An assessment of the Inventory Management Practices of Small and Medium Enterprises (SMEs) in the Northern Region of Ghana (original) (raw)
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The Effects of Proper Inventory Management on the Profitability of SMEs
Technium Social Sciences Journal
A business must have or be able to generate enough cash and cash equivalent to meet its short-term liabilities if it is to continue and grow in business. Therefore, working capital management which helps an entity to, efficiently and effectively control current assets and liabilities is a key factor in the company’s long-term success; without working capital, the non- current assets will not function. The greater the extent to which current assets exceed current liability, the more solvent or liquid a company is likely to be. This paper observes the relationship between working capital management practices of small and medium enterprises (SMEs) and the performance and profitability of these businesses in the Kumasi Metropolis , to evaluate inflows and outflows of inventory to determine the rate at which certain goods are purchased in relation to others. This practice will also help ascertain seasons and times during which certain products experience higher demand and vice versa. Th...
Inventory Management and the Performance of Listed Manufacturing Firms in Ghana
Open Journal of Business and Management
The purpose of this research was to investigate how inventory management affected the performance of manufacturing enterprises in the Kumasi Metropolis. In addition, the research used both descriptive as well as explanatory research approaches. The research demographic included all of the manufacturing companies in Ghana's Kumasi Metropolis, and the target demographic included all of the staff members who work in essential departments of the manufacturing businesses sited throughout the Assembly. The total population is 62. The sample size was determined using the Yamane sample size determination formula in the study. Because the population and location of manufacturing companies were available, probability sampling was utilized in this investigation, with a sample size of 54. According to the research, a one-unit gain in inventory management leads to a 20.3 percent, 31.9 percent, and 21 percent rise in marketplace efficiency, financial results, as well as client satisfaction, respectively. Ultimately, the research shows that stock management is a factor in the success of manufacturing companies. As a result, it is advised that optimum stock management methods be implemented in order to improve the operation of industrial enterprises in Ghana's Kumasi Metropolis.
Inventory Management Practices and Business Performance for Small-Scale Enterprises in Kenya
Small-Scale Enterprises (SSEs) are acknowledged as significant contributors to economic growth through their perceived critical role in providing job opportunities, poverty reduction and their acting as intermediaries in trade. However, the International Labor Organization (2010) estimates that two-thirds of the enterprises generate incomes equal to or below the minimum wage, a sobering finding that must temper one’s enthusiasm for the growth of SSE’s as a solution to the country’s poverty and employment problems. Inventory constitutes much of the working capital held by SSEs and poor working capital management has been identified as one of the major causes of SSE failures. With this backdrop, this study investigated the relationship between inventory management practices and the business performance of SSEs in Kisii Municipality, Kenya. The relationship was probed based on primary data gathered by use of a structured questionnaire from 70 SSEs. The empirical results revealed a positive significant relationship between business performance and effective inventory management practices at 0.05 significance level. Further, they showed that inventory budgeting had the largest effect on business performance with a beta coefficient of 0.329, followed by shelf-space management with a beta coefficient of 0.30. Inventory level management had the least but significant effect with a beta coefficient of 0.297. The study suggests that owners/managers of SSEs embrace effective inventory management practices as a tactic to further their business performance. Keywords: Inventory Management practices, Business Performance, Small Scale Enterprises
This study aimed to empirically examine the impact of inventory management practice on firms' competitiveness and organizational performance. Data for the study were collected from 188 micro and small enterprises (MSEs) operating in manufacturing sub sector and the relationships and hypothesis proposed in the conceptual framework were tested using Structural Equation Modeling (SEM). The results indicate that higher levels of inventory management practice can lead to enhanced competitive advantage and improved organizational performance. Also, competitive advantage can have a direct, positive impact on organizational performance. Therefore, it is recommended for policy makers, universities, NGOs and any concerned party who are engaged in supporting of micro and small enterprises need to work in providing the necessary training and resource to promote the inventory management practice of MSEs which will result in increasing their competitiveness and organizational performance. That would enhance their contribution to economic development of the country. Note that, the conclusion obtained from this study may not be used to generalize to large and medium scale as well as overall sectors since its focus is only from the MSEs manufacturing sub sector points of view.
This study ascertained the extent managers applied inventory control approaches for improving operations of small and medium scale enterprises in South-East Nigeria. Two research questions guided the study and two null hypotheses were tested. Descriptive survey research design was adopted for the study. The population comprised 4745 registered SMEs managers from services, construction and manufacturing businesses operating within South-East Nigeria. Sample size of 1424 registered SMEs managers were used, through proportionate stratified random sampling technique. The instrument for data collection was a 22-item structured questionnaire. The instrument was validated by three experts. Cronbach Alpha was used to determine the reliability co-efficient values of 0.91 and 0.90 for clusters B1 and B2 respectively, with an overall co-efficient value of 0.91. Mean and standard deviation were used to answer the research questions, while Analysis of Variance (ANOVA) was used to test the null hypotheses at 0.05 alpha levels. The findings of the study revealed that managers of SMEs in South-East, Nigeria lowly applied economic order quantity (EOQ) and activity-based costing (ABC) inventory approaches to improve their business operations. Years of business experience of managers of SMEs significantly influence their mean ratings on the extent they applied economic order quantity and activity-based costing inventory approaches for improving operations in South-East Nigeria. The study concluded that the inventory control approaches used in this study have been lowly applied by managers for improving operations of small and medium scale enterprises in South-East Nigeria. It was recommended among others that managers of small and medium scale enterprises should establish various inventory levels which will help in avoiding over or under-stockings in their business outfits.
Inventory Management Practices and Operational Performance of Manufacturing Firms in Ghana
Advances in Research, 2020
Aims: The study examined the effect of different inventory management practices on the operational performance of manufacturing firms in Ghana. Study Design: The study adopted the descriptive survey design. Place and Duration of Study: The study was conducted among manufacturing firms within the Accra, Tema and Kumasi metropolises in Ghana between November 2019 and February 2020. Methodology: The study randomly sampled 152 Procurement and Operations managers and officers from 246 registered manufacturing firms with the Association of Ghana Industries. The manufacturing firms are specifically located within the Accra, Tema and Kumasi metropolises. The study gathered primary data using structured questionnaires of which analysis was done using both descriptive and inferential statistical tools including mean, standard deviation and ordinary least square regression. Results: Using 114 valid responses, the study found manufacturing firms in Ghana to have high preference for Strategic Su...
Inventory management and control plays a significant role in better performance of business entities. This paper analyses whether SMEs in Shomolu-Yaba of Lagos State carry out inventory management and the impact of Inventory Management and Control of cash flow on the liquidity of SME’s in Shomolu-Yaba Metropolis. The study used descriptive and analytical sample survey for the representation and the analysis of the findings. A sample of 150 SMEs was used. However, a total of 149 responses were received. The study relied on both primary data, collected through a questionnaire, and secondary data collected from reports and financial records of SMEs in Shomolu-Yaba. Summary of findings shows that the findings established a positive correlation coefficient (r), = 0.220, (r2) = 0.049 between Stock Ordering Level and Provision for slow moving/obsolete items in inventories, there is no positive effect between the techniques adopted by these SMEs in managing their accounts and the inventory level and measures employed by these SMEs in terms of profit and liquidity established a positive correlation coefficient (r), = 0.202, 0.174, 0.279, (r square) = 0.041, 0.030, 0.078. Finally, these SMEs should create a re-order level policy for their institutions that will create an enabling environment for them to request for the supply of moderate and high quality stocks.
This study aimed to empirically examine the impact of inventory management practice on firms' competitiveness and organizational performance. Data for the study were collected from 188 micro and small enterprises (MSEs) operating in the manufacturing sub-sector and the relationships and hypothesis proposed in the conceptual framework were tested using structural equation modeling (SEM). The results indicate that higher levels of inventory management practice can lead to an enhanced competitive advantage and improved organizational performance. Also, competitive advantage can have a direct, positive impact on organizational performance. Therefore, it is recommended that policy makers, universities, NGOs and any concerned party who are engaged in supporting of MSEs need to work on providing the necessary training and resource to promote the inventory management practice of MSEs which will result in increasing their competitiveness and organizational performance. That would enhance their contribution to the economic development of the country. Note that, the conclusion obtained from this study may not be used to generalize to large and medium scale as well as overall sectors since its focus is only from the MSEs' manufacturing sub-sector points of view.
Inventory constitutes bulk of current assets small and medium scale enterprises (SMEs) such as bakeries, fast food/eateries, chain stores and furniture making firms. SMEs need to understand the true costs associated with inventory management and poor inventory productivity so as to be able to review the benefits of alternative approaches. The objective of the study was to examine the effect of inventory management on profitability of SMEs in Nigeria. The study used a descriptive research design. The population consists of all SMEs operating in Delta State. The study used stratified random sampling. 10 SMEs were randomly selected from each stratum making a total of 30 firms for the study. Data for the study were obtained through the administration of a self-designed questionnaire to managers or accountants of the sampled firms. The questionnaire was structured to elicit information about the trading and financial activities for the last two accounting years. A multiple regression analysis was conducted to test the model established for the study. Findings of the study reveal that inventory turnover has a significant positive relationship with financial performance of SMEs. The study also reveals that there is a negative relationship between inventory conversion period and profitability; and no significant positive relationship between inventory leanness and profitability. The study concludes that inventory management has a great role to play in corporate financial performance of firms hence firms' inventory systems must maintain an appropriate inventory levels to enhance profitability and reduce the inventory costs associated with holding excessive stock in the warehouses. In line with the findings of the study, it is recommended that firms should embrace modern production technology that will enhance faster production to shorten inventory conversion period which will in turn improve inventory turnover and profitability.