Inventory Management in Sri Lankan Small and Medium Retail Shops

Abstract

As Sri lanka is a developing country, small and medium retail shops can contribute a higher performance to rise up the Sri Lankan economy. The purpose of this paper is to provide guidelines for entrepreneurs for implementing effective inventory management (IM) practices and present the results of a survey of small and medium retail shops in western province, Sri Lanka. Data was gathered using structured questionnaires and analyzed using both descriptive and inferential statistics. Finally, a qualitative data analysis was performed separately to interpret the observations and additional information gathered through discussions with retail shop owners. The study identified that most of small and medium retail shops are using a proper inventory management tool and only a few supply chain factors have a statistically significant effect on inventory management practices. In addition, the supply chain factors impact on retail shop’s performance while inventory management practices impact on sales performance. Most shops face overstock and stock shortage issue. This study is considering a small sample with few categories of retail shops. It provides an understanding about the practical implementations and nature of the IM practices in the real business field. Also it confirmed the need for manager to make aware of IM practices and factors which affect IM in the shop. Considering the lack of studies about IM in the context of small and medium retail shops in Sri Lanka, this paper helps fill a gap in the literature. The study suggests that effective approaches to IM can improve the performance and reduce the IM issues of small and medium retail shops in Sri Lanka.