Project Materials

CONTRIBUTIONS OF PURCHASING AND STOCK CONTROL IN COSTS REDUCTION

ABSTRACT

This project examines the role of purchasing and stock control in cost reduction. Purchasing and survival: Purchasing the incorrect material or carrying too little might be disastrous for the organisation. The question therefore is, what is the optimal level of stock control to maintain? These are some of the questions that the buying manager is required to answer, and they will be the emphasis of the project. The first chapter provided an introduction to what purchasing and stock control are all about, as well as a well-explained backdrop of the study, description of problem, purpose of the study, both study limitations and definitions of words. Chapter three described the design utilised in conducting various researches, including the methods employed by the researcher to collect data, such as the primary and secondary approaches. In Chapter 4, the data was analysed and presented precisely and clearly using tables. Finally, chapter five contains a review of research findings and conclusions, as well as recommendations on how to avoid the various concerns.

Chapter one

Introduction

1.1 Background of the Study

Many organisations, particularly those in the manufacturing sector, prioritise purchasing and storage. However, the average manufacturing company spends more than half of its revenue on materials, supplies, and services. The importance of procurement as a crucial role in corporate management can be emphasised by analysing the overall cost of materials, which in many cases account for a rising proportion of output.

Also, material-related difficulties are becoming more difficult and numerous than they were earlier. The term materials is used in a broad sense to refer to the entire spectrum of goods and services purchased or created from sources outside the organisation and distributed or processed to offer finished products for sale.

Purchasing has traditionally been seen as one of the fundamental duties shared by all organisations. traditionally before major corporations with functionally specialised departments emerged, people bought and sold.

Buying, or acquiring things and services in exchange for a price, predates the development of written records. This is equivalent to selling, which is the transfer of products and services in exchange for a price.

It is likely that humans have always bought and sold, and that these transactions have benefited them both culturally and financially.

1.2 Statement of The Problems

Industries are responsible for creating high-quality commodities at a low cost to citizens. Materials in this regard have grown so important that no result could be obtained without proper acquisition. In the topic “The CONTRIBUTION OF PURCHASING AND STOCK CONTROL IN COST REDUCTION,” Nigerian Breweries PLC, as the case study, faces the following challenges.

(1) It is necessary for the purchasing department to have a thorough grasp of stock control and a better comprehension of its specification requirements.

(2) The research is dealing with the subject of developing methods for improving the purchase of the appropriate quality.

(3) Research should be undertaken to determine the unique role of purchasing in a manufacturing organisation.

(4) A large number of industrial firms do not take their routinely, and this practice may provide an opportunity for dishonest and unreliable employees to mislead their employers.

(5) There is also a problem with unprofessional behaviour in the purchasing function.

1.3 GOALS OF THE STUDY

The key reasons for my pursuing this research are

(1) To determine the extent to which an efficient stock control system can help reduce production and other general costs in all organisations.

(2) To understand how good purchasing practices and techniques can help an efficient stock control operation.

(3) Determine the level of commitment of an organization’s management team to implementing a proper stock control system in order to reduce the organization’s operating costs.

(4) To identify some of the barriers to the adoption or implementation of an effective stock control system in an organisation, followed by suggestions and recommendations on how to handle this issue.

1.4 RESEARCH QUESTION.

To avoid issues, many questions must be asked and addressed when conducting research. The following are some of the questions that need to be asked and evaluated.

(i) What is the appropriate level of stock control to maintain?

(ii) What and from whom should we order?

(iii) Are the necessary supplies purchased at the appropriate time to meet the need?

(iv) Are those in charge of stock control experts in their field?

(v) Is it appropriate to stockpile?