ROLE OF THE APPLICATION OF COMPUTER IN INVENTORY PLANNING AND CONTROL IN AN ORGANIZATION (A CASE STUDY OF SAM MBAKWE INTERNATIONAL CARGO AIRPORT, OWERRI IMO STATE)
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Inventories are the life wire of any services and manufacturing organization, they refer to the stock of items used in the operation of the business. This represents a significant portion of most firms assets and such demand proper management of efficiency and effectiveness and in that light it brings us to the research topic” the role of the application of computer in inventory planning and control in an organization .
The role of computer as a data processing tools in business is today an issue of economic priority in every large and small services business Especially, the business organizations with large volume of data to be processed and produced as information to management for effective and efficient corporate planning and decision making.
This project work has been divided into five chapters. Chapter one deals with the introduction of the approach, the statement of problems, research questions, objective of the study scope of the study and significance of the study, chapter two is review of related literature both on computer and inventory planning and control in an organization. The next three, outlines the methodology and procedure used in gathering data. Chapter four is where the hypothesis formulated in chapter one are tested, the findings are presented and analysed.
Chapter five is the summary, conclusion and recommendation of the research topic.
1.1 BACKGROUND OF THE STUDY
As there are different scholars in computer science, so are there different definitions of computer. The same is applicable to inventory planning and control, however all boils down to the same meaning at least though from different perspectives depending on the understanding.
Iyang (1996:40 defined computer as” an electronic data processing machine capable of receiving, storing, performing arithmetic and logical operations in line with defined instruction, high speed, accuracy and finally transforming the processed data to an output or presenting the data or information in a final printed or visual from”. A computer system could as an “Electro- mechanical machine which receives data instructions, processes them and produce its result as information which are made up of hardware, software, data ware, and human-ware, computer technology is fast revolutionizing the world, Before computer there had been aids to doing such actions as calculation, storing and retrieving information, which were adopted by various organizations.
In the same view, Arnold (1996:221) defined inventory as materials and supplies that a business or institution carries either for sale or to provide inputs or supplies to the production process. All businesses and institutions require inventories which forms the life wire of any organization. Similarly, inventory planning and control for. According to Arnold (1996:223) is responsible for managing and directing inventory from the raw material stage to the customer. Inventory planning and control involves a wide rage of activities like planning, purchasing, storage, usage and control of inventory and for this to be effective, come the use of computer inventory for easy accessibility.
The role computer play in inventory control be over- emphasized. The computer assemblies all pertinent facts about inventory planning and control and bring all these facts up to date. This has been made possible, by the fact that inventory planning and control recognizes that important role computer plays in inventory. Successful inventory planning and control actions are as a result of a computerized inventory system, where all the additions and withdrawals are recorded electronically, so that the computer can trigger the placement of orders to replenish the inventory. Since inventory is necessary for any company dealing with physical products, what it handles large volume of inventory can best be imagined when told like a storey and it beats human imagination when put into use and it is proved.
Brief history of Sam Mbakwe international cargo airport (SMICA). The airport was built but the Administration of late chief Sam Mbakwe. First Civilian Governor of the old Imo State made up of the present Imo, Abia and part of Ebony State. The airport was renamed after late chief Sam Mbakwe as an honour for his contribution to growth of the country and aviation industry Sam Mbakwe international cargo Airport, Owerri was officially commissioned on the 15th July 1994 by the former head of state commander. In- chief of the Armed forces, Federal republic of Nigeria, Late general Sanm Abacha as a passenger airport, recently, it has been re-designated a cargo airport for the importation of cargo in the eastern geo-political Zones of the country by the former president and commander in- chief of the armed forces of the federal Republic of Nigeria, chief Olusegu Obasanjo.
The Airport is managed by one federal Parastatal and three Agencies namely, Federal Airport Authority of Nigeria (FAAN), Nigeria airspace management Agency (NCAA) and Nigeria meteorological service Agency (NIMET) . The Airport has as purchasing and stores department where materials of different kinds are purchased and kept for services and which as highly monitored by computer so as to maintain efficient and effective inventory planning and control, it is located at Ngorokpala L.G.A
1.2 STATEMENT OF THE PROBLEM
The problem of inventory planning and control has been very daring but it has also been within the past years that this scientific method in computer was introduced in various companies and establishments to promote proper inventory planning and control. The researcher desired to go into the major problems which the establishment have been experiencing before the use of computer was imitated and deduced remedies and solutions in solving these problems. As a result of many operational activities of industries and establishments, they have found the difficult with the surge in business activities. The function of the stores is changing into a more complex one, which emphasized the availability of information at the shortest possible and also the speeding up of time used in rendering certain services. This means that, the use of manual operations could not effectively handle the whole work load and this almost led to a less servicing activities to different operational areas. This also means that materials shortage were delays in stock recording and delivery, at times a complete halt as shortage of material will hit the services operations. Computerization is then seen as answer to those problems facing servicing and manufacturing industries that operates a large system and has the finance and manpower quickly embraced the new technology.
Beside the role of computer in inventory managements face a lot of difficulties due to the following problems.
(a) Inability to determine correctly the exact period of replenishment stock and the economic order quantity.
(b) Inadequate planning and effective control of stock.
(c) Unfavorable internal and external factors which influences inventory planning and control
(d) Inability of the inventory managers to predict with certainty into the future of their customer demand.
(e) Shortage of funds available to business managers and the need to resolve the liquidity and profitability conflict.
(f) Poor accounting documentation of stock
(g) Lack of unskilled personnel to operate the computer system.
(h) Hum Sum of money involved in the purchase of computer system.
(i) Unauthorized persons getting access to the computer system.
(j) The difficulty of correcting errors when they occurs, when the wrong code number is entered the various services rendered in inventory planning and control and how this application has affected output and efficiency.
1.3 OBJECTIVE OF THE STUDY
What ever be the nature and structure of a country for instance Nigeria, Sam Mbakwe International cargo airport has contributed immensely to the success and development of the country hence international buying and selling via relationship is concern. To this end the objectives of the study are.
(1) To examine the methods and importance of computer application in inventory planning and control
(2) To identify the effects of computer application in inventory planning and control.
(3) To investigate into the uses to increases the efficiency of the store.
(4) To examine the Overview of computer application to the various services rendered in inventory planning and control.
(5) To identify the desirability and effects of computer application in the storage system.
(6) To find how computer application in inventory planning and control will help change the whole concept of inventory.
1.4 RESEARCH QUESTION
One important thing a research of this nature needs to achieve is to empirically prove the subject matter of the study. This is an order to give direction to readers, other researchers and planners so as to elicit what the research is all about. It is therefore becomes necessary to formulate research questions on which the conclusion would be based and are followed.
a. What things can a computer do in inventory planning and control in an organization
b. Why should inventory planning and control in an organization be computerized.
c. Does computer really increase effectiveness and efficient in inventory planning and control in an organization.
d. How should the computer system be operated in inventory planning and control in an organization
e. Does computerization help in reducing the burden of work in your stores?
The above research questions are such which reasonable answers can be elicited at the end of the project.
1.5 STATEMENT OF HYPOTHESIS
Hypothesis is a declaration statement of relationship between two or more variables used for better understanding of the problem of the study. That is, it is a statement to be proved or disproved as a result of findings. It is regarded as the core work of the research work. The hypothesis to be tested on is to prove that either,
HYPOTHESIS ONE (1)
Ho: The computerization of Sam Mbakwe international cargo airport has not improved services in inventory planning and control of the establishment.
H1: the computerization of Sam Mbakwe international cargo airport has improved services in inventory planning and control of the establishment.
HYPOTHESIS TWO (11)
H0: The computerization has reduced the burden of work load in stores.
1.6 SIGNIFICANCE OF THE STUDY
The significance of importance of this study cannot be overemphasized who related to the contributions of airport (establishment) in Nigeria via Sam Mbakwe international cargo airport. The research will serve as a useful guide in determining the relevance of computer application in inventory planning and Control. To this end the significance of the study are as follows:
(1) It helps in determining the role computer plays in inventory planning and control.
(2) It serves as a bedrock of experience and understanding with respect to computer application in inventory planning and control.
(3) It gives/ allows employers and employees an amp time in applying the right system of inventory
(4) It helps students of purchasing and supply as well as the researcher to know the relationship between computer and inventory planning and control
1.7 SCOPE OF THE STUDY
The scope of this study is very wide if it has to be carried out in all the airport (establishment) in Nigeria. Thus the study will only cover the activities of Sam Mbakwe international cargo airport as it regards to the application of computer in inventory planning and control. The findings may reflect the situation but by and large attempt to find the methods and importance of computer application in inventory planning and control of Sam Mbakwe international cargo airport.
1.8 LIMITATIONS OF THE STUDY
The Zeal and enthusiasm that the researcher felt in the course of this research was short-lived as a result of certain obstacles which are as follows.
a. NON- RESPONSE
The staff of Sam Mbakwe international cargo airport felt reluctant to give o information to avoid being maneuvered by their federal auditors and even compactors posed a problem and there was no bank where one can easily go for the collection of such information.
B. TIME FACTOR
The time carrying out this research was limited for visits and revisiting to the place of establishment because of the institutions academic system which did not create a particular period for their research work which resulted in the researcher dividing her time between lecturers and research.
The cost involved in carrying out this research was exorbitant, coupled with the present economic condition affected the research of the work.
1.9 DEFINITION OF TERMS
The terms in this study which have unique meaning that could be subjected to different interpretation by different readers of this project are as follows.
(1) HARDWARE: It is the mechanical, magnetic, electronic and electrical devices and components of the compute operating system itself.
(2) SOFTWARE: It provides an interface between the user programmers and operators, the hardware system and the application software.
(3) ACCESSS: Is the process by which information are funds in a storage devices and called up for use.
(4) HUMAN WARE: Is the term used for people who are directly involved in the use of computer.
(5) TURNKEY SYSTEM: Is a system where only the operation peoples ware or users have the code to get in and out of the system.
(6) MASTER RECORD SIZE: Is the quantity to be ordered whether from within or without the source to avoid relevant cost.
(7) UODARE: It is a process of modifying a master record with current information according to a specific procedure.
(8) COMPUTERIZED INVENTORY SYSTEM: is the set of policies and controls that monitors levels of inventories and determine what level should be maintained, when stock should be replenished and how large orders should be.
(9) INVENTORY: this can be defined as stock of raw materials, component parts, fabricating parts or finished goods which are held for several reasons.
(10) INVENTORY CONTROL: This is the supervision of the supply, storage and accessibility of items in order to ensure an adequate supply with excessive or over supply.
(11) INVENTORY MANAGEMENT: Is a major cost centre analysis which must be carefully scrutinized by the firm with a view to employ prudent financial management.
(12) Inventory planning: This is the activities and techniques of determining the desired levels of items, whether raw materials, work in process, or finished products include order quantities and safety stock levels.
(13) Computer: this can be seen as an electronic device which under the control of stored program, accept data through its input devices,
(14) Computer science: is the blending of principles theories and application of the technologies that underlies the access to information
(15) STOCK OUT: This is a situation where the stock position or level is nil. It is an ugly situation that causes stoppage of operation.
(16) STOCK RECORD: these are forms of clerical record designed to provide on the spot information about all items of stock held within the stores organization.
(17) DISCREPANCY: Can be defined as a non- arrestment between the stock balance as indicated in the stock record and the quantity physically funds and counted during stocktaking
(18) PILFERAGE: Means the act of stealing small amounts or small articles.
(19) STORES: Is an area in an organization where various kinds of materials needed for production, distribution, maintenance, packaging and general administration etc. Are received in, stores and issued out on demand.
(20) PURCHASING: This is a process involving the provision of raw materials, tools and equipment of the right quality in the right quantity at of the right time, at the right price and from the right place (source)
(21) DATE: This is raw- facts and figures generated by human’s and their activities.
(22) FRAUD: Is an international deception made for personal gain or to damage another individual.
(23) OUTPUT: is the amount of materials/ products or result that a person, a machine or an organization produces or the information, result, etc. Produced by a computer
(24) INPUT: It means time, knowledge, ideas, materials, etc that are out into work or a project etc in order to make a success or produce a computer.
(25) WORK LOAD: This is the amount of work that has to be done by a particular person or an organization.