVENTORY COSTS

Cost of Items:

The amount paid for purchasing an item is the cost of that item. Cost of an item sometimes includes the transportation , receiving and inspection cost.

Procurement Cost:

The cost that is incurred for the refill of items is termed as the procurement cost. This cost is also known as the preparation cost. These costs are the costs involved in printing, stationary , telephone and telegrams, telex, postage, travelling and running expenses of transport.

INVENTORY CARRYING COST:

The cost that is incurred by holding of stocks is termed as the inventory carrying cost. This cost is also termed as the holding cost. This cost includes capital cost , storage and handling charges, loss due to deterioration and taxes and insurance etc.

STOCKOUT COST:

The cost that is associated with the loss of demand when the stocks have been depleted. Stockout cost is related to the lost sales or backorder cost. When sales are lost due to stockouts, the profit margin and goodwill of the firm gets reduced.

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ABC ANALYSIS OR ABC CLASSIFICATION

ABC means Always Better Control analysis, as the name indicates , is based on three letters: A, B and C.

Efficient storekeeping requires sufficient control over all the items of the stores. However , comparatively greater care is necessary in case of items.

According to this analysis , the items that are required for any firm are divided into three categories , which are termed as A , B and C. The items that are required in bulk by a firm and the major part of expenditure are made on these goods and are termed as A. Other items that are required in small quantities but are numerous in number are known as B and C items. The main idea behind this devision of items is that attention can be paid to the items according to their categorisation .

A Items:

These are the items , which are required in small quantities, but they comprise nearly 70% to 75% of the total cost made by the firm .

B ITEMS:

This category include the items that consist of 10% to 15% of the total items and comprises of 10% to 15% of the total expenditure made by any firm.

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C ITEMS:

These are the items that constitute about 70% to 80% of the total items but are inexpensive.

RE-ORDER LEVEL

When the stock of an item approaches or falls below a prefixed level that item needs to be refilled by the store- keeper. this prefixed level at which the store keeper restocks the items in a stock is known as the re-order level.

Reorder level is the sum of safety stock and the average consumption during that time . Safety stock is maintained so that increase in the demand during that time can be considered. Also, they are maintained to meet demand when lead time is extended .

All the arbitrary and inclusive disturbance that are caused due to variation usage rate, delay in delivery by the suppliers and rejection in the incoming consignment are absorbed by the minimum stock. The reorder level is fixed somewhere above the minimum level.

This system is very simple and easy to operate . for every item , daily issues are caused on its stock cards. Also , the stock balance is worked out for the item and is compared with its reorder level.

EXAMPLE:

Calculate the re-order level of an item when its annual consumption is 2400 units and lead time is ½ month or 15 days.

SOLUTION:

Average monthly usage of an inventory -2400/12 lead time -1/2 month

Re-order level-(Average daily usages of inventory) x (Lead Time in Days)

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Re-order level-1/2 x 2400/12-100 units.

BASIC EOQ MODEL:

F.W. Harris First developed the EOQ model in 1913.Later, R.H Wilson

performed the in-depth analysis of the model. Therefore , the model is also called the Wilson EOQ model.

Economic order quantity is the point at which the costs of procuring the inventory and costs of holding the inventory are minimum.

EOQ is the resultant quantity derived when the procurement cost per period and the inventory carrying cost are at the optimum balance and the total cost is minimum.

I. Annual consumption of the item(units):ACII. Unit Price(Rs.):U

III. Order Quantity (Units):OQ

IV. Procurement Cost/ Order (Rs.):Cp

V. Inventory carrying cost expressed as a percentage of average inventory investment: Ci

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MATHEMATICAL EXPRESSION FOR THE COST:

1. Annual Procurement Cost:

Number of order per year x Procurement cost per order

AC/OQ x Cp

2. Annual Inventory Carrying Cost:

Average Inventory Investment x Inventory Carrying Cost

- ½ x Order Quantity x Price / Unit x Inventory Carrying cost

-1/2 x OQ x U x Ci

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Satisfaction of Customers in Various Types or Times

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Satisfaction of Customers

in Various Types or

Times

Time

Total

2004 2005 2006 2007 2008

Excellent 9 25 26 8 6 74

Good 6 34 41 7 8 96

Average 2 3 9 4 2 20

Poor 1 2 4 1 2 10

Table : Satisfaction of Customers

Company Wise Satisfaction With Purple Wave

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Companies

Satisfaction in Various Companies Total

Excellent Good Average Poor

Customers

44 62 14 8 128

Suppliers 30 34 6 2 72

Table: Satisfaction of Companies

Interpretation :

Purple Wave is still one step behind of customer delight.

Majority of customer think the experience as good, so efforts should be taken to

convert them into excellent.

Companies have better satisfaction as compared to other companies work.

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CHAPTER IV

FINDINGS

Various Records: During my training i have found the various records of the company. I have worked in various terms. There are many records which are described different years statement of the company.

Tender Profiles: During my work time i have found the company tender list also. I have worked with that. Tender is issuing by the company for products list. Purple Wave is a company who takes part in that work. It sends tenders which are accepted by other company or needed.

Balance Sheet and Trading Accounts: During my visit and work experience , i have worked with the company profits and losses, all assets, liabilities of the company .I have done work with the statement of company finance.

Identify the Outcomes : During my visit , i identify the outcomes of the company. There are a lots of products which are supplied by the other companies to

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Purple Wave and This company sends that items to the customers .There are many products in the company stores.

Stock Details And Maintain Delivery Challans: During my period of training i took the knowledge of stock in the company. I found the variables and other objectives in the company. Delivery Challan is also the part of stock inquiry. In that we can find the optimum stock and the IN and OUT entries.

Tax Invoices Records: During my internship period , i have calculated the Tax Invoices which are coming in the company and out of the company. Invoice can tell the total sale and purchase of the company. It tells the full record of items.

Bank Statement and Cheque Details: During that time , i have find the bank statement of the company. I have calculate the income and pay of the company. I have find out the cheque details also.

Market Penetration for Future group apparels: During exploring various service industries which required apparels in bulk for their employees and clients what I found that there is huge scope for extended market of apparels in corporate sector.

Requirement of high promotional activities: Offering corporate discounts, giving free membership cards to employees, giving high discounts schemes such as free LCD for Logix Groups. It creates excitement in prospective clients and this help in positioning differently in compare to competitors.

Turn around time: What I find while dealing with clients that exact time of delivery of order also gives very good impression in clients mind which helpful in creating good long term relationship

High end customization : During whole process of communication with concern authorities of various organisations and academic institutes what I find that if we would able to give accurate customised apparels what they actually require it helps in improving market potential and also help in creating new clients and thus eventually increase market share as well.

Price consciousness: Most of organisations give highest preference to price of apparels, they require reasonable good quality apparels but at low price. If we would

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able to give good quality apparels at low price in compare to competitors we could have extra edge in this niche market.

CHAPTER V

CONCLUSIONS

According my project what I infer that there is high potential market and financial services

For the satisfaction of customers ,it is necessary that to provide best equipment . Inventory Control is define the need of store for future. It identifies the better alternatives in company.

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From the study conducted the following conclusions can be drawn. In order the dreams into reality and for turning liabilities into assets one must have to meet the needs of the customers and according to that providing them satisfaction as well as customer delight.

Finally I conclude that if we able to control the inventory , we can provide more in future demand. It is most important for the customers satisfaction.

CHAPTER VI

RECCOMENDATIONS

1. Promotional Activities:

Follow the various promotional activities such as advertisement on TV ,Radio,

Newspaper, Internet, etc. For Sales promotion and financial activities provide some discount,

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schemes, offers, gifts, etc to accelerate the sales. Distribute the folders, leaflets, pamphlets,

posters in the various areas to create an awareness or reminder to the customer.

.2. Quality:

Maintain the quality of the equipment as per the requirements of the customers in

order to attain customer satisfaction

3). Time Management:

Time management should be strictly followed in providing the ordered

consignment on time

4). Training to the staff:

A proper training should be provided to the staff by providing the

detailed information about the products and schemes in order to avoid the chances of

hampering the company’s image and reputation.

5). Feed backs:

The feedbacks obtained should be thoroughly studied to know the updated market

conditions and accordingly implement the strategies.

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