Effects Of Inventory Management Practices On Organizations Operational Performances; The Case Of Ethiopian Airlines

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Addis Ababa University


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



inventory management, inventory record accuracy, stock out