School of Business and Finance

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The inventory management practices amongst manufacturing SMEs in the Cape Metropole, province of the Western Cape, South Africa
(Danubius University, 2016) Enow, Samuel Tabot; Isaacs, Eslyn
Financial management is one of the seven important managerial functions and is responsible for ensuring that institutions have adequate or access to financial resources to meet short-term and long-term resources to meet long-term obligations. Long-term resources are capital provided by the owner (s) and long-term loans, whilst short-term resources include cash on hand or in the bank, accounts receivable and inventory or commonly referred to as current assets. The investment in inventory is often 50% of the value of current assets and in many cases overlooked as a source of short-term funds. Considering the importance of inventory in any business, this study focused on inventory management practices in SMEs. Using a sample of 100 businesses, our research revealed that only (i) 19% always prepare inventory budgets; (ii) 21% always review inventory levels; (iii) 25% review the shelf-space allocated for the products; and (iv) 19% use computers in inventory management.