INVENTORY OPTIMIZATION AND PERFORMANCE OF PHARMACEUTICAL FIRMS IN KENYA

Nehemia Ngigi, Dr. Charles Ndeto

Abstract


Over the past years, pharmaceutical organization have been working towards increasing their market share, improving the level of profitability and at the same time ensuring customers are satisfied with their products. Only few firms achieve the objective through careful implementation of their plans and combined efforts of its workforce while the rest exit. The general objective of this study is to assess the influence of inventory optimization on performance of pharmaceutical firms in Kenya. Specifically, the study sought to evaluate the effect of inventory management systems on Performance of Pharmaceutical Firms in Kenya and to assess the effect of Economic Order Quantity (EOQ) on Performance of Pharmaceutical Firms in Kenya. The study used a descriptive research design. Kenya has 50 registered pharmaceutical manufacturing and distributing firms (Pharmacy and Poisons Board, 2019). The study targeted four managers in every firm. The total target population was therefore 200 management employees. Given the small population of 50 firms, a census approach was adopted targeting all of the firms. Primary data was collected through use of semi structured questionnaires. The study also conducted pilot test to test the validity and the reliability of the data collection instrument. The data collection instrument generated both qualitative and quantitative data. The study used both descriptive and inferential statistics for data analysis with the aid of Statistical Package for Social Sciences (SPSS version 25). Descriptive statistics such as mean, standard deviation, frequency and percentages were used in this study. In relation to inferential statistics, the study used correlation analysis. This was used to establish the relationship between the independent and the dependent variables. Data was then presented in a tables, bar charts and pie charts. The study concludes that inventory management systems have a significant effect on performance of pharmaceutical firms in Kenya. The study also concludes that Economic Order Quantity (EOQ has a significant effect on performance of pharmaceutical firms in Kenya. Based on the findings, this study recommends that the management of pharmaceutical firms in Kenya should give priority to inventory management systems and Economic Order Quantity.

Key Word: Inventory Optimization, Inventory Management Systems, Economic Order Quantity 


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References


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