1.1 Background of the Study
Inventories
are vital to the successful functioning of manufacturing and retailing
organizations. They may consist of raw materials, work-in-progress, spare
parts/consumables, and finished goods. It is not necessary that an organization
has all these inventory classes. But, whatever may be the inventory items, they
need efficient management as, generally, a substantial share of its funds is
invested in them.
Inventory
represents an important decision variable at all stages of product
manufacturing, distribution and sales, in addition to being a major portion of
total current assets of many organizations [More, Lee & Taylor,( 2003). It
many represent 33% of company assets and as much as 90% of working capital,
Sawaya Jr. and Giauque, (2006). Since inventory constitutes a major segment of
total investment, it is crucial that good inventory management be practiced to
ensure organizational growth and profitability Peterson and Joycey,(2007)
maintained that it is evidence that inventory management can make a direct
contribution in increasing profitability in the following ways;
Get the Complete Project Material Now!!!
