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Inventory management

rpg electrade pvt

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Inventory management

  1. 1. INVENTORY MANAGEMENT AT RPG ELECTRADE PVT. LTD. A PROJECT REPORT Submitted by SACHIN BOHRA in partial fulfillment for the award of the degree of BACHELOR OF COMMERCE Under the Guidance of : Submitted by: Mrs. Jyoti Verma Sachin Bohra Assistant Professor 11104318 LOVELY PROFESSIONAL UNIVERSITY Phagwara–144401, Punjab (India)
  2. 2. ELECTRONIC CONSUMER GOODS INDUSTRY Indian Electronics consumer goods industry dates back to the early 1960's. Electronics was one industry initially restricted to the development and maintenance of fundamental communication systems including radio-broadcasting, telephonic and telegraphic communication, and augmentation of defence capabilities. Until 1984, the electronics Industry was primarily government owned and then in 1980s witnessed a rapid growth of the electronics industry due to sweeping economic changes, resulting in the liberalization and globalization of the economy. The electronics market of India is one of the largest in the world and is anticipated to reach US$ 400 billion in 2022 from US$ 69.6 billion in 2012. The market is projected to grow at a compound annual growth rate (CAGR) of 24.4 per cent during 2012-2020. Total production of electronics hardware goods in India is estimated to reach US$ 104 billion by 2020. The communication and broadcasting equipment segment constituted 31 per cent, which is the highest share of total production of electronic goods in India in FY13, followed by consumer electronics at 23 per cent.
  3. 3. The growing customer base and the increased penetration in consumer durables segment has provided enough scope for the growth of the Indian electronics sector. Also, digitization of cable could lead to increased broadband penetration in the country and open up new avenues for companies in the electronics industry. Key Players  VIDEOCON  SAMSUNG  SONY  LG  WHIRLPOOL  HITACHI
  4. 4. RPG ELECTRADE PVT. LTD. RPG ELECTRADE PVT. LTD. is a Delhi based company. It comprises one subsidiary businesses, most of them united under RPG ELECTRDE PVT. LTD, and is the largest company in south Delhi. Founder of RPG ELECTRDE PVT. LTD. Late Shri Rajesh Pusp Gupta. It was established in 1998, and widespread its sales and offices all over New Delhi. “The journey of a thousand miles is made up of a million steps, but the most important one is always the First step” In 1998, we took our first baby step with a single shop in Delhi, all the stock was in the shop so it was is to maintain the inventory. Even though our products were circulated only at Delhi we never ever did we compromise on the standards of Service or our dedication towards efficient distribution because we have always believed that the quality of SERVICE defines a company’s image and its perception in the market.
  5. 5. INVENTORY MANAGEMENT Inventory is an idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformation, use or sale in a future point of time. Inventory management is a very important function that determines the health of the supply chain as well as the impacts the financial health of the balance sheet. Every organization constantly strives to maintain optimum inventory to be able to meet its requirements and avoid over or under inventory that can impact the financial figures. Inventory is always dynamic. Inventory management requires constant and careful evaluation of external and internal factors and control through planning and review. Most of the organizations have a separate department or job function called inventory planners who continuously monitor, control and review inventory and interface with production,
  6. 6. Techniques of Inventory Management 1. Setting up of various stock levels: (a) Re-ordering level = Maximum Rate of consumption x maximum lead time (b) Maximum level = Reordering level + Reordering quantity — (Minimum Consumption x Minimum re-ordering period) (c) Minimum Level = Re-ordering level — (Normal rate of consumption x Normal delivery period) (d) Average level =1/2 (Minimum stock level + Maximum stock level) (e) Danger Level =Average rate of consumption x Emergency supply time. (f) Economic Order Quantity = √2AS/I (A stands for annual requirements of an item in terms of rupees; S stands for cost of placement of an order in rupees; and I stand for inventory carrying cost per unit per year in rupees.) 2. Preparation of Inventory Budgets 3. Maintaining Perpetual Inventory System
  7. 7. 4. Establishing Proper Purchase Procedures: (a) Purchase Requisition (b) Inviting Quotations (c) Schedule of Quotations (d) Approving the supplier (e) Purchase Order 5. Just in time 6. ABC analysis 7. Dropshipping 8. Cross-docking 9. Bulk shipments 10. Backodering
  8. 8. TECHNIQUES OF INVENTORY MANAGEMENT FOLLOWED BY COMPANY 1. Dropshipping 2. Bulk shipments 3. Maintaining Perpetual Inventory System 4. Establishing Proper Purchase Procedures: (a) Purchase Requisition (b) Inviting Quotations (c) Schedule of Quotations (d) Approving the supplier (e) Purchase Order 5. Backodering
  9. 9. OBJECTIVE OF THE STUDY • To study about the ordering levels for the important components of inventory. • To understand and measure economic order quantity for the selected raw material items. • To evaluate the inventory management practices of RPG ELETRADE PVT. LTD. • To offer suitable suggestions for the improvement of inventory management practices.
  10. 10. RESEARCH METHODOLOGY Research methodology is a way to systematically solve the problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. For completing the project work, data inputs were collected from the following sources:-  Primary Data: Collected data through discussion with the Finance manager and Collected data during working in RPG ELECTRAD PVT. LTD.  Secondary Data: Collected data from personnel manual of RPG ELECTRAD PVT. LTD. And Collected data from different magazines, journals, Newspapers and Internet.
  11. 11. FINDINGS AND SUGGESTIONS  The company should follow Just-in-Time technique, thereby it can do away with waiting time for a receipt of materials.  The company is having good sales for their products during all the years of the study.  Company should take measures for maintenance of proper stores and spares so as to avoid the shortage of products.  The EOQ calculated is suggesting that the company should obtain its inventory requirements by placing orders frequently to its suppliers rather than one time replenishment.  There is a need to develop good communication system between various departments like marketing, planning, procurement, and distributions functions.
  12. 12. CONCLUSION Inventory management has to do with keeping accurate records of goods that are ready for shipment. This often means having enough stock of goods to the inventory totals as well as subtracting the most recent shipments of finished goods to buyers. When the company has a return policy in place, there is usually a sub-category contained in the finished goods inventory to account for any returned goods that are reclassified or second grade quality. Accurately maintaining figures on the finished goods inventory makes it possible to quickly convey information to sales personnel as to what is available and ready for shipment at any given time by buyer. Inventory management is important for keeping costs down, while meeting regulation. Supply and demand is a delicate balance, and inventory management hopes to ensure that the balance is undisturbed. Highly trained Inventory management and high-quality software will help make Inventory management a success. The ROI of Inventory management will be seen in the forms of increased revenue and profits, positive employee atmosphere, and on overall increase of customer satisfaction.