Impact Of Cost Of Holding Inventory On The Profits & Sales Of The BHEL With The Help Of ABC Analysis & EOQ- A Study

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Muninarayanaappa, Dr ; Aggarwal, Shruti (2013)
  • Publisher: Journal Of Business Management & Social Sciences Research
  • Journal: Journal Of Business Management & Social Sciences Research (issn: 2319-5614, eissn: 2319-5614)
  • Subject: Business management; Financial Management | Cost of holding inventory, ABC Analysis, EOQ: Economic order quantity

This research paper focusses on the issue of inventory management and the part thereof, basically the cost of holding inventory and its impact on the profits and sales of the company with the help of inventory managemnt tools, ABC analysis and the EOQ (Economic order quantity). The purpose is to find out the ways of managing the inventory properly, so that there would be a little impact on the profits and sales of the company. To carry out the research , the researcher have taken BHEL, as the target company, the study is Descriptive in nature, and the time horizon is cross sectional. The hypothesis is tested by ANOVA and the statistical tools are Regression, Correlation. To support the study the Ratio Analysis, ABC analysis and EOQ model is prepared.The sole purpose is to find out:1. How Important the inventory management is for the company?2. What is the economic order quantity, time of ordering inventory and How one can calculate it?3. What can be the adverse impact on the profits and sales of the company , if one doesnot hold inventory properly, donot reorder it on time?4. How one can manage the inventory properly?
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