inventory management

British Journal of Economics, Finance and Management Sciences
October 2011, Vol. 2 (1)

49

Inventory Management in Small Business Finance: Empirical Evidence From Kwara State, Nigeria
Abdulrasheed ABDULRAHEEM, Ph.D
Department of Accounting and Finance, University of Ilorin
Khadijat Adenola YAHAYA, Ph.D
Department of Accounting and Finance, University of Ilorin
Sulu Babaita ISIAKA, Ph.D
Department of Business Administration, University of Ilorin
Olanrewaju Atanda ALIU, Ph.D
Department of Accounting and Finance, University of Ilorin
Abstract
Small Businesses are the backbone of all economies and their importance as an impetus to economic development especially in developing economies cannot be over-emphasized. However, a well designed inventory management can be employed to promote economic development. This paper therefore assessed inventory management in selected small businesses in Kwara State, Nigeria. Using a regression model Y = β0+ β1x1 + µi to explain the effect of inventory value on performance proxy by profit over a period of ten years, the study revealed that a Naira change in stock would cause almost a Naira (92 Kobo) change in profitability of selected businesses. This indicated a strong positive relationship between inventory and profitability of small businesses in Kwara State with a t-value of (6.409). Based on the findings of the study it was concluded that small businesses are likely to generate higher profit if an effective inventory management is put in place.
Keywords: Small business, Inventory management, Finance, Profitability
Introduction
Inventory management is a pivotal in effective and efficient organization. It is also vital in the control of materials and goods that have to be held (or stored) for later use in the case of production or later exchange activities in the case of services. The principal goal of inventory management involves having to balance the conflicting economics of not wanting to hold too

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