THE IMPACT OF INVENTORY MANAGEMENT ON FINANCIAL PERFORMANCE. (original) (raw)

This research was conducted to determine the impacts of inventory management on the financial performance of XYZ Packaging (Cambodia) Co., Ltd and to identify strategies that can be implemented to overcome challenges in inventory management impact on financial performance. The research was designed using a quantitative approach that used correlation and regression to analyse the data. The target population was 55 employees comprised of management and staff of XYZ Packaging (Cambodia) Co., Ltd who work in the accounting, procurement, production, and inventory management departments. The primary data was collected from the close-ended questionnaire distributed to the respondents and collected data coded and recorded into the SPSS programme for analysis. The analysis was conducted using SPSS's Pearson Correlation, and the outcomes indicate a moderately positive relationship between material control and financial achievement with a Pearson Correlation "R" value of 0.603 (60.30%). Additionally, the "p" value is 0.000, which is lower than 0.01, indicating a 99 percent significant association between inventory management and financial performance. The financial performance of inventory management is impacted by 36.4 percent, as indicated by the R square value of 0.364. This study recommended that XYZ Packaging (Cambodia) Co., Ltd should practice techniques such as the economic order quantity (EOQ) model to order raw materials and reduce spaces for storage, reduce holding costs such as labour, insurance, damages, and spoils. Moreover, the study recommended using a computer-based inventory management system to reduce the risk of mistakes and the potential for fraud. Further, Management should continuously conduct training for employees to help them improve their inventory management skills.