Abstract: With increase in competition in the manufacturing sector globally, organizations are pursuing cost containment measures to ensure efficiency and competitiveness. Inventory management has been identified as a critical approach towards attaining this pursuit. It includes aspects such as storage of inventory, ordering the amount of inventory sales and ordering of inventory. It is basically adherence to the 5 Rs of Supply Chain Management (Right inventory, at the right time, in the right quantity, at the right cost and the right place) hence performance. The study purposed to investigate how inventory management influences performance of sugar factories in Western Kenya. Specifically, the study addressed the following objective: To establish the influence of inventory management on performance of sugar factories in Western Kenya. The research employed a descriptive survey and co relational research design. The target population of the study consisted of 268 respondents from the Procurement Department of five Government Owned Sugar Companies. Purposive sampling was applied to categorize the respondents. Primary data was collected using questionnaires. Descriptive statistics and linear regression was used to analyze the data. From the results, the correlation of the mean of inventory management and mean of performance had a beta term β = 0.505, P=0.001. This implies that the value of beta is positive and significant. Basing on this value, it therefore implies that there exists a statistically significant positive effect of inventory management on the performance of sugar factories in Western Kenya. From the results, 25.5% of performance can be explained by inventory management (r2 = 0.255). Therefore, the null hypothesis was rejected as there is significant relationship between inventory management and performance of sugar factories in Western Kenya. The study then recommended that management of organization should participate adequately in the inventory management process from inventory planning, supervision, monitoring and assessment. Further, Organizations should have inventory management policies in place in the organization to guide the organization’s inventory management processes and conduct in conjunction with procurement practices.
Keywords: Inventory Management, Organizational Performance.
Title: Influence of Inventory Management on Organizational Performance of Sugar Factories in Western Kenya
Author: Eric N. Wasilwa, Dr. Janet Manyasi, Evans S. Kwendo
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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