Need for Inventory Planning and Control in a Manufacturing Organization
Objective of the study
- To assess the existing inventory planning and control practices within the manufacturing organization to identify strengths, weaknesses, and areas of improvement.
- To identify and analyze the primary challenges and inefficiencies in the organization’s inventory management process.
- To investigate the potential adoption and integration of advanced inventory management technologies and automation to enhance the efficiency and accuracy of inventory control.
REVIEWED OF RELATED LITERATURE
Relative to the stationary-demand inventory literature, there is much less work for uncertainty demand. We characterize this work by how the uncertainty demand is specified and whether the work focuses on optimization versus performance evaluation. Morton and Pentico (1995) and Bollapragada and Morton (1999) focus on setting inventory policies for a single stage facing a general uncertainty demand process with proportional holding and backorder costs. When the order cost is zero, a time-varying base-stock policy is optimal; for a nonzero order cost, a time-varying policy is optimal. This research develops computationally efficient upper and lower bounds on these optimal policies. For short life cycle products, the challenge of accurately forecasting demand can be as important as determining inventory policies. Kurawarwala and Matsuo (1996) develop an integrated framework for forecasting and inventory management of short lifecycle products. Their approach estimates the parameters for a seasonal trend growth model and uses this as an input to a finite-horizon stochastic inventory model with timedependent demands. Uncertainty demand has also been modeled as a Markovmodulated Poisson demand process. One example is Chen and Song (2001), who show the optimality of echelon basestock policies with state dependent order-up-to levels for serial networks. A second example is Abhyankar and Graves (2001) who determine the optimal position of an inventory hedge in a two-stage serial supply chain that faces Markov modulated demand with two states. Within the bullwhip literature, several papers develop models for uncertainty demand. Papers generally assume that each stage follows an adaptive base-stock policy and then analyze the effect that different forecasting techniques and assumed demand distributions have on the inventory requirements at each stage. For instance, Lee et al. (1997) demonstrate that the adjustment of order-up-to levels at the retailer amplifies the variance of the order signal the retailer provides for the manufacturer. Two other examples are Graves (1999) and Chen et al. (2000). Finally, there is a growing body of work on designing supply chains to handle uncertainty demand. Beyer and Ward (2000) use simulation to accurately model the inventory requirements in a two-echelon supply chain that utilizes two modes of distribution and is subject to uncertainty demand. Johnson and Anderson (2000) investigate the benefits of postponement in supply chains that introduce multipleproducts with short product life cycles. Ettl et al. (2000) minimize the total inventory in a multistage inventory system, where the key challenge is to approximate the replenishment lead times within the supply chain. To model uncertainty demand, they break the horizon into a set of stationary phases and adopt a rolling-horizon approach where the optimization is performed for each demand phase.
CONCEPT OF INVENTORY
Inventories are vital to the successful functioning of manufacturing and retailing organizations. This is because many companies hold inventories as part of their business operation. Inventories make up the most significant part of current assets of most companies especially the manufacturing companies. The need for management to ensure inventory 12 control if properly managed cannot be over emphasized. A firm neglecting inventory management will be jeopardizing its ling run profitability and it may end up failing in its business. The definition of inventory has been defined by many professional bodies and scholars in different ways. The Microsoft Encarta premium defined it as the quantity of goods and mateials on hand. A manufacturer’s inventory represents those items that are ready and available for sale. According to Nwaorgu (2005:123), inventory can be defined as a tangible property held to resale in the ordinary course or business, in the production for sale, to be consumed in the production of goods and services According to Jain (1999:472), inventory is the aggregate of these items of intangible property which are held for sale in the ordinary cause of the business, held in the process of production for such sales to be currently consumed in the production of goods and services to be made available for sale. According to Morse (1997:454), inventory is a general term describing goods which are held in the store house and stock yards, the bulk of which is usually intended for the connection with production or operation activities and also finished products awaiting dispatch to customers. 13 However, according to Ama (2000:209), inventory is the stock of goods a firm is producing for sale and the components that make up the goods. A key decision in manufacturing and retail is how much inventory to keep on hand. Once an inventory level is established, it becomes an important input to the budgeting system.
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine Need for inventory planning and control in a manufacturing organization. Edustore NG, Ibadan forms the population of the study.
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
SUMMARY, CONCLUSION AND RECOMMENDATION
It is important to ascertain that the objective of this study was to ascertain Need for inventory planning and control in a manufacturing organization. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing Need for inventory planning and control in a manufacturing organization
This study was on Need for inventory planning and control in a manufacturing organization. Three objectives were raised which included: To assess the existing inventory planning and control practices within the manufacturing organization to identify strengths, weaknesses, and areas of improvement, to identify and analyze the primary challenges and inefficiencies in the organization’s inventory management process and to investigate the potential adoption and integration of advanced inventory management technologies and automation to enhance the efficiency and accuracy of inventory control. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Bottling Company Plc Owerri plant. Hypothesis was tested using Chi-Square statistical tool (SPSS).
In this study, it has been reviewed a model of placement safety stock in a supply chain (inventory) with conditional distributions. We can change the distribution of costs given that Demand is less than, equal to, or greater than Supply and then we observe these.
The company should try by all means to adhere to inventory polices made. A situation is a case whereby materials or items are allowed to leave the stores without proper requisition, this shows that the internal control is weak. In order to ensure that the company adheres to inventory policies, under no circumstance should items of inventory be allowed to leave stores without proper requisition.
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