1.1                       BACKGROUND OF THE STUDY

          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.

1.2                       STATEMENT OF THE PROBLEM

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          

Profit?

4.                 Does stock location and layout bring about efficient stock 

Management?

5.                 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