The Effect of Inventory Management Strategies on Business Growth in Manufacturing Companies: A Case of Gisakura Tea Factory Ltd
DOI:
https://doi.org/10.53819/81018102t2382Abstract
This study assesses the effect of inventory management strategies on the business growth on manufacturing companies in Rwanda especially at Gisakura tea factory ltd. determining the effect of demand forecasting, establish the effect of lead time, examining the effect of reorder and analysing the effect of safety stock, on business growth in Gisakura Tea Company, from 2020 up to 2023. The literature review defined key concepts and developed conceptual review, theoretical review, empirical review and conceptual framework regarding the effect of inventory management strategies on business growth. This study was conducted on 102 staff members of Gisakura Teak Factory, who were purposively selected due to their small number to respectively answer to questionnaire for data collection to be descriptively and correlatively analysed, with the help of SPSS computer packages, version 20. A mixed survey design, being both descriptive and correlative, was used in this study where, in the inventory management strategies and business growth, this study involved gathering and analyzing data to describe the current state of invetroy management strategies and correlate it with the business growth within a company. The study revealed that the demand forecasting with (β=0.506; p=028); lead time with (β=-0.512; p=024); reorder point with (β=0.906; p=011) and safety stock with data (β=0.840; p=018) indicated its significant positive effects on various aspects of business growth in Gisakura Tea Company Ltd, including contributing to customer retention rates, impacting Net Promoter Score (NPS), and enhancing a reliable and customer-centric brand. Consequently, the study concluded that inventory management strategies positively affect the business growth in manufacturing companies in Rwanda. Therefore, it was recommended, particularly focusing on Gisakura Tea Factory, to invest in cutting-edge demand forecasting techniques. This includes the incorporation of predictive analytics, machine learning algorithms, and thorough analysis of historical data, to optimize it supply chain processes for efficient lead time management, to avoid overstocking, as this can tie up capital and lead to issues such as product obsolescence, and to invest in comprehensive training programs to educate their staff about the holistic impact of inventory management on business growth.
Key words: Demand Forecasting, Lead Time, Reorder Point, Safety Stock And Business Growth
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