A CASE STUDY. OF• INVENTORY CONTROL PROBLEM IN AN AUTOMOBILE MAINTENANCE . WORKSHOP

Abstract

Since the industrial revolution started in India a couple of decades ago, a number of management problems have come to the surface, an important one of which is scientific inventory management to effect cost reduction and cost control. As it has been established that the cost of material, semifinished and finished goods accounts more than half of the total cost in any industry, it is obvious that any scheme of cost reduction is always welcome by the management. Materials are procured and held in the shape of inventories to act as cushion to the fluctuating demand and supply rate. Hence it has been accepted that inventories are inevitable to any industry, but there has to be some system for exercising proper control over it. A recent study [2] conducted on public Ltd. companies and private companies on all India basis shows that 64% of the private Ltd companies and 76.5% of public Ltd companies use ABC Analysis while intensity of application of economic order quantity was 58% in private companies and 64.7% in public Ltd companies. It has also been seen that the impact of introduction of inventory control technique is highly encouraging in both the sectors and 88,88% private companies and 84.7% public Ltd companies have been success-ful in reducing their inventory holding cost through scientific inventory management techniques. ii Inventory represent stock of raw materials, work in process and finished goods which are held for a short term and converted into money at the time of accounting. They are one of the most active elements of a business operation. Inventories appear not only. on the balance sheet and stock holding statement of any business, but also in profit and loss statement of the organisation. It is said that inventories are the grave yard of any business and at the same time, we cannot sell from an empty bin. These problems have made inventory management, a topic of considerable and wide spread interest.