A live project on study of

inventory management
adopted by Sataluj Hotel.

INC- Ahmadabad
Submitted to:
Miss. Hetal Pandya
Submitted by:
Sandhya k patel(8NBAM078)
Section: C

CONTENTS
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1.ACKNOWLEGEMANT……………………………………1
2.PREFACE……………………………………………………
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3. COMPANYPROFILE……………………………………...3
4.OBJECTIVE OF INVENTORY MANAGEMANT………4
5. INVENTRY MANEGEMANT IN SATALUJ
HOTEL ………………………………………………….5
6.QUESTIONER……………………………………………....8
7. CONCLUSION……………………………………………..9

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 ACKNOWLEDGEMENT
Through this live project report we would like to express our
sincere gratitude towards all those members who helped us in
the preparation of this project report on ‘Inventory management
adopted by sataluj hotel which has been a learning experience
for me in MBA program.
The project work on Financial management would not have
been possible without support of Miss hetal pandya who have
supported with their valuable time, experience and facilities
towards the competition of the project.
Practical training is an important part besides theoretical studies.
As a student of MBA programmed of ICFAI, we have carried
out our live projects on various topics, with the use of this
project we learn how we implement the theorical knowledge in
to the real corporate practice life. This project has carried on the
topic of ‘Inventory management adopted by Sataluj Hotel.

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 PREFACE
As we were given the project on Financial management to
‘Study on Inventory management adopted by sataluj resturant’.
So, I am visited to Mr. NarendraI owner with questionnaire.
We all know the importance of the live project in this marketing
era, so we are grateful to Icfai national collage to give us the
opportunity to do the project in every semester and we are sure
that it will help us in future. Through this project we learn how
implement theorical knowledge in to real corporate life problem.
Inventory management is a concerted effort to integrate the
firm’s value chain and its inventory policy. In organization,
inventory is effectively managed by using certain inventory
control tool like reorder point, order lead time, usage rate, safety
stock, EOQ, JIT, and fixed order interval system.
They try to provide the best quality product to their customer
according to their preference.

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 Objective of inventory
management
Inventory management is a concerted effort to integrate the firm’s value
chain and its inventory policy. In organization, inventory is effectively
managed by using certain inventory control tool like reorder point, order
lead time, usage rate, safety stock, EOQ, JIT, and fixed order interval
system.
The inventory is usually allocated using two methods:
The first one, known as real time replacement, involves an immediate
processing of orders.
In the second method called the batch method, the orders are processed
at periodic intervals, such as, at the end of the day, or shift, and so on.
Batch order processing helps the company control the inventory in
critical situation of low inventory. This is possible because in batch
processing, the orders can be processed to allocate the material from the
current stock.

The Objective is to determine a system base stock level which

minimizes the long run average system cost per period. The main
approach are (1) an inventory allocation model and associated convex
cost function designed to allocate a given amount of system inventory
across locations, and (2) a characterization of the amount of available
system inventory using the inventory shortfall random variable. An
exact model must consider the possibility that inventories may be
imbalanced in a given period. By assuming inventory imbalances cannot
occur, we develop an approximation model from which we obtain a
lower bound on the per period expected cost.

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 Company Profile
Sataluj Hotel is one of the leading Hotel in the area of Naroda. It
is started in 1981 by Mr.Narendra take care it. Sataluj restarunt
is partnership firm. 10 to 15 workers are inclding shaif working
in the Sataluj restarunt. Their food famous in the area & also in
other areas. They are having different foods of verities like
Punjabi ,chinies ,continental ,south Indian. Sataluj hotel update
their food as per the new trend of market. They believe in
provide the best quality product to their customer. The annual
turnover of Sataluj Hotel is twenty to twenty five lakhas. Sataluj
hotel cannot believe in holding inventory they believe in just in
time. They order raw material on time. They have very well
supply chain management system. They give best quality
product on customers time and what they want. They also
believe in time punctuality.

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 Inventory management in
Sataluj Restarunt
Inventory management is important for any ORGANISATION.
Inventory management is a concerted effort to integrate the
firm’s value chain and its inventory policy. He believes in
quality product. Their annual turnover is around 20 TO 25
LAKH. So I go there to ask about their inventory management
system to Mr.Narendra I am goes there with questationary.
 Turnover of the SATALUJ HOTEL
Sataluj Hotel annual turnover are 20TO25 lakhas They cannot
make their product in advance they made as par customer
requirements.

 Reorder point:
The reorder point means when the next order will given. The
head of the department informs to the owner about
requirements of raw material and they reorder according to their
requirements to reduce the inventory holding costs and ordering
costs.

 Order lead time:

Order lead time mean the period between the dates an order is
placed to the date the raw materials are available for production.
Head of kitchen department inform the owner of the hotel and
give the date when they want raw material according to that date
purchase department give order to supplier. If supplier is not

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time punctual then they give two three days ahead date. They
have two or more supplier and they give alternative order to
them so in the time of emergency they got raw material.

 Usage rate:
Usage rate is the average rate at which the raw materials are
used in production process of an organization. Usage rate is not
fixed in sataluj hotel they made according to customer
requirements. And they have lots of products usage rate of one
material is not fixed.

 Safety stock:
Safety stock is the extra stock that is maintained in the
inventory. In any emergency time like unexpected customer
demands or delays in supplier deliveries they use it. Most of
restarunt keeps minimum level safety stock. sataluj hotel keeps
5% to 7 % safety stock.

 Just in time :
Sataluj hotel believe in just in time inventory management
system. Just in time implies that raw materials are delivered in
required quantities to the production as and when they are
needed without any delay. Just in time process focuses on the
reduction or elimination of inventory in the restarunt .They are
not believed to holding inventory they order as par
requirements.

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  Fixed order interval system:
Sataluj restaurant have weekly or 15 days fixed order interval
system. They depend on the head of the kitchen department.
They purchase their product from different places like
vegetables purchase from kalupur.marchantile goods from
madhupura market in wholesale & other goods for the Chinese
food they purchase from manek chowk bazaar. According to
production alternative they give the order to supplier. They have
more than two suppliers so they give order alternative to all of
them. So in the time of emergency they got raw material easily.

 Transportation:
SATALUJ HOTEL transportation depends on their requirement
and their needs they purchase goods from three places one is
madhupura wholesale market near to the kalupur semi wholesale
bazaar and third for other requirement they purchase from
manek chowk bazaar. All the transportation cost paying by the
Sataluj restaurant.

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 Questationary
1) How much the annual turnover of sataluj hotel?
2) How head of kitchen department know to reorder or order
the raw material required? And in how much quantity
purchase?
3) How your departments calculate reorder quantity in most
economy way to reduce inventory holding costs, or
ordering costs?
4) How sataluj hotel maintain order lead time?
5) What is the usage rate of the raw material?
6) Will sataluj hotel maintain safety stock?
7) How much safety stock your hotel maintain?
8) Your company purchase raw material in Just in time
system or your company stock the raw material?
9) Do sataluj hotel give transportation service?
10) DO THEY HAVE THE STORAGE PLACE?

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 Conclusion
Inventories constitute a major portion of current assets
maintained for smooth business operations. If not managed
effectively, the investment made in inventories cannot be
justified, that will decrease the overall return on investment. The
Performance of inventory can be measured by calculating
efficiency and turnover ratios. These all will be helpful in
managing inventories effectively.
Inventory management is required for all organization.
Inventory management is a concerted effort to integrate the
firm’s value chain and its inventory policy. Each companies
Production capacity is finite, and perhaps random in each
period. So inventory management is important for any firm.
With the effective use of inventory management company
reduces the raw material holding cost, carrying cost, and also
know the reorder time. SATALUJ HOTEL BELIVES IN JUST
IN TIME SYETEM SO THEY ARE PURCHASING GOODS
AS PER THEIR REQUIREMANT.

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