Effect of inventory management practices on performance of small and medium-scale Entreprises in the cape coast metropolis

Abstract

This study examined the effect of inventory management practices on the performance of small and medium-scale enterprises in the Cape Coast Metropolis. The study adopted the descriptive and correlational study designs and used the proportional stratified sampling technique to select 341 small and medium enterprises in the Cape Coast Metropolis, who served as sample size for the study. Respondents constituted owners/managers of SMEs. Questionnaires were designed based on past empirical studies and data collection was aided by enumerator. The data collected were analysed using descriptive statistical tools (frequencies, percentages, mean scores) as well as inferential statistics (Pearson’s correlation coefficient, regression analysis)using SPSS for windows, version 21.The findings revealed that SMEs in the Cape Coast Metropolis apply information technology, lean inventory systems and strategic suppler partnership in their firms. Also, inventory management practices had a positive and significant relationship with the performance of SMEs in the Cape Coast Metropolis. Finally, there was positive effect of inventory management practices (information technology, lean inventory system, strategic supplier partnership) on the performance of SMEs in the Cape Coast Metropolis. The study recommended that the state agencies that seek the welfare of SMEs, for instance, NBSSI and Ghana Chamber of Commerce should encourage owner/managers of small and medium sized enterprises to embrace inventory innovations in order to generate long term stability and for the firm to have competences.