A study on effectiveness and efficiency of the existing inventory control system of BPCL

CHAPTER I
INTRODUCTION TO THE STUDY

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1.1 BACKGROUND OF THE STUDY
Inventories constitute the most significant part of current assets of most of the companies in
India. On an average, inventory held ups are approximately 60% of current assets in public
limited companies in India. Because of the large size of inventories maintained by many factory
concerns, a considerable amount of funds is required to be committed to them. It is absolutely
imperative to manage inventories efficiently and effectively in order to avoid unnecessary
investment. A manufacturing undertaking neglecting the management of inventories will be
jeopardizing its long run profitability and may go downward ultimately. It is possible for a
company to reduce its levels of inventories to a considerable degree, eg; 10 to 20%, without any
adverse effect on production and sales, by

using simple inventory planning and control

techniques. The reduction in “excessive” inventories carries a favorable impact on a company’s
profitability.
The literary meaning of the work inventory is “stock of goods”. To a finance manager, inventory
means the value of raw materials, consumables, spares, work in progress, finished goods and
scrap in which a company’s fund has been invested.
The purpose of inventory management is to ensure availability of materials in sufficient quantity
as and when required and also to minimize investment in inventories. Raw materials, goods in
process and finished goods all represent various forms of inventory. Each type represents money
tied up until the inventory leaves the company as purchased products. Because of the large size
of the inventories maintained by firms, a considerable amount of funds is required to be
committed to them. It is therefore absolutely imperative to manage inventories efficiently and
effectively in order to avoid unnecessary investments. A firm neglecting the management of
inventories will be jeopardizing its long run profitability and may fail ultimately. The reduction
in excessive inventories carries a favorable impact on the company’s profitability.

2

i

1.2 BACKGROUND OF THE PROBLEM

In BPCL a sustainable

part of current asset is covered by inventories. In today completion it

become mandatory to keep large current asset in from of inventories so as to ensure smooth
production it is necessary to strike a balance between all the inventories required for the
production.
My study concentrates on the study of effectiveness and efficiency of the existing inventory
control system of BPCL and to suggest ways for reducing the inventory cost there by improving
the profitability of the firm.

1.3 INTRODUCTION TO THE COMPANY
1.3.1 INDUSTRY PROFILE
The word petroleum is a combination of two Latin words “Petra” which means rock and“oleum” which means oil. Petroleum is a fossil. It is called so because it was formed from the
remains of living organisms that sank to the bottom of the oceans. Here they were buried by
thousands of feet of sand and silt. Over time this organic mixture was subjected to enormous
pressure and heat as the layers increased. The mixture changed breaking down into compounds
made of hydrogen and carbon atoms. That is hydrocarbons. Finally an oil saturated rock much
like a wet household sponge was formed.
Petroleum was discovered while drilling for salt. People found it useful for illuminating lamps
and thus its demand increased. Samuel Kier, a Pittsburgh druggist bottled it and sold it as drug.
To market a deodorised variant he designed the first refinery in 1852 which was a huge
impoverished kettle, connected to a metal tank. Colonel Edwin Drake and Uncle Billy Smith
drilled a well with the specific objective of finding oil, and on 27th August 1859, they struck oil
at Titus vale in North Western Pennsylvania, USA at a depth of 69.5ft. The 1860’s saw vast industrial development. A lot of petroleum industries came up. An important player in the market
was Burma Oil Company and later there emerged many new companies and new varieties of
3

products out of petroleum. Since then the hydrocarbon industry has contributed substantially in
meeting the primary energy demand all over the world. The share of oil in the primary consumption was all the high at 51% during 1970s and it started declining after the invention of newer
methods of energy. Today oil accounts for about 40% of world energy of consumption. The ever
increasing demand for energy has ensured sustained, if not dramatic development of the hydrocarbon industry be it exploration of crude oil, production, refining or marketing of petroleum. Oil
and gas industry is the most important sector in any economy since it caters to a wide range of
industry. Oil and gas industry is the most important sector in any economy since it caters to a
wide range of industries including petrochemicals, fertilizers, automobiles etc. Thus, before using this energy source, the crude petroleum required to be refined in the petroleum refineries for
extracting various fractions for energy generation namely, petrol, natural gas, kerosene, asphalt
and many more.
In 1989 during vast industrial development, an important player in the South Asian market was
the Burmah Oil Company. Though incorporated in Scotland in 1886, the company grew out of
the enterprises of the Chef RohitOil Company, which had been formed in 1871 to refine crude
oil produced from primitive hand dug wells in Upper Burma.
In 1928, Asiatic Petroleum Company (India) started cooperation with Burma oil company. This
alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India
Limited. Burmah Shell began its operations with import and marketing of Kerosene.
On 24 January 1976, the Burmah Shell was taken over by the Government of India to form
Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation
Limited. It was also the first refinery to process newly found indigenous crude Bombay High.
In 2003, following a petition by the Centre for Public Interest Litigation, the Supreme Court
restrained the Central government from privatizing Hindustan Petroleum and Bharat Petroleum
CPIL, RajinderSachar and PrashantBhushan said that the only way to disinvest in the companies
would be to repeal or amend the Acts by which they were nationalized in the 1970s As a result,
the government would need a majority in both houses to push through any privatization.
The petroleum industry in India stands out as an example of the strides made by the country in
its march towards economic self-reliance. At the time of Independence in 1947, the industry was
controlled by international companies. Indigenous expertise was scarce, if not non- J existent.
Today, a little over 50 years later, the industry is largely in the public domain with skills 1 and
4

technical know-how comparable to the highest international standards. The testimony of its
vigour and success during the past five decades is the significant increase in crude oil
production from 0.25 to 33 million tons per annum and refining capacity from 0.3 to 103
Million Metric Tons Per Annum (MMTPA).
A major boost to the oil industry came in pursuance of the Industrial Policy Resolution, 1956
that intended to promote growth of the vital sectors such as petroleum under the state con- 1
trol. ONGC, which was formed as a Directorate in 1955, became a Commission in 1956. Indian
Refineries Ltd., a Government company, was set up in 1958. In 1959, the Indian Oil Company
(IOC), again a wholly-owned Government company, was formed for marketing of petroleum
products. Indian Refineries Ltd. was merged with Indian Oil Company Ltd. to form Indian Oil
Corporation Ltd. in September, 1964.
Unlike at the time of Independence when there were no specialized petroleum bodies or
institutions worth mentioning to provide developmental support to the petroleum industry in the
country, there are today several such institutions such as the Indian Institute of Petroleum, Oil
Coordination Committee, Petroleum Conservation Research Association, Oil Industry Safety
Di- 1 rectorate, Centre for High Technology and Directorate General of Hydrocarbons. In
addition, oil I companies have set up research and development centres such as the one
established by the Indi- I an Oil Corporation in Faridabad which have done pioneering work in
formulation of lubricants I and greases
The real growth in exploration and production sector began after the discoveries by Burmah Oil
Company in the fifties prompting the Government to establish Oil & Natural Gas I Commission
in 1956 and Oil India Ltd. in 1959.
During the second decade of Independence (1957-67) a number of oil and gas-bearing structures were discovered by ONGC in Gujarat and Assam. Discovery of oil in large
quantities in Bombay High in February, 1974 opened up a new vista of oil exploration in
offshore areas.
During the period 1977-87, exploratory efforts by ONGC and OIL India yielded discoveries
of oil and gas in a number of structures in Bassein, Tapti, Krishna-Godavari-Cauvery basins,
Cachar (Assam), Nagaland, and Tripura. The indigenous production reached 30 million tons
by 1984-85, a self-sufficiency level of 70% of the country's requirements.

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The petroleum industry includes the global processes of exploration, extraction, refining,
transporting (often by oil tankers and pipelines), and marketing petroleum products. The largest
volume products of the industry are fuel oil and gasoline (petrol). Petroleum (oil) is also the raw
material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides,
and plastics. The industry is usually divided into three major components: upstream, midstream
and downstream. Midstream operations are usually included in the downstream category.
Petroleum is vital to many industries, and is of importance to the maintenance of industrial
civilization in its current configuration, and thus is a critical concern for many nations. Oil
accounts for a large percentage of the world’s energy consumption, ranging from as low of 32%
for Europe and Asia, up to a high of 53% for the Middle East. Other geographic regions
consumption patterns are as follows: South and Central America (44%), Africa (41%), and North
America (40%). The world consumes 30 billion barrels (4.8 km³) of oil per year, with developed
nations being the largest consumers. The United States consumed 25% of the oil produced in
2007.
Governments such as the United States government provide a heavy public subsidy to petroleum
companies, with major tax breaks at virtually every stage of oil exploration and extraction,
including for the costs of oil field leases and drilling equipment.
Natural History
Petroleum is a naturally occurring liquid found in rock formations. It consists of a complex
mixture of hydrocarbons of various molecular weights, plus other organic compounds. It is
generally accepted that oil is formed mostly from the carbon rich remains of ancient plankton
after exposure to heat and pressure in the Earth's crust over hundreds of millions of years. Over
time, the decayed residue was covered by layers of mud and silt, sinking further down into the
Earth’s crust and preserved there between hot and pressured layers, gradually transforming into
oil reservoirs.
Early History
Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in general
has been used since early human history to keep fires ablaze, and also for warfare.

6

Its importance in the world economy evolved slowly, with whale oil used for lighting into the
19th century and wood and coal used for heating and cooking well into the 20th Century. The
Industrial Revolution generated an increasing need for energy which was fueled mainly by coal,
with other sources including whale oil. However, it was discovered that kerosene could be
extracted from crude oil and used as a light and heating fuel. Petroleum was in great demand,
and by the twentieth century had become the most valuable commodity traded on the world
markets.
Modern history
Imperial Russia produced 3,500 tons of oil in 1825 and doubled its output by mid-century. After
oil drilling began in what is now Azerbaijan in 1848, two large pipelines were built in the
Russian Empire: the 833 km long pipeline to transport oil from the Caspian to the Black Sea port
of Batumi (Baku-Batumi pipeline), completed in 1906, and the 162 km long pipeline to carry oil
from Chechnya to the Caspian.
At the turn of the 20th century, Imperial Russia's output of oil, almost entirely from the
Apsheron Peninsula, accounted for half of the world's production and dominated international
markets. Nearly 200 small refineries operated in the suburbs of Baku by 1884. As a side effect of
these early developments, the Apsheron Peninsula emerged as the world's "oldest legacy of oil
pollution and environmental negligence." In 1878, Ludwig Nobel and his Branobel company
"revolutionized oil transport" by commissioning the first oil tanker and launching it on the
Caspian Sea.
The first modern oil refineries were built by IgnacyLukasiewicz near Jasło (then in the dependent
Kingdom of Galicia and Lodomeria in Central European Galicia), Poland from 1854–56. These
were initially small as demand for refined fuel was limited. The refined products were used in
artificial asphalt, machine oil and lubricants, in addition to Lukasiewicz's kerosene lamp. As
kerosene lamps gained popularity, the refining industry grew in the area.
The first commercial oil well in Canada became operational in 1858 at Oil Springs, Ontario (then
Canada West). Businessman James Miller Williams dug several wells between 1855 and 1858
before discovering a rich reserve of oil four metres below ground. Williams extracted 1.5 million
litres of crude oil by 1860, refining much of it into kerosene lamp oil. Some historians challenge
Canada’s claim to North America’s first oil field, arguing that Pennsylvania’s famous Drake well
7

was the continent’s first. But there is evidence to support Williams, not least of which is that the
Drake well did not come into production until August 28, 1859. The controversial point might be
that Williams found oil above bedrock while Edwin Drake’s well located oil within a bedrock
reservoir. The discovery at Oil Springs touched off an oil boom which brought hundreds of
speculators and workers to the area. The first gusher erupted on January 16, 1862, when local oil
man John Shaw struck oil at 158 feet (48 m). For a week the oil gushed unchecked at levels
reported as high as 3,000 barrels per day.
The first modern oil drilling in the United States began in West Virginia and Pennsylvania in the
1850s. Edwin Drake's 1859 well near Titusville, Pennsylvania, is typically considered the first
true modern oil well, and touched off a major boom. In the first quarter of the 20th century, the
United States overtook Russia as the world's largest oil producer. By the 1920s, oil fields had
been established in many countries including Canada, Poland, Sweden, the Ukraine, the United
States, Peru and Venezuela.
The first successful oil tanker, the Zoroaster, was built in 1878 in Sweden, designed by Ludwig
Nobel. It operated from Baku to Astrakhan. A number of new tanker designs were developed in
the 1880s.
In the early 1930s the Texas Company developed the first mobile steel barges for drilling in the
brackish coastal areas of the Persian Gulf. In 1937 Pure Oil Company (now part of Chevron
Corporation) and its partner Superior Oil Company (now part of ExxonMobil Corporation) used
a fixed platform to develop a field in 14 feet (4.3 m) of water, one mile (1.6 km) offshore of
Calcasieu Parish, Louisiana. In early 1947 Superior Oil erected a drilling/production oil platform
in 20 ft (6.1 m) of water some 18 miles off Vermilion Parish, Louisiana. It was Kerr-McGee Oil
Industries (now Anadarko Petroleum Corporation), as operator for partners Phillips Petroleum
(ConocoPhillips) and Stanolind Oil & Gas (BP), that completed its historic Ship Shoal Block 32
well in October 1947, months before Superior actually drilled a discovery from their Vermilion
platform farther offshore. In any case, that made Kerr-McGee's well the first oil discovery drilled
out of sight of land.
After World War II ended, the countries of the Middle East took the lead in oil production from
the United States. Important developments since World War II include deep-water drilling, the
introduction of the Drillship, and the growth of a global shipping network for petroleum relying
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upon oil tankers and pipelines. In the 1960s and 1970s, multi-governmental organizations of oil–
producing nations OPEC and OAPEC played a major role in setting petroleum prices and policy.
Oil Spills and their clean-up have become an issue of increasing political, environmental, and
economic importance.
1.3.2 COMPANY PROFILE
Bharat Petroleum Corporation Limited is a Central Public Sector Undertaking under the Ministry
of Petroleum & Natural Gas, Government of India. BPCL engages in petroleum refining and
marketing of petroleum products, Petro-chemical products and Lube oil. BPCL is a Fortune 500
Company occupying the 225th position in the listing of fortune 500 companies, with and equity
base of Rs.361.54 crores. BPCL currently have Refineries at Mumbai and Kochi with a capacity
of 12 Million Metric Tonnes Per Annum (MMTPA) and 9.5 MMTPA respectively for refining
crude oil. NRL, BPCL’s subsidiary at Numaligarh has a capacity of 3 MMTPA.
1.3.2.1 Strategic Business Units of BPCL
BPCL has 6 Strategic business units as detailed below:Refinery Strategic business unit
Retail Strategic business unit
LPG Strategic business unit
Industrial and commercial strategic business unit
Lubricants strategic business unit
Aviation strategic business unit

1.3.2.2 About Kochi Refinery
The Refinery has implemented world class technology and systems for operations and
enterprises Resource planning. It is an ISO 14001 Environmental Management Systems (EMS)
and ISO 9001 : 2000 Quality management system (QMS) accredited Company and has also
obtained the ISO 17025 (Testing methods in quality control) certification from NABL (National
Accreditation Board for Testing and Calibration of Laboratories). The Refinery has successfully
implemented the Occupational Health and Safety Management System (OHSAS) 18001:2007 in
the year 2009. It was incorporated as a Public Limited Company in September, 1963 with
technical collaboration and financial participation from Philips Petroleum Company of U.S.A
under the title of Cochin Refineries Limited (CRL). The Refinery situated at Ambalamugal,
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Kerala was commissioned in 1966. The name of the company was changed as Kochi Refineries
Limited (KRL) in May 2000.
M/s Bharat Petroleum Corporation Limited (BPCL) acquired Government of India’s entire
equity (54.81%) in Kochi Refineries Limited in March 2001.

Pursuant to Order dated 18

August, 2006 issued by Ministry of Company Affairs the refinery has been merged with Bharat
Petroleum Corporation Ltd.
The Capacity Expansion cum Modernization Project (Phase-II) scheduled for completion in
December 2009 that would enhance the refining capacity of BPCL (KR) to 9.5 MMTPA and
equip it to produce auto-fuels conforming to Euro-III specifications. At present, the Refinery has
a refining capacity of 1,90,000 barrels per day producing all fuel based refinery products. With a
wide spectrum of activities, BPCL Kochi Refinery redefines the benchmarks in the technology
and market preferences. Seeing the sharp rise in demand for petroleum products Kochi Refinery
has envisaged a 6 MMTA capacity expansion with the utilization of available infrastructure like
the SPM and Shore Tank with an Integrated Refinery Expansion Project (IREP) This project
envisages cvapacity expansion, refinery modernization to produce auto-fuels conforming to
Euro-IV specifications and Residue up-grading facilities also. Kochi Refinery world then be
able to cater the product demand with ease to the Southern part of India.

1.3.2.3 Products
BPCL Kochi Refinery produces wide range of petroleum products, petro-chemicals, and lube oil
products. The following are important among them:
o Motor Spirit (MS)
o High Speed Diesel (HSD)
o Jet Propellant-5 (JP-5)
o Light Diesel Oil (LDO)
o Liquefied Petroleum Gas (LPG)
o Low Pour High Speed Diesel (LPHSD)
o Low Sulphur Heavy Stock (LSHS)
o Aviation Turbine Fuel (ATF)
o Bitumen (various grades)
o Furnace Oil
o Low Sulphur High Flash Diesel (LHFD)
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o Mineral Turpentine Oil
o Mixed Aromatics Solvent (MAS)
o Naphtha
o Poly IsoButene (PIB)
o Special Boiling Point Spirit (SBPS)
o Superior Kerosene Oil
o Benzene
o Toluene

1.3.2.4 Corporate Social Responsibility
As a socially responsible corporate citizen, the community welfare initiatives of the Refinery
concentrate on developing the weaker sections of society, particularly, the scheduled castes and
scheduled tribes and people below the poverty line in important sectors like health, education,
housing and women empowerment.
Kochi Refinery has always extended its helping hand to socially and economically backward
community. Some of the projects implemented/sponsored by BPCL Kochi Refinery for general
public over years are:
 Insurance coverage for families below poverty line, living near BPCL Kochi Refinery (600
families insured)
 Railway over bridges on approach road to BPCL KR
 Installation and maintenance of traffic signal systems
 Maintenance of public parks in and around Ernakulam.
 Maintenance of prominent junctions in the city.
 Tarring and maintaining public roads
 Construction of primary health centers, community halls, police watch towers.
 Renovation of Anganwadis (play home for children)
 Donation of accessories like baby chairs, furniture, toys, meal plates to Anganwadis
 Sanitation facilities to villages
 Provision of drinking water
 Extending support to old age homes
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1.3.2.5 Certifications
 BPCL Kochi Refinery has been rated Level 8 in the International Safety Rating
System (ISRS) consolidating its place among the top companies and industrial units
audited by the independent foundation Det Norske Veritas (DNV).

 BPCL Kochi Refinery received ISO 17025 certificate in Quality Control

from

National Accreditation Board for Testing & Calibration Laboratories (NABL)

 BPCL Kochi Refinery was accorded the ISO-14001 certification first in 2002 for
environmental standards by the international agency Bureau Veritas Quality International
(BVQI) and again in 2005.

 M/s. Det Norske Veritas (DNV) has certified BPCL Kochi Refinery ISO 9001-2000 for
Quality Management System.

1.3.2.6 Awards

 BPCL-KRL has won the second prize for Outstanding performance in Industrial Safety
in the Category of very large Industries by Department of Factories & Boilers, Govt of
Kerala for the year 2012.
 BPCL – Kochi Refinery has been adjudged as Runner up for Outstanding Safety
Performance Award in the category of Very Large Industries in Kerala by National
Safety Council (Kerala Chapter) for the year 2012
 BPCL – Kochi Refinery is proud to be the winner of CSR award, the Kerala Management
Association. KMA has been conferring the KMA Excellence Awards to Corporate to
recognize excellence in various spheres.
 BPCL - Kochi Refinery is the winner of the Rotary Binani Zinc CSR excellence
awards. KR has been the winners of this prestigious award for its CSR initiatives for
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the past two consecutive years. The award comes under the category “Public Sector
Unit” for the year 2012-13.
 BPCL –Kochi Refinery has achieved 30 milltion accident free man hours on 25.02.2013.

1.3.2.7 SWOT Analysis
Strengths
 Highest capacity utilization
 Wide experience in petroleum industry
 Participative work culture conductive to team work
 Adaptability to new technological changes

Weakness
Inability to change the products to take the advantages of prices due to the following
constraints:
 Nature of raw materials
 Government directions
 Heavy dependence on imported crude countries

Opportunities
 Deregulation in energy sector resulting in several business opportunities for
diversification and expansion
 Deficit of the product like LPG continues in the supply zone of the Company.
 The per capita oil consumption of India is much lower than the developed countries
and this will ensure the growth prospect in India.

Threats
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 Volatility of the international prices of crude oil and petroleum products.
 Excess refining capacity in the cart run and increased competition in the petroleum
sector.

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1.3.1

Organization Chart – BPCL (Kochi Refinery)

Chairman &Managing Director

D (F)

D (R)

ED(RF)

ED (KR)

DGM (FIN)

GM(HR)

GM(TECH)

GM(P)

GM (O)

DGM(L&D)

DGM(T)

DGM(P)

DGM(E&AS) IC

DGM(P
&CS)

DGM(
E&C)
(E&C)

DGM(PT)

DGM
(CEMPII)

DGM

DGM

DGM

DGM

(MFG)

(P&U)

(OM&S)

(MAINT)

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1.3 RESEARCH METHODOLOGY

1.3.1 RESEARCH DESIGN
The research design used in this project is Analytical in nature. The researcher used facts or
information already available, and analyze these to make a critical evaluation of the
performance.

1.3.2 OBJECTIVES OF THE STUDY

1.3.2.1 Primary Objective


To find out inventory optimization techniques of BPCL.

1.3.2.2 Secondary Objective


To evaluate inventory control techniques of BPCL



To suggest the ways to reduce the cash investment in the different item of the inventory.



To classify the various components based on its value and movements.



To suggest suitable techniques of inventory control and optimization in BPCL

1.3.3 DATA COLLECTION

1.3.3.1 Primary Data
1.All financial data are collected through personal interviews and discussion with Chief Manager
(Finance).
2. All inventory related data are collected from Manager (P&CS), who is in charge of inventory
section.
3. All warehouse related data are collected from Manager P&CS), who is in charge of Ware
house section.

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4.Personal discussions with staff members in inventory section, warehouse section, finance
section etc. are also used for collecting various data.

1.3.3.2 Secondary Data
1. All financial data are collected from the published annual financial statements of the company.
2.Inventory related data collected from Management reports maintained in inventory section of
P&CS Dept.
3.Data collected from company’s web site.
4. Books and journals pertaining to the topic.

1.3.4 TOOLS USED IN THE ANALYSIS
The following tools used for analysis of the data:


Economic Order Quantity



Trend analysis



ABC Analysis



FMSN Analysis



Inventory Turn Over Ratio

ECONOMIC ORDER QUANTITY
The answer to the question “How much is to order?' is the economic order quantity (EOQ). The
basic objective is to economize on the total cost of purchase. There are two major costs involved
in purchases:
Purchasing Cost: This is the cost incurred by the purchase department. It involve
The cost involved in calling for quotation
 Scrutinizing the quotations
 The clerical cost
 Issuing purchase order
 Stationary' cost
The sum total of all these costs is called the purchasing cost.
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Inventory Carrying Cost:
When stocks are carried in stores, various costs are incurred to maintain these stocks:
 Interest on the money locked up on the materials stocked
 Taxes payable
 Insurance on goods
 Rental for space occupied by the stores
 Labor costs involved in the operation of the stores
 Overheads like electricity, water and maintenance costs
 All this added up together will constitute Inventory Carrying Cost.
The formula for finding the EOQ of an item is The formula used is

Q = √(2AP/UC)
Where ,
A = annual consumption in units
P= Procurement cost per order
C = Inventory carrying cost expressed as a percentage
U = unit price
TREND ANALYSIS
It is the practice of collecting information and attempting to spot a pattern, or trend, in the
information. In some fields of study, the term "trend analysis" has more formally defined
meaning. Although trend analysis is often used to predict future events, it could be used to
estimate uncertain events in the past, such as how many ancient kings probably ruled between
two dates, based on data such as the average years which other known kings reigned.
In statistics, trend analysis often refers to techniques for extracting an underlying pattern of
behavior in a time series which would otherwise be partly or nearly completely hidden by noise.
A simple description of these techniques is trend estimation, which can be undertaken within a
formal regression analysis.
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ABC ANALYSIS
ABC analysis is a basic analytical tool which enables management to concentrate its efforts
where results will be greater. The concept applied to inventory is called as ABC analysis.
Statistics reveal that just a few items account for bulk of the annual consumption of the
materials. These few items are called A class items which hold the key to business. The other
items known as B & C which are numerous in number but their contribution is less significant.
ABC analysis thus tends to segregate the items into three categories A,B & C on the basis of
their values. . Items up to 70%consumption value come under A class, next 20 % under B class
and the rest under C class.

FEATURES OF ABC ANALYSIS
A Class (High Value)

B Class (Moderate Value)

C Class (Low Value)

1.Tight control on stock 1. Moderate control on stock 1.Less control
levels

levels

2.Low safety stock

2. Medium

3.Ordered frequently

3. Less frequently

4.Individual

posting

5. Monthly control

5.Weekly control reports
Continuous

3. Bulk ordering

in 4. Individual posting in stores

stores

6.

2. Large

effort

4. Collective posting
5. Quarterly control
6. Minimum efforts

6. Moderate efforts
to

reduce lead time

FSN ANALYSIS
All the items in the inventory are not required at the same frequency. Some are required
regularly, some occasionally and some very rarely. FSN analysis classifies items into fast
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moving, slow moving, non moving items. More control can be implemented on Fast Moving
items and Medium moving items etc. Similarly Orders can be limited in case of Slow moving
items and non-moving items.
INVENTORY TURNOVER RATIO
Kohler defines inventory turnover as “a ratio which measures the number of times a firm’s
average inventory is sold during a year”.
A higher turnover rate indicates that the material in question is a fast moving one. A low
turnover rate, on the other hand, indicates over-investment and locking up of working capital on
undesirable items.
Inventory turnover ratio may be calculated in different ways by changing the numerator, but
keeping the same denominator. For instance, the numerator may be materials consumed, cost of
goods sold or net sales. Based on any one of these, the ratio differs from industry to industry.

Inventory turnover ratio =

Net sales
Average Inventory

1.3.5 PERIOD OF STUDY
The study was carried out for a period of one month, from March 18 to April 18, 2012 at BPCL.
1.4 SCOPE FOR STUDY

Every organization needs inventory for the smooth runni11ng of its activities. It serves as a link among
production processes. The investment in inventories constitutes the most significant part of current assets
/ working capital in most of the undertakings,

Thus, it is very essential to have proper control and

management of inventories. The purpose of inventory management is to ensure availability of materials
in sufficient quantity as an when required and also to minimize investment in inventories

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1.5 LIMITATIONS OF THE STUDY



The entire analysis applied only to BPCL( Kochi Refinery), Ambalamughal, Cochin



Since there are around 67533 items in inventory, it is not possible to have an in-depth study of
all items.



The study takes into account only the quantitative data and the qualitative aspects were not taken
into account.

1.6 CHAPTERIZATION

Chapter I

: INTRODUCTION TO THE STUDY

Chapter II

: LITERATURE REVIEW

Chapter III

: DATA ANALYSIS AND INTERPRETATION

Chapter IV

: FINDINGS AND SUGGESTION

Chapter V

: CONCLUSIONS

21

CHAPTER II
LITERATURE REVIEW

22

LITERATURE REVIEW
Literature review includes all paper works done by experts. There are a number of different
literature works which emphasized the importance of efficient inventory management practices.
The literature works related to study are listed below.
Kotler (2000)states that “inventory management refers to all the activities involved in developing
and managing the inventory levels of raw materials, semi-finished materials (work in- progress)
and finished good so that adequate supplies are available and the costs of over or under stocks
are low”.
Tersine (1988)states that “inventory can be defined as any idle resource or tangible asset which
can be seen, weighed, and counted. This includes supplies, raw materials, work in process (WIP),
and finished goods”.
Goldratt et al (1992)defined "inventory costs as the money the system invests in things that it
intends to sell: materials waiting to be processed, work in process, and finished goods".
As mentioned earlier, inventory management leads to inventory reduction, as is often the case
in JIT, where raw materials and parts are purchased or produced just in time to be used at each
stage of the production process. Several studies have found that this JIT inventory management
has

a positive impact on firm performance. A study by Fullerton etal.(2003) provides

empirical support that firms that implement higher degrees of JIT manufacturing practices
should out perform competitors who do not; it was also found that a positive relationship exists
between firm profitability and the degree to which waste-reducing production practices, such as
reduced set-up times, preventive maintenance

programs and uniform

workloads

and

implemented. These findings indicate that enterprises employing JIT manufacturing techniques
are consistently more profitable than their counterparts.
Another

study

suggesting

a positive relationship between inventory management

and

performance was Eroglu and Hofer (2011), which used the Empirical Leanness Indicator
(ELI) as a measurement for inventory management. They argued that inventory leanness is
the best inventory management tool. Lean production itself considers inventory as a form of
waste that should be minimized and it has become synonymous with good inventory
23

management. Their study on US manufacturing firms, covering the period of 2003–2008, found
that leanness positively affects profit margins. According toEroglu and Hofer (2011), firms
that are leaner than the industry average generally see positive returns to leanness. They found
that the effect of inventory leanness on firm performance is mostly positive and generally
non-linear. Their study also implies that the effect of inventory leanness concave, which is in
line with inventory control theory that there is an optimal degree of inventory leanness
beyond which the marginal effect of leanness on financial performance becomes negative.
On the other hand, a study by Cannon (2008) introduced contradictory findings. That study
focused on assessing

the relationship between inventory

performance and overall

firm

performance and it was argued that inventory performance should not be measured as a robust
indicator of overall performance. In doing so, it tested the in corporation of firm’s annual
percentage change in inventory turnover as a measurement for inventory management towards
return on assets (ROA) as a measurement of performance. The study (Cannon, 2008)7
indicated that when the effects of time were taken in to account, turnover improvement on
average had a slightly negative effect on ROA. Additionally, turnover improvement exhibited
a prominent random effect, with result indicating that approximately95% of the firm’s
turnover-improvement slopes would fall within a negative range. This was interpreted as
evidence that substantial variability existed across firms with regard to turnover improvement
and its performance effects, with some turnover improvement associated with increased ROA
and other turnover improvement associated with decreased ROA. Moreover, Cannon (2008)
also further explored the turnover-ROA dynamic by including capital intensity as potential
source of variability. It was found that capital-intensive firms tended to be below average with
regard to ROA and the variable’s presence in the model did not significantly alter the
relationship between turnover improvement and ROA over time Hence, this lent additional
weight to the conclusion not to support the hypothesis that improved inventory performance
will be associated with improved overall firm performance .Consistent with Cannon (2008),
Another study Kolias et al., (2011) found that inventory turnover ratio (as a measurement
of inventory management), is negatively correlated with gross margin. Kolias et al.(2011)9 is
based on an econometric analysis conducted on a sample of financial data for Greek retail firms
for the period of 2000–2005. They found a negative relationship between gross margin and
inventory turnover. This implies that retailers’ trade off gross margin for inventory turns to
24

achieve similar return on inventory investment since, if inventory turnover ratio is lower than
targeted given the level of gross margin, then management should be alarmed with this
inefficiency. Consequently, it was likely that the coefficient of gross margin differs between
sectors.

According toCachon and Fisher (2000), the positive correlation between inventory turns and
capital intensity results from the nature of the investment. Capital investment includes
investment in warehouses, equipment, information technology (IT) and logistics management
systems. These capital investments lead to better inventory allocation as well as to a more
efficient implementation of customer orders, thereby increasing inventory turns. Additionally,
a positive influence of IT on inventory performance is well supported at the firm level.
For an instance, prior studies (Frohlich and Westbrook,2002; Vickery et al., 2003) found that
an increase in IT investment results in higher inventory returns and lower inventory holding
costs. Investments in IT have helped firms to cut back on the volume of inventory as a
precaution against glitches in their supply chain or a hedge against unexpected increase in
aggregate demand (Ferguson, 2001). In addition, IT investments may increase inventory turns
due to improvement in the replenishment process.
Clark and Hammond(1997) show that with the adoption of a continuous replenishment
process by food retailers, their inventory turnover increased by up to100%. However, automatic
replenishment is not limited to the grocery industry: apparel retailers utilized automatic
replenishing programs to improve inventory efficiency (King and Maddalena, 1998).
Another study (Kolias et al., 2011) on the Greek retail sector found that inventory turnover
was

positively

correlated

with capital intensity. The coefficient in their study for the

supermarket sector is relatively higher than those for other sectors, indicating the
importance of the investments in IT in that sector where supermarkets may experience improved
product availability associated with the reduction of stock-outs and they can thereby carry
less backup inventory leading to lower inventory levels. Hence, with lower inventory
investment, inventory turnover may be higher.

25

Bern At De William (2008) his study tell us that the main focus of inventory management is on
transportation and ware housing. The decision taken by management depends on the traditional
method of inventory control models. The traditional method of inventory management is how
much useful in these days the author tell about it. He is also saying that the traditional method is
not a cost reducing ,it is so expensive .But the managing inventory is most important work for
any manufacturing unit.
Jon Schreibfeder (1992)said that it is easy to turn cash in to inventory , the challenge is to turn
inventory back in to cash. In early 1990’s many distributor recognize that they needed help
controlling and managing their largest asset inventory. In

response to this need several

companies developed comprehensive inventory management modules and system. These new
packages include many new features designed to help distributors effectively managed
warehouse stock. But after implementing this many distributors do not feel they have gain
control of their inventory.
There is need for installation of a proper inventory control technique in any business
organization in developing country like Nigeria. According to Kotler (2000), inventory
management refers to all the activities involved in developing and managing the inventory
levelsof raw materials, semi-finished materials (work in-progress) and finished good so that
adequatesupplies are available and the costs of over or under stocks are low.
Rosenblatt (1977) says: “The cost of maintaining inventory is included in the final price paid by
the consumer. Good in inventory represents a cost to their owner. The manufacturer has the
expense of materials and labour. The wholesaler also has funds tied up”.Therefore, the basic goal
of the researchers is to maintain a level of inventory that will provide optimum stock at lowest
cost.
Morris (1995)stressed that inventory management in its broadest perspective is to keepthe most
economical amount of one kind of asset in order to facilitate an increase in the total value of all
assets of the organization – human and material resources.
Keth et al. (1994) in their text also stated that the major objective of inventory managementand
control is to inform managers how much of a good to re-order, when to re-order the good, how
frequently orders should be placed and what the appropriate safety stock is, for minimizing stock

26

outs. Thus, the overall goal of inventory is to have what is needed, and to minimize the number
of times one is out of stock.
Drury (1996) defined inventory as a stock of goods that is maintained by a business in
anticipation of some future demand. This definition was also supported by Schroeder (2000) who
stressed that inventory management has an impact on all business functions, particularly
operations, marketing, accounting, and finance. He established that there are three motives for
holding inventories, which are transaction, precautionary and speculative motives. The
transaction motive occurs when there is a need to hold stock to meet production and sales
requirements. A firm might also decide to hold additional amounts of stock to cover the
possibility that it may have under estimated its future production and sales requirements. This
represents a precautionary motive, which applies only when future demand is uncertain. The
speculative motive for holding inventory might entice a firm to purchase a larger quantity of
materials than normal in anticipation of making abnormal profits. Advance purchase of raw
materials in inflationary times is one form of speculative behavior.
Inventory models allowing for emergency orders have been developed under various
assumptions. Moinzadeh and Nahmias (1988) and Tagaras and Vlachos (2001) have performed a
thorough bibliographic review of these models. Moinzadeh and Nahmias (1988) present a
continuous review inventory model to find the optimal reorder point and order quantity for the
normal and emergency replenishments. This model was analyzed from a different perspective
by Johansen and Thorstenson (1998). They present an inventory model with normal and
emergency orders where normal orders are managed through a (Q,r) policy while emergency
orders are controlled by a reorder point and an order-up-to level which depend on the time
remaining until the normal order is received. Vlachos and Tagaras (2001) analyse a periodic
review inventory system with a main and an emergency supply mode.
Inventory models allowing for emergency orders have been developed under various
assumptions. Moinzadeh and Nahmias (1988) and Tagaras and Vlachos (2001) have performed a
thorough bibliographic review of these models. Moinzadeh and Nahmias (1988) present a
continuous review inventory model to find the optimal reorder point and order quantity for the
normal and emergency replenishments. This model was analyzed from a different perspective
by Johansen and Thorstenson (1998). They present an inventory model with normal and
emergency orders where normal orders are managed through a (Q,r) policy while emergency
27

orders are controlled by a reorder point and an order-up-to level which depend on the time
remaining until the normal order is received. Vlachos and Tagaras (2001) analyse a periodic
review inventory system with a main and an emergency supply mode.
The issuance of an emergency order in a cycle leads to a smaller lead time for the first delivery
in the cycle. This effect can also be achieved by expediting the normal order so that it is
delivered earlier. Lawson and Porteus (2000)consider order expediting in a multistage inventory
model, in which the delivery of expedited items is made instantaneously. Minner (2003)breviews
inventory models with multiple supply options and presents related inventory problems from the
field of multi-echelon systems.
Lead time usually comprises components such as order preparation, order delivery,
manufacturing and transportation (Tersine, 1994). In some cases, options exist for reducing the
duration of some of these components (Liao and Shyu, 1991; Ryu and Lee, 2003). For example,
there are cases in which transportation can be carried out in either a slower or a faster mode
(such as by air and by truck).
The problem of simultaneously determining pricing and inventory control strategies in the face
of return and expediting opportunities Toyota by Cook et al. (2005)and in Motorola
by Cederlund et al. (2007), respectively.
The coordination of pricing and inventory replenishment strategies in a dynamic environment
has been extensively studied in the literature. Whitin (1955) first addresses the newsboy problem
with the price-dependent demand. Thomas (1974) considers a model with a fixed ordering cost
and proposes a policy called (s, S, p) to control the system. For both the finite and infinite
horizon cases, ( [Chen and Simchi-Levi, 2004] and [Chen and Simchi-Levi, 2004b]) prove that
such a policy is indeed optimal when demand uncertainty is additive, but not necessarily so
under multiplicative demand uncertainty. Chen and Simchi-Levi (2006) extend the results to the
continuous review model.
Thowsen (1975) considers a model without the fixed ordering costs and shows that a base-stocklist-price policy is optimal and that the optimal price is a decreasing function of the starting
inventory. Federgruen and Heching (1999) extend Thowsen’s work to a more general setting.
They show that the base-stock-list-price policy remains optimal with general stochastic
demands. Chao and Zhou (2006)analyze the infinite-horizon continuous-review stochastic
28

inventory model with Poisson demand process and price-dependent demand rate. They focus on
the structural results of the optimal policy and related computational issues. [Yin and Rajaram,
2007] and [Chao et al., 2008] study a joint pricing and inventory decision problem with a
Markovian demand and random supply capacity, respectively. [Chen et al., 2006] and [Song et
al., 2009] address the dynamic joint inventory-pricing control for the lost-sales model with an
additive demand and a multiplicative demand, respectively.

Author :-AsafAque Ahmed (October 12,2004)
(Article from mater requirement planning and master requirement production)
He said that most of the manufacturing company vendors have planning and scheduling product
which assume either infinite production capacity for calculating quantities of raw material and
WIP requirement or infinite quantities of raw material and WIP material for calculating
production capacity. There are many problems with this approach and how to avoid these by
making sure that the product you are buying indeed take in to account finite quantities of
required materials as well as finite capacities of work centers in your manufacturing facilities.

Author :-Silver ,Edward A (December 22,2002)
(Article from production and inventory management journal)
This article consider the context of a population of items for which assumption underlying the
EOQ derivation holds reasonably well. However as it frequently the cash in practices there is an
aggregate constraint that applies to the population as a whole.

Author :-Delaunay C,Sahin E,(2007)
A lot of work has been done but now if we have to go a head we must have good visibility upon
this field of research. That is why we are focused on frame work for an exhaustive review on the
problem of supply chain management with inventory inaccuracies. The author said that their aim

29

in this work is also to present the most important criterion that allows a distinction between
different types of managing the inventory.
Author:-D.Hoopman (April 7,2003)(Article from inventory planning and optimization)
In this article he said that inventory optimization recognize that different industry have different
inventory profiles and requirement .Research has indicated that solutions are priced in a large
range from 10 to 1000 of dollars to millions of dollars .In this niche market sector price is
definitely not an indicator of the quantity of solution, ROI and usability are paramount.
A multi criteria approach to the ABC classification problem in inventory control is presented.
The proposed method rates items on both qualitative and quantitative criteria. The model is
demonstrated through an example, using real data from the maintenance department stockroom
of a pharmaceutical company. A series of simulation experiments shows how the resulting
classification can benefit inventory control [Partovi, Fariborz Y; Burton, Jonathan (1993)]
The model aims to provide a holistic view of the supply chain as an integrated system by
analyzing inventory options to facilitate the decision-making process by business partners in the
system. In recent years, organizations have focused on incorporating both internal and external
business activities of their supply chain into an integrated system. The goal of integration of all
supply chain activities is to maximize total system performance while minimizing costs.
Literature review and professional experience in the field provided the foundation for the model
development in this research. The article demonstrates the usefulness of a decision support
model in analyzing and developing a cooperative environment among supply chain members in
order to reduce the cost of inventory as well as the cost of goods sold. The effects of utilizing
such tools as just-in-time and electronic business systems are illustrated and discussed. Research
limitations/implications - The proposed model demonstrates disadvantages of individual
optimization in an integrated supply chain system as well as the advantages of collaboration of
supply chain members in finding the minimum cost. The model uses one manufacturer with
multiple retailers and distributors. Future research in this area could expand the model to allow
multiple manufacturers. The decision support model allows decision makers along the supply
chain to employ a series of what-if analyses to evaluate different scenarios with regard to
lowering the cost of products reaching the consumer. The model developed in this paper

30

provides the foundation for future research as well as support for decision making when various
decision makers are involved.[Beheshti, Hooshang M.(2010)]

2.1 MEANING OF INVENTORY
Inventory generally refers to the materials in stock. It is also called the idle resource of a
company. Inventories represent those items which are either stocked for sale or they are in the
process of manufacturing or they are in the form of materials which are yet to be utilized.
It also refers to the stockpile of the products a firm would sell in future in the normal course of
business operations and the components that make up the product.
Inventory is a detailed list of those movable items which are necessary to manufacture a product
and to maintain the equipment and machinery in good working order.
2.2 TYPES OF INVENTORIES
 A manufacturing firm generally carries the following types of inventories:
 Raw Materials.
 Bought out parts.
 Work-in-process inventory (WIP).
 Finished goods inventories.
 Maintenance, repair and operating stores.
 Tools inventory.
 Miscellaneous inventory.
 Goods in transit.
 Goods for resale.
 Scrap Material.
2.3 REASONS FOR HOLDING INVENTORY


To stabilize production.



To take advantage of price discounts.



To meet the demand during the replenishment period.



To prevent loss of orders.
31



To keep pace with changing market conditions.

2.4 INVENTORY CONTROL
The main objective of inventory control is to achieve maximum efficiency in production & sales
with minimum investment in inventory.
Inventory control is a planned approach of determining what to order, when to order and how
much to order and how much to stock, so that costs associated with buying and storing are
optimal without interrupting production and sales
.
2.5 BENEFITS OF INVENTORY CONTROL


The benefits of inventory control are:



Improvement in customers’ relationship because of the timely delivery of goods and
services.



Smooth and uninterrupted production and hence, no stock out.



Efficient utilization of working capital.



Economy in purchasing.



Eliminating the possibility of duplicate ordering.

32

REFERENCES
1. , G.P. and M.L. Fisher (2000). Supply Chain Inventory Management and the Value of Shared
Information. Management Science 46, 1032 – 1048.
2. Cachon Cannon, A.R. (2008). Inventory Improvement and Financial Performance.
International Journal of Production Economics 115, 581–593.
3. Cannon, A.R. (2008). Inventory Improvement and Financial Performance. International
Journal of Production Economics 115, 581–593.
4. Clark, T. and J. Hammond (1997). Reengineering Channel Reordering Process to Improve
Total Supply Chain Performance. Production Operation Management 6, 248–265.
5. Eroglu, C. and C. Hofer (2011). Lean, Leaner, Too Lean? The Inventory-Performance Link
Revisited. Journal of Operations Management 29, 356–369.
6. Eroglu, C. and C. Hofer (2011). Lean, Leaner, Too Lean? The Inventory-Performance Link
Revisited. Journal of Operations Management 29, 356–369.
7. Ferguson, R.W. (2001). Domestic Macroeconomic Developments:Past, Present and Future.
Remarks at the Bay Area Council 2001 Outlook Conference.SIU Journal of Management,
Vol.2, No.1 (June, 2012). ISSN: 2229-004472
8. Frohlich, M.T. and R. Westbrook (2002). Demand Chain Management in Manufacturing and
Services: Web-Based Integration, Drivers and Performance. Journal of Operations
Management 20, 729–745.
9. Jonsson, P. and Mattsson, S-A. 2003. The implication of fit between planning environments
and manufacturing planning and control methods. International Journal of Operations and
Production Management, 23 (8), 872-900.
10. Jonsson, P. and Mattsson, S-A. 2006. A longitudinal study of material planning applications
in manufacturing companies. Forthcoming in the International Journal of Operations and
Production Management
11. King, R. E. and R.P. Maddalena (1998). Replenishment Rules. Bobbin 39, 55–56.
12. Kolias, G.D., S.P. Dimelis and V.P. Filios (2011). An Empirical Analysis of Inventory
Turnover Behavior in the Greek Retail Sector: 2000-2005. International Journal of
Production Economics 133(1), 143–153.

33

13. Kolias, G.D., S.P. Dimelis and V.P. Filios (2011). An Empirical Analysis of Inventory
Turnover Behavior in the Greek Retail Sector: 2000-2005. International Journal of
Production Economics 133(1), 143–153.
14. Molinder, A. 1997. Joint optimization of lot-sizes, safety stocks and safety lead times in an
MRP system. International Journal of Production Research, 35 (4), 983-994.
15. Rosenfield, D. B. Disposal of Excess Inventory. Operations Research, v. 37-3, p. 404-409,
1989.
16. Tagaras and Vlachos (2001) A Binary Decision Model for the Stock Control of Very Slow
Moving Items. Journal of Operational Research Society, v. 34-3, p. 249-252, 2001
17. .“Investing in reduced setups in the EOQ model, Management Sciences, Vol. 31, pp.998- 1010” by
Lambert, Stock, &Ellram (1998).
18. .Foundations of inventory management. First Edition” by Rosenblatt (1977), pages 223-22.
19. Cachon, G.P. and M.L. Fisher (2000). Supply Chain Inventory Management and the Value of Shared
Information. Management Science 46, 1032 – 1048.
20. Cannon, A.R. (2008). Inventory Improvement and Financial Performance. International Journal of
Production Economics 115, 581–593.
21. Chen, H., M.Z. Frank and Q.W. Wu (2005). What Actually Happened to the Inventories of American
Companies between 1981 and 2000? Management Science 51(7), 1015–1031.

.

WEB SITES :


http://bpcl.co.in



http://bpclkochirefineries.com



http://www.bharatpetroleum.com/EnergisingBusiness/KochiRefinery_Overview.aspx



http://inventorymanagementinterview.org/justintime/index

34

CHAPTER III
DATA ANALYSIS AND
INTERPRETATION

35

3.1.1 ABC ANALYSIS
ABC analysis is a basic analytical tool which enables management to concentrate its efforts
where results will be greater. The concept applied to inventory is called as ABC analysis. ABC
analysis tends to segregate the items into three categories A,B & C on the basis of their values. .
Items up to 70%consumption value come under A class, next 20 % under B class and the rest
under C class

Items

Annual
usage (Rs)

Annual
usage
%

Cumulative
%

1

HIGH SPEED DIESEL

3,237,028.02

27.98

27.98

2

MOULD GLASS, DIA 35.5+/- 0.5MM DOTTED

591,878.67

5.12

33.09

3

CONVEYOR CHAIN AS PER DRAWING

340,094.40

2.94

36.03

4

MOULD GLASS 33.50MM +/- 0.50MM

245,093.48

2.12

38.15

5

INK CATRIDGE FOR VIDEOJET 1210

240,736.86

2.08

40.23

6

Mould holder Assembly(B type)- RRT

237,179.09

2.05

42.28

7

CAP CLOTH (GREEN COLOUR)

235,097.01

2.03

44.31

8

ASSEMBLY. MOULD HOLDER (W/O WASHER)

230,550.54

1.99

46.30

9

MASK FACE (COTTON)

173,901.79

1.50

47.81

10

FLAP CONDUCTIVE RUBBER 210 X 73 X 0.5
MM

135,556.42

1.17

48.98

11

GLASS MOULD (RITCHER)DIA-36.5

129,030.04

1.12

50.09

Sl
No

36

Categor
y

A

A

A

A

A

A

A

A

A

A

A

12

BRUSH BEAD LARGE ASPER DRG.HLL-B-17100

120,361.44

1.04

51.13

13

MOULD GLASS PLAIN RRT 32.5 +/- 0.5MMSIZE

114,010.70

0.99

52.12

14

FITTINGS YARD LIGHT LUMINARY 72W LED

113,574.84

0.98

53.10

15

BEARING ROLLER NK 15/16

110,880.00

0.96

54.06

16

TOP UP FOR INK JET PRINTER

110,046.93

0.95

55.01

17

ASSEMBLY SPINDLE FOR RRT M/CWITH
BEARING

109,058.40

0.94

55.95

18

STEAM TRAP BALLFLOAT,SLR&TV IBR 15NB

106,745.04

0.92

56.88

19

GLOVES (MEDIUM SIZE)

105,401.90

0.91

57.79

20

CIJ MEK INK BLACK 201-0001-601

99,309.38

0.86

58.65

21

PRESS JAW OF NEW 3 LINE BRT PKG
MACHINE

70,000.00

0.60

59.25

22

STEREO FLAT RUBBER XXXX

88,965.28

0.77

60.02

23

MOULD GLASS (PLAIN) 36.50 +/-0.50 MM

84,820.93

0.73

60.75

24

VALVE PVS AP-1125A, MODEL - E222B4

82,869.49

0.72

61.47

25

GLOVES (SMALL SIZE)

81,372.38

0.70

62.17

26

DIGITAL INDICATING PID CONTROLLER

80,838.15

0.70

62.87

27

MS PLATE CHEQUERED PLATE 6MM THICK

76,443.67

0.66

63.53

28

MOULD GLASS PLAIN RRT 35.5+/-0.5MMSIZE

37

A

A

A

A

A

A

A

A

A

A

A

A

A

A

A

A
A

68,978.52

0.60

64.13

29

TOP UP CATRIDGE FOR VIDEOJET 1210

65,462.34

0.57

64.69

30

BEARING UCP 204 J (NTN) 20 MM

64,867.35

0.56

65.25

31

SPONGE BOARD- C, DRG.NO.HLL-D-016-00

60,615.20

0.52

65.78

32

VIBRATOR FEEDER CONTROLLER

63,060.60

0.55

66.32

33

PIPE SS 304, 1 INCH SIZE

58,595.13

0.51

66.83

34

PIPE SEAMLESS SS 304 SCH.40 50 NB(2")

54,641.19

0.47

67.30

35

CONTROLLER TEMPERATURE JCD-33A-R/MBKA2

50,777.78

0.44

67.74

36

HOLDER MOULD (RRT) 32.5MM

53,314.38

0.46

68.20

37

KIT WASH SOLUTION - IMAJE 9020 MAKE

51,016.21

0.44

68.64

38

PIPE SEAMLESS SS304 SCH,40 65NB(2 1/2")

50,566.94

0.44

69.08

39

VALVE PVS AP-1120A,MODEL - E222B82

35,687.74

0.31

69.39

40

BRUSH BEAD SMALL ASPER DRG.HLL-B-17200

50,715.20

0.44

69.83

41

PIPE SEAMLESS SS 304 SCH40.40NB(1 1/2")

46,843.58

0.40

70.23

42

VALVE PVS-40A-210

47,697.66

0.41

70.64

43

BEARING UCP315D1

40,878.56

0.35

71.00

44

SHAFT FOR METAL MOULD (DRY EPT M/C.)

42,462.00

0.37

71.36

38

A

A

A

A

A

A

A

A

A

A

A

A

B

B

B

B

45

GEAR BOX FOR EPT MACHINE

43,674.23

0.38

71.74

46

GLASS MOULD (RITCHER) DIA-36.5

40,748.79

0.35

72.09

47

VALVE GATE F END 75MM SCREWAL END

39,659.07

0.34

72.44

48

INK FOR JET INKS - 500ML PART NO. CS602

37,957.91

0.33

72.76

49

LIGHT FITTINGS(YARD )LUMINARY 24W LED

38,059.56

0.33

73.09

50

CENTRIFUGE PUMP

36,382.50

0.31

73.41

51

TOP UP FOR JET INKS -500ML PART NO.CS603

34,492.19

0.30

73.70

52

VALVE BALL SS304 3 PCS ASA800 BSPT 40NB

32,176.50

0.28

73.98

53

PIPE SEAMLESS CS SCH.40 50NB

31,069.56

0.27

74.25

54

FAN CABIN

30,309.30

0.26

74.51

55

MOTORISED GEARBOX FOR RRT
DEHYDRATOR

26,185.45

0.23

74.74

56

ROLLER CUTTER

30,130.33

0.26

75.00

57

SPONGE BOARD B WITH DRG.NO HLL-D-00700

29,249.43

0.25

75.25

58

DIRECT ACTING SOLENOID VALVE

29,496.44

0.25

75.51

59

CONTROLLER- PLC MICRO LOGIX 1200

42,749.00

0.37

75.88

60

RACK SEGMENT AS PER DRG NO:HLL-B-06101

29,062.46

0.25

76.13

61

PIPE SEAMLESS CS SCH.80 IBR 50NB

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B
B

39

27,899.74

0.24

76.37

62

OIL SHELL RIMULA X 15W/40,CH-4,CLASS

26,166.33

0.23

76.60

63

MOULD METAL BODY SIZE 40 MM

25,946.31

0.22

76.82

64

CHAIN CONVEYOR FOR SS PKG MACHINE
60x60

28,539.48

0.25

77.07

65

BRUSH BEADING RRT_D MACHINE

26,148.85

0.23

77.29

66

VALVE SS 304 BALL TWO PIECES BSPT 65NB

23,134.50

0.20

77.49

67

BRUSH BRASS WIRE

25,560.01

0.22

77.71

68

RACK-SEGMENT, DRG.NO HLL-B-06100,REV.01

24,403.43

0.21

77.92

69

SHEET MS 6'X4' 10 MM THICK

24,885.61

0.22

78.14

70

CONTROLLER- PLC MICRO TYPE

18,102.00

0.16

78.30

71

PIPE GI C CLASS WITH ISI MARK 50 NB

24,031.20

0.21

78.50

72

MOULD HOLDER OUTER COVER FOR 56MM
WIDTH

23,629.32

0.20

78.71

73

EDGE ROLLER GEARED MOTOR WITH VFD
DRIVE

28,234.26

0.24

78.95

74

VALVE BALL SS304 3 PCS ASA800 BSPT 25NB

23,221.60

0.20

79.15

75

BEND SHORT FORGED CS B/W SCH.80 IBR 2"

22,169.70

0.19

79.34

76

PIPE SEAMLESS SS 304 SCH,40 15 NB (1/2")

21,262.55

0.18

79.53

77

RACK STRAIGHT PRG NO HLL-B-011-00

21,202.03

0.18

79.71

40

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

78

CARTRIDGE MSA-USA MAKE MULTI GAS

20,834.80

0.18

79.89

79

BRUSH BODY SPECIAL WITH PP BASE

21,197.28

0.18

80.07

80

ELECTRODE MS WELDING (10G) 3.15 MM

19,966.76

0.17

80.25

81

BEARING-BALL 688 ZZ

19,864.64

0.17

80.42

82

THINNER N C FOR SPRAY PAINTING

19,345.46

0.17

80.59

83

LIGHT FITTINGS(YARD )LUMINARY 36W LED

19,162.50

0.17

80.75

84

PIPE SEAMLESS CS SCH. 80 IBR 25NB

18,722.26

0.16

80.91

85

GAS FREON 22

18,191.70

0.16

81.07

86

FLANGE FCS TABLE- F IBR ,2"(50NB)

17,980.91

0.16

81.23

87

PAINT POLYUERTHANE SUPERCOAT M
SKYBLUE

17,906.18

0.15

81.38

88

BEARING UCP 205 D1

17,380.80

0.15

81.53

89

BEARING-BALL 1202 E

16,636.12

0.14

81.67

90

PIPE GI HEAVY 100MM

16,837.61

0.15

81.82

91

COIL STEAM 15" (FH)x15" (FL)X2RD, 12FPI

25,035.41

0.22

82.04

92

COMMON SALT

16,770.00

0.14

82.18

93

BEARING UCP 206 D1

16,318.66

0.14

82.32

94

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B
B

INMARCO INGREF GASKET SHEET3 MM
41

THICK

16,062.15

0.14

82.46

95

SENSOR OPTICAL FIBER SENSOR

15,577.81

0.13

82.60

96

VALVE GATE BRONZE HEAVY FLANGED ISI
65NB

19,393.71

0.17

82.76

97

HOSEPVC DUTRON DUCT FLEXIBLE
4'(100MM)

16,007.92

0.14

82.90

98

ANGLE MS ISA 40 X 40 X 3MM

15,927.31

0.14

83.04

99

FOIL UNWINDING CONTROL UNIT

13,914.29

0.12

83.16

100

BEARING UCP 313 D1

13,218.52

0.11

83.27

101

CONVEYOR CHAIN ASSEMBLY FORPACKING
M/C

18,258.00

0.16

83.43

102

VALVE GLOBE BRONZE STEAM,SCRWED IBR
15NB

15,475.16

0.13

83.57

103

BEARING 6308 2RS

14,794.92

0.13

83.69

104

SHEET SS 304 8"X 4" 18 SWG

14,734.67

0.13

83.82

105

BRUSH NECK SPECIAL WITH PP BASE

14,551.62

0.13

83.95

106

Valve C.S NRV(DCV) Table H - IBR 100 NB

11,059.75

0.10

84.04

107

CYLINDER AIR MODEL-CMK2-M-LB-40, 100-J

17,527.17

0.15

84.19

108


14,647.46

0.13

84.32

109

PIPE SEAMLESS CARBON STEEL IBR 80NB

14,894.25

0.13

84.45

110

RELAY PROGRAMMABLE (6 I/P PLC)

14,472.00

0.13

84.57

42

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

111

BEND SHORT FORGED SS304 S/W SCH80 2"

14,908.02

0.13

84.70

112

PIPE GI C CLASS WITH ISI MARK 40 NB

14,255.50

0.12

84.83

113

VALVE BALL SS304 3PCS. ASA800 BSPT 65NB

14,178.92

0.12

84.95

114

CARBON BRUSH-SLIP RING

14,070.41

0.12

85.07

115

FLANGE FCS TABLE- H, IBR 3"(80NB)

14,098.76

0.12

85.19

116

OIL SERVO MESH SP-320

13,906.88

0.12

85.31

117

OIL SERVOMESH EE 460

13,588.56

0.12

85.43

118


13,416.64

0.12

85.55

119

SHEET GI 8'X4' 24 SWG

13,345.27

0.12

85.66

120

VALVE BALL SS304 3PCS ASA800 BSPT 20NB

13,609.16

0.12

85.78

121

PROXIMITY SENSOR-IMAGE PRINTER MAKE
9020

15,471.00

0.13

85.91

122

PAINT ENAMEL SKY BLUE

12,879.14

0.11

86.02

123

VALVE BALL SS304 1 PCS SCREWED 20NB

12,426.40

0.11

86.13

124

TEE FORGED SS304 ASA6OOO SCREWED 21/2'

15,094.24

0.13

86.26

125

EHT BLOCK FOR IMAJE 9020 PRINTER

-

-

86.26

126

BEARING UKF 205 D1 WITH SLEEVE

12,452.16

0.11

86.37

127

FLUID ROTO INJECT-2901 0522 00

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B
B

43

17,808.15

0.15

86.52

128

FLAT BRASS 1/4" X 3/4"

11,619.30

0.10

86.62

129

MASK-FACE MSA-USA MAKE ADVANTAGE
HALF-

11,724.47

0.10

86.72

130

BRUSH VERTICAL CLEANING FORRRT M/C

12,511.69

0.11

86.83

131

GREASE MOBILE SERVOGEM-2

11,713.20

0.10

86.93

132

SWITCH PROXIMITY

10,349.00

0.09

87.02

133

THERMOCOL CUT SEC FOR 65NB PIPE 50MM
THK

11,350.40

0.10

87.12

134

Cotton waste

11,258.93

0.10

87.22

135

DIGITAL PRESSURE SENSOR

10,078.94

0.09

87.31

136

VALVE SS 304 BALL TWO PIECES BSPT 25NB

11,417.17

0.10

87.40

137

WASH DOWN FOR VEDEOJET INK JET
PRINTER

11,147.02

0.10

87.50

138


10,975.16

0.09

87.60

139

TEMPERATURE CONTROLLER PIDAUTONICS

11,498.09

0.10

87.70

140

PNEUMATIC SOLENOID VALVE MFH-5-1/8

11,489.01

0.10

87.79

141

LAMP FLUORESCENT TUBE 40W

10,849.89

0.09

87.89

142

MOTOR INDUCTION 3.7 KW 440V RPM 2850

12,910.00

0.11

88.00

143


10,651.31

0.09

88.09

44

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

144

BEARING-BALL 6206 2RS

10,485.60

0.09

88.18

145

FLAT BRASS 1/4" X 1/2"

10,545.20

0.09

88.27

146

ANGLE SS 304 ISA 50 X50X 5 MM

10,255.89

0.09

88.36

147

ADDITIVE KIT - IMAJE 9020 MAKE

11,442.34

0.10

88.46

148

PAINT ENAMEL GREY

10,085.19

0.09

88.55

149

ULTRASONIC PROXIMITY LEVEL SENSOR

-

-

88.55

150

RELAY LY4N,DC 24 OMRON

9,875.38

0.09

88.63

151

PIPE PVC 90MM

9,681.71

0.08

88.72

152

SPONGE SHEET - PER FOAM

9,706.43

0.08

88.80

153

PIPE SEAMLESS CS SCHEDULE40 25 NB

9,323.20

0.08

88.88

154

RING SLIP FOR PACKING MACHINE

9,398.88

0.08

88.96

155

VALVE FLOAT HEAVY GM PR.10BAR ISI
50NB

9,391.40

0.08

89.04

156

RTD - DRG. NO. HLL-D-036-00

10,225.69

0.09

89.13

157


9,166.74

0.08

89.21

158

MOULD GLASS,, RIBBED TYPE.36.50+/-0.50MM

9,180.00

0.08

89.29

159

FLANGE FORGED SS 304 11/2"

9,012.33

0.08

89.37

160

RTD MODULE. CAT: NO-1762-IR4

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B

B
B

45

-

-

89.37

161

PIPE SEAMLESS SS 304 SCH.40 20NB(3/4")

9,008.77

0.08

89.45

162

HEATER CARTRIDGE HIGH DENSITY
50MM,70W

9,052.16

0.08

89.53

163

POWER SUPPLY INPUT 230VAC,OUT PUT
24VDC

7,652.83

0.07

89.59

164

NIPPLE HEX FORGED SS304 ASA6OOO 2"

9,095.19

0.08

89.67

165

Filter oil 4000 Hrs – 2903752500

12,793.79

0.11

89.78

166

GREASE,BEARING

8,512.50

0.07

89.85

167

THERMOCOL SHEETS 100CM X 50 CM

8,250.00

0.07

89.93

168

CHAIN ROLLER SIMPLEX 3/4" X7/16"DIN Std

8,334.63

0.07

90.00

169

MOTOR PROTECTION CIRCUIT BREAKER

8,173.71

0.07

90.07

170

FLANGE FCS TABLE- F, IBR 1"(25NB)

8,091.96

0.07

90.14

171

THINNER -FOR ENAMEL PAINT

8,074.77

0.07

90.21

172

ROD BRIGHT SS 304 30 MM DIA

8,112.75

0.07

90.28

173

COUPLING FORGED SS 304 SCH80 2" BSP

8,030.31

0.07

90.35

174

TEE FORGED SS 304 ASA6000 11/2" BSP

8,506.38

0.07

90.42

175

FLANGE FCS TABLE- F IBR ,11/2"(40NB)

7,862.22

0.07

90.49

176

CIRCUIT BREAKER MCB 4 POLE 63 A

8,253.12

0.07

90.56

46

B

B

B

B

B

B

B

B

C

C

C

C

C

C

C

C

177

CHOKE FOR TUBE LIGHT CPR.40W

7,713.26

0.07

90.63

178

PIPE GI C CLASS WITH ISI MARK 25NB

7,638.90

0.07

90.69

179

CABLE FIBRE :MODEL: FD-620-10.

7,522.69

0.07

90.76

180

PAINT ENAMEL PISTA

7,444.89

0.06

90.82

181

VALVE BALL SS304 3 PCS,ASA800 BSPT 25NB

7,628.51

0.07

90.89

182

RELAY PROGRAMMABLE (12 I/P PLC)

10,954.59

0.09

90.98

183

GLOVES SEAMLESS HAND COTTON KNITTED

7,290.39

0.06

91.05

184

EPOXY SCOTCHKOTE 3M - 152LV

8,534.56

0.07

91.12

185

ELBOW FORGED SS 304 SCREWED 11/2 "

7,494.20

0.06

91.18

186

MCCB 100 A

7,054.34

0.06

91.25

187

SHOES SAFETY

7,140.00

0.06

91.31

188

SWITCH CAPACITIVE PROXIMITY

6,893.97

0.06

91.37

189

DIAPHRAGM FOR PUMP MODEL S 15,

6,779.54

0.06

91.43

190

VALVE GLOBE BRONZE STEAM,SCRWED IBR
20NB

6,192.76

0.05

91.48

191

FLANGE FORGED SS 304 TABLE-F 2"(50NB)

6,513.55

0.06

91.54

192

SOLENOID VALVE,CATALOGUE NO :E222E3

9,944.67

0.09

91.62

193

FLAT MS 25X6MM

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C
C

47

6,490.77

0.06

91.68

194

V BELT B-39

6,446.27

0.06

91.73

195

THK

6,465.50

0.06

91.79

196

SPROCKET FOR VULCANISING BARREL

5,814.90

0.05

91.84

197

BEND SHORT FORGED SS304 S/W SCH80 1"

6,533.45

0.06

91.90

198

CABLE FLEXIBLE 4 CORE 1.5 sqmm copper

6,366.71

0.06

91.95

199

FITTINGS TUBE LIGHT 40W BOX TYPE

6,286.72

0.05

92.01

200

ELECTRODE WELDING MS (10G) 3.15MM

6,335.85

0.05

92.06

201

SENSOR INDUCTIVE , IE5099

4,660.57

0.04

92.10

202

BEND SHORT FORGED SS304 S/W SCH80 21/2"

6,305.28

0.05

92.15

203

COUPLING FORGED SS 304 SCH80 11/2" BSP

6,108.80

0.05

92.21

204

BALLAST FOR 2X 24W T5 FLUORESCENT
TUBE

5,958.75

0.05

92.26

205

THK

6,037.80

0.05

92.31

206

SPROCKET

6,529.76

0.06

92.37

207

BEARING ROLLER 22308 K WITH SLEEVE

6,721.73

0.06

92.43

208

VALVE SOLENOID CAT.NO. 20106-10-4G

4,383.51

0.04

92.46

209

CONTACTOR TP WITH AUXILARY CONTACTS

5,831.41

0.05

92.51

48

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

210

VALVE STEAM 25MM,GLOBE BRONZE
SCR/END

5,733.97

0.05

92.56

211

BEARING UCP 207 D1

5,707.92

0.05

92.61

212


5,648.85

0.05

92.66

213

SHEET SS304 24 SWG

5,605.15

0.05

92.71

214

STARTER- MANUAL MOTOR STARTER 2.5A

4,780.01

0.04

92.75

215

STATIONARY DOSING SYSTEM IN ST M/C

5,004.54

0.04

92.79

216

COUPLING FORGED SS 304 SCH80 1" BSP

5,422.49

0.05

92.84

217

WIRE COPPER SUPER ENAMELLED 32 SWG

5,329.50

0.05

92.89

218

TEE SS 20MM NB,304L THICKNESS 1.5MM

5,311.47

0.05

92.93

219

COUPLING FORGED SS 304 SCH80 21/2" BSP

4,550.56

0.04

92.97

220

CHANNEL MS ISMC 100X50 MM

5,302.19

0.05

93.02

221

MODULE OUTPUT ,CAT: NO-1762-OW16

-

-

93.02

222


5,296.45

0.05

93.06

223

COUNTER TOTAL SELF POWERED H7EC-NV-H 6,226.93

0.05

93.12

224

CYLINDER DOUBLE ACTING , STROKE ;
10MM

4,743.76

0.04

93.16

225

VALVE GATE SCREWED END 15MM

5,110.62

0.04

93.20

226

PINION DRG.NO.HLL-B-010-05

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C
C

49

5,029.04

0.04

93.25

227

CAPACITOR POWER FOR PF CORRECTION

3,744.00

0.03

93.28

228

VALVE, STEAM 1.5" SCREWED WITH IBR

3,739.69

0.03

93.31

229

STREET LIGHT FITTINGS

4,658.13

0.04

93.35

230

GLAND PACKING INMARCO STYLE103-10 MM
DIA

3,682.01

0.03

93.38

231

PIPE PVC RIGID HEAVY PL:QLTY OD 90 MM

4,851.69

0.04

93.43

232

SWITCH DISCONNECTOR FUSE UNIT, 630
AMPS

-

-

93.43

233

BRUSH ROOT SPECIAL WITH PP BASE

4,963.28

0.04

93.47

234

PIPE GI B CLASS WITH ISI MARK 20 NB

4,878.42

0.04

93.51

235

PIPE SEAMLESS CS SCHEDULE40 20 NB

4,766.35

0.04

93.55

236

FLANGE FCS TABLE-F ,IBR 1/2" (15NB)

4,706.15

0.04

93.59

237

RTD, PT 100,L - 170MM X 6 MM, L SHAPE

4,996.72

0.04

93.64

238

CONTACTOR SIEMENS SICOP 3TF 45

3,496.22

0.03

93.67

239

CABLE FLEXIBLE 5 CORE 1.5 sqmm copper

4,635.28

0.04

93.71

240

WIRE COPPER SUPER ENAMELLED 27 SWG

4,304.41

0.04

93.74

241

BRUSH HOLDER FOR CARBON BRUSH

4,703.35

0.04

93.78

242

SPROCKET FOR DEHYDRATERAS

5,155.19

0.04

93.83

50

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

243

BEND SHORT FORGED SS304 S/W SCH80 1/2"

4,474.79

0.04

93.87

244

VALVE CI BUTTERFLY 50NB PN 16

4,062.17

0.04

93.90

245

BEARING ROLLER 22310 K WITH SLEEVE

5,384.29

0.05

93.95

246

PNEUMATIC CYLINDER BORE 20X25

3,973.20

0.03

93.98

247

CIRCUIT BREAKER MOTOR PROTECTION 2.5
A

4,384.99

0.04

94.02

248

WASH DOWN FOR JET INKS-1000ML
P.NO.WL300

4,352.47

0.04

94.06

249


4,314.60

0.04

94.10

250

BRUSH ROLLING UP FOR EPT MACHINE

4,337.01

0.04

94.13

Table 3.1.1: ABC Analysis

Total annual usage (Rs):

1,15,70,468.75

51

C

C

C

C

C

C

C

C

Figure 3.1.1: ABC Analysis Pie Chart
4%
13%

A
B
C

83%

ANALYSIS AND INTERPRETATION
The above table shows the classification of various components as A, B & C classes using ABC
analysis techniques based on unit value. From the classification A classes are those whose
cumulative annual usage percentage up to 70 and constitutes 4% of total components. B classes
are those whose cumulative annual usage percentage is between 70-90 and constitutes 13% of
total of components and rest 83 % items are classified under C class.

52

3.1.2 FSN ANALYSIS
All the items in the inventory are not required at the same frequency. Some are required
regularly, some occasionally and some very rarely. FSN analysis classifies items into fast
moving, slow moving, non moving items.
973 items were analyzed for FSN analysis. Out of which 723 items have been truncated for
convenience.

Sl.
Items
No

Cumulative
Consumption
rate

Cumulative
%

35,690.42

35,690.42

65.82

Consumption
rate(/Month)

1

STEREO FLAT RUBBER XXXX

2

HIGH SPEED DIESEL

4,653.75

40,344.17

74.40

3

MASK FACE (COTTON)

2,552.25

42,896.42

79.11

4

CAP CLOTH (GREEN COLOUR)

2,173.42

45,069.83

83.12

5

GLOVES (MEDIUM SIZE)

952.75

46,022.58

84.88

6

GLOVES (SMALL SIZE)

861.08

46,883.67

86.46

7

TAG ALUMINIUM 2" X 4"

416.67

47,300.33

87.23

8

ASSEMBLY. MOULD HOLDER (W/O
WASHER)

334.33

47,634.67

87.85

9

MOULD GLASS 33.50MM +/0.50MM

208.58

47,843.25

88.23

10

SCREW ALLEN CAP FULL
THREADED M5 X 10 )

195.83

48,039.08

88.59

11

LUG COPPER (RING TYPE) SIZE 4
MM2

166.67

48,205.75

88.90

53

Category

F

S

S

S

S

S

S

S

S

S

S

12

FLAP CONDUCTIVE RUBBER 210 X
73 X 0.5 MM

165.25

48,371.00

89.21

13

PINION DRG.NO.HLL-B-010-05

152.75

48,523.75

89.49

14

BEARING ROLLER NK 15/16

147.42

48,671.17

89.76

15

SCREW ALLEN COUNTSUNK
M6X20MM

129.17

48,800.33

90.00

16

BOLT & NUT HEX HT M12X65MM
(FT)

127.08

48,927.42

90.23

17

WASHER PLATE HT STEEL 10MM

116.67

49,044.08

90.45

18

MS PLATE CHEQUERED PLATE
6MM THICK

115.42

49,159.50

90.66

19

Mould holder Assembly(B type)- RRT

111.08

49,270.58

90.87

20

WASHER PLATE HT STEEL 12MM

100.00

49,370.58

91.05

21


98.83

49,469.42

91.23

22

WASHER PLATE SS 304 6MM

91.67

49,561.08

91.40

23

CLIP SADDLE 3/4"

91.67

49,652.75

91.57

24

BEARING-BALL 688 ZZ

83.33

49,736.08

91.72

25

SPLIT PIN-B,DRG.NO.HLL-B-016-00

83.33

49,819.42

91.88

26

BOLT & NUT HEX SS 304
M12X25MM(FT)

83.00

49,902.42

92.03

27

MOULD GLASS PLAIN RRT 32.5 +/0.5MMSIZE

81.75

49,984.17

92.18

28

HOLDER MOULD (RRT) 32.5MM

76.42

54

S

S

S

S

N

N

N

N

N

N

N

N

N

N

N

N
N

50,060.58

92.32

29

ASSEMBLY SPINDLE FOR RRT
M/CWITH BEARING

68.75

50,129.33

92.45

30

GASKET FOR BALL FLOAT TRAP15 NB

66.67

50,196.00

92.57

31

EAR PLUG (IS: 9167 / 1979)

66.67

50,262.67

92.70

32

EAR PLUG WITH CORD

66.67

50,329.33

92.82

33

COPPER FERRULE

66.67

50,396.00

92.94

34

MOULD GLASS (PLAIN) 36.50 +/0.50 MM

62.50

50,458.50

93.06

35

(FT)

62.50

50,521.00

93.17

36

FLAT MS 50X6MM

60.00

50,581.00

93.28

37

(FT)

58.33

50,639.33

93.39

38

MOULD GLASS PLAIN RRT 35.5+/0.5MMSIZE

55.25

50,694.58

93.49

39

WASHER PLATE SS 304 8 MM

50.00

50,744.58

93.58

40

SLEEVE FIBRE GLASS 2MM

50.00

50,794.58

93.68

41

SCREW BRASS, SLOTTED R/HEAD
M4 X 25 MM

49.58

50,844.17

93.77

42

WASHER PLATE HT STEEL 15 MM

45.83

50,890.00

93.85

43

(FT)

41.67

50,931.67

93.93

44

SCREW COUNTER SUNK HT M5 X
25 MM

41.67

50,973.33

94.01

55

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

45

LUG COPPER OPEN TYPE 16 SQ.MM

40.00

51,013.33

94.08

46

SHEET MS 6'X4' 10 MM THICK

39.25

51,052.58

94.15

47

TOP UP FOR INK JET PRINTER

35.25

51,087.83

94.22

48

STARTER FOR TUBE LIGHT 40W

35.00

51,122.83

94.28

49

SCREW ROUND HEAD BRASS
M5X25MM

34.75

51,157.58

94.35

50

GLOVES SEAMLESS HAND
COTTON KNITTED

34.00

51,191.58

94.41

51

MOULD GLASS, DIA 35.5+/- 0.5MM
DOTTED

33.33

51,224.92

94.47

52

LUG COPPER 2.5SQMM

33.33

51,258.25

94.53

53

SOCKET COUNTER SUNK SCREW
M6X12MM

33.33

51,291.58

94.59

54

OIL SERVO SYSTEM 46

32.92

51,324.50

94.65

55

BEND SHORT FORGED CS B/W
SCH80 15NB

32.75

51,357.25

94.71

56

SHAFT FOR METAL MOULD (DRY
EPT M/C.)

28.08

51,385.33

94.77

57

MOULD GLASS RIBBED 35.5+/0.5MM DIAD

27.08

51,412.42

94.82

58

LAMP FLUORESCENT TUBE 40W

26.75

51,439.17

94.87

59

ANGLE MS ISA 40 X 40 X 3MM

26.50

51,465.67

94.91

60

LAMP CF 18 W

25.08

51,490.75

94.96

61

SLEEVE FIBRE GLASS 4MM

24.67

56

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N
N

51,515.42

95.01

62

LUG COPPER

23.83

51,539.25

95.05

63

HOLDER FOR TUBE LIGHT SINGLE

23.17

51,562.42

95.09

64

TUBE SQUARE M.S.50 X 50 X 6 MM

22.75

51,585.17

95.13

65

FLANGE FORGED SS 304 1"(25NB)

22.00

51,607.17

95.18

66

TAPE TEFLON 15MM WIDTH 10M
LENGTH

21.83

51,629.00

95.22

67

BOLT & NUT HEX HT M8 X 50 MM
(FT)

20.83

51,649.83

95.25

68

SOCKET COUNTER SUNK SCREW
M5X12MM

20.83

51,670.67

95.29

69

CONDUIT FLEXIBLE PVC 16 MM

20.83

51,691.50

95.33

70

SCREW COUNTER SUNK HT
M6X20MM

20.83

51,712.33

95.37

71

GOGGLES CHEMICAL SPLASH

20.67

51,733.00

95.41

72

LUG COPPER 25 SQ.MM

19.58

51,752.58

95.44

73

BOLT AND NUT SS 8X25MM
1.25MM PITCH

19.17

51,771.75

95.48

74

GLASS MOULD (RITCHER)DIA-36.5

18.33

51,790.08

95.51

75

LAMP CF 2 PIN, 9W

18.33

51,808.42

95.55

76

CHAIN ROLLER SIMPLEX 1"X11/16"
DIN Std

17.95

51,826.36

95.58

77


17.92

51,844.28

95.61

57

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

78

ADAPTOR STRAIGHT 1/8" BSP X
6MM OD

17.33

51,861.61

95.64

79

Cotton waste

17.08

51,878.70

95.68

80

COUPLING CONDUIT P.V.C 20MM

16.92

51,895.61

95.71

81

CASING AND CAPPING 32MM

16.83

51,912.45

95.74

82

CABLE FLEXIBLE 2 CORE 1.5 sqmm
copper

16.67

51,929.11

95.77

83

BOLT&NUT HEX SS304 M10X25MM
(FT)

16.67

51,945.78

95.80

84

NUT & BOLT (MS) WITH WASHER
12 * 50 MM

16.67

51,962.45

95.83

85

TUBE POLYURETHENE 2MM X
4MM

16.67

51,979.11

95.86

86

TUBE POLYURETHENE PUN-6X1 BL

16.67

51,995.78

95.89

87

BOLT & NUT HEX SS 304
M10X75MM(FT)

16.67

52,012.45

95.92

88

WASHER PLATE SS 304 10 MM

16.67

52,029.11

95.95

89

LUG TINNED COPPER 30A

16.67

52,045.78

95.98

90

LAMP CF 13 W

16.58

52,062.36

96.01

91

PLUG BASE 3 PIN 5 AMPS

16.42

52,078.78

96.04

92

(FT)

16.25

52,095.03

96.07

93

SLEEVE FIBRE GLASS, 6 MM

16.25

52,111.28

96.10

94

16.17
TUBING TYPE PU-6 PNO.9159
58

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N
N

POLYURITHENE

52,127.45

96.13

95

BOLT & NUT HEX SS304
M8X50MM(FT)

16.17

52,143.61

96.16

96

BOLT & NUT SS304 HEX 1/4"X2"
(FT)BSW

16.00

52,159.61

96.19

97

REDUCER CONCENTRIC FCS ,B/W
IBR 1/2'X2"

15.83

52,175.45

96.22

98

(FT)

15.50

52,190.95

96.25

99

GRIP PLUG 6 x 30 MM

15.25

52,206.20

96.28

100

SLEEVE FIBRE GLASS, 3 MM

15.17

52,221.36

96.31

101

BRASS BAR BOX (200 AMPS):1

15.00

52,236.36

96.34

102

THINNER N C FOR SPRAY
PAINTING

14.58

52,250.95

96.36

103

BRUSH BRASS WIRE

14.25

52,265.20

96.39

104

LAMP COMPACT FLUORESCENT 11
W

14.17

52,279.36

96.41

105

SPONGE BOARD DRG NO-HLL-A004-01

13.92

52,293.28

96.44

106

LUG COPPER 35 MM3

13.75

52,307.03

96.47

107

FITTING TO SUIT4MM PU TUBE Size
M5x4 MM

13.33

52,320.36

96.49

108

UNIVERSAL TERMINAL BLOCKS

12.50

52,332.86

96.51

109

CHART PAPER FOR TEMP
RECORDER 0-200DEG.C

12.33

52,345.20

96.54

110

OIL SHELL RIMULA X 15W/40,CH4,CLASS

12.08

52,357.28

96.56

59

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

111

TRANSMISSION OIL FOR DIESEL
FORK LIFT

12.08

52,369.36

96.58

112

PAINT-ENAMEL-IVORY

12.00

52,381.36

96.60

113

ADAPTOR STRAIGHT 1/8" X 8MM

11.67

52,393.03

96.62

114

BOLT & NUT HEX HT M12X100 MM
(FT)

11.67

52,404.70

96.65

115

FLAT MS 25X6MM

11.42

52,416.11

96.67

116

HOLDER CONDOM

11.17

52,427.28

96.69

117

copper

11.08

52,438.36

96.71

118

(FT)

11.08

52,449.45

96.73

119

CARBON BRUSH-SLIP RING

10.92

52,460.36

96.75

120

SPONGE BOARD- C, DRG.NO.HLLD-016-00

10.58

52,470.95

96.77

121

SCREW WITH NUT M S M3X25 MM

10.00

52,480.95

96.79

122

SCREW SOKT.LOW HEAD CAP
SS304 FT M4X10MM

10.00

52,490.95

96.81

123

PAINT GP PRIME GUARD 235

9.92

52,500.86

96.82

124

MOULD HOLDER OUTER COVER
FOR 56MM WIDTH

9.75

52,510.61

96.84

125

THERMOCOL SHEETS 100CM X 50
CM

9.17

52,519.78

96.86

126

PIPE SS 304, 1 INCH SIZE

9.08

52,528.86

96.87

127


9.08

60

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N
N

52,537.95

96.89

128

BEARING UCP 204 J (NTN) 20 MM

8.92

52,546.86

96.91

129

BEARING-BALL 6005 ZZ

8.83

52,555.70

96.92

130

ELBOW CONDUIT PVC 20 MM

8.83

52,564.53

96.94

131

OIL SERVO MESH SP-320

8.75

52,573.28

96.96

132

FUSE LINK HRC, OFF SET TAG

8.75

52,582.03

96.97

133


8.67

52,590.70

96.99

134

BRUSH PAINTING 2"

8.67

52,599.36

97.00

135

BEND CONDUIT BEND, PVC 20 MM

8.67

52,608.03

97.02

136

FLAT MS 50X4MM

8.42

52,616.45

97.04

137

THERMOCOLE CUTSEC FOR 50NB
PIPE 2" THK

8.33

52,624.78

97.05

138

PIPE PVC RIGID HEAVY PL:QLTY
32 MM OD

8.33

52,633.11

97.07

139

PAINT GP GUARD 641

8.33

52,641.45

97.08

140

ROD FORGED EN8 70 MM DIA

8.33

52,649.78

97.10

141

CONDUIT FLEXIBLE PVC 25 MM

8.33

52,658.11

97.11

142

BOLT&NUT MS 15 X 75 MM

8.33

52,666.45

97.13

143

SCREW COUNTER SUNK HT
M8X20MM

8.33

52,674.78

97.14

61

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

144

SCREW ALLEN CAPLESS
M6X25MM

8.33

52,683.11

97.16

145

SPIDER FOR LOVEJOY COUPLING
L-110

8.00

52,691.11

97.17

146

LOCK FULL LINK,SIMPLEX CHAIN
1/2"X5/16"

7.92

52,699.03

97.19

147

BOLT & NUT HEX HT
5/8"X4"BSW(FT)

7.92

52,706.95

97.20

148

PIPE PVC 32MM

7.83

52,714.78

97.22

149

SCH80 IBR11/2"

7.75

52,722.53

97.23

150

LOCK FULL LINK, SIMPLEX CHAIN
1"X11/16"

7.75

52,730.28

97.25

151

(FT)

7.67

52,737.95

97.26

152

TUBE POLYURETHENE 10 MM OD
X 8 MM ID

7.67

52,745.61

97.27

153

LUG COPPER 50 MM2

7.67

52,753.28

97.29

154

OIL SERVOMESH EE 460

7.58

52,760.86

97.30

155

PIPE GI B CLASS WITH ISI MARK
15 NB

7.58

52,768.45

97.32

156

V BELT B-39

7.50

52,775.95

97.33

157

QS PUSH-IN/THREADED T
CONNECTOR

7.50

52,783.45

97.34

158

TEE FESTO MAKE PUSH IN
CONNECTOR,

7.50

52,790.95

97.36

159

CONNECTOR STRAIGHT. QS-1/8-6

7.50

52,798.45

97.37

160

7.50
62

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N
N

(FT)

52,805.95

97.39

161

PIPE SEAMLESS CS SCH. 80 IBR
25NB

7.33

52,813.28

97.40

162

DIAPHRAM FOR LATEX
DIAPHRAM PUMP

7.33

52,820.61

97.41

163

BRUSH PAINTING 4"

7.25

52,827.86

97.43

164

LOCK FULL LINK SIMPLEX
3/4"X7/16"

7.17

52,835.03

97.44

165

TUBE SQAURE MS 50 X50X5MM

7.08

52,842.11

97.45

166

PAPER EMERY NO.50

7.08

52,849.20

97.47

167

TOP UP CATRIDGE FOR VIDEOJET
1210

6.92

52,856.11

97.48

168

PIPE SEAMLESS CS SCH.80 IBR
50NB

6.92

52,863.03

97.49

169

HEATER CARTRIDGE HIGH
DENSITY 70MM,100W

6.92

52,869.95

97.50

170

PAPER EMERY NO.80

6.92

52,876.86

97.52

171

CIJ MEK INK BLACK 201-0001-601

6.75

52,883.61

97.53

172

SPONGE BOARD B WITH DRG.NO
HLL-D-007-00

6.67

52,890.28

97.54

173

GREASE MOBILE SERVOGEM-2

6.67

52,896.95

97.55

174

PIPE GI C CLASS WITH ISI MARK
15NB

6.67

52,903.61

97.57

175

WASHER PLATE HT STEEL 3/4"

6.67

52,910.28

97.58

176

SPARE FOR LUNG PROTECTOR

6.67

52,916.95

97.59

63

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

177

SCREW FLAT HEADED HT M4 X 10
MM

6.67

52,923.61

97.60

178

SHEET SS 304 8"X 4" 18 SWG

6.50

52,930.11

97.61

179

THINNER -FOR ENAMEL PAINT

6.50

52,936.61

97.63

180

GLOVES RUBBER

6.50

52,943.11

97.64

181

CHOKE FOR 10 W CF LAMP

6.50

52,949.61

97.65

182

GLASS MOULD (RITCHER) DIA-36.5

6.42

52,956.03

97.66

183

20NB

6.33

52,962.36

97.67

184

PAINT ALUMINIUM
HEATRESISTANT-400 0

6.25

52,968.61

97.69

185

THERMOCOL CUT SEC FOR 15NB
PIPE 2"THK

6.25

52,974.86

97.70

186

SCH80 IBR 3/4'

6.25

52,981.11

97.71

187

PIPE SEAMLESS SS 304 SCH,40 15
NB (1/2")

6.17

52,987.28

97.72

188

PIPE PVC 20MM,OD,6 KGSQ.CM ISI MARK

6.17

52,993.45

97.73

189

PIPE PVC 90MM

6.08

52,999.53

97.74

190

INK CATRIDGE FOR VIDEOJET 1210

6.00

53,005.53

97.75

191

PRIMER PAINT RED OXIDE

6.00

53,011.53

97.77

192

LUG ALUMINIUM 95 MM2

5.92

53,017.45

97.78

193


5.83

64

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N
N

53,023.28

97.79

194

HOSEPVC DUTRON DUCT
FLEXIBLE 4'(100MM)

5.83

53,029.11

97.80

195

CLIP-HOSE CLIP-3/4"

5.83

53,034.95

97.81

196

MALE THREADED ASSEMBLY

5.83

53,040.78

97.82

197

CONVEYOR CHAIN AS PER
DRAWING

5.75

53,046.53

97.83

198

BEND SHORT FORGED CS S/W
SCH80 IBR 1/2"

5.75

53,052.28

97.84

199

BEARING-BALL 6203

5.75

53,058.03

97.85

200

PAINT ENAMEL SKY BLUE

5.58

53,063.61

97.86

201

copper

5.58

53,069.20

97.87

202

BEARING-BALL 6302

5.50

53,074.70

97.88

203

V BELT A-64

5.50

53,080.20

97.89

204

(FT)

5.42

53,085.61

97.90

205

CLOTH DUNGRY

5.37

53,090.98

97.91

206

PIPE PVC RIGID HEAVY PL:QLTY
OD 50 MM

5.33

53,096.31

97.92

207

CELL TORCH LEAK PROOF

5.33

53,101.65

97.93

208

PAINT POLYUERTHANE
SUPERCOAT M SKYBLUE

5.25

53,106.90

97.94

209

SPONGE SHEET - PER FOAM

5.25

53,112.15

97.95

65

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

210

PIPE GI C CLASS WITH ISI MARK
50 NB

5.17

53,117.31

97.96

211

CHOKE FOR TUBE LIGHT CPR.40W

5.17

53,122.48

97.97

212

GREASE,BEARING

5.00

53,127.48

97.98

213

PIPE 50MM THK

5.00

53,132.48

97.99

214

PIPE GI C CLASS WITH ISI
MARK20NB

5.00

53,137.48

98.00

215

PUSH BUTTON SWITCH GREEN

5.00

53,142.48

98.01

216

ELECTRODE WELDING MS (12G)
2.5MM

5.00

53,147.48

98.02

217

LUNG PROTECTOR FOR AMMONIA
LPR.90

5.00

53,152.48

98.03

218

FLANGE FCS TABLE- F IBR
,2"(50NB)

4.83

53,157.31

98.03

219

40NB

4.83

53,162.15

98.04

220

CAPACITOR 2.5 MFD

4.83

53,166.98

98.05

221

ELBOW GI HEAVY SCREWED ISI
MARK 3/4'BSP

4.83

53,171.81

98.06

222

FLANGE GI 15 MM

4.83

53,176.65

98.07

223

PUTTY METAL

4.77

53,181.41

98.08

224

TOP UP FOR JET INKS -500ML PART
NO.CS603

4.75

53,186.16

98.09

225

FLANGE FCS TABLE-F ,IBR 1/2"
(15NB)

4.58

53,190.75

98.10

226

4.58
THINNER-FOR POLY URETHENE
66

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N
N

PAINT

53,195.33

98.10

227

PIPE GI B CLASS WITH ISI MARK
100 NB

4.55

53,199.87

98.11

228

ANGLE SS 304 ISA 50 X50X 5 MM

4.50

53,204.37

98.12

229

FLANGE FCS TABLE- F, IBR
1"(25NB)

4.50

53,208.87

98.13

230

COUPLING GI HEAVY SCREWED
WITH ISI 1/2"

4.50

53,213.37

98.14

231

PIPE SEAMLESS SS 304
SCH40.40NB(1 1/2")

4.42

53,217.79

98.15

232

SWITCH ROTARY 6 AMPS 1 POLE

4.42

53,222.21

98.15

233

COMMON SALT

4.33

53,226.54

98.16

234

HEATER CARTRIDGE HIGH
DENSITY 50MM,70W

4.33

53,230.87

98.17

235

COUPLING FCS SCREWED SCH80
IBR 3/4"

4.33

53,235.21

98.18

236

PAINT ENAMEL GREY

4.25

53,239.46

98.19

237

(FT)

4.25

53,243.71

98.19

238

PIPE 50MM THK

4.17

53,247.87

98.20

239

LAMP CF 36 W

4.17

53,252.04

98.21

240

RELAY WITH SOCKET MY4N 220V
AC OMRON

4.17

53,256.21

98.22

241

ROD BRIGHT SS 304 20MM DIA

4.17

53,260.37

98.22

242

OIL SERVO SYSTEM 32

4.17

53,264.54

98.23

67

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

N

243

ADAPTOR STRAIGHT 1/4" X 8MM

4.17

53,268.71

244

PILLOW BLOCK WITH BEARI UCP
208J NTN40MM

4.17

53,272.87

98.25

245

LED MODULE PANEL INDICATION
30.5 MM 230V

4.17

53,277.04

98.25

246


4.17

53,281.21

98.26

247


4.17

53,285.37

98.27

248

ROD BRIGHT EN8 47 MM DIA

4.17

53,289.54

98.28

249

ROD BRIGHT EN8 25MM DIA

4.17

53,293.71

98.29

250


4.17

53,297.87

N

98.24

98.29

N

N

N

N

N

N

N

Table 3.1.2: FSN Analysis

Figure 3.1.2: FSN Analysis Pie Chart
0.10%

1.44%

F
S
N

98.46%

68

ANALYSIS AND INTERPRETATION
The above table shows the classification of various components as FSN items using FSN
analysis techniques based on movements. From the classification F items are those which moves
fast and constitutes 0.1% of total components. S items are those which moves slowly constitute
1.44% of total components and N items are those which doesn’t move (Non-moving items).
According to data given, there are 98.46% of Non-moving items. It is not good, as the company
maintains low percentage in fast moving items.

69

3.1.3 ECONOMIC ORDER QUANTITY
The answer to the question “How much is to order?' is the economic order quantity (EOQ).
The basic objective is to economize on the total cost of purchase.
The formula for finding the EOQ of an item is

Q = √(2AO/UC)

Where A = Annual Average consumption in units
O = Ordering cost per order (1500 per order)
C = Inventory carrying cost (30% of unit price)
U = Unit price

70

Sl. No

Item No.

Annual Unit
usage
price
(Unit)
(Rs)

Items

1

1211710004 HIGH SPEED DIESEL

2

I121221014 MOULD GLASS, DIA 35.5+/- 0.5MM DOTTED

3

I121111012 CONVEYOR CHAIN AS PER DRAWING

4

1212210037 MOULD GLASS 33.50MM +/- 0.50MM

5

1212711157 INK CATRIDGE FOR VIDEOJET 1210

6

1212210081 Mould holder Assembly(B type)- RRT

7

1212710282 CAP CLOTH (GREEN COLOUR)

8

1212210059 ASSEMBLY. MOULD HOLDER (W/O WASHER)

9

1214410013 MASK FACE (COTTON)

EOQ

55845

57.96

3,104

400

1479.7

52

69

4928.9

12

2503

97.92

506

72

3343.57

15

1333

177.93

274

26081

9.01

5,379

4012

57.47

836

30627

5.68

7,344

1983

68.36

539

220

586.5

61

9 13373.49

3

10

1251610076 FLAP CONDUCTIVE RUBBER 210 X 73 X 0.5 MM

11

1212210073 GLASS MOULD (RITCHER)DIA-36.5

12

1210710012 BRUSH BEAD LARGE ASPER DRG.HLL-B-171-00

13

1212210042 MOULD GLASS PLAIN RRT 32.5 +/- 0.5MMSIZE

14

1251110397 FITTINGS YARD LIGHT LUMINARY 72W LED

15

1210110216 BEARING ROLLER NK 15/16

16
17

1211211039 TOP UP FOR INK JET PRINTER
ASSEMBLY SPINDLE FOR RRT M/CWITH
1212210067 BEARING

18

1213710015 STEAM TRAP BALLFLOAT,SLR&TV IBR 15NB

19

1214410011 GLOVES (MEDIUM SIZE)

20

1211211035 CIJ MEK INK BLACK 201-0001-601

21

1211110230 PRESS JAW OF NEW 3 LINE BRT PKG MACHINE

22

1212710244 STEREO FLAT RUBBER XXXX

23

1212210039 MOULD GLASS (PLAIN) 36.50 +/-0.50 MM

24

1251610018 VALVE PVS AP-1125A, MODEL - E222B4

25

1214410010 GLOVES (SMALL SIZE)

26

1251510146 DIGITAL INDICATING PID CONTROLLER

27

1212310459 MS PLATE CHEQUERED PLATE 6MM THICK

1385

55.19

501

28

1212210043 MOULD GLASS PLAIN RRT 35.5+/-0.5MMSIZE

663

104.04

252

29

1212711158 TOP UP CATRIDGE FOR VIDEOJET 1210

83

788.7

32

30

1210110449 BEARING UCP 204 J (NTN) 20 MM

107

606.24

42

31

1211610037 SPONGE BOARD- C, DRG.NO.HLL-D-016-00

127

477.29

52

32

1251510141 VIBRATOR FEEDER CONTROLLER

8

7882.58

3

33

1213211149 PIPE SS 304, 1 INCH SIZE

109

537.57

45

34

49

1115.13

21

35

1213210739 PIPE SEAMLESS SS 304 SCH.40 50 NB(2")
CONTROLLER TEMPERATURE JCD-33A-R/M1251510006 BKA2

5 10155.56

2

36

1212210009 HOLDER MOULD (RRT) 32.5MM

71

981

116.22

291

11 10324.99

3

1769

62.68

531

423

260.16

128

825

132.19

250

27

3953.52

8

11433

9.22

3,522

81

1226.04

26

1
428285

70000 0.21 143,589

750

113.09

258

7

11838.5

2

10333

7.88

3,622

7 11548.31

2

917

58.14

397

37

1251710014 KIT WASH SOLUTION - IMAJE 9020 MAKE

20

2550.81

9

38

1213210740 PIPE SEAMLESS SS304 SCH,40 65NB(2 1/2")

27

1872.85

12

39

1251610019 VALVE PVS AP-1120A,MODEL - E222B82

1 35687.74

1

40

1210710013 BRUSH BEAD SMALL ASPER DRG.HLL-B-172-00

5 10143.04

2

41

1213210741 PIPE SEAMLESS SS 304 SCH40.40NB(1 1/2")

42

53

883.84

24

1251610017 VALVE PVS-40A-210

5

9539.53

2

43

1210110052 BEARING UCP315D1

4 10219.64

2

44

1211610013 SHAFT FOR METAL MOULD (DRY EPT M/C.)

45

1212010011 GEAR BOX FOR EPT MACHINE

46

1212210072 GLASS MOULD (RITCHER) DIA-36.5

47

337

126

164

5

8734.85

2

77

529.21

38

1214010354 VALVE GATE F END 75MM SCREWAL END

8

4957.38

4

48

1212711194 INK FOR JET INKS - 500ML PART NO. CS602

23

1650.34

12

49

1251110417 LIGHT FITTINGS(YARD )LUMINARY 24W LED

11

3459.96

6

50

1260010860 CENTRIFUGE PUMP

1

36382.5

1

51

1212711195 TOP UP FOR JET INKS -500ML PART NO.CS603

57

605.13

31

52

1214010147 VALVE BALL SS304 3 PCS ASA800 BSPT 40NB

19

1693.5

11

53

1213210727 PIPE SEAMLESS CS SCH.40 50NB

70

443.85

40

54

1251110029 FAN CABIN

21

1443.3

12

55

1212010089 MOTORISED GEARBOX FOR RRT DEHYDRATOR

2 13092.73

1

56

I121111005 ROLLER CUTTER

8

3766.29

5

57

1211610035 SPONGE BOARD B WITH DRG.NO HLL-D-007-00

80

365.62

47

58

1251210003 DIRECT ACTING SOLENOID VALVE

23

1282.45

13

59

1251510009 CONTROLLER- PLC MICRO LOGIX 1200

60

1212810126 RACK SEGMENT AS PER DRG NO:HLL-B-061-01

10

2906.25

6

61

1213210734 PIPE SEAMLESS CS SCH.80 IBR 50NB

83

336.14

50

62

1212510027 OIL SHELL RIMULA X 15W/40,CH-4,CLASS

145

180.46

90

63

1212210045 MOULD METAL BODY SIZE 40 MM

33

786.25

20

64

1211110115 CHAIN CONVEYOR FOR SS PKG MACHINE 60x60

4

7134.87

2

65

1210710015 BRUSH BEADING RRT_D MACHINE

3

8716.28

2

66

1214010358 VALVE SS 304 BALL TWO PIECES BSPT 65NB

3

7711.5

2

67

1212710102 BRUSH BRASS WIRE

171

149.47

107

68

1212810112 RACK-SEGMENT, DRG.NO HLL-B-061-00,REV.01

8

3050.43

5

69

1212310202 SHEET MS 6'X4' 10 MM THICK

471

52.84

299

70

1251510008 CONTROLLER- PLC MICRO TYPE

1

18102

1

71

62

387.6

40

117

201.96

76

73

1213210692 PIPE GI C CLASS WITH ISI MARK 50 NB
MOULD HOLDER OUTER COVER FOR 56MM
1212210074 WIDTH
EDGE ROLLER GEARED MOTOR WITH VFD
1250210197 DRIVE

2 14117.13

1

74

1214010152 VALVE BALL SS304 3 PCS ASA800 BSPT 25NB

8

5

72

72

1

42749 -

2902.7

75

1213210044 BEND SHORT FORGED CS B/W SCH.80 IBR 2"

35

633.42

24

76

1213210738 PIPE SEAMLESS SS 304 SCH,40 15 NB (1/2")

74

287.33

51

77

1212810110 RACK STRAIGHT PRG NO HLL-B-011-00

20

1060.1

14

78

1214410024 CARTRIDGE MSA-USA MAKE MULTI GAS

33

631.36

23

79

1210710025 BRUSH BODY SPECIAL WITH PP BASE

19

1115.65

13

80

1211211016 ELECTRODE MS WELDING (10G) 3.15 MM

41

486.99

29

81

1210110257 BEARING-BALL 688 ZZ

1000

19.86

710

82

1213110002 THINNER N C FOR SPRAY PAINTING

175

110.55

126

83

1251110418 LIGHT FITTINGS(YARD )LUMINARY 36W LED

5

3832.5

4

84

1213210733 PIPE SEAMLESS CS SCH. 80 IBR 25NB

88

212.75

64

85

1210910031 GAS FREON 22

41

443.7

30

86

58

310.02

43

87

1213210425 FLANGE FCS TABLE- F IBR ,2"(50NB)
PAINT POLYUERTHANE SUPERCOAT M
1213110057 SKYBLUE

63

284.23

47

88

1210110010 BEARING UCP 205 D1

24

724.2

18

89

1210110059 BEARING-BALL 1202 E

41

405.76

32

90

1213211143 PIPE GI HEAVY 100MM

18

935.42

14

91

1211510017 COIL STEAM 15" (FH)x15" (FL)X2RD, 12FPI

1 25035.41

1

92

1212710207 COMMON SALT

52

322.5

40

93

1210110025 BEARING UCP 206 D1

19

858.88

15

94

1213010137 INMARCO INGREF GASKET SHEET3 MM THICK

10

1606.22

8

95

8

1947.23

6

96

1251410014 SENSOR OPTICAL FIBER SENSOR
VALVE GATE BRONZE HEAVY FLANGED ISI
1214010177 65NB

2

9696.86

1

97

1213210475 HOSEPVC DUTRON DUCT FLEXIBLE 4'(100MM)

70

228.68

55

98

1212310175 ANGLE MS ISA 40 X 40 X 3MM

318

50.09

252

99

1211110113 FOIL UNWINDING CONTROL UNIT

3

4638.1

3

1210110239 BEARING UCP 313 D1

2

6609.26

2

100

Table 3.1.3 EOQ

73

Figure 3.1.3: EOQ and Annual Usage
500000
400000
300000
Annual usage (Unit)

200000

EOQ

100000
0
0

20

40

60

80

100

120

-100000

Analysis and Interpretation
In the above table the EOQ & the no. of orders purchased per year for various components are
calculated. The calculated EOQ is compared with the no. of units of each component purchased
in the organization. It is found that, there is a variation in the EOQ & no. of unit purchased.It is
understood that the company is not following EOQ for purchasing the materials & therefore the
inventory management is not satisfactory

74

A study on effectiveness and efficiency of the existing inventory control system of BPCL

A study on effectiveness and efficiency of the existing inventory control system of BPCL

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