Effect of Inventory Management on Organisational Effectiveness

Abstract

The study of the “Effects of Inventory Management on Organizational Effectiveness in selected organizations in Enugu, was carried out, to asses the impact of proper inventory management on organizational performances in Emenite, Hardis & Dromedas and the Nigeria Bottling Company all in Enugu, Enugu State. Descriptive research method, especially survey and case study were employed in carrying out the study. The population of the study is six hundred and fifty eight (658). A sample size of two hundred and fouthy eight (248), was derived using the Taro Yamene formula for sample size determination from a finite population. Data were generated using questionnaire, oral interviews, observations, books, journals and the internet. Data were presented in tables and analyzed using simple percentages. Pearson product moment correlation coefficient and linear regression  was used in the hypotheses testing. From the analyses, it was discovered that irrespective of the fact that the organizations studied, painted the picture that they were applying the tenets of good inventory management, they from time to time run into the problems of inventory inadequacy. This consequently affected their production, leading to the scarcity of one brand of their products or the other, thereby affecting their profitability and consequential effectiveness negatively. The Findings indicate that there is significant relationship between good inventory management and organizational effectiveness. Inventory management has a significant effect on organizational productivity. There is highly positive correlation between good inventory management and organizational profitability. The study concluded that Inventory Management is very vital to the success and growth of organizations. The entire profitability of an organization is tied to the volume of products sold which has a direct relationship with the quality of the product Against this background the study recommended that Organizations should diversify their inventory system to suit specific needs of production, and that management should closely monitor and manipulate their inventory system to maintain production consistency for organizational profitability and effectiveness.

Keywords:Inventory management,   Organisational  effectiveness, Firms