The Role Of Inventory Management On The Nigeria Brewery Industry
This study was carried out to examine the role of inventory management on the Nigeria brewery industry using Nigeria brewery industry 9th mile corner, Enugu as a case study. The study was specifically set to ascertain the techniques of inventory management adopted by the brewery, to seek way of improving such practices, and determine problem encountered by the use of such methods as well as benefits derived from their use. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of staff Nigeria brewery industry 9th mile corner, Enugu. In determining the sample size, the researcher conveniently selected 70 respondents while 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using mean scores, while the hypotheses was tested using Chi-square statistical tool. The result of the findings reveals that the economic order quantity contribute to poor performance at the brewery industry particular Nigeria brewery industry. Furthermore, the study showed that the materials abnormal loss constitute some set back within the wheel of productivity in the Nigeria Breweries Industry. The study recommends that brewery firms in Nigeria should develop a policy framework to facilitate faster implementation of the best inventory management practices such as Just In Time in order to enhance the return on assets of such firms. To mention but a few.
Table of Content
- Title Page
- Table of Content
- List of Tables
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Questions
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of the Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisations of the Study
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Review
- 3.1 Research Design
- 3.2 Population of the Study
- 3.3 Sample Size Determination
- 3.4 Sample Size Selection Technique and Procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Validity of the Study
- 3.9 Reliability of the Study
- 3.10 Ethical Consideration
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Analysis of Data
- 4.3 Answering Research Questions
- 4.4 Test of Hypotheses
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background of the Study
Inventory management is the science based art of controlling the amount of stock held in various form within as business to meet economically the demand placed upon that business it is thus a machinery used by brewery industry to determine the optimal level of stock to hold at specific periods of time depending on certain such as cost minimization and / or anticipated price increase.
The need for inventory arises because of the dynamic nature of the environments within which the brewery industry exist. According to Patterson and Silver, in an ideal situation where the demand upon a business is known exactly and in advanced where supplies arrives when due, there would be little need for any inventory at the end of financial periods.
In practices however, the demand is not known in advance and suppliers could arrive either early or late as the case may be and this brings about the need for inventories to act as a butter between the vagaries of demand and supply.
Patterson and Silver expressed the need for effective management of inventory according to them inventories by a brewery as expressed associated with inventory management often form a substantial amount of the total expenditures incurred by any brewery. This also stated that inventories determined the extent to which purchasing manufacturing and distribution activities of any brewery could be rationalized to ultimately provide competitive customer service.
In late 20’s many business sectors in U.S.A experienced great slumps. These were as a result of materials or stock management. In effective it was during this period that some businessmen coined the statement “stock are the grave yard of a business”. This statement means that is with her stock is bound to face some financial hitches which may in effect, grind the business wheel to halt.
One should not fail to understand that in most industrial firms materials account for over 50% of the company’s total cost of production. Therefore, any business that would want to remain in operation, should as a matter of importance exercise adequate measures towards protecting her stock levels. A good inventory management saves many breweries that are about folding up.
Again, there is no doubt that many uncertainties be calmed inventory management. Hence, this range form determining how much inventory are needed at a particular period, how and when to have them obtained, and the determination of the marketability of the outputs, therefore the associated risks of these uncertainties could only be taken care f by a well establish proper inventory management techniques.
Little wonder is that no two breweries in the same industry having equal materials risk condition on and on the same scale of operations record the same inventory cost. The difference can be explained by the techniques employed by each of the breweries.
Many options are open to the inventory manager, he may chose to maintain a high inventory level to avert the hazards of being or having to order for materials very often, he can also maintain low inventory level to put ordering more frequently than when highly maintained. The question lies now on which of these approaches is preferable to the other. Efforts will therefore be geared I this piece to throw more light on this question, as this study set to examine the role of proper inventory management in brewery industry in Nigeria with special emphasis on Nigeria brewery Plc 9th mile corner Enugu.
1.2 Statement of the Problem
Inventories play an essential role in many breweries, that is why we say, inventories is live wire of a brewery industry. Inventory like to business what human blood is to human beings, it implies that business sustainability so much depend on it. Management of inventories in brewery industries is a function of observations of prudent inventory accounting techniques which aims at not only helping the sustenance of brewery industries or setting it on the path to growth. Instability is the major problem to tackled in the Nigeria economy. The reason why we said instability is it fluctuates the prices of the products thereby shifting customer taste between Nigeria brewery plc product and other products in the market.
1.3 Objective of the Study
The overall aim of this study is to critically assess the role of inventory management on the Nigeria brewery industry using Nigeria brewery industry 9th mile corner, Enugu as a case study. Hence, the study will be channeled to the following specific objectives;
- To ascertain the techniques of inventory management adoted by the brewery.
- To seek way of improving such practices
- To determine problem encountered by the use of such methods as well as benefits derived from their use.
It is hoped that by the end of the study, certain loopholes in the inventory management system of the brewery would be identified and probable solutions generated.
1.4 Research Question
- Does the economic order quantity contribute to poor performance at the brewery industry particular Nigeria brewery industry?
- Does the absence of the practice of periodic or perpetual inventory, taking has effect on the Nigeria breweries industry?
- Does the materials abnormal loss constitute some set back within the wheel of productivity in the Nigeria Breweries Industry?
- Is the poor storage space a hindrance to the achievement of your inventory control?
1.5 Research Hypotheses
- Ho: Inventory management does not play a significant role on the Nigeria brewery industry.
- Ha: Inventory management plays a significant role on the Nigeria brewery industry.
1.6 Significance of the Study
This work is intended to be of benefit to processing business in general and to Nigeria breweries plc particularly. It is hoped that by improving the profitability of these firms, this study has benefited the economy as a whole, this is not an over statement.
Following the completion this work and the result made available to them, the processors will be in a position to re-examine their proper inventory management techniques and upstate them so as to enjoy these benefits accruable to firm, with proper inventory management, and also avoid plunging their business into financial and operating difficulties.
Finally, this work will increase the materials available on this topic. Reader will appreciate of other people’s view on the proper inventory management and see the workability of so-called inventory models in real life situation.
1.7 Scope of the Study
The scope of this study covered the role of inventory management in a brewery industry. The scope also covered the Nigeria Breweries Plc. 9th mile corner in Enugu State.
1.8 Limitation of the Study
The limitation of this study denotes the constraints or impediments as it affected the researcher the course of this study. The major limitations include inadequate time for carrying out an exhaustive work on the study. There was also the problem of inadequate finance which impeded on the researchers effort to visit several academic libraries and the areas under study for the collection or relevant data. A major limitation to the study was the uncooperative attitude of area under study as it concerned the completion of the copies of questionnaire administered to them.
1.9 Definition of Terms
Are stocks of the product a company manufacture for sale and component that make up the product. The various form in which inventories exist in a manufacturing company are, raw materials, work in progress and finished goods.
It is process of planning organizing leading and controlling the work of organization members and using all available organizational resources to reach stated organizational target or aim.
Is a place where beer is made or a company that makes beer.
Is where the production of goods are made especially in factories.
1.10 Organization of the Studies
The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, and selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.
Summary, Conclusions and Recommendations
This chapter summarizes the findings on the role of inventory management on the Nigeria brewery industry using Nigeria brewery industry 9th mile corner, Enugu as a 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 the role of inventory management on the Nigeria brewery industry using Nigeria brewery industry 9th mile corner, Enugu as a case study. The study was specifically carried out to ascertain the techniques of inventory management adopted by the brewery, to seek way of improving such practices, and determine problem encountered by the use of such methods as well as benefits derived from their use.
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 were staff Nigeria brewery industry 9th mile corner, Enugu.
Based on the findings of this study, the researcher concluded that;
- The economic order quantity contribute to poor performance at the brewery industry particular Nigeria brewery industry.
- The absence of the practice of periodic or perpetual inventory, taking has effect on the Nigeria breweries industry.
- The materials abnormal loss constitute some set back within the wheel of productivity in the Nigeria Breweries Industry.
- The poor storage space is a hindrance to the achievement of your inventory control.
Inline with the findings of this study, the researcher proffer the following recommendations;
- Brewery firms in Nigeria should develop a policy framework to facilitate faster implementation of the best inventory management practices such as Just In Time in order to enhance the return on assets of such firms.
- Brewery firms should consider investing in modern technology and implement Electronic Data interchange (EDI). This will reduce inventory costs and improve returns, thereby, improving the growth of firm.
- Since IM has a positive and non-significant relationship with ROE, it is recommended that top management should emphasis on the proper inventory management techniques and measuring of efficiency deviations to identify weaknesses in the process of managing inventories.
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