inventory management and business performance. a …

INVENTORY MANAGEMENT AND BUSINESS PERFORMANCE.

A CASE STUDY OF COCA- COLA LIMITED MBARARA BRANCH

BY

AGUMEABDUL

BBA/44473/143/DU

A RESEARCH REPORT SUBMITTED TO THE COLLGE OF ECONOMICS AND

MANAGEMENT IN PARTIAL FULFILMT OF THE REQUIREMENTS

FOR THE AW ARD OF BACHELORS DEGREE IN BUSINESS

ADMINSTRATION (BANKING AND FINANCE) OF

KAMPALA INTERNATIONAL

UNIVERSITY

JULY,2017

DECLARATION

I Agume Abdul hereby declare that this report is from my own knowledge and effort. It has

never been submitted by any other person for degree in any University or institution of higher

level.

SIGNATURE: --+-A----"'r--, , __ 0_; ___ _ DATE:

AGUMEABDUL

BBA/44473/143/DU

APPROVAL

This report on the role of Inventory Management and Business Performance of private

organizations in Uganda: A case of Coca-Cola Mbarara Plant in Mbarara Municipality" has been

submitted to the academic board of examination with my approval.

SIGNATURE:--•------

MR. TUKUNDANE ADONIA

SUPERVISOR

DATE:

ii

DEDICATION

I dedicate this piece of work to my mother Mrs. Mutesi Fazira, my Dad Hajji Budala, my dear

brothers Isaac, Seif Matovu and sisters Shamila, Samiat and even to my special friend Mr.

Ssekinyomo Frank who gave me a good foundation in my education. May God protect you

always.

iii

ACKNOWLEDGEMENT

I am grateful to the following people for their contributions, support and assistance in having this

book completed.

First and foremost I would love to give thanks to almighty God for His divine protection,

direction, knowledge, wisdom and understanding He has always accorded to me.

I am grateful to my supervisor, Mr. Tukundane Adonia for his pertinent guidance, support and

encouragement during the writing of this report.

I am exceedingly thankful to my brother Isaac and Seif Matovu for the support. encouragement

and positive attitude they have showed me from the day go to date when I have been able to

accomplish such an impo1iant project.

I would also like to acknowledge the management and staff of Coca-Cola Mbarara Branch for

their valuable support during this research.

Lastly, I would like to extend my sincere thanks to all the staff of Kampala International

University for their intellectual, moral and professional support.

God bless you all.

iv

TABLE OF CONTENTS

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

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

DEDICATION ................................................................................................................................ 111

ACKNOWLEDGEMENT ............................................................................................................. IV

TABLE OF CONTENTS ................................................................................................................ v

LIST OF TABLES ....................................................................................................................... VIII

LIST OF ABBREVIATIONS/ACRONYMS ................................................................................. ix

ABSTRACT .................................................................................................................................... x

CHAPTER ONE .............................................................................................................................. l

BACKGROUND OF THE STUDY ................................................................................................ 1

1.2 Statement of the problem ........................................................................................................... 3

1.3 Purpose of the study .................................................................................................................. 3

1.4 Specific objectives ..................................................................................................................... 3

1.5 Research questions .................................................................................................................... 3

1.6 Scope of the study ...................................................................................................................... 4

1. 7 Significance of the study ........................................................................................................... 4

1.8 Conceptual framework .............................................................................................................. 6

CHAPTER TWO ............................................................................................................................. 7

LITERATURE REVIEW ................................................................................................................ 7

2.0 Introduction ............................................................................................................................... 7

2.1 Strategies of Inventory Management.. ....................................................................................... 7

2.2 The relationship between inventory management and business performance ........................ 15

CHAPTER THREE ....................................................................................................................... 19

METHODOLOGY ........................................................................................................................ 19

3 .1 Research Design ...................................................................................................................... 19

3 .2 Study Population ...................................................................................................................... 19

3.3 Sample size .............................................................................................................................. 19

3.4 Sampling Techniques .............................................................................................................. 20

V

3.5Data collection instruments ...................................................................................................... 20

3.5.1 Self-Administered Questionnaires ........................................................................................ 20

3.5.2 Interview Guide .................................................................................................................... 21

3.5.3 Observation check lists ......................................................................................................... 21

3.6 Measurement ofVariables ....................................................................................................... 21

3.7 Validity and Reliability of Instruments ................................................................................... 21

3.7.1 Validity ................................................................................................................................. 21

CONTENT VALIDITY INDEX (CVI) ........................................................................................ 21

3.7.2 Reliability ............................................................................................................................. 22

3.8 Ethical Considerations ............................................................................................................. 22

3.9 Data Collection Procedures ..................................................................................................... 22

3.10 Data Analysis ......................................................................................................................... 23

3.11 Limitations of the study ......................................................................................................... 23

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

PRESENTATION, ANALYSIS AND INTERPRETATION OF STUDY FINDINGS ............... 24

4.1 Data Presentation ..................................................................................................................... 24

4.1.1 Response rate ........................................................................................................................ 24

4.2 Techniques of inventory management used at Coca- Cola Mbarara branch ........................... 27

4.2.1 Inventory Management? ....................................................................................................... 28

4.2.2 The company trying to manage its inventories? ................................................................... 28

4.2.3 The techniques of inventory management. ........................................................................... 29

4.3 Purchase Raw Materials after the Customers have Ordered for Products of the Company .... 30

4.3.2 Produces of inventories ........................................................................................................ 30

4.3.3 Recording of issued and sold inventories at Coca- Cola Company ..................................... 31

4.3.4 Use of tied security system at the store ................................................................................ 32

4.4 The relationship between inventory management and performance of Coca- Cola Company

Mbarara branch .............................................................................................................................. 33

4.5 Challenges faced by the Coca- Cola Company Mbarara branch in managing inventories ..... 35

vi

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

DISCUSSIONS OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS .................. 38

5.0 Introduction ............................................................................................................................. 38

5.1 Bio Data ................................................................................................................................... 38

5.1.1 Distribution of Respondents By Gender ............................................................................... 38

5.1.3 Marital Status ........................................................................................................................ 38

5.1.4 Age Group ............................................................................................................................ 38

5.1.5 Level of education ................................................................................................................ 39

5.1.6 Length of Relationship with Coca- Cola Company Mbarara Branch .................................. 39

5.2 Summary of the study findings according to objectives .......................................................... 39

5.2.1 To examine the strategies used in Inventory management.. ................................................. 39

5.2.2 The degree of business performance .................................................................................... 40

5.2.3 The relationship between inventory management and performance .................................... 41

5.2 Conclusions ............................................................................................................................. 43

5.3 Recommendations ................................................................................................................... 44

5.3 .1 Techniques of inventory management used at Coca Cola Mbarara branch ......................... .44

5 .4 Areas for further researcher ................................................................................................. 44

REFERENCES .............................................................................................................................. 45

APPENDICES ............................................................................................................................... 48

Appendix A: Questionnaire for the company workers .................................................................. 48

Appendix B: (Interview guide for the Company Clients) ............................................................. 51

vii

LIST OF TABLES

Table 1: Sample Size ..................................................................................................................... 20

Table 2: Showing the response rate ............................................................................................... 24

Table 3: shows the distribution questionnaires administered ........................................................ 24

Table 4: Gender of Respondents ................................................................................................... 25

Table 5: Age ofRespondents ........................................................................................................ 25

Table 6: Marital Status ofRespondents ......................................................................................... 26

Table 7: Academic Qualification of Respondents ......................................................................... 26

Table 8: Length of Relationship with Coca- Cola Company Mbarara Branch ............................. 27

Table 9: the table showing whether respondents understand the term inventory management? .. 28

Table 10: Showing whether the company trying to manage its inventories .................................. 28

Table 11: Shows arranging of inventories according to their importance at Coca- Cola Mbarara.

·······················································································································································29 Table 12: Shows the company Purchase raw materials after the customers have ordered for

products of the Company ............................................................................................................... 30

Table 13: Shows Produces of inventories when our customers are in need of them .................... 30

Table 14: Shows recording of issued and sold inventories at Coca- Cola Company .................... 31

Table 15: Shows the Use of tied security system at the store ........................................................ 32

Table 16: Showing kind ofrelationship between inventory management and performance ........ 33

Table 17: Showing challenges faced by the Coca- Cola Company Mbarara branch in managing

inventories ..................................................................................................................................... 3 6

viii

LIST OF ABBREVIATIONS/ACRONYMS

W.I.P Work In Progress

MRO Maintenance, Repair and Operations

MRP Materials Requirements Planning

MRP Manufacturing Resources Planning

EDI Electronics Data Interchange

LIFO Last In First Out

FIFO First In First Out

JIT Just in Time

us United States

UGX Uganda Shillings

UN United Nations

NY New York

ix

ABSTRACT

This study was based on the role of inventory management and performance of private

organizations in Uganda while considering Coca Cola plant- Mbarara. The study was guided by

three objectives; (i) to find out the strategies used in inventory management at Coca- Cola

Mbarara branch, (ii) to assess the degree of business performance at Coca- Cola Company

Mbarara branch and (iii) to find out the relationship between inventory management and

performance of Coca- Cola Mbarara Branch. The researcher used both a descriptive cross

sectional survey design which included both qualitative and quantitative method of data

collection, the quantitative method was used to collect numerical data in form of numbers

representing paiticular facts or measurements which helped the researcher to obtain information

from respondents in depth. The study made the following findings the common strategy of

inventory management used at Coca- Cola Mbarara branch include; integrated system (System

Application and products) responsible for management information system which helps to make

serious decisions on inventory, inventory requirement points, and over stock brands for the fast

moving products, recoding of all the purchased and issued inventories to the production

department of the Company, issue of inventories from the store that were previously purchased

to the production depaitment and arrangement of some company inventories according to the

order of their impo1iance, the respondents both "Strongly Disagree and Undecided" indicated

inventory management having a negative relationship on the performance of Coca-Cola

Company Mbarara branch. The study concluded that the common materials handling techniques

used at Coca- Cola Company Mbarara branch include; integrated system (System Application

and products) responsible for management information system, inventory requirement points,

and over stock brands for the fast moving products, recoding, issue of inventories from the store

that were previously purchased to the production department and arrangement of some company

inventories according to the order of their importance. The study recommended management in

manufacturing companies to always forward planning, centralize the purchase and store function.

carry out stock taking exercise periodically, top mai1agement in most organizations to emphasis

on the proper inventory management techniques and measuring of efficiency deviations to

identify weaknesses in the process of managing inventories, managers in organizations to

unde1take forward production planning.

X

CHAPTER ONE

BACKGROUND OF THE STUDY

A soft drink (see terminology for other names) is a drink that typically contains carbonated

water, a sweetener, and a natural or artificial flavoring. The sweetener may be sugar, high

fructose com syrup, fruit juice, sugar substitutes (in the case of diet drinks), or some combination

of these. Soft drinks may also contain caffeine, colorings, preservatives, and other ingredients.

This statistic highlights the market share of leading carbonated beverage companies worldwide

as of 2015. The carbonated soft drink market was dominated by the Coca-Cola Company, which

held a market share of 48.6 percent. The global market was estimated at 341.6 billion U.S.

dollars.

Soft drinks are called "soft" in contrast to "hard drinks" (alcoholic beverages). Small amounts

of alcohol may be present in a soft drink, but the alcohol content must be less than 0.5% of the

total volume if the drink is to be considered non-alcoholic_Pl Fruit juice, tea, and other such non

alcoholic beverages are technically soft drinks by this definition but are not generally referred to

as such.

Soft drinks may be served chilled, over ice cubes or at room temperature. In rare cases, some soft

drinks, such as Dr Pepper, can be served warm. Soft drinks are available in many formats,

including cans, glass bottles, and plastic bottles (the latter in a variety of sizes ranging from small

bottles to large 2-liter containers). Soft drinks are also widely available at fast

food restaurants, theaters, convenience, casual dining restaurants, and bars from soda

fountain machines. Soda fountain drinks are typically served in paper or plastic disposable

cups in the first three venues. In casual dining restaurants and bars, soft drinks are often served in

glasses. Soft drinks may be drunk with straws or sipped directly from the cups.

Soft drinks are mixed with other ingredients in several contexts. In Western countries, in bars

and other places where alcohol is served (e.g., airplanes, restaurants and nightclubs) many mixed

drinks are made by blending a soft drink with hard liquor and serving the drink over ice. One

well-known example is the rum and coke, which may also contain lime juice. Some

homemade fruit punch recipes, which may or may not contain alcohol, contain a mixture of

1

various fruit juices and soda pop ( e.g., ginger ale). At ice cream parlours and l 950s

themed diners, ice cream floats are often sold. Two popular ice cream floats are the coke float

and the root beer float, which consist of a scoop of ice cream placed in a tall glass of the

respectively named soft drinks.

Inventory management is the controlling of stock inventory levels with the physical disthbution

function to balance the need of minimizing stock holding and maximizing handling costs.

Inventory management is important to all most every type of business whether product or service

oriented; it is a system which ensures that the right quality of materials is available in right

quantity at the right place and at a right time with the amount of investment (Bierderman. 2004 ).

Inventory management system helps the firm in managing the flow of raw materials, semi

finished products and provides the staff to coordinate various activities for effective inventory

management and this will increase demand and supply of products which increase customer

satisfaction (Donald, 2009). The measures of inventory management include Economic order

quantity inventory management (E)Q), Material requirement planning (MRP), ABC Analysis

inventory management and Just in time inventory management.

Business performance is the effectiveness of the business in fulfilling its purpose. Some

businesses aim to trade successfully in order to return financial benefits to shareholders. while

others have non-financial objectives such as service to the community (Bierderman, 2004)

. Business performance improvement is the concept of organizational change in which the

managers and governing body of a business put into place and manage a programme which

measures the current level of performance of the organization like inventory management and

then generates ideas for modifying business behavior and infrastructure which are put into place

to achieve higher output.

The primary goals of business inventory management are to increase business effectiveness and

efficiency to improve the ability of the organization to deliver goods and or services (Ronald,

2013). Performance improvement at the operational or individual employee level usually

involves processes such as statistical quality control. At the organizational level, performance

improvement usually involves softer forms of measurement such as customer satisfaction

2

surveys which are used to obtain qualitative information about performance from the viewpoint

of customers. The measures of business performance are financial performance, product

management performance and shareholders return.

1.2 Statement of the problem

Inventory management at Coca Cola Mbarara plant is mostly seen in arrangement of crates at the

plant, bottles packing, buying of raw materials, supply of customers, issuing of raw materials for

use in the plant departments. According to UNBS (2016), Coca Cola Company Mbarara Branch

has improved in its business outcomes and performance. It can now supply the needs of the

market in terms of product availability in actual time when the customers need it and also to cope

up with the demanding extra market of South Sudan. Although inventory management involves

activities such as controlling of stock and distribution of stock at the right time, poor business

performance still exists. This is probably due to shock of high commodity fuel prices and impact

of global economic crisis mainly because of weaker consumption private demand, (Kasekende

20 I 0) hence poor inventory management. However these techniques for inventory management

at Coca-Cola, performance of the company had reduced from 80% to 60% in the years 2008 and

2009 respectively. Basing on the above information, Coca Cola Mbarara plant has registered

decline in sales performance over time (Arinaitwe, 2009). The study was set to investigate the

relationship between invento1y management on performance of Coca Cola plant- Mbarara.

1.3 Purpose of the study

The purpose of the study was to find out the impact of inventory management and performance

of private organizations in Uganda while considering Coca Cola plant- Mbarara.

1.4 Specific objectives

1. To examine the strategies used in inventory management at Coca- Cola Mbarara branch.

11. To assess the degree of business performance at Coca- Cola Mbarara branch.

111. To the relationship between inventory management and performance of Coca- Cola

company Mbarara branch.

1.5 Research questions

1. What are the strategies used in inventory management at Coca- Cola Mbarara branch?

3

11. What is the degree of business performance at Coca- Cola Mbarara branch?

m. What is the relationship between inventory management and performance of Coca- Cola

Company Mbarara branch?

1.6 Scope of the study

Content scope, the study focused on the role of inventory management of inventory management

and business performance. Geographical scope, the study was conducted at Coca-Cola Plant on

Mbarara-Masaka Road. Time scope, the study considered information relating to the period or four months.

1. 7 Significance of the study

The study findings were significant in the following ways;

i) Academic

The findings of the study helped the student to acquire more knowledge on inventory

management and its role in business performance.

The study was also partial requirement for the fulfillment for the award of a bachelor's degree in

procurement and logistics of Cavendish University.

ii) Policy makers

The study may further encourage government and other policy makers to set up educational

institutions to provide training on how to manage inventory in organizations.

iii) Industry

The findings may provide information to managers in different organizations/industries

especially on knowing how to compare actual performance and inventory management.

iv) Development practitioners

The findings may also be beneficial to other upcoming researchers to investigate further about

the impact of inventory management on organizational performance of other organizations other

than Coca- Cola plant- Mbarara.

4

DEFINITION OF KEY TERMS

Inventory: - is the amount of goods, materials or parts carried out in stock or store house for

example, work in progress (W.1.P), raw materials, financial goods resale MRO items.

Inventory management according to Garry (2011) involves the planning, ordering and

scheduling of the materials used in the manufacturing process. Garry, J. Z (2011 ).

Inventory control: - refers to the process whereby the investment in materials and parts carried

in stock is required within pre-determined unit set in accordance with inventory policy

established by management.

A customer, also client, buyer or purchaser is the buyer or user of the paid products of an

individual or organization, mostly called the supplier or seller. (Freneau 2010).

Profit generally is the making of gain in business activity for the benefit of the owners of the

business. It is also defined as returns received on a business undertaking after all operating

expenses have been met.

A technique refers to the ways which may be adopted in order to minimize on the uncertainties

or outcomes of poorly inventory levels like stockless purchasing system, determining order

quantities and inventory levels. (Freneau 2010).

Efficiency refers to a functioning or prospering of a company at a given time in a given period

basing on the desired goals and objectives of a company. (Schreilsfeder, 2011)

5

1.8 Conceptual framework

INDEPENDENT VARIABLE

INVENTORY MANAGEMENT

• Economic order quantity inventory

management (EOQ

• Material requirement planning

(MRP)

• ABC Analysis inventory

management

• Just in time inventory management

DEPENDENT VARIABLE

BUSINESS PERFORMANCE

• Financial performance

• Product management

performance

• Shareholders return

INTERVENING VARIABLES

• Government policies

• Organization culture

Figure 1: Showing the conceptual framework

Source: Researcher's conceptualization and Halachmi, A., & Bouckart G. (2005); Performance

measurement, organizational technology and organizational technology and organizational

design. Work Study, 43 (3), 19-25.

6

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter focuses on the review of the related literature in line with the study variables. The

researcher mainly obtained the theoretical available written data by different authors about the

variables under the study and the reviewed information is arranged as follows;

2.1 Strategies of Inventory Management

The word "inventory" has been defined in many ways, as indicated in the literature. Three

definitions have been chosen seem to be more appropriate to the topic developed in this

dissertation. "Inventories are stockpiles of raw materials, suppliers, components, work in

process, and finished goods that appear at numerous points throughout a firm's production and

logistics channel" (Ballou, 2004).

According to Chase, Jacobs and Aquilano (2004), inventory is the stock of any item or resource

used in an organization. An inventory system is the set of polices and controls that monitor levels

of inventory and determine what levels should be maintained, when stock should be replenished,

and how large orders should be. Finally, Pycraft et al., (2000) defined inventory or stock as "the

stored accumulation of material resources in transformation system. So a manufacturing

company will hold stocks of materials, a tax office will hold stocks of information and a theme

park will hold stocks of customer, when it is customers which are being processed we normally

refers to the stocks of them as a queues".

Inventory management involves providing the required inventory levels that will sustain the

organization's daily operations at minimum costs. This covers issues like determining the level

of stock to order, when to order, establishing receipt and inspection procedures and providing

proper storage facilities. Without proper stock control procedures in place, firms are likely to

face two undesirable inventory levels. That is to say excessive/ high levels of inventory or

inadequate/ low levels of inventory (Dickerson 2014 ).

Inventory is defined as the value of the quantity of raw materials, components, assembles,

consumables work in progress and finished goods that are kept or stored for use as the need

7

arises, it is the total amount of goods and all material contained in a store or factory forgiven

time (Lysons 2000). Inventory can be defined as items that are in a stock to decouple successive

operations in the progress of manufacturing a product and distributing it to the customers the

organization which consists of a list of goods and materials held available in stock (Lysons

2000).

According to Allen (2001) successful inventory control involves simultaneous attempts to

balance both costs and benefits of inventory. Inventories can be purchased in varying quantities

according to the requirements of the firm where as other elements of cost like labor and other

services cannot be easily varied once they are established, therefore it can be concluded that

material is the most flexible and controllable factor of production. Most organizations have three

(3) types of inventory that is raw materials work in progress and finished goods which are kept to

facilitate smooth production.

Inventory management involves controlling of stock or inventory levels with the physical

distribution function to balance the need for minimizing stock holding and handling costs (Lyson

2000). It is aimed at ensuring that the company is supplied with the right inventories at the right

time in the right place and ensuring optimization of the benefits of holding inventory in the

organizations maximizing the benefits while minimizing the costs.

Inventory management is the system which ensures that the right quality of materials is available

in the right quantities at the right time and right place with the right amount of investment Jain

and Narang (1986) inventory management is a system concerned with a question and recording,

inspecting, handling, storage issuing and control of supplies (Lysons, 2000).

Inventory management strategies are used by enterprises to strike an effective balance between

inputs and outpnts of a given process of production or trade (scholasticus2010).

Perpetual inventory management technique

This technique is continuously assessed; it is basically because the treatment of various

transactions of purchase and sale directly affects the inventory in book keeping. e.g. the business

model of mall works on a sale basis i.e. whatever inventory comes in from the dealer is sold to

8

final customer without any processing, perpetual inventory system find work best in such case,

also in perpetual system the individual books for sale and purchase are done away with and there

is only one book, the account is balanced at the end of each day which yield the inventory

positive for the day (Kamukama, 2006).

The perpetual inventory system is best suited for the enterprises that usually keep a high

inventory and have a high turnover, it is also well suited for type of industries where there is no

much processing to do so the inventory exists at only one level for sale rather than at the three

levels (raw material work in progress) and for sale. This technique is also well suited for the fact

that inventory checking is an important part of operation of the industry (Kulkarni 2010).

Perpetual management technique has better responsiveness to demand compared to periodic

reviews, ordering is automatic which saves time and labour thereby ensuring better control of

stock Lysons, (2000).

Periodic review inventory management techniqne.

This is also another technique for inventory management, under this technique, items inventory

position is reviewed periodically rather than at a fixed order point, the period or interval at which

stock levels are reviewed depends on the imp01tance of stock item, available quantity will be

ordered at each reviewed to bring the stock level back to the maximum .

This technique is important in that there is greater chance of elimination of absolute items owing

to periodic review of stock, also the purchasing load may be spread more evenly with possible

economies of scale ordered from the supplier at the same time, in this technique large quantity

discounts may be negotiated when arrange of stock items are ordered from the same supplier at

the same time , there is also production economies however, if the usage rate changes shortly

after review period stock out may occur before the next review date (Lysons 2000).

Use of this technique increases the chances of enjoying economies of scale especially when

depending on one supplier; there would be also a sense of better utilization of organizational

resources for scheduling (Ikiror, 2008). Periodic system inventory would be calculated once in a

month or 6 months or a year, periodic means that the inventory would not be continually

9

watched but instead would be assessed periodically the period being predicated by the company

(Arjun 2010).

Just in time inventory management technique.

This is based on cost of zero wastage, according to this system a business should order inventory

which is needed to cany on their immediate production in other words manufacturing units

should not store any extra inventory as it leads to additional carrying costs, for example a door

manufacturing industry needs to make 100 doors besides other part it keeps around 150 doors

stored as inventory to apply this inventory management technique a clear understanding of how

much raw materials are needed at a given time to maintain proper flow of production should be

there for this time taken by raw materials to reach manufacturing facility from the supplier

should be known and the life of raw materials should be clearly determined before , procedures

should be formulated to ensure that raw materials arrive just in time before the production starts

so that little to no storage time is needed (Kamukam2006).

Just in time is advantageous in that it reduces the operational costs of the business thus

increasing the profits and return on investment, also it eliminates the possibility of making a

mistake in production process. However, if the raw material that is ordered is not of good quality

or gets damaged the production will have to be stopped as there is no extra stock ofraw materials

available; this leads to time wastage (Dogra2010). According to (Poundy2005)different goals of

JIT are to produce the required items , required quantity at the right time seeking to achieve

elimination of non valuable activities such as zero inventories zero defects, zero break downs

and 100% on delivery. Lysons (2000) in his book using this technique of inventory management

aims at maintaining just enough materials at right place and time to make just the right amount of

a given product.

AB C Analysis inventory management technique.

It is a business term used to define inventory categorization technique often used in materials

management; it is also called selective inventory control. A B C analysis provides a mechanism

for identifying items that will have a significant impact on overall inventory cost while also

providing a mechanism for identifying different categories of stock that require different

management controls, the A B C analysis Suggests that inventory of an organization are not of

10

equal value, thus the inventory is grouped into 3 categories i.e. A B & C in order of their

estimated importance. "A" items are very important for an organization because of high value of

these "A" items frequently value analysis are required , in addition to that an organization needs

to choose an appropriate order pattern for example Gust in time )to avoid excess capacity. "B"

Items are important but of course less important than "A" items and more important than "C"

items, there "B" items are inter grouped. "C" items are marginally important.

A B C Categories

"A" Items 20% of items accounts for 70% of the annual consumption value of items - "B" Items

30% of items accounts for 25% of the annual consumption value of items. - "C" Items 50% of

items accounts for 5% of the annual consumption value of the items. Young pharmacists, (20 I 0)

Lysons (2000) also indicated that A B C can be used to arrange goods according to level of

spending, priority, importance, annual sales and profitability and on other grounds.

A B C technique in general helps to save time, fasten planning, improve stores lay out, improve

management of stores, on the centrally however, it could be misleading to some extent since it

does not address deep issues of stock control and requires technical competences on the side of

store staff Richard, (2003 ).

Economic order quantity inventory management technique (EOQ)

Economic order quantity inventory management technique is the level of inventory that

minimizes the total inventory holding costs and ordering costs .This model applies where the

demand for a product is constant over the year and that each new order is delivered in full when

the inventory reaches zero there is a fixed cost charged for each order placed regardless of

number of units ordered, there is also holding or storage cost for each unit held in storage .The

optimal number of units can be determined by the product so that total cost can be minimized

associated with purchase delivering and storage of the product the required parameters to

solution are the total demand for the year the purchase cost for each item , the fixed cost to place

the order and the storage cost for each item per year. Note. Number of items an order is placed

will also affect the total cost, however this number can also be determined from the parameters

Andrew & John, (2010). According to Jessop, (2004) the following are identified as the

fundamental assumption of basic EOQ model.

11

Assumptions

The ordering cost is constant -The lead time is fixed -The purchase price of the item is constant

that is no discount is available. -Assumes that replenishment is made instantaneously, the whole

batch is delivered at once.

According to Ikiror, (2008) one order to arrive at economic order quantity the formula below is

used.

Variables Q -Order quantity Q* -optimal demand quantity of the product. D -purchase cost per

unit S - Fixed cost per order H -Annual holding cost per unit Total cost function

Total cost =purchase + ordering cost+ holding cost.

Material requirement planning (MRP)

This is production planning and inventory control system used to manage manufacturing

processes;

i) MRP is Marjory intended to meet three objectives.

ii) Ensure materials are available for production and production are available for delivery to

customers.

iii) Maintain the lowest possible level of inventory.

iv) Plan manufacturing activities delivery schedules and purchasing activities.

The basic function of MRP system includes inventory control bill of material processing and

elementary scheduling. MRP helps organizations to maintain low inventory levels it is used to

plan , manufacturing, purchasing, and delivering activities , companies need to control the types

and quantities and ensure that they are able to meet current and future customer demand. at all

the lowest possible cost making bad decision in any of these areas will make the company lose

money. MRP is a tool to deal with these problems and provides answers to several questions. -

What items are required? - How many are required? - When are they required? The major

problem with MRP system is the integrity of the data if there are any errors in the inventory data.

The bill of materials (BOM) data or the master production schedule, then the outputted data will

also be incorrect.

Data integrity is also affected by in accurate cycle count adjustments, mistakes in receiving

input and shipping output and the scrap note reported waste damage, box count errors and system

12

issues many of these types of errors can be minimized by implementing pull systems and using

bar code scanning. Another problem with MRP is requirement that the user specify how long it

will take a factory to make a product from its component paiis Hopp & Spearman, (2004 ).

According to Lysons, (2000) MRP is a computerized time phase requirement planning system

which aims at holding zero stock of an item un less its required for current production. The

system calculates the total quantity of each item that needs to be ordered establish the lead time

in the system and send this information to stores procurement department and suppliers store. In

his book purchasing and supply chain management (Lysons 2003) stipulates the following

assumption upon which MRP is based demand must be uniform, the organization must practice

planning in all sectors, master production schedules must be present, and demand must be

dependent. Jessop (2003), there are various steps in material requirement planning system

includes sales forecast , mastering production schedule, stock record file, and purchase required.

The Degree of Business Performance

Business Performance is a measure of the results achieved. Performance efficiency is the ratio

between effort extended and results achieved. The difference between current performance and

the theoretical performance limit is the performance improvement zone. Business Performance

assumes an actor of some kind but the actor could be an individual person or a group of people

acting in concert. The performance platform is the infrastructure or devices used in the

performance act (Malcom 2010).

According to Like1i there are two main ways to improve Business performance: improving the

measured attribute by using the performance platform more effectively, or by improving the

measured attribute by modifying the performance platform, which in tum allows a given level of

use to be more effective in producing the desired output. Business Performance can be measured

by obtaining the magnitude of a quantity, such as length or mass, relative to a unit of

measurement, such as a meter or a kilograJ11.

Business Performance involves performai1ce improvement is the concept of business change in

which the managers and governing body of an orgai1ization put into place and manage a

progran1me which measures the current level of performance of the organization like inventory

13

management and then generates ideas for modifying organizational behavior and infrastructure

which are put into place to achieve higher output. The primary goals of business inventory

management are to increase business effectiveness and efficiency to improve the ability of the

organization to deliver goods and or services.

Business Performance improvement at the operational or individual employee level usually

involves processes such as statistical quality control. At the business level, Business performance

improvement usually involves softer forms of measurement such as customer satisfaction

surveys which are used to obtain qualitative information about performance from the viewpoint

of customers.

Business performance tributes

Profitability offer several different measures of the success of the firm at generating profits. The

gross profit margin is a measure of the gross profit earned on sales. The gross profit margin

considers the firm's cost of goods sold, but does not include other costs. Dividend policy ratios

provide insight into the dividend policy of the firm and the prospects for future growth. Two

commonly used ratios are the dividend yield and payout ratio. However, a high dividend yield

does not necessarily translate into a high future rate of return. It is important to consider the

prospects for continuing and increasing the dividend in the future. The dividend payout ratio is

helpful in this regard. Nyamuyonga, (2001 ).

• Market share is the percentage of a market ( defined in terms of either units or revenue)

accounted for by a specific entity. In a survey of nearly 200 senior marketing managers,

responded that they found the "dollar market share" metric very useful, while the

majority found "unit market share" very useful. Nyamuyonga David, (2001 ).

• Increasing market share is one of the most impo1iant objectives of business. The main

advantage of using market share as a measure of business performance is that it is less

dependent upon macro environmental variables such as the state of the economy or

changes in tax policy. However, increasing market share may be dangerous for makers of

14

fungible hazardous products, particularly products sold into the United States market,

where they may be subject to market share liability. (Bouckart, 2005).

• Growth refers to a positive change in size, and/or maturation, often over a period of time.

Growth can occur as a stage of maturation or a process toward fullness or fulfillment. It

can also perpetuate endlessly, for example, as detailed by some theories of the ultimate

fate of the universe. A sustained growth in business performance is a primary goal for

most managers. Trends in accounting-based measures are frequently used in evaluating

the performance of management. The process of improving some measure of an

enterprise's success. Business growth can be achieved either by boosting the top line or

revenue o the business with greater product sales or services income or by increasing the

bottom line or profitability of the operations by minimizing costs. (Halachmi, 2013).

2.3 The relationship between inventory management and business performance

Inventory plays an important role in the growth and survival of a Business in the sense that

failure to an effective and efficient management of inventory, will mean that the organization

will lose customers leading to poor services delivery and sale will decline. Emphasizing on the

impo1iance of inventory on the balance sheet of companies. Coyle, Bardi and Langley (2003)

state that "inventory as an asset on the balance sheet of companies has taken an increased

significance because of the strategy of many firms to reduce their investment in fixed assets, that

is plants, ware houses, office buildings, equipment and machinery , and soon.

Virtually every enterprise finds it necessary to hold stocks (or inventory) of various items and

materials. That is because it would be practically impossible to operate with only one of each

item to be sold or used in manufacture or used in office work. A reserve or a fund or inventory of

each item or material used or sold frequently is therefore maintained, so that as items or

materials are sold or used they can be replaced or replenished from the stocks held in reserve.

Due to unce1iainty in future demand, and because of the unguaranteed availability of supplies,

stock is therefore held to ensure an availability of goods to minimize the overall costs associated

with the management of stock (Drury, 2000).

15

Gittinger (2013) argues that precautionary motive is one of the central roles of inventory

management. Accordingly, precautionary motive means that stock held to guard against risk of

unpredictable changes in demand and supply. In most cases, the level of demand of goods and

the time required for supply cannot be known with certainty. Therefore, to ensure product

availability, the organization maintains additional amount of safety stock to meet regular

production and market needs. Firms should invest in stock control for precautionary motive to

act as a buffer or link between demand and supply so that production can be geared to a more

constant output. Precautionary motive necessitates holding of inventories to guard against the

risk of unpredictable changes in demand and supply forces and other factors (Pandey, 2002).

According to Kenneth and Brian (2006) includes keeping inventory includes the following

reason:- Reduce the risk of supplier failure or uncertainty- safety and butter stocks are held to

provide some protection against such as strikes, transport breakdowns due to floods or snow,

crop failures, wars and similar factors. Protect against lead time uncertainties, such as where

supplier's replenishment and lead time are not known with certainty - in such case an investment

in safety stocks is necessary if customer services is to maintain at acceptable levels. Meet

unexpected demands or demands for customization of products as with agile production and

smooth seasonal or cyclical demand.

Balloon (20 I 2) illuminates that inventories should be held to improve business performance and

therefore goods should be spotted at a place where customers can get them in the quantities they

wish. The transaction motive is aimed at facilitating smooth operations on daily basis. According

to Pandey (2002) Transaction motive emphasizes the need to maintain inventories to facilitate

smooth production and sales operation. Firms should maintain back up inventory either in excess

or low levels to take advantage of current and future demands or price fluctuations. They should

therefore purchase goods and stock them in advance when they anticipate price increase in future

and also prepare for contingencies that may befall a company, for instance, strikes, prices, goods

among others (Kakuru, 2000).

A research done by Holdren and Hollingshead (2011) work of inventory held by American

businesses is financed by the bank loans with the goods pledged as security. An impo11ant

industrial marketing relationship exists between inventory managers and commercial lending

16

officers who write this inventory loan. Inventory manager need to provide their lenders with

sufficient information to obtain financing at the lower rate. Loan officers need to assess the

degree of inventory loans are matters of concern for both inventory manager and creditors.

According to Richard et al. (2009), business performance encompasses three specific areas of

firm outcomes: (a) financial performance (profits, return on assets, return on investment, etc.);

(b) product market performance (sales, market share, etc.); and (c) shareholder return (total

shareholder return, economic value added, etc.). The term business effectiveness is broader.

Specialists in many fields are concerned with business performance including strategic planners,

operations, finance, legal, and development. In recent years, many organizations have attempted

to manage organizational performance using the balanced scorecard methodology where

performance is tracked and measured in multiple dimensions such as: financial performance (e.g.

shareholder return) ,customer service ,social responsibility (e.g. corporate citizenship.

community outreach) ,employee stewardship.

According to West et.al (2011), Business performance refers to a function of an business's

ability to meet its goals and objectives. How successful a business achieves its objectives,

satisfies social responsibilities or both depends upon how well an organization carries out its

activities. Businesses function is an important factor in the performance of a society or nation.

How well the businesses of the society do their job-organizational performance, gives rise to

debate (Stoner et. al, 20 I 0). Business performance is evaluated regardless of the system being

used, either formal or informal. Systematic ways of appraising organizational performance

throughout the company are however desirable so that each manager can help to improve current

business performance and identify individuals who show the greatest potential for higher

management positions (Pigers et al., 2012).

Lucay (2003) observes that excessive levels of stock are undesirable because they increase the

risks of inventory becoming obsolete, stock loss through damage and theft, increased storage

costs like rent, insurance and unnecessary tie up of the firm's funds. He fmiher state that a firm

would be foregoing profits when it continues maintaining excessive levels of inventory, which

implies that the probability position of the firm is being threatened in the long run since funds are

not being invested in other profitable ventures. Lower levels of inventory are also undesirable

17

because it interrupts production, loss of good will and high ordering costs especially when

ordering is frequent. Inadequate inventory levels leads to business closure due to shifting of

customers to other efficient suppliers as a result of production/ operation interruptions (Gittinger,

201 !).

Inventory management is typically a concern of all businesses in a competitive environment

which is product or service oriented. It is noted from above discussion that there is a strong core

lection between inventory management and business performance improper management

inventory leads to stock out costs and delayed delivery. Well performing businesses have its

customers buy again and convince others to join. Hence increased business performance and

increased number of proper customers of the business and its good will as it does not fall short of

deliveries and its customers are happy about its practices (Sanderson, 2003).

18

CHAPTER THREE

METHODOLOGY

3.1 Research Design

The study used case study and descriptive research design. A case study was chosen as the most

appropriate research strategy. Saunders et al (2003) define a case study as "a strategy for doing

research which involves an empirical investigation of a particular contemporary phenomenon

within its real life context using multiple sources of evidence".

The design used both qualitative and quantitative approaches. According to Amin (2005), both

qualitative and a quantitative techniques can be used triangulated especially where the study

involves investigating people's opinions. Qualitative techniques were also employed to address

the gap left by quantitative methods. The qualitative methods to be used include interviews

guided by an interview schedule. The quantitative data collection methods were used mainly

closed ended questionnaire, which were filled in by the respondents.

3.2 Study Population

The study population was 140 respondents chosen from the leadership structure and directly

mandated to manage inventory management in Coca-Cola plant-Mbarara and have the relevant

information on Inventory management; and are divided as: marketing representatives (30). Sales

executives (20), Customers (80) and managers (10)

3.3 Sample size

Due to limited time and resources, a sample size of (97 people) were selected from the study

population of (140) respondents (Krejcie & Morgan, 1970) divided as seen in Table I below.

This study used simple random sampling for those in the manager's Office and sales executives.

Simple random sampling is good for in-depth analysis, it enables high representation of the

population, less bias, and simplifies data interpretation and analysis ofresults (Black, 20 I I).

19

Table 1: Sample Size

No Respondents Target Sample size Selection method

population

I Marketing representatives 30 15 Purposive Sampling

2 Sales executives 20 15 Simple random sampling

3 Customers 80 57 Purposive Sampling

4 Managers 10 8 Purposive Sampling

Total 140 97

Source: Primary data

3.4 Sampling Techniques

Simple Random technique was used or other employees because these are workers from the

same companies and they all understand the work flow of the organization that they work in.

Simple random sampling is best because it is easy to collect data when the population members

are similar to one another on important variable (Gay, 201 I). It also ensures a high degree of

representativeness and ease of assembling the sample (Thompson, 2002; Levy& Lemeshow,

2008).

Purposive sampling was used for selecting the managers and heads of departments in the

population especially marketing representatives and customers. This sampling procedure is used

for its cost efficiency and effectiveness to collect specific information and allows for probing for

clarity (Kothari, 2004 ).

3.5 Data collection instruments

3.5.1 Self-Administered Questionnaire

The research instrument included the Self-Administered Questionnaire (SAQs). SAQs were

used because they are the most suitable in a survey that involves a large number of respondents

(Amin, 2005). In addition, (SAQs) were very suitable for the target respondents given their high

levels of English literacy. Finally, SAQs consumed less time and money compared to other

methods (Alston & Bowels, I 998)

20

3.5.2 Interview Guide

Interviews were mainly used to get information from key informants. Interviews are good for

probing clarity, and more detailed explanations by the respondent and they keep them focused to

the study topic. In addition, the interview was used in order to collect additional data that might

have been left out by the questionnaires especially closed-ended ones (Amin, 2005),

3.5.3 Observation check lists

The observation check lists was used for ascertaining trends, gaps and the way forward. Some of

the documents reviewed include government, non-government documents and reports,

dissertations, library books, the Internet, news papers and magazines as will be presented in the

literature review and also clear observations were taken from the working schedules of the firm.

3.6 Measurement of Variables

Inventory Management was measured according to scales adopted from Usha (2009). The scales

were anchored on a 5-point Likert scale ranging from(!) strongly agree to (5) strongly disagree.

Business Performance was measured according to its dimensions of supportive, participative and

directive adopted from Hoffman (2002). The scales were anchored on 5 Liket scale ranging from

strongly agree (I) to strongly disagree (5).

3.7 Validity and Reliability of Instruments

3.7.1 Validity

Validity referred to the degree to which results obtained from analysis of the data actually

represents the phenomenon under study. In calculating validity, the researcher ensured that

questions are relevant in order to ensure that data collected give meaningful and reliable results

represented by variables in the study (Mugenda and Mugenda, 2009). The researcher used the

following formula to establish validity of the research instruments as seen below.

Content Validity Index (CVI) = Agreed items by all judges as suitable

Total number of items judged.

Content Validity Index (CVI)

From the above calculation, 35 was the Agreed items by all judges as suitable and 43 is the total

number of items judged and 0.81 is the Content Validity Index (CVI) which has come out valid

since it is above 0. 7.

21

3.7.2 Reliability

According to Mugenda and Mugenda (2009) reliability refers to the measure of the degree to

which a research instrument yields consistent results or data after repeated trials. Cronbach • s

Alpha coefficient will be used to measure reliability of the instruments.

Accordingly, to Amin, (2005), an alpha of 0.5 or higher is sufficient to show reliability; the

closer it is to I the higher the internal consistency in reliability (Sekaran, 2003). The

questionnaire was pre-tested using ten (] 0) respondents within the area of study and the

reliability results will be computed using the Statistical Package for Social Scientists (SPSS).

3.8 Ethical Considerations

It was important during the process of research for the researcher to understand that paiticipation

is voluntaiy; participants are free to refuse to answer any question and may with draw any time.

Another important consideration, involves getting the informed consent of those going to be met

during the research process, which involved interviews and observations bearing in mind that the

area bears conflict.

Accuracy and honesty during the research process is very impo1tant for academic research to

proceed.

The researcher treated the project with utmost care, in that there should be no temptation to cheat

and generate research results, since it jeopardizes the conception of research.

Personal confidentiality and privacy are very impo1tant since the disse1tation was public. lf

individuals were used to provide information, it was impo1tant for their p1ivacy to be respected.

If private information has been accessed then confidentiality has to be maintained (Stephen

2002).

3.9 Data Collection Procedures

The researcher discussed with his supervisors and to seek approval on validity and reliability of

the instruments. Then an introductory letter was obtained from Kampala International University

for the reseai·cher to present in the field in Coca Cola plant in Mbarara so as to create rapport

with the respondents. The procedure helped to improve the usefulness, timeliness, accuracy,

comparability and collection of high quality for better analysis and reporting.

22

3.10 Data Analysis

This is the process of bring understanding and meamng to data collected for validity and

reliability (Sekaran, 2003). Data collected from the field was first of all sorted, edited, coded and

entered into in the computer using Microsoft Excel. This package was useful to the researcher to

present data using tables, graphics and frequency tables and fmiher help the researcher generate

descriptive statistics such as means and standard deviations.

Data was analyzed using Microsoft excel to generate tables. Qualitative data was transcribed and

generated texts.

3.11 Limitations of the study

The study involved the following constraints;

(i) Slow or non- response. Since I did not know the kind of respondents I was dealing with,

some of them failed to respond or delay to do so. I made convenient appointments with the

respondents and encouraged them to respond and give true information in time.

(ii) Due to the sensitivity of the study, some respondents refused to give some data to the

researcher citing the reason behind the study. The researcher however overcame this by

showing an introductory letter he had acquired from the faculty fully explaining the purpose

of the research. He also assured respondents that their ideas would be treated with utmost

confidentiality.

(iii)Bureaucracy delayed the study. From all the procedures to get data from a government

organization took time. However, the researcher took his time and appealed to the

bureaucrats for data.

23

!

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF STUDY FINDINGS

4.1 Data Presentation

The table below shows the distribution of the questionnaire administered in terms of the number

completed and returned, those not returned at all, and those returned but not completed by the

respondents.

4.1.1 Response rate

Table 2: Showing the response rate

Research instrument Targeted number Actually conducted Percentage

Questionnaire 96 96 99.72%

Interviews I I 0.27%

Total 97 97 100%

Source: Primary Data 2017

Table 2 above shows that out of the 96 questions distributed 30 for marketing representatives,

20 for sales executives in Coca-Cola and 80 for customers of Coca-Cola which gave the total

percentage of questionnaires filled at 99.72% and 0.27% for the procurement department where

data was collected using an interview tool to supplement on the quantitative responses. The

response rate was about I 00% because all the respondents showed willingness to fill in questions

just like the customers of Coca-Cola. This helped data to be more accurate and reliable.

Table 3: shows the distribution questionnaire administered.

Questionnaire Respondents Percentage

Completed and Returned 80 88.2%

Not Returned at all 10 9.1%

Returned but not filled 7 2.7%

Total Distributed 97 100%


24

Table 3 above shows that 80 (88.2%) out of ll0 (100%) questionnaire administered were

completed and returned. 7 (2.7%) were returned but not completed, while 10 (9.1%) were not

returned at all.

Table 4: Gender of Respondents

Variable Frequency Percentage %

Male 61 62.9

Female 35 36.1

Total 97 100

Source: Primary Data (2017)

This table 4 above shows the total number of respondents within "male" and "female" categories.

61 (62.9%), respondents were under the "male" category, while 35 (36.1 %), respondents with

were under the "female" category. From the result obtained, it was observed that the "male"

category had the highest number of responses with 62.9% than the "female" category.

Table 5: Age of Respondents


Below 20 years 21 21.6

21-29 years 47 48.5

30-39 years ll 11.3

40-49 years 12 12.4

50 years and above 6 6.2

Total 97 100

Source: primary Data (2017)

The table 5 above shows indicates that a total number of 21 (21.6%) respondents fell between the

age bracket "below 20 years", 47 (48.5%) respondents fell within the age bracket of"21-29". 11

respondents with (I 1.3%) were within the age bracket of "30-39". Also, 12 respondents with

(12.4%) fell within the age range of "40-49". Lastly, 6 respondents with (6.2%) fell within the

age range of "50 years and above". From the result obtained, it was observed that respondents

within the age range of"21-29" had the highest percentage from the overall percentage.

25

Table 6: Marital Status of Respondents

Variable Frequency Percentage

Single 67 69.1

MmTied 28 28.9

Divorced 1 1

Total 97 100

Source: Primary data (2017)

This table 6 above shows the total number of respondents within, their total frequency number

and the percentage level. 67 respondents with (69.1 %) belong to the "Single" category, while 28

(28.9%) respondents belong to the "Married" category. Lastly, only 1 respondent belong to the

"Divorced" category with (1.0%). From the result obtained, it was observed that majority of

respondents belong to the "Single" variable with (69.1 %) from the overall percentage.

Table 7: Academic Qualification of Respondents


CERTIFICATE 29 29.9

DEGREE 9 9.3

B.SC/HND 34 35.1

MBA/MSC/PI-ID 24 24.7

Total 97 100


The table 7 above shows the total number of respondents and their educational level. 29 (29.9%)

respondents were "CERTIFICATE" holders, while 9 (9.3%) respondents were "DEGREE"

holders. Also, 34 (35.1 %) respondents are either "B.SC or I-IND" holders. Lastly, 24 (24.7%)

respondents are either "MBA/MSC holders" or "PI-ID" holders. From the result obtained, it was

observed that more respondents with "B.SC/HND" had the highest percentage as compared with

other variables.

26

Table 8: Length of Relationship with Coca- Cola Company Mbarara Branch


1-2 years 13 13.4

3-4 years 28 28.9

5-6 years 33 34

7 years and above 23 23.7

Total 97 100


The table 8 above shows the total number of respondents and their percentage level. 13 ( 13 .4%)

respondents have been in the Coca- Cola company between the period of "1-2 years", while 28

(28.9) respondents have been in Coca- Cola company between the period of"3-4 years". also, 33

(34%), respondents have been in Coca- Cola company between the period of "5-6 years". lastly,

23 (23.7%) respondents have been in Coca- Cola company between the period of "7 years and

above". from the result obtained, it was observed that majority of the respondents have been in

Coca- Cola company Mbarara branch for a long period of time ranging between "5-6 years".

4.2 Techniques of inventory management used at Coca- Cola Mbarara branch.

The study objective one was set to find out the techniques of inventory management used at

Coca- Cola Mbarara branch. According to the study findings, all (100%) of the respondents were

able to understand the term inventory management as none of the study respondents was able to

reveal of not understanding the same study variable. On further understanding by the researcher,

some of the study respondents indicated that inventory management can also mean managing of

stock in the organizations setting.

After understanding of the respondents knew of the term materials handling, the study went

ahead to establish whether Coca-Cola Company was taking part in inventory management and

findings from the study reported of the company taking part in managing its inventories despite

using different techniques of inventory management as shown in Table 9.

27

4.2.1 Inventory Management?

Table 9: the table showing whether respondents understand the term inventory

management?


Disagree 1 1

Undecided 3 3.1

Agree 31 32

Strongly Agree 62 63.9

Total 97 100

Source: Field Survey (2017)

This table 9 shows the total number of respondents and their percentage level that responded to

the question. A total number of 62 (63.9%) respondents "Strongly Agree" to the questions, while

31 (32.0%) respondents simply "Agreed" with the question. 3 (3.1 %) respondents were

"Undecided" about the questions, while, only 1 (1.0%) respondent "Disagree" with the question.

No respondents "Strongly Disagreed" to the question. From the result obtained, it was observed

that majority of the respondents in Coca- Cola Plant understand the term Inventory Management.

4.2.2 The company trying to manage its inventories?

Table 10: Showing whether the company trying to manage its inventories


Disagree 2 2.1

Undecided 1 1

Agree 36 37.1


Total 97 100


The table 10 above shows the total number of respondents and their percentage level that

responded to the question. 58 (59.8%) respondents "Strongly Agreed" to the question, while 36

(37. l %), respondents "Agreed" to the question. 2 (2.1 %) "Disagreed to the question, while only

1 (1.0%) respondent was "Undecided" in his response to the question above. No respondent

Strongly Disagree to the question above. From the result obtained it was observed that over

28

96.9% of the respondents said that the company is trying to manage its inventories while the

minorities said that they were not aware that the company is trying to manage its inventories with

3. 1 % respectively.

4.2.3 The techniques of inventory management

Table 11: Shows arranging of inventories according to their importance at Coca- Cola

Mbarara.


Disagree 1 1

Undecided 4 4.1

Agree 35 36.1


Total 97 100



responded to the question. 57 (58.8%) respondents "Strongly Agree", while 34 (35.1 %)

respondents "Agree" to the question above. Also, 4 ( 4. 1 %) respondents were "Undecided" in

their response. Only 1(1%) respondent "Disagree" to the question above. No respondents

"Strongly Disagreed" to the question above. From the result obtained, it was observed that

majority of respondents combining both the "Agree" and "Strongly Agree" responses with

(94.9%) believe that Coca- Cola Company was arranging materials in stores according to their

importance. This means that the Company management pay attention to the inventory

management of material in the store to a higher extent. From the above results arrangement of

materials at Coca-Cola Company for improved Company's performance especially in the

production department was still wanting.

29

4.3 Purchase Raw Materials after the Customers have Ordered for Products of the

Company

Table 12: Shows the company Purchase raw materials after the customers have ordered for

products of the Company.


Undecided 2 2.1

Agree 36 37.1


Total 97 100


The table 12 shows the total number of respondents and their percentage level that responded to

the question. 59 (60.8%) respondents "Strongly Agree", while 36 (37.1 %), respondents ··Agree"

to the question. Also, only 2 (2.1 %) respondents were "Undecided" in their response to the

question. From the result obtained, it was observed that 97.9% from respondents' sought to

understand whether the Company was purchasing raw materials after the customers have ordered

for goods. These study findings showed that the business organization like Coca-Cola Company

as a private company is not actually purchasing raw materials after the customers have ordered

for goods from the Company as majority of the study respondents indicated.

4.3.2 Produces of inventories

Table 13: Shows Produces of inventories when our customers are in need of them.


Disagree 1 1

Undecided 1 1

Agree 35 36.1


Total 97 100


The table 13 above shows the total number of people with their percentage level that responded

to the question. 60 (61.9%) respondents "Strongly Agree" with the fact that responding swiftly to

customers' needs is the priority of customer relationship management, while 35 (36.1 %)

30

respondents "Agree" to the question. I (I%) respondent was "Undecided" in his response to the

question. Lastly, only I (I%), respondent "Disagree" to the question.

The study findings as in table 11 indicate that most of the respondents both "Strongly Agree"

and "Agree" with the statement that "Our Company produces inventories when our customers

are in need of them" it was observed at (98%) comprising of both of the respondents. However.

the least 2 (2%) of the respondents disagreed with the same statement that "The Coca-Cola

Company produce materials when our customers are in need of them". The above is an

indication that Coca-Cola Company normally produces materials as not according to customers

order but customers just reach the company to take what is already produced and those in the

store department as the marketing department distributes what is produced to the customers who

do not purchase the Company products direct from the main plant site.

4.3.3 Recording of issued and sold inventories at Coca- Cola Company

Table 14: Shows recording of issued and sold inventories at Coca- Cola Company.

Variable Frequency Percentage 0/.,

Strongly Disagree 58 59.8

Undecided 33 34

Agree 5 5.2

Strongly Agree I I

Total 97 100


The table I 4 above shows the total number of respondents and their percentage level that

responded to the question. 58 (59.8%) respondents "Strongly Disagree", while 33 (34.0%)

respondents "Undecided" to the question. Also, 5 (5.2%), respondents were "Agree" in their

response to the question. I (1.0%) respondents "Strongly Agree" to the question. No respondents

"Agree" to the question stated.

From the result obtained, it is observed that whether Coca-Cola Company records inventories

purchased and sold. This was answered as indicated in the table above. From respondents' views,

the Coca-Cola Company records inventories purchased and sold. This is reflected by 58(59.8%)

agreement as none of the study respondents covered was in the disagreed with the same

statement. The results above, can be interpreted that Coca-Cola Company records inventories

31

purchased and sold at all times since the respondents covered by the study agreed with the

statement and that it was using recording of inventories as one of the inventory management

techniques for improved performance of the Company. This was substantiated by a view of one

respondent who expressed that the Company issues different documents like invoices, goods

received note, goods returned note and still that the company had a general book for recoding all

the company diary transactions concerning the materials produced, received and issued at the

company.

4.3.4 Use of tied security system at the store

Table 15: Shows the Use of tied security system at the store.



Undecided 3 3.1

Agree 40 41.2


Total 97 100



responded to the question. 52 (53.6%) respondents "Strongly Agree" to the question, while 40

(41.2%) "Agree" to the question stated above. 3 (3.1%), respondents were "Undecided" in their

response to the question. Lastly, only 2 (2.1 % ) "Strongly Disagree" to the statement above.

Qualitative results as obtained from the interview further confirmed the commonly techniques of

materials handling used at Coca-Cola Company to be including integrated system (System

Application and products) responsible for management information system which helps to make

serious decisions on stock, material requirement points, and over stock brands for the fast

moving products, plus recoding of all the purchased and issued materials to the production and

operations department of the Company.

In addition to the above findings from the study, respondents were able to indicate that for proper

materials handling at Coca-Cola Company the company management has reso1ted to use security

ale1t with the aim of reducing theft cases of the Company goods for improving organization's

32

efficiency. These results significantly show that inventory management is an important factor in

improving the performance of the organization.

4.4 The relationship between inventory management and performance of Coca- Cola

Company Mbarara branch

The study also looked at whether there is a relationship between inventory management and

performance of Coca- Cola Company Mbarara branch. The views as per the study respondents

revealed that all respondents believed that inventory management techniques has a relationship

between inventory management and performance of Coca- Cola Company Mbarara branch as

none of the respondents was in the disagreement with the same statement that a relationship

between inventory management and performance of Coca- Cola Company Mbarara branch exist.

Respondents from the study reported of the relationship between inventory management and

performance of Coca- Cola Company Mbarara branch can be either negative or positive

depending on the way how the method/technique is applied in the management inventories. The

above information as per the study respondents significantly implies that managing of inventory

techniques can either be negative or positive and these were further evidenced by the findings as

in table 4.15.

Table 16: Showing kind of relationship between inventory management and performance



Disagree 27 27.8

Undecided 30 30.9

Agree 22 22.7


Total 97 100


This table 16 above shows the total number of respondents and their percentage level that

responded to the statement. 30 (30.9%) respondents were "Undecided" to the question, while 27

(27.8%) "Disagree" to the question. Also, 22 (22.7%) respondents "Agree" to the question stated

above. Lastly, only 13 (13.4%) respondents "Strongly Agree" in their response to the question

33

stated above. From the result obtained, it was observed that for century bottling company to be at

its best it must constantly meet the needs and demands of customers by reducing their tariff

charges and also improving on their network signals.

From the table I 6 above, shows that majority both "Agree and Strongly Agree" of the

respondents at 35 (36. I%) said that materials handling techniques have a positive relationship

between inventory management and performance of Coca- Cola Company Mbarara Branch. The

study respondents claimed that inventory management techniques has a positive influence on the

performance of Coca-Cola Company went ahead and said that as such techniques of managing

inventories help in proper planning of the materials needed by identifying the gap between the

desired and the actual level of materials, allocation of resources, purchasing, sales and

employment of staff and everything concerned to human resources management all of which

reduces on the costs incuned by the organization in the production departments for improved

performance of the company.

However some of these respondents said that the positive relationship of the inventory

management techniques on the performance of Coca- Cola Company Mbarara branch depends

on how the techniques are used by the users at the company plus the prevailing conditions like

power inform of electricity.

The above results may hence indicate that proper use of inventory management techniques like

application of JIT reduces on ordering costs such as air time costs, in organizations when

employed. This was further evidenced by the study respondents who was able to say that" proper

use of JIT had improves on the performance of private organizations like Coca- Cola Company

Mbarara branch.

When the researcher inquired on issues related to whether recording of inventories at the

company was helping in proper decision making, there was a high level of agreement as the

results indicate that all the respondents did not disagree that recording of inventories at the

Company was helping in proper decision making as the distribution left none of the respondents

who were in the disagreement with the same statement. In conclusion, results indicate that since

almost all the decisions made by the Company management in the process of managing

inventories aim at influencing the production department of the company for better Company

results as recording of materials greatly influence on the Company's performance.

34

Qualitative results from the majority of interviewed participants on the matters concernmg

whether inventory management techniques have any influence on performance of production

depaiiment of the company revealed that the influence between the two variables of inventory

management techniques and the performance of Coca- Cola Company Mbarara branch exists.

This is because respondents explained that good management of inventories maintains quality of

the company products out of the production department, control time management especially

during production process and that materials can be easily identified especially in the store

department when need in the production section of the company. Most of the respondents still

argued that proper materials handling reduce on labour with its associated costs for improved

performance of the Company operations.

Also that, 04(08%) of the respondents indicated inventory mai1agement having a negative

relationship on the performance of Coca- Cola Company Mbarara branch. These same

respondents believed that, inventory management involves a lot of costs, inconsistence as there is

over charging of customers, use of highly skilled workers in charge of managing inventories,

theft, obsolescence among others all of which increase on the costs hence reducing much of the

on the performance of the organization in question especially in the production department.

These same study respondents further cited that purchasing of raw materials after the customers

have ordered for goods from the company among the inventory management techniques

influence the company performance in terms of profitability level negatively as most of the study

respondents indicated that such does not help to maintain the company Customers.

However, basing on the most of the study respondents as eluded in table above, the study

therefore established that there is a positive relationship of inventory management on

performance private organizations like Coca- Cola Company Mbarara branch as was revealed by

majority 46(92%) of the covered respondents during data collection process.

4.5 Challenges faced by the Coca- Cola Company Mbarara branch in managing inventories

The last study objective sought of understanding challenges faced by the Coca- Cola Company

Mbarara branch in managing the inventories and findings from the study respondents indicated

that the company was facing challenges in the process of managing inventories. Regarding the

same issue, all the respondents selected during the study agreed with the statement that there are

35

Challenges faced by the Coca- Cola Company Mbarara branch in managing inventories as none

of the study respondents disagreed with the same statement. The study on further findings

established the following challenges among others faced by the Coca- Cola Company Mbarara

branch in managing inventories as in Table 4.16.

Table 17: Showing challenges faced by the Coca- Cola Company Mbarara branch in

managing inventories

Challenges faced Frequency Percentage(%)

Loss of inventories 34 35

Un predetermined products demand 22 22.7

Oppo1tunity costs 10 10.3

Administration costs 13 13.4

Theft 12 12.4

Others like (labour turnover, load-shedding etc) 06 6.2

Total 97 100 - ·--


The table 17 shows that of the respondents covered by the study majority revealed loss of

inventories among challenges faced by the Coca- Cola Company Mbarara branch in the process

of inventory management as was revealed by (35%) of the study respondents, this was followed

by un predetermined products demand by the company customers as was reported by (22.7%) of

the respondents, then (13.4%) of the respondents that was reported by administration costs in

relation to the people responsible for the managing inventories, opp01iunity costs and theft that

were indicated by (22.7%) of the study respondents each, then others like labour turn over and

load-shedding with (6.2%) of the covered study respondents during data collection process.

On fmiher established by the study, it was established that the above challenges affect the

production department at Coca- Cola Company's Mbarara branch performance as sometimes

reduce greatly on the performance level due to delays. Administration costs as having a

department in the organization to supervise and investigate inventories accounts at the company

as such costs were cited to involve the amount given to the administrators of the organization to

control the invent01y levels in the to enhance the production department of the company The

36

above study results are also an indication that there are still challenges faced at Coca- Cola

Company's Mbarara branch as organization in the process of managing inventories for

improving the performance of the company.

37

CHAPTER FIVE

DISCUSSIONS OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction

This chapter contains summary of the study findings, conclusions, recommendations and

suggestions for further studies. The summary of the study findings, conclusions and

recommendations were done in accordance to study objectives as follows.

5.1 Bio Data

To present sample background data, frequency tabulations and frequency distributions were used

to indicate variations of respondents based on gender, marital status, number of children, age

group, education level, nature of business, position in the business and period in business.

5.1.1 Distribution of Respondents By Gender

The table 5 showed that the total number of respondents within "male" and "female" categories.

61 (62.9%), respondents were under the "male" category, while 35 (36.1 %), respondents with

were under the "female" category. From the result obtained, it was observed that the "male"

category had the highest number ofresponses with 62.9% than the "female" category.

5.1.3 Marital Status

The table 6 indicated that the total number of respondents within, their total frequency number

and the percentage level. 67 respondents with (69. 1 %) belong to the "Single" category, while 28

(28.9%) respondents belong to the "Man-ied" category. Lastly, only 1 respondent belong to the

"Divorced" category with (1.0%). These results attributed that majority of respondents belong to

the "Single" variable with (69.1 %) from the overall percentage.

5.1.4 Age Group

The table 4 above represents that respondents of a total number of 21 (21.6%) respondents fell

between the age bracket "below 20 years", 47 (48.5%) respondents fell within the age bracket of

"21-29". 11 respondents with (11.3%) were within the age bracket of "30-39". Also, 12

respondents with (12.4%) fell within the age range of "40-49". Lastly, 6 respondents with (6.2%)

38

fell within the age range of "50 years and above". From the result obtained, it was observed that

respondents within the age range of "21-29" had the highest percentage from the overall

,ercentage.

il.5 Level of education

~rom table 7 above it is showing that the total number of respondents and their educational level.

~9 (29.9%) respondents were "Certificate" holders, while 9 (9.3%) respondents were

'DEGREE" holders. Also, 34 (35.1 %) respondents are either "B.SC or HND" holders. Lastly, 24

:24.7%) respondents are either "MBA/MSC holders" or "PHD" holders. From the result

ibtained, it was observed that more respondents with "B.SC/HND" had the highest percentage as

:ompared

vith other variables.

U.6 Length of Relationship with Coca- Cola Company Mbarara Branch

[he table 8 reflected that the total number of respondents and their percentage level. 13 (13.4%)

·espondents have been in the Coca- Cola company between the period of "1-2 years", while 28

28.9) respondents have been in Coca- Cola company between the period of "3-4 years". also, 33

34%), respondents have been in Coca- Cola company between the period of "5-6 years". lastly,

\3 (23.7%) respondents have been in Coca- Cola company between the period of "7 years and

Lbove". from the result obtained, it was observed that majority of the respondents have been in

:oca- Cola company Mbarara branch for a long period of time ranging between "5-6 years".

i.2 Summary of the study findings according to objectives

i.2.1 To examine the strategies used in Inventory management

:he study found out that the common strategy of inventory management used at Coca- Cola

Jbarara branch include; integrated system (System Application and products) responsible for

nanagement information system which helps to make serious decisions on inventory, inventory

equirement points, and over stock brands for the fast moving products, recoding of all the

,urchased and issued inventories to the production department of the Company, issue of

nventories from the store that were previously purchased to the production department and

.rrangement of some company inventories according to the order of their importance.

39

These study findings were in support by the findings of with Pandey (2014) who argued that

since most organizations maintain different types of inventories with different value, minimum

attention is devoted to different items with the highest value. The difference involves of the

different classes of inventory leads to the inventory control model by impmiance and exception

or ABC analysis (Rich Mond 2013). The ABC analysis involves the following:-Classify the

items of inventory determining the expected used in units and price per unit for each item.

determine the total value of each item by price and units, rank items according to value, and

determine Percentage (%) ratio or units of each item to total items and value. Also, Wood Frank

(2011 ), the way materials are valued has implication on the firms reported profit and the material

usage and balance therefore different inventory profit reported by firms. The different materials

valuation techniques include Last in First out (LIFO), First in First out (FIFO), average cost

method and net realizable value.

5.2.2 The degree of business performance

Also that, 32(33%) of the respondents both "Strongly Disagree and Undecided" indicated

inventory management having a negative relationship on the performance of Coca- Cola

Company Mbarara branch. These same respondents believed that, inventory management

involves a lot of costs, inconsistence as there is over charging of customers, use of highly skilled

workers in charge of managing inventories, theft, obsolescence among others all of which

increase on the costs hence reducing much of the on the performance of the organization in

:iuestion especially in the production department.

fhese same study respondents fmiher cited that purchasing of raw materials after the customers

mve ordered for goods from the company among the inventory management techniques

.nfluence the company performance in terms of profitability level negatively as most of the study

·espondents indicated that such does not help to maintain the company Customers. However,

Jasing on the most of the study respondents as eluded in table above, the study therefore

:stablished that there is a positive relationship of inventory management on performance private

Jrganizations like Coca- Cola Company Mbarara branch as was revealed by majority both

'Strongly Agree and Agree" 35 (36.1 %)) of the covered respondents during data collection

Jrocess.

40

The findings of the study were supported by Malcom (2010) who stated that Business

Performance is a measure of the results achieved. Performance efficiency is the ratio between

effort extended and results achieved. The difference between current performance and the

theoretical performance limit is the performance improvement zone. Business Performance

assumes an actor of some kind but the actor could be an individual person or a group of people

acting in conce1i. The performance platform is the infrastructure or devices used in the

performance act (Malcom 2010).

Liker! (201 !), also stated that there are two mam ways to improve Business performance:

improving the measured attribute by using the performance platform more effectively. or by

improving the measured attribute by modifying the performance platform, which in turn allows a

?iven level of use to be more effective in producing the desired output. Business Performance

:an be measured by obtaining the magnitude of a quantity, such as length or mass, relative to a

mit of measurement, such as a meter or a kilogram.

'lyamuyonga, (200 I) also suppmied the study when he stated that Profitability offer several

lifferent measures of the success of the firm at generating profits. The gross profit margin is a

neasure of the gross profit earned on sales. The gross profit margin considers the firm's cost or ;oods sold, but does not include other costs. Dividend policy ratios provide insight into the

lividend policy of the firm and the prospects for future growth. Two commonly used ratios are

he dividend yield and payout ratio. However, a high dividend yield does not necessarily

ranslate into a high future rate of return. It is important to consider the prospects for continuing

nd increasing the dividend in the future. The dividend payout ratio is helpful in this regard.

;,2.3 The relationship between inventory management and performance

·rom the table 4.4 above, shows that majority both "Agree and Strongly Agree" of the

"spondents at 35 (36.1 %) said that materials handling techniques have a positive relationship

etween inventory management and performance of Coca- Cola Company Mbarara Branch. !"he

tudy respondents claimed that inventory management techniques has a positive influence on the

erformance of Coca-Cola Company went ahead and said that as such techniques of managing

1ventories help in proper planning of the materials needed by identifying the gap between the

esired and the actual level of materials, allocation of resources, purchasing, sales and

41

employment of staff and everything concerned to human resources management all of which

reduces on the costs incurred by the organization in the production departments for improved

performance of the company.

The study indicated that there is a relationship between inventory management and performance

of Coca- Cola Company Mbarara branch. This is because respondents explained that proper

managing of inventories maintains quality of the company products out of the production

department, control time management especially during production process and that materials

can be easily identified especially in the store department when need in the production section ul

the company. Most of the respondents still argued that proper inventory management reduce on

labour with its associated costs for improved performance of the Company operations.

The findings of the study were supported by the findings of Gittinger (2013) who argues that

precautionary motive is one of the central roles of inventory management. Accordingly.

precautionary motive means that stock held to guard against risk of unpredictable ch,mg.c, 11,

demand and supply. In most cases, the level of demand of goods and the time required for supply

cannot be known with certainty. Therefore, to ensure product availability, the organization

maintains additional amount of safety stock to meet regular production and market needs. Firms

should invest in stock control for precautionary motive to act as a buffer or link between demand

and supply so that production can be geared to a more constant output. Precautionary motive

necessitates holding of inventories to guard against the risk of unpredictable changes in demand

and supply forces and other factors (Pandey, 2002)

Kenneth and Brian (2006) also supported the findings by stating that keeping invento1y includes

the following reason:- Reduce the risk of supplier failure or uncertainty- safety and butter stocks

are held to provide some protection against such as strikes, transport breakdowns due to floods or

snow, crop failures, wars and similar factors. Protect against lead time uncertainties. such as

where supplier's replenishment and lead time are not known with certainty - in such case an

investment in safety stocks is necessaiy if customer services is to maintain at acceptable levels.

Meet unexpected demands or demands for customization of products as with agile production

and smooth seasonal or cyclical demand.

42

In conclusion, results indicate that smce almost all the decisions made by the Company

management in the process of managing inventories aim at influencing the production

department of the company for better Company results as recording of materials greatly

influence on the Company's performance. Qualitative results from the majority of interviewed

participants on the matters concerning whether inventory management techniques have any

influence on performance of production department of the company revealed that the influence

between the two variables of inventory management techniques and the performance of Coca

Cola Company Mbarara branch exists. This is because respondents explained that good

management of inventories maintains quality of the company products out of the production

department, control time management especially during production process and that materials

can be easily identified especially in the store depmiment when need in the production section of

the company. Most of the respondents still argued that proper materials

5.2 Conclusions

That the common materials handling techniques used at Coca- Cola Company Mbarara branch

include; integrated system (System Application and products) responsible for management

information system which helps to make serious decisions on inventory, inventory requirement

points, and over stock brands for the fast moving products, recoding of all the purchased and

issued inventories to the production depmiment of the Company, issue of inventories from the

store that were previously purchased to the production department and arrangement of some

company inventories according to the order of their importance.

That proper material handling technique plays an impo1iant function on the performance of

Coca- Cola Company Mbarara branch. This is because proper inventory management techniques

was established to maintain proper running of the production depmiment, controls quality of the

company products out of the production department, control time management reduction on

labour with its associated costs for improved performance of the Company operations, helping

the Company production department to perform well, increase on the company profits, help in

the assessment of taxes and help in the process of determining the company sales volume for

understanding of the company performance and derive towards better performance of the

Company. In addition, it is concluded that the kind of relationship between inventory

43

management techniques and performance of private organizations m Uganda can either be

positive or negative depending on how the techniques of inventory management are used and

how it is applied.

Lastly, the study concludes that the challenges faced by Coca- Cola Company Mbarara branch in

the process of managing inventories include; loss in inventories, unpredetermined products

demand, opportunity costs, administration costs, theft and labour turnover, load shedding among

other challenges faced by the company.

5.3 Recommendations

5.3.ITechniques of inventory management used at Coca Cola Mbarara branch

[he study also recommends top management in most organizations to emphasis on the proper

nventory management techniques and measuring of efficiency deviations to identify weaknesses

n the process of managing inventories.

n addition, the study recommends managers in organizations especially those in developing

:ountries like Uganda to always undertake forward production planning, this is because they will

,e able to know when the incoming sales orders can be scheduled for delivery and also takes into

ccount current backlogs so that production and delivery schedules are realistic which will

1inimize inventory management costs.

1s also recommended that whether or not a perpetual/continuous stock control system is

iaintained, there should be continuous annual stocks take at the company. To this, procedures

m be prescribed for this with emphasis on identifying damaged, slow moving, and obsolete

:ock and cut-off procedures.

1 addition, inventories at Coca- Cola Company Mbarara branch should be continuously checked

·ith actual stocks held by independent officials, and inquires made into all reconciling

.fferences. If this done, theft challenge associated with inventory management will be

.inimized at the company premises.

4 Areas for further researcher

1e impact of materials handling techniques on employees efficiency in private organizations

44

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47

APPENDICES

Appendix A: Questionnaire for the company workers

I am Agume Abdul a year three Bachelor of Business Administration student at Kampala

International University carrying out a study at this Company. Your feedback is very important

as your inputs will be used for academic purposes only. I greatly appreciate if you could take a

few minutes to provide me with information. Your response will be kept confidential and it will

not be divulged to any person or institution outside this corporation.

Thank you in advance

SECTION A: BIOGRAPHIC DATA

(N.B Answer by Ticking where applicable)

I. Gender

(a). Female

2. Marital Status

(a) Single

( c) Divorced /separated

3. Age

(a) Below 21

(c) 31-40

4. Education Level

D

D D

D D

(b). Male

(b) Married

(d) Widowed

(b) 21-30

(d) 41& above

(a) Primary D (b) Secondary

( c) Tertiary D ( d) University

( e) Others (Specify) ------------------------------------------------------

5. Religious affiliation

(a) Roman catholic D (b) Anglicans

(c) Moslem D (d) Pentecostal

( e ). Others (specify) ----------------------------------------------------------

6. Position held in the company

------------------------------------------------------------------------------

48

D

D

D

D D

D D

D D

SECTION B: TECHNIQUES OF INVENTORY MANAGEMENT USED COCA- COLA

COMPANY

7. Do you understand the term inventory management?

(a) Yes 0 (b)No D

8. Is the company trying to manage its inventories?

(a) Yes 0 (b)No D

r What are kinds in inventories that are managed at this company?

0. List the methods used by Coca- Cola Company Mbarara branch in managing the inventories.

-----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------

ECTION C: RELATIONSHIP BETWEEN INVENTORY MANAGEMENT AND

'ERFORMANCE OF COCA- COLA COMPANY

I. Do you think there is a relationship between inventory management and performance of this

Jmpany?

(a) Yes

2. If Yes, what kind of relationship?

(a) Positive

0 (b)No

D (b) Negative

~plain you answer above in Question 12.

49

D

D

SECTION D: CHALLENGES FACED BY COCA- COLA COMPANY MBARARA

BRANCH IN MANAGING THE INVENTORIES.

13. Is the Company faced with challenges in the process of managing its inventories?

(a) Yes D (b)No D 14. If yes to Question 13, what are such challenges?

l5. What is your conclusion on the impact of inventory management on performance of your

:ompany?

--------------------------------------------------------------------------------------------------------------

6. Any other comment

-------------------------------------------------------------------------------------------------------------

THANK YOU VERY MUCH

50

Appendix B: (Interview guide for the Company Clients)

I am a year three Bachelor of Business Administration student at Kampala International

University carrying out a study at this Company. Your feedback is very important as your inputs

will be used for academic purposes only. I greatly appreciate if you could take a few minutes to

provide me with information. Your response will be kept confidential and it will not be divulged

to any person or institution outside this corporation.

I. Gender of the respondent.

2. Marital Status of the respondent.

3. Age of the respondent.

4. Education Level of the respondent.

5. Religious affiliation of the respondent.

6. Inventory control ways used at Coca-Cola Company.

7. Whether inventory control methods influence the performance of the Company.

8. Whether the company is faced with challenges in inventory management?

9. Recommendations on the impact of inventory management on performance of private

organizations in Uganda.

I 0. Conclusion on the impact of inventory management on performance of Coca Cola

Company?

THANK YOU VERY MUCH

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inventory management and business performance. a …

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