CHAPTER ONE
1.1 INTRODUCTION
Every Organization has to its own purpose of operation. The level of actualizing the objectives or goals determines how efficient and effective that organization is. But for the goals of any organization to be achieved, such entity must observe some stipulated or laid down principles for its effective performance. When these rules are followed simultaneously, then the usefulness of such principles or concepts will be achieved.
In general term, management has been recognized as that which plans, direct and as well control the effective use of organizational resources to achieve its objective.
Akpala (1987) as in Onuoha (1991:4-5) defines management as the process of combining and utilizing or of allocation of organization’s input (men, materials and money) by planning, organizing, directing and controlling for the purpose of producing output (goods and services) desired by the customers so that the organizational objectives / goals are accomplished.
In evaluating a topic as this, one ma start by analyzing the key words in it, such as usefulness, inventory, and management as they relate to the manufacturing concerns.
Something is said to be useful when it is achieving the best objective, purpose aim or goal of its wage. And also when using the laid down rules and resources available, achieves the best desired goals without wasting the available resources.
According to Ama (2001:470), inventory is the stock o goods a firm is producing for sale and the component that make up the goods.
Again, Hilton (1994:13-14) defines inventory as: an itemized list of goods or valuables with their estimated worth, specifically, the annual accounting stock taken in any business.
Therefore, from the above definitions inventory is the totality of all the stock, which includes: raw materials, work-i-progress and finished goods that enable an organizational to produce. It could also said to be the total amount of goods and or materials contained in a store or factory at any given time.
But the question is: are there ways of handling these inventories for the purpose of achieving the best thereof? The answer is simply yes! The inventories must be managed and controlled in order to achieve their usefulness.
In doing this, the production manager, purchases manager and the sales manager of the organization always put heads together to
According to Lucey (1989:29), inventory management is the system used in a firm to control the firms’ investment in stock. The system involves recording and monitoring of stock levels, forecasting future demands and deciding when and how to order with overall objective of minimizing in total, the cost associated with stock.
However, inventory management is the ability of an organization to use all the techniques at its disposal to hold the quantity of stock (inventory) that will be enough to produce its required goods needed by the customers at the appropriate time and at least cost to the organization with the view to maximize profit.
Thus, Ama (2001:475) states the following as the usefulness of inventory management to the organization.
– Reduction in cost incurred due to inventory holding.
– Maintenance of certain level of customer services that are excellent.
– Sustenance of a large size of inventory for efficient and smooth production and sale operation.
– Maximization of profit.
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