SALES FORCASTING AND INVENTORY MANAGEMENT IN NIGERIAN BREWING INDUSTRY

Obianuju M. Chiekezie, Raphael Obuseh

Abstract


Brewing industry is confronted with several constraints which affect their level of sales and inventory management. These constraints are caused by inaccurate sales forecasting and lack of efficient inventory management practices. The multiple results include poor customer service, high cost, delay in lead time due to variability in sales of products, substantial stock-out and back orders. The gross consequence is inability to satisfy customers’ needs thus undermining the achievement of organizational objectives. Thus, this study was carried out to determine the relationship between sales forecasting and inventory management of brewing companies in Nigeria (2008 - 2021) with special reference to Nigeria breweries Plc and International breweries Plc. In pursuance of the objectives, ex-post facto design was adopted. The sources of data collection were the annual reports of the sampled companies, the National Bureau of Statistics, and the Central Bank of Nigeria Statistical Bulletin. A panel regression model was used to present the generated data, while tests of hypotheses were carried out using the t-statistics of the panel regression estimates. The study found a statistically significant positive relationship between sales forecasting and inventory management as represented by product price and inventory turnover rate, while inflation rate has a negative effect on inventory turnover rate. Accordingly, the ability of management to project the expected level of sales has helped the firms to achieve a greater turnover rate. This study concluded that there is a very strong linkage between sales forecasting and inventory management of brewing companies in Nigeria; and therefore recommended that brewing companies in Nigeria need adequate monitoring of their product prices so as not to dissuade consumers from patronizing their products. Again, there is need for management of brewing companies to stock adequate goods that would suffice for the current demand in addition to gathering current data on product prices for forecasting purposes.

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