Inventory Management

Paavai Engineering College
A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD

CEMENT CORPORATION LIMITED, KARUR
PROJECT REPORT
Submitted by
S.GOKUL
Register No: 108001612014

In partial fulfillment for the award of the degree
Of
MASTER OF BUSINESS ADMINISTRATION
In
DEPARTMENT OF MANAGEMENT STUDIES
PAAVAI ENGINEERING COLLEGE

PACHAL, NAMAKKAL-637 018
JUNE 2012
Chettinad Cement Corporation Limited

BONAFIDE CERTIFICATE
PAAVAI ENGINEERING COLLEGE

DEPARTMENT OF MANAGEMENT STUDIES
PROJECT REPORT
JUNE 2012
This is to certify that the project A STUDY ON INVENTORY MANAGEMENT IN

CHETTINAD CEMENT CORPORATION LIMITED, KARUR
Is the bonafied record of project done by
S.GOKUL
Register No: 108001612014

Of MBA during the year 2011-2012
--------------------------- -------------------------
Project Guide HOD
Submitted for the Project Viva-Voce examination held on ----------------------------
----------------------------- --------------------------
Internal Examiner External Examiner

DECLARATION
I affirm that the project work entitled A STUDY ON INVENTORY MANAGEMENT
IN CHETTINAD CEMENT CORPORATION LIMITTED, KARUR being submitted in
partial fulfillment for the award of Master of Business Administration (MBA) is the original
work carried out by me. It has not formed the part of any other project work submitted for award
of any degree or diploma, either in this or any other University.
Signature of the Candidate
I certify that the declaration made above by the candidate is true
Signature of the Guide

ACKNOWLEDGEMENT
I would like to express my gratitude to Shri.CA. N. V. Natarajan, B.Com., FCA.,
Chairman and Smt. Mangai Natarajan, M.Sc., Correspondent, Paavai Institutions, Namakkal
for giving me an opportunity and facility to complete this project.
I wish to place my deep sense of gratitude to Dr.

K. K. Ramaswamy, M.E., Ph.D., Director Admin. Paavai institutions and I would like to
express my gratitude to Dr. C. Jegadheesan, M.E., MS., Ph.D., Principal, Paavai Engineering
College, Namakkal.
I offer my profound gratitude to Dr.G.Gopalakrishnan, M.B.A, M.Phil, Ph.D
Head, Department of Management Studies, Paavai Engineering College, Namakkal, for his entire
support to complete this project report.
I owe my boundless gratitude to my faculty guide, Dr.A.Arumugam.M.Com, M.Phil,
M.B.A., Ph.D Professor of MBA Department, for his guidance and supervise of this project for
successful completion.
I sincerely thank to Mr.Thirunavukarasu, HR manager, Chettinad Cement
Corporation limited, Karur for giving me permission to do this project at their concern.
I express my sincere thanks to my beloved parents, friends and the staff member for
and those who are encouraged and supported for completion and this project report.
S.GOKUL

TABLE OF CONTENTS
CHAPTER NO DESCRIPTION PAGE NO

LIST OF TABLES
LIST OF CHARTS
ABSTRACT
INTRODUCTION
1.1 About the study
1.2 Scope of the study
I 1.3 Statement of the problem
1.4 Objectives of the study
1.5 Research methodology
INDUSTRY AND COMPANY PROFILE
2.1 Industry profile
2.1.1 Cement industry in Global
II 2.1.2 Cement industry in India
2.1.3 Cement industry in Tamilnadu
2.1.4 Cement company in Karur
2.2 Company profile
CONCEPTUAL AND THEORETICAL FRAME
WORK
III 3.1 Conceptual and theoretical frame work of
inventory management
3.2 Review of literature
ANALYSIS OF INVENTORY MANAGEMENT
IV 4.1 Analysis Part-1 Ratio Analysis(Inventory)
4.2 Analysis Part-2 EOQ Analysis
SUMMARY OF FINDINGS, SUGGESTIONS AND
CONCLUSION
V 5.1 Findings
5.2 Suggestions
5.3 Conclusion
BIBLIOGRAPHY

LIST OF TABLES
Table No. Description Page No.

4.1.1 Level of inventory
4.1.2 Inventory turnover Ratio
4.1.3 Inventory conversion period
4.2.1 EOQ analysis for the year 2006-07
LIST OF CHARTS
Chart No. Description Page No.

4.1.1 Level of inventory
4.1.2 Inventory turnover ratio
4.1.3 Inventory conversion period

ABSTRACT
The purpose of inventory management is to ensure availability of raw material in
sufficient qualities as and when required and also minimize investment in inventories. There is
an essential to manage inventories efficiently and effectively in order to avoid excess investment.
It is possible for a company to reduce the level of inventories to a considerable extent without
any adverse effect on production and sales by using simple inventory planning and control
techniques. The reduction of excessive inventories will create a favorable impact on the company
profitability. Inventory turnover ratio, inventory conversion period are very helpful to know how
effectively plays and control in the organization EOQ analysis will enables the organization to
use of EOQ analysis is very effective and useful tool for classifying, monitoring and control of
inventories.

CHAPTER-I
INRODUCTION
1.1 ABOUT THE STUDY

Inventory management is primarily about specifying the size and placement of stocked
goods. Inventory management is recurred at different locations within a facility or within
multiple locations of a supply or network to protect the regular and planned course of production
against the random disturbance of running out of materials or goods. The scope of Inventory
management also concerns the fine lines between replenishment lead time, carrying costs of
inventory, asset management, Inventory forecasting, physical inventory, available physical space
for Inventory, quality management, returns and defective goods and demand and forecasting.
Types of inventory
Normally the inventory has divided into two types. These,
1. Merchandising inventory,
2. Manufacturing inventory.
The manufacturing inventory has been subdivided into three types. These,
1. Raw materials,
2. Work in process,
3. Finished goods.
Raw materials: Everything the crafter buys to make the product is classified as raw
materials. That includes leather, dyes, snaps and grommets. The raw material inventory
only includes items that have not yet been put into the production process.
Work in process: This includes all the leather raw materials that are in various stages of
development. For the leather crafting business, it would include leather pieces cut and in
the process of being sewn together and the leather belts and purse etc. that are partially
constructed.

In addition to the raw materials, the work in process inventory includes the cost of the
labor directly doing the work and manufacturing overhead. Manufacturing overhead is a
catchall phrase for any other expenses the leather crafting business has that indirectly
relate to making the products. A good example is depreciation of leather making fixed
assets.
Finished goods: When the leather items are completely ready to sell at craft shows or
other venues, they are finished goods. The finished goods inventory also consists of the
cost of raw materials, labor and manufacturing overhead, now for the entire product.
1.2 SCOPE OF THE STUDY
The study helps the management to improve its profitability through a reduction in non-
moving inventory.
It develops the policies for both continuous review of inventory management system.
The study helps to show the level of the inventory in the organization. The company will
make the proper inventory methods from the suggestions of the study.
1.3 STATEMENT OF THE PROBLEM
There are a number of problems that can cause havoc with inventory management. Some
happen more frequently than others. Here are some of the more common problems with
inventory systems.
Unqualified employees in charge of inventory, Using a measure of performance for their

business that is too narrow, Not identifying shortages ahead of time, Bottlenecks and weak points
can interfere with on-time product delivery, Too much distressed stock in inventory, Excessive
inventory in stock and unable to move it quickly enough, Computer assessment of inventory
items for sale is inaccurate, Computer inventory systems are too complicated, Items in-stock gets
misplaced, Not keeping up with the rising price of raw materials.

1.4 OBJECTIVES OF THE STUDY
To analyze the inventory those are sufficient to perform production and sales
activities smoothly.
To study the inventory management followed in chettinad cement.
To identify the existing inventory management and its effectiveness.
To calculate analysis for their performance in inventory management.
1.5 RESEARCH METHODOLOGY
Research Design
The Descriptive type of research has been applied in the study . This research the
researcher has no control over the variables. Only reports what has happened or what is
happening. The research can only discover causes but cannot control the variables.
Data collection
This study purely based on secondary sources of information. The necessary data
calculated from annual report, books, journals and websites.
Period of study
This study covers a period of five years from 2006 2007 to 2010 2011. The
accounting year commenced from April and ending with March of the next year.
Area of study
This study was conducted in Chettinad cement corporation limited, Puliyur, Karur
District.

Tools for analysis
The following tools have been applied in the present study.
They are listed below
Ration analysis (inventory) and

EOQ analysis
Ratio Analysis (Inventory)
The percentage of a mutual fund or other investment vehicle's holdings that have
been "turned over" or replaced with other holdings in a given year. The type of mutual fund, its
investment objective and/or the portfolio manager's investing style will play an important role in
determining its turnover ratio.
Economic Order Quantity (EOQ)
Economic order quantity is that level of inventory that minimizes the total of
inventory holding cost and ordering cost. The framework used to determine this order quantity is
also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most
economical quantity of a product that should be purchased at one time. The EOQ is based on all
associated costs for ordering and maintaining the product. EOQ refers to the size of the order
which gives maximum economy in punches of materials.
EOQ=
2 Ao
C1
Where
A= Annual usage unit
O=Ordering cost

C 1=Carriying cost
CHAPTER-II
INDUSTRY AND COMPANY PROFILE

2.1 INDUSTRY PROFILE
History of the origin of cement
It is uncertain where it was first discovered that a combination of hydrate non-hydraulic

lime and a pozzolan produces a hydraulic mixture, but concrete made from such mixture was
first used on large scale by roman engineers. They used both natural pozzolans (trass or pumice)
and artificial pozzolans (ground brick or pottery) in the concretes. Many excellent examples of
structures made from these concretes are still standing. Notably the huge monolithic dome of the
pantheon in Rome and the massive Bath of Caracalla. The vast system of roman aqueducts also
made extensive use of hydraulic cement. The use of structural concrete disappeared in medieval
Europe. Although weak pozzolanic concretes continued to be used as a core fills in stone walls
and columns.
Modern cement
Modern hydraulic cement began to be developed from the start of the industrial Revolution
(around 1800) ,driven by three main needs: Hydraulic renders for finishing brick buildings in wet
climates Hydraulic mortars for masonry construction of harbor works etc , in contact with sea
water.
Varieties of the cement
There are some varieties in cement that always find good demand in the market. To
known their characteristics and in which area they are most required, it will be better to take a
look at some of the details given below.

Portland blast furnace slag cement (PBFSC)
The rate of hydration heat is found lower in this cement type in comparison to PPC. It is
most useful in massive construction projects, for example-dams.
Sulphate resisting Portland Cement (SRPC)
This cement is beneficial in the areas where concrete has an exposure to seacoast or sea
water or soil or ground water. Under any such instances, the concrete is vulnerable to sulphates
attack in large amounts and can damage to the structure. Hence, by using this cement one can
reduce the impact of damage to the structure. This cement has high these cement one can reduce
the impact of damage to the structure. This cement has high demand in India.
Rapid hardening Portland Cement (RHPC)
The texture of this cement type is quite to that OPC. But, it is bit more fine than OPC and
possesses immense compressible strength, which makes casting work easy.
Ordinary Portland Cement (OPC)
Also referred to as grey cement or OPC, it is of much use in ordinary concrete

construction. In the production of this type of cement in India, Iron (fe2O3), Magnesium (MgO),
Silica (SiO2), and Sulphur, trioxide (SO3) components are used.
Portland Pozolona Cement (PPC)
As it prevents cracks, it is useful in the casting work of huge volumes of concrete. The
rate of hydration heat is lower in this cement type. Coal waste or waste or burnt clay is used in
the production of this category of cement. It can be availed at low cost in comparison to OPC.

Oil Well Cement (OWC)
Made of iron, coke, limestone and iron scrap, Oil Well Cement is used in constructing or
fixing oil wells. This is applied on both the off-shore and on-shore of the wells.
Clinker Cement (CC)
Produced at the temperature of about 1400 to 14560 degree Celsius, Clinker cement is
needed in the construction work of complexes, houses and bridges. The ingredients for this
cement comprise iron, quartz, clay, limestone and bauxite.
A part from these, some of the other types of cement that are available in India can be
classified as:
Low heat cement,

High early strength cement,
Hydrophobic cement,
High aluminum cement and
Masonry cement.
2.1.1 Cement Industry in Global
Cement is a basic ingredient for the construction industry. It is estimated there are 1500
integrated cement production plants in the world. Although the players such a Lafarge or
CEMEX, the share of the four largest firms account only for 23% of the overall demand.
Demand
World cement demand was 2,283MT in 2005, with China accounting for 1,064MT (47%
of total). The expected demand for 2010 is estimated at 2,836 MT. China will increase its
demand by 250MT during the period, an increase higher than the total yearly European demand.

The Demand of Cement
Demand for cement in MT 2005 2010 Growth rate
North America 170 200 2.9%
Western Europe 208 236 2.2%
Asia/Pacific 1500 1900 5.2%
Other regions 405 500 4.7%
World cement demand 2283 2836 4.7%
Source: www.cementhistory.com, www.google.com.

Top 25 Cement companies in the world
S.NO Name of the Company Name of the

Country
1. Aditya Birla Group-Grasim India
2. Al-Ghurair Group Dubai
3. Ambuja Cements Limited India
4. Anhui Conch Cement Company China
5. Arabian Cement Company Egypt
6. Ararat Cement Co. South Africa
7. Cement Cruz Azul Cement Co. Armenia
8. CEMEX Co. U.S.A
9. China National Cement Materials Group Corporation China
10. Cimpor Cement corp. China
11. Companhia Siderurgical National S.A Brazil
12. Concrete Casting Cement Company Pacific Alloy
13. CRH plc America
14. Eagle Materials Inc U.S.A
15. Heidelberg Cement Company Germany
16. James Hardie Cements U.S.A
17. Lafarge India
18. Libyan Cement Company Libya
19. Monarch Cement Ltd. U.S.A, California
20. Norcem Germany
21. Pretoria Portland Cement Company South Africa
22. Ready Mix Inc India
23. Rinker Group Australia
24. Semapa Group Europe
25. Smith-Midland Cement Company U.S.A, Milford
Cement industry in India
2.1.2 Cement Industry in India
The cement industry in India has undergone a major shift over the last 6 years. The Indian
cement industry is the second largest producer of quality cement. Indian cement industry is

Source: www.google.com, www.ask.com, www.linkedin.com, en.wikipedia.com
engaged in the production of several varieties of cement such as, ordinary Portland cement
(OPC), Portland pozzoland cement (PPC), Portland blast furnace slag Portland cement
(PBFSPC), sulfate resistance Portland cement (SRPC), white cement, etc,. They are produce
strictly as per the Bureau of Indian standards (BIS) specifications and their quality is comparable
with the best in the world.
The industry occupies an important place in the national economy because of its strong
linkage to other sectors such as, construction, transportation, coal and power. The cement
industry is also one of the major contributors to the exchequer by way of indirect taxes.
S.NO Name of the company Details of the company
Year of establishment 1994
1. ACC Limited Head quarters Maharashtra
Web site www.acclimited.com
2. Ambuja Cements Limited Head quarters Gujarat
Web site www.ambujacement.com
3. Andhra Cements Ltd Head quarters Andhra Pradesh
Web site www.andhracements.com

4. Barak Valley Cements Ltd Head quarters Assam
Web site www.barakcement.com
5. Bheema Cements Ltd Head quarters Andhra Pradesh
Web site www.bheemacement.com
6. Binani Cement Ltd Head quarters West Bengal
Web site www.binani.com
7. Birla Corporation Limited Head quarters West Bengal
Web site www.grasim.com
8. Burnpur Cement Ltd Head quarters West Bengal
Web site www.burnpurcement.com

Chettinad Cement Corporation
9. Head quarters Tamil Nadu
Limited
Web site www.chettinadcement.com

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

11. Deccan Cements Ltd Head quarters Andhra Pradesh
Web site www.deccancem.com
12. Everest Industries Ltd Head quarters Maharashtra

Web site www.everestind.com
13. Grasim Industries Limited Head quarters Madhya Pradesh
Web site www.grasim.com
14. Gujarat Sidhee Cement Ltd Head quarters Gujarat
Web site www.gujaratsidhee.com
15. Heidelberg Cement India Ltd Head quarters Karnataka
Web site www.mycemco.com
16. Hyderabad Industries Ltd Head quarters Andhra Pradesh
Web site www.hil.in

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

19. JK Lakshmi Cement Ltd Head quarters Rajasthan
Web site www.jklcem.com
20. Kalyanpur Cements Ltd Head quarters West Bengal
Web site www.kalyancemenet.com
21. Katwa Cements Ltd Head quarters Karnataka
Web site www.katwagroup.com
22. Kesoram Industries Ltd Head quarters West Bengal
Web site www.kesocorp.com
23. Madras Cements Limited Head quarters Tamil Nadu
Web site www.madrascements.com
24. Mangalam Cement Ltd Head quarters Rajasthan
Web site www.mangalamcement.com
25. NCL Industries Ltd Head quarters Andhra Pradesh
Web site www.nclind.com
26. Nirman Cements Ltd Head quarters Bihar
Web site www.nirmancements.com

27. OCL India Ltd Head quarters Orissa
Web site www.ocl.in

Panyam Cements & Mineral
28. Head quarters Andhra Pradesh
Inds Ltd
Web site www.panyamcements.com
29. Prism Cement Ltd Head quarters Andhra Pradesh
Web site www.prismcement.com
30. Rose Zinc Ltd Head quarters Rajasthan
Web site www.rosezinc.com
31. Sagar Cements Ltd Head quarters Andhra Pradesh
Web site www.sagarcements.in
32. Sainik Cement Inds. Ltd Head quarters Delhi
Web site www.sainikcem.in
33. Sanghi Industries Ltd Head quarters Andhra Pradesh
Web site www.sanghicement.com
34. Saurashtra Cement Ltd Head quarters Gujarat
Web site www.saurashtra.com

35. Shiva Cement Ltd Head quarters Orissa
Web site www.shivacement.com

Shree Digvijay Cement
36. Head quarters Gujarat
Company Ltd
Web site www.digvijaycement.com
Head quarters Andhra Pradesh

37. Somani Cement Company Ltd
Web site www.anjanicement.com
38. Sri Vasavi Inds. Ltd Head quarters Andhra Pradesh
Web site www.srivasavi.com
39. Sri Chakra Cements Ltd Head quarters Andhra Pradesh
Web site www.chakracement.com
40. Stresscrete India Ltd Head quarters Maharashtra
Web site www.stresscrete.com
41. The India cements Ltd Head quarters Tamil Nadu
Web site www.ramcocement.in

42. Udaipur Cement Works Ltd Head quarters Rajasthan
Web site www.udaipurcement.com
43. UltraTech Cement Limited Head quarters Maharashtra
Web site www.ultratechcement.com
44. Vinaycements Ltd Head quarters Assam
Web site www.vinaycements.com
45. Visaka industries Ltd Head quarters Andhra Pradesh
Web site www.visaka.org
46. Zuari cement corporation Ltd Head quarters Andhra Pradesh
Web site www.zuaricement.com
Source: www.google.com, info.shine.com, www.indiacatalog.com

2.1.3 Cement Industry in Tamilnadu
The cement industry of India hopes the most in Tamilnadu. The Tamilnadu is the state
which has produces the quality cement in India.
The Tamilnadu government was formed a company name is Tamilnadu cement

corporation limited (TANCEM) in the February 1976 as public limited company. The TANCEM
was formed two cement plants in Tamilnadu. These,
1. Alangulam cement works. Alangulam, virudhunagar districts.

2. Ariylur cement works. Ariyalur, perambalur districts.
The following table shows the details of cement companies in districts of Tamilnadu. These,
S.No Name of the company Details

Year of
1962
establishment
Chettinad Cement Corporation Corporate office Chennai

1
Limited
Karur, Dhindukal,
Plant Places
Ariyalur
Brand name Chettinad.
Year of
1946
establishment
Corporate office Chennai.

2 The India cements Ltd
Ramanathapuram,
Plant Places
Sangakiri, Ariyalur.
Sankar cement,
Brand name
Coromandel cement.

Year of
1950
establishment
3 Madras cement Ltd Corporate office Chennai.
Plant place Ariyalur.
Brand name Ram co cement.
Year of
1979
establishment
Corporate office Chennai (Govt).

Tamilnadu cements corporation
4
Ltd
Plant place Ariyalur.
Brand name Arasu cement
Year of
1976
establishment
Corporate office Madurai.

5 Janathacem industries limited
Plant place Rajapalayam,madurai.
Janatha cement, agsar

Brand name
cement.
Source: www.indiacatalog.com, www.ask.com, en.wikipedia.com
2.1.4 Cement Company in Karur District

Chettinad Cement Corporation limited, karur is the one of most popular cement
manufacturer in Tamilnadu. The Chettinad cement work plants other than karur district,
1. Karikalini cement works, Dhindukal district,

2. Ariyalur cement works, Ariyalur district,
The Chettinad cement corporation limited, Karur is the head company in Chettinad cement
companies. They are produced 5,00,000 tons of cement per year. They are used those cement for
their own company use such as,
1. Chettinad builders pvt ltd,

2. Chettinad house pvt ltd,
3. Chettinad group of companies.
2.2 COMPANY PROFILE
History of the company
The history of the group house of chettinad is linked with the 9 decades old saga. In
1912 took birth the House of Chettinad through a visionary idealist, born entrepreneur Dr. Rajah
Sir Annamalai Chettiar who believed in Social Transformation through business. The founder of
the House of Chettinad envisioned, his companies providing the stimulus for Industrial Growth
and conceived business as a means of improving the living standards of people.
The corporate credo of the House of Chettinad STRIVE, SAVE AND SERVE is the
very thought of our founder. IN order to continue fulfilling his dreams and aspirations. To reach
greater heights and the reins were taken over by equally visionary businessmen his son, Dr.
Rajah Sir Muthiah Chettiar and grandson Dr. MAM. Ramaswamy. The house of Chettinad
reached new heights with generations of hard work, dedications and remains the stamp of
quality, integrity and reliability under the versatile, pragmatic and visionary leaderships.
Present position of the company

Today, a 8500 million business group has ventured and diversified in varying fields
including manufacturing (Cement, Silica, Quartz, Grits), services (construction Transports, Steel
fabrication, Ship management and stevedoring. Clearing and forwarding) Trading, power
generation, plantation, farms, logistics. Education, sports management, literature, art and music
fields have also been contributed vastly. It is a matter of great pride and satisfaction that the
group finds worldwide patronage and earns precious foreign exchange for the country.
The group aims to broaden its horizons and reach and the zenith in this millennium under
the yond, dynamic, enthusiastic, able leadership of Mr. MAMR Muthiah. The future of the
companies in the house of chettinad is based on the time tested and proved guidelines of total
customer orientation, technology in the service of man and business as an instrument of social
service. To these timeless truths, we remain stead fast forever.
Management of Chettinad Cement Corporation Limited

CHAIRMAN : MR.M.A.M.RAMASWAMY
MD : SRI.M.A.M.R.MUTHAIAH
STARTED : 1962
DIRECTORS : SRI.RAMANATHAN PALANIAPPAN

SRI.R.KRISHNA MOORTHY
SRI.SP.S.T.PALANIAPPAN
SRI.K.GANAPATHY&C.S.PARI
Dr.T.PRABHAKARA RAO, IAS (TIIC
NOMINEE)
COMPANY SECRETARY : SRI.S.HARIHARAN
TYPE : PUBLIC
CO-SECRETARY : SRI.S.HARIHARAN
AUDITORS : M/S.P.B.VIJAYARAGRAN&CO
M/S V.SOUNDARARAJAN&CO
M/S KRISHAAN &CO
REGISTERED OFFICE : Chettinad Cement Corporation Ltd,
5th Floor, Rani Seethai Hall,
603 Anna Salai, Chennai - 600 006.
Telephone No: +91-44-28292727
Fax No : +91-44-28291594
e-mail : chtdmds@vsnl.com
PRODUCTION PLANTS : PULIYUR, KARIKKALI, ARIYALORE.
WEBSITE : www.chettinad.com
VISION

With almost a century of continuous growth and prosperity behind us we envisage our
future as another opportunity to which greater heights and to perfect the art of perfectionism
upholding the vision of our founder Dr. Rajah sir Annamalai Chettiar STRIVE, SAVE AND
SERVE. The nature ethics and style of business believe that nothing can supplement the idealism
which motivates the business we fall back on the time tested. Principles of total customers
orientation technology in service of man and business as an instrument of social service to this
timeless truth we remind steady fast forever.
MISSION
To achieve & sustain cost leadership in the cement market. The harness technology to its
full potential in a safe & clear environment in the entire business cycle & integrate quality with
continuous improvement. To became a vibrant learning organization by building skills and
competitiveness of employees for growth. To be the best and most respectable corporate citizen.
Product profile of Chettinad Cement Corporation Ltd.
Pavithram: Unique cement manufactured at Puliyur works having high quality for
special concrete applications.
Chettinad Grade 53: Superior finely ground cement, suitable for plastering works,
giving a silky finished look. For RCC applications laser controlled manufacturing would
yield best result.
Chettinad Grade 43: Multipurpose cement, suitable for plastering and binding.
Chettinad PPC: A finely blended cement, providing very fine result for plastering work,
devoid of hair line cracks and giving excellent appearance to the building.
Sulphur Resistant Cement: Finds applications in the construction activity in the coastal
areas to save from corrosiveness due to salty environment.
Organizational chart of Chettinad Cement Corporation Ltd.
Chairman Cement Corporation Limited

Chettinad
Managing Director
Board of directors
President
Vice president
Senior general manager
Additional General Manager
Deputy General Manager

Senior Manger
Senior Assistance Manager
Supervisor
Sales Officer
Chief Security Officer
Vigilance Officer
Accounts Officer
Junior Officers
MANUFACTURING DETAILS
Mines-Puliyur Works

Limestone is sourced from our mines at palayam which is located 40kms from the
factory. The mines are equipped with the latest machinery and technology including for
sequential blasting. The mined limestone is then crushed through primary and secondary crusher.
Mines-Karikkali works
Limestone Mines are located at about 3 kms. from the factory. The mines are fully
mechanized and have also a terminator for mechanized breaking of individual boulders. The
Crusher is located at Mines and crushed limestone is transported by long belt conveyors to
factory.
Stacker and Reclaimer-Puliyur Works
The crushed limestone is then sent through the X-Ray analyzer and approved for further
process only on meeting quality standards backbone of the quality control.
Stacker and Reclaimer- Karikkali works
The entire quantity of crushed limestone passes through the online cross belt analyzers
and is stacked at the pile in the factory. Three numbers of separate stacker-reclaimer are available
with truck tipplers for proper stacking and
Reclaiming of corrective raw materials, fuels and additives. Stacker Reclaimers help to achieve
high degree of stacking and ensure maximum level of consistency for the input materials to raw
mill, coal mill and cement mill.
Raw Mill-Puliyur Works

The limestone from the reclaimed is mixed with additive of bauxite and Iron ore and
transported to the vertical roller mill through weigh feeders (which control the additive addition).
The operator takes corrective steps on viewing any deviation. The loesche-German make vertical
roller mill is similar in principle to the tilting grinder with gigantic roller and operated by the
hydraulic system, to give fine blended raw material. From the loesche mill the raw material is the
taken to two silos to produce Varity of cement.
Raw Mill- Karikkali works
Pre-stacked limestone of stockpile is ground in the VRM along with corrective materials
with required ratios are made to produce raw meal and that is stored in Blending cum Storage
Silo. There are separate hoppers with weigh feeders for continuous and regulated addition of
each raw material. The mix passes through the cross belt analyzers which analyze the mix
chemistry and solve the mix ratio every minute to have very good consistency in the raw mix.
Kiln-Puliyur Works
The finely grounded blended raw material is sent to a five stage kiln. Kiln is a key
process in the manufacture of cement where the calcinations & chemical reaction take place.
Coal fired burner (Controlled through latest solid & low feeder) is used to heat the air to 1400c
and is fed from one end of the kiln. The data accusation and control center meticulously monitor
the entire process including the temperature.
Kiln- Karikkali works
Raw meal extracted from silo is fed to the kiln where it is sintered at about 1400o C to
clinker. This process is called preprocessing which consists of a five stage suspension heaters
with precalciner, the kiln and the clinker cooler. Clinker cooler with CIS and CFG for maximum
heat recuperation and the cooled clinker is transported to a storage silo.
Cement Mill-Puliyur Works

The clinker is then ground, depending upon the grade, the additive is added. For all
grades of cement 5% gypsum is added to control setting of cement we use Japanese technology
in fine grinding with vertical roller mill from anode Kobe, Japan, laser practical size analyzer is
used to monitor fineness of the cement for yielding very good quality cement.
Cement Mill- Karikkali works
Finally, grinding is done in OK Vertical Roller Mill for optical particle size distribution
and less power consumption with excellent ease of operation for feeding, grinding and
classification. To maintain quality of various types/grades of cement, there are separate hoppers
with weigh feeders for the addition of fly ash, gypsum, etc. Quality of final product is monitored
and controlled every hour by testing samples in the XRF analyzer. Final products are stored in
cement silos.
Packing House - Puliyur woks
The four automatic packing machines have been installed, together they have the capacity
to deliver 4800 tons per day of packed cement. These packing equipments are very accurate and
any fault can be rectified as each bag is verified before the next is filled. These are also cross-
checked by the Electronic weighing scale used to note the load carried by the Lorries.
Packing House - Karikkali works
There are 2 nos. of Electronic Rot packer which automatically pack cement in bags, each
with a capacity of 150 tons/hour. Packed cement is loaded into trucks/wagons with automatic
loading machines.
WET PROCESS TECHNOLOGY

Calcareous Material Argilseeous
Limestone Material Clay
Crushing
Water Washing
Storage Tank Storage Tank
Mixing IN Correct Production
Slurry Formation
Correction Basin
Pumping
Rotary Kiln Coa

l
Dus
Formation Of Clinker
Clinker Cooler
Grinding In Ball and Tube Gyp

Mill sum
Storage In silos
Weighing and packaging in Bags
Distribution
DRY PROCESS TECHNOLOGY

Calcareous Material Argilseeous
Limestone Material Clay
Crushing Crushin
g
Grinding Grinding
Storag Storage
e
Mixing In Correct Proportion
Storage of raw materials Coa

l
Dus
Rotary
Kiln
Formation of Clinker

Clinker Cooler
Gyp
Grinding In Ball and Tube sum
Mill
Storage in Silos
Weighing and Packing in bags
Distribution
ACHIEVEMENTS OF CHETTINAD CEMENT CORPORATION LTD.
S.No AWARDS YEAR

National Safety Award (for outstanding performance in Industrial Safety in 1976

1 achieving lowest frequency rate in Industry)
Runners up Highest % reduction in frequency rate 1977
2 Merit Awards from Regional Directorate of Workers Education 1972
3 Tamil Nadu Film Arts Association, Chennai Shield 1978
National Productivity Award (Best Productivity Performance in Cement
1985
Industry issued by NPC)
Second Best 1986
4
Best 1995
Best 1996
Second Best 1997
National Safety Award (Mines)-(for lowest injury frequency rate Metal Mines
Mechanized Open Cast).
1986
5 Longest Accident Free Period.
1986
Best performance of the year.
1989
Conservationist of the year (for outstanding progress in the field of

6
Conservation of Energy, Metal Components & Machinery) 1987
NCBM National Awards (Improvement in Energy Performance).
Second Best 1994
7
Best 1995
Best 1998
TNEB Energy Conservation Award - (One among the 15 Energy Efficient
8
H.T. Industries of 2000 KVA) 1998
NCBM National Award
9
Second Best for Energy Efficiency Performance 1998
Source: Annual report of Chettinad Cement Corporation Limited
MILESTONES OF CHETTINAD CEMENT CORPORATION LIMITED

Sl. No. MILESTONES YEAR
0.4 MTPA cement production capacity with wet process plant installed at
1 1967
Puliyur.
Modernized into dry process plant to a capacity of 0.8 MTPA with a kiln
2 capacity of 2000 TPD commissioned with modern vertical roller mills for 1989
fuel & limestone grinding.
3 2 Nos. of 5.4 MVA Capacity WARTSILA DG set installed. 1990
66 Nos. of wind electric Generator of total capacity 17.3 Mw installed at
4 1994
Poolavadi Udumaplet Taluk.
5 ISO 9002 Certificate received. 1995
6 Stacker & Re-claimer for Limestone installed. 1996
7 Belt Elevator for Raw mill and Kiln feed installed. 1996
A) Impact Crusher for lime stone crushing at mines installed.
8 1997
B) Bag filter for coal mill grinding system.
Vertical roller mill for cement grinding installed. Additional ESP installed
9 1998
for Kiln/ Raw mill to handle excess process gases.
CIS/CFG Cooler installed. Low pressure cyclone installed. Latest
10 Technology LV-Tech classifier installed in Raw Mill. The plant capacity 2000
increased to 1.2 MTPA cement.
Green field Cement plant with capacity of 0.9 MTPA was commissioned at
11 2001
Karikkali.
12 Rock breaker (Terminator) installed in mines. 2001
13 ISO 14001:2004 is implemented. 2003
14 Environment Management Service Certificate option. 2004
1 No. 15MW Coal based Captive Power Plant commissioned in 12 Months
15 2004
at Karikkali.
16 Fly Ash Silo construction work completed at Puliyur and Karikkali. 2005
Roller press with ball mill for cement grinding with capacity 0.7
17
MTPA installed at Karikkali. 2006
Vertical roller mill for cement grinding installed. Additional ESP installed
18 2006
for Kiln/ Raw mill to handle excess process gases.
19 Karikkali plant capacity increased to 2.0 MTPA by increasing of blended 2007

cement production.
Bag House installed in Raw Mill/Kiln Circuit in addition to the existing ESP
20 2007
at Puliyur.
Energy dispersive X-Ray specto meter was put into service for increasing
21 2007
the output and economical mines operation & conservation of minerals.
Advance Research laboratories, Switzerland make X-Ray Spectrometer
22 Sequential type was commissioned for augmenting clinker production and 2007
its quality.
Seethainagar Mines crusher capacity was upgraded for supply of 40%
23 2007
Karikkali plant requirement of limestone.
Coal based 15 MW capacity CPP was commissioned during Feb-2008 at
24 2008
Puliyur Works.
Automation & control sections PLC's OS software up gradation and PLC's
25 2008
capacity.
KHD make Burner Management System for kiln operation to improve
26 2008
quality of clinker and to save thermal energy.
Coal based 2 x 15 MW capacity CPP was commissioned during Sep-2008 at
27 2008
Ariyalur.
Green field Cement plant with capacity 2.75 MTPA was commissioned
28 2008
during Dec-2008 at Ariyalur.
Video conferencing facility was commissioned between Puliyur, Karikkali,
29 Ariyalur and Head Office for more effective and faster communications and 2008
project monitoring.
Brown field Cement plant with capacity 2.75 MTPA was commissioned at
30 2009
Ariyalur during October-2009.
Coal based 1 x 15 MW capacity CPP was commissioned during Jan-

2010 Erection and Commissioning of 2 Cement Plants in World Record time
at ariyalur 30 months from Bhoomi Pooja to commissioning highest
production capacity for cement in a single location at Ariyalur Three No. 15
31 2010
MW coal based captive power plants commissioned in 18 months at
Ariyalur Chettinad Cement Technical team rated No1 by FLS Denmark at
Ariyalur.

Roller press with ball mill for cement grinding with capacity 0.5 million
32 2010
commissioned during February -2010 at Puliyur.
Brown field Cement Plant with capacity of 2.5 MTPA was commissioned at
33 Karikkali in March 2011 along with coal based 30MW captive power plant 2011
within the same premises
Work is under progress for a new Green field production line of 2.5 MTPA
cement with 1 No. of 30MW Coal based captive power plant in Kallur
34 2011
Village, Chincholi Taluk and Gulburga Dist of Karnataka state and expected
to be commissioned in year 2012.

CHAPTER-III
CONCEPTUAL AND THEORITICAL
FRAME WORK
3.1. CONCEPTUAL AND THEORITICAL FRAME WORK OF

INVENTORY MANAGMENT
Inventory management is a process of evaluating and controlling method for

inventory or stock level of the company. The purpose of inventory management is to diagnose
the information contained in the stock book of the company, so as to judge the stock level and
control methods of the firm. The analysis and interpretation of inventory management is essential
to bring out the stock needed. The inventory management is an attempt to determine the stock
and meaning of the stock book statement data so that forecast may be made of the future cost
control of the company. The stock evaluation helps to understand how best the organization is
functioning with good stock control.
The analytical tools generally available to an analyst for this purpose are as follows,

Inventory turnover analysis

EOQ analysis
OBJECTIVES OF INVENTORY TURNOVER ANALYSIS, EOQ ANALYSIS
The objectives of inventory turnover analysis EOQ analysis is to provide information

about the stock level and control when purchase of raw materials of an enterprise that is useful to
a wide range of purchasing power of raw materials. We have discussed in the previous
paragraphs the utility of the components of inventory turnover and EOQ. Later we will us
discussing how they are made use of by stock department
o To study the stock book of the company

o To evaluate the stock position of the company.
o To find out the efficiency in utilization of stock materials to produce the goods.
USES OF INVENTORY TURNOVER ANALYSIS, EOQ ANALYSIS
It is helpful in assessing the stock position and productivity position of a concern. The
main objectives of a inventory turnover analysis are to assess
The present and future stock capacity of a concern.

To give corrective solution for the inventory problem.
To differentiates the investment with EOQ and invest without EOQ for purchasing of the
raw material
INVENTORY TURNOVER RATIOS
Inventory turnover ratio
A ratio showing how many times a company's inventory is sold and replaced over a period.

Inventory turnover period
How often interest is calculated and added on to your investment. If you have two conversion
periods, it means that interest is calculated every six months. The inventory conversion period
for calculate the interest for credit sales to their agents
ECONOMIC ORDER QUANTITY
Economic order quantity is that level of inventory that minimizes the total of
inventory holding cost and ordering cost. The framework used to determine this order quantity is
also known as Wilson EOQ Model. The model was developed by F. W. Harris in 1913.The most
economical quantity of a product that should be purchased at one time. The EOQ is based on all
associated costs for ordering and maintaining the product. EOQ refers to the size of the order
which gives maximum economy in punches of materials.
EOQ=
2 Ao
C1
Where
A= Annual usage unit
O=Ordering cost
C 1=Carriying cost
3.2 REVIEW OF LITERATURE
Bharathi pathak 1991 The bulk of the banking business in the country is in the public
sector comprising the state bank of India and its seven associated banks and twenty nationalized
commercial banks till 1991, the Indian banking industry was operating in a highly regulated and
protected regime. But with the acceptance of Norseman committee recommendation, competition
has been injected into the banking industry in two forms.
The study has been found that HDFC Bank emerged as a leader in this financial analysis
of the year ended 2000-01. It closest competitor was ICICI Bank. Financial performance of the
other three, no doubt, lagged behind them, but it by no means, depressing. These Bank obviously,

have to focus more improving parameters like credit quality and cost control for the emerge as
the top performance.
R. Hamsalakshmi-M.Manicham 2000 The study, it has been found the liquidity position
and working capital positions were favorable and good during period of study. Regarding
turnover ratio, efficiency in management of fixed assets and total assets must be increased.
Regarding return on investment and return on equity was proved that the overall profitability
position of the software companies had been increasing at a moderate way.
Dr R.Dharmaraj 2003 The study airtical positing in Indian management industry have
concluded that for the last five year, there has been proliferation of international and domestic
providence of mutual funds. He says that this increased growth is due to the increasing cash
flows among innovative young companies through India.
.Bharathi pathak, Finance India Dec 2003
R. Hamsalakshmi-M.Manicham, Finance India Sep2 2009
Dr R.Dharmaraj Indian journal of finance volume4 Allen and Carolinian (2003)
Dr Harish kumar 2008 A capital adequacy ratio was constant over a period of time. During
the study period. It was observed that the return on net worth had negative correlation with the
debt equity ratio. Inters income to working funds also had a negative association with interest
coverage ratio and the non performing to net advance was negatively correlated with interest
coverage ratio.
J R Raiyani 2009 During the periods of high inflation depending on conventional

accounting wisdom. May results in firms financial information losing its meaning and creation
of unrealistic expectation among information users.
Dr.Kavitha Chavvali 2009 Inventory analysis of gold exchange trade funds. Mathew
T.Jones and Maurice ousted (2007) revised and evaluated pre world war ii current date for

countries by treating gold follows on a continuous basis. The historical data of saving and
investment was taken over a time period of 1850- 1945.
N.Prasanna 2009 Stock performance Aitkin 1997 the external effect foreign direct
investment on export with example of Bangladesh where entry of a koala multinational in
garment exports led establishment of a member of domestic export firms creating the countrys
largest export industry.
Awedh 2005 defend that inflator does not have really an effect on the profitability measured
by return on equity of foreign banks exerting in Lebanon. In the same way, the author steers that
the level of inflation affect more than the return on assets of Lebanese bank than foreign banks in
Lebanon.
Dr Harish kumar single,The icfai journal of inventory management (vol vii Feb. 2008)
J R Raiyani, The infaciS university journal of inventory research (vol viii, No 2 Feb. 2009)
Dr.Kavitha Chavvali, Indian journal of inventory (vol 3 No: 2 dec 2009)
N.Prasanna, Indian journal of inventory (vol 5 No: 1 Jan 2008)
Dr.R.B.Bhatasna, Indian journal of inventory (vol 5 No: 2 Feb 2011)
Dr Sushil kumar Mehta 2010 The financial performance mutual funds schemes. Jayadew
(1996) attempted of evaluate the performance of two growth oriented mutual funds on the basis
of monthly return. It was found that master gain performed better according to Jensen and trey
nor measures and basis of sharps ratio.
Monika uppal 2010 Financial performance factors a survey of the literature shows that the
foreign bank performance is affected by factors like the economic and financial environment.
Among these factors one can equate the growth rate of gross domestic product, monetary market
rate, inflation rate and foreign exchange rate. (Williams 1998).
Dr Sushil kumar Mehta, Indian Journal of inventory vol: 4 No: 2 Feb, 2010
Monika uppal, Indian Journal of inventory vol: 5 No: 1 Jan 2011


CHAPTER-IV
ANALYSIS OF INVENTORY
MANAGEMENT

ANALYSIS PART-1
RATIO ANALYSIS (INVENTORY)
TABLE - 4.1.1
LEVEL OF INVENTORY
S.No Particulars 2006-07 2007-08 2008-09 2009-10 2010-11
1 Raw materials
Lime stone 3330.80 5169.86 8392.21 11109.76 11265.50
(stacker 60 Per cent)
Iron ore 1387.83 2154.11 3496.76 4629.10 4693.96
Clay ash
832.70 1292.47 2098.05 2777.44 2816.40

TOTAL(clinker) 5551.33 8616.44 13937.02 18516.26 18775.86
2 Work in process 5386.48 8451.74 13822.02 18351.46 18611.09
3 Finished goods 6251.55 9316.59 14522.32 19216.54 19416.11
Total 17189.36 26384.77 42331.36 56084.26 56803.06
Qty in thousand tones
The inventory level was found to be increased trend from 2006-2007 to 2010-2011. The
overall inventory level position for the five years is satisfactory.
CHART - 4.1.1
LEVEL OF INVENTORY

25000
20000
15000
Raw materials Work in process Finished goods
10000
5000
0
2006-07 2007-08 2008-09 2009-10 2010-11
INVENTORY TURNOVER RARIO
. The inventory turnover ratio measures the number of times a company sells its inventory
during the year.

Cost of sales
Inventory turnover ratio=
Average stock
Cost of sales=salesGross profit
Opening stock+Closing stock

Average stock =
2
TABLE - 4.1.2
INVENTORY TURNOVER RARIO
Cost of goods sold

S.No Year (` in lakhs) Average stock (in tones) Inventory turnover ratio
2006-07 2663028 487428 5.46 per cent

1
2007-08 2844494 503184 5.65 per cent

2
2008-09 3094850 819401.5 3.78 per cent

3
2009-10 4010580 945491.5 4.24 per cent

4
2010-11 4521886 822538.5 5.50 per cent

5
Source: Annual reports of Chettinad Cement Corporation Limited
The inventory turnover ratio was high in the year 2006-07 after that 2007-08 the
inventory turnover ratio was decreased. The present value of inventory turnover ratio is good.
CHART - 4.1.2
INVENTORY TURNOVER RATIO

6
5.65
5.46 5.5
4.24
4 3.78
0
2006-07 2007-08 2008-09 2009-10 2010-11
INVENTORY CONVERSION PERIOD

The inventory conversion period is the time required to obtain materials for a product,
manufactured it, sell it.
No . of daysthe year
Inventory conversion period=
Inventory turnover ratio
TABLE 4.1.3
Inventory conversion
S.No Year No. of days Inventory turnover ratio
period (in days)
5.46 per cent 66
1 2006-07 365
5.65 per cent 64

2 2007-08 366
3.78 per cent 96

3 2008-09 365
4.24 per cent 86
4 2009-10 365
5.50 per cent 65

5 2010-11 365
Source: Annual reports of Chettinad Cement Corporation Limited
The inventory conversion period is normally indicates the wealth of the company. The
company wants to concentrates with its inventory conversion period.

CHART 4.1.3
120
100 96
86
80
66 65
64
60
40
20
0
2006-07 2007-08 2008-09 2009-10 2010-11

ANALYSIS PART-2
EOQ ANALYSIS
TABLE-4.2.1
EOQ ANALYSIS FOR THE YEAR 2006-07

Total Total Saving

Annual
Item O C P EOQ investment investment inventory
requirement
with EOQ without EOQ cost
Iron Ore 31500 36 1.5 65 1230 81794 138615 56821
1.2
Lime Stones 15000 40 144 980 142345 145225 2880
5
Clay Ash 14000 42 2 144 767 111982 135915 23933
1.7
Sulphur 13000 34.5 153 716 110801 133927 23136
5
1.2
Gypsum 13500 35 144 869 126223 130688 4465
5
Bauxite 11500 36.5 1.5 150 748 113322 116173 2851
The companys annual requirement for the year 2006-07 is 101000 tons of raw materials.
They using investment with EOQ spent ` 787168. When the same in without investing EOQ is
` 882551. So the company saved ` 169432 in the year 2006-07.
CHART-4.2.1

160000
145225
142345
138615
135915
140000 133927
130688
126223
116173
120000 113322
111982 110801
100000
81794
80000 Total investment with EOQ Total investment without EOQ
60000
40000
20000
0
Iron Ore Lime Stones Clay Ash Sulphur Gypsum Bauxite
TABLE-4.2.2

Total
Total
Annual investment Saving
Item O C P EOQ investment
requirement without inventory cost
with EOQ
EOQ
Iron Ore 33500 35 1.5 75 1250 95626 169675 74049
Lime Stones 13500 41 2 154 744 116064 140115 24051
1.5
Clay Ash 16500 55 154 1100 171050 171050 0
5
Sulphur 14000 35 1.5 163 808 132916 153304 20388
Gypsum 12500 36 2 154 671 104676 153304 20388
Bauxite 11000 37 2.5 160 571 92787 118752 25965
CHART-4.2.3

180000 171050
171050
169675
160000 153304 153304
140115
140000 132916
118752
116064
120000
104676
95626
100000 92787
Total investment with EOQ Total investment without EOQ
80000
60000
40000
20000
0
TABLE-4.2.3

Total Total Saving

Annual
requirement
Iron Ore 13500 34 1.5 65 1260 83789 153905 7046
Lime Stones 13500 36 1.5 167 805 135642 151515 15873
1.7
Clay Ash 15000 38 165 807 134567 166445 13878
5
1.7
Sulphur 14000 37 164 769 127462 154384 26922
5
Gypsum 15000 35 2.5 165 648 108540 166775 58235
1.7
Bauxite 11200 36.5 170 684 117476 128191 10715
5
CHART-4.2.3

180000
166445 166775
160000 153905 154384

151515
135642 134567
140000
127462 128191
117476
120000
108540
100000
83789
80000
60000
40000
20000
0
TABLE-4.2.4

Total
Total
Annual investment Saving
Item O C P EOQ investment
requirement without inventory cost
with EOQ
EOQ
Iron Ore 34000 36 1.5 95 1271 123231 217605 94374
1.7
Lime Stones 12500 37 174 727 127770 146226 18456
5
Clay Ash 14000 40 1.5 175 864 152496 164575 12079
1.7
Sulphur 16000 38 174 834 146575 187161 40586
5
Gypsum 18000 36 2.75 175 686 121938 212190 90252
Bauxite 17000 37 1 180 1122 203082 205062 1980
They using investment with EOQ spent `875092. When the same in without investing EOQ is
`1132819. So the company saved `2577276 in the year 2009-10.
CHART-4.2.4

250000
217605
212190
205062
203082
200000 187161
164575
152496
146226 146575
150000
127770
123231 121938
100000
50000
0

TABLE-4.2.5
Total Total Saving

Annual
requirement
1.7
Iron Ore 38000 37 105 1268 135358 268736 133378
5
1.2
Lime Stones 13500 35 185 869 161852 167588 5736
5
Clay Ash 12000 38 3 195 551 109099 157770 48671
Sulphur 15000 40 3.25 185 608 114455 187225 72770
1.2
Gypsum 17000 40 194 1043 203646 221110 17464
5
Bauxite 18000 39 2.75 200 715 144965 242235 97270

CHART-4.2.5
300000
268736
250000 242235
221110
203646
200000
187225
167588
161852
157770
150000 144965
Total investment with EOQ
135358 Total investment without EOQ
114455
109099
100000
50000
0

CHAPTER-V
SUMMARY OF FINDINGS,
SUGGESTIONS AND CONCLUSION
5.1 FINDINGS

In inventory level of the company, the in inventory level has been increased year
by yea. There is no problem in the inventory level of the Chettinad Cement
Corporation Limited.
In inventory turnover ratio the ratios of the year has been finded as low in the
years of 2008-09 and 2009-10. After those periods the inventory turnover ratio
has slightly increased in the year 2010-11. Even though that level is quite low
when compare with 2007-08.

In inventory conversion period is finded as good level. Even though they wants to
keep the inventory conversion period as low.
EOQ ANALYSIS
In EOQ analysis for the year 2006-07 to 2010-11 is good. For this year they
followed EOQ with investment for purchase of goods.



In EOQ analysis for the year 2009-10 to 2010-11 is good. In this year the EOQ
with investment and EOQ without investment are same.

In EOQ analysis for the year 2010-11 to 2010-11 is good. All years of EOQ is
followed only investment with EOQ.
5.2 SUGGESTION

In inventory level of the company shows the increase of the raw materials, work-
in-process and finished goods. The inventory level of Chettinad Cement
Corporation Limited is well.

In inventory turnover ratio finded some problems. They want sell their product to
outside also. Now they use their cement which are produced in Chettinad Cement
Corporation Limited for their own purpose. They want to sell that to others also
then only the ratio will be increased.

Chettinad Cement Corporation Limited sells the 25 per cent of the cements
produced, remaining they used for own purpose. For sales to others they allowed
more days as credit to their agents.
EOQ ANALYSIS
In EOQ analysis there is no problems finded in findings for the Chettinad Cement
Corporation Limited. Even though they want to keep that situation in upcoming
years also. Then only they can retain position.



Corporation Limited. The EOQ was finded as same in the concept of EOQ with
investment and EOQ without investment, even though they followed EOQ with
investment.

5.3 CONCLUSION
The study covers the inventory management for effective inventory control. I have used a
technique Economic Order Quantity Analysis named as EOQ Analysis for find out the
rate with EOQ and without EOQ investment for purchasing of good in the manufacturing

the cement in Chettinad Cement Corporation Limited. Hence the inventory management
of the organization quite good. During the year 2006-2011 from this study I concluded
that organization would be efsfective inventory management. The study will be use for
Chettinad Cement Corporation Limited in various ways.

BIBLIOGRAPHY
BIBLIOGRAPHY
BOOKS
Asohok Banerjee - Financial Accounting A Managerial Emphasis Excel Books
2005
Collis Business Accounting Palgrave Macmillan 2007

Khan MY Jain P.K Management Accounting : Text, problems and cases 4th
Edition Tata McGraw Hill 2007
Pandikumar Management Accounting Excel Books 2007
Ramachandran N Kakani Kumar Ram Financial Acccounting For Management
Tata McGraw Hill 2006
Robert N.Anthony David F.Hawkins Kenneth A.Merchant Accounting Text and
Cases Tata McGraw Hill 2007
S.K Bhattacharyya Jhon Dearden Costing for Management Vikas Publishing
2002
S.N Maheswari S.K Maheswari Accounting for Management Vikas Publishing
2006
WEBSITES
en.wikipedia.com
Info.shine.com
www.ask.com
www.chettinad.com
www.google.com
www.indiacatalog.com
www.inventoryquzz.com
www.reportjunction.com
www.scribed.com
www.yahoo.com

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Paavai Engineering College

A STUDY ON INVENTORY MANAGEMENT IN CHETTINAD

Register No: 108001612014

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

PAAVAI ENGINEERING COLLEGE

Chettinad Cement Corporation Limited

PAAVAI ENGINEERING COLLEGE

This is to certify that the project A STUDY ON INVENTORY MANAGEMENT IN

Is the bonafied record of project done by

Register No: 108001612014

Submitted for the Project Viva-Voce examination held on ----------------------------

Chettinad Cement Corporation Limited

I affirm that the project work entitled A STUDY ON INVENTORY MANAGEMENT

IN CHETTINAD CEMENT CORPORATION LIMITTED, KARUR being submitted in

of any degree or diploma, either in this or any other University.

Signature of the Candidate

I certify that the declaration made above by the candidate is true

Signature of the Guide

Chettinad Cement Corporation Limited

I would like to express my gratitude to Shri.CA. N. V. Natarajan, B.Com., FCA.,

for giving me an opportunity and facility to complete this project.

I wish to place my deep sense of gratitude to Dr.

I offer my profound gratitude to Dr.G.Gopalakrishnan, M.B.A, M.Phil, Ph.D

support to complete this project report.

I owe my boundless gratitude to my faculty guide, Dr.A.Arumugam.M.Com, M.Phil,

I sincerely thank to Mr.Thirunavukarasu, HR manager, Chettinad Cement

Chettinad Cement Corporation Limited

CHAPTER NO DESCRIPTION PAGE NO

Chettinad Cement Corporation Limited

Table No. Description Page No.

4.1.2 Inventory turnover Ratio

4.1.3 Inventory conversion period

4.2.1 EOQ analysis for the year 2006-07

4.2.2 EOQ analysis for the year 2007-08

4.2.3 EOQ analysis for the year 2008-09

4.2.4 EOQ analysis for the year 2009-10

4.2.5 EOQ analysis for the year 2010-11

Chart No. Description Page No.

4.1.2 Inventory turnover ratio

4.1.3 Inventory conversion period

4.2.1 EOQ analysis for the year 2006-07

4.2.2 EOQ analysis for the year 2007-08

4.2.3 EOQ analysis for the year 2008-09

4.2.4 EOQ analysis for the year 2009-10

4.2.5 EOQ analysis for the year 2010-11

Chettinad Cement Corporation Limited

The purpose of inventory management is to ensure availability of raw material in

Chettinad Cement Corporation Limited

1.1 ABOUT THE STUDY

Chettinad Cement Corporation Limited

Normally the inventory has divided into two types. These,

Chettinad Cement Corporation Limited

1.2 SCOPE OF THE STUDY

1.3 STATEMENT OF THE PROBLEM

Unqualified employees in charge of inventory, Using a measure of performance for their

Chettinad Cement Corporation Limited

1.4 OBJECTIVES OF THE STUDY

To study the inventory management followed in chettinad cement.

To identify the existing inventory management and its effectiveness.

To calculate analysis for their performance in inventory management.

1.5 RESEARCH METHODOLOGY

Chettinad Cement Corporation Limited