Effect of Vendors Managed Inventory on the Performance of Selected Supermarkets in Eldoret City, Kenya

Abstract

Inventory management practices are key 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. In Kenya, the retail sector has experienced significant growth, with supermarkets emerging as key players in both urban and peri-urban areas. Eldoret City, a rapidly growing economic hub in the country, has seen increased competition among supermarkets, necessitating the adoption of more efficient inventory management practices. To make sure inventory is managed properly, there needs to be the adoption of vendor managed inventory which promotes collaboration between suppliers and retailers, reducing inefficiencies and improving supply chain performance. The objective of the study was to determine the effect of vendor managed inventory on performance of selected supermarkets in Eldoret City, Kenya. The study was guided by Stochastic Theory. The positivist approach was applied and an explanatory research design was applied. 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. Descriptive and inferential statistics was used to analyze data. Results revealed that vendor management inventory was positively and significantly correlated to organization performance [r = 0.796, ρ<0.01 (ρ=0.000)], Results further showed that vendor inventory management had a positive and significant effect on the performance of selected supermarkets in Eldoret City, Kenya. Based on the coefficient [β =.556, ρ< 0.05 (p = 0.000)]. It was concluded that vendor inventory management is positively associated with supermarkets’overall performance. The study Journal of Business, Economics and Management Research Studies2(3)Received:August 23, 2024Accepted:October02, 2024Published:October09, 2024 recommends that supermarket and retail store management shouldexpand the use of VMI in order to know the quantity of stock to order at any given time