An Inves

RESEARCH PROPOSAL

1.0. Title

An Investigation on the Effectiveness and Efficiency of Inventory Management at Premier Service Pharmaceuticals Standish Pharmacy

2.0. Statement of the problem

Inventory is defined as an asset acquired and maintained by an entity which are held for sale or as supplies in the business operations. It is a comprehensive listing of merchandise or stock on hand, work in progress, and raw material, finished or unfinished goods on hand.

Inventory management can be defined as policies, procedures and techniques employed in maintaining optimum number of each inventory item. The objective of inventory management is to provide uninterrupted production, sales and or customer services levels at a minimum cost. For retail outlets, inventory is the largest item in the current asset category hence inventory problems can contribute to losses or even business failures. In managing inventories the objective should be in consonance with the shareholders’ wealth maximization principle.

Holding excessive inventory for a long time ties up funds leaving the organization with very little or no funds for other opportunities of investments that may arise, thus reducing chances to grow or maximize the shareholders’ wealth and yet investing too little on inventory can result in stock outs and therefore create customer dissatisfaction.

An organization can also run a risk of pilferage, wastages, incurring high carrying costs and inventory obsolescence by stocking excessive inventory. It is therefore, very important to balance on what is being stocked and the quantities of the inventory in order to remain profitable, that is without losing sales due to stock outs and at the same time not tying up funds.

The aim of inventory management is thus to avoid excessive or inadequate inventories and to maintain sufficient inventory for smooth production and sales operations. Efforts should be made to place an order at the right time with the right source to...