MODERATING EFFECT OF TECHNOLOGY ON THE RELATIONSHIP BETWEEN INVENTORY MANAGEMENT PRACTICES AND PERFORMANCE OF SELECTED SUPERMARKETS IN ELDORET CITY, KENYA

Abstract

Inventory management practices play a vital role in minimizing costs and maximizing profits, as well as meeting customer demands by making sure there is enough stock at the right quantity and quality and available at the right time and the right place. To make sure inventory is managed properly, there needs to be the adoption of inventory management systems. The objective of the study was to determine the moderating effect of technology on the relationship between inventory management practices and the performance of selected supermarkets in Eldoret City, Kenya. Specifically, the study sought to determine the effect of economic order quantity (EOQ) on performance, the effect of vendor managed inventory (VMI) on performance, the effect of ABC on performance, the effect of just in time on performance, and the moderating effect of technology on the relationship between inventory management practices and performance of selected supermarkets in Eldoret City, Kenya. The study was informed by game theory, transaction cost theory, and the technology acceptance model. The philosophical foundation of this study is in line with the positivist approach. Anchoring on an explanatory research design, the study target population was 1,004 employees of selected supermarkets in Eldoret City, Kenya. The study sample size was 317 employees, computed using the Yamane formula. The employees were selected using stratified and simple random sampling techniques. Data was collected using structured questioners and items anchored on a five-point Likert scale. The study hypotheses were tested using a multiple regression model and Hayes process macro for moderation analysis. The results showed that economic order quantity (EOQ) (β = 0.438, p = 0.00), vendor managed inventory (VMI) (β = 0.556, p < 0.05), ABC analysis (β = 0.548, p = 0.00), and just in time inventory management (β = 0.578, p = 0.00) had a positive and significant effect on performance. In addition, technology moderated the relationship between economic order quantity (EOQ) (β = 0.141, p = 0.009), vendor managed inventory (VMI) (β= 0.132, p = 0.004), ABC analysis (β = 0.155, p = 0.032), and just in time inventory management (β = 0.370, p = 0.00) with performance. The study concluded that inventory management practices (economic order quality, vendor management inventory, ABC inventory management, and just-in-time inventory management) are important in enhancing organization performance. Additionally, technological innovations in processes improve productivity and efficiency, which reduce costs and improve profit margins while making businesses more competitive. From the findings, the study recommends utilizing inventory management practices in meeting customer demands while minimizing carrying costs and stock-outs. The study is beneficial to the government and policymakers since it may uncover some specific challenges or barriers faced by supermarkets related to inventory management, technology adoption, or financial performance. The management of fast-moving consumer goods needs to adopt proper inventory management practices in order to reduce operation costs such as holding costs and ordering costs, among others, hence increasing company performance