INVENTORY CONTROL SYSTEM ON THREE PRODUCTS OF THREE SUPERMARKETS IN OWERRI

INVENTORY CONTROL SYSTEM ON THREE PRODUCTS OF THREE SUPERMARKETS IN OWERRI

ABSTRACT

This study looks at the inventory control process at three supermarkets and the three products they sell. As examples, consider Noble supermarket, Pick ‘n’ smile supermarket, and Maris supermarket. We purchase Candid Red Wine, So Klin Detergent (900g sachet), and Peak Milk Powder. Data for observation were collected and analyzed using statistical inventory control models in this study. Single item static model (with no shortages allowed) and single item static model were used in this case (with shortages Allowed). These models are used to determine the shortcomings of inventory management and control in supermarkets for these three goods.

TABLE OF MATERIALS

Page Title

Approval Page 1

Dedication 2

Certificate iii

iv. acknowledgment

Abstract v

Table of Contents vii

CHAPITRE ONE

1-5 Introduction

1.2 Situation 5-6

1.3 Purposes and Goals 6

1.4 Study 6-7’s Importance

1.5 Study Scope 7

1.6 Terminology 8–10

CHAPITRE TWO

11-16 Literature Review

CHAPITRE THREE

Methodology 3.0

3.1.1 Data Collection and Methodology 17

3.2 Difficulties 17

3.3 Analytical Method 18

vi

18-21.3.4 Data Presentation

CHAPITRE FOUR

4.1 Data Analysis 22-28

4.2 Interpretation of Result 28-29

CHAPTER FIVE

5.1 Summary of Result 30-31

5.2 Recommendation 31-32

5.3 References. 33-34

Appendix 35-50.

vii

CHAPTER ONE

1.1   INTRODUCTION

Inventory control entails planning for the flow of goods into and out of a business. Inventory control enhances the marketing system by detecting discrepancies and allowing for more effective planning. It is also used in all manufacturing activities. As a result, inventory control is extremely useful in a marketing organization. It is critical to the marketing process. In recent years, much emphasis has been placed on viewing manufacturing facilities as a production/inventory system. The framework restructures the significance of inventory.

However, it is possible that the organization will find itself with more items in inventory than the maximum, resulting in an excessive inventory. Inventory system management typically entails keeping track of thousands of stock keeping units. Because efficient operations provide competitive and economic benefits,

Inventory control models have been developed to assist with inventory management.

The inventory control system determines a set of parameters that optimize inventory control based on recorded or theoretical (rather than actual) stock levels. These variables have an impact on both operational and financial decisions. A recorded stock level is considered accurate when it agrees with the actual stock level; otherwise, an error has occurred. Inaccurate inventory records can lead to out-of-stock situations, lowering service levels and resulting in lost production time or sales.

The primary goal of inventory control is to maintain a system that minimizes total cost and determines the best quantity of commodity to order and when to order it. The two most important

The “Re-order level system” and the “periodic review system” are two systems.

Re-order level system: This is the most commonly used method for determining the amount of stock for each item. This system, which is more responsive to fluctuations in demand than the periodic review system, establishes the value of three important stock levels as a check or trigger for management. The three most important stock levels are as follows:

i. Re-order level = maximum usage (per period) multiplied by maximum lead time.

ii. Minimum Level (Lmin) = Re-order level – average lead time for normal usage.

Lmax = Re-order level + Economic order quantity (EOQ) – (Minimum usage x minimum lead time), where EOQ is associated with the cost of ordering inventory.

System of Periodic Review: This system establishes a review period for

each stock item at the end of which the stock level of the item is brought up to a predetermine value. When multiple items are ordered at the same time or in the same sequence, the cost is reduced while the profit is increased. Because stock is reviewed on a regular basis, there is little to no risk of it becoming obsolete.

GRAPH OF INVENTORY

Inventory control can be graphically represented in relation to the information obtained during the inventory control system.

B

A

O

q1

Q1

Fig. 1.1

C

t2

T

The inventory graph depicts the control of stock from stores at a constant rate of q1 per T. In this case, the graph is known as a periodic review graph.

The average inventory level from the graph is then calculated.

T + T

+ T

= Area A plus Area B plus Area C