Study or Research Objectives: The main objectives of study: a.

To learn how the company keeps all the

data of inventory perfectly. b. To study how finance department of the company work. c. To find out the
composition of inventory. d. To study the various inventory ratio. e. To analyze the inventory
management techniques used in the company. f. To study the Inventory Control Techniques of the
company. Methods of Data Collection: The data is collected from the respected persons of the
company. The communication was informal in nature. i. Secondary Data: The data was analyzed from
the balance sheet, various tables, graphs, charts, referred some of the reports and other companies
report. Data Analysis Techniques: For the purpose of analysis of the data and the report I have kept in
mind the objective and analyzed each and every data I got at each stage of the report. I have used many
tools for analyzing the data and the different ratios used for it are as follows: i. Total investment in
inventory ratio. ii. Total inventory to current ratio. iii. Raw materials turnover ratio. iv. Work in process
turnover ratio v. Finished goods turnover ratio. 5 SWOT Analysis

16. It focuses on the company’s financial as well as overall performance and future. STRENGTHS • Well
organized structure of inventory management with high productivity and economic cost. • Well defined
policies and innovative plans with cost reduction by its excellent human resources. • Good link of raw
materials requirement planning and monitoring with annual and monthly requirement plan. •
Environment consciousness. WEAKNESS • Non moving inventory items are in huge quantity. • Due to
regulated environment in the fertilizer sector, there is a lack of pricing in fertilizers business of GNFC. •
Disposal activity results are not satisfactory. OPPORTUNITIES • Nice chance of converting all fertilizers
plant into gas producing unit. As government is allowing subsidy on these plants. • Scope of reduction in
energy consumption by way of implementing revamp scheme. THREATS • Few plants are in operation
for more than twenty year and may also require replacement of high value equipment and higher
maintenance expenditures. • Entry of new competitors in the same field of business. • Higher
competitive market for IT products and service. 6 INDUSTRY PROFILE

NEED TO HOLD INVENTORIES Martin and miller identified three general motives for holding inventories
TRANSACTION MOTIVE: This refers to the need of maintaining inventory to facilitate smooth production
and sales operations. PRECAUTIONARY MOTIVE: Precautionary motive for holding inventory is to
provide a safeguard when then actual level of activity is differ than anticipated. This inventory serves
when there is a unpredictable changes in the demand and supply forces. SPECULATIVE MOTIVE: This
motive influences the decision to increase or decrease the levels of inventory to take the advantage of
price fluctuations.

2. Excessive inventories: It will lead to firm losses due to excessive carrying costs the risk of liquidity. It is
also referred as danger level.

3. Inadequate Inventory: It is another danger which results is production hols-up and failure to meet
delivery commitments. In adequate raw materials and work - in - process inventors will results in
frequent production interruptions. It finished goods are not sufficient customers may shifts to
competitors.