Inventory Management: A Study of TELANGANA FOODS, Slides of Finance

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WELCOME

SRI INDU COLLEGE

OF ENGG &TECH

PRESENTATION

BY

D.CHANDANA

HT.NO: 18D41E

UNDER THE GUIDENCE

OF

MRS.VASUDHA

INTRODUCTION:

The Chartered Institute of Management

Accountants in England (CIMA) has defined Cost

Accounting as, “the process of accounting for cost

from the point at which expenditure is incurred or

committed to establishment of its ultimate

relationship with cost centres and cost units. In its

widest usage, it embraces the preparations of

statistical data, the application of cost control

methods and the ascertainment of the profitability

of activities carried or planned.”

The basic elements of costs for a manufacturing

organization are:

• Raw materials
• Labour
• Indirect expenses/ overhead

Definitions:

“Inventories are the assets which are held for sale in

the ordinary course of business i.e. finished goods,

used in the process of production for such sale i.e. raw

material, WIP etc, to be consumed in the process of

production or in rendering the services.”

• ICAI

AS-2 VALUATION OF INVENTORIES

o f i n v e n t o r y o f i n v e n t o r y w m a t e ri a l

w m a t e ri a l

i n p r o g r e s s i n p r o g r e s s h e d g o o d s h e d g o o d s

L O W E R O F

L O W E R O F

C

O

S

T

C

O

S

T

VALUATION OF INVENTORY

COSTS ASSOCIATED WITH

INVENTORY

 Ordering cost: The costs which are

associated with purchasing or ordering of the

material

 Set up cost: The costs which are

associated with setting up a machinery.

 Holding cost: The costs that are incurred

for holding the inventory.

 Shortage cost: The costs that are

ELEMENTS OF INVENTORY

MANAGEMENT

Purchasing of materials

Receiving of materials

Inspection of materials

Storage of materials

Issuing of materials

Maintenance of inventory records

Stock audit

ECONOMIC ORDER QUANTITY (EOQ):

EOQ= Square root of 2AO/C

A- Annual consumption

O- Ordering cost

C- Carrying cost

NEED FOR THE STUDY

Materials are comparable to cash and they make up a vital part of the total cost.

It is basic that materials should be properly safeguarded and accurately accounted.

Appropriate control of material can make a considerable contribution to the

efficiency of a business. The achievement of a business concern largely depends

upon efficient purchasing, storage, utilization and accounting.

The cost of creation is expanded as of late because of the wide utilization of

TELANGANA FOODS organization items.

Inventory plays a vital role in every industry. Better it control leads to better

capital usage. The company should take care of the inventory effectively.

Each industry needs to keep up the inventory in an ideal amount. It should not

be excessively high or excessively low. Which prompts the inappropriate

administration of inventory, too high inventory causes an increment in costs and the

capital of the firm will blocked too low inventory causes genuine changes in the

assembling process. So there is a requirement for investigation of INVENTORY

MANAGEMENT in TELANGANA FOODS.

OBJECTIVES OF THE STUDY

 To study various INVENTORY MANAGEMENT procedures

followed at TELANGANA FOODS.

 To examine relative advantages and disadvantages of various

techniques of inventory management.

 To analyse the ABC Analysis and understand the impact of

business dynamics on inventory.

 To evaluate the stocking level of the company that is minimum

level, maximum level and re-ordering level of an inventory.

 To summarise the overall company’s performance in inventory

management.

METHODOLOGY OF THE STUDY

Primary data:

The data identifying with study is gathered with the

collaboration of the board of the organization, who allowed me to

carry on the examination and furnishing with essential information

through oral meetings with the employees.

Secondary data:

Since the study is aimed at the financial aspects of the

company whole data has been gathered from

Annuals reports of the corporation

Financial statements

“CONTROL THE

INVENTORY

CONTROL THE PROFITS”

-JOSEPH

BRANDT

THANK YOU