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THE IMPACT OF INVENTORY CONTROL AND PLANNING IN STORES ADMINISTRATION
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The research work will look into the impact of inventory control and planning in stores administration in fan milk industry owerri. This work is divided into five chapters, the first chapter will look into the introduction, background of the study, research questions, limitation of the study, and definition of terms. Chapter two will look into the literature review that is introducing many authors and their books, journals etc bring out their view on the topic while chapter three will look into the research design sources/method of data collection, population and sample size, sample techniques, validity and reliability of measuring instrument and method of data analysis. Chapter four will talk about data presentation and analysis after which the hypothesis will be tested and finally discussion on the major findings during the study. Chapter five finally will summarize all the chapters above, conclusion will be drawn and the researcher will give his recommendations and state the bibliography and finally write out the questions in the questionnaire.
1.1 BACKGROUND OF THE STUDY
Inventory control is an extension of stores keeping and it has been in practice for a long time. It has a wide scope of activities today. Inventory control is an act of safe keeping some valuable items for future use and to produce them when the need arises. Inventory control goes beyond the scope of keeping and producing the items only but also involves controlling of operations, receiving, quality control activities, training of store staff, control of all store houses, stock handling as well as clerical documentation (Ogbu 2016).
According to Victoire, (2015), inventory control can be defined as an act and science of achieving the objectives of inventory in an organization. It involves planning, organizing, staffing controlling and coordinating all the inventory operational activities for the provision of efficient services. Inventory control is a serving centre and the services to be provided must be meticulously handled, more organized to meet the demand of all units or department that constitute the organization for optimum performance. The primary function of inventory control is to provide for efficient inventory and handling of goods to be redistributed to the ultimate user, this activity when carried out with the use of information technology (IT) will make recording of materials easy as the information are already in the computer. The use of information technology in controlling of inventory eliminates time wastage. This provision of services to the operating function must be fully appreciated. All other activities although they have their own relative importance are subordinate to this primary responsibility the above central objective can be analyzed as follows:
i. To make available a balance flow of raw materials components, tools, equipment and any other item necessary to meet operational requirement.
ii. To provide maintenance materials spare part to general stores as required.
iii. To receive and issue work in progress and finished products
iv. To accept and store scraps and other materials as it arises.
v. To account for all receipt and issue of goods in the store
Thus in any institution, private or public some substantial amount is spent on the acquisition of material and equipment etc which are kept in the store house for future use. These items represent an equivalent amount of cash and have to be looked after, protected against unauthorized usage, until they are used for the intended purpose and duly accounted for (Tarus, 2015).
A lot of cost are associated with keeping of inventory despite that we must however hold stock to meet production needs and sales needs. This is because if we do not hold stock in sufficient quantity we stand the risk of running out of stock and incurring all the cost associated with stock out. Therefore, for an organization not to have the above mentioned problem it is important that they strike a balance between carrying too must stock (over stocking) and carrying too little stock (under stocking) the importance of profitability cannot be overstated, because that is the reason why organization are in business, if inventory control is carried out properly, there will be increase in production and sales thereby increasing profitability for the organization (Shardeo, 2015).
There, this study attempt to find out how inventory can be effectively be used to reduce time wastage, theft, obsolesce and pilferage in the organization so as to achieve their goals of profitability.
1.2 STATEMENT OF PROBLEM
The impact of inventory control and planning in fan milk ice cream Owerri, the firm is battling with a lot of problems varying from building up stock of materials which first of all has to be purchased from suppliers and remembers in many cases the goods will have to be paid for the organization working capital. Therefore, the impact of inventory control becomes of problem.
1. The firm is battling with unavailability of materials in stock in the sense that most at times, they operate on hand to mouth level and that makes the impact of inventory to be difficult.
2. Because stock are sometimes allowed out of the store without proper requesting, it cause difficulty in the impact of inventory.
3. Due to deterioration and pilferage caused by overstocking it makes it difficult to impact inventory control and planning in the firm.
4. Because the optimal levels of stock is not easily determined it makes it difficult to impact inventory control and planning in the firm .
5. The use of non qualified stores administrator resulting to lack of proper inventory control and planning (Oso, & Onen, 2015).
1.3 OBJECTIVES OF STUDY
The primary objectives of this research work is to assess the impact of inventory control and planning in stores administration. Specifically, other objectives are:
1. To highlight the immense/importance of efficient stock planning and control in stores administration.
2. Finding solutions to the problems of managing and controlling stocks in the stores administration.
3. Finding the likely consequences of overstocking and under stocking planning and control in stores administration and the benefits attributable to having stock at it optimal level.
4. Whether there is divergence between policy and practice in the stock management of fan milk industry in Owerri.
5. To ensure that the services of a qualified stores administrator is employed in the store of the organization to enhance inventory control and planning.
1.4 RESEARCH QUESTIONS
The following are the research questions
1. Does store administration appreciate the importance of efficient, the impact of inventory control and planning?
2. Does overstock introduce unnecessary carrying cost and tying up of capital?
3. Is the impact of inventory control and planning of any importance to stores administration?
4. Does under stocking result to stock out in store administration?
5. What impact does stock/inventory have in the profitability of the organization.
1.5 SIGNIFICANCE OF THE STUDY
The success of largely project and programmes envisage for sustained inventory control and planning in stores administration although it depends on the useful guide for a research work because inventory forms the life blood of any organization set –up.
The research work will be a reference material for researchers on how to manage and control inventory in an industry for rapid growth. However the researcher believes that the information gathered from this research will help the employees of concerned companied in Nigeria to know whether their method of inventory control and planning is really having an impact in their company.
Also to the users, it will review to them whether the inventory control and planning procedures guarantees the success for inventory control and planning system in their company. It will highlight the pubic on the procedure of inventory control and planning in the establishment. It will also highlight the work points of the procedure in use. The reader might benefit from considering inventory control and planning as he/she perceive it in his/her own environment.
1.6 SCOPE OF STUDY
This study is to analyze the need for efficient stock control and planning on store administration. In general but with particular reference to Fan Milk Industry in Owerri. This is with the view of finding out how the company has been able to control and plan her stock and the achievement of her objectives.
1.7 LIMITATION OF THE STUDY
During the course of research for this work the researcher encountered difficulties in gathering response from the respondents, the location of the case study organization the difficulty in delivery what is normally termed organization’s secrete by respondents. Despite all the problems the researcher was able to obtain the needed information.
1.8 DEFINITION OF TERMS
In this research work some technical words which are purely related to the topic are used for easy comprehension and the explanations of the work are given below:
Order cost: Ordering cost using consist of cost of preparing a purchase order or production order and special processing and receiving cost related to the number of order processed.
Carrying cost: Carrying cost of desired rate of return on the investment in inventory and cost of storage, breakage, obsolesce, deterioration, insurance and personal property taxes.
Economic order quantity: Economic order quantity is the size of inventory that will result in minimum total and annual cost of the items in question.
Recorder level: This is the print or level that automatically triggers new order. It is dependent on expected usage during lead time.
Safety stock: This is the stock set aside to meet the demand of the customers in the case of new materials in case where there is sudden usage beyond the normal usage. The essence is to ensure that the company does not run out of stock at the same time.
Lead time: This is the interval between the recognition of need till the placement of order and the gathering of the requirement and delivered to the buyers.
Stock: This is the quantity of goods or anything that is kept or stored for use as the need arise especially a quantity of raw materials, work –in-progress, finished goods of suppliers.
Stock control: Activity process or study of stock ensuring that quantities of stock or raw materials suppliers or finished goods are such that satisfactory services level is maintained for all stock keeping unit while holding cost are minimized.
Stock holder: A firm or a person who has a specified type of sock example wholesalers that has stock of manufactured goods.
Stock level: (Inventory level) this is the level at which sales are kept.
Stock out: This is a state of having in keeping stock or materials for some time example. The rent of storage space the wages of a store keeper the cost of sock records.
Stock card: This is the measuring of the quantities of item of stock that an enterprises has in order to obtained the accurate list of item.
Stock turnover: This is the ratio of the sales revenue of a firm for a person of the averages goods during that period.
Obsolesce: This is simply the state of being older fashioned.
Obsolete: The state whereby a given product or material is out of use or no longer in the use because of the invention of a new product or materials.
Minimum stock level: This the level at which stocks are not allowed to exceed.
Parato analysis: This is a systematical mechanism used in classifying stocks in the order of importance.
Bulk purchase: This is making purchase in large qualities .
Deterioration: This is the reduction in value residual value of product asset materials etc.
Tags: Inventory control Impact of inventory control Assessment of inventory control Stores administration Planning in stores administration Evaluation in stores administration
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