Inflation and cost of production in manufacturing industries in kampala uganda: a case study of mukwano industries ltd

Abstract

The study aimed at assessing the effect of Inflation on the cost of production in manufacturing industries, case study being Mukwano Industry in Kampala City along Jinja Road. The study was mainly looking at inflation and cost of production of Mukwano industry and if this was effective to the industry. During the research a cross sectional research design with both qualitative and quantitative methods with a population study of 600 employees out of which a sample size of 240 employees was chosen. Stratified sampling design was used to divide the employees into strata which were departments under which the employees worked and they included operational and production departments alongside the marketing department. Using simple random sampling respondents were chosen from the different department selected and questionnaires distributed to the selected respondents from the two major departments in the industry. Both the primary and secondary data was used during collection of data. Data was collected by use of questionnaires and observation methods and analyzed in form of tables. Findings revealed that the cost of production in Mukwano has been escalating due to unpredictable values of inflation in the economy. There was a strong relationship between inflation and cost of production, this was shown in that whenever the figures of inflation went up the cost of raw materials increase, employees demand more wage to meet the cost of living and this eventually increases cost of production which is then reflected in the price of the final product to be met by the consumers.