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The significant of management on the impact of inventory control in a manufacturing company is not properly maintain and control as a result of lack of professional, expert in inventory system and good inventory policy.

This research work looks into the performance of impact of inventory in manufacturing company. In the research work, primary and secondary sources were obtained from questionnaire collected while chi-square was used to analyses using statistical analysis, the effective and efficiency of inventory control policy.

The main objective of the study is to determine the impact of inventory control system in manufacturing company.

Data used for this study was collected via primary and secondary. Primary data was collected through structured questionnaire and interview with users of Eastern Match Industries Limited. The data obtained were collated and analyzed using statistical package and which chi-square techniques were used to test the reliability and validity of the earlier formulated hypothesis in order to draw valid inference were applicable statistical table were employed for data analysis

The findings of this study are clearly identifying the problems how to used inventory control to check production cost and see how it affects the performance of manufacturing industry. Therefore necessary to find out areas where we can save cost and the incorporate in the plans for the future.

So as to increase productivity (profitability), manufacturing concern has to reduce the cost of production and this reduction can be achieved through an efficient and effective of inventory control system.

Based on the study findings, it can be concluded that the inventory control system of manufacturing industries has made positive impact on Eastern Match Industries Limited.










Title page





Table of content


1.1     Background to the study

1.2     Statement of the problems

1.3     Purpose of the study

1.4     Significance of study

1.5     Research Question/Research hypothesis

1.6     Scope/Limitation of the study

1.7     Definition of terms


2.1     Theoretical frame work

2.2     Inventory control problem   

2.3     Inventory records and procurement

2.4     Specification of an inventory system

2.5     Inventory related cost holding or carrying cost

2.6     Valuation of inventory


3.1     population and sample size

3.2     Instrument used

3.3     Procedure for data collection

3.4     research design

3.5     statistical analyses


4.1     Presentation of data

4.2     Result and discussion of findings


5.1     Summary of findings

5.2     Conclusion

5.3     Recommendation

5.4     Suggestion for further studies













Manufacturing industries are those enterprises that are engaging in the production of certain products through the combination of factors of production such as material, labour and factory services land operation.

Inventory can be described as the totality of stocks of different. These includes basic raw material, partially finished goods and material (work-in-progress) sub assemblies, office and workshop supplies and finished goods. Without inventories, manufacturing industries cannot exist, for them to produce product, they need raw materials and in the process of production they will have stock of partially finished product called work-in-progress. All these form the totality of inventory of manufacturing concerns invest highly. Furthermore, manufacturing concerns invest highly in inventory and it constitutes about sixty percent (60%) and above of current assets held at any point in time depending on the size, level of operation and policies of such a particular concern. As a result of the huge amount always invested in inventory, proper planning and controlling here to put in place to avoid loss of inventory which will eventually affect the organization as a whole.

Profit maximization through the satisfaction of the consumer is one of the basic strategy, many business often make losses at the end of the period.

Taking the problem to it’s root, one would see that its linked with ineffective inventory control system.

The control of inventory has posed a serious problem for managers in manufacturing industries. This is because when inventory cost becomes very high without corresponding increase in production or sale, profit is bound to drop since the cost of holding the excess inventory will increase the company’s production cost heading to a reduction in profit.

However, control of production cost would be made difficult if there are no adequate reports to cover the reasons for the high cost of production (such as idle time absenteeism, increased material wastage, loss of materials and periodic physical stock taking)

Actually, the problem concerns how we can use inventory control to check production cost and see how it affects the performance of manufacturing industries. It is therefore necessary to find out areas where we can save cost and the incorporate in the plans for the future

Paramount in the heart of the owners of manufacturing concern with the survival of the enterprises, to fulfill thus desire, there has to be enough profit from the business that would be able to cover the company’s obligations to its owner and other parties such as government, creditors, investor e.t.c.

So as to increase performance (profitability), manufacturing concerns has to reduce the cost of production and this reduction can be achieved through an efficient and effective system of inventory control.


The main characteristics of manufacturing companies is that they

obtain raw materials and other components and then convert them into finished goods ready for sales. The problem arises as to how to account for the cost of these product and determination of the value or worth of raw materials coupled with work in progress. The study will help to appraise the role of costing system in manufacturing companies. In another plan, it is the beliefs of some people that inability of the enterprises to get manifested in the economy. In spite of immense contribution of the subject matter, there exist businesses enterprise that offer something worthwhile to the growth and development of the country at large and that there are a lot of mis-management, fraudulent practices going on in the organization which might deter the growth and development of such organizations. A perfect example of organization which runs at a risk of fraud and error in the manufacturing business or organization where the tendency for somebody to steal raw material and resources which is supposed to be used for production or store in a correct stock records, but use it for their personal use is so rampant.



The fundamental aim of inventory control is for pricing and control of the cost of production. Other purposes are mainly informative and work towards cost control.

This study is design to achieve the following objective

  1. To identify the various inventory control system and procedures and specify how they could be applied in the organization they are best fit for.
  2. To show the importance of inventory control in product cost control.
  • To show the relationship that exist between inventory and performance and demonstrate how Eastern match industries limited can enhance its profit position by controlling the cost of its inventory through the use of efficient inventory control system.



Inventory control is a managerial function that demands a combination of the use of financial information and intelligence; since inventory forms a very part of a manufacturing concerns working capital. It is a fundamental determinant of the profitability of the business upon which leans the survival of the business.

A good understanding of the system of inventory control with practical life situation will therefore broaden the scope of the managers on how to bring cost to the lowest possible level. This study will be immense important to the practicing manager in this respect.

To the management of Eastern Match industries limited it will help     reveal the various areas where there has not been effective inventory control.

It will also help to reveal the potentials within her disposal to raise profit. To the academics, it will help contribute to knowledge, shed more light on the use of inventory control in the general manufacturing cost control.


These are related questions asked in the context of the project. This definitely serves as a guide to the researcher on the topic under study. To proffer solution to my research topic under study, the following questions were asked.

  1. What are the positive impacts of inventory control on manufacturing industries?
  2. Does inventory control play significance impact in the development of manufacturing industries?
  • Are there hindrances confronting effective manufacturing industries by inventory as well as their impact in Nigeria
  1. Are there problems confronting effective on how we can use inventory control to check production cost and see how it affect the performance of manufacturing industries




These are testable statements formed to provide linkages between the world of theory and reality. The need to determine the reliability and validity of these statements in this project brought statistical hypothesis which are formulated in two forms.

The following hypothesis were put to test in this project

  1. Null hypothesis (Ho): That impact of inventory control has not contributed positively to the growth, development and advancement of manufacturing organization
  2. Alternative hypothesis (Hi): That impact of inventory control has contributed positively to the growth, development and advancement of manufacturing organization.



This research attempt to look into the impact of inventory control on the performance of manufacturing industries in Nigeria with particular reference to Eastern Match industries limited as well as the business tycoon in the area of study.

The problem facing inventory control have been put into consideration and some likely solution have been suggested

This study covers a wide area but time is very limited to carryout investigation on variables that make up the study, financial constraint is not left out. The huge amount of money needed for study is not available enough.

Despite the limitation to the study, reliable and reasonable information was obtained from different sources to make this study valid and liable for its general acceptability and its applicability to other related areas.


The following terms related to the study are hereby defined and used as follow:

  1. MANUFACTURING: This is the production of goods for use or sale using labour and machines, tools chemical and biological processing or formulation.
  2. INVENTORY: Is a quantity of goods and materials on hand, called stock. A stock includes finished goods.
  3. INVENTORY CONTROL: This is the report of financial and non-financial information related to an organization.
  4. INDUSTRY: It is a term given to all business of all forms producing the same commodity or group of technically similar commodities
  5. IMPACT: The impression made by an idea, cultural movement, social group e.t.c
  6. BUSINESS: It is an activity by a person or a group of persons employing the available resources of an environment to manufacture and distribute goods and services with the main purpose of making profit
  7. CAPITAL: This is economic term of wealth other than land which is used to produce another wealth.
  8. FINANCIAL INSTITUTION: These are financial and non-financial institution dealing in financial instrument. These includes government, creditors, investors e.t.c
  9. FINANCIAL SERVICES: These are services rendered by financial institution e.g. labour and factory services land operation.
  10. INTEREST: This is the price paid for capital. It may be fixed or determined by the forces of supply and demand for capital



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