Inventory Management of Groceries

A STUDY INTO THE EFFECTIVENESS OF INVENTORY MANAGEMENT AT CLINOID SUPERMARKET.

COMPILED BY

Tatenda Mvura

1.0 Introduction

This chapter gives the background to the research and the statement of the problem that motivated the researcher to embark on the study. The research objectives are also outlined in this chapter .The research questions derived from the objectives and key assumptions are also discussed. Significance of the study is outlined together with the delimitation of the research .Definition of terms provides contextual explanations for some key terms used in the research. The challenges faced during the study are accounted for under the limitations section.

2.1 Background of study

The term inventory is used to indicate raw materials ,work in progress and the finished goods . (Saleemi, 1997). Inventory management is the function of planning , controlling and maintaining the right quantity of materials using the minimum level of resources. Inventory management aims at efficient purchasing , storage and use of the materials (Nair, 2003). Inventory management involves ensuring a constant supply of stock to avoid stock out and have uninterrupted sales and efficient customer service , maintaining sufficient stock, controlling investment in inventories by keeping at an optimum level of production while minimizing carrying costs and time (Pandet , 1995). The objective inventory management is to ensure sufficient level of stock which maintains an acceptable level of available demand while minimizing the related holding , administrative and stock out cost (Foulks ,2004). Several activities are undertaken with in the sphere of inventory management, these include stock control.

There is a huge relationship between inventory management and profitability level, this indicates that if inventory management is poor the profits levels are reduced due to loss of money in breakages, theft and stock out.(Pandey ,1995).Profits are the desired...