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Inventory Management And Control In A Manufacturing Organization
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1.8 LIMITATIONS OF THE STUDY
The
research is limited to Akaraka Industries Nigeria Ltd. It was not easy
to get most heads of departments and supervisors on seat while some of
those seen were reluctant to open up. Nevertheless, I am grateful to the
very few who not only made data available to me but also provide some
useful guidelines and critics.
Scarcity of reference materials in the
country really affected the smooth work of the project. Most of the
text books in the library were out dated so finding and locating items
becomes a problem. Materials required from the library were difficult to
get, the librarian kept on giving promises of come today, come tomorrow
at the end disappointing the researcher.
Unavailability of adequate
finance was another major limitation. The researcher could not attain
the desired scope and depth as a result of this financial handicap.
1.9 DEFINITION OF TERMS
1. Inventory – All the tangible assets of an organization other than the fixed assets.
2.
Stock control and Inventory control – Are used synonymously, whereas
stock control originates from Britain, inventory is of America origin.
Both mean the same thing.
3. Pre-production Inventory – Comprise
parts and materials purchased from outside the organization for
manufacture into the products.
4. In-production stock – Comprises the
parts and assemblies manufactured inside the organization which are not
yet finished products and may for accounting purposes be treated as
part of work –in-progress.
5. Post-production stocks – Are finished products held either at the factory or at warehouse and distribution centers elsewhere.
6.
Stock taking – Represent the complete process of verifying the quantity
balances of the entire range of items held in stock. It is periodic but
is usually carried out annually so as to disclose the value and
quantity of stock for balance sheet purposes.
7. Stock checking – Represent any other check on physical quantities which may be applied either regularly or intermittently.
8.
Minimum stock level [or danger level] – Represents the amount of stock
expressed in units of issue below which stock of any given item should
not be allowed to fall. When this level is reached, it triggers off
urgent action to bring forward delivery of the next order.
9. Maximum
Stock Level – Is the amount of stock expressed in units of issue above
which the stock should be allowed to rise. The purpose of this level is
to curb excess investment.
10. The Ordering Stock Level – Represents
the amount of stock expressed in units of issue at which ordering action
is indicated in time for the materials to be delivered before stock
falls below the minimum.
11. Buffer or Safety Stock – This is the
reserve stock held to guard against stock out due to usage or lead time
exceeding the average.
12. Lead Time – The time between the placing of new order and the arrival of the order.
13. Out of stock – A state where there is no stock at all in the store.
14. FIFO – First-in-first out.
15. LIFO – Last-in-first out
16. Ltd – Limited.
17. Codification – This is the allocation of number or alphabets to stores items for easy identifications.
18.
Surplus – A Usable material, equipment or parts including capital
equipment which are in excess of normal manufacturing operating or
repair requirements.
19. Scraps – Materials which have lost their
original value due to faulting work, obsolescence or other causes. They
may also raise through manufacturing out offs or treated as scarp due to
non-usage over the years and disposed of as such.
20. Obsolete – A
material, or equipment or part which is no longer useable in the service
for which it is purchased and therefore cannot be utilized owing to
technological, fashion or taste change.
21. Obsolescence – This can
be machinery or equipment which is going out of use for operational
reasons but not completely phased out or out of use.
22. Deterioration – when material has lost its useful vale naturally or due to poor handing and storage.
23.
Discrepancy – this is a non-agreement of the calculated or book balance
with the quantity physically found and counted during stocktaking.
24. Dormant Stock – item with no present demand are classified as dormant stock.
25.
MRO Items – these are maintenance, repairs and operating supplies which
help to facilitate production operation but do not become part of the
finished product.
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ABSRACT - [ Total Page(s): 1 ]An efficient and effective inventory control and management in any organization is very vital in the survival of such organization. Inventory is defined as “An idle resource of any kinds that possesses economic values, and is classified in many ways thus: production inventories like raw materials, parts and components which enter the firm’s product in the production process. MRO inventories that is maintenance, repair and operating supplies which are consumed in the production proce ... Continue reading---
