MANAGEMENT OF STOCK IN A PUBLIC UTILITY COMPANY: A CASE STUDY OF DISTRIBUTION AND MARKETING SECTOR OF NATIONAL ELECTRIC POWER AUTHORITY (NEPA)
This project is primarily concerned with the analysis of management of stock in public utility companies with particular reference to the. Distribution and Marketing department of the (PZ PLC). In doing this, the researcher briefly explain some of the general problems facing the stores control functions in many organizations and went on to touch on the background of the subject matter where some of the activities of the organization were highlighted. Some of the problem facing stores control systems were highlighted to include the dearth of qualified stores personnel, overstock and sometimes under stocking, pilferages, deterioration, obsolence and insufficient store materials. The research work further reviewed related literature on the subject matter to sample the opinions of various authors on the subject. The review of related literatures centred on inventory control, stock control, problems in accounting for stocks, products procurement and management, reasons for holding stock, stores control, stock taking and stock checking, cyclical provisioning, stock record system, among others. The researcher noted there was a consensus among the authors on these matters as mentioned above.
1.1 BACKGROUND INFORMATION:
P.Z Plc is a government owned business organisation set up by Decree with the main aim of maximising public welfare. Services usually provided by PZ Plc are essential. To ensure even distribution of facilities and social services, the government establishes PZ. PZ helps to control private monopoly of power and helps to combat the unhealthy rural – urban drift of the population. Store control is an important functional branch of PZ as an organization and needs more attention that it is actually being presently given. It has been viewed in some quarters as an unnecessary activity that really costs money while in some other quarters is regarded as being vital, and a sophisticated method of control is adopted to protect the inventories. There are organizations where the buying departments do not have responsibility for the stores or even the stock control function. Despite this, the role of buying is still linked with both functions. All organisations have some stock, which must be cared for, because they represent money. In a manufacturing organisation where large unit items are produced daily for instance, large quantities of materials and component parts have to be provided daily as well.
This obviously means a lot of money and it is therefore to organize store function so that investment cost is kept to the specific standard system of stores control, which can be universally recommended or applied, but in the course of time, certain principles and practises of more or less general application have been evolved. A material as used in this write-up has the same meaning as inventory or stock. It is necessary to bring out the points at this stage because in Financial Accounting, material is often known as stock or inventory. As on accounting category, material stock is a current asset represented by goods owned by the business at a particular point in time and help for the purpose of future sale or for the manufacturing of goods for sale. Materials management is concerned basically with planning and control of materials. Control is a process by which events are made to conform to a plan. Therefore to control materials, there must be a store, where to buy, when to buy, and how much to buy. The items to be stored will be dictated by the basic functions of the firm and the customers it serves. The suppliers to be selected will be influenced by such factors as the ability of the supplier to supply the quantity of the right quality at the right time and at the right price (right from the point of view of the purchaser). Continuous stock checking is the checking by counting of physical quantities of materials in stores regularly, a few at a time, until items are checked at least once a year. The figures so obtained by continuous stock takings are compared with the corresponding figures on the bin card and stores ledger cards. The exercise is should not be aware of the balances on the bin cards or stores ledger card before the exercise. Government plays an important part with the total amount invested, with the central government, state government, local authorities and public corporations for high part. Profit is not the main determinant, but political and social factors. Although, costs-benefit analysis is used to evaluate the differing projects which a government might consider. Governments have used public work as a means to expand or restrain the economy and the commitment of full employment. For the private sector industrialist, the factor that determines investment is the profitability or rather anticipated profitability of the project. The profitability can be said to depend on the expected future returns obtained from the purchase of the equipment. The later is known before a decision is taken, while the former can be thought as nothing more than a calculated or inspires guess. However, whether it is a private or public sector, the acquisition, storage, issuance, and usage of stock in the running of the business must be involved. For effectiveness, efficiency and productivity of the business, therefore, functional machinery should be put in place for the proper control of stock or inventory of the organisation.