An Assessment of Inventory Management Practice and its Effectiveness

This study was conducted to assess of inventory management (IM) practices and its effectiveness in Dire Dawa City Municipality using ABC analysis as well as descriptive and inferential statistics. The researcher used a sample size of 125 employees from the target population to act as sample size. The research used questionnaire and interview and observation of the researcher. The collected data were analyzed quantitatively and qualitatively. The key findings from the study revealed that Independent Variable of ITR (Sig. 0.409), JIT (Sig. >0.791) and LT (Sig. 0.>.05) are greater than 0.05, there was no significance relationships between these three independent variables and organizational effectiveness in terms cost reduction. Thus, ITR, EOQ, ABC and VMI were also positive prediction for organizational effectiveness in terms cost reduction. Last but not least, the survey questionnaires' regression results show that the majority of the independent variables— practice, fixed order periodic, just-in-time, reorder point, economic order quantity, obsolete, measures, and barriers—had a significant impact on how well the practices of the inventory management (IM).The researcher recommends for better improvement of the inventory management and control of inventory, by providing the constructive comments.