Thesis:

Effects Of Inventory Management Practices On Organizational Performance In Hospitals In Kisii County, Kenya

Effective inventory management is essential for enhancing operational efficiency and financial success across industries. Strategic inventory practices directly impact an organization’s profitability, customer satisfaction, and overall performance. In this context, the present study aimed to examine the critical role of inventory management practices on the performance of Kisii County Hospital. The specific objectives focused on evaluating the influence of inventory reduction, inventory tracking, accuracy of inventory records, and supplier collaboration on the hospital’s performance. This research is expected to guide hospital management in adopting effective inventory strategies to boost productivity. The study was grounded in the theories of strategic choice, economic order quantity, and transaction cost. Employing a survey design to gather quantitative data, it targeted department employees involved directly or indirectly in inventory management, including those in purchasing, warehousing, auditing, and hospital committees—totaling 832 respondents. Yamane’s formula was applied to determine the sample size, ensuring proportional representation across departments. Data were collected through questionnaires, with a pilot study conducted in Nyamira County hospitals, which have similar characteristics to Kisii County, to enhance the study’s reliability and validity. Reliability testing indicated a Cronbach's alpha of 0.7 or above for all variables, confirming internal consistency, while construct validity was established with factor loadings of 0.5 or higher. The data were then coded and analyzed using SPSS, applying descriptive statistics, standard deviation, and linear regression analysis. Findings revealed that inventory shrinkage, inventory tracking, and record accuracy negatively predicted organizational performance in Kisii County Hospital, while collaboration with suppliers had a positive impact. The study concluded that inventory management practices significantly influenced hospital performance. It recommended that medical practitioners and hospital management invest in advanced inventory software for realtime tracking, low-stock alerts, and automated replenishment processes to enhance inventory control.