An assessment of factors influencing to the inventory management practices in small and medium sized enterprises: special reference to Anuradhapura district

Abstract

Inventory constitutes the most significant part of current assets in most of the companies. Business organization neither keeps excess inventories to avoid an unnecessary tying down of funds as well as loss in fund due to pilferage, spoilage and obsolescence nor maintain too low inventories so as to meet users demand as at when needed. The purpose of this paper is to examine the factors that influence to the inventory management practices in small and medium sized enterprises in Anuradhapura district. 100 SMEs had been applied based on convenient sampling method. The study was conducted on five hypotheses which were constructed to reveal about procurement procedure, Planning, Documentation, Funding and skills of the staff significantly influence for inventory management practices among SMEs in Anuradhapura. And those five hypotheses were tested by multiple regression analysis, Reliability analysis, descriptive analysis and inferential analysis. The findings of this study revealed procurement procedure, Documentation and Funding are significantly influence to the inventory Management Practices but Planning and Skills of the staff are influence but these factors are not significant. The study revealed that documentation is crucial in ensuring efficient inventory management, stock records provide the management with the information which is used to ensure accountability through stocktaking and stock audit exercise. Also, funding positively affects efficiency of inventory management among SMEs in Anuradhapura to a great extent. The study therefore recommended that there is a need for SMEs in Anuradhapura to enhance their procurement procedures through elimination of overlapping or conflicting jobs or duties and behavior of the system is predicable. The findings of the study hold practical implications for Policy makers, Managers, investors and stock keepers.