Project Abstract

Abstract
Inventory control is a crucial aspect of managing a business that directly impacts its profitability. This research project focuses on examining the relationship between inventory control practices and the profitability of RCN Gas, a company based in Uyo. The study aims to analyze how effective inventory management strategies can enhance the financial performance of the organization. The research methodology includes a combination of qualitative and quantitative approaches to gather relevant data. Primary data will be collected through interviews with key personnel involved in inventory management at RCN Gas, while secondary data will be obtained from financial reports and inventory records. By comparing the inventory control practices with the company's financial performance, the study seeks to identify the key factors that influence profitability. Through a comprehensive analysis of inventory turnover rates, carrying costs, stockouts, and other relevant metrics, the research aims to provide insights into how inventory control impacts the overall profitability of RCN Gas. By optimizing inventory levels, reducing carrying costs, and minimizing stockouts, the organization can improve its financial performance and achieve higher profitability. The findings of this study are expected to contribute to the existing body of knowledge on inventory management and its impact on organizational profitability. By identifying best practices and strategies for effective inventory control, RCN Gas and other similar companies can enhance their operational efficiency and financial results. The implications of this research extend to other organizations in the gas industry and beyond, as effective inventory control is a critical factor in managing costs and maximizing profits. By understanding the relationship between inventory management and profitability, businesses can make informed decisions to improve their bottom line and achieve sustainable growth. In conclusion, this research project on inventory control and its impact on the profitability of RCN Gas aims to provide valuable insights for business managers, stakeholders, and researchers. By examining the relationship between inventory management practices and financial performance, the study seeks to offer practical recommendations for enhancing profitability through effective inventory control strategies.

Project Overview

Inventory control is an extension of stores keeping and it has been in practice for a long time. It has a wide scope of activities today. Inventory control is an act of safe keeping some valuable items for future use and to produce them when the need arises. Inventory control goes beyond the scope of keeping and producing the items only but also involves controlling of operations, receiving, quality control activities, training of store staff, control of all store houses, stock handling as well as clerical documentation.

Inventory control can be defined as an art and science of achieving the objectives of inventory in an organization. It involves planning, organizing, staffing controlling and co-coordinating all the inventory operational activities for the provision of efficient services. Inventory control is a serving centre and the services to be provided must be meticulously handled, more organized to meet the demand of all units or department that constitute the organization for optimum performance. The primary function of inventory control is to provide for efficient inventory and handling of goods to be redistributed to the ultimate user, this activity when carried out with the use of Information Technology (I.T) will make re-ordering of materials easy as the information are already in the computer. The use of information technology in controlling of inventory eliminates time wastages. This provision of services to the operating function must be fully appreciated. All other activities although they have their own relative importance are subordinate to this primary responsibility. The above central objective can be analyzed as follows:

1. To make available a balance flow of raw materials components, tools, equipment and any other item necessary to meet operational requirement.
2. To provide maintenance materials spare part to general stores as required.
3. To receive and issue work in progress and finished products.
4. To accept and store scraps and other material as it arises.
5. To account for all receipt and issue of goods in the store.

Thus in any institution, private or public, some substantial amount is spent on the acquisition of materials, equipment etc. which are kept in the store house for future use. These items represent an equivalent amount of cash and have to be looked after, protected against unauthorized usage, until they are used for the intended purpose and duly accounted for. A lot of costs are associated with keeping of inventory despite that; we must however hold stock to meet production needs and sales needs. This is because if we do not hold stock in sufficient quantity we stand the risk of running out of stock and incurring all the cost associated with stock out. Therefore, for an organization not to have the above mentioned problem it is important that they strike a balance between carrying too much stock (over stocking) and carrying too little stock (under stocking). The importance of profitability cannot be overstated, because that is the reason why organizations are in business, if inventory control is carried out properly, there will be increase in production and sales thereby increasing profitability for the organization.

Therefore, this study attempts to find out how inventory control can be effectively used to reduce time wastage, theft, obsolescence and pilferage in the organization so as to achieve their goals of profitability.

Statement of the Problem Empirical research has shown that the study of inventory control or administration started late, unlike the study of other fields of human endeavour, such as medicine, engineering, and law, accounting and public administration to mention but few. This is not to say that it did not exist at all but this field has not attracted people as the belief that anybody can work in that area (inventory). Every year organization prepared and implements one type of economic policies/budget whereby a large sum of money is spent on acquisition of materials without making and adequate planned effort to provide for inventory facilities. These lapses coupled with improper stock control system and lack of trained personnel account for the ineffectiveness of inventory function in the public and private sector.

One is baffled to see that things bought for use such as capital equipments are left in the open during training reasons in which the outcome is usually deteriorated materials, a waste of effort and money.

Inventory control has problems in general, especially in area of discrepancies, theft, fraud, obsolescence, deterioration and breakages.