EXTENT OF APPLICATION OF VARIOUS INVENTORY CONTROL TECHNIQUES AMONG SUPERMARKETS IN NAIROBI

Abstract

Inventory management is important to firms with inventory comprising of ten to forty five percent of the total assets. Large inventories consume cash, increase investment in business and can bankrupt a business if not properly controlled. Therefore, there is need to apply proper inventory control techniques at the supermarkets. This study sought to determine the extent of the application of the various inventory control techniques among the supermarkets in Nairobi. Survey research design was employed. The target population comprised of all supermarkets based in Nairobi, as listed in the Yellow pages of the Nation Business Directory (NBD), Nairobi 2010). A sample size of 50 supermarkets was utilized. Stratified random sampling was used with strata based on only two categories that existed that is supermarkets with one branch and those with more than one branch was used. Data was collected through a questionnaire. The questionnaire was administered to 50 supermarkets in Nairobi. 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.