INVENTORY CONTROL TECHNIQUES EMPLOYED BY SUPERMARKETS IN NAIROBI COUNTY, KENYA

Abstract

Supermarket can be more competitive if they are able to manage their inventory costs efficiency. This is because
proper cost management will reduce operating cost thus increasing profitability. Supermarkets in Nairobi hold
large volumes of inventory. This is likely to lead to high carrying costs and high level of obsolescence. On the
other hand if they maintain low levels of inventory, this can lead to stock outs which will result to loss of
goodwill and translate to lost sales. Overstocking has the consequences of having dead stock or the stock
becoming obsolete while under stocking leads to frequent stock outs of essential items. It is therefore a
challenge for the managers of the supermarkets to maintain an optimum inventory level in their stores. This
study sought to examine the inventory control techniques employed by supermarkets in Nairobi County in
Kenya. It adopted a survey research design with a target population drawn from all supermarkets based in
Nairobi. The study utilized a sample size of 50 supermarkets. Data was analyzed using statistical package for
social sciences (SPSS).Correlation analysis was used to establish the level of correlation between the techniques
investigated while factors analysis was used to ascertain the inventory control techniques that were most widely
applied by supermarkets in Nairobi. The study concluded that basic (Q, r) inventory technique was the least
popular and batch control and periodic review witnessed constrained application as well.