The document outlines a case study on material management using ABC analysis for a commercial construction project with Centaur Pharmaceuticals, highlighting that materials account for nearly 50% of construction costs. It provides a detailed breakdown of material costs totaling approximately Rs 73 lakhs and poses various questions for participants to analyze inventory management based on the cost classification. Key areas of focus include determining the classification of items into types A, B, and C, their inventory values, order quantities, and the relevance of ABC analysis based on project duration.

1. CASE STUDY
MATERIAL MANAGEMENT: ABC ANALYSIS
1. Materials constitute a very large % of total construction costs. In a commercial
building project almost 50% cost pertains to materials. Project details:
• Project Name-Quality control lab
• Client Name-Centaur Pharmaceuticals Pvt.Ltd
• Consultant Name-Shroff & Associates ( Engineers ) Pvt .Ltd
• Contractor Name-Indus Construction Company
• Project Starting Date-20-11-15
• Project Duration-24 Months
• Project Type- Commercial Building
• Project Location- MIDC-Ambernath-Plot-76/1
2. Based on the scope of work, the cost of various materials required for the project is
approx. Rs 73 Lakhs. Breakup of the cost of various materials is:
Sr No Material Cost(Rs)
1 Steel 23,75,540
2 Cement (155 MT) 12,37,512
3 Aggregates 10,20,000
4 Plumbing 5,05,000
5 Electrical 5,05,000
6 Bricks 4,52580
7 Paints & POP 4,46,650
8 Metal 2,56,725
9 Tiles 2,07,648
10 SS Railing 1,52,000
11 Rubble 35000
11 Waterproofing compound 31068
12 Miscellaneous (9 Items) 1,03,750
Total 73,28,480
Instructions to participants
3. Carry out an ABC Analysis and discuss the same: -
(a) How many items would you like to classify as Type A? What is the total value & % ?
(b) Subject to likely lead time and availability should Inventory value of Type A items be
high or low? Discuss reasons.
(c) How many items would you like to classify as Type B? What is the total value % %?

2. (d) How many items would you like to classify as Type B? What is the total value % %?
(e) For Type C: Should you place more number of orders or less? Reasons?
(f) For Type C: Should you place more number of orders or less? Reasons?
(g) Is ABC analysis more relevant for long duration projects or short duration projects?
(h) Calculate Economic Order Qty for Cement, if rate per MT of Cement is Rs 8000. .
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