CHAPTER 6: THE ROLE OF INVENTORY MANAGEMENT ON CUSTOMER SATISFACTION

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 



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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 < xtab = 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.


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