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Impact Of Efficient Inventory Control On Materials Management In An Organization
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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
A
trend in the past has been for companies to hold some level of stock
than preciously did. Hence companies gas fund that they can sometimes
reduce the lead time required to obtain materials and to produce
products, so that they can operate with less inventory and skill serve
their customers effectively.
Stock is idle resources hold for future
use. Whenever the inputs and outputs of a company are not used as soon
as they become available, inventory is present. Services operation and
jobs tend to have small investments in stock. For may companies,
however, stocks account for a large percentage of assets this need for
stock control.
Chilaka (2006:128) times stock control as the means
by which materials of the correct quantity and quantity is made
available and as at when required with due regard to the economy in
storage and ordering cost, purchasing and working capital.
Carter and
price (1996:139) defines stock control as the process of ensuring that
the stock held by the organization is supplied to those parts of the
operations that required the items (ie production, distribution, sales,
engineering etc).
Henritz and Farrell (1990:100) defines inventory
stock control as the assurance of having the items at hand when needed
and afford the added protection of reserve, stocks, theoretically
untouchable but practically serving to fill needs when extra ordering
demand develops or when correct procurement fails.
Organizations that
have stocks has the advantages of assessing items to be held in stock,
the extent of stock holding operational needs time required to deliver
goods, availability of capitals, cost of storage, regulation of the
input of s tock into and from the stove house through these, it is
possible for firms to adjust continuously the quantity and value of
stock held to com firm with circumstances of control.
According to
monk (200:148) inventory need to be effectively managed, if efficient
operation is to be achieved, due to its initial nature, the mode of
control and management of inventories can be a factor in the success or
failing of manufacturing company concern.
He pointed out that
insufficient inventory can seriously disrupt the product distribution
cycle that is so critical to the survival of all the manufacturing
organization. On the other hand excessive inventories can cripple a firm
as felons and this endanger it’s liquidity position. Either poor
inventory management can present a serous challenge to the productive
capacity of manufacturing organization.
In view of the subject matter
of the work, the researcher aims at identifying the nature of stock
control in Rokana industries Plc Nekede Owerri.
1.2 STATEMENT OF THE PROBLEMS
Strictly,
this project is a case study of the impact of efficient inventory
control on materials management in an organization at Rokana industries
limited Nekede Owerru Imo State.
The problems of the study therefore are as follows.
The impact of efficient inventory control on the materials management in an organization can not be over stated-
(1)
Selection and application of wrong inventory method which does not
consider critical factors of efficient inventory control on materials
management in an organization.
(2) Poor operation of the stove which
in turn leads to problems of materials flow in the production system and
efficient inventory control on materials management in an organization.
(3)
Most people involving in efficient inventory control on materials
management do not possess the right skill and knowledge on inventory
control.
(4) The stock out cost or shortage cost has serious effect
on the quantity of efficient inventory control on materials management.
(5) There is no serious attempt on the part of firms to improve efficient inventory control management.
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ABSRACT - [ Total Page(s): 1 ]Inventory control requires high cost and investment commitments. In manufacturing company where inventories are handled the introduction of a well planned and effective system or means of controlling these inventories is necessary for profitability and accountability to both the management and shared holders of the company whose inertest, objectives was established must be protected. However, the researcher work will be treated in five chapters. Chapter one is the introduction of the work where ... Continue reading---
