Effect of Inventory Management on Organizationa Performance

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EFFECT OF INVENTORY MANAGEMENT ON ORGANIZATIONAL PERFORMANCE IN KENYA.

BY

BETTY CHEROTICH-BBM/0698/10
SOLOMON BIWOTT KIPSIRIA-BBM/0676/11
MUDOGO ROTICH JAMES-BBM/0673/08

A RESEARCH PROPOSAL SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF A DEGREE IN BUSINESS MANAGEMENT AT MASINDE MULIRO UNIVERSITY OF SCIENCE AND TECHNOLOGY

NOVEMBER, 2012

DECLARATION
Declaration by the Reseachers
This study is our original work and has not been presented in any other institution for Academic Purpose or Otherwise.

1.BETTY CHEROTICH SIGN DATE
BBM/0698/10____________________________
2.JAMES MUDOGO ROTICH
BBM/0673/08 ____________________________
3.SOLOMON KIPSIRIA BIWOTT
BBM/0676/11____________________________

Declaration by the Superviser.
This Research has been submitted with my approval as the Masinde Muliro University of Science and Technology Supervisor.

NAME SIGN DATE MR.KWENDO___________________________________

DEDICATION
This research is dedicated to the staff of Lake Victoria North Water Services Board, National Highways Authority - Kakamega District, and Kenya Seed Company limited.

ACKNOWLEDGEMENT
Many thanks goes to our supervisor Mr. Kwendo for his continuous support and guidance towards writing of this research proposal. Also many thanks goes to our fellow collegues for their support and encouragement.

TABLE OF CONTENTS

DECLARATION1
DEDICATION2
ACKNOWLEDGEMENT3
TABLE OF CONTENTS4
LIST OF FIGURES6
ABSTRACT7
ABBREVIATION8
CHAPTER ONE9
INTRODUCTION9
1.1 Background of the study9
1.2 Statement of the research problem10
1.3 Purpose of the study.10
1.4 Ojectives of the Study.11
1.5 Research Questions11
1.6 Signnficance of the study.11
1.7 The Scope of the study11
CHAPTER TWO13
LITERATURE REVIEW13
2.1 Introduction13
2.2 General Overview of Inventory Management13
2.3. Establishment of Stock levels14
2.4. Just In Time Technique16
2.5. Economic Order Quantity (EOQ)16
2.6. Materials Requirement Planning17
2.7 Adoption of a proper issuing method17
2.8. Supplier Selection19
2.9. Organizational Factors19
2.9.1 Storage Facilities19
2.9.2 Nature of Goods selection and procurement19
2.9.3 Management20
2.10 Summary of the Literature Review20
RESEARCH DESIGN AND METHODOLOGY21
3.1 Introduction21
3.2 Research Design21
3.3 Study Area21
3.4 Target Population21
3.5 Sample Size21
head of departments21
store keepers21
O & M employees21
GRAND TOTAL21
3.6 Data Collection22
3.7 Validity and Reliability of Research Instrument22
3.8 Data Analysis22
3.9 Presentation of the findings22
REFERENCES23

LIST OF FIGURES
Figure 1: Effect of Inventory Management Strategies in the achievement of Procurement Objectives3
Figure 2: A diagrammatic representation of stock levels is as shown below7

ABSTRACT
Inventory management represents a major portion of an organizations cash investment and is an area that purchasing influences significantly. Worldwide, purchasers should be aware of the major categories of inventory management and the various options for managing them. It includes materials that are consumed in the performance of an organizations service or in the manufacture of organizations products. The purpose of this study is to establish the effect of invetory management on organizational performance. Specifically the study seeks to examine the effect of establishment of stock levels on Procurement Objectives, to establish the Effect of issuing Methods on Procurement objectives to determine the influence of Supplier Selection on organizational performance, to find out the effects of Economic Order Quantity on procurement objectives, to establish the effect of Just In Time on procurement objective and to establish the effect of Materials...
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