Effect of Inventory Control on the Operational Performance of Manufacturing Firms in Dire Dawa Administration

The main purpose of this study was to investigate the effects of inventory control on operational performances of manufacturing firms in Dire Dawa Administration in the case of National Cement Share Company and Dire Dawa Food Complex Share Company. A cross-sectional survey and explanatory research design where both qualitative and quantitative methods were used and the data analyses through both descriptive and inferential satirical analysis methods. The SPSS version 26.0 was used to analyze the data using descriptive statistics, including mean, standard deviation and ordinal logistic (O logit) regression used to analyze inferential output. For this study, five independent variables were identified including inventory receiving and handling system, warehouse internal control over inventory, inventory stock record accuracy, lean inventory system and inventory audit practice. The dependent variable is operational performances of manufacturing firms which was measured under O logit regression. According to the logistic regression output, three the explanatory variables were contributing for the operational performances of manufacturing firms such as inventory stock record accuracy system, lean inventory control system and inventory audit practice system the p-values of those antecedents is less than 0.05. However inventory receiving and handling system and warehouse internal control system weren’t significantly influence operational performances of manufacturing firms since the p-values were above 5%. Then, the researcher recommends that management of manufacturing companies should pay attention to adopt proper inventory control systems in order to increasing companies’ operational performance.