THE IMPACT AND EFFECT OF INVENTORY MANAGEMENT AND CONTROL ON PERFORMANCE
This research work is an attempt to look into the impact of inventory management and control on performance using a manufacturing company. It was conducted using Tower Galvanized Products (GTP) Ltd Kaduna. The research work was carried out with the intention of examining the pit falls of manufacturing companies in carrying out necessary management and control of their inventories. For this purpose the study was divided into five chapters. Chapter one introduced the research topic, the objective of the study was also define which include to access and highlight the different methods of inventory, planning and reeducation and the most appropriate one. Chapter two was concerned with the review of related literature and points like objectives of inventory management which include to maintain minimum investment in inventories to maximize profitability were discussed. Chapter three dealt with the methodology used in collecting data. In this chapter the random sampling technique was adopted and questionnaire were used to collect the data. Chapter four has to do with the analysis of the various data collected using the mean. In chapter five, summary of the research work was don and
conclusion were drawn to give recommendations in that a manufacturing companies with a view to profit maximization and cost reduction should adopt and maintain an effective inventory management and control system
1.1 BACKGROUND OF THE STUDY
Inventories constitute the most significant part of current events of a large majority of companies in Nigeria and indeed many other part of the world. Because of the large size of inventories maintained by firms, a considerable amount of fund is required to be committed to them. Therefore, the efficient and effective management of inventories becomes imperative in order to achieved unnecessary turnover or to minimized the cost associated with keeping inventories. The neglect of inventory management and control by a firm will amount to jeopardizing its long run profitability and may even cause the firm to fail ultimately. Inventory is defined as the stock of any item or material used in an organization. Therefore, an inventory management is the set of policies and control that monitor levels of inventory and determines the following:-
i. What level should be maintain
ii. When stock should be replenished.
iii. How large order should be
However, inventory can include input such as human resources, financial, equipment e.t.c and output such as parts or component. It is possible for a company to reduce its level of inventories to a considerable degree without any adverse effect on production and sales by using inventory planning and control techniques.
The reduction in excessive inventory carries a favourable impact on company profitability (Pandey 1999) in doing this however, care should be taken to avoid under stocking which directly affect production causing stoppage, loss of sales, loss of good will. etc.