TABLE OF CONTENTS
Title Page – – – – – – – – – i
Approval page – – – – – – – – – ii
Certification – – – – – – – – iii
Dedication – – – – – – – – – iv
Acknowledgements – – – – – – – – v-vi
Abstract – – – – – – – – – – vii
List of Tables – – – – – – – – – viii
Table of Contents – – – – – – – ix-xi
CHAPTER ONE
INTRUDUCTION
1.1 Background of the Study – – – – – 1-3
1.2 Statement of the Problem – – – – 3-4
1.3 Objectives of the Study – – – – – 4
1.4 Research Questions – – – – – – 5
1.5 Significance of the Study – – – – – 5
Pages
1.6 Scope of the study – – – – – – 6
1.7 Limitations of the Study – – – – – 6
1.8 Organization of the Study – – – – – 7
1.9 Definition of Terms – – – – – – 7-9
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Concept of Inventory Management, – – – 10-12
2.2 The Reasons for Stocking Inventory, – – – – 12-17
2.3 Vendor Managed Inventory, – – – – – 17-21
2.4 Inventory costs incurred in procurement process. – 21-26
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research design – – – – – – 27
3.2 Population of the Study – – – – – 27
3.3 Sample and Sampling Technique – – – – 28
3.4 Instrumentation – – – – – – 28-29
3.5 Method/plan for Data Analysis – – – – 29
3.7 Problems of Data Collection – – – – 29
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Analysis of Research Questions – – – – 30-36
4:2 Discussion of Findings – – – – – – 36-38
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings – – – – – – 39-40
5.2 Conclusion – – – – – – – – 40-41
5:3 Recommendations – – – – – – 41-42
References
Appendixes
LIST OF TABLES
Table 3.1: Sample selection – – – – – 28
Table 4.1:1 Responses to research question one – – 30
Table 4.1.2 Responses to research question two – – 32
Table 4.1.3 Responses to research question three – 33
Table 4.1.4 Responses to research question four – – 35
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Inventory management and control have become issue of serious concern in manufacturing organizations especially in the present economic dispensation. The relevance of inventory management and control in organizational performance cannot be overemphasized since they have direct impact on reported profits of organizations.
Inventory constitutes a greater percentage of the current assets groups, and in relation to other assets, it forms a good proportion of total assets in manufacturing companies. Over the years many organizations have not realized this important fact.
Consequently, adequate internal control measures seem not be given to inventory. Therefore, a lot of pilferage, damage to stock, obsolescence, stock outs, etc occurs which can be traced to the absence or non-functionality of proper inventory management and control measures in the system.
Inventories according to Pandey, (2004) are “stock of the product a company is manufacturing for sale and components that make up the product”. The various forms in which inventories exist in a manufacturing company are:
Raw materials, work in process and finished goods. Horngren, (2000) defines inventory management as “the planning, coordinating and controlling activities related to the flow of inventory into, through and form the organization,” While inventory control involves the procurement, care and disposition of materials.
It could be deduced from the foregoing definitions that profit performance of any manufacturing firm is largely dependent on the efficient management and control of the firm’s inventory.
Both excessive and inadequate inventories are not desirable as either of the conditions affect the organization performance. These are two danger points within which the firm operates. The objective of the inventory management should be to determine and maintain optimum level of inventory investment. The optimum level of inventory will no doubt lie between the two danger points of excessive and inadequate inventories.
Some manufacturing firms very often than not found themselves in a situation of over investment or under investment in inventories.
The Economic Order Quantity still has costs associated among others to inspection activities (time) and storage activities (time) which affects reported profits. Hence, the need for other inventory management methods that will enhance the profit performance of manufacturing companies, like Just In Time, Total Quantity management and ABC methods upon which this study will dwell.
1.2 STATEMENT OF THE PROBLEM
Over the years, the performance of some manufacturing companies has been very poor due to lack of adequate attention and control on inventory. Attention seems to be focused more on cash and bank balance than on inventory. Consequently, this seldom results in the alarming rate in which some of these manufacturing companies wind up shortly after commencement, and some that are operating, do so inefficiently.
This poor performance due to inefficient management of inventories in manufacturing companies that adversely affected the effectiveness of the organization may be traceable to some of the following: High cost of ordering and carrying cost of inventories under emergency situations, high cost of storage/holding cost of inventory, Too much inventories held in store at year end due to absence of stock levels, inadequacy of inventory needed for production/distribution, Non availability of inventory (raw materials) when needed for production, Delay in replenishment of inventories.
Therefore, this research work seeks to address these problems enumerated above, with a view of proffering solutions that will go a long way in improving the performance and effectiveness of manufacturing companies in Akwa Ibom State and Nigeria in general.
OBJECTIVES OF THE STUDY
To examine the effects of inventory management on organizational effectiveness.
To examine contribution of proper inventory management to the growth of an organization.
To identify the reasons for holding inventory.
To identify the cost associated with inventory management.
RESEARCH QUESTIONS
How does inventory management affects organizational effectiveness?
What are the contributions of proper inventory management to the growth of an organization?
What are the reasons for holding inventory?
What are the various costs associated with inventory management?
1.5 SIGNIFICANCE OF THE STUDY
This study will be relevant to the following
Management of manufacturing companies for planning and proper management of inventories for organization effectiveness.
It will also be useful to the government for planning and policy making.
It will also be useful to employees/workers of manufacturing companies.
Furthermore, the study will serve as guide to student researchers who may wish to explore more on this or related topic.
1.6 SCOPE OF THE STUDY
The research focuses on the effect on inventory management on organization effectiveness, using Supremebyte bakery Essien Udim as a case study.
1.7 LIMITATIONS OF THE STUDY
The study was limited by the following factors
Financial Constraint: funds were in very short supply to the researcher and the researcher could not purchase some valuable print materials needed for this project at the time they were most needed.
Time Factor: Another constraint faced by the researcher was limited time for the completion of the project and engagement in other academic activities which occupied most of the researcher’s time.
Material Factor: shortest of relevant materials for literature review post a great difficulty.
Inability to retrieve all the questionnaire forms for good representative used for the anticipated sample.
The study was also limited to the information gathered from both primary and secondary sources.
1.8 ORGANIZATION OF THE STUDY
This research project was organized into five chapters. Chapter one was on the introduction which gives the background of the study, statement of the problem, objectives of the study, research questions, significance of the study, scope of the study, limitations of the study, organization of the study and definition of terms: chapter two covers literature review where various works of other authors were reviewed and also attempt was made to provide answers to the questions set out in chapter one; chapter three showed the research design and methodology, it highlights the methodology used in conducting this research project; in chapter four data was presented, analyzed and interpreted, chapter five provided the summary of findings, conclusion and the possible recommendations.
1.9 DEFINITION OF TERMS
The following definitions are considered within the context of this research.
Inventory: This refers to items of value held for use or sales by an enterprise and usually comprises raw materials and supplies used in production work in progress and finished goods.
Control: A management action taken to ensure conformity with plan for attainment of organizational objectives.
Stocks: These are items of value held for use or sale by an enterprise and usually comprise finished goods. It is also referred to as inventory.
Stock Out: This is a term used to refer to the unavailability of finished goods on store when demanded by customers or raw materials when needed by the production department for continuous or increased production to meet up with customers’ demands.
Excessive Stock: This refers to more items of stock held in store than is economically justifiable.
Lead Time: This is the time lapse between placing an order and receiving the ordered goods i.e. replenishment the goods.
Just In Time (JIT): This is a manufacturing method which satisfied the management objective of responding adequately and meeting of the customers’ requirements of a firms product, in a competitive market environment; just exactly as at when necessary and needed. It is also a system which aims to co-ordinate the supply of materials so that they arrive just when they are needed, not before and afterwards, but in time.
Total Quality Management: Is the process of involving and integrating all employees in a total quality management strategy aimed at enhancing organizational performance and the customer’s requirements (satisfaction) which must be achieved at minimum cost.
EFFECT OF INVENTORY MANAGEMENT ON ORGANIZATIONAL EFFECTIVENESS A CASE STUDY OF SUPREME-BYTE BAKERY
