An assessment of the Inventory Management Practices of Small and Medium Enterprises (SMEs) in the Northern Region of Ghana

Abstract

The purpose of this study was to assess inventory management practices and its effect on the financial performance of SMEs in the Northern Region of Ghana. The study adopted a descriptive cross-sectional survey research design which allowed the collection of primary quantitative data through structured questionnaires. The target population was 1000 owner/ managers of SMEs. Stratified random sampling technique was used to obtain a sample of 300 SMEs comprising 164 trading 26 manufacturing, 10 hairstyling, 62 dressmaking, and 38 carpentry enterprises. The data was analyzed using both descriptive and inferential statistics. The study revealed that SME financial performance was positively related to efficiency of inventory management (EIM) at 1 per cent significance level. The study concluded that stock management practices have influence on the financial performance of SMEs, hence there was need for SME managers to embrace efficient stock management practices as a strategy to improve their financial performance and survive in the uncertain business environment.

Keywords: Inventory Management Practices, Financial Performance, SMEs