At the same time, inventory can be thought of as a liability if not in an accounting sense. A large inventory carries the risk of spoilage, theft, damage, or shifts in demand.
The aim of this study is to investigate and ascertain areas of lapses by the company and offer effective ways and solutions in which the manufacturing company can explore the services of inventory management to effect its objectives.
In carrying out this study, various research instruments such as questionnaires and oral interview were used to collect data from respondents and a research design was adopted with a sample size of The statistical tool used for this work is Chi-square.
Based on the analysis, it was discovered that inventory management plays a vital role in the manufacturing company. A well functional inventory management following the recommendations can bring about proper management thereby enhancing proper and effective production and it will equally ensure the effective, efficient and adequate use of materials and resources in the manufacturing company.
The need for inventory control cannot be overemphasized as it is a means for improving the performance of manufacturing industries. Inventory can be defined as a record of a business current assets including property owned, merchandise on hand and the value of work in progress and work complete but not sold and it is classified as a current asset because it can be turned into liquid cash within a short period of time.
Inventory has created a great impact on the profitability of the manufacturing firm which resulted to the deep research of this topic.
Effectiveness of inventory management in a manufacturing company. Inventory plays a major role in the operation of many businesses and manufacturing companies. In manufacturing, inventories of raw materials allow companies to operate independently of their sources of supplies. Day to day operation are not dependent on deliveries from supplies since stock of the necessary materials are maintained and used s needed.
Without inventory control, millions of naira could be lost year because of non accountability of stocks and inaccurate checks and balances. The process of control and management of inventory is a very important factor in the success or failure of any business for example, little stock will result in stock out which will disrupt the production distribution cycle that is crucial to the survival of all manufacturing companies while too much stock will tie down the resources of a company.
Poor or inadequate inventory management can present a serious challenge to the productive capacity of a manufacturing organization. In addition to raw materials and finished goods, many companies also maintain items of assets, property, inventories of work in progress, office supplies, business firms and general operation supplies.
Inventories often constitutes the most significant part of current assets of large companies. Considering the large sum of money that are committed to the stocks of raw materials, work in progress and finished goods, it is therefore of paramount necessity that these stocks be managed efficiently and effectively in order to avoid the jeopardizing of the profit position of the firm.
In inventory, there is an optimum level therefore inadequate inventory causes loss of sale and disrupts the production process while excessive stock level leads to unnecessary carrying cost and obsolescence or spoilage risks.
According to Charles T. Horngrenthe optimum inventory.
Level lies between the inadequate inventories and the excessive inventories. Inventory management aims at maintaining an optimum inventory level that will be carried at the least cost. Ineffective management of inventory in the manufacturing company specifically Ama Greenfield Breweries. Loss of sales or business of the company as a result of insufficient inventories of finished goods.
Low productivity in the manufacturing company as a result of poor inventories model used by the company iv. Poor management and control of inventories in the manufacturing company. The specific objectives of this study are as follows: To determine to what extent the ineffective management of inventory in Ama Breweries plc has caused low productivity in the company.
To examine the extent to which insufficient inventory of finished goods cause loss of sales to the company.Inventory management can be very convenient if you know how to do it. The well-functioning system is a process of overseeing the flow of items into and out of your stock.
It’s a balance of having just enough products in the warehouse. Effective inventory management keeps the stock costs under control so you can run a successful business. Jun 29, · Inventory management is a system used to oversee the flow of products and services in and out of an organization.
A company may decide to incorporate one key inventory management technique or. A well functional inventory management following the recommendations can bring about proper management thereby enhancing proper and effective production and it will equally ensure the effective, efficient and adequate use of materials and resources in the manufacturing company.
Inventory has created a great impact on the profitability of the manufacturing firm which resulted to the deep research of this topic. Effectiveness of inventory management in a manufacturing company.
Inventory plays a major role in the operation of many businesses and manufacturing companies. So, for example, if a company has $2 billion in sales for the year, and average inventory levels of $ million, then $ million in inventory, divided by $2 billion in sales, times days in a year, equals average DIO of Effective Inventory Management has over 20 years of experience providing consulting services, leading educational classes and seminars, writing articles and books, and developing tools that help organizations manage inventory levels in a way that contributes to the overall success of the business.