THE EFFECT OF STOCK CONTROL PROFIT MAXIMISATION IN MANUFACTURING COMPANY
ABSTRACT
This project is centered on the importance of stock control and management in business organization to
enable the research obtain relevant materials and information for the purpose of analysis and conclusion
personals interviews and the use of questionnaire were employed together, information from various
department in Nigerian Bottling Company Kaduna. The use of text books to review related literate was also
employed. The study also evaluate the extent the company complies with accepted methods or (models) like
economic order quantity, re-order level, safety stock etc. the essence of this study have been to study the
problems. The researcher reveals that for erective control of stock, the company has a department solely
responsible for inventory control thereby reducing the operational cost of the business. It also facilitate easy
and maintenance of all documents. It was also discovered that the company does not apply scientific
method of economic order quantities to determine re-order level or quantities. Based on the findings, it was
recommended that the organization should introduce the use of computer to enable it keep proper and up to
date stock record at all times. It was recommended that the entire system should be made to involves all
functional managers directly affected by the stock control system, will facilitate on understanding of the system and its effective implementations.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Stock is frozen cash and as such should be given the same if not more priority than liquid cash. Firms need
stock in one form or the other in order to carry out its day-to-day activities and as such, the need to have the
stock at the required time, quantity, quality and under proper condition can never be over emphasized more
often than not, organization hold in order to have ready supply of materials from the store house to guard
against future increase in price, enjoy quality discount, prevent shortage of supply from its various sources
etc. since the ultimate goals of any business set up is to make profit, then, such profit can only be realized
through incurring the least affordable cost while expecting huge returns.
Inventory is major area of asset deployment which should be required to produce, minimum return on capital
investment since it incurs cost so there is a great need to minimize such cost and control stock with respect
to its receipt, storage and issue. When an organization is declining on what is to be held in stock, it is of
necessity to consider what item are to be used, and produced by the organization in question and then
decide which items is stocked. Stock have been noted to be life blood of organization and all such efforts are
always made to see that efficient stock control system and equipments are invented to cater for the various
items held in stock.
In order to minimize stock holding cost via efficient stock control measure, experience and qualified staff
should be employed to see to such matter. In public sector of the economy today, stock control is nothing to
write home about, you find stock idle in the store house, and some are even deteriorated due to lack of
storage facilities and staff with the little or no knowledge with regard to store management.
However, in the private sectors where individual are the owner of the business, the reverse is the case
because stock, no matter its form is given attention by well trained stoppers, under the appropriate
conditions after all, huge sum of money have been sunk in the acquisition of such stock items and to what
much is given much is or will be expected.
Organization in recent times have been facing one problem or the other which in most cases lead to early
liquidation. An investigation have revealed that most often than not, the whole problem normally arises from
inefficient management of stocks at one stage or the other both within and out side the organization, you will
find improper or lack of inspection facilities, poor and inadequate storing equipments, bad movement of
stock, just to mention a few with most of these thing present in organization, there is a great possibilities of
such an organization having problem thereby leading to closure.
Shortage arises due to lack of effective control stock among others, such as deterioration, reducing
obsolescence obsolete, pilferage receipt of the wrong specification of stock stoppage in production arising
from interior materials into the production term cost thousand or millions of naira. But if stock are been
monitored with high accuracy such problem will be satisfactorily reduce or totally controlled.
According to the stores recently have been make to reduce this cost while still maintaining a high degree of
control large firm have introduced a system of analyzing stock by various categories so as to ensure that
adequate attention can be paid to important item. The main theme of this project is to bring to lime light the performance of beverage industry in Nigeria
toward analysis of stocked control procedures with a particular reference to Nigeria Bottling Company (NBC).
In view of the above, we will have a glance on some specific areas further understanding. Firstly the writer
intends to discuss analysis of stock control procedures in beverage industry.
Stock comprises a major part of a companies current asset, and can be classified as raw material, work in
progress (or work in process) and finished goods. Its function are centered on stock management. At time
firms could not reach the peak of its operation because of major lapse in the area of stock management, it
was examined that the management tend to ignore the aspect of stock control in relation to inventory level
mostly, some firm liquidate due to ineffective stock management, which was made known in the introduction
part, this problems brings about frequent production interruptions and failure to meet delivery commitment.
When a firm experience these, it obviously result to tie-up of the firms funds and loss of profit which could
gradually lead to shut down of plant, and it affect the society as a whole (massive retrenchment). In essence
stock for smooth production and to ensure the maintenance of holding stock that forms part of the smooth running of the business.
1.2 STATEMENT OF THE PROBLEM
In the past, many companies witnessed considerable lapse and increasing changes in management
disciplines of stock control an important element in the management of stock.
- Stock management or management of stock is one of the problem business faces.
- The development of analytical techniques and computer capability now permits more sophisticated
analysis of stock problems. These two phenomena have combined to transform stock control into a critical
function requiring professional skills.
Most companies still adopt the oil and crude methods of stock control, the use of guess work and intuition, while others do not even make any attempt to minimize investment in inventory in the name of the pilling? Also, companies that stock a strategic number of item do not segregate the high value of stock selective and efficient control these, no doubt have contributed to high operating cost and hence less profit recorded by most manufacturing companies.
THE EFFECT OF STOCK CONTROL PROFIT MAXIMISATION IN MANUFACTURING COMPANY