ASSESSMENT OF INVENTORY FOR GREATER PRODUCTIVITY AT NIGERIAN GAS COMPANY

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ASSESSMENT OF INVENTORY FOR GREATER PRODUCTIVITY AT NIGERIAN GAS COMPANY, UYO

TABLE OF CONTENT

Content Pages

Title Page……………………………………………………………………… i

Declaration……………………………………………………………………. ii

Certification…………………………………………………………………… iii

Dedication……………………………………………………………………… iv

Acknowledgements…………………………………………………………v

Abstract………………………………………………………………………..vi

Table of contents……………………………………………………………vii

List of table……………………………………………………………………. xi

List of figures…………………………………………………………………..xi

CHAPTER ONE: INTRODUCTION

Background to the study………………………………………………..

1.1 Statement of the Problem………………………………………………

1.2 Objectives of the Study………………………………………………..

1.3 Research Hypothesis………………………………………………….

1.4 Significance of the Study……………………………………………..

1.5 Scope and Limitations of the Study…………………………………..

1.6 Organisation of the Study……………………………………………..

1.7 Historical Background of Nigerian gas Company Plc,

Uyo………………………………………………………………….

1.8 Definition of Terms……………………………………………………

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.0 Introduction……………………………………………………………

2.1 Conceptual Framework………………………………………………..

2.1.1 Meaning of Inventory Management………………………

2.1.2 Forms of Inventory Maintained by Manufacturing

Companies

Functions of Inventory………………………………………………..

Need for Holding Inventories…………………………………………

2.2. Inventory Valuation Methods…………………………………………

2.2.1 First In First Out (FIFO)………………………………………………

2.2.2 Last In First Out (LIFO)………………………………………………

2.2.3 Weighted Average Price (WAP)………………………………………

2.2.4 Illustration: Stock Valuation Methods………………………….

2.2.5 Factors Affecting Inventory Valuation Decisions…………

2.3 Inventory Control………………………………………………………

2.3.1 Elements of Inventory Costs…………………………………………..

2.3.2 Objectives of Inventory Control and Setting of

Inventory Levels

2.3.3 Factors to Consider In Inventory

Control…………………………….

2.3.4 Inventory Control Costs……………………………………………….

2.3.5 Inventory Control Methods……………………………………………

2.4 Requirement for Effective Inventory

Management…………………..

2.5 Objectives of Inventory Management…………………………………

2.6 Over Investment in Inventories………………………………………

2.7 Under Investment in Inventory……………………………………….

CHAPTER THREE: RESEARCH METHODOLODY

3.0 Introduction……………………………………………………………

3.1 Research Design……………………………………………………….

3.2 population of the study…………………………………………………

3.3 Sample Size and Sampling Technique…………………………………

3.4 Method and Sources of Data……………………………………………

3.5 Instrumentation…………………………………………………………

3.6 Data Analysis Technique……………………………………………….

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTEPRETATIONS

4.0 Introduction…………………………………………………………….

4.1 Data presentation……………………………………………………….

4.2 Data analysis……………………………………………………………

4.3 Test of Hypotheses……………………………………………………..

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction…………………………………………………………….

5.1 Summary of findings……………………………………………………

5.2 Conclusion………………………………………………………………

5.3 Recommendations………………………………………………………

References………………………………………………………………

Appendix I………………………………………………………………

Appendix II…………………………………………………………….

Appendix III……………………………………………………………

LIST OF TABLES

Tables Pages

Table 2.2.1 Valuation of Stock Using FIFO Method

Table 2.2.2 Valuation of Stock using LIFO Method

Table 2.2.3 Valuation of Stock Using WAP Method

Table 2.2.4 Tabular Method of EOQ

Table 2.2.5 Classification of Items in Stock Using ABC system

Table 2.2.6 Classification of Items in Stock using ABC system

Table 4.1.1 Number of Questionnaires administered and returned

Table 4.1.2 Number of Years served by Respondents in the Company

Table 4.2.1 Awareness of the Existence of Inventory Management

Techniques

Table 4.2.2 Inventory Management Techniques Adopted by the Company.

Table 4.2.3 Costs associated with ASSESSMENT Inventory in Nigerian Gas Company Plc, Uyo.

Table 4.2.4 Problems faced by Nigerian Gas Company Plc, Uyo In ASSESSMENT its Inventory.

Table 4.2.5 Negative Effect of Ineffective Inventory Management.

Table 4.2.6 Inventory Valuation Method Adopted By Nigerian Gas Company Plc, Uyo.

Table 4.2.7 Benefits to be derived from proper Management of Inventory.

Table 4.3.1 Test for Hypothesis I

Table 4.3.2 Table for Hypothesis II

Table 4.3.3 Test for hypothesis III

LIST OF FIGURES

Figure Page

Figure 2.2.1: Graphical representation of EOQ

CHAPTER ONE

INTRODUCTION

1.0 Background to the Study

Agara, (2005:111) defines inventory as the physical units of items i.e. goods that a business trades on or manufactures for sale. Inventory also includes all items required for proper packaging and raw materials. It also includes the items which are used as supportive materials to facilitate production. No manufacturing company can operate without material input(s), sourced locally or abroad, as inputs determine the company’s output and productivity. In manufacturing companies, inventory exists in various forms. These include Raw materials, Work in progress; partly finished goods/materials and sub-assemblies held between manufacturing stages, finished goods and supplies. Effective inventory management plays a critical role in the smooth and efficient running of any business. Inventory management is important from the point that it enables the firm to maintain adequate inventory for smooth production and selling activities and to minimize the investment in inventory to enhance the firm’s productivity. Many organizations, however, go out of business because of inability to handle inventory or poor inventory management. Some organizations have excellent inventory management and others have satisfactory inventory management. Management is therefore required to determine its optimum level of investment in inventories. Reducing excess inventory and investing in the right amount of inventory leads to improved customer service, increased inventory turnover, reduced costs and increased productivity. It is therefore important to manage inventories efficiently and effectively in order to avoid over or under investing in them. The study is therefore conducted to find ways of assessment inventory for greater productivity using Coca-Cola Company Plc as the case study.

1.1 Statement of the Problem

Assessment inventory poses considerable challenges to the management of companies .This is because inventory represents high investments in businesses. This would therefore affect the liquidity position of the firm thus affecting productivity if not properly managed. Productivity represents a favorable return on investments. The productivity of a firm depends to a large extent on the ability of managers to take strategic decisions on inventory management. Some firms have encountered difficulties in inventory planning and control due to lack of qualified managers. The problem is to what extent could the right inventory level, at the right price, at the right time be achieved such that there is no stock-out costs and no over stocking or ideal working capital?

In fact, many manufacturing companies have been experiencing losses because large inventories become obsolete, damaged or lost. Thus, firms who fail to manage their inventories effectively will lose productivity in the long run or fail ultimately in business.

1.2 Objectives of the Study

This study set to achieve the following objectives:

To determine the effects of inventory management on firm’s productivity.
To ascertain the relationship between inventory management costs and productivity.
To show the impact of effective inventory management technique on firm’s profit.

1.3 Research Hypotheses

The following hypotheses were formulated for this study: the null hypothesis is represented by the H₀the alternative hypothesis represented by H_1.

Hypothesis I

H₀: There is no significant relationship between inventory management and productivity.

H₁: There is significant relationship between inventory management and productivity.

Hypothesis II

H₀: There is no significant effect of the cost of ASSESSMENT inventory on firm’s productivity.

H₁: There is significant effect of the costs of ASSESSMENT inventory on firm’s productivity.

ASSESSMENT OF INVENTORY FOR GREATER PRODUCTIVITY AT NIGERIAN GAS COMPANY

ASSESSMENT OF INVENTORY FOR GREATER PRODUCTIVITY AT NIGERIAN GAS COMPANY, UYO

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