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- FINANCIAL IMPLICATION OF INTERNAL CONTROL SYSTEM IN AN ORGANISATION (A Case Study of Mercury Microfinance Bank)
- AN ASSESSMENT OF BUSINESS ENVIRONMENT AND ITS IMPACT ON ORGANIZATIONAL GROWTH (A Case Study of Oil Down Stream in Nigeria.)
- COMPENSATION MANAGEMENT AND ORGANIZATIONAL PERFORMANCE (A STUDY OF PZ CUSSIONS NIGERIA PLC)
- EFFECTS OF LABOUR TURNOVER ON ORGANIZATIONAL PERFORMANCE (A COMPARATIVE STUDY OF UNILEVER AND PZ NIGERIA PLS)
- THE IMPACT OF ELECTRONIC BANKING ON THE PERFORMANCE OF BANKING IN NIGERIA (A Case Study of Eco Bank Plc)
- THE IMPACT OF CASHLESS POLICY ON THE PERFORMANCE OF FINANCIAL INSTITUTIONS IN NIGERIA
- IMPACT OF CORPORATE LEVEL MANAGEMENT ON THE EMPLOYEE’S PERFORMANCE (A Case Study of Fidelity Bank Plc.)
- THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON ORGANIZATIONAL PERFORMANCE (A Study of Nigeria Bottling Company Plc)
- IMPACT OF PERFORMANCE APPRAISAL ON EMPLOYEES PRODUCTIVITY (A CASE STUDY OF NIGERIA BREWERY)
THE IMPACT OF INVENTORY CONTROL SYSTEM ON ORGANIZATIONAL PERFORMANCE (A CASE OF INTERCONTINENTAL DISTILLERS LIMITED)
This research embarked upon in writing of this project topic: the Impact of inventory Control System on Organizational Performance in private and public corporation, a case study of intercontinental Distillers Limited (IDL) is the Central Gospel of the truth contain herein.
Inventory control system is an organizational adopted ways of controlling the business stock activities in the aim of meeting customer’s expectation and exceeding them operationally in the aim of reducing errors, waste, and scraps in order to maximize organizational profit. The problem encountered during investigation was time wasted seeking for an appointment with the company top strategists, stressful walking going from one library to another in the course of searching for materials for the project as books on inventory are said not to be common around. There was some financial constraint along the line due to lots of money spent on transportation.
TABLE OF CONTENTS
Title Page i
Table of Contents vi
1.1 Background of the Study 2
1.2 Statement of Problem(s) 3
1.3 Purpose of the study 4
1.4 Research Questions 5
1.5 Statement of Research Hypothesis 5
1.6 Scope of the Study 6
1.7 The significance of study 6
1.8 Limitation of the study 7
1.9 Definition of Terms 9
Literature Review 11
2.1 Historical Background 11
2.1.1 Historical Background of Intercontinental
Distillers Limited (IDL) 12
2.1.2 Corporate mission 13
2.1.3 Organizational Structure of Intercontinental
Distiller Limited 14
2.2 Relevant variables of the model of theory 14
2.2.1 Inventory Management 14
2.2.2 Economic Order Quantity (EOQ) 16
2.2.3 Assumption of EOQ 17
2.2.4 Functions of Inventory Control 18
2.2.5 Movement of stock and Records Keeping 18
2.2.6 Issue of materials 19
2.2.7 Materials Return Note (MRN) 19
2.2.8 Materials Transfer Note (MTN) 20
2.2.9 Organization of Stores 20
Research Methodology 22
3.0 Brief outline of the chapter 22
3.1 Research Design 22
3.2 Area of Study 23
3.3 Population of study 23
3.4 Sample of Study 23
3.5 Sampling Technique 23
3.6 Instrumentation 24
3.6.1 Design of Questionnaire 24
3.6.2 Administration of Questionnaire 25
3.6.3 Problem Encountered on Questionnaire Administration 25
3.6.4 Statistical Tools Applied 25
3.6.5 Validity of Research Instrument 27
3.7 Procedure for Data Collection 28
3.8 Procedure for Data Analysis 28
DATA ANALYSIS (HYPOTHESIS TESTING) AND INTERPRETATION 29
4.0 Brief Introduction of the chapter 29
4.1 Respondents characteristics and classification 29
4.2 Analysis of Questionnaire 32
4.3 Analysis of Research Questions 45
4.4 Decision Rule of Result 47
5.1 Summary of Study 49
5.2 Summary of Findings 49
5.3 Conclusion 51
5.4 Recommendation 52
5.5 Suggestion for further studies 53
In the past years in Nigeria, business system were usually a wasted and installed with the objective of getting work done by the cheapest, quickest and unscientific method available.
The prime objective of every business is to achieve result whether means justifies the end or not.
Today, whilst these objectives have not been lost sight of it has been realized, the establishment of a system whish tends to affect and automatically corrected the system is imperative. It has revealed that the establishment by piece meal methods of uncoordinated work processes ultimately neither efficient nor cheap.
Inventory control is vital element in the successful operation of any business enterprise whether the form is just beginning or is already producing and distributing goods to its customers, a planned and controlled approach to the problem involved is essential.
Therefore, inventory control is an element of management tasks which involves the measurement and regulatory of stock activities performance of the enterprise (both raw materials and finished goods) to make sure that the objectives of the enterprise and the plans devised to attain them are accomplished efficiently and economically.
1.1 BACKGROUND OF THE STUDY
Inventories refer to stock of items used within the production system or in the operation of business among which are: raw materials, work in progress and finished goods.
Also, inventories are current assets and relate to a specific accounting period in which their use should be much as possible be regulated to the period to which they relate.
It is common to loose some of them by way of obsolescence, theft, physical deterioration and damage. Owing to all, these assets must be well managed to ensure that only the required quantities are in hand and that they are well stored and safety transferred into and within the organization.
Therefore, control and management of inventories is a crucial factor in the success or failure of both manufacturing and non-manufacturing organizations. For example, insufficient inventory can seriously disrupt the production distribution circle that is so crucial to survival of all manufacturing organizations. On the other hand, excessive stocks can cripple a firm cash flow and thus endanger its liquidity positions. As such the idea of a business organization is therefore to strike a balance between carrying too much stock and carrying too little. This is the essence of inventory control.
Therefore, it is in recognition of this fact that the researcher chooses this topic THE IMPACT OF INVENTORY CONTROL SYSTEM ON ORGANIZATIONAL PERFORMANCE.
1.2 STATEMENT OF PROBLEM(S)
The success or failure of any manufacturing organization is a function of the management and control of resources available for it under normal production circumstances.
The frequent management review programme pervading the whole sectors of Nigerian economy has seriously affected the manufacturing industry.
The problems posed by these incessant review programmes tend to inhibit continuity in the corporate policies of such organizations.
Therefore research has shown that the causes of these review programmes can be traced to the under listed as the statement of problem of the study:
i) Lack of the needed expertise within the industry
ii) Inability of policy makers to establish and facilitate and inventory management and control system.
1.3 PURPOSE OF THE STUDY
The main purpose of this study includes:
i) To appraise the various sources of supply available to a firm so as to select the best or right source(s)
ii) To evaluate the necessary skills for stores staff and to consider various opinions on the location and layout of stores
iii) To examine various stores and to evaluate the skills required of the operators
iv) To examine various stock level, evaluate how to derive these levels and the principle underlie each level
v) To appraise the various principles connected with the movement of stock within an organization
vi) To highlight the disparities in stock taking and how to bridge the gap
vii) To examine various limitation to effective stock control and how to minimize the limitation.
For the above purpose to be achieve, the researcher hopes to determine the Constituents of the cost applied to goods sold and goods on hand at the end of inventory measurement procedure of deteriorating goods whose values are less than their cost and to use the matching principle of cost with revenue to determine the periodic profitability of the firms under study.
1.4 RESEARCH QUESTIONS
Some of the relevant research questions applicable to the effectiveness of Inventory control system includes the following:
1) Does your organization place a great emphasis on store management?
2) Does your organization experience stock out of materials or products?
3) Does an effective inventory control system contribute to mass production?
4) What factor enhances stock control policy in your organization?
5) Does inventory control and continuous or constant production have a relationship in your organization?
1.5 STATEMENT OF RESEARCH HYPOTHESIS
a) Effective inventory control has no relationship whatsoever with constant production in an organization.
Null Hypothesis (Ho)
b) Effective inventory control has a relationship with constant production in an organization.
Alternative Hypothesis (Hi)
1.6 SCOPE OF THE STUDY
An attempt has been made to objectively touch those key areas considered important in stock control. To this end, many establishment that keep materials for one purpose or the other will find the work useful.
The scope of the study then covers:
i) delivery of stock to stores and proceeds logically up to stock taking at the end of the year
ii) The stores planning and layout are also considered.
Usually a project or research suppose to cover a wider scope than this and most especially the topic chose which suppose to include more functions especially purchasing functions.
However, due to insufficient time, coupled with financial constraint and look warm attitude on the part of respondent, this research scope will be limited to the listed above.
1.7 THE SIGNIFICANCE OF STUDY
The significance of this study includes the following:
a) To bring into focus of management (both the potentials and substantial) the relevance of stock control for any successful manufacturing company
b) To reveal the technicalities involve in keeping of stocks and therefore the need to employ the service of an experience store-keeper
c) To make a recommendation as to the appropriate tools to apply to have effective stock control. More so, this will provide a penance to the issues of poor store-keeping which lead to:
i) Much capital tied down, lead to liquidity problems
ii) Stock-out cost lead to loss of scale and goodwill.
d) To review the implication of:
i) Capital tied down
ii) Under or over stocking of materials
iii) Stock-out cost
e) To review the risk of loss due to:
i) Falling prices
ii) Spillage, theft, breakages etc
iii) Deterioration and obsolescence
f) Provide solution for the location stores
g) To provide other information and explanation as may be necessary for management to plan and maintain effective stock control in order to achieve an uninterrupted production in the company.
1.8 LIMITATIONS OF THE STUDY
Certain limitations that were encountered in the course of this study include the following:
1.8.1 COST IN TERM OF:
1) TIME: - A lot of time was spent seeking for appointment with the company to management managers for the case study in dealing with the given study work to be submitted.
2) MONEY: - Fund was not enough for certain requirements of the study such as transportation to the head office at Ikeja, Lagos. Purchase of stationeries, printing and binding of materials for the research work. The reason for this is evident in the ever increasing general price of goods and services in the economy.
1.8.2 AVAILABILITY OF DATA
Enough data was not made available for the case study due to policy of confidentiality maintained in keeping some of the data needed. More so, it was difficult to gain the attention of the personnel concerned as they had to give priority to their finding duty.
1.9 DEFINITION OF TERMS
Inventory control is the utilization of stock of items used within the production system or the operations of business in an orderly and efficient manner, ensure adherence to management policies, safeguarding the assets and secure as far as possible the completeness and accuracy of the inventory records among which are:
a) RAW MATERIALS: - Materials of the appropriate quantity and specification required for the production of goods.
b) WORK-IN-PROGRESS: - Materials which are still under processing.
c) FINISHED GOODS: - Materials that has been processed and is in conformity with the set standard.
INVENTORY CONTROL LEVELS
d) MINIMUM STOCK LEVEL: - Level below which stocks should not be normally allowed to fall.
e) MAXIMUM STOCK LEVEL: - Level above which stocks should not normally be allowed to rise beyond or above.
f) RE-ORDER LEVEL: - Level at which to initiate the purchase order for fresh supplies of materials.
g) RE-ORDER QUANTITY: - Quantity of the replenishment order.
h) LEAD OR PROCUREMENT TIME: - Period of time between ordering and replenishment.
i) DORMANT STOCK: - Materials which presently are in no demand.
j) OBSOLETE STOCK: - Materials for which are no longer in demand.
k) STOCK TURN OVER: - Ratio of cost of materials consumed to the average stock held during the period.