ABSTRACT
This is a research study in the relevant of stock control in an organization. This research project is written mainly to harness critically the strategies involved in the stock control and comment on the need and important at control stock as a basis for organizations standard and profitability. It is also intended to make useful suggestion and recommendation that might help an organization to grow.
However, this research project has been carefully and specifically prepared into five chapters. It includes materials which have been collected personally by full observation and study. The language used is simple enough to be understood by the readers. Chapter one of the research work is focused on the introduction, problems, objectives, statement, scopes, relevance and information of the study.
Chapter two, the research reviewed the related literature, chapter tree is based on the research methodology design and methodology, chapter four is on the presentation and analysis of data while chapter five is about the summary, conclusion and recommendation.
CHAPTER ONE
1.0 INTRODUCTION
1.1BACKGROUND OF THE STUDY
Production operations will highly be hampered if the references of stock control are not properly and effectively carried out. The basic stock function is that of holding stock, thus the need for proper stock control becomes imperative.
In the other of contrary, the basic relevance /functions of stock control is that of making sure that activities designed towards the effective management and control of all inventory items held in stock are properly taken care of. Nevertheless, in an industry as well as the public sector organization the stores has remained one of the production department and storage whether of raw materials, partly processed work or finished products, is part of the sequence of operations, both clerical and physical which starts as soon as the customer’s order or the management decision to manufacture, the principle and procedures are exactly the same.
1.1 GENERAL OVERVIEW OF THE STUDY
The study of purchasing and supply management cannot be complete without proper valuement of control of stock and its relevancies.
In treating the relevancies of stock control as an operation or topic is to acknowledge the managers the most similar object to bear in mind which is to ensure that every piece of material whether raw or worked coming into any store shall stay there for as short a time as possible before moving either out into the factory to be processed or in the case of such things as spares, tools or building materials involves into use. The essential qualifying condition here is that stocks must be maintained first high enough for a constant supply of material component to be available when required.
1.2 OBJECTIVE OF THE STUDY
The objective of the study (Relevance of stock control in an organization) is to ensure that the following is achieved in every organization
• To find out whether materials needed for manufacturing or operation purposes are available in the right quantity and quality at the required time and place.
• To find out whether the level of stock is kept as low as possible, in order to keep capital invested into a practical minimum and to avoid occupying excessive factory space with consequent high overhead.
• To find out whether the necessary information for financial control is readily and accurately provided.
• To know the protection of stock against waste and pilferage.
• To provide basis for perpetual inventory check and to eliminate the need for annual stock taking.
1.3 THE SCOPE OF THE STUDY
The researcher having visited some companies that deal on the same business line concentrated his investigation on the ways of achieving an organization stated goals. The researcher will however identify the different strategies involved and used in the areas of stock control in these organization and some of the problems associated with it.
Furthermore we will only focus our attention on the ways of achieving success:
• By giving accurate record of every item in the store house.
• Keep proper custody of material information needed for the day to day operation in the storehouse.
• Transmit such information to appropriate locations.
• Adopt effective method of discharging dead stock and method of providing life stock.
• Establish the most economic levels for all stock of items in the stock.
1.4 STATEMENT OF PROBLEM
The relevance of stock control in an organization is so vital in both large and small firm. Upon the relevance of the stock control, the researcher in carrying out this research work was able to identify some problems that may hinder the progress of smooth control of stock in an organization. Some of these problems are identified below:
• Professionals were not employed in the purchasing department and this makes the strategy involved in the relevance of stock control not achievable because the staff employed to do the job is not well trained.
• The method of source of information used in these organizations in terms of checking the control of stock is not good in the sense that anybody can do it without considering if the individual have the capacity.
• The stock control records are not properly kept and this makes the stores manager to be very active.
• Another problem that hinders the progress of stock control in an organization is the type of materials purchased. This implies that the materials might be in a bad shape thereby stopping the smooth running of the organization.
Finally the stock held in the stores for so long can cause a problem in controlling the stock in an organization. This means that stocks are not supposed to be kept in the stores for so long before they are dispatched to where they are needed.
1.5 RESEARCH QUESTION
A. Do you think that professionals were not employed in the purchasing department and this make the strategies involved in the relevance of stock control not achievable because the staff employed to do the job is well trained?
B. Do u think that the method of source of information used in this organization in terms of checking the control of stock is not good in the sense that anybody can do it without considering if the individual has the capacity?
C. Do you think that the stock control records are not properly kept and this makes the stores manager to be very active?
D. Do you think that the type of stock control strategy used in an organization might equally affect the type of material produced?
E. Does it imply that the type of stock control can cause materials to be in bad shape thereby stops the smooth running of the organization?
F. Can a stock held in the stores for a longtime cause a problem in controlling the stock in an organization.
G. Does it mean that stocks are not supposed to be kept in the stores for a long time before they are dispatched to where they are needed?
1.6 THE SIGNIFICANCE OF THE STUDY
The significance and or the relevance of stock control in an organization cannot be over emphasized. Perhaps it entrances this organization to be able to make and know the various ways of controlling the stock in the firm.
Stock control is also relevant in an organization because it aided the researcher to and how the organization should be used and able to control their stock. It also enables an organization to maximize profit since a huge amount of money is being spent on materials. It will also help the organization to ensure that cost is also minimized to the lowest minimum level.
Finally, stock control serves as a means of references to the organization. This implies that the data used to carry out the research are kept and this makes it easy for those who need than house it.
1.7 THE LIMITATION OF THE STUDY
An investigation of this kind of confronted with several limitations. Its limitations are as follows:
• FINANCIAL PROBLEM: Financing projects has been a trying experience because of the prevailing economic condition in the society. So the researcher is unable to travel and cover many places of interest in order to gather information for this research work.
• NATURAL FACTORS: This is seen as a hindrance to the study. The project work is disturbed from effects of regular rainfalls and hot weather wind thereby hinders the researcher’s movement in his bid to collect data and distribution of questionnaires to respondents.
• LIMITED TO FACTORS: The schedule of academic activities for every final year student both ND’s and HND’s of the polytechnic is tactic. The researcher needs to attend classes read other causes etc this makes the researcher unable to collect responses from many companies, organizations as he would have love d to.
• TRANSPORTATION PROBLEM: The researcher was also confronted with transportation problem. He wasted so much time on road and thereby making him to reach his place of investigation very late.
• Even some people in the organization do not give reliable information to the researcher which associated with unreliable information; poor audience by respondents is a big limitation to this project.
1.8 THE DEFINITION OF TERMS
The researcher did not observe hard terms/words during his investigation. Nevertheless, below is the definition of few observed terms by the researcher during his investigation:
• TACTIC: This entails the ability of the researcher to develop the skill in avoiding offenses during his investigation in order to get useful information from the investigation.
• RECORD-USING/ RECORD CARDS: Under this system, a number of other sub-forms have been devised notable amongst them are
• PERIODIC STOCK LEVEL/CYNICAL PROVISIONING: This means that stock is reviewed at regular intervals and sufficient is ordered to restore stock to the predetermined level.
• RE-ORDER LEVEL STOCK CONTROL/ MAXIMUM AND MINIMUM CONTROL: Through this method a replenishment order is issued when balance falls to re-order level.
• BASE STOCK METHOD: This system is mainly used for major projects example ship building, where there is to be major project like a series of units constructed.
• SELF REGULATING STOCK PLAN SCHEDULING: This is concerned with cumulative movements of stocks which are compared with predetermined friends, perhaps seasonally adjusted.
• IMPREST STOCK CONTROL: This system applies where sub-stores are maintained e.g. initial float of stock is given at regular basis like weekly or monthly.
• OUT FOR ONE STOCK CONTROL: Here each issue is dependent on the returns of the items being replaced.
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