CHAPTER ONE

INTRODUCTION

BACKGROUND OF THE STUDY:  APPRAISAL OF INVENTORY CONTROL IN A MANUFACTURING COMPANY (A CASE STUDY OF SEVEN UP - BOTTLING

COMPANY)

In the real sense of economic development, the efficiency and effectiveness of a nation's economy rests viably on its ability to meet with the demands of the populace of such an economy.

In order words, the effectiveness of an economic is vested on the manufacturing sector. This is because, the indices by which the development and progress of an economy is measured is predicated on the goods and services so produced by the out fits in such a sector which could either be consumed locally or be exported for exchange of foreign currency.

Furthermore, the distinguishing factor between productive and unproductive economies lies in the production capacity in relation to the importation capacity which directly affects the economy. However, the afore-mentioned positive outcomes/results are based on the" effective management of the manufacturing industry in terms of its capital (Financial resources) ,inventory, labour (Human resources) among other things, so as not to bring about negative results such as costs resulting from overstocking, loss resulting from capital tied down and loss goodwill as a result of stock outages.

STATEMENT OF THE PROBLEM

Inventory plays an essential role in any organization. The larger the inventory size, the easier it is to reduce costs of purchasing, manufacturing and shipping as well as provide prompts customer's service. However, a larger inventory stock requires a higher investment of money, higher carrying cost such as storage handling risk of obsolescence and data processing. These costs must be balanced off against any advantages in holding inventory.

The study tends to look at certain problematic issues in manufacturing companies as Seven- Up Bottling Plc it relates to inventory management. Such issues are:

Stock are managed, that the level of stock held are neither more than nor less than requirement for a given season. Most companies fail to appreciate the role inventory management plays in the survival of their business. Accurate information on the cost of stock is necessary for management control of working capital requirement.

 OBJECTIVES OF THE STUDY:  APPRAISAL OF INVENTORY CONTROL IN A MANUFACTURING COMPANY (A CASE STUDY OF SEVEN UP - BOTTLING

COMPANY)

The main objective of this study is to conduct appraisal of inventory control in a manufacturing company.

Specifically, the study intends to:

Present inventory control system in the selected company. Examine the checks and balances in the inventory control system. Determine the effects of the organization's inventory control system on the operating expenses and profit levels of the organization. Ascertain the effectiveness and efficiency of the organization's inventory control system. Make suggestions for improvement to bring about further enhancement of efficiency in the company's inventory so as to improve the overall performance.

RESEARCH QUESTIONS

Will effective inventory control minimize total inventory cost in a manufacturing company?

Will high inventory control lead to reduction in the profit of manufacturing company?