Citation:

Odumusor, Charles Joseph. "Effect of Inventory Management on the Production Efficiency of Manufacturing Firms in Nigeria" International Research Journal of Economics and Management Studies, Vol. 3, No. 1, pp. 399-413, 2024.

Abstract:

The general objective of this study was to examine the effect of inventory management on the production efficiency of manufacturing organizations: A study of selected manufacturing firms in Nigeria. The study specifically set out to examine the effect of inventory availability on the production efficiency of selected manufacturing firms in Calabar, to determine the effect of inventory accuracy on the production efficiency of selected manufacturing firms in Calabar, and to examine the effect of inventory coverage on the production efficiency of selected manufacturing firms in Calabar. The study adopted the descriptive research design. The population of this study was seven hundred seven (707), cutting across management and non-management employees in the selected companies, respectively, and a sample size of 370 was selected using the Taro Yamane formula. The study adopted a stratified random sampling technique, while a standardized questionnaire was used to gather responses from the research participants. Using SPSS 27.0, quantitative and qualitative data were analyzed. The results were summarised using descriptive statistics and Ordinary Least Squares regression. The regression analysis revealed that inventory availability (β1=0.668, p=0.000, t=8.055) had a significant and favourable influence on the organizational production efficiency of the selected manufacturing businesses in Calabar. The study also discovered that some manufacturing companies in Calabar might enhance their production efficiency by assuring the accuracy of their inventory (o1=0.267, p=0.000, t=3.777). The study revealed that inventory coverage had a substantial influence on production efficiency (β1=0.117, p=0.000, t=2.297) for certain industrial companies in Calabar. Based on the study findings, it is recommended that top management give priority to implementing efficient inventory management techniques and measuring variances in efficiency. This will help identify specific areas where improvements are needed in inventory management.

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Keywords:

Inventory management, Manufacture, Economic Order Quantity (EOQ), Work in progress (WIP).