The Impact Of Inventor Management In The Pharmaceutical Industries (A Case Study Of Nichben Pharmaceutical Industries)

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Project and Seminar Material for Purchasing and Supply PS

Project and Seminar Material for Purchasing and Supply PS


Dedication


I sincerely dedicate this work to the Almighty God and my beloved wife Mrs. Chioma Duru and my brothers and sisters for their wonderful support and encouragement to make sure that the fulfillment of my Higher National Diploma (HND) programme become reality.

Finally, to God be the glory for leading me to this extent in my programmes with Federal Polytechnic Nekede Owerri.


Acknowledgement


My immense gratitude goes to Almighty God the giver of wisdom and knowledge who gave me success to the conclusion of my Higher National Diploma to him be the glory. I acknowledge my indebtedness to my supervisor Mr. Obuseh Rapheal who had made his effort for the supervision of this project to be successful. And also my HOD Mr. A. Uzor for his sincere encouragement kept me on the right track through the exercise.

My gratitude also goes to my younger brother Chijioke Duru and my wife Mrs. Chioma Duru.

I cannot forget my Late mother Nwaozichi Duru for her motherly advice when she was alive, my brothers and sisters. Above all I remain indebted to Mrs. Chidinma Nlemadim for her relentless assistance all through my stay in the school and my bosom friend Engr. Kenneth Ezekwe, may the good Lord bless and protect them.

Finally, to God Almighty for his wonderful love and protection.


Abstract


Inventory management is an important unit in pharmaceutical industries and contributes a lot to the growth and profitability of the industry. For production to be effective and continuous there should be effective inventory management and this will help in cost reduction and boost industry’s income. Therefore, inventory management involves production and sales inventory management in an industry based on the crucial nature of inventory management.


Table Of Contents


  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table Of Contents

Chapter One

  • 1.0 Introduction
  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Purpose of the study
  • 1.4 Research questions.
  • 1.5 Scope of the study and limitations
  • 1.6 Significance of the study
  • 1.7 Definition of terms.

Chapter Two

  • 2.0 Literature review
  • 2.1 Introduction
  • 2.2 Need for inventory management
  • 2.3 Issue of materials.
  • 2.4 Stock recording
  • 2.5 Inventory control levels.
  • 2.6 Inventory Valuation costing. (Methods).
  • 2.7 Economic order Quantity.

Chapter Three

  • 3.0 Research methodology
  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 Questionnaire design.
  • 3.4 Sample of the study.
  • 3.5 Other methods used.
  • 3.6 Data sources.
  • 3.7 Data analysis

Chapter Four

  • 4.0 Presentation and analysis of data
  • 4.1 Introduction
  • 4.2 Analysis of responses.
  • 4.3 Testing of hypothesis.

Chapter Five

  • 5.0 Summary, Recommendation and Conclusion.
  • 5.1 Introduction.
  • 5.2 Summary
  • 5.3 Recommendation
  • 5.4 Conclusion.
  • Appendix

Chapter One


1.0 Introduction

1.1 Background Of Study

Inventories constitute the most significant part of current asset in a large majority of manufacturing companies indeed, most manufacturing companies required to maintain a large size of inventories ought to amount of funds are committed to them. It is absolutely imperative therefore that inventory ought to be efficiently and effectively managed to prevent unnecessary investment by tying up funds in them. Any manufacturing company which chooses to neglect the management of the inventories may be jeopardizing its profitability in the long run. As well as reducing the efficiency of production, if as a result of stock out production is held up which may also lead to the dissatisfactions of customers and consequent loss of goodwill.

According to Pandey (200L:884), inventories are stock of products as company is manufacturing for sale and components that make up the product the various forms in which inventories are raw materials, work in progress and finish goods”. Raw material inventory and work in progress inventory represent products need further processing before they become finished goods for sales while finish goods are completely manufacture products which are ready for sale. Raw materials and work in progress inventory facilitate production while finished goods are required for smooth marketing operation.

According to Van Horne (1992:437), inventories forms a link between production and sale of the product, maintaining inventories involves tying up the company funds and also incurring storage cost.
Why do firms maintain inventories?

According to Starr and Miller (1962:17), three motives for holding inventories can be identified, namely:

1. Precautionary Motive:

This necessitates holding of inventories to guard against the rest of unpredictable change in demand and supply forces and other social economic variables.

2. Transactionary Motive:

This emphasizes the need to maintain inventories to facilitate a smooth production and sales operations and

3. Speculative Motive:

This influences the decision to increase or reduce inventory levels to take advantage of price fluctuations.

Basically, firms are faced with two needs in inventory management namely,

  1. The need to maintain a large size of inventory for efficient and smooth production and sales operation.
  2. To maintain a minimum investment in inventories so as to minimize cost and maximize profit.

Both excessive and inadequate stock of inventories is not desirable. Hence, a proper inventory control modeling should help determine and maintain an optimum level of investment in inventory.


1.2 Statement Of Problem

Inventories comprise or significant proportion of the asset of many business organizations. In view of this, a business organization will be doing well in the area of its stock management if it can meet its material input at the right time and at the lowest possible cost. However, this is often difficult due to the following problems.

  1. Inability to determine correctly the exact period of replenishing stock and are economic order quantity.
  2. Inadequate planning and effective control of stock.
  3. Unfavourable internal and external factor which influence stock management.
  4. Inability of the inventory managers to predict with certainty into the future of the customer demand.
  5. Poor accounting documentation of stock.
  6. Shortage of funds available to business managers and the need to resolve the quality and profitability conflict.

1.3 Purpose Of The Study

This research work intends to find an appropriate means of avoiding or at least minimizing losses due to inefficient stock management practices within manufacturing concerns.

The following shall be carefully examined.

  1. The determination of adequate replenishing period and economic quantity to order.
  2. The examination of the tools and techniques for effective inventory management.
  3. Investigation of internal and external factor which influence inventory management.
  4. Evaluation of inventory manager’s ability to predict and forecast into the future accurately determining demand and fluctuation in supply schedule.
  5. Careful examination of accounting documentation for stock control.
  6. The future role of inventory management within a dynamic economic environment.

1.4 Research Questions

It is widely acclaimed that all active inventory management leads to cost minimization and profit maximization. There are pertinent questions that need to be asked in order to be sure that suggestion outlined in this work will really help.

  1. Do the changes in the level of inventory maintained affect the profitability of a firm?
  2. Do the changes in the level of inventory maintained influence the operating cost of the firm?
  3. Do the changes in the level of inventory maintained favour its liquidity position?
  4. What should be the desired quantity in a given replenishment order?
  5. What are the problematic areas that the stores personnel needs to pay more attention?
  6. Does accounting documentation affect inventory control?
Hypothesis

From the above research, we formulate the following hypothesis for the research study;

  1. Ho1: Variations in the level of inventory does not affect the operating cot of a firm.
  2. HO2: There is no relationship between the level of the inventory maintained and the profitability of the firm.

1.5 Scope Of The Study And Limitations

This research work attempts to examine the methods and importance of inventory management in a manufacturing company. In discharging the work we would evaluate its effects on achieving sales target, liquidity objective, cost minimization and enhancement of profit performance of the company. This study will be limited to a case study of NICHBEN PHARMACEUTICAL INDUSTRIES. This study was extensively carried out to involve several other enterprises but has been limited to just one company due to the following constraints.

Time Constraints:

The time available for this study is quite short, so the project tends to be limited to the examination of just one company.

Financial Constraints:

High expenses involved in prosecuting the project bring about a limitation in scope.

Attitude of the respondents to the questionnaires presents yet another limitation to the project. The respondents handled the questionnaire with carefree attitude and are very sluggish in returning their responses to the questions.


1.6 Significance Of The Study

In majority of manufacturing companies, inventories stock of goods represent a significant investment funds (Osaze and Anao 1990:98) as with any other investment, the cost of holding stock must be related to the benefit gained.

The findings and recommendations consequent upon concluding this research will be of immense benefit to the manufacturing sector of the economy. It will broaden the knowledge of the impact of the inventory control and management on the profit performance of a business enterprise the findings of this research will also be of great importance to students who will engage in this line of research in future.

Financial analysis and the academic society as long as inventory still forms a crucial part of the firms working capital investment. Above all this study will equally be beneficial to other sectors of the economy and enlarge the existing literature on inventory management for practitioners and professionals.


1.7 Definition Of Terms

1. Inventory:

This is the stock of a product a company is manufacturing for sale and the components that make up the product. The inventory of a particular firm are made up of raw materials, work in progress and finished goods. A fourth kind of inventory classified as supplies may also be maintained. These items are held by the company to ensure that sales operations are not disrupted or production schedule go on smoothly.

2. Lead Time:

This refers to the period of time expressed. In days, weeks, months etc between ordering and replenishment.

3. Economic Order Quantity (EOQ):

The economic ordering quantity which minimizes the balance of cost between inventory holding cost and re-order cost. It is also known as the economic batch quantity.

4. Physical Stock:

This is the number of items that are physically in the stock at a given time.

5. Buffer Stock:

This is a stock allowance to cover errors in forecasting the lead time or the demand during the lead time. It is held as a safety stock in order to guard against stock out.

6. Stock Out:

A situation where the expected level of inventory falls to zero while there is positive customer demand.

7. Maximum Stock:

A stock level selected as the maximum desirable which is used as an indicator to how when stock have risen too high.

8. Re-Order Level:

This is the level of stock which a further replenishment order should be placed.


I bet you, the complete material is fully loaded. This is just an excerpt. The Material is in MS-Word Format which you can easily edit and is comprehensive for a complete research work for this topic


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How to nail it on the head during your project defence


You are through with writing that project. Now what?

You have found yourself at that point where you have to defend what you have written. Of course you have to stand in front of your supervisor and other literary personalities to prove that you know what you wrote in your project paper. Unfortunately, the more you think about it, the more it looks like you are about to face a legion. It is not a war. But the emotion of dread welling up inside of you makes it look like one. So now you are asking yourself questions.

  • How am I going to start?
  • I hope I will do well enough to get an A.

You really want to nail it, but you need to come to terms with exactly how to get everything in perfect control. Especially your emotions of fear that seem to make a wreck of you every time you think about public speaking.
So here is the deal. I want to help you avoid that feeling that would ruin your precious moment if you dare to let it. And we are going to do it together.

I am going to highlight some very important tips to help you get in control for you to be comfortable enough to move from that feeling of DREAD to CONFIDENT; and making an awesome Impression for that great rating your supervisors should be giving to you so freely.

Consider these tips as you prepare for your defence. We will be taking them one after the other so here we go.


Watch Your Body Language And Keep It Confident:

Can you tell that a person is falling apart if they look confident? … If I can second guess you rightly, am sure you answered no to that question. Remind yourself that you need to come out that way. Now this might seem like a huge big deal when you are dealing with the foreboding. Maintaining a poise of confidence is very important. So find your most comfortable position, sitting or standing and draw up your body. You must exude confidence. It is something you need to do for yourself. People can only see what you allow your body language to show. So you must endeavour to put that out. Remember the story of David and Goliath? … At the end of your defence day, you want to be David.


Dress In Your Most Comfortable And Impressive:

Am sure this one is a no brainer. However I must highlight that you choose comfortable pieces. You don’t want to look so good and yet look like you were forced to wear something that does not belong to you. It’s great to ensure that as impressive as your clothes are on you, that they are also very comfortable.


Speak With Authority:

Going hand to hand with that aura of confidence is your most powerful asset:your words. If you look that confident, your words must not come out like whimpers. To be able to pull this off, you definitely need to speak as deliberately as possible in expressing yourself. Let them also hear what they see.


Use, Your Gestures:

I have often found this to come to my rescue in dealing with shyness and conveying my confidence. Usually it gives you an edge to also drive home your point. You must, however, ensure that you do not over use it. It doesn’t mean that your hands should be flying all over the place. That would be absolutely unnecessary. If you do this well, after a while you will realize that you are not as self-conscious as you used to be at the very start. For most situations, it would have completely disappeared altogether; leaving a really confident you talking.


Have A Good Opening And Closing Line:

Make sure you have perfected a good opening line. You should also be armed with a good closing line too. Try and rehearse it to a friend. If for the first time you presented it, your friend does not say “wow, that’s beautiful” or something like that; just know you need to keep refining it until you get the perfect line. Both opening and closing lines will go a long way in how impressed your panel gets to rate you high.


Make Sure You Know Your Work:

Certainly you should understand how important it is to know your own work from start to finish. Not having in-depth knowledge of your own work is tantamount to a suicide mission. Why should you kill yourself?
When all is said and done, this is what you came to defend in the first place. You should know your work from A to Z.


Prepare For The Questions:

Now this part is truly essential. You must be sure you do not floor all the good work you did on your presentation by not answering correctly. You must pay attention to the questions you are asked to be sure you will give the right answer. Many people get it wrong at this stage and spoil their good presentation. When you do not understand any question do endeavour to ask the person to expatiate what they mean before you answer.


These tips are by no means exhaustive, but applying these tips will give you some necessary advantage you need for a great outcome. Of course that outcome would mean that you eventually earn all your points on this project.


The structure of a good project work


Undergraduate projects in Nigeria is a prerequisite for graduation amongst Nigerian tertiary students who will which to obtain bachelors degree in their respective courses of study such as accounting, banking and finance, business administration and a host of others. Writing an undergraduate project in Nigeria for final year students entails a lot both financially and otherwise. Being able to develop any final year project depends on getting a researchable topic whether it is Accounting Undergraduate project topics, Banking and Finance research topics or banking and finance project topics and materials and it all requires diligent hard work of students who are willing to develop best undergraduate projects in Nigeria and graduate in flying colors.

A typical Undergraduate project in Nigerian tertiary institutions can be said to be divided into five or six chapters depending on the format of the school and course of study which are


1. Introduction

The introduction of an undergraduate project states the main research problem and research argument. What precisely the study is all about and why it is important. It looks at the originality of the research work and how it will fill the gap in other studies. Justification for a research undergraduate topic should not be lengthy before it has been explicitly stated.

Below are the contents in chapter one of an undergraduate research project which includes;

  • Background of the study,
  • Statement of the problem,
  • Objectives or aims of the study,
  • The research questions,
  • Research hypothesis,
  • Significance of the study,
  • Scope of the study,
  • Limitations of the study and
  • Operational definition of terms.

2. Literature review

Literature review of any undergraduate research work, be it business administration project topics or Economics project topics just to mention a few is very critical to securing a high grade in one’s project work. The literature review of a research process uncovers what other writers have written about the student’s topic. A student’s undergraduate research work should include a discussion or review of what is known about the subject and how that knowledge was acquired. The review could conclude with a brief summary of the literature and its implications. The contents of the literature review are the theoretical review, conceptual framework, empirical review and summary of literature review.

3. Research Methodology

This section includes a description of the research methods used in the undergraduate research work such as the sample size, data collection methods, measurement instruments, research data analysis procedures and the population from which the sample was selected.  This section also describes the method used in selecting the sample or samples, validation and reliability of the instruments used in the research work. There are different research statistical techniques used in undergraduate research work such as SPSS, e-views etc.


4. Results & Discussion

This section presents and discusses the data analysis results used in an undergraduate research work, the results of each analysis is being summarized, tabulated, and then discussed for each research question.  Then for each research hypothesis, the statistical test of significance selected and applied to the data is briefly described, followed by a statement indicating whether the hypothesis was supported or not supported.  In presenting the result analyses/summary in an undergraduate project tables and figures and or graph are used to add clarity to the presentation.


5. Summary, Conclusions And Recommendations

This section summarizes the findings of the study in an easy to understand manner.  It also explains the practical implications of those findings, and points to recommended directions for future research in that area.


References:

This is where every source cited in the undergraduate research work is being included. Every undergraduate research work must be properly referenced for its authenticity.

SAMPHINA ACADEMY

SAMPHINA ACADEMY

Samuel Obiora Blessed is the CEO and founder of Samphina Academy (samphina.com.ng) a.k.a Nigeria Students Media, the youngest engineering graduate of Federal Polytechnic Nekede in 2017 and the engine brain behind this great platform. He is the man behind the scene, filled with many potentials, a musician as well as a pro developer with the interest of Nigerian students at heart.

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