s6 Entrepreneurship Paper 2 Notes

TOPIC: 9.
PRODUCTION MANAGEMENT:
This is the planning, implementation and control of industrial production processes to ensure
smooth and efficient operation. Production means transformation of inputs (goods and services)
into output.
A product is anything that can satisfy a need or a want. It can also mean a set of tangible and
associated attributes capable of being exchanged for a value with the ability to satisfy consumer or
business need.
Elements of a Product:
Description: This is the product name on how it can be called. E.g. doughnut, French cut, back
bush, etc. this should be unique and appealing to customers.
Product attributes: These are the product features or characteristics that make it different from
others. They can be in form of taste, colour, shape, size etc.
Quality: This is the extent to which the product meets the customers’ needs, expectation and
requirements.
Branding: A brand is a name, sign, symbol, or design or combination of all these intended to
differentiate ones products or services from others. Branding creates customer loyalty about a
particular product e.g. Guinness beer, tusker, bell lager, Airtel etc.
Features Considered When Developing A Product:
 Consumers’ needs: It is better to develop a product that shall satisfy the needs of the
customers but not the entrepreneurs’ needs.
 Availability of raw materials: It is better to see that there are enough raw materials to produce
the required product and there is a steady supply without any interruptions.
 Decide on the shape, colour, brand name, quality and quantity of what the customers want.
This shall help to attract or discourage customers to your product.
 Competitors’ products: Decide whether it should look the same with those on the market or
unique depending on the needs of the customers.
 Potential Market: it is wise to look at the potential customers to who you expect to sell the
product. This can be looked at n for of age, sex, income level, buying behaviours etc.
 Government policy: Establish the policy of the government concerning the product you hope
to produce and set standards required for that product before producing it.
 Packaging type: the materials to be used for packaging of the product should not be neglected
as different products require different packaging in nature.
Importance of Production Management to the Business Firm:

It leads to the accomplishment of firm's objectives: Production management helps the business
firm to achieve all its objectives by producing products, which satisfy the customers' needs and
wants. So, the firm will increase its sales.
It leads to reputation, Goodwill and Image: Production management helps the firm to satisfy its
customers. This increases the firm’s reputation, goodwill and image.
It helps to introduce new products: Production management helps to introduce new products in
the market. It conducts Research and Development (R&D). This helps the firm to develop newer
and better quality products.
It supports other functional areas: Production management supports other functional areas in an
organization, such as marketing, finance and personnel. The marketing department will find it easier
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to sell good-quality products and the finance department will get more funds due to increase in sales.
It will also get more loans and share capital for expansion and modernization.
It helps to face competition: Production management helps the firm to face competition in the
market. This is because production management produces products of right quantity, right quality,
and right price and at the right time.
It leads to optimum utilization of resources: Production management facilitates optimum
utilization of resources such as manpower, machines, etc. So, the firm can meet its capacity
utilization objective. This will bring higher returns to the organization.
It minimizes cost of production: Production management helps to minimize the cost of
production. It tries to maximize the output and minimize the inputs. This helps the firm to achieve
its cost reduction and efficiency objective.
It leads to expansion of the firm: The Production management helps the firm to expand and
grow. This is because it tries to improve quality and reduce costs. This helps the firm to earn higher
profits. These profits help the firm to expand and grow.
Importance of Production Management to Customers and Society:

It promotes a higher standard of living: Production management conducts continuous research
and development (R&D). So they produce new and better varieties of products. People use these
products and enjoy a higher standard of living.
It generates employment: Production activities create many different job opportunities in the
country, either directly or indirectly. Direct employment is generated in the production area, and
indirect employment is generated in the supporting areas such as marketing, finance, customer
support etc.
It improves quality and reduces cost: Production management improves the quality of the
products because of research and development. Because of large-scale production, there are
economies of large scale. This brings down the cost of production. So, consumer prices also reduce.
It spreads effect: Because of production, other sectors also expand. Companies making spare parts
will expand. The service sector such as banking, transport, communication, insurance, BPO, etc. also
expand. This spread effect offers more job opportunities and boosts economy.
It creates utility: Production creates Form Utility. Consumers can get form utility in the shape, size
and designs of the product. Production also creates time utility, because goods are available
whenever consumers need it.
It boosts economy: Production management ensures optimum utilization of resources and
effective production of goods and services. This leads to speedy economic growth and well-being of
the nation.
Capacity Planning and Design:
Capacity planning is the process of determining the production capacity needed by an organization
to meet changing demands for its products.
Capacity Requirement Planning (CRP): It is the process of determining in detail the amount of
labour and machine resources needed to achieve the required production. This process considers the
lead time of operations and offsets the operations at work centres accordingly.

PRODUCTION PROCESS:
The production process refers to the stages required to complete a product from the idea to the final
master item ready for use/consumption. It is how the business intends to produce or procure the
desired goods or services for the final consumer or user.
Inputs Projects Outputs Objectives
Costs Interventions Outcomes Benefits
Steps in Production Process:

1) Carrying out market research to find out customers’ opinion about what to produce
2) Developing of a product idea to determine what products to produce and its shape, size etc.
3) Transforming of the idea into a product design to be put on the market
4) Sourcing for raw materials to be used in production.
5) Going into actual production of good but putting in mind the quality element.
6) Packing the product to suit customers’ requirements for easy handling and transportation
7) Branding the product to distinguish it from similar competing products.
8) Storing the product well to avoid contamination so as to maintain its quality.
9) Distributing the product to reach the customers in time by using different channels available.
10) Making customer follow-up to see the product meets the customers’ requirements and desires.
11) Making of any improvement on the product to meet the changing needs and wants.
Question to Students: ( To be checked when the term opens)

You are operating a metal fabricating workshop in your home area and you plan to diversify
to also produce bread.
(a) Prepare a programme for production process for the new product.
(b) State the objectives of developing new product ideas.
Types of Production Processes:

Job production: This is the creation of single items by either one operative or a team of operatives.
It is possible for a number of identical units to be produced in parallel under job production. Smaller
projects can also be seen as a form of job production, e.g. hand knitting a sweater, writing a book,
rewiring a house, etc.
Batch production: The term batch refers to a specific group of components which go through a
production process together. As one batch finishes, the next one starts. For example on Monday,
Machine A produces a type 1 engine part, on Tuesday it produces a type 2 engine part, on
Wednesday a type 3 and so on. All engine parts will then go forward to the final assembly of
different categories of engine parts. Batches are continually processed through each machine before
moving on to the next operation.
Flow production: This is a continuous process of parts and sub-assemblies passing on from one
stage to another until completion. Units are worked upon in each operation and then passed straight
on to the next work stage without waiting for the batch to be completed.
.

Factors Affecting Production Decisions:
Natural factors: This includes factors like climatic conditions, soil type etc. all affect production.
Production can be diminished due to natural calamities like flood, drought etc.
Technical progress: This can positively influence production. Use of improved variety, fertilizers,
insecticides etc. can give us more production.
Political factors: This will also affect production positively or negatively. Decisions pertaining to
taxation, investment or fiscal among others affects production decisions.
Infrastructure facilities: Facilities like transport, credit, storage etc. are equally important to have
more impact on production. How you are going to transport the raw materials to the production
plant plus the transferring of the finished goods from the plant to the customers is very important.
Sales promotion: The promotional activities to be used during the product sales and whether these
activities can lead to more sales are important. You have to determine the costs that are to be
involved in this process annually since this activity is a continuous one throughout years and years.
Character of people: This determines productivity. The hard workers and sincere workers always
produce more and hence it is very important factor which influences production.
Availability of market for the products: One has to first establish that there is market for the
products to be produced. This can be ascertained by carrying out market research to see what types
of goods are missing from the market and that buyers are looking for them.
Availability of raw materials: Establish that there are enough raw materials to produce the goods
or services such that there is no shortage to cause interruptions in the production process.
Techniques of production. This is very important to be considered as it will determine the quality
of output. An entrepreneur has to ensure that the methods of production to be applied will lead to
quality and quantity output to enable him compete in the market and also capture enough market
share to make him continue in the production line.
Availability of human resource: These are the people to carry out the production process. It is
necessary to ensure that there is enough personnel to enable the business produce enough goods or
services at the right time to feed the increasing demand.
Government Policies: It is very important to ascertain the government policies as regards the type
of products that an entrepreneur intends to produce. This is because there are some goods or
services which may be illegal in a particular country and hence their production being prohibited.
Expected tax to be charged: High taxes from the government will reduce on the amount of
profits earned by the firm and this may compel the business to increase the prices for the goods or
services which in the end will discourage customers from buying the products due to high prices
putting in mind the law of demand.
Competition level: One has to decide whether to produce the same goods like those on the market
or not and if so, there will be high competition which may necessitate carrying out a lot of sales
promotion activities so as to get market for your products.
Labour requirements: There is need to know the number of employees that will be required in the
production process and how much each will be paid. If the costs are high, then the firm can avoid
them and look for others.
Legal requirements: This affects the production process as you have to know the type of
production you are in to ascertain the kind of license you need. Is the business legal or illegal in the
country it is being set? Etc.
Costs of production: This should be cheap such that it does not force the final price for the
product up. If the final price for the product is high, customers may be discouraged from buying the
product.

Capital/ money requirement: This will determine the size of the firm at the same time production
level and capacity. How much is required to enable production start should be looked at critically.
Community stand: The community in which the production plant is to be set determines a lot. If
the community is against the idea, the costs may be high which may force the entrepreneur to
relocate the plant to another place.
Factors to Consider Before Producing Goods or Services:
1. Availability of market for the products: One has to first establish that there is market for the
products to be produced. This can be ascertained by carrying out market research to see what types
of goods are missing from the market and that buyers are looking for them.
2. Availability of raw materials: Establish that there are enough raw materials to produce the
goods or services such that there is no shortage to cause interruptions in the production process.
3. Techniques of production. This is very important to be considered as it will determine the
quality of output. An entrepreneur has to ensure that the methods of production to be applied will
lead to quality and quantity output to enable him compete in the market and also capture enough
market share to make him continue in the production line.
4. Availability of human resource: These are the people to carry out the production process. It is
necessary to ensure that there is enough personnel to enable the business produce enough goods or
services at the right time to feed the would be increasing demand.
5. Government Policies: It is very important to ascertain the government policy as regards the
type of products that an entrepreneur intends to produce. This is because there are some goods or
services which may be illegal in a particular country and hence their production being prohibited.
6. Expected tax to be charged: High taxes from the government will reduce on the amount of
profits earned by the firm and this may compel the business to increase the prices for the goods or
services which in the end will discourage customers from buying the products due to high prices
putting in mind the law of demand.
7. Competition level: One has to decide whether to produce the same goods like those on the
market or not and if so, there will be high competition which may necessitate carrying out a lot of
sales promotion activities so as to get market for your products.
WORK SCHEDULING:
Scheduling is the process of deciding how to commit resources between varieties of possible tasks.
Workplace scheduling is the process of ensuring that an organization has sufficient staffing levels at
all times.
A schedule is a list of employees who are working on any given day, week or month in a work place.
Work Order Form:
This is a form where the customers’ jobs are recorded showing the name of the customer, work to
be done, employee to do the work, when to start and finish the work plus the cost of the same work.
This form will have the following information:
1. Name, address and phone contact of the customer.
2. Date of the work order 4. Projected starting and finishing time of the job got
3. Work order number. 5. Description of the work to be done
6. Names of the employees to perform the job 7. Total costs of the work including taxes.

Sample of a work order form:
BANAMASAKA WIELDERS LTD
TEL: 0414 435390
Order No………………..... WORK ORDER FORM
Date: ……..……………
Customer Work Employee Starting Ending Order Job cost

Name Description to do the time / Date time / work (UGX)
and Work date No.
Address
Namukasa Door fixing General staff 10/04/2010 30/04/2010 001 2,400,000.
Jane
0752 290836
Work Schedule Form:

This is a form that specifies the work to be done, the customer’s name, when it will begin and end
and which employee is responsible for the work. Scheduling of work is important for the following
reasons:
1. It helps to make sure that work is completed on time.
2. It facilitates sequencing of time and jobs, as some jobs need completion before others.
3. It keeps the workers busy other than being redundant for the firm to lose money and time
4. It helps to coordinate work in different departments.
5. It leads to full customer satisfaction as their work is done as per the agreed time.
6. It helps to reduce work conflicts among the workers as each one knows his/her responsibility. A
work schedule for an organization can be for one day, a week or even a month.
BANNAMASAKA WELDERS LTD
P.O BOX 445 KAMPALA
TEL: 0414 435390
EMPLOYEE WORK SCHEDULE
Day Name of worker Work Description Supervisor Start End Remarks
Time Time
Monday
Tuesday
Wednesday
Thursday
Friday
Prepared By: Signature:……………….. Approved By: Signature:…………….
Name: ………………….. Must be filled in Name:……………….
Title: ……………………. Title:…………………
Date:…………………… Date:…………………

Below Is the Vehicle Maintenance Programme
AIDAH’S RESTAURANT
P.O BOX 35, JINJA
TEL: 0434 8695044
VEHICLE MAINTENANCE PROGRAMME
Day Activity Service Vehicle No. Person Responsible Remarks
Venue
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
Prepared by: Signature:………………………...Approved by: Signature:……………
Name:……………………………. Name:……………….
Title:……………………………… Title:…………………
Date:……………………………… Date:…………………
Reasons for Budgeting:
This is a summary of projected incomes and expenses of a business for a specified period of time or
It is a formal statement of management goals and objectives expressed in financial terms for a
specified period.
1. To enable forced planning: A budget compels management to plan for future. It forces
management to look ahead and become more effective and efficient in administering the business
operations.
2. To enable performance evaluation and control: It facilitates control by providing definite
expectations in the planning phase that can be used as a form of reference for judging the
subsequent performance.
3. To coordinate operations: Budgeting helps to coordinate, integrate and balance the efforts of
various departments in the light of the overall objectives of the enterprise.
4. To improve on effective communication: Budgeting improves the quality of communication.
The firm’s objectives, budget, goals, authority and responsibility and procedures to implement plans
are clearly written and communicated through budgets to all individuals in the firm.
5. To improve productivity: It increases the morale and thus the productivity of the employees
by seeking their meaningful participation in the formulation of plans and policies, bringing harmony
between individual goals and the enterprise objectives and by providing incentives to perform more
effectively.
6. To help manage by Exception: Budgeting permits to focus the management’s attention on
significant matters through budgetary reports.
7. To be efficient: It measures efficiency, permits management self-evaluation and indicates the
progress in attaining the enterprise objectives.
8. To help aim at profit mindness: Budgeting develops an atmosphere of profit mindness and
cost consciousness.
9. To aim towards optimum utilization of resources: It helps to optimize the use of the firm’s
resources, capital and human. It aids in directing the total efforts of the firm into the most profitable
channels.

10. To ensure sufficient working capital and other resources for the efficient operation of the
business.
11. To show management where effort is needed to remedy situations and facilitate management by
exception.
12. To identify the activities to be undertaken and allocate authority and responsibility. After
formalizing all the requirements for the business to start, the entrepreneur may need to establish an
operational budget.
Types of budgets:
1. Operating Budgets: An operating budget is a statement that presents the financial plan for each
responsibility centre during the budget period and reflects operating activities involving revenues
and expenses. The most common types of operating budgets are expense, revenue and profit
budgets.
Importance of operational budget:
 It helps to estimate the production cost in advance by considering anticipated items of
expenditures
 It helps to prioritize expenditures basing on the income as it shows all the items of expenditure.
 It facilitates proper pricing of products basing on estimated production cost to get the desired
profits.
 It helps in calculating the gross profit/loss basing on the estimated sales & costs of production
or costs of sales.
 It enables the calculation of net profit/loss by comparing estimated costs to planed gross profits.
 It enables the monitoring of the business as it provides the business with the direction and
purpose like the estimated sales.
 It helps to know the sources of income for business so as an entrepreneur may plan in time
where to get additional funds to finance the business operations.
Operational Budget for Kamasu Constructors Limited
KAMASU CONSTRUCTORS LIMITED
P.O BOX 530, KAMPALA
TE: 0414 526930
OPERATIONAL BUDGET FOR THE MONTH OF JULY 2016
Details Amount (Shs) Amount (Shs)

Expected Revenue 460,000,000
Expected machinery costs (160,000,000)
Expected Gross Income for the month 300,000,000
Less Expected Operating expenses:

Salaries and wages 25,000,000
Insurance and loan interest Repayment 10,000,000
Machinery depreciation 32,000,000
Other operating expense 64,000,000
Total Operating Expenses (131,000,000)
Net profit before taxation (NPBT) 169,000,000
Less Taxes (29,000,000)
Expected Net Profit after Tax (NPAT) 140,000,000

Expansionary Budget for Kamasu Contractors Limited
KAMASU CONSTRUCTORS LIMITED
TE: 0414 526930
EXPANSIONARY BUDGET
FOR THE MONTH OF JULY 2011
FOR SHILLINGS 60,000,000/=
Items Costs (Shs) Total (Shs)
Fixed Requirements
Purchase of more land 10,000,000
Building of more premises 20,000,000
Purchase of more vehicles 12,000,000
Purchase of more furniture 6,000,000
Legal charges on land purchase 2,000,000
Purchase of more gum boots 700,000 50,700,000
Working Capital Requirements:

Extension of electricity 2,000,000
Extension of water 1,300,000
Hiring & training of more labour 2,000,000
Liquid cash 4,000,000 9,300,000
TOTAL AMOUNT 60,000,000
Note: Check the language used on expansionary budget especially the fixed requirements.
Steps in Operational Budget Preparations:
1. Selecting the business goals and objectives for the period to be budgeted for.
2. Setting the activities to be carried out and their timetable/timeframe.
3. Estimating the sales projections to be made.
4. Estimating the costs of goods/services to be sold/provided
5. Calculating the expected gross profit.
6. Estimating the operational expenses.
7. Charging the tax to the difference between gross profits and estimated operating expenses to get
the tax payable.
8. Subtracting the tax from the Net profits to get the retained profit.
2. Financial Budgets: These outline how an organization is going to acquire its cash and how it
intends to use the cash.
3. Master Budget: This is an overall financial and operating plan for a forthcoming calendar or
fiscal year. It is usually prepared annually or quarterly.

QUALITY MANAGEMENT IN PRODUCTION:
Quality refers to the ability of a product to meet the customer’s needs and requirement.
Quality Dimensions / Features:
Quality of a product or services consists of the following features or characteristics.
1. Performance / Operation. This is how well the product works. For example does a car
accelerate and stop quickly?
2. Reliability. This reflects the probability of a product failing or deteriorating. For example does a
car always start on a cold morning?
3. Durability. This reflects the length of time the product takes in use before it is replaced by
another one. For example what is the life span of the car?
4. Conformance. This relates to the degree to which a product meets the pre-established
specifications. For example are all seats of a particular car adjustable to suit the required
specifications?
5. Serviceability. This refers to courtesy, speed and accuracy of repairs. For example, can a
particular car be repaired quickly in case of any damage or failure to work?
6. Appearance. This reflects personal feelings and includes such variables as looks, touch, sound
taste and smell. For example does a car look good in terms of shape, colour and size?
7. Perceived quality. Many products are judged by their brand names, images and advertising. For
example, Mercedes Benz E-class.
Some Misconceptions about Quality:
Different people have different misinterpretations or misconceptions as regards quality of services
and goods as seen below:
Price reflects quality. Other factors constant, it is assumed by many people that the higher the
price, the higher the quality of the product and or service and vice versa. This however is untrue as
goods are duplicated and charged highly when actually their quality is low. This can be seen today in
phones, shoes, matchboxes etc.
Country or Place of Origin. Many people have a perception that items made from some countries
or areas are of good quality as compared to other areas. For example it is believed that quality shoes
come from Italy. This leads people to make shoes from Katwe (one of Kampala suburbs) and label
them “made in Italy” and charge them highly.
Poor quality is blamed on workers. Employers often or at times blame their employees for the
poor or low quality of the products. This is not true because quality in any organization is a
combination of both the lower workers and the top management to blame for low quality.
Improving on quality requires more cash. It may be true that quality of products requires more
investment but some time just giving clear instructions to the employees and inspecting them can
improve on the quality of the product.
Brand name. A good brand name gives a good image and reputation to the company. This is why
people today say that Nokia phones are better than say Siemens and others
Consumers view. Different consumers have different tastes and preferences. This, therefore make
people to perceive quality differently and hence end up saying that this brand is better than that. E.g.
people who take Bell beer will say that bell is better than Nile beer and the reverse is true.
Some Common Terms Used In Quality:
1. Quality planning. These are the various steps undertaken by a firm to achieve quality.
2. Quality assurance. This means the degree to which a product actually conforms to the design
specifications.

3. Quality system. It refers to the organizational structure, procedures and resources which are
needed to implement management.
4. Quality control. These are operational techniques and activities that are used to fulfill the
requirements of quality. It also mean setting control for the process of manufacture or service
delivery. It is aimed at preventing the manufacture of defective units or provision of defective
services.
5. Quality policy. This means the overall intentions and direction of a firm with regard to quality.
Factors influencing Quality production:
1. Ensuring Customer education: This is necessary because it increases the chances that the
product will be used for the intended purposes and in such a way that it continues to function
properly and safe. Much customer education takes the form of printed instructions and labeling on
the products.
2. Buying quality raw material: Leaving other factors constant if a firm buys quality raw materials
to be used in the production, the goods produced will be of good quality but if the raw materials
bought are of poor quality, the output will also be of poor quality.
3. Ensuring quality of design: This involves decisions regarding specific characteristics of a
product or service such as the methods, material processes and equipment that will be employed.
Design decisions must take into account the wants, needs of consumers, production and service
capabilities, safety and liability both during production and after delivery and projected costs and
profits.
4. Providing good working conditions: If the working conditions are favorable at the workplace,
workers will always work hard to ensure quality products are produced. The working conditions may
be in terms of, good feeding, fair and timely payments, job security etc.
5. Conforming to design: Once the design has been selected, the operation manager must ensure
that operation follows through as intended. This involves concern of various areas like
workmanship, inspection etc. and corrective action where necessary.
6. Carrying out market research: This involves finding out the needs of the customers and
produce products that satisfy those needs. If the customers are provided with products having all
the needed requirements, then this will imply quality on the customers’ side.
7. Creating awareness of total quality management: This can be done by holding meetings in
quality management with top management, suppliers, staff and customers to create awareness of the
concept, highlighting the benefits of the concept. It must highlight the requirements for its success
and emphasizing that it is everybody’s responsibility to implement total quality management.
8. Providing a clean working environment: A clean environment in which a good is produced or
service is rendered will maintain its quality. It is assumed that unhygienic environment will greatly
affect the quality of the good or service. Therefore for quality products, a clean environment is vital.
9. Ensuring top management commitment and full involvement: This is a pillar towards the
success of any organization plan. Top management commitment could be reflected in developing
favorable policies like rewarding employees for excellence and innovativeness which will encourage
them to work hard and ensure that quality goods and services and produced.
10. Having good, clean storage facilities: Where storage facilities for goods are available and in
good conditions, quality of the goods in the same store will be maintained. This is because goods in
most cases end up being spoiled in the stores.
11. Having good and beautiful product packaging: The packaging materials and the methods of
packaging a product can affect its quality. Businesses have to pack their products well so as to
reduce on the rate of spoilage and contamination with foreign bodies and elements which could
compromise of the product quality.

12. Supplier partnerships: This should be developed to ensure that materials and other supplies are
of the highest quality. Companies / firms should choose supplies based on consistent delivery of
quality materials.
13. Forming quality circles: There should be formation of quality circles or groups among the
employees who should also meet regularly to discuss problems of quality and ensure quality control
and come up with suggestions for improvement and come up with quality products within the firm.
This will also encourage the spirit of innovativeness and team coherence.
14. Having capacity building: There should be training of staff to perfect the skills in quality
achievement and implementations. It can be done by training staff into research skills of customer
needs and should involve everybody involved in quality management. This will enable enterprises to
achieve quality goods and services and hence more customers.
15. Acquiring and using appropriate technology: Firms should adopt relevant technology to be
used in the production of goods and services to meet the international standard and enable them
compete on the world markets. The workers should where possible be trained on how to use these
technologies.
16. Ensuring functional departments’ commitment: For businesses to achieve quality products,
all the functional areas like marketing, accounting, research, purchasing etc. should be committed to
a culture of getting it right the first time. This can be done through improved inter-functional
committees formal and informal meetings and discussions to come up with the right techniques of
achieving quality products for the organization.
17. Using of quality assurance: Entrepreneurs and companies should include re-engineering and
bench marking in their processes towards attaining quality goods and services in their businesses.
18. Using proper distributional channels to move the goods from the factory to the consumers.
19. Constant monitoring and Supervision: Management has to monitor the operations of the firm
to see that workers do not divert from the set specifications and standards of the organization of
ensuring quality.
20. Specialization and division of labour: Workers should be given the work where they have
more experience and knowledge so as to produce quality output in the firm.
21. Setting and following the technical specification. If these are followed the way they were set,
good and quality products will be produced in the company.
22. Giving of clear instructions to the workers and ensuring that they follow them while working
in the firm.
23.By motivating the workers: If the workers are motivated say by paying the on time and in
relation to the amount of work done, the will work towards producing quality products.
Bench marking Is the practice of establishing international standards of performance by looking at
how world-class companies run their businesses and carry out innovative activities.
Elements of Product Life Cycle That Influence Quality:
In order to achieve high quality products, an enterprise should aim at having ZERO defects in all
areas of the organization for all phases of the process. Therefore the activities of an enterprise that
have an impact on quality are:
1. Marketing and market research. 5. Packaging and storage.
2. Product design and development. 6. Sales and distribution.
3. Purchase of raw materials. 7. Installation
4. Production of the product. 8. Technical assistance and servicing.

These activities can be presented schematically as below.
1. Market Research 2. Product design & Development
Activities of
8. T.A and Servicing 3. Purchase of raw
Product materials
7. Installation 4. Production of Product
Quality
6. Sales and Distribution

5. Packaging & Storage
Importance of Quality:
1. It crates good reputation and image: High quality products or services gain reputation on the
side of the entrepreneur and the organization. Therefore producers should always aim at production
of high quality products as this can increase on the market share for the organization.
2. It leads to international implication: Quality products produced make it possible for the
company to compete on international market.
3. It leads to reduction in cost: Good quality products will reduce on certain costs incurred by the
organization. The costs reduced may include rework costs, warranty costs, replacement costs.
4. It leads to increased market: Quality products increases customer satisfaction through
providing the required goods and in the end the customers will buy more of the products hence
increased market or sales.
5. It is a pre-requisite to comply with quality standards: It shows that the entrepreneur or
manufacturers has complied with the quality standards prescribed or set by the relevant authorities
and the customers in particular.
6. It enables selling goods at a higher price: People always attach quality with high prices.
Therefore when an entrepreneur produces high quality products, he can charge them highly and
hence earning more sales and profits.
7. It leads to reduction in liability: Organizations that pay special attention on quality always
reduces on their potential liabilities due to damages or injuries resulting from faulty designs or
workmanship.
PURCHASING SKILLS:
Purchasing means the process of acquiring materials and components needed for production and
maintenance of business.
Key Principles of Purchasing:
Right delivery place: The products should be delivered at the right place in order to reduce the
costs and time on the side of the buyer when carrying them to the end user department.
Right quality: The quality of the products should be the right one as required by the buyer and as
agreed up during the signing of an agreement between the supplier and the buyer.
Right quantity: The amount of the products or items supplied should not be less than those that
was agreed upon. The amount to be supplied is determined by the user department.
Right time: The items required should be supplied at the right time to enable the user be able to
use them at the appropriate hour. Therefore good timing for purchase is essential to avoid late
supply and running out of stock due to late supply which may lead to stoppage in production.
Right price/ costs: The items to be supplied should not be inflated to deny or deprive the user
value for money.
Right supplier/ source: The products should be supplied by the right agreed upon person and
source. This comes as some countries prohibit importation of some goods from some countries due
to some reasons. The reasons may be poor quality, political differences etc.
Factors to Consider When Choosing Suppliers of Raw Materials:
1. Terms and conditions of payment: One would choice a supplier whose terms of payments are
reasonable. These terms may include credit purchase or cash basis. In most cases, producers prefer
suppliers with favorable terms that may include discounts, credit facilities etc.
2. Lead time: This is how long it will take to order and receive the goods needed. An entrepreneur
should therefore select a supplier who can deliver the required items on time.
3. Mode and transport availability: The buyer should consider the mode of transport depending
on the nature of the items to be purchased. One should also consider whether the goods are bought
locally or internationally as the transport costs will vary.
4. Taxes charged: The taxes charged on the product will have an impact on the price of the same
product. Therefore one should look at the different taxes charged both in the supplier’s country and
the buyer’s country and one should choose a supplier where taxes are not too much.
5. Quality of the material to be supplied: This comprises of the features which are relevant to
the ability of the materials to meet a given need as specified by the buyer during the time of looking
for the materials. Therefore the choice of supplier should look at the quality, as garbage in garbage
out i.e. poor quality bought will result in poor or low quality of products.
6. Price comparison/ cost of the materials: Different suppliers have different prices; therefore
the buyer should consult different suppliers to select one whose prices are friendly and cheap.
However price should go hand in hand with quality of the materials.
7. Quantities available for supply: The buyer should select a supplier with sufficient or enough
quantities to enable constant supply of the material. If the quantities are few, they may be forced to
look for another supplier in the middle of production process which may be expensive in terms of
costs and time given the procurement procedures to pass through.
8. Ease of communication: An entrepreneur should choose a supplier whom he / she can easily
communicate to or access whenever there is need for any supply of the inventory items.
9. Risk of damage: It would be wise to buy raw materials that do not easily get damaged as this can
increase the costs of production.
10. Raw material location: The location of raw materials to be used in production is very vital as if
they are near the factory, production costs can be minimized as compared to those which are far
from the plant. This is most likely to increase the transport cost and hence final price.
11. Amount of raw materials to be held in store: This may depend on the company as others will
balance the costs involved in holding a lot stock in store and the costs of continuous ordering for
the same raw materials. Others however will consider the rate at which the finished goods are sold
and if the rate is high, then they are most likely to have a lot of raw materials in stock.
12. Level of material wastage: Businesses prefer to use raw materials with less level of wastage so
as to reduce on the costs of acquiring the same materials and also reduce of the production costs.
13. Amount of units of raw materials used per production cycle: If the business uses more
units in its production, more units of raw materials shall be used but if less units are used then less
units shall always be bought.

Purchasing Procedures:
1. Receiving of material requisition form: This is raised by the department in need of materials. It
is raised to the stores department and if the materials in store are not enough, then an officer in
charge of store will inform the purchasing department about the need for materials. The materials
requisition form will normally include quantity of materials required, expected date of delivery, the
person responsible who has signed the material requisition form.
KAMPI HOLDINGS LTD
TEL: 0703086760
Producers of good quality natural water
Number:………………… Purchases Requisition Form

Date:…………………….
Required by:……………….. Department:……………………………….Date required:………
Material Description Code No. Quantity Required Remarks
Requisitioned by: Signature:…………… Approved by: Signature:………….....

Name:………………. Name:………………...
Title:………………… Title:………………….
Date:……………… Date:…………………
2. Making of an Inquiry: On receiving a purchases requisition, the purchases department sends
letters of inquiry to different suppliers requesting them to quote prices for the supply of materials
mentioned on the letter. Sometimes, the purchasing department may maintain a list of suppliers
from whom to choose the suppliers for the required items.
KAMPI HOLDINGS LTD.
P.O BOX 4544
KAMPALA
TEL: 0752 833909
KAMPALA STATIONERS LTD
PO BOX 3004 Inquiry No. P/2094
KAMPALA AN INQUIRY Date: 21st March, 2020
Dear sir/ madam,

Please quote us your prices, terms of payment and terms of delivery for the items below.
QUANTITY DESCRIPTION
50 English dictionary Longman
10 Boxes Coloured chalk
Your faithfully
…………………
Kinene Dogo
Purchasing manager
3. Receiving of Quotation: After receiving an inquiry, the producer/ supplier responds by sending
a quotation which will clearly state the price, product specification, lead-time, terms and condition of
payment and warranties if any.
TEL: 0703086780 No: B309
KAMPI HOLDINGS LTD Date: 22ND MARCH, 2020
P.O BOX 4544 KAMPALA QUOTATION
Dear sir,
In response to your letter of inquiry No. P/2094, dated 21st MARCH, 2020, the details are
below.
Quantity Description Unit Price (Shs) Total Price (Shs)
50 Copies English Long man 40,000 2,000,000
dictionary 8,000 80,000
10 Boxes Coloured chalk
Delivery/ Payments: Three days from receipt of your order and 50% down payment and the
balance within 30 days after delivery
Discount: 2% on cash balance if paid within the specified time.
We look forward to receiving your order.
Yours faithfully
………………
Gaali Enkoseeko
Sales Manager
4. Placing of Purchases order: This is a document that authorizes the selected supplier to go
ahead and supply the inventory items. It is normally prepared in copies where the original copy is
sent to the supplier and the other duplicates sent to the receiving, finance and the stores
departments.
KAMPI HOLDINGS LTD
P.O BOX 4544 KAMPALA
TEL: 0752 833909 Date: 23rd/04/ 2020
KAMPALA STATIONERS LTD Order No. 507
P.O BOX 3004, KAMAPALA LOCAL PUCRCHASE ORDER Delivery date: 30th/04/ 2020
Dear Sir,
Please supply and deliver the following items.
QUANTITY DESCRIPTION UNIT PRICE TOTAL AMOUNT (SHS)
50 Copies Longman dictionary 40,000 2,000,000

Coloured chalk 8,000 80,000
10 Boxes
Enclosed is a cheque No. 0092018302 for Shs. 1,040,000, 50% deposit. Delivery and discount
terms are as per your Quotation No.021 dated 22nd March, 2020
Your faithfully : Authorized by:

………………. …………………….
Kinene Dogo Kabotoongo John
Purchasing Manager Director Managing

5. Sending of Goods Delivery Note: This is a document sent to the buyer alongside with the
goods. On receiving this document with the goods, the goods should be checked properly to ensure
that quantity specifications tally with the physical goods received. If on inspection goods are
accepted, a goods received Note is raised. A person responsible for receiving these goods will sign
both the Delivery Note and Goods received Note and thereafter goods sent to the store.
TEL: 0703086780 Note No. 37907
Date:…………
To:………………. DELIVERY NOTE
M/S:……………..
Please receive the following goods / items in their good condition.
Quantity Description
I have received the above goods in their good conditions.

Received By:
Signature:………………
Name:…………………
Title:…………………..
6. Sending of Package Sheet: When the supplier packs goods to be supplied to the customer, he
will always send them with a package sheet showing the goods packed. If the goods are packed in
three containers, three package sheets will also be prepared. This sheet is prepared in quadruplicate,
the original placed inside the case, a copy sent to the buyer with the delivery note, a copy to the
accounts department and a copy retained by the suppliers for future records.
POBOX 3004KAMPALA
TEL: 0703086780
No. 3902
PACKAGE SHEET Date: ………………
TO: ………………
P.O BOX ………….
TEL: ………………
This package contains the following goods / items
No. Description Quantity
Packed by: Signature:……………. Checked by: Signature:…………..

Name:…………. Name:………………
Title:……………. Title:………………...

7. Preparation of the Goods Received Note: This is sent alongside with the goods and signed by
the person receiving the goods from the supplier. It is prepared in triplicate, one copy sent to the
accounts department to await the arrival of the invoice and provide evidence of the safe arrival of
goods. The second copy to the stock control section for entering the receipt of goods on the stock
control card and the last copy to the purchasing department.
KAMPALA STATIONERS LTD.
TEL: 0703086760
Purchases Order No. 507 Number: 780
Received from ……………….. GOODS RECEIVED NOTE Date:…………..
……………………………….
I have received the following goods / items in their good conditions
Serial No. Description Code No. Stock Code No. Quantity Rate (Shs) Amount
Counted by:………………………… Approved by:………………..

Inspected by………………………… Received by:…………………
9. Returning of Rejected items: In case some of the goods received are damaged or do not
conform to the specifications, they are returned to supplier. Goods may be returned due to poor
type, wrong colour, wrong size, damaged in transit etc.
TEL: 0703086760
TO: GOODS RETURNED NOTE
………………………. No: 0092
………………………. Date:………….
Please accept the following goods as returned
QUANTITY DESCRIPTION REASON
Please issue us with a Credit Note.

Signature:………………….
For: Kampala Stationers Ltd
10. Sending the Debit Note: This is from the buyer to the seller showing the goods returned plus
the reasons for the return. This may be due to overcharge, wrong goods supplied among other
reasons and asking the supplier to reduce the amount demanded from the buyer.

KAMPI HOLDINGS LTD
PO BOX 4544 KAMPALA
Tel: 0752 833909
To: KAMPALA STATIONERS
DEBIT NOTE
P. O BOX 3004 Note No. 4/89
KAMPALA Date:10th/04/2020
Details/ Description Per Unit Total
50 copies of Longman dictionary 40,000 2,000,000
Less 5 copies not required (200,000)
1,800,000
Signed by:………………….
For: Kampi Holdings Ltd
11. Sending of the Credit Note: This is a document sent by the seller to the buyer notifying him of
the reduction in the amount he owes to the seller due to an over charge made on the invoice or
good supplied have been returned to the supplier.
PO BOX 3004 KAMPALA
TEL: 0703086760
To: KAMPI HOLDINGS LTD
P. O BOX 4544 CREDIT NOTE Note No. 4/89
KAMPALA Date:10th/04/2020
Details/ Description Per Unit Total
50 copies of Longman dictionary 40,000 2,000,000
Less 5 copies not required (200,000)
1,800,000
Signed by:………………….
For: Kampi Holdings Ltd
11. Preparation of an Invoice: This is prepared by the seller to the buyer indicating the total
amount of goods sold to him/her on credit. It will show the type of goods, unit price, total amount,
quantity sold/supplied and the terms of payment.
P.O BOX 4544KAMPALA
TEL: 0703086760
TO:………………………. Invoice No: 3012
P.O Box:…………………. SALES INVOICE Date:…………..
……………………………
…………………………..
Quantity Description Unit Price (Shs) Total Amount (Shs)
E&OE Signed by:……………..

Terms: 10% Discount if paid within one month. For Kampala Stationers Ltd

12. Raising Cheque payment voucher: This is prepared after all the corrections have been made
and there is need to pay the supplier for the goods received. It is followed by the cheque in the
names of the supplier and hence closing the transaction process with all document stamped on
PAID.
Cheque Payment Voucher
KAMPI HOLDINGS LTD
PO BOX 4544 KAMPALA
Tel: 0752 833909 Voucher No: 8091
CHEQUE PAYMENT VOUCHER
No…………………………Cheque No:…………………….Date:………………………
PARTICULARS AMOUNTS
TOTAL
Prepared By: Date:
Checked By: Date:
Authorized By: Date:
Received By: Date:
13. Preparation of the Cheque: When all corrections in the invoice have been made and a cheque
payment voucher has also been made, a cheque in the names of the supplier shall be written to
effect the payment for the goods supplied or services rendered. See the sample below for the
cheque.
Cheque Sample
Date………… GLOBAL TRUST BANK 000453 06200000069
KAMPALA ROAD BRANCH
To:………….. Date:…………….
A/C Payee Only
Pay:……………………………………………………………….Or Order
Old Bal:……...
Deposit:……. Ugandan Shillings:………………………………………UGX
Total:……….. ………………………………………………………………………………..
Total:………..
KAMPI HOLDINGS LTD
New Bal:……. 000453 06200000069
Cheque Foil

Programme For Purchasing Business Goods:
BADO POULTRY FARM
TEL: 0752 833909
PROGRAMME FOR PURCHASING BUSINESS GOODS:
Date Activities Person(s) in Charge Remarks
Determining the business needs
Identifying the potential suppliers by sending
letters of inquiries
Do fill Receiving quotations from the potential Fill in Leave
in suppliers. It empty
Contacting the potential suppliers.
Sending the Order Note for goods supply
Checking the goods on arrival
Crossing checking the invoice for accuracy
Raising the cheque payment voucher with a
cheque for payment of the good.
Prepared by: Approved by:
Signature:………… Signature:………..
Name:…………….. Fill in all Name:………….. Do not fill in
Title:……………… Title:……………
Date:……………… Date:……………
TYPES OF INVENTORY:
Inventory refers to the goods held by the business for sale. The types include:
1. Raw materials: These are the goods which are not yet committed to production process. They
may still be in the store of the business.
2. Work-In-Progress (W.I.P): These are partly finished goods which are held between
manufacturing stages. They have been committed to production process but have not yet been
completed.
3. Finished goods: These are completed products ready for sale or distribution. They can be sold
directly to the retailers or the final customers.
4. Service materials: These are materials for maintenance purposes like cleaning oil, etc.
5. Consumables: These are items that aid in the production of goods or services. They are not part
of finished products. They are sometimes referred to as Support inventory. For example fuel and
stationery.
Inventory Management:
Inventory management is the process of efficiently overseeing the constant flow of units into and
out of an existing inventory.
Costs of Holding Inventory:
1. Ordering costs: These are costs of placing an order with the supplier. The greater the quantity
ordered, the less the ordering costs. Examples include costs of transport / delivering items, costs of
placing materials to the store, administrative costs of paper work, costs of contacting supplier.
2. Holding/carrying costs: These are costs of keeping stock in the store. Examples include,
insurance costs, costs of rent, lighting, costs of depreciation of items, costs of capital held in
inventory (opportunity cost).

3. Stock out costs: These are costs that a firm meets when it gets inventory shortages i.e. when they
run out of stock for sale. They include loss of future sale, cost of stoppage in production, damage of
original reputation, costs of failing to fulfill emergence orders.
The Major Objectives of Inventory Control/ Management:-
1. To meet demand fluctuations: Fluctuations in demand are common therefore there is need to
maintain suitable stock for safety to absorb variation in demand from customers.
2. To allow flexibility in production: There is need to allow flexibility in production scheduling
and marketing as keeping higher levels of finished goods relieves the pressure on the production
system.
3. To minimize financial investment in inventories: This refers to the capital being blocked in
the inventory. Capital required in carrying inventory costs, money and holding assets in form of
inventories results into decreased liquidity.
4. To maintain timely records of inventory: There is need to maintain timely records of
inventories of all items and maintain stock within the desired limits.
5. To prevent of inventory theft: Inventory need to be protected or prevented from theft, wastage,
loss, damage and unauthorized use by organization workers or any other person.
6. To reduce holding surplus stock: It is necessary to avoid excessive stocking and take
appropriate measures to bring stock down to a reasonable level, hence reducing investment in stock
which may deny taking money to other activities which would bring in more money.
7. To minimize the value of consumed materials: Proper control of materials from the time
orders are made with the suppliers up to when the materials are used is important.
8. To provide the desired level of customer service: Customer service refers to a company’s
ability to satisfy the needs of its customers. Therefore companies hold inventory items such that
they are able to satisfy their customers whenever need raises.
9. To achieve cost-efficient operations: Inventories can allow a company to maintain a level or
work force throughout the year even when there is seasonal demand for the company’s output. At
the same time large purchases of inventory might qualify for quantity discounts which will also
reduce the unit cost of each item.
Techniques of Inventory Management:
Re-order level: It is a system where a replacement of inventory is made such that delivery of the
items will be made when stock levels are at minimum. An inventory manager fixes a minimum level
below which stock should not fall before ordering for new stock. When stock reaches the set
minimum level, a new order is made.
Re-order level diagram:
Maximum level
Inventory
Control Re-order level
Level
Minimum level
BUFFER STOCK
Period of time
Periodic Review system/ fixed time-re-ordering: This is a system where an inventory manager
will always fix particular periods for checking on the level of different stock items for example every

first day of the month, every Monday of the week for first moving consumer goods. If he finds the
stock below a specified level, he will make an order. This system is also called Top up system.
Profitability Technique: Here the inventory manager bases on consumption in previous
corresponding periods to determine how much to buy. For example if during the last Christmas
period he sold a lot of beer and got much profits, then this Christmas period will buy and stock
much beer but if the sales were less and made less profits, he will stock less.
ABC System: The system focuses on categorizing inventory items basing on a given value of stock,
turnover rate for an item. For example if the rate of turnover of an item is high, he will always stock
much stock for the same item.
Economic order quantity: It is an optimum level of stock to a company. The precise level of this
will vary in different firms and industry. Therefore a particular firm will have to balance between the
costs of holding stock and the cost of ordering for the same stock.
Just –In –Time Method: This is a purchasing and control method in which materials are obtained
just in time for production to provide finished goods just in time for sale. The system only requires
goods or services when the customer requires it.
Ways / Tools Used To Control Inventory in Store:
Physical stock taking: This is where the available stock is physically counted to determine what is
available and cross check with what is expected to be on the stock card to enable the storekeeper
know the remaining amount of stock.
Inventory labeling: This is probably the most important. Especially if you have a large warehouse
of merchandise, it is absolutely essential that everything is clearly labeled so that all replenishment
stock can be placed in the proper area with no hesitation or uncertainty, and also that any outgoing
merchandise can easily be located for shipping or sale.
Using purchases requisition document/ form: This originates from the stores to the purchasing
department indicating the various items needed in the store. Normally the purchasing department
bases on this to make purchase orders. See the format on page 207.
Stock reconciliation: After carrying out physical stock taking, if any discrepancy was found it has
to be corrected so as to help the store keeper make fresh orders or not.
Stock rotation: When new stock arrives, it is filed into the inventory kept in the warehouse behind
any current stock of the item. This allows for older inventory to move out to the sales floor or to the
ordering customer first. When you rotate stock, you keep out any of your inventory from becoming
outdated and useless. Therefore, stock rotation is one of the most important inventory techniques
you can employ to achieve success in stock control.
Stock valuation: This refers to the determination of the costs of the inventory items in the
company. The inventory items that are valued are raw materials, work-in-progress, finished goods
and any other inventory items. Therefore stock can be valued to determine their costs.
Store Record Card: This is a document where information regarding items kept in the stores is
recorded. It has the following details: materials received and date of receiving them, costs of
materials received and quantity, description of quantities issued out and the remaining balance.

Stock Record Card Sample
MBAATA TRADING CO. LTD
TEL: 04142894290 CardRECORD
STOCK No: 8910 CARD
Name of item::……………………………………..Item No…………………………………

DATE RECEIPT ISSUES BALANACE ISSUED AUTHORIZ
TO ED BY
Qty Rate Amount Qty Rate Amount Qty Rate Amount
Method of Issuing: First In First Out (FIFO)

Recorded by: Signature:………….. Checked by: Signature:……………
Name:……………. Name:………………
Title:………………. Fill in Title:………………… Do not fill in
Date:……………… Date:………………..
Stock Requisition / Issue Form: It is a well-prepared document that is required by the

storekeeper to issue out materials from the store. It should bear the following information: Date
when it is raised, person who originated it from the user department, quantities required and the
authorization officer.
TEL: 04142894290
No: 250
STOCK REQUISITION
Date:.........................
FORM
Please issue the following materials from the store
QUANTITY DESCRIPTION
Required by:.......................... Position:.................................... Signature:........................

Date required:.......................
Stock control sheet: This is also used to determine the amount of inventory items in the store of
the business. It is very vital in any business that holds stock items in their store. It works in the same
way like a stock card.

TEL: 04142894290
STOCK CONTROL SHEET
Product description:....................................................... Unit Weight:..............................
Date Receipts Issue Closing Balance Description Sign
Recorded By: Signature:…… Checked By: Signature:……….

Name:……… Fill in Name:…………..
Title:………... Title:…………… Do not fill
Date:……….. Date:…………...
STOCK CONTROL SYSTEM:
Stock control system is responsible for the correct establishment of stock levels for every item held
in an organization. The system takes care of the response to customer requirements in form of re-
order levels, minimum levels and maximum levels. There are basically two forms of stock control
systems; namely the Manual and Computerized system.
Manual system is where adjustment of stock levels and other activities in the management of
supplies are performed manually like manual stock taking.
Computerized system is where a computer is programmed to perform the functions of adjusting
the stock records automatically. However the quality of the data and efficiency of the system
depends on the people entering the data or information.
Need For Inventory in an Organization:
Need for inventory means the reasons as to why it is necessary to have inventory stock in business.
1. To avoid loss of sale especially when the customers demand for goods.
2. To reduce ordering costs like typing costs, mailing, transport costs.
3. To achieve efficient production run so as to avoid shortage of raw materials during production.
4. To meet speculations about future prices.
5. Appreciating items since some items the longer they stay in stock, the more value they gain.
6. For promotion purposes whereby during the promotion period the business cannot know how
much the customers will demand and therefore the need to have much inventory.
7. Due to long lead-time, some items take long lead-time, organizations may keep them to avoid so
8. Due to seasonality issues where due to changes in the weather conditions, we cannot know how
much we shall harvest during a particular season or period and therefore the need to enough or
some inventory items in the stores such that during a bad season we have some items for sale or use
the production chain.

PRODUCTION MACHINERY FOR GOODS:
The range of resources bought by organizations varies largely depending up on many factors that
differentiate organizations. The bought out/ purchased items may include: capital equipment, raw
materials, components, merchandise, and in many firms services.
Different Types of Capital Items Bought By Firms:
Buildings: These are permanent construction on site to house or enclose equipment and personnel
employed in industrial, institutional or commercial activities.
Installation equipment: These include plants and machinery or other major equipment used
directly to produce the organization’s goods and services.
Accessory equipment: These are durable major equipment used to facilitate the production of
goods and services or to enhance the operation of a firm. Examples include motor vehicles,
motorcycles, etc.
Operating equipment: These category includes semi-durable minor equipment which are
moveable and use in but not generally essential to the production of goods and services. E.g. gum
boots, gloves etc. their absence cannot stop production to take place.
Tools and Instruments: These are semi-durable or durable portable minor equipment and
instruments required for producing, measuring or calculating associated with the production of
goods or services. E.g. tape measure, weighing scale, ruler, T-square for carpenters etc.
Furnishing and Fittings: These are the goods and materials employed to fit buildings for the
organizational purposes but not specifically used in production. E.g. floor covering, carpets,
furniture, shelves and counters etc.
Factors to Consider When Buying Capital Equipment:
Purposes of the equipment: The prime purpose of buying the equipment should proceed on other
uses before buying capital items.
Flexibility: This deals with the versatility of the item i.e. can the item be used for other purposes
other than those it was bought or acquired for.
Compatibility: This is to do with the ability of the item to be used with the already existing
machinery or items. It would not be wise to buy items which would necessitate throwing the already
existing.
Reliability: It is better to buy items that will not easily break down as this can cause delays in
production process.
Guarantee from the manufacturer: Before buying and acquiring machinery, the buyer would look
for a manufacturer / supplier who can offer guarantee in terms of repair in case it is damaged with a
specified period, replacement in case it does not work or fit with those already available etc.
Durability: Most buyers of capital equipment prefer buying those that can be used for a long period
before they are beyond repair.
Cost of maintenance: Items bought should not be expensive to maintain, e.g. items whose spare
parts are hard to get locally, items whose technology is hard to get or copy would not be good to be
bought by an organization.
Costs of installation: It is very important to ascertain whether the purchase price includes
installation costs or not. This is because for some capital items the cost of installation is very high.
Miscellaneous factors: These include; space requirement for the item, safety aspects, issues to do
with the environment in terms of noise, air pollution etc.
Operation costs: This need to be looked at as the operation costs of the equipment should be low
and affordable by the firm.

Initial costs of the items: The costs of buying the capital items should relatively low and affordable
but not expensive.
Production capacity of the machinery: The production capacity should be high to match with the
current demand for the products so as to enable the entrepreneur also meet his/her customers’
demand but if it cannot meet the demands, then the items should not be bought by the firm.
Guarantee given by the manufacturer: It is better to buy items from manufacturers who can offer
guarantee such that in case of any problem then the entrepreneur can run to the suppliers for a
replacement or repair.
Sources of machinery and equipment: This should be reliable than not reliable source of these
items.
Complexity of the work to be done:
Productivity and efficiency of the items:
Policy Guidelines for Handling Machinery:
1. Employees shall not start any machine of which its operation is not known as it may cause
accidents
2. Oiling and lubrication of machines shall be done according to instructions from the
manufacturer or supplier or manual.
3. In case of any machinery break down during use, the employee(s) shall report to the immediate
supervisor.
4. Employees shall not directly use or allow the use of machines for other activities other than the
officially approved one by the company.
5. All machines shall be installed with warning devices in case of any danger.
6. Movement of heavy machines shall be done with the help of cranes or lifts or other devices.
7. No employee shall remove company machines without permission from the authority.
8. Access to machines by unauthorized persons is strictly prohibited.
9. Employees shall check the machine to ensure that all levers are in proper position before
switching them off.
10. Employees shall ensure that machines are stored in places free from moisture to avoid rusting.
Service Schedule for Business Machines:
Business Name And Address
Service Schedule For Business Machines
Date Of Type of Nature of Technician Venue of Date of Remarks
Service Machine to be the Service to Service the Service The Next
Serviced Service
Designed by: Approved by:

Signature:………………… Signature:……………………
Name:……………………. Fill in Name:……………………….
Title:……………………... Title:…………………………

PLANT LAY OUT DECISION:
Plant lay out is the arrangement of machines, workstations, storage areas etc. in an already existing
or proposed facility to ease the production process or the offer of the services. A facility layout has
an implication on quality and productivity.
Principles of Plant Layout:
1. Integration of all factors: The plant should integrate all the essential resources of men, machines
and materials in order to give an optimum level of production.
2. Minimum Movement: The less the movement of men, machines and materials, the less will be
the cost of production. Thus, minimum movement of these resources will provide cost efficiency.
3. Unidirectional flow: All materials should progressively move towards the same direction i.e.
towards the stage of completion. Any back-tracking should be avoided here.
4. Efficient space handling: The space used up during the plant work also costs money as more
the space required, more will be the floor rent. The materials should be organized in stacks in a
proper and recognizable order to maintain space efficiency.
5. Inherent safety: The environment of the plant should be safe for the workers as well as the
machines. There should be fire extinguishers and fire exits placed strategically. There should be
minimum contact of the labour to toxic chemicals and environment.
6. Maximum observation capacity: The layout of the plant should be in open such that all of its
resources and workforce can be observed and evaluated at all points in time. This helps in better
supervision of work and helps in increasing both effectiveness and safety.
7. Maximum accessibility: The layout of the plant should ensure that all essential resources are
accessible to the labour and machines without any delay. The aisles should be free from obstacles.
The materials should be placed as close to the machines concerned as possible.
8. Minimum Handling: The ineffective handling of materials leads to a rise in cost. Materials
should be handled in stacks and transferred in one go. Handling of a material twice in the same
direction must be avoided to avoid delays and costs.
9. Maximum protection: The layout should ensure the protection of the materials and machines
while they are in the working or the storage stage. The security system should be efficient without
making too many doors or barriers.
10. Maximum flexibility: The plant layout should not be rigid and permanent. If the need arises,
the plant layout should be able to change itself without being expensive.
11. Disposal site: When deciding on the plant lay out, it is also important to consider an area for
disposal of waste from the factory than dumping the waste anywhere.
12. Room for expansion: It is important to put in mind the space for future expansion of the
business. This is because as more customers buy the products, more money comes in and this
provides the need to expand the facility to match increasing demand for the products.
13. Storage facilities: There is also need to consider room for storing materials in terms of raw or
finished goods.
Determinants of Plant Layout Design:
 Human needs: While deciding on the plant layout, human needs or requirements should be
considered. These needs include toilets, washing rooms, drinking water facilities; all these should
be arranged adequately for the employees and other people within the organization.
 Safety arrangements: While designing the plant layout, human safety should be looked at with
care. It should be planned to allow free flow of people, goods and raw material in and out of the
factory. It should have enough ventilation, light for sight etc.
 Easy repair and maintenance: The layout should be properly designed so as to allow
engineers have easy movement or access to machine for repairs and maintenance.
 Factory building: The nature and size of the buildings determines the floor space available for
layout. In designing special requirements for air conditioning and dust control, the nature and
size of the building must be considered.
 Plant environment: It is better to consider enough light in and ventilation to provide a
conducive, health and safe environment for the workers.
 Type of machinery: Machines which are bought to be used for general purpose are always
arranged as per process layout while those for special purpose or use are arranged according to
product layout.
 Nature and size of the factory: This determines the floor space required especially in welfare
facilities.
 Nature of the product to be produced: For uniform products, process layout in more suitable
as compared to other forms.
 The production process: In manufacturing businesses, process lay out can be more
economical as compared to assembling firms where product line layout is better.
Elements of a good plant layout:
Security Section: The lay out should have an area where security guards operates from and should
be near the gate for the premises.
Parking Yard: The lay out need to have an area where company trucks and employees or visitors of
the company park their vehicles.
Receiving and Dispatching Section: There should an area for receiving the firm’s raw materials
and where goods to be sold are delivered from.
Ware House Section: The lay out should show a place where finished goods or raw materials for
production are kept before use or selling them.
Machinery or Processing Section: This where the production machinery is assembled to form the
production process.
Maintenance Section: The lay out should have an area where repair, cleaning and general
maintenance of the company vehicles is done from.
Emergency Section: The lay out should have an area for emergency exit by the workers in case of
any fire outbreak in the business.
Production Section: This is an area where the actual production for goods takes place.
Welfare Facilities: There should be area where workers dress from, have lunch and breakfast from,
toilets, plus where workers can rest from in case one is not feeling well.
Generator Room: There should be a good ventilated room for generator plus a generator on
standby in case power goes off so as o enable continuous production.
Waste Disposal Section: The firm should have an area where to dispose off the remains and
unused parts in production. This need to be well kept and maintained.
Advantages of a Good Layout:
 It minimizes overall process time and costs. This is because of the reduced unnecessary
handling, movement and general increase in effectiveness of all the work.
 It simplifies supervision and production control. This is achieved by elimination of “hidden
corners” in which information and materials can be misplaced.
 It leads to feeling of unity among the employees. This will be encouraged by avoiding
unnecessary segregation.
 It leads to high total output. This will be ensured by maximum effective use of available space.
 It leads to increased quality output. Quality of goods and services will be sustained by safer and
better methods of production.
 It leads to accommodation of changes in organizational programmes since it was planned during
the layout process.
 It leads to minimal discomfort on the side of the employees and employer due to the sufficient
lighting, low or no noise etc.
 It leads to minimal rate of accidents because of safety precaution put in plans during the
designing of the layout.
Plant layout for a bank:
Teller 1 Teller 2 Teller 3 Teller 4 Accounts

Place
Resting
Opening
Security
Dining Hall
Section
DOOR
Customers’ waiting area
Toilets
Branch Customer
Manager Care
Manager
Plant Layout for Manufacturing Firm:
Kitchen
GATE Security
Dining Hall Staff and Visitors
Parking Yard Office
Block
Dispatch
Administration
Section
Block
Finished
Goods
store
Sickbay
Raw
Material
Generator Factory Building store
Toilet House
s Emergence Exit

Production Control:
These are activities involved in handling materials, parts, assemblies, and subassemblies, from their
raw or initial stage to the finished product stage in an organized and efficient manner. It may also
include activities such as planning, scheduling, routing, dispatching, storage, etc.
Aspects in the Production of Goods and Services:
A) Quality control. Quality control is a process that is used to ensure a certain level of quality in a
product or service. It might include whatever actions a business deems necessary to provide for the
control and verification of certain characteristics of a product or service.
B) Technology and Technical Skills: Technology is the process of applying the findings of
science and other forms of enquiry to applied situations. Production technology therefore involves
applying the work of researchers to develop new products and processes.
C) Production Processes: These are mechanical steps used to create an object, usually repeated to
create multiple units of the same item. It involves the use of raw materials, machinery and
manpower to create a product.
COSTS OF PRODUCTION:
Prime Costs: These are costs that are directly involved or charged to the production of the product.
They include direct labour involved in production, direct materials plus other direct expenses.
Indirect Costs: These are costs which occur in the factory or other place where production is being
done, but which cannot be traced to the items being produced. These include: wages of cleaners,
rent expenses, depreciation of plant and machinery, factory power and electricity etc.
Total Production Costs: These are all the costs incurred in the production of the product. It
includes the total of prime and indirect costs.
Administration Costs: These are the costs such as the managers’ salaries, legal costs, secretary’s
salaries etc.
Selling and distribution Costs: These are costs involved in ensuring that the product is made
available to the final consumer. They include salaries and commissions of the sales team, advertising
expenses, hire of van to be used in advertising, transportation of goods costs etc.
Elements of Costing:
1. Direct Cost:
It is that element of cost in which we can include the cost of direct material and direct labour. If we
take its total, it will be prime cost.
Direct Material Cost: Direct material is that material which we find in finished product and easily
measures its cost. For example, for making furniture, woods are direct material and its cost will be
part of direct cost.
Direct Labour Cost: Direct labour is used for producing the product. We pay wages to labourers
for making product and this cost will be a direct labour cost.
Direct expenses cost: Except direct material and direct labour, all direct expenses will be direct
expenses cost.
2. Indirect Cost
Overheads: When we cannot charge an expense directly on the product, we can say it is indirect
expense or overhead. In overhead, we can include indirect material cost, indirect labour cost and
other following indirect expenses. Manufacturing overheads, administrative overheads, selling

overheads and research and development cost. Factory rent and rates, insurance of plants or
telephone bill are the main examples of overheads.
Example:
The following information relate to the business of Mukwano Plant Limited for the year ended 2013
Inventory of raw materials as on 1st January 5,000,000
Inventory of raw materials as on 31st December 7,000,000
Raw materials purchased 80,000,000
Direct wages 210,000,000
Royalties 1,500,000
Indirect wages 90,000,000
Factory rent 4,400,000
Depreciation of factory plant 4,000,000
General indirect wages 3,100,000
Required: Prepare the final account for Mukwano Plant Limited for the year ended 2008
Mukwano Plant Limited
Production/ Manufacturing Account
For the year ended 2013
Shs Shs.
Opening inventory of raw materials 5,000,000
Add Purchases 80,000,000
85,000,000
Less closing inventory of raw materials 7,000,000
Cost of raw materials consumed 78,000,000
Royalties 1,500,000
Prime Cost 289,500,000
Add indirect production cost:
Rent 4,400,000
General expenses 3,100,000
Depreciation of factory plant 4,000,000
101,500,000
Production cost of completed goods 391,000,000
Exercise: ( Do this work please)

1. The information below relates to the business of Para Manufacturing Limited for the year ended
December 31st, 2019. Shs.
Inventory of raw materials on January 1st 10,500,000
Work-in-progress as at 1st January 2,400,000
Finished goods as on January 1st 14,300,000
Innovatory of raw materials on December 31st 10,200,000
Inventory of finished goods on December 31st 13,200,000
Work-in-progress on December 31st 2,900,000
Purchase of raw materials 27,200,000
Factory wages: Direct 72,600,000
Indirect 13,900,000
Carriage inwards 700,000

Rent and rates 1,200,000
Electricity 2,000,000
Depreciation of machinery 3,900,000
Repairs to factory buildings 1,300,000
Sundry expenses 900,000
Sales for the year 160,400,000
Required:
a) Cost of raw materials used In production (c) Production of finished gods
b) Prime cost (d) Gross profit (e) Cost of goods sold.
Costing Methods:
Job Costing: Under this method costs are ascertained for each work order separately as each job
has its own specifications and scope. Examples: Painting, Car repair, Decoration, Repair of building
Contract Costing: Under this method, costing is done for big jobs which involves heavy
expenditure and stretches over a long period and is often undertaken at different sites. Each contract
is treated as a separate unit for costing. E.g. Construction of bridges, roads, buildings, etc. comes
under contract costing.
Batch Costing: This method is used where the units produced in a batch are uniform in nature and
design. For the purpose of costing, each batch is treated as a job or separate unit. Industries like
Bakery, Pharmaceuticals etc. usually use batch costing method.
Operating Costing or Service Costing: Where the cost of operating a service such as nursing
home, Bus, railway etc. This method of costing is used to ascertain the cost of such particular
service. Each particular service is treated as separate units in operating costing.
Process Costing: This is used for the products which go through different processes. For example,
manufacturing cloths goes through different process. First process is spinning. The output of
spinning is yarn. It is a finished product which can be sold in the market to the weavers as well as
used as a raw material for weaving in the same manufacturing unit. For the purpose of finding out
the cost of yarn, the cost of spinning process is to be ascertained. The second step is the weaving
process.
Multiple Costing: When the output comprises many assembled parts or components such as in
television, motor car or electronic gadgets, costs have to be ascertained or each component as well
as the finished product.
Unit costing/Single output costing. The method is used for products which can be expressed in
identical quantitative units and is suitable for products which are manufactured by continuous
manufacturing activity. Costs are ascertained for convenient units of output. Examples: Brick
making, mining, cement manufacturing, dairy, flour mills etc.
Determinants of Costing Method:
The nature of the product or service: The costing approach designed for identical products is
completely different from the one designed for different products because the processes and
resources they require will never be the same.
The stages / processes the product passes through: Products that pass through a series of
stages cannot have the same treatment as those which are not subjected to any stages. Therefore
different costing methods can be designed to suit the different processes used by different
companies.
Level of activity or Output: Identical and high volume output requires a cost method which is
different from unique and single units that are produced to meet consumer’s specific requirement.

Installation and Maintenance cost required: Systems that are required to capture and analyze
production costs do not require the same costs. The costing method to be used in place by the firm
may therefore be influenced by costs involved.
Time required completing the product: Products do not take the same time to make. It is
therefore important for companies to design costing methods that suit the time duration of every
product.
Measures To Reduce The Costs Of Production In An Enterprise:
1. Allocating of duties and responsibilities: Management can give responsibilities to the workers
such that there is no duplicate work and also reduce conflict on the jobs by the workers which will
consume time as resource.
2. Studying the production technique: The workers should study the methods of production to
ensure that they can use them efficiently and effectively. This will make workers use the technique
properly without difficulties and produce goods on time without learning on the job which
consumes a lot of time and other costs like rent and salaries when they are not producing.
3. Buying of cheap raw materials: An entrepreneur should find favorable and cheap sources of
raw materials. However, being cheap should not compromise the quality of the same raw materials.
For example, if A sells raw materials at UGX 1,200 and the quality is poor and low, B at UGX 1,500
and C at UGX 1,800 but the quality of raw materials from B and C are high and the same, then we
shall buy from B but not A as the quality is poor and C is costly.
4. Using supportive facilities: Supportive facilities like cranes, pulleys, G-clap should be
introduced to ease and reduce the handling of goods by the workers and this can reduce the
production costs.
5. Having proper accountability of funds: The cashier or the accountant should properly
account for the funds received and paid out in the business and ensure that no money has been
spent out without having been budgeted for and allocated for that expense.
6. Controlling the lead time: The time gap between ordering and receiving the raw materials
should be minimized and controlled to ensure that there is no shortage of raw materials in the store
to interrupt the production process. If the raw materials are not available, it will mean that there is
no production and yet costs like rent costs, salaries or wages among others are being paid.
7. Fixing of standard time for operations: There should be setting of latest time to finish
particular activities or an operation such that workers can work within that time limit and ensure that
work is completed without delay. Where this is not done , workers may do work at their own
interval and waste a lot of time on particular activities doing few work with a lot of time taken.
8. Training of workers properly: Workers should be trained to acquire the required skills needed
to produce goods for the company without delay.
9. Ensuring quality output: Management must ensure that the goods produced are of quality and
the consumers are satisfied with them. This will reduce costs of re-work, replacement after the
customer has returned the product, being sued by the customer because the item has harmed him /
her as a result of negligence by the company during the making of the product.
10. Monitoring / supervision of the workers: There should be constant monitoring and
supervision of the employees of the organization to ensure that the workers do not waste time and
resources of the business like raw materials and time.
11. Separating of storage bins: Management should separate and label bins well for storing both
finished goods and unwanted items in the business. This will eliminate chances of workers putting
the required goods together with unwanted items which can make the required finished goods being
contaminated and hence reproducing them again which consumes resources.

12. Encouraging specialization: Specialization among the employees should be encouraged such
that each one can do or work where he / she know better. This will enable workers to produce a lot
of goods in a less time and hence saving time and eliminate the possibility of try and error method in
production.
13. Properly laying out the production process. Arrangement of machines, workstations, storage
areas etc. in an already existing or proposed facility to ease the production process or the offer of the
services than delaying which consumes time and costs of the firm.
Specific Business Control Systems:
A) Cash: This is the money both in hand and in the bank for the business. Proper control of cash
in a business is very vital to minimize cash theft, frauds among others. The following can help in
controlling and minimizing all the above.
1. Receipting and counting all the cash received in the business plus balancing physical cash and cash
records at the end of each day.
2. Documenting all cash payments and having it authorized by the entrepreneur personally or
authorized official.
3. Controlling all cash receipts and payment vouchers plus other related documents for
accountability and kept well and safely for reference.
4. Banking all the cash received in the business each day and the day’s payments withdrawn from the
bank.
5. Keeping the cash that remains in the business under lock or safe to ensure cash security.
6. Carrying out internal transfer in the accounting section by the entrepreneur than particular
cashiers remaining in one place or office for a long time without any transfer.
7. Receiving the business bank statements regularly and reconcile it with its cashbook balance to see
the actual balance at the bank.
8. Avoiding spending the firm cash by the entrepreneur on personal matters as the business is a
separate entity from the owners.
9. Signing against the money received in cash payment voucher on receiving money to how evidence
of paying and receiving the money.
10. Avoiding many people to receive and handle money in the business to limit or avoid money theft
and frauds.
11. Employing qualified auditors at the end of the trading period to balance and audit the business
books as inaccuracies can be found during this process and advises given on how to solve them.
How Proper Financial Management / Control Can Improve
The Quality of the Products in an Enterprise:
a) Using the funds available to purchase quality raw materials that guarantee production of quality
products.
b) Using the available funds to hire skilled personnel that can efficiently produce final goods.
c) Using the available funds to carryout market research to gather information on product quality
from customers and come to produce products of customers’ wishes and needs/expectations.
d) Using funds available in acquiring efficient distribution channels that can maintain the product
quality up to the final consumer.
e) Motivating of the employees by using monitory and non-monitory rewards as the workers will
perform well on the job to produce quality products/services for the customers.
f) Using the available funds to buy quality machinery and also clean service and repair the available
one to ensure that they are in position to produce quality goods.
g) Using the available funds to provide good storage facilities like stores or warehouse that can
maintain the product quality.
h) By using the available funds to renovate the business premises for quality service delivery or
production especially for the service businesses.
i) Using of the available funds to train the workers through seminars and workshops to equip
them with the required skills to produce quality products.
B) Physical Assets: These are the resource held by the business at a particular period of time.
Ways of Controlling Fixed Assets of the Business:
 Having Assets register: A register book can be used to record the assets of the business like the
furniture, computers, buildings, calculators etc. Review your physical assets regularly against your
asset register and investigate any missing items. Make sure this is done irregularly not just on 30
June.
 Labeling the Assets: Company assets can be controlled by labeling them in the company names
and assigning the some unique numbers for identification e.g. KSL/001/2014 etc.
 Physical security such as locking premises, using security cameras, safes etc.
 Restricting access to access codes for the asset by outsiders except trusted employees only.
 Changing computer passwords regularly.
 Avoiding giving one employee total control over a process.
 Making sure that there is an independent check on processes and procedures.
 Having firewalls and protective devises on computer systems.
 Having clear guidelines on personal use of assets of the company.
 Ensuring proper management supervision.
 Locking laptop to desks computers and data projectors as popular targets for theft.
 If your office entrance is located near the street or a staircase ensure hand bags and petty cash are
well locked up at all times.
 Allocating a staff member to be responsible for any expensive items, ensure staff knows the
location of the asset and lock it away when not in use.
 Reviewing your physical assets regularly against your asset register and investigate any missing
items. Make sure this is done irregularly not just on 30 June.

Assets register book:
EMBOKO ENTERPRISE LIMITED
TEL: 0752833909 Sheet No. 076
ASSET REGISTER BOOK:
Date of Asset Quantity Cost Price Depreciation Life span Current Recorded
Purchase Name (Shs) Rate (%) (Years) Value (Shs) by
Checked by: Signature:…………………

Name:……………………..
Title:……………………….
Date:………………………
Internal Control for Small Businesses:
Internal controls are methods or procedures adopted in a business to safeguard its assets, ensure
financial information is accurate and reliable plus assist in achieving the businesses' objectives
Purposes of Internal Control:
• Helping align objectives of the business: To ensure thorough reporting procedures and that
the activities carried out by the business are in line with the business's objectives
• Safeguarding assets: Ensuring the business's physical and monetary assets are protected from
fraud, theft and errors
• Preventing and detecting fraud and error: Ensuring the systems quickly identify errors and
fraud if any and when they occur
• Encouraging good management: Allowing the manager to receive timely and relevant
information on performance against targets.
• Allowing action to be taken against undesirable performance: Authorizing a formal method
of dealing with fraud or dishonesty if detected.
• Reducing exposure to risks: Minimizing the chance of unexpected events in the company.
• Ensuring proper financial reporting: Maintaining accurate and complete reports required by
legislation and management and minimizing time lost correcting errors and ensuring resources are
correctly and efficiently allocated.
Benefits of Internal Controls System:
Good communication: Well-written documentation not only gets your message across, but also
builds a picture of the culture and processes that have been established to ensure the firm meets its
aims.
Education: The existences of internal controls help new employees learn the right way to do their
job and the correct procedures needed to fulfill a task.

Error reduction: Good and clear internal controls procedures minimize errors and save time and
money. It helps ensure business information is correct and that staffs are accountable for their
actions.
Protection and authorization: Internal controls give comfort to staff that they have protection if
they have acted in the way prescribed by the internal controls and within their authorization limits.
The business cannot blame you if you have acted in good faith and within the guidelines specified.
Perceptions of detection: The existence of internal controls act as a deterrent for those
considering fraud increasing the risk they will be detected.
TECHNOLOGY IN PRODUCTION:
Technology refers to the know-how, design and intellectual input of doing things. This means that
technology can change from time to time. Technology is the process of applying the finding of
science and other forms of enquiry to applied situations.
Types of Technology:
There are mainly two types of technology, i.e. Indigenous and advanced technology.
1. Indigenous Technology: Technologies employed by the native inhabitants of a country and
which constitute an important part of its cultural heritage and should therefore be protected against
exploitation by industrialized countries.
Characteristics of Indigenous technology:
 Indigenous technologies emerge from the implicate order to reflect the art of skillful living.
Indigenous technology is pragmatic. It is responsive and responsible to the ecology in which it
lives.
 Indigenous technologies attract the learning spirit(s) and provide a learning ecology that supports
the revitalization and transformation of awareness and knowledge.
 Indigenous technology is intended to enhance the ability to maintain and renew balance and
harmony within a multi-dimensional environment.
 Indigenous Technology is created within a sensory environment that builds on our sense of
relationship, meaning, balance, feeling, memory and place as well as sight, sound, smell, taste and
touch.
 Through meaningful interactions Indigenous technology seeks to engage and evoke significant
knowledge and experiences reflective of the Indigenous world.
 Indigenous technologies have the obligation to come into existence, to be used and to transform
within an ethical space that is responsible to life in all its forms.
 Indigenous technologies have intrinsic value because we know their ancestry where they came
from, what their place is in our world.
2. Advanced Technology: This is the technology that has developed from modern science
principles. It is also subdivided into three:-
Assistive technology: This refers to all equipment and technology, both hardware and software,
that assist people who are blind, deaf blind or have low vision to access or participate in a particular
activity or range of activities.
Transferred Technology: This is the process of skill transferring, knowledge, technologies,
methods of manufacturing, samples of manufacturing and facilities among governments or
universities and other institutions to ensure that scientific and technological developments are
accessible to a wider range of users who can then further develop and exploit the technology into
new products, processes, applications, materials or services.

Appropriate technology: Is the technology which is most suitably adapted to the conditions of a
given situation. Or. It is the technology that is compatible with human, financial and material
resources that surrounds its application.
Features of Appropriate Technology:
Flexibility: Technology changes almost every time therefore appropriate technology should be
flexible enough to adapt to the changing needs of the company and prevailing environmental need.
Cost effective: The technology should match with benefit derived from using it by the company.
The overall benefit should at least be higher than the price of the technology acquired.
Simple: It should be easy to be used by the current personnel but not again employing of other
workers to use it. The people in the firm should be able to use the technology without difficulties.
Durability: The technology acquired should be able to be used in the firm without breaking down
and running obsolescence easily in a short time.
Effectiveness and Efficient: The technology acquired should be able to help in the production of
goods or services within the shortest possible time. However these goods or services should be of
quality to match the company set goals and objectives.
Easy to maintain: The technology should be easy to maintain with the local spares than requiring
importing them from outside which may be costly. The spare parts should at least be available
locally.
Environment-friendly: Large scale industrial technology creates pollution and is responsible for
global warming, climate change, sea-level rise, glacier melting etc. Appropriate technology
encourages the use of renewable resources and discourages the use of coal and oil.
Benefit the community. Appropriate technology advocates argue for the use of high technology
involves the use of costly components, which are not available to low-income earners or to low-
income communities. This should change so as to benefit the community than leaving them out.
It should utilize local materials available without sourcing them from outside.
It should create jobs with local skills and labour available.
Factors Influencing the Choice of Technology:
Availability of financial resources: Availability of money to buy/purchase a particular technology
will determine the type and nature of technology to be acquired by a business. A company that has
enough money can be in position to buy the type of technology desired as compared to one without
enough finance.
Availability of power: Since power to run the technology acquired is very important, in case it is
not available it may be hard to acquire the required technology by the firm but if it is available, it
may be easy to acquire the desired type of technology.
Availability of spare parts: A company will be very much interested in acquiring the type whose
spares parts can easily be got and the same time that is easy to repair using the available manpower.
Market conditions: If there is a high demand for a particular product but whose production is low
due to the use of only manual labour, the company may decide to acquire some technology to enable
it produce more goods to match the increasing demand from its customers as compared to one with
low demand.
Product to be produced: If the product to be produced by a particular company requires some
form of technology, the company may be forced to acquire that technology to enable it in its
production process.
Skilled man power requirement: If the company requires a specific technology to use and there
are skilled personnel to run or operate that technology, it will be easy for that company to acquire
the same technology as compared to one without the skilled personnel to operate the technology.

Government policy: The government may restrict on the type of technology to be used by
companies and hence making it hard for some companies to acquire their desired technology. This is
common especially where the technology may be a hazard to the people around plus the
environment.
Easy absorption: If the technology to be acquired can easily work with the existing technology, it
will be easy for the firm to buy than if it requires replacing all the existing as this may be costly on
the side of the firm.
Investment cost: The relationship between capacity and investment cost is an important factor to
consider. This is because the investment cost per unit of capacity reduces as the plant capacity
increases and hence making initial cost one of the factors to consider when choosing the choice of
technology.
Technological requirements: The requirement for technology by particular industries producing
particular items will determine the technology required. Industries involved in the production of
juice will require different technology from those producing iron sheets and cement, books, clothes
etc.
Market conditions: If the demand for the product is likely to be high, it is better to choose
technology which can cater for high capacity production but when it is likely to be low, the choose
technology of smaller capacity but put in mind the provision for expansion.
Feasible normal capacity: It is better to look at technology which can produce a large
volume/number of units in a given period during the manufacturing stage than a less volume.
Role of Technological Advancement in Business:
Improving productivity: Advanced technology leads to increase in the production of goods or
services and hence making the goods available for customers.
Increasing resource utilization: The resources that would have remained idle and unused by
businesses can be exploited with the advanced technology available.
Promoting competition: With the application of advanced technology, businesses can produce
quality products for their customers and hence leading to competition in businesses.
Reducing operational costs: With the automation of the production process, costs of production
can minimize costs of labour.
Improvement in customer satisfaction: With the use of advanced technology, customers can get
their goods on time, make orders of time and all these makes the customers satisfied.
Enhancing labour knowledge and skills development: Technology makes workers get more
skills and hence compete for different tasks which can lead to ore production.
Minimizing resource wastage: Advanced technology ensures that the resources which were being
wasted by use of labour will reduce drastically.
Increasing profitability of the firm: Because of increased production and improvement in delivery
of goods to the customers, more sales are likely to be made and hence more profits for the business.
Structuring Time for Increased Productivity:
There are a few tricks you can use to keep your mind on track and your productivity up.
Make use of hidden time: This is the time that was previously misused or mismanaged. Make this
time productive in your activities. This could the time you were sleeping when there was some work
to be done, weekends etc.
Manage interruptions: If you work in an office or firm you will find that people are a constant
source of interruptions (especially your boss) focus on projects and work achievements try wearing
headphones while you get tasks completed, stand up when someone comes in your office to help
accelerate the conversation or create a do-not-disturb sign while you try and get things done.

Schedule yourself first: Book an appointment every day that is focused on you. This might include
exercise, mediation, quiet time, reading, self-development or all of the above.
Avoid shifting priorities: This happens when you are not sure what is more important and react to
crises. For people with shifting priorities, pain is the thing that causes the shift and the focus for
them is to stop this pain at all costs. Usually, it makes them feel overwhelmed and stressed.
Effective Time Management Techniques:
Setting Goals: Set yourself specific and clearly defined goals and make sure they are realistic and
achievable.
Making priorities: You need to decide what tasks are urgent and important and focus on these.
This is called prioritizing. It is important to list the tasks you have and sort these in order of priority,
then devote most time to the most important tasks. This avoids the natural tendency to concentrate
on the simple, easy tasks and to allow too many interruptions to your work.
Avoiding Procrastination: It is important that you manage your fear of doing things you do not
want to do and realize that the fear is often far worse than any possible negative results. Try to take
decisions now when possible and when you do not need to get more information pertinent to the
decision.
Rewarding/ motivating yourself: After performing a task and succeeding, celebrate, enjoy and
reward yourself for the achievement made out of your hard work. This will encourage and motivate
you to do more tasks and keep you looking for more tasks to be accomplished.
Spending time planning and organizing: Since failing to plan is planning to fail, take time to plan
and organize the tasks that you have to perform. If you need instruments to help in performing the
tasks, organize and bring/acquire them in time before starting the tasks.
Breaking down tasks: Break goals down into components so that you can accomplish them one
step at a time. Write these steps down and try to be as specific as you can when you do this. Try to
complete one task before you go on to the next.
Eliminating urgency: Avoid urgency in your work as this can lead to short term consequences.
Learn to work towards reducing urgent things and put your energy on important issues.
Saying no to none-essential tasks: Consider your goals and schedule before agreeing to take on
additional work. Set your goals to be accomplished and ensure that you work upon them well as you
say NO to none important issues.
Persevering: Not all things will always run smoothly as you progress towards your goals. When
things are not working out, try to persevere and learn how to take a positive attitude towards
frustration and failure.
Setting deadlines: It is better to set deadlines for all projects worked on. Some clients will need you
to finish by a specific date, but others will have more flexibility.
Taking down notes: Have always a small book to record down important issues for future
reference and also the next tasks to be accomplished.
Taking a break when needed: Too much stress can derail your attempts at getting organized.
When you need a break, take one. Take a walk.
Being action-oriented: Once you have decided to solve specific issues and problems, outline your
next course of action and then go to do it.
Being reflective: This is the act of learning from the past, present and future activities to see what
are required to be done next. So reflect on the past to see where you failed and how to do it now.
Working in blocks of time: Try as much as possible to do important tasks in a block of three or
four hours during the day when you feel you are more effective and still fresh.

Asking question before working: Before starting to work, make sure that you answers for
question like what do I have to do: who do I have to do it? Why do I have to do it? When do I have
to do it?
Setting start and stop times: When arranging start times, also arrange stop times. This will call for
some estimating, but your estimates will improve with practice. This will allow you and others to
better schedule activities.
Planning for tomorrow: By the end of the day’s activities, plan for the next activities to be done
the next day such that you are aware of where to start from tomorrow.
Reception /Counter Book (Register)
MEEME TRADING COMPANY LIMITED
TEL: 0752833909
Vistors’ Book
Date Visitors’ Name Address Reason (s) Signature Comments
Guidelines for Effective Time Management in an Enterprise

 Setting periodical goals by the company to be achieved by the workers.
 Setting of deadlines for achieving the set targets by the company.
 Having annual work plan/road map to be followed when carrying out the business activities.
 Recognizing the company employees for achievements/targets made on time.
 Setting arrival time for all the workers at the work place say 7:30 am daily and leave at 5:00 pm.
 Having half annual assessment and evaluation of the workers in regard to set targets.
 Stopping private work be done during the normal working hours by the workers.
 Stopping workers to use the business property or machinery for private business without getting
permission from the authority.
 Setting work time tables and schedules and strictly adhered to.
 Warning bells shall be used for the different activities and programmes of the company.
 Monitoring and supervising the workers during working hours to avoid time wastage.
 Using the time rate system as a method of payment for the workers.
 Limiting personal visitors during working but only during the breaks.
 Improving good reporting relationship should be put in place to ensure harmony at all times in
the enterprise.
Time Management Planning:
Time management is a technique for the allocation of the manager’s own time by setting goals,
assigning priorities, identifying and eliminating time wasters and use of managerial techniques to
reach the set goals effectively.

Advantages of Good Time Management:
 It allows the entrepreneur to relax and do recreational activities
 It reduces the stress level of the entrepreneur as he completes activities s planned and on time.
 It leads to more productivity of the goods or services
 It leads to one focusing on the relevant tasks and hence improves on the entrepreneur
performance
 It enables one to predict the results and control situations
 It leads to gaining of self-confidence as one is able to plan work properly and take good
decisions
 It leads to healthy life as an entrepreneur adopts to scheduling tasks and space time for doing
exercise and health related work
Arrival and Departure Time Book
GOODLIFE RESTAURANT
TEL: 0752 905180
ARRIVAL AND DEPARTURE TIME BOOK
Date Employee Name Post Time In Time Out Signature
Indicators of Time Wasting In an Enterprise:

 Having unnecessary and too long meetings in the organization.
 Allowing too many interruptions during work.
 Having no specific set targets and being disorganized.
 Engaging in gossips at work discussing personal and other non-organization issues.
 Being late or absent for work and yet there is much activities to done.
 Lack of administrative hierarchy in the organization.
 Having too many role conflicts.
 Having no time warning instruments like bells, wall clocks etc.
 Being indecisive (inability to settle issues) on the side of the entrepreneur or manager.
 Having unnecessary long procedures or too much bureaucracy.
 Engaging in little or no delegation of activities by the superiors.
Consequences of Time Wasting In an Organization:
 Time wasting leads to delays in production of goods/services in the enterprises.
 Lowering the sales volume of the organization and hence less revenue and profits.
 Poor and late service delivery to the business customers.
 Leading to organizational resource wastage.
 Leading to customer dissatisfaction as they get services/goods late.
 Leading to poor and bad employee-employer relationship in the firm.
 Leading to less/low business productivity.
 Destruction of teamwork among the employees of the organization.

 It puts the organization at a competitive disadvantage which may make it to be out competed.
Controls Used To Have Proper Time Management:
 Being flexible and able to adjust depending on the situation or need.
 Learning to say no to non-issue or unnecessary matters.
 Spending time to plan and organize the issues to be done at a particular period.
 Doing the right thing at the right time.
 Eliminating the issue of urgency in doing things.
 Developing / having a list of things to be done
 Setting goals to be achieved by the organization.
 Setting the start and end time for every activity.
 Rewarding self for the activity well done which can encourage more thinking.
 Considering of the biological time.
 Avoiding being a perfectionist.
 Practicing the art of intelligent neglect.
Paper Three: Case Study-Time Management
It is 4:00 am in the morning and Anyango wakes up. She tunes on the radio to listen to her favorite
programme up to 6:30 am. There after prepares to set off to Lumino High School and by 8:30 am,
she is at the school gate late by 30 minutes.
While at school, she dodges some lessons to go for betting where she realizes some money on good
days but in most cases she losses. She mainly uses school fees and she is always chased from school
due to failure to pay fees in time although it is always given to her by the parents at the term start.
On daily basis, Anyango comes home at 2:00 pm, listens to other favorite programmes up to 4:00
pm. She does house chores until 5:00 pm and thereafter helps in the preparation of dinner, eats and
washes the dishes. She washes her uniform and hangs them to dry inside the house. She then listens
to a sex talk show on the radio for those looking for lovers which take two hours. She starts her
homework at 8:30 pm to 10:30 pm and retires to bed. By the morning hours, the uniforms are not
yet dry so she “dries” them with a flat iron as she irons them.
Lumino High school has 600 students and each paid admission fee of Shs. 30,000/-, each pays
school fees of Shs.200,000/- per term, uniform Shs. 60,000/- per year, food Shs. 70,000/- per term,
laboratory fee Shs. 15,000/- per year, medical fee Shs. 30,000/- per term. The school incurs salaries
to 16 teachers each Shs. 260,000/- per month, for the three months per term, and Shs.1,400,000/-
for the support staff, per term, URA taxes Shs. 1,480,000/- per year, directors’ allowances Shs.
900,000 per term, other sundry expenses Shs. 4,640,000/-. Only 16 students on average default
school fees per term and the school has always arrears to suppliers of beans Shs. 1,350,000/- per
term.
Tasks: (i) What are the weaknesses of Anyango?
(ii) Advise her on how to overcome those challenges
(iii) What lessons can you learn from the case study?
(iv) Prepare the income statement for Lumino High School for one year.
(Please this work above)

PACKAGING:
Packaging is the wrapping of the products in special containers to protect them from contamination
and bad weather that can affect their quality.
Methods of Packaging Products:
Bottling or Canning: This is the putting of goods in the bottles or cans. It is common with liquid
foods like drinks, drugs etc.
Bagging or putting in bags: Here products are put or packed in bags. This is common with
clothes etc.
Putting in plastic containers: Here, products are packed in plastic containers and it is common
with drinks, powder, perfumes etc.
Baling or Tying in bales: This is commonly used in paper trims and waste paper, beverage
containers, plastic wraps, fiber such as cotton wool, tobacco etc.
Tinning or putting in Tins: Here products are packed in tins after production. Examples of
products tinned are drinks, powders, tablets etc.
Putting in boxes: This is packaging products in the boxes. This is common for products like
flowers, spare parts for cars and bicycles, mineral water and other tangibles, books etc.
Why Package The Products:
 To protect the products: Good packaged materials are usually strong enough to protect the
contents from rough handling and external conditions.
 To preserve the products: Packaging is a means of preserving the contents. Goods especially
food products and chemicals are protected against atmospheric germs and contamination.
 To be transported easily (portability). Well packaged goods are easy to handle and transport
to customers especially liquids, cereals etc.
 To help in promotion: Goods packaged well and attractively create a good product image. This
facilitates the selling of the products because the customers can easily identify them.
 To provide for self-service: This is only possible when the products are well packaged in
containers, boxes etc.
 To enable easy distribution: Well packaged goods can easily be delivered to customers like by
mail order service etc.
 To enable ease handling and selling them: Well packaged goods can be handled well and
sold by automatic machines as compared to those that are not packaged.
 To display instruction labels: Prices are always displayed on packaged goods which helps the
customer for easy guidance and questioning about the product prices.
 To provide relevant information: Packaging the product helps in providing information like
the ingredients used in producing it, sugar contents to those who do not like sugar, expiry date
for the product, name of the producer and location, address etc.
 To differentiate the product: Packaging helps in distinguishing the product from those of the
competitors such that yours can easily be identified by the customers.
 To help in portioning: Packaged products can be in different sizes according to weights,
volume or length. This therefore makes it easy to handle them and also people to buy depending
on their financial capacity.
Factors Considered When Choosing Packaging Materials:
Cost of product and materials: It is better to cost the cost of the packaging materials such that the
costs are not too high to affect the final price for the product by making it expensive to the
customers.

Consumer expectations and requirements: Another important factor in packaging decision is
what the consumer requires and expects from a packaging. As we marketers love to say “Consumer
is the king” so the consumer expectations are important in deciding the packaging materials.
Retail space: As the retail space is becoming costly and scarce with every passing day, the
manufacturers are coming up with innovative and space efficient packages everywhere, so as to
ensure cost control without compromising on adequate exposure to the customer.
Transportation: This decides the type, size, material and shape of the package to be used package.
Goods to be transported by road would have a different package as compared to those to be
transported by Air. The package has to ensure that product is not damaged during transit and at the
same time should not escalate the cost of transportation too much to make it impractical.
Government regulations: Governments have clearly defined policies and legal requirements on
packaging of various products and it is required by manufacturers to adhere to that. Packages that
are not easily bio-degradable could draw customer and possibly governmental concern.
Social norms: Social norms and the usage behavior of people also play an important role in
deciding on the packaging to be used for various products. People in different countries use same
products in a different ways and as a result the packaging in which it is offered differs from country
to country.
Product nature restrictions: Manufacturers have to use proper packaging to ensure that product is
stored optimally for usage when required without being damaged. Products could sometimes react
chemically with the packaging material if not properly chosen and be rendered useless. For e.g. Acid
could only be packaged in glass bottles and containers because only glass could store acid without
being melted.
Raw material availability: In order to ensure that the cost of packaging is kept under check and
also to ensure ready availability of packaging, it is important that the raw material is available locally.
If the raw material for making the packaging is imported from another country, it could greatly
increase cost of product.
Value addition: Many types of packing could be used for one particular product but manufacturers
will tend to choose the packaging that adds most value to their products.
Supply chain requirements: Every manufacturer takes its products to the final customer through a
supply chain involving retailers, wholesalers and other middlemen. A manufacturer would have to be
careful to choose a packing that meets the supply chain requirements i.e. is easy to store, transport,
pack, display etc.
Product usage: Various aspects are involved in this particular factor like how the product will be
used, when it will be used, for what purpose. Based on these factors, a product might be available in
various packaging types to make the product suitable for particular usage. For restaurant usage
tomato ketchup is packed in big plastic containers.
Level of consumer education: If a product is new or has a new usage or requires a particular level
of expertise, then it is necessary to educate the consumers about how to use the product, so as to
make sure its smooth usage.
Product handling: The way a product has to be handled can go a long way in deciding the
packaging type to be used. Delicate products like glassware or electronics that need careful handling
are packed in corrugated boxes whilst supported by thermal coal sheets to ensure its safety against
breakage.
Mode of sale: If a product is sold via wholesaler-retailer-consumer, the products are packaged in a
big package so that it is easier for wholesaler to store and transport bigger packages and it is easy for
retailer to buy a big package and then sell individual units as per customer convenience.
Target consumer: Consider various demographics and social aspects of their target audience in
order to be able to decide on a packaging. A packaging for elderly people will have to make the
product easy to access and use, whereas products for kids have to be packed in tamper-proof,
attractive packages.
Level of competitors: The packaging of the product used by competitors also goes a long way in
helping a manufacturer determine the packaging of the product.
PRODUCT LIFE CYCLE (PLC):
This is the course of the product sales and profits over its lifetime. It involves five distinctive stages:
Product development Stage: This begins when the company finds (conceives) and develops a new
product idea. During this stage the company investment costs accumulates or are high.
Introduction Stage: It is a period of slow sales growth as the product is introduced into the market.
At this stage, profits are non-existent due to heavy expenses of product introduction like sales
promotion activities.
Growth Stage: This is a period of rapid market acceptance and increasing profits on the side of the
business.
Maturity Stage: It is a period of slowdown in sales growth because the product has achieved
acceptance by most potential customers, profits decline because of increased expenditure to defend
the product against competition from new entrants (free entry) in the market due to much profits.
Decline Stage: It is a period when sales of the product fall off and profits chops. Due to high
competition, the product will be forced to close off from the market. It should be noted that not all
products follow all the product life cycle. Some products are produced and die quickly while others
stay in the maturity stage for a long and long time and the later pick up. Not all products will
experience withdraw from the market. E.g. refer to Airtel when MTN came, it had challenges but
was not withdrawn.
Withdrawal: Here there is down turn in the market and the product is removed from the market.
More innovations are made, intensive price cutting, there is change in customers’ tastes and many
companies remove their products from the market.
Product life cycle curve:

Sales
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
Withdrawal
Time

Paper Three: Case Study:
Sarah operates a restaurant in Nakasero Market amidst other restaurants. She is very hard working
and opens the restaurant very early to serve morning tea and closes very late after serving supper to
her customers. The restaurant is famous for its delicious, quality, traditional and a variety of other
dishes.
She employs other workers to serve customers promptly as she collects payments. She buys all types
of daily newspapers in addition to a television set installed in the restaurant to make her customers
not bored. Every customer who buys food is always given a free glass of either water or juice.
After serving customers, she bids them farewell and requests them to come back again next time as
well as telling others to also come and she does this with a cutting smile on her face. The restaurant
is open all the year round which has made her customers build trust and confidence in it.
The employees are well motivated to avoid the costs of labour turn over. The competitors are now
jealous about her restaurant and they think she uses charms to attract customers. She has so far
received two certificates of quality assurance from UNBS and she now wants to change the
restaurant into a Hotel though she still fears that this would push the price beyond the reach of her
customers. She had not taken up any insurance policy concerning the business or anything.
She employs a cashier who maintains well the books of accounts and make sure that the business
pays all the taxes to the authority. At the close of last year her sales were Shs.340,000,000, cost of
purchases were Shs. 200,000,000, taxes and other expenses totaled to Shs. 85,000,000 and carriage
on purchases were Shs. 10,000,000 while discount received on purchases were Shs. 8,000,000. She
had stock at start of the year worth Shs 25,000,000 and closing stock worth Shs. 15,000,000. She had
returned some goods to the suppliers worth Shs. 3,000,000. She paid commission to her workers
Shs. 200,000 and also received rent refund worth Shs. 300,000 and she had taken food items worth
Shs. 1,000,000 for private use from the business.
Questions:
a) What promotional strategies do Sarah uses to attract more customers?
b) Identify the personal entrepreneurship skills Sarah uses to make business successful
c) Identify the insurances policies the business can take.
d) What costs of labour turnover is Sarah trying to avoid by motivating the employees?
e) Prepare an income statement for Sarah restaurant for the year ended 31st/12/2017
f) Computer the following: (i) Margin (ii) Stock turnover rate

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TOPIC: 9.

Importance of Production Management to the Business Firm:

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 1

Importance of Production Management to Customers and Society:

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Inputs Projects Outputs Objectives

Costs Interventions Outcomes Benefits

Steps in Production Process:

Question to Students: ( To be checked when the term opens)

Types of Production Processes:

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Customer Work Employee Starting Ending Order Job cost

Work Schedule Form:

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Details Amount (Shs) Amount (Shs)

Less Expected Operating expenses:

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Working Capital Requirements:

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1. Market Research 2. Product design & Development

6. Sales and Distribution

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Number:………………… Purchases Requisition Form

Requisitioned by: Signature:…………… Approved by: Signature:………….....

Dear sir/ madam,

50 Copies Longman dictionary 40,000 2,000,000

Your faithfully : Authorized by:

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 16

I have received the above goods in their good conditions.

Packed by: Signature:……………. Checked by: Signature:…………..

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 17

Counted by:………………………… Approved by:………………..

Please issue us with a Credit Note.

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 18

E&OE Signed by:……………..

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 19

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 20

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 21

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Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 23

Name of item::……………………………………..Item No…………………………………

Method of Issuing: First In First Out (FIFO)

Stock Requisition / Issue Form: It is a well-prepared document that is required by the

Required by:.......................... Position:.................................... Signature:........................

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Recorded By: Signature:…… Checked By: Signature:……….

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 25

Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 26

Designed by: Approved by:

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Teller 1 Teller 2 Teller 3 Teller 4 Accounts

Plant Layout for Manufacturing Firm:

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Mzee Okello Hatuba- WhatsApp Number-0705 555159 Page 31