INVENTORY MANAGEMENT

AT
COROMANDEL FERTILISERS LIMITED, VISAKHAPATNAM
 
Project report submitted to Andhra University, Visakhapatnam
Partial fulfillment for the award of the Degree in

MASTER OF BUSINESS ADMINISTRATION

Submitted by
SK. HANIF
Registered No : 2085454041
Under the esteemed guidance of
Mr.P.V. PRASAD
Asst. Professor – MBA, HOD- BBM

DEPARTMENT OF MANAGEMENT STUDIES.

AQJ CENTERE FOR PG STUDIES
(Affiliated Andhra University, Visakhapatnam-530 017)
(2008-2010)
 INTRODUCTION 
 Inventory constitutes the most significant part of current assets to
a large majority of companies in India. On an average inventories
are approximately 60% of current assets in public Limited
companies in India. Because of the large size of inventories
maintained by the firms, a considerable amount of funds is
required to be committed to them.

 It is possible for a company to reduce its levels of inventories to a

considerable degree e.g., 10 to20 percent, with out any adverse
effect on production and sales, by using simple inventory planning
control and techniques. And at the same time company should not
invest excess money in inventory by managing large size of
inventories.

 The company may loose the opportunity cost on the excess

inventory and also the carrying cost will increase due to large size
of inventories. Therefore it is advisable for the company to
maintain inventory at an optimum level always. There are different
techniques available for the company to maintain optimum level of
inventory.
 OBJECTIVES OF THE STUDY
 The study titled “INVENTORY MANAGEMENT”- A case study of
Coromandel fertilizers ltd., has been carried out with the
following objectives.

 To find whether the CFL ensures a continuous supply of

materials to facilitate uninterrupted production.
 To study the inventory management policies, techniques and
their effectiveness.

 To give suggestions to increase inventory turnover.

 To make an appropriate investment in inventories and keep it at

an optimum level.
 SCOPE OF THE STUDY
 The scope of my study is confined to one of the key areas of
finance i.e. inventory management. The study concentrates on
the methods and techniques followed by CORAMANDAL
FERTILIZERS LIMITED for its inventory management and its
relative merits and demerits.

 The study appraises the company’s success in meeting the

requirements of the company and the country by helping the
farmers to raise agriculture output to meet the requirement of
the country’s growing population for food grains.
 METHODOLOGY

 Both primary and secondary data were used in conducting this

project which is as follows:

 PRIMARY DATA: This is done by personal discussions with

various officials in warehouse department and financial
department of CFL.

 SECONDARY DATA: Data collection from the in-house

purchase order books, indent books and journals relating to
fertilizers industry magazines and annul report of CFL. The
secondary data is obtained from the annual reports and the
documents maintained by the company.
 LIMITATIONS

 The below mentioned are the constraints under which my study

has been carried out.

 The study is confined to only 5 years.

 Most of the information has been kept confidential and as such

is not passed on as a part of the policy of the company.

 Since the number and size of inventory is very large, all the raw
materials could not be included in the analysis.
 INDUSTRY PROFILE
 Fertilizers refer to any materials, which supply nutrients to plants
in fields, which can be readily absorbed by them. Since the
essential physiological attribute of seeds is their ability to convert
a great duel of nutrients into grain.

 The spread of this variety lead for greater consumption of

fertilizers simultaneously with increasing demographic pressure
on the agricultural productivity has assumed more importance.

 The fertilizers which are most widely used are classified as under
basing the nutrients available. The most widely nutrients are
nitrogen, phosphorus and potash.
 COMPANY PROFILE
⇒ Coromandel fertilizers Ltd was incorporated in 1964, was result of
the synergistic effort EID parry India Ltd now belonging to the
Rs.8500crores (USD $ 2 Billion) Murugappa Group one of the
leading business house in India and two major US corporations
Chevron Chemical Company and Industrial Mineral and Chemical
Corporation (IMC). This bought to India analysis fertilizers in
1995.
⇒ Chevron Chemical Company disinvested their taken infamous of
EID parry and IMC in end of 1998 after effecting buy back of 20%
of CFL, total share in while the promoters did not anticipate the
group stake has gone up to 78.31%. The Indian Financial
Institution held about 12.61% equity the remaining 9% being held
by the public.

CFL’S MAJOR COMPETITIORS

=> The Fertilisers and Chemicals Travancore Ltd. (FACT)
=> Hindustan Liver Ltd. (HLL)
=> Indian Farmers Fertilisers Co-operation Ltd.(IFFCO)
 FINDINGS

 Company is right now using only four inventory management

techniques such as ABC analysis, XYZ analysis, FIFO,
Non – moving items.

 The company is using XYZ analysis only for the past four
years.

 E.O.Q method is followed by the company only on few

inventories.
 SUGGESTIONS

 Company should maintain an optimum level of inventory to

ensure efficient and smooth production.

 The company is investing huge amount on A class and X

category items on which the company would loose opportunity
cost. Therefore company shall reduce size of inventories on
these categories.

 The categories under XYZ & ABC have to be continuously

monitored and reviewed. The company can maintain only
minimum investment in order to maintain efficiently .
 SUMMARY

 Inventory management as a project has been carried over in C.F.L

for a duration of 8 weeks. This topic is chosen because almost 60%
of the working capital is blocked in inventories for all the Indian
companies.

 Hopefully the company would consider the suggestions in managing

the inventories effectively in coming years.
Under the Esteemed Guidance of

Asst. Professor – MBA, HOD- BBM

VISAKHAPATNAM
 Done by:
SK. HANIF