CHAPTER ONE

BACKGROUND TO THE STUDY

INTRODUCTION

          It has been established that a large percentage of the expenditure of the manufacturing industries is made up of purchase of materials, spare part, and component up to fifty percent of company’s budgets.

          The magnitude of the expenditure emphasis the importance of performing the store function in the meet effective manner possible.

          Furthermore, since materials components and spare constitute life wire of any big or small organization left and in operating store, once they are buying quantities of materials that cannot be used immediately must buy raw material according to its production schedules and keep them in the store pending the time that these materials are to be used or needed.

          Moreso, its production cannot sell at the product-produced, it stores them pending the two effective demands is made.

          The important point is that not all the raw materials and components bought are used instantly but rather some are kept temporary. Also, the outputs are storage units that are needed by the final consumers. Also, the role of stores in manufacturing industries is well emphasized that due to the importance of store department in an organization both private and public sector need a well-defined store function for effective storage of materials spare and component at a minimum economical level.

          The store function has the responsibility for the receipt custody and distribution of stocks and for the determination of appropriate quantities and qualities of the material to be held since the order that operational needs, maybe in an economic possible, therefore, store management can become an important tool for the achievement of the organization objectives.

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