Inventory Management Practices among Micro Retailing Enterprises

This study examined the current state of inventory management practices and factors that
influence their use in micro retailing enterprises through questionnaire survey among the
owners/managers of the micro retailing enterprises. The researchers proposed three hypotheses.
The first hypothesis was that the cost barrier has a significant influence on inventory
management. The second hypothesis was that attitude towards inventory management has
significant influence on inventory management. The third hypothesis was that knowledge on
inventory management practices has a significant influence on inventory management. All three
proposed hypotheses developed in this study are supported.

Body Supporting Evidence

A simple random sampling was employed wherein there were only 100 respondents as
the sample size. Within the sample size, 50 (50 percent) of the respondents were operating for
not more than five years. This was followed by small and medium-sized enterprises which were
around 9 (17 percent) and 3 (5 percent) respectively while there were 38(18 percent) had been in
business for more than 10 years. The sample size is representative however; the problem
lies with the distribution of the sample.  The sample number for in particular 50 (50 percent) of
the respondents were operating for not more than five years is insufficient.  A larger well
represented sample with regard to all categories would have aided in the data analysis,
particularly when looking for possible interactions between inventory management practices and
its influence on inventory management.  

The instrument utilized comprised details of inventory management practices using 16

items related to how the inventory was stored, handled, controlled and purchased. The first
category refers to the activities related to how the inventories were kept and traced. This
component helps the enterprises to easily trace and identify the inventories. The second category
comprise of activities related to purchase and control.

This is a critical aspect of management in ensuring sufficient amount of inventories are

available when needed. Meanwhile, the selected factors associated with inventory management
practices included cost, owner/manager’s attitude and owner/manager’s knowledge on inventory
management. All items were measured using a five Likert’s scale from 1; Strongly Disagree to
5; Strongly Agree. The reliability analysis using a Cronbach’s alpha value was conducted in
order to calculate the internal consistency of all scaled-items used in this study. The closer the
Cronbach’s alpha coefficient is to 1.0, the greater the internal consistency of the items.