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A STUDY ON INVENTORY MANAGEMENT IN SUNGWOO GESTAMP HITECH PVT

LIMITED- CHENNAI

PROJECT REPORT

Submitted by

M. ELAKKIYA

Reg. No: 108001619012

In partial fulfillment for the award of the degree

of

MASTER OF BUSINESS ADMINISTRATION

IN

DEPARTMENT OF MANAGEMENT STUDIES

VIVEKANANDHA COLLEGE OF ENGINEERING FOR WOMEN

TIRUCHENGODE-637205

JUNE-2012

VIVEKANADHA COLLEGE OF ENGINEERING FOR WOMEN

(Affiliated to Anna University of Technology, Coimbatore)

Elayampalayam, Tiruchengode

DEPARTMENT OF MBA

PROJECT WORK

JUNE -2012

This is to certify that the project entitled

A STUDY ON INVENTORY MANAGEMENT IN SUNGWOO GESTAMP HITECH PVT LIMITED-CHENNAI

Is the bonafide record of project work done by

M. ELAKKIYA

Register No. 108001619012

Of M.B.A during the year 2010-2012.

-------------------------------- ------------------------------

Project Guide Head of the

Department

Submitted for the project Viva-Voce examination held on __________________

------------------------------------ -----------------------------

Internal Examiner External Examiner

DECLARATION

I affirm that the project work title “A Study on inventory management in

sungwoo gestamp hitech pvt limited chennai. Being submitted in partial fulfillment

for the award of 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, either in this or any

other university.

(Signature of the candidate)

ELAKKKIYA.M

Reg.No: 108001619012

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

Signature of the Guide,

Mrs.E.DEEPA, Assist Prof, MBA.,

M.Phil.,

ACKNOWLEDGEMENT

I express my sincere thanks and gratitude to Vidhya Rathna RashtriaRatta, Hind

Rattan, Pen KalviSathanaiyalar Prof. Dr. M. Karunanidhi, B.Pharm., M.S., Ph.D., D.Lit.,

Chairman & Secretary, Vivekanandha Educational Institutions, for his support in all our

endevours.

I extent my heartfelt thanks to the principal, Dr. R. K. Gnanmoorthy, ME., Ph.D.,

for the constant support given in all our activities.

I wish to express my sincere thanks to Dr. M. Latha Natarajan, MBA., Ph.D., Head

of the Department of Business Management for the help and kind support rendered by her.

I express my profound thanks to Mrs.E.Deepa Assist Prof, MBA., M.Phil.,

Departement of management studies, Faculty guide for the encouragement, supervision and

guidance throughout the project.

I also thank Mr.sathish kumar, project guide, Sungwoo gestamp hitech pvt

limited,Chennai for granting me permission to undergo this project in their organization.

I would like to express my sincere thanks for my parents and friends for their unbounded

support to make this project a reality.

I also express my heartfelt thanks to all the respondents who have provided

information required for the study.

CONTENTS

Chapter No Title Page No

ABSTRACT I

LIST OF TABLES Ii

LIST OF CHARTS Iii

I INTRODUCTION

1.1 About the study

1.2 About the Industry

1.3 About the company 5

II MAIN THEME OF THE PROJECT

2.1 Objectives of the Study 10

2.2 Scope of the Study 11

2.3 Limitations of the Study 12

2.4 Review of Literature 13

2.5 Research Methodology 15

2.6 Data Analysis And Interpretation 17

III FINDINGS, SUGGESTIONS AND CONCLUSION

3.1 Findings 58

3.2 Suggestions 59

3.3 Conclusion 60

IV SCOPE WORK FOR FUTURE 61

4.1. Appendix

4.2.Bibliography 63

ABSTRACT

The project report is the result of “A STUDY ON INVENTORY MANAGEMENT

IN SUNGWOO GESTAMP HI-TECH (CHENNAI) PVT LIMITED.

Inventory management is the process of determining the significant management of

stock. The research has to use facts for information already viably and analyze these to make

a critical evaluation of the material. The study is based on the secondary data provided by the

company. The desired information has been derived from the inventory section.

Inventory in a wider sense is defined as any idle resource of an enterprise. However it

is commonly used to indicate materials raw, in process, finished. Packing, spares and others-

stocked in order to meet an expected demand or distribution in future even though inventory

of materials is an idle resource in the sense it is not meant for the most immediate use, it is

almost a necessity to maintain some inventories for the smooth functioning of an organization

inventories are a sort the supply-production-distribution system that protects it for excessive

friction. The period which is taken for the study, is five year.

The objective of the company is to find out how the company is managing their

stock in an efficient manner. The range of tools used in this project is ABC analysis, ratio

analysis, trend analysis, correlation and linear regression analysis. The finding that reveal that

the store is managed properly with modern business like SAP.

I

LIST OF TABLES

LIST OF CHART

TABLE NO TITLE PAGE NO

RATIOS:

2.6.1.1 Current ratio 29

2.6.1.2 Quick ratio 31

2.6.1.3 Net working capital ratio 33

2.6.1.4 Total debt ratio 35

2.6.1.5 Proprietary ratio 37

2.6.1.6 Current assets turnover ratio 39

2.6.1.7 Total assets turnover ratio 41

STATISTICAL ANALYSIS

2.6.2.1 Correlation between inventories & current

liabilities

43

2.6.2.2 Correlation between inventories & fixed

deposits

44

2.6.2.3 Correlation between inventories & loan &

advance

45

2.6.2.4 Correlation between inventories & sundry

debtors

46

2.6.2.5 Correlation between inventories & reserves 47

TREND ANALYSIS

2.6.3.1 Trend analysis of future years for total assets 48

2.6.3.2 Trend analysis of future years for inventories 51

LINEAR REGRESSION ANALYSIS

2.6.4.1 Linear regression analysis for expected value 54

ABC ANALYSIS

2.6.5.1 ABC analysis for the year 2007 56





CHAPTER 1

CHART NO TITLE PAGE NO

2.6.1.1 CURRENT RATIO 30

2.6.1.2 QUICK RATIO 32

2.6.1.3 NET WORKING CAPITAL RATIO 34

2.6.1.4 TOTAL DEBT RATIO 36

2.6.1.5 PROPRIETARY RATIO 38

2.6.1.6 CURRENT ASSETS TURNOVER RATIO 40

2.6.1.7 TOTAL ASSETS TURNOVER RATIO 42

2.6.3.1 TREND ANALYSIS FOR FUTURE YEARS

TOTAL ASSETS

50

2.6.3.2 TREND ANALYSIS FOR FUTURE YEARS

INVENTORIES

53

2.6.5.1 ABC ANALYSIS FOR THE YEAR 2007 57





INTRODUCTION

INDUSTRY INTRODUCTION

AUTO COMPONENTS INDUSTRY IN INDIA:

The Indian auto component industry is expected to reach a turnover worth US$ 113 billion by

2020-21 from US$ 43.4 billion in 2011-12, according to Automotive Component

Manufactures' Association (ACMA) report titled, 'Auto Component Industry in India:

Growing Capabilities & Strengths'. The exports from the industry are expected to grow at a

compound annual growth rate (CAGR) of 17 per cent during 2012-21, the ACMA report

highlighted.

The small and medium enterprise (SME) dominated automotive sector is among the top three

sectors attracting heavy online traffic on the site, IndiaMART.com, in terms of the number of

buyers who visited from other countries, both developed and developing, as per a report by

IndiaMART.com. In addition, among the Indian suppliers registered on IndiaMART.com, the

auto component sector features in the top five categories, contributing 11.8 per cent to the

whole segment. Product categories such as pumps and pumping equipments took the top

position with 8.1 per cent buy leads posted, followed by products such as nuts and bolts, and

lights and accessories in second and third position, respectively.

"India is a growing market for us and we are pleased to partner with Uno Minda to bring best

practices to Indian original equipment manufacturers (OEMs) and to explore and expand the

markets within Asia," as per Mr S M Park, President, AMS.

Market Structure

The tyre production in India is anticipated to reach 191 million units by the end of 2015-16,

according to RNCOS research report titled, 'Indian Tyre Industry Forecast to 2015'.

Moreover, manufacturers are expected to invest huge amount into the industry over the next

few years, with a major proportion of this investment directed towards the radial tyre capacity

expansion.

In an analysis of medium to heavy-duty Hybrid and Electric Commercial Vehicle Market in

China and India, Frost and Sullivan estimated that the component revenues from India will

reach US$ 212 million by 2020, which would account for 11 per cent of the global

component market.

The vision of Automotive Mission Plan (AMP 2006-16) aims India to emerge as the

destination of choice in the world for design and manufacture of automobiles and auto

components with output reaching a level of US$ 145 billion accounting for more than 10 per

cent of the gross domestic product (GDP) and to provide additional employment to 25 million

people by 2016.

India: The Global Auto Hub

The amount of cumulative foreign direct investment (FDI) inflow into the automobile

industry during April 2000 to November 2012 was worth US$ 7,518 million, amounting to 4

per cent of the total FDI inflows (in terms of US$), as per data published by Department of

Industrial Policy and Promotion (DIPP), Ministry of Commerce.

The Indian automobile and auto components industry can be expected to surpass China's

growth path by 2021, according to a research report by Espirito Santo Securities.

Supportive government policies, positive business environment, availability of reasonably

priced talented workforce and stable outlook for the industry has made India a global hub for

the international manufacturers to set up their facilities in the country. The auto components

manufacturers are also reaping the benefits.

Auto components manufacturer, Uno Minda of N K Minda Group and AMS

Corporation of Korea are entering into a technical licence agreement for design,

manufacture and sale of automotive lamps in India

SKF has signed contracts with Audi for the delivery of SKF components. The

contracts, estimated at about SEK 1 billion (US$ 150.73 billion), include the delivery

of four different versions of wheel bearing units for the wheel ends and a range of

bearings for the new double clutch transmission

Sungwoo Gestamp Hitech ( Chennai ) Limited., (SGH) is a Joint Venture between :

SUNGWOO Hi-Tech Co.Ltd,south korea (51%). GESTAMP automotive span,(49%).

Gestamp Group :

GESTAMP is a Technology and Engineering company. GESTAMP, through its joint

ventures with global partners undertakes designing and development of components and

systems, to address the needs of Indian Automobile customers as also to meet the needs of

global partners and customers.

Sungwoo Hi-tech:

Established in 1977 in Korea, it is a leading supplier of Stampings and Assemblies for

automobile manufacturers of Korea. Sungwoo Hi-tech also designs and manufactures Tools,

D Sungwoo Hi-tech:

-3. SGH General Status

1) Type of Firm : J/V (SW (50%)+G/tamp(50%) )

2) Established : July. 1997

3) Address : Tamilnadu. Chennai

GroundGround

(sqm)(sqm)

BuildingBuilding

(sqm)(sqm)KoreanKorean

IndianIndian

StaffStaff WorkerWorker

60,00060,000 37,58237,582 66 165165 1,6001,600

4) Investment

TOTALTOTAL BuildingBuilding M/CM/C D/MD/M RemarksRemarks

2,4302,430 290290 1,3501,350 790790

5) Sales

Discrip Discrip 08 Year08 Year 09 Year09 Year 10 Year10 Year RemarksRemarks

SalesSales 4,700 4,700 4,5104,510 43204320

SGH MILESTONE AND CERTIFICATION:

COMPANY VISION:

To become a global solution provider of metal parts to automobile customers. This will be

achieved by :

Manufacture of quality sheet metal parts (Stampings and Assemblies).

Design & Manufacture of technically superior tools and dies

1.3 PRODUCT PROFILE

MAIN

PRODUCT

MAIN PRODUCTIONS

MODELMODEL SUB ASSEMBLIES SUPPLIEDSUB ASSEMBLIES SUPPLIED

SANTRO (EMXI)SANTRO (EMXI) 3838

ACCENT (LCI)ACCENT (LCI) 3535

VERNA (MCI)VERNA (MCI) 3535

GETZ (TBF)GETZ (TBF) 1818

i10 (PA)i10 (PA) 3232

i20 (PB)i20 (PB) 44

FLUIDIC VERNA (RBI)FLUIDIC VERNA (RBI)

EON (HA)EON (HA)

FACTORY & LINE STATUS

LINE PRODUCT DISPLAY AREA DEPARTMENT WISE PERFOMANCE DISPLAY

SHOPPING ENTRANCE AREA WIELD SHOP GANGWAY

SHIFT TIMING

T/GATE ASS’Y

RAIL ASS’Y RR BPR

RR FLR COMPL

REINF SIDE OTR

CTR FLR COMPLFRT S/MBR COMPLRAIL ASS’Y FRT BPR

COWL UNDER COVER

HOOD ASS’Y

DASH COMPLSIDE INRP/TRAY CTR

SHIFT IN OUTGeneral shift 08.00 am 06.00pm

“ A” Shift 08.00am 04.30pm“ B” Shift 04.30pm 01.00am“ C” Shift 01.00am 08.00am

STAFF, WORKMEN & TRAINEES

S. no Particulars No.of.person1 Staff 1612 Workmen 2843 Diploma apprentices 2004 Act. Apprentices 1405 Company Trainee 956 On the job trainee 3007 Flexi. Contract 1908 Contract labour 550

TOTAL 1920

PRODUCTION STATUS:

Model Production Item

E/MXI TBI LCI MCI PA PB TOTAL

14 13 23 20 12 4 86

CAPACITY: (IN THOUSANDS)

Description 08 Year 09 Year 10 Year

Capacity 550 600 600

QUALITY STATUS:

Active (09 Year)Active (09 Year) Target (10 Year)Target (10 Year)

30 PPM30 PPM 20 PPM20 PPM

DIE MAINTANENCE SHOP:

High Pressure Die washing;

Die Maintenance is equipped with hot and cold water high pressure jet Die washing

machine.

Protects the die from unwanted impurities sticking on to the dies.

Improved panel quality.

As per P.M. schedule the dies are washed periodically.

STORES

Die Maintenance is equipped with separate stores to cater its needs.

Optimum stock level and inventory control is totally computerized.

Direct import of Die Maintenance Spare

DIE MAINTANENCE SHOP:

Kihueng KMB U7

Universal Milling Machine DRO controlled

Working table 2700 x 750

Max Perm Load 4 tons

Long travel 2000 mm

Cross travel 1000 mm

No. of speeds 18

Radial Drilling BR 624

Batliboi

Heavy Duty :60 mm

Electro Hydraulic Camping: In solid steel

Working Table : 1570 x 980

Maximum Spindle Stroke: 400 mm

Spindle Speed : 50 – 1600 rpm

Sungwoo Offers:

World Class Facility for sheet metal stampings and assemblies with Korean know-

how

Proven track record with Hyundai Motors India and others

A company with values driven by the TATA group

Participation in new programmes for sheet metal assemblies

Engineering and programme management skills and experience

Strategic partnership with dedicated capacities

-

10.0020.0030.0040.00

50.0060.0070.00

19992000

20012002

20032004

20052006

2007

S ales US D Million

S ales US DMillion

1.4 ABOUT THE TOPIC

Inventory management is the active control program which allows the management of sales,

purchases and payments. Inventory management software helps create invoices, purchase

orders, receiving lists, payment receipts and can print bar coded labels. An inventory

management software system configured to your warehouse, retail or product line will help to

create revenue for your company. The Inventory Management will control operating costs

and provide better understanding. We are your source for inventory management information,

inventory management software and tools.

A complete Inventory Management Control system contains the following components:

Inventory Management Definition

Inventory Management Terms

Inventory Management Purposes

Definition and Objectives for Inventory Management

Organizational Hierarchy of Inventory Management

Inventory Management Planning

Inventory Management Controls for Inventory

Determining Inventory Management Stock Levels

Inventory management is the process of efficiently overseeing the constant flow of units into

and out of an existing inventory. This process usually involves controlling the transfer in of

units in order to prevent the inventory from becoming too high, or dwindling to levels that

could put the operation of the company into jeopardy. Competent inventory management also

seeks to control the costs associated with the inventory, both from the perspective of the total

value of the goods included and the tax burden generated by the cumulative value of the

inventory.

Inventory management is not limited to documenting the delivery of raw materials and the

movement of those materials into operational process. The movement of those materials as

they go through the various stages of the operation is also important.

Typically known as a goods or work in progress inventory, tracking materials as they are

used to create finished goods also helps to identify the need to adjust ordering amounts before

the raw materials inventory gets dangerously low or is inflated to an unfavorable level.

Finally, inventory management has to do with keeping accurate records of finished goods

that are ready for shipment. This often means posting the production of newly completed

goods to the inventory totals as well as subtracting the most recent shipments of finished

goods to buyers. When the company has a return policy in place, there is usually a sub-

category contained in the finished goods inventory to account for any returned goods that are

reclassified as refurbished or second grade quality. Accurately maintaining figures on the

finished goods inventory makes it possible to quickly convey information to sales personnel

as to what is available and ready for shipment at any given time.

Inventory Managment must tie together the following objectives ,to ensure that there is

continuity between functions :

Company’s Strategic Goals

Sales Forecasting

Sales & Operations Planning

Production & Materials Requirement Planning.

Inventory is defined as the blocked Working Capital of an organization in the form of

materials. As this is the blocked Working Capital of organization, ideally it should be zero.

But we are maintaining Inventory. This Inventory is maintained to take care of fluctuations in

demand and lead time. In some cases it is maintained to take care of increasing price

tendency of commodities or rebate in bulk buying.

1.5 REVIEW OF LITERATURE

Brent D. Williams, (Department of Marketing and Logistics, Sam M. Walton College of

Business, University of Arkansas, Fayetteville, Arkansas, USA), (2008) "A review of

inventory management research in major logistics journals: Themes and future directions",

International Journal of Logistics Management, The, Volume. 19 Iss: 2, page number.212 –

232. Keyword: Inventory management, Research, Supply chain management. Emerald Group

Publishing Limited, The purpose of this paper is to provide a review of inventory

management articles published in major logistics outlets, identify themes from the literature

and provide future direction for inventory management research to be published in logistics

journals.

Travis Tokar, (The Ohio State University, Fisher College of Business, Marketing

and Logistics, Columbus, Ohio, USA).A review of inventory management research in

major logistics journals: Themes and future directions. The Volume. 19, page.212 – 232.

First, logistics researchers have focused considerable attention on integrating traditional

logistics decisions, such as transportation and warehousing, with inventory management

decisions, using traditional inventory control models. Second, logistics researchers have more

recently focused on examining inventory management through collaborative models.

Vollman, berry and whybark (1997) noted that a key management issue is

determining the inventory control system performance while addressing the utility of

manufacturing inventory systems. They also indicated that in manufacturing industry

performance is measured by such factors as inventory carrying costs and inventory turnover.

Geoff relph and gail bradbear (2003) stated about on the measure of inventory in

terms of annual usage and average inventory. As the part of analysis the inventory turnover

ratio and ABC (Stock classification) are used for planning and controlling the inventory and

basic steps for managing the inventory are discussed in order to achieve the objectives of cost

control.

Mr. wolfe bagby explain inventory as managing inventory to meet profit goals,

shortening the cash cycle, avoiding inventory shortage, avoid excessive carrying costs for

unused inventory, improving, improving profitability by decreasing cash conversion.

1.6 NEED FOR THE STUDY

The question of managing inventory arises only when the company holds inventory.

Maintaining inventories involves tying up of the company’s fund and incurrence of storage

and handling cost. It is expensive to maintain inventories

In the context of inventory management the firm is faced with the problem of

Meeting two conflicting needs

To maintain a large size of inventories of raw material and work in progress for

efficient and smooth production and of finished goods for uninterrupted sales

operation.

To maintain a minimum investment in inventories to maximize profitability

1.7 SCOPE OF THE STUDY

The main aim of inventory management is better understanding of firm’s position and

performance. The financial analysis refers to the process of determining financial strength

and weakness of the firm by establishing strategic relationship the terms of the balance sheet

and profit and loss account.

The financial statement provides the basis data for financial analysis of ratio analysis. This

study helps the management to know about the real reasons of profit or loss and the

suggestion given will be useful for the management for the future growth of the origination.

To give plan to the company what to order, when to order and how much to order.

It is useful for deciding operating policy & volume of inventory.

It helps to develop the policies for the executives in inventory.

It helps the company what items goods are categorized.

CHAPTER 2

RESEARCH OBJECTIVES

PRIMARY OBJECTIVES:

To analysis the financial performance on Sungwoo Gestamp hi-tech (Chennai)

pvt limited.

SECONDARY OBJECTIVES:

To analysis the investment made in inventories.

To measure the ABC analysis of the Sungwoo Gestamp Hi-tech (Chennai) Pvt.

Limited.

To identify the stock level for various components.

To examine the impact of stock out situation with the user department.

To study the supply of raw materials for the purpose of production.

To make the suggestion and recommendation on the basis of the study to

improve the inventory management of the company.

CHAPTER 3

RESEARCH METHODOLOGY

MEANING

Research is an academic activity and such the term should be used in a technical sense

According to Clifford woody research comprises defining and redefining problems.

Formulating hypothesis or suggested solutions; collecting, organizing and evaluating data;

making deductions and reaching conclusions; and at last carefully testing the conclusions to

determine whether they fit the formulating hypothesis.

RESEARCH DESIGN

A research design is the arrangement of conditions for collection analysis of data in a manner

that aims to combine relevance to research purpose with economy in procedure. It constitutes

the blueprint for the collection, measurement and analysis of data. This research study is

mainly based on analytical in nature

3.2 ANALYTICAL RESEARCH

The research design carried out is analytical research design. This research will mainly deal

on facts or information already available, and analyze them to make a critical evaluation of

the material and finding a solution to the problem. It makes use of the data that is already

available and analyses these to evaluate and make discoveries. Analytical research takes

information that has been gathered and looks at what it shows such as trends. The analytical

research is mainly done based on the secondary data which is already in the balance sheet of

Sungwoo.

3.3 SOURCES OF DATA

The data is collected from the available source like ANNUALREPORT of the company

including the BALANCESHEET/ and company website (www.sgh.co.in.)

http://www.sgh.co.in/

3.4 METHOD OF DATA COLLECTION

The research is confirmed to the information available based on the secondary data only.

SECONDARY DATA

The data is collected from the available source like ANNUALREPORT of the

company including the BALANCESHEET/ and company website (www.sgh.co.in.)

STATISTICAL TOOL TO BE USED:

RATIO ANALYSIS

CORRELATION

TREND ANALYSIS

ABC ANALYSIS


http://www.sgh.co.in/

CHAPTER 4

LIMITATIONS OF THE STUDY

The report is based only on the financial statement published by Sungwoo Gestamp

Hi-tech (Chennai) Pvt limited.

The report is specified to SGH and is not to the automobile company as a whole.

The differentiation of certain concept is not possible

CHAPTER 5

DATA ANALYSIS AND INTREPRETATION

2.6.1 RATIO ANALYSIS:

Ratio analysis is widely used tool of financial analysis. Ratios are relationships

expressed in mathematical terms between figures which are connected with each in some

manner.

It is defined as the systematic use of ratios to interpret the financial statements so that the

strengths and weaknesses of a firm as well as its historical performance and current financial

condition can be determined. This relationship can be expressed as Percentages, Fractions and

proportion of numbers.

MEANING OF RATIOS:

Ratios are relationship expressed in mathematical terms between figures, which are

connected with each other in some manner. Obviously, no purpose will be served by comparing

two sets of figures, which are not at all connected with each other. Moreover, absolute figures

are also unfit for comparison.

The following ratios are calculated:

1. Current ratio

2. Quick ratio / Liquid ratio

3. Net working capital ratio

4. Total debt ratio

5. Proprietary ratio

6. Current assets turnover ratio

7. Total assets turnover ratio

2.6.2 STATISTICAL ANALYSIS

CORRELATION

Karl Pearson’s coefficient of correlation is the most widely used method of measuring

the degree of relationship between two variables. Karl Pearson’s coefficient of correlation

formula comes below

∑XY

∑(X) 2 ∑ ( Y) 2

The correlation analysis studies the joint variation of two or more variables for

determining the amount of correlation between two or more variables. Karl Pearson’s

coefficient of correlation ( or simple correlation) is the most widely used method of

measuring the degree of relationship between two variables. This coefficient assumes the

following.

That there is linear relationship between two variables.

That the variables are casually related which means that one of the variables is

independent and the other one is dependent; and

A large number of independent causes are operating in both variables so as to produce

a normal distribution.

Karl Pearson’s coefficient of correlation is also known as the product moment correlation.

The value of ‘r’ lies between +1. Positive values of r indicate positive correlation between the

two variables (i.e., changes in both variables take place in the statement direction), whereas

negative values of ‘r’ indicates negative correlation i.e., changes in the two variables taking

place in the opposite directions. A zero value of ‘r’ indicates that there is no association

between the two variables. When r = (+) 1, it indicates perfect positive correlation and when

it is (-)1, it indicates perfect negative correlation, meaning thereby that variations in

independent variable (X) explain 100% of the variations in the dependent (Y). We can also

say that for a unit change in independent variable, if there happens to be a constant change in

the dependent variable in the same direction, then correlation will be termed as perfect

positive.

But if such change occurs in the opposite direction, the correlation will be termed as

perfect negative. The value of ‘r’ nearer to +1 to -1 indicates high degree of correlation

between the two variables.

2.6.3 TREND ANALYSIS

trend analysis determines the direction upwards or downloads and involves the computation

of the percentage relationship that each statement item bears to the same item in the base

year. Return values alone a linear trend and fits a straight line and predicts the future values.

The line of the trend analysis equation is Y= a + b x

Where A = ∑y

-----------

N

Where B = ∑y

______

∑X2

2.6.4 LINEAR REGRESSION ANALYSIS METHOD

Regression means dependence and involves estimating the values of a dependent

variable Y, from independent variables X.

Y = a + b x

Where a = y – b x ;

Sxy – n xy

B = _____________

Sx2 – nx2

2.6.5 ABC ANALYSIS

Selective inventory control indicates that there are variations in the method of

inventory for different items and this difference should be on a selective basis. ABC analysis

is an effective inventory control system should classify inventories according to their value so

that the most valuable items may be paid greater attention regarding their safety and care as

compared to others. Hence it is desirable to classify the production and supply items, both

purchased and manufactured, depending upon their importance, ABC analysis is also known

as “Always Better Control”

CONTROL POLICY FOR A CLASS ITEMS:

Since these items account for 70% of the value, they should be ordered more

frequently to reduce the capital locked up at a time in inventories. There should be many A

items for which the consumption varies considerably from time to time during the year. For

such, items the expected future consumption should be estimated in advance and that should

be procured on a planned basis. So that the required qualities arrive a little before they are

required for consumption. Of course, small extra stock could be carried throughout to meet

any eventualities. Annual or 6 monthly contracts with scheduled deliveries are welcome for A

items.

Since these items are to be stocked as less as possible purchasing department should

make maximum efforts to expedite the delivery of these items.

CONTROL POLICY FOR B CLASS ITEMS:

Order quantities, recorder points and safety stocks should be fixed for B items and

revisions once a year is adequate. Annual or 6 monthly contracts with scheduled deliveries

can be used to advantage for B items. Stock and issues record are necessary to be maintained.

These items should be frequency.

CONTROL POLICY FOR C CLASS ITEMS:

Liberal quantities can be kept in stock since in case if C items it does not involve

much capital tie-up. Annual or 6 monthly orders should be placed to reduce paper work in the

purchasing department and also to take advantage of quantity discount for bulk purchases.

For ordering C items a combination of review period system and two-bin system is

suggested.

CURRENT RATIO

Current ratio is a widely used indicator of company’s ability to pay its debts in the short-term.

It is the relationships between current assets and current liabilities. Current assets are those

assets which can be easily converted into cash within a short period of time or within an

operating cycle generally one year. Current liabilities are those which are payable within a

short period of time generally one year.

Current assets

Current ratio = ___________________

Current liabilities

TABLE NO: 2.6.1.1

Table showing the current ratio for the year 2007-2011

YEAR CURRENT

ASSET

CURRENT

LIABILITIES

CURRENT

RATIO

2007 1681.75 1865.97 0.90127

2008 1644.30 2196.49 0.74860

2009 2374.91 2207.29 1.07887

2010 2849.22 3002.68 0.94889

2011 3573.64 3505.26 1.01950

Source: secondary data

INTERPRETATION

The above table shows that the current ratios of SGH gradually increase and decreased

during period of 2007-2011. For the next years the current ratio of SGH was decreased. So it

is inferred that after 2007,the current ratio of SGH has been decreased.

CHART NO: 2.6.1.1

CURRENT RATIO 2007-2011

2007 2008 2009 2010 20110

0.2

0.4

0.6

0.8

1

1.2

0.90127

0.748600000000013

1.07887

0.9488900000000111.01949999999997

QUICK RATIO (OR) ACID TEST RATIO

This ratio is also termed as “Acid Test Ratios” and Liquidity Ratio”. This ratio is ascertained

by comparing the liquid assets to current liabilities. Prepaid expenses and stock are not taken

as quick assets. Bank overdraft is not taken as quick liability.

Quick Ratio = Current Assets – inventories

Current Liabilities

TABLE NO: 2.6.1.2

Table showing the quick ratio for the year 2007-2011

YEAR QUICK

ASSET

CURRENT

LIABILITIES

QUICK

RATIO

2007 611.43 1865.97 0.3276

2008 420.39 2196.49 0.1913

2009 1044.9 2207.29 0.4733

2010 1210.9 3002.68 0.4032

2011 1364.7 3505.26 0.3893


INTERPRETATION

From the above table shows that quick ratio of SGH 0.3276 in 2007. In 2008, 0.1913 of

quick ratio of has been decreased. In 2009, the quick or acid test ratio has been increased. In

2010, the quick ratio 0.4032 has been decreased. In 2011, the quick ratio 0.3893 has been

decreased.

The quick ratio of the SGH has been decreased

CHART NO: 2.6.1.2

Chart showing the Quick ratio 2007-2011

2007 2008 2009 2010 20110

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

0.327600000000005

0.1913

0.473300000000003

0.4032 0.389300000000008

QUICK RATIO

NET WORKING CAPITAL RATIO

Net Working Capital = Net Working Capital

Net Assets

TABLE NO: 2.6.1.3

Table showing the Net working capital ratio 2007-2011

YEAR NET WORKING CAPITAL

NET ASSET NET WORKING CAPITAL

RATIO2007 1894.58 574.72 3.2965

2008 2148.98 217.66 9.8730

2009 3473.89 720.32 4.8227

2010 3656.30 736.17 4.9666

2011 3962.96 365.22 10.850


INTERPRETATION

From the above table shows that net working capital of SGH 3.2965 IN 2007. In 2008,

9.8730 of net working capital has been increased. In 2009, 4.8227 the net working capital has

been decreased. In 2010, 4.9666 the net working capital has been increased. In 2011, 10.850

the net working capital has been increased.

The net working capital ratio of the SGH has been increased.

CHART NO: 2.6.1.3

CHART SHOWING THE NET WORKING CAPITAL RATIO 2007-2011

200710%

200829%

200914%

201015%

201132%

NET WORKING CAPITAL RATIO

TOTAL DEBT RATIO

The total debt-equity ratio is establish a relationship between the long-term funds raised from

outsiders and total long-term funds available in the business. It is calculated as;

Total debt

Total debt ratio = _______________

Total assets

TABLE NO: 2.6.1.4

Table showing the total debt ratio for the year 2007-2011

YEAR TOTAL DEBT TOTAL ASSETS TOTAL DEBT RATIO

2007 640.4 2534.97 0.2526

2008 887.5 3036.48 0.2922

2009 1961.98 5435.87 0.3609

2010 2280.45 5936.76 0.3841

2011 2658.19 6621.14 0.4014


INTERPRETATION

The above table shows that the total debt ratio was decreased during the period of 2007,and

2008. After 2009 the total assets ratio has been increased for every year (2010, 2011).

The total debt ratio of the SGH has been increased.

CHART NO: 2.6.1.4

Chart showing the total debt ratio 2007-2010

2007

2008

2009

2010

2011

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45

0.2526

0.2922

0.360900000000003

0.384100000000001

0.4014

TOTAL DEBT RATIO

PROPRIETARY RATIO

Proprietary ratio shows the relationship between shareholders’ fund to total assets of

the concern. The shareholders’ funds are equity share capital, preference share capital,

undistributed profits reserves and surpluses. If it is calculated as;

Share holders equity

Proprietary ratio = _____________________

Total assets

TABLE NO: 2.6.1.5

The table showing the proprietary ratio for the year 2007-2011

YEAR SHARE HOLDERS

EQUITY

TOTAL ASSETS PROPRIETARY

RATIO

2007 132.39 2534.97 0.0522

2008 133.03 3036.48 0.0438

2009 133.03 5435.87 0.0244

2010 133.03 5936.76 0.0224

2011 133.03 6621.14 0.0200


INTERPRETATION

The above table shows that the proprietary ratio has been increased in the year of 2007 and

2008. For the next year 2009 has been decreased. In 2011 has been very poor performance in

the every year of proprietary ratio.

The proprietary ratio of the SGH has been much decreased.

CHART NO: 2.6.1.5

Chart showing the proprietary ratio 2007-2011

200732%

200827%

200915%

201014%

201112%

PROPRIETARY RATIO

CURRENT ASSETS TURNOVER RATIO:

The current assets turnover ratio is a relationship between the sales and current assets. It is

calculated as;

Sales

Current assets turnover = _______________________

Current assets

TABLE NO: 2.6.1.6

The table showing the current assets turnover ratio for the year 2007-2011

YEAR SALES CURRENT ASSETS CURRENT ASSETS

TURNOVER RATIO

2007 7358.88 1681.75 4.3757

2008 7972.52 1644.30 4.8485

2009 6168.99 2374.91 2.5975

2010 7436.18 2849.22 2.6099

2011 11407.15 3573.64 3.1920


INTERPRETATION

The above table shows that the current assets turnover ratio has been increased in the year of

2007 and 2008. For the next year 2009 and 2010 has been decreased. In 2011 has been

increased in the every year of current assets turnover ratio.

The current assets turnover ratio of the SGH has been much increased.

CHART NO: 2.6.1.6

Chart showing the current assets turnover ratio 2007-2011

200725%

200828%2009

15%

201015%

201118%

Current Assets Turnover Ratio

TOTAL ASSETS TURNOVER RATIO:

The total asset turnover ratio is refers to the relationship between the sales and total assets. If

it is calculated as;

Sales

Total assets turnover = ________________________

Total assets

TABLE NO: 2.6.1.7

Chart showing the total assets turnover ratio 2007-2011

YEAR SALES TOTAL ASSETS TOTAL ASSETS TURNOVER RATIO

2007 7358.88 574.72 12.80

2008 7972.52 217.66 36.62

2009 6168.99 720.32 8.56

2010 7436.18 736.17 10.10

2011 11407.15 365.22 31.23


INTERPRETATION:

The above table shows that the total assets turnover ratio was increased during the period of

2007 and and 2008. After 2009 the total assets ratio has been decreased, And increased the

total assets turnover ratio for every year (2010, 2011).

The total assets turnover ratio of the SGH has been increased.

CHART NO: 2.6.1.7

CHART SHOWING THE TOTAL ASSETS TURNOVER RATIO 2007-2011

200759%2008

23%

200910%

20109%

Total Assets Turnover Ratio

CORRELATION BETWEEN INVENTORIES AND CURRENT LIABILITIES

The following table below shows the relationship between inventories and current liabilities.

It is used as a measure to determine how much of the company is related inventories to

current liabilities. For a good position the company inventories and Cost level should be

good.

TABLE NO: 2.6.2.1

Correlation between inventories & current liabilities

YEAR Inventory

X

Current

liabilities

Y

XY (X)2 (Y)2

2007 1070.32 1865.97 19971.8 11455.8 34818.4

2008 1223.91 2196.49 26883 14979.5 48245.6

2009 1330.01 2207.29 29357.1 17689.2 48721.2

2010 1638.24 3002.68 49191.1 26838.3 90160.8

2011 2208.90 3505.26 77427.6 48792.3 122868.4

∑XY=2028.3 ∑(X)2=1197.5 ∑(Y)2=3448.1

Source: Secondary Data

r= ∑XY

∑(X) 2 ∑ ( Y) 2

r= 2028.3

(1197.5)2(3448.1)2

r= 0.998 The above table depicts that the correlation between total inventories and current

liabilities is high i.e., r = 0.998. Therefore ‘r’ is said to be positive (+ve correlation is good

for the company).

CORRELATION BETWEEN INVENTORIES AND FIXED DEPOSITS

The following table below shows the relationship between inventories and fixed deposits It is

used as a measure to determine how much of the company is related inventories to current

liabilities. For a good position the company inventories and fixed deposits should be good.

TABLE NO: 2.6.2.2

Correlation between Inventories & Fixed deposits

YEAR Inventory

X

Fixed deposits

Y

XY (X)2 (Y)2

2007 1070.32 346.39 3707.48 11455.8 1199.8

2008 1223.91 406.82 4979.11 14979.5 1655.0

2009 1330.01 115 1529.51 17689.2 13225

2010 1638.24 330.01 5406.35 26838.3 1089.0

2011 2208.90 0 0 48792.3 0

∑XY=15622.4 ∑(X)2=1197.5 ∑(Y)2=17168.8

Source: Comparative Balance Sheet and Annual Cost Report

r= ∑XY

∑(X) 2 ∑ ( Y) 2

r= 15622.4

(1197.5)2(17168.8)2

r= 0.718 The above table depicts that the correlation between total inventories and fixed

deposits is high i.e., r = 0.718. Therefore ‘r’ is said to be positive (positive correlation is the

good for the company(SGH)).

CORRELATION BETWEEN INVENTORIES AND LOANS & ADVANCES

The following table below shows the relationship between inventories and loans & advance It

is used as a measure to determine how much of the company is related inventories to loans &

advance. For a good position the company inventories and loans & advance should be good.

TABLE NO: 2.6.2.3

Correlation between Inventories & Loans & Advance

YEAR Inventory

(X)

Loans &

advance (Y)

XY (X)2 (Y)2

2007 1070.32 2544.92 27238.7 11455.8 64766.1

2008 1223.91 2759.38 33772.3 14979.5 76141.7

2009 1330.01 3195.69 42502.9 17689.2 102124.3

2010 1638.24 4107.54 67291.3 26838.3 168718.8

2011 2208.90 4360.81 96325.9 48792.3 190166.6

∑XY=2671.3 ∑(X)2=1197.5 ∑(Y)2= 6019.1


r= ∑XY

∑(X) 2 ∑ ( Y) 2

r= 2671.3

(1197.5)2(6019.1)2

r= 0.037 The above table depicts that the correlation between total inventories and loans &

advance is high i.e., r = 0.037. Therefore ‘r’ is said to be positive (positive correlation is the

good for the company).

CORRELATION BETWEEN INVENTORIES AND SUNDRY DEBTORS

The following table below shows the relationship between inventories and sundry debtors. It

is used as a measure to determine how much of the company is related inventories to sundry

debtors. For a good position the company inventories and sundry debtors should be good.

TABLE NO: 2.6.2.4

Correlation between Inventories & Sundry Debtors

YEAR Inventory

(X)

Sundry

debtors (Y)

XY (X)2 (Y)2

2007 1070.32 522.88 5596.4 11455.8 2734.0

2008 1223.91 375.84 4599.9 14979.5 1412.5

2009 1330.01 957.97 12741.0 17689.2 9177.0

2010 1638.24 1022.06 16743.7 26838.3 10446.0

2011 2208.90 1185.21 26180.1 48792.3 14047.2

∑XY=658.61 ∑(X)2=1197.5 ∑(Y)2= 378.16


r= ∑XY

∑(X) 2 ∑ ( Y) 2

r= 658.61

(1197.5)2(378.16)2

r= 0.9787 The above table depicts that the correlation between total inventories and sundry

debtors is high i.e., r = 0.9787. Therefore ‘r’ is said to be positive (positive correlation is the

good for the company).

CORRELATION BETWEEN INVENTORIES AND RESERVES

The following table below shows the relationship between inventories and reserves. It is used

as a measure to determine how much of the company is related inventories to reserves. For a

good position the company inventories and reserves should be good.

TABLE NO: 2.6.2.5

Correlation between Inventories & Reserves

YEAR Inventory

(X)

Reserves

(Y)

XY (X)2 (Y)2

2007 1070.32 1739.23 18615.3 11455.8 30249.2

2008 1223.91 1993.57 24399.5 14979.5 39743.2

2009 1330.01 1976.00 26280.9 17689.2 39045.7

2010 1638.24 2190.10 35879.0 26838.3 47965.3

2011 2208.90 2523.65 55744.9 48792.3 63688.0

∑XY=1609.1 ∑(X)2=1197.5 ∑(Y)2=2206.9


r= ∑XY

∑(X) 2 ∑ ( Y) 2

r= 1609.1

(1197.5)2(2206.9)2

r= 0.9898 The above table depicts that the correlation between total inventories and reserves

is high i.e., r = 0.9898. Therefore ‘r’ is said to be positive (positive correlation is the good for

the company).

TABLE NO: 2.6.3.1

TABLE SHOWING THE TREND ANALYSIS OF TOTAL ASSETS FOR FUTURE

YEARS

YEAR TOTAL

ASSETS(X) (x2) XY

2007 2534.97 -2 4 -5069.94

2008 3036.48 -1 1 -3036.48

2009 5435.87 0 0 0

2010 5936.76 1 1 5936.76

2011 6621.14 2 4 13242.2

TOTAL 23565.22 0 10 11072.54


The line of equation of trend analysis is Y= a + b x

In the year of 2012 is

= 4713.04 + 1104.2 (3)

= 8025.64


= 4713.04 + 1104.2 (4)

= 9129.84

= 11338.24


= 4713.04 + 1104.2 (5)

= 10234.04


= 4713.04 + 1104.2 (6)


= 4713.04 + 1104.2 (7)

= 12442.44

INTER PRETATION:

It is clear from the above table that the trend analysis is calculated for cost of Sungwoo

gestamp hitech (chennai) pvt ltd. The trend analysis is predicted for the 2012-2016 in which

the cost is expected to increase from 8025.64 to 12442.44.

Past year amount 6621.14 and expected amount from this analysis is 8025.64

CHART NO: 2.6.3.1

TABLE SHOWING THE TREND ANALYSIS OF TOTAL ASSETS FOR FUTURE YEARS

201216%

201318%

201420%

201522%

201624%

TABLE NO.2.6.3.2

TABLE SHOWING THE TREND ANALYSIS OF INVENTORIES FOR FUTURE

YEARS

YEAR INVENTORIES (X) (x2) XY

2007 1070.32 -2 4 -2140.64

2008 1223.91 -1 1 -1223.91

2009 1330.01 0 0 0

2010 1638.24 1 1 1638.24

2011 2208.90 2 4 4417.8

TOTAL 7471.38 0 10 2691.49


The line of equation of trend analysis is Y= a + b x


= 1494.2 + 747.13 (3)

= 3735.59


= 1494.2 + 747.13(4)

= 4482.72


= 1494.2 + 747.13(5)

= 5229.85


= 1494.2 + 747.13(6)

= 5976.98


= 1494.2 + 747.13(7)

= 6724.11

INTER PRETATION:

It is clear from the above table that the trend analysis is calculated for cost of Sungwoo

gestamp hitech (chennai) pvt ltd. The trend analysis is predicted for the 2012-2016 in which

the cost is expected to increase from 3735.59 to 6724.11.

Past year amount 2208.90 and expected amount from this analysis is 3735.59.

CHART NO: 2.6.3.2

CHART SHOWING THE TREND ANALYSIS OF INVENTORIES FOR FUTURE

YEARS

2012

2013

2014

2015

2016

0 1000 2000 3000 4000 5000 6000 7000

3735.59

4482.72

5229.85

5976.98

6724.11

Inventories

TABLE NO: 2.6.4.1


Year Inventories

( Y)

X

X=x-2009

X2 XY

2007 1070.32 -2 4 -2140.64

2008 1223.91 -1 1 -1223.91

2009 1330.01 0 0 0

2010 1638.24 1 1 1638.24

2011 2208.90 2 4 4417.8

TOTAL(S) 7471.38 0 10 2691.49


X = S x / n

X = 0 / 5 = 0

Y = S y / n

Y = 7471.38 / 5 = 1494.27

b = sxy – n x y / Sx2 – nx2

b = 2691.49 – 5 * 0 * 7471.38 / 10 – 5 * 0

= 269.149

a = y – b x

= 1494.27 – 269.149 * 0

= 1494.27

The forecast of inventory for the year 2012 is computed by substituting x = 2012 in the above

equation.

Y = a + b x = 1494.27 + 269.149 x

= 1494.27 + 269.149 (x – 2009)

= 1494.27 + 269.149 (2012 – 2009)

= 1494.27 + 269.149 (3)

= 1494.27 + 807.447

= 2301.71

Therefore inventory year 2012 will be approximately Rs. 2301.71

TABLE 2.6.5.1

ABC ANALYSIS OF CONSUMPTION REPORT FOR THE YEAR 2007

Part

no

Part

name

Price/unit Unit/year

Annual

consumption

Rs/year

Cumulative value

of annual

consumption(Rs.

)

Class

J050 Dash

complete

19529.88 8000 180918180 180918180

A

J000 RR FLR 20102.02 9000 156239040 337157220

complete

J200 RR FLR

complete

19652.13 4000 108874845 446032065

B

J200 QTR

compl, LH

19852.25 440 80362255 526394320

J000 QTR

compl,RH

20120.07 2000 78608520 605002840

J001 RR FLR

complete

19100.85 5700 51189516 656192356

C

X000 HOOD 19452.43 1600 40240140 696432496

X050 Sun roof

reinf

18959.08 2700 30779104 727211600

X000 Roof FR 19236.94 1600 31123888 758335488

X000 Fuel filler 19600.55 4100 8734990 767070748


INTERPRETATION:

The classification of ABC analysis is shown as follows:

“A” class items- Dash complete and RR FLR complete.

“B” class items- RR complete.QTR compl, KH and QTR compl, LH

“C” class items- RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel filler

CHART NO 2.6. 5.1

GRAPH SHOWING ABC ANALYSIS REPORT FO SGH FOR THE YEAR 2007-2011

Dash RR FLR 5 RR FLR 3 QTR LH QTR RH RR FLR HOOD Sun roof ROOF FR Fuel filler18000

18500

19000

19500

20000

20500

A class

A class

B class

B class

B class

C class

C class

C class

C class

C class

ABC Analysis

TABLE 2.6.5.2


Part

no

Part

name


Annual

consumption

Rs/year

Cumulative value

of annual

consumption(Rs.

)

Class

J050 Dash

complete

20931.81 3000 104961850 104961850

A

J000 RR FLR

complete

20100.45 1000 83409640 188371490

J200 RR FLR

complete

19862.48 700 62795430 251166920 B

J200 QTR

compl, LH

19785.25 400 20100450 271267370

C

J000 QTR

compl,RH

20125.12 300 20042320 291309690

J001 RR FLR

complete

20015.22 500 13903736 305213426

X000 HOOD 19952.27 200 7914100 313127526

X050 Sun roof

reinf

20042.32 1000 6037536 319165062

X000 Roof FR 20852.41 4000 3990454 323155516

X000 Fuel filler 20992.37 5000 10006110 333161626


INTERPRETATION:


“A” class items- Dash complete and RR FLR complete.

“B” class items- RR complete,

“C” class items- QTR compl, LH and QTR compl, RH RR FLR complete, HOOD,

Sun Roof Reinf, ROOF FR, Fuel filler

CHART NO 2.6.5.2


DASH RR FLR 5 RR FLR 3 QTR LH QTR RH RR FLR HOOD Sun roof ROOF Fuel filler19000

19500

20000

20500

21000

21500

20931.8099999999

20100.45

19862.4819785.25

20125.1220015.22

19952.2720042.32

20852.41

20992.37

ABC analysis

TABLE 2.6.5.3



INTERPRETATION:


“B” class items- Dash complete and RR FLR complete. RR complete, QTR compl,

LH and QTR compl, RH

“C” class items- RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel fill

Part

no

Part

name


Annual

consumption

Rs/year

Cumulative value

of annual

consumption(Rs.

)

Class

J050 Dash

complete

19039.41 1000 25510836 25510836

B

J000 RR FLR

complete

19945.45 1100 23047020 48557856

J200 RR FLR

complete

19500.85 900 2193995 70497851

J200 QTR

compl, LH

18959.78 700 19039410 89537261

J000 QTR

compl,RH

18900.36 600 17550765 107088016

J001 RR FLR

complete

19205.85 1200 13387584 120475610

C

X000 HOOD 19623.72 1300 13271846 133747456

X050 Sun roof

reinf

19125.12 700 12379829 146127284

X000 Roof FR 18656.62 450 11340216 157467500

X000 Fuel filler 19045.89 650 8395479 165862979

CHART NO 2.6.5.3


DASH RR FLR 5 RR FLR 3 QTR,LH QTR,RH RR FLR HOOD Sun roof ROOF Fuel filler18000

18200

18400

18600

18800

19000

19200

19400

19600

19800

20000

B class

B class

B class

B classB class

C class

C class

C class

C class

C class

TABLE 2.6.5.4


Part

no

Part

name


Annual

consumption

Rs/year

Cumulative value

of annual

consumption(Rs.

)

Class

J050 Dash

complete

24759.49 1148.00 36865522 36865522

A

J000 RR FLR

complete

25100.25 1441.63 33654903 70520425

J200 RR FLR

complete

24855.15 1238.10 30773161 101293586

J200 QTR

compl, LH

24220.45 1522.07 19354972 120648558

B

J000 QTR

compl,RH

23999.96 1402.29 3618527 124267085

C

J001 RR FLR

complete

24520.45 798.34 8803153 133070238

X000 HOOD 22895.81 972 5581754 13851992

X050 Sun roof 25080.21 351 1389653 140041645

reinf

X000 Roof FR 23853.65 234 2842389 142884034

X000 Fuel filler 23959.54 58 2225472 145109506


INTERPRETATION:


“A” class items- Dash complete and RR FLR complete, RR complete.

“B” class items- QTR compl, LH

C” class items- QTR compl, RH RR FLR complete, HOOD,


CHART NO 2.6.5.4


DASH RR FLR 5 RR FLR 3 QTR LH QTR RH RR FLR HOOD Sun roof Roof FR Fuel filler21500

22000

22500

23000

23500

24000

24500

25000

25500

C class

B class

A class

A class

A class

B class

Cclass

C class

C classC class

ABC analysis

TABLE NO: 2.6.5.5


Part

no

Part

name


Annual

consumption

Rs/year

Cumulative value

of annual

consumption(Rs.

)

Class

J050 Dash

complete

34692.83 2300 221437739 221437739 A

J000 RR FLR

complete

33495.63 5805 194442132 415879871

J200 RR FLR

complete

34500.32 1494 114403851 530383722 B

J200 QTR

compl, LH

33900.45 6532 79793509 610077231

J000 QTR

compl,RH

35100.22 750 77676637 687753868

J001 RR FLR

complete

33850.24 250 51543478 739297346 C

X000 HOOD 34290.85 315 30151882 769449228

X050 Sun roof

reinf

35265.36 855 26325165 795774393

X000 Roof FR 34522.95 2250 10801617 806576010

X000 Fuel filler 34252.65 3340 8462560 815038570


INTERPRETATION:


A” class items- Dash complete and RR FLR complete, RR complete.

B” class items- QTR compl, LH and QTR compl, RH

C” class items- RR FLR complete, HOOD,


CHART NO: 2.6.5.5


DASHA class RR FLR

5A class

RR FLR 3

B class

QTR,LHB class

QTR,RHB class

RR FLRC class

HOODC class

Sun roof

C class

ROOFC CLASS

Fuel fillerC class

ABC analysis

CHAPTER 6

FINDINGS

The overall performance of the years 2007 is high as compared to the previous year.

Overall the current ratio of SGH has been decreased.

Most of the quick ratio of the SGH has been decreased.

The net working capital ratio of the SGH has been increased.

The total debt ratio of the SGH has been increased.

The proprietary ratio of the SGH has been much decreased.

Current assets turnover ration of the company has been increased.

The total assets turnover ratio of the SGH has been increased.

Overall the performance of the inventories positive correlation is good for the

company

Correlation between inventories and fixed deposits is also positive correlation.

So it is good for the company.

Inventories and loans & advances are positive correlation.

The correlation of the inventories and sundry debtors is also positive

correlation. So the inventory and sundry debtors’ level is good for the

company.

Inventories and reserves, correlation of the company is positive relation. So it

is good for the company.

Trend analysis for total assets of the company is past year amount from this

year amount will be increased in the future year, it is good for the company.

Trend analysis for inventories of the company is past year amount from this

year amount will be increased in the future year, it is good for the company.

Linear regression analysis for the inventory will be increased.

“A” CLASS ITEMS- Dash complete, RR FLR complete, RR FLR complete.

“B” CLASS ITEMS- QTR complete LH, QTR complete RH.

“ C” CLASS ITEMS- RR FLR complete, HOOD, SUN Roof REINF, ROOF

FUEL filler.

Overall the inventory percentage is least during the 2008,2009 because only a

small portion of inventory has been invested.

The year 2011 has highest investment in inventory.

front page

Documents

blocked working capital

net working capital

karl pearsons coefficient

die maintanence shop

sun roof reinf

rr flr complete

acid test ratio

major logistics journals