The stock management in many business organization are often neglected and it is not realized that materials represent an equivalent amount of cash materials pilferage deterioration of materials and careless handling of stock loads to reduced profit or even losses so it is essential that to obtain the maximum advantage of cost accounting system and efficient and well equipped stocks management is required.
Inefficient stock manage leads to excess supply of stock which result in high storage costs excessive capital being locked up storage of valuable space losses and absolve whole a short supply results in reduced output and possible in danic buying.
Sales and purchase are the basic trading activities that give rise to profit and productivity. Stock movement is an indication of the level of business activity in a firm. This is because stock reflects the sale and purchase activities of the firm. Therefore stock are connected not only production but ultimately with productivity over sixty percent of firm cost production or capital is represented by the stock (materials) pilferage, deterioration of materials and careless hard of stock lead to reduced profit or even losses.
The aim of this research work is to show how an efficient and good stock management in a manufacturing organization can affect the levels of efficiency on productivity of the firm.
Stocks account forms a substantial part of a company’s assets. It must be appreciated that stocks include raw materials components, partly finished good (work in progress) and finished goods ready for sale. Too much stock will unnecessarily tie down the resource of a company while too little stock will result in stock outs with its attendant problem eg. unsatisfied demand and costly arrangements to replenish stock etc. it is therefore necessary to have a middle of a road quantity of stocks at any given time.
Stock management function in the capacity of service and control groups within the firm. In other words it is service oriented from managerial viewpoint, stock exist for three reasons.
First, they provide a service to the production operation, it is difficult for a production organization to operate efficiently unless someone is specifically designated to organize and control the physical slow of materials into production.
Secondly, the stock organization acts as a custodial and controlling agency. It is responsible for the physical welfare and control of a substantial portion of a trans – current assets.
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