Factors affecting effectiveness ofinventory management practice: In Jimma university

Abstract

An effective inventory management improves the firm’s total performance through matching inventory management practices and a competitive advantage especially now that most organizations operates in a more competitive industries or sectors all over the world. So the main purpose of this study was to identify factors affecting the effectiveness of inventory management practice in the study area. Based on personal observation and different literature identified factors were: age, sex, educational background, service year, qualified staff, funds, information technology and documentation. Primary and secondary sources were used to collect both qualitative and quantitative data. Survey consists of structured questionnaire, key informant interview was carried out to achieve the research objectives. The target population of this study were 85 employees of in Jimma University. The researcher used census sampling technique because Census is a process of collecting data by distributing questionnaire to all population in the study area. The collected data was analyzed via SPSS version (20). In addition, descriptive and inferential statistical tools such as mean, percentage, frequency, normality test, correlation and multiple regressions were used to analyze the collected data from questionnaires. To test the reliability, Cronbach’s alpha coefficients were calculated. The analysis result implies that effective inventory management practice has large positive correlation with qualified staff, funding and information technology documentation. Besides, the finding of this study shows that regression analysis funding had relatively strongly significant and direct effect on effectiveness of inventory management with beta value of 0.333 and followed by qualified staff with beta value of 0.262, information technology with beta value of 0.190 and documentation with beta value of 0.164respectively.Therefore, it’s recommended that the documentation system of the study area needs improvements of the manual documentation systems through by automating system.