Role Of Inventory Management In Industries

INTRODUCTION
Inventory management is the science based art of controlling the amount of stock held in various form within as business to meet economically the demand placed upon that business it is thus a machinery used by brewery industry to determine the optimal level of stock to hold at specific periods of time depending on certain such as cost minimization and / or anticipated price increase.
The need for inventory arises because of the dynamic nature of the environments within which the brewery industry exist. According to Patterson and Silver, in an ideal situation where the demand upon a business is known exactly and in advanced where supplies arrives when due, there would be little need for any inventory at the end of financial periods.
In practices however, the demand is not known in advance and suppliers could arrive either early or late as the case may be and this brings about the need for inventories to act as a butter between the vagaries of demand and supply.
Patterson and Silver expressed the need for effective management of inventory according to them inventories by a brewery as expressed associated with inventory management often form a substantial amount of the total expenditures incurred by any brewery. This also stated that inventories determined the extent to which purchasing manufacturing and distribution activities of any brewery could be rationalized to ultimately provide competitive customer service.

1.1 BACKGROUND OF THE STUDY
In late 20’s many business sectors in U.S.A experienced great slumps. These were as a result of materials or stock management. In effective it was during this period that some businessmen coined the statement “stock are the grave yard of a business”. This statement means that is with her stock is bound to face some financial hitches which may in effect, grind the business wheel to halt.
One should not fail to understand that in most industrial firms materials account for over 50% of the company’s total cost of production. Therefore, any business that would want to remain in operation, should as a matter of importance exercise adequate measures towards protecting her stock levels. A good inventory management saves many breweries that are about folding up.
Again, there is no doubt that many uncertainties be calmed inventory management. Hence, this range form determining how much inventory are needed at a particular period, how and when to have them obtained, and the determination of the marketability of the outputs, therefore the associated risks of these uncertainties could only be taken care f by a well establish proper inventory management techniques.
Little wonder is that no two breweries in the same industry having equal materials risk condition on and on the same scale of operations record the same inventory cost. The difference can be explained by the techniques employed by each of the breweries.
Many options are open to the inventory manager, he may chose to maintain a high inventory level to avert the hazards of being or having to order for materials very often, he can also maintain low inventory level to put ordering more frequently than when highly maintained. The question lies now on which of these approaches is preferable to the other. Efforts will therefore be geared I this piece to throw more light on this question, as this study set to examine the role of proper inventory management in brewery industry in Nigeria with special emphasis on Nigeria brewery Plc 9th mile corner Enugu.

1.2 STATEMENT OF THE PROBLEM
Inventories play an essential role in many breweries, that is why we say, inventories is live wire of a brewery industry. Inventory like to business what human blood is to human beings, it implies that business sustainability so much depend on it. Management of inventories in brewery industries is a function of observations of prudent inventory accounting techniques which aims at not only helping the sustenance of brewery industries or setting it on the path to growth. Instability is the major problem to tackled in the Nigeria economy. The reason why we said instability is it fluctuates the prices of the products thereby shifting customer taste between Nigeria brewery plc product and other products in the market.

1.3 OBJECTIVE OF THE STUDY
The objectives of the study are as follows:
(1) To ascertain the techniques of inventory management adoted by the brewery.
(2) To seek way of improving such practices
(3) To determine problem encountered by the use of such methods as well as benefits derived from their use.
It is hoped that by the end of the study, certain loopholes in the inventory management system of the brewery would be identified and probable solutions generated.

1.4 RESEARCH QUESTION
(1) Does the economic order quantity contribute to poor performance at the brewery industry particular Nigeria brewery industry?
(2) Does the absence of the practice of periodic or perpetual inventory, taking has effect on the Nigeria breweries industry?
(3) Does the materials abnormal loss constitute some set back within the wheel of productivity in the Nigeria Breweries Industry?
(4) Is the poor storage space a hindrance to the achievement of your inventory control?

1.5 SIGNIFICANCE OF THE STUDY
This work is intended to be of benefit to processing business in general and to Nigeria breweries plc particularly. It is hoped that by improving the profitability of these firms, this study has benefited the economy as a whole, this is not an over statement.
Following the completion this work and the result made available to them, the processors will be in a position to re-examine their proper inventory management techniques and upstate them so as to enjoy these benefits accruable to firm, with proper inventory management, and also avoid plunging their business into financial and operating difficulties.
Finally, this work will increase the materials available on this topic. Reader will appreciate of other people’s view on the proper inventory management and see the workability of so-called inventory models in real life situation.

1.6 SCOPE AND LIMITATIONS OF THE STUDY
The scope of this study covered the role of inventory management in a brewery industry. The scope also covered the Nigeria Breweries Plc. 9th mile corner in Enugu State while the limitation of this study denotes the constraints or impediments as it affected the researcher the course of this study. The major limitations include inadequate time for carrying out an exhaustive work on the study. There was also the problem of inadequate finance which impeded on the researchers effort to visit several academic libraries and the areas under study for the collection or relevant data. A major limitation to the study was the uncooperative attitude of area under study as it concerned the completion of the copies of questionnaire administered to them.

1.7 DEFINITION OF TERMS
(1) INVENTORIES: Are stocks of the product a company manufacture for sale and component that make up the product. The various form in which inventories exist in a manufacturing company are, raw materials, work in progress and finished goods.

(2) MANAGEMENT: It is process of planning organizing leading and controlling the work of organization members and using all available organizational resources to reach stated organizational target or aim.
(3) BREWERY: Is a place where beer is made or a company that makes beer.

(4) INDUSTRY: Is where the production of goods are made especially in factories.