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   CHAPTER ONE         


        The aim of this research work is to show how an efficient and good stock management in a manufacturing organization can affect the levels of efficiency on productivity of the firm.

        Stocks account forms a substantial part of a company’s assets. It must be appreciated that stocks include raw materials components, partly finished good (work in progress) and finished goods ready for sale. Too much stock will unnecessarily tie down the resource of a company while too little stock will result in stock outs with its attendant problem eg. unsatisfied demand and costly arrangements to replenish stock etc. it is therefore necessary to have a middle of a road quantity of stocks at any given time.

Stock management function in the capacity of service and control groups within the firm. In other words it is service oriented from managerial viewpoint, stock exist for three reasons.

First, they provide a service to the production operation, it is difficult for a production organization to operate efficiently unless someone is specifically designated to organize and control the physical slow of materials into production.

Secondly, the stock organization acts as a custodial and controlling agency.   It is responsible for the physical welfare and control of a substantial portion of a trans – current assets.

Thirdly, the existence of stock permit quantity buying and its attendant cost saving in price, proper work and handily the stock management in many business organization are often neglected and it is not realized that materials represent and equivalent amount of cash material most manufacturing firm on realizing the importance of stock try to achieve effective control of stocks by guess work thereby creating half baked stock management.


Sales and purchase are the basic trading activities that give rise to profits and productivity stock movement is an indicator of the level of business activity in a firm. This is because stock reflects the sale and purchase activities of the firm therefore stocks are connected not only with production but ultimately with productivity.

        Over sixty percent of firms cost of production or capital is reprinted by stock (material) material pilferage, deterioration of material and careless handling of stocks lead to reduced profit or even losses. Inefficiency stock management or control leads to great supply of stock which results in high storage of valuable space, stock losses and obsolesce, while a short supply result reduced output and possibly in panic buying or even tock outs.

In studying or investigating these problems the following question need to be answered.

  1. Does efficient stocks management increase efficiency and productivity?
  2. Does poor staffing affect efficient stock management?
  3. Does stock – outs lead to loss of customers good will and reduced          


  1. Does stock location and layout bring about efficient stock 


  1. Can training enhance efficient stock management?

 1.3             PURPOSE/ AIM OF THE STUDY

          Materials are one of the firm current assets which take about sixty percent of the firms capital yet the management of these materials has been neglected over the years. It is the main purpose of this study to a find out how efficient stock management could increase the efficiency and productivity.

a)     Investigate the influence of poor staffing on efficient stocks control.

b)     Determine how inefficient stock control could lead to stock- out and how stock out could lead to losses of customer’s goodwill and reduced profit.

c)     To find out how stock location and layouts could bring about efficient stock management.

d)     To find out how training could enhance efficient stock management.


This research is considered important because of the important role stock management is expected to play in a business concern.

        Business organization cannot function without good stock management.   It needs this management to management its materials resources.

        This research is primary for students preparing for career in business. It’s used is not limited to students with career interest in the stock keeping.  It will be extremely useful to student’s career interest in functional area of business.

        It is equally for manage of stock who would wish to achieve this optimum performance in business, the managers need to understand the general concepts and problems in stock management.

        This study will help researcher to carryout further research in this area, as it is necessary for reading on this topic to be carried out n the Nigeria universities.

        1.5             LIMITATION OF THE STUDY

This research is limited to stocks management in general cotton mill Onitsha.  It covers only raw materials, work in progress and finished goods management in this organization.

The study is only exploratory and descriptive.

No detailed interpretation and explanation is intended this means that the research approach have a case study method approach.

1.6             DEFINITION OF TERMS

Purchase Requition Note

v at is a document raised by the replenish the stock of materials.

 Purchase order

v Ones the purchase requisition comes to the purchasing department, the buyer will contact suppliers and ensure that the order is for materials with the correct description delivery address and delivery data and the best possible price.

 Goods Received Note.

v This entail that deliveries of materials to business should be inspected against the order, to ensure that the quantity and quality are correct.

Supplier’s Invoice

v This is a document which shows the particular of goods supplied.


v This is any material, raw or manufactured, which is useless for it’s original purpose but many still have some recovery value.


Nzelibe C. G.O. (1995) Business Statistics Theory

and application, Enugu Optimal Publisher.

 Nwachukwu  C.C. (1998) management Theory and

Practice; Onitsha African FEP Publisher.

 William J. (1994) Economic Prinicples and policy,

New York; U.S.A. The Garden press Publisher.

 Gordom S.D. and Danisen G.G. (1990) Introductory

economics; Heineman education Book Publisher.