CHAPTER FOUR
PRESENTATION AND
ANALYSIS OF DATA
4.0
INTRODUCTION
In this chapter data generated from our
respondents were presented and analyzed. The researcher has adopted a composite
presentation of the questions to make the presentation more concise, and
comprehensive. In order to quantify the responses more appropriately, the
researcher employed such statistical tools as frequency tables, percentages,
and chi-square as mentioned in chapter three.
The researcher used the last part of this chapter to test the hypothesis
formulated in chapter one.
The chi-square is used for this purpose.
The result of the
test forms the basis of accepting or rejecting
the earlier or preconceived
notion of the hypothesis
Table 4-1
Total
number of Questionnaires Distributed and Collected.
S/NO
|
DEPARTMENT
|
NUMBER
|
%
|
NUMBER
COMPLETED RETURNED
|
%
|
NUMBER
UNCOMPLETED RETURNED
|
%
|
1
|
Stores
|
32
|
25
|
31
|
24
|
1
|
0.8
|
2
|
Accounts
|
46
|
35
|
44
|
34
|
2
|
1.5
|
3
|
Productions
|
30
|
23
|
29
|
22
|
1
|
0.8
|
4
|
Internal
Audit
|
17
|
13
|
17
|
13
|
-
|
-
|
5
|
Managers
|
5
|
4
|
5
|
4
|
-
|
-
|
Total
|
130
|
100
|
126
|
97
|
4
|
3.1
|
Sources:
Ezechukwu Field work
As table 4-1 shows a total of One
hundred and thirty (130) questionnaires were distributed to the four (4) chosen
departments and the managers but only one hundred and twenty-six (126) were
completed and returned. This represents 97% of the total number of
questionnaire distributed. Four (4) questionnaires were returned uncompleted.
This constitutes 3.1% of the total number of questionnaires distributed. In
effect only 4 of the distributed were returned uncompleted. The thirty-two (32)
questionnaire representing 25% of the total numbers distributed were
administered to the store depts. Out of thirty-two (32), thirty-one were duly
completed and returned. One (1) was returned partly completed. This repressing
24% and 0.8% respectively.
Also forty-six (46) questionnaires
representing 35% administered to accounts department, forty- four (44)
constituting thirty-four (34%) answered and returned completed, two (2)
questionnaires were returned partly completed this representing 1.5%.
Production department was
administered thirty (30) questionnaires represent 23%, 29 constituting 22% were
completed are answered and returned one (1) questionnaires was returned partly
completed, this representing 0.8%.
Seventeen (17) questionnaires (which
are 13%) were administered to the internal Audit, they responded and returned
all of them, like wise, managers was administered five (5) questionnaire
represent 4% and returned all of them.
From our analysis of table 4-1, out
of the one hundred and thirty (130) questionnaires representing 100% that were
distributed, only one hundred and twenty- six (126) were completed and
returned. This represents 97% of the total number distributed. Four (4)
questionnaires constituting 3.1% were returned but were party completed and so
were not used for further analysis.
Table 4-2
PERSONAL DATA OF RESPONDENTS
Education Qualification
|
No
of respondent
|
Percentage
%
|
SSCE/GCE
|
19
|
14.6
|
OND/NCE
|
37
|
28.5
|
HND/B.SC
|
49
|
37.6
|
HIGER
DEGREE
|
15
|
11.5
|
PROFESSIONAL
CERTIFICATE
|
6
|
4.6
|
Sources:
Ezechukwu Field work
Table 4-2 shows that 14.6% of those who
render their services to manufacturing companies, in Anambra Motor
Manufacturing Company and Nigeria Brewery industry Enugu are holders of
SSCE/GCE, while 28.5% of the employees are OND/NCE holders, Again the table
shows that 37.6% of workers are HND/B.SC holders, only fifteen (15) respondent
(representing 11.5% are confirmed higher degree holder and also shows that
professional certificate holders in the company is (6) representing 46% of the
respondents.
A critical evaluation of the table
indicates that higher degree holders and professional certificate holders is
less in number than other educational qualifications of the employees.
Table 4-3
Effectiveness and Efficiency
Description
|
Stores dept.
|
%
|
Accounts
dept.
|
%
|
Production
dept.
|
%
|
Internal audit dept.
|
%
|
Managers
|
%
|
4. Are material of appropriate
qualities and specification purchased only when required?
a.
Agree
b.
Disagree
(c)
I don’t, know
|
29
2
-
|
(23)
(1.6)
-
|
39
3
2
|
(31)
(2.4)
(1.6)
|
28
1
-
|
(22)
(0.8)
-
-
|
13
3
1
|
(10.3)
(2.4)
(0.8)
|
5
-
-
|
(4)
-
-
|
5 Who authorizes the purchase of the
material?
(a) Directors
(b) Production managers
© Purchase managers
(d) All of the above
|
13
2
2
|
10.3
1.6
1.6
|
18
4
3
|
14.3
3.2
2.4
|
10
4
2
|
7.9
3.2
1.6
|
4
2
2
|
3.2
1.6
1.6
|
3
1
-
|
2.4
0.8
-
|
14
|
11.1
|
19
|
13
|
13
|
10.3
|
9
|
7.1
|
1
|
0.8
|
|
8. Are the appropriate storage
facilities provided for the stock:
a.
Agree
b.
Disagree
c. I don’t know
|
28
3
-
|
22.2
2.4
-
|
38
5
1
|
30.2
4
0.8
|
27
2
-
|
(21.4)
1.6
-
|
14
3
-
|
11.1
2.4
-
|
3
1
1
|
2.4
0.8
0.8
|
9 Are following arrangement made to
ensure that the materials ordered are adequately and promptly supplied to the
firm?
a.
Agree
b.
Disagree
© I don’t know
|
28
-
3
|
22.2
-
2.4
|
35
4
5
|
27.8
3.2
4
|
21
6
2
|
16.7
4.8
1.6
|
14
2
1
|
11.1
1.6
0.8
|
4
1
-
|
3.2
0.8
-
|
10.
On the receipt of materials are they inspected as to find out whether they
agree with the order placed?
(a.
Agree
b.
Disagree
©
I don’t know
|
29
2
-
|
23
1.6
-
|
38
5
1
|
30
4
0.8
|
25
3
1
|
19.8
2.4
0.8
|
15
2
-
|
11.9
1.6
-
|
4
1
-
|
3.2
0.8
-
|
11.
Are copies of goods received note sent to the various control unit, Store, Accounts
and Supplies?
a.
Agree
b.
Disagree
(c) I don’t know
|
29
2
-
|
23
1.6
-
|
38
5
1
|
30
4
0.8
|
25
3
1
|
19.8
2.4
0.8
|
15
2
-
|
11.9
1.6
-
|
4
1
-
|
3.2
0.8
-
|
12.
Are goods received note (GRN) or inspection notes, signed when goods are
taken into store:
a.
Agree
b.
Disagree
c.
I don’t know
|
30
1
-
|
23.8
0.8
-
|
28
9
7
|
22.2
7.1
5.9
|
18
5
6
|
14.2
4
4.8
|
14
2
1
|
11.1
1.6
0.8
|
2
-
3
|
1.6
-
1.6
|
14
what policy of inventory control do you operate?
(a)
physical stocktaking
(b)
perpetual method
(c)
I don’t know
|
28
3
-
|
22.2
2.4
-
|
40
4
-
|
31.7
3.2
-
|
24
5
-
|
19
4
-
|
17
-
-
|
13.5
-
-
|
5
-
-
|
4
-
-
|
15
What is the method of stock valuation applied by the company?
a.
FIFO
b.
LIFO
c.
Weighted average
d.
Base stock
|
23
5
2
1
|
18.3
4
1.6
0.8
|
35
7
2
|
27.8
5.6
1.6
-
|
13
11
5
-
|
10.3
8.7
4
-
|
10
4
2
1
|
7.9
3.2
1.6
0.8
|
5
-
-
-
|
4
-
-
-
|
ANALYSIS:
QUESTION 4: APPENDIX A
Table
4-4
DATA ON MATERIAL PURCHASE
Variables
Responses
Percentages
S.A
114 90.5
A 9 7.1
S.D
3 2.4
D
126 100
Sources:
Ezechukwu survey data
From the table indicates that 90.5% of
the respondents, said yes that the materials used in the company is gotten from
overseas, while 7.1%, 2.4% of the respondents disagree. In the researcher’s
view the later group has something against the management (officers) as it
pertains to the movement of the materials. But that was not disclosed. Reasons:
(1) to prevent the obsolescence of materials (2) to prevent capital from being
tied down (idle capital).
ANALYSIS
QUESTION 5 APPENDIX A
Table 4-5
DATA ON
AUTHORIZATION OF THE PURCHASE OF MATERIALS
Variables
Response
Percentage%
Directors
48 38.2
Production
manager 13 10.3
Purchases
manager 9 7.1
All of the above 56 44.4
Total
126 100
Sources:
Ezechukwu survey data
The result from table 4-5 reveals that
38.2% (48 respondents), 10.3% (respondents of 13), 7.1% (9 respondents) and
44.4% (56 respondents). It was observed by the researcher that each requisition
raised for material issue by any authority as duly signed by different named
functionaries each indicating the authority he has on the document.
Decision: It is accepted that there
is proper authorization for the purchase of materials, which is vital tool in
the management and control of inventories.
ANALYSIS
QUESTION 10 APPENDIX A
Table 4-6
RECEIPT AND
INSPECTION OF MATERIALS.
Variables Response Percentage
S.A 111 88.1%
A
4 3.2%
S.D
11 8.7%
D 126 100%
Sources:
Ezechukwu survey data
From the data above, it is observed that
88.1% (111 respondents), 3.2% (4 respondents) and 8.7% (11 respondents). It is
established that there is no job interference, the responsibilities of
inspection does not conflict with any other job (s).
Decision: It is clear that the
proper inspection is carried out on the arrival of materials before they are
stored. To the surprise of the researcher, the percentage of those who do not
know about the operation of the company with regard to inventory management are
high in number than the groups that said No.
ANALYSIS:
QUESTION 11 APPENDIX B
Table 4-7
DISPATCHES OF
COPIES OF GOODS RECEIVED NOTES
Variables
Response
Percentage
S.A 111 88.1%
A 13 10.3%
S.D 2 1.6%
D 126 100 %
Sources:
Ezechukwu survey data
Table 4-7 further shows that 88.1% (111
respondents), 10.3% (13 respondents), and 1.6% (2 respondents). Though to 10.3%
of the respondents gave a negative response that will not invalidate the
affirmative answer of the 88.1% of the respondents. Again, from the
researcher’s oral interviews, it’s very clear that the goods received note
(GRN) is sent to the various units.
ANALYSIS:
QUESTION 14
APPENDIX A
DATA ON
INVENTORY CONTROL
Variables
Responses
Percentage
A.
physical stock taking 114 90.5%
B.
perpetual Method 12 9.5%
c.
I don’t know - -
Total 126 100%
Sources:
Ezechukwu survey data
Table 4-8 further shows that 90.5% (114
respondents), 9.5% 912 respondents). Through response, that will not invalidate
the affirmative answer of the 90.5% of the respondents. It is very clear that
the physical stock taking is more to operate inventory control.
Reasons:
To verify the level of inventory by items, the accuracy of the inventory cards.
ANALYSIS:
QUESTION 15
APPENDIX A
Data on Cost
Flow Policy
Variable
Response Percentage
FIFO
86 68.3%
LIFO 27 21.4%
Weighted
average 11 8.7%
Base
stock 2 1.6%
Total 126 100%
Sources:
Ezechukwu survey data
The table further reveals that 86
respondent (representing 68.3%), respondents (representing 21.4%) 11
respondents (representing 8.7%), and 2 respondent (representing 1.6%). It is
clear that the cost flow method of the companies adopts is the
first-in-first-out (FIFO) method. The researcher observed from the interview
that not every body knows the method of stock valuation the company uses. The
companies use FIFO methods of valuation the issue of raw material as well as
finished goods.
Reasons are to ensure that materials
are issued out at the actual cost thereby avoiding unrealized profit or losses
which may result from issue of materials, and this method is recommended by
professional bodies.
ANALYSIS:
QUESTION 12 APPENDIX A
Table 4-10
DATA ON SIGNING
OR INSPECTION NOTES:
Variables
Response Percentage
S.A 92 93.
%
A 17 13.5%
S.D 17 13.5%
D 126
100%
Sources:
Ezechukwu survey data
From table 4-10 stated that 92
respondents (representing 73. %), 17 respondents (representing 13.5%) 17
respondents equally (representing 13.5%). That is, there is proper checking on
receipt of goods (materials). The ignorance of about 13.5% of this fact cannot
as well out weight the decision of the 73% of the respondents. In the opinion
of the recorder most members of the first group don’t know what is meant by
goods received notes.
ANALYSIS:
QUESTION 8 APPENDIX A
Table 4-11
DATA ON APPROPRIATE
STORAGE FACILITIES:
Variables
Responses Percentage
S.A 110 87.3%
A 4 11.1%
S.D 2 1.6%
D 126
100
%
Sources:
Ezechukwu survey data
From the table 4-11, it is observed that
110 respondents (representing 87.3%) 4 respondent (representing 11.1%), 2
respondents (representing 1.6%) and from table above, it can seen that enough
and appropriate storage facilities are provided. This is by consideration the
affirmative response individually in accordance with the management response.
But from the observation of the researcher in conjunction with the percentage
of the negative and indifference response, there are not enough storage
facilities in places.
ANALYSIS:
QUESTION 9 APPENDIX A
Table 4-12
Variables
Responses Percentage
S.A 90 75%
A 16 10.3%
S.D 14 8.7%
D
6 6.0%
126 100
Sources:
Ezechukwu survey data
The
above data show that follow-up arrangements are made to ensure adequate and
promptly supplies to the organizations. It should be pointed out that quite a
good number of the employees know about the arrangements. This is not good for
efficient and effective management and control of inventories. The researcher
observed that the work of “follow-up” is widely left for the purchasing manager
who raised the local purchase order (LPO), the workers of other sub-units do
not know or care about what happens during the lead time.
4. 2 HYPOTHESIS
TESTING
In
chapter three of this work, we stated that one of the statistical tools to be
employed is the chi-square. The three Hypotheses earlier stated in chapter one
has been tested using that data extracted from their respective analyzed
tables.
Hypothesis
Ho
(a): Efficiency in production is not a function of efficient stock management
H1
(a): . Efficiency in production is a function of efficient stock management
The
data for the hypothesis is extracted from question 2 Appendix A.
Question 2: Does your company deem it
necessary to keep inventories?
Results of the responses are as show
in the table 4-13a and 4-13b. Our confidence level was assumed at 95% (that is
test was carried not with 5% error margin).
Table
4-13A
OBSERVED AND
EXPECTED FREQUENCIES FOR TABLE 4-2.
Description
|
Strongly
Agreed
|
Disagree
|
I
don’t know
|
Total
|
Store
Dept
|
15
(20.421)
|
12
(7.135)
|
4(3.444)
|
31
|
Accounts
Dept
|
26(28.984)
|
10(10.127)
|
8(4.889)
|
44
|
Production
Dept
|
24(11.193)
|
3(6.675)
|
2(3.222)
|
29
|
Internal
Audit
|
15(11.193)
|
2(3.913)
|
0(1.889)
|
17
|
Managers
|
3(3.394)
|
2(1.151)
|
0(0.559)
|
5
|
Total
|
83
|
29
|
14
|
126
|
Sources:
Ezechukwu survey data
The figures in the brackets are our
expected frequencies. It has been computed using the expression.
Eij = Rt x Ct
Nt
Where,
Eiji = Expected frequency
Rt =
Row total
Ct= Column total
Nt = Net total
Table 4-13 b
Observed
and Expected Frequencies
Responses
|
Observed
(0)
|
Expected
(e)
|
O-e
|
(O-e)
|
O-e2
|
|
1
|
Agree
|
15
|
20.421
|
5.421
|
29.387
|
1.44
|
Disagree
|
12
|
7.135
|
4.865
|
23.668
|
3.31
|
|
I
don’t know
|
4
|
3.444
|
0.556
|
0.309
|
0.08
|
|
2
|
Agree
|
26
|
28.984
|
2.984
|
8.904
|
0.31
|
Disagree
|
10
|
10.127
|
0.127
|
0.16
|
0
|
|
I
don’t know
|
8
|
4.889
|
3.111
|
9.678
|
1.98
|
|
3
|
Agree
|
24
|
19.103
|
4.897
|
23.980
|
1.26
|
Disagree
|
3
|
6.675
|
3.675
|
13.505
|
1.02
|
|
I
don’t know
|
2
|
3.222
|
1.222
|
1.493
|
0.46
|
|
4
|
Agree
|
15
|
11.198
|
3.802
|
14.455
|
1.29
|
Disagree
|
2
|
3.913
|
1.913
|
3.659
|
0.94
|
|
I
don’t know
|
0
|
1.889
|
1.889
|
3.568
|
1.89
|
|
5
|
Agree
|
3
|
3.294
|
0.294
|
0.086
|
0.03
|
Disagree
|
2
|
1.151
|
0.849
|
0.720
|
0.63
|
|
I
don’t know
|
0
|
0.556
|
0.559
|
0.312
|
0.56
|
|
16.2
|
X2= £ £ (Or, c – Er, o)2
r
c £r,c
at the level of significance
x
= 0.05
The degrees of freedom are given by
df
= (r-1) (c-1)
df = (5-1) (3-1) = 4 x2 =8
Critical valve of x2 table at
8 df with 95% confidence interval is 15.15
i.e. = x2 cal = 16.2
x2 tab = 15.15
x2 cal = 16.2 > x2 tab = 15.15
Decision Rule: Reject Ho: and accept Hi:
that the company recognizes the need to keep, control and management of
inventories.
HYPOTHESIS
II
Ho:
Efficiency inventory management is not a major tool for cost reduction
and
increasing profitability .
Hi: Efficiency inventory management is a major tool
for cost reduction and
increasing
profitability
The questions in the oral interview are used for the collection of data
relevant to this hypothesis. The question No 2 in Appendix B. No 2- what are
the major costs you insure in holding and replenishing the inventories?
The data for the hypothesis is extracted
from table 4-2 R/No2 as has shown in table 4-14a and 4-14b. Our confidence
level was assumed at 95% (that is, test was carried out with 5% error margin).
Table 4-14a
Observed and expected frequencies for
the table
4-2 R/No2
Description
|
Holding or carrying cost
|
Procuring cost
|
Shortage cost
|
Total
|
Store dept
|
18(22.4)
|
8(6.9)
|
5(1.7)
|
31
|
Accounts dept
|
40(31.8)
|
4 (9.8)
|
0 (2.4)
|
44
|
Production
|
19(20.9)
|
10 (6.4)
|
0(1.6)
|
29
|
Internal Audit
|
10(12.3)
|
5(3.8)
|
2(0.9)
|
17
|
Managers
|
4(3.6)
|
1(1.1)
|
0(0.3)
|
5
|
Total
|
91
|
28
|
7
|
126
|
Sources: Ezechukwu Field work
Table
4-14b
Observed
and expected frequencies
Responses
|
observed
|
Expected
|
o-e
|
(o-e)2
|
(o-e)2
E
|
Holding costs
|
18
|
22.4
|
4.4
|
19.36
|
0.86
|
Procuring costs
|
8
|
6.9
|
1.1
|
1.21
|
0.18
|
Shortage costs
|
5
|
1.7
|
3.3
|
10.89
|
6.41
|
Holding cost
|
40
|
31.8
|
8.2
|
67.24
|
2.11
|
Procuring cost
|
4
|
9.8
|
-5.8
|
33.64
|
3.43
|
Shortage cost
|
0
|
2.4
|
-2.4
|
5.76
|
2.4
|
Holding cost
|
19
|
20.9
|
-1.9
|
3.61
|
0.17
|
Procuring cost
|
10
|
6.4
|
3.6
|
12.96
|
2.03
|
Shortage costs
|
0
|
1.6
|
-1.6
|
2.56
|
1.6
|
Hold costs
|
10
|
12.3
|
-2.3
|
5.29
|
0.43
|
Procuring costs
|
5
|
3.8
|
1.2
|
1.44
|
0.38
|
Shortage costs
|
2
|
0.9
|
1.1
|
1.21
|
1.34
|
Holding cost
|
4
|
3.6
|
0.4
|
0.16
|
0.04
|
Procuring cost
|
1
|
1.1
|
-0.1
|
0.01
|
0
|
Shortage cost
|
0
|
0.3
|
-0.3
|
0.09
|
0.3
|
Total
|
21.68
|
Sources:
Ezechukwu Field work
X2= £ £
(Or, c – Er, o)2
r c
£r,c
X2
= 21.68
At the level of significance e = 0.05,
the degree of freedom are given by df- (r-1) (c-1)
df = (5-1) (3-1) = 4x2 =8
Critical valve of x2 tab at 8
df with 95% confidence interval is 15.15.
i.e.
x2 cal = 21.68
x2 tab = 15.51
x2 cal = 21. 68 > x2 tab = 15.51
Decision
Rule:
Reject Ho: and accept Hi: that careful handling of inventories leads a higher
profit in the manufacturing companies.
HYPOTHESIS
III
a. Ho: Overstocking
and under stocking in manufactory company does not have its benefit attributed
to having stock at its optimum levels in
attaining to customer satisfaction
Hi: Overstocking
and under stocking in manufactory company have its benefit attributed to having
stock at its optimum levels in attaining
to customer satisfaction
b. Ho: Efficiency
inventory management is not a major tool for cost reduction and increasing
profitability
Hi: Efficiency
inventory management is a major tool for cost reduction and increasing
profitability (pg 15-16
c. Ho: Overstocking
and under stocking in manifesting company does not have its benefit attributed
to having stock at its optimum levels in attaining to customer satisfaction
Hi: Overstocking
and under stocking in manufacturing company have its benefit attributed to
having stock at its optimum levels in attaining to customer satisfaction.
Does
your inventory management and control policy minimize costs or expenses or
inventories?
Result of the responses as shown in
the table 4-15a and 4-15b. Our confidence level was assumed at 95% (that is
test was carried out with 5% error margin).
Table
4-15a.
Observed
and expected frequencies for table 4-2 R/No 8 and 16
Description
|
Yes
|
No
|
I
don’t
|
Total
|
Store
depts..
|
18
(21.7)
|
9
(6.4)
|
4
(3.0)
|
31
|
Account
depts.
|
28
(30.7)
|
10
(9.1)
|
6
(4.2)
|
44
|
Production
|
24
(20.3)
|
3(5.9)
|
2
(2.8)
|
29
|
Internal
Audit
|
15
(11.9)
|
2
(3.5)
|
0(1.6)
|
17
|
Managers
|
3
(3.5)
|
2
(1.0)
|
0
(0.5)
|
5
|
Total
|
88
|
26
|
12
|
126
|
Sources: Ezechukwu Field work
Table 4-15b
Observed and expected
Reponses
|
Observed
|
Expected
|
0-e
|
(0-e)2
|
(0-e)2
|
Agree
|
18
|
21.7
|
-3.7
|
13.69
|
0.63
|
Disagree
|
9
|
6.4
|
2.6
|
6.76
|
1.05
|
I don’t know
|
4
|
3.0
|
1.0
|
1.0
|
0.33
|
Agree
|
28
|
30.7
|
-2.7
|
7.29
|
0.24
|
Disagree
|
10
|
9.1
|
0.9
|
0.81
|
0.09
|
I don’t know
|
6
|
4.2
|
1.8
|
3.24
|
0.77
|
Agree
|
24
|
20.3
|
3.7
|
13.69
|
0.67
|
Disagree
|
3
|
5.9
|
-2.9
|
8.41
|
1.43
|
I don’t know
|
2
|
2.8
|
-0.8
|
0.64
|
0.23
|
Agree
|
15
|
11.9
|
3.1
|
9.61
|
0.81
|
Disagree
|
2
|
3.5
|
-1.5
|
2.25
|
0.64
|
I don’t know
|
0
|
1.6
|
-1.6
|
2.56
|
1.6
|
Agree
|
3
|
3.5
|
-0.5
|
0.25
|
0.07
|
Disagree
|
2
|
1.0
|
1
|
1
|
1
|
I don’t know
|
0
|
0.5
|
-0.5
|
0.25
|
0.5
|
Total
|
10.07
|
Sources:
Ezechukwu Field work
X2= £ £
(Or, c – Er, o)2
r c
£r,c
X2 = 10.1
At the level of significance 0.05, the
degree of freedom are given by df (r-1) (c-1) df = (5-1)(3-1) = 4x2 =8
Critical valve of x2 at 8df
with 95% confidence internal is – 15.15
i.e. = x2 cal = 10.1
x2 tab = 15.15
= x2 cal = 10.1 < x2 tab = 15.15
Decision Rule: Accept Ho and reject Hi
that the cost involved in the management and control of inventories is at
greater than the benefit of effective inventory control.
Reasons: This is proved by the
researcher’s interview with majority of the workers could not apprehend the
technicalities involved in the management and control of inventories.
Some of the workers also are not trained
as to the risk involved in the management and control of inventories.
CHAPTER
FIVE
5.0
DISCUSSION OF
FINDINGS AND FINDINGS.
This chapter expounds the effects of
efficient management of inventories on
the manufacturing companies. It
is apparent from our discussions so far in
the previous chapters that
manufacturing companies have some benefit they derive
for managing their inventories efficiently
and effectively (customer
satisfaction). The accruable benefit or effects are here under analyzed
5.1
PILFERAGE REDUCTION:
Pilferage is a system whereby staff (workers)
steals small quantities of the company products.
In an organization where high rate
of pilferage occurs, it will help to reduce the revenue of the organization
generated as well as its project profits. In
such organizations delivery of
demands of their
products are usually not met as records in the
bin cards and actual
quantities of products available differ, such situation send embarrassing message to
customers. However, manufacturing companies adequately circumvent excessive
pilferage through effective management of their inventories. The providing of authorization to a definite
personnel and punishment of disobedient personal. this have helped in the early identification and
curtailing of pilferage respectively
whereas pilferage products increase the cost of production and
reduce profit, its reduction increases
revenue generation and hence profit
these facts are inferred from
question No 3 in appendix B
5.1.1
ELIMINATES IDLE
WORKING CAPITAL:
Many
factors contribute to the working capital of many organization being tied down, among such factors are using the company’s working capital to either buy raw materials in excess or using it to
buy raw materials that are not needed immediately, misappropriating the
working capital, using
the working capital to produce out of fashion
goods and so on. The only
plausible reasons that can reactive engrossed in idle working capital is effective inventory management. This will be so because idle working capital
is like cash at hand that does not generate profit.
5.1.2
REDUCTION ON
COST OF PRODUCTION.
Various factors are responsible for increment in the cost of production among such factors
are over –stocking which attract rent- age cost, security
cost and the like, under stocking
which brings about idle man hour which increases purchase cost and other such
factors. All these factors bring revenue close to cost of production. In other words, it means they make the difference between revenue and cost of production to be
as small as possible, with effective and efficient inventory management, an
organization eliminates overstocking, under
stocking, pilferage and the like.
The reduction of this factor of their elimination brings favourable
organizational rewards. The researcher
identified these all important factors through
comparing the various
discrepancies between actual quantities
available and actual records and
the cost of production of
various use of the companies
understudy.
Another evident problem, which the
company faces, is lack of adequate storage facilities for the stocks. This causes deterioration of materials and
makes for uneasy physical count during stocking. Some companies does not embark on
regular and efficient stock
taking within the year as it depends
heavily on the stock records this is
due to high cost of stock taking
5.2
SUMMARY :
All along, inventory management in
manufacturing company has been examined. It has been observed that poor
inventory management are noticed more from the store department and those that
are under the accounting section. This
is because they allow other departments like production and control to prepare
requisition order. Also, materials not used up by the production departments
are held by them instead of
reducing them to the stores
department. Hence, improper documentation and records of in flow and out flow
of materials occurs, which will have negative effects on the profit of the
companies
All these notwithstanding, difficulty in
inventory control is found in every company and must be effectively and
efficiently managed if a company wants to progress.
This is why some strategies that
companies should take to minimize these problems and maintain good relationship,
have been mapped out by the researcher.
CHAPTER SIX
6.0 RECOMMENDATION
AND CONCLUSION
6.1
RECOMMENDATION
This study has revealed what inventory is all
about, its make up, its need in the company, its management and its effects on
manufacturing company. It is the belief of the researcher that the following
recommendations will help to effectively and efficiently manage inventories in
manufacturing companies. It will
equally be of benefit to our society if properly applied.
1.
Competent
staff with relevant experience in control of inventories should be employed for
the Accounts, Stores and Production departments.
2.
The
need for centralization of the control
functions should be articulated and
enhanced
3.
The
main basic principles of stock control, irrespective of the organization or
companies are to have the right materials in
the right quantity at the
right time in the right place at
the right price, this must always be emphasized.
4.
Companies
should employ the services of experts
for the organizing and processing
of the inventory control and management data as to get the
maximum advantage of their
electronic device (computers)
which are used for inventory management
and control
5.
Companies
should always reject the supplies
of defective inventories and
the suppliers informed
immediately for collection and for subsequent replacement
6.
Detecting
of errors and fraud can be done by
reconciling the differences between the stock record balances and
physical counts.
7.
It
is recommended that training programmes
on inventory management should be organized for those who are involved in the planning
and controlling of inventories
in the company
8.
Proper
procedure: The organization should provide up-to date procedure manuals which
specify the flow of documents and provide information and instruction to
facilitate adequate record keeping. Routine and automatic clerks are major ways of attaining proper procedures.
9.
Companies
should establish strategies that will eliminate improper pricing and retrieval
of goods without receipting them.
10.
Another
important means through which the companies can improve economically are to request
and get financial assistance from the Federal Government
6.2 CONCLUSION:
There is yet, no single model, which
holds for all inventory problems. The use of model helps us to understand the
operation of inventory system and the behavior of the system under real or
stimulated operating condition. The use models go along way in
helping to solve the most common inventory problems faced by
business management that is of deciding
order quantities and re order points .
Most investigations of stock control
problems shows that almost every one like to have more stock than necessary
except those inventories where there is higher degree of obsolescence.
High
stock makes for easy and untroubled life, especially when it is hard to procure
the stocks. This results in high holding
cost with a low ordering cost. The
opposite happens where the management of a companies is an advocated of low
stock holding. The condition may vary
from one industry to another, the ultimate aim should be to minimize total a
production cost and stock cost.
The aim of inventory control system is
to find the different between the cost of holding stocks and the cost of
running out of stock. To maintain this delicate balance calls for great
business skill, warrants more attention than it’s given by those who entrust
more to luck and instinct than to acknowledge and principles. Application of sound
economic principles in managing inventories may not be a cure all for stock
out, but it can reduce the incident of indecision and wrong decision. Anything
less than a maximum implementation of all
the economic factors is like, according to P.D Ana, (2000) playing
Russian Roulette; you may hit
the target some of the
times, but more often you will be
left wandering what the next manipulation will bring.