TABLE OF CONTENTS
DECLARATION ............................................................................................................................. i
APPROVAL ................................................................................................................................... ii
DEDICATION ............................................................................................................................... iii
ACK.NOWLEDGEMENT ............................................................................................................. iv
TABLE OF CONTENTS ................................................................................................................. v
LIST OF TABLES ......................................................................................................................... xi
LIST OF ACRONYMS ................................................................................................................ xii
ABSTRACT ................................................................................................................................. xiii
CHAPTER () NE ............................................................................................................................ l
INTRODUCTION AND BACK GROUND TO THE STUDY .................................................. !
1.0 Introduction ................................................................................................................................ I
1.1. Background to the study ........................................................................................................... 1
1.2 Statement of the problem ........................................................................................................... 3
1.3 Purpose of the study ................................................................................................................... 4
1.4 Objectives of the study .............................................................................................................. 4
1.5 Research questions - .................................................................................................................. 4
1.6.0 Scope of the study ................................................................................................................... 4
1.6. l. Conceptual scope ................................................................................................................... 4
1.6.2. Geographical scope ................................................................................................................ 5
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1.6.3 Tiine scope .............................................................................................................................. 5
1.7 Significance of the study ............................................................................................................ 5
1.8 Definition of key terms ...... , ....................................................................................................... 5
CHAPTER rfWO ........................................................................................................................... 7
LITERArfURE REVIEW ............................................................................................................. 7
2.0 Introduction ................................................................................................................................ 7
2.1 Definition of key variables ......................................................................................................... 7
2.1.1 The concept of inventory control. ........................................................................................... 7
2.1.2 The Concept ofperfonnance .................................................................................................. 8
2.2 The reasons for holding inventory ........................................................................................... 10
2.3 Techniques of inventory control. ............................................................................................. 16
2.3.1 Leeders/fearon (1997), points out purchasing systems as one of the techniques of
controlling inventories ................................................................................................................... 16
2.3.2 Determining order quantities and inventory levels is another technique .............................. 16
2.3.3 The optin1un1 111odel .............................................................................................................. 16
2.3.4 Periodic review system/ topping- up system ........................................................................ 17
2.3.5 Material requirements planning (MRP I) .............................................................................. 17
2.3.6 Manufacturing resource planning (MRP II) ......................................................................... 17
2.3.7 Enterprise resource planning (ERP) ..................................................................................... 18
2.3.8 Just in Time Purchasing Emerges ......................................................................................... 18
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2.3.9 Inventory recording technique; ............................................................................................. 19
2.3.10 Inventory 1nodels; ............................................................................................................... 19
2.3 .11 Trial and error technique; .................................................................................................... 20
2.3.12 Two Bin Syste111; ................................................................................................................ 20
2.3 .13 ABC-Analysis 1nodel; ......................................................................................................... 20
2.3.14 The Economic Order Quantity (EOQ) technique ............................................................... 20
2.3.15 VED analysis ...................................................................................................................... 21
2.4 The relationship between inventory control and organizational performance ......................... 22
CHAP'fER 11IREE ..................................................................................................................... 28
METHODOLOGY ...................................................................................................................... 28
3.0 Introduction .............................................................................................................................. 28
3.1 Research Design ...................................................................................................................... 28
3.2 Study Population ...................................................................................................................... 28
3.3 Sa1nple size .............................................................................................................................. 29
3.4 San1pling Technique ................................................................................................................ 30
3.5 Source of Data ......................................................................................................................... 30
3.5.1 Prin1aryData ......................................................................................................................... 30
3.5.2 Secondary Source ................................................................................................................. 30
3.6 Data Collection Methods ......................................................................................................... 30
3.6.1 Interviewing .......................................................................................................................... 31
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3.7 Research Instru111ents ............................................................................................................... 31
3.7.1 Questionnaires ...................................................................................................................... 31
3.7.2 Focus group discussion ...................................................................................................... 32
3.7.3 Observation ........................................................................................................................... 32
3.8 Reliability and validity of research instrument.. ...................................................................... 32
3.9 Procedure of Data Collection ................................................................................................... 32
3.10 Data Analysis and Management ............................................................................................ 33
3.11 Ethical Consideration ............................................................................................................. 33
3.12 Limitations of the study ......................................................................................................... 33
CHAPTER FOUR: ...................................................................................................................... 35
PRESENTATION, INTERPRETATION AND ANALYSIS OF FINDINGS ....................... 35
4.0 Introductions ............................................................................................................................ 35
4.1 Background information of the respondents ............................................................................ 35
4.1.1 Gender of respondents ......................................................................................................... .35
4.1.2 Age Brackets of respondents ................................................................................................ 36
4.1.3 Academic background of respondents .................................................................................. 36
4.1.4 Department of the respondents ............................................................................................. 37
4.2 Inventory management practices used by Gulu Independent Hospital.. .................................. 37
4.2.1 Up-to- date stores records ..................................................................................................... 38
4.2.2 Stock plan ............................................................................................................................. 39
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4.2.3 Proper accounting records .................................................................................................... 39
4.2.4 Surprise checks ..................................................................................................................... 40
4.2.5 Proper stores management .................................................................................................... 40
4.3. Contributions of inventory management to organizational performance .............................. .41
4.3.1 Inventory planning and scheduling ...................................................................................... .42
4.3.2 llnproved procureinent. ......................................................................................................... 42
4.2.3 Cost reduction ....................................................................................................................... 43
4.3.4 Effective stores management and internal coordination ...................................................... .43
CHAPTER FIVE ......................................................................................................................... 45
DISCUSSION, CONCLUSION AND RECOMMENDATIONS ........................................... .45
5.0 Introduction ........................................................................................................................ 45
5.1 Discussion .......................................................................................................................... 45
5.1.1 Inventory management practices used by Oulu Independent Hospital... ............................. .45
5.1.2 Contributions of inventory management to organizational performance ......................... .47
5.2 Conclusion ............................................................................................................................... 48
5.3 Recon1111endations .................................................................................................................... 49
5.4 Areas of Further Research ....................................................................................................... 50
APPENDICES ............................................................................................................................... 52
APPENDIX A: ............................................................................................................................... 52
QUESTIONNAIRE FOR STAFF OF OULU INDEPENDENT HO SPIT AL .............................. 52
ABSTRACT The research study focused on the inventory management and organization performance in Gulu Independent Hospital in Gulu District. The study was guided by the following objectives: 1. To analyze the inventory management practices used by Gulu Independent Hospital. ii. To find out the methods used in performance measurement and its contributions to organization's performance. 111. To find the importance relationship between inventory management and organization's performance to Gulu Independent Hospital. The study used a descriptive survey method. By use of simple random sampling, I 00 respondents from the departments of store, purchasing, top management and others were selected from the area of study. From each depaiiment respective officers took part in the study. In all a total of l 00 respondents took part in this research study. The study used closed ended questionnaires to collect data. The study reveals that Gulu Independent Hospital holds stock that is used to satisfy current and future needs of the people of Gulu Independent Hospital. The district carries out monthly stock taking of items in stores and stock is inspected for quality and right speci lkations. The methods that are used by Gulu Independent Hospital to manage inventory are stock valuation where by the system used FIFO to record the value of the stock that is held at a particular period for accountability purposes and writing of final accounts to be submitted to the Ministry of Health . The organization has a strong data centre for its stock such as receipts, invoices which help in keeping record of all the relevant prices so as to carry out a stock valuation. Basing on the findings, Inventory management helps organizations to cut clown costs incurred by an organization. It can therefore be concluded that inventory management practices are related to performance of an organization, corporation or business as regards service delivery From the findings, it was evident that inventory management leads to efficiency and effectiveness by avoiding over stocking and under stocking. To ensure this stock taking is carried out to determine the stock levels and hence determine the organizations worth. It also helps to determine the balance of stock and check for any variances and make reconciliations to make sure that the physical stock corresponds with what is within the records. This helps management to detect for any variations and consider possible solutions to solving these problems.