INFLUENCE OF INVENTORY MANAGEMENT PRACTICES ON PERFORMANCE OF RETAIL OUTLETS IN NAIROBI CITY COUNTY
Achieng James Brown Otieno - Master of Science in Procurement and Logistics Management, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Samson Nyang’au Paul (PhD) - Jomo Kenyatta University of Agriculture and Technology, Kenya
Lydia Kwamboka Mbura - Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Many retail outlets have had a persistent problem in establishing the right inventory levels and they have thus turned to computerizing their systems so as to achieve a balance between responsiveness and efficiency. The main objective of this study was to investigate the influence of inventory management Practices on performance of retail outlets in Nairobi City County. The study was guided by the following objectives; to determine the influence of inventory categorization, inventory planning, inventory processes automation and inventory modeling on the performance of retail outlets in Nairobi City County. This study was guided by a number of theories including; theory of constraint, resource-based view theory, strategic choice theory and economic order quantity model. The study adopted a descriptive research design. A sample population of 198 was arrived at by calculating the target population of 407, with a 95% confidence level and an error of 0.05 using the formula taken from Kothari. This study adopted a stratified and simple random sampling technique. Primary data was obtained using self-administered questionnaires while secondary data was obtained using data collection sheet. The researcher personally administered the research instruments to the respondents. The qualitative data from the open-ended questions was analysed using conceptual content analysis and presented in prose. Inferential data analysis was done using regression analysis. The regression analysis was used to establish the relations between the independent and dependent variables. Presentation of the data was in form of tables and graphs based on the major research questions. The study found that ABC Analysis which entails inventory categorization technique is adopted, that their firm practices Just in Time planning, that organization uses Periodic Ordering to manage inventory and that Electronic Data Interchange is used in inventory management and that their firm use Bar Coding in transaction. The study also found that firm don’t have a Material Requirement Planning System. The study concluded that inventory categorization having the greatest effect on performance of retail outlets in Nairobi County followed by Inventory modeling then Inventory planning while Inventory processes automation having the least effect on performance of retail outlets in Nairobi County. The study recommends that the retail outlets should automate their inventory management systems so as to improve their customer delivery levels, that the retail outlets should make use of automation so as to reduce their operational costs, that the retail outlets invest technology that is most useful to their operations so as to avoid wasting a lot of capital on technology that will never be used and that management has to ensure that industry-specific requirements of some of the inventory management systems (as for the case of JIT) and the obtaining situation are considered before the adoption of the technology.
