ANALYSIS OF INVENTORY MANAGEMENT PRACTICES FOR OPTIMAL ECONOMIC PERFORMANCE USING ABC AND EOQ MODELS

The success of many businesses is related to their ability to provide goods and services at right quality, quantity and at the right location. Based on this premise, this study examines inventory management practices in Covenant Bakery and their effects on economic performance. The study aims at determining the degree of importance of each of the inventory items and EOQ for the inventory items. The ABC analysis and EOQ technique were adopted for this study. Amongst others, the study also found that for the organization to minimize total cost Covenant Bakery economic order quanity to be purchased for flour, sugar and butter are 206, 38, and 21 bags respectively per order. Therefore, study recommmends that the organization should maintain tight control over category flour, suagar and butter and loose control for the rest of the inventory items.