A

PROJECT REPORT
ON
INVENTORY MANAGEMENT AT
V.S. ENTERPRISE
SUBMITTED TO
PUNJAB UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF AWARD
FOR THE DEGREE OF THE
MASTER OF COMMERCE
SESSION 2023-24

SUBITTED TO SUBMITTED BY
PUNJAB UNIVERSITY SIMRANJEET KAUR
UNIVERSITY ROLL No.
42561
RAMGARHIA GIRLS COLLEGE,MILLER GANJ LUDHIANA.

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 Date: 18July2024
TO WHOM IT MAY CONCERN
It is certified that Ms SIMRANJEET KAUR D/O of AJMER SINGH of
RAMGARHIA GIRLS COLLEGE, MILLER GANJ Ludhiana has successfully
completed her training in V.S. ENTERPRISE from 03-06-2024 to 18-07-
2024.During this period Ms. SIMRANJEET KAUR has worked on project
“INVENTORY MANAGEMENT” and has successfully completed the work
assigned to her. We wish her all the best for future endeavours.

FOR

V.S.ENTERPRISE

Auth. Signatory

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 DECLARATION
I SIMRANJEET KAUR hereby declare that the Project Report entitle “INVENTORY
MANAGEMENT” has been undertaken by me as a part of my studies in DEGREE of M.COM. I
have complete this study under the guidance of DR. AJIT KAUR MAM (H.O.D) of
COMMERCE DEPARTMENT of RAMGARHIA GIRLS COLLEGE, MILLER GANJ LUDHIANA. The
matter embodied in this project report has not been submitted to any university or
institute for the award of degree. This Project is my original work and it has not been
presented earlier in this manner. This information is purely for Academic interest.
SIMRANJEET KAUR
M.Com 2nd Semester
Roll no.42561
Project Guide
[DR. AJIT KAUR]

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 ACKNOWLEDGEMENT
I wish to express my gratitude to V.S. ENTERPRISE for giving me an opportunity to be a part
of their esteemed organisation and enhance my knowledge by granting permission to do
project under their guidance.
I am deeply indebted to my guide, Mr. Ajay Goyal, V.S. ENTERPRISE,LUDHIANA for his valuable
and enlightened guidance. He provided me with the opportunity to learn in the organisation
and spread his valuable time to help me.
I like to express my special Thanks of gratitude of My Teacher DR. AJIT KAUR MAM as well
as our PRINCIPAL MAM who gave me this golden opportunity to do this wonderful Project
on “INVENTORY MANAGEMENT”. Which also help me in doing a lot of research and I came
to know about so many new things. I am really thankful to them.

SIMRANJEET KAUR

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 TABLE OF CONTENTS

Content Page. No

DECLARATION iii

ACKNOWLEDGEMENT iv

TABLE OF CONTENTS V

LIST OF TABLES Vi

LIST OF FIGURES Vii

LIST OF APPENDICES Viii

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 TABLE OF CONTENTS

CHAPTER CONTENT Page No.

No.
1. INTRODUCTION
2. LITRATURE REVIEW
3. RESEARCH METHODOLOGY
3.1 Introduction
3.2 Sampling Procedures
3.3 Sources Of Data
3.3.1 Primary Data
3.3.2 Secondary Data
3.4 Data Collection
4. DATA ANALYSIS
5. FINDINGS & CONCLUSION
5.1 Summary and Conclusion
5.2 Suggestion
Annexure BIBLIOGRAPHY AND
REFRENCES

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 CHAPTER 1

 INTRODUCTION OF STUDY

THEORETICAL FRAMEWORK OF INVENTORY MANAGEMENT

Every enterprise needs inventory for smooth running of activities. It serves, as a link between
production and distribution. For every process there is, generally, a time lag between the recognition of
a need and its fulfillment. The greater the time lag, the higher the requirement for inventory. The
unforeseen fluctuations in demand and supply of goods also necessitate the need for inventory. It
provides a cushion for future price fluctuations.

The investment in inventories constitutes the most significant part of current assets/working capital in
most of the undertakings. Thus, it is very essential to have proper control and management of
inventories. The purpose of inventory management is to ensure availability of materials in sufficient
quantity as and when required and also to minimize investment in inventories.
The investment in inventory is very high in most of the undertakings engaged in manufacturing,
wholesale and retail trade. In India, a study of 29 major industries has revealed that the average cost of
materials is 65paise and the cost of labour is 10 paise and overheads is 15paise of a rupee, 10%is profit.
It is necessary for every management to give proper attention to inventory management. A proper
planning of purchasing, handling, storing and accounting should form a part of inventory management.

An efficient system of inventory will determine,

 What to buy
 How to buy
 Where to buy
 Where to store

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There are conflicting interests of different departmental heads over the issue of inventory. The finance
manager will try to invest less in inventory because to him it is an idle investment, where as production
manager will emphasis to acquire more inventory as he does not want any interruption in production
due to shortage of inventory. The purpose of inventory management is to keep the stocks in such a
neither way that there is over-stocking nor under-stocking. The over-stocking will mean a reduction of
liquidity and starving of other production processes whereas under-stocking, on other hand, will result
in stoppage of work. The investments in inventory should be kept in reasonable limits.

MEANING AND NATURE OF INVENTORY

There are different meanings of inventory in different languages. In accounting language it may mean
stocks of finished goods only. In a manufacturing concern, it may include raw materials; work in process
and stores, etc., to understand the exact meaning of the work “inventory” Inventory may include the
following things:

1. RAW MATERIALS:
Raw materials form a major input into the organization. They are required to carry out production
activities uninterruptedly. The quantity of raw materials required will be determined by the rate of
consumption and the time required for replacing the supplies. The factors like the availability of raw
materials and government regulations, etc., too affect the stock of raw materials.

2. WORK-IN-PROGRESS:
The work-in-progress is that stage of stocks, which are in between raw materials and finished goods. The
raw materials enter the process of manufacturing but they are yet to attain a final shape of finished
goods. The quantum of work-in-progress depends upon the time taken in the manufacturing process.
The greater the time taken in manufacturing, the more will be the amount of work-in-progress.

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 3. CONSUMABLES:
These are the materials, which are needed to smoothen the process of production. These materials do
not enter directly into production but they act as catalysts. Consumables may be classified according to
their consumption and criticality. Generally, consumables stores do not create any supply problem and
form a small part of production cost. There can be instances where these materials may account for
much value than the raw materials. The fuel oil may form a substantial part of the cost.

4. FINISHED GOODS:
These are goods, which are ready for the consumers. The stock of finished goods provides a buffer
between production and market. The purpose of maintaining inventory is to ensure proper supply of
goods to the customers. In some concerns the production is under taken on order basis. In these
concerns there will not be a need for finished goods inventory. The need for finished goods inventory
will be more when production is undertaken in general without waiting for specific orders.

5. SPARES:
Spares also form a part of inventory. The consumption pattern of raw materials, consumables, finished
goods are different from that of spares. The stocking policies of spares are different from industry to
industry. Some industries like transport will require more spares than the other concerns. The costly
spare parts like engines, maintenance spares etc., are not discarded after use. Rather they are kept in
ready positions for further use. All decisions about spares are based on the financial cost of inventory on
such spares and the cost that may arise due to their non-availabilityefficiency, aggressively expand its
reach to customers, continue to invest in brand building activities and ensure customer and shareholder
delight.

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  COMPANY PROFILE

INTRODUCTION

V.S. ENTERPRISE came into existence in the year 1990. A one of the leading manufacture, importer,
distributers and supplier of an appreciable and durable range of safety products. we are appreciated in the
market for completing orders on stipulated time without compromising with quality, we offer a wide and
appreciable range of safety products, safety shoes, safety helmet, safety gloves, safety jackets, safety bets,
safety net, safety goggles, safety mask, safety equipments, safety gumboots, PVC ear plug safety reflective
jacket solar energy products, industrial tapes, rain safety, equipment body protection products, welding
accessories, MIG welding, all brands of welding electrode & stickers, disposables wear, safety shoes, Q-
manager safety mask, industrial safety belts, as we work in according with TQM approach, we ensure our
clients with the optimum quality and safety of our quality tested product. We offer discount to our value able
clients for bulk orders and provide after sales service, our team is specialized in manufacturing products as per
the preference of our clients.

VISION & MISSION

VISION

V.S. ENTERPRISE objective is to establish itself as the preeminent global manufacturers and
exporters of safety products, accessories and allied products, along with providing world class
quality products and timely delivery.

MISSION
V.S. ENTERPRISE is committed to safely providing high quality and valuable safety products and
services for our customers worldwide. We will work with our employees to discover opportunities
for their continued growth and expect the highest levels of integrity in return. We will contribute
to our communities for their betterment. Our financial success will be through satisfied
customers, employees, and communities.

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NEED FOR THE STUDY
 Inventory management helps companies identify which and how much stock to order at what
time.

 It tracks inventory from purchase to the sale of goods.

The practice identifies and responds to trends to ensure there's always enough stock to fulfill customer
orders and proper warning of a shortage

OBJECTIVES OF

PRIMARY OBJECTIVE

 To study inventory management system of V.S. ENTERPRISE.

SECONDARY OBJECTIVE

 To analyze the inventory position through various financial ratios .

 To understand the problems faced by company in handling inventory.

SCOPE OF THE STUDY

 The scope of an inventory system can cover many needs, including valuing the
inventory, measuring the change in inventory and planning for future inventory levels.

 The value of the inventory at the end of each period provides a basis for financial
reporting on the balance sheet.

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LIMITATIONS OF THE STUDY
• The inventory details of company are collected for 5 years only

• The information taken from the company was limited

• In this study only limited ratios are used

 CHAPTER FRAMEWORK

CHAPTER-1 First Chapter discuss introduction of the study, Industry Profile, Need for the study,
Statement of the Problem, Objectives of the Study & Limitation of the study.

CHAPTER-2 Second Chapter Reviews previous studies.

CHAPTER-3 Third Chapter describes Research Methodology, Research Design,Data Collection,

Statistical Tools used for the Study.

CHAPTER-4 Forth Chapter deals with data analysis and Interpretation

CHAPTER-5 Fifth Chapter enlists findings and conclusions