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RELEVANCE OF STOCK KEEPING AND STOCK CHECKING IN A MANUFACTURING ORGANIZATION

ABSTRACT

In this project topic “the relevance of stock checking in a manufacturing organization”. A case study of P.Z industry Aba, is therefore to give an insight into ways of solving the problems of improper application of stock keeping and stock checking in the industry. The researcher made use of the stratified random sample to identify the sample among the staff of the company. The size was determined by the use of Yaro Yahmen’s sampling statistical formula. Information and all data were presented and were collected from various sources. Two hypothesis were put forward and tested. It was found that holding large stock at material increased carrying out and tied up capital which could have been used in other areas. Based on the findings above it was recommended that for efficient stock keeping and stock checking to be properly maintained daily/annual demand should be ascertained. This processes of obtaining and stocking inventory should be monitored and controlled. Finally, the total inventory investment should reflect good relationship between forecast of sales, cost of production and storage.

CHAPTER ONE

INTRODUCTION 

1.1 BACKGROUND TO THE STUDY

Stock keeping and stock checking is an important area of activity which is often neglected and underrated in many organizations both public and private sectors. Stock keeping and stock checking can be defined as a means by which materials of the correct quantity and quality are made available as an when required by taking due regard to economy in storage and the ordering cost purchasing prices, and the working capital. Stock keeping and stock checking therefore involves the process of  1. Assessing the items to be held is stock  2. Regulating the issue of stock from the store houses. To enable the stock keeping and stock checking to assess the items to be held in the stock, it is necessary that he consider what items that are being used and produced by the particular company, and from this, he can decide which of those items he should stock. It is believed that the stock keeping and stock checking and management can be a factor in the success or failure of any organization. Considering this, there is the need to hold stock to act as insurance against “longer than lead-times” to take advantage of quantity discount, seasonal and other fluctuations is prices. Naturally, it is necessary to held stock of materials which are regularly used and also those items which may be required at short notice in the event of plant.

The study of relevance of stock keeping and stock checking in a manufacturing organization in being confined to the operations. The organization has been a participant in economic development and reconstruction since its inception and therefore has pulled a lot if experiences in market orientation. Stock keeping and stock checking has long time been in existence without full realization by the organizations involved. Therefore, there is the need to fully understand the role of stock keeping and stock checking in providing a means of hedging against future prices and delivery uncertainties as caused by strikes, price increase and inflation affective and efficient attainment of the organizational objective.

Stock keeping and stock checking has been defined or described as a means by which materials or items of the correct quantity and quality are made available when required with due regards to economy in storage and cost of ordering, purchasing price and working capital. Stock keeping and stock checking can also be described as the function of planning and maintaining the right quantity of item for a given production or sales programmed with the minimum of investment. Stock keeping and stock checking has the following objectives:

i. To eliminate production or sales delay by supplying the materials items in manner and quantity need at the specified time 

ii. To reduce the number of item which need to be carried etc.

1.2 STATEMENT OF PROBLEM

Certain conditions or factors can pace way for effective stocking and verification. The problem of this study intends to solve are as follows:

i. Lack of proper application of inventory control which indicates the physical balance of items in the manufacturing company.

ii. Lack of proper application of stock level and documentation of items in the company to indicate when replenishment are required.

iii. Items are strongly located in the company which exposes the items to deterioration and portage. This constitute wastes which drastically affects the company’s profit maximization.

Despite all the importance and benefits of stock taking it has from time to time recorded some drawbacks. This study is therefore designed to identify such factors militating against effective and efficient stock keeping and stock checking for better performance.

1.3 OBJECTIVES OF THE STUDY

Stock keeping and stock checking long time been in existence without full realization by the individuals. The question is that to what extent is it implied in the social in order to achieve individual or co-operate goal? Subsequently research work has been carried out based on the effective application of the stock keeping and stock checking principles techniques and practice in various organization for purpose of achieving a health economy in the organization. The following objectives to review are:

i. To determine the degree of interference the employer or any of his sons in the course of carrying out their operation.

ii. To determine through the analysis, the degree of the application of effective stock keeping and stock checking in the manufacturing company 

iii. That the space utilization is achieved.

iv. Examine how optimum safety stock level is determined and maintained.

1.4 RESEARCH QUESTION

The following question shall be asked:

1. What institutes stock requisition in P.Z industries?

2. Who is responsible for ordering raw material in P.Z industry?

3. What determines the quantity of raw material order?

4. Has P.Z industry ever experience excess stock 

5. Does P.Z industry ever had a case of inadequate stock

1.5 SIGNIFICANCE OF THE STUDY

This study will be of the benefit to the following persons or group of persons.
a. The government: The government will be able to know how resources are being effectively managed and controlled in the public sector. b. The public sector: This study will help the public sector to know the need for proper stock keeping and stock checking in an organization. c. The store managers: This group of person will be able to identify areas to intensify inventory management and control measures. e. The researcher: Another significance of this study is that it will help other student who may want to carry out further research on this topic or related topic.

1.6 DELIMITATIONS OF AND LIMITATIONS

This study is designed to give an insight into way of solving the research problems. The problem of improper application of stock keeping and stock checking in P.Z industry and for the research to study all of them. It will be impossible within the time given to the research. Therefore, the researcher decided to use PZ Aba as a case study so as to carry out an in depth study of the role of stock keeping and stock checking in that company. The limitation of this study is the elements of shortcoming one often encounters when trying to get necessary information and materials for successful completion any research project. This includes, financial problems. Inadequate text books transportation problems and time constraint that was allowed for completion of this particular research works was not sufficient enough for a thorough work to be carried out on this particular topic. 

THE PLAN OF THE WORK

In this laudable project, the researcher used Paterson Zonchonis Plc Aba Abia State to examine the role of stock keeping and stock checking in the attainment of organizational objective the situation that gave rise to this work was as a result of problems of inadequate and inefficient stock keeping and stock checking found among manufacturing industries in Nigeria review of different related literatures. This work will identify drawbacks and other factors militating against effectives and efficient stock keeping and stock checking for better performance.

1.7 DEFINITION OF TERMS

1. Stock keeping and stock checking: Stock keeping and stock checking can be defined as the means by which materials of the correct quantity and quality are made available as regard to economy in storage and the ordering cost, purchasing prices and the working capital.

2. Replenishment: This could be defined as the ability of making something full again by replacing what has been used.

3. Deterioration: Can be defined as something to be worse in quality or condition.

4. Inventory: This can be defined as the total umber of goods or materials available in a storehouse at a given period of time.

5. Material control: Material control section of the store organization that is directly involved with the control of the flow of production materials (in most cases) from the supplier to production centres 

6. Interference: Can be defined as to get involved in and try to influence a situation that not concern you in a way that annoys other people.

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