Effects Of Inventory Management Practices On Organizations Operational Performances; The Case Of Ethiopian Airlines
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Date
2017-08
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Addis Ababa University
Abstract
The purpose of this research study was to examine the effects of inventory management
practices on organizations operational performances: the case of Ethiopian Airlines. The
research objectives were to examine the effect of inventory management practice on, on time
performance; to study the inventory management practice in Ethiopian Airlines; to examine the
role of inventory planning and inventory control section in the Airlines and to examine the
challenges in implementing inventory management practice in Ethiopian Airlines. The research
study was conducted through a causal and descriptive research design. The research study
adopted purposive sampling techniques in which all PSCM and MRO key users were selected.
The data was analyzed based on descriptive statistics in which SPSS version 20 was used. The
research study established that effective inventory management model, inventory record
accuracy , stock out management and information technology usage is statistically significant
with P-value >0.05 and information technology usage has more impact on operational
performance of Ethiopian Airlines relative to other inventory management practices studied.
The research concluded that inventory management practices impact significantly the
operational performances of Ethiopian airlines. The implementation of an effective inventory
management practices leads to many benefits in the airline , including ensuring on time
performance, optimal production, meeting the assembly targets and customer satisfaction, which
are all associated with operational efficiency. While there are different inventory management
practices, the findings of this research study establish that Ethiopian Airlines more likely to
benefit from Economic Order Quantity model, Vendor Managed Inventory and Bar-coding
Inventory management model. The research study establishes that Ethiopian Airlines should
embrace effective inventory management practices this is because an effective management of
inventories has an overall impact on enhancing operational performance of the organization,
including a guarantee of on-time performance, ensuring optimal production levels are met, and
making sure that assembly targets are met, which, consequently, leads to a customer
satisfaction
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Keywords
inventory management, inventory record accuracy, stock out