INFLUENCE OF INVENTORY MANAGEMENT PRACTICES ON PERFORMANCE OF COMMERCIAL STATE CORPORATIONS IN KENYA: A CASE OF KENYA ELECTRICITY GENERATING COMPANY
Abstract
The purpose of the study was to examine the influence of inventory management practices on performance of commercial state corporations in Kenya. It was notable that there exist strong positive relationship between the indepedent variables and dependent variable as shown by R value of 0.792. The coefficient of determination (R2) explains the extent to which changes in the dependent variable can be explained by the change in the independent variables or the percentage of variation in the dependent variable and the four independent variables that were studied explain 62.70% of the performance in the commercial state corporation. This therefore means that other factors not studied in this research contribute 37.30% of the performance in commercial State Corporation. This implied that these variables were very significant therefore need to be considered in any effort to boost performance of the commercial State Corporations in the study area. The study therefore identified the variables as critical inventory management practices that influence performance of the commercial state corporations in Kenya. The study recommended for the better management of inventories would release capital for use elsewhere productively. Hence Inventory control implied the coordination of materials accessibility, controlling, utilization and procuring of material. The inventory control includes cost minimization, profit maximization, avoidance of running out of stock and to prevent surplus stock that are unnecessary. Process auditing is important for the source error identification and should be done often. Process auditing should take place at every transactional step from receiving and to shipping inventory including all the inventory transactions that takes place in between the processes. It is necessary to allocate warehouse resources efficiently and effectively to enhance the productivity and reduce the operation costs of the warehouse. There should be proper storage locations for easy order and material handling. There is need for selecting appropriate storage assignment policies and routing methods with regards as a possible solution to improve the efficiency.
Key Words: Inventory Control, Process Auditing, Inventory Investment, Warehouse Management, Performance
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DOI: http://dx.doi.org/10.61426/sjbcm.v5i1.662
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