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AN APPRAISAL OF INVENTORY MANAGEMENT AND PROFITABILITY OF FOOD AND BEVERAGE MANUFACTURING COMPANIES IN LAGOS STATE, NIGERIA
Food and beverage manufacturing companies faced several challenges with regards to their daily operations. These challenges have continued to affect their performance in the form of low product quality, decline in sales, excessive inventory and low product turnover. Key challenge to the companies is poor inventory management and implementation. Inventory management is the backbone of many manufacturing companies around the world which when properly managed contributes immensely in improving firm performance. The food and beverage manufacturing companies in Nigeria however faces issue with regards to poor management and control of materials within the sector which contributes to its low performance. This studytherefore examines the effect of inventory management on profitability of food and beverage manufacturing companies in Lagos State, Nigeria. A cross sectional survey research design was adopted. The target population comprised of 2027 top, middle and lower level managers within the selected food and beverage companies in Lagos State, Nigeria. Stratified random sampling technique was used for the study. A validated questionnaire was used. Cronbach’s alpha coefficients for the constructs ranged from 0.702 to 0.955. Data was analysed using descriptive and inferential statistics.The findings revealed that inventory management had significant effect on profitability of selected food and beverage manufacturing companies in Lagos State, Nigeria (Adj. R2 = 0.538, F (4, 351) = 104.185, p < 0.05). The study concluded that inventory management affects profitability of selected food and beverage manufacturing companies in Lagos State, Nigeria. The study thus recommended that proper inventory management techniques should be put in place by the companies in order to avoid delays, wastage and increase the overall profitability.
Keywords: Food and beverage, Inventory management, Profitability, Manufacturing companies, Nigeria