Inventory management under demand uncertainty in the fast moving consumer goods organisation in Gauteng

Abstract: This research study involves examining the relationship between inventory management and uncertain demand and assessing the effects of uncertain demand on inventory management in the fast moving consumer goods (FMCG) organisation in Gauteng. Inventory management is required within the businesses to ensure that there is a smooth flow of production without shortages of items needed. The study looked at inventory management models that can assist in lowering the rate of uncertain demand, and avoiding unnecessary holding costs on stocked items; economic order quantity (EOQ), activity based costing (ABC) analysis, and just in time (JIT). In many instances inventories are difficult to manage and control, and inventory managers find it challenging to know when to order and how much to order. Prior research shows that FMCG companies are known as leaders in the economy with low on shelf life and are consumed at all times. Inventory managers should be able to calculate the safety stock levels and economic order quantity to be able to cut on excessive inventory. Is also vital that inventory management is given the attention it deserves in order for the business to stay competitive, flexible for the demand and at low cost. The study was a descriptive in nature and was conducted through the use of quantitative research methods. Survey questionnaire was used to collect primary data from five FMCG companies in the manufacturing firms. The sample of 255 respondents was involved in this study. The findings were significant of the correlation coefficient value. Literature review had shown the significance of inventory management models and systems for inventory control in the FMCG companies that assist to cut down on excessive inventory on hand and the inventory management costs in search of eliminating, through accurate forecasting and correct movement of stock from physical warehouse and system warehouse.M.Tech. (Operation Management