A Study on Inventory Management

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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

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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

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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

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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.

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TABLE OF CONTENTS

CHAPTER NO DESCRIPTION PAGE NO

LIST OF TABLES LIST OF CHARTS ABSTRACT

I

INTRODUCTION

1.1 About the study 1.2 Scope of the study

1.3 Statement of the problem 1.4 Objectives of the study 1.5 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

IV

ANALYSIS 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 Conclusion BIBLIOGRAPHY

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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 4.2.2 EOQ analysis for the year 2007-08 4.2.3 EOQ analysis for the year 2008-09 4.2.4 EOQ analysis for the year 2009-10 4.2.5 EOQ analysis for the year 2010-11

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 4.2.1 EOQ analysis for the year 2006-07 4.2.2 EOQ analysis for the year 2007-08 4.2.3 EOQ analysis for the year 2008-09 4.2.4 EOQ analysis for the year 2009-10 4.2.5 EOQ analysis for the year 2010-11

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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.

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CHAPTER-I

INRODUCTION

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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.

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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.

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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.

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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.

√ Where

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CHAPTER-II

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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.

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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.

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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.

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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%

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Top 25 Cement companies in the world

Cement industry in India

S.NO Name of the Company Name of the

Country 1. 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 Source: www.google.com, www.ask.com, www.linkedin.com, en.wikipedia.com

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2.1.2 Cement Industry in India

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

Year of establishment Head quarters Web site 1981 Gujarat www.ambujacement.com 3. Andhra Cements Ltd Year of establishment Head quarters Web site 1936 Andhra Pradesh www.andhracements.com

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4. Barak Valley Cements Ltd Year of establishment Head quarters Web site 1999 Assam www.barakcement.com 5. Bheema Cements Ltd Year of establishment Head quarters Web site 1978 Andhra Pradesh www.bheemacement.com 6. Binani Cement Ltd Year of establishment Head quarters Web site 1996 West Bengal www.binani.com

7. Birla Corporation Limited

Year of establishment Head quarters Web site 1919 West Bengal www.grasim.com 8. Burnpur Cement Ltd Year of establishment Head quarters Web site 1986 West Bengal www.burnpurcement.com

9. Chettinad Cement Corporation Limited Year of establishment Head quarters Web site 1962 Tamil Nadu www.chettinadcement.com

10. Dalmia Cement (Bharat) Limited Year of establishment Head quarters Web site 1951 Tamil Nadu www.dalmiacement.com

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11. Deccan Cements Ltd Year of establishment 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

Year of establishment Head quarters Web site 1948 Madhya Pradesh www.grasim.com

14. Gujarat Sidhee Cement Ltd

Year of establishment Head quarters Web site 1973 Gujarat www.gujaratsidhee.com

15. Heidelberg Cement India Ltd

Year of establishment Head quarters Web site 1958 Karnataka www.mycemco.com 16. Hyderabad Industries Ltd Year of establishment Head quarters Web site 1946 Andhra Pradesh www.hil.in

17. Indian Hume Pipe Company Ltd Year of establishment Head quarters Web site 1962 Maharashtra www.indianhumepipe.com 18. J. K. Cement Limited Year of establishment Head quarters Web site 1994 Uttar Pradesh www.jkcement.com

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19. JK Lakshmi Cement Ltd Year of establishment Head quarters Web site 1938 Rajasthan www.jklcem.com 20. Kalyanpur Cements Ltd Year of establishment Head quarters Web site 1937 West Bengal www.kalyancemenet.com 21. Katwa Cements Ltd Year of establishment Head quarters Web site 1993 Karnataka www.katwagroup.com 22. Kesoram Industries Ltd Year of establishment Head quarters Web site 1919 West Bengal www.kesocorp.com

23. Madras Cements Limited

Year of establishment Head quarters Web site 1954 Tamil Nadu www.madrascements.com 24. Mangalam Cement Ltd Year of establishment Head quarters Web site 1976 Rajasthan www.mangalamcement.com 25. NCL Industries Ltd Year of establishment Head quarters Web site 1979 Andhra Pradesh www.nclind.com 26. Nirman Cements Ltd Year of establishment Head quarters Web site 1983 Bihar www.nirmancements.com

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27. OCL India Ltd Year of establishment Head quarters Web site 1949 Orissa www.ocl.in

28. Panyam Cements & Mineral Inds Ltd Year of establishment Head quarters Web site 1955 Andhra Pradesh www.panyamcements.com 29. Prism Cement Ltd Year of establishment Head quarters Web site 1992 Andhra Pradesh www.prismcement.com 30. Rose Zinc Ltd Year of establishment Head quarters Web site 1990 Rajasthan www.rosezinc.com 31. Sagar Cements Ltd Year of establishment Head quarters Web site 1981 Andhra Pradesh www.sagarcements.in

32. Sainik Cement Inds. Ltd

Year of establishment Head quarters Web site 1991 Delhi www.sainikcem.in 33. Sanghi Industries Ltd Year of establishment Head quarters Web site 1985 Andhra Pradesh www.sanghicement.com 34. Saurashtra Cement Ltd Year of establishment Head quarters Web site 1956 Gujarat www.saurashtra.com

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35. Shiva Cement Ltd Year of establishment Head quarters Web site 1985 Orissa www.shivacement.com

36. Shree Digvijay Cement Company Ltd Year of establishment Head quarters Web site 1983 Gujarat www.digvijaycement.com

37. Somani Cement Company Ltd

Year of establishment Head quarters Web site 1983 Andhra Pradesh www.anjanicement.com

38. Sri Vasavi Inds. Ltd

Year of establishment Head quarters Web site 1985 Andhra Pradesh www.srivasavi.com

39. Sri Chakra Cements Ltd

Year of establishment Head quarters Web site 1981 Andhra Pradesh www.chakracement.com 40. Stresscrete India Ltd Year of establishment Head quarters Web site 1983 Maharashtra www.stresscrete.com

41. The India cements Ltd

Year of establishment Head quarters Web site 1946 Tamil Nadu www.ramcocement.in

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42. Udaipur Cement Works Ltd Year of establishment Head quarters Web site 1993 Rajasthan www.udaipurcement.com

43. UltraTech Cement Limited

Year of establishment Head quarters Web site 2000 Maharashtra www.ultratechcement.com 44. Vinaycements Ltd Year of establishment Head quarters Web site 1986 Assam www.vinaycements.com 45. Visaka industries Ltd Year of establishment Head quarters Web site 1981 Andhra Pradesh www.visaka.org

46. Zuari cement corporation Ltd

Year of establishment Head quarters Web site 1985 Andhra Pradesh www.zuaricement.com Source: www.google.com, info.shine.com, www.indiacatalog.com

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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

1 Chettinad Cement Corporation Limited

Year of

establishment 1962 Corporate office Chennai

Plant Places Karur, Dhindukal, Ariyalur

Brand name Chettinad.

2 The India cements Ltd

Year of

establishment 1946 Corporate office Chennai.

Plant Places Ramanathapuram, Sangakiri, Ariyalur. Brand name Sankar cement,

Coromandel cement.

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3 Madras cement Ltd

Year of

establishment 1950 Corporate office Chennai. Plant place Ariyalur.

Brand name Ram co cement.

4 Tamilnadu cements corporation Ltd

Year of

establishment 1979

Corporate office Chennai (Govt). Plant place Ariyalur.

Brand name Arasu cement

5 Janathacem industries limited

Year of

establishment 1976 Corporate office Madurai.

Plant place Rajapalayam,madurai. Brand name Janatha cement, agsar

cement.

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2.1.4 Cement Company in Karur District

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.

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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.

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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

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VISION

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.

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Organizational chart of Chettinad Cement Corporation Ltd.

Board of directors

President

Vice president

Senior general manager

Additional General Manager Chairman

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Senior Manger

Senior Assistance Manager

Supervisor Deputy General Manager

Sales Officer

Chief Security Officer

Vigilance Officer

Accounts Officer

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MANUFACTURING DETAILS



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.

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

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.

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

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.

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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 Coal Dust Rotary Kiln

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Formation Of Clinker

Clinker Cooler

Grinding In Ball and Tube Mill

Gyp sum

Storage In silos

Weighing and packaging in Bags

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DRY PROCESS TECHNOLOGY Calcareous Material Limestone Crushing Grinding Storag e Argilseeous Material Clay Crushin g Grinding Storage

Mixing In Correct Proportion

Rotary Kiln

Coal Dust

Formation of Clinker Storage of raw materials

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Grinding In Ball and Tube Mill

Gyp sum

Storage in Silos

Weighing and Packing in bags

Distribution Clinker Cooler

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ACHIEVEMENTS OF CHETTINAD CEMENT CORPORATION LTD.

S.No AWARDS YEAR

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

6

Conservationist 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 8

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

H.T. Industries of 2000 KVA) 1998

9

NCBM National Award

Second Best for Energy Efficiency Performance 1998

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MILESTONES OF CHETTINAD CEMENT CORPORATION LIMITED

Sl. No. MILESTONES YEAR

1 0.4 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

4 66 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

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

B) Bag filter for coal mill grinding system. 1997

9 Vertical 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

11 Green 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

15 1 No. 15MW Coal based Captive Power Plant commissioned in 12 Months

at Karikkali. 2004

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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

for Kiln/ Raw mill to handle excess process gases. 2006

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

cement production. 2007

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

at Puliyur. 2007

21 Energy 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

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

Karikkali plant requirement of limestone. 2007

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

Puliyur Works. 2008

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

capacity. 2008

26 KHD make Burner Management System for kiln operation to improve

quality of clinker and to save thermal energy. 2008

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

Ariyalur. 2008

28 Green 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.

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30 Brown 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 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.

2010

32 Roller 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.

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CHAPTER-III

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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.

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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.

√ Where

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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)

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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)

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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

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CHAPTER-IV

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ANALYSIS PART-1

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TABLE - 4.1.1

LEVEL OF INVENTORY

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.

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

1

Raw materials Lime stone

(stacker 60 Per cent) Iron ore

(stacker 25 Per cent) Clay ash

(stacker 15 Per cent)

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

Qty in thousand tones

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CHART - 4.1.1

LEVEL OF INVENTORY

0 5000 10000 15000 20000 25000 2006-07 2007-08 2008-09 2009-10 2010-11

Raw materials Work in process

Finished goods

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INVENTORY TURNOVER RARIO

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

TABLE - 4.1.2

INVENTORY TURNOVER RARIO

S.No Year

Cost 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.

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CHART - 4.1.2

INVENTORY TURNOVER RATIO

5.463428445 5.652989761 3.77696404 4.241793818 5.49747641 0 1 2 3 4 5 6 2006-07 2007-08 2008-09 2009-10 2010-11

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INVENTORY CONVERSION PERIOD

The inventory conversion period is the time required to obtain materials for a product, manufactured it, sell it.

TABLE – 4.1.3

INVENTORY CONVERSION PERIOD

S.No Year No. of days Inventory turnover ratio Inventory 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.

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CHART – 4.1.3

INVENTORY CONVERSION PERIOD

66 64 96 86 65 0 20 40 60 80 100 120 2006-07 2007-08 2008-09 2009-10 2010-11

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ANALYSIS PART-2

EOQ ANALYSIS

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TABLE-4.2.1

EOQ ANALYSIS FOR THE YEAR 2006-07

Item Annual requirement O 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 Source: Annual report of Chettinad Cement Corporation Limited

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.

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CHART-4.2.1

EOQ ANALYSIS FOR THE YEAR 2006-07

0 20000 40000 60000 80000 100000 120000 140000 160000

Iron Ore Lime Stones Clay Ash Sulphur Gypsum Bauxite

81794 142345 111982 ₁₁₀₈₀₁ 126223 113322 138615 145225 135915 ₁₃₃₉₂₇ 130688 116173

Total investment with EOQ

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TABLE-4.2.2

EOQ ANALYSIS FOR THE YEAR 2007-08

Item Annual requirement O C P EOQ Total investment with EOQ 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 55 1.55 154 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 Source: Annual report of Chettinad Cement Corporation Limited

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CHART-4.2.3

EOQ ANALYSIS FOR THE YEAR 2007-08

0 20000 40000 60000 80000 100000 120000 140000 160000 180000

95626 116064 171050 132916 104676 92787 169675 140115 171050 153304 153304 118752

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TABLE-4.2.3

EOQ ANALYSIS FOR THE YEAR 2008-09

Item Annual requirement O C P EOQ Total investment with EOQ 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 38 1.75 165 807 134567 166445 13878 Sulphur 14000 37 1.75 164 769 127462 154384 26922 Gypsum 15000 35 2.5 165 648 108540 166775 58235 Bauxite 11200 36.5 1.75 170 684 117476 128191 10715

Source: Annual report of Chettinad Cement Corporation Limited

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CHART-4.2.3

0 20000 40000 60000 80000 100000 120000 140000 160000 180000

83789 135642 ₁₃₄₅₆₇ 127462 108540 117476 153905 ₁₅₁₅₁₅ 166445 154384 166775 128191

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TABLE-4.2.4

Item Annual requirement O C P EOQ Total investment with EOQ Total investment without EOQ Saving inventory cost Iron Ore 34000 36 1.5 95 1271 123231 217605 94374 Lime Stones 12500 37 1.75 174 727 127770 146226 18456 Clay Ash 14000 40 1.5 175 864 152496 164575 12079 Sulphur 16000 38 1.75 174 834 146575 187161 40586 Gypsum 18000 36 2.75 175 686 121938 212190 90252 Bauxite 17000 37 1 180 1122 203082 205062 1980

Source: Annual report of Chettinad Cement Corporation Limited

The company’s annual requirement for the year 2009-10 is 111500 tons of raw materials. 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.

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CHART-4.2.4

EOQ ANALYSIS FOR THE YEAR 2009-10

0 50000 100000 150000 200000 250000

123231 127770 152496 146575 121938 203082 217605 146226 164575 187161 212190 205062

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TABLE-4.2.5

EOQ ANALYSIS FOR THE YEAR 2010-11

Item Annual requirement O C P EOQ Total investment with EOQ Total investment without EOQ Saving inventory cost Iron Ore 38000 37 1.75 105 1268 135358 268736 133378 Lime Stones 13500 35 1.25 185 869 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 40 1.25 194 1043 203646 221110 17464 Bauxite 18000 39 2.75 200 715 144965 242235 97270

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CHART-4.2.5

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135358 161852 109099 114455 203646 144965 268736 167588 157770 187225 221110 242235 0 50000 100000 150000 200000 250000 300000

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CHAPTER-V

SUMMARY OF FINDINGS, SUGGESTIONS AND

CONCLUSION

5.1 FINDINGS

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

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

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 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.

 In EOQ analysis there is no problems finded in findings for the Chettinad Cement Corporation Limited. The EOQ was finded as same in the concept of EOQ with

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

 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.

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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.

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