Effects of inventory management system on firm performance–an empirical study

Abstract

The study was guided by the following objectives: to find out how the systematic application production in data processing (SAP), just in time system and economic order quantity affect the organization performance. Literature review indicated that previous studies have brought out both positive relations and weak relations between the inventory management practices and the operational performance of firms. The researcher used an empirical evidence to analyze the findings. The study established that systematic application and production in data processing affect performance of organization. The study concluded that Economic order quantity should be continuously reviewed were by inventory control system is closely monitored at all time to make it more effective.On recommendations, the first recommendation made was that since SAP was found to be significantly affects firm performance, organizations should appropriately use the SAP technology in managing their procurement for an efficient operations. The second recommendation was based on EOQ. Since EOQ was found to be an important technique in inventory management, firms should ensure to order the recommended lot size as determined by the EOQ.