EFFECTS OF INVENTORY MANAGEMENT ON ORGANIZATIONAL

PERFORMANCE. A CASE STUDY OF VOYAGER BEACH RESORT

FRUITS PROCESSORS

REGINA MAKENA MUTUA

DSUM/13813/2021

A RESEARCH PRIOJECT SUBMITED TO THE KENYA NATIONAL

EXAMINATION COUNCIL IN PARTIAL FULFILMENT FOR
AWARD OF DIPLOMA IN SUPPLY CHAIN MANAGEMENT.

AUGUST, 2021

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 DECLARATION
This research project is my original work and has not been presented to any college.
Name: Regina Makena Mutua
Index 1151010390
Signature.....................................
Date: …………………………...

Declaration by supervisor
This project has been submitted for examination with my approval as College Trainer.
Signature...................................
Date............................
Mr. John Luseta
DEPARTMENTOFBUSINES

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 ACKNOWLEDGEMENT
The project owes a lot of people, who at various stages of its inception and creation offered
help, advice until its completion. I also owe a debt of gratitude to many trainers and
colleagues’ from whom I abundantly. Have learned so much over the entire course.

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 DEDICATION
I would like to dedicate this proposal to my father and mother Mr. and Mrs. Mutisya .You all
believed and invested so much in me even when you owned so little of your own. For what I claim
as my achievements, you have achieved much more through your dedication to excellence and the
opportunities you provided for me. I also thank my siblings Rose, Mercy and Sammy who
stood by me during my course. May the Almighty bless you all abundantly.

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 LIST OF ACRONYMS
EBQ: Economic Batch Quantity
EOQ: Economic Order Quantity
FIFO: First In First Out
JIT: Just In Time
LIFO: Last in First Out
MRO: Maintenance Repair and Operations
MRP: Manufacturing Resources Planning
MRP: Material Requirement Planning
WIP: Work in progress

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 ABSTRACT
The study will investigate the effect of inventory management on performance of organizations
while considering Voyager beach resort fruits processors ltd based in Mombasa County. The study
will be guided by three objectives; to find out effects of inventory turnover at Voyager beach resort
fruits processors plant, to determine relationship between inventory management and performance of
Voyager beach resort fruits processors plant and to find out the effective methods used by Voyager
beach resort fruits processors plant in managing the inventories. Data is collected using a
questionnaire and interview guide, and during data collection purposive sampling method is used.
Both qualitative and quantitative methodologies will be used to analyze data as a sample size of 50
respondents will be considered. This study will provide information to managers in different
organizations especially on knowing how to compare actual performance and inventory
management. The result will suggest the government to set up educational institutions to provide
training on how to manage inventory management in organization

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 TABLE OF CONTENTS
DECLARATION.................................................................................................................ii
ACKNOWLEDGEMENT..................................................................................................iii
DEDICATION....................................................................................................................iv
LIST OF ACRONYMS........................................................................................................v
ABSTRACT........................................................................................................................vi
TABLE OF CONTENTS........................................................................................................vii
CHAPTER ONE.....................................................................................................................1
1.0: Introduction.......................................................................................................................1
1.1Background of the Study.....................................................................................................1
1.2 Statement of the Problem...................................................................................................1
1.3 Purpose of Study................................................................................................................2
1.4 Objectives of the study.......................................................................................................2
1.4.1 Main Objective................................................................................................................2
1.4.2 Specific Objectives.......................................................................................................2
1.5 Research Questions...........................................................................................................2
1.6 Significance of the Study.................................................................................................2
1.7 Limitations of the study....................................................................................................3
1.8 Delimitations of the study................................................................................................3
1.9 Scope of the Study............................................................................................................3
1.10 Conceptual Framework..........................................................................................................3
1.11 Operational Definition of Terms......................................................................................5
CHAPTERTWO: LITERATURE REVIEW............................................................................6
2.0 Introduction.........................................................................................................................6
2.1 Theoretical Literature.........................................................................................................6
2.1.1 Theory of Economic Order Quantity Model................................................................6
2.1.2 Transaction Cost Analysis (TCA) Theory....................................................................7
2.1.3 Bureaucratic Procurement Procedures Theory................................................................8
2.2 Empirical Literature...........................................................................................................8
2.2.1 Inventory Investment....................................................................................................8
2.2.2 Inventory turnover........................................................................................................9
2.2.3 Measurement of Organizational Performance.............................................................10
2.3 Summary of Literature Review........................................................................................11
CHAPTERTHREE: RESEARCH METHODOLOGY...............................................................12
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3.0 Introduction.......................................................................................................................12
3.1 Research Design...............................................................................................................12
3.2 Location of Study.............................................................................................................12
3.3 Target Population.............................................................................................................12
3.4 Sample Design................................................................................................................12
3.4.1 Sample size.................................................................................................................12
3.4.2 Sampling Technique......................................................................................................13
Table 3.1Target population.....................................................................................................13
3.5 Data Collection Instruments...................................................................................................13
3.6 Data collection procedures...............................................................................................13
3.7 Reliability and Validity....................................................................................................14
3.8 Data Analysis Procedure..................................................................................................14
3.9 Ethical Consideration.......................................................................................................14
CHAPTER FOUR................................................................................................................15
RESEARCH FINDINGS, ANALYSIS..................................................................................15
4.0 INTRODUCTION............................................................................................................15
Table 4.1. Demographic Characteristics.........................................................................15
Table 4.1.1 Distribution of respondents by Gender...............................................................15
Table 4.1.2 Distribution of respondents by age.....................................................................15
Table 4.1.3 Distribution of the respondent by highest academic qualification ................16
4.2 Presentation of Findings.................................................................................................16
4.2.1 Inventory Investment...................................................................................................16
Tables 4.2.1: Are the Employees satisfied with Inventory Investment?..............................17
4.2.2 Inventory Turnover.....................................................................................................17
Tables 4.2.2: Are the Inventory Turnover systems effective?...........................................17
4.2.3 Methods used in Inventory Management on Organizational Performance.................18
CHAPTER FIVE..................................................................................................................19
SUMMARY...........................................................................................................................19
5.0 Introduction......................................................................................................................19
5.1 Summary of the finding....................................................................................................19
5.2 Conclusions......................................................................................................................20
5.3 Recommendations............................................................................................................20
5.4 Suggestions for further studies.........................................................................................20
REFERENCES.......................................................................................................................21
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APPENDIX I: LETTER OF INTRODUCTION
APPENDIX II: CONSENT
APPENDIX III: QUESTIONNAIRE
APPENDIX IV: TIMELINE AND BUDGET
APPENDIX V: LOCATION
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 CHAPTER ONE
1.0 Introduction
1.1 Background of the Study
Inventory is the stock of goods held for doing business and it's usually required to carry on
business and its activities. Inventory may include raw materials, work-in-process goods and
completely finished goods that are considered to be portion of a business's assets that are
ready or will be ready for sale. Inventory represents one of the most important assets that most
businesses posses because the turnover of inventory represents one of the primary sources of
revenue generation and subsequent earnings for the company's shareholders/owners.

There are costs that accrue as a result of holding inventory, example, holding costs, extensive
product proliferation and risk of obsolescence, especially in a rapidly changing market make
the expense of holding large inventories of finished goods excessive and that demand items
naturally have safety stock assigned to them. In many organizations there are so many very-
low-demand items that keeping any stock of these items is unreasonably expensive, so they
argue that companies must now provide good service while maintaining minimal inventories.
Therefore, inventory management approaches are essential for aspects of any organization.
Buffers tocks have been kept by many organizations against possibility of running out of the
needed items; however large buffer inventories consume valuable resources and generate
hidden costs.
1.2 Statement of the Problem
Most organizations experience conflict between the need for efficient and effective services
and the need to economize in stock holdings. It is however, obviously desirable to provide the
services as economically as possible. Frequently, but not always, the most important
consideration is to keep the stock value at the lowest practical level to economize in the use of
working capital, which is most of time scarce, and to minimize on the cost of storage.

Another challenge in managing inventory is to balance the supply of inventory with demand.
An organization would ideally want to have enough inventories to satisfy the demands of its
customers and not to lose customers due to inventory stock outs. On the other hand, the
organization does not want to have too much inventory staying on hand because of the cost of
carrying inventory. Enough but not too much is the ultimate objective.

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1.3 PURPOSE OF STUDY
The study was to investigate the effects of inventory management on organizational
performance in Voyager Beach Resort.

1.4 Objectives of the study

1.4.1 Main Objective
General objective will be to study effects of inventory management on the performance of
voyage beach resort fruits process.

1.4.2 Specific Objectives

i. To determine the effect of an inventory of Voyager Beach Resort Fruits
Processors.
ii. To establish the effect of inventory turnover of Voyager Beach Resort Fruits
Processors.
iii. To determine the methods used in inventory management on organization
performance

1.5 Research Questions

i. What are the effects of inventory statement?

ii. What are the effects of inventory turnover?

iii. What are the methods used in inventory management on organization performance?

1.6 Significance of the Study

From the findings of the study the researcher hope that the findings will help the Voyager
Beach Resort Processor identify areas where costs can be reduced while ensuring overall
efficiencies in the voyage beach resort Processor is maintained. The study therefore seek to
propose to the management of the voyage beach resort Processor the current inventory control
systems to implement in order to reduce costs associated with inputs and outputs of
inventories of the voyage beach resort Processor without reducing the service level while
improving efficiencies at the same time.
The study can also be used as basic information by the stores officer and inventory control
staff to develop friendly policies and procedures for purchasing inputs and controlling their
levels as well.

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1.7 Limitations of the study
In carrying out of the study, the following limitations were faced;
i. Holding inventory can result to a greater risk of loss of changes in price
ii. Unwillingness of respondents to disclose all information.
iii. Lack of enough time to carry out research.

1.8 Delimitations of the study

i. Saves time and money
ii. Helps maintain right amount of stock.

1.9 Scope of the Study

This research will be conducted in Mombasa specifically at voyage beach resort fruits
processors ltd. The study is conducted within the framework of diploma certificate at coast
institute of technology.
Part of the information in this study will be developed through an extensive literature review;
however it will be supplemented and modernized through interviewing shareholders and
directors of voyage beach resort fruits processors ltd. The availability and accessibility of the
information is therefore a precondition for successful gathering the required information.

1.10 Conceptual Framework

Conceptual framework is a network, or “a plane,” of interlinked concepts that together

provide a comprehensive understanding of a phenomenon or phenomena. The conceptual
framework is a set of broad ideas used to explain the relationship between the Independent
variables (factors) and the dependent variables (outcome) Conceptual framework provide the
link between the research title, the objectives, the study methodology and the literature
review.

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 Independent Variables

Inventory Records Accuracy

Completeness of information.
Up to date records
Stock position/ No. of stock.

Dependent variable

Organizational performance
Inventory investment
Cost reduction
Capital invested Customer satisfaction
Cash flow
Value of goods in store

Inventory turnover

Number of times inventory issued

Number of days inventory is available in storeroom

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1.11 Operational Definition of Terms
Inventory – refers to the goods and materials that a business holds for the ultimate goal
production or utilization.
Management – this isthe effective planning, organizing, staffing, directing, and controlling
in an organization to accomplish a goal in an organization
Inventory Turnover- a financial ratio showing how many times a company has sold and
replaced inventory during a given period.
Consumer – Individual who buys a product for the final use or consumption.
Supplier- it refers to a source of goods or services.
Procurement – Process by which organizations or businesses purchase goods and services
from other organizations.

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 CHAPTERTWO: LITERATURE REVIEW
2.0 Introduction
This chapter reviews the literature of the study. It's organized under the following parts:
theoretical literature and empirical literature. Literature will be reviewed in line with the
stated study objectives. The review will relay greatly on data obtained from published
reference materials such as books, online magazines, and journals. The review will provide an
overview of major past activities that had earlier been studied in relation to inventory
management and how it affects organizational performance.

2.1 Theoretical Literature

According to Kothari (2010) a theory is a coherent group of tested propositions commonly
regarded as correct and that can be used as principles of explanation and prediction of class
phenomena. In line with this definition, the study will use four theories that help explain the
arguments advanced in this study that efficient inventory management is affected by various
factors and unless these factors are looked into in a harmonious way, inventory management
will be affected and hence poor performance in Voyager Beach Resort Fruits Processors .The
theoretical literature is a theory that serves as a basis for conducting research.

2.1.1 Theory of Economic Order Quantity Model

Blackburn (2010) is among authors who agree that EOQ is one of the models widely used to
manage inventory in many industries. EOQ model was developed by F.W. Haris in 1913 and
is also known as Wilson EOQ model, who critically analyzed the model in detailed, that is
according to Arsham (2010). The use of the model has shown increase in some costs as other
costs decline, an example of ordering costs decline with the inventory holdings, while holding
costs rise and the total inventory associated costs curve have a minimum point. It is also
known as the point where total inventory costs are minimized. EOQ is the level of inventory
that minimizes the total of inventory holding costs and ordering costs. Coleman (2012) and
Ogbo (2011) define the model as one that order quantities which minimize the balance of cost
between inventories holding costs and re-order costs. Ogbo (2011) describes the basic EOQ,
assumptions that are necessary to calculate EOQ as follows: That stock holding costs are
known, and constant; there is a known, constant ordering costs; the rate of demand are known
and constant; lead time cycle is known and constant; the price per unit constant; the
replenishment is made instantaneously, the whole batch is delivered at once and no stock-outs
are allowed. One disadvantage of EOQ is that it ignores the need to have buffer stocks, which
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are maintained to cater for variations in lead-time and demand making it difficult to be
observed in practice.
The EOQ model requires that for every item stocked in the stores, there is need to determine
the point of order and that of the most cost effective quantity to order. The model assumes that
all other variables are constant even though uncertainties are common and regular all
business. For example uncertainty includes change in demand, damage during transportation
and delay in delivery. Uncertainty in demand, will therefore force EOQ to be adjusted to
buffer against uncertain business atmosphere. Ogbo (2011), due to uncertainties experienced
in business environment adjusted economic order quantities an EOQ model that can be used where
fluctuation in demand is a common occurrence. Especially in processing industry where
demand cannot be accurately forecasted since it depends on several external factors. There are
several key factors, both internal and external, that affect inventory level in the store. These
factors can influence production rate. The fact that uncertainty in demand seems to be
encountered in most situations, EOQ model should be fixed to cope with this uncertainty.

2.1.2 Transaction Cost Analysis (TCA) Theory.

The study of inventory management calls for an organization to ensure all costs are kept at a
minimum hence the need to apply the theory of (TCA). According to Halldorsson (2010),
(TCA) is a theory that ensures that costs across the supply chain are kept at a minimal.
Transaction cost approach has been widely used in different areas, especially in economics
and organizational studies. In the early 1970s, the mathematical economist, Williamson,
incorporated TCA into the general equilibrium model and set up his transaction cost economics in
the new theory of the firm. Williamson suggests that organizations can reduce their transaction
costs by vertical integration and increasing the level of trust at the same time. This kind of
integration can reduces the costs of inventory management while increasing the service level of
both internal and external customers while releasing capital to be used in other areas of the
organization. Organizational supply chain can however reduce transaction not only through
vertical integration and increasing the level of trust among supply chain participants, but also
though horizontal integration and economy of scale gained from the aggregation of supply
and/or demand.

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2.1.3 Bureaucratic Procurement Procedures Theory.
As organization become large and more complex, the authoritarian- paternalistic patter gave
way to increased functional specialization with many layers of middle and lower management
for coordinating organization effort (Kenneth, 2010). According to Osborne and Plastrik
(2010), the advantages of bureaucracy are many folds. Apart from consistent employee's
behavior, it eliminates overlapping or conflicting jobs or duties and behavior of the system is
predicable. Despite the above advantages, bureaucratic organization has some significant
negative and side effect. Too much red tapes and paper work not only lead to unpleasant
experiences but also to inefficient operations. Since employees are treated impersonality and they
are expected to rely on rules and policies, they are unwilling to experience individual judgment
and avoid risk. Bureaucracy expects conformity in behavior rather than performance (Kenneth &
Kenneth, 2005).During the financial year 2011 -2012 various Government Ministries and
department in Kenya returned billions of money meant for critical projects to Treasury (The
Standard Newspaper, 2012, July 26).The head of Public Service blamed it on bureaucratic
procurement procedure while the Prime Minister on the other hand, blamed Procurement rules
for slow implementation of the projects.

2.2 Empirical Literature.

2.2.1 Inventory Investment.
Inventory management is the process of efficiently overseeing the steady flow of components into
and out of an existing inventory and to monitor how companies track and control the
quantities of finished products for sale. Inventory management practices are often considered
to be the major asset because it helps business to be more profitable by lowering their cost of
goods sold and/or by increasing sales. The opportunities available by improving a company's
inventory management can significantly improve bottom line business performance.
Inventories frequently account for more than 30% of the firm's invested capital. The main
purpose of this article is to analyze in detail how the inventory techniques used in inventory
management will help the organization in achieving their goals and objectives. We have taken
Voyager beach resort fruit processors as our case study. The study was carried out to examine
the nature of relationship between inventory management and organizational effectiveness
and to determine the effect of inventory management on organizational productivity. This
study has helped in identifying the consistent need of implementing the inventory techniques
and also maintaining the practice in a systemized manner. Rather than being a market leader it is
very important for a company to perceive how the fundamentals are laid down in the
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organization, the strategies and developing the culture which can drive those strategies.
Leenders/Fearon (2010) has a different description on inventory control. Many purchases cover
repetitive items held in inventory. Thus inventory has a great influence on purchase-quantity
decisions. The questions are how much to order, when and how much continuous improvements
examinations along with the flows on quality and customer, employee and supplies satisfaction. It is
important in making delivery inventory or purchase order size decisions to understand why inventories
exist and what the relevant trade of fare. The rapidly changing environment within which an inventory
complicates inventory management and purchasing planning is carried out. Inventories always seem to
be too big, too small of the wrong type or in the wrong place.
The use of Kanban's and a variety of Just In Time (JIT) inventory management schemes have
revolutionized manufacturing thinking about all form of inventories. Never the less it is useful to
understand the nature and costs of inventories so that appropriate policies and procedures can be
developed for specific organizational needs.
According Halachmi and Bouckart (2011) inventories have 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.

2.2.2 Inventory turnover

The study further deduced that inadequately trained staff in the inventory management section and
insufficient funds given for Inventories use contributes greatly to the poor performance of
Voyager beach resort fruit processors. The study further found out that improved customer
service can be realized with proper inventory management at Voyager beach resort fruit
processors.

Minimum-Maximum Inventory Levels, theoretically the minimum inventory levels could be zero.
The last unit of inventory would be used at the moment a new shipment arrives. The
maximum inventory would then be the correct ordering quantity or economic order quaintly.
This buffer system is not as popular as it once was for it tends to encourage the maintenance
of excess inventories.
The optimum model: According to the Van Horne (2012), 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, 2010). Materials management is there a
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managerial process of counting planning, coordinating, control, monitoring and motivation.
On effects of inventory management practices on inventory shrinkages, losses resulting from
goods expiration leads to increased inventory shrinkage, losses resulting also from damages leads
to increased inventory shrinkage, losses resulting from obsolesce increased inventory
shrinkage. Losses resulting from goods theft leads to increased inventory shrinkage. Inventory
shrinkage results from a number of issues including employee theft, backorder, stock outs at the
wholesalers & manufacturing points, product recalls, expired goods e.t.c. Thus, inventory
shrinkage in the long run is uneconomical to the organization and largely affects performance
negatively. To ensure accurate and reliable stock records there is need to do spot checks/
surprise checks, stock taking, which is the physical counting and measuring of quantity of
each item in stock and recording the results. It is therefore apparent that effective record
management is essential function of inventory management thus in order to improve inventory
process there is need to ensure that all records kept by the organization are accurate. Inventory
turnover have effect on holding costs, Inventory turnover have effect on service level and
Inventory turnover may lead to low cost of operation of Voyager beach resort fruit processors.
Depending on the ratios of inventory turn, the firm can have a positive or negative impact on
its performance.

2.2.3 Measurement of Organizational Performance

According to Likert (2003) manual perusal of the inventory levels on a daily basis is one of
the ways to facilitate re-ordering under computerized system. Under this plan a print out is
generated of all items in inventory and is examined by the inventory manager, who decide
when and how much to order based on usage rates and expected future needs. ABC analysis
and minimum and maximum meters of establishing inventory review plans are vital and they
are useful for both manual and computerized systems.

Vilfredo (2009) an economist believes that a 20 percent of a country’s population does 80

percent of the work. Today’s inventory control manager refines Pareto's arguments into three
priority categories A, B and C. The A items may number only 10 or 20 percent of the inventory's
total number of items. The B items number perhaps only 10 to 15% of the total inventory. The
C items number perhaps 65 percent of all items in inventory. Typical advantages that have
resulted are concentrated on class A and B and on using larger order quantities on C. reduced
purchasing department costs through processing of fewer orders. Reduced receiving and
inspection cost through the elimination of the handling and processing of materials as well as
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paperwork for many small vale items. Reduced materials handling and internal traffic costs
because of fewer and easier loads.

Like purchases (Leenders, 20l0) assess that inventories may be classified in a variety of ways
including ABC analysis. Nature of items carried is frequency of use. Modern computer and word
processing systems allow extensive automation of purchasing and inventory control. Control of all
items is improved and a managerial time freed for the negotiations value engineering, research and
other managerial tasks necessary to deal effectively with A and B items.

According to (Leenders, 2010) has a different description on inventory control. Many

purchases cover repetitive items held in inventory. Thus inventory has a great influence on
purchase-quantity decisions. The questions of how much to order, when and how much
continuous improvements examinations along with the flows on quality and customer, employee
and supplies satisfaction. It is important in making delivery inventory or purchase order size
decisions to understand why inventories exist and what the relevant trade off- are. The rapidly
changing environment within which an inventory complicates inventory management and
purchasing planning is carried out. Inventories always seem to be too big, too small of the
wrong type or in the wrong place.

2.3 Summary of Literature Review

The role of inventory management has been consistently increasing in the many processing
industry arena and in general procurement inventory management so as to achieve set goals
and objectives. It should therefore be understood that proper inventory management starts
with an understanding of purchasing right products in the right quantity at the right price, and
the right time from the right vendor. Applying these concepts along with the practices such as
the right stock valuation, and ABC results in optimal inventory levels and ensures customer
satisfaction. Voyager beach resort fruit processing team should adopt inventory management
practices which have positive effects on the performance of the hospital. Using these key
concepts and practices to gain insight will enhance inventory investment, inventory turnover
in the purchasing departments and will go a long way to improve methods used in inventory
management on organizational performance.

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 CHAPTERTHREE: RESEARCH METHODOLOGY
3.0 Introduction
This chapter presents the research methodology which includes; Research design, target population,
sample design, data collection methods, data analysis procedure and ethical consideration.

3.1 Research Design

The study will use descriptive research design. This kind of research design aims at
generating information after the incident has occurred. The research design will look at the
reasons why the situation behaves the way it is. The design exploits both qualitative and
quantitative approaches. Qualitative approach will include use of interviews, while
quantitative approaches involve use of descriptive statistics generated with frequency tables,
graphs, and Charts. Descriptive survey method normally provides reliable, valid and
theoretical meaningful information. These approaches are adopted to enable the researcher get
and analyze relevant information concerning people's opinions about the effects of inventory
management on performance of the organizations in Kenya like Voyager beach resort fruits
processors ltd.

3.2 Location of Study

The location of the study is Voyager Beach Resort in Mombasa County. The study area is located in
Nyali Kenya.

3.3 Target Population.

The target population for the study will be employees of Voyager beach resort Fruits
Processors. Since the organization has over fifty employees, the study will target employees
who are involved in inventory stock control in Voyager beach resort Fruits Processors.

3.4 Sample Design.

3.4.1 Sample size
A sample of 30 employees was selected to participate in the study which was 60% of target
population.

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3.4.2 Sampling Technique.
Stratified sampling will be applied in selection of respondents. Stratification will be
used because the population was structured into various non-homogenous units, hence the
need for sample diversity. The procurement population will be divided into three
divisions; senior managers, supervisors and subordinates staffs as shown below.

Table 3.1Target population

Persons Population Sample

size size
Top level managers 3 3

Medium level managers 3 3

Lower level managers 20 15

Other staff members 40 19

Total 66 40

3.5 Data Collection Instruments.

The project is going to involve both the qualitative and quantitative research methods and include
both the primary and secondary collection methods. Questionnaires and interviews will be used
to conduct surveys as tools for collecting primary data. Books, journals and articles, will serve as
the source of secondary data. The questionnaires will be administered to the employees
while interviews will be administered to the management team. The questionnaires will
target all levels of employees of Voyager beach resort Fruits Processors. The primary data from
the questionnaires will give insight to the stock management procedures at the Voyager beach
resort Fruit Processors. The interview with management team will focus on varied aspects of
intangible assets.

3.6 Data collection procedures.

Advance preparation and planning of the interviews and questionnaires is imperative for the data
collection activity. Different stages of the process have different choices in terms of
approaches (Centre, 2006) the tools for data collection will include;
Self Administered Surveys- they are useful in making large samples feasible and are flexible
and describe the characteristics of a huge population. They are both structured and semi structured
so that respondents choose freely. The use of standardized questionnaires helps in the

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assessment of people’s attitudes, experiences and orientations. Self administered survey will
reduce bias error while giving respondents greater anonymity.

Personal Interviews these include asking respondents questions orally and record is kept of
the answers. It reduces the incidences of ambiguity and confusion during analysis. There is
also possibility of seeking clarification. They are effective when collecting data from
leaders because of their unavailability to take part in the survey. Personal interviews are
flexible, and the response is instantaneous. It also affords the respondent privacy and control
of the interview flow.

3.7 Reliability and Validity.

To ensure the validity and reliability of the research instruments, the trainers of Coast
Institute of Technology, who are research experts in the study area will go through the
questionnaires and give suggestions to refine the research instruments before sending them
to the respondents.

3.8 Data Analysis Procedure.

The collected data is edited as this involve sorting of the collected information in order to
get information that is relevant to the study variables. At this stage all the responses are looked
through by the researcher while giving codes to the answered options. Data is then be
entered into the computer and analyzed by the use of Statistical Package for Social Scientists
(SPSS) program that is used to develop frequency tables, graphs and pie-charts. However,
qualitative data is analyzed by developing themes (headings) or sub themes, which were
derived from the study objectives. Both quantitative and qualitative techniques will be used
during data analysis.

3.9 Ethical Consideration

The research treated the respondents with discretion since it was for academic purpose.
Respondents did not write their names in the questionnaires and confidentiality was observed.
The study selected the respondents randomly.

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 CHAPTER FOUR
RESEARCH FINDINGS, ANALYSIS
4.0 INTRODUCTION
The chapter presents and discusses the findings of the study. The chapter involves
demographic characteristics and presentation of findings. Data presented, analyzed and
interpreted according to the research objectives formulated in chapter one. It is presented in
the form of tables basing on the responses got from the study respondents that were selected
during the process of data collection.

4.1 Demographic Characteristics

Table 4.1.1 Distribution of respondents by Gender
Gender Frequency Percentage Cum. Percentage

Male 30 67% 67%

Female 20 33% 33%

Total 50 100% 100%

The above Table shows that 67% of the respondents were male while the female
constituted 33%.The business outlets adhered to the requirement of 30% of either gender.
The researcher sought to know the age of the respondents and the results are show in Table
4.1.2

Table 4.1.2 Distribution of respondents by age

Age bracket Frequency percentage Cum. Percentage

Below 25 years 10 17% 17%

26-30 years 15 33% 50%

31-35year 16 37% 87%

Over 35 years 9 13% 13%

Total 50 100% 100%

From the results, 37% of the respondents had an age of 31-35 years, 33% had an age of 26-
30 years, and 17 % had less than twenty five (25) years while 13% had over 35 years. This
could imply that majority of employees in Voyager beach resort fruits processors are middle

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aged probably reason being they tend to retain their employees or employ experienced staff
from other sectors.

Table 4.1.3 Distribution of the respondent by highest academic qualification

Highest academic Frequency percentage Cum. Percentage

qualification
Masters 7 7% 5%
Degree 12 23% 16%

Diploma 15 33% 31%

Certificate 16 37% 48%

Total 50 100% 100%

The Table above shows the highest academic qualification where 37% of the respondents
were certificate holders, 33% were diploma holders and worrying 7% were master’s
holders.

4.2 Presentation of Findings.

4.2.1 Inventory Investment
The Table below shows the satisfaction of the workers, from the results a large number
(70%) of the respondents are general workers while a small number (30%) were managers’
.It can be stated that most of the staff are general workers.

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 Tables 4.2.1: Are the Employees satisfied with Inventory Investment?
Inventory Frequency percentage Total percentage
Investment

Very satisfied 19 30% 30%

Satisfied 31 70% 70%
Not satisfied 0 0% 0%
Total 50 100% 100%

4.2.2 Inventory Turnover

Tables 4.2.2: Are the Inventory Turnover systems effective?
Response Frequency Percentage Total percentage

Yes 33 77% 77%

No 16 20% 97%
Not sure 1 3% 3%
Total 50 100% 100%

From Table 4.2.2 77%oftherespondentsrevealedthatthe inventory turnover systems were

effective and where only 3% were not sure. This led to effective inventory management.

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 4.2.3 Methods used in Inventory Management on Organizational Performance
Statement Strongly Disagree Neutral Agree Strongly Total
disagree agree

Effective Frequency 0 0 0 48 2 50
inventory
management
Percentage 0 0 0 93.3 6.7 100
helps
%
attract customers

Improved Frequency 0 0 0 3 47 50
inventory
management
reduces stock Percentage 0 0 0 10 90 100
wastage %

Improved Frequency 0 0 0 25 25 50
inventory
management
leads to easy Percentage 0 0 0 50 50 100

storage %

From the above table on whether improved inventory management helps attract customers, a
large number (93.3%) of respondents agreed that improved inventory management helps
identify clients’ needs. On the question on whether improved inventory management reduces
stock wastage90% of the respondents strongly agreed showing that businesses are able to
track the movement of their goods hence avoiding overstocking which leads to wastage. An
equal number 50% of the respondents agreed and strongly agreed that improved inventory
management leads to easy storage and access of raw materials.

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 CHAPTER FIVE
SUMMARY
5.1 Introduction
The basic purpose of this chapter is to give the summary of the findings, summary,
recommendation and suggestion for further studies. This was based on the research findings
that was presented and discussed in the previous chapters.

5.2 Summary of the finding

The study revealed that 67% of the respondents were male while the female constituted
33%.The organization adhered to the requirement of 30% of either gender. 37% of the
respondents had an age of 31-35 years, 33% had an age of 26-30 years, and 17 % had less
than twenty five (25) years while 13% had over 35 years. 37% of the respondents were
certificate holders, 33% were diploma holders and worrying 7% were master’s holders. It
showed that most of work in production was manual work which required less academic
qualification.
The study further revealed that 67% of the respondents supported usage of IT 20% did not
support the usage where 13% were not sure who could be the cleaners. 63% of the
respondents supported the innovation of new technologies while 37% never supported the
innovation that could be rigid to change.
It was also established that 60% of the respondents said that they were satisfied and those
who stated that they were very satisfied and not satisfied had the same percentage. It showed
that the services offered by the organization were recommendable.
The study also revealed that a large number (70%) of the respondents were general workers
while a small number (7%) were managers. It could be stated that most of the staff were
general workers and the percentages of the year of service were almost equal. That showed
that the business maintained almost equal number of workers who had served for specific
years.
The study revealed that 77% of the respondents said that the inventory turnover systems were
effective and efficient where only 3% were not sure. That led to effective inventory
management. A large number (93.3%) of respondents agreed that improved inventory
management helps identify clients’ need. An equal number 50% of the respondents agreed
and strongly agreed that improved inventory management leads to easy storage and retrieval
of materials.

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5.3 Conclusions
Based on the research findings, it can be concluded that effective inventory investment led to
improved inventory management in Voyager beach resort. It can also be concluded that
inventory management applied affected the level of customers’ satisfaction. There is
relationship between staff level of training and competency and effectiveness of inventory
management.

5.4 Recommendations
From the findings of the study, it can be recommended that the organization adopt new
methods and the staff need to be taken for training in the stores management since some of
them did not support use of IT. The inventory turnover system used should be improved
which will lead to effectiveness of inventory management.

5.5 Suggestions for further studies

The researcher suggests that another study be carried out on other businesses in other
Counties since this one research is not sufficient to draw generalized conclusion without
studying some more.

ix
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 APPENDICES
APPENDIX I: LETTER OF INTRODUCTION
Regina Makena Mutua
Coast Institute of Technology
P.O. Box
Voi

Dear Respondent,

RE: REQUESTFORRESEARCHDATA
I am a diploma student at the Coast Institute of Technology, Business Department. In partial
fulfillment of the requirements for the award of Diploma in Supply Chain Management; I
am required to conduct a study on the effect of inventory management on organizational
performance in Kenya. Please note there is no right or wrong answer, so feel free to give the
answer you think is correct. Strict confidentiality will be maintained and all the information
collected through this questionnaire will remain confidential. The information you provide
will not be used for any other purpose apart from its intended academic use.
I thank you in advance for your co-operation.

Yours faithfully

Makena Mutua

ix
 APPENDIX II: CONSENT
I am Regina Makena a third year student pursuing Supply Chain Management at Coast
Institute of Technology carrying out a study at this Company. Your feedback is very
important as your inputs will be used for academic purposes only. I greatly appreciate if
you could take a few minutes to provide me with information. Your response will be kept
confidential and it will not be given to any person or institution outside this corporation.
Thank you in advance

Respondents Signature: ________________

Date: __________________

ix
 APPENDIX III: QUESTIONNAIRE
Instructions
(N.B Answer by Ticking where applicable)
1. Gender
a) Male
b) Female
2. Education Level
a) Primary
b) Secondary
c) Tertiary
d) University
SECTION B: Techniques of inventory management used by Voyager beach resort
fruits processors
3. Do you understand the term inventory management?
a) Yes
b) No
4. Is the company trying to manage its inventories?
a) Yes
b) No
5. What kinds of inventories are managed at this company?
SECTIONC: Relationship between inv entory management and Voyager beach resort
fruits Processor Company
6. Do you think there is a relationship between inventorymanagement and performance of
this company?
a) Yes
b) No
7. If yes what kind of relationship
a) Positive
b) Negative

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SECTION D: Challenges faced by Voyager beach resort fruits processors company in
managing inventories
8. Is the company faced with challenges in the process of managing the inventories?
a) Yes
b) No
9. If yes to question 8, what are the challenges
-------------------------------------------------------------------------------------------
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ix
 APPENDIX IV: TIMELINE AND BUDGET

ACTIVITY March May June July

26th
17th 2021 3rd 30th

2021 2021 2021

Topic proposal

Literature search and review

Proposal writing

Proposal defense

Direct cost:
1.Topic Proposal 200
2.D a t a C o l l e c t i o n 500

3.Project and binding 800

4.Finalreportcost 200

Subtotal 1700

Miscellaneous 100

Totalcost 1800

APPENDIX V: LOCATION
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