THE EFFECT OF INVENTORY MANAGEMENT ON PRODUCTION EFFICIENCY IN CASE OF DASHEN BREWERY SHARE COMPANY, GONDAR BRANCH

Abstract

The study sought to determine the effect of inventory control practices on production efficiency of Dashe Brewery Gondar branch. The objective of the study was to measure the production performance of Dashe Brewery Gondar branch. The research designs involved were descriptive and inferential explanatory design. Data were collected from 80Dashe Brewery Gondar branch employees using a survey questionnaire that was administered to employees and conducted by researcher. Tables were used to present data. Descriptive statistics like mean and standard deviation were used to analyze demographic and each constructs under investigation, whereas inferential statistics like Correlation and regression analysis were used to measure the relationship between independent and dependent. The result of the study established that the inventory management practices are greatly used to establish the production efficiency of Dashen Brewery Gondar branch. Capacity utilization (b=0.382) has the most positive influential effect on production efficiency, followed by stock availability, inventory management practices, inventory accuracy and stock out practices (b = 0.265, b = 0.196 b = 0.180, and b = 0.156) respectively at p value <0.001. It was also found that there is a significant relationship between inventory control and production efficiency represented by R2 value of 0.860 which translates to 86.0% variance explained by the five independent variables.