THE EFFECT OF INVENTORY MANAGEMENT ON PROFITABILITY OF MANUFACTURING COMPANY (A CASE STUDY OF NIGERIA BOTTLING COMPANY, KADUNA)

ABSTRACT The study investigates The Effect of Inventory Management on Profitability of Manufacturing Company (A Case Study of Nigeria Bottling Company, Kaduna). The objectives of the study were to examine the relationship between inventory management practices and financial performance in manufacturing firms and to assess the impact of different inventory management strategies on profitability. The study had a population of 140 employees of the organization, out of which a sample size of 103 was determined using Taro Yamane formula. The study made use of primary and secondary data. A total number of 103 copies of the questionnaire were distributed while 88 copies were collected. The methodology used in the study was quantitative method (survey research design) through gathering of primary data, which was analyzed using tables, percentages and the hypotheses tested using chi-square analysis. The study hereby established that all for investigated objectives of this study has been fulfilled and the study accepts all alternative hypotheses and rejects the null hypotheses. It is on this ground that the study concludes that there is a significant relationship, with a strong majority of respondents agreeing that these practices reduce operating costs. This suggests that practices such as regular stock monitoring, optimized inventory levels, safety stock maintenance, and interdepartmental coordination contribute to cost efficiencies, enhancing financial performance. The results affirmed a significant impact, with most respondents agreeing that efficient inventory control directly improves profitability. Strategic approaches, including techniques like Economic Order Quantity, Just-In-Time, ABC analysis, and demand forecasting, were shown to optimize resource allocation and align inventory with market demands, boosting profitability. It was therefore, recommended that the firm should maintain its focus on effective inventory management practices, such as stock monitoring and safety stock maintenance, through ongoing staff training to ensure consistent application and address neutral responses.