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Evaluating the Effectiveness of Inventory Management Practice and Its’ Challenges on Manufacturing Companies in Yirgalem Agro-Industrial Park, Ethiopia

Received: 10 August 2022     Accepted: 8 September 2022     Published: 27 September 2022
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Abstract

The goal of managing inventory is to maintain optimum level balance within a manufacturing firm because excess and inadequate inventory are not desirable. Effective inventory management is leads the high success of any company specifically in the manufacturing industry is undeniable. The primary purpose of this study was to evaluate the effectiveness of inventory management practices and the challenges of manufacturing companies operating in Yirgalem agro-industrial parks, Ethiopia. The descriptive research design with a mixed approach was adopted. Primary and secondary data source was used. Primary data collected through open and closed-ended questionnaires, interviews, and field observation methods. The secondary data was collected from empirical publications research and books. Total of 18 respondents’ were selected purposively. Percentage, mean average, and narrative techniques were used to analyze the collected data. The result revealed that, the effectiveness of inventory management practice in manufacturing companies operating in Yirgalem agro-industrial parks was moderate. Also, as the result showed the companies adopted EOQ, JIT, ABC, and MRP and also both computerized and manual inventory techniques. The study recommended that, the companies should improve the inventory management practice effectiveness level to be more successful. However, the trend of classifying the inventory items as classes A, B, and C, based on cost volume should be improved. Besides, the study found that, the supply chain relationship of companies was good, but needs to create more linkage with suppliers to get sufficient raw material for production. Additional investors should be attracted and motivated by governments through good advertising about the Yirgalem agro-industrial park, implementing appropriate tax strategy, and may facilitate long-term loan for local investors to generate sufficient intended economic contribution for the country, Ethiopia.

Published in European Business & Management (Volume 8, Issue 4)
DOI 10.11648/j.ebm.20220804.12
Page(s) 89-98
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Effectiveness of Inventory Management Practice, Inventory Techniques, Yirgalem Agro-Industrial Park

References
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  • APA Style

    Aklilu Assefa Adato. (2022). Evaluating the Effectiveness of Inventory Management Practice and Its’ Challenges on Manufacturing Companies in Yirgalem Agro-Industrial Park, Ethiopia. European Business & Management, 8(4), 89-98. https://doi.org/10.11648/j.ebm.20220804.12

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    ACS Style

    Aklilu Assefa Adato. Evaluating the Effectiveness of Inventory Management Practice and Its’ Challenges on Manufacturing Companies in Yirgalem Agro-Industrial Park, Ethiopia. Eur. Bus. Manag. 2022, 8(4), 89-98. doi: 10.11648/j.ebm.20220804.12

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    AMA Style

    Aklilu Assefa Adato. Evaluating the Effectiveness of Inventory Management Practice and Its’ Challenges on Manufacturing Companies in Yirgalem Agro-Industrial Park, Ethiopia. Eur Bus Manag. 2022;8(4):89-98. doi: 10.11648/j.ebm.20220804.12

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  • @article{10.11648/j.ebm.20220804.12,
      author = {Aklilu Assefa Adato},
      title = {Evaluating the Effectiveness of Inventory Management Practice and Its’ Challenges on Manufacturing Companies in Yirgalem Agro-Industrial Park, Ethiopia},
      journal = {European Business & Management},
      volume = {8},
      number = {4},
      pages = {89-98},
      doi = {10.11648/j.ebm.20220804.12},
      url = {https://doi.org/10.11648/j.ebm.20220804.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ebm.20220804.12},
      abstract = {The goal of managing inventory is to maintain optimum level balance within a manufacturing firm because excess and inadequate inventory are not desirable. Effective inventory management is leads the high success of any company specifically in the manufacturing industry is undeniable. The primary purpose of this study was to evaluate the effectiveness of inventory management practices and the challenges of manufacturing companies operating in Yirgalem agro-industrial parks, Ethiopia. The descriptive research design with a mixed approach was adopted. Primary and secondary data source was used. Primary data collected through open and closed-ended questionnaires, interviews, and field observation methods. The secondary data was collected from empirical publications research and books. Total of 18 respondents’ were selected purposively. Percentage, mean average, and narrative techniques were used to analyze the collected data. The result revealed that, the effectiveness of inventory management practice in manufacturing companies operating in Yirgalem agro-industrial parks was moderate. Also, as the result showed the companies adopted EOQ, JIT, ABC, and MRP and also both computerized and manual inventory techniques. The study recommended that, the companies should improve the inventory management practice effectiveness level to be more successful. However, the trend of classifying the inventory items as classes A, B, and C, based on cost volume should be improved. Besides, the study found that, the supply chain relationship of companies was good, but needs to create more linkage with suppliers to get sufficient raw material for production. Additional investors should be attracted and motivated by governments through good advertising about the Yirgalem agro-industrial park, implementing appropriate tax strategy, and may facilitate long-term loan for local investors to generate sufficient intended economic contribution for the country, Ethiopia.},
     year = {2022}
    }
    

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  • TY  - JOUR
    T1  - Evaluating the Effectiveness of Inventory Management Practice and Its’ Challenges on Manufacturing Companies in Yirgalem Agro-Industrial Park, Ethiopia
    AU  - Aklilu Assefa Adato
    Y1  - 2022/09/27
    PY  - 2022
    N1  - https://doi.org/10.11648/j.ebm.20220804.12
    DO  - 10.11648/j.ebm.20220804.12
    T2  - European Business & Management
    JF  - European Business & Management
    JO  - European Business & Management
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    SN  - 2575-5811
    UR  - https://doi.org/10.11648/j.ebm.20220804.12
    AB  - The goal of managing inventory is to maintain optimum level balance within a manufacturing firm because excess and inadequate inventory are not desirable. Effective inventory management is leads the high success of any company specifically in the manufacturing industry is undeniable. The primary purpose of this study was to evaluate the effectiveness of inventory management practices and the challenges of manufacturing companies operating in Yirgalem agro-industrial parks, Ethiopia. The descriptive research design with a mixed approach was adopted. Primary and secondary data source was used. Primary data collected through open and closed-ended questionnaires, interviews, and field observation methods. The secondary data was collected from empirical publications research and books. Total of 18 respondents’ were selected purposively. Percentage, mean average, and narrative techniques were used to analyze the collected data. The result revealed that, the effectiveness of inventory management practice in manufacturing companies operating in Yirgalem agro-industrial parks was moderate. Also, as the result showed the companies adopted EOQ, JIT, ABC, and MRP and also both computerized and manual inventory techniques. The study recommended that, the companies should improve the inventory management practice effectiveness level to be more successful. However, the trend of classifying the inventory items as classes A, B, and C, based on cost volume should be improved. Besides, the study found that, the supply chain relationship of companies was good, but needs to create more linkage with suppliers to get sufficient raw material for production. Additional investors should be attracted and motivated by governments through good advertising about the Yirgalem agro-industrial park, implementing appropriate tax strategy, and may facilitate long-term loan for local investors to generate sufficient intended economic contribution for the country, Ethiopia.
    VL  - 8
    IS  - 4
    ER  - 

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Author Information
  • Department of Accounting and Finance, Furra College, Yirgalem, Ethiopia

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