CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
A trend in the past has been for companies to hold some level of stock than preciously did. Hence companies gas fund that they can sometimes reduce the lead time required to obtain materials and to produce products, so that they can operate with less inventory and skill serve their customers effectively.
Stock is idle resources hold for future use. Whenever the inputs and outputs of a company are not used as soon as they become available, inventory is present. Services operation and jobs tend to have small investments in stock. For may companies, however, stocks account for a large percentage of assets this need for stock control.
Chilaka (2006:128) times stock control as the means by which materials of the correct quantity and quantity is made available and as at when required with due regard to the economy in storage and ordering cost, purchasing and working capital.
Carter and price (1996:139) defines stock control as the process of ensuring that the stock held by the organization is supplied to those parts of the operations that required the items (ie production, distribution, sales, engineering etc).
Henritz and Farrell (1990:100) defines inventory stock control as the assurance of having the items at hand when needed and afford the added protection of reserve, stocks, theoretically untouchable but practically serving to fill needs when extra ordering demand develops or when correct procurement fails.
Organizations that have stocks has the advantages of assessing items to be held in stock, the extent of stock holding operational needs time required to deliver goods, availability of capitals, cost of storage, regulation of the input of s tock into and from the stove house through these, it is possible for firms to adjust continuously the quantity and value of stock held to com firm with circumstances of control.
According to monk (200:148) inventory need to be effectively managed, if efficient operation is to be achieved, due to its initial nature, the mode of control and management of inventories can be a factor in the success or failing of manufacturing company concern.
He pointed out that insufficient inventory can seriously disrupt the product distribution cycle that is so critical to the survival of all the manufacturing organization. On the other hand excessive inventories can cripple a firm as felons and this endanger it’s liquidity position. Either poor inventory management can present a serous challenge to the productive capacity of manufacturing organization.
In view of the subject matter of the work, the researcher aims at identifying the nature of stock control in Rokana industries Plc Nekede Owerri.
1.2 STATEMENT OF THE PROBLEMS
Strictly, this project is a case study of the impact of efficient inventory control on materials management in an organization at Rokana industries limited Nekede Owerru Imo State.
The problems of the study therefore are as follows.
The impact of efficient inventory control on the materials management in an organization can not be over stated-
(1) Selection and application of wrong inventory method which does not consider critical factors of efficient inventory control on materials management in an organization.
(2) Poor operation of the stove which in turn leads to problems of materials flow in the production system and efficient inventory control on materials management in an organization.
(3) Most people involving in efficient inventory control on materials management do not possess the right skill and knowledge on inventory control.
(4) The stock out cost or shortage cost has serious effect on the quantity of efficient inventory control on materials management.
(5) There is no serious attempt on the part of firms to improve efficient inventory control management.