Inventory management, retailing sector, Malaysia, micro enterprises, SMEs


Inventory management represents a key success factor that shows how efficient a company is controlling its inventories. However, there is little information on inventory management practice in a small business setting. Therefore, this study examines the current state of inventory management practices and factors that influence their use in micro retailing enterprises. A questionnaire survey was employed to gather data from the targeted respondents. Using 100 completed replies, the results demonstrate that most responding enterprises have adopted both unsystematic and systematic inventory management approaches in their business. A fully systematic approach of inventory management was only utilized by 33 per cent of the total respondents. In terms of inventory management techniques used, ‘the rule of thumb’ is the most popular among respondents. Meanwhile, EOQ, Bar Code Tagging and VMI are only applied by a small number of respondents. The results also indicate that Purchasing and Controlling are the most frequent inventory management activities applied by micro enterprises as opposed to Storage and Tracing. Finally, the results suggest that owner/managers’ attitude and knowledge in inventory management have significant and positive influences on inventory management practices. On the other hand, the cost factor has a significant and negative influence on inventory management practices. Thus, all three proposed hypotheses developed in this study are supported.

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