ABSTRACT
Past studies have shown that the poor performance of many firms in Nigeria is due to their inability to manage the relationship between suppliers of input and the operation of the firm. This study is therefore designed to examine how manufacturing firms manage their materials.
Secondary data were collected on the inventory of material in 7up bottling company Ilorin plan. Economic order quantity (EOQ model) was used to analyse data collected.
The result shows the cost saving effect of economic order quantity EOQ model on inventory of raw materials for concentrate, sugar, hydrated lime and acciducant as N521939, N 179421, N1115796 N1014656 respectively and for finished product like Mirinda orange, Pepsi, seven up, Mirinda fruity and mountain dew drink are N359235 N98101, N369835, N293813, N1000557
Findings indicate that the method used by 7up company to maximize their inventory of both materials and finished product is not efficient because the naira saved in the course of purchase have more effect on the profit of company in production/selling. This is why purchasing should be cost effective.
Recommendations include an adoption and application of the EOQ model in order to save cost and make their operation more efficient. This will make 7up product more comprehensive and perhaps enable them gain competitive advantage. The conclusion suggest that EOQ model reveals the cost saving and total inventory of materials use in production and effective management and control leads to efficient operation cost.
