THE IMPORTANCE OF STOCK CONTROL IN A MANUFACTURING SECTOR A CASE STUDY OF ETERNIT LIMITED, SAPELE

ABSTRACT
This study was done to examine the importance of stock control in a manufacturing company. The study was carried out in Eternit Ltd Sapele, Delta State. The objective of the study was to consider some management practices in manufacturing companies to see how they affect stock control of a company. Chapter one dealt with the background, the objective, the significance, scope and limitation on the importance of stock control in manufacturing company. Chapter two dealt with a review of some related literature written on empirical studies. Chapter three dealt with the method adopted in collecting the data and the method adopted was through administering of questionnaire. Chapter four dealt with the result and findings based on the questionnaire administration to Eternit Ltd management staffs. Chapter five dealt with summary, findings, recommendations and conclusion. Some recommendations were made which if considered will go a long way to remedy the effect of mismanagement of stock of manufacturing companies.

TABLE OF CONTENTS
Title i
Approval ii
Dedication iii
Acknowledgement iv
Abstract vi
Table of contents vii
Chapter One – Introduction
1.1 Background of the study 1
1.2 Statement of problem 2
1.3 Objective of the study 3
1.4 Research Question 3
1.5 Significance of the study 4
1.7 Scope of the Study 5
1.8 Limitation of the Study 6
1.9 Definition of Terms 7
Chapter Two – Literature Review
2.1 Introduction 9
2.2 Maintenance and Repair/Operation (MRO) 10
2.3 Probability Model with Constant Lead Time 11
2.4 Purchasing Procedures 14
2.5 Material Storage 16
2.6 Storage System 19
2.7 Stock Level 20
2.8 Review of Related Empirical Studies 22
Chapter Three – Research methodology
3.1 Research design 24
3.2 Population of the Study 24
3.3 Sample Size and Sample Techniques 24
3.4 Research Instrument 25
3.5 Validation of Instrument 25
3.6 Reliability of the Instrument 25
3.7 Method of Data Collection 25
3.8 Method of Data Analysis 27
Chapter Four – Data Analysis and Presentation
4.1 Introduction 28
4.2 Presentation and Analysis of Research Question 28
4.3 Discussion of Findings 34
Chapter Five – Summary Conclusion and Recommendations
5.1 Summary of the Findings 36
5.2 Conclusion 37
5.3 Recommendation 37
Bibliography 38
Appendix 39
Questionnaire 40

CHAPTER ONE

INTRODUCTION

1.1 Background Of The Study

Stock control is the system used in a firm’s investment in stock, which involves recording and monitoring of stock level, forecasting future demand and deciding when and how many to order, in other to minimize overall cost associated with stock. This is a managerial responsibility which focuses on material control, procurement, quality control and stock holding. Stock control is essentially an activity that is concerned with the efficient purchase and use of material for the attainment of predetermined corporate objectives.
The need for efficient stock control in the face of increasing cost of material due to high demand of such materials, economic inefficiencies cannot be over emphasized.
Stock constitutes an essential cost element of production, in manufacturing industries, whether process or job order firms. The objectives of an industry especially a private industry is to make production can be obtained when cost elements like stock and its cost controlled which will lead to less expenses and higher profit.
In order to prevent manufacturing industries from running out of stock, the right material has to purchased from the best source at a good price on a positive note, stock control has an important role with regard to profit maximization.

1.2 Statement of the Study

Due to economic problems of monetary instability and inflation, there has been high cost of material. Huge sum of money is lost through various forms of purchase fraud, low quality of materials and store materials and in addition the method of stock valuation. Beside the increased materials cost, misadministration which may cause or lead to stock out cost, this present a major problem of disruption use in operation as a result of inaccurate balancing of material acquisition with wage also account for high cost of materials acquisition. Problem of disruption can lead to supplies disaster of various magnitude one of such supply disaster may be stock-out-cost. The consequences of this include loss of current sales, premium payment for such delivery, loss of future sales and also good will.

1.3 Objective of Study
In carrying out this study of stock control in Eternit Plc, Sapele, the following objectives will be achieved.
To study the material and stock control policies and by evaluating, analyzing the purchasing procedures, materials holding methods and various accounting method of costing inventory.
To investigate, so as to identify the controllable and incontrollable variables associated with materials cost control with a view of determining ways of keeping them within controllable limits.