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Production Planning and Inventory Systems in Agro-Based Industry: A Case Study of Adapalm (NIG) LTD Ohaji-Imo State

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Abstract

Adapalm (Nfg) Ltd Is a mono-product Agro-Industry and
was studied to apprafse the extent to which manageinent
technfques of productfon plannfng and fnventory cor trol system
are employed in Its operattons. The study also fnvc stfgated
the impact of fnclusfon of production plannlng techn ques of
demand forecasting and capacfty Pevellfng on produc fon efffciency
and reductlon fn raw materlal waste.
Therefore an elabomte survey was carded out through
questlonafres, oral fntervfews and the more objective method of
partfcipant observation. Facts gafned from the rev!( w of related
literature guided the development of concepts and b: ckground
upon whlch the study objectfves were assessed.
Chf-square xZ was used as the test statfstks fc r the
several hypotheses developed from our problem state nent. The
result of the evaluatfon and test of hypothese revez led thk
1. Productfon plannfng fn Adapalm of! fndustry is riot demand
oriented but revolves more on evaflability of rav. material
and as such, the use of elaborate demand forec; st fn
productfon plannfng process is not gtven enougl attehtlon.
2. Capacity levellfng technfques are employed to m: fnly respond
to upward variation fn supply of Fresh Fruft Bunch [FFB) durfng harvest peak perfods. Shfft and overtfre are the i 1 predomfnantly used capacfty levellfng techniques ~Adapalm
Wfth the availabflity of FFB, 100% capaclty utfl zation can be
achleved by Adding shfff and uslng overthe ~frnultaneously.
Flow control Inventory system is used for raw material
fnventory, achievable through vertfcal lntegratfon. Thus
vertfcal fntegratfon is used as an inventory option. Whfle the
MRO inventories are controlled wfth the ffxed ~rder quantity
system.
The test of our hypotheses shows that there f; no
signfficant relatlonshlp between the use of den and forecast
In productfon planning, and Increase in produ1:tfon efffclency
and reduction fn raw materlal waste. Whfle th :re was
slgnlffcant relationship between increase fn prt ductfon
efficiency, reductfon In raw material waste an'c the use of
capacfty levellfng technfques. Again our test ~f hypotheses
reveals that Increase fn production efficiency : nd reduction
In raw materlal waste Is sfgnfffcantly dependert on choice
of good and appropriate fnventory control sys?ern.
Finally, the study has only qualitatively asses ied the Impact
of the use of productfon planning technfques in Ad tpalm oil
Industry. It 1s therefore recommended that further studles on
quantftatlve profft data analysfs be carrfed out befc re a generalfsed ,
statement could be made as regards the benefits ac:urable from
the application of production planning techniques in Agro-based industries.