Florence Atemo, Dr. Mary Kamaara


The manufacturing sector for instance heavily relies on the procurement process to meet the customer needs and gain competitive advantage. However, there are persistent complaints among stakeholders over poor procurement performance, which increased by 23%. The main focus of this study was to establish the effect of inventory management strategies on procurement performance of large manufacturing companies in Nairobi County, Kenya. Specifically, the study sought to establish the influence of Economic order quantity on procurement performance of large manufacturing companies in Nairobi County, Kenya and to ascertain the influence of Activity Based Costing on procurement performance of large manufacturing companies in Nairobi County, Kenya. This study used descriptive research design. The study targeted procurement officials in the large manufacturing firms. To get a representative sample, Coopper and Schidler’s formula was adopted. Therefore, 187 procurement officers were sampled using simple random sampling. The choice of this sampling technique is preferred as it gives each item in the population an equal probability of being selected. This study used questionnaire to collect data relevant to this study. Quantitative data collected was analyzed using descriptive statistical techniques which are frequencies, mean, standard deviation. Inferential statistics which include Pearson correlation and the Regression Analysis Model was used to test the relationship between study variables. The significance of the model was tested at 5% level of significance. Data was analysed using Statistical Package for Social Sciences (SPSS) software. The study results were presented through use of tables and figures. The study concludes that the study concludes that economic order quantity has a positive and significant effect on procurement performance of large manufacturing companies in Nairobi County, Kenya. The study also concludes that activity based costing has a positive and significant effect on procurement performance of large manufacturing companies in Nairobi County, Kenya. Based on the findings, this study recommends that large manufacturing companies in Nairobi County should consider adopting JIT principles within their procurement processes. In addition, large manufacturing companies in Nairobi County should incorporate EOQ calculations into their procurement processes.

Key Words: Inventory Management Strategies, Procurement Performance, Economic order quantity, Activity Based Costing, large manufacturing companies

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