The effect of inventory management on Company Performance Reference to Listed Manufacturing Companies in Sri Lanka

Author(s)

HH Dedunu , IMS Weerasinghae ,

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Volume 7 - July 2018 (07)

Abstract

Inventory management is generally recognized to be of sufficient importance to warrant the appointment of a person to carry specific responsibility for it .The study investigated the relationship between company performance and inventory management. The researcher used inventory days as a dependent variable and gross profit and net profit as an independent variable. Now a days most of companies highly consider about inventory management some of the organization implement different tool such as JIT some are applied ERP, SAP systems to control their  inventory efficiently and effectively hence the study employed descriptive analysis, correlation analysis and regression analysis using STATA package to investigate effect of inventory management, on the listed manufacturing company performance. According to the analysis result in the researcher identified inventory management and gross profit had a positive relationship, net profit had a nethe gative relationship and inventory management significantly affect to gross profit margin and net profit margin. Hence organizations have to take a correct the decision regarding the inventory management administrative cost and another relan evant cost to increase the performance of the organization.

Keywords

Inventory Management, Financial Performance, Listed Manufacturing Company

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