Evaluating Inventory Management And Control In Manufacturing Firms (A Study Of Champion Breweries Plc, Uyo)

Project and Seminar Material for Accountancy / Accounting

Evaluating Inventory Management And Control In Manufacturing Firms (A Study Of Champion Breweries Plc, Uyo)


Inventory management is a significant component of any business since inventories are normally accountable for the majority of the costs incurred in business operations. Several researches conducted to ascertain how companies meet customer demand by tracking and maintaining the inventory required using and inventory management system. Thus, the desire to find out inventory management and control on manufacturing ignited this study. This work examined the inventory and control management with a particular reference to Champion Breweries Plc, Uyo. To achieve this purpose, four research questions were formulated to guide the study. A structured questionnaire was used as the main instrument for data collection from 50 personnel of the company. The data collected from the respondents were analysed using simple percentage and correlational analysis for testing hypothesis. The study concluded with some recommendations that the company should hold inventory in the form of raw material, work-in-progress (process) and finished goods.

Chapter One


1.1 Background to the Study

Inventory constitutes the most significant part of current assets a larger majority of Nigerian manufacturing industries. Because of the relative largeness of inventories maintained by most firms, a considerable sum of an organization’s fund is being committed to them. It thus becomes absolutely imperative to manage inventories efficiently so as to avoid the costs of changing production rates, overtime, sub-contracting, unnecessary costs of sales and lack order penalties during periods of peaks demand.

According to Redhakrishman et al, (2009), manufacturing enterprises (companies) are compelled to supply their best in order to survive because remarkable changes in the market scenario frequently occur because of global competition, shorter product life cycles, dynamic changes of demand pattern and product varieties and environmental standards. Pandey, 2008 says it is possible for a company to reduce its levels of inventories to a considerable degree without any adverse effect on production and sales, by using simple inventory planning and control techniques. The reduction in excessive inventories carries a favourable impact on a company’s profitability.

Nowadays, understanding of the significance of inventory control throughout the various links in a supply chain is further increased by the awareness in supply chain management. In recent years, management decisions are supported by lots of newly constructed supply chain and inventory control models. A sufficient supply without too much oversupply of items are assured by monitory supply, storage and availability is known as inventory control.

Total inventory costs can be minimized by optional order quantity in an inventory system in which an order is considered slowly, as inventory continues to be used up. Improving company management at the same time as improving custom services, maximizing return of investment, improving production performance and minimizing investment on inventories is the major objective in implementing an inventory system.

1.2 Statement of the Problem

The problem of this study is how to maintain a large size of inventories of raw material and work in progress (process) for efficient and smooth production and of finished goods for interrupted sales operators.

This study argues in its statement of the problem that inability to maintain a minimum investment in inventories to maximize profitability and also maintaining an inadequate level of inventories is also dangerous in the manufacturing company.

1.3 Objectives of the Study

The objective of the study is to find out the following:

  1. To find out the inventory management procedures in Champion Breweries Plc, Uyo.
  2. To examine the inventory and control management in Champion Breweries Plc, Uyo.
  3. To identify the problems associated with evaluating inventory management and control in manufacturing company.

1.4 Research Questions

  1. Does inventory management increase profitability in Champion Breweries Plc, Uyo?
  2. Does inventories help Champion Breweries Plc to make effective and efficient production?
  3. What is the benefit of inventory management to Champion Breweries Plc?
  4. What are the problems associated with inventory management and control in Champion

1.5 Research Hypotheses

The following research hypotheses were formulation to guide this study.

Hypothesis 1
  • H0: There is no significant relationship between Inventory management and profitability in Champion Breweries Plc.
  • H1: There is a significant relationship between Inventory management and profitability in Champion Breweries Plc.

1.6 Significance of the Study

The ultimate goal of any industry or organization is to maximize profit. The goal can be achieve in the manufacturing company like Champion Breweries Plc, Uyo through inventory management and control in manufacturing firm.

This study is necessary because it would enable the employer and employee of Champion Breweries Plc, Uyo to improve ethnical behavior and code of conduct in the management of the company.

It would be of immense benefit to investors who want to invest in the company and the shareholders of the company to earn more profit. It will also serve as a reference source to researchers (students) who might want to further studies in the similar topic.

1.7 Scope / Limitation of the Study

The study concerns about evaluating inventory management and control in manufacturing firm with specific focus on Champion Breweries Plc, Uyo. Significantly, the study seeks to investigate the inventory management procedures in the company and control man in the manufacturing firm. However, the findings and recommendations will be generalized to cover other similar company’s.

Besides, the study is limited to Champion Breweries Plc, Uyo and its limitation in scope caused by the time constraint. The period within which the study is conducted is short for a thorough research study, hence, gathering adequate information becomes very difficult.

Also, finance is one of the limitations to the scope of this study. The researcher is facing financial constraint to meet all the needed educational requirements including this research work. This caused the researcher to restrict this research to one company for possible completion of the study.

Finally, lack of materials on the topic. This area is totally new in the Nigeria companies, and schools, hence the researcher resolved to seek friendly approach in order to obtain the needed materials or information from the establishment or organization under study through the administration of questionnaire and oral interview.

1.8 Definition of Operational Terms

In the course of the study the researcher defined some terms peculiar to the study. These are:


A stock of goods for production and distribution. This includes raw materials, finished goods, component parts and semi processed goods.

Inventory Management and Control:

It is the art and science of ensuring there is no over and under supply of inventory to enhance smooth production and distribution.


This is a measure of the amount by which a company’s revenue exceeds its relevant expenses.

1.8 Organization of the Study

To achieve the purpose of this research project on “evaluating inventory management and control in manufacturing firm”, the study is divided into five inter-connected chapters, ranging from chapter one to five.

  1. In this chapter one the researcher has been able to give an introduction to the work, state the problem that necessitate this study, outline the questions this work seek to answer as well as the objectives it hopes to achieve.  The scope and significance of this study were detailed as well as the hypotheses to be tested in the study. Also, key terms were equally defined.
  2. Chapter two deals with literature review, conceptual review, and empirical review.
  3. Chapter three discuss the research methodology and methods of data analysis.
  4. Chapter four describes the presentation, analysis and interpretation of data as well as testing of the stated hypotheses.
  5. While chapter five, the final chapter deals with the summary, conclusion and recommendations.

Chapter Five

Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings into the evaluation of inventory management and control in manufacturing firms using Champion Breweries Plc, Uyo as case study. The chapter consists of summary of the study, conclusions, and recommendations.

5.2 Summary of the Study

In this study, our focus was to examine inventory management and control in manufacturing firms using Champion Breweries Plc, Uyo as case study. The study specifically was aimed at finding out the benefits of inventory management in Champion Breweries Plc, Uyo; To examine the inventory and control management in Champion Breweries Plc, Uyo; To identify the problems associated with evaluating inventory management and control in manufacturing company.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent are active staffs if the selected orgnization.

5.3 Conclusions

Based on the finding of this study, the following conclusions were made:

  1. Inventory management and control is essential as it will enable a firm to meet up with current and future demand for it products.
  2. Inventory management increase profitability in Champion Breweries Plc, Uyo
  3. Inventories help Champion Breweries Plc to make effective and efficient production.
  4. There is a significant relationship between the inventory management and profitability.

5.3 Recommendations

The following recommendations are made base on the findings and conclusion.

  1. The management of Champion Breweries Plc should be cost effective. The relative costs to the firm has a long way of impacting the firm’s profitability. Therefore, empoyees should be expose to cost minimization through inventory management and control at all times.
  2. Efficiency in the organization should always be emphasized as it can affect the firm’s profitability. The management and control of inventories should not be neglected because it will help the organization to be efficient thereby increasing it long term profitability.
  3. Management of Champion Breweries Plc and other organizations should Recognized the fact that they are operating with other firms in an industry and so should manage and control it inventories well enough to be ahead of their competitors. Having an edge over competitors will enable the firm to increase it profitability through increased market share.
  4. Organizations with optimum inventories are more likely to fix price that encourage customer patronage. The management of Champion Breweries Plc as well as other organizations should emphasize management and control of inventories. Setting high prices will scare away customers and this will lead to loss of sales. If the price is favourable to customers, there will be increased sales revenue that go along way increasing the firm’s overall profitability and vice versa.
  5. It is highly recommended that Champion Breweries Plc should maintain optimum inventories to guide against under stocking which will lead to stock out in the organization as well as over stocking to minimize costs. Adequate inventories will minimize stock out and help the firm to increase the overall profitability of the firm. Loss of sales will be minimized when the firm satisfy it customers. Sales people should be proactive as they are in the field as well as engage in face to face contact with customers and therefore in better position to know what customers needs are. They should give feedback to the organization to enable useful decision.
  6. Inventory management and control should be seen as a driver of a firm’s profitability and therefore be treated as such.

5.4 Suggested Areas for Further Studies

Further research should be conducted in the following areas;

  1. The role of inventory accounting systems in manufacturing firms.
  2. Effects of inventory management practices on performance of small scale enterprises.

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