Inventory Management and Organisational Performance of Selected Manufacturing Firms in Southwest, Nigeria

Abstract

This study examined the effect of inventory management on organisational performance of selected manufacturing firms in Southwest Nigeria. The study specifically investigated the effect of Economic Order Quantity (EOQ), and Order Interval (OI) on organisational performance. The increasing complexity of manufacturing operations, rising production costs, supply chain uncertainties, and the need for efficient resource utilisation have made effective inventory management a critical determinant of organisational competitiveness. The study adopted a descriptive survey research design. The population of the study comprised registered manufacturing firms operating in Lagos, Ogun, and Oyo States, Nigeria. According to the Manufacturers Association of Nigeria (MAN, 2024), the total population consisted of 1,078 registered manufacturing firms, comprising 566 firms in Lagos State, 305 firms in Ogun State, and 207 firms in Oyo State. Using the Taro Yamane sample size determination formula at a 5% level of precision, a sample size of 292 respondents was obtained. The study employed proportionate and simple random sampling techniques to ensure adequate representation of manufacturing firms across the selected states. Data were collected using a structured questionnaire titled Inventory Management and Organisational Performance Questionnaire (IMOPQ), which measured the study variables using a five-point Likert scale. The collected data were analysed using descriptive statistics and regression analysis, while diagnostic tests were conducted to establish the suitability of the data for inferential analysis. The findings revealed that Economic Order Quantity had a positive and statistically significant effect on organisational performance (β = 0.152, p = 0.002 < 0.05). Similarly, Order Interval was found to have a positive and significant effect on organisational performance (β = 0.276, p = 0.000 < 0.05). The study concluded that inventory management significantly influences organisational performance among selected manufacturing firms in Southwest Nigeria.