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A Study on Relationship between Inventory Management and Company Performance: A Case Study of Textile Chain Store

Syed Jamal Abdul Nasir bin Syed Mohamad, Nurul Nadia Suraidi, Nabihah Amirah Abd. Rahman, and Raja Durratun Sakinah Raja Suhaimi
Universiti Teknologi Mara, Shah Alam, Malaysia
Abstract—This paper reports the findings of an applied research on inventory management at a textile chain store in Malaysia. It specifically examined the relationship between inventory management and company’s performance. Interviews with the company management were conducted to identify the inventory management issues and system used by the company. The relationship between the inventory management and company performance was determined based on inventory days and return on asset (ROA) analysis. The research found that company X had a few inventory problems such as unorganized inventory arrangement, large amount of inventory days / no cycle counting and no accurate records balance due to unskilled workers. The study also proved that there was a significant relationship between return on asset (ROA) and inventory days. This paper also provides recommendation to the company and for further research.

Index Terms—inventory management, performance

Cite: Syed Jamal Abdul Nasir bin Syed Mohamad, Nurul Nadia Suraidi, Nabihah Amirah Abd. Rahman, and Raja Durratun Sakinah Raja Suhaimi, "A Study on Relationship between Inventory Management and Company Performance: A Case Study of Textile Chain Store," Journal of Advanced Management Science, Vol. 4, No. 4, pp. 299-304, July 2016. doi: 10.12720/joams.4.4.299-304
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