Inventory Management and Profitability of Companies in Kampala: A Case Study of Mega Standard Supermarket
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Date
2014-05
Authors
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Publisher
Kampala International University, College of Economics and Management
Abstract
The major aim of this research was to find out the relationship between inventory
management and profitability of companies. The research topic was "Inventory
management and profitability of Companies in Kampala" A Case study of Mega
Standard Supermarket. The objectives of the study were; to examine the inventory
management practices used in Mega standard Supermarket, to examine the factors
affecting profitability of Mega standard Supermarket and to study the relationship
between inventory management and profitability of Mega standard Supermarket.
Cross sectional and correlational research designs were used. The researcher
applied purposive sampling on 70 employees from Mega Standard Supermarket who
constituted the survey population. To achieve the objectives, the researcher collected
data from both primary and secondary sources. Primary data was obtained from
respondents through questionnaires and interviews while secondary data was
obtained using existing literature like books, magazines, brochures, journals and
internet. Data from the field was analyzed using frequencies and percentages. The
data was also edited, coded and well arranged in order to ensure accuracy and
completeness.
According to the research findings, the researcher discovered that most factors
examined had a negative impact on profitability of the company. The factors included
cost of acquiring raw materials, tax liability on the profits and cost of production.
Profitability of Mega Standard Supermarket was mainly affected by high costs of
acquiring raw materials, high tax liability on profits, low productivity per employee and
increasing cost of production. It was also established that there is a positive
relationship between inventory management and profitability of companies. This
implied that the more effort Mega Standard Supermarket channels towards improving
the inventory management practices, the higher will be its profits.
One of the recommendations was that management of Mega Standard Supermarket
should understand all the factors that affect profitability of the company and then
come up with feasible measures and solutions for each. This will help to maintain
high profits in the company.
Description
A Research Report Submitted to the College of Economics and Management in Partial Fulfillment of the Requirements for the Award of the Bachelors Degree in Business Administration of Kampala International University
Keywords
Inventory Management, Profitability, Companies, Mega Standard Supermarket