Inventory Management Practices and Organizational Performance of National Medical Stores, Entebbe Municipality, Uganda

ABSTRACT 

MUSISI PETER, School of Graduate Studies, Bugema University, Kampala, Uganda. October, 2015. “INVENTORY MANAGEMENT PRACTICES AND ORGANIZATIONAL PERFORMANCE OF NATIONAL MEDICAL STORES, ENTEBBE MUNICIPALITY, UGANDA” Supervisor: Abuga Mokono Isaac, PhD The study objectives were: to establish the level of inventory management practices by NMS, Entebbe Municipality, to assess the level of organizational performance of NMS, and to establish the relationship between inventory management practices and organizational performance of NMS. It was also hypothesized that, there was no significant relationship between inventory management practices and organizational performance of NMS. This study was based on a descriptive survey and correlation research designs with both qualitative and quantitative approaches. A total of 66 respondents were used in the study. The Self-Administered Questionnaire (SAQ) was used as the primary instrument of data collection. The findings of the study revealed that; inventory management practices had a grand mean of 3.18, which meant that inventory shrinkage, records accuracy, investment and turnover was managed averagely; level of organizational performance had a moderate grand mean of 3.17 in terms of cost reduction and customer satisfaction; there was a moderate positive correlation between inventory management practices and organizational performance, at r = 0.653. The researcher rejected the null hypothesis since the p- value (0.000) was less than the level of significance (0.01). The study concludes that inventory management practices affects NMS performance. It was recommended that inventory records accuracy in NMS should be strengthened and procurement plans should be improved.

TABLE OF CONTENTS

PAGE

LIST OF TABLES x

LIST OF FIGURES xi

LIST OF APPENDICES xii

LIST OF ABBREVIATIONS xiii

CHAPTER ONE 1

INTRODUCTION 1

Background of the Study I

Statement of the Problem 3

Research Questions 3

General Objective 4

Specific Objectives of the Study 4

Hypothesis of the Study 4

Significance of the Study 4

Scope of the Study 5

Limitations of the Study 6

Theoretical Framework 7

Conceptual Framework 8

Operational Definition of Terms 9

CHAPTER TWO 13

LITERATURE REVIEW 13

Inventory Management Practices 13

Inventory Shrinkage 17

Inventory Records Accuracy 19

Inventory Investment 21

Level of Organizational Performance 22

Cost Reduction 22

Customer Satisfaction 23

Relationship between Inventory Management and Organizational Performance 24

Summary and Identified Gaps 25

CHAPTER THREE 26

METHODOLOGY 26

Research Design 26

Locale of the Study 27

Population of the Study 27

Target Population 27

Sample Size 27

Sampling Procedure .28

Research Instruments/Methods 28

Validity and Reliability 30

Data Collection Procedure 31

Data Analysis 31

CHAPTER FOUR 33

RESULTS AND DISCUSSIONS 33

Demographic Characteristics of the Respondents 33

Level of Inventory Management Practices 36

Level of Organizational Performance 43

Relationship between Inventory Management Practices and Organizational

Performance 50

Suggestions 54

CHAPTER FIVE 56

SUMMARY, CONCLUSION AND RECOMMENDATIONS 56

Summary 56

Conclusion 58

Recommendations 59

Areas for Further Research 60

REFERENCES 61

APPENDICES 65