Abstract: Inventories constitute the most significant part of current asset of large majority of companies. Because of that, a considerable amount of fund is committed in it by organizations. The general objective of this study was to examine the effect of inventory management practices on financial performance of Skol Rwanda Limited. Descriptive research was considered prior to quantitative research design as it provided an overall overview as to what variables to test quantitatively. The target population of this study was seventy employees (76 employees) of Skol Rwanda Limited involved in accounting, finance, logistics, and procurement departments as shown by the Human Resource Management department of Skol Rwanda Limited. Since the target population of the study is a small number, the researcher preferred to use a census by considering the total population as sample. The researcher collected primary and secondary data. Primary data were collected through questionnaires and interview while the secondary data were collected from the Audited inventory statements of Skol Rwanda Limited for the past four years from 2014 to 2017. The collected data were first examined and checked for completeness and comprehensibility. Means, standard deviations and frequency distribution were used to analyze data. Data presentation was done by the use of frequency tables for easy understanding and interpretations. The study concluded that cost reduction is necessary for implementation of inventory management for performance of manufacturing firms also holding stocks and ordering costs may increase the performance of an organization. Cost reduction helps in preparing employees towards managing the inventory ideology and equips organization with sufficient resources and that inventory cost reduction helps in achieving profitability objective. The study also concluded that improved anticipation of future developments in manufacturing firms in Rwanda will improve their performance and new technologies are promising to save costs and thus improving the performance of the manufacturing firms. The study further concluded that Inventory Management practices is a competitive tool in the organization for realizing its corporate competitive strategy; information sharing and a channels relationship affect the performance of the manufacturing firms and enhance productivity. It is recommended that sugar manufacturing firms develop a policy framework to facilitate faster implementation of the best inventory management practices such as JIT and MRP. It is also recommended that manufacturing firms consider investing in modern technology and implement EDI and this will reduce inventory costs and improve returns.
Keywords: Inventory management practices, financial performance.
Title: EFFECT OF INVENTORY MANAGEMENT PRACTICES ON FINANCIAL PERFORMANCE OF SKOL RWANDA LIMITED
Author: JEANET KAGWISAGYE, Dr. PATRICK MULYUNGI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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