MIDLANDS STATE UNIVERSITY

FACULTY OF BUSINESS SCIENCES

DEPARTMENT OF APPLIED ACCOUNTING

NAME SURNAME REG NUMBER

SUSAN NKOMO R197865M
TINOTENDA SAKUHUNI R1917818B
TANAKA T MBAIWA R195125F
ELLEN M HWINGWIRI R196315N
PROUD P CHIWARA R227846Z
TANAKA T MUBOBO R226437F
MUNASHE NYATSANZA R192244F

MODULE : ACC251 ACCOUNTING RESEARCH METHODS

LECTURER : L. NYAMWANZA

GROUP : 16
TOPIC : ANALYSIS OF THE INVENTORY MANAGEMENT
TECHNIQUES AND THEIR EFECTS TO PROFITABILITY OF TANGANDA
TEA PVT LTD
REFERAN VARIABL METHOD FINDINGS RECOMME AREA OF
CE ES OLOGY NDATION FURTHER
DETAILS STUDY

Karim N.A. Inventory Mixed Efficient inventory Implement Examine the

Nawawi.Inv management Research management strategies to relationship
entory approach practices help in improve between
managemen controlling costs inventory sustainable
t associated with turnover, inventory
effectivenes inventory. By such as management
s of a optimizing reducing lead practices, cost
manufacturi inventory levels, times, savings, and
ng companies can improving profitability.
company. reduce carrying demand Study strategies
(2018) costs, such as forecasting to minimise
storage, insurance, accuracy, and waste, reduce
and obsolescence negotiating carbon footprint,
costs. This leads to favorable and implement
improved payment environmentally
profitability by terms with friendly
minimizing suppliers. inventory
unnecessary management
expenses. practices.

Koumanako Profitability Interview implementing Implement Conduct a cost

s D. P.The and effective inventory just-in-time benefit analysis
effects on Questionnai management (JIT) to determine the
inventory re controls leads to inventory impact of JIT
managemen cost reduction, management implementation
t on firm working capital techniques to on profitability,
Performanc optimization, reduce taking into
e. increased carrying account the
Internationa operational costs. potential risks
l Journal of efficiency, and benefits
Productivity improved cash specific to thee
and flow, enhanced company’s
Performanc customer service, industry and
e minimized operations.
managemen stockouts, reduced
t. (2008) inventory holding
costs, better
supplier
relationships, and
improved decision-
making. All of
these factors
directly contribute
to improved
profitability for
businesses.

Gill ,Bigger Inventory The Excess inventory Implement Conduct

and management multiple will cause an effective customer
MathuThe and regression increase in costs inventory surveys and
relationship profitability models used which reduce profit tracking analyse the
between to analyse systems and impact of
working the data of real-time inventory
capital dependent inventory management on
managemen variable and visibility to customer
t and independent ensure satisfaction and
profitability variables. accurate sales. Explore
.(2010) order the relationship
r. fulfillment between
and minimise inventory
stockouts. availability,
Utilise customer
customer loyalty, and
relationship long-term
management profitability.
(CRM)
systems to
 gather
customer
feedback and
understand
demand
patterns.
Manikas A. Profitability Interview Effective inventory Implement Evaluate the
S.Interdepe management helps demand accuracy and
ndence control costs forecasting reliability of
anomg associated with models to different
inventory inventory. By accurately demand
types and maintaining optimal predict forecasting
firm inventory levels, customer models in
performanc companies can demand and improving cash
e. minimize carrying align flow. Investigate
Operations costs such as inventory the use of
and Supply storage, insurance, levels advanced
Chain and obsolescence accordingly. analytics and
Managemen expenses. This cost This helps machine
t. (2017) control directly prevent learning
contributes to overstocking algorithms to
improved and ensures enhance demand
profitability. that working forecasting
capital is accuracy.
efficiently
utilized.
Baker ,H ,Fi Inventory Quantitative Use if calculation Implement Analyse the
lbeck G and management and other methods cash flow impact of
Barlkley and to establish a forecasting to different cash
T.Working profitability relationship accurately flow forecasting
capital between working predict cash methods on
magement capital management inflows and profitability.
concepts and profitability outflows. Investigate the
and Optimize use of
strategies. cash technologies
(2023) conversion such as artificial
cysles by intelligence and
 reducing the machine
time it takes learning in
to convert improving cash
inventory flow
into sales and management.
collect
receivables.
Ogbo .A.I. Inventory Qualitative Forecasting Conduct a Investigate cost-
Onekaknma management customer demand cost-benefit effective
.I.V. accurately is crucial analysis to inventory
Wilfred .I.U for inventory demonstrate manegement
.The impact management. the potential solutions
of effective However , return on suitable for
inventory predicting demand investment smalland
control can be challenging of medium-sized
managemen due to factors such implementing enterprises.
t on as seasonality, inventory
organizatio market trends, and management
n changing customer improvement
performanc preferences. s. Prioritize
e.(2014) Inaccurate demand high-impact
dorecasting can initiatives
lead to excess and consider
inventory or phased
stockouts, implementati
impacting on.
profitability.
Kamau .L. Inventory Interview Inventory Establish Investigate the
W. management and represents a strong impact of supply
Assumpta . Questionnai substantial portion relationships chain
W.K.Influe re of a company’s with integration and
nce of working capital. suppliers and collaboration on
inventory Efficient inventory implement inventory
managemen management collaborative management
t practices ensures that planning and profitability.
on working capital is forecasting, Analyse the
organisation utilised effectively. and effectiveness of
competitive By managing replacement different supply
ness.(2015) inventory levels, strategies. chain
companies can free Improve management
up cash flow and communicati techniques and
reduce financing on and technologies.
costs, leading to coordination
improved throughout
profitability. the supply
chain to
minimize
delays and
disruptions.
Moser .P Inventory Interview IT systems enable Implement an Evaluate the
Isaksson .O. management and seamless inventory impact of IT-
H.D and Questionnai collaboration and management enabled
Seifert Profitability. re integration among software inventory
R.W.Invent supply chain system that visibility on
ory partners, including integrates inventory
dynamics in suppliers, with other turnover,
process distributors, and business customer
industries: retailers. Through systems such satisfaction, and
An electronic data as point of profitability.
empirical interchange (EDI), sale systems, Investigate the
investigatio electronic ordering supply chain effectiveness of
n. and inventory management emerging
Internationa sharing, systems, and technologies
l journal of organisations can customer like block-chain
Production achieve better relationship and artificial
Economics. coordination, management intelligence in
(2017) reduce lead times, systems. enhancing
and improve overall inventory
supply chain visibilty.
efficiency. This
collaboration
results in cost
savings, improved
customer service,
 and increased
profitability.
Madisheti, Inventory Mixed Inventory Implement Analyze the
Srinivas, management Research management has a inventory impact of
Kibona , and approach significant impact control different
Deogratias. Profitability on a company’s techniques inventory
Impact of profitability. By such as ABC control
inventory implementing analysis, techniques on
managemen effective inventory economic cost reduction
t on the control practices, order and profitability.
profitability optimizing cash quantity Compare the
of SMEs in flow, satisfying (EOQ), and effectiveness of
Tanzania. customer demand, just-in-time various
(2013) and enhancing inventory inventory
supply chain systems. management
efficiency, SMEs software and
can improve there tools in
profitability. improving cost
control.
Lysons .K. Inventory Qualitative Organisations with Enhance Analyse the
Gillingham management complex supply communicati impact of supply
.M. chains, involving on and chain
Purchasing multiple suppliers collaboration complexity on
and supply and distribution with inventory
chain centers, may face suppliers and management
managemen challenges in partners to and identify
t.(2012) coordinating streamline strategies to
inventory inventory simplify supply
management management. chain networks.
activities. Implement Investigate the
supply chain use of
visibility blockchain
tools to technology for
improve secure and
coordination transparent
and inventory
information tracking across
 sharing. multiple
stakeholders.
Olhager .J. Inventory Questionnai IT systems enable Implement Analyse the
Evolution management re mare accurate demand impact of IT-
of demand forecasting planning and enabled demand
operations and planning by forecasting forecasting on
planning leveraging software that inventory
and control: historical sales data, utilizes data turnover, stock-
from market trends, and analytics and outs, and
production customer insights. machine profitability.
to supply This helps optimise learning Investigate the
chains. inventory levels algorithms. use of big data
(2013) and align them with analytics and
customer demand. predictive
modeling
techniques in
demand
forecasting.
Chopra .S, Inventory Interview Implementing Create a Explore change
Meindl .P. management changes in change management
Supply inventory management strategies
chain management plan that specific to
managemen practices may face includes clear inventory
t : Strategy, resistance from communicati management
Planning, employees, on, employee implementations
and especially if it training, and . Investigate the
Operation. requires changes in involvement impact of
(2016) established in the employee
processes or roles. decision engagement and
making buy-in on the
process. success of
Highlight the inventory
benefits of management
effective initiatives.
inventory
management
in terms of
 improved
profitability.
Dumas .C. Inventory Interviews Inventory Implement Analyze the
Effective management management has a inventory impact of
inventory significant impact control different
managemen on a company’s techniques inventory
t in small to profitability. By control
medium- implementing techniques on
sized effective inventory cost reduction
enterprises. control practices, and profitability.
(2008) optimizing cash
flow, satisfying
customer demand,
and enhancing
supply chain
efficiency, SMEs
can improve there
profitability.
McGuire .T Inventory Mixed Well managed Implement Evaluate the
.J. management Research inventory inventory impact of
Noronha .G and approach operations management inventory
, Profitability streamline internal software management
Iskandar- processes, reduce systems that technologies, on
Datta .M. waste, and enhance integrate with operational
The impact overall operational other efficiency and
of inventory efficiency. This business profitability.
managemen leads to cost functions.
t on savings, improved
profitability productivity, and
of a firm: A increased
case study profitability.
of
Zimbabwe
Stock
Exchange.
(2013)
Minor problems

 Inaccurate demand forecasting, leading to either excess inventory or stockouts.

This can result in inreased holding costs or missed sales opportunities, impacting
Tanganda Tea Pvt Ltd.
 Inefficient order fulfillment processes, causing delays or errors in delivering
products to customers.
 Limited collaboration with suppliers can result in longer lead times, unreliable
deliveries, and inventory shortages.
 The use of ineffective inventory control methods.

Problem Statement

Previous studies have highlighted the significance of inventory management in

enhancing profitability ( Monczka et al., 2015; Simchi-Levi et al., 2014; Waters,
2020; Wisner et al., 2014). However, there is a lack of research specifically focusing
on Tanganda Tea Pvt Ltd's inventory management techniques and their effects on
profitability. To fill this research gap, it is essential to conduct an in-depth analysis of
Tanganda Tea Pvt Ltd's inventory management practices and their influence on the
company's profitability.

Inventory management plays a crucial role in the profitability of companies by

ensuring efficient control and utilization of resources (Lambert 2017). In the case of
Tanganda Tea Pvt Ltd, a limited company in Zimbabwe, it is essential to evaluate the
inventory management techniques employed and analyze their effects on the
company's profitability. Most managers ignores the saving potential that arise from
proper inventory management practices as such distribution firms do not or ignore to
control their inventory this negatively affects the profitability of a firm (Anichebe and
Agu, 2013). Tanganda Tea Ltd for the year 2018 and 2019 faced a decline in
profitability by 20% in 2018 and 10% in 2019 due to inefficient inventory
management systems (Annual finance report, 2019) thereby affecting the company
growth and survival .
Research Question

 What are the effects of inventory management practices on the profitability of

Tanganda Tea Pvt Ltd?

Main research objectives

 To determine the effects of inventory management practice on profitability of
Tanganda Tea Pvt Ltd.

Sub- Research objectives

 Assess the current inventory management techiniques employed at Tanganda Tea
Pvt Ltd.
 Evaluate the impact of inventory management techniques on inventory turnover.
 Analyse the relationship between inventory management techniques and
profitability.