CHAPTER - V

Invcotoly coll~lltIltc5 ;I SllbSlnntla~ poltlon of the cullent assets of lnnrly

busmess trlgl~ll~satlolls i t 1s Llle stock of icsoulces held fa1 F I I ~ I I ~ p~otltlct~on

act~vlty ot sale 011 ill1 avclage lllvellloly ~1ccou11ts €01 apy~ox~liiately 50 lo 60

per ~ e n t 01 t l ~ e cu1rt:nt tisicti I I I ~~llnoat all b u s ~ ~ ~ e s s a n t e ~ p ~ l s r s Pludcl~t

lllil~~agclilellt 111 111vel11(11y 15 tile IIICII~IIIIIII: 1011 of efficieut w o ~ h ~ r ~ g cap~tal

maoagetllc!lt I I I tllc \[IIICIC 01 W ~ I I ~ I I I ~ cnl~~tal, effic~ellt , I I I ~ c l f c ~ t ~ v e

~lianagclncnt ol lnveritory ptrics 11 c l ~ a l l e l ~ g ~ t ~ g problc~n Effictcnt ll lvcl~tu~y

mu~ageunclil icquiles s l~cc~a l c a ~ c and imporlance to lrtiplove the finaticcal health

a11d catnlng capac~ty ol any buil~less ct~tc~pslsc

i t ~ v c ~ l l o ~ y boltl~nps ale oltcn ~onntlcicd as the glaveyiuti 01' ~ ~ I ~ I I I C S ~ , 115

su~plns { t ods havc hcc11 a p ~ i l ~ c ~ p n l ~tiuac ol bus~ncss f a ~ l u ~ c l I I I ~ \ , I I I ~ of

iitt~tutic 111 the outlook of bu51ncsa towartls Inventory inny be att~~btitetl to tlie

l n c ~ c a a ~ ~ ~ g i ~ ~ c , w~tlc va~lcly ti1111 L O I I I P I C X I L ~ 11f IJ I ISI I I~SS ~ I ~ ~ C I [ I I I S C S , ~ I I ~ C I I C Y ot

~ n o d e ~ n I C ~ ~ ~ I I I C I I I ~ I I ~ T to cope wltll tllc busmess wolld n~ld lilgll idle cot1 01

oiacliine and men At l l~c S~IIIIC LIIIIC, "Lhe erficrent ~nsnagcmct~t nl~tl coiitrol of

lllventoty 1101 ollly sc~lves tlie acute p ~ o i ~ l e r ~ ~ of 11q111d1ty but also e1111onces annual

ptufits illitl C B U S C ~ sl~bsta~lllal I C ~ U C ~ I O I I In 1l1e work~ng ci~p~tnl of a f i ~ m " ~ The

Increnslng ~ tnpo~tn l~cc of illvelitolles H P n Cole ~ ~ ~ g ~ e d ~ e ~ i t 111 gloss W O I ~ I I I ~ cap~tal

obv~ot~sly calls fot maxlmunl offic~ency 111 mm~aging them f o ~ the ove~all

efficlcut tniluagetnent of wo~lallg cnp~tal.

'Tile tcltn rnvet~to~y, dertvetl fiorn the Plenoh wold 'Knvent;uie3 and L a t ~ n

wort1 'Inventfirrum', ~ n ~ p l ~ o s a irst of thiags found As such the tenn '~nvento~y '

mny mean any detallctl ilst of tlilllgs I-lowevc~, 111 cuinrneic~nl pa~l.ilice. ~t

lmpltes s~ock-~~~-t lnde, riieolit f o ~ sale e~tlier m its o i ~ g ~ t i a l fo~i i i , oi aftet

ptocessi~igi~ni~ii~~ff~~t~~tttig It illdy be spelled out as stocksls~o~er o f i itw

~iiatettals, w o ~ k io p t o g ~ e ~ r :lll(l iiiir5lied goods' I t h i i ~ been clctiticil lty tlie

Aiiiel.ican inrt~tute of ~ccoi i i i t . ;~ d \ Llic aggiegate of those item5 o f taliglblc

peisonal [ptol~ctly w l i ~ch (11) 811c llclll In1 sale 111 tlie oitltriaiy coulse ol'bus11ie5\,

(b) ate la the ptoccss o f ]11oduclto11 ~ O I srich siiles, ut (c) ale to be ~ l l ~ ~ e l i t l y

consutlled i n the p~ot luct~oi i o f goods o i sclvlces to be dvallable foi s;ilc5 I t 15

cleat f io~ i i llic above t l e i i ~ i i t ~o~ t that invc~itot~es co~istst o f the f r~ l low l l~g ty11i:s

I) Raw ~i i ;~tc t~;~ l ! , aic l l l o~c b i i ~ t ~ IIII~LI~S ll181t ale convc~terl into f i i i ~ ~ l i c t l

good5 t l i ~o t~g l i llic ~ i ~ i ~ i i i i ( i l ~ t ~ ~ ~ ~ i g IIIIICCSS,

11) W~I~-III-IIIOC~? iiicludes IIIO(ILICIS, wl i l c l~ ale only pait wily tlt~ouglt a

t nn i i l ~ f i ~c l u~~ t i g ptoccs~ Raw ~nittertnls, labou~, subco~i l iac l~~ig atitl ot l ie~

n~anitf ;~ctu~ing cost5 all togetiic~ constltilte wo~k-111-plogtess,

111) I'11its1ietl goods ale t i i o~c co~iil)lctely tna1111Cilct11ied p~ot lu~ ts , wliicli ale

~c;ltly rot sale to lllc illtimnte usel,

iv) Spilics atc tlie items ~equiieri to keep plant a ~ i d i i ~ a ~ l i ~ t i e ~ y 111 w o ~ k i i ~ g

c o i i d t l ~ o ~ ~

Some otlier exl~erts have definetl lllventory drfferently, G~ea te llns defined

mventoly as "the movable arltcles o f the bus~ness whtcli are eventually cxpected

to go lttto the flow o f trade"! 111ventory fiotn the vlewpomt o f financial lnanaget

Is die agglegntc value or l i lw i11,1t~11ill~, stoles and spales, coiisomnbles. w n ~ h III

ptocess, filrisl~etl gooils 111 WIIICII l l i ~ f i t 111's fillrils llavc bee11 invested7

As the 1)lesellt 5tiltly leiatcs to the excluslvc hadllig concenls o f consoinel

c o - o l ~ u t ~ ~ ~ v c ~II~XI balaali, lire liivclitolles of supci baj.aa~s ic])ic$rtlt t l lc

f i~i~slrcd goods, WIIILII a i ~ II~CIIIII ILII llic i i ) t i~~iate IISC of cotrsu;ilels

Al l 1111s11rcsi IIIIIIS ~ C C I I I C IIICII CIIS~OII~CIS LO ?til)ply gootls ~egt;lally irt

leasonable 1111cc.; l'lris aicuiii~lcc iicccaslltltcs thc Iiolt1111g afll lvclltoiies foi tile

s~riootli l i ~ i l c l ~ o i i ; ~ ~ g or 11i1'1ll lc~~ ~IOICOVCI, {IIOCIIIII~~ III~LCI~IIIIP IS also a 111iic

consu~o~ l~g plncc$i A l tllc ssiinc IIIIIC I~crlrl~ng of tna tc~~~ i ls i l lvolvcj cost

BI;SIIIC% Ii111ri Ilolrl ~l~vcntoi lcs ~cep l l ig 111 vlew tlrlec getle~al s~iot lves~

hi~iisactloll irrcltlve, ~ICL~III~IOIIIIIY IIIO~IVC, ant1 sl1cculat1ve llrotlvc

a. The tl:~os:~ctino lllrltivc

A c c o ~ t l ~ ~ i g to lhls t~ io l~vc, i i ivctllo~ler oic to be ~ ~ i a ~ l ~ t n ~ i ~ c r l bnsccally I'OI

the opc~allolinl coc~vcnicl~cc so ns to have uci~~itct~upted product~an-III~ and snles

opelation?

b. 'Tile i1recnuliona1y mulive

P~ecaut to~ i i~~y lnotlve llecessltntes the lioldiilg o f ~nve~~tor lcs to gllald

agamst usk 01 unprctllctalile clinnyes In tlelnand u l d supply folces nntl otlre~

factors

c. Tlrc spec~il:rtive rrrntivc

'I'h17 mot~ve ~iiflucllccs tile tlcclslon to lrlc~ease or ~et loce lnve~itory levels

to take nt lvi~~~tdge ol"[)ltce flucluallous

I n r l x ~ t:irice of inve~ltrr~ y mt1n:lgellicllt

i:lfect:vc ~~iila;rgclncnt o f ~ i ~ v c ~ i t o t ~ c s ltlt~~iistely 1s ieflcctcd I I I the ovc~all

profit;rbil~ty ol tllc bus~~lcss AIIY bosrncss 15 llltlgctl by the well-ilcceptetl s~iigle

'I yaldstlch ria~ncly - llrc rcluin o11 111vcsl111cnl Ft11 ti glvcrl volume of bus~riess,

tllis ~ t ~ t e I$ 111iix11111ir11 W ~ I C I ~ Lllc cil[)ltal llivestmctit IS r n l r n i ~ i ~ i ~ ~ i ~ ~ .I 11111 I S ti) say,

~f foi t l~c strlnc volnnlc oS buwess tlrid li~ofils, c i ~ l ) ~ l d ilovestllient I \ ietluccd. the

late of tcturli on cnp~tal 11.;cs A \ cons~tlerable ium of nlolluy 1s loclterl I I ~ 111

invcnloiy, by ~ c t h ~ c ~ t ~ g revestmcnl 111 !r\veololy, we cno b i ~ n g about n cl~angc in

the t l eno t~ i~~~a tor , w l ~ ~ c l ~ wrll 1;ilsc l l ~ c ~ i ~ t c of 1elu111

0bjcctivc.i of lnvcritoty M s n a ~ e l a c n t

As iiuted al~cady maxllnotn eri'ic~cncy 111 the matingement of inventolies

ennl~lcs a liirrr to a c l ~ ~ c v c cffic~cnt ~tianngement of its w o ~ k ~ n g cap~till Suci~

~ n a ~ ~ a g e r n c ~ ~ t shoultl ~ e s ~ l l t 111 tile 1n;lxlinisatlon of tile film's wealtl~ Therefo~e a11

e l l t e ~ p ~ ~ s c should 11e11lre1 l~old excessrve 111ver11o11es ]lor liolti liladeclllate

~nventol~es, but 1na111ta1n an optimum level Excess~vi: and inadequate levels of

~ n v e ~ ~ t o ~ y arc t l~c two dnnycr points belween wh~ch the optlrnum level of

nventaly nlvcstlnellt hes. 'rhos t l~c olijcct~ves of inventory msnngement 1s to

steel cleat nl' these tlallge~ ~ O I I I ~ S and inalntaul optllnutn level f o ~ the smooth

funct~on~tig o r busllle~s,

(I) so AS to ensutc it conlltllluus supply of matettols to facllttate utl~~ite~tllpted

p ~ o ( l ~ ~ ~ t t o n ol $dlc, dtld

(11) heel] tlllnlrntitti ilivcvtment in inventotlcs to ~naxl~nlse p~ofitnblll~y

IPlolic~ tn;lnagclticltt 01 l~tvcl i lo~~es not only solvei the acute ])~oblc~tt ol

I ~ q i ~ ~ d ~ t y , b11t also t~lc~eases tlie l i~ofi tab~l~ty of the busliicss iotd causes

sub?tantl;ll ~etlucttan 111 tlie wotklt~g ca111tal of an u~lde~takllig

Uenetitu 1111tl cost7 il l llolding invrntsry

i'lioogll 11 15 ctse~it~lll to llave tetlt~~letl tnvetltotles, excewvc ltive!itotlc$

ate ~tllc tc$nutccs oSllic ti1111 So I I I V C S ~ ~ I I C I ~ ~ 111 I I IVCI I~OI ICS IIIVOIVC'; cellilltl cost$

atltl benefit iiivcntot~c< ate held 111 stock becaure fot th~ee leasons They would

seive 8s unrcly stock5 itgaln.;t tlie ~ n t e ~ ~ t t p l ~ o o coused by l in~lu~e o r suppllcs lor

whatevc~ tcasoli 'I'llis 15 a tlltc ~lcetl of evcty co~~t~i toous hatltng colicern 'i'lley

enable tltc fitln to t t i k ittivastage of lowet lii~ccs, tlnough bulk pl~tcltasttig,

whicl~ 15 ~lseSltI linrt~cula~ly wheu tlie tiatrlte of ~na te t~a l 1s seasonal It ttiakes ibl

mmlmtvng admlntstrativc costs lnvolved whe~lever a pt~lcllase 15 made

Stmllil~ly work-~u-p~og~ess 1s held to l~ave a cotitinuous product~oll lun and

fi~usl~etl goods arc rnalnta~lled to prov~de customet serwces

As against these benefits, t l~ete are celtam costs, dtlect atid 111d11ect

involved 111 l~oldttig illventory There are three tl~rect costs, whlch are

lmllledlately c o n ~ e ~ n e d wltll buylog aitl lioldllig goods nnmely inatella1 cost,

oldel cost ant1 cilllying cost of llivelltoryl' The lntlfrect costs include the losses

of tevernle that valy with tl~ffellllg inventoly lna~lagenient decis io~~s Tllcy ajc

costs of flintis t ~ c d up In ~~ive~i to ly and costs of I L I I I I I I I I ~ ant of goods

A tiglit ~oiiliol oii qtocks 15 neetled in oltlel to solveihe tangle of costs and

benefit5 so 21s to ilrllve at all Optl~IIlll level of lllvcllto~y Thos, 11s stock lcvcli

inciease, the gteatel IS the plotcctio~l affoltletl lo tlie ptotluct~on, tlie gleatet will

be tlic ability la lncel customcl leqolielncnts, linwcvei g~eilt llic sioclt levels

ma~nta~octl alltl gtcilt tlle costs The firvarlc~al executive should ail11 at an

optllnuln lcvcl of ~livci~loiy by acll~cvlng ii t i ; ~ ~ l c off betwecil costs iliitl bcncfili

so ils to I I I ~ I X I I I I ~ S C 111c filin's wealtll"

firfic~ciit liialiagellleilt of llivcnto~y mlnllnlscs tlie cosl and miixliiilses the

Ictuln on ~ ~ ~ v c s l ~ ~ r c ~ i t 111 a bloatlet \ensc, lliveutoly tnnongcnient !nay be tlefined

as the sum total ol' Lllose acl~vlt~es tiecessaly fol tlie acqui?ltloll, stolage, snle,

disposal ol li$c ol ~n~itc~l ; i l i;ffectlvc l~~veiitoly ta;ulage~neilt of a bi~s~ness urllt 1s

~eflecterl 111 the efficlel~t tnilnagciiient of available filtltls alltl plofitabll~ly A

plopel laventory maaagcmenl not ollly helps In solving the acute p~oblern or

I~quld~ty but also lllcleascs p~ofits and causes sulbstnntlal ~educ t lo~l In the

wo~klllg cap~tal of the colmelil. There ate sevelal impoltant tools mld techniques

of lllveritory management and conho! They iue tleterminatlon of stock Levels,

deterlnmatlon of safety stocks, selectiuig n proper system of ordelmg f o ~

rnventoly, determination of eoonomlc order quantity, ABC analysis, VED

anaIys~~, ltivcntoly tlltnovcl I ~ I ~ I O ~ . ziglt~g scbedule a f iiivento~~cs, class~ficatton

illl(l cotlifcilt~on o f ~llvcotolle.;, plcp:l~ntlon of 1nveiitol.y lepolts, etc Of these

detc~~olnntioll of h l o ~ k ICVCIP, dctcllllllldtlo~l of CCIIIIOI~IC oldel ql~al~tity, ABC

sialyvs, all11 VI;Il allnlysli ,Ire impottdtit tools l'llese nlny be hlicfl) crinsldc~cd

Delc~ 11111liit1011 i l f S t l )~h IIcvcI~

C; i~~y lng of loo IIIIIC~I i l l i t l loo llllle of slocLi IS t l c t ~ ~ r n e ~ ~ t ; ~ l IC illc fill11 I f

the III~~II~III~ level i r too liltlc. tlic li1111 wil l h i ~ e fietiiieiil stock-niits I I I ~ ~ ~ V I I I ~

IIC~IVY oitIe1111l: LOI~ alltl i f tlic lnvcn(oly lcvcl 1s too lllgll it ~ v i l l ilivolve

LIII I ICLCP\II IY ~Ic-IIII 01' Cil[lllill I/ICIC~DIC, Ill1 ~ I ' f i ~ l ~ l l L IllVCll~OlY IlldllilgClIlCllt

~ccll i~tci LII,II :I l i i ln al~o~i l t l I~;IIII~~III :III opt i~ in i t~~ lcvcl of i ~ i v c ~ ~ t o l y

L)etel ~ ~ ~ i n a l i o ~ i o f ICconomic 01tle1 011:lntity

A t lcc~s~ot~ ~iilclr~t Ihow 11iucl1 lo oitlcl Iln5 ~ ~ c i l t $lgn~licilnce 111 111vcr11ni-y

maniigclilcllt 'I'hc IIII~III~I~~ to IIC [~IIIC~IIISCII sl~o~i ld nclthc~ be s111,1ll nal LII~

because costs of buyllig aiitl costs o l ' c i i i ~y l~~g i~ialclliilb ale vcly 111gl1 ECOIIIIIIIIC

uttlcr quaoltlly 1s llic swc ol tllc lot lo bc p ~ ~ c l ~ t ~ s c t l , wlllcl~ IS cconoa~ically viable

Gcoe~~illy, ccunolnlc oltlet t l~i i i l l i~ly 1s the point ;it wll lcl~ 111venluly-ciu lying costs

nlc cq11d to olt lc~ coats I'lopcr tlete~ta~natio~l of econornlc oldel q~ la~ i t i ty will

Implove the c f f i c~c~~cy of invcnloly innungemelit

A-U-C hllnlysis

The ABC rulalysis 1s ti bas~c at~alyl~cnl tcclliilque fol illvcnlosy

ma~iage~iient, wlilch ellable tu11 tnn~lngccnel~t to dl~ect the e f fo~t wheie the ~esulls

will be h~ghesl Tlus tool IS popula~ly known as "Always Better Control" Tills

malys~s classifies the l~~vetltorles accotdlng to the impoltance of each

componcnt The ABC clnss~ficatlol~ of Irlvclltortes 1s based on tlie concept that

ltetlls of glealet value but lessel 111 ~ ~ u ~ n h c ~ should be watched mote closely and

looited a l k ~ by the rl~embers of top m a ~ ~ a g e ~ n c ~ ~ t ' s team, wl~eleas Items of lowel

value, but lil~gel. 111 numbel niay llol cilll (01 st11ct cot~hol, and may be In the

charge of a junior execubve The ]terns of the mttldle categoly are lnoderately

controllet1 by tile rnlddle level mat~age ts '~ Hetbelt, J kchmod, obsetves, "The

ABC plnt~ concenllates on lrnpoitatlt ltems and 1s also known as cor~tlol by

I I I I ~ O I ~ I I I I ~ ~ alirl exception"'"

VED analysis

' I l~e VED annlys~s 1s usetl geuelally f o ~ spare parts The lequtlernellts and

ilige~~cy of spare palts ale cl~ffeient fiom those of matellais Tlie A-B-C aunlysls

may not be p~opetly used f o ~ spwe palls S p a ~ e pntts ale class~lied ns Vltnl (V),

Esseld~al (E), and Des~~able (D) V~tal spales ale a must f o ~ lunnlng tile concenl

s~nootllly atld these must be stored adequately The non-avatlabllily of vital

spares wlll cause llnvoc in the concein. The E type of spares are also necessary

but the11 stocks lnny be kept at low figuies The stockrng of D type of spale may

be avotdetl at tlmes. If the leatl-ume of tl~ese spares is less, he11 stockrtlg of

these s p a ~ e s can be avo~ded. The classificat~on of spues under t h e e categolies

IS tmpo~tant. A wrong olassifioatlon of ally spiue w ~ l l crelte d~fficult~es fot the

ploductlolt depattment 'I'lte clnsstficatiort of spares should be left to tlte

technrcal staffhcca~tse they know tllc need, utgency and use of tliese spates

Co-opeiatrve super hazaatr, wttli wlttch the pleselil study 1s concernetl, ate

excl~rstvely tindrltg colicertis They (lo busuiess purely in consume1 gootls Thrts

tlte ~ n v e ~ i t o ~ r c s of tlle sntnple I I I I I ~ S ~ I C constltner goads l~lte p~ovlstotis.

cos~nctrc$, to~lets, ~ lo ths , ctr: Sn lltcy do not rlsc any of the above technrques fot

the mariagernerlt of ~nventoly III the wolk~ng cap~tal ttlalrngement In them the

top maxagcmcnt, viz , bus~~tcss ~ t ~ o ~ ~ i t g e t 01 manger of tlie untt looks 8fte1 tile

tltve~~loly rnvcstlnent polrc~es

lnveltto~ y rllitl WOI l ~ i ~ t j : Capitill

lo tltc , t~ca u r workrttg cirl~:li~l, ~ I I L I ~ C I I L r ~ ~ a t ~ a g c t ~ t ~ n t of ~rivcnto:te~ posts a

cltallct~g~tlg probleni Invcntot~cs trrually fo t~n mole that1 50 pel cent of tlie

cu~terit assets of n t~atlltlg ctitcrprlsc Evcir 111 rtnnll onlts, tltis pelcellloge lioltls

ttio~e 01 less v;tlrtl As such, so~l~ i t l t t ~ a ~ ~ a g c ~ n e ~ ~ t of ~tlventories gleatly liell~s

cCfictct~t ir~anitgc~nent of wo~htrtg ~irpititl ttl tlte piesent sludy of tlic slrper

bazaars, ~avetttory coi~ststs of vatrous es~critral items l ~ k e piovislon, cosmetics,

cloths, clc 111 thc lollowteg taliles, analysis of tnve~itory martngernetrt of tlre

satnple stlpet bozaats 1s ptesetited No super bazaar ltad any sepalate patteni of

mvetltory lrnaaigement f o ~ tl~c smooth fuocttonutg of its busrness operatroils All

the sample utitts ale following ally lnetltod of l~iventory management, hnd~tronal

oi otl~ct wrse, whrcb is convenient to cnrryout their operations.

Quaiitllrn of ltivestment in l i ivc~~tnry

All h a d ~ n g concelils geilelally keep some stock to meet the11 customel

~equnerneiit? The ptescnt siliill~le sltpei b~zaa ts also innmtotll stock of vaitoos

essenttal goods to rneet llic ~cqtitietnents of (he11 membe~s in p ~ l t ~ c i ~ l a ~ ar~tl

otl~ets 111 g c r ~ e ~ a l Eacll tliaildgctlictli has to decide on t11c basis of its past

expettencc the level o r Illveitlllcol Ill lllvelitoly to bc rniirle on vattous ileins lo

run the bustness w~thoul any iillc1luptlon A [letatled lnvestlgatlan is rnittle

rcgatd~ng tlie s ~ z e of ~ t ive i~ to~y ~nitnllatnetl by the sntnple supel bnzants tlul~og

the pettorl of study in llic littee icgioilr vtz, Raynlnseema, Coastal Andhtil, tltid

rela~igatia

Sicc nf 111v~lltol y

Tablc No 5 1 gtven below Illebetlts tlte rue of inventory 111 t l ~ c sclcctcrl

supei bazanis af Rilyalasecmii tluitng the p e ~ ~ o d of s t ~ d y 'The aveiage stze ol

invciitotlcs 111 t h ~ s legloll rtgt~tficailtly iociea5etl duttng tlie slurly pettotl It

tac~cased fiom Rs 6 391aklis in 1991-92 to Rs 15 07lakhs 111 2000-01, ~eco id~t ig

inole than two trtnes of t~~ctcttse tluitng tlic pettod In Lhe ~ndivltlual study of

super bnzaals, Maanatha reg~stc~ed a fluchlation in lnvestmetlt in t i~ve t~ to t~es wllh

m werage of Rs 11 07 li~kl~s 111 Balaji tile s z c of t~~venlortes vai~etl betweell

Rs 12 62 lakhs and Rs 33 62 laklis, wit11 an average of Rs 22 95 Inkl~s In

Kacllttn the ~nvestment varied f~oiti n low of Rs 1 45 lakl~s to a lugh of Rs.2 57

lakhs w ~ t l ~ an average of Rs 2.13 laklis during the shidy In Anaatapui it raiiged

between a low of Rs 8.17 I&hs xl~d a 11igl1 of Rs 17 23 lakhs with an average of

RS 13 26 lakhs Aiid in Proddatur the slzc of ~ ~ ~ v e u t o i y cons~dclably flnctuated

f io~n Rs 2 1 l li~klls lo RS 7 02 lnk11~ with aa avciage of Rs 3 53 laklls

Teble No 5 1 Sizc of lavelitolie~ in Rayalasce~~ia legion

It 1s filitlici evldellt ~ I O I I I rl~e table tlnoug11 tlie co-efficient of vali;ltloe

~ c g a i d ~ n g conclstency tlint the Kadluil ant1 Anai~tapm supet liazaai? weie

consistent (0 20) 111 malnlalmng the illvesllllcnt m it~vcnto~ics, wllile the

I+oddatu~ Super Bazaal was incon51steot (0 51)

Table No, 5 2 shows the slze of iilve~ltoly III Uie selected slipel bazaals of

the Coastal legton duriiig the stlltly peliotl. Tlic average s a c o r itlventolies in

Ulis region nodel lately lncleased tluntlg the 10 years of st~ldy The ~nvestrnent 111

Rs 28 62 lakhs On an average the super bazaars me consistet~t 111 ~nnnngnlg the

inventor~es whose CV stood at 0.1 I durlng the sh~dy ilnde~taken In~livtdual unit

data sliows that the invesrmeiits in lnvento~res vaiied belwcett Rs 7 44 lakfis and

~ ~ 1 6 7 0 lakhs In the Kalpavall~, R s 8 2 1 Iakhs and Rs 1260 lakha III

St~kakularn, l<s 32 50 laklts a ~ i d Rs 64 3 1 lakhs iii the VSP, Rs 53 I3 lakhs and

Rs 78 45 laklts III Vlsnkl~apnllra~n. altrl Rs 7 36 li~klis and Rs 14 64 laklls in the

Rs In lakbs:

9 62 34 37 76 43 8 10 27 33 --- 1260 3502 64 83 8 01 25 58

~ ~ 53 . 13 736 - 2273 - 71 03 7 54 27 02 -

~ 511 48 7 71 26 92

1007-98 .- 5431 5681 1183 3164 1998-99 62 46 6342 I187 - 3188

54 67 6641 I2 10 3082

65 73 9 69 28 62 -- -

(i 891 264 313 C v - -- --- 014 0 2 7 011 Snurcc C o ~ ~ ~ p ~ l e r l fio111 A I I I I U ~ ~ Repa~ts C V -Co-efficient of Variation

Fuilltr:~, lltc [able leve~lls lllc co-ci'ficicnt of vatlat~ott of supei bnzaais in

mattagiilg the investment 111 luveetorlcs The V~sakhapattiarn Supet Bnzaai was

conslsteur, its CV slntldli~g ot 0 14, ant1 the otl~el supel bazaals Slrkakulam, VSP

and Kalal~i~vall~, and Oligolc followed it In tllnt oltler

The table 5 3 ieveals the mnvestment of lcvveilto~les 111 t l ~ e selected supel

bazaars of Tclsltgana The average size of lllvontorles in this regton ral~ged fiom

Rs 3 42 lakhs to Rs 8.03 lakhs with sn avelage of Rs 5 33 laklts The super

bazaars wele corrs~stellt (CV stood at 0 24) In Inimaging Lhe inventones rlurlng

the per~otl of study The table ;llso plcsents the s u e of lnvento~les of the supel

l&hs w ~ t h an avelage of Rs 5 12 laklls, 111 Alljaill Supel Bazaar it ranged between

va~ied f i o ~ n Rs '3 21 lak1:i to Its 8 62 lakll? wltl~ an average of Rs 6 19 i,rkh~, In

Kalpaliltha it ranglllg betwecr~ Rs 6 20 lakl~s arltl Rs 16 32 lakhs w~t l l all avelage

of Rs 8 16 lakhs ant1 in Atlersha l l ~ e lrrvellto1les slze vatled between RqO 26

lakhs ant1 Rs 1 45 lakhs w~tll an avct,igc of Rs 0 02 lakl~s

Frrrther ~t 1s evident froln the tnblc lltat tlie co-effic~ent of va~iatlon of the

Neelagln Super Bazam was more co~lsistent (0 33) than that of the otlie~ sarnple

Utllts af the regton.

bnzants weic conslstcut (CV stood at 0 24) In tnanaglng the iliventoiles tlrillng

the pe~iot l of st~it ly l'be table also p~eserlts Lhe slze o f ~tiveiitoiies o f the supet

bazalus 111 K;unadliemi tlic iiivcstment vaiied fioni Rs 1 17 lakhs to Rs 7 56

laklls w ~ t l ~ an avcragc of Rs 5 12 laklis, 111 A i l~an i Supei 3azaa1 i t tnnged between

I<r 3 03 alld Rs 9 99 l a k l ~ ~ wit11 on aveiage of Rs 6 27 lilkhs, III Neclai2111 tlie i izc

vni~cd CIDIII R \ 3 21 Iahbs to I<$ 8 62 lnklis w ~ t l i :in aveiage of Rq 6 I 9 lahili, in

Kall~alatlia i t iatigiilg betweeii I<( 6 20 laldls a~ i t l Rs 16 32 laklis w ~ t l ~ ail aveinge

of Rs 8 16 l ;~kl~s and in Arlaislln tlic invctltoilcs size va~iet l bctwec~i Rs 0 26

Ratio of 111ventntieu to l'otnl Assets

lnvestinellt 111 invelltolle.; cno be exp~essed 8s n petceotagc of toull assets

In o tdc~ to know their ~ l l n ~ c trf li~vcslinetlt III t11c totid assets of tho elltelpilse

'me fnllowlng table\ picicnl ihc !nventol~cs to total assets ~ a t ~ o of selected wpel

bnzaa~i in thc t l l~cc leg!oll$ of Allrllltn I1latlcsh

pel cent w~t l l an ilvelage of 36 48 IICI cent 111 Anantnpm it ~nrlgcd Fmrn 9 53 pel

cellt to 19 8 1 IICI cent wltll all avelage of 16 97 pel cell1 And III Plotltlahll the

liltlo vatlet1 hctwccn 9 26 pel cent d1ld 25 25 pel ccnt w ~ t h an ilvelage of 15 55

pel cc~it dui111g Llle study I I E I I O ~

I t obvious L10111 the above table that the Balql Super Bnziln~ liad 119

llivesttne~lt cons~s tc~~t ly (0 10) 111 invcntolles in p1opo111o11 to totiil assets The

co-effic~cnt of vaual~on was I11gl1 I" Mainat118 slid Pioddatur (0 38) and ~iiotle~ate

111 Anantril~tn (0 18) nntl Kiitllll~l (0 10) dullng the study pellod

C V - ~ o - e k o ~ e n t ofVnrtnt~on

T ~ b l e No. 5 5 presents the ~~lvenlories to totnl nssets latro in the selecled

supel bazonrs of the Constal re8lon duiiiig the study penotl. The nvclnge rntlo

varier1 horn 25 9 1 per ccnt to 39.72 per colt From the analysis of utdlv~dual co-

opcinttves, it 15 c l e a ~ tllat lo the fililpavalll Srlpe~ Bazaat the iatto vitt~ed F~oru

14 59 l)et cent to 20 41 per cent wtth all avelage of 17 61 pel cell1 In the

Snkakulam ?upel bazaar the latlo tattgetl between 34 10 pel ccnt and 56 62 pel

cent, wltll 1111 avetttge ilf 42 72 pel cent In the VSP 11 vu~lcd tiotn 36 39 pel cent

to 77 64 p c ~ cent with an avctnge of 59 09 pel cent in Vtsakhapnlnaln it ri~llged

between I9 20 1x1 cetlt allti 19 89 pel cent wtth all avelage of 18 06 pel ~ c n t

And In tlte Ongolc s u p c ~ bazaat tlle tatlo v a ~ e d between 14 60 per cent a t~d

19 89 11cr cent w ~ t l l an avctagc of 18 0 6 pel cent d m n g the study uncie~taltm~

I t cvtdc~rt hntn the tltble that tllc Ongole Supet Bazaal ltnd 11s tt~vestlr~ent

cat~s~stc~itly (0 1 I) 111 ~nventci~~cs 111 ptopolLto~t to total assets atit1 i t wits follawctl

by Kalp;tvt~ll~ (0 I I ) , V~cnkh;tpalttnm (0 17), S~~ltakulatn (0 18) attd VSP (0 27)

d11111tg the slutly p c ~ ~ o d , in that o l d c ~

I'ilble No 5 6 glven below tile lntto of l ~ t v e ~ ~ t o ~ ~ e s to total assets 111 the

selectcd co-upctilt~ves supet baleate O F 'relangana The aveinge iatlo o r the

sul)el beranrs vallctl between 18 73 pel cent ant1 29 74 pel cent w ~ t l ~ at1 avelage

of 21 12 pet cent antl wltli a constslcnl co-efficient of vntlattotl (0 16) in

m;ulaglng the lntlo Fro111 the itid~v~clual atialysls of tlie supel bazaats, it IS cleiu

thal in tlte I<iitnatlbenu Srtpe~ Baznat tt ra~igetl from 6 46 pet cent to 28 93 pet

cent w~tlt an avelage of 14 95 per cent Tlte raUo in the A I I ~ ~ I I I Supel Bazaars

vwled betwee11 in a low of 16.99 per cent aucl a high of 33.40 pet cent with all

average of 24 86 per cent, In the Neelagiri Super Bazaar ~t varied between 16.32

per cent nnd 115.09 per cent wrtli ne average of 35.09 per cent, m Kalyalntlla tlle

latlo ~nl~gerl between 8 67 [)cl all({ 18 67 pel cellt wlth a11 nvelilge of 12 01

pel cel~t And 111 Arla~slla tllr latlo v d ~ ~ e d betwceu 17 26 pel cent arltl 41 79 pel

cel~t w1tI1 an irvelage 0113 71 1ic1 Lent du~ing tllc study petiud

Adaisl~;~ Supci f3;1daa1 wns coilslslellt (023) wil~le Ka~natllie~~u tilt1 not malntaln

the roil0 co~~s~stenl ly, its co-c l l i c~o~t of v;l~lnt~un s t o l ~ d t ~ ~ g at 0 56 rlu~lng the

Invento~ics to currcnt nssets inti0

Tl i~s ratlo indicates tlie piopo~lion of inve~ltor~es illvestment 111 current

assels ~ u a ~ s t a ~ n c d by nn etitcrpnse it 1s rmpoltant ns the voll~tne of ~ t~ve~i to i ies

dec~tles the slnooth f i lnct~onl~~g of Lllc busi~tess enterprise

'I'ablc 5 7 g l v c ~ ~ 21bove t lc l l~~cs lllc tntlo 01 tltvenlolles to total asscts II I llic

selectctl sttpc~ bwai~is 01" ilnytil;~\ce~iia t l u ~ ~ i ~ g llle I0 ycats petloci of slucly I t 1s

clcat fto111 tllc lablc tlir11 III i l l l l l ~ \ L all 1111: five 'iill~er baza81s 011 a11 ave~iigc, the

llivelltoty c o t ~ s t ~ l ~ ~ t e t l dio1111tl 810 ~ I C I L C I I ~ of C I I I I C I ~ ~ assets Thc LO-cflicle~tt of

vallatlort slootl at 0 I0

It~dtv~tluslly, the ilvciage values oi tlic ttlt~o of lnvelttorles to cullent assets

wete stytltficnntly vmied among t l ~ e sample supei bnzn'rts The \atto va~w,<l

behveet~ 16 24 pel cetit and 58 17 per cent in the Man~allla Sitpel Elazaa~, 51 18

per cent turd 76 06 per cetil rn B a l q ~ , 36 42 pet ccrlt n11d 73 16 pel cent it1

Kadhiu, 25 79 per cent and 45 94 pcr cent 111 Attantaput, nntl 13.33 pel cent al~tl

41 78 per cent III Proddatut Tints, the co-effic~enl of vtu~atlon 111 the ]atlo of

~tlventories to current assets was lowest 111 Bnlaj~, followed by Analaotapul,

KadIil~l, Mamath11 and P~otltl~llul In (hat oltiel It 1s tliterestlllg to [late h a t

among t11c sample unlts, P~oddi~tul llatl tllc luwc~ avelage value intl~catlng a

C V - ~ o - e ~ c ~ c o t of Vnt~z~t~ol~

Tllc above i~lble No 5 8 pleiolls thc latlo of ~ ~ l v c l ~ t u ~ l c s to cullcnl assets

111 the sclcctetl supc~ balaa15 of tllc Coilstal I C ~ I I I I I tlu~lllg ilic 11el1od o r stildy

Tllc avelages of tllc lntio rcvcal tllat Knlpnvalll, Si~kakulnll~ ~ t l t l the VSP supel

bazilnls had lnolc than 50 pcl cellt of cultent assets whlle the V~sakhapati~am ant1

Ongole Super Bilznnn hntl mucll less h~dlv~tluril analyscs of the ltillos leven1

that 111 Kalapavalh tlie ratlo v;cl~cd fiom 47 43 per cent to 57 76 pel cent wlt l~ an

average of 51 36 per cent, in S~~kakularn it ranged behveal 51 40 pet cent m d

66.40 per cent w1t11 nn avelage of 57.64 per cent, III the VSP between 63 70 pel

cent alld 87 13 per cerlt wit11 an avetage of 75 17 per cenl, In V~sakhnpatnnm

bemeen 38 48 pel ~ c n L illid 53 64 Ire1 cell1 willl all avclage 01115 39 pel cent, ;u~tl

,, Ongolc t l ~ e in110 raligcd fiuln I8 96 pel Lent to 27 36 pel cerit w ~ t l ~ ,111 avelage

of 25 0') pet cerrl

The tahlc also ~cvcillq llie co-eSficle111 (11 viliratlorr of the latio of the

sillnplc s u p c ~ bazaa~s alld tlic cxtclll of consistency m malllaglng tlie mvestiiient

ilrveiltorlc\ in [ ~ ~ o p o ~ l l t ~ n 10 tile ~lllletl! asyet On tlle whole, all tlic siilnple

lllilts werc consislent lntl~v~tlually tllc Kalpavnll~ Sapel Rilzail~ had a

colislslency of 0 07 followctl by Si~kilkularn, Visakhapato;lm, Ongole and VSP 111

I ,11>Ic Nc 5 9 liiveritor 1c5 to ( ' I I I I c l~t Aa$cts R,itro 111 rolal~gar~a I eglon

(Ill

51 26 1823 45 13 3236 5543 I9 1 1 60 35 ? 7 30

~~~

5285 1945 54 64 j 6 0 0

21 61 I4G6 38 12 31 31 32 16 1.1 5'3 -zS6! 28 58 13 22 5647 3279 -- 1 7 5 0 2742 59 09 4239

12 80 0 28 023 0 2 2 0 13

Souice Co~nlrilctl Hon~ Allnlial Reports C V -Co~eflic~coi of Vnrlntlo~~

The tatlo oC ~ ~ i v e ~ t t o i ~ c s to canent assets 111 the selected stunple supel

bazna~s 111 Tel~o~gnna is presented el Toblc 5 9 d u n g the petrod of study On an

,lvetagc the salnplc F I I ~ I ~ I bazaals I1:ttl 20 to 40 gel ccnt of tnventolles 111 cultelit

assets

The tt~tl~v~tluitl tlata {if llic sllrlel bazaai? teveals tllat in the K i ~ i ~ l ~ t l h e ~ ~ ~ i

Supel Unzan; the tatlo vdlletl llclwce~l 1 1 42 pet cent ntltl 43 93 pet cent wtth it11

ovelnpe of 27 26 ~ J C I cell1 lo llic Anl;ln~ Slipel Bazaat tt ~ , t t~ged ftoti~ 28 39 pel

ccllt to 40 29 pet cent wit11 ill1 iivcltige of 37 04 pet cent The Inuo of the

Neelagill Supel Uni.nat vnllcrl ~ I ~ I I I I 21 61 per ccnt lo 55 43 pel cent w ~ t l ~ an

iiveliige of 15 32 pet celll, in tllc Kall)alalha it langed from 13 22 pel cctil to

27 42 pel cc t~ t t v ~ l l ~ a n ~ivctiigc ol 17 87 pel cent And in the Atlalsl~a Supct

Biuzaa~ 11 vit~tetl Iic~wccii 26 20 pet cent ,111tl 61 88 pel c c ~ ~ t wttl~ an nvctngc of

51 49 11e1 ccnl t l u ~ ~ n g tllc pcitc~tl tii a t ~ ~ d y

I I 15 clc~ii l io~i i tllc iiliovc U~blc tllzit Llle Atilan~ Silpet Unztlat was

cons~s lo~t 111 tn~iiiti~gt~~g IIIC lilltn illltl 115 C O + C ~ ~ ~ L I C I I ~ of vattatiotl qtood al 0 21 It

is followc(l by Atliitsli;~, I<itlpdla1li;1, Neelnyltt, atltl Kalllntllletl~i supet hazna~s III

tbet ottlet

ltlventoty T U I tlrrvcr Rtrtio

It 15 the tntto Foontl by tlt~tdtllg tlie cost of goods sold d i ~ l i ~ ~ g a yeat by llle

avelnge invcnloly it is a lnctliotl of rwlcwing pcrformnnce nnd cont~olling

illventones pe~codicnlly to check illc inventory of each type of stock The

it~ven(oly t u ~ n o v e ~ iotlo ~ c t s as a11 l i~d~cator of the liquidity of lilventoly A

lug11e1 tunover Indicates t~ tllotc crlic~etlt tnnllagement of invetitoty Gecleraliy,

the manngcment of an enlclpltse plans ac~d manages its bustl~oss w ~ t h

'Tablc 5 10 sllows illc lnv?lltOlY t11111ove1 lalloll of the selected super

baz~ars 111 ll;~y~ilasccnla (111 ill1 .Ivct:lge the tdtlo flttctllatetl betweell 9 61 timer

and 14 03 tltnes, wtlh Lollrl~tency 111 Lhc tt l l~o in llie sa111pIc s11pe1 bazaa~s 01 thc

teglon ~ ~ I I I I I I ~ tllc [lctlod O F illldy I11 ltlt~lviduil~ lliltts 01 the legion, M;~lnailia

reg~stcrctl Llte lowcrt tlltllovet of ~liventollcr ( 5 56 tlmes) 1111998-99 i t~g l l e~ t

tt~r~iovcr (24 82 i ~ m e s ) 111 ihc ycat 1903-94, wttll at1 ave~age of 12 08 tltnes In

Bola11 the la110 tnllgctl itottil 1 76 illnc.; lo 15 75 ~ I I I I C S w ~ i l ~ an avci;~gi. of 13 16

times 'Ihc tatlo III Knrllntt v i~ l~c t l 110111 8 42 tlmcs to 15 45 tlmes, In At~an la l~~ t r

~t 11111gcd r1n111 7 95 illne5 to 1 1 58 tclnci, i~iltl 111 1'1orltlst111 the lttvento~y ~ I I I I I O V ~ I

Ftttthc~ 11 IS evidcl~t fio111 tilo table tllat the Balaji Super Bazai41 was

conslstellt 111 ltlveiltory tlltnovcl liltlo, ,llltl its CV stood at 0 10 I t ieveals

efftclent manilgemetlt ot 1nve11loly It IS lollowcd by the Al~antaplu. 1<ucll1111

~

I007 816 ~~~ 1086 15 47 1091

9 25 ..-. 1 I 05 ~~ I 1 02 1065 1514 1142 8 1 9 . 1250 1213 . ~~

~ .. 1238 6 8 J23X 1996-97 . . ~ - 46.1 .--. 2 7 1 2 6 3 1117 1824 1199

4.17 1275 - 1178 - . 1019 1533 1106 -- . .- -- - -- --

10 58 "18 ! ! -_- 1273 1304 1100

~ 4 b X . 12L)L) 1 2 3 - -~ 1251 12 18 1 1 02

8 80 1 I9? - . - - ~ - ~ . . -. ~

l l 09 10 88 14 37 11 41

0 62 SOIIILC C O I I I ~ I ~ C ~ tom Anno,tl Jlcpoila C V - C O - C ~ ~ ~ L I C I I ~ (If Valldtltlll

'htble No 5 l I tlcp~cls thc ~ t ~ v c t ~ l o ~ y hnnovet inLio of the selected supel

bnzani? 111 tile i'onstnl legfoil 0 1 1 ail average tbc ratio sliglltly fluctuahtl

betwee~l 10 91 timcs ant1 12 38 ~I I I ICS 111 tlic sitlnple super bezatus of tlie t c g ~ o t ~ ,

wtlh c o ~ ~ s ~ ~ l c n c y III the mlio, ;mtl tlic cu-cflic~enl of variation stood at 0 05 The

~ndlnd~lnl t l n h of tile snt~iple ut~ltr ' tntio ieveals that, the turnover Inti0 111

KaIpwall~ V R I I C ~ between 4 47 tiines nnd 18 66 tlmcs with an avelngc of 8 80

times, in Sriknkulam 7 93 times to 16 1 8 t ~ m e s w ~ t h NI avernge of 11.92 tnnes, III

tlle VSP betwccn 7 76 ttlncs find I5 72 Iiines wlt l~ ao average of 11.09 ltmes, in

Vlsakhapatllarn between 7 69 tlmes nnd 12 73 tlliies h l r l in the Ongole Sopcr

Bazaa~ the lnvelltoly turnovei intlo valied between 12 18 t l~nes and 18 24 tunes

with an avaage of 14 37 times dulli~g the study pcrlotl

It 1s evlde~ll Cioin the abovc table that the Kalpavalll Supel Bazaal was

mcolislsteut (0 62) lu manag~llg tRc iatlo bettel tllar~ the other seu~ple supel

bazaa~s Tlie Ongole Supel Uazaat was collrlstclit in rnntlagtng tile letin alrd 11s

aiitl S~lkaltulam, VSP (0 22) 111 tlus o ~ r i e ~ tlutirlg the sh~dy undettaken

'l;ibleNo 5 12 lnve~ltory I llrnovei Ratio 111 l'elnngana regloil

0 1 4881 3 151 12721 3 02) 3 481 2 43

C V I 0 301 0 301 0 791 0 191 0321 0 17 Source Compded fiam hlinual Reports C V -Co-effic~ent of Vanatlon

The mvetiloly turnover ratla 111 the selected super bazaars of Telaogaila 1s

presented 11) Table No 5 12 clu~mg the 10 yews of sh~tly. On an welage fhe ratlo

fluctuated between 10 84 tltnes aid 19.04 tllnes 111 the satnple supel baznals of

[lie leglor1 with conslstellcY 111 tile lotlo, aii~l the co-efficient of variatlan stood at

0 17

Analys~s of t l ~ c ~ a l l o of i~idividual llnlts reveals tllat In Karnadl~enu it

liuiged belween 11 18 t~lrics and 26 19 tlmes with an avelage of 16 10 tltnes, I"

the Anlanl Supel Ba7,eal 11 w:la bclweeo 7 36 times and 15 48 tilllei wit11 an

avelagc of l 1 34 tlmes, in Neelagill i t ianyed f ~ o m 6 03 t~nics to 42 22 tlirlcs

w ~ t l ~ 1111 avelage of 16 08 tlmes, III Kalpillatlia the latlo v a ~ ~ c d S I ~ I I I 13 73 tunes to

2230 tilnes wltli an avclage of 16 26 tunes Anrl i n Adaislie tlic lalio vaueti

between 4 70 illncs ant1 I6 73 tlmcs w ~ t h an avelage of I0 74 tunes d u ~ i n g tlie

peiiotl oT9tudy

It is luithe~ ev~dent fioitl lhc dbove table tliat the co-efficleut of vnilntloli

sliows ~ncons~stcncy 111 Ncelagr~i 111 mannglng t h ~ s in110 (0 79), but conslstcncy in

I<alpal;~tlla (0 19) followctl by i<i~oiatlheau, Arlajillil (0 30) and Atlaisl~a (0 32)

supel bazaais la this o ~ t l e ~

I~npnct ot Sales 011 I i ~ v c ~ ~ t o r y

T l ~ e it1vcntol.y balances hilvc an impottaiit [ole in the sale vo1111ne of an

entc~piise The size of iliverltory ieveals the ~~ives t i~ le r~ t matlc by a concclli to

c a ~ t y out its b t ~ s ~ ~ i e s s ope~atlons stnoothly 111 the follow~ng tables the lnventoiy

balmices a i d sales volunies and impact of sales on Inventory balances ale

p~ptesented In Lhe selected supel baznats of tlnee regtons m tlie state to d ~ a w

logical cu~iclus~ons ovel the pe~iotl of study.

-

Ailnual

~- - ~

477 75 21 29 638 08 31 56 687 42 7 73 . -

21 87 691 21 0 55 -0 65 -- 780 02 12 85

5991 -4 84 653 3 -16 25 1999-ZI< 69 59 ~. 16 16 743 43 - .. - -- - 13 80

809 78 8 92 . r' t-value

5 352*" Soiiicc Coiiipiictl ilolll Alllllid~ IKcpoit~ ** Slgll~fic;int el I %I level

Table 5 13 tlc1)lcls lilt g~owlb 11enrls III i~ivci~ioiy nad sales volu~nc i n ell

t l~c selcctctl sul)ei baranis of I<dytil;~sccm;~ d u ~ i ~ ~ g the pellod of sl(itly The

~oveslnrcl~ts 111 ~ l l v c l ~ t o ~ y ~ccoitlcrl ;I giowlng lici~tl 111 all the yenis cxccpl 1997-

98 a~itl 1998.99 in the icglon I'lic balnnces of Inventory vallerl T1o1n Ra 31 93

37 26 percetlt tluting the pcilod of study

Rcgatdlug the sides volutnc of Llle s q e i bnzanrs III tlie regton, the g ~ o w t l ~

rate vnllcd from n posit~ve g~owth lnte of 33 56 per cent duiing 1991-95 to a

negiltlve rate of 16 25 pet cent 1111998-99

'The clep~ctcd co~relat~an vtllue 111 the table shows t l~a t there was a strong

reinhot1 between the va~iables mz., inventoly nod sales in the sclectcd super

bazaars a f tllc rcglon rhls implies t l~at ill1 the supel bnznais 111 ihc ~ c g l o ~ i took

effective measulca lo contiol IIlV~StlilCnt 111 lnventoly in t.eli111o11 to sales The

conespond~i~g t-value levcill5 thlll tllclc wns aignlfic:mt 111lpnct of sales on

~ilvelltoiy levels dl 5 [ICI ~ c n t level of ~lgiirficance in the tegloli dui l i~g tllc peiiod

of sludy

I h c l ~ ~ l c a i 1cgics51u11 C C ~ I I I I ~ I I I I I glvell 111 l l ~ c table may be llred f o ~

predlct~on of tllc liitlnc ~ n v c n t o ~ y level bnsltng an the palametel glvell ln the

1 ablc Nu 5 I4 I I I I ~ . I C ~ O F S ~ I C I 011 I I I V C I I ~ ( I I ~ 111 Codstnl iegiorl

~ L R s in lakl~s) Year liivci~toly A I I I I I I ~ ~ Soles Ailaual

(i1~1wi11 r~itc - -- ~ ...~~~ --- Giowtli l a i c I99 1-92 ~ ~ 116 65 1251 49

-6 10 1301 4G 3 99 -11 14 I321 99 158

1994.95 135 1 1 18 88 1441 17 9 02 1995-96 ~ 171774 19 19

15'1 36 14 70 1771 53 .- -- . 3 13 158 I8 2 17 I824 15 2 97

1998-9') 1970 72 4 35 -

156 82 2ooo-0 1 . . . 175 2028 43 2 93 --- L~nenr ~cgressio~l eqo,lllail r i i !-value

Y - a 1 bx Y=690SII lO0448x 0 8457 07152 4 482**

Sauicc Colnplled fiom Annual Roports * * S ~ g ~ ~ i f i c a n t nt 1 % level

'rnble 5 14 exhtb~ts tllc growth bends 111 l~~ventoly and snles volurne in HU

lllc selected super baznats of the Constnl legion t l u l ~ ~ l g the pelcod of study 'She

luvestmc~lts m inventory fluctuated rlunng llle penod i t v a ~ l e d betweell

Rs 113 G5 laklls md RS 159 41 lnkhs by legistetlng both poslt~ve nnd negntlve

giowtl~ rates The gmwth lates varied between a posrtive lute of 18 88 pel cent

and a negatlvc of l l 14 per cent

Tlrc sales voluine of the sample super b ~ z a a t s of the Coastal reglon

~ c c o ~ d e d a poslttve glowth late dulmg the pet~od of study The glowth late In

sales volulne vaiied lietween I 58 pel cent and 19 19 per cent

The glveti co~ielallon val~ie in the table shows that there was a iiiodetntely

shong relation between llre vnllablcs NZ, Inventory and sales la the selected

super bazailts of the ~cglon Thls 11npl1es tllat all t l ~ c super bazaats m the region

took rneasotes to conhol lnvestlnent in invcntoly In lelatlon to sales Howeve~

the coitespondltrg t-value (4 482) sllows that thete was sig~llficant telat~onshtp

between mventoly ant1 sslcs volume at 5 pel cent level of slgnlficance in the

teglon tlur~ng the pelrorl of shldy It 1s fount1 fiotn thc ltnear ~egtessioll equatlon

tltat one ~111tt changc 111 sales lcsolted 111 0 04 nrnoulit of change m lnventoly

'Table 5 15 presetits tlie g~owth txtes m lllvcntory and sales volume in all

tlie selected supet bazaars of Telallgaiia clullng tlle pellad of study l h e

Investments 111 lnventoly generally leco~ded n posittve gowvth late except ~n

1997-98, 1998-99 and 1999-2000 111 the legion The balances of mventoly vatted

fiom Rs 17 09 lakl~s to Rs 40.17 iakhs And also the growth late vatled ftom a

negative rate of 17 04 per cent to apos~tlve rate of 68 99 pet cent ovel the perlod

The sales volume of the saniple super bazaars rn llle leg1011 vtlrled

betweet1 Rs 213 86 lakhs and Rs 482 67 lakhs rluuiitg tlre perlod And the

g~owtlt ldte in the sales volume rartged from a irega~rve liite of I0 95 lie1 cclit to a

Table No 5 15 Impact of sales on invelitoty in Telangana reglon

(Rs in Iakhs) -1- % i v G t F - - \ - Annual 1 Sales I Aii~iilal 1

Y = a .I- bx I I 1 0 5437 0 2956 1 832" Y=12 5~47~00403xLl.-_-.- . . 1 1--

Source Compiled from Ailnual Reports NS Not Srg~uficaf~t at 5% level

.- 1991-42 1992-'93 1 9 9 3 2 , 1994-95 1995-96 1996-97 1997-98

'Tbc gtver~ correlatio~i value 111 tlle table sl~ows that tllete was a weal(

~ e l a t ~ o ~ ~ s l ~ ~ p between the variables vle, inventory and sales in tlle selected supel

17 09 20 3 3 2461 2G 88

-. 29 54 31 46 28 75

buaats of tlte ~ e g ~ o r t Tltts rmpllcs that all the supel baznals d~t l nut take ally

effective measate to co~iliol ttivestments 11) lnventoly in relattw> to sales volulne

Growth rate

.- 18 96 21 O5 9 22 9 90 6 501

-8 61 1998-99 1999-21C 2000.01

It is cleat fiom the gtveo correspottd~ng t-value (1 832) of the Inventory and sales

-170! -0 34 68 99

I

-- 23 85 23 77 40 17

that t l~ete was no s ~ g l ~ ~ f i c a ~ ~ t lelatronshrp between both the vauables ~t 5 pel cent

_- 213 86 240 09 304 3 1 365 87 361 13

389 501 375 14

Llneai iegrcssioti equntioit

level of srgrtrficance in the reglot1 dultlty the pellod of study

Gruwth late

12 27 _ 26 75

20 23 - 1 30 7 86 - - .- -. -

-3 69 465 95 - 41494

.- - 482 67 F--

24 21 - - I il 95

16 32 tvalue

References

I Chndda, R S , lllventoly mnnngeslent in India, Allicd publ~sliers pllvate Ltd , Bombay, 1971, p l

3 Om Piakasll, Ratio Asa1ysl.r for Management in New Pel.spective (Management liatlos), I-lnnlaya Publ~sh~ng I-louse, Bombay, 1987, p 179

4 Account~og Resea~ch a ~ ~ t l Te~~lllnology Bulletm, Published by the American Institute of Aecooats, New Yolk, June I96 I, p 28

6 Jalnes 1-1 G ~ e e a e , P r o d ~ ~ c t i o a and Inventory Control - Systelns and Dec~sir~ns, Talnpolcwrila Saris & Co , Pvt I l d , Bombay, 1983, p 203

10 Chatlda, R S . Op cit , p 10

11 Erncst W Willke~, W11llil111 H Briuplu~, Financial Planning nnrl Pnlicy, Ha~pel Intettiat~onal Student Rcpolt Publ~slied jonitly by t1aipe1 & Row, Jol~rl Weathc~ 1-1111 Inc, New Yolk a~idTokyo, p 172

12 Khan M Y and la111, P K , Fii~ancial Maoagement Text and Problems, Tats McGtaw 11t11 Publ~sh~ng Co , 1Ltd ,New Delhl, 2'"~tl1t1on, 1992, p 731

14 Herbelt J Rtclunond, Effective Inveiltory Management - Factor 01

Fictinli Flnanc~al Executive ( M a ~ c b 1969), pp 74-78