THE EFFECTS OF INVENTORY MANAGEMENT ON THE PERFORMANCE OF PHARMACEUTICAL SHOPS IN THE BUEA MUNICIPALITY OF CAMEROON

Abstract

Inventory constitutes majority of current assets of small businesses such as bakeries, fast food/eateries, chain stores, Pharmaceutical shops and furniture making firms. Small businesses need to understand the true costs associated with inventory management and poor inventory productivity so as to be able to review the benefits of alternative approaches. The objective of the study was to examine the effect of inventory management on performance of small businesses in the pharmaceutical sector with the case of Pharmaceutical shops in the Buea municipality in Cameroon. The study used a descriptive research design. The population consists of all Pharmaceutical shops operating in the Buea municipality. The study used a census study. Data for the study were obtained through the administration of a self-designed questionnaire to the pharmacists, workers and accountants of the Pharmaceutical shops. A linear regression analysis was conducted to test each objective established for the study. Findings of the study reveal that inventory Planning, organizinghad a significant positive relationship with financial performance of Pharmaceutical shops while inventory control had no significant effect on the performance of Pharmaceutical shops. The study also reveals that there is a negative relationship between inventory management and customer satisfaction. The study concludes that inventory management has a great role to play in the financial performance of Pharmaceutical shops. Hence firms' inventory systems must maintain anappropriate inventory levels to enhance profitability and reduce the inventory costs associated with holding excessive stock in the warehouses.