Inventory Management and Sales Performan

INVENTORY MANAGEMENT AND SALES PERFORMANCE OF
ENTRPRISES: A CASE STUDY OF COCA COLA LIMITED
MBARARA MUNICIPALITY IN
MBARARA DISTRICT
A RESEARCH REPORT SUBMITTED TO THE FACULTYOF BUSINESS
AND DEVELOPMENT STUDIES IN PARTIAL FULLFILMENT OF THE
REQUIREMENT FOR THE AWARD OFTHE BACHELORS
DEGREE OF BUSINESS ADMINISTRATION OF
BISHOP STUART UNIVERSITY
BY
TANDEKA EDIN
09/BSU/BBA/236
JUNE, 2012
DECLARATION
I, Tandeka Edin, do hereby declare that this research report is my own composition,
knowledge, effort and it has never been submitted by any other person for degree in any
University or institution of higher level and where the works of other persons have been
used or referred to, and such sources have been duly acknowledged.
Signed………………………………… Date……………………………
TANDEKA EDIN
i
Supervisor’s Approval
This is to certify that this research report study was carried out under strict supervision
and has been approved for submission to the Bishop Stuart University, in partial
fulfillment of the requirements for the award of the Degree of Business Administration.
Signed…………………………… Date………………………………
MR. TUHIRIIRWE JACKSON
ii
Dedication
This work is dedicated to the almighty God for his mercy, guidance and protection, for
seeing me through this programme, most successfully efforts towards my academics.
iii
Acknowledgement
I thank the Almighty God for making it possible for me to complete this piece of work.
Special thanks for the knowledge, wisdom, courage and determination he has granted me.
I am greatly indebted to my parent Mr. George Herbert Kambendyaho, dear mother M/s
merab Kambendyaho for her financial support, parental care, love, prayers and courage; I
am so grateful my dear mother.
Thanks also go to the respondents who sacrificed their time in giving me relevant
information that backed my research especially the Coca-Cola Mbarara plant employees
and its customers who did it whole heartedly.
Finally, I wish to acknowledge my brother Phenehas Tukamwesiga and finally my old

school friend Monday Alex. They were so supportive in sharing academic knowledge in
which research was part of it. Your company and constructive ideas made my life very
easy at the University. I owe more than I can briefly describe, thanks for giving me your
company.
Table of contents
iv
DECLARATION..................................................................................................................i
Supervisor’s Approval.........................................................................................................ii
Dedication...........................................................................................................................iii
Acknowledgement..............................................................................................................iv
Table of contents..................................................................................................................v
List of acronyms...............................................................................................................viii
CHAPTER ONE INTRODUCTION...............................................................................1

1.0 Introduction....................................................................................................................1
1.1 Background of the study................................................................................................1
1.2 Statement of the Problem...............................................................................................3
1.3 Purpose of the Study......................................................................................................4
1.4 Objectives of the Study..................................................................................................4
1.5 Research Questions of the Study...................................................................................4
1.6 Hypothesis of the Study.................................................................................................4
1.7 Scope of the Study.........................................................................................................5
1.7.1 Content of the Scope...................................................................................................5
1.7.2 Geographical scope of the study.................................................................................5
1.7.3 Time scope of the study..............................................................................................5
1.8 Significance of the Study...............................................................................................5
CHAPTER TWO: LITERATURE REVIEW.................................................................7

2.0 Introduction....................................................................................................................7
2.1 Techniques of inventory management...........................................................................8
2.2 Importance of Inventory management.........................................................................11
2.3 Challenges faced by inventory management in Business Enterprises.........................14
CHAPTER THREE: RESEARCH METHODOLOGY..............................................17

3.0 Introduction..................................................................................................................17
3.1 Research Design...........................................................................................................17
3.2 Study area.....................................................................................................................17
3.3 Study population and sample size................................................................................18
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3.5 Source of Data..............................................................................................................18
3.5.1 Primary Data.............................................................................................................18
3.5.2 Secondary Source......................................................................................................18
3.6 Data Collection methods..............................................................................................19
3.6.1 Questionnaires...........................................................................................................19
3.6.2 Interviewing..............................................................................................................19
3.7 Reliability and validity.................................................................................................20
3.8 Research Procedure.....................................................................................................20
3.9 Data Analysis and Management...................................................................................20
3.9.1 Data processing.........................................................................................................21
3.9.2 Editing.......................................................................................................................21
3.9.3 Coding.......................................................................................................................21
3.9.4 Data analysis.............................................................................................................21
3.10 Ethical Consideration.........................................................................................……21
3.11 Limitations of the study.............................................................................................22
Appendices.........................................................................................................................50
Appendix I: Work Plan.....................................................................................................50
Appendix I1: Budget Plan.................................................................................................51
Map 1: Map of Uganda showing Mbarara district.............................................................56
Map 2: A Map of Mbarara Showing Mbarara municipality..............................................57
Map 3: Map of Mbarara Municipality Showing Coca-Cola Plant.....................................58
List of Tables
vi
Table 4.1 Gender of respondents………………………………………………………...23
Table 4.2 Age of respondents……………………………………………………………24
Table 4.3 Academic background of respondents………………………………………...24
Table 4.4 Departments of the respondents ………………………………………………25
Table 4.5: types of inventory management method used ……………………………….26
Table 4.6 Response patterns on up-to- date stores records………………………………26
Table 4.7 Responses on Good stock plan ……………………………………………….27
Table 4.8 Responses on proper accounting records……………………………………...27
Table 4.9 Responses on surprise checks…………………………………………………28
Table 4.10 Responses on proper stores management……………………………………29
Table 4.11 Response patterns Material valuation techniques……………………………29
Table 4.12 Responses on Inventory valuation…………………………………………...30
Table 4.13 Responses on trial error technique for material control……………………...31
Table 4.14 whether inventory management importance contribute ………………….….31
Table 4.15 Responses on inventory planning and scheduling………………………..….32
Table 4.16 Responses on improved procurement………………………………………..32
Table 4.17 Responses on cost reduction………………………………………………....33
Table 4.18 Responses on effective stores management and internal coordination…..….33
Table 4.19 Responses on Improved customer service……………………………….…..34
Table 4.20 Challenges faced in applying inventory management practices…….…..…..35
Table 4.21 Responses on Bureaucratic constraints…………………………………..….35
Table 4.22 Responses on Cost of carrying inventory………………………………..….36
Table 4.23 Responses on to the type of ordering cost encountered……………………..37
Table 4.24 Responses on Conflict of interest……………………………………………37
Table 4.25 Responses on Poor evaluation and monitoring………………………………38
Table 4.26 Responses on Strains on resources and weak management………………….39
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List of acronyms
% Percentage
ABC Activity based costing

ACM average cost method
CBCL Century Bottling Company Limited
EDI Electronic Data Interchange
FIFO First In First Out
JIT Just in Time
LIFO Last In First Out
MRO Maintenance, Repair and Operations.
MRP Manufacturing Resources Planning
MRP Materials Requirements Planning
No.1 Number one
NY New York
PBL Print British Limited
SPSS Statistical Package for Social Sciences

UGX Uganda Shillings
UN United Nations
US United States
W.I.P work in progress
viii
Abstract
The study was about the effect of inventory management on the sale performance of Coca
cola enterprises in Mbarara Municipality Mbarara District. It was guided by three
objectives; to find out types of inventory management methods used by Coca cola
business enterprises, to examine the importance of inventory management towards sale
performance of Coca-Cola Business Enterprises and to establish the challenges faced by
Coca-Cola Company Limited Business Enterprises in Mbarara Municipality Mbarara
District. Data was collected using a questionnaire and interview guide and during data
collection purposive sampling was used. In addition, the study employed an exploratory
case study design using both qualitative and quantitative tools as sample size of 100
respondents was selected from the study.
The study concluded that Coca cola enterprises in Mbarara branch use up-to- date stores
records, a good stock plan, Proper accounting and recording, surprise checks, Proper
stores management, different material valuation techniques of inventory management
include last in first out (LIFO), first in first out (FIFO), an inventory valuation, ABC
technique, Just In Time (JIT) Technique, recording stock and security system at the stores
as common inventory management techniques. It is also concluded that there is a
relationship between inventory management and sale performance of the coca Cola
enterprises, Lastly, that the challenges faced by Coca Cola enterprises in Mbarara
Municipality include; load shedding, poor record keeping, high taxes, low sales, negative
cash flows, management problems, and situations, inadequate of stock, lack of business
plan, high fuel prices, low turn up of customers, and sometimes theft among others.
The study recommended businesses always to forward planning, centralize the purchase
and store function, carry out stock taking exercise, continuous stock control system, and
that business inventories to be stored under conditions to protected from being damaged
due to physical causes, for example heat, and cold. Lastly, that the effect of inventory
management on the employees efficiency in small and medium enterprises in are
suggested areas for further research.
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CHAPTER ONE
1.0 Introduction
This chapter comprise of background of the study, statement of the problem, purpose of
the study, objectives, research questions and significance of the study.
1.1 Background of the study

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 uninitiated understand. 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. Too much inventory and not high enough customer service is 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 (Briers, 1995).
According to Tayebwa (2002) Coca-Cola Sabco secured Century Bottling Company

Limited during 1995. The first CCS representatives arrived in the country's capital
Kampala in January 1996 on a mission to sort out the operations and sales side of the
business. For the first time in CCS history, a whole production line was airlifted from
Aplington and installed in the coca cola plant. In the production process of so many
companies. According to Lord Keynes (2002), good inventory management from top to
the bottom ready emphasizes effective production process and reduces production costs.
Statistics reveal that about 20% companies are affected by poor inventory management of
which it has increased their production costs and therefore hindering their development.
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In Africa, companies are facing a problem of poor inventory management and this has
increased their production costs. For example coca cola plants among others are facing
such a consequence. This poor inventory management is always from top management to
the lower level management. It’s from poor managerial skills that have affected so many
companies to accomplish their development trends, (J.S Charndan 2004).
Using the right techniques for sales forecasting and inventory management help to
monitor changes and respond to alerts when action needs to be taken in running the
business. The right approach to inventory management can produce dramatic benefits in
customer service with lower inventory (Kreg, Christine, 2007). Modern inventory
management in business organizations 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.
However Alvesson (2001) argued that cycle inventories arise because of management
decision to purchase, produce or sell in lots rather individuals units or continuously.
Cycle inventories accumulate at various points in operating systems. The size of the lot is
a tradeoff between the cost of handling inventory and the cost of making more frequent
orders and set ups. A mathematical description of this relationship, the economic order
quantity is very vital. In JIT the need for cycle inventory is reduced by set up cost and
time reduction.
Performance improvement is the concept of organizational change in which the managers
and governing body of an organization put into place and manage a programme which
measures the current level of performance of the business like inventory management and
then generates ideas for modifying organizational behavior and infrastructure which are
put into place to achieve higher output. The primary goals of organizational inventory
management are to increase organizational effectiveness and efficiency to improve the
ability of the organization to deliver goods and or services (Ronald, H 1999). Sale
2
Performance improvement at the operational or individual employee level usually
involves processes such as statistical quality control. At the organizational level,
performance improvement usually involves softer forms of measurement such as
customer satisfaction surveys which are used to obtain qualitative information about
performance from the viewpoint of customers. Many Coca-Cola enterprises in Mbarara
Municipality manage their inventories in different ways to improve on the performance
of such businesses
1.2 Statement of the Problem

Inventory management in business enterprises in Mbarara Municipality is mostly seen in,
bottles packing, buying of stock and keeping of it to provide the customers good services,
supply of customers, issuing of stock among others. This is because most of the business
enterprises use different systems in inventory management including; integrated system
(System Application and products) responsible for management information system
which helps to make serious decisions on stock, material requirement points, and over
stock brands for the fast moving, use of store keepers. Inventory is a significant asset in
business enterprise; its effective management therefore is a key task within the auspices
of operations, Zipkin (2000). But inventory management is difficult. It involves a
complex of decision due to the many forms inventory takes and functions it provides. In
additions inventories are a result of functional policies within business enterprise as well
as the short and long term decisions in purchasing, production, storages and sales. This
has compelled business enterprise to develop inventory management systems to improve
their sale performance but challenges in inventory management have not stopped (Lamert
and Stock, 2001).
Though most of the Coca-Cola businesses in Mbarara Municipality apply the above
inventory management techniques, but it has not always achieved its performance
standards and business growth (Opio, 2012 and Nanyonjo, 2011) much is needed for
improved performance. This is because most of the small scale business enterprises do
not show growth as years go by. These was the main reason have prompted the researcher
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to establish the effect of inventory management on Coca Cola Business Enterprises
Performance.
1.3 Purpose of the Study

The purpose of the study was to investigate the effect of inventory management on the
sale performance of Coca-Cola company limited Business Enterprises in Mbarara
Municipality Mbarara District.
1.4 Objectives of the Study

This study was based on the following objectives;
(i) To find out types of inventory management methods used by Coca cola business
enterprises in Mbarara Municipality.
(ii) To examine the importance of inventory management towards sale performance
of Coca-Cola Business Enterprises in Mbarara Municipality.
(iii) To establish the challenges faced by Coca-Cola Company Limited Business
Enterprises in Mbarara Municipality Mbarara District.
1.5 Research Questions of the Study

This research was set to answer the following research questions:
(i) What are types of inventory management methods used by business enterprises in
Mbarara Municipality?
(ii) What is the importance’s of inventory management towards sale performance of
Coca-Cola Business Enterprises in Mbarara Municipality?
(iii) What are challenges faced by Coca-Cola business enterprises in Mbarara
Municipality Mbarara District?
1.6 Hypothesis of the Study

There is no relationship between inventory management and sale performance of Coca
Cola Business Enterprises in Mbarara Municipality Mbarara District.
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1.7 Scope of the Study
1.7.1 Content of the Scope

This study was based on the effect of inventory management and performance on
business enterprise. It was guided by the objectives; to find out types of inventory
management methods used by Coca-Cola business enterprises, to establish the challenges
faced by business enterprises, and to examine whether there is a relationship between
inventory management and sale performance of Coca-Cola Business Enterprises in
Mbarara Municipality Mbarara District
1.7.2 Geographical scope of the study

The area of the study was in Coca-Cola limited Mbarara Municipality which is located in
Mbarara District. The study select Coca-Cola Business Enterprises- Mbarara
Municipality as many of the business enterprise owners manage their inventories and the
researcher was not aware of the contributions of such inventory management methods
applied.
1.7.3 Time scope of the study

The study considers information relating to the period of four years that is 2009-2012.
This range of four years was considered as many of the business enterprises have in the
area have come up with inventory management methods as the study tried to establish
their importance.
1.8 Significance of the Study

The findings of the study highlight the importance of inventory management in Coca
Cola Business Enterprise performance which was to encourage managers to develop
appropriate inventory management policies to improve their business enterprise
performance.
It is hoped that study findings was used as basis for further research and investigations in
form of literature to other upcoming researchers.
5
The findings provide information to managers in different business enterprises especially
on knowing how to compare actual performance and inventory management.
The study may further encourage government to set up educational institutions to provide
training on how to manage inventory in business environment for improving
performance.
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CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This part of the study tackled the review of literature related to inventory management
and sales performance. The sub themes that form this section will be developed and
arranged basing on the study objectives to find out types of inventory management
methods used by Coca-Cola business enterprises, to examine the importance of inventory
management towards sale performance, and to establish the challenges faced by Coca-
Cola Business Enterprises in Mbarara Municipality Mbarara District
INVENTORY MANAGEMENT: DEFINITIONS AND CONCEPTS

According to Kotler (2000), inventory management refers to all the activities involved in
developing and managing the inventory levels of raw materials, semi-finished materials
(work-in- progress) and finished good so that adequate supplies are available and the
costs of over or under stocks are low. Rosenblatt (1977) says: “The cost of maintaining
inventory is included in the final price paid by the consumer. Good in inventory
represents a cost to their owner. The manufacturer has the expense of materials and
labour. The wholesaler also has funds tied up”. Therefore, the basic goal of the
researchers is to maintain a level of inventory that will provide optimum stock at lowest
cost.
Morris (1995) stressed that inventory management in its broadest perspective is to keep
the most economical amount of one kind of asset in order to facilitate an increase in the
total value of all assets of the organization – human and material resources. Keth et al.
(1994) in their text also stated that the major objective of inventory management and
control is to inform managers how much of a good to re-order, when to re-order the good,
how frequently orders should be placed and what the appropriate safety stock is, for
minimizing stock outs. Thus, the overall goal of inventory is to have what is needed, and
to minimize the number of times one is out of stock.
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Drury (1996) defined inventory as a stock of goods that is maintained by a business in
anticipation of some future demand. This definition was also supported by Schroeder
(2000) who stressed that inventory management has an impact on all business functions,
particularly operations, marketing, accounting, and finance. He established that there are
three motives for holding inventories, which are transaction, precautionary and
speculative motives. The transaction motive occurs when there is a need to hold stock to
meet production and sales requirements. A firm might also decide to hold additional
amounts of stock to cover the possibility that it may have under estimated its future
production demand is uncertain. The speculative motive for holding inventory might
entice a firm to purchase a larger quantity of materials than normal in anticipation of
making abnormal profits. Advance purchase of raw materials in inflationary times is one
form of speculative behavior
2.1 Techniques of inventory management

Recording technique; Inventory recording is undertaken to reduce the error relating to
inventory accountability and accuracy in a firm’s investment in inventories. Wood Frank
(1996) indicates that stock accounting is important in any firm as it registers the changes
in the level of stock held to realize maximum value and avoid misuse of funds. Inventory
recording may take it form of stock taking and sport checks which are a process of
physically counting, weighing or otherwise measuring the quality of each item in stock
and recording system should reduce the discrepancies between stock in record and the
physical stock.
Inventory storage. Stock is vital tool as it achieves an efficient inventory management

system. Since there is storage and issue of inventory, the cost of obsolescence and fraud,
management should ensure performance of all storage and issue functions. Stock
valuation; According to Wood Frank (1996), the way materials are valued has
amplification on the firms reported profit and the material usage and balance therefore
different inventory profit reported by firms. The different materials valuation techniques
include Last in First out (LIFO), First in First out (FIFO), average cost method and net
realizable value.
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Inventory models aim at minimizing materials costs. The order quantity that
minimizes the cost of holding stock is determined. The key issue is the determination for
when to order and how much to order. Materials models range from those concerning
stock files and investment or stock records to economize costs calculated according to a
number of formulas (Holstein 19681).
Determining order quantities and inventory levels is another technique, some

relatively simple theoretical models used to determine order quantities are discussed. The
application of these models depends on whether the demands or usage of the inventory is
dependent or indecent. Dependent demand means the item is part of larger comment or
product, and its users are dependent on the production schedule for the larger comments.
Independent demand means the usage of the inventory item is not driven by the
production schedule (Peter and Watter, 1998).
Inventory control: Inventory control is the activity which organizes the availability of
items to the customers of the organization. It co-ordinates the purchasing, manufacturing
and distribution functions to meet the marketing needs. This role includes the supply of
current sales items, new products, consumables, spare parts, obsolescent items and all
others supplies (wild, 2002) Lysons and Gillingham (2003) write that inventory/stock
control refers to the techniques used to ensure that stocks of raw materials, WIP and
finished goods are kept at levels which provide maximum service levels at minimum
costs.
Trial and error technique; According to Pandey (1995), this is the simplest method of
material control. In this case, management determines the level of inventory basing on
the prices, orders and value of items of inventory. Material controlling is to understand
the need for material and then taking appropriate action to meet this need (Lau A., and
Snell, 2006).
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Two Bin System; the two-bin system involves the storage of each item in two storage
bins. In case the first bin is emptied, an order must be placed for re- supply. The second
bin will contain sufficient quantities to last until fresh delivery is made. However, since
this is not based on any analysis of stock usage, it may result in holding too much or too
little stock.
ABC-Analysis model; Since most organizations maintain different types of materials

with different value, minimum attention is devoted to different items with the highest
value (Pandey, 1995). The difference involves of the different classes of inventory leads
to the inventory control model by importance and exception or ABC analysis (Rich mond
1969). The ABC analysis involves the following:-Classify the items of inventory
determining the expected used in units and price per unit for each item, determine the
total value of each item by price and units, rank items according to value, and determine
percentage ratio or units of each item to total items and value. Therefore proper ABC
analysis leads to better control over materials and consequent reduction in cost associated
with materials (Jordan, 1997).
The optimum model: According to Van Horne (1989), a company should introduce
policies to reduce lead time, regulate usage and thus minimize safety status. Therefore the
finance manager should ensure that only an optimum amount is invented in inventory to
achieve the trade of between profitability and liquidity (Pandey, 1995). Materials
management is therefore a managerial process of counting, planning, coordinating,
control, monitoring and motivation.
Just in Time Purchasing; It means the uninterrupted flow of 100% acceptable materials
delivered on due date as option cost 100% of time. Jordan (1997) relate this definition for
dozens of techniques including supplier certification materials, requirements planning,
(MRP) manufacturing resources planning, (MRP) bar coding systems, contracting,
electronic data interchange (EDI) value analysis and work simplification. This type of
purchasing production and inventory control has the great advantage of locating and
fixing quality problems immediately.
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Inventory Planning and Scheduling: This is how units of stock are required by an
organization in a given period to enable smooth business operations. A good stock plan
set in advance will enable planners to set procurement/ purchase dates and quantities that
are consistent with the plan to avoid disruptions due to inventory shortages (Dilworth
1992).
2.2 Importance of Inventory management

Inventory plays an important role in the growth and survival of an organization in the
sense that failure to an effective and efficient management of inventory, will mean that
the organization will lose customers leading to poor services delivery and sale will
decline. Emphasizing on the importance of inventory on the balance sheet of companies.
Coyle, Bardi and Langley (2003:188) state that “inventory as an asset on the balance
sheet of companies has taken an increased significance because of the strategy of many
firms to reduce their investment in fixed assets, that is plants, ware houses, office
buildings, equipment and machinery , and soon.
Virtually every enterprise finds it necessary to hold stocks (or inventory) of various items
and materials. That is because it would be practically impossible to operate with only one
of each item to be sold or used in manufacture or used in office work. A reserve or a fund
or inventory of each item or material used or sold frequently is therefore maintained, so
that as items or materials are sold or used they can be replaced or replenished from the
stocks held in reserve. Due to uncertainty in future demand, and because of the
unguaranteed availability of supplies, stock is therefore held to ensure an availability of
goods to minimize the overall costs associated with the management of stock (Drury,
2000)
Inventory management is primarily about specifying the size and placement of stocked
goods. Inventory management is required at different locations within a facility or within
multiple locations of a supply network to protect the regular and planned course of
production against the random disturbance of running out of materials or goods (Malcom,
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2005). The scope of inventory management also concerns the fine lines between
replenishment, lead time, carrying costs of inventory, asset management, inventory
forecasting, inventory valuation, inventory visibility, future inventory price forecasting,
physical inventory, available physical space for inventory, quality management,
replenishment, returns and defective goods and demand forecasting. Balancing these
competing requirements leads to optimal inventory levels, which is an on-going process
as the business needs shift and react to the wider environment (Malcom, 2005).
Inventory management involves a retailer seeking to acquire and maintain a proper

merchandise assortment while ordering, shipping, handling, and related costs are kept in
check. Systems and processes that identify inventory requirements, set targets, provide
replenishment techniques and report actual and projected inventory status that handles all
functions related to the tracking and management of material. This would include the
monitoring of material moved into and out of stockroom locations and the reconciling of
the inventory balances (Ronald H, 1997).
According to Gary (1997), there are three basic reasons for keeping an inventory: Time -
The time lags present in the supply chain, from supplier to user at every stage, requires
that you maintain certain amounts of inventory to use in this "lead time." Uncertainty -
Inventories are maintained as buffers to meet uncertainties in demand, supply and
movements of goods. Economies of scale - Ideal condition of "one unit at a time at a
place where a user needs it, when he needs it" principle tends to incur lots of costs in
terms of logistics. So bulk buying, movement and storing brings in economies of scale.
According to Ronald, H (1999), inventories are stockpiles of raw materials, supplies,

components, work in process and finished goods that appear at numerous points
throughout a firm’s production and logistic channel. Inventories are frequently found in
such places as warehouses, yards, shop floors, transportation equipment and on retail
store shelves. Having these inventories on hand can cause between 20 and 40 percent of
their value per year. Therefore, carefully managing inventory levels makes good
economic sense in relation to the performance of the business organization. Even though
12
many strides have been taken to reduce inventories through Just In Time, time
compression and quick response purchases applied throughout the supply channel, the
annual investment in inventories by manufacturers, retailers and merchants wholesalers
to improve sale performance.
Inventory management process is the science-based art of controlling the amount of stock
held in various forms, within a business to meet economically the demands placed up one
that business. The aim of inventory control system is to maintain the quantities of stock
held by a business at a level which optimizes some management criteria such as
minimizing the costs incurred by the whole business enterprise for improved performance
(Halachmi and Bouckart, 2005).
Malcom, S. (2005) says that uncertainty or safety stocks exist as a result of uncertainties
in demand or supply. Raw materials, purchased parts or maintenance, repair and
operations. buffer stocks give some protections against the uncertainty of supplier
performance due to shut down, strikes, led time variations, late deliveries to and from
suppliers, poor quality units that can not be accepted and so on. Work in process buffer
inventories protect against machine break down, employee illness and so on. Finished
goods buffer protect against unforeseen demand or production failures. Management
efforts to reduce supply uncertainty may have substantial pay off in reduced inventories.
According Halachmi and Bouckart (2005) inventory management has the following
purposes including: to provide and maintain good customer service; to smooth the floor
of goods through the productive process, to provide protection against the uncertainties of
supply and demand and to obtain a reasonable utilization of people and equipment.
Transit or Pipelines Inventories are used to stock the supply and distribution pipelines
linking an organization to its suppliers and customers as well as internal transportation
points. They exist because of the need to move materials from one point to another.
Obviously transit inventories are dependent on location and mode of transportation. A
decision to use a distant supplier will rail transport will probably create a far larger raw
13
materials transit inventory than one to use a local supplier with truck delivery. In Just In
Time production a variety of means are used to reduce transit inventories including the
use of local supplies, small batches in special containers and trucks specifically designed
for side loading in small quantities (Ronald .H, 1999).
Sale Performance involves organizational change in which the managers and governing
body of an organization put into place and manage a programme which measures the
current level of performance of the organization like inventory management and then
generates ideas for modifying organizational behavior and infrastructure which are put
into place to achieve higher output. The primary goals of organizational inventory
management are to increase organizational effectiveness and efficiency to improve the
ability of the organization to deliver goods and or services (Ronald, H, 1999).
2.3 Challenges faced by inventory management in Business Enterprises

According to Gourdin (2001:62:63), said that holding (or carrying) costs are such as
storage, handling, insurance, taxes, obsolescence, theft and interest on funds financing the
goods. These charges increase as inventory levels rise. In order to minimize carrying
costs, management makes frequent orders of small quantities. Holding costs are
commonly assessed as a percentage of unit value, i.e. 15 percent, 20 percent, rather than
attempting to derive a monetary value for each of these costs individual. This practice is a
reflection of the difficulty inherent in deriving a specific per –unit cost for, for example,
obsolescence or theft.
This is a stock management technique, which involves controlling the amount of stock
held by an organization. The main aim of this technique is to strike a balance between
profitability and liquidity to ensure that there is no under or over stocking. According to
Kamukama, 2006, short adherence to stock control should be established in order to
minimize the costs associated with stock. Firms should therefore determine the level of
stock they require so that excess or inadequate stock is avoided. Several Authors indicate
that firms should establish the following practices in order to avoid undesirable stock
14
levels i.e. the re-order level, average stock level and maximum stock level, minimum
stock level of safety stock.
In the United States, some of the largest concerns of small business owners are insurance
costs (such as liability and health), rising energy costs and taxes. In the United Kingdom
and Australia, small business owners tend to be more concerned with excessive
governmental red tape. Another problem for many small businesses is termed the
'Entrepreneurial Myth' or E-Myth. The mythic assumption is that an expert in a given
technical field will also be expert at running that kind of business (Ronald, 1997).
According to Kabuye-Kagimu, (1994), small businesses often face a variety of problems

related to their size. A frequent cause of bankruptcy is undercapitalization. This is often a
result of poor planning rather than economic conditions - it is common rule of thumb that
the entrepreneur should have access to a sum of money at least equal to the projected
revenue for the first year of business in addition to his anticipated expenses. In addition to
ensuring that the business has enough capital, the small business owner must also be
mindful of contribution margin (sales minus variable costs). To break even, the business
must be able to reach a level of sales where the contribution margin equals fixed costs
(Mayanja, 1992).
However Kizito-Mayanja, (1994) argued that finding new customers is the major
challenge for Small business owners. Small businesses typically find themselves strapped
for time but in order to create a continual stream of new business, they must work on
marketing their business every day. Common marketing techniques for small business
include networking, word of mouth, customer referrals, yellow pages directories,
television, radio, outdoor (roadside billboards), print, email marketing, and internet.
Electronic media like TV can be quite expensive and is normally intended to create
awareness of a product or service. For example, if the prospective owner thinks that he
will generate $100,000 in revenues in the first year with $150,000 in start-up expenses,
then he should have no less than $250,000 available. Failure to provide this level of
funding for the company could leave the owner liable for all of the company's debt
15
should he end up in bankruptcy court, under the theory of undercapitalization (Kayumbu,
1994).
Cost of goods sold: This matches our previously computed cost of goods sold figure. To
arrive at the $12,500 ending inventory figure, the 50 unsold ounces was multiplied by the
purchase price of $250 per ounce. In this example, all Janis’ purchases were made at the
same price, $250 per ounce. In the real world, the per ounce cost is likely to fluctuate.
Also, Janis, like many businesses, may offer more than one type of product with
fluctuating prices. In order to accurately compute the cost of goods sold, Janis has to be
able to get an accurate count of unsold inventory on hand and she also has to assign the
“correct” costs to these products. (Henry Fayol 2007).
Inventory management is an important concern for managers in all types of businesses.

For companies such as J C Penny limited, which operate on relatively low profit margins,
poor inventory management can seriously undermine the business. The challenge is not to
pare inventories to the bone to reduce costs or to have plenty around to satisfy all
demands, but to have the right amount to achieve the competitive priorities for business
most efficiently (Krajewski and Ritzman 1999). Since some variances are always present
due to the timing of transactions, business managers should recognize that the business
system and the general ledger might never be exactly equal. Therefore business managers
should establish a threshold for acceptable variances and manage the reconciliations with
theses established parameters.
Finally, according to the U.S Bureau of Census (Ballou 2004:326-328), inventories are
found in such places as warehouses, yards, shop floors, transportation equipment and on
retail store shelves. Having these inventories on hand can cost between 20 and 40 percent
of their value per year. Therefore, carefully managing inventory levels makes good
economic sense.
16
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 Introduction
This chapter presents the methodology that was used in the study; it gives a description of
the study area and the methods that used to collect data from the field. It gives a summary
of the research design, sample population and size, data collection instruments, data type,
data processing and presentation and the problems encountered during the process of data
collection and analysis.
3.1 Research Design

The research was based on both the qualitative and quantitative research designs. A case
study was chosen as the most appropriate research strategy. Saunders et al (2003) define a
case study as “a strategy for doing research which involves an empirical investigation of
a particular contemporary phenomenon within its real life context using multiple sources
of evidence”. This fitted well with the author’s intention to investigate a real life issue
through a variety of data collecting methods. Jankowicz (2000) suggests the
appropriateness of a case study when the thesis focuses on a set of issues in a single
organization.
The qualitative research design was descriptive in nature and this enabled the
researcher to meet the objectives of the study. A statement was used to assign variables
that were adequately measure using numbers and statistics.
The quantitative research designs were used in form of mathematical numbers and
statistics assigned to variables that may not be easily measured using statements or
theme.
3.2 Study area

The area of the study was Coca Cola Business Enterprise located along Mbarara –
Kampala Road in Mbarara Municipality which is located in Mbarara District. The study
selected Mbarara Municipality as many of the Coca Cola businesses enterprise owners
17
manage their inventories and the researcher was aware of the contributions of such
inventory management methods applied.
3.3 Study population and sample size

The researcher obtains information from Coca Cola business owners, employees and their
customer in the study area of Mbarara Municipality. The researcher was involving all
these categories in the study because; it was assumed that such respondents have the
information needed to complete her study in time. Here, a sample size of 100 respondents
was selected from the study area to save both time and money during the process of data
collection.
3.4 Sampling Technique

The study participants were chosen using a purposive sampling technique because of the
nature of the research where the respondent was identified before the researcher went for
data collection. Purposive sampling was involved in choosing persons who have the
appropriate characteristics required of the sample members. It also target members who
are relevant to the study and easily accessible. The reasons for selection of this method
are that it is convenient and it helps the researcher target those particular people who fit
within the study. For example employees who had been in employment for at least a year
and above. Management employees since they are the implementers of these strategies. A
random sampling method allow them have equal chances of being sleeted for the study
since they are also believed to have relevant information regarding the problem under
investigation.
3.5 Source of Data
3.5.1 Primary Data

Primary data was gathered from respondents at Coca Cola who were assumed to give first
hand information on the subject under study.
3.5.2 Secondary Source

Secondary data was got from Coca Cola manual of production and others sources like;
Annual reports, Journal articles, internet, magazines, newspapers and books related to the
18
subject of the study and these were consulted at length to extract the information required
to support the findings from the study respondents.
3.6 Data Collection methods

The study were incorporated the use of various methods in the process of data collection
in a bid to come up with sound, concrete and credible research findings. The researcher
therefore amalgamated the use of questionnaire, interviews and documentary analysis in
the process of collecting primary data.
3.6.1 Questionnaires
Questionnaires titled “the effect of inventory management and same performance of Coca
Cola Business Enterprise” will be used in the process of collecting data. The researcher
administered questionnaires to selected top employees and management officials of Coca
Cola Business Enterprise in Mbarara Municipality. The relevance of these questionnaires
was convenient and less time consuming. With management staff who would not have
time for an appointment, an email of the questionnaire was sent to them which would
easily be filled. The questionnaire were piloted as recommended by Saunder et al (2003)
who writes that, piloting helps ensure validity and reliability and also said that piloting
helps to refine the questionnaire so that respondents have no problem in answering the
questions and there would be no problems in recording the data.
3.6.2 Interviewing
The researcher use formal interviewing as a method of data collection and the interviews
offered a chance to explore topics in depth and allowed interaction between the
researcher and the respondents such that any misunderstanding of the questions and
answers provided could easily be corrected. The researcher interviewed the lower level
employees of the organization using the interview guide. This was used to tap the vital
information that would not be collected using the questionnaires from the top level and
management employees.
19
3.7 Reliability and validity
Validity of an instrument used in this study was consistent with the definition provided
by Miles and Huberman (1994), as the” extent to which the items in the instrument
measure what they are set out to measure.” The validity of the instruments will be
established by the supervisor.
Reliability, according to Miles and Huberman (1994), has to do with the extent to which
the items in an instrument generate consistent responses over several trials with different
audiences in the same setting or circumstances”. The reliability of the instruments and
data was established following a pre-test procedure of the instruments before their use
with actual research respondents.
3.8 Research Procedure

The study was observed all those procedures followed in research. Using the letter of
introduction obtained from the Faculty, the researcher was introduced to every respondent
reached at, fully explaining the purpose of research. After getting their consent, he
conducted the research. The researcher also built the confidence of the respondents by
assuring them that their views were confidential and was used only for academic
purposes.
3.9 Data Analysis and Management

After collecting all the necessary data, these data was coded and edited, analyzed and
rephrased to eliminate errors and ensure consistency. It involved categorizing, discussing,
classifying and summarizing of the responses to each question in coding frames, basing
on the various responses. This was intended to ease the tabulation work. It also helped to
remove unwanted responses which would be considered insignificant. Data collected
from the field with the use of study instruments was classified into meaningful categories.
This enabled the researcher to bring out essential patterns from the data that would
organize the presentation. Data were entered into a computer and analyzed with the use of
Statistical Package for Social Sciences (SPSS). Finally, a research report was written
from the analyzed data in which conclusions and recommendations will be made.
20
3.9.1 Data processing
The collect data was edited, categorized or coded and entered into computer using SPSS
for generation of summary frequency tables and graphs. Data collected with interview
guide were edited, categorized according to themes and then summarized into
percentages using a computer spread sheet. This was done by recording data and
organizing it in themes and after which analyze the themes in line to the research
questions. Numbers of response were noted and corresponding percentages determined.
3.9.2 Editing
The collected data was edited for accuracy, completeness. Editing was done to find out
how well the answered questionnaires were done in line with consideration paid to
questions and responses from interview guide answered by the study respondents.
3.9.3 Coding
The edited data were coded. Coding involved assigning numbers to similar questions from
which answers were given unique looks to make the work easier. In this case SPSS (Statistical
Package for Social Scientists) will be used to analyze the code data.
3.9.4 Data analysis

Qualitative data was analyzed in the field as it is being collected (verbatim reporting)
while quantitative data were used to analyze data by using computer programs like
Microsoft excel and Microsoft word. Also under qualitative analysis, thematic analysis
will also be used and in quantitative data analysis; graphs, tables and pie charts were used
for data analysis and presentations of findings.
3.10 Ethical Consideration

Before commencing the research, introductory letters dean faulty of business and
development studies from the University were sought and the purpose of the study
explained to the authorities to avoid inconveniences and misunderstandings about the
purpose. The information collected was kept highly confidential.
21
3.11 Limitations of the study
The study involves the following constraints;
The time allowed to do this research was not enough to allow exhaustive study and obtain
all the essential information for much more suitable conclusions. The problem was
minimized by putting much effort on this research so as to meet the deadline.
The Researcher was limited by financial resources such as the transport costs and
stationery to carry out her research effectively. In an effort to mitigate this shortcoming,
the researcher was source for funds from a few sponsors.
Slow or non- response: Since the researcher does t know the kind of respondents to deal
with, some of them fail to respond or delay to do so. The researcher makes convenient
appointments with the respondents and encourage them to respond and give true
information in time.
Due to the sensitivity of the study, the respondents might refuse to give some data to the
researcher citing the reasons behind the study. The researcher was however overcome this
by showing an introductory letter acquired from the faculty fully explaining the purpose
of the research. The researcher was also assured respondents that their ideas were treated
with utmost confidentiality.
Bureaucracy delayed the study. From all the procedures, getting data from management
take time. However, the researcher was take time and appeal to the bureaucrats for data.
Time and resources constraints were restrict the scope of the research. Despite the
researcher effort to expand the scope of the research by getting into more in-depth study
of cash management, it may not materialize due to the practical difficulties faced during
the work.
22
CHAPTER FOUR
PRESENTATION, INTERPRETATION AND ANALYSIS OF FINDINGS
4.0 Introductions
In this chapter, the researcher presents, interprets the findings of the study and analysis in
line with the set objectives, which include; To find out types of inventory management
methods used by Coca cola business enterprises, to examine the importance of inventory
management towards sale performance of Coca-Cola Business Enterprises and to
establish the challenges faced by Coca-Cola Company Limited Business Enterprises in
Mbarara Municipality Mbarara District. The social characteristics of the respondents are
also considered to establish their relationship with the variables under investigation.
4.1 Background information of the respondents

The study investigated on social characteristics of the respondents in the locality. The
reason was to establish whether such characteristics have a strong bearing on the effect of
inventory management on the sale performance of Coca-Cola Company limited Business
Enterprises in Mbarara Municipality Mbarara District. The findings are tabulated in the
subsequent tables.
4.1.1 Gender of respondents

The research further investigated the respondents’ gender. The reason was to find out if
both sexes hold same views or different ones on the effect of inventory management on
the sale performance of Coca-Cola Company limited Business Enterprises in Mbarara
Municipality Mbarara District. This is presented statistically below;
Table 4.1 Gender of respondents
Frequency Percent Valid Percent Cumulative Percent
Valid Male 55 52.4 55.0 55.0
Female 45 42.9 45.0 100.0
Total 100 95.2 100.0
Source: Primary Data 2012
23
Table 4.1, shows that male respondents constituted 55% while female respondents were
45%.
4.1.2 Age Brackets of respondents
The researcher explored on the age of the respondents in regard to the effect of inventory
management on the sale performance of Coca-Cola Company limited Business
Enterprises in Mbarara Municipality Mbarara District. The results are tabulated below;
Table 4.2 Age of respondents

Valid 20-30 35 33.3 35.0 35.0
31-40 28 26.7 28.0 63.0
41-50 17 16.2 17.0 80.0
50+ 20 19.0 20.0 100.0
Total 100 95.2 100.0
Source: Primary data 2012
The table presents that 35.0% of the respondents were between 20-30 years, 28.0% were
between 31-40 years, 17% were between 41-50years, while 20% were above 50 years.
4.1.3 Academic background of respondents

The researcher also considered the academic background of respondents to establish how
it relates to the effect of inventory management on the sale performance of Coca-Cola
Company limited Business Enterprises in Mbarara Municipality Mbarara District. The
findings are presented in the table below;
Table 4.3 : Academic background of respondents

Cumulative
Frequency Percent Valid Percent Percent
Valid Certificate 26 24.8 26.0 26.0
Diploma 45 42.9 45.0 71.0
Degree & Post- graduate 24 22.9 24.0 95.0
Others 5 4.8 5.0 100.0
Total 100 95.2 100.0
24
From the table 26.0% of the respondents had certificates, 45% had diplomas, 24% had
degrees, while 5% had others qualifications
4.1.4 Departments of the respondents

The researcher also considered the education levels of the respondents to establish how it
relates to the effect of inventory management on the sale performance of Coca-Cola
Company limited Business Enterprises in Mbarara Municipality Mbarara District. The
findings are presented in the table below;
Table 4.4 Departments of the respondents

Valid Stores & Marketing 46 43.8 46.0 46.0
Top management 34 32.4 34.0 80.0
Accounts 6 5.7 6.0 86.0
Purchasing & Sales 9 8.6 9.0 95.0
Others 5 4.8 5.0 100.0
Total 100 95.2 100.0
From the table 66.0% of the respondents were from store and marketing department, 34
% were from top management department, 6% of the respondent are from Accounts
Department, 9% were from purchasing and sales department, while 5% were from others
department.
4.2 The Types of Inventory Management Method Used By Coca Cola Business
Enterprise
The study investigated into the types of inventory management method used by coca cola
business enterprise. The reason was to establish the method adopted by the Coca Cola in
its quest to ensure proper sale performance. The findings are tabulated in the subsequent
tables. The researcher first asked respondents whether there are various types of
inventory management method used by coca cola business enterprise. The responses
given by the respondents were inform of strongly agree, agree, not sure, disagree, and
strongly disagree as follow;
25
Table 4.5: Whether there are types of inventory management method used by
coca cola business enterprise
Valid Strongly agree 35 33.3 35.0 35.0
Agree 53 50.5 53.0 88.0
Not sure 10 9.5 10.0 98.0
Disagree 2 1.9 2.0 100.0
Total 100 95.2 100.0
According to the table, 35% of the respondents strongly agreed and 53% agreed
respectively that types of inventory management method used by coca cola business
enterprise. Accordingly, 10% were not sure, 2% disagreed and none strongly disagreed to
the idea. Types of inventory management method used by coca cola business enterprise
that were established from the study included;
4.2.1 Accurate and Up-to- date stores records

The study established that accurate stores records were one of the types of inventory
management method used by coca cola business enterprise. It was revealed that the
employees at the coca cola take recording as an important component of their
management and that this had improved their sale performance. The findings are
presented in the table below;
Table 4.6 Response patterns on up-to- date stores records

Agree 40 38.1 40.0 96.0
Not sure 2 1.9 2.0 98.0
Strongly disagree 2 1.9 2.0 100.0
Total 100 95.2 100.0
From the table, 56% of the respondents strongly agreed to the notion of up-to- date stores
records as one of the types of inventory management method used by coca cola business
enterprise. 40% agreed, 2% were not sure, while 2% strongly disagreed to the idea.
26
4.2.2 Good Stock plan
It was established that a good stock plan helps in sale performance and is a component of
inventory management. This was cited by the respondents during the study. Respondents’
opinions are expressed in the table below;
Table 4.7 Responses on Good stock plan
Cumulative
Agree 34 32.4 34.0 80.0
Not sure 6 5.7 6.0 86.0
Disagree 9 8.6 9.0 95.0
Total 100 95.2 100.0
According to the table, 46% of the respondents strongly agreed that stock plan is good
types of inventory management method used by coca cola business enterprise, 34%
agree. 6% were not sure, 9% disagreed, while 2% strongly disagreed to the idea.
4.2.3 Proper accounting records

Proper accounting and recording is a means of inventory management in used Coca Cola
Company Business Enterprise. Respondents’ opinions on the idea are presented below;
Table 4.8 Responses on proper accounting records
Valid Cumulative
Frequency Percent Percent Percent
valid Strongly agree 28 26.7 28.0 28.0
Agree 56 53.3 56.0 84.0
Not sure 5 4.8 5.0 89.0
Disagree 9 8.6 9.0 98.0
Total 100 95.2 100.0
According to the table, 28% of the respondents strongly agreed that proper accounting
records is types of inventory management method used by coca cola business enterprise
56%agreed , were not sure, 5% disagreed, 9% strongly disagreed, and 2% disagreed.
27
4.2.4 Surprise checks/ Spot checks
It emerged from the study that positive surprise checks constitutes an important strategy
in types of inventory management method used by coca cola business enterprise. First
and foremost, all employees at the Coca Cola Business Enterprise and more so top
managers should work towards ensuring that all their subordinates comply with the set
rules and standards in the organization. This can be achieved through surprise checks.
This is clearly presented below;
Table 4.9 Responses on surprise checks
Valid Cumulative
Agree 48 45.7 48.0 84.0
Not sure 13 12.4 13.0 97.0
Total 100 95.2 100.0
From the table, 36% of the respondents strongly agreed surprise checks helps in
promoting proper inventory management, 13% were not sure, and 3% strongly disagreed.
4.2.5 Proper stores management

Coca Cola Business Enterprise management should create opportunities where all
employees in their respective departments will feel as part of the systems. Proper stores
management thus was established to be an important practice that leads to sale
performance in Coca Cola Company Business Enterprise. Views of the respondents are
tabled below;
Table 4.10 Responses on proper stores management

Valid Cumulative
28
Table 4.10 Responses on proper stores management
Agree 47 44.8 47.0 90.0
Not sure 1 1.0 1.0 91.0
Disagree 1 1.0 1.0 92.0
Total 100 95.2 100.0
According to the table, 43% of the respondents strongly agreed that proper stores
management is method of inventory management, 47% agreed, 1% were not sure and
disagreed respectively, and 8% strongly disagreed.
4.2.6 Material valuation techniques

The study established that different material valuation techniques of inventory
management include last in first out (LIFO), first in first out (FIFO), average cost method
and net realizable value were one of the types of inventory management method used by
coca cola business enterprise. It was revealed that the employees at the coca cola take
recording as an important component of their management and that this had improved
their sale performance. The findings are presented in the table below;
Table 4.11 Response patterns Material valuation techniques
Valid Cumulative
Agree 40 38.1 40.0 96.0
Not sure 2 1.9 2.0 98.0
Total 100 95.2 100.0
From the table, 56% of the respondents strongly agreed to the notion of that different
material valuation techniques of inventory management include last in first out (LIFO),
first in first out (FIFO), average cost method and net realizable value as one of the types
of inventory management method used by coca cola business enterprise. 40% agreed, 2%
were not sure, while 2% strongly disagreed to the idea.
29
4.2.7 Inventory valuation
It was established that an inventory valuation in your company an activity which
organized the availability of item to the customer of the organization at least minimum
costs in sale performance and is a component of inventory management. This was cited
by the respondents during the study. Respondents’ opinions are expressed in the table
below;
Table 4.12 Responses on Inventory valuation
Valid
Frequency Percent Percent Cumulative Percent
Agree 34 32.4 34.0 80.0
Not sure 6 5.7 6.0 86.0
Disagree 9 8.6 9.0 95.0
Total 100 95.2 100.0

According to the table, 46% of the respondents strongly agreed that an inventory
valuation in your company an activity which organized the availability of item to the
customer of the organization at least minimum costs in sale performance and is a
component of inventory management method used by coca cola business enterprise.34
agree, 6% were not sure, 9% disagreed, while 2% strongly disagreed to the idea.
4.2.8 Trial error technique for material control & Inventory control systems
Use trial error technique for material control & Inventory control systems have led to
reduction of costs incurred by the used Coca Cola Company Business Enterprise.
Respondents’ opinions on the idea are presented below;
Table 4.13 Responses on trial error technique for material control

Valid Cumulative
30
Table 4.13 Responses on trial error technique for material control
valid Strongly agree 28 26.7 28.0 28.0
Agree 56 53.3 56.0 84.0
Not sure 5 4.8 5.0 89.0
Disagree 9 8.6 9.0 98.0
Total 100 95.2 100.0
According to the table, 28% of the respondents strongly agreed that Use trial error
technique for material control & Inventory control systems have led to reduction of costs
incurred by the used Coca Cola Company Business Enterprise is types of inventory
management method used by coca cola business enterprise, 56% agree, 5% were not sure,
9% disagreed, and 2% strongly disagreed.
4.3. Importance of Inventory Management Practices on the Sale Performance of

Coca Cola Company Business Enterprise
The study explored importance of inventory management practices on the sale
performance of coca cola company business enterprise. The reason was to establish
whether respondents were aware that inventory management practices contribute greatly
to the sale performance of Coca Cola Company Business Enterprise. The results are
presented below;
Table 4.14 Whether inventory management importance contribute greatly to
the sale performance of Coca Cola Company Business Enterprise.
Cumulative
Agree 59 56.2 59.0 80.0
Not sure 15 14.3 15.0 95.0
Strongly
5 4.8 5.0 100.0
disagree
Total 100 95.2 100.0
31
According to the table, 21% of the respondents acknowledge the assertion that inventory
management importance contribute greatly to the sale performance of Coca Cola
Company Business Enterprise, 59% of the respondents agree, 15% were not sure, 5%
strongly disagreed with the idea.
4.3.1 Inventory planning and scheduling

Ìt emerged that inventory planning and scheduling was being improved as a result of
inventory management at the Coca Cola Company Business Enterprise. This was through
accomplishment of the planned projects due to good inventory practices. Responses are
presented below;
Table 4.15 Responses on inventory planning and scheduling
Valid Strongly
28 26.7 28.0 28.0
agree
Agree 66 62.9 66.0 94.0
Not sure 6 5.7 6.0 100.0
Total 100 95.2 100.0
From the table, 28% strongly agree of the respondents noted that inventory planning and
scheduling had improved as a result of good inventory management practices, 66% of the
respondents agree and 6% not sure.
4.3.2 Improved procurement

Improved procurement was reported by the respondents as one of the contributions
of inventory management to sale performance as presented in the table below;
Table 4.16 Responses on improved procurement
Valid Strongly
38 36.2 38.0 38.0
agree
Agree 56 53.3 56.0 94.0
Not sure 6 5.7 6.0 100.0
Total 100 95.2 100.0
32
From the study, 38% of the respondents confirmed the assertion that improved
procurement, 56% of the respondents agreed, and 6% were not sure.
4.2.3 Cost reduction

Cost reduction is central in ensuring that any project prospers. It was noted by the
respondents there is a need for Coca Cola Company Business Enterprise to show clear
commitment to Cost reduction which was being reflected through inventory management.
Their opinions are presented below;
Table 4.17 Responses on cost reduction
Valid Cumulative
Valid Strongly
41 39.0 41.0 41.0
agree
Agree 56 53.3 56.0 97.0
Not sure 3 2.9 3.0 100.0
Total 100 95.2 100.0
According to the table, 41% of the respondents noted that cost reduction was a function
of inventory management, 56% of the respondents agreed, and 3% were not sure.
4.3.4 Effective stores management and internal coordination
Effective stores management and internal coordination was cited by respondents as one
of the great importance of inventory management at Coca Cola Company Business
Enterprise. This was cited by the respondents as in the table below;
Table 4.18 Responses on effective stores management and internal
coordination
Valid Cumulative
Agree 30 28.6 30.0 91.0
Not sure 9 8.6 9.0 100.0
Total 100 95.2 100.0
33
According to the table, 61% of the respondents said that effective stores management and
internal coordination in Coca Cola Company Business Enterprise is a result of proper use
of inventory management, 30% of the respondents agreed, and 9% were not sure.
4.3.5 Improved customer service and Inventory help in the growth and survival of
an organization
Ìt emerged that Improved customer service can be realized with inventory management
and Inventory help in the growth and survival of an organization in the sense that failure
to an effective and efficient management of inventory was being improved as a result of
inventory management at the Coca Cola Company Business Enterprise. This was through
accomplishment of the planned projects due to good inventory practices. Responses are
presented below;
Table 4.19 Responses on Improved customer service and Inventory help in the
growth and survival of an organization
Cumulative
Valid Strongly
28 26.7 28.0 28.0
agree
Agree 66 62.9 66.0 94.0
Not sure 6 5.7 6.0 100.0
Total 100 95.2 100.0

From the table, 28% of the respondents strongly agree noted that improved customer
service and Inventory help in the growth and survival of an organization had improved as
a result of good inventory management practices, 66% of the respondents agree and 6%
were not sure.
4.4 Challenges Faced In Applying Inventory Management Practices by Coca Cola

Company Business Enterprise
The study explored challenges faced in applying inventory management practices by coca
cola company business enterprise. The reason was to establish whether respondents were
34
aware that Challenges faced in applying inventory management practices greatly affect to
the sale performance of Coca Cola Company Business Enterprise. The results are
presented below;
Table 4.20 Whether Challenges faced in applying inventory management
practices greatly affect to the sale performance of Coca Cola Company Business
Enterprise.
Agree 59 56.2 59.0 80.0
Not sure 15 14.3 15.0 95.0
Strongly
5 4.8 5.0 100.0
disagree
Total 100 95.2 100.0
According to the table, 21% of the respondents acknowledge the assertion that
Challenges faced in applying inventory management practices greatly affect to the sale
performance of Coca Cola Company Business Enterprise, 59% of the respondents agree,
15% were not sure, 5% strongly disagreed with the idea.
4.4.1 Bureaucratic constraints

Ìt emerged that it is clear that the issue of deciding on quality, quantity and price of the
stock is shared by several groups of people. The question involves stock verifier,
purchasing officer and Stores officers are problem to inventory management at the Coca
Cola Company Business Enterprise. This was through accomplishment of Bureaucratic
constraints in Coca Cola Company Business Enterprise hinders the operation of inventory
management systems. Responses are presented below;
Table 4.21 Responses on Bureaucratic constraints
Valid Strongly
28 26.7 28.0 28.0
agree
Agree 66 62.9 66.0 94.0
Not sure 6 5.7 6.0 100.0
Total 100 95.2 100.0
35
From the table, 28% of the respondents strongly agree noted that Bureaucratic constraints
in Coca Cola Company Business Enterprise hinders the operation of inventory
management systems, 66% of the respondents agree, 6% were not sure.
4.4.2 Cost of carrying inventory

Costs incurred for maintaining the inventory in ware house are called carrying
costs. They include interest on capital locked up in inventory, storage, insurance,
taxes, obsolescence, deterioration spoilage, salaries of ware house staff and expenses
on maintenance of ware house building. The greater the inventory held the higher
the carrying costs as presented in the table below;
Table 4.22 Responses on Cost of carrying inventory
Valid Strongly
38 36.2 38.0 38.0
agree
Agree 56 53.3 56.0 94.0
Not sure 6 5.7 6.0 100.0
Total 100 95.2 100.0
From the study, 38% of the respondents confirmed the reveals that costs of carrying
inventory that the company encounters ranges from storage costs, Breakage’s/damages
and obsolescence, Insurance and takes, stock taking, reordering and accounting costs,
cost of tied down capital in inventory, 56% of the respondents agreed, and 6% were not
sure.
4.4.3 Ordering costs

The expenses incurred to place orders with suppliers and replenish the inventory of raw
material are called ordering costs. They include costs are; Requisitioning, Purchase
ordering or setup, Transportation and Receiving, inspecting and receiving at the ware
house. These costs increase in proportion to the number of orders placed. Firms
maintaining large inventory levels place a few orders and incur less ordering costs. It was
noted by the respondents there is a need for Coca Cola Company Business Enterprise to
36
show problem of Ordering cost encountered by the transportation, costs are
administrative in nature, transportation Import Duties as well as administrative costs
being problem in inventory management. Their opinions are presented below;
Table 4.23 Responses on to the type of ordering cost encountered
Valid Strongly
41 39.0 41.0 41.0
agree
Agree 56 53.3 56.0 97.0
Not sure 3 2.9 3.0 100.0
Total 100 95.2 100.0
According to the table, 41% of the respondents noted that Ordering cost encountered by
the transportation; costs are administrative in nature, transportation Import Duties as well
as administrative costs has problem of inventory management, 56% of the respondents
agreed, and 3% were not sure.
4.4.4 Conflict of interest

Conflict of interest in the Coca Cola Company Business Enterprise hinders Inventory
Management a practice was cited by respondents as one of the great problem of inventory
management at Coca Cola Company Business Enterprise. This was cited by the
respondents as in the table below;
Table 4.24 Responses on Conflict of interest
Cumulative
Agree 30 28.6 30.0 91.0
Not sure 9 8.6 9.0 100.0
Total 100 95.2 100.0
According to the table, 61% of the respondents said that Conflict of interest in Coca Cola
Company Business Enterprise is a result into poor inventory management, 30% of the
respondents agreed, and 9% were not sure.
37
4.4.5 Poor evaluation and monitoring
Ìt emerged that Poor evaluation and monitoring hinders inventory Management practices
in Coca Cola Company Business Enterprise a result of poor inventory management at the
Coca Cola Company Business Enterprise.. Responses are presented below;
Table 4.25 Responses on Poor evaluation and monitoring

Valid Strongly
28 26.7 28.0 28.0
agree
Agree 66 62.9 66.0 94.0
Not sure 6 5.7 6.0 100.0
Total 100 95.2 100.0
From the table, 28% of the respondents strongly agreed noted that poor evaluation and
monitoring a result poor inventory management practices, 66% of the respondents agree
and 6% were not sure.
4.4.6 Strains on resources and weak management

Strain on resources result into Shortage costs or stock out costs: These are the costs
associated with either a delay in meeting the demand or inability to meet the demand at
all due to shortage of stock. These costs include. Loss of profit on account sales lost
caused by the stock out, Loss of future sales customers migrate to other dealers, Loss of
customer goodwill and Extra costs associated with urgent replenishment purchases.
Measurement of shortage cost attributable to the firm’s failure to meet customers demand
is difficult because it is intangible in nature and it affects the operation of the firm now
and in future. Which affect the sale performance of Coca Cola Company Business
Enterprise is a result into challenges of inventory management
Table 4.26 Responses on Strains on resources and weak management
38
Valid
Frequency Percent Percent Cumulative Percent
Agree 30 28.6 30.0 91.0
Not sure 9 8.6 9.0 100.0
Total 100 95.2 100.0
According to the table, 61% of the respondents said that strains on resources and Weak
management systems in Coca Cola Company Business Enterprise is a challenge to in
Inventory Management practices , 30% of the respondents agreed, and 9% were not sure.
CHAPTER FIVE
39
SUMMARY OF FINDINGS, CONLUSIONS, RECOMMENDATIONS AND
SUGGESTION FOR FURTHER STUDIES
5.0 Introduction
This chapter contains summary of the study findings, conclusions, recommendations and
suggestions for further studies. The summary of the study findings, conclusions and
recommendations were done in accordance to study objectives.
5.1 Summary of findings

The study showed that the common inventory management techniques and sale
performance of Coca Cola Business enterprises in Mbarara include; from table 4:6, 56%
of the respondents strongly agreed to the notion of up-to- date stores records as one of the
types of inventory management method used by coca cola business enterprise. 40%
agreed, from table 4:7, 46% of the respondents strongly agreed that stock plan is good
types of inventory management method used by coca cola business enterprise, 34%
agree, from table 4: 8, 28% of the respondents strongly agreed that proper accounting
records is types of inventory management method used by coca cola business enterprise
56%agreed.integrated system (System Application and products) responsible for
management inventory system which helps to make serious decisions on stock, material
requirement points, and over stock brands for the fast moving products, recoding of all
the purchased and sold inventories, issue of inventories from the store that were
previously purchased to the production department and arrangement of some Company
inventories according to the order of their importance as well as use of skilled workers to
manage the company inventory.
These study findings can be compared with Pandey (1995) who argued that since most
organizations maintain different types of materials with different value, minimum
attention is devoted to different items with the highest value. The difference involves of
the different classes of inventory leads to the inventory control model by importance and
exception or ABC analysis (Rich mond 1969). The ABC analysis involves the following:-
Classify the items of inventory determining the expected used in units and price per unit
40
for each item, determine the total value of each item by price and units, rank items
according to value, and determine percentage ratio or units of each item to total items and
value.
Also, Wood Frank (1996), the way materials are valued has amplification on the firms
reported profit and the material usage and balance therefore different inventory profit
reported by firms. The different materials valuation techniques include Last in First out
(LIFO), First in First out (FIFO), average cost method and net realizable value.
According to the study findings as in table 4.15, 21% of the respondents noted that
inventory planning and scheduling had improved as a result of good inventory
management practices, 59% of the respondents agree able to say that inventory
management influence on sale performance level of Coca Cola Business enterprises in
Mbarara Municipality positively. 41% of the respondents noted that Ordering cost
encountered by the transportation; costs are administrative in nature, transportation
Import Duties as well as administrative costs has problem of inventory management, 56%
of the respondents agreed, These same respondents indicated that inventory management
involves a lot of costs that reduce on the sales performance of the businesses for reduced
profits by the same business enterprises.
However, further study findings from table 4.17 38% of the respondents confirmed the
assertion that improved procurement, 56% of the respondents agreed the study showed
inventory management influence on the performance level of the Coca Cola Business
enterprises in Mbarara Municipality as the respondents believed that employment of JIT
had helped small and medium enterprises in Mbarara Municipality to reduce on the
transport costs and that JIT was employed in the study area during the process of getting
stock for the business and that had helped to reduce on the ordering costs. This can mean
that proper use of JIT reduces on ordering costs such as air time costs, transport costs in
organizations when employed. From table: 4.23 say that 41% of the respondents noted
that Ordering cost encountered by the transportation; costs are administrative in nature,
transportation Import Duties as well as administrative costs has problem of inventory
41
management, 56% of the respondents agreed This was further evidenced by one of the
study respondents who was able to say that employment of JIT had improved on the sale
performance of the business products making such businesses to improve on their profits.
According to the study findings as in above table 4.8 , 61% of the respondents said that
effective stores management and internal coordination in Coca Cola Company Business
Enterprise is a result of proper use of inventory management, 30% of the respondents
agreed all the study respondents were able to say that inventory management influence on
sale performance level of Coca Cola Business enterprises in Mbarara Municipality as
none of the respondents selected was not able to reveal that inventory management does
not influence on the performance level of the business enterprises. The above findings,
basing on the majority of the study respondents was concluded that inventory
management influence on sale performance level of Coca Cola Business enterprises in
Mbarara Municipality as all the study respondents were able to indicated the same.
The above study findings can be related with Ronald, H.(1999), from table: 4.22 38% of
the respondents confirmed the reveals that costs of carrying inventory that the company
encounters ranges from storage costs, Breakage’s/damages and obsolescence, Insurance
and takes, stock taking, reordering and accounting costs, cost of tied down capital in
inventory, 56% of the respondents agreed, who reported that inventory exists for this
reason alone, the relevance of the decision to be made. Carrying, holding or possession
costs. These include handling charges, labour and operating costs, insurance premium,
breakage, pilferage, obsolescence, taxes and investment or opportunity costs. In short any
cost associated with having as opposed to not having inventory is included. Other costs
may include ordering costs, or purchase costs, set-up costs, stock out and price variation
costs.
However, from 21% of the respondents noted that inventory planning and scheduling had
improved on sale performance as a result of good inventory management practices, 59%
of the respondents agree Halachmi and Bouckart, (2005) say that inventory management
process is the science-based art of controlling the amount of stock held in various forms,
42
within a business to meet economically the demands placed up one that business. The aim
of inventory control system is to maintain the quantities of stock held by a business at a
level which optimizes some management criteria such as minimizing the costs incurred
by the whole business enterprise for improved sale performance.
The study established that load shedding was among the common challenge faced by
Coca Cola Business enterprise in Mbarara Municipality. Interruption in power supply
affected some businesses that use electricity like in reflection of some soft drinks. Such
businesses pointed out that challenge included grain mills, saloons, and soft drinks among
many others. It was argued that the operation of such businesses was entirely dependent
on power and hence any event that cut power supply impinged on the businesses.
The study found out further that high cost of ordering cost and carrying cost remained a
challenge even amidst Micro Financial Institutions. It was noted that from table. 4:22
respondents pointed it out that 38% of the respondents confirmed the reveals that costs of
carrying inventory that the company encounters ranges from storage costs,
Breakage’s/damages and obsolescence, Insurance and takes, stock taking, reordering and
accounting costs, cost of tied down capital in inventory, 56% of the respondents agreed
lead to Finance challenge has remained outstanding though the carrying cost and ordering
cost, so its role is still challenge.
In addition, the study went ahead to discover from table 4:22 indicates that the cost of
carrying inventory in the organization ranges from storage cost, damages/breakage’s and
obsolescence, Insurance and taxes, stock-taking, reordering, accounting cost, cost of tied
down capital in inventory and so on poor record keeping was a challenge to the coca cola
businesses. The researcher established that most coca cola businesses relied on guess
work and memory to settle debts and payments for goods given to clients on credit. The
respondents as well admitted that some colleagues could not document business plans,
incomes and expenditures. Therefore this accidentally has led to high expenditure
considered to cash inflows hence a challenge, the challenge was cited by 38% of the
respondents confirmed the reveals that costs of carrying inventory that the company
43
encounters ranges from storage costs, Breakage’s/damages and obsolescence, Insurance
and takes, stock taking, reordering and accounting costs, cost of tied down capital in
inventory, 56% of the respondents agreed.
5.2 Conclusions of the study

Basing on the study findings, the researcher has drawn the following conclusions;
That the common inventory management techniques used by small and medium
enterprises in Mbarara include; material requirement points, and over stock brands for the
fast moving products, recoding of all the purchased and sold inventories and use of
skilled workers to manage the company inventory.
The research findings also revealed a significant positive relationship between inventory
management and sale performance. This implies that in order to obtain high levels of sale
performance towards customer satisfaction, there is need for better inventory
management. The research findings further showed significant positive relationship
between inventory management and sale performance towards customer satisfaction. This
implies that increased levels of information sharing among chain partners lead to
improved levels in customer satisfaction.
In addition, the study concludes that there is a relationship between inventory

management and sale performance of the Coca Cola company enterprises in Mbarara
Municipality and that in most situations the relationship depends on the techniques of
inventory management used in small and medium enterprises, as can either be negative or
positive relation. The respondents said that when inventories are properly managed, the
relationship between the two variables of inventory management and performance is
positive and that when it is poorly managed the relationship between inventory
management and performance becomes negative.
Lastly, that the challenges faced by Coca Cola Business enterprises in Mbarara
Municipality Mbarara District include; loading shedding, poor record keeping, high
taxes, lack of enough capital, low sales, negative cash flows, management problems,
44
family control, and situations, inadequate of stock, lack of business plan, high fuel prices,
low turn up of customers, competition, perishability of the products and sometimes theft
among others.
5.3 Recommendations of the study

In light to the above study findings and conclusions, the following recommendations are
made as follows;
Since inventory management techniques do not normally lead to immediate effect on the
sale performance of Coca Cola business enterprises, the study recommends management
in most Coca Cola business Enterprise always to forward planning, centralize the
purchase and store function, carry out stock taking exercise periodically as if such factors
are adopted together then profitability level and efficiency of the such businesses will be
greatly influenced positively.
It is also recommended that whether or not a perpetual/continuous stock control system in

the inventory department is maintained, there should be continuous annual stock taking in
Coca Cola business Enterprise. To this, procedures can be prescribed for this with
emphasis on identifying damaged, slow moving, and obsolete stock and cut-off
procedures.
The study further recommends management in most Coca Cola business Enterprise to
emphasis on the proper inventory management techniques and measuring of efficiency
deviations to identify weaknesses in the process of managing inventory.
The study further recommends the Coca Cola business Enterprise inventories to be stored
under conditions as to get protected from being damaged due to physical causes, for
example heat, cold. To this, special arrangement of stock which is classified as secrete
should made in small and medium enterprises for improving the performance level in
such businesses.
5.4 Areas for further research
45
Further studies are suggested by the study on the following areas.
 The effect of inventory management on the employee’s efficiency in small and
medium enterprises in Uganda.
 The relationship between taxation and performance of small and medium enterprises
in Mbarara Municipality
 Collaborative Inventory management and customer satisfaction.
 Information accessibility, Customer responsiveness and enhanced performance
 Supply chain environment and customer satisfaction
 Relationship between qualifications and customer satisfaction in the downstream
chain
 Relationship between qualifications and inventory management in the downstream
chain
REFERENCES
46
Aaker D A . (2001) John Wisely. USA strategic management. 6th Edition.
Alvesson, M. (2001); The Structuring of Organizations: Prentice-Hall, Englewood Cliffs,

N.J.
Ballou R .H. (2004) Business Logistics / supply chain management. Planning,
Organization. 5th Edition
Bebko C P. Services Encounter Problems: which services providers are more likely to be
blamed? Journal of services marketing. Volume .2001:1
Bertolini & Rizzi A. (2002). A simulation approach to manage finished goods inventory
Biggart & Gargeya (2002) Impact of JIP on inventory to sales ratios. Volume
102.Numbers 2002
Bloomberg D J, Lemay S & Hanna J B. (2002). Logistics. Prentice Hall. New Jersey.
USA.
Braglia & Montanari (2004) Multi- attribute classification method for spare Parts
inventory management. Volume 10. Number 2.
Chandra C & Kumars. Taxonomy of inventory policies for supply- chain effectiveness.
Volume 29. Number 4. 2001:3
Clodlfer, M. A., (2003). Identifying opportunities for improving Teradyne's service-parts

Logistics system. Interfaces, 29(4), 1-18.
Colvin, J. G & Slevin, D.P (2007); the Structures in Fives: Designing Effective
Organizations. Prentice-Hall, Englewood Cliffs, N.J.
Craighead, C. W., & Meredith, J. (2006). Operations management research paradigms:

evolution and alternative future paths. Manuscript submitted for publication
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Ellram, L. M., Tate, W. L., & Billington, C. (2004). Understanding and managing the
services supply chain. Journal of Supply Chain Management, 40(4), 17-32.
Gary j. Zenz (1997); Purchasing and the management of materials Florida state
university, 7th Edition, simultaneously, Canada, USA
Halachmi, A., & Bouckart G. (2005); Performance measurement, organizational

technology and organizational technology and organizational design. Work Study, 43 (3),
19-25.
Hugo, S., Baden W. and Van Rooyen (2002). A systems perspective on supply chain
measurements. International Journal of Physical Distribution & Logistics Management,
30(10), 847-868.
Kamukama N. A., (2006). Cost and management accounting. First Edition
Kaplan, R. S., Norton, D. P. 1996. The Balanced Scorecard. Translating Strategy into
Action. Boston, Harvard Business School Press.
Kayumbu, William (1994): The Impact of Agricultural Credit on Small Holder

Agriculture in Uganda: a case study of Cooperative Credit Scheme (CCS) in Mbarara
District.
Kenneth Lysons and Brian .Farrington Seventh Edition (2006). Purchasing and supply
Chain management
Lau A., & Snell R. (2006); Structure and growth in small Hong Kong enterprises.
International Journal of Entrepreneurial Behavior & research.
Leenders/ Fearon (1997); purchasing and supply management 11th edition, Rob Zunettler,
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Lei, D, Slocum, J.W., & Pitts, R.A. (1999); Designing Organizations for Competitive
Advantage: The Power of Unlearning and Learning. Organizational Dynamics, winter.
Malcom Saundrers (2005); strategic purchasing and supply chain management 2nd
edition, Pittman publishing, 128, long acre London wc2e 9an
Moberg, G. C., Cutler, B. D., Gross, A., & Speh, T. W. (2002). Identifying antecedents of
information exchange within supply chains. International Journal of Physical Distribution
& Logistics Management, 32(9), 755-770.
Richard et al. (2009): Measuring Organizational Performance: Towards Methodological

Best Practice. Journal of Management.
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hall international inc, USA.
Smaros J et al (2003). The impact of increasing demand visibility on production and

inventory control Efficiency. Volume 33. Number 4.
Appendices
Appendix I: Work Plan

Item/Time March April May June June
Data Collection
49
Data Analysis
Data Presentation
Clear Report Writing/
Dissertation
50
Appendix I1: Budget Plan
Item Quality/quantity Unit cost Total cost
1. Proposal Writing
Stationary
Ruled Paper 2 reams 10,000= 20,000=
Note book 4 2,500= 10,000=
Printing 30 pages 500= 15,000=
Photocopying 30 pages 100= 3000=
Pens 1 box 3,000= 3,000=
Box file 2 5,000= 10,000=
Clip board 2 3,500= 7,000=
Subtotal 68,000=
2. Data Collection
Allowance 6 days 20,000= 120,000=
Subtotal 188,000=
3. Data Analysis
Transcription Allowance 6 days 20,000= 120,000=
Analysis Allowance 6 days 20,000= 120,000=
Subtotal 240,000=
4. Report writing
Secretarial services
Typing 50 pages 500 per page 25,000=
Printing 50 pages 500 per page 25,000=
Photocopying 50 pages 100 per page 5,000=
Binding 4 books 20,000= each 80,000=
Subtotal 135,000=
Appendix III: A QUESTIONNAIRE FOR STAFF OF COCA COLA BUSINESS
ENTERPRISE
Dear respondent,
I am TANDEKA EDIN, a student of Bishop Stuart University -Mbarara offering
Bachelor’s in Business Administration. Iam carrying out my research on “the importance
of inventory management on the sale performance of Coca Cola business enterprises
in Mbarara Municipality Mbarara District”. I kindly request you to provide me the
necessary information having been chosen to be one of the respondents to enable me
complete my research project successfully.
51
Please answer the following questions about the general climate in your organization in
terms of how it really is, not how you would prefer it to be. Please be as candid as
possible; remember, all your responses will remain strictly anonymous and confidential.
Please indicate the extent to which you agree with each of the following statement about
your organization by indicating with a tick in the box of your choice. Use the scale below
on each of the sections and indicate on the answer sheet next to the number of the
corresponding statement the number which best represents your answer.
Use the key below answering the following questions: Apply a tick where applicable
using the following key. SA – Strongly, A – Agree , NS – Not Sure, D – Disagree SD
– Strongly disagree
SECTION A: BIOGRAPHIC DATA INFORMATION ON THE RESPONDENT

(Please tick in the appropriate Box)
1. Sex: Male Female
2. Age: 20 – 30 years
31 – 40 years
41 - 50 years
51 – 60 years
60 and above
3. Marital status:
Single
Married
Separated
Divorced
4. Level of Education:
Primary
Secondary
Diploma
Degree & post -graduate
52
others (specify) …………………………
5. Which department do you belong to?
Top management
Stores & Marketing
Purchasing& sales
Accounts
Please specify…………………………………………..
SECTION B: THE TYPES OF INVENTORY MANAGEMENT METHOD USED BY
COCA COLA BUSINESS ENTERPRISE
1 2 3 4 5
SA A NS D SD
There are various types of Inventory management method used
by Coca Cola Business Enterprise
Accurate and up-to- date stores records is an Inventory
management practices used Coca Cola Company Business
Enterprise
Good stock plan is an inventory management practices used by
used Coca Cola Company Business Enterprise
Proper accounting and recording is a means of inventory
management in used Coca Cola Company Business Enterprise
Spot checks/surprise checks help in inventory management in
local governments
Proper stores management is a form of inventory management in
used Coca Cola Company Business Enterprise
They are different material valuation techniques of inventory
management include last in first out (LIFO), first in first out
(FIFO), average cost method and net realizable value are used by
used Coca Cola Company Business Enterprise.
Is inventory valuation in your company an activity which
organized the availability of item to the customer of the
organization at least minimum costs
Does your company use trial error technique for material control
& Inventory control systems have led to reduction of costs
incurred by the used Coca Cola Company Business Enterprise
53
SECTION C: IMPORTANCE OF INVENTORY MANAGEMENT PRACTICES ON
THE SALE PERFORMANCE OF COCA COLA COMPANY BUSINESS
ENTERPRISE.
1 2 3 4 5
SA A NS D SD
Inventory Management practices contribute greatly to the sale
performance of Coca Cola Company Business Enterprise
Inventory Management helps in inventory planning and
scheduling in Coca Cola Company Business Enterprise
Procurement/purchase dates and quantities are improved by
inventory management practices
Cost reduction in Coca Cola Company Business Enterprise is a
result of inventory management practices
Inventory Management helps in effective stores management of
Coca Cola Company Business Enterprise
Internal coordination in Coca Cola Company Business
Enterprise can be improved by inventory management
Improved customer service can be realized with inventory
management
Inventory help in the growth and survival of an organization in
the sense that failure to an effective and efficient management of
inventory
Stock help to ensure an availability of goods to minimize the
overall cost associated with the management of stock
SECTION D: CHALLENGES FACED IN APPLYING INVENTORY MANAGEMENT

PRACTICES BY COCA COLA COMPANY BUSINESS ENTERPRISE
1. 2. 3. 4. 5.
SA A NS D SD
Inventory Management practices involve various challenges
Conflict of interest in the Coca Cola Company Business

Enterprise hinders Inventory Management practices
54
Poor evaluation and monitoring hinders inventory
Management practices in Coca Cola Company Business
Enterprise
Strain on resources by Coca Cola Company Business
Enterprise is a challenge to inventory Management practices
Weak management systems in Coca Cola Company
Business Enterprise is a challenge to in Inventory
Management practices
Bureaucratic constraints in Coca Cola Company Business
Enterprise hinders the operation of inventory management
systems
Does your company incur ordering costs are such as
transportation, import duties and administrative costs.
Does your company incur holding or carrying costs are such
as storage, handling, insurance, taxes, obsolescence, theft
and interest on funds financing the goods.
55
Thank you for sparing your precious time and God bless you
56
Map 1: Map of Uganda showing Mbarara district
57
Map 2: A Map of Mbarara Showing Mbarara municipality
Source: Mbarara district planning office
58
Map 3: Map of Mbarara Municipality Showing Coca-Cola Plant
Source: Mbarara district planning office
59

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INVENTORY MANAGEMENT AND SALES PERFORMANCE OF

ENTRPRISES: A CASE STUDY OF COCA COLA LIMITED

A RESEARCH REPORT SUBMITTED TO THE FACULTYOF BUSINESS

AND DEVELOPMENT STUDIES IN PARTIAL FULLFILMENT OF THE

REQUIREMENT FOR THE AWARD OFTHE BACHELORS

DEGREE OF BUSINESS ADMINISTRATION OF

BISHOP STUART UNIVERSITY

Finally, I wish to acknowledge my brother Phenehas Tukamwesiga and finally my old

CHAPTER ONE INTRODUCTION...............................................................................1

CHAPTER TWO: LITERATURE REVIEW.................................................................7

CHAPTER THREE: RESEARCH METHODOLOGY..............................................17

ABC Activity based costing

FIFO First In First Out

JIT Just in Time

LIFO Last In First Out

MRO Maintenance, Repair and Operations.

MRP Manufacturing Resources Planning

MRP Materials Requirements Planning

No.1 Number one

PBL Print British Limited

SPSS Statistical Package for Social Sciences

W.I.P work in progress

1.1 Background of the study

According to Tayebwa (2002) Coca-Cola Sabco secured Century Bottling Company

1.2 Statement of the Problem

1.3 Purpose of the Study

1.4 Objectives of the Study

1.5 Research Questions of the Study

1.6 Hypothesis of the Study

1.7.1 Content of the Scope

1.7.2 Geographical scope of the study

1.7.3 Time scope of the study

1.8 Significance of the Study

INVENTORY MANAGEMENT: DEFINITIONS AND CONCEPTS

2.1 Techniques of inventory management

Inventory storage. Stock is vital tool as it achieves an efficient inventory management

Determining order quantities and inventory levels is another technique, some

ABC-Analysis model; Since most organizations maintain different types of materials

2.2 Importance of Inventory management

Inventory management involves a retailer seeking to acquire and maintain a proper

According to Ronald, H (1999), inventories are stockpiles of raw materials, supplies,

2.3 Challenges faced by inventory management in Business Enterprises

According to Kabuye-Kagimu, (1994), small businesses often face a variety of problems

Inventory management is an important concern for managers in all types of businesses.

3.1 Research Design

3.2 Study area

3.3 Study population and sample size

3.4 Sampling Technique

3.5 Source of Data

3.5.1 Primary Data

3.5.2 Secondary Source

3.6 Data Collection methods

3.8 Research Procedure

3.9 Data Analysis and Management

3.9.4 Data analysis

3.10 Ethical Consideration

PRESENTATION, INTERPRETATION AND ANALYSIS OF FINDINGS

4.1 Background information of the respondents