Analysis Of The Problems And Prospects Of Inventory Control In A Manufacturing Company

Download complete project materials Analysis Of The Problems And Prospects Of Inventory Control In A Manufacturing Company from chapter one to five

TABLE OF CONTENTS

TITLE PAGE

CERTIFICATION

DEDICATION

ACKNOWLEDGEMENT

LIST OF TABLE

CHAPTER ONE

BACKGROUND OF THE STUDY

STATEMENT OF THE PROBLEM

AIMS AND OBJECTIVE

SIGNIFICANCE OF THE STUDY

SCOPE AND LIMITATION OF THE STUDY

RESEARCH METHODOLOGY

THE HYPOTHESIS OF THE STUDY

ORGANIZATION AND PLANS OF THE STUDY

CHAPTER TWO

2.O    LITERATURE REVIEW11

2.1     INVENTORY CONTROL DEFINITION AND TYPES

2.2     IMPORTANCE OF INVENTORY CONTROL

2.3     MATERIAL PURCHASE

2.4     MATERIAL STORAGE

2.5     CENTRALIZATION OF MATERIAL STORAGE

2.6     INVENTORY VALUATION METHOD (MATERIAL PRICING)

2.7     STOCK TAKING

2.8     BRIEF HISTORY OF THE ORGANIZATION

2.9     COMPUTERIZATION OF NBC PLC

2.10   CALCULATING THE ECONOMIC ORDERING QUANTITY (EOQ)                                                     `

CHAPTER THREE

3.0     INTRODUCTION

3.1     RESEARCH DESIGN

3.2     POPULATION OF THE STUDY24

3.3     SAMPLE SIZE24

3.4     SOURCE OF DATA AND DATA COLLECTION INSTRUMENT

3.5     QUESTIONNAIRE BASIC ASSUMPTION

3.6     STATISTICAL TECHNIQUES/TOOLS

3.7     PROFILE OF THE CASE STUDY

CHAPTER FOUR

4.0     DATA ANALYSIS AND PRESENTATION

4.1     INTRODUCTION

4.2     CHARACTERIOSTICS OF RESPONDENT ANALYSIS

4.3     THE HYPOTHESIS RESULT

4.4     DISCUSSION OF FINDINGS                                        

CHAPTER FIVE

5.0 SUMMARY OF INDINGS, CONCLUSSION AND RECOMMENDATION

5.1     SUMMARY OF FINDINGS

5.2     CONCLUSSION

5.3     RECOMMENDATION

BIBLIOGRAPHY

QUESTIONNAIRE

CHAPTER ONE

1.1  BACKGROUD OF THE STUDY

A major problem facing the stock control has affected the growth of business or company is the determination of an economic order quantity that will minimize total inventory cost. The purchasing department only orders the amount needed to attain the maximum stock level whenever stock reaches or fall below the minimum stock level.

While the company fails to realize that the minimum level does not have to be attained always, it has cost implications whenever stock falls below minimum level, ordering cost per unit decreases as quantity increases, however, there will be an increase in carrying cost. Hence, total cost is not minimized whenever the quantity order is greater than the optimum required that is the economic order quantity.

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The company is faced with the problem of delayed with regards to local supplies of its production materials such as sugar, and water bottle soften carbon(iv)oxide02. even though local supplies constitute only 28% of the total production material used in most cases, supplies fail to meet the delivery date upon because they do not know the exact materials required and yet will not admit ignorance.

The high value part of the materials on the one hand and the financial inability on the part of suppliers initially may not realize the huge amount of capital involved with the result that they will not supply at all  and fail to inform the company of their inability to supply.

Consequently, the company incurs cost in sending remainders and in cancellation of orders prompt delivery of production material is of primary concern to management.

Delay in the delivery of these materials will lead to the increment of enormous cost by the company.

1.2 STATEMENT OF THE PROBLEM

The importance of stock in any organization can be over emphasized and its control must be accorded a great attention so as to minimize some of the problems associated with inventory control. Some of these problems are:

1. inventory valuation method are many

2. There are improper record keeping

3. The supply of raw material by contractors is ineffective

4. No policy regarding minimum and maximum stock levels determination

5. The company adopts manual inventory control system

6. The bi-annual stock taking is not enough for effective control.

PROBLEM OF STOCK MANAGEMENT DUE TO INEFFECTIVE STOCK CONTROLL SYSTEM

For accurate pricing of stock, these has to be an effective means of recording the movement of stock. This is to say that the recording must be up to date regarding materials prices. The following are major problem of stock management due to ineffective stock control system.

Material are brought at different prices

These material becomes unidentifiable from other undesirable from costing point of view

Profit calculation is affected by the pricing method adopted by an organization, particularly where materials from a large of raw material due to suppliers cause problem of stock inefficiency management

Storage: material like concentrates chemical require fully air conditioned, very cold room

Ineffective supply of raw material due to suppliers cause problem of stock inefficiency management.

Capital tied down due to ineffective control system

Quality of materials; there may be available found but in absence of materials of the desired quantity for graded materials, problems ensure.

1.3 AIMS AND OBJECTIVE OF THE STUDY

Inventory forms a large proportion of any firms working capital and therefore, there is need for effective control by management which is like major  objective of this study on inventory control system

To have a general critical review of managing problems arising from stock control of the soft drinks industry

The Bi – annual stock taking adopted by NBC plc to be used as a case study industry.

Ways of correcting faulty valuation method and at the same time determine the suitable stock valuation method for the particular circumstances of soft drink companies Nigeria

To check the problem of determining the E.O.Q

To suggest appropriate policy regarding determination of maximum and minimum stock levels.

To look at possible means of bringing to minimum the huge expenditure on stock control

The effective management of available funds will be the result of effective stock control system

Management information system (MIS) to enhance control system on introduction of computer

Clerical operations account for inefficiencies in management control on inventory

To look at the ways of making maximum and effective use of the seemingly washing human resources who are not fully utilized in management control system of stock other implement to efficiency of stock management in organization which with equally draw attention in this study include

Fraud and misappropriation of stock balance (quality) and of pricing (price)

SIGNIFICANCE OF THE STUDY

Significantly the study is aimed at achieving the significantly purpose in the NBC plc and in the soft drinks industry as a whole

To achieve inventory control function of ensuring that sufficient goods are retained in the stock to meet all requirements

The key to stock control system and efficiency of stock management is in ensuring a balanced position providing material needed for production, maintaining the economic level for material of different nature, at the right time and place yet keeping the cost incurred in so doing to a minimum level.

The possibility of carrying unnecessary large stock resulting in obsolesce of stock items wastage and eventual lost of funds will be tackled

In financial management, it is believe that few percentage saving on a large scale would mean large amount of money high ways of bringing the huge expenditure on stock control system to the best minimum.

To provide an insight to student, researchers and other interested persons or organization on inventory system practiced in real life situation as compared with the theories of inventory really applies, especially to soft drink companies

This study will highlight the cause of problems encountered in controlling stock in NBC plc and find suitable solution to eradicate these problems

To suggest ways of ensuring continuous supply m of materials to facilitate an uninterrupted production process

To control invest met in stock

To attain a high level of efficiency by reconciling the practice with the theory because the theoretical aspect is a model system on which the practice of inventory control is based

This study will reveal the need for the company (NBC PLC) to go computerized regarding inventory control

Problems which arise in the course of inventory control in practice are highlighted and suggested solution proffered

It is hoped that the study will serve a very useful purpose to the ,Nigeria Bottling companies (NBC PLC) as well as other soft drink have been produced in the area of inventory control.

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