CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the study
Manufacturing companies have efficient material management as one of their functions. They also focus on the management of their resources to produce or deliver the product or services provided by the organization. Many specific decisions fall under the operation of management umbrella. Examples include the mix of product or services to sell or manufacture the layout of retail outlet, distribution, ware house or manufacturing plants and the purchasing and handling of inventories by retailers and manufactures. Therefore, inventories and stocks are used interchangeably, stocks or inventories constitute the most significant part of current assets of large companies. Industries such as engineering garages, transport equipment, hydrogenated oil and mooting textiles, inventories constitutes three quarters of current assets while it account for only 30% or less in trading and shipping industries, printing and publishing, electricity generation and water supply. Inventories are the stock of product, a company is manufacturing for disposal and product is made up of component, the components are the raw materials, work-in-progress and finished goods. Raw materials as the basic input of material that are turned into finished goods through the process of manufacturing raw material stocks are those inputs purchased and stored in the ware house for the future production. Then work in progress or goods-in progress inventories are used interchangeably. Inventories can be of three kinds but depending on the volume of business operation.
A manufacturing company will have substantially high levels of all the three kinds of inventories while retail and wholesales company will have a very low level. In order not to jeopardize the profit position of the firm, efficient stock of materials,, work in progress, finished goods should be maintained. In some ways, planning for an inventory of cash is much like planning for the inventory of raw materials and finished goods. The firm must hold a minimum amount of stock or inventory to satisfy production and sales demand. According to Don T. Deconster if the rate of usage and delivery (1979: 564) “if the rate of delivery cloud be predicted with certainty, the firm would need to hold only the minimum inventory level necessary for the known transactions”. However, business activities are not certain and provision must be made for contingencies as well as for expected transactions for a company to avoid the risk of inefficient stock management, an undertaken monitoring of the management of inventory will be instituted. To avoid this, sound and efficient stock management system should be maintained. According to Horgreen (1992), the optimum inventory level is some where between the two danger points, the two danger points are inadequate inventories and excessive inventories. At inadequate inventories, inputs production may endanger sales. The other danger points which is the excessive stock level introduces unnecessary carrying cost and obsolesce risk. Optimum level is somewhere between these danger points. Prime objective of this research is to x-ray the computation and the maintenance of the level which guarantees the maximization profit and this is the essence of efficient and effective management of stocks. There is an optimum level of investment for any stock whether it is cash at hand or bank, physical plant or inventories. The balance of cash may be large or small. The reason for having large cash balance might be the sacrifice of earning made by stock or shareholders. It is low cash holding that leads to poor credit rating of the firm to help maximize profit at the long-run, optimum level of investment must be held
MarcosHar says
tadalafil 40 mg from india: http://tadalafilonline20.com/ tadalafil 40
JasonAllop says
buy cheap prescription drugs online: https://genericwdp.com/ prescription drugs without a doctor
JasonAllop says
generic pills without a doctor prescription india pharmacy mail order
Jasontuppy says
mexican viagra viagra over the counter
cheap viagra online
Jasontuppy says
buy generic 100mg viagra online viagra price
viagra online usa
Jasontuppy says
order viagra online viagra price
where to buy viagra online
Jasontuppy says
best over the counter viagra viagra over the counter
where can i buy viagra over the counter
Michaelsax says
http://diflucanfavdr.com/ – generic diflucan
buy generic ed pills online
Michaelsax says
http://diflucanfavdr.com/ – diflucan 150 mg over the counter
best ed medicine
TerrynuB says
best online pharmacy buy ed drugs
cheap ed pills usa
TerrynuB says
ed pills without a doctor prescription erectyle dysfunction
cheap ed pills in mexico
PeterGussy says
http://prednisonest.com/# prednisone 5093
PeterGussy says
https://zithromaxst.com/# zithromax tablets
PeterGussy says
https://hydroxychloroquinest.com/# cheap plaquenil
PeterGussy says
https://prednisonest.com/# prednisone oral
PeterGussy says
https://prednisonest.com/# 5mg prednisone
PeterGussy says
http://zithromaxst.com/# zithromax over the counter
RafaelCof says
https://zithromaxproff.com/# can you buy zithromax over the counter in australia
buy zithromax
Billywains says
buy chloromycetin online: order erythromycin
buy vantin generic
Michaelcib says
order prescription drugs from india: order medications online from india meds from india
Michaelcib says
best online international pharmacies india: trusted india online pharmacies order medications online from india
Michaelcib says
india pharmacy without dr prescriptions: cheap online pharmacies from india online medications from india
RobertArten says
ed meds: https://edpillsonline24.com/# top erectile dysfunction pills
RobertArten says
viagra pills online: https://edpillsonline24.com/# generic viagra pills
RobertArten says
buy erectile dysfunction pills online: https://edpillsonline24.com/# erectile dysfunction pills
RobertArten says
levitra pills: https://edpillsonline24.com/# pills for erectile dysfunction
MichaelRUSSY says
viagra discount: viagra without a doctor prescription canada viagra prescription
MichaelRUSSY says
order viagra online: viagra without a doctor prescription canada viagra without a doctor prescription usa
MichaelRUSSY says
viagra: buy viagra without prescription viagra without a doctor prescription usa
ClaudZew says
amoxicillin online without prescription: cheap amoxicillin – amoxicillin price canada