The impact of inventory management on the performance of small and medium scale enterprises
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The main objective of this study was to analyze the impact of inventory management on the profitability of small and medium enterprises in Mbale trading center, Mbale Municipality, and the specific objectives were to identify the association of stock taking on the performance of SMEs, to find out inventory management techniques applied by SMEs, to establish the level of effectiveness of inventory management techniques, to establish the relationship between Inventory techniques and production sales of SMEs in Mbale trading center. The study utilized simple random sampling because it gives each member of the population an equal chance of being selected and it thus reduces biasness in the selection of cases to be included in the sample using a closed ended questionnaire administered face to face to the respondents by the researcher. The study adopted a descriptive survey that sought to examine the role of stock management. The study will be being conducted in Mbale trading center owners on how they manage their inventory. The study considered accuracy as a major consideration and minimizes bias and maximizes the reliability of the evidence collected. Data collected was analyzed using frequency tables, percentages, simple descriptive data analysis and chi-square statistical analysis. The majority of the respondents (56.0%) were married, 26.0 percent were single, 12.0 percent were widowed, 6.0 percent were divorced with highest percentage (46.0%) of the respondents in the age bracket of 36-50 years, 26.0 percent in the age of 18-35 years, 12.0 percent in the age 51-65 years and 6.0 percentage above 65 years which revealed that the sample selected was actually a representative sample that included all ages. (56.0%) were married, 26.0 percent were single, 12.0 percent were widowed, 6.0 percent were divorced, the majority of the respondents (76.0%) were reported to apply economic order quantity, 12.0 percent apply action level methods, 8.0 percent apply just in time technique and 4.0 percent apply material requirement planning 1. The study further showed that improvement in stock taking and lead time can be used as a filter in terms of a consumer’s perception of quality which in turn affect the performance of Mbale trading center businesses to a large extent. It can also be concluded that ineffective inventory management leads to incidences of overproduction, underproduction, excessive stocks, stock out of spare parts for machines, production bottlenecks and delays in delivery of raw materials thus the study recommended that improved lead time and immediate action of stock taking can greatly improve performance of the small and medium enterprises in Mbale municipality.