STOCK SUPERVISION: A TOOL FOR MAXIMIZING PROSPERITY AND CONTINUITY OF SMALL AND MEDIUM SCALE ENTERPRISES (A CASE STUDY OF SELECTED SMEs IN UYO
TABLE OF CONTENT
Cover page
Title page
Certification
Dedication
Acknowledgement
Table of content
Chapter one – Introduction
- Background of the study
- Statement of the study
- Objectives of the study
- Research questions
- Research hypotheses
- Significance of the study
- Scope of the study
- Limitation of the study
- Definition of terms
Chapter Two
Review of related literature
2.0 Introduction
2.1 Conceptual frame work
2.2 Stock supervision theory
2.3 Nature of inventories
2.4 Motive for holding inventories
2.5 Objective of stock supervision
2.6 Stock supervision techniques
2.7 The importance of stock supervision
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Stock supervision is primarily about specifying the size and placement of stocked goods. Stock supervision is required at different location within a facility or within multiple location of supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods (Behnam, 2013). It is the overseeing and controlling of the ordering, storage and use of components that an enterprise will use in the production of the items it will sell as well as the overseeing and controlling of the qualities of the finished product for sale. According to Mpamugo (2003) stock supervision involves the procurement and maintenance of various levels of stock items for smooth operation of a business in order to ensure prosperity. A business stock is one of the major assets of the business and it represents an investment that is tied up until the item is sold or used in the production of item that is sold. As postulated by Pandey (2003), inventories constitute the most significant part of current assets of a large majority of small and medium scale enterprise (SMES) in Nigeria.
Due to the large size of inventories maintained by some SMEs a considerable amount of funds is required to be commuted to them. It is therefore absolutely imperative for inventories to be effectively and efficiently managed in order to avoid unnecessary investment as well as cost. Where an enterprise neglect to manage their inventories properly, they run the risk of jeopardizing their long-run prosperity and may fail ultimately, rather they end up in carrying storage cost as well as insurance expenses. Mismanaged inventories tend to create significant financial problems for a business which could result in stock glut or stock shortage. Rather, a lot of costs are associated with keeping of stock despite that; we must however hold stock to meet production needs and sales needs. This because if we do not hold stock in sufficient quantity we stand the risk of running out of stock and incurring all the cost associated with stock out. Therefore, for an enterprise not to have the above mentioned problem it is important that they strike a balance between carrying too much stock (over stocking) and carrying too little stock (under stocking). The importance of prosperity and continuity of small and medium scale enterprise (SMES) cannot be overstated, because that is the reason why organizations are in business, if stock supervision is carried out properly. There will be increase in production and sales thereby maximizing prosperity and continuity for the organization.
Panday (2003), suggested that business should reduce their stock level to a considerable degree of 10-20 percent, without any adverse effect on production and sales by using simple stock planning and control techniques, adding that the reduction in ‘’excessive’’ inventories carries a favourable impact on a company’s prosperity and continuity. A successful stock supervision involves creating a purchase plant that items are available when they are needed and ensure that they are at an appreciate quantity (i.e. not too much or too little) and keep track of existing stock as well as to use.
According to Akinsulires (2003), the effective and efficient functioning of productive system requires the regular demand and supply of stock of the input transformation and output phases of the production process. Supervision is also seen as the effective and efficient utilization of resource for the achievement of organizational objectives. To en sure profitably and continuity of SMEs, there must be a free flow of materials unencumbered at every stage of the production process.
In Nigeria today, there are many SMEs, and they all source their raw materials from the few available markets if not the same market. With the present economic problems, organizations are after these scare resources to produce their products, therefore calls for urgency in areas of effective and efficient supervision of their stock inform of raw material, work- in- progress and finished goods, which constitute significant proportion of assets of most business which leads to prosperity and continuity.
Why is it pertinent to keep an eye on these items? These are questions often asked by some sole proprietors and managers of SMEs.
Therefore, his study attempts to find out how stock supervision can be effectively used to reduce time wastage, theft, obsolescence, pilferage and, many more in the organization so as to achieve their goals, in the prosperity and continuity.
1.2 STATEMENT OF THE PROBLEM
Empirical research has shown that the study of stock supervision started late, unlike the study of other fields of human endeavour, such as medicine engineering, and law, accounting and public administration to mention but few. This is not to say that it did not exist at all but this field has not attracted people as the belief that anybody can work in that area (stock). Every year organization prepared and implements one type of economic/budget whereby a large sum of money is spent on acquisition of materials without making an adequate planned effort to provide for stock facilities. These lapses couples with improper stack control system and lack of trained personnel account for the ineffectiveness of stock function in the public and private sector. A lot of costs are associated with keeping of stock despite that; we must however hold stock to meet production needs and sales needs. Acquiring too much of stock will lead to tying down of capital as well as the risk of the goods being obsolete and expired. On the other hand, having too little would jeopardize production as well as leading to under stocking. Stock supervision has problems in general, especially in areas of discrepancies, theft, fraud, obsolescence, deterioration and breakages.
Many SMEs have failed due to disregard of the importance of stock supervision while some of the SMEs tends to ask the question “how can we determine the quality of raw materials or goods to purchase on a regular basis devoid of scarcity?” how much should we invest in stock to remain at an equilibrium level of demand and supply? Does effective stock supervision results to prosperity? Amongst other.
It is against his backdrop that the researcher tends to undertake study on this topic in order to proffer solutions to these problems so as to faster prosperity and continuity of SMEs in Uyo metropolis.
1.3 Objectives of the Study
- Determine whether inventor supervision serves as a tool to maximizing prosperity and continuity of SMEs.
- Ascertain the relationship between stock supervision and the prosperity of an organization.
- Known whether maintaining a minimum investment in stock can maximize profit.
- Known whether to maintain large size stock do leads to efficient and smooth production and sales operation of SMEs.
- Identify the problems faced by the Entrepreneurs in the course of managing inventories in their organizations.
1.4 Research Questions
- Does stock supervision serves as a tool to maximizing prosperity and continuity of SMEs?
- Any relationship between stock supervision and the prosperity of an organization?
- Maintaining a minimum investment in stock can maximize profit?
- Do large size stock leads to efficient and smooth production and sales operations of SMEs?
- What are the problems faced by the entrepreneurs in the course of managing inventories in other organizations?
1.5 Research Hypotheses
To guide his research work, the following hypotheses have been formulated:
H0: There is no significant relationship between stock supervision and the prosperity of small and medium scale enterprises.
H1: There is significant relationship between stock supervision and the prosperity of small and medium scale enterprises.
H0: Effective stock supervision does not reduce material wastage and cost.
H1: effective stock supervision reduces material wastage and cost.
1.6 Significant of the Study
This study is significant in the fact that the findings could provide stock supervision techniques as well as cutting- edge technologic supervisions and the organization of large to attain a greater level of stock supervision, thus; prosperity and hereby discouraging under stocking. Transaction ally, this study emphasizes the facilitate smooth production and sales operations.
The result of this study would serve as a stepping- stone for other researchers on further research in this area. This study is also aimed at updating previous research in the subject matter as well as emphasizing on the need for effective and efficient stock supervision practices so as to ensure prosperity and continuity of small and medium scale enterprises in Uyo metropolis.
1.7 Scope of the Study
This study focuses on selected small and medium scale enterprises in Uyo metropolis. In the course of selection, this study will touch on manufacturing and merchandising enterprises covering the scales of the micro, the small and medium enterprises all in Uyo metropolis. They are AMECOM Nigeria enterprises and Usmer water limited.
1.8 Limitations of the Study
In the course of carrying out this research, the main limitation envisaged is the fact respondents may misconstrue the purpose of the study on the groups that it is intended to expose their inefficiencies, thus unwilling to supply the needed primary day which will invariably affect the duration of the research. However, the researcher then eliminate this limitation by explaining the purpose of the study to make them see the benefits of this study other limitations include:
- typing and photocopying of the needed materials
- Inadequate blue-print on the exact subject matter.
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STOCK SUPERVISION: A TOOL FOR MAXIMIZING PROSPERITY AND CONTINUITY OF SMALL AND MEDIUM SCALE ENTERPRISES (A CASE STUDY OF SELECTED SMEs IN UYO
