Inventory Management and Profitability of Agricultural Processing Plants in Kabarole District

TABLE OF CONTENTS

Page

DECLARATION ............................................... ........................................................................ 1

DEDICATIONS ......................................................................................................................... 4

ACKNOWLEDGEMENT .......................................................................................................... 5

TABLE OF CONTENTS ............................................................................................................ 6

LIST OFT ABLES ..................................................................................................................... 9

LIST OF FIGURES .................................................................................................................. 10

Page ......................................................................................................................................... 10

ABSTRACT .. ........................................................................................................................... 11

CHAPTER ONE ...................................................................................................................... 12

INTRODUCTION .................................................................................................................... 12

1.0 Background to the Study ........................................................ ............................................. 12

1.1 Statement of the Problem .................................................................................................... 16

1.3 Purpose of the Study ....................... .................................................................................... 16

1.4 Objectives of the Study ....................................................................................................... 17

1.5 Research Questions ............................................................................................................. 17

1.6 Research Hypothesis ........................................................................................................... 17

I. 7 Scope of the Study .............................................................................................................. 17

l . 7. I Geographical Area: .......................................................................................................... 17

1.7.2 Content Scope ............................................................. ..................................................... 18

1.7.3 Period/ Time scope .......................................................................................................... 18

1.6 Significance of the Study .................................................................................................... 18

CHAPTER TWO ......................................................... ............................................................. 20

LITERATURE REVIEW ......................................................... ................................................ 20

2.0 Introduction ........................................................................................................................ 20

CHAPTER THREE .................................................................................................................. 33

V

CHAPTER ONE INTRODUCTION 1.0 Background to the Study This chapter includes the background to the study, statement of the problem, purpose of the study, specific objectives, research questions, hypothesis, scope of the study, significance of the study and definition of the terms. 1.1.1 Historical perspective Inventory Management involves the coordinating of materials availability, controlling, utilization and procuring of materials. Inventory Management is the direction of activities with the purpose of getting the right inventory in the right place at the right time and in the right quantity and it's directly linked to production function of any organization which implies that the inventory management system operated will affect the profitability ofan organization directly and indirectly ( Ahmad, & Nicholas, 2001). Inventories are the stock of raw materials, work in progress, finished goods and supplies held by a business organization to facilitate operations in the production process, (Pandey, 1995). Also if the company fails to manage its inventory efficiently, it is likely to face profitability problems (Block and Hirt, 1987). The goal of inventory management therefore is to provide the inventories required to sustain operations at minimum costs Alm, (2000).