CHALLENGES IN THE APPLICATION OF VARIOUS INVENTORY CONTROL TECHNIQUES AMONG SUPERMARKETS IN NAIROBI

Abstract

Supermarkets in Nairobi hold large volumes of inventory. This is likely to lead to high carrying costs and high levels 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 therefore sought to establish the challenges experienced by supermarkets in Nairobi in the application of various inventory control techniques. To achieve this, primary data was collected through a questionnaire. The questionnaire was administered to 50 supermarkets in Nairobi. Data was received from 39 supermarkets. The respondents generally pointed out a number of challenges regarding the application of the respective inventory control techniques. EPOS registered the highest number of challenges mainly because it was also the most widely used. The main challenge of applying the EPOS technique was that it was expensive to install and maintain. FIFO was also quoted as not applicable to all types of inventory and not accurate in predicting reorder levels. Similar sentiments were also raised in respect of the minimum stock level technique, batch control, periodic review and just-in-time inventory control techniques. EOQ was quoted as not easy to learn and that it was expensive to install and maintain.