Abstract:
The study assessed the effectiveness of inventory management on procurement performance at Coca cola kwanza Mbeya. The objectives of the study were; to examine the effect of inventory shrinkage on procurement performance, to determine the influence of inventory investment on procurement performance, to assess the influence of order quantity on procurement performance and to determine the relationship between procurement performance and inventory shrinkage, inventory investment and economic order quantity. The study was a quantitative and qualitative research design. Random sampling and purposive sampling technique was used to select 101 respondents in this study. Data were collected from primary and secondary sources by use of structured questionnaire, interviews and documentary review. The findings revealed that there is an idea on inventory management, furthermore the study found that losses resulting from stock theft leads to increased inventory shrinkage and also losses resulting from stock damages leads to increased inventory shrinkage. Capital invested contribute greatly to inventory investment of Coca cola kwanza. It was also found that proper management of cash flow contributes greatly to inventory investment of Coca cola kwanza and that proper procurement/reorder practices contribute greatly to inventory investment of Coca cola kwanza. Shortage costs are influenced by order quantity of materials at Coca cola, ordering costs are high due to poor inventory management practices and the quantity of materials ordered has influence on the storage space of Coca cola. It is concluded that inventory shrinkage has effect on procurement performance, inventory investment has influence on procurement performance, order quantity has influence on procurement performance. It is also concluded that procurement performance has a negative relationship with inventory shrinkage, but positive relationship with inventory investment and order quantity. Owing to the findings researcher recommends the following; Firstly, it is recommended that Coca cola should maintain the way it does inventory management. Secondly, it is recommended that Coca cola kwanza should continue employing workers with better knowledge on procurement basically those working in procurement departments. Thirdly it is recommended that other organizations should emulate the example of Mbeya Coca cola kwanza in order to make better procurement in their organizations.
