Effects of Inventory Management Policy Practices on the Financial Performance of Gas Manufacturing Companies, Africa

Abstract

Inventory management is a major determinant of effective and efficient work for managers in gas manufacturing organization. This study looked at the effects of inventory management practices on the financial performance of gas manufacturing companies in Africa. The population of the study comprises of gas manufacturing companies in Africa whereas the sample of the study targeted both private and public gas manufacturing companies in the different countries. The scope of the study covered the period from 2010 to 2020. Descriptive statistics, regression analysis and Pearson correlation coefficient were used in analyzing data. The finding of the study shows that there is a positive significant relation between inventory management and the company’s financial performance. The higher the levels of inventory that a firm keeps the lower the financial performance due to incurring high carrying costs. Based on the results, it was recommended that the companies should keep adequate inventories in their warehouse to avoid overstocking or understocking of inventory.