Project Materials

IMPACT OF EFFICIENT INVENTORY PLANNING AND CONTROL IN GOVERNMENT ESTABLISHMENTS

ABSTRACT

The government has made numerous efforts to determine if government establishments, particularly ministries, properly use inventory planning. This research effort was consequently launched to investigate. The influence of efficient inventory planning and control in government establishments, with the Ministry of Works and Transport as a case study. The goal is to determine whether effective inventory planning has a major impact on the growth and development of government organisations. Two sources of information were used. There are primary and secondary sources. Questionnaires were employed as a research tool to supplement the available data from the other two sources. The Chi square (X2) test was employed to test the hypothesis. However, the data demonstrates that effective inventory planning has a major impact on the growth and development of government institutions. The investigation also demonstrates the effectiveness and efficiency of inventory planning in government establishments. Based on the findings, the researcher proposed that, in order to ensure effective and efficient inventory planning, supplies be adequately controlled by the store’s workers. This will increase productivity and profitability.

Chapter one

INTRODUCTION

1.1 Background of the Study

An organization’s survival depends on efficient and effective inventory planning. Meigs et al. (1998) describe inventory as the collection of tangible personal property kept for sale in the usual course of business and in the process of producing goods and services to be sold.

According to Hone (1988), inventories serve as a link between product production and selling. The Webbstor’s Third Dictionary defines stock as money spent on property servicing. Capital stock alone cannot provide a desired good; rather, it is related to financial planning.

As the name implies, efficient and effective inventory planning and control is an alternate phrase for stock control, which is used in the United States and by some public authorities to refer to the quantity and/or value of stock kept by the authority.

Inventory management is thus an attempt to match supply and demand at a specific period, and it is therefore part of a capacity management plan. Various approaches to inventory management have been developed, including MRPI and MRP II.
Slack (1995) defines inventory management as the storage of material resources in a transportation system.

According to Slack (1995), all organisations maintain some inventory or stock of commodities at any one moment. This can include everything from stationery to machine parts and raw supplies.

The primary focus of inventory management is typically on the resources being transported, such as raw materials, purchased components, or consumers in a service business. The nature of an organization’s demand for goods and services typically determines the sort of inventory management system used.

1.2 Statement of the Problem

Inventory planning is critical for the success of any government agency, notably the Imo State Ministry of Works and Transportation. A fundamental challenge for any government establishment is determining an economic order quantity that will reduce total inventory costs.

According to study, the cost government establishment failed to meet their targets due to a lack of appropriate inventory planning.

The objective of this research is to address these concerns by providing answers to the following questions.

1. What form of inventory control technique is appropriate for a government establishment.

2. What ordering and transporting costs do government establishments incur?

3. What are the repercussions of poor inventory planning in government establishments?

1.3 PURPOSE OF THE STUDY

This study, which focusses on inventory planning and control at government establishments, is intended to achieve the following objectives:

(i) Determine if the government establishment efficiently and effectively used inventory planning.

(ii) Determine whether inventory planning has a substantial impact on the expansion of government.

(iii) To identify the benefits of proper inventory planning by government establishments in Imo state.

(iv) Determine whether the government of Imo state has a department solely dedicated to inventory planning and control.

1.4 SCOPE OF THE STUDY.

The scope of this activity will be limited to the Ministry of Works and Transportation in Owerri. The investigation would look into the inventory control techniques they use, the type of ordering and carrying costs they incur, as well as their overall attitude and treatment of stock planning processes.

The study will also aim to control the work-in-progress items. Furthermore, the study will examine the standards and methods used in carrying and holding stock.

Finally, we hope to make recommendations to help improve inventory control, as well as carry out various actions such as analysing previous relevant research and testing hypotheses to determine their validity.

1.5 RESEARCH QUESTION.

This study will respond to the following research question.

(i) Does the government effectively and efficiently use inventory planning?

(ii) Does inventory planning have a substantial impact on the operation of government agencies?

(iii) What are the benefits of efficient inventory planning in government ministries?

(iv) Do government organisations have departments dedicated to inventory planning and control?

1.6 Hypothesis.

The researcher often works using the following hypothesis.

HO: There is no effective or efficient inventory planning and control in government facilities.

Ho: Government establishments have effective and efficient inventory planning and control.

HO: Efficient inventory planning and control have no substantial impact on the growth and development of government organisations.

HO: Efficient inventory planning and control has a significant impact on the growth and development of government organisations.

1.7 The Significance of the Study

This study has significant implications for society, businesses, and government institutions, as well as academia in general. First, the study will inform the general public on the significance of inventory planning and control in government institutions.

In this line, it will concentrate on the importance of inventory planning and control in promoting organisational growth, reducing corrupt practices and activities, and managing resources properly to improve performance.

Second, the study will act as a wake-up call to government and commercial institutions by providing them with important literature, methodologies, and procedures employed in modern inventory planning and control management.

Furthermore, the study would help policymakers in Nigeria devise better ways to manage investments by giving applicable methods of inventory planning and management to the government and commercial sector.

Finally, the study will give extensive material to students of higher education, particularly those interested in current discoveries on inventory planning and control.

1.8 Limitations of the Study

Inventory control and planning, like other managerial roles, has unique challenges. It can be internal or external. External issues can arise when management fails to comprehend the role inventory planning plays in the ministry.

If the shop manager’s work is specified, the store department will improve; otherwise, the store keeper’s duty may be reassigned to another department. This may result in mismanagement due to insufficient knowledge of both quantity and quality.

While internal issues may arise, they provide information on customer attitudes about ministry-produced products. Quantity control is based on customer demand.

For example, the quantity demanded in a week determines whether the storekeeper will order more materials in the hope that more product will be demanded by the upper week.

If such is not ordered as expected, it will result in overstocking of materials items, which may be determined before they are used. This may eventually result in a loss of earnings. It has been identified as a limitation in inventory control management.

Operational definition of terms

Inventory is the amount of supplies or merchandise owned by the firm that will be sold to clients in one form or another.

Control is involved with directing the internal operations of the firm to create the highest profit at the lowest expense. A Dictionary of Accountants (Kalior, 1973).

It is defined as the control of merchandise resources, items in progress, finished goods, and suppliers on hand through purchasing and physical methods.

Inventory planning and control is the act of ensuring that an organisation maintains a balanced flow of materials while taking into account its strengths and weaknesses as well as other environmental considerations.

The environmental elements are external factors that the organisation must subject to because they are uncontrollable and cannot be controlled.

CONTROL: It is the process by which an organisation develops activities and procedures that allow it to not hold more than is essential while also not holding less than is necessary.

INVENTORY REDUCTION: This is to determine what is required, its requirements, or determine the machine and materials that are needed or required, i.e. to decrease the necessary materials that would be utilised, which is the quantity required.

PRODUCTION PLANNING AND CONTROL: It is the process of planning the input resources used to produce goods and services that are acceptable to humans.

PRODUCTION CONTROL: This is the process of ensuring that plans are carried out as intended by comparing the company’s expected performance to its actual performance.