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The impact of efficient inventory management on profitability: evidence from selected manufacturing firms in Ghana

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  • Prempeh, Kwadwo Boateng

Abstract

Given the important contributions of the manufacturing sector to the Ghanaian economy, this research deems it necessary to evaluate the impact of efficient inventory management on the profitability of manufacturing firms in Ghana. A cross sectional data from 2004 to 2014 was gathered for the analysis from the annual reports of four manufacturing firms listed on the Ghana Stock Exchange. Measures of profitability were examined and related to proxies for efficient inventory management by manufacturers. The Ordinary Least Squares (OLS) stated in the form of a multiple regression model was applied in the analysis. The study revealed that the main variable raw materials inventory management designed to capture the effect of efficient management of raw material inventory by a company on it’s profitability is significantly strong and positive and impacts on the profitability of the manufacturing firms in Ghana. Therefore, efficient management of raw material inventory is a major factor to be considered by Ghanaian manufacturers in enhancing or boosting their profitability.

Suggested Citation

  • Prempeh, Kwadwo Boateng, 2015. "The impact of efficient inventory management on profitability: evidence from selected manufacturing firms in Ghana," MPRA Paper 67889, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:67889
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    File URL: https://mpra.ub.uni-muenchen.de/67889/1/MPRA_paper_67889.pdf
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    References listed on IDEAS

    as
    1. Dimitrios P. Koumanakos, 2008. "The effect of inventory management on firm performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 57(5), pages 355-369, June.
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    Cited by:

    1. Kwadwo Boateng Prempeh Godfred Peprah-Amankona, 2020. "Does Working Capital Management Affect Profitability of Ghanaian Manufacturing Firms?," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 23(1), pages 1-18, May.
    2. OMODERO, Cordelia Onyinyechi & JOSEPH, Fineboy Ikechi & OKEZIE, Uzochi Chinkata, 2019. "Inventory Control Management And Revenue Generating Capabilities Of Oil And Gas Drilling Firms In Nigeria," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 19(4), pages 75-95.

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    More about this item

    Keywords

    Manufacturing firms; inventory management; Ghana Stock Exchange; profitability;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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