ABSTRACT
The technique of inventory control is indispensable going by their impact in contributing, promoting and ensuring efficiency and effectiveness in any organization. In actual practice the vast majority of manufacturing companies suffer excessive inventories than are necessary. Therefore, inventory control process is much more complex than the uninitiated understand. In fact, inventory control is perceived as little more than a clerical function. This has resulted into lots of material shortages, high costs and loss of profit. This study provides a basis for implementing inventory control policies by service companies, professional managers, especially manufacturers.
The aim of these research works is to critically assess the impact inventory control has on the profits of manufacturing companies. Relevant literature on inventory management and control by various authors were reviewed.
Both primary and secondary sources of data were used in the course of study. Primary source of data used was questionnaire while the secondary sources used are, text books and journals. The chi-square formulae, person product moment correlation co-efficient, test of significance were employed for effective analysis of data collected. Data was collected through the distribution of 50 questionnaires to the staffs of Tower Aluminum Nigerian Plc.
The two hypothesis formulated were subject to thorough tests and all two hypothesis tested were accepted. The respondents agreed that inventory control is a contributory factor to the profitability of manufacturing companies and as such proper control of inventory of manufacturing companies and as such proper control of inventory reduces the overall cost. Conclusion and recommendation were also made as to the acceptance of the alternative hypothesis such as putting in place all necessary features that inventory control needs to effectively achieve its purpose in a manufacturing organization.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There is a growing emphasis on the importance of inventory management in the attainment of organizational goal. In manufacturing companies where stock of raw materials and other component parts consists of many different items, the task of maintaining a stock management on every individual item is obviously difficult if not impossible.
The focus of this project is therefore the impact of effective inventory management in Tower Aluminum Nigeria Plc. This study is aimed at identifying the overall impact of proper and accurate management of stock items together with the recording and monitoring of stock level, forecasting future demand or production run and deciding when and how to place the order and how many inventory to carry per unit of item in other to satisfy the needs and wants of potential customers in essence of maximizing profit for the organisation.
Inventory refers to the stock of resources that possess economic value, held by an organization at any point of time. These resources stocks can be manpower, machines, capital goods or materials at various stages.
According to wise Greek, inventory is total amount of goods and /or materials contained in a store or factory at any given time. It’s necessary for business manager of an organization to know the precise number of items on their shelves and storage area in order to place orders or control losses.
The word inventory “can refer to both the total amount of goods the act of counting them. Many companies take an inventory of their suppliers on a regular basis in order to avoid running out of popular items. Others take an inventory of to insure the number of items or ordered matches the actual number of items counted physically. Shortages or overages after an inventory can indicate a problem with theft (called shrinkage in retail circle) or inaccurate accounting practices in an organization.
Inventory simply means a quantity of goods and materials in the control of an organization held for a time in a relatively idle or unproductive stage “GREAT MAN”. Management is concerned with the process of achieving objectives through efficient use of resources and the planning, organization, coordination, direction, and control of the activities of people. It is the sum total of all the activities involved in the organizing men, machines, materials, and money and the maintaining, directing, coordinating, supervising, and controlling them to produce or provide for a profit, goods and services which benefit members of the society. “Dr. ADE Oyedijo 2009, Essential of Mgt”
Other functions of management are;
LEADING: Leading here means influencing people so that they can contribute
positively towards achieving the goal of maintaining stock at minimum cost.
COORDINATING: Coordinating here means each department contributing towards the organization goal of keeping the inventory at minimum cost
DIRECTING: Directing here means harmonization of individual objectives with that of the organization so that the goal of the organization to maintaining stock at minimum cost is achieved.
.