Role Of Inventory Planning And Control In An Organization

1.0 INTRODUCTION
Inventory planning and us control as a concept has been as old as human race, in history of mankind, if the origin of inventory control is well traced well traced we will discover that it has some element of build recognition. In story of the early man, we were made to understand that they lived unsettled life having nothing in control and keeps nothing for future use and due to this they end up facing different problem caused by out of stock, not unit they were able to discover that their lift over or the used fruits turn out to reproduce new ones and once this was discovered the idea of keeping these seeds together started and things begins to move well for the early man toady manufacturing tem suppliers of finished product retailers to put inventory planning and control into practice, as they know that proper stock control procedures, is one of the things that is expected of most organizations.
Therefore, as the management practices are becoming increasingly dynamic with the passage of them numerous nation planning and controlling activities formerly performed by clerks have developed into sophisticated functions, with for reaching efforts on corporate objects and profits in inventory control as a vital element of material management is one of such function that should be given proper attention.
According to Mockler control is refer as a systematic effect by business management to compare performance to predetermined standards plan of objectives to determine whether performance is in line with the standards and presumably take to any remedying action required to see that human and other corporate resources are being used is the most effective and efficient way possible in achieving corporate objectives. Thus inventory is the means by which merchandise, materials, and in progress finished goods and suppliers an hand are controlled by accounting and physical method.
With a look at the above explanation we can see that sock control is the life wire of any organization for this reason inventory control is an idea of planning auditing and controlling items pars equipment e.t.c for continues production process in order to prevent out of sock in production life of producing firms, supplying firms e.t.c if proper care is not taken in the store department of any firm, there rate of success will be low and waste will be high in terms of obsolescence and scraps.
Finally Emenite limited Emene which is our case study has as its major objective like every other enterprises and that is profit maximization the organization was established to employ member of the public directly and indirectly by direct we means the staff of the organization where as by indirect employment we mean the department on the organization and helps to reduce the unemployment problem prevailing within our country Nigeria.

1.1 BACKGROUND OF THE STUDY
The role inventory planning and control is the system designed by the management of a firm to control it’s investment in stock. This is found to be in existence in EMenit limited Emene which produces roofing sheets and hard boards for ceiling. The system involves the recording and monitoring of stock level knowing when to place order and how many orders to be placed. Effective, efficient and economic inventory helps to cheek the following costs:-
(i) Carrying cost which include interest an capital invested in stock
(ii) Storage charged
(iii) Store staffing
(iv) Material handling cost
(v) Transportation cost
Since management needs information on inventory as a guide to decision making inventory handling should not be placed on the basis of trial and error. Material control is an act of management which ensures the provision of required quantity of inventories of the required quantity at the required time with the minimum amount of capital lied up embraces stock control procedure, placing of purchasing receiving inspecting storing requirement and issuing of stocks.
It is an important and difficult rask, inventories are and smooth running of an organization most organization invest in large number of inventory items, irrespective of the system of storage adopted there must be place for everything are everything in its place for the stock weeping system to operate efficiently. Floor space is very expensive and must be used to the best advantage. It is therefore necessary to build ware house for storing materials and provide things for feasible, bins rocks and shelves must be provided.

1.2 STATEMENT OF THE PROBLEMS
Problems of stock planning its planning and control exist in almost all firms except service oriented organizations. The problems arise from the fact that most organization (mainly manufacturing companies) based their stock control on human judgment approach rather than applying modern scientific models like reorder levels which removes entirely all elements of bias in determine stock levels lead time provision, Economic order quantity (EOQ) and other relevant inventory models are conspicuously ignored. The relative degree of weakness of the internal control system with respect or stock, leaves much to be desired especially in the management and the control aspect of most firms.
Furthermore, indiscriminate placing of orders back over above the economic order quantity (EOQ) increase holding cost. The total of the invoice price of the inventory plus other incidental cost associated with ordering and holding cost give the value of the inventory. Streamlining these costs and proper planning of inventories it the problem. This study is expected to solve for Emenite limited.

1.3 OBJECTIVES OF THE STUDY
This research is conducted to enable companies with trading and manufacturing orientation to see the effective models e.g minimum stock level, re- order level, maximum stock level, economic order quantity (EOQ) e.t.c of inventory control and effect they have folder or wounded up because of carefree attitude towards stock control. It is not an overstatement to say that material cost in all organization constitute a considerable percentage of production. Cost of such stores administration in relation to stock control should not be neglected since such stock represent an equivalent amount invested.
Moreover great reliance should not be placed on the accuracy of the costing records if conditions under which such inventories are kept and not under strict control. Hence proper storage conditions must be maintained in other to minimize inventory losses through pilferage damage deterioration and careless handlings. It goes without change that for cost accounting system to be fully effective, there must be properly designed system of re-ordering materials from the time order is placed till the materials issued to production or sold. Where stated case is absent excess stock of some items is likely to occur consequent unnecessary rising up of capital.
On a more general basis, the overall objective of the research is as itemized below:-
(i) To evaluate the system of material control with respect to stock
(ii) To ascertain how Emenite limited determines her re- order point and achieve safety of stock
(iii) To ascertain as to whether the costs incurred in maintaining the inventory and the opportunities available
(iv)To ascertain the modern inventory cannot techniques (if any) which the company uses during this period of economic recession.
(v) To determine whether sales forecast can be made with relative degree of certainty
(vi)To determine a better approach to inventory planning recording and control
Above all to after useful suggestion on how management can make decisions and problems associated with inventories.

1.4 SIGNIFICANCE OF THE STUDY
Inventory planning and control in modern business period such as a month quartering semi- annually and annually inventories compromise a significant portion of the assets of marring companies, hence the planning and presentation inventories have a considerable effect in the determination and presentation of the financial position and the result operations of those enterprises.
This study makes it crystial clear why it is necessary for companies and individuals to control their inventories such reason as to minimize carrying, regulate the quantity of stock on hand e.t.c. Also by this study an opportunity is created for existing and spective businessmen employers and employees to benefit from the modern inventory control techniques.

1.5 SCOPE OF THE STUDY
This research has to do with an industrial sector known as Eminite limited Owerri it relates the activities and operations of the company.
The research is mainly concerned with the following:-
(1) To investigate and find out if the company keeps appropriate internal control system in relation to inventory.
(2) To investigate into the purpose of inventory control
(3) To ascertain if the method of stock planning can effect the company’s profit and loss and balance sheets.
(4) To investigate and find out if the company uses the scientific model of inventory control like the buffer level, maximum stock level and economic order quantity (EOQ) e.t.c
(5) To ascertain there are proper security covering handling and storage of stocker.
However, it is strongly believed that the result, findings and recommendations pertaining this case study well apply to all other related companies in Nigeria. That means any information divulges out of the specific scope should not be in any way regarded as unnecessary, provided it serve as an avenue of enlightening other related companies.

1.6 LIMITATIONS OF THE STUDY
This research work faces a number of problems which includes; financial problem, attitude of respondents time constraint and lack of high cost of printing materials, lack of related literature.
The above constraints or imitations are here under explained to show the influence of each.
(i) INADEQUATE FINANCE:- The research faced a lot of financial constraints due mainly to the fact that the continuous fall n the value of the naira has made the budgeted sum for the research work so insufficient that is affected the extent of data collection all the places mapped out to be visited were not covered due to inadequate finance.
(ii) ATTITUDES OF RESPONDENT:-The knowledgeable respondents who are mainly top managers of the very few companies the research visited are not always available and if available are not easily accessible to provide the necessary information required. In addition some who are ever accessible deem the information too secret to be divulged probably for fear of selling their strategies to competitors.
(iii) TIME CONSTRAINTS:-The fact that the study had to be undertaking along side with normal lectures the efforts of the researcher more often than not the researcher had to ignore some lectures in other meet up with appointment in connection with the study.
In spite of the above mentioned constraints, the researcher still was able to carry out an objective study to arrive at a logical conclusions.
(iv) LACK OF RELATED LITERATURE:- The research was able to go through some of the related literature, but the works are so out dated and are basically more of theory than practical. Hence, the researcher was unable to finalize works than can be used to match the practical demands of the research study. Like the system of functions of stock controlling unit of the stock department of an organization cannot be found in any text.

1.7 DEFINITIONS OF TERM
(i) INVENTORY: It is stock of products the company deals on or manufactures and companies that makes up the product
(ii) CONTROL:- This is the act of selling performance (expected and monitoring actual performance against standard. The primary concern in the management of stock control must be to provide the right goods in the right condition at the right price in right place at the right time
(ii) INVENTORY CONTROL: The regulation of quantities of materials avoiding excess reserves, stock the calculation being based on rice rate of issues and time necessary for replenishment.
(iv) SAFETY STOCK: This is the quantity of stock added to the expected demand (quantity) during the lead time to rake care of fluctuations in demand and lead time variations.
(v) CARRYING COST: This is the cost of inventory storage handling and insurance together with required rate of return in invested inventory. This costs include floor space, racks, bins, security quid’s maintenance e.t.c.
(vi) ORDERING COST:- These are entire cost of acquiring materials stock. Generally there are costs which are incurred in requisitioning purchase ordering, transpiration, receiving, inspecting and storing.
(vii) STORE RECORDS CARDS:- These are cards for each item in the stock and they show names of products, quantifies received, issued, balance and prices.
(viii) BASE STOCK: It is the minimum quantity of raw materials operate their plants or conduct their operations. It is at times tartest as being fixed assets, which is under constraint renewal by charged to revenue.