THE IMPACT OF INVENTORY PLANNING AND CONTROL ON PRODUCT AVAILABILITY
Background of the Study
It is a fact in materials management that continuity in production or provision of services on constant flow of required inventory. However, the question confronting the materials management remain, how much shall be ordered when the quality available is less than required to meet production demand or the quantity is less than order point and how best to plan and control the quantity of inventory needed at a given time.
The focus of the materials manager is to reduce the two extreme ends of the spectrum, that is excessive (surplus) stock and adequate stock (stockout). The level of stock or inventory to be purchased or carried by an organization will depend on a number of issue, such as level of consumption, bulk purchase, discount, reliable, delivery dates, difficulty in matching supply with demand, speculation (availability or scarcity) and the company’s policy it is this prevailing dynamic circumstance that gives rise to the need for inventory planning for product availability. Inventory planning however, an enormous task that requires an astute combination of intelligence of what is actually happening to demand and that of what we expect to happen (forecasting).
A closer look at organization annual balance sheet, it shows that assets account for between 60-70% of materials held in stock; yet proper attention, is hardly given to this aspect of management stacks and left at the mercy of the unqualified individuals.
Inventory planning is itself has been explained as the determination of the quantity and quality required of a material, components, points and services ordering, control receiving, inspection and storage of the right material and the efficiency utilization of these materials to achieve organization’s objective. In this study a general understanding of inventory planning shall be considered as well as issue such as inventory control its importance to the organization, stock maintenance, material handling quality control and product availability among others.
Statement of the Problems
Organizations in their effort to satisfy consumers demand for their product needs always to keep stocks of inventory at all times, since no organization can survive without keeping stock and ensuring constant flow. The problem that emerges from this is that of how best to ensure optimum supply without overstocking and understocking. Inventory planning and control is argued to be an effective way of overcoming these two extremes.