Inventory management and sales performance

Abstract

The purpose of the study was to establish the relationship between inventory management and sales performance; this was conducted at Roofings Group Limited in Lubowa along Entebbe road. This study was based on the objectives which include; to identify the impacts of stock taking on the sales performance of an organization, to analyze the importance of lead time on the sales performance and lastly to examine the effects of logistics on the sales performance. The research design used in the study was the case study design and the data used included both primary and secondary data. Primary data was collected by use of self administered questionnaires and interviews. The study covered a sample of 56 respondents which was selected using the simple random sampling technique. Questionnaires and interviews were used as instruments of data collection. Frequency tables and graphs presented data which was worked out basing on the data entered into SPSS. The SPSS was also used to determine the relationship between the two variables through the use of the correlation analysis. The findings revealed that inventory is managed and controlled well at Roofings Group Limited, the quantity of raw materials is equal to the quantity of products that are produced, stock taking provides accurate data about the company’s inventory, lead time sets the basis for the organization’s re-order level, logistics is a component of the supply chain. However the findings also reflected the following; inventory valuation is not used when making pricing decisions, stock taking is not done on a regular basis, lead time is not considered when setting prices, and also the organization does not use the internet service providers when receiving raw materials. Never the less, there is a strong positive relationship between inventory management and sales performance at Pearson correlation coefficient r=1.000** It was recommended that Roofings Group Limited should greatly emphasize and supervise stock taking so as to ensure proper records of the quantity of goods that should be produced in order to determine the level of sales that should be made.