CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
The main objectives or pre-occupation of any business oragnisation is profit. The company need profit to satisfy the owners, income to pay salaries of employees as well as to pay corporate taxes to government (so that they will be in a better position to be well omitted in other to keep the business a float to enhance the oragnisation set objectives.
The need for efficient and inventory control and management in oil servicing company cannot be overemphasized or overstressed as it tends to be the pivot upon which any business oragnisation involving stocking rest.
Profit maximization depends on proper inventory control and management without it on business might not operate profitability. Any business oragnisation can run for several days, weeks or months without inventory hence much important is adequately attached to its management it is noted that despite the fact that substantial fund are invented in inventory as control and management are placed in the hands of non professionals, those are made it impossible for many organisations to adopt the scientific method inventory control and management.
However, inventory management over the years has undergone some sophistication since industrial revolution due to dynamic. Presently, a good number of companies have been able to computerize stock inventory to meet the dynamic and physiological need of the society.
As a result of the increasing tends or changes in technological advancement this research work able to identify Halliburton Energy Services Nigeria Limited as one of the company in Nigeria that is fast growing with the advancement in computer technology which has been the living force of this trend.
The company, stocked equipment repair parts, vehicles repair parts, comments float equipment and chemicals. These materials are kept in store before they are issued for various operations. The company major operations include survey of oil wells, development and maintenance of farm routine services to its abandonment. Therefore, this research work is directed towards inventory control and management of Halliburton Energy Service Nigeria Limited in relation to profit margin. The question then asked is does efficient and effective inventory control and management leads to profit maximization?
1.2 STATEMENT OF THE PROBLEMS
Inventory occupies a unique position in the financial records of almost every business organisation and as a result its management cannot be ignored.
In this study, the researcher identified two problems needs faced by the company is the management and control of its inventories such as;
The problem of maintaining a large size of inventory for efficient and smooth operating services.
The problem of maintaining a minimum investment inventories to maximize profitability.
The company’s management ability to effectively manage the above conflicting objectives according to Abotti A.A. (2002:53) help to strike a balance between the cost of ordering and carrying the company inventory. This is because of both excessive and inadequate inventorate as associated with cost.
An excess inventory will consume a large proportion of the company’s funds which otherwise could profitably employed in other areas whilst a situation in which the company unemotionally runs out of stock of materials is costly in terms of loss of returns on investment and customers goodwill, therefore the effective management and control of inventory in the company will involve the problem of determining how much stock is to be ordered (i.e. the economic order quantity) and when to order for stock (.i.e. the re-order level).
1.3 OBJECTIVE OF THE STUDY
The objective of inventory control and management in any business concern cannot be over-emphasized a good and efficient inventory management minimizes cost and maximizes profit has been very impressive over the years and this has also been attributed to various factors which include good and efficient management from both human and materials resources efficiently in operating department and adequate maintenance system but lapses are not totally rule out. Therefore effort has been made for purpose of the research to analyze the company’s inventory control and management system.
However, the primary purpose includes
To examine the relationship between the frequency and extent of inspection and plant breakdown.
To evaluate the efficiency of inventory control and management in the institution understudy with a view of attaining of the objectives of the oragnisation.
To determines the effect of inventory control and management policy on operating profit margin of Halliburton Energy Service Nigeria Limited (HESNL).
To ascertain the relationship between effective inventory management and profit maximization.
To find way of accounting for goods purchased and as far as practicable to trace then through the business until they have been delivered and changed to customers on operations.
The need to place an order at the right time, the right resources to acquire the right quantity at the right price.
1.4 RESEARCH QUESTIONS
The studies shall answer the following questions.
What is the relationship between the frequency and the extend of inspection and plant breakdown?
How is the effectiveness and efficiency of inventory control and management in the institution?
How effective is inventory control?
Control and management policy on operating profit margin?
What is the relationship between effective inventory management and profit maximization?
How is the organization account for good purchased and to trace goods through the business until they have been delivered and charge to operation?
What is the used to place an order at the acquire the right time with right resources to acquire the right quantity at the right price?
