Inventory Control System and Profitability of Companies: A Study of Selected Listed Firms in Nigeria
Keywords:
Keywords: Inventory Management, Profitability.Abstract
ABSTRACT
Inventory management is critical to a company's efficient operations. Inventory management is a crucial aspect of profitability. The purpose of the study was to determine the impact of inventory management on the profitability of two (2) industrial goods firms listed on the Nigerian Stock Exchange. The independent variable (Inventory Management) was measured using opening inventory, closing inventory and average inventory. The dependent variable (Firm Profitability) was measured using Profit After Tax gathered for the study for a period of 5 years (2015-2019), was analysed using descriptive statistics, correlation analysis and ordinary least square method. The results of the study showed that inventory management had a significant effect on Profit After Tax. Therefore, the study recommends that in order for companies to improve on their Net Profits as a measure of profitability, they should implement strategies in order to improve their inventory management systems.
Keywords: Inventory Management, Profitability.
References
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Anisere-Hameed, R., & Bodunde, T. D. (2021). The Impact Of Inventory Management On The Profitability Of Manufacturing Companies In Nigeria. International Journal of Innovative Research and Advanced Studies (IJIRAS) 8(1), 9-15.
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Banjoko., S. A. (2004). Production and Operations Management, . Ibadan: Oluseyi Press Limited.
Barney, J., Wright, M., & Ketchen Jr, D. J. (2001). The resource-based view of the firm: ten years after 1991. Journal of management, 27(6),, 625-641.
Boruah, B. G. (2020). Inventory Management and Profitability: A study of Numaligarh Refinery Limited, Assam. Journal of Critical Reviews 7(9), 3200-3206.
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Gencer, Y. G. (2018). Modern Inventory Control Policies for Appliance Firms.
George, E. (2019). A study on the impact of inventory management on profitability of firms with special reference to steel industry. International journal of basic and applied research 9(5), 756-762.
Gokhale, P. P., & Kaloji, &. M. (2018). A Study on Inventory Management and Its Impact on Profitability in Foundry Industry at Belagavi, Karnataka. International Journal of Latest Technology in Engineering, Management & Applied Science , 29-31.
Golas, Z. (2020). The Effect of Inventory Management on Profitability: Evidence From The Polish Food Industry. Agricultural Economics Czech 66, 234-242.
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Hanson, O. Y., Ackah, D., & Agboyi, M. (2015). . Assessing the impact of efficient inventory management in on organization. International Journal of Advanced Research in Computer Science and Software Engineering, 5(8),, 86-103.
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Kolawole, A. D., Akomolafe, A. B., & Olusipe, B. J. (2019). Inventory management: An impetus for increased profitability in manufacturing firms. International Journal of Accounting, Finance and Risk Management, 4(4), 1-6.
Kootanaee, A. J., & Nagendra, B. &. (2013). Just-in-Time Manufacturing System: From Introduction to Implement. International Journal of Economics, Business and Finance, 1(2),, 7-25.
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Kumar, R. (2016). Economic order quantity (EOQ) model. Global Journal of finance and economic management, 5(1), , 1-5.
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Mbah, S., Obiezekwem, J., & Okuoyibo, A. (2019). Inventory Management and Operational Performance of Manufacturing Firms in South-East Nigeria. International Business Research 12(7), 76-82.
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