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impact of inventory management on profitability of listed pharmaceutical firms in nigeria

Volume: 44  ,  Issue: 1 , January    Published Date: 20 January 2020
Publisher Name: IJRP
Views: 1092  ,  Download: 775

Authors

# Author Name
1 Rashida Dakyes Usman
2 Yusuf Ibrahim Karaye
3 Abdulkadir Abubakar

Abstract

This study examines the relationship between Inventory Management, specifically, the discrete components of inventory and firm Profitability for the Nigerian Pharmaceutical sector. The study is carried out based on the historical panel data analysis. To achieve the objective of this study, an ex-post factor research design was employed. Data was generated from secondary sources, specifically, the annual reports and accounts of listed pharmaceutical firms from 2009 to 2018 and the Nigerian Stock Exchange Fact book. Descriptive statistics, Pearson correlation as well as multivariate regression techniques were utilized as tools of analysis in this study. The study revealed that Inventory Management affects the profitability of Nigerian Pharmaceutical companies significantly. The significant relationships found among all the discrete components of Inventory and profitability, evidenced by lower p values and higher t values, implied good inventory turnover for the studied companies. The study recommends that pharmaceutical companies in Nigeria should sufficiently plan and control their operations as regard proper management of the different components of inventory and to utilize the services of professionals in complex business areas especially in the use of modern sophisticated inventory management techniques such as the Just-in-Time, Material Requirement Planning, and The ABC inventory categorization and so on in order to maintain the tempo and remain competitive both locally and internationally.

 

 

 

Keywords: Inventory Management, Just in Time, Material Requirement Planning and Profitability

Keywords

  • inventory management
  • just-in-time
  • material requirement management