The Impact Of Inventory Control In Business Organization (A Case Study Of Nigerite Nigeria Limited)
Inventory control in an organization is a system or process of ascertaining of a point in the time the list of goods business time or period. How ever the process is a tools for rapid growth excellence service delivery and as well sustainable or continuous existence of an organization if effectively and efficiently carried out.
Thus, the research hereby intends to vividly discuss on the impact of inventory control in business organization chosen Nigeria limited Ikeja as a case study.
In the quest to present the topic in a precise and understandable masterpiece the researcher has decided to strategically divide the research topic into five distinctive categories or chapters.
The first chapter will cover the introduction and general background to the study. This will initiate a preamble understanding of what the topic entails and addition to this, the aim and objective scope and limitation research question and definition of term will also be discuss.
To further a better understanding of the research topic, the second chapter will extract literatures existensively.
The third chapter, entail the research mythology which implies a method through which information is being gathered thee population of the study e.t.c. The formulated structured questionnaire is thus administered at this stage. Analysis of the information gathered through the questionnaire will be presented in the forth chapter, in a tabular and simple percentage format and the test of hypothesis to validated the appropriateness of the research will be carried out using the chi-square formular.
Lastly the Fifth Chapter summarizes the whole project and equally suggest act of the inventory control to a business organization.
Table of Content
- Title Page
- Table of Contents
- 1.1 Background of the Study
- 1.2 Statement of the Researcher Problem
- 1.3 Objective of the Study
- 1.4 Significant of the Study
- 1.5 Scope of the Study
- 1.6 Limitation and Constrains of the Study
- 2.1 Mode of Inventory
- 2.2 Cost Criteria in Inventory Control
- 2.3 Static and Dynamic Inventory Selection Control
- 2.4 Element Influencing Inventory Selection Polities
- 2.5 ABC Inventory Classification Control and Period Review
- 2.6 Relevance of the Review of the Study
- 3.1 Data Specification
- 3.2 Procedure for Data Collection
- 3.3 Techniques of Data Analysis
- 3.4 Problem of Data Analysis
4.0 Data Presentation and Analysis.
- 4.2 Data Analysis
- 4.3 Summary of Findings
5.0 Summary Recommendation and Conclusion
- 5.1 Summary
- 5.2 Recommendation
- 5.3 Conclusion
1.1 Background of the Study
The importance of inventory control in any organization can not be over emphasized. In fact both wholesaler and retail business firm establish and maintain inventones to meet the possible demand of the customers through the avoidance of running out of stock or stock out cost. And buying higher nice. In addition, minimization of ordering cost, reduction of production cost as well as manufacturing firms keep inventories since manufacturing firms must stock raw materials and component parts in order to meet the demands of the production processes.
Inventory control exists in different size shape and forms to meet a variety of demand. As a result of the importance the current emphasis in management science that refore began with the analysis of inventory control in 1915 develop the first economic cot size equation which was probably the beginning problems.
In 1931, Raymond published in is quantity and economy in manufacturer, in which he develop this idea farther attempting to account for a wide variety of condition. In fact, in the past war period, the management science literature has been filled with the analysis of Inventory and production control system, partly because of the great interest shown by such progressive companies as the Eastman Kodak company, procter and gamble, johson and johson Kodak and a lost of many others.
The word ‘Inventory’ as a stated in the encyclopedia britanica’’ is term use to designate item that are in process of producing goods to be sold. It has also been defined according to migs wand meifs R. as the merchandise which is available fore sale but not sold duing the year constitution the Inventory of merfchandise bthe year.
Also for clarity sake Burbidge J.L defined it as all of the materials parts supplies expensive tools work in progress and finished products recorded on the book by an organization and kept in the stock room, ware houses or plants ‘’other see it to usable resources that are idle at a given point in time. But in the context of the study of appraising inventory controlling business organization with reference to niger limited. Ikeja which is manufacturing firms Inventory well include raw materials semi finished goods (work in progress) e.g. predict meant from painting and firming (becorceil) as well as finished goods.
This is different from the way Inventory is viewed in a retail environment such as supper market department shop, were Inventory is generally viewed as the stock of goods or sales. It mat how ever, according to Davis et al (1786) include non physical asset such as each account receivable and personnel.
In the general Inventory is associated with manufacturing and retailing firms. Although equipment suoolies and personnel are all integral inventories for organization such as hospital, universities, and other public services organization there fore, wagner (1989) concludes the Inventory mode plays the same role in the field of operation research as do Newtons elementary laws in the field physical well nearcy the same role. Even though the situation considered by the model is idealized, the encompass many of the important consideration for chosen an Inventory policy.
1.2 Statement of Research Problems
A cost of business of recent are falling in the country to meet demand of their customers through running out stock some of this firms are attributing this to the vacling economic depression in the country but this explation show ever quite unsatisfactory the research opines that most problems associated with firms especially nigerrite limited in running out of stock to meet customers need, buying of raw materials at higher prices thereby producing at high cost in due to the improper application Inventory control.
The issue here is that customers would then begin to ask question such as ‘‘ is Nigerite limited having finance problem? Are the funds provided reducing year out? Or is there any form of mismanagement? What wad situation some years bank in the organization? As question being asked by customers so also the management or the organization is face with some problems such as ‘why are we sometime out or stock what should be stocked? How many? When should replenishment be affected? In what amount ? how should we adjust production when sales are uncertain/unpredicated?
What capacity will examine the extent too which Nigeria limited has adopted inventory control in organization and recommend possible ways in which the situation could be bettered.
1.3 Objective of the Study
The major objective of the study include the followings.
- To examine the extent at which nigerite limited has adopted the use of proper Inventory control in their polly formulation.
- To identify the organization Inventory items and their associated cost.
- To find out the total number of product each machine the organization has can produce either in batches units with associated dry taken hair for completion of the jogs.
- To Inventory how the organization places order or their raw materials with associated cost.
- To find out recording quantity of each of raw materials uses and average number of days each of the producer takes before being and the carrying cost.
- Lastly and most importantly to make useful recommendation to Nigerite limited and other similar organization based on the finding of the study.
1.4 Significance of the Study
Inventory control as already indicated in the background of the study is very importance to businessmen due to it’s numerous applications or properly applied such as the avoidance of the organization faced with the problems of running but of stocks. Profit maximization especially when they are anticipated price increase minimization of nordering cost reduction of production cost, shelve display a commodities uncomplying of successive operation in the process of making it possible to process a product at a distance from customer or from raw material supplies or two do two operation at a distance from each other e.t.c.
With the benefit derivable from proper application of inventory models as well as various problems still confronting most manufacturing, retailing or wholesaling firms in Nigeria, which are mostly wrongly attributed to economic depression, whenever they fail to meet customers orders there by costing such customers to their competitors apart from the money they our to have realized obviously called for this kind of study.
1.5 Scope of the Study
The attention of this project is focused essentially on inventory control to Nigerite limited lagos being the head office where all relevant information needed about others operating plant with in the country easily and ready available and accessible.
Since the write up will not extend beyond how inventory control is beings used in the chosen organization various concept of inventory control and how they are applied to the company under study. Nigerite limited lagos, could be attempted. This will enable us see the relationship between inventory control and operating result of the company.
1.6 Limitation and Constraints of the Study
Research study in nigerite is best with a problems which mass prejudice against the researcher themselves under secrecy as well as were time and financial constraints may of this limitation were experienced the course of out study.
However, provement among these limitation were experienced the course limitation were time and financial constraints. As final year student we had short time at my disposal for the study. As has to combine it with other academic work some problems were therefore encountered in the conduct of the field work it was not quite easy to arrange or personnel intervention with the general manager, propriety or the product manager of the aquan rapha investment company. The national directorate of employment as well the Nigeria banks of commerce and industry limited
Summary, Conclusion and Recommendation
This section summarizes the shole study which was aimed in business at accessing the Impact of Inventory control in business significant with a particular are however Nigerite from the study.
Nigerite Limited inventory management was found to be in the hands of the company’s account department with the assistance of the company’s marketing department.
It was also discovered that five major machines each producing different other machine coupled together to form one e.g SM1 under each type. The actual value for each was said to be running into several millions of naira but no actual value for each was said to be running into several millions the naira but no actual figure was obtained.
Greater numbers of raw materials used in the organization was found to be found locally (i.e idhdn Nigeria) while few sourced externally.
Furthermore, the highest days for the organization product disposition (getting) after production was found to be fourteen days. But sometimes, it can be up to 28 days if further test out observation were to be carried our again to guarantee.
Most costs could not be obtained in the organization for all the items kept because of the organizational structure of the company or the fear of competitors.
For proper gathering and keeping of inventory record for future decision making by Nigerite Limited and similar organization, there should be a separate inventory item section in the organization especially in bigger organization such as Nigerite Limited, Ikeja.
Secondly, once there is an inventory manager in any organization, inventory related problem would be effectively tackled and addressed properly.
The most important to the above is the implications of not having an inventory section in an organization e.g. holding or carrying cost which include, stress, cost, overheads, deterioration, insurance and security. For example Duches Slate is a slow moving product (item) i.e demand for it is painted and it liable to the vaganes of wheather before it is sold eventually.
Most medium and small scale business as well as manufacturing firms like Nigerite Limited establish and maintain inventories to meet the demands. The inventory control from the literature reviews how ever exist in many sizes, shapes and firm to meet these varieties of demands.
From the study, it can be concluded that there us now proper or other adequate on conclusive inventory record of all items in Nigerite Limited, and without proper records of yearly inventory, it would be very difficult if it is not possible for any organization to meet its set goals and objective because its either able to meet their needs through shortage of production or over production without available market leading to wastage.
In the absence of proper inventory also fraudulent practice will be rampant among both management and worker of any organization which may eventually lead them to closure.
If the recommendation below can be adherently used by Nigerite Limited as well as similar organization not paying attention to inventory management most of the problem highlighted would be minimized if not completely eliminated.
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