The study states that Inventory management is the key aspect to be analysed in order to increase the profitability of the organization. The findings indicate a statistical relationship between Inventory turnover period and profitability of the selected sectors. The questionnaire survey was conducted for 34 companies available at Chennai. The survey includes about 162 companies from 500 listing. The Net Operating Profitability is used as a measure of organizational performance. The study aims at examining the efficiency of inventory management measured by Average Inventory and cost of goods sold on Profitability of various manufacturing firms in the selected 15 sectors such as Automobile, Electrical equipment, Steel and Construction. The study involves both primary and secondary data. The Sampling technique adopted in the study was Random sampling. The present study concentrates on the effect of the management of inventory on profitability of leading manufacturing companies of CNX S&P 500 listed in NSE. The Inventory constitutes a significant portion of current assets of a firm, which helps in financial decision making. Inventory management is a major component of any organizations working capital. This is done through maintaining low safety stock levels, continuous check on schedules & ordered frequently in inventories, in order to avoid over investment of working capital. While ABC Analysis has shown that the management must have more control on C items than that on A & B items, because C class constitutes more of higher in numbers. It was suggested that the management of the plant should incorporate Total Quality Management, particularly in all departments of production to ensure better sales and reduce the inventory of finished products. Also it was found that due to this the production process was affected in the company. It was found that in the firm’s master data was not maintained properly on SAP which was the major reason behind the unmatched sets of parts and excess buying of materials. This deals about the entire activities of purchase and stores department to suggest the suitable technique to the company to have improved control over the inventory. It included the complete study to conduct Ratio Analysis, ABC and VED Analysis for inventory. 2014 Honda Grom (picked up 9/11/14) - Composimo Tidy Tail, Thai OEM Honda projector headlight, H4 bulb, Thai turn signals, and MSX125 decals, H2C rear luggage rack, 14 tooth front, all blacked out. This project was undertaken to analyze the inventory management of Ashok Leyland Ltd.
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