EFFECTIVENESS OF INVENTORY MANAGEMENT ON PROFITABILITY OF MANUFACTURING COMPANIES
Abstract
This study investigates the effectiveness of inventory management on the profitability of manufacturing companies. Inventory management plays a crucial role in ensuring the availability of raw materials and finished goods while minimizing costs. The study adopts a descriptive research design using secondary data from manufacturing firms and relevant literature. Key inventory management practices such as Economic Order Quantity, Just-in-Time systems, and stock control techniques were examined. Findings reveal that efficient inventory management significantly improves profitability by reducing holding costs, minimizing waste, and enhancing operational efficiency. Conversely, poor inventory practices lead to increased costs and reduced profit margins. The study concludes that effective inventory management is essential for sustaining profitability in manufacturing companies.
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