EFFECTS OF ENVENTORY MANAGEMENT PRACTICES ON THE FINACIAL PERFORMANCE OF MANUFACTURING COMPANY IN RWANDA

Abstract

This study's main goal was to examine how inventory management practices affected Rwandan manufacturing companies' financial results. It has three specific objectives such as to examine the effectiveness of inventory managements practices at BRALIRWA, to assess the effects of inventory managements practices on the financial performance at Blarirwa from 2021up to 2023 and to find relationship between inventory management practices and financial performance of BRALIRWA. Descriptive and correlational research designs were used in this study. Because of the way the study was set up, 41 respondents who were systemically selected from among BRALIRWA employees were able to submit the questionnaires. Source of data was gathered utilizing primary and secondary data source, which was gathered with the use of paperwork and a questionnaire. The Statistical Package for the Social Sciences (SPSS) software has been used to process the data, which is then shown in tables. Then, it was discovered that BRALIRWA, a manufacturing business and profit-making organization, relies heavily on the precision, dependability, effectiveness, and efficiency of inventory management to meet its objectives. Goal achievement will thus have been largely dependent on the inventory management strategies employed by BRALIRWA, including JIT and the economic order quantity approach. Effective inventory management is critical to enhancing client interactions, lowering production expenses; a decrease in the carrying and total costs of inventory would improve the company's financial performance. It was well observed that BRALIRWA’s profitability was diminished during the duration of the investigation. A very significant connection of 99.8% was found when comparing the findings of the correlation coefficient table, indicating that efficient inventory management contributed to BRALIRWA's profitability. The investigation came to the conclusion that BRALIRWA's primary method of achieving its degree of profitability was inventory management. According to the report, BRALIRWA should implement new strategies and enhance inventory management to prevent a decline in profitability.