Correlate of inventory management and organizational performance
Correlate of inventory management and organizational performance

Summary/Abstract: Research background: Inventory management is pivotal in effective and efficient organization. Organizations are faced with the problem of unpredictable performance due to complexities associated with inventory control. This implies that profitability of any organization directly and indirectly is affected by the inventory management system operated. At any level of a firm, inventory is among the largest investment made and therefore logically deserves to be treated as a major policy variable, highly responsive to the plans and style of top management. Therefore, it is essential to study the effect of inventory management on organizational performance. Purpose of the article: The study determined the effect of Economic order quantity performance on operational costs and also examined the effect of production costs on sales turnover. Methods: The paper adopted a survey method. The total population of the study consists of 201 employees of Honeywell Flour Mills Plc Ikeja Lagos Nigeria. 134 copies of questionnaire were given to the respondents to write clearly their views and observations. (SPSS) and (Cronbach’s alpha) was employed. Also descriptive, statistical and content analyses techniques were used in the analysis of the data collected. The study made use of statistical tools such as regression analysis in testing hypotheses and ANOVA which helped in the interpretation of results. Findings & Value added: The study found out that Economic order quantity significantly affects the operational cost. This means that for every 100% change in operational cost, EOQ contributed 21.1%.This implies that EOQ can influence the operational cost. Second, Production cost significantly affects sales turnover. This means that for every 100% change in sales turnover, production cost contributed 31.7%. It shows that production cost can influence sales turnover. The research recommends that Management should put into consideration the degree of control and evaluation of sales turnover, Economic order quantity and operational cost so that these assets can provide liquidity to the organization with ease.

• Details
• Contents