Financial Managment: Types of Inventory Used by TATA Motors

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INVENTORY MANAGEMENT OF TATA MOTORS

TATA MOTORS:

COMPANY PROFILE

Tata Motors Limited one of the largest Indian automobile company is the leader in the commercial vehicle segment and in passenger vehicles. Its revenues could be consolidated to INR 1,88,818 crores (USD 34.7 billion) in 2012-13. It is also the world's fifth largest truck manufacturer and fourth largest bus manufacturer.

TYPES OF INVENTORY USED BY TATA MOTORS:

1. FINISHED GOODS INVENTORY

Finished goods refer to that number of cars manufactured that are anticipating sales to the customer. These are the goods that have undergone all the process of manufacturing but yet to be sold. These goods are accounted in the balance sheet as current assets. The finished goods inventory at the end of the previous accounting period is taken as the opening inventory plus the cost of goods purchased or manufactured and less the cost of goods sold.

2. RAW MATERIALS INVENTORY

This refers to the total cost of all components in present stock that have not been utilised in work in process or finished goods production i-e these are the items yet to be consumed in the production process.

Direct materials - those incorporated in the final product e.g. glass

Indirect materials - those which are not incorporated in the final product e.g. Oil

3. WORK IN PROCESS INVENTORY

This refers to the cost of materials that have entered the production process i-e has been partially converted with work to be done to make it a finished good. It is taken as a current asset in the balance sheet.

4. SUPPLIES AND OTHER INVENTORY

Cost of products directly or indirectly used in the production process which might or might not be a part of the final product.

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...tent rights of the products and is not to use any information in relative to patent rights

• Copy Rights published by TML would remain with Tata Motors.

ADVERTISING

Suppliers are not to use logos or name of Tata Motors to promote its products without proper authentication from Tata Motors.

FORCE MAJEURE

• There is no liability for any of the parties in case of failure or lack of compliance in the following cases:

o Natural calamities

o Actions of public enmity

o Governmental actions

o War/ strikes/lock outs

• In such cases for a period of 3 months parties would discuss and come to plausible future action plan.

COMMUNICATIONS AND LANGUAGE

• Default language of communication is English.

• Periodically review of programmes is done.

• Change of any details used for communication should be informed to Tata Motors by 3 working days.

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