The Effect of Inventory Forecasting on The Performance of Fast-Moving Consumer Goods Manufacturing Firms in Kilifi County, Kenya

Inventory forecasting practices are pivotal for FMCG manufacturing firms in Kenya’s competitive market in order to improve their operational performance. The fast-moving consumer manufacturing firms have been experiencing performance challenges that affect their daily operations through increased production costs, increased lead-time, poor customer satisfaction. The study sought to determine the relationship between inventory forecasting practices and performance of fast-moving consumer manufacturing firms in Kilifi County, Kenya. The study targeted 11 Fast-moving consumer manufacturing firms in Kilifi County, Kenya as unit of analysis while procurement officers, logistic officers, transport officers, distribution officers and warehouse officers were the unit of observation. The target population was 2922 and therefore the sample size of 351 respondents was determined using Yamane 1967 sampling formula. The study adopted stratified random sampling. The research was anchored on two theories Systems Theory and the Theory of Economic Order quantity (EOQ). The study used descriptive research design, the study targeted 351 respondents comprising of procurement officers, logistic officers, transport officers, ware-housing officers. Primary data was collected through structured questionnaires. Data was analysed using SPSS version 31 where descriptive statistics such as means, standard deviation, frequencies and percentages were used. Correlation analysis was done to test the strength and direction of linear relationship between variables. Multiple regression analysis was conducted to determine the relationship between independent and dependent variables. A pilot test was conducted with 10% of the sample size and it showed strong reliability (Cronbach’s alpha = 0.795) The pilot test results revealed that the data collection instruments used in the study were both valid and reliable. Inventory forecasting demonstrated a strong positive relationship with performance. The study concluded that effective inventory forecasting plays a key role in boosting the performance of FMCG manufacturing firms in Kilifi County.