CHAPTER ONE
BACKGROUND OF THE STORY.
The
importance of inventory control in any organization cannot be over emphasized. In
fact both wholesaler and retail business firm establish and maintain inventones
to meet the possible demand of the customers through the avoidance of running
out of stock or stock out cost. And
buying higher nice. In addition, minimization of ordering cost, reduction of
production cost as well as manufacturing firms keep inventories since
manufacturing firms must stock raw materials and component parts in order to
meet the demands of the production processes.
Inventory control exists in different
size shape and forms to meet a variety of demand. As a result of the importance
the current emphasis in management science that refore began with the analysis
of inventory control in 1915 develop
the first economic cot size equation which was probably the beginning problems.
In 1931, Raymond published in is
quantity and economy in manufacturer, in which he develop this idea farther
attempting to account for a wide variety of condition. In fact, in the past war
period, the management science literature has been filled with the analysis of
Inventory and production control system,
partly because of the great interest shown by such progressive companies as the
Eastman Kodak company, procter and gamble, johson and johson Kodak and a lost
of many others.
The
word ‘Inventory’ as a stated in the encyclopedia britanica’’ is term use to
designate item that are in process of producing goods to be sold. It has also
been defined according to migs wand meifs R. as the merchandise which is
available fore sale but
not sold
duing the year constitution the
Inventory of merfchandise bthe year.
Also for clarity sake Burbidge J.L
defined it as all of the materials parts supplies expensive tools work in
progress and finished products recorded on the book by an organization and kept
in the stock room, ware houses or plants ‘’other see it to usable resources
that are idle at a given point in time. But in the context of the study of
appraising inventory controlling business organization with reference to niger
limited. Ikeja which is manufacturing firms Inventory well include raw
materials semi finished goods (work in progress) e.g. predict meant from
painting and firming (becorceil) as well as finished goods.
This
is different from the way Inventory is viewed in a retail environment such as
supper market department shop, were Inventory is generally viewed as the stock
of goods or sales. It mat how ever, according to Davis et al (1786) include non
physical asset such as each account receivable and personnel.
In
the general Inventory is associated with manufacturing and retailing firms.
Although equipment suoolies and personnel
are all integral inventories for organization such as hospital,
universities, and other public services organization there fore, wagner (1989)
concludes the Inventory mode plays the
same role in the field of operation research as do Newtons elementary laws in
the field physical well nearcy the same role. Even though the situation
considered by the model is idealized, the encompass many of the important
consideration for chosen an Inventory policy.
STATEMENT OF RESEARCH PROBLEMS
A cost of business of recent are falling
in the country to meet demand of their
customers through running out stock some of this firms are attributing this to
the vacling economic depression in the country but this explation show ever
quite unsatisfactory the research opines that most problems associated with
firms especially nigerrite limited in running out of stock to meet customers need,
buying of raw materials at higher prices thereby producing at high cost in due to the improper
application Inventory control.
The issue here is that customers would
then begin to ask question such as ‘‘ is Nigerite limited having finance
problem? Are the funds provided reducing year out? Or is there any form of
mismanagement? What wad situation some years bank in the organization? As
question being asked by customers so also the management or the organization is
face with some problems such as ‘why are we sometime out or stock what should be stocked? How
many? When should replenishment be affected? In what amount ? how should we
adjust production when sales are uncertain/unpredicated?
What capacity
will examine the extent too which Nigeria limited has adopted inventory control
in organization and recommend possible ways in which the situation could be
bettered.
OBJECTIVE OF THE STUDY
The
major objective of the study include the followings.
1) To examine
the extent at which nigerite limited has adopted the use of proper Inventory
control in their polly formulation.
2) To identify the organization Inventory items and their associated cost.
3) To find out
the total number of product each machine the organization has can produce
either in batches units with
associated dry taken hair for completion of the jogs.
4) To
Inventory how the organization
places order or their raw materials with associated cost.
5) To find
out recording quantity of each of raw
materials uses and average number of days each of the producer takes before
being and the carrying cost.
6) lastly
and most importantly to make useful recommendation to Nigerite limited and
other similar organization based on the finding of the study.
SIGNIFICANCE OF
THE STUDY
Inventory
control as already indicated in the background of the study is very importance
to businessmen due to it’s numerous applications or properly applied such as
the avoidance of the organization faced with the problems of running but of
stocks.profit maximization especially when they are anticipated price increase
minimization of nordering cost reduction of production cost,shelve display a commodities uncomplying
of successive operation in the process of making it possible to process a
product at a distance from customer or from raw material supplies or two do two
operation at a distance from each other e.t.c.
With
the benefit derivable from proper application of inventory models as well as
various problems still confronting most
manufacturing, retailing or wholesaling firms in Nigeria, which are mostly
wrongly attributed to economic depression, whenever they fail to meet customers
orders there by costing such customers to their competitors apart from the
money they our to have realized
obviously called for this kind of study.
SCOPE OF THE
STUDY
The
attention of this project is focused essentially on inventory control to Nigerite
limited lagos being the head office where all relevant information needed about
others operating plant with in the country easily and ready available and
accessible.
Since
the write up will not extend beyond how inventory control is beings used in the
chosen organization various concept of inventory control and how they are
applied to the company under study. Nigerite limited lagos, could be attempted.
This will enable us see the relationship between inventory conrol and operating
result of the company.
LIMITATION AND CONSTRAINTS OF THE STUDY
Research
study in nigerite is best with a problems which mass prejudice against the
researcher themselves under secrecy as well as were time and financial constraints
may of this limitation were experienced the course of out study.
However,
provement among these limitation were experienced the course limitation were
time and financial constantrants. As final year student we had short time at my disposal for the
study. As has to combine it with other
academic work some problems were therefore encounterd in the conduct of the
field work it was not quite easy to arrange or personnel intervention with the
general manager, propriet or the product manager of the aquan rapha investment
company. The national directorate of employment as well the Nigeria banks of
commerce and industry limited