Impact Of Stock-Taking In An Organization
An independent activity within an organization to review of purchasing and financial policies of the organization are fully implemented as well as malting policies and procedure guideline on stock-taking, account, financial, asset ands liabilities of the department. It has immensely helped in the management of the organization. Despite, there is also improvement in areas like decision making regarding the stock-taking and ensuring the completeness and accuracy of the organization book and other operation as basic for service to management.This study examined the impact of stock taking in an organization and was aimed at investigating the impact of stock taking and its influence on productivity as well as ascertaining the problems and benefit to be gained from it. The method used in collecting data was a survey research method and the sample size used for the study was Ninety-six (96). One hundred (100) questionnaires were administered and a total of Ninety-six were returned by the respondents who were chosen from Fan Milk Nigeria plc, Rivers state. The outcomes of study were presented in tables while chi-square statistical analysis tool was employed to test the hypothesis formulated in the research. The test result showed a significant relationship between stock taking and productivity and the result also showed that stock taking also has relationship with productivity. This indicated that inventory management was an important tool that could assist the organization to achieve her numerous objectives and improve productivity. The research recommended that managers must ensure that necessary materials are supplied to the department at the right time, so as to ensure effective and efficient operation in the organization, the store officer must also ensure regular inspection of the stores especially areas in which materials are stored and handled, to ensure that unused materials are carefully disposed.
The purpose of this is to look at the need to maintain high standard of audit work. The purchasing may be held liable for negligence because the law requires one purchasing to care, diligence and skill as is reasonably necessary in a particular circumstances, where an organization of person suffers loss or damage as a result of the failure of an purchasing to discharge the fiduciary duty imposed on him by law they may be liable for negligence and an action for negligence may be instituted against him in court of law.
To ensure that quality of audit work is still high, he should then establish a means at maintaining the jobs on his behalf. In this case of purchasing and stock-taking practitioners, these are faced with many pressures form clients to maintain their fee levels or even reduce them. This may not be unconnected with the present economic condition in the country, which is hard on almost all business organization, in most companies; unlike the case study of this project “on organization” the stock-taking firms are made to perform both the purchasing and stock-taking functions for the same fee”
In this study, we will discuss the meaning of audit management reason for audit management, its objectives and stage such as planning of audit, recording and control. The purchasing operational standard states that, the purchasing should satisfy him as to the quality of work established adequate control procedures. The control procedure will include proper allocation of staff of appropriate ability, proper briefing of staff and review of the work done by others.
There are also improvement in areas like decision making regarding the assets and ensuring the completeness and accuracy of the organization’s books. Even though it is not the duty of the purchasing to take check, he should satisfy himself as to the validity of the amount attributed to the assets in the accounts which are the subject of the audit in determine the nature and extent of the audits steps necessary for its purposes, it was found that the purchasing examined the system of organization control in order to access its effectiveness relative to the ascertainment and evaluation of stock.
1.1 Background of this Study
Stock taking has been traced to the Ancient Egyptian Civilization as demonstrated in their Ancient wall paintings. The utilities of the early purchasing were also recovered in the writing of ancient Roman Empire.
Stock taking came in to existence since men bargain to enter into contractual relationship with one another. This is because there was always the desire to establish the accuracy and reliability if the records and results of such relationships to the satisfaction of all the parties to a contracted relationship would engage a neutral person to check the records of their transaction and real his findings to their learning.
This methods is associated social club etc, various effort have these effort were too simple thereby excluding some essential information while others ended up being confusing.
1.2 Statement of Problems
Another problem encountered in this central on the absence of the organization purchasing. Purchasing in the office due to some circumstances that led outside office due numerous tours their expectation are lectures, cut off. The extensively with issues relating to the history and nature of stock taking, lectures two will discuss mater relating his expected roles in an enterprise where he act as an purchasing. Since our major concern in these lectures is the statutory purchasing matters relating to him are adequately covered by the companies and Allied matters Decree (CAMA) in 1990 is as follows:
First appointment the first director of a New organization can make the first appointment before the first Annual General Meeting (AGM) of the organization where the first Directors made the appointment, the shareholder are at liberty to either ratify the appointment or reject it as the power to appoint the purchasing to resides with the shareholders. But where the shareholder intends to reject a purchasing appointed by the directors, they must given fourteen days noticed to the directors.
Subsequent appointment by this, the purchasing of any organization are appointed are the Annual General Meeting (AGM) to hold offices from the conclusion of the next meeting of the organization.
retiring purchasing shall be re-appointed to continue in officer without passing any resolution except:
He is disqualified from re-appointment of the Annual General Meeting (AGM)
A resolution appointing another purchasing or dropping the retiring purchasing has been properly passed. The organization has received notice of his unwillingness to continue in office.
1.3 Objectives of the Study
The main objective of this study is to examine the impact of stock taking and productivity of a business organization.
The specific objectives are:
- To examine the contribution of inventory management to an organization performance.
- To examine the impact of specification on materials on the material management.
- To assess the impact of material handling on the enhancement of uninterrupted production.
- To examine the impact of forecasting for material requirement on the smooth operations of the organization.
- To examine the impact of stock taking and proper stock checking on material management?
- To identify the contribution of materials management to the success of an organization.
1.4 Research Questions
The following questions shall guide the study:
- To what extent does inventory management contribute to an organization performance?
- Does specification on materials have any impacton the material management?
- To what extent does material handling help in the enhancement of un-interrupted production?
- Does forecasting for material requirement help the organization to have smooth operations?
- Does stock taking and proper stock checking essential for material management?
- Does materials management contribute to the success of an organization?
1.5 Statement of the Hypothesis
The Following Hypothesis are Formulated?
- Ho: Gender is not significantly related to whom is responsible for the effective store control, stock holding and assessment of goods.
- H1: Gender is relatedtowhom is responsible for the effective store control, stock holding and assessment of goods.
- Ho: Age does not determine effective material management which contributes to the success of an organization.
- H1: Age determines the effective material management which contributes to the success of an organization.
- H0: Inventory management does not significantly impact organization performance.
- H1: Inventory management significantly impact organization performance.
- H0: Specification on material does not significantly impact material management.
- H1: Specification on material significantly impact material management.
1.6 Significance of the Study
The result of this research when concluded will be of great benefit to the following: Companies in the beverage industry especially Fan Milk Plc.The findings and the recommendation will asset production managers to find better ways to manage their inventory. The findings and recommendation can also be used as a stepping stone to other researcher in the areas for further research work.
1.7 Justification of the Study
A research of this nature is significant in the sense that the impact of stock taking and productivity of business organization requires a constraint research. It is belief that the study will throw light on the essence and importance of stock taking and productivity of business organization and the choice of selecting Fan Milk Nigeria plc. As my case study.
1.8 Scope of the Study
This research study centered on materials handling in a manufacturing company. It covered such areas as storage, transportation procurement, materials handling planning control and value engineering. The research is also intended to cover a specified period of time and also information are going to be drawn within the domain of Fan Milk Plc.
1.9 Definition of Terms
There are numerous terms and concepts associated with material handling. It is considered most appropriate to define some of these terms and concept.
1. Inventory Management:
This is the part of operation management concerned with maintaining the optimum level of inventory investment. It is concerned with policy making on inventing planning and inventory control.
2. Holding / Carrying Cost:
These include the cost for storage facilities, handling, insurance, pilferage, obsolescence, depreciation, taxes and the opportunity cost of capital obviously high holding cost tend to favour low inventory and frequent replenishment.
3. Ordering Cost:
These include certain clerical costs incurred in preparing order delivery and material handling costs, such costs usually represent a fixed amount for order placed regardless of the quality ordered.
4. Stock Valuation:
This is the method of assigning value to items of stock of a company. It helps company management to make inventory level decision. They use different method like last in first out (LIFO) first in first out (FIFO).
5. Inventory Control:
This involves regulation of quantities of materials or inventory on hand in such a way as to ensure the meeting of current needs of the organization while avoiding excess stock, the calculation being based on the rate of withdrawals and the time necessary of replenishment.
This is the stock of any item or resources used in an organization. It includes input such as human, equipment, financial and raw materials.
7. Inventory System:
These are set of policies and controls that monitors levels of inventory and determines what levels of should be maintained when stock should be replenished and how large orders should be.
8. Re order Level:
This is the quality level that automatically biggers a new order it is the stock level at which further replenishment order should be placed.
9. Maximum Stock:
This is the most desirable beyond which stock should not be allowed
10. Re order Quantity:
This is the quantity of the replenishment order.
11. Stock Out:
When an item of stock is required but is not available, then there is a stock out of that item.
12. Safely Stock:
An amount of stock in excess of average inventory held in a cushion against a stock out alive to usage or uncertainty of lead time.
Summary, Conclusion and Recommendations
5.1 Summary of Findings
Inventory management has been defined as the total of all those tasks, function activities and routines which concerns the transfer of external materials and service into the organization and the administration of the same until they are consumed or used in the process of production operation or sales.
After the analysis and interpretation in chapter four, evidence has shown that effective Inventory management and control contribute to the organizational performance or success. The research work had come up with the following summations:
- Stock taking and stock checking of materials should be implemented in the organization for effective and efficient management of materials.
- The company has to establish an efficient communication system in the organization to ensure that the information required are communicated at the right time and to ensure that decisions based on stock control are trusted and implemented.
However, this study wasable to establish that effective materials management contribute to the success of 7 up bottling company, Plc. Ilorin plant the case study
The creation of management within the procedure of purchasing and storing activities is nothing but to see that the store department which houses the purchasing sectionachieves it goals. Based on the findings from the investigations carried out for the purpose of this research work, the following facts have emerged.
- The materials in the organization should be properly handled and stored to protect the materials from deterioration of materials which may render them useless and can cause a great loss to the organization.
- Stock taking and proper stock checking are essential for effective material management
- The results revealed that effective materials management contributes to the success of an organization.
From the fore going investigations and findings the following recommendations were offered with the hope that they will help in improving the efficiency of the company and also increase their profitability.
- Adoption and application of economic order quantity (EOQ) model for total inventory cost.
- The manager must ensure that necessary materials are supplied to the department at the right time, so as to ensure effective and efficient operation in the organization.
- The store officer must ensure regular inspection of the stores especially areas in which materials are stored and handled.
- Automated material handling system should be adopted to avoid damages, pilferage and deterioration of material.
- Adequate safety and security of staff in the store, factory and other departments must be ensured (i.e. protective clothing e.g. gloves, goggles, and helmet etc.) must be used when needed so that maximum productivity can be attained.
- The storekeeper must ensure that unused materials are carefully disposed e.g. empty bottles
- Materials should be tested by a qualified control employee before being placed in the store.
If the above recommendations are implemented in the organization, it will assist the organization in the management and control of materials and also guarantee effective and efficient use of material in the organization.
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