ABSTRACT

Obviously, there has been a remarkable poor influence of some key participants in the economic sector. This is made manifest in the recording of operational losses in view of profits which eventually leads to liquidation and winding Lip of most companies, unnecessary reduction in the already achieved capacity and the worsening of the unemployment syndrome. It will interest the businessman to control this bad condition of business in order to forge: ahead and remain in operation. Meanwhile, a close observation of the role of inventory might suggest that adequate management of inventory might become a solution to the problem. Hence, the research focused attention on finding out the role played by inventories in the operation of a business. It also tried to find out the influence of inventory management on the volume of profits as well as verifying the extent to which the various cost associated with inventory affect the performance of companies. Consequently, some recommendations were made. To carry out this research, Star paper mill was used as a case study. Data were collected from it through the use of questionnaires, oral interviews and observations were the primary data source while library research was the secondary source of data. A sample size of 30 was distributed and 25 as determined mathematically was used as a basis for the drawing of the sample which was done randomly. For the test of the formulated hypothesis, the chi-square was used. The carrying out of this research work revealed that the company has experienced staff to handle the management of inventory items. There is a remarkable reduction in pilferage rate, defalcation, holding cost and ordering cost e.t.c; adequate control and monitoring technique are employed to enhance an efficient and effective inventory management. The timing of inventory items in superb, shortage and overstocking are avoided, with bulk purchasing of inventory items as a policy; inventory management whether good or bad, has a great impact in the profitability of companies. Following the conclusion of the research work, some key recommendations were made as follows: A certain level of stock should be kept as a buffer stock. There should be well segregation of duties with regard to invention counting. There should be a creation of a separate section to take the responsibility of the control of inventory to be managed by a well trained staff. There should be a significant reduction in the dependence on the imported raw materials. Finally, efforts should be made to provide motivational incentives to workers to ensure their full commitment to duty.