The Relevance Of Efficient Inventory Control In The Administration Of Materials In A Manufacturing Firm (A Case Study Of Rokana Industry, Owerri)

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Inventory control requires high cost and investment commitments. In manufacturing company where inventories are handled the introduction of a well planned and effective system or means of controlling these inventories is necessary for profitability and accountability to both the management and shared holders of the company whose inertest, objectives was established must be protected.

However, the researcher work will be treated in five chapters.
Chapter one is the introduction of the work where the problems were identified, five research questions and four hypothesis were stated to guide the work.

Chapter two involved the review of related literature quoting the various professional ideals on the issue while my own perspective was also stated.

Chapter three inventories the sources of data for the study, the sample size and the statistical tool were used in analyzing the data.

Chapter four dealt with proper analysis of research questions and hypothesis with percentage, frequency and hypothesis statistical tools.

Chapter five is the summary of the work the conclusion of findings from the data analysis in chapter four.



A trend in the past has been for companies to hold some level of stock than preciously did. Hence companies gas fund that they can sometimes reduce the lead time required to obtain materials and to produce products, so that they can operate with less inventory and skill serve their customers effectively.

Stock is idle resources hold for future use. Whenever the inputs and outputs of a company are not used as soon as they become available, inventory is present. Services operation and jobs tend to have small investments in stock. For may companies, however, stocks account for a large percentage of assets this need for stock control.

Chilaka (2006:128) times stock control as the means by which materials of the correct quantity and quantity is made available and as at when required with due regard to the economy in storage and ordering cost, purchasing and working capital.

Carter and price (1996:139) defines stock control as the process of ensuring that the stock held by the organization is supplied to those parts of the operations that required the items (ie production, distribution, sales, engineering etc).
Henritz and Farrell (1990:100) defines inventory stock control as the assurance of having the items at hand when needed and afford the added protection of reserve, stocks, theoretically untouchable but practically serving to fill needs when extra ordering demand develops or when correct procurement fails.

Organizations that have stocks has the advantages of assessing items to be held in stock, the extent of stock holding operational needs time required to deliver goods, availability of capitals, cost of storage, regulation of the input of s tock into and from the stove house through these, it is possible for firms to adjust continuously the quantity and value of stock held to com firm with circumstances of control.
According to monk (200:148) inventory need to be effectively managed, if efficient operation is to be achieved, due to its initial nature, the mode of control and management of inventories can be a factor in the success or failing of manufacturing company concern.

He pointed out that insufficient inventory can seriously disrupt the product distribution cycle that is so critical to the survival of all the manufacturing organization. On the other hand excessive inventories can cripple a firm as felons and this endanger it’s liquidity position. Either poor inventory management can present a serous challenge to the productive capacity of manufacturing organization.
In view of the subject matter of the work, the researcher aims at identifying the nature of stock control in Rokana industries Plc Nekede Owerri.

Strictly, this project is a case study of the impact of efficient inventory control on materials management in an organization at Rokana industries limited Nekede Owerru Imo State.
The problems of the study therefore are as follows.
The impact of efficient inventory control on the materials management in an organization can not be over stated-
(1) Selection and application of wrong inventory method which does not consider critical factors of efficient inventory control on materials management in an organization.
(2) Poor operation of the stove which in turn leads to problems of materials flow in the production system and efficient inventory control on materials management in an organization.
(3) Most people involving in efficient inventory control on materials management do not possess the right skill and knowledge on inventory control.
(4) The stock out cost or shortage cost has serious effect on the quantity of efficient inventory control on materials management.
(5) There is no serious attempt on the part of firms to improve efficient inventory control management.

The objectives of this study are
(1) To create serious awareness in the mind of firms and their employees on these serious need for efficient inventory control ob materials management in an organization
(2) To create the necessary awareness on the important of improving those who are involved in inventory control on materials management in an organization.
(3) To suggest other ways of improving efficient inventory control on materials management in a organization.
(4)To see whether efficient inventory control on materials management can be improved through empowerment.
(5) To make people appreciate the importance of effective inventory control on materials management in a organization.

One Important thing a researcher of this nature to achieve is to provide the subject matter of the study. It therefore becomes necessary to formulate research question on which the answer would be based and are as follows.
(1) Are efficient inventory control basic element in inventory control management?
(2) Does your organization attach importance in carrying adequate efficient inventorying control management?
(3) Is poor inventory control administration tractable to poor efficient inventory control management?
(4) Does your organization achieve any efficient age as a result of effective and efficient inventory control management via efficient purchasing.

In order to achieve the set goals, this work is guided by the following hypothesis:
H0: Inventory control does not have any impact in the cost of operation in the organization
H1: Inventory control has no significant differences in terms of operations of the organization.
H0: Inventory control does not contribute to the success of an organization
H1: Inventory control has significance differences in terms of operation of the organization.


The primary significance of this study is for fulfillment of the equipments for the award of higher national Diploma (HND) in purchasing and supply.

(1) To help and guild the younger ones on what to do when writing project or carrying ant research.

(2) To guide industrial purchase to efficient of inventory control enable them to obtain the “ best by which is the ultimate goal of the purchasing fracture”

(3) Successful completion of the work will help to educate managers on how to ensure implementation of effective stock control.

(4) Useful in ensuring efficiency in decision making which will enhance efficiency in the utilization of resources in the materials management activities.

(5) It helps organization unrest the charging demand pattern by understanding the variables is stock control and how to manipulate them in every situation, this possessing the sufficient group of expertise in materials management which can be supplied in production process.

(6) It make firms to know the essence of having the optimum level of stock at any particular period.

(7) The successful completion of this work will go a long way to help researchers to widen out it’s importance.

(8) It will also enable students who will be carrying out such related topics in future.

The study on the impact of effective inventory control on the materials management of a organization will focus on Rokana industries Plc, their elements are the subject matter the techniques, reasons and the importance of the topic under discuss will be elaborated in subsequent chapters of this study.


In limitation, the financial carrying out this activity was a big problem. Obtain relevant data information was another limiting factor as almost all the required information obtained was sufficient.
The degree of time consumed at the expenses of lectures and other important assignments. This cannot be over emphasized.
Finally, fiancé was constraint for the researcher. Normally, a considerable amount of money for the gathering of information typing of manuscripts.
Difficulties in securing some vital documents contain some valued information’s relating to the subject matter of the researcher.


(1) Lead time: This is the moment, the stock controller placed order to the time the order is supplied.

(2) Stock taking: This represent the complete process of verifying the quantity balances of the usually range of terms held is stock. It is usually carried out annually so as to discuss the value and quantity of stock for balance sheet purposes.

(3) Stock checking: Represents any physical check on the quantity of items held in stock. This is actually applied either required or intermittently.

(4) Maximum stock level: This is the amount of stock expressed in units or issue above which the stock should not be allowed to rise. The purpose of this level is to curb excess investment or over stocking.

(5) Minimum stock level: This is the level blow to which the stock should not be eliminating under stocking.

(6) RE- ORDER LEVEL: This represents the amount of stock at which new order is to be placed or ordering actions is indicated in time for the materials to be delivered before stock falls below the minimum level.

(7) Surplus: A useable materials, equipments or parts including capital equipment which are in excess of normal manufacturing operating or repair equipments.

(8) FIFO: First in, first out

(9) LIFO: Last in, last out.

(10) Obsolete: This is where an item is completely usuable by the organization.

(11) Stock: these are inventories or stores used within the production system.

(12) Productivity: This is the rate or amount of goods produced compared with low much input (time, money ) used or needed to produce then.

(13) Obsolescent: When stock is going out of use but is not yet completely unusable.

(14) Redundant: When item in stock is more than what is reasonably necessary to provide an adequate service to the production or operational activity, the excess over the normal holding.

(15) Discrepancies: This is when the amount of stock found by psychical check fails to correspond with the balance on the stock records.

(16) Minor discrepancies: This is when difference between the physical check and stock record are less of small.

(17) Major discrepancies: This is a situation where the difference between calculation and physical stock id small, but items involved in every important to the operations of the organization.

(18) Pre- Production inventory: Companies parts and materials purchased from out side the organization for manufacturing a product.

(19) Stock control and inventory control: Are used synonymously, stock control originated from Britmins while inventory control is of American origins but means the same thing.

(20) Buffer or safely stock: Thus is not stock level but the stove manager must take cogmzanace of this so as to completely avoid a situation of s tock out.

(21)Stock out cost or shortage cost: This usually occur when an organization lacks inventories to satisfy the requirement and demand.

(22) Administration/ handing cost These cost are incurred when an organization places order for item to be stored.

(23) Cost of carrying stock: These costs are incurred when inventory is held in stock/stores.

(24) Call- off order: This is another system used to solve small value purchase problems.

(25) Petty cash order: The petty cash order system is a little variation of the cash purchase.

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