study of inventory management system
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TRANSCRIPT
PROJECT REPORT ON
“STUDY OF INVENTORY MANAGEMENT SYSTEM”
FOR THE ORGANIZATION
T.CHOITHRAM & SONS- DUBAI
SUBMITTED BY
MATHEW. LAWRENCE
UNDER THE GUIDANCE OF
Dr. S.P. KASANDE
SUBMITTED TO
UNIVERSITY OF PUNEIN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF
DEGREE OF MASTERS IN BUSINESS ADMINISTRATION (MBA)
THROUGH
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VISHWAKARMA INSTITUTE OF MANAGEMENTPUNE-48
A C K N O L E D G E M E N T
Words fall short to express my deep sense of gratitude
towards them all, who have imparted their valuable time,
energy and intellect towards the beautification of my project
report.
I take this opportunity to express my gratitude towards my
guide Dr. S.P Kasande and encouragement and guidance and
also to Professor Yuvraj Lahoti who has been my mentor for
this entire project by giving me regular information about
retail industry in UAE and whole across world.
I take immense pleasure in thanking Mr. Mohommad Kiyas
and Mr.Pravesh Sawlani for always being so friendly and co-
operative with our project work. I also extend my gratitude
to all the Store Managers and with all the people with whom I
did interact for the project work, especially to Mr. Gireesh
Kumar, Mr. Jay Kumar and Mr. Kartik for providing me with
valuable information, suggestions and above all this is their
time and effort for the compilation of our project.
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Last but not the least I would like to thank Vishwakarma
Institute of Management, for his technical and moral support
required for the realization of this project report.
Thanks to all
Mathew.
Lawrence
D E C L A R A T I O N
I MATHEW LAWRENCE AKKARA of Masters in Business
Administration of Vishwakarma Institute of
Management hereby declare that I have completed
the project report on
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The Study of Inventory Management System for T.
Choithram & Sons in the academic year 2008-09. The
information submitted is true and original to the best
of my knowledge.
MATHEW LAWRENCE
L I S T O F A B R E V A T I O N S
Sr. No Short form
Meanings
1ITC Indian Tobacco Company
2CG Convience Grocery
3MAF Majid Al Futiam
4SKU Stock Keeping Units
5SBU Strategic Business Unit
6 GRV Goods Receipt Voucher
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7GRN Goods Receipt Note
8RI Received Import
9RL Received Local
10PO Purchase Order
11LPO Local Purchase Order
L I S T O F C H A R T S
Table No. Table Name Page No.1 UAE retail companies 62 TCS Store in UAE 15
C O N T E N T S
Chapters
Topic Page No
1 Executive Summary- Objectives1
2 Introduction- Explains what is retailing?, Types of retailing,
23 UAE retail scenario- Reason for retail revolution, Types
& its characteristics, 4
4 Food retail Industry- Indian food retail scenario, U.A.E food retail scenario 7
5 Inventory management function- Inventory Management, Controlling Inventory Levels, Inventory Investment Control, 9
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6 T. Choithrams & Sons- Choithrams a successful enterprise, About the Stores, An environment friendly store, Al Awir warehouse. 14
7 Analysis on Inventory management functionsat Um – Sequiem store - Identification of need to make a Purchase Order, Issuing of a Purchase Order, Delivery of the Purchase Order, Stocking of the product in shelf & in the back office, making the product available for sale
20
8 Research Methodology- Research Process carried out at TCS, Field Work plan carried out. 24
9 Data analysis and Interpretation- Analysis of Excess/shortage stock, Analysis of Safety stock. 26
10 Findings & Recommendation57
11 Limitations58
12 Bibliography59
13 Annexure Questionnaire Collected datao Analyzing of collected data
60
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Chapter- 1
Executive Summary
This project work starts of with familiarizing the concept of what is Retail?
explaining different types of retail etc. The core objective of this project report is
to understand the inventory management system carried out by T.Choitram’s at
present and its effectiveness and efficiency. The Study comprises of a detailed
analysis on the Inventory Management systems that are currently being used at
T. Choithram & Sons (LLC). The data for this study has been collected by means
of store visits at Umm Sequim, questionnaire, interaction with the staff of TCS, &
personal observations.
The study throws light on areas such as Inventory Management, Product
Placement, Stocking- Safety stock & Necessary Stock.
The objectives of this study are in multiple folds, the core objectives being are:
1. To study the current inventory management and control techniques
used at TCS.
2. The impact of various inventory levels on space and cost in the store.
3. To identify the approximate difference between Ideal Inventory and the
Actual Inventory.
4. To define a exact reorder period and quantity for products taken as
population for the study.
5. To identify the problems faced while using current Inventory
Management & Control System.
6. To search for solutions and alternatives for those problems faced at
TCS.
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Chapter- 2
Introduction to Retail Scenario
Retailing today occupies a key role in the world economy. This is
evidenced by the fact that the largest firm is not a manufacturing
organization, rather it is a retail firm i.e. Wal- mart. According to
fortune 500 of July 2007 Wal-mart stores had revenue of $219.812
million and employed about 1.4 million people. Today the retail
industry is estimated at $6.6 trillion. In India too we have been
witnessing a retailing revolution since 1991, when the first
organized and contemporary organized retail store chain Shoppers Stop was opened in
Mumbai. Today, India has 12 million retail outlets, but organized retailing for only 4% of
the business.
Retailing today is a fun filled experience for the entire family. No more now the dust and
heat in which Indian consumers shop. Faced with competition from modern retail outlets,
the conventional kirana store or retailer has also changed colors. They organize their
merchandise, display new products, run localized promotion, offer loyalty bonus to
frequent shoppers, even take orders on phone and deliver at the customer’s home at no
additional cost, use bar codes, accept credit and debit cards etc. The change is not only
restricted to metros. It has affected the lives of shoppers in smaller towns like Indore,
Pune and Baroda as well. Organized retail has today entered rural India also. ITC, a
tobacco giant is revolutionizing shopping experience in rural India through e-choupals.
Thus, retailing is today heading for a boom.
So what is Retailing?
Retailing includes all activities involved in selling
goods or services directly to final consumers for
personal, non-business use. A retailer or retail store is
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any business enterprise whose sales volume comes primarily from retailing. Retailers are
at the end of the supply chain.
Types of Retail OutletsAlthough most retailing is done in retail stores, in recent years non-store retailing --
selling by mail, telephone (telemarketing), door-to-door contact, vending machines, and
numerous electronic means -- has grown tremendously. Retail stores come in a variety of
shapes and sizes, and new retail types keep emerging. They includes:-
Specialty stores carry a narrow product line with a deep assortment within that
line. Examples include stores selling sporting goods, books, furniture, electronics,
flowers, or toys. Today, specialty stores are flourishing, due to the increasing use
of market segmentation, market targeting, and product specialization.
Department store carries a wide variety of product lines. Each line is operated as
a separate department managed by specialist buyers and merchandisers.
Supermarkets are large, low-cost, low-margin, high-volume, self-service stores
that carry a wide variety of food, laundry, and household products. Most US
supermarket stores are owned by large chains such as Safeway, Publix, Winn-Dixie,
Jewel, and Tops. Chains account for almost 70% of all supermarket sales.
Convenience stores are small stores that carry a limited line of high-turnover
convenience goods. Examples include 7-Eleven, Circle K, Wilson's Farms, and
Starvin' Marvin. These stores located near residential areas and remain open long
hours, seven days a week. Convenience stores must charge high prices to make up
for higher operating costs and lower sales volume, but they satisfy an important
consumer need.
Superstores are almost twice the size
of regular supermarkets. Many leading
chains are moving toward superstores
because their wider assortment allows
prices to be 5-6% higher than
conventional supermarkets.
Hypermarkets are even bigger than combination stores, perhaps as large as six
football fields. Hypermarkets combine discount, supermarket, and warehouse
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retailing, and operate like a warehouse they usually give discounts to customers
who carry their own heavy appliances and furniture out of the store.
Chapter- 3
United Arab Emirates Retail Scenario
Middle East retailing has gone through a tremendous amount
of change over the past 10 years. It has been fascinating to
witness and participate in the rapid evolution of retailing in the
Middle East. Annually, many new state of the art stores are
added to the country’s retail map, creating continuous
competition among the major retailers. The region has always had a rich heritage of shop
keeping, starting from the original traditional souqs, through to the development
shopping on the main high streets, to shopping malls to the current large-scale shopping
malls that are being developed in every city across the region. The retail industry for the
UAE is estimated to be $9.4 billion a year. In 2002 food and grocery retailing in the UAE
was an estimated $4.1 billion and is considered to grow between 5-10% p.a. A 2001
survey revealed per capita retail sales in the UAE at $2,686 was lower compared to the
UK at $5,628 and $8,930 for the US. It exceeded figures for South East Asia at $1,440
and India at $246. At the time retail space per capita to square foot was 20 for the US,
eight for the UK, seven for South East Asia, six for the UAE and two for India.
Recent studies prepared on infrastructure development in the retail
industry for the region have not kept pace with the rapid growth of
shopping malls that are under construction or have been earmarked
to be completed in the coming two to five years. Hypermarkets,
superstores and supermarkets, despite their limited number, are
estimated to account for nearly 50 percent of all retail sales.
Smaller-sized groceries and convenience stores account for the
other half. Retail development is concentrated in the three largest
emirates of the UAE - Abu Dhabi, Dubai and Sharjah, home for nearly 75 percent of the
population. Consumers in those locations tend to shop more at larger stores and less on
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smaller grocery and convenience stores. Such stores are relied upon for last minute, spur
of the moment food needs. However, in the further out suburbs and the lesser-developed
areas of the country, grocery and convenience stores play an important role in the retail
business. It is estimated that Dubai alone will have over 2.5 million square meters of
shopping mall retail by 2008 reflecting a 360% increase over space available in 2003 at
543,000 square meters. In the past one year, plans for over 1 million additional square
meters of retail space has been announced in Dubai alone
Types and its market characteristics:-
Hypermarket is usually the anchor stores drawing many shoppers. A very successful
example is the French hypermarket – Carrefour (represented by Majid Al Futtaim) and
Geant. In recent years hypermarkets have expanded to suburban areas to be closer to
their target customers. Convenience/Grocery (C/G) stores far outnumber all other types
of retail outlets. In urban centers, convenience stores serve as last minute, one-or-two
item suppliers. However, in suburban and interior areas these stores are the primary
supply centers. C/G stores are franchise operations. The number of new Gas Marts outlets
is rising rapidly. Companies are investing in this concept, giving outlets trendy new looks
and stocking with a wide range of products, in effort to attract a more consistent customer
base. Several Gas Mart operations have staged in-store promotions, but results are not
readily available.
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UAE Retail Companies
Retailers Name and Outlet Type
Ownership(local/foreign)
Sales($Mil)
No. of Outlets
Locations(City/Region)
Purchasing AgentType
T. Choithram & Sons (TCS) International
46 27 Regional Importer/local buyer/distributor
Consumer Co-op Local 220 82 Regional Direct
Emirates Co-op Local 50 5 Dubai Direct
Abu Dhabi Co-op Local 55 10 Abu Dhabi Importer/local buyer
Abela Stores Local 13 1 Abu Dhabi/Sharjah
Importer/local buyer/Wholesaler
Emke Group Indian 400 28 Regional Importer/local buyer/wholesaler
Shop n Save Indian 75 42 Regional Local buyer
Spinney’s Dubai Local 155 17 Regional Importer/local buyer/wholesaler
Al Maya Lal’s Group
UK/India 45 14 Regional Importer/local buyer/distributor
Carrefour/MAFHypermarkets
Local 150 8 Regional Buys locally/Importer
Lebanese Fruit Co.UAE/Lebanese
7 4 Sharjah/Abu Dhabi/Dubai
Importer/local buyer/distributor
Park n’ Shop Indian 10 1 Dubai Importer/local buyer/distributor
Giant Supermarket 49/51U.A.E./Indian
22 11 Regional Importer/local buyer/wholesaler
Emarat Gas Marts Local 40 65 Regional Local buyer
Modern Bakery & Supermarkets
Local 11 4 Regional Importer/local buyer/distributor
Emirates Petroleum Co.
Local 60 160 Dubai Direct
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Tabel-1
Chapter- 4
Food retail IndustryFood industry is not a formally defined term;
however, it is usually used in a broadly inclusive way
to cover all aspects of food production and sale. The
Food Standards Agency, a government body in the
UK, describes it thus: "...the whole food industry –
from farming and food production, packaging and
distribution, to retail and catering."
With populations around the world concentrating in urban areas, food buying is
increasingly removed from all aspects food production. This is a relatively recent
development, taking place mainly over the last 50 years. The supermarket is a defining
retail element of the food industry, where tens of thousands of products are gathered in
one location, in continuous, year-round supply. Food preparation is another area where
change in recent decades has been dramatic. Today, two food industry sectors are in
apparent competition for the retail food dollar. The grocery industry sells fresh and
largely raw products for consumers to use as ingredients in home cooking. The food
service industry offers prepared food, either as finished products, or as partially prepared
components for final assembly.
UAE Food retail Industry scenario:
The UAE retail sector continues to grow, supported by the upgrading of existing retail
stores and the addition of state of the art new mega retail stores. The UAE market
presents retailers with diverse relatively high-income consumers. Exporters who are
willing to establish personal relationships, consolidate shipments, and meet the labeling
requirements of the UAE market will find a rapidly growing sector in which to sell a
wide range or products. Annual sales in the industry are estimated at $3.5 billion. The
U.A.E. depends heavily on imports to fill the gap between limited domestic food
production and demand from a growing population base. Foods sold in retail outlets
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consist 75-80 percent of imported consumer-ready products, and 20-25 percent of locally
processed foods.
The UAE food retail sector continues its aggressive growth. More large type stores are
being built. French retail chain already operates in the market while a new one is being
prepared to launch its services. Values of retailed products are currently estimated by
trades at about $2.5 billion. The French Retail Giant, Carrefour, has moved aggressively
into the retail of food and non-food products in the United Arab Emirates and is expected
to open at more locations across the UAE. Other Arabian Peninsula markets are definitely
in the cards for this retailer as consumers go more and more for low prices and everything
under one roof. Drawn by the country’s affluence, food suppliers from all over the world
vigorously compete for market share. EU and Asian products pose the greatest
competition to U.S. products. Both hold a proximity advantage, which translates to lower
freight costs. In addition, Asian products enjoy an additional advantage of having a low
cost of production. Locally processed food products are limited in range and are not very
competitive to products of U.S. origin except for the categories of snack food, juices and
some confectionery items. The U.S. market share for food imports is about 8 percent.
Nearly 50 percent of products imported from the U.S. are consumer-ready. Some U.S.
origin food is re-exported to countries throughout the region. Food re-exports (from all
sources) total about $1 billion annually.
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Chapter- 5
Inventory Management Function
In order to ensure a smooth flow of operation at the store level, it is necessary that the
management defines processes and the people end the resources to implement them. The
task to be performed and the processes are usually defined in a Store Operation Manual.
This document lists the tasks which need to be carried out at the store level; it states the
responsibility and the time period in which these tasks need to performed. A well-
prepared operations manual or blue print is the starting point of efficient store operations.
Typically in a retail store, the following tasks need to be performed:
1. Store Administration and management of the premises
2. Managing Inventory and display
3. Managing Receipts
4. Customer Services
5. Managing Promotions, Events, Alliance and Partnerships
Inventory Management
Inventory is a list for goods and materials, or those goods and materials themselves, held
available in stock by a business.
Inventory management can be briefly described as:-
Acquiring an adequate supply and assortment of merchandise from which customers
can buy.
Providing safety stocks to meet unexpected demand or delays in inventory
replenishment.
Maintaining clear, correct, and current records.
Purchasing the proper assortment of goods in quantities that will maintain inventory
levels consistent with business requirements, while providing adequate safety stocks.
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Reducing excessive inventories promptly, so that the dollars realized from clearing
overstocks can be invested in merchandise with a greater market potential.
Need for Prompt Action
Inventory problems often require prompt corrective action. In many businesses, the
market life of inventory is short and if inventory is insufficient when market demand
peaks, sales and profits are lost. If inventory is excessive when demand declines, the
excess must be cleared, often at sharply reduced prices, again affecting profits. These
special problems are particularly acute in certain businesses. The market life for the latest
hit record may be just a few months. For seasonal greeting cards, the market life is a few
weeks, and for fresh fruit, produce and baked goods, the market life is measured in days!
Inventory Investment Control
Inventory investment is the actual investment made in carrying the inventory in a
particular organization, and inventory investment control is the technique used to control
the investment made. It is accomplished in two ways:
Prompt elimination of overstocked items:
Whenever a particular item is overstocked, the overstock should be reduced as
promptly as possible. Naturally, the most effective and profitable way is to sell it to
customers, even at a discount. Excessive consumer goods inventories are often sold to
"bargain basements" or warehouse outlets. Frequently, it is wiser to scrap inventory
that shows no sales activity for an extended period of time. In this way, you reduce a
misleading overstatement of inventory on your company's books. At the same time,
you make space available for inventory that can be sold at a profit.
Inventory replenishment in anticipation of customer demand:
The key to successful inventory management is adherence to procedures for inventory
replenishment. Your ability to anticipate customer demand for certain items will help
you plan your inventory purchases so that sufficient stocks are on hand to
accommodate sales volume without excesses that cause other problems. Determining
purchasing requirements involves answering two questions:
o What to buy?
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o When to buy?
o How much to buy?
Both questions can be answered by establishing an inventory target for any item you
carry expressed as so many days', weeks', or months' sales. For example, if a grocery
store planned to carry a two days' supply of muffins, and average daily sales were 15
boxes of muffins, then a desirable inventory level could be calculated as follows:
Inventory Level = Days' Supply x Average Daily Sales
Inventory Level = 2 x 15
Inventory Level = 30
If the supply on hand is less than 30 boxes, then more muffins must be purchased. If the
actual stock were 17 boxes, then the grocer would have to purchase 13 (30 - 17) boxes.
The example of the grocer is relatively simple. But in real retail business the problem
becomes far more complex. They have to analysis various other factors like- Sales
Forecasting, Demand Forecasting, Product Shelf Life (perishable goods), Lead time,
Safety or Cushion stock, Re-order point
Sales forecasting: Sales forecasting is the process of organizing and analyzing
information in a way that makes it possible to estimate what your sales will be.
Demand Forecasting: Demand Forecasting manages the balancing act between
minimizing inventory investment and optimizing revenue opportunities. It is the concept
of matching supply with demand.
Product Shelf life: Shelf life is the time that products can be stored, during which the
defined quality of a specified proportion of the goods remains acceptable under expected
(or specified) conditions of distribution, storage and display. Shelf life is that length of
time that food, drink, medicine and other perishable items are given before they are
considered unsuitable for sale or consumption.
Lead time: Lead-time is the total amount of time between the date you recognize the
need to reorder an item and the date replenishment merchandise is on the shelf. In short it
the length of time between order placement and receipt of goods.
Safety or Buffer stock: It is that stock of materials which are kept for protecting you
from variations in the usage rate or in the lead time. Assume that the lead-time for a
particular item is two weeks. The safety stock that the business wishes to maintain is a
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four weeks' supply. Additionally, a one-week basic stock is required. The desired
inventory level would be established as the sum of these factors:
Lead-Time 2 weeks
+ Safety Stock 4 weeks
+ Basic Stock 1 week
= Inventory Level 7 weeks
The size of the safety stock will depend upon the number and extent of the factors that
could interrupt deliveries. Suitable guidelines would have to be based upon your own
experience in the industry.
Re-order point: Reorder point is a service control and it maintains continuity of stock.
Reorder point is the amount of material below which you shouldn’t go without starting
the replenishment process if procuring from a source outside the company.
Lead Time 2 weeks
+ Basic Stock 1 week
+ Safety Stock 1 week
= Order Point 4 weeks or
Doubt of order point & order ceiling
Conclusion for Inventory management
No business can be run by formulas alone. But formulas can be useful in guiding
decisions. Systematic review of inventory purchases is the most effective means of
preventing overstocks and avoiding lost sales. The availability of accurate inventory and
sales records, combined with your own judgment, can guide you to sound purchasing
decisions. A physical inventory should be taken periodically to be sure that the actual
quantities on hand equal those shown on the inventory records. The inventory records
must then be adjusted to reflect any difference between "physical inventory" and "book
inventory," the quantities shown on the inventory records. The actual quantity of each
item on hand must be counted and compared with that shown on the inventory record.
Necessary adjustments should be made immediately. Differences between book and
physical inventory arise for many reasons.
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The most easily understood, of course, is pilferage. Any business naturally wants
to maintain an inventory control system to detect this situation as early as
possible.
Receiving procedures are faulty, a receiving clerk may not be counting actual
quantities received and comparing them with those on the vendor's packing list or
invoice. If the quantity actually received is less than that invoiced to you, you are
paying for the difference!
Merchandise may be sold to customers without being billed to them, through
oversight or carelessness. In these cases, you will take a loss equal to your cost of
the product and also lose the profit that you should have earned on the sale.
Clerks may be accepting customer returns of merchandise that are no longer
saleable because of damage, stains, or packing defects. You may be ignoring
opportunities to return merchandise to vendors when it arrives in an unfit
condition for resale.
Employee theft and shop lifting are all some of the main challenges faced in the
inventory management functions.
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Chapter- 6
T. Choithram and Sons
Choithram Supermarkets is the face of a large and successful
network of companies, T. Choithram & Sons. T. Choithram & Sons
was establised in 1944 in Sierra Leone, West Africa by Thakurdas
Choithram Pagarani, who opened a small grocery store in Freetown,
Sierra Leone in 1944 and set in motion a success story that
continues to this day. Since then, it has developed into an international company
spanning Europe, North America, Africa as well as the Gulf, and remains a private
business. Under his skilful management and high standards which set the correct building
blocks has made the business today into an extensive retail chain spanning continents.
Today the company’s integration as manufacturer, distributor and retailer is what sets
Choithrams apart from others. Post his demise the group remains a successfully managed
private business. The trust funds and manages a group of schools and hospitals in India
and West Africa. It was in the 70's that Choithrams came to the Gulf countries namely
UAE, Oman, Bahrain and Qatar It brought with it international expertise, experience,
networks and communication. Since then, many Choithrams outlets have come up in
convenient locations across the seven Emirates.
Choithrams a successful enterprise: Choithrams is today a
successful group with associates in diverse fields like
wholesaling, commodity brokerage, and manufacturing of
edible and non-edible items. This rich association brings to the
group a huge bank of experience and resources. Choithrams
came to UAE in 1974 and has grown to a retail chain with over 25 supermarkets in the
emirates. With its unbeatably high standard of quality and service, Choithrams has
become a name synonymous with excellence in the region today. True to its mission of
absolute customer satisfaction, Choithrams provide the freshest fruit and vegetables and
quality meats. The variety of wholesome seeded breads, light creamy cakes and
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croissants are baked in store every day and the readymade chilled and hot meals are a
great relief to a growing number of customers who are always on the go.
The efficiency of the chain was recognized when Choithrams was awarded the first ever
"Grocer of the year" RetailME award in 2005, for overall excellence in the field of food
retailing. This ‘philosophy’ and statement is the direction taken by the company, be it
satisfaction, value or range. To further emphasise the outlets have come up in convenient
locations across the seven Emirates – making everyday shopping easy and fun with its
unbeatably high standard of quality and service.
About the Stores:
A lot of thought is put into the size and scope of
each outlet. This depends on the location and
customer preference. Right from the smallest stall in
the store to the entire product mix, every
Choithrams outlet is custom made for its clientele.
They are placed in all the 7 emirates of UAE.
TCS Stores in UAE Tabel-2S.N Location Area Timings
1. Nakheel Ras Al Khaimah 08:00-13:30 and 16:30-23:00
2. Sheikh Hamad Street Ajman 08:00-13:30 and 16:30-23:00
3. King Faisal Street Sharjah 08:00 - 01:00
4. Sheikh Humaid Street Fujairah 09:00-13:30 and 16:30-22:00
5. Opp. Ramada Hotel Bur Dubai 24 Hrs.
6. Al Fahidi Street Bur Dubai 09:00 - 23:00
7. Jumeirah Beach Road Jumeirah 08:00 - 22:00
8. AlWasl Road, Jumeirah 07:00 - 01:00
9. Umm Sequeim Jumeirah 07:00 - 22:00
10. Greens SheikhZayed Road 08:00 - 23:00
11. Springs SheikhZayed Road 08:00 - 22:00
12. Lakes SheikhZayed Road 08:00 - 22:00
13. Jebel Ali SheikhZayed Road 08:00 - 22:00
14. Green Community SheikhZayed Road 08:00 - 22:00
15. Holiday Centre SheikhZayed Road 08:00 - 22:00
16. Karama Karama 08:30-13:30 and 16:30-22:00
17. Garhoud Deira 08:00 - 22:00
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18. DubaiTower, Al Nasr Square Deira 24 Hrs.
19 Hyatt Galleria Deira 08:30 - 22:00
Al Awir Warehouse of T. Choitrram & Sons – visited on 9th June 2008
Introduction
Al Awir warehouse of T.Choitram and sons for fruits and
vegetables is an exclusive centralised warehouse for the entire 25
Choitram supermarket in whole across UAE. The warehouse is
centrally located in the fruits and vegetables wholesale market at
Al Awir which gives in better advantage for buying fruits and
vegetables from local supplier. The Al Awir warehouse concept
was formed in 2006 with marginal SKU’s, but today the
warehouse has 300 SKU’s with 1 million sales turnover everyday. The complete credit
goes to the top management of choitrams along with efficient and loyal employees like –
Girish Kumar head of purchase for imported goods who has been working with the group
for the last 8 years, Kailash head of purchase for local goods has been working with the
group for last 9 years, are the two employees with whom I had the opportunities to
interact.
About the Warehouse
The warehouse is located at Al Awir with a 1,500q mt area. The warehouse is been coded
with 090 for better administration It is been distributed in 2 floors, where in each floor
has got 3 chillers maintained at 4 degree Celsius although out the year. The warehouse
follows good store layout of First-in-First out. Each chiller contains goods from different
countries like Holland, Ghana, Hong- kong, Thailand, and Vietnam etc. so the chillers are
differentiated by countries. The warehouse has also got good material handling
equipments like conveyor belts for carrying goods to 2nd floors, also various trolleys to
handle goods. Proper maintenance and cleaning has always been done and maintained all
throughout the day. The warehouse has staff strength of 22 workers where in it is
distributed by 11 workers in each shift. The warehouse operates in 2 different shifts
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starting from 6.30 am to 2 pm and 4 pm to 10 pm. Al Awir warehouse works as a
separate SBU (Strategic Business Unit) by which it gets the goods from the supplier at
cost price and then adds 5-10% margin (debit price) and sells to the customers
(supermarket) and then finally to the customer, the supermarket charges with 20-25%
margin. The warehouse charges this margin on the supermarket for conducting there
daily and monthly expenses like overhead expense, (water, electricity, maintenances etc)
employees salary, payment for suppliers etc. Al Awir warehouse is also a centralised
warehouse for private labelling (fresh express) section for packed fruits and vegetables
which is been conducted through proper hygiene and quality consciousness. How much
to stock in the warehouse depends on certain parameters like-
Nature of the product (shelf life)
Nature of sourcing (local, importing country, lead time)
Demand in the market
Price variations in the market.
For every warehouse it has got two major operations
Purchasing/Receiving
Delivery / Distribution
Purchase/Receiving:
This operation is been broadly classified in two function or responsibilities, the local
purchase and import purchase. Local purchase can be conducted in cash purchase and
credit purchase, where as Import purchase is always done in credit purchase. The credit
period provided by the suppliers varies from 30 days to 60 days. Choitram’s has it self
maintained a proper good will for making the payment in due time.
Process followed in purchase-
The process for both local as well as import purchase has been kept same.
17
1. Daily the process starts with acquiring of Material request form all across the 25
outlets. Each store places order in the morning and evening respectively. The
morning order has to be placed with the warehouse by 10.30pm and for evening
order it has to be placed by 12pm. The complete operation in been conducted in two
different computer software exclusive made for the group. SMS and SMART.
2. After getting the material request order from all across the stores, order with the
respective local and import supplier is placed.
3. After receiving the order, the store keeper checks the material invoice or purchase
order. He also checks for the quality and quantity of materials received.
4. After proper securitizing of all the materials received, the store keeper prepares
GRV (Goods Receipt Voucher) manually.
5. Data from the GRV is then fed into computer system which generates GRN (Goods
Receipt Note) GRN contains- warehouse reference number, description of product,
quantity received, type of SKU’s etc. Each GRN is identified by the sourcing type
by-RI (Received by Import) and RL (Received Local)
6. Damage and claim issue are of two types- Goods not received and damaged goods.
For goods not received proper intimations are done with the supplier. In case of
damaged goods inventory is updated by decreasing the value of damaged goods.
Claims from the suppliers are made for products damaged by suppliers. If goods are
damaged because of organisational transfer or loading and unloading then it is
transferred to damage and destroy section.
Delivery/Distribution:
1. Delivery order starts after the material request is received from all the stores.
2. Material order is then converted into Distribution chart. Distribution chart is a
consolidated report chart which clearly identifies the number of goods required at
which store.
18
3. Distribution chart is then converted into Delivery chart for each store. Delivery
order contains – reference no, Description, Type of SKU’s, Debit price, Retail
price, cost price.
4. Four copies of delivery order is printed where in which two copies are kept in
warehouse and the remaining is send along with the delivery van.
5. Store keeper at each store verifies the delivery order along with the goods received
acknowledges and sends one copy back to warehouse.
6. Issue of goods returned from the stores are of two types- Goods wrongly delivered
and goods damaged in during transit.
7. In case of goods wrongly delivered, account of store getting additional goods is
debited with additional goods and vice versa for store getting fewer goods
(credited)
8. When damaged goods are returned back from store to warehouse, the warehouse
issues a credit note to respective store denoting about the complete details of the
damaged warehouse.
SWOT analysis of Al Awir warehouse
Strengths-
1. Centrally located in the vegetable and fruits wholesale market, which gives in better
advantage for buying goods from local supplier.
2. Maintained goodwill in the market for making payment to the suppliers.
3. Proper utilization of the space.
4. Proper maintenance of hygiene and quality.
5. Good knowledgeable and loyal employees.
6. Good distribution and logistics system(6 trucks)
19
7. Well maintained chillers
Weakness-
1. No proper accounting system
2. No regular inventory check is been conducted.
Opportunities-
1. To increase upon the availability of trucks so that the goods can be delivered in a
better efficient manner to store at Abu Dhabi and Fujairah.
2. Can start of with wholesale market for other retailers.
Treats-
1. From local wholesale market.
2. To make the goods available at the right store, at the right time, at the right place.
3. To maintain a competitive price in the market.
4. To maintain the quality of goods supplied by the supplier.
Chapter- 7
Analysis of Inventory Management Functions Carried out in TCS (Um- Sequiem)
“Inventory Management Function”, had been carried out is a simple procedure of
Questionnaire for the staff at TCS at Umm Sequiem store at Dubai through which proper
analysis of Reorder Section and Safety Stock concept has been derived
During the analysis there was an observation as to the procedure that is followed in the
company for Inventory Control. The observation was that there is no scientific or
technically formulated system that is followed for inventory management & control,
rather a simple technique is followed in which the Shelf in-charge makes a LPO (Local
20
Purchase Order), or a Invoice for the warehouse totally based on his experience and his
calculation.
There are 5 steps in Inventory Management & Control:
1. Identification of need to make a Purchase Order.
2. Issuing of a Purchase Order.
3. Delivery of the Purchase Order.
4. Stocking of the product in shelf & in the back office.
5. And making the product available for sale.
STEP 1:
Identification of need to make a Purchase Order (PO):
This is the most basic and the most crucial part of Inventory Control, because if we are
not able to identify the basic need to make a Purchase Order then it would be really very
difficult rather impossible to manage Inventory and run a store in a appropriate manner.
At TCS the need to make a Purchase Order is identified by a shelf in-charge (a person
who looks after the products in a certain number of shelves) totally based on his
experience. i.e he calculates in his mind the average number of products that are sold in a
week and checks the number of products available in the store and if he find a need to
make PO then accordingly he would make a PO.
STEP 2:
Issuing of a Purchase Order:
Once the need to make a PO is identified then comes the procedure to make a PO. Now
in this case there are two conditions:
1. That the product is to be ordered from the Local Supplier.
2. The product is to be ordered from the Companies Warehouse.
In both the cases the procedure for making a PO would differ. Let us consider both the
cases one by one.
1. PO for Local Supplier:
21
In this case the representative from the Local Supplier comes into the store on a certain
day, and he asks the shelf in-charge the products that are required for that particular
week. The shelf in-charge according to his calculation and experience gives the
representative a list of products to be delivered. Then the representative shows the list to
the IT section and there a LPO (Local Purchase Order) in the name of the respective
vendor is produced. From here the LPO is taken to the Store Manager for confirmation,
and once the Store manager confirms the LPO then the LPO is dispatched to the
respective vendor for delivery.
2. PO for Warehouse:
In this case the product to be ordered is not available in the local market the product
needs to be Imported or it is purchased by the company and then distributed into the
stores, for this type of products there is a separate method of making PO.
Here the shelf in-charge identifies the need to issue a PO and then makes an invoice and
sends it to the Central Warehouse of the company. Before sending the invoice it has to be
verified by the Store Manger, and once the verification & confirmation is done then the
invoice is delivered to the warehouse, and after a specific period the goods are
dispatched. In this case there is no representative of the supplier, the shelf in-charge
himself has to issue a PO.At the end of every week the store receives a invoice from the
company containing all the details of the LPO’s made & another list containing products
ordered from the warehouse, thus at end of every week there is a check on the LPO’s &
Invoices.
STEP 3:
Delivery of the Purchase Order:
On receiving the LPO or Invoice from the store, the supplier or the warehouse dispatches
the list of products to the store. On the arrival of these products at the store the person at
the receiving area checks the products, this checking is done by simple technique of
Visual Examination or by the method of Random Sampling. The in-charge person signs
on the invoice and only then the products can enter the store. In case during examination
products are found missing or damaged those respective products are rejected and sent
22
back to the supplier or ware house and this is marked on the invoice that the
representative of the supplier brings.
STEP 4:
Stocking of the product in shelf & in the back office:
After entering the store the products are brought into the storing section where in
the products are stored in the respective conditions in which they are to be stored.
Example: Fish would go into the Cold Storage Section, Toiletries would go into the Dry
section, Vegetables & fruits would go into the Fresh Section, etc. Once the products are
placed at their respective places then the products can be brought to the shelf as and when
required.
STEP 5:
Making the Product Available for Sale:
After the product has reached the back office of the store then the shelf in-charge
with co-ordination with the store manager decides a place for displaying the product for
better sales. Here many times the product needs to be placed at a particular shelf only
because that space has been rented to that company for that product. Many times there are
certain “offers” that are given by the company to attract customers the store manager has
to see to it that the “offer” has been displayed properly and the price tags have been put
up in order.
Even in this step there is no scientific method to support the actions all the actions are
performed totally on “experience”. Thus this analysis shows that there has to be a
scientific method to support the actions of the staff. The staff needs to be made aware
about various Inventory Management & Control Systems that are available in the market
or the methods that they can use to make the Inventory Storage more effective.
Conclusion
From the above analysis (reorder analysis) it can be seen that even after not having any
scientific base line, the staff of TCS is doing a considerable job in making exact reorders,
but still the proportion of making shorter reorder i.e running the product into a out of
stock situation is very high. Thus by using a scientific & technical base for Inventory
Management & Control System TCS could do wonders to its turnover
23
Chapter- 8
Research Methodology
Research methodology is a way to systematically solve a research problem. It may be
understood as a science of studying how research is done scientifically. In it we study
various steps that are generally adopted by a researcher in studying his research problem
along with logic behind them. Before we understand the research methodology used for
this research let us first understand what a research means:
“Research in common parlance refers to a search for knowledge”. One can also define
research as a scientific and systematic search for pertinent information on a specific topic.
In fact, research is an art of scientific investigation. The advanced learner’s dictionary of
24
current English lays down the meaning of research as “A careful investigation or inquiry
especially through search for new facts in any branch of knowledge”.
For every research there is a certain objective, towards which the research is directed,
following are the objectives towards which the research methodology has been designed.
The purpose of research is to discover answers to questions through the application of
scientific procedures. Though each research study has its own scientific purpose, we may
think of research objectives as falling into a number of following groups:
1. To gain familiarity with a phenomenon or to achieve new insights.
2. To portray accurately the characteristics of a particular individual, situation or a
group.
3. To determine the frequency with which something occurs or with which it is
associated with something else.
4. To test a hypothesis of a casual relationship between variables
Research Process carried out at TCS
A) Primary Data Source: - Questionnaire, Interviews
B) Secondary Data Source: - Books, Journals etc.
Collected data will be analyzed with simple statistical tools and will be interpreted with
graphical explorations.
The project was to check feasibility of the methodologies used at T. Choithram & Sons
using primary data. For the collection of the primary data a regular format of store visit
has been followed. The primary data was also obtained through observation, direct
communication with the staff and filling up of questionnaires, also enormous help was
obtained from T. Choithram & Sons branch members, crew, staff and colleagues working
there.
Field Work plan
The field work was carried according to the sampling plan formed, by visiting various
branches of T. Choithram & Sons under some limitations and time constraints. The main
25
motive for these visits was to identify the system that is being followed in the company &
to find out solutions to the problems that the company faces at this moment in handling
the present Inventory Control & Management System. A two-way discussion was done
with the staff at the stores and s questionnaire was filled by the respective personals. The
questionnaires are either directly filled up or indirectly filed up by the people and through
the prospect of the respective people.
Chapter- 9
Data analysis and Interpretation
Data analysis and interpretation started of with great tough time like, visiting the store
regularly getting appointment with the store manager, floor manager, talking with the
particular shelf in charge, taking time of the IT person. All through this process of time
all employees were kind enough to explain me the different aspects related to the
prevailing inventory process. The two such works which are being carried out in this
project work under the data analysis and interpretation part is -
Analyzing and interpretation of the Safety Stock required.
Analyzing and interpretation of the Excess/Shortage stock at the store.
26
The source for the data analysis and interpretation was the Umm Suqeim store of
T.Choitram & Sons located at beach road, Dubai. The reasons behind selecting this
particular store was that-
1. One of the biggest store of TCS spread over 20,000 Sq.m
2. Was the only store which was located in an esteemed area of Dubai, catering to
various types of customers including – Emirati, European, Asian etc.
3. Had a large variety of SKU’s in almost all section catering to various customers.
4. Had got good support from the employees working over there.
TCS as such does not have any strong base on the concept of inventory system, as the
complete system was based on the experience of the employees working in TCS for the
last 5-10 years. Orders where based manually checking the stocks available in the shelf
and warehouse, which gave me the opportunity to carry out the operation in Inventory
management system and to study on various aspects related to it.
My Work Plan:
1. Identified 5 basic products which has got the maximum sales turnover. (Facial
tissue papers, Detergents, Water, Milk, Tooth paste.)
2. Took various aspects related to the products like- total stock, price, shelf life,
weekly sales, etc (provided in the last page of the project report)
3. Identified the excess/shortage stock
4. Identified the Safety Stock
Analysis of Excess/Shortage Stock: This is the analysis of the stock in the store by
which the company can know the excess or the shortage stock prevailing in the store and
so accordingly they can control the flow of stocks required over a period of time.
Excess/Shortage Stock = Current Stock- Ideal Stock.
Current Stock = It is the prevailing stock which the company has kept in the shelf.
Ideal stock/Total stock = Minimum Stock + Safety Stock
Where in-
Minimum Stock = Daily Sales (Average sales from 12th July-18th July 2008) x Re-order
period days (taken from Co.)
Safety Stock = Sales per day x Safety Stock in days.(taken from Co.)
27
Analysis of Safety Stock: This is the analysis of the stock which helps us to identify the
level of the stock which has to be kept as a buffer or safety during the time of crisis.
These stocks of goods are never touched upon until and unless there is really a need for it.
Safety stock = Sales per day x Safety Stock in days
*Note: This project was carried out during the time when there was an off season in all
across U.A.E. i.e during May – July (summer vacation) as people do go out of the
country for vacations.
Analysis of Excess/Shortage Stock
1. Facial Tissue Paper: This includes products like Masafi, Fine, Promise, Scott, Family,
Kleenax, Baqa. In this range of products brands like- Masafi, Fine, Kleenax and Baqa
TCS are the sole distributors of this products in all across U.A.E. so even there is no sale
they have to push this product in all across there stores. Also the products come in two
variants i.e single and outer
Graph-1
28
Facial Tissue -Single
3 31 1 1
30.42
22 22 22 22 2220 20
69
3 3 3
9
1
1613
19 19 19
11
19
0
5
10
15
20
25
Masafi Fine Promise Scott Family Kleenax BaqaBrands
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess Stock
Interpretation
This is a single pack of fiscal tissue paper. It costs ranges from 2dhs to 3.75dhs. Where in
the Baqa costs the lowest and Masafi costs the highest. In all across U.A.E this product
has got very good sale because of the humidity level prevailing in the atmosphere.
In the graph one can see that the products like Masafi, Fine, Kleenax has got the
maximum sale. The current stock maintained in the shelf are 22 in no. expect for kleenax
and Baqa it is 20 in no. Also there prevails an excess stock in all products where in
Promise, Scott, Family and Baqa tops the chart.
Graph-2
29
Facial Tissue-Outer
4 4
02 1 2
0
22 21
10 11
14
10 1012 12
0
6
3
6
1
10 9 10
5
11
4
9
0
5
10
15
20
25
Masafi Fine Promise Scott Family Kleenax Baqa
Brands
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess
Interpretation
This is a outer pack of fiscal tissue paper. It costs ranges from 10dhs to 17.5dhs. Where in
the Baqa costs the lowest and kleenax costs the highest.
In the graph one can see that the products like Masafi, Fine has got the maximum sale.
The current stocks maintained in the shelf are 22 in number for Masafi and Fine. Where
as Promise, Scott, Kleeenax, Baqa, is 10 in number. Also there prevails an excess stock
in all products where in Family tops the graph.
2. Detergents: This section includes products like Airel and Tide are for washing cloths.
Omo and Dettol are for surface cleaning. Lux and Fiary are for utensil cleaning. All this
range of products is imported from various countries. The products come in various
variants like 10kg, 8kg, 2.5kg, 600gms, 450gms etc.
Graph-3
Ariel
0 1 1 5 45
23 20 22
80
0 2 210 85
21 1812
72
0102030405060708090
10 kg 8kg 4kg 2.5kg 600gms
Product category
Valu
es Daily Sales
Current stock
Ideal Stock
Excess Stock
Interpretation
30
Ariel is one such brand which was got the most sales in all across the stores of TCS.
Compared with Tide Ariel has the highest sales in all types. The highest sales is for 2.5kg
type followed by 600gms. The current stock maintained for the 600gms is 80 sku’s were
in the actual it has to be 8, so there is an excess of 72 sku’s in the store which could have
been utilized for any other purpose.
Graph-4
Tide
0 1 155
19
30
62
3 5 5
24
2
14
25
38
0
1020
3040
5060
70
8kg 4kg 2.5kg 450gmsProduct category
Va
lue
s
Daily Sales
Current stock
Ideal Stock
Excess
Interpretation
Tide is one of the popular brands used for washing cloths. Tide is one of the major
competitors for Ariel. Tide 450gms has got the highest sale and the highest current stock,
because of which there is an excess stock of 38 sku’s. Also the type 4kgs has got the
current stock of 19 sku’s, where in ideally it has to be 5, so there is an excess of 14 sku’s.
Graph-5
OMO
0 0 1 2 0
12 14
24
39
14
0 04
8
2
12 14
20
31
12
05
1015202530354045
7.5kg 6kg 4kg 2.5kg 500gnsx3
Producy category
Va
lue
s
Daily Sales
Current stock
Ideal Stock
Excess Stock
Interpretation
31
Omo is one such brand which is popular among the U.A.E used for washing cloths. It has
got the maximum number of variants like – 7.5kg, 6kgs, 4kgs, 2.5kgs etc. where in which
2.5 kg has got the maximum sale of 2. The maximum excess stock is also seen in 2.5 kgs
of 30 in number
Graph-6
Dettol
1 1 1
26
10
18
57
5
21
3
13
0
5
10
15
20
25
30
750ml 4 liter 2literProduct category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortageStock
Interpretation
Dettol is one such brand which is popular in all across world used for surface cleaning. It
has got very limited variants that comes in 3 broad variants ie. 750ml, 4liter and 2liter,
where in which all the product has got equal number of sales. The maximum current
stock maintained by this product is for 750ml which is a popular one.
Graph-7
Lux
0 04
24
47
72
1 08
23
47
64
0
10
20
30
40
50
60
70
80
1.5 liter 1 liter 500mlProduct category
Va
lue
s
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
32
Lux is a major competitor for fairy in utensil cleaning segment. It has got world over
recognition, so product has good amount of sales. Among the daily sales category only
500ml has got a sale of 4 units also it has got the maximum excess stock of 64 units.
Graph-8
Fairy
0 0 2
16
57
72
0 1 4
16
56
68
0
20
40
60
80
1.5 liter 1 liter 500mlProduct category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
This product is less popular as compared with Lux. This comes in 3 variants ie. 1.5liter,
1liter, 500ml. The highest excess stock is found in 500ml category of 68 units, where as it
has only got the sale of 2 units.
3. Water: Water is considered as one of the basic ingredient in ones life. In U.A.E
nobody boils the water for drinking purpose every one buys water for this purpose. This
section covers products like Alain, Masafi, Aquafina. Lot many people do buy big cans
of 20 liter for there household purpose. Because of some restrictions from the company I
could not take the inventory of this product as such. The category that covers in this
section are 500ml, 330ml, 600ml and 1.5liter. It is one such product which fell short
according to the calculations, because there is a great turnover of this product in all
stores. This product is also sold in cartons where in one carton contains 6 outers.
Graph-9
33
Alain- single
71
1825
42
6
-24
19
-40
-20
0
20
40
60
500ml 330ml
Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Graph-10
Alain- outer
5 4
34
16
3024
4
-8-20
-10
0
10
20
30
40
500ml- 330ml-
Product category
No.
of S
KU
's
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
Alain is a very popular brand among all across the country. It is one of the local brands
which is manufactured and packed in U.A.E. Lot of space allocation were dedicated for
this brand in water segment, as bottles were stuffed in refrigerators. For better
understanding of this product, category 500ml and 330ml were considered.
In single pack of 500ml it has got a sale of 7 units, where it still fall short by 24 units as
the ideal stock has to be 42 units. The prices are 1dhs and 0.75dhs.
In outer pack 330ml unit falls short by 8 units as the store has got 16 units where in
ideally it has to be 24 units. The highest ideal stock is seen in 500ml category i.e. of 30
units. The prices are 4.00dhs, 3.50dhs.
Graph-11
34
Masafi- single
5027
325
4015
100
54
6
-75
-14
9
-100
-50
0
50
100
150
1.5liter 500ml 330ml
Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Graph-12
Masafi outer
12
52
10 8 10
24
104
-14
-2
6
-20
-10
0
10
20
30
1.5 liter 500ml 330ml
Product category
Valu
es
Daily Sales
Current stock
Ideal Stock
Excess/shortage
Interpretation
Masafi is one of the most popular brand in all U.AE it is probably sold even in small
stores. TCS is the sole distributor for this brand in all cross the country. Masafi is popular
among the emritai people. One complete shelf is solely dedicated for this brand in water
segment. This comes in 3 broad categories i.e 1.5liter, 500ml and 330ml.
In single pack 1.5 liter and 500ml pack falls short by 75 and 14 units respectively. Where
in the ideal stock has to be 100 and 54 units respectively. The prices are 1.5dhs, 1dhs, and
0.75dhs.
In outer pack also 1.5 liter and 500ml unit falls short by 14 and 2 units respectively,
where in actually is has to be 24 and 10 units respectively. The prices are 4.50dhs,
4.25dhs, and 2.00dhs
35
Graph-13
Aquafina - single
0 4 7
100
30
78
0
24
42
100
6
36
0
20
40
60
80
100
120
1.5 liter 600ml 500mlProduct category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Graph-14
Aquafina -outer
3 2
55 55
1812
3743
0
10
20
30
40
50
60
1.5 liter 600mlProduct category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
Aquafina is brand of pepsico which is internationally recognized. Also this product is
very popular among European people. The only difference one can see in Aqufina
products is that the product 500ml does not come in outer packs.
The single pack of 500ml has got the highest sale of 7 units and the highest current stock
maintained is 100 units i.e for 1.5 liter, since there is no sale for this product all the
current stock is considered as excess stock.
The outer pack comes in 2 variant i.e 1.5 liter and 600ml where in the current stock
maintained is 55 each where in ideally it has to be 18 and 12 respectively so there is an
excess stock of 37 and 43 units.
36
4. Packed Milk: Milk is one such product which is consumed on a daily basis by every
person directly or indirectly. In U.A.E since there is a shortage of fresh milk people do
buy packed milk which remains for a longer period of time. In this segment there are
many players prevailing like Pure heart, Rainbow, Lacnor and Almarai, where in lacnor
has got a good amount of sale and also it is the only brand which comes in outer pack.
The price of these brands ranges from 3.75 – 6.95 dhs and for outer pack it ranges from
13.75- 15.50 dhs. A single outer pack contains 1x 4 liter. Among these brands Almarai is
a local brand which is available only in U.A.E.
Graph-15
Pure heart
0 1 0 1
20
40
32
17
1.96
14 11.9 1418.04
2620.1
3
0
10
20
30
40
50
Aussie Nature Soy Rice Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
Pure heart is brand which has got the maximum variety in packed milk section. It ranges
from Aussie dream, Nature soy, Soy milk, Rice. The highest current stock is maintained
in Nature soy of 40 units. Also it is seen that there is hardly any sale for this product. The
price ranges are from 10.95 to 11.50 dhs. Pure heart does not come in outer packs which
make the company restricted to sell only single pack of 1 liter.
37
Graph-16
Freedom foods
1 5 4
20
72
1814
7056
6 2
-38-60
-40
-20
0
20
40
60
80
Smooth white Soy milk Rice drink
Product category
Valu
es
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
A freedom food is a product in the packed milk category which comes only in 1 liter
pack. The prices are kept constant for all the products i.e 11.50. From the above graph we
can analyze that the category smooth white and soy milk has got a manageable excess
stock of 6 and 2, where as in the rice drink category there is a shortage of stock of about
38 units which the company should take an immediate action on it.
Graph-17
Lacnor- single
3 3 7 017 17 17 16
42 42
98
5
-25 -25
-81
11
-100
-50
0
50
100
150
Skimmed Full cream Low fat Chocolate
Product category
Valu
es
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
38
Graph-18
Lacnor- outer
30 2
17 19 18
42
0
28
-25
19
-10
-30
-20
-10
0
10
20
30
40
50
Skimmed Full cream Low fat
Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
Interpretation
Lacnor is one such brand that is most sold in the packed milk category with an average
sales of
about 3 units is all most every category. It is a preferred brand among the people in all
across U.A.E. It has got option like skimmed, full cream and low fat milk, which also
comes in outer pack too. In single category section all the category are running in
shortage with only chocolate category having an excess stock of 10 units. Where as outer
category is also running in shortage with only full cream has got the excess stock of 19
units. Each outer pack contains 4x 1 liter packs. The price of single pack is 3.75 dhs and
outer pack is 14.75 dhs. Among all the products seen till now this product is well
managed by the company. Complete one shelf is been dedicated for lacnor display.
39
5. Tooth paste: Tooth past is again one such brand which is used daily on every house
hold, so there fore the consumption rate is also very high. Two such shelves are dedicated
for the display of tooth paste section. The four such broad products which are seen a good
amount of sale are Colgate, Close-up, Sensodyne and Crest. Among this almost every
brand has got it own purpose and use. Expect Crest all brands come in 190gms and 72
gms, where as Crest come in 167 gms. Highest amount of Sku’s are seen in this category
with TCS. Proper care is taken in the display of this category. Merchandisers of these
companies do come 2-3 times in a week.
Graph-19
Colgate -190gms
2 1 1 3 2 1
35 35 35 35 35 35
14
7 7
21
14
7
21
28 28
14
21
28
05
10152025303540
Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/shortage
Graph-20
Colgate- 72 gms
1 1 1 2
28
60
12
60
7 7 714
21
53
5
46
0
10
20
30
40
50
60
70
Total 12 Herbal miswa Freshconfidence
MaxiumcavityProduct category
Val
ues
Daily Sales
CurrentstockIdeal Stock
Excess/shortage
40
Interpretation
Colgate has got a sale of 2-3 products in almost every product category ranging from 190
gms to 72 gms. Product category of 190 gms has got the maximum current stock
maintained by the company because of which it has got the highest excess stock. Colgate
products comes in 4 different categories they arr- Total 12, Herbal miswa, Fresh
confidence and Maximum cavity. Among all these Maximum cavity has the highest sale
of 3 and 2 in 190 gms and 72 gms respectively.
Graph-21
Sensodyne-190gms
02
02 1 0 1 1
32 32 32 32 32 32 32 32
4.2
20
5.7
0
14.2
0
10 10
27.8
12
26.3
32
17.8
32
22 22
0
5
10
15
20
25
30
35
Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/shortage
Graph-22
Sensodyne-72 gms
1 1 0 0 0 0
35 35 35 35 35 35
10 10
4.2 4.2 5.7
0
25 25
30.8 30.8 29.3
35
05
10152025303540
Product category
Valu
es
DailySalesCurrentstockIdealStockExcess/shortage
41
Interpretation
Sensodyne is product in tooth past section which has got very less sales, the maximum
sale it has got is in 190 gms category is 2 products. Sensodyne has got maximum variety
of product category it comes 8 variants in 190 gms and 6 variants in 72 gms. It seems that
TCS has been pushing this product. This product is a niche product where in the price
ranges are from 18.50 to 21.95 for 190 gms and 10.50 to 13.50 for 72 gms. In all the
category of Sensodyne product it has got excess stocks ranging from 17 to 35 which it
shelf denoted that there is less sale for this product.
Graph-23
Close up 190 gms
2 1 0 0 0 0
48
24 24
48 48
24
96 4.71 4.71 3 3
39
18 19.29
43.29 45
21
0
10
20
30
40
50
60
Red hot Mentholchill
MilkCalcium
Whitening Centerfilled gel
Centerfilled
orangeProduct category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/shortage
Graph-24
Close-up 72gms
1 2
20 20
69
-19 -18-25
-20
-15
-10
-5
0
5
10
15
20
25
Red hot Menthol chill
Product category
Valu
es
Daily Sales
Current stock
Ideal Stock
Excess/ shortage
42
Interpretation
Close- up has also got a very good variety in the product category of 6 variants in 190
gms, but it lacks in 72 gms. The variants are Red hot, Menthol chill, Milk calcium,
whitening, center filled gel and center filled orange. The price range are from 6.25 dhs to
8.25 dhs for 190 gms and 3.25 flat for all 72 gms. Excess stock is only seen in 190 gms
ranging from 18 products to 39 products where as in 72 gms there exists shortage of
products of 19 and 18 respectively. Also the sale of this product is not so bright with
marginal sales reaching to 2 products in red hot for 190 gms and menthol for 72 gms.
Graph-25
Crest - 167gms
4 4 5 7 4
18 18 18
5448
40 4050
70
40
-22 -22-32
-16
8
-40
-20
0
20
40
60
80
Lemonextract
Delicate Artic fresh Complete Pro Health
Product category
Val
ues
Daily Sales
Current stock
Ideal Stock
Excess/shortage
Interpretation
Crest is one such unique brand which is seen in the entire tooth paste segment. It comes
in only 167 gms which is quite different from its competitors. This tooth paste is a
medicinal tooth paste which is normally used when doctors recommend it. Even catering
to niche segment the product has got good amount sale ranging from 4 to 7 products. The
biggest drawback seen from the above graph is that it is running in shortage in almost
every section. Only Pro health has an excess stock of 8 products.
43
Analysis of Safety Stock
1. Facial Tissue paper: Graph-26
Facial tissue- singel
2
3
1 1 1
3
0
1 1 1 1 1 1 1
2
3
1 1 1
3
00.5
11.5
22.5
33.5
Mas
afi
Fine
Prom
iseSco
tt
Family
Kleena
xBaq
a
Brands
Un
its
Sales per day
Safety Stock indaysSafety stock
Graph-27
Fasical tisue - outer
4 4
0
2
1
2
0
1 1 1 1 1 1 1
4 4
0
2
1
2
00
0.51
1.52
2.53
3.54
4.5
Brands
Un
its Sales per day
Safety Stock in days
Safety stock
Interpretation
Safety stock found in fasical tissue paper ranges from 0 to 4 i.e there are products which
does not need to keep as according to the formula. But in reality the company has to
display because of certain reasons like- company owning the distribution network for
certain products, avoid the opportunity cost, variants in display etc. Since this product is
purchased for a longer period of time people do prefer to buy the outer pack, so higher
safety stock is maintained in outer pack section.
44
2. Detergents:
Graph-28
Airel
0.14
1 1
5
4
1 1 1 1 1
0.14
1 1
5
4
0
1
2
3
4
5
6
10kg 8kg 4kg 2.5kg 600gmsproduct category
Un
its Sale per day
Safety stockin days
Safety stock
Interpretation
The product category of 2.5 kg in Airel has the highest safety stock of 5 units has it has
got the highest sales turnover. Also followed by 2.5 kg it is 600 gms that has got the
second highest safety stock of 4 units. The company keeps a safety stock for 1 day only
as company owns the distribution network for this product in all across U.A.E. Also there
is an average of 1 unit sales in each category where in making the company to keep a
safety stock in all categories.
Graph-29
Tide
0.71 1 1
5
3 3 3 32.13
3 3
15
0
2
4
6
8
10
12
14
16
8kg 4kg 2.5kg 450kgProduct category
Un
its Sale per day
Safety stockin days
Safety stock
45
Interpretation
The product category of 450 kg in Tide has the highest safety stock of 15 units has it has
got the highest sales turnover. Here the company keeps a safety stock for 3 days, as it is
been distributed from central warehouse. The average sales for this product falls between
the 1 – 2 units.
Graph-30
OMO
0.14 0.14
1
2
0.71
1 1 1 1 1
0.14 0.14
1
2
0.71
0
0.5
1
1.5
2
2.5
7.5kg 4kg 500gnsx3Product category
Un
its Sale per day
Safety stockin days
Safety stock
Interpretation
The product category of 2.5 kg in OMO has the highest safety stock of 2 units has it has
got the highest sales turnover. Also followed by 2.5 kg it is 4 kg that has got the second
highest safety stock of 1 unit. The safety stock in days which the company maintains is of
1 day. OMO in general is preferred by European customers. There is hardly any sale for
7.5 and 6 kgs category which denotes that the company does not need to keep any much
safety stock for this product.
Graph-31
Dettol
11.42
1
3 3 33
4.26
3
00.5
11.5
22.5
33.5
44.5
750 ml 4 liter 2 literProduct category
Un
its Sale per day
Safety stockin days
Safety stock
46
Interpretation
The product category of 4 kg in Dettol has the highest safety stock of 4 units. Company
keeps a safety stock for 3 days. This is the only product in the detergent section which
has got the highest safety stock in days. Also there is an average of 1 unit sales in each
category where in making the company to keep a safety stock in all categories. Dettol is a
very recognized brand in detergent section
Graph-32
Lux
0.71
0
4.14
1 1 10.71
0
4.14
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1.5 liter 1 liter 500 mlProduct category
Un
its Sale per day
Safety stockin days
Safety stock
Interpretation
This product of Lux is used for dish washing. From the above graph we can identify that
there is a good sales for 500 ml category which denotes that customers do prefer this
category. For the entire category company has been maintaining a safety stock for 1 day,
but for 500 ml category they can increase the safety stock in days from 1 day to 3 days.
Graph-33
Fairy
0.28
0.71
2
1 1 1
0.28
0.71
2
0
0.5
1
1.5
2
2.5
1.5 liter 1 liter 500 mlProduct category
Un
its Sale per day
Safety stockin days
Safety stock
47
Interpretation
Fairy in another such brand which is used for dish washing. Over here we can identify
that there is a sale in all category. The highest safety stock maintained is 2 units in 500
ml. Also there is hardly any sale found in 1.5 liter and 1 liter which clearly denotes that
the company can save the cash blocked in such product by decreasing the safety stock.
3. Water:
Graph- 34
Aquafina 1.5 liter
0
3
0
2 2 2
0
6
00
1
2
3
4
5
6
7
Singel outer CartonProduct category
Un
its Sale per day
Safety stockin days
Safety stock
Graph-35
Aquafina 600ml
4
2
0
2 2 2
8
4
00123456789
Singel Outer CartonProduct category
Un
its Sale per day
Safety stockin days
Safety stock
48
Interpretation
Aquafina is an internationally renowned brand which comes from Co-co cola .As such
this comes in various categories, for the project work we will focus on only on two. Form
the graph we can identify that there is no sale for single 1.5 liter bottles and for cartons,
but there is in outer pack of 1.5 liter. But in the 600 ml category there is no sale for
cartons. From this we can identify that though people do prefer to buy in bulks they
prefer in outer category. But to be in the safer side we can have a safety stock of 2 days in
all categories
Graph-36
Masafi-1.5 liter
50
12
23
1 1 1
50
12
23
0
10
20
30
40
50
60
Singel Outer CartonProduct category
Un
its Sale per day
Safety stockin days
Safety stock
Graph-37
Masafi- 500ml27
5
22
1 1 1
27
5
22
0
5
10
15
20
25
30
Singel Outer cartonProduct category
Un
its Sale per day
Safety stockin days
Safety stock
49
Interpretation
Masafi is TCS’s owned distribution product in all across U.A.E. Even though there is sale
in all the product categories of masafi, we can identify that the safety stock in days kept
for this product is only one day which shows that there is a good distribution for this
product. Since the safety stock is for only one day, company will have to keep the safety
stock as per the sales. Masafi is local drinking water company which comes in various
product categories. This product is well accepted among the emrathi’s. For better
understanding we will focus on 1.5 liter and 500 ml. Also if we see that there is good
amount of sale in cartons, which again denotes that people do prefer to buy in large
quantities.
Graph-38
Alain- 500ml
75
22 2 2
14
10
4
024
68
1012
1416
Singel Outer cartonProduct category
Un
its Sale per day
Safety stockin days
Safety stock
Graph-39
Alain-300ml
1
45
2 2 22
8
10
0
2
4
6
8
10
12
Singel Outer CartonProduct category
Un
its Sale per day
Safety stockin days
Safety stock
50
Interpretation
Alain is a local competitor for Masafi in drinking water segment. This product is also
well accepted. The safety stock in days maintained by the company is for 2 days. There is
also sale in all the categories of 500 ml and 300ml section. This shows that the company
has to keep certain amount of safety stocks all throughout the period. The highest safety
stock maintained is in 500 ml single category of 14 units.
4 Milk:Graph-40
Lacnor 1 liter
3 37
0.427 7 7 7
21 21
49
2.94
0
10
20
30
40
50
60
Skimmed Full cream Low fat Chocolate
1 2 3 4Product category
Un
its Sale per day
Safety stockin days
Safety stock
Graph-41
Lacnor outer
30
2
7 7 7
21
0
14
0
5
10
15
20
25
Skimmed Full cream Low fat
1 2 3
Product category
Un
its Sale per day
Safety stockin days
Safety stock
51
Interpretation
Lacnor is an internationally renowned brand for packed milk category. The product
comes in 4 broad categories i.e skimmed, full cream, low fat and chocolate. Since this is
an imported product company has to maintain a safety stock for 7 days. The highest
safety stock maintained is 49 units for low fat product in 1 liter pack. Outer pack comes
in 3 variants i.e. skimmed, full cream and low fat, where in skimmed category has the
highest safety stock.
Graph-42
Rainbow 1 liter
0 0.28
7 7
0
1.96
0
1
2
3
4
5
6
7
8
Full cream Low fat
Product category
Un
its Sale per day
Safety stockin days
Safety stock
Graph-43
Rainbow - outer
0.57 0.28
7 7
3.99
1.96
012345678
Full cream Low fat
1 2
Product category
Un
its Sale per day
Safety stockin days
Safety stock
52
Interpretation
Rainbow comes in two categories i.e. full cream and low fat. As such rainbow has
marginal sale for both the category in single as well as outer packs. The safety stock in
days maintained by the company is seven days. The highest safety stock is seen in outer
pack of full cream of approximately 4 units. Though there is a marginal sale company has
to keep certain amount of units for certain people.
Graph-44
Pure heart
0.14
1 0.85 1
7 7 7 7
0.98
7
5.95
7
0
1
2
3
4
5
6
7
8
Aussiedream
NatureSoy
Soy milk Rice drink Product category
Un
its Sale per day
Safety stockin days
Safety stock
Interpretation
Pure heart is only such brand which comes in 1 liter single pack. The safety stock
maintained by the company is for 7 days. Since there is absence of outer packs in this
product we can find sales in all product categories. The highest safety stock unit is seen
in nature soy category.
53
Close- up 190 gms
21
0 0 0 0
3 3 3 3 3 3
6
3
0 0 0 001234567
Product category
Un
its
Sale per day
Safety stockin days
Safety stock
Close up-72gm
1
2
3 3
1
6
0
1
2
3
4
5
6
7
Red hot Menthol chillProduct category
Un
its Sale per day
Safety stockin days
Safety stock
5. Tooth Paste:Graph-45
Graph-46
Interpretation
From the above graph we can identify that sales is absent in all the categories of 190 gms,
but still company has tried to maintain a safety stock for 3 days. Red hot and Menthol
chill are the only such categories which have got a sale of 2 and 1 units respectively.
Where as in 72 gms company has 2 such brands Red hot and Menthol, which got a sale of
1 and 2 units. The safety stock units kept are 1 for Red hot and 6 for Menthol chill. Days
of safety stock maintained by the company are for 3 days.
54
Graph-47
Sensodyne - 190 gms
0.42
2
0.570
1.42
01 1
3 3 3 3 3 3 3 3
1.26
6
1.71
0
4.26
0
3 3
01234567
product category
Un
its
Sale per day
Safety stockin days
Safety stock
Graph-48
Sensodyne- 72gms
1 10.42 0.42 0.57
0
3 3 3 3 3 33 3
1.26 1.261.71
00
0.51
1.52
2.53
3.5
Product category
Un
its
Sale per day
Safety stockin days
Safety stock
Interpretation
Sensodyne is a very popular brand in the tooth paste segment, where in it has sale in all
the categories. Also it is such a brand which has the maximum variety of 8 categories
with it. The safety stock is maintained for 3 days in the store. Safety stock maintained
varies according to the sales of the product. The highest safety stock is maintained in
whitening gel of 190 gms of 6 units. Where as in 72 gms the highest safety stock is seen
in whitening gel and extra fresh category of 3 units each. This clearly denotes that
whitening gel is a popular category among the people.
55
Graph-49
Colgate-190gms
21 1
32
12 2 2 2 2 2
4
2 2
6
4
2
01234567
Product category
Un
its
Sale per day
Safety stockin days
Safety stock
Graph-50
Colgate-72 gms
1 1 1
2 2 22 2 2
0
0.5
1
1.5
2
2.5
Total 12 Herbal miswa FreshconfidenceProduct category
Un
its
Sale per day
Safety stockin days
Safety stock
Interpretation
Colgate comes in 6 categories of which 190 gms has all the types and in 72 gms it has 3
types. Here the company maintains an safety stock of 2 days. The highest stock
maintained is in maximum cavity of 6 units. Where as in 72 gms there is an equal
proposition of 2 units each. Also we can identify that there is sales in all across the
56
categories of Colgate, because of which company has a huge shelf space for rented fro
this product.
Graph-51
Crest - 167gms
4 4 57
43 3 3 3 3
12 1215
21
12
0
5
10
15
20
25
Lem
on e
xtra
ct
Delica
te
Artic f
resh
Comple
te
Pro H
ealth
Product category
Un
its
Sale per day
Safety stockin days
Safety stock
Interpretation
Crest is the only tooth past which comes only in 167 gms. This is a niche product catering
to specific targeted customers. Also among the tooth paste segment this is the costliest
product in the store. Crest comes in 5 variants, where in all the variant has got a marginal
sales. The safety stock maintained is in Complete Crest toot paste of 21 units. Company
maintains a safety stock for 3 days.
57
Chapter- 10
Findings & Recommendation
From the research that I have conducted I have come across the following findings and
Recommendations:-
Findings Awareness among the Staff of TCS regarding modern Techniques of Inventory
Management & Control System needs to be updated.
Even after not having any Scientific or Technical Base the staff at TCS perform a
fabulous job in maintaining considerable standards for inventory management.
Inventory check is done after every 6 months.
Material handling procedure has to be improved like- Like this side up, fragile.
The receiving area at many stores has to be improved.
Every often it so happens that the products reach the store a bit too late, i.e the
supply chain management of the company needs to be upgraded.
The percentage of shrinkage due to employee theft has to be considered.
Products are available with reference to the quality and quantity according to
market customization like- European, Asian, Localities etc.
Recommendations The staff should be trained to use new system of Inventory Control system.
Inventory check has to conduct on every 3 months basis.
The manual inspection system that is followed could be replaced with electronic
scanner system.
For the reorder system instead of depending on staffs experience the company
should go for technical (automatic) reorder.
Proper IT enabled solutions (software) should be implemented.
58
Proper space management has to implemented in the store warehouse also, this
will give a good and proper management of goods stored.
Planogram has to be implemented at complete store level
Products which are not giving sales has to be removed.
Chapter- 11
Limitations
This study has tried to understand the Inventory management system used at T.
Choithram & sons retail with special focus on calculating the excess or shortage stock
and safety stock. This project was not an exception with restrictions. There were many
limitations, like as we were on visit visa we were not allowed to interact with customers,
nor were allowed to take any kind of market survey so the data collected was purely on
observation basis. Choithram’s as a company do lack in various aspects in inventory
management field. Company has been practicing the inventory management with the
experience of senior employees. They have been practicing the reorder procedure with
mere employee’s experience.
So because of being unaware to modern aspects of inventory management, there was no
such data related to inventory management. Even the inventory check was conducted
once in a year. Challenges in collecting the data were many. As the company was not in
keeping the track of inventory system there were no such data related to this field. So at
first data was supposed to be collected and then analyzed, so lot of time and energy went
in collecting the data with the help of Information Technology department of the store,
corrections and alterations always used to pop with respect to price and sales figures.
Analysis was done using certain formulas.
Last but not the least some other limitations were with respect to the employees working
in the store. Interaction with them, sharing there experience, clearing various doubts,
explaining the current working system of inventory etc during there working time was a
big challenge to this project.
59
Chapter- 12
Bibliography
Internet:-
http://business.mapsofindia.com/india-retail-industry/index.html
http://www.ibef.org/industry/retail.aspx
http://tolearn.net/marketing/retailing.htm
http://internationaltrade.suite101.com/blog.cfm/walmart_sets_up_shop_in_india
http://www.magazine.org/press_room/speeches/11332.cfm
http://www.indianmba.com/Occasional_Papers/OP129/op129.html
http://www.foodretailworld.com/
http://216.55.176.196/retail/ - Choitram’s official website
Books:-
Principles Of Marketing by Philip & Gary Armstrong (1996), 7th Ed. Englewood Cliffs,
NJ: Prentice-Hall.Kotler,
Marketing Management by Rajan Saxena of Tata Mc Graw-hill Publishing co ltd chapter
21 Retailing page 476
60
Chapter- 13
Annexure
Questionnaire used for Inventory management system
Interviewee:____________ Date: __________Designation:____________ Timing:_________
Human Resource related questionnaire 1. What do you call your inventory management department?
2. How many people are involved in your department?
3. What is the average qualification of people involved in your department?
4. How is the hierarchy structured? (store manager, quality mgr, stocker etc)
5. Do you have any Shift work in your department?
6. If yes how many people are involved in each shift?
Technical related questionnaire 7. What is the stores average stock in hand?
8. What is the time period after which a regular inventory check is done in the store and in the warehouse?Daily Weekly Monthly
9. How much time is given to stock taking and how many people are employed for it?
61
10.Do we follow the procedure for annual stock taking?Yes No
11.Who makes the following decisions:-What to store?-How much to store?-When to store?-Where to store?
12.What is the % share of fresh and perishable goods in the entire inventory?
13.What is the % amount of perishable goods that are produced by us and that is purchased from others?
14. Do we follow any special techniques to increase the durability/expiry of certain commodities?
15.How is the inventory check for perishable goods done?
16.What is the procedure that is followed stock taking and reordering (time)?
14.What is the procedure to calculate reorder point?
15.In the process of stock taking, inventory control, and reordering when does the store manager come into action?
16.Do we observe inventory shrinkage? If Yes, how much of it is due to -Shoplifting. % -Employee Theft. % -Inventory record errors. %
22. How are returns and damages handled?
23. At the end of each accounting year approximately how much inventory is found unaccountable? (in %).
Purchase and Sales related 17.Who issues the Purchase Order (PO)?
62
18.What are the documentations required for making a PO?
19.What is the procedure followed to make a purchase order, for local supplier and for imported goods?
20.What is the procedure followed after the PO has been received?
21.What system do we follow for Sales Documentation?22.Do we observe seasonal sales?
Yes No for Some Products
21. Do we follow a regular check between the cash counter sales and the Inventory records?
23.Is the supply and availability of products affected by seasonal variation? If yes how do we keep a check on it?
26.Do we have a duplicate receipt of the goods that we sale at the cash Counter?
Vendor related 24.On what basis is a vendor selected for a certain commodity?
25.Do we have a rating system for our vendors? If yes on what scales are the rated?
26. What suggestions do you have to improve the inventory management of the store?
63
64
Inventory chart used for collecting the data at Umm Suqeim storeFor the Period 12th July to 18th July
Store Keeper: Jitesh
1. Product Name:- Facial tissue paper *1 outer = 5 single packs Shelf In Charge:- Kamal *1 Carton= 6 outer
Sr.No
Brand Name PriceSin/Out
Shelf life
On shelfSin/Out
Store Stock
SalesWeekly
No. of visits by vendor
Timing of visit
SpaceAllotted
1 Masafi- Single Outer
3.7517.95
unlimit 22 pieces 10 outer
2 car tan 1231 Wee 1-2 Morning
9-11
2 facing2 facing
2 Fine- Single Outer
4.2520.50
unlimit 225
2 car tan1= 8 outer
2433 Monthly
1
Morning9-11
2 facing1 facing
3 Promise-Single Outer
3.5015.50
unlimit 224
1 car tan 5--
When ordered From ware
2 facing1 facing
4 Scott- Single Outer
2.7514.50
unlimit 225
1 car tan 2418 Wee 3-4 From ware
2 facing1 facing
5 Family- Single Outer
3.5018.75
unlimit 228
1 car tan 26
When ordered From ware
2 facing2facing
6 Kleenax- Single Outer
2.9519.70
unlimit 204
1 car tan 189 Wee 1-2 Morning
9-11
2 facing3 facing
7 Baqa- Single Outer
2.25 10.00
unlimit 204
1 car tan 35
Whenordered
From ware 1 facing1 facing
*Note: Similar kind of data was collected for other product
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Inventory Planning WorksheetFor the period 12th July to 18th July
Facial Tissue paper
Sr.No Description Sale/ Reorder Min Safety Safety Total Actual Excess Cost/ Value, Value Day Period Stock Stock, Stock Stock Stock (Shortage) Unit Excess Shortage Days Days C12xD12 C12xF12 E12+G12 I12-H12 J12xK12 J12xK12
1 Masafi- Single 2 2 4 1 2 6 22 16 3.75 60 Outer 4 2 8 1 4 12 22 10 17.95 179.5
2 Fine- Single 3 2 6 1 3 9 22 13 4.25 55.25 Outer 4 2 8 1 4 12 21 9 20.5 184.5
3 Promise- Single 1 2 2 1 1 3 22 19 3.5 66.5 Outer 0 2 0 1 0 0 10 10 15.5 155
4 Scott- Single 1 2 2 1 1 3 22 19 2.75 52.25 Outer 2 2 4 1 2 6 11 5 14.5 72.5
5 Family- Single 1 2 2 1 1 3 22 19 3.5 66.5 Outer 1 2 2 1 1 3 14 11 18.75 206.25
6 Kleenax- Single 3 2 6 1 3 9 20 11 2.95 32.45 Outer 2 2 4 1 2 6 10 4 19.7 78.8
7 Baqa- Single 0.42 2 0.84 1 0.42 1.26 20 18.74 2 37.48 Outer 0.71 2 1.42 1 0.71 2.13 10 7.87 10 78.7
*Note: Similar kind data analysis has carried out for other remaining products.
66