Abstract: The purpose of this study was to examine the effects of inventory management practices on the performance of Skol Rwanda because poor inventory management leads to poor financial performance of manufacturing firms. In addition, inventory management is a significant asset in any business enterprise and its effective management is a key task in the operations of a business. However, many organizations consider inventory management a difficult task (Ogbo, 2011) as it involves a complex of decisions due to the many forms it takes and functions it provides. Researcher achieved this study by use of three specific objectives; examined inventory management practices used by Skol Rwanda; investigated the level of business performance of Skol Rwanda; and examined the effect of inventory management practices on performance of Skol Rwanda. Literature by different scholars on the effects of inventory management on the performance of organizations was analyzed. The study used a descriptive study based on both qualitative and quantitative approach. The population of the study was 90 and sample size to be selected was 75 respondents. The researcher used both primary and secondary source of data in order to enough information for the purpose of the study. SPSS software was used for data processing and analysis done by frequency, percentages, mean and Standard deviation and Anova table to establish relationship between inventory management and financial performance of Skol Rwanda limited. In the finding it was established that inventory management strategies like VED analysis model strategy analyses vital stock before purchase, analyses essential stock before purchase and analyses desirable stock before purchase which improve organization profitability. MRP analysis model strategy analyses prices of different products before buying, determines minimum stock required in the organization, determines maximum stock required in the organization and analyses value and durability of the products. ABC analysis model strategy analyses the types of materials used in the company, analyses the average rate of consumption of the material used in the company, analyses the behavior of the customers in consumption of the goods company and analyses the value of the product before purchase. The analysis further shows the relationship between Inventory management strategies and Skol Rwanda limited profitability. Significant level is 0.01, the results indicate that independent variable has Positive high correlation to dependent variable equal to. 825** and the p-value is .000 which is less than 0.01. When p-value is less than significant level, therefore researchers conclude that variables are correlated. This means that there is a significant relationship between Inventory management strategies and Skol Rwanda limited profitability by 82.5%.
Keywords: inventory management, organizations, business, profitability.
Title: EFFECT OF INVENTORY CONTROL STRATEGIES ON PROFITABILITY OF MANUFACTURING FIRMS IN RWANDA: CASE OF SKOL BREWERIES RWANDA LIMITED
Author: AYEBARE HOPE, PATRICK MULYUNGI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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