FACTORS AFFECTING DEMAND BASED FORECASTING ON INVENTORY MANAGEMENT IN KERIO VALLEY DEVELOPMENT AUTHORITY AT ELDORET, KENYA

Author's Name: Jepchirchir Kibet Lorna
Subject Area: Social Science and Humanities
Subject Business Management
Section Research Paper

Keyword:

Forecast, Inventory Management, Delphi, Kenya


Abstract

Inventory management is a precursor for cost minimization and a prerequisite for break even analysis. Demand based forecasting is influences by a number of factors. The main objective of this study was to find out the factors that affect demand based forecasting on inventory management. The study employed an explanatory research design. The target population was 70 respondents. The sampling techniques used were stratified random sampling, purposive sampling and simple random sampling. The data collection instruments were questionnaires and interview schedules. Validity of the research instrument was tested using expert opinion and piloting approach while cronbach alpha for reliability. The data was analyzed using descriptive statistics. SPSS version 24.0 aided in Analysis. The factors that affect demand based forecasting were; shortening of product life cycles, wrong information in the market place, shrinkage of the business and lack of capacity to use customer information to predict the future demand. The study concluded that Retailers want to grow sales, realize profits and satisfy customers. There is a realistic assessment of the likely accuracy of forecasts level in the organization and consideration of other strategies that can be used in conjunction with forecasting to best solve the challenges affecting demand based forecasting and inventory management. The study recommends that organizations’ should screen any information they come across before choosing which demand based forecasting method to use. Organizations should ensure at all times they have the right personnel competent enough to use customer information to predict future demand.

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