Abstract:
Inventory constitutes the most significant part of current assets in most of the
companies. Business organization neither keeps excess inventories to avoid an
unnecessary tying down of funds as well as loss in fund due to pilferage, spoilage and
obsolescence nor maintain too low inventories so as to meet users demand as at when
needed. The purpose of this paper is to examine the factors that influence to the inventory
management practices in small and medium sized enterprises in Anuradhapura district.
100 SMEs had been applied based on convenient sampling method. The study was
conducted on five hypotheses which were constructed to reveal about procurement
procedure, Planning, Documentation, Funding and skills of the staff significantly
influence for inventory management practices among SMEs in Anuradhapura. And
those five hypotheses were tested by multiple regression analysis, Reliability analysis,
descriptive analysis and inferential analysis. The findings of this study revealed
procurement procedure, Documentation and Funding are significantly influence to the
inventory Management Practices but Planning and Skills of the staff are influence but
these factors are not significant. The study revealed that documentation is crucial in
ensuring efficient inventory management, stock records provide the management with
the information which is used to ensure accountability through stocktaking and stock
audit exercise. Also, funding positively affects efficiency of inventory management
among SMEs in Anuradhapura to a great extent. The study therefore recommended that
there is a need for SMEs in Anuradhapura to enhance their procurement procedures
through elimination of overlapping or conflicting jobs or duties and behavior of the
system is predicable. The findings of the study hold practical implications for Policy
makers, Managers, investors and stock keepers.
