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Nventory Policy As A Tool In The Attainment Of Organizational Goals
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1.3 OBJETIVES OF THE STUDY
The research work is to
examine the unfulfilling attitude influencing size and structure of
inventories to be held and the best planning and control methods to be
used by the organization.
An organization that takes a good
inventory policy has made a step towards achieving its aims and
objectives and such could be seen a prudent organization. The types of
inventory policy taken its accuracy and time taken to formulate this
policy is a prove of good planning, responsiveness to responsibility,
and so depends on efficient and effective organization. This study
therefore tries to discuss
a. The difficulty of finding the proper
cost to be assigned to the maintenance of inventory as well as other
matters which influences the establishment of an adequate inventory
policy.
b. The problem of re-ordering and production scheduling as it affects inventory policy.
c.
The crash seasonal and similar problems as they relate to a rational
programme of inventory and production planning with the major problem of
forecasting and control included in the total approach to inventory
policy in as it relates to the business.
d. This study is also
aimed at ascertaining the method of formulating inventory policy in
organizations, the levels of inventory stock held and the possible ways
of eradicating disappointment from suppliers to customers.
1.4 SIGNIFICANCE OF THE STUDY
Lesser attention has been paid to the formulation of inventory policy
while more attention has been paid to its management. Efficiency is the
key word of all organization be it manufacturing, merchandizing and so
on which are both small scale and large scale. A well established
inventory policy enables the organization to enjoy multiple effects of
its merit. The importance of this study is to provide guideline that
will help both effective and efficient. This invariable creates an
opportunity for a more co-ordinate work and profit maximization since
the satisfaction of most management is that they succeeded in using
minimum cost to maximize profit.
To the stores or production
manager as he may be called who is responsible for the stores production
department and who is responsible and accountable for the inventories.
This study will provide the necessary equipment needed for planning,
control and procurement of inventories according to “Hongreen†two
limits must be imposed in controlling inventory levels because there are
two danger points that management usually wants to avoid, the first
danger that of inadequate inventories, disrupts production and may lose
sale. The second danger excessive inventories introduced unnecessary
carrying cost and obsolescence risk.
In the light of the
above it is hoped that this study will help eradicate or minimize the
incidence of the above with the current emphasis of small scale
manufacturing industries, this study will be of immense help to the
public and any person who have the intention of indulging in some small
scale business.
Others who will benefit from this study are
future researchers and fellow students who may pick up this work from
the library. Since researcher could not have ordinary gone into this
work, as it will be considered invaluable, this work exposed him to
things that could have escaped his notice. Employees in training and
development courses in stores management for this position of stores
work helpful. It is also helped that managers also found this public
organization as well as the government and individuals will find this
work as an assistance in their daily transaction.
1.5 DEFINITION OF TERMS
Policy: The term policy covers the objects of business and the principle upon which it is conducted.
Inventory
Control: Is the controlling of physical qualities of actual things
found in the stores at any time. It is no procurement policy and
procedure which supply livestock and pricing procedure which clear out
dead stock.
Work – In – Progress: this is the materials that are still in process of production.
Raw Material: material available to be used in the production process.
Finished Goods: complete product ready for sales, shipment and consumption.
Profit Maximization: this is the maximization of total policy
Wealth Maximization: this is the maximization of earnings per share which will maximize stockholder welfare.
Planning:
Planning is an intellectual demanding process. It requires that we
unconsciously determine the action and base our decision on purpose,
knowledge and consider estimate.
Inventory: this is the total firms investment in work in progress, raw materials and finished goods.
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ABSRACT - [ Total Page(s): 1 ]Inventories policies in manufacturing companies has been a great assistance towards the attainment of organizational goal which aim not only helping the sustenance of manufacturing industries or setting it on a going concern and thereby fostering long term profitability through one of the problems that indeed usually confront manufacturing companies is how to maintain and value their inventories and by so doing achieve opinion inventory. The importance of inventory policy in the attainment of or ... Continue reading---
