CHAPTER ONE
1.1 INTRODUCTION
Effective procurement is one of the key functions
of any manufacturing organization; profit is the excess of return over
expenditure in any transaction or service of transaction especially the
excess of selling price of goods over their cost or the net income for a
given period of time. The word profit to the aforementioned fact, is
the ratio of profit for a given year to the amount of invested or to the
value of sales.
In distance profit to some business experts is the
compensation accruing to entrepreneurs for the assumption of risk in
business enterprise of distinguished from wages or rent? However; in
making the maximization of profit a reality in any business setup, the
management team must be ready to harness her strength by making used of
her available resources in maximum, implies the uses of the entire
latent and uncultivated avenue for possible investment to suppress the
environmental threats.
Any cost incurred by a firm may be classed into two
groups. Fixed cost and variable cost. Fixed costs are incurred by the
business at any level of output, including none. These may include
equipment maintenance, rent, wages and general up keep. Variable cost
changes with the level of output, increasing as more products are
generated. Materials consumed during production often have the largest
impact on this category. Fixed cost and variable cost, combined, equal
total cost.
Revenue is the total amount of money that flows in to the
firm. This can be from any source, including product sales, government
subsidies, venture capital and personal find.
Profit to an economist is the differences between total
revenue and total cost or symbolically it is = TR – TC where represent
profit. In view of these, business man, manufacture investors, marketers
and what have you must ensure the effective validation of marketing
tools and techniques through planning, implementation, monitoring and
control to establish an equilibrium between the company(s) available and
potential resources and the desire of the consuming populace towards
profit maximization actualization.
1.2 STATEMENT OF RESEARCH PROBLEM
Nigerian business organizations conceive and yield
to effective procurement in varying degree. Taking a wider look at
firm’s different industries in Nigeria, one can conclude that many going
concerns do not reach with “Effective procurement and maximization of
profit business activities, especially in the area of organizational
growth and profit ability level of a firm.