The Relationsidp Between Inventory Control and Organization Performance Case Study: Bamburi Cement Limited Nairobi -Kenya

ABSTRACT

Inventory control reqmres the tracking of all parts and materials purchased, product processed and product stored and ready for shipment, but having the sophisticated tracking system alone does not improve performance of the organization instead its how

you use the information that your system provides. Inventory mismanagement is one of the most common causes of company decline, buyers and purchasers often have many incentives to maintain an excessive inventory level which usually leads to a vicious cycle of lower margins, reduced cash flows and less efficient inventory management.

According to Public Procurement Act (PPA 2004) and its regulations to have procurement plan for every financial year, it enables the public office to order a bulk requirement to be kept in their stores for the rest of the period.

The researcher therefore, intends to study the effects of both overstocking and under stocking in relation to the performance of the organization and at the end of the study to reveal the root cause of the problem and measures on how to overcome it. The study was driven by three objectives: Analyzing the professional qualification and skills of stores personnel in managing inventory identifYing the problems which encounter the present

inventory control system m your Organization and IdentifYing solutions and recommendations in order to develop strong inventory control. To achieve these objectives the researcher sampled 30 respondents from Bamburi Cement Limited Company and their clients. The study utilises qualitative research methods, two data collection instruments were used: Structured questionnaire and interviews .The collected data was presented in tabular and figurative forms and analyzed statistically to decipher finding.

TABLE OF CONTENTS

DECLARATION ................................................................ i

APPROVAL ................................................................ ii

DEDICATION ............................................................... iii

ACKNOWLEDGEMENT ................................................................. iv

ACRONOMYS .................................................................. v

LIST OF TABLES ................................................................. vi

ABSTRACT .................................................................vii

CHAPTER ONE ................................................................. I

1.0 Back ground of the study ................................................................. I

1.1 Statement of the problem ................................................................. 3

1.2 Purpose of the study .......................................................................................................... 4

1.3 Objectives of the Study .................................................................. 5

1.4 Research questions ................................................................. 5

1.5 Scope ofthe Study ................................................................. 5

1.6 Significance of the study ............................................................... 7

CHAPTER TWO ................................................................. 8

2.0 Introduction ................................................................. 8

2.1 Meaning and overview of stock control... ........................................................ 7

2.2 Stock control cycle........................................ I 0

2.3 Importance of inventory control .................................................. 11

2.4 Inventory control Models ............................................................ 12

2.5 Other stock control Models ................................................... 16

2.6 Problems facing Inventory Management. ................................................... I 8

2.7 Performance measurement ................................................................... .18

CHAPTER THREE ......................................................................................................... 20

3. 0 Introduction ................................................................................................................. 20

3. I Research design ................................................................. 20

3.2 Area of study ................................................................... 20

3.3 The Study Population ..................................................... 21

3.4 Selection ofRespondents ........................................................... 21

3. 5 Instruments For Data Collection ......................................................... 22

3.6 Validity and reliability of instruments ........................................................... 23

3. 7 Data Processing and Analysis .................................................. 23

3.8 Limitations of the study .................................. 23

CHAPTER FOUR. ................................................. ... 24

4.0 Introduction ................................................................. 24

4.1 Backgrotmd Information ...................................................... .24

4.2 Verification of Research Questions .......................................................... 28

4.3 Research Question One ............................................... .28

4.4 Research Question Two ............................................. 32

4.5 Research Question Three ............................................. 35

CHAPTER FIVE ............................................. .38

5.0 Introduct............................................ .38

5.1 Conclusion................................................... 39

5.2 Recommenda.................................................. .40

5.3 Further Recommendation ..................................... .43

REFERENCES ..................................................................44

INTERVIEW GUIDE. ........................................................ .45

QUESTIONNAIRE FOR BAMBURI CEMENT LTD EMPLOYEES ................. .46