Project Materials







Inventory in the form of raw , work-in-progress, and finished commodities represents a large component of the assets of the majority of businesses. But why is it necessary to monitor these items? Or, why do we engage in inventory management?

Inventory items cost money to acquire, they cost money to store and maintain, which necessitates the provision of storage facilities to ensure that these materials or things do not perish until they are transformed into sellable goods, and they do not generate revenue. When stock is held, it ties up capital that would have been employed in other areas; therefore, it all represents a cost and must be managed efficiently in order to achieve efficiency.

However, we must maintain inventory to meet production and sales demands. This is because if we do not maintain adequate stock levels, we risk running out of inventory.

Likewise, if we lack finished items, we risk disappointing our clients. Both of these types of inventory shortages will certainly result in consumer and monetary loss. To avoid the aforementioned issues, the organization must achieve a balance between holding too much stock (overstocking) and carrying too little stock (understocking) (under stocking).

This is the essence of inventory management's significance. Managing all types of assets is fundamentally an inventory ; the same analysis methodologies apply to cash and fixed assets as to inventory.

In order to balance inflows and outflows of items, an initial stock must be maintained. The amount of the stocks relies on the pattern of flows, whether the things are regularly flowing or quickly moving.

Second, because the unexpected may occur, it is vital to maintain safety stock, or additional stock, to avoid incurring the expense of not having enough to meet current needs.

Thirdly, additional funds may be necessary to accommodate future growth requirements. These are referred to as anticipation stocks, and it is recognized that they are optimal purchase sizes defined as economic order quantity (EOQ).

When borrowing money for the purpose of purchasing raw materials for production or purchasing plants and equipment, it is less expensive or more economical to purchase more than is strictly necessary.

Typically, manufacturing companies have three types of inventory:

a) Primitive material

c) In-progress Work

c) Completed products

a) The inventory level of raw materials is influenced by projected production, seasonality of production, the dependability of sources of supply, and the effectiveness of arranging purchases and manufacturing operations.

b) The length of the production period, which is the time between the planning of raw materials in production and the completion of final products, has a significant impact on work in progress inventory. Production can be raised to boost inventory turnover. One way to achieve this is to perfect engineering processes, which may then be applied to the production process. Alternatively, they might be purchased rather than created. Coordination of production and sales determines the level of finished goods inventories.

Holding any sort of stock costs money. The capital tied down by the stock itself must be serviced by interest payments, and the necessary land or warehouse must be purchased or rented. The handling of protecting the inventory and any quality deterioration also incur expenses. The bin system of stock control is utilized by the majority of firms and has a sample size of two amounts.

The first amount represents the minimum stock level at which a new order must be placed. Under this approach, stock is maintained in two bins, from which one and two units are withdrawn as needed until the bin is empty.

Many firms have effectively implemented inventory, planning, and control systems. The primary objectives of inventory management are to determine and maximize inventory investment. Inventories may be too high or too low; if they are too high, there is a risk of obsolescence and excessive carrying costs. If production is disrupted or sales are lost permanently, goodwill, reputation, and consumers may be lost to competitors in the same industry.

The optimal level of inventory is one which minimizes the total cost of inventory.


Material is the lifeblood of any institution, private or public, and numerous businesses have neglected this for a long time. Any organization's ability to endure is contingent on the application of sufficient material functions, policies, and recognition according to function.

Due to a variety of factors, inventory management has not been able to assume its true place. The rights of staff responsible for inventory management have been violated. In numerous firms, they are frequently limited to secretarial tasks.

In many firms, the lack of acknowledgment for the inventory management function has wreaked havoc.

For example, where the job must be recognized and developed due to the need to handle the affairs of many activities. In addition, the functions responsible for personnel operations have few or no plans for low-level individuals to benefit from staff training programmes that would have increased their professional fundamental abilities.


This study's aims and objectives are to examine inventory management as a strategy for increasing the profitability of organizations.

Additionally, the study aims to provide information on how smart inventory management can boost profitability.

In addition, the project is targeted toward analyzing how inventory issues, inspection, and stocktaking are handled inside the organization and how this impacts inventory management. The initiative also tends to demonstrate to the organization's management that appropriate of inventory can cut wastage costs and limit theft. Therefore, this research endeavors to concentrate on the following issues:

Where are products delivered throughout the organization?

Does the constantly maintain inventory records for accountability?

Where does the buy request originate?

How are things organized within the warehouse?


The following hypotheses have been formulated to guide this research:

Effective inventory management will not minimize material waste or costs, and as a result, will not increase profitability.

Hi: Effective inventory management will decrease material waste/costs and increase profits.


The purpose of the study is to examine inventory management as a tool for increasing profitability, as well as to identify difficulties related with the function and the necessary solutions. The case study chosen by the researcher was Natec Aluminium Company Limited, Uyo.

It is also an effort to disabuse manufacturing organizations of the notion that inventory is not a profit center and to encourage them to view inventory management as a managerial activity deserving of adequate attention rather than as a dumping ground.

Students enrolled in production operation management courses at a variety of colleges and universities, as well as those tasked with inventory management functions in organizations, can find this work to be quite beneficial and helpful. In all institutes of technology and polytechnic, the study is also a requirement for the awarding of a higher national diploma. The purpose of the study is also to enhance the function of inventory management within the firm under investigation and the entire industrial sector.




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