Inventory Management and Organizational Performance A Case Study of Hardware Word Limited Ntinda

TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATION ~jj

ACKNOWLEDGEMENT

LIST OF TABLES V

LIST OF ACRONYMS vi

ABSTRACT

CHAPTER ONE .... .......,.,,..,,,,,,,,,,.,,, 1

INTRODUCTION 1

1 .0 Introduction 1

1 . 1 Background to the study 1

1 .2 Statement of the problem 3

1.3 General objective 4

1.4 specific objectives 4

1.5 Research questions 4

1.6 Scope of the study 4

1.6.1 Area of study 4

1.6.2 Content scope 5

1.6.3 Time scope 5

1.6.4 Significance of the study 5

1 .7 Definition of key terms s

1.8 Conceptual frame work 6

CHAPTER TWO 7

LITERATURE REVIEW 7

2.0 Introduction 7

2. 1 Techniques of inventory management 7

2. 1 . 1 Determining order quantities and inventory levels 7

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2.1.2 Materials requirements planning (MRP) .8

2.1 .3 Just in Time Purchasing Emerges 8

2.1.4 Inventory recording technique 9

2.1.5 Trial and error technique 9

2.1.6 Two Bin System 9

2.1.7 ABC-Analysis model 9

2,2 The challenges faced by Hardware World limited in managing the inventories 10

2.2.1 A flawed or unrealistic business plans 10

2.2.2 Transport costs’ 11

2.2.3 Storage and Handling costs 11

2.2.4 Insurance and Taxes 12

2.2.5 Obsolescence 12

2.2.6 Theft and Damage 12

2.2.7 Cost of Money 12

2.2.8 Carrying or holding cost 13

2.3 Effect of Inventory management on the performance of Hardware World 13

2.3.1 Concept of performance 15

2.3.2 Performance indicators 16

CHAPTER THREE

METHODOLOGY 18

3.0 Introduction 18

3.1 Research design 18

3.2Studyarea 18

3.3 Sampling size and selection 18

Source: Primary Data 2018 19

3.4 Sampling frame work 19

3.5 Sampling procedures/strategies 19

3.6 Instruments of data collection 20

3.6.1 Interview 20

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3.6.2 Questionnaire .20

3.6.3 Qualitative data analysis 20

3.7 Data collection procedure 21

3.8 Data processing and analysis 21

3.9 Data sources 21

3.9.1 Primary sources 21

3.9.2 Secondary sources 21

3.10 Data quality control 22

3.10,1 Validity 22

3.10.2 Reliability 22

3.10.3 Ethical consideration 22

3.1 iLimitation of the study 22

CHAPTER FOUR .23

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS 23

4.0 Introduction 23

4.1 Demographic information 23

4.1.1 Gender of the respondents 23

4.1.2 Description of age composition of the respondents; 24

4.1.3 Description of the marital status of the respondents 25

4.1.4 Education level of respondents 25

4.2 The techniques of inventory management used at Hardware World limited 26

4.2.1 Material requirements planning (MRP) 26

4.2.2 Just in time purchasing emerges is used for critical items 27

4.2.3 The two bin system 27

4.2.4 Periodic review system is also being practiced 27

4.2.5 The ABC analysis method 27

4.3 Challenges faced by Hardware World limited in inventory management 30

4.3.1 Transportation and Freight costs at Hardware World limited 30

4.3.2 Stock obsolescence 30

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4.3.3 Carrying or holding costs .30

4.3.4 Unrealistic business plans 30

4.3.5 Insurance costs and taxes on inventory 31

4.3.6 Theft and damage of stock 31

4.4 The effect of inventory management on performance 32

4.4.1 Authorizing of purchase 33

4.4.2 Goods being inspected on receipt 33

4.4.3 Maximum attention paid on inventory 33

4.4.4Periodic stock taking 33

4,4.5 Coding stock 33

4.4.6 Standardization carried out in stores 34

4.4.7 Discussion of the questionnaire and interview findings of the study 35

4.4.8 The techniques of inventory management used at Hardware World limited 35

4.4.9 The challenges faced by I-Hardware World limited in managing the inventories 37

4.4.10 The effect of inventory management on performance 38

CHAPTER FIVE “~“~““~~ 40

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION ~40

5.0 Introduction 40

5.1 Summary 40

5.2 Recommendation 40

5.3 Conclusion 41

5.4 Suggested areas for further research 41

REFERENCES 42

APPENDIX I: QUESTIONNAIRE FOR THE RESPONDENTS 45

APPENDIX II: INTERVIEW GUIDE FOR THE RESPONDENTS 49

ABSTRACT 

The study was about the inventory management and organizational performance case study of Hardware World Ltd. The study was based on three specific objectives: To find out the techniques of inventory management used at Hardware World Ltd, the second objective was to find out the challenges faced by Hardware World Ltd in inventory management, the third objective was to find out the effect of inventory management performance of Hardware World Ltd. It was based on a descriptive survey design basing on the us~ of qualitative and quantitative approaches. The methodology applied was use of both primary and secondary data using different research tools namely: open discussions, questionnaires, and observation etc. the study followed random sampling where a sample of 40 people was selected from the population basing on a number of reasons which enabled the researcher to find out the role of each person in inventory management. According to the research carried out the researcher found out that in order to have appropriate inventory management in an organization, there is need to look at the impact at the of inventory control systems on the work force and top management so as to ensure effective and efficient monitoring and evaluation of the systems. However, also the consumers of the services should also be considered since they can also cause a change in the consumption inte due to poor inventory management systems. Therefore this calls upon all the stakeholders to prequalified measures in ensuring good inventory control systems in the organization The study recommended that Hardware World house of plastics should adopt strong policy measures on the variables of inventory management. segregation and rotation of duties, independent checks on organizational performance and internal controls, and also at creating a committed workforce. Financial accountability and risk management for better organizational performance .another recommendation was further research should be carried on the effect of inventory control system on human resource since this system is highly managed by human resource and the perceptions of the service consumers towards the nature of inventory control system as used by the organization.