Effectiveness of Inventory Management to the Turnover Performance

of Citimart Group of Companies in Batangas City

Statement of the Problem

1. How does inventory management affect the turnover performance of Citimart

Group of Companies?
2. What are the factors to be measured on the inventory management of Citimart
Group of Companies?
3. How may the turnover performance of Citimart Group of Companies be assessed
in terms of the following factors:
3.1 Controllable Factor
3.2 Uncontrollable Factor
4. Is there a significant effects of Inventory Management to the Turnover
Performance of the Citimart Group of Companies
5. Based on the findings, what programs may be proposed to improve the inventory
management and turnover performance of the company?
INTRODUCTION

Inventory is a significant constituent of a firm and ought to be managed prudently

considering that it ties up a substantial percentage of an organizational capital. The

main objectives of firms are to boost productivity with fewer resources while also

enhancing quality (Nsikan, Etim & Uduak, 2015). There are a number of methods that

enable a firm to accomplish these objectives; however, the key and usually “hidden”

technique is to trim down firm inventory. The Inventory Management' implies

supervision and control of the ordering, storage, as well as use of components that a

firm used in the process of producing items it sold over and above supervision and

control of quantities of the finished products. As opined by Muhayimana (2015), the

inventory of a firm is one of its chief resources and embodies a venture that is tied up till

the article is sold or used in producing the final merchandise. Furthermore, it costs

finances to store, track as well as to insure inventory. Inventories, which are

mismanaged, are likely to create considerable financial problems for a firm, whether the

mismanagement leads to an inventory surplus or shortage (Luthubua, 2014).

Flourishing inventory management is associated with the creation of a purchase plan

that guarantees items are available the moment they are in need in addition to keeping

the track of existing inventories and their use. Senior management’s concern is

managing inventory levels because the impact of changing the inventory management

procedures on turnover is reflected in turnover growth.

Citimart is an establishment wherein its preliminary and most important goal is to give

the highest service to its customers and clients. Believing that the customer is the most
important factor that affects the operations of the business, his satisfaction has been

and will always be the first and foremost priority above all..

Poor inventory management had become an issue of great concern since performance

is regarded as the main stream for development of organizations. A truly effective

inventory management system minimizes the complexities involved in planning,

executing and controlling a supply chain network which is critical to business success.

The opportunities available by improving a company’s inventory management can

significantly improve bottom line business performance.According to Jayeff, (1998)

argued that from a financial perspective, inventory management is no small matter.

Oftentimes, inventory is the largest asset item on a manufacturer’s or distributor’s

balance sheet. As a result, there should be a lot of management emphasis on keeping

inventories.

The objectives of inventory reduction and minimization are more easily accomplished

with modern inventory management processes that are working effectively for improved

performance. The inventory management is much more complex than the initiated

understood. In fact, in soft drinks industry the inventory control department is perceived

as little more than a clerical function as it is probably not very effective. The result of this

to inventory management is lots of material shortages, excessive inventories, high costs

and poor customer service (Briers, 1995). Too much inventory and not enough

customer service are very common, but unnecessary. There are proven techniques that

can help accurately industry customer demand and to calculate the inventory needed to

meet defined level of customer service. Using the right techniques for sales forecasting

and inventory management help to monitor changes and respond to alerts when action
needs to be taken. The right approach to inventory management can produce dramatic

benefits in customer service with lower inventory (Kreg, Cristine, 2007).

Modern inventory management in retail out lets industry utilize new and more refined

techniques that provide for dynamic performance of inventories to maximize customer

service with decreased inventory and lower costs. These improved approaches to

inventory management are of major consequence to overall competitiveness where the

highest level of customer service and delivered value can favorably impact market

share and profits.