JIGJIGA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

ASSESSMENT OF CHALLENGES AND PROSPECTS OF

INVENTORY MANAGEMENT

(IN CASE OF SHEIK HASAN YABARE REFERRAL HOSPITAL)

A RESEARCH PAPER SUBMITTED TO ARSI UNIVERSITY COLLEGE

OF BUSINESS AND ECONOMICS DEPARTMENT OF MANAGEMENT
FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
THE DEGREE OF BACHELOR OF ARTS IN MANAGEMENT

Prepared By: 1. Shale Seid Aden

2. Husein Mohamed Aden

Advisor: Fami (Asst. Professor)

Feberuray, 2024
 Jigjiga, Ethiopia

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 APPROVAL SHEET
This research entitled “ASSESSMENT OF CHALLENGES AND PROSPECTS OF
INVENTORY MANAGEMENT IN CASE OF SHEIK HASAN YABARE REFERRAL
HOSPITAL” prepared and submitted by Shalle Seid Aden and Hussein Mohamed

Aden in partial fulfillment of the requirement for the Degree of Bachelor of Arts in
Management.

____________________ __________________ _________________

Advisor Signature Date
____________________ __________________ _________________
Examiner Signature Date
____________________ __________________ _________________
Head, Department of Management Signature Date

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 ACKNOWLEDGEMENT
First and for most, we would like to say thanks for our “GOD” for helping us in our educational
carrier.

Next, we would like to express our deepest thanks to our family who support us financially.

And we would like to express our deepest gratitude and precaution to our Advisor Fami (Asst.
Professor) for his relentless technical assistance.

The next special thanks go to Sheikh Hasan Yabare referral hospital employees for their positive
response in providing valuable information.

Our last, but not last special thanks go to our friends, those who are assisting for successful
completion of this paper.

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 ABSTRACT

The main objective of this study will to asses, the challenges and prospect of
inventory management in Sheikh Hasan Yabare referral hospital. The specific
objective of this study will to identify storage system implemented in Sheikh
Hasan Yabare referral hospital, to understand challenges of inventory
management, to understand the benefit of using effective inventory inspection
and to understand the activity of inventory management system in the
organization. The researchers also discuss the literature review of the study. To
achieve objective of the study the researchers used descriptive research design.
The subject of the study will include 58 respondents and used random sampling
techniques. In order to collect relevant data, the researchers used primary source
through questionnaires. And also the researchers collect data from primary source
through distributing questionnaires. They obtained data would be analyzed by
using table and percentage. The finding of this study shows that organization used
different items in distinct store method. Even through this method helps to improve
management system it highly increase carrying cost of inventories. Therefore it is
better to the organization if it apply all items at a center store method over all
items at distinct store method.

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 TABLES OF CONTENTS

Contents Page
APPROVAL SHEET.........................................................................................................................................i
ACKNOWLEDGEMENT..................................................................................................................................ii
ABSTRACT...................................................................................................................................................iii
TABLES OF CONTENTS.................................................................................................................................iv
LIST OF TABLE.............................................................................................................................................vi
CHAPTER ONE..............................................................................................................................................1
1. INTRODUCTION.......................................................................................................................................1
1.1. Background of the study...................................................................................................................1
1.2. Background of the organization........................................................................................................2
1.3 Statement of the problem.................................................................................................................3
1.4. Research Questions..........................................................................................................................4
1.5. Objectives of the study.....................................................................................................................4
1.5.1. General Objective of the study..................................................................................................4
1.5.2. Specific objectives of the study..................................................................................................4
1.6 Significance of the study....................................................................................................................5
1.7 Scope of the study.............................................................................................................................5
1.8 Limitation of the study.......................................................................................................................5
1.9. Organization of the paper.................................................................................................................6
CHAPTER TWO.............................................................................................................................................7
2. LITERATURE REVIEW................................................................................................................................7
2.1 An overview of inventory and inventory management.....................................................................7
2.2. Aggregate Inventory Management...................................................................................................8
2.3. Objectives of inventory management...............................................................................................8
1.4. Purpose of inventory...................................................................................................................9
1.5. Challenges of inventory management.......................................................................................11
1.6. Inventory costs..........................................................................................................................12
1.7. Nature of demand in inventories...............................................................................................13

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 1.8. Types of inventory.....................................................................................................................13
2.9. Inventory management system......................................................................................................14
2.10. Inventory system..........................................................................................................................15
2.11. Safety stock...................................................................................................................................15
2.12 Inventory Storage Systems............................................................................................................15
2.13. Inventory analysis /classification/ system.....................................................................................16
2.14, Inventory codification / cataloguing/............................................................................................17
2.15 Symptoms of poor inventory management...................................................................................18
CHAPTER THREE........................................................................................................................................19
METHODOLOGY OF THE STUDY.................................................................................................................19
3.1. Research design..............................................................................................................................19
3.2. Type of sources of the data............................................................................................................19
3.2.1. Primary data sources...............................................................................................................19
3.2.2. Secondary data sources...........................................................................................................19
3.3. Sampling Techniques......................................................................................................................20
3.4. Method of data collection..............................................................................................................20
3.5 . Methods of data processing and analyzing..............................................................................21
CHAPTER FOUR..........................................................................................................................................22
DATA PRESENTATION AND ANALYSIS........................................................................................................22
CHAPTER FIVE............................................................................................................................................33
CONCLUSION AND RECOMMENDATION...................................................................................................33
5.1. Summary of findings.......................................................................................................................33
5.2 Conclusions......................................................................................................................................34
2.3. Recommendation...........................................................................................................................35
REFERENCES..............................................................................................................................................37
APPENDIX..................................................................................................................................................38

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 LIST OF TABLE
Tables Page

Table 4.1. Background information of respondents..............................................................................22

Table 4.2. Contribution of inventory for the organization....................................................................23
Table 4.3. Availability of enough warehouses for inventories...............................................................24
Table 4.4. Inventories storage method....................................................................................................24
Table 4.5. Implementing rule procedures of inventory management...................................................25
Table 4.6. Counting and inspection of inventories.................................................................................25
Table 4.7. Frequency and inventory counting and inspection..............................................................26
Table 4.8. Challenges of inventories management.................................................................................27
Table 4.9. The practice of inventory management system....................................................................27
Table 4.10. The replacement of inventories............................................................................................28
Table 4.11. Respondents view regarding damaged and expired inventory..........................................28
Table 4.12. Storage system......................................................................................................................30
Table 4.13. Inventory management performance of the organization.................................................30
Table 4.14. Disposal of expired and scrap material..............................................................................31
Table 4.15. Disposal method of expired and scrap materials................................................................31
Table 4.16. The availability of computerized inventory recording system..........................................32

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 CHAPTER ONE
1. INTRODUCTION

1.1. Background of the study

Material management has gained acceptance in all developing economies. The material
department accounts for over 60% of the cash out flow and 90 % of working capital of the
organization. With every five-year plan, the size of the investment has been increasing offering
great challenges and opportunities to the material professional (P.Gopalakrishnan, 2011: PPxxi)

Management view towards inventory has changed significantly over the past several years
previously managers perceived inventory as an asset because it appears as an asset in the firm’s
financial report (M. Davis, 2003: PP 604).

Inventories are materials and supplies that a business or institution carries either to provide input
for manufacturing and service providing organization. Inventory management is a specialized
branch of materials management which supplies for produced and service delivery process. All
business organizations require inventories. Inventory management is responsible for planning
and controlling inventories from raw materials stage to reach customers (Arnold et.al, 2004: PP
254)

Inventory includes input (raw materials ) which mean vendor –supplied items that have not had
any labor added such as human, financial , energy , equipment and physical items, output
(finished good) which mean complete products but still in the possession of the firm and work in
process (Semi-finished good) item that have been partially processed but are still incomplete. In
manufacturing inventories are materials that contribute or become part of a firms products
output. In service, inventories are tangible goods that are sold and supplies necessary to
administer the service. Customers waiting in line at a service operation also can be viewed as
inventory similar to parts waiting to be processed in factory (M.. Davis, 2003: PP 604).

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Generally inventory is the stock of any item resources used in an organization where as
inventory management system is the set of policies that monitor and control the level of
inventory and determine what levels should be maintained when stock should be replenished and
how large order should be. So the basic purpose of maintaining inventory management in
manufacturing and stock keeping service is to specify when item should be ordered and how
long the order should be; that is the reason why the recent trend have modified the simple
question of “ When and how many” (M. Davis , 2003: PP 604).

Sheik Hasan Yabare referral hospital is a public service providing institutions which deliver
service for patient. This referral hospital has inventories like drug, ray machine, syringes,
microscopes and other medical equipments which are necessary to maintain, facilitate and to
improve service delivery process. Even though this organization provide smooth and
uninterrupted service to the society , some employers does not give considerable attention for
inventory and its importance and they have little awareness and knowledge about the influence
that threaten effectiveness of inventory management.

1.2. Background of the organization

Sheik Hasan Yabare referral hospital is a teaching hospital where nearly a million catchment
populations get medical care. It is a public hospital which is an affiliate of Jijiga University
providing training for health science students in range of disciplines. The hospital has been
providing highly active antiretroviral therapy (HAART) for PLW HIV (People living with HIV)
especially since 20012, 2014 and 2015. Sheik Hasan Yabare referral hospital is established in
1986 G.C by having 20 employees, 2 doctor’s and 11 other supportive employees. It is found in
Somale region in West Fafan Zone in Jijiga. It is located 600 km far away from the capital city,
Addis Ababa. It is 800m far from bus station to the north.

Vision

Sheik Hasan Yabare referral hospital aspires to be the premier and recognize hospital nationwide
in provision of quality health care. It also aspires to create healthful, productive and prospective
citizen in the teaching and learning process. It also ambition to seen as a highest institution from
top 10 health science college and referral hospitals in Eastern Africa.

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Mission

Based on the countries interest, the mission of Sheik Hasan Yabare referral hospital is to:

 Create skillful, knowledgeable and healthy professional.

 Minimize incapability and death to create productive and qualified man power.
 Preventing disease and insuring the society’s health.
 Enabling the hospital to be comfortable working environment.
 Building up continues service to meet client’s interest.

1.3 Statement of the problem

In broad terms, customer’s service is the ability of company to satisfy the needs of customers. In
inventory management, the term is used to describe the availability of items when needed and is
a measure of inventory management effectiveness. The customer can be purchaser a distributor,
another plant in the organization or the work station where the next operation is to be performed.
There are many different ways to measure customer service each with its strength and weakness
but there is no one best measurement. Some measures are percentage of orders shipped on
schedule, percentage of line items shipped on schedule and order days out of stock. Inventories
are help to maximize customer service by protecting against uncertainty. If we could forecast
exactly what customers want and when we could plan to meet demand with no uncertainty.
However demands and the lead time to get an item are after uncertain, possibly resulting in stock
outs and customers dissatisfaction. For these reasons, it may be necessary to carry extra
inventory to protect against uncertainty (Arnold, 2004: PP 259).

Wolcott (2000) explain that inventory management system and inventory control process provide
information to efficiently utilize people and equipment, coordinate internal activities
communication with customers, and David (1996) explains that whether used to provide
customers service or to achieve efficiencies the need to carry inventory conflict with the
management desire to minimize inventory investment (Samuel , 2014: PP:9).

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Therefore to minimize uncertain and to satisfy customer satisfaction it is important for
employees to have adequate knowledge, awareness and giving adequate attention about
organization’s inventories. But some employees have little awareness and knowledge about
inventory and inventory management, its contribution and influencing factor of inventory
management. Due to this reason the researchers initiated to assess the challenges and prospects
of inventory management in SheikHasan Yabare referral hospital.

1.4. Research Questions

This study would try to answer the following questions.

 What type of storage system does the organization use?

 What are challenges of inventory management in the organization?
 What are the benefits of implementing inventory inspection to the organization?
 What is the inventory management system the organization could use?
 What method does the organization used to dispose expired drugs and other interrupt
materials?

1.5. Objectives of the study

1.5.1. General Objective of the study
The general objectives of this study are assessment of challenges and prospects of inventory
management in case of Sheik Hasan Yabare referral hospital.

1.5.2. Specific objectives of the study

 To identify types of storage system implemented in Sheik Hasan Yabare referral
hospital.
 To understand challenges of inventory management in the organization.
 To examine the benefits of using effective inventory inspection.
 To understand the activity of inventory management system that the organization can use.
 To assess disposal method of expired drugs and other interrupt materials.

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1.6 Significance of the study
The study was believed to have the following importance:

This study would help employees to give more attention to effective inventory management and
also to identify the challenges which influence the effectiveness of inventory management. The
study may also help the organization to know their strength and weakness and to take remedy
action for future improvements. It would help the organizations to minimize inventory carrying
cost and investment on inventory. This leads to minimize obsolescence and reduce the amount of
expire drugs and equipments. Finally this study would help to another researcher as a reference
who conducts a related study.

1.7 Scope of the study

The findings of this study would be more successful if it were conducted widely in all referral
hospitals. But due to financial and time constraints it was difficult to assess challenges and
prospects of inventory management in all referral hospitals. Therefore the study was delimited on
challenges and prospects of inventory management in Sheik Hasan Yabare referral hospital
only.

1.8 Limitation of the study

In order to gather relevant information, the researcher used different data collection methods.
When the researcher used questionnaires as data collection method, there would be the problem
of allowing low opportunities for responding to seek clarification of statement made in
questionnaires. As a result there would be the problem of returning of some unfilled
questionnaires form respondents. When the researcher used random sampling techniques the
relevant data were collected from all targeting population. So during communicating and
collecting information from the overall respondents the researcher would spent long period of
time and high amount of money. Therefore the study would be time consume and would be
expensive.

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1.9. Organization of the paper
The researcher would have five chapters. The first chapter contains the introductory part of the
research. This includes background of the organization, background of the study, statement of
the problem, research questions, and objectives of the study, significance of the study, scope of
the study and limitation of the study. The second chapter would have literature review about
inventory related information. The third chapter contains about research methodologies which is
the means of conducting a research. Research design, type of and data source, sampling design
and data collection method would have including in this chapter. Chapter four concern about
data presentation and analysis. In this chapter the data that the researcher would gather through
questionnaires would be analyzed by table, percentage and statement would also include under
this chapter.

Finally the fifth chapter would have deals with summary and conclusion about the findings,
performance of working area and also would gives some recommendation that must be
implemented in the case organization. In addition to these chapter the researcher would have
includes references and appendix.

CHAPTER TWO

2. LITERATURE REVIEW
2.1 An overview of inventory and inventory management.
Inventory management is specialized branch of material management and plays a great role in
integrated approach of material management. It concerned with the physical storage of goods.
Inventory management is a technique of utilizing inventory to the maxim tent, so that it generates
maximum profit from the last amount of inventory investment without compromising customer
satisfaction level. It is keeping the over al cost associated with having inventory as loom as
possible without creating problem. It is the process of effectively overseeing the constant in and
out flow unit of an existing inventory. It is also seek to control the cost associated with the
inventory both from perspective of total value of goods included and tax burden generated by
cumulative value of inventory (kale, 2013 pp 197)

Inventory is stock of any resource used in a certain organization and inventory management is
systems which consist of polices that control and monitor the level of inventories and determine

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what level should be maintained, when stock should be replenished and how large order should
be. Inventories are material and supplies that a business or institution carries either for the sale or
supply inputs for production process. All business organization and institution require inventory
often they are used their value is converted in to cash, which improves cash flow and return on
investments (Arnold etal, pp; 237

According to Arnold inventory management is responsible planning and controlling inventories

from raw material stage up to reach to customer due to the presence of inventory carrying cost,
which increase operating cost and decrease profit implementing effective inventory management
is essential pp. 238

2.2. Aggregate Inventory Management

Aggregate inventory management deals with managing inventory according their classification
(raw material, work in process, finished goods) and the function the perform rather than the
individual item level. It is financial oriented and convened with the cost and the benefits of
carrying different classification of inventories. Aggregate inventory management involves:
( Wild T,1995,pp236.

 Flows and kinds of inventory needed.

 Functions that inventory perform.
 Supply and demand pattern.
 Objective of inventory management.
 Cost associated with inventory.

2.3. Objectives of inventory management

The basic objective of inventory management is to reduce investments on inventory at minimum
level, to minimizing carrying cost of inventory and to maximizing profitability. According to
Arnold inventory management will have achieving the following objectives:-Arnold;2004 pp239

I. Maximizing customer service

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Customer service is the ability of firm to satisfy the need of customers. The term inventory
management used to describe the availability of item when needed and is the measure of
inventory management practice effectiveness. There are many different ways to measure
customer service each with its strength and weakness, but there is no one measurement.
Inventory help to maximizing customer service by protecting against uncertainty.

II. Operation efficiency

Inventory help to make a manufacturing operation more productivity in the following ways:-

1. Inventory allows operation with difference rate of production to operate separately and
more economically. when two or more operation in a sequence have different rate of
output and are to be operate differently inventories must built between them.
2. Production planning for seasonal production in which demand is non uniform throughout
the year. By labeling production manufacturing, organizational can continually produced
an amount equal to average demand.

I.4. Purpose of inventory

All firms keep supply of inventories for the following reason (Jacobs.F,2011 pp6-7

1. To maintain independence of operations

A supply material at a work center allows that center flexibility in operations. Independency of
work station is desirable on assembly lines as well. The time that it takes to do identical
operations will naturally vary from one unit to the next? Therefore, it is desirable to have a
cushion of several parts within the work station so, that shorter performance times can
compensate for longer performance times. This may the average output can be fairly stable

2. 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. Usually, however, demand is not completely known, and safety or
buffer stock must be maintained to absorb variation.

3. To allow flexibility in production scheduling

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A stock of inventory relies on the pressure the production system to get the goods out. This was
cause to longer lead times which permits production planning for smoother flow and lower cost
of operation through longer lots- size production.

4. To provide a safe guarded for variation in a raw material delivery time

When material is ordered from a vendor, delay can occur for a variety of reason:
Normal variation in shipping time, shortage of material at the vendors, Plant causing back logs,
an unexpected strike at the vendor’s plant or at one of the shipping companies, lost order, or a
shipment of incorrect or defective material.

5. To take advantage of economic purchase order sign

There are costs to place an order: labor, phone cells, typing, postage and so on. Therefore, the
large the shipment, the lower per unit cost and also the largest each order is the fewer the order
that need be written.

I.5. Challenges of inventory management

The challenges that influence the effectiveness of inventory management arise from the
conflicting objectives across variation segment of each organization and from the tentative nature
of demand. In case of conflicting objective some part of the business need to decrease inventory.
For inventory which is one of the biggest numbers in balance sheet, effective inventory
management is vital function to insure continues success of manufacturing and service providing
organization. The effectiveness of inventory management is measured by how successful the
organization is reducing investment on inventory.

The concept inventory management determining what item to stock, how many of each item
should keep and when order should be placed for more. However inventory management is much
more complex in practice. The factors that complicate the process fail into broad categories. For
example, the sell department priorities the delivery of product in the best time frames to satisfy
customer exception. In case of supply and demand there is a difficulty of supplier performance,
supply chain distribution, scarcity of material, deterioration and damage of product contribute to
the need to established buffer stock level to provide safety days of lead time on the environment
news product and innovation, high scale volume for same items and seasonal sale for the other

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items encourage the business to keep maximum finished good stock. The purchasing department
achieve volume discount on large batch and off season purchase this increase level of inventory.
Production wants all row materials and parts to be a variable to keep higher level of efficiency
and run large batch size. This also increase inventory. Conversely product developer often
wants to keep low inventory. All of these complications forced to consider inventory
management is fundamentally among to making affine between meeting customer demand and
stocking the minimum amount of inventory as possible because in the production and service
delivery process keeping enough inventory is important to avoid paying the opportunity cost of
loss of production (stock out). Cost and diminished customer satisfaction and loyalty ( Zip kin,
2000, pp 172)

I.6. Inventory costs

In making any decision that affects inventory size, the following cost must be considered
(Jacobs.F, 2011 pp7-9)

1. Holding (carrying) cost

Carrying cost is the cost of maintaining the inventory and protecting the inventories items. It
including all expense in carried by the firm because of the volume of inventory carried. It consist
the costs for storage facilities, handling insurance, pilferage, breakage, obsolescence,
depreciation, taxes and the opportunity costs of capital. Obliviously, high holding costs tends to
favor law inventory level and frequent replenishment.

2. Set up (production change) costs

Set up cost is also called ordering cost. It is a cot those associated with placing an order either
with the factory or supplier. The cost of placing an order does not depend up on the number of
orders placed in a year.

3. Item cost (purchased cost)

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According to Arnold et al, item cost is the price paid for purchasing item which consist of the
cost of item and any cost associated with getting the item into the plant. These could include
such cost as transportation, custom duties and insurance. The inclusive cost is often called the
landed price. For an item manufactured in the cost includes direct material, direct labor and
factory over head. This cost can usually be obtained from either accounting or purchasing
department.

4. Shortage (penalty or stock out) costs.

The cost of lost production or downtime due to stock out is considered as shortage /penality cost

I.7. Nature of demand in inventories

The demand for inventory may be dependent or independent (Tersine R. J. pp: 183).

I. Dependent demand items:- are those items their demand is related to the demand for
another items. This demand is also known as derived demand.
II. Independent demand items:- are those items that are not influenced by production/
operation but by the market force.

For example :- if an automobile company plans an producing 500 automobiles per day, then
obliviously per day , then obviously it will need 2000 wheels and tires. The number of
wheels and tires needed is dependent on the production level of automobiles on the other
hand is independent, it comes from many external sources to the automobiles firms and is
not a part of other products and so is unrelated to the demand for other products.

I.8. Types of inventory

Based on location of inventories in value adding processor based on characteristics, inventories
can be classified into several categories (Agrawal, 2014, pp: 268)

A, Raw material / production inventories

Material all items that act as input to man organization value adding process

B, Work in process/in process inventories

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Work in process inventories consists of all raw materials and purchased parts which are inter in
transit from one stage of production to another

C, Finished product

Finished goods inventories consist of goods which have been manufactured, but not dispatched
to dealers and customers include stock in ware house owned by the manufacturing as well as
these with dealers on consignment. Simply it is a complete product ready for shipment or waiting
for sale.

D, MRO (maintenance, Repair and Operating Supplies/supplies

MRO/supplies are inventories consist of good s which have been manufactured and dispatched to
dealer or inventories consumed in the normal function of the organization. All materials used by
the organization that do not come part of the finished good are referred to as supplies they are not
of final product. Dou to this reason it is known as indirect material.

2.9. Inventory management system

Inventory management system assisted receiving and stores operation by ordering materials in
quantities related to standard unit. Load capacity is essential for effective inventory management
to reduce investment in inventories and absolute materials. Reducing the damage of material
during in house holding will decrease inventory control problems. Reserving personnel can also
assist inventory control by promptly rejecting shipment of ordered and un acceptable materials.
Effective inventory management system includes the following concerning activities (AK Datta.
1998: pp: 267-273)

1. Replenishment of materials

On time replenishment of materials insure the production division to maintain operation and
finance section to keep investment in inventories at the optimal level by avoiding unnecessary
large stocks. Requisition of material replenishment is one of important activities of ware house.
The process of requisition forces the store to examine the stock level of items and their
requirement for the future .replenishment approaches based on its own unique characteristics
provide information that helps to answer the two basic questions of when to order and how much
to order.

2. Fixed internal method

The replenishment interval of all items and supplies will arrive according to the lead time. The
advantage of fixed interval system is as all items are replenished at one time there is considerable
reduction in the volume of work and a large number of similar items are purchased. This method
is suitable to re ordering steady consumption items.

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 3. The re order point system

The system recognizes the fact that each item has its own unique optimum order quantity,
therefore, based on order point and order quantity rather than on time factor. The features of the
system achieved by maintain a perpetual record for each item. An inventory clerk continued to
post all materials until the balance of an item falls inventory elements and dynamics.

4. Just in item (JIT) system

The operating the concept of the system to gear factor out put tightly to gather and gear the
supply of production inventories to the manufacturing demand schedule. This means that all
materials in the system including production inventories are maintained at absolutely mineral
level (Dobler and Burt, 1996, pp: 94)

2.10. Inventory system

An inventory system provides the organizational structures and the operating policies for
maintaining and controlling goods to be stocked.

The system is responsible for ordering and receipt of goods: timing the order placement and
keeping track of what has been ordered, how much, and from whom. The system also must
follow up to answer such question as : has the supplier received the order? Has it been shipped?
Are the dates correct? Are the procedures established for recording or returning under standard
able merchandise? (Silver E, 1998, pp, 69)

2.11. Safety stock

Safety stock is needed to maintain production operation and to deliver finished goods arise.
These stocks also achieved a reduction of emergency purchase a higher price and extra
transportation. Two factors play an important role in inventory management system. The first
factor is that demand is never certain and is best distributed over a certain range of days. Hence
companies can tackle this situation by treating demand or maintain inventory more than previous
period. Safety stock is needed because of quantity uncertainty that is the number of scrap or
imperfect items the order is going to contain. Therefore safety stock comes in use when rejection
at the time of recipient or good due to damage (Ahuja, 1995)pp:76).

2.12 Inventory Storage Systems

According to Dobler and Burt planned organized store system is a basic ground to provide
consistent service. To do so, Dobler specifies two basic systems that can be used in physically
controlling stores system. A single organization often uses both systems at the same time. These
combined depends up on the nature of production and the way in which materials used. This
system called random access store system. (Dobler M (1999 PP. 269)

A. Open store system

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Open store system is highly mass production type of operation exhibiting a continuous and
predictable demand of the same material. In organization using open system, no store room as
such exist each material is stored as closed to its point of use as is physically possible

B. Closed store system

A closed store system is one in which all materials physically stored in closed or controlled area.
The general practice is to maintain physical control by looking the storage area whenever there
are no activities as a rule there is no other than the store personnel is permitted in the stores area.
Materials enter and leave, they are only with the accomplishment to an authority document
(requisition). This system offered maximum physical security and to ensure tight accounting
counting of inventory.

C. Random access store system

It is a unique type closed system employed by relatively small number of large firms. In this
system no materials has affixed storage location. When an items enters the store room, it is
stirred in the available shelf suitable for its requirement.

2.13. Inventory analysis /classification/ system

Items that are in the inventory are not of equal importance in terms of the amount invested, profit
potential, stock out penalties ….etc. therefore , all items do not deserve the same degree of
attention ( J. Elbert 2003 PP.85 )

According to Elbert some of the popular classification selective control techniques are as
follows:-

 ABC classification.
 FSN classification.
 VED classification.

1, ABC classification
ABC stands for “always better control” The item on hand are classified in to A, B and C types on
the basis of the value items of capital or annual dollar usage thus the items with high value and
low volume are kept in A- types, item with low value and high volume are kept in C- type and
the items with moderate volumes and moderate values are belongs to B- type. In addition A-type
items are given the maximum attention while ordering for purchase, C-type is given less
attention and B- type gets moderate attention.

2, FSN classification

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In this method the items are classified according to the rate of consumption. Thus, the materials
can be fast (F), slow(S) and non moving types (N). F-types materials get the maximum attention
and the N –type gets the minimum for control and procurement. Example: let the different items
in our home be: rice salt, sugar, tea, vegetable, fruits medicine, cosmetics, shaving, blades,
wound plaster and dry-fruits. According to FSN, they can be classified as

F= rice, salt, sugar, tea, are consumed almost daily at relatively faster rate and they need more
attention.

S= fruit, dry fruit, are consumed at a moderate speed and need moderate attention.

N= medicine, shaving blades, wound plaster and cosmetics are consumed at a very negligible
rate and need less attention.

3, VED classification
The materials are classified according to its criticality in the production system. Thus material
can be vital (V) essential (E) and desirable (D) types. Maximum attention is paid to vital items
and less to the desirable items it is so because the lack of vital items can bring the production of
the plant down and the plant will run in to losses.

2.14, Inventory codification / cataloguing/

Codification is a process of assigning a unique code to items for its easy and complete
identification. Codification of an item are obtained from different sources/ suppliers/. It is also
important to prevent the creation money. There are often three broad approaches to developing a
suitable codification / identification/ system N .Chapman 2008 pp. 257).These are:

1. Arbitrary approach

In this approach the item is received by stores in its receiving bay, a running and unique serial
number is assigned to it. This number becomes the code of the item for subsequent use at
different stages. Example: gggxxx as an items code. Arbitrary approach is suitable only where
perhaps items are non-respective and the inventory management need not be scientific.

2. Symbolic approach
Also known as intelligent code system it assigns code in a manner that the same items is not
allowed two different codes and also a code, because of its design can used to tell many thing
about an item. The system uses either numeric or mnemonic codification system , under
numeric system a set of numeric code (length pre decided) is assigned to each item where
different parts of code describe, of an items.

15
For example

Similarly , there can be code using alpha numeric value like AA22B234 with different alpha and
numerical value describing pre –decided meaning . It is also called mnemonic system. Symbolic
approach is a wide use everywhere.

3. Use of drawing numbers

In many firms using a complex drawing through which part, number etc are drawn, use their
drawing numbers as a codes to identify an item

2.15 Symptoms of poor inventory management

The following are the symptoms of poor inventory management (Agrowal, 2014, pp:

 Frequent lack of adequate storage space.

 High rate of costumer turn over and order cancellation.
 Increasing back order status.
 Increasing dollar investment in inventory with back order remaining constant.
 Deteriorating relationship with middle men as typified declined orders.
 Inventories rising faster than sale.
 Customer not satisfied inventory turnover too low.

16
 CHAPTER THREE

METHODOLOGY OF THE STUDY

3.1. Research design
Research design is the detailed plan of how the goal of the research can be achieve. Based on the
purpose of the research the searcher would used descriptive research design, because in this
method information was collected from an existing source by using questionnaires. The total
population of this study was the current employees of Sheikh Hasan Yabare referral hospital.
This includes 92 nurses, 38 midwifery, 20 laboratory technologists, 1 surgeon, 12 pharmacists,
19 anesthetists, 3 managers and other administrative staff of 200 employees and these total 385.

3.2. Type of sources of the data

To perform this study the researcher used both qualitative and quantitative data types. The
relevant data were obtained from both primary and secondary sources.

3.2.1. Primary data sources

The primary data was collected from employees of Sheik Hasan Yabare referral hospital through
questionnaires.

3.2.2. Secondary data sources

To conduct this study the researcher used secondary data sources which could be obtained from
books, documents, newspapers, magazines and internets.

17
3.3. Sampling Techniques
For the collection of primary data the researcher used simple random sampling techniques.
Simple random sampling is used to gather data from the employees randomly. It is a probability
techniques in which elements in the population has a known and has equal probability of selected
in the sample size. The sample size for this study was 58 from the total population of 385
employees. This sample size is determined based on the following sample determination formula
provided by (Kothari, 2004).

n= (Z) 2(p) (q) (N)/ (e) 2(N-1) + (Z) 2(p) (q)

Where: Z= confidence level= 90%=1.65

N= Total population = 385

E= Margin error= 10%=0.1

P= Probability of success=50%=0.5

Q= Probability of fail= 50%= 0.5

n= Sample Size=?

Thus: n= (1.65)2(0.5)(0.5)(385)/ (0.1)2(385-1)+(1.65)2(0.5)(0.5)=262/4.52=57.96

So, sample size (n) 58, employees are selecting randomly.

18
3.4. Method of data collection
In this study, both primary and secondary data collection methods were used. The primary data
collected through distributing questionnaires to the employees of Sheik Hasan Yabare referral
hospital. The secondary data was collected through review of company’s documents, books,
magazines, news paper, internet and etc.

3.5 . Methods of data processing and analyzing

After the data was properly collected from respondents it would be analyzed. To analyze this
relevant data the researcher used quantitative and qualitative data analyses method. Finally to
produce a valid research report a collected relevant data would be analyzed by using qualitative
data analysis for closed ended questions through descriptive static like tabulation.

19
 CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS

This section is concerned with analysis and interpretation of data that were gathered through
primary source. These data mainly analyzed and interpreted in the form of table computation,
percentage and summary format. The questionnaires were distributed for 58 employees who
were represent the total number of employees in Sheik Hasan Yabare referral hospital even
through the questionnaires were distributed for 58 employees, only 46 of them were respond in
appropriate manner. So, data analysis was based on employee’s response,

Table 4.1. Background information of respondents.

Item No Item Alternatives No of respondent Percentage

1 Sex Male 26 56.52%

Female 20 43.47%

Total 46 100%
2 Age 20-35 42 91.3%
36-45 2 4.34%
46-60 2 4.34%
Above - -
Total 46 100%
3 Education level 12th completed -
Diploma 10 21.74%
Degree 14 30.43%
Master’s 9 19.56%
Doctor’s 13 28.26%
Total 46 100%

20
 4 Work experience Less than 1 year 12 26%
1-5 years 26 56.52%
6-10 year 8 17.39%
Above - -
Total 46 100%

Source; Field Survey, 2019

According to the above table 4.1 out of 46 respondent, 26 (56.52%) of respondents were male,
20 (43.47%) were female. Regarding age of the respondents, 42(91.3%) of them were between
age 20-35, 2 (4.34%) were between age 36-45 and 2 (4.34%) were between age 46-60.
Regarding educational level 10(21.74%) were diploma, 14 (30.43%) were degree, 9 (19.56%)
were masters and 13 (28.26%) were doctors. Regarding work experiences of respondents 12
(26%) have less than 1 year work experience, 26(56.52%) have 1-5 year work experience and
8(17.39%) have 6-10 year work experience. These show, regarding sex majority of employee
were male, regarding age majority of employee were between 20-3 age, regarding educational
level majority of employee were diploma holder and regarding work experience majority of
employee have 1-5 work experience.

Table 4.2. Contribution of inventory for the organization

Item Item Alternatives No of respondent Percentage

No
5 Do you think inventory Yes 46 100%
have a substantial No - --
contribution for the
organization
Total 46 100%
Source: Field Survey, 2019

As shown in the above table 4.2, all of 46 respondents or 46 (100%) of respondents response that
inventory have a sustainable contribution for the organization.

21
Table 4.3. Availability of enough warehouses for inventories

Item Item Alternatives No of respondent Percentage

No
6 Does the organization Yes 30 75%
have enough ware house No 16 25%
for inventories
Total 46 100%
Source:Field Survey, 2019

As indicated in the above table 4.3 30(75%) of respondents said that the organization have
enough ware house for inventories and 16 (25%) of respondents said that the organization have
not enough ware house for inventories. This indicates that the organization have minimum
shortage of ware house for inventories.

Table 4.4. Inventories storage method

Item Item Alternatives No of respondent Percentage

No
7 How inventories are stored All items are 10 21.75%
within ware house stored within
ware house

Different items 36 78.26%

are stored at
different area of
store
Total 46 100%
Source: Employee questionnaire, 2019

22
As indicated in the above table 4.4, 10 (21.75%) of respondents said that all items are stored
within warehouse and 36(78.26%) of them ware said that different items are stored at different
areas of store.

This indicates that organization is mostly use different items at distinct store method. So the
organization keeps drugs of medical equipment in independent, separable and distinct storage
areas.

Table 4.5. Implementing rule procedures of inventory management

Item Item Alternatives No of respondent Percentage

No
8 How do you see your Very high - -
organization on applying High 16 34.78%
rules and procedures of Neutral 2 4.34%
inventory management Low 28 60.86%
Very low - -
Total Total 46 100%
Source: Field Survey, 2019

According to the above table 4.5, out of 46 respondents, 16(34.78%) of them said that the
organization was applied rules and procedures of inventory management, 2(4.34%) of
respondents that the organization being a neutral to apply rules and procedures of inventory
management and 28(60.86%) of respondent said that the organization was mostly not used rule
and procedures of inventory management.

Table 4.6. Counting and inspection of inventories

Item No Item Alternatives No of

respondent
9 Does the organization have implementing Yes 46 100%
counting and inspection of drugs and
No - -
medical equipment
Total 46 100%
Source:, Field Survey 2019

23
According to the above table 4.6, 46(100%) of respondent response that the organization
implementing counting and inspection of drugs and medical equipment. This indicates that the
organization was applied a regular counting and inspection of inventories therefore the
organization could clearly decide about when and how much order will required in the future.

Table 4.7. Frequency and inventory counting and inspection

Item No Item Alternatives No of respondent Percentage

10 How often inspection were Weekly - -
take place Monthly 4 8.69%
Semi–annual 30 65.21%
Annually 6 13%
Total 46 100%
Source: Field Survey, 2019

As indicate in the above table 4.7, out of 46 respondents, 4(8.69%) responded that the
organization was taken monthly inspection of inventory, 30 (65.21%) of respondent said that the
organization was taken semi- annually inspection of inventories and 6(13%) of respondent said
that the organization was taken annually inspection of inventories. This indicates that most of the
time the organization was taken semi- annually inspection of inventory, but according to the
nature of inventory, sometimes inspection were taken place in each monthly and annually.

24
 Table 4.8. Challenges of inventories management

Item No Item Alternatives No of respondent Percentage

11 What challenges of Complexity of ordering 4 8.69%
inventory management and stocking of an items
does the organization faces Difficulty of supplies 18 39.13%
performance
Scarcity of materials 20 43.47%
Damage of product or an 4 8.69%
items
Total 46 100%
Source: Field Survey, 2019

As indicate in the above table 4, 8, out of 46 respondents, 4 (8.69%) of respondents said that the
organization was challenging complexity of ordering and stocking of an items, 18 (39.13%) of
them respond that the organization was faced difficulty of supplier performance, 20 ( 43.47%) of
respondents said that the organization was faced scarcity of materials and 4(8.69%) of them was
said that the organization was faced difficulty of supplier performance, but sometimes it also
face the problem of complexity of ordering, stocking and damage of product.

Table 4.9. The practice of inventory management system

Item No Item Alternatives No of respondent Percentage

12 What inventories management Item inventory 24 52.17%
system does the organization uses management
Aggregate 22 47.82%
inventory
management

Total 46 100%
Source: Field Survey, 2019

As illustrated in the above table 4.9, out of 46 respondents, 24 (52.17%) of them respond that the
organization was used item inventory management while 22(47.82%) of them said that the

25
organization was use an aggregate inventory management. This indicates that the organization is
uses both item and aggregate inventory management, but it favors item inventory management
than aggregate inventory management.

Table 4.10. The replacement of inventories

Item No Item Alternatives No of respondent Percentage

13 Does the organization insure on Yes 46 100%
time replacement of drug and No - -
medical equipment

Total 46 100%
Source Field Survey:, 2019

As shown in the above table 4.10, all 46 (100%) of respondents respond that the organization is
replaced the required inventories within a specified time period. This indicates that when the
inventories when either consumed by the patient or deteriorated due to any factor, the
organization insure on time replacement of inventories.

Table 4.11. Respondents view regarding damaged and expired inventory

Item No Item Alternatives No of respondent Percentage

14 Does the obsolete, damage and Yes 46 100%
explained items are timely report No - -
to responsible bodies

Total 46 100%

Source Field Survey:, 2019

As indicated in the above table 4.11, 46(100%) of respondents said that obsolete, damage and
expired items are timely reports to responsible bodies. This shows that the organization is totally
out flows unwanted items timely.

26
Table 4.12. Storage system

Item No Item Alternatives No of respondent percentage

15 What type of storage system does Open store 16 34.785%
your organization uses Closed store 30 65.17%
Random access - -
store
Total 46 100%

Source: Field Survey 2019

As illustrated in the above table 4.12 16(34.78%) of respondents said that the organization was
used open store and 30(65.17%) of respondents said that the origination was used closed store
system. This indicates that most of time inventories are in and out flow through the permission
of inventory manager, but sometimes according to the nature of inventories the organization is
control in and out flow inventories through the open store system.

Table 4.13. Inventory management performance of the organization

Item Item Alternatives No of respondent Percentage

No
16 How do view the Very high 15 32.6%
performance of your High 16 34.78%
organization on drug and Neutral 10 21.73%
medical equipment Low 5 10.86%
Very low - -
Total 46 100%

Source: Field Survey, 2019

According to the above table 4.13,15(32.6%) , 16(34.78%), 10(21.73%) and 5(10.86%) of

respondents respond very high, high, neutral and low respectively . these indicates that the

27
organization is performing well in drug and medical equipment, but sometimes low performance
of the organization is seen on drug and medical equipment’s.

Table 4.14. Disposal of expired and scrap material.

Item No Item Alternatives No of respondent percentage

17 Does the organization dispose an Yes 38 82.6%
expired drugs and scrape material No 8 17.39%
timely

Total 46 100%

Source Field Survey:, 2019

According to the above table 4.14, out of 46 respondents 38(82.%) of respondents said that the
organization was dispose an expired drugs and scrap materials timely and 8(17.39%) of them
said that the organization does not dispose an expired and scrap materials timely . This indicates
that most of the time the organization was disposed expired and scrap material timely, but
sometimes if faces a problem to dispose them.

Table 4.15. Disposal method of expired and scrap materials

Item No Item Alternatives No of respondent Percentage

18 By what method capered scrap By 23 50%
material disposed classification
By codification 23 50%

Total 46 100%

Source: Field Survey, 2019

As indicated in the above table 4.15, out of 46 respondents 23(50%) of respondents said that the
organization was use classification and also 23(50%) of them said that the organization was used

28
codification. This shows that the organization is use both codification and classification system
equally to dispose unwanted items.

Table 4.16. The availability of computerized inventory recording system

Item No Item Alternatives No of respondent Percentage

19 Does the organization`s inventory Yes 40 86.95%
management system was assigned No 6 13%
by the computer

Total 46 100%
Source: Field Survey 2 019

From the above table 4.16, we understand that, out of 46 respondents 40(86.95%) of them said
that the organization`s inventory management system was assigned by computer and 6913%) of
respondents said that it was not assigned by computer. This indicates that the organization has a
computerized inventory recording system as many respondents respond, but, there may be a
problem of inventory recordings through computer.

29
 CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
5.1. Summary of findings
 Regarding with the contribution of inventory 100% of respondents said that inventories
has their contribution to the organization.
 Concerning to warehouse 75% of respondents answered that the organization has enough
warehouse for inventories.
 Regarding to inventory storage methods 78.26% of respondents responds said that the
organization used different items at different areas of store.
 Concerning with inventory management rule procedure 60.86% of respondents respond
that the organization is low to apply rules and procedures of inventory management.
 Regarding to counting and inspection 100% of respondents answered that the
organization performs regular counting and inspection of inventories.
 Concerning with frequency of counting and inspection 65.21% of respondents said that
inventories that were counted and checked in semi-annually interval.
 Regarding to challenges of inventory management 43.47 % of respondents said that the
organization faces scarcity of materials.
 Concerning inventory management system 52.17% of respondent’s respond that the
organization was used item inventory management system.
 Concerning with replacement of inventories 100% of respondents said that inventories
were replaced timely.
 Regarding to reports of damaged and expired inventories 100%of respondents said that
damaged and expired items are timely report to responsible bodies.
 Concerning with types of storage system 65.17% of respondents respond that the
organization used closed system.
 Concerning with the inventories management performance 34.78% of respondents
respond that the organization has a high inventory management performance

30
  Regarding to dispose of expired and scrap materials 82.6% of respondents respond that
the origination was disposed expired scrape material timely
 Concerning with disposal method of expires escape material 50% , 50% of respondent
said that the organization used both classification and codification system respectively
 Concerning with the assistance of computer 86.95% of respondent said that inventory
management system of the organization was assigned by computer.

5.2 Conclusions
Inventory management is one of the crucial elements that enable organization to provide
smooth and uninterrupted service for the society. The study has been concluded the research
major findings as follow.
 Regarding to respondent background information most of employees are young and found in
productive age most of them are diploma holder and degree holder and have 1-5 years work
experience
 This implies that most of employees could easily understand questionnaires and also they
have at least one year work experience, so they are familiar with inventory management
practice.
 Based on the major findings mostly inventories were stored in separate distinct house. This
helps to clear counting and inspection of material seen through most of the time inventories
are stored in distinct area sometimes the organization stores all items at a center store
method. At this in order to easily count and identification each type of inventories from a
center store the organization on forced to use both codification and classification system.
 According to major findings inventories inspection were taken place in semi-annual interval.
This implies that by considering the effect of deterioration and expired drugs has on the
health of society ,organization strictly control in and out going of drugs medical equipments
through via implementation of closed store sea stem.
 Based on the major findings the organization insures on time implementation of drugs and
medical equipments. Through on time replacement of drug and medical equipments the
organization enables to offer consistent health care service to the society. On time counting
replacement of inventories help to overcome sock out problem, which arise due to shortage
of required inventories. From this

31
 This implies that by considering the effect of deterioration and expired drugs has on the
health of society ,organization strictly control in and out going of drugs medical equipments
through via implementation of closed store sea stem.
 Based on the major findings the organization insures on time implementation of drugs and
medical equipments. Through on time replacement of drug and medical equipments the
organization enables to offer consistent health care service to the society. On time counting
replacement of inventories help to overcome sock out problem, which arise due to shortage
of required inventories. From this

2.3. Recommendation
 After the above observation the following idea could be provided as recommendation for
effective inventory management to be implemented in Asella referral hospital.
 Warehouse is the great aspect of inventory management that the manager of inventories
should have give advice for employees to give considerable attention to store inventories.
Appropriate store management play a vital role to the performance of business operation.
 More over to improve inventory management performance and to reduce cost associated with
inventories it is advisable to hiring qualified personnel in the arias of inventory management.
 Classification of inventory is important to eliminate duplication of items in warehouse and to
achieve a physical control of inventories. The codification and classification of are advisable
to account the functions and technical nature of materials. The organization was used
deferent items at the distinct store method. Due the separate layout materials these storing
methods help the organization to easily count, check and identify individual items. These
methods enable organization to perform effective inventory inspection. Even though this
enable to perform effective counting, identification and inspection of materials it needs many
warehouse for each unique group of inventories which require high amount of capital. On the
contrary, if the organization applies all items at a center store method it enables the
organization to reduce inventory cost. But it difficult easily counts, check and identifies the
required items from collectively stored over all inventories. However this problem is solved
by classification, identification and by frequent regular inspection. So it is better to the
organization if it apply all items at a center store method.

32
 The availability of adequate inventory enables organization to deliver uninterrupted service
to the society. Providing effective service requires the availability of excess amount of
inventories. As result some inventories would be deteriorate, obsolete and expired. In order
to remove these unwanted inventories, the organizations sometimes use fire and burn them.
Drugs by its nature composed from so many chemicals, so burning drugs causes’ air
pollution. These directly affect health and safety of the society and environment. Therefore it
is better to the organization to find other less risky disposal method such as putting under the
ground.

33
 REFERENCES

 Agrawa (2014) , Production and Operation Management 5thed , Dilshad garden, New
Delhi
 Ahuja, R. (1999) Principle of Material Management 3rd ed New Delhi
 Ak Datta, (1998) , Material Management 2nded New Delhi
 Dobler M and Burt (1999) Introduction to Material Management, 4thed New Delhi
 Jacobos F.R (2011), Manufacturing, Planning and Control for Supply Chain Management
4thedNewwork Mc Graw hill.
 J.Elbert(2003), Production and Operation Management,5thed New delhi
 J.R Tony Arnold, Stephen N and Chapman (2004) Introduction to Material Management
5thed New Delhi
 Kitheka Samson Samuel (2014) International Journal of Research in Management and
Business Studies ( ISMBS), University of Nairobi
 Mark M. Daviis, Nicroholas J Aquiline and Rechard B Chase (2003) Fundamental of
Operation Management 4th ed Mc Graw Hill.
 N.Chapman and M.Clive (2008) Material Management 6th ed , Kindersly,India
 P. Gopalakrishan (2011) , Handbook of Material Management, EEE, ( Eastern Economy
Edition)
 R- Peterson (1998) Decision System For Inventory and Material 4thed New York
 Shailendra kale (2013), Oroduction and Operation Manaegwement, 6thed , Green park
Extension, New Delhi.
 Silver E (1998), Decision System for Inventory Management and Production Planning
and Control, 3rded, New York Wiley
 Tersine R.J (1994) Principle of Inventory and Materials Management, 4thed New York,
North Holland.
 Wild T. (1995), Best Practices Inventory Management 5thed, New York
 Zip kin P.H (2000) Foundation of Inventory Management, 6th, New York (Irwin), Mc
Graw Hall

34
 APPENDIX
ARSI UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF MANAGEMENT

QUESTIONARIES FILLING BY EMPLOYEES OF

ASELLA REFERRAL HOSPITAL

Dear respondent;

First of all we would like to express our deepest thanks for your participation about the
organization. The purpose of this questionnaire is to collect data for the study about challenges
and prospect of inventory management in case of Asella referral hospital. Responding to these
questionnaires will not create any harm. Therefore you are kindly requested to respond
confidentially when you are asked.

Instruction

 No need of writing your name.

 For closed ended questions give your answer by putting mark “x” on the space
provided.
 Please, careful and answer questions according to they asked.
Part one; personal information

1. Sex; A. Male B. Female

2. Age A. 20-35 B. 36-45 C.46-60 D. Above .

3. Educational level; A. Diploma B. Degree C. Master’s D. Doctor’s

4. Work experience; A. Less than 1 year B.1-5 Years C. 6-10 Years

D. Above

35
 Part two; questionnaires related to title of the study
5. Do you think inventory have a substantial contribution to the organization?
A. Yes B. No

6. Does the hospital have enough warehouses for all inventories?

A. Yes B. No
7. If your answer is yes in question number ‘2’ how inventories are stored within
warehouse?
A. All items are stored within warehouse
B. Different items are at the distinct area of store
8. How do you see your organization on Applying rules and procedures of inventory
management?

A. Very high B. High C. Neutral D. Low E Very low

9. Does the organization implement counting and inspection of drugs and medical
equipments?
A. Yes B. No
10. If your answer is yes in question No ‘5’ how often inspection were taken place?

A. Weekly B. Monthly C. Semi-annual D. Annually

11. What challenges of inventory management does the organization faces?

A. Complexity of ordering and stocking of items
B. Difficulty of supplier performance
C. Scarcity of material
D. Damage of products (an item)
12. What inventory management system does the organization uses?
A. Items inventory management
B. Aggregate inventory management
13. Does the organization insure on time implementation of drugs and medical equipments?
A. Yes B. No
14. Does obsolete, damage and expired items are timely report to responsible bodies?
A. Yes B. No
15. What type of storage system does your organization uses?

A. Open store B. Closed store C. Random In access store

16. How do you view the performance of your organization on drug and medical equipment?
A .Very high B .High C. Neutral D. Low E. Very low

36
17. Does the organization dispose an expired drugs and scraps material timely?
A. Yes B. No
18. If your answer is yes in question number ‘13’ by what method it disposed?
A. By classification B. By codification
19. Does the organization’s inventory management system was assigned by the computer?
A. Yes B. No

37