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Control of stock and its implication for manufacturing industries are very significant in the operational activities of an organization especially that of processing and manufacturing concerns, which are profit, oriented. The research direct its focus on the proper understanding of how effective and efficient application of stock control techniques will enhance greater productivity in the organization as well as stimulate economic growth and development. This project review relevant literature and source it data main from primary sources and analyze them to warrant an object recommendations, which will be indispensable to policy maker.


Inventory is one of the resources that are managed by business organizations and it was first recorded in 1601. The need for inventory control cannot be overemphasized as it is a means for improving the performance of manufacturing industries. Inventory can be defined as a record of a business current assets including property owned, merchandise on hand and the value of work in progress and work complete but not sold and it is classified as a current asset because it can be turned into liquid cash within a short period of time. Inventory has created a great impact on the profitability of the manufacturing firm which resulted to the deep research of this topic. Effectiveness of inventory management in a manufacturing company.

Inventory plays a major role in the operation of many businesses and manufacturing companies. In manufacturing, inventories of raw materials allow companies to operate independently of their sources of supplies. Day to day operation are not dependent on deliveries from supplies since stock of the necessary materials are maintained and used s needed. Without inventory control, millions of naira could be lost year because of non accountability of stocks and inaccurate checks and balances. The process of control and management of inventory is a very important factor in the success or failure of any business for example, little stock will result in stock out which will disrupt the production distribution cycle that is crucial to the survival of all manufacturing companies while too much stock will tie down the resources of a company. Poor or inadequate inventory management can present a serious challenge to the productive capacity of a manufacturing organization. In addition to raw materials and finished goods, many companies also maintain items of assets, property, inventories of work in progress, office supplies, business firms and general operation supplies.

Inventories often constitutes the most significant part of current assets of large companies. In the public limited companies, inventories are approximately 60% of current assets on the average. The US Burean of the census stated that inventory and accounts receivable ate the two largest accounts of equal magnitude and together they comprise almost 80% of current assets and over 30% of total assets for all manufacturing companies in 1982. Considering the large sum of money that are committed to the stocks of raw materials, work in progress and finished goods, it is therefore of paramount necessity that these stocks be managed efficiently and effectively in order to avoid the jeopardizing of the profit position of the firm.

In inventory, there is an optimum level therefore inadequate inventory causes loss of sale and disrupts the production process while excessive stock level leads to unnecessary carrying cost and obsolescence or spoilage risks.
According to Charles T. Horngren (2007), the optimum inventory. Level lies between the inadequate inventories and the excessive inventories. Inventory management aims at maintaining an optimum inventory level that will be carried at the least cost.

The problems seen in the course of this study are as follows:-
i. Ineffective management of inventory in the manufacturing company specifically Ama Greenfield Breweries.
ii. Loss of sales or business of the company as a result of insufficient inventories of finished goods.
iii. Low productivity in the manufacturing company as a result of poor inventories model used by the company
iv. Poor management and control of inventories in the manufacturing company.


The major objective of this study is to determine of the effectiveness of inventory management in a manufacturing company. The specific objectives of this study are as follows:-
i. To determine to what extent the ineffective management of inventory in Ama Breweries plc has caused low productivity in the company.
ii. To examine the extent to which insufficient inventory of finished goods cause loss of sales to the company.
iii. To identify the degree to which poor inventory modern used by the company has resulted to low productivity in the company.
iv. To ascertain whether the company has suffered from poor management and control of inventories.

Based on the problems and objectives of this study, the following hypotheses are formulated for this research.
Ho: There is no significant relationship between low productivity and poor inventories management.
H1: There is a significant relationship between low productivity and poor inventories management.
Ho: There is no significant relationship between proper inventory policies and productivity in a manufacturing company.
H2: There is a significant relationship between proper inventory policies and productivity in a manufacturing company.

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