Abiyot

Inventory Management System and Control on Operational Performance in
Cement Industry (A Case Study on

National Cement Share Company)
A proposal submitted to the school of graduate studies Addis Ababa Medical

and Business College in the partial fulfillment of the requirements for the
degree of Master in Business Administration (MBA)
Prepared By: Abiyot Amare
Advisor: Abebayehu Haile

Dire Dawa, Ethiopia
March, 2021
Table of Contents page

ABSTRACT.................................................................................................................................................I
LIST OF ACRONYMS.................................................................................................................................II
CHAPTER ONE………………………………………………………………………………………………………………………………………….1
INTRODUCTION...........................................................................................................................................1
Background..............................................................................................................................................1
Background of the Study.........................................................................................................................1
Company Background..............................................................................................................................2
Cement Process Description....................................................................................................................3
Statement of the Problem.......................................................................................................................3
Hypotheses..............................................................................................................................................4
Objective.................................................................................................................................................5
General Objectives..................................................................................................................................5
Specific Objectives...................................................................................................................................5
Significance..............................................................................................................................................5
Scope/Delimitation of the Study.............................................................................................................5
CHAPTER TWO …………………………………………………………………………………………….6
LITERATURE REVIEW....................................................................................................................................6
Theoretical Literature Review.................................................................................................................6
Concepts of inventory management and control....................................................................................6
How Inventory is controlled in an Organization......................................................................................9
Inventory Control Systems....................................................................................................................10
Economic order quantity.......................................................................................................................10
Vendor managed inventory...................................................................................................................11
ABC analysis...........................................................................................................................................11
Material Requirement Planning (MRP)..................................................................................................11
Just in time (JIT).....................................................................................................................................12
Computerized Systems..........................................................................................................................13
Measuring of Operational Efficiency in an Organization........................................................................14
Effect of Inventory Control on Operational Efficiency...........................................................................16
Empirical Literature Review...................................................................................................................17
Conceptual Framework.........................................................................................................................19
CHAPTER THREE …………………………………………………………………………………………20
RESEARCH METHODOLOGY……………………………………………………………………………………………………………………20
Research Design....................................................................................................................................20
Research Area........................................................................................................................................21
Population Description..........................................................................................................................21
Sampling Technique..............................................................................................................................21
Sample Size............................................................................................................................................21
Research Instruments............................................................................................................................22
Questionnaires......................................................................................................................................23
Interviews..............................................................................................................................................23
Observation...........................................................................................................................................23
Data Collection Procedure.....................................................................................................................23
Reliability and Validity of Data...............................................................................................................23
Data Analysis.........................................................................................................................................24
Research Ethical Considerations............................................................................................................24
Time Schedule.......................................................................................................................................24
Research Budget....................................................................................................................................25
Reference..............................................................................................................................................25
ABSTRACT
The main purpose of the study is to find out the effect of inventory control on operational
efficiency using National Cement Share Company as a case study. The research study is guided
by research objectives to find out how inventory is controlled in an organization, to establish
how operational efficiency is measured, and finally the impact of inventory control on
operational efficiency of an organization. To achieve the operational performance of
manufacturing firm and their association with components of inventory management; just-in-
time approach, materials requirement planning and strategic supplier partnership, will be
examined through a questionnaire and interview. The questionnaire will be distributed to the
sample respondents of the Company to fill properly that to be relevant for the study. The study
will be use Excel-based descriptive statistics to analyze the data collected. Regression analysis
also will be used to test the hypotheses of the study.
LIST OF ACRONYMS
NCSC: National
Cement Share Company
EOQ: Economic Order Quantity
JIT: Just in Time VMI:
Vendor Managed Inventory ERP:
Enterprise Resource Planning MRP:
Material Requirements Planning DCEO:
Deputy Chief Executive Officer
Inventory Management System and Control on Operational
Performance In the Case of NCSC
CHAPTER ONE
INTRODUCTION
This chapter consists of the background of the study, background of the company, statement of
the problem, hypotheses of the study, objectives of the study, significance of the study, and
scope/delimitation of the study.
Background
Background of the Study
Due to high complexities in the supply chain function, ever changing technology, intense
competition and the economic reforms in the recent past, there is need for the organizations to
develop and implement practices in the organization in order to enhance the performance of the
organization, and one of the critical resources in the organization is inventory since it directly
affects the efficiency and effectiveness of the operations in the organization, which ultimately
affects the sustainability and organization performance (Pujari, 2012).
Inventory management practices are models used by organizations in order to manage and
control their stocks. According to Stevenson (2010), inventory management practices involves
the systems that are implemented with a purpose to ensure optimal level of stocks are kept in the
organization and it involves activities such as recording and monitoring the levels of stocks in
the organization, forecasting the demand of the materials and products and making the decisions
on how much to order, how to order and when to order.
Inventory plays a crucial role in the operations of the organization and their management practice
enables the organization to grow as it relates internal and external customers (Gibson, 2013).
Inventory management is essential in the firms as it has a direct influence on the financial
resources of the organization that ultimately affects the overall performance of the firm. A firm
with a robust inventory management practices can increases the overall performance, which
includes the profitability, sustainability, efficiency and effectiveness of the operations of the
organization, which contributed through efficient management of the working capital, production
and customer satisfaction (Dobler, 2014). Effective management of the inventory in the
organization ensures the transformation of the broad and general business objectives into the
operational actions which it main focus it to hit between the inventory investment and customer
satisfaction (Pirttila & Virolainen, 2012).
In traditional settings, inventories of raw materials, work-in-progress components and finished

goods were kept as a buffer against the possibility of running out of needed items. However,
large buffer inventories consume valuable resources and generate hidden costs. Consequently,
many companies have changed their approach to production and inventory management. Since at
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least the early 1980s, inventory management leading to inventory reduction has become the
primary target, as is often the case in just-in-time (JIT) systems, where raw materials and parts
are purchased or produced just in time to be used at each stage of the production process. This
approach to inventory management brings considerable cost savings from reduced inventory
levels. As a result, inventories have been decreasing in many firms (Chen et al, 2005), although
evidence of improved firm performance is mixed (Koliaset al, 2011).
Hence, for an organization to maintain an optimal level of inventory there is need to adopt robust
system that it will ensure accurate track of the levels of the inventory in the organization, that
will ensure adequate management of the supply chain players and to maintain control of the
stocks internal processes. For the firms to adopt the inventory management system there is need
for the organization to understand the supply chain processes, the market environment of its
products and the operation processes in the organization (Muhayimana, 2015). The most
commonly used inventory management system implemented by the organization are the
Economic Order Quantity, Vendor Managed Inventory (VMI), Just In Time (JIT), Cycle
Counting, ABC Analysis/Pareto Analysis, Two-Bin System (Kanban), Automatic Stock
Replenishment and Stochastic Model Systems.
This is therefore prompting the researcher to carry the study on the effect of inventory
management system and control on operational performance in case of National Cement Share
Company.
Company Background
The current National Cement share company (The former Dire Dawa Cement and Lime Factory)
is the pioneer cement manufacturing company in Ethiopia. It was established in 1936 G.C. & this
year it celebrates its 85 years of existence. The Company, during its more than 8 decades of
operation has seen shifts in ownership from private to public & currently it is operating as a
share company. Especially after its transfer to private ownership in 2005, it has exhibited
unprecedented growth both in production capacity as well as market horizon.
The new plant which is erected in 2013 G.C. is a state of the art plant, as it is built and operated
to world class design and technological standards. The facility has the capacity to produce
around 45,000 quintals of cement per day and incorporates quarries associated with producing
the main raw materials for this operation. The location of the plant is in Dire Dawa City
Administration with close proximity to Ethio – Somali, Oromia Regional states locally, Somalia
& Djibouti export markets. (www.nationalcementsc.com)
Cement Process Description
The cement plant used in this study is located in Dire Dawa City Administration, Ethiopia and is
owned and operated by the National Cement Share Company. It is assumed the plants usually
operate twenty – four hours a day, seven days a week, twelve months of the year continuously
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without stoppage except during schedule shutdown maintenance which is the company operates
310 days in a year. This is a common practice for most cement plants because of the high costs
associated with firing up and cooling down the large kilns. The Kiln is the heart of the plant and
there is schedule shutdown maintenance on this particular line of equipment. There are also
incident break down and necessary repairs, thus these are handled as they occur.
Cement is produced by chemically combining calcium carbonates, silica, alumina, iron ore, and
small amounts of other materials. These ingredients are chemically altered through intense heat
to form a compound with binding properties. Raw materials including limestone, basalt and clay
will pass through a crusher after they are treated. They are then converted to fine powder in
proper portion in mills. Clinker is produced from treating raw materials by heating, which
consists of three parts: pre-heaters, kiln and cooler. The clinker produced will be ground and
mixed with gypsum and other additive materials, and then sent for packing (Avami and Sattari,
2007).
Statement of the Problem
Inventory management is one of the most critical practices in many of the organization, which
are focused on meeting and exceeding the customers’ satisfaction levels while at the same time
reducing the cost of the operation in the organization. As stipulated by Ahmad and Zabri (2016),
inventory management has a direct influence on the day-today activities of an organization
which by extension affects the operations and profitability of the organization. According to
Dobler (2006), a firm that practices an effective inventory management usually increases its
service delivery to their customers, operational capacity and overall profitability of the firm.
Thus, the application of taking inventory in real-life business scenarios ought to influence the
company’s operational performance, despite the shortcomings of the techniques used; periodic
review, continuous review, materials requirements planning systems (MRP), ABC, economic
order quantity (EOQ), and enterprise resource planning (ERP).
In recent past, NCSC have experienced a lot of challenges in while trying to carry out its
inventory management and material control processes, this has in return impacted more
negatively on the performance of this Company. Besides, the Company incur loses through poor
inventory management ranging from Raw material, Work-in-process, Finished goods and Total
inventory along the product processing line. NCSC had also face special challenge in keeping
inventory at reasonable levels due to the difficulty of forecasting demand and expectations of
customers about product availability.
Even if there are different researches which were conducted in different cases of business
organizations concerning inventory management, there is no other research conducted before in
the case of NCSC. Hence, this research is the first that focuses on “inventory management
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system and control on Operational Performance in case of NCSC”. The elements of the study
problem are illustrated by answering the following questions;
1. To what degree is the relationship between ABC approach and the operational
performance of NCSC significant?
2. To what degree is the relationship between material requirements planning approach and
the operational performance of NCSC significant?
3. To what degree is the relationship between economic order quantity approach and the
operational performance of NCSC significant?
4. How significant is the relationship between strategic supplier partnership and the
operational performance of NCSC?
5. Examine whether computerized inventory management influences the operational
performance of NCSC?
Hypotheses
The study consists of the following hypotheses stated in null form:
H01: ABC approach has no significant relationship with the operational performance of
NCSC. H02: Economic Order
Quantity has no significant relationship with the operational performance of NCSC.
H03: Materials requirement planning has no significant relationship with the operational
performance of NCSC. H04: Strategic
supplier partnership has no significant relationship with the operational performance of
NCSC. H05: Computerized Inventory
Management has no significant influences in the operational performance of NCSC.
Objective
General Objectives
The study aims at examining the relationship between inventory management and the operational
performance of NCSC in the eastern region of Ethiopia, Dire Dawa City Administration.
Specific Objectives
1. Ascertain the degree of the relationship between ABC approach and the operational
performance of NCSC.
2. Investigate the degree of the relationship between materials requirement planning and the
operational performance of NCSC.
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3. Investigate the degree of the relationship between economic order quantity and the
4. Determine the extent of the relationship between strategic supplier partnership and the
5. Determine the extent of the relationship between Computerized Inventory Management
and the operational performance of NCSC.
Significance
Every research is expected to contribute in some ways to various parties. The study is important
to assess the inventory management system and control on operational performance in case of
NCSC, because the inventory materials have a direct effect on operational performance of the
Company. So, the study’s findings and recommendations are highly important to NCSC for
making the right decision in keeping smooth operational efficiency by improving their inventory
management system. The study is also important to top level management of National Cement in
understanding of the study finding and recommendation to improve their inventory management
system. In addition to these, the study will serve as information source for those who are
interested to conduct further study on related topics.
Scope/Delimitation of the Study
The drawback of this paper is situated from its scope as it restricted to its own objectives. Other,
the research is conducted only the inventory management system and control on operational
performance that will be taking NCSC as area of the study and in strict sense the results not
pertained to other Cement manufacturing companies because of difference in the experience and
activities inventory system of these companies. Additionally, this study will address only the
employee’s perspective through questionnaire and interview so that it not incorporates the views
other stakeholder’s sides.
CHAPTER TWO
LITERATURE REVIEW
This chapter is focused on providing the theoretical and Empirical models that are related to the
topic of the research study. The chapter also presents the findings of the past researches in
regards to the effect of inventory management practices on performance of organizations.
Theoretical Literature Review
Concepts of inventory management and control
It is a principal necessity for any organization to have a proper inventory control system. Miller
(2010) explained inventory system as a set of policies that controls and monitors inventory level
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and determine what level should be maintained, how many orders should be made and when
stock should be replenished. Miller (2010) furthermore explained inventory control as the
supervision of the storage, supply and accessibility of items to ensure an adequate supply without
oversupply. Coleman (2000) and Jay and Barry (2006) defined inventory management as a
science-based art of ensuring that just enough inventory stock is held by an organization to meet
its demand. Systems in inventory management are developed with the aim of reducing costs
associated with the entire process on inventory management and are however described as
complex systems to develop (Jones & Riley, 1985). Emmett (2005) defined inventory
management as an approach to manage the flow of production in a supply chain, to achieve the
required service level at an acceptable cost.
Stock and Lambert (2001), categorized inventories into six main types, namely:
1) Cycle stock: is the inventory that results from the replenishment process and is required in
order to meet demand under conditions of certainty. That is when the firm can predict
demand and replenishment times (lead times) perfectly.
2) In-transit inventory (pipeline): is the inventory that is en-routed from one location to
another. It may be considered part of cycle stock even though it is not available for sale and
or shipment until after it arrives at the destination.
3) Safety or buffer stock: is the stock held in excess of cycle stock because of uncertainty in
demand or lead time. The notion is that a portion of average inventory should be devoted to
cover short-range variations in demand and lead time.
4) Speculative stock: is inventory held for reasons other than satisfying current demand. That is
inventories purchased as a result of speculations of price hikes.
5) Seasonal stock: is a form of speculative stock that involves the accumulative volume of
inventory before a season begins in order to maintain a stable labour force and stable
production runs or in the case of agriculture products, inventory accumulated as a result of a
growing season that limits availability throughout the year.
6) Dead (obsolete) stock: is the set of items for which no demand has been registered for some
specified period of time. They are out of date, deteriorated or no longer useful as a result of,
for example, advancements in technology.
According to Hillier and Lieberman (2001), organizations should follow the following steps in
order to have an effective inventory management system: Firstly, the need to develop a
mathematical model which describes the behavior of inventory; secondly, the need to design and
adopt an optimal inventory policy with respect to the firm’s mathematical model; thirdly, the
need to develop a computerized information processing system that will provide information on
the current inventory levels; and lastly, the need to use the current inventory levels information
to apply the optimal inventory policy to replenish existing inventory levels.
Narain and Subramanian (2008) indicated that a good inventory management system provides
information to effectively manage the flow of materials, effectively utilize people and
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equipment, coordinate internal activity and communicate with customers. They further indicated
that inventory management does not make decisions or manage operations, but provides
information to managers to enable them to make more accurate and timely decisions to manage
their operations. Ellram (1996) stated that inventory management is an important function that
helps to insure the success of manufacturing and distribution companies. The effectiveness of
inventory management systems is directly measurable by how successful a company is in
providing high levels of customer service, low inventory investment, maximum throughout and
low costs. Inventory management entails holding an appropriate amount of inventory. Too much
inventory consumes physical space, creates a financial burden, and increases the possibility of
damage, spoilage and loss. On the other hand, too little inventory often disrupts business
operations, and increases the likelihood of poor customer service (Dimitrios, 2008).
Inventory management cycle involves the following areas: planning, ordering and scheduling of
the materials used in the manufacturing process. Inventory management exercises management
over three types of inventories that is raw materials, work in progress and finished goods.
Purchasing is primarily concerned with management over the raw materials inventory, which
includes; raw materials or semi-processed materials, fabricated parts and MRO items
(Maintenance, Repair and Operations) (Garry, 1997). However, Lau and Snell (2006) argued that
inventory management is primarily about specifying the size and placement of stocked goods.
Ogbo (2011) postulated that the main objective of inventory management and control is to
inform managers how much goods should be replenished, when they should be ordered, how
frequently orders should be placed and what the appropriate safety stock is, for minimizing
stock-outs. Therefore, the overall goal on inventory is to have what is needed, and to minimize
the number of times one is out of stock. Morris (1995) indicated 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’s human and material
resources. Lysons and Gillingham (2003) stated three main aims of inventory management as:
 To provide both internal and external customers with the required service levels in terms of
quantity and order rate fill.
 To ascertain present and future requirements for all types of inventory to avoid both
overstocking and bottlenecks in production, and
 To keep costs to a minimum by variety reduction, economical lot sizes and analysis of costs
incurred in obtaining and carrying inventories.
Granville and Emmett (2007) stated that a flawed or unrealistic business plan leads to failure in
forecasting how well a firm may do in the future. This has an impact on inventory management
because if a company forecasts more growth than they actually experience, it can lead to an
overstock of inventory. The opposite is true if forecasters do not predict enough growth and are
left with not enough inventories. Failure to identify shortages ahead of time leads to a lack of
enough products in stock to meet customer demands which spoil customer relations. The staff in
7
charge of inventory management should look over their inventory on a regular basis to make sure
enough products are in stock (Granville & Emmett, 2007). Plossl (1985) stated the following five
inventory types defined by function:
 Fluctuation inventories: These are inventories carried because the quantity and timing of
sales and production cannot be predicted accurately. Fluctuation inventories may be provided
in the production plan so that production levels do not have to change in order to meet
random variations in demand,
 Anticipation inventories: These are inventories built up in advance of a peak selling season,
a marketing promotion program or a plant shutdown period,
 Lot-size inventories: It is frequently impossible or impractical to manufacture or purchase
items at the same rate at which they will be sold. The items, therefore, are obtained in larger
quantities than are needed at the moment; the resulting inventory is the lot-size inventory,
 Transportation inventories: These exist because materials must be moved from one place
to another, and
 Hedge inventories: Companies using large quantities of basic minerals or commodities that
are characterized by fluctuating prices can realize significant savings by purchasing large
quantities, called hedge inventories, when prices are low. Also, buying extra quantities at an
existing lower price will reduce material costs of items scheduled for a price rise later.
Meng (2006) indicated that all businesses, including Rustenburg smelter, keep a supply of
inventory for the following reasons:
 To maintain independence of operations: A supply of materials at a work center allows that

center flexibility in operation,
 To meet variation in product demand: If the demand for the product is known precisely, it
may be possible to produce the product to exactly meet the demand. However, demand is
usually not completely known, and a safety or buffer stock must be maintained to absorb
variation,
 To allow flexibility in production scheduling: A stock of inventory relieves the pressure on
the production system to disseminate goods. This causes longer lead times, which permit
production planning for smoother flow and lower-cost operation through larger lot-size
production,
 To provide a safeguard for variation in raw material delivery time: When material is ordered
from a vendor, delays can occur for a variety of reasons: a normal variation in shipping time,
a shortage of material at the vendor’s plant causing backlogs, an unexpected strike at the
vendor’s plant or at one of the shipping companies, a lost order, or a shipment of incorrect or
defective material, and
 To take advantage of economic purchase order size: There are costs to place an order: labour,
phone calls, typing, postage, and so on. Therefore, the larger each order is, the fewer the
orders that need be written.
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How Inventory is controlled in an Organization
Zenz (1994) indicated that inventory control involves the planning, ordering, and scheduling of
materials used in the manufacturing process. It also exercises the control over three types of
inventory that is raw materials, in process inventory (work in progress) and finished goods. He
reveals that inventories make up a sizeable percentage of company’s assets and usually the
largest single current asset. Typically firms hold from 15 to 40 percent of their total capital
invested in their inventories. Many companies list inventory reduction as their first priority thus
inventory control becomes one of the purchasing foremost goals.
Dr.S.Ravishankar, (1996), has it that inventory control involves maintaining a constantly

available of raw materials, purchased parts and supplies that are required for the manufacture of
products. Functional responsibilities include the requisition of materials for the purchase in
economic quantities at the proper time and their receipts, storage and protection, issuing of
materials to production upon authorized request and the maintenance and verification of
inventory records.
Chris Joseph, (2010), states that tighter inventory control can allow for the implementation of a
leaner inventory management process such as just in time (JIT) ordering. With this technique, the
lead time required to order materials and merchandise decreases, resulting in a more efficient
process. For this to be successful, however, tighter inventory control is necessary because the
margin for error is also lower. Buyers and other purchasing personnel can gain a better handle on
how much inventory is on hand, taking much of the guesswork out of their purchasing decisions.
A computerized inventory system can automatically indicate to buyers when it is time to reorder
or even place the orders for them, giving them more time to perform other duties. Steve Brown,
et al, (2001), inventory control involves maintaining resources held by the organization intended
for use by the organization or held after operations for future consumption by their customers or
the public at large.
Anthony Kelly,(1997),states that Inventory control policy requires a set of rules for deciding how
the number held in stores to be controlled so that the stores objective will be met .one of the
most commonly used for example is for moving parts and is based on the notion of a cost
optimal reorder level(for any particular part, the stores holding which when reached will trigger
the process of re-ordering) and cost optimal economic order quantity (the number to be ordered
at any one time).This stock control monitors the usage and delivery of parts and uses the
inventory policy to control replenishment.
Inventory Control Systems
Economic order quantity
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According to Bowersox (2002), the inventory management needs to be organized in a logical

way so that the organization can be able to know when to order and how much to order. This
must be attained through calculating the Economic Order Quantity (EOQ). Monetary request
amount engages correlation to arrange their stock re-establishment on an ideal premise. For
instance, the arrangement can be scheduled to happen from month to month, quarterly, half
yearly, or yearly. By so doing, it enables firms to have insignificant limit costs or zero inside
their circulation focuses. Along these lines, as associations attempt to enhance the stock
administration, the EOQ and Re-Order Point (ROP) are necessary instruments that associations
can utilize.
Vendor managed inventory
Vendor Managed Inventory is a streamlined way to deal with inventory management and request
satisfaction whereby the merchant is completely in charge of the recharging of stock in light of
opportune point of all data to the purchasers (retailer). This idea builds the client responsiveness
by lessening the free market activity hole consequently giving the fulfillment to end client by
benefiting the coveted item when required. Store network accomplices must share their vision of
interest, necessity, and requirement to set the regular destinations. Kazim (2008) identifies that
upstream information exchanged to suppliers such as the current stock level and precise deals
conjecture is the most vital element for the effective usage of Vendor Management Inventory.
ABC analysis
The ABC stock control technique relies on that the decision a little bundle of the things may
usually address the weight of money estimation of the total stock. It is used as a part of the era
method, while a tremendous number of things may happen from a little part of the money
estimation of stores. Accordingly, to manage stock control high regard things are more solidly
controlled than low regard things. ABC examination is an essential action method that follows
the Pareto Principle concerning an organization’s arrangement of stock. Most organization
attempts and oversights are depleted on managing; A things, C things get the base thought, and B
things are in the centers.
The ABC approach ranks using the following criteria: A things represent 70–80% of the firm’s
annual consumption approximation and just 10–20% of aggregate stocked items. B things
represent 15–25% of annual use esteem and 30% of aggregate the stock, and C things
characterize 5% of the annual application of esteem and half of total stocked items.
Material Requirement Planning (MRP)
Ballou (2000) defined material requirement planning as a mechanical method of supply

scheduling where the timing of purchase or of production output is synchronizing to meet period
by period operations requirement. Ballou (1999), explained further that material requirement
10
planning methods try to avoid carrying more inventory than is needed at a time. Thus the
emphasis is on carrying only the quantities of stock needed at any point in time, and this is
achieved through precise timing of material flows to meet requirements. Lysons and Gillingham
(2003), defined material requirement planning as a product- oriented computerized technique
aimed at minimizing inventory and maintaining delivery schedules. It relates the dependent
requirements for the materials and components comprising an end product to time periods known
as ‘buckets’ over a planned horizon (typically one year) on the basis of forecasts provided by
marketing and sales and other input information. Coyle et al. (2003), explained material
requirement planning as a set of logically related procedures, decision rules, and records
designed to translate a master production schedule into time-phased net inventory requirements
for each component item needed to implement this schedule. Lysons and Gillingham (2003),
outlined the aims of material requirement planning as follows:
I. To synchronize ordering and delivery of materials and components with Production

requirements
II. To achieve planned and controlled inventories and ensure that required items are
available at the time of usage or not much earlier.
III. To promote planning between the purchaser and the supplier to the advantage of each.
IV. To enable rapid action to be taken to overcome material or component shortage due to
emergencies, late delivery and so on.
Coyle et al. (2003) also explained the goals of material requirements planning as follows: Ensure
the availability of materials, components and products for planned production and for customer
delivery.
I. Maintain the lowest possible inventory level.

II. Plan manufacturing activities delivery schedule, and purchasing activities.
III. In doing so, the material requirement planning system considers current and planned
quantities of parts and inventory products, as well as the time used for planning.
Material requirement planning (MRP) is relevant to this study in that it places emphasis on
carrying quantities of stock that is needed at any point in time and avoid unnecessary stock. This
therefore helps reduce holding or carrying cost.
Just in time (JIT)
Donald waters, (2009), argues that JIT offers another approach which does not use rigid plans
but gives a way of organizing all activities to occur exactly the time they are needed. They are
not done too early which would leave materials having around until they are actually needed and
they are not done too late which would give poor customer service. JIT looks for improvements
to solve problems rather than accept current bad practice with stocks.
11
Colin drury, (2008), states that JIT involves delivery of materials immediately they precede their
use. By arranging with suppliers for more frequent deliveries; stocks can be cut to a minimum,
considerable savings in material handling expenses can be obtained by requiring suppliers to
inspect materials before their delivery and guaranteeing their quality. The companies have
managed to have substantially reduced their investment in raw materials and work in progress
stocks. Other advantages include a substantial saving in factory space, large quantity discounts,
and savings in time from negotiating with few suppliers and a reduction in paperwork ensuring
from issuing blanket long term orders to a few suppliers rather than individual purchase orders to
many suppliers.
JIT is based on planned elimination of all waste and continuous improvement of inventory
productivity. It encompasses the successful execution of all manufacturing activities required to
produce a final product right away from design engineering to delivery including all stages of
conversion from raw material on ward making provision of inventories to customers as needed in
right quantities and at the right time. Kenneth Lyson, (2006).
Peter Baily, (2005), urges that it requires production when and not before a customer requires
something and the pursuit and elimination of waste in production and associated planning and
purchasing. The basic idea is simple, if made in parts are produced in just the quantity required
for the next stage in the process just in time for the next operation to be carried out, if bought out
parts are delivered direct to the production line without delays in stores, inspection just on time
for the needs of production and in just the quantity needed, then material stocks are largely
eliminated too.
JIT means that components and raw materials arrive at work centers exactly as they are needed.
This feature greatly reduces queues of work in progress inventory. JIT is a mixture of high
quality working environment, excellent industrial engineering practice and a healthy focused
factory attitude that operations are strategically important. The order and discipline are achieved
through management effort to develop streamlined plant configurations that remove variability,
Lenders fearon, (1997).
Computerized Systems
According to zenz, (1994), this system uses code numbers that correspond to specific items.
Each item in inventory is coded and any adjustment made to the item is effect through use of the
items in the code number. He continues that computerized systems make an inventory
adjustment each time an order for a particular item is processed for either an internal requisition
or an outside sale. When an item is ordered, the amount of the item remaining in inventory is
adjusted accordingly.
Computerized system will receive input data; carry out a computation or process on it, and
output results: the input may be typed in directly on the keyboard or read by appropriate device
from printed character, barcodes, magnetic or tape, punched cards and other media. A detailed
12
list necessary for inventory and components is computed from a simple statement of how many
units of which particular inventory are to be assessed. Jessop, Alex Morrison, (1996),
Peter baily, (2005),states that now computers have become so cheap and even small machines
come equipped with large random access memories and they have become standard tool for
stock control. They can provide all kinds of useful features, in addition to recording items such
as order level, order quantity, unit cost, allocated stock and free stock, what is on order, and
consumption records
Measuring of Operational Efficiency in an Organization
Operational efficiency of organizations is what occurs when the right combination of people,
process, and technology come together to enhance the productivity and value of any business
operation, while driving down the cost of routine operations to a desired level. (Ensynch,2009)
states that the end result is that resources previously needed to manage operational tasks can be
redirected to new, high value initiatives that bring additional capabilities to the organization.
Organizations must be able to examine baseline operational processes that support the business,
and then plan, implement, and support the right procedures. Being process-driven means the
operations that support business activities become highly efficient.
Dr.S.Ravishankar et al, (1996), states that Operational efficiency is reflected in terms of

productivity, profitability, morale of employees, customer service improvement, adaptiveness to
changes, competitive edges among others. He continues that to make an organization operate
efficiently factors related to the management and determinations of organizational efficiency are
essential. Many suggestions have been made by academicians regarding different criteria that
can be employed , and in the assessment of organizations operational efficiency including:
profitability measured in terms of gross profit, growth, productivity relating a unit of output to
the input required to produce, new innovations in terms of new services, new technology and
managerial systems and procedures.
Rao Thukaram,(1999), notes that operational efficiency can be measured on the following
criteria; reduction in operating cost by not producing defective goods, identification of the
process faults and defects of products and thus control scrap and waste, setting and resetting of
processes and machinery to know the performance of similar machines and operations, increase
in the profit earning capacity of the business, reduction in product line bottlenecks and
customers’ satisfaction, easy management of working capital, earning and dividends, efficient
operation of workers, reduction in material handling costs and efficient installation of new
techniques of production and automation if necessary.
Operational efficiency of organizations is reflected in the ability to control costs and manage the
material flow in some uniform way. (A.K.Datta,2000) continues that potentiality of this control
is again highly related to the quality of decision making, information available with respect to the
13
quantity and location of materials. A little reflection on the basic needs of the functional units of
any organization will confirm that an effective interrelationship at the various stages of materials
utilization, conversion, location and their movement will ultimately control costs. If the quantity
and movement of materials have to be controlled, information flow must be timely, accurate and
without disruption.
According to http://www.certified-mail-envelopes.com, operational efficiency involves

understanding clearly the demands of each customer and every to cut down on costs and increase
productivity as well as quality. Since no one knows a job more than the people who do it every
day, hearing their advice on how to reduce costs without limiting quality is often a smart idea.
Some organizations now offer an incentive to workers who can resolve the problem of how to
save money without hindering efficiency. The purpose of manufacturing cost reduction through
design optimization is to make money by reducing the overhead. Keeping the manufacturing
process simple, reducing the costs of material and increasing the efficiency of the manufacturing
process are the best ways to achieve this objective. Manufacturing cost reduction through design
optimization is definitely a good business practice.
According to http://www.pwc.com operational efficiency is measured through the use of new

technologies that reduces labor costs and/or increase revenue levels, expenses reduction,
competitively, and boosting of the bottom line, identification of all the hidden costs in a
company, efficient detection of all the weaknesses in the company’s financial control systems
and design improvements that reduces operating costs. Effective Management of company
cash flows, increase in gross tax margins and net profits, and reduction of the overall tax rates of
the organization.
David M. Anderson, (2004), believes that operational efficiency can be reflected in terms of
purchasing Leverage. Being able to order larger quantities of standard parts and materials
provides purchasing leverage where buyers can benefit from suppliers economies-of-scale and
arrange more frequent deliveries, to support just-in-time operations. Processes must be
coordinated and common enough to ensure that all parts and products in the mass customization
platform can be built without the setup changes that would undermine flexible manufacturing.
Effect of Inventory Control on Operational Efficiency
According to Abo, Tetsuo, (1994), inventory control ensures regular supply of materials so as to
enable uninterrupted production; it minimizes investment of capital on purchase of materials. It
also reduces damage of obsolesce, reduces inventory carrying costs, avoids duplication in
ordering the materials, avoids theft or loss of material, simplifies accounting of materials and it
14
makes use of modern technique such as standardization; value analysis: input substitution which
cut down the material costs.
Gary Zenz, (1994), states that inventory control encourages reduction of production costs
because of smooth flow of materials, efficient use of invested capital that is balancing of the
three preceding elements in the cost of capital encouraging good financial management of
inventory, optimal customer service that is quantity purchase (low production runs) assure
optimal customer service and provide efficient scheduling of internal operations.
Alan muhlemann, (1992), states that inventory control encourages a stock item file, which
consists of the basic information on all items with one record(or card in a manual system) for
each item including basic information, ensure that stocks for a particular job are earmarked
before actually issuing it to the job. Since some types of items go into quarantine on annual in
stock only to be free for issue when some tests have been successfully completed and materials
issued to a job back to a particular delivery can easily be traced and stocks of some items may be
held at several locations.
Inventory control policy requires a set of rules for deciding how the number held in stores to be
controlled so that the stores objective will be met .one of the most commonly used for example is
for moving parts and is based on the notion of a cost optimal reorder level(for any particular
part, the stores holding which when reached will trigger the process of re-ordering) and cost
optimal economic order quantity (the number to be ordered at any one time).This stock control
monitors the usage and delivery of parts and uses the inventory policy to control replenishment.
Anthony Kelly, (1997)
According to Lee Morgan, (2010), with a proper inventory control system in place, it is easy to
compare physical inventory counts to the numbers in the system. If there is a discrepancy,
management will know about it immediately instead of the missing or excess items being
overlooked for weeks or months. Chris Joseph, (2010), tighter inventory control can allow for
the implementation of a leaner inventory management process such as just in time (JIT) ordering.
With this technique, the lead time required to order materials and merchandise decreases,
resulting in a more efficient process. For this to be successful, however, tighter inventory control
is necessary because the margin for error is also lower. Buyers and other purchasing personnel
can gain a better handle on how much inventory is on hand, taking much of the guesswork out of
their purchasing decisions.
According to http://www.management-hub.com, with an inventory control system in place you

can easily track the movement of the inventories on daily basis, go down basis, date-wise,
category-wise, item-wise, party-wise etc. This helps you to stock the materials in the required
quantity and avoid overstocking. The inventory management system helps you to generate
different kinds of reports on the available data which will help the management to take informed
decisions. If this software is integrated with the POS system, then you will get data related to the
15
daily sales of an item. With this information you can chart out the demand for a particular
product. This helps you to stock the inventory related to the product in demand. Thus this
software helps you to meet the demand in the market and increase the profitability.
Dr.S.Ravishankar, (1996), notes that inventory control encourages maintaining a constantly

available of raw materials, purchased parts and supplies that is required for the manufacture of
products. Functional responsibilities include the requisition of materials for the purchase in
economic quantities at the proper time and their receipts, storage and protection, issuing of
materials to production upon authorized request and the maintenance and verification of
inventory records. To many business owners, inventory control impacts cash flow directly; a
good automated system will help immensely in calculating inventory turnovers. Total inventory
turnover is stated either in number of turnovers per year or number of days of inventory on hand.
Tol Broome Jr, (1999), would be foregoing profits when it continues maintaining excessive
levels of inventory, which implies that the probability position of the firm is being threatened in
the long run since funds are not being invested in other profitable ventures.
Empirical Literature Review
A study carried out by Victoire (2015) investigated the impact of inventory management on
profitability in Rwanda using a manufacturing company as case study. The findings indicate that
inventory management had significant impact on the company’s financial performance. Morgan
(2009) conducted a research study in United States of America on inventory management
performance in case of Alien Technology Corporation. The findings revealed that efficiency
inventory management of the Alien Technology Corporation is achieved by applying just in time
purchase by assuring smooth and well maintained relationship with suppliers of materials to
ensure constant supply when the corporation is in need of raw materials to facilitate production.
The researcher concluded that for any company to grow should take greater control on inventory
because inventories are heart to the manufacturing companies for the purpose of meeting
customer demand without running stock out or over stock situation.
The research done by Gashu (2016) at the Addis Ababa University entitled “Improving
Inventory Management at SUR Construction Company” indicate that major inventory
management techniques such as minimum-maximum level, safety level, lead-time analysis,
inventory cost decision and economic order quantity are not applied in the company. Hence,
researcher concludes that the main contributing factor for inventory management in effectiveness
to the construction company, which results in high stocks outs and non-moving obsolescence
items, rush ordering, unplanned and urgent purchasing items, is the staff development and
capacity incompetence.
Ackahand Ghansha (2016) studied on the title of Assessment of Inventory Management; the
researchers assessed the Performance of the Production Sector to find out how the management
of inventory within work would be effective and bring a lot of cost savings for the organization
16
to increase organizational profitability. In order to reduce the cost of holding to ensure the
continuity of supply at the same time shows, how the management of inventory within
operational works would be effective and bring a lot of cost savings to the organization.
Therefore increasing organizational profitability since inventory represents the asset account.
Despite the growing concern for non-stock procurement policies, inventory continues to play a
vital role within organization supply chain
Ogbo and Ukpere (2014) studied on the assessment of inventory control management; according
to their finding ineffective inventory control system drives high inventory cost and storage cost
that decreases the organization profitability. More importantly, they found that improving
inventory control system has a benefit of cost reduction improvising sales effectiveness,
reduction of waste, transparency and accountability, easy storage and high inventory
utilization .They recommend that in order to achieve all these organizations have to maintain
flexible inventory services. Keitany et al. (2014) in their study showed that inventory control
systems and lead time in materials management, an organization can achieve the benefits of
effective use of labor, providing system flexibility, increasing productivity, decreasing lead
times, reduction in wastes, reduction in production costs, increased product quality are achieved.
The ratings showed that inventory control systems played a vital role in organizational
performance, and as such, organizations must ensure that inventory controlling system are highly
involved in material management activities hence achieving higher organizational performance.
Nyambere (2015) investigated the Inventory Practices and Productivity of Large Manufacturing
Firms in Nariobi, Kenya. The Research design used was descriptive design.. The sample size of
the study included 50 large manufacturing companies. The study used primary data which was
collected using a questionnaire and data was analyzed using descriptive statistics including mean
and standard deviation. The study concluded that inventory management practices positively
affect the productivity of large manufacturing firms in Nairobi, Kenya. Effective inventory
management has become a critical issue for firms’ productivity. Large manufacturing firms have
saved millions of dollars in costs and decreased inventories while improving efficiency and
customer satisfaction though inventory management practices. Inventory management has
resulted to integration of better production methods to minimize costs and wastages.
Conceptual Framework
From the theoretical and empirical literature reviews the study realized that, inventory
management notably important to organizations as it can result to minimize operational risks
related with production losses, continues at an economic, customer satisfaction and sources of
competitive advantage. Especially, PanosKouvelis (2002) discussed the inventory management
system of the organization in four dimensions: internal inventory control system, contribution of
inventory management system and problems of inventory management. Moreover, Alie et al.
(2017) notified that information technology system is one of the one of the important factor for
the successful inventory management practices particularity Ethiopian basic metal industries.
17
Therefore, based on the above themes the table representation of the conceptual framework of
the study is indicated below.
Independent Variables
Dependent Variables
 ABC
 JIT  Operational
 EOQ Performance of
 Vendor Managed NCSC
Inventory
18
CHAPTER THREE
RESEARCH METHODOLOGY
This chapter presents the methodology that will be use to carry out the research. It provides the
research design that will be used in the study, target population of the study, data collection
methods or instrument of the study, and the data analysis tools that will be employed in the
study.
Research Design
The Researcher will adopt quantitative research design. The study undertakes the description of
various kinds of inventories, costs associated with keeping the inventory control and the impact
of inventory management on company’s operations. The study also will adopt a qualitative
research design involving description and analysis of data.
Research Area
The Study will conduct at National Cement Share Company in Dire Dawa City administration,
eastern region of Ethiopia. The choice of this study is, due to the convenience of to the
researcher, which has in commuting to and from the place and having many acquaintances in the
Company, and something that easily getting of required information.
Population Description
The target population to be used for this study includes DCEO, Department Managers, and
Division Managers of the Company. The respondents will be drawn from various sections of the
Company like; Operation, Finance, Supply Chain, and Marketing and Sales of the Company. The
total number of target population will be 36 employees which are 20 employees from Plant
Operation, 6 employees from Supply Chain, 6 employees from Finance, and 4 employees from
Sales Departments.
Sampling Technique
Sampling technique refers to method used in selecting the items for the sample. The sampling
technique to be used in this study will be stratified random sampling technique. As explained by
Yamane (1967), Stratified random sampling is useful method for data collection if the population
is heterogeneous. As indicated before in the population part, since the target population in this
study is heterogeneous, stratified random sampling technique will be appropriate in order to take
representative samples.
19
The technique will enable the data also appropriate to keep the proportionality of the samples
from each stratum. Based on this, the target population will be stratified in to four strata which
are Finance Department, Supply Chain Department, Marketing and Sales Department, and Plant
Operations. After stratifying the target population, the proper sample will be taken from each
stratum randomly and proportionally by using Yamane formula.
Sample Size
Sample size is the number of items to be selected from the universe to constitute a sample. The
size of sample should neither be excessively large nor too small. It should be optimum; an
optimum sample is one which fulfills the requirements of efficiency, representativeness,
reliability and flexibility. Budgetary constraint must invariably be taken into consideration when
the researcher decides the sample and the sample size (Kothari, 2004). The target population is
stratified in to four strata, which are; Finance Department, Supply Chain Department, Marketing
and Sales Department, and Plant Operation. After stratifying the target population, the following
Yamane formula will be applied to determine the appropriate sample size.
N
n= 2
(1+ N e )
Where n is the sample size, N is the population size, and e is the level of precision as 95%
confidence and 10% precision level.
As indicated before, the target population for this study is 38 employees which are explain in the
below tables
Target Sample Size

Strata
Population (Ni) (ni)
1. Finance Department 6.00 4.00
2. Supply Chain Department 6.00 6.00
3. Marketing & Sales Department 6.00 4.00
4. Plant Operation Department 20.00 18.00
Total 38.00 32.00
Proportional sample size from each stratum will be calculated by using the following formula:
𝑛𝑖=𝑛*(𝑁𝑖/𝑁), Where;
ni= sample size for individual departments Ni =
the total number of employees in each department/stratum N=the total
number of population in the study n= the total
sample size for selected stratum: (http://ocw.jhsph.edu/courses/statmethodsforsamplesurvey
Research Instruments
20
The researcher will develop both primarily and secondary sources of information and data. In
collecting primary Data, the researcher will use questionnaires, interview guide and observation
as tools for collecting the data. For Secondary Data which includes, related literature from text
books, document review of organization activities, the organizational brochures, reports,
magazines, internet and newspapers. The instruments or tools are as mentioned below;
Questionnaires
The researcher employees self-administer questionnaires in which written questions will be

presented and will answer by the respondents in written form. The use of questionnaires ensured
that there is wide coverage in terms of scope.
Interviews
The researcher also used in-depth interview method where respondents will be asked the same
questions in exactly the same way, order and terminology. The use of interview method ensured
that there will be established report between researcher and respondents and also high degree of
response.
Observation
The researcher also utilized an observation checklist to record what he or she observed during
data collection.
Data Collection Procedure
The Researcher will get a letter from the Institute of Addis Ababa Medical and Business College,
department of Management, allowing him to conduct the research. Then, the letter will be
presented to the firm for requesting it to allow him to carry out the research. After this, the
researcher will design questionnaires which will be used in the data collection.
The Researcher must seek appointments with respondents for interviews and distribution of
questionnaires. On collecting the data, the researcher will analyze and interpret it and finally
write the research report.
Reliability and Validity of Data
For reliability of the data, the researcher ensured that data is only collected from the concerned
and knowledgeable respondents in the field of study. In this case, respondents that gave reliable
information include employees of the organization, and other relevant authorities of the
organization.
The validity of the questionnaire will be determined by initially carrying out a pilot test. The
pilot testing or study will be conducted on selected group of workers before the real data
21
collection exercise takes place to ensure consistency in its findings. The validity of the research
instruments will be also established through consultations with the researcher’s supervisor.
Data Analysis
The data pertaining to effect of inventory management system and control on operational
performance will be coded using the numeric scales that will be used by the respondents in
responding to the questions posed in the questionnaire. This transformed the data into a
quantitative form that permitted analysis using quantitative methods. Descriptive statistics will
be used to analyze general information collected in Section A. Section B analyzed using
descriptive statistics on the extent of inventory management system and control by NCSC.
Section C will be used correlation and regression to analyze the collected data on the effect of
inventory management system and control on operational performance.
Table 1 Summary of Data Collection and Data Analysis Methods
Objective Questionnaire Data Analysis

General Profile Section A Descriptive Statistics
Extent of Inventory Management Practices Section B Descriptive Statistics
Organizational Performance Section C Factor Analysis
Research Ethical Considerations
Above all, the researcher will not be asked the study participants to engage into risks as a result
of participating in this study. Besides, informed verbal consent will be obtained from the key
respondents during data collection. The respondents will be given the right to refuse or take part
in the study. All the primary and secondary data collection in the organization is under the
permission of the managers and without any offence in ethical rules during the whole research
process.
Time Schedule
A schedule or a timetable, as a basic time-management tool, consists of a list of times at which

possible tasks, events, or actions are intended to take place, or of a sequence of events in the
chronological order in which such things are intended to take place. Thus, a major activity that
has to been conducted and a timeframe which will be accomplished are depicted in the following
Gantt chart.
Sr. Activity Time Frame (Feb – June 2021)

No. Feb Mar Apri May Jun
22
l
1 Preliminary Data Gathering
2 Finalizing the Research Proposal
3 Design & Development of Questionnaire
4 Data Collection
5 Data Preparation
6 Data Analysis and Interpretation
7 Report Generation
8 Presentation
Research Budget
Estimate of the cost that the researcher will incur while conducting the project is summarized as
here under.
Sr. Unit of Unit Total Cost

Description Quantity Remark
No. Measure Price (In Birr)
1. Stationery Items
1.1 Pencil PCS 5.00 5.00 50.00
1.2 Pen-Ball Point (Blue) PCS 10.00 10.00 150.00
1.3 Highlighter PCS 6.00 25.00 150.00
1.4 Photocopy Paper (Package) PCS 5.00 150.00 750.00
1.5 CD RW and Flash (16 GB) for Backup PCS 2.00 300.00 600.00
1.6 Printing and other related PCS
Sub Total 1,700.00
2. Transportation
2.1 Travel Cost Days 60.00 30.00 1,800.00
Sub Total 1,800.00
3. Entertainment Expense
3.1 Coffee, Tea, Water etc. Days 3,000.00
Sub Total 3,000.00
Grand Total 6,500.00
Contingency (10%) 650.00
Reference
 Abo, Tetsuo, Hybrid Factory: The Japanese production system in the United States, New
york, 1994, oxford university press
 Alan Muhlemann, production and operations management, 1992, 6th edition, pitman
publishing
 Arjan J Van Weele, purchasing and supply chain management, analysis, planning and
practice, 2005, 4th edition, Thomson learning
 Elwood S.Buffa et al,modern production/operations,1987,8th edition, john Wiley and sons
Bonnie Conrad, eHow contributor, July 06, 2010
23
 http://www.management-hub.com/benefits-of-using-an-inventory-management-system.html
 Lwiki, T., Ojera, P. B., Box, P. O., Bagmaseno, P., Nebat, K., Mugenda, G., & Wachira, V.
K. (2013). The Impact of Inventory Management Practices on Financial Performance of
Sugar Manufacturing Firms in Kenya. International Journal of Business, 3(5), 75-85.
Retrieved from www.ijbhtnet.com
 Munyao, R. M., Omulo, V. O., Mwithiga, M. W., & Chepkulei, B. (2015). Role of Inventory
Management Practices on Performance of Production Department’ A Case of Manufacturing
Firms. International Journal of Economics, Commerce and Management, III(5), 1625-1658.
Retrieved from http://ijecm.co.uk/
 Otundo, J. B., & Bichanga, W. O. (2015). The Effects of Inventory Management Practices on
Operational Performance of Kisii County Government, Kenya. International Journal of
Social Sciences and Information Technology, 1(IV), 1-16. Retrieved from
http://www.ijssit.com
 Panigrahi, D. A. (2013). Relationship between Inventory Management and Profitability: An
Empirical Analysis of Indian Cement Companies. Asian Pacific Journal of Marketing &
Management Review, 2(7), 107-120. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?
abstract_id=2342455
 Wangari, K. L., & Kagiri, A. W. (2015). Influence of Inventory Management Practice on
Organizational Competitiveness: A Case of Safaricom Kenya Ltd. International Academic
Journal of Procurement and Supply Chain Management, 1(5), 72-98. Retrieved from
http://www.iajournals.org/articles/iajpscm_v1_i5_72_98.pdf
 http://www.certified-mail-envelopes.com
 http://www.pwc.com
 www.nationalcementsc.com
 http://ocw.jhsph.edu/courses/statmethodsforsamplesurvey
24

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Inventory Management System and Control on Operational Performance in

Cement Industry (A Case Study on

A proposal submitted to the school of graduate studies Addis Ababa Medical

Prepared By: Abiyot Amare

Advisor: Abebayehu Haile

Table of Contents page

Background of the Study

In traditional settings, inventories of raw materials, work-in-progress components and finished

Cement Process Description

Statement of the Problem

The study consists of the following hypotheses stated in null form:

Scope/Delimitation of the Study

Theoretical Literature Review

Concepts of inventory management and control

 To maintain independence of operations: A supply of materials at a work center allows that

How Inventory is controlled in an Organization

Dr.S.Ravishankar, (1996), has it that inventory control involves maintaining a constantly

Inventory Control Systems

Economic order quantity

According to Bowersox (2002), the inventory management needs to be organized in a logical

Vendor managed inventory

Material Requirement Planning (MRP)

Ballou (2000) defined material requirement planning as a mechanical method of supply

I. To synchronize ordering and delivery of materials and components with Production

I. Maintain the lowest possible inventory level.

Just in time (JIT)

Measuring of Operational Efficiency in an Organization

Dr.S.Ravishankar et al, (1996), states that Operational efficiency is reflected in terms of

According to http://www.certified-mail-envelopes.com, operational efficiency involves

According to http://www.pwc.com operational efficiency is measured through the use of new

Effect of Inventory Control on Operational Efficiency

According to http://www.management-hub.com, with an inventory control system in place you

Dr.S.Ravishankar, (1996), notes that inventory control encourages maintaining a constantly

Empirical Literature Review

Target Sample Size

The researcher employees self-administer questionnaires in which written questions will be

Data Collection Procedure

Reliability and Validity of Data

Table 1 Summary of Data Collection and Data Analysis Methods

Objective Questionnaire Data Analysis

Research Ethical Considerations

A schedule or a timetable, as a basic time-management tool, consists of a list of times at which

Sr. Activity Time Frame (Feb – June 2021)

Sr. Unit of Unit Total Cost

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