Production Planning and Profitability of Selected Manufacturing Firms in Nigeria.


This research focuses on Production Planning and Profitability. A study of Flour Mill of Nigeria Plc, Dangote Flour Mill Plc, and Honeywell Flour Mill Plc was adopted. Production Planning is important in providing better and more economic goods to customers at lower investment. Inventory shortage as a result of stock out and unexpected increase in demand, supply challenge associated with inadequate capacity installation of machines, poor technology, poor capacity utilization, inability to meet budgetary target as a result of change in demand and supply variable and poor demand forecasting are established as the problem of this study. In view of the problem identified, the objectives of this study are to examine the effect of inventory shortage on turnover, to examine the problems of value added by supply chain on profitability and to ascertain the influence of budget on investment of selected manufacturing firms in Nigeria. This work is anchored on the Economic Theory of Production and Rational Economic Man Theory. Data collected for this research were based on Secondary information. Data obtained were analyzed using Ordinary Least Square (OLS) technique by the use of time series. The finding of this study shows that the estimated coefficient of the constant term is statistically significant at better than 0.1 per cent for Dangote Flour Mill Plc and Honeywell Flour Mill Plc and statistically significant at 0.6 per cent for Flour Mill of Nigeria Plc. This implies that increase in turnover (sales) lead to subsequent increase in inventory which in turn increases level of production. The increase in turnover subsequently increases profitability in Dangote Flour Mill Plc and Honeywell Flour Mill Plc. This study concludes that increase in turnover, profitability and budget are vital sources of facilitating growth in flour milling firms in Nigeria. The study recommends that flour millers should integrate their supply chain management operations efficiently to enhances their sales and profitability and also adopt the supply chain strategy/models that were developed in this study to align with their operations and target customers

Keywords: Capacity Utilisation and Budgetary Target, Production Planning, Profitability

Article Review Status: Published

Pages: 11-32 (Download PDF)

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