The effects of inventory management on sales performance in small and medium enterprises (smes): a case study of Lyalabbisi farm supply limited

Abstract

The study examined inventory management and sales performance. The objectives of the study includes; the effects of material planning on sales performance, the effects of stock levels on sales performance, and the effects of inventory management on sale performance in SMEs. The researcher used a quantitative cross sectional survey design during data collection and secondary sources such as text books, journals, magazines, internet, reports and conference proceedings. The study also reveals empirical and theoretical literature on the variable of the topic of study. Findings indicated that there are effects of inventory management on sales Performance in small and medium enterprises (SMEs). The researcher recommends that Lyalabbisi Farm Supply Limited should forecast market for its products so that it stocks enough inventories to avoid under stocks, fix the stock levels to avoid inadequate stocks or stock outs; minimize its inventory expenses by using skilled labour, increase its sales by widening the market for its products, identify the order quantity that minimizes total cost of stock holding, stock ordering and purchase costs in order to maximize profits, put into consideration inventory management when planning for better profits in the coming years; and minimize the cost of production as lowest as possible. Therefore inventory management must be emphasized in Lyalabbisi Farm Supply Limited as a way of improving sales performance of the company and raising its profitability. This should be done by sensitizing inventory management in the company that is to say making sure all employees understand inventory management and its importance to the company.