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Journal of Critical Reviews THE FEASIBILITY OF INVENTORY MANAGEMENT

SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF DESSIE,
ETHIOPIA

Article · July 2020

DOI: 10.31838/jcr.07.13.211

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 Journal of Critical Reviews

ISSN- 2394-5125 Vol 7, Issue 13, 2020

THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND

HOUSING DEVELOPMENT UNIT OF DESSIE, ETHIOPIA
Sandeep Kumar Gupta1, Esra Sipahi2, Akimova Liudmyla3, Yimer Ayalew4, Mengistu Guliti5, Vivek
Srivastva6*, Fikremariam Teferi7
1Professor, Sharda University, India. skguptabhu@gmail.com

Ministry of Education, Privacy Office, Turkey. dresrasipahi@gmail.com

2
3Professor, National University of Water and Environment Engineering, Rivne, Ukraine. l_akimova@ukr.net
4Assistant Professor, Wollo University, Ethiopia, yimerayalew37@gmail.com
5Assistant Professor, Wollo University, Ethiopia, mengistuguliti@gmail.com
6*Assistant Professor, Amity University, India. vivek.gnitcm@gmail.com
7MBA Student, Wollo University, Ethiopia.

Received: 22.04.2020 Revised: 24.05.2020 Accepted: 19.06.2020

Abstract
This research attempted to assess the inventory management practice of Dessie Housing and Development Agency branch office. The
type of research design was descriptive survey. The study employed both quantitative and qualitative methods (mixed method). The
total number of the target population was 54 among which 18 participants were selected using purposive sampling. Two employees of
the office were also purposively selected for an interview (Branch manager and logistic manager). The data were collected by
questionnaire, interview and document analysis. The quantitative data were collected through a self-rated questionnaire where the items
are rated using the Likert Scale. The items are 49 in number, which are categorized into seven groups. Seven generalized questions were
designed for the interview. Necessary documents that are essential to carry out inventory management were examined to perform the
document analysis. The major findings of the research are concerning inventory controlling mechanisms materials are issued from
storerooms only based on requisitions which are verified by a technical staff of the units, strategies being followed by the branch office in
overcoming the problems of inventory are Standard price method, weighted average cost method and First in first out method. Among
the Constrains the main ones are a storage problem in its stock and significant losses of construction materials. To generate inventory
record reports the organization conducts regular auditing inventory records and perpetual inventory records are updated promptly.
Finally, further research is recommended to investigate more the practice of inventory management controlling system in the research
area.
Keywords: Inventory, Inventory Management, Inventory Records.

© 2020 by Advance Scientific Research. This is an open-access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)
DOI: http://dx.doi.org/10.31838/jcr.07.13.211

INTRODUCTION
A major problem, which encounters most business today, is the Specific objectives
determination of optimum stock level, that is, a tradeoff between To achieve the above general objective, the following specific
the minimum and maximum level. Being out of stock forces objectives were set.
customer to run to competitors or resolute in losses of sales but,
this problem is not seen in the company. Excessive level of To identify inventory controlling mechanisms the agency uses.
inventories results in large inventory carrying costs including the To explore the strategies being followed by the agency in
cost of capital tied up in inventory, warehouse fee insurance etc. overcoming the problems of inventory.
In addition to a large inventory, carrying cost in excessive
investment in inventories there is also a high degree of To find out the constraints of the organization faces in inventory
obsolescence. management of its day to day organizational activities.

A study conducted in India on Performance Analysis of IM To identify the systems used by the organization to record, store,
System in Construction industries (Sindhu, Nirmal Kumar and retrieve and generate reports of inventory.
Krishnamoorthy, 2014), few main inventory management risks
identified, which summarized below: Significance of the Research
The finding of this study was useful in improving the inventory
• Storage space problem management system of Dessie Construction and Housing
• De-centralized processing problem Development Agency Office. The employees of the company who
• Lack of appropriate training practices are working in stores, transportation, administration, and project
• In accurate financial support in the materials ordering sites are beneficiaries of this study. Furthermore, the study may
• Delivery problem of long-lead materials serve as a starting point to research a different setting and
environment.
The Objective of the Research
General Objective Scope of the Research
The overall objective of the research is to assess the practice of This research was geographically delimited in Dessie city area
inventory management system of Amahara National Regional and investigated the inventory management system of Dessie
State Construction and Housing Development Agency Dessie City Construction and Housing Development Agency Office. In the
Branch Office. data collection process, the study only targeted employees of the

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 THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF
DESSIE, ETHIOPIA

company. Besides, the study particularly investigated only the construction operations of the consumer in a case when the
material management aspect of the construction company. procurement or produce of the products cannot meet the
requirement. Inventory plays a marginal row in an organization's
Limitation of the Research development and sustainability in the context that it struggles to
The researcher tries to accomplish the basic objective of the control inventories successfully and efficiently That would mean
research. But time limitation and lack of funds will be the main the company lacks market service and efficiency would decrease.
limitation that may challenges the successful accomplishment of To better accomplish its operational aims, a company is to fulfill
this research paper. In addition to the above two variables, the expectations of the client. Within a business, the customer's
limitation of data and limitation of sample are the other sides to wish has always been a crucial issue to increase it (Tersine, 1994;
the limitation part of the research. Furthermore, during filling Potilen & Goldsby, 2003). Kotler (2002), Posits that warehouse
the questionnaire, there might be hesitations from the control applies to all tasks engaged in the production and
respondents. maintenance of inventory quantities of raw materials, semi-
finished products (work-progress) and finished items such that
REVIEW OF LITERATURE sufficient stocks are accessible and the expense of over or under
Inventory management is described as an art of making sure that inventories is minimal.
an company keeps just enough inventory stock to meet demand
(Coleman, 2000; Jay & Barry, 2006). Inventory is the availability, Inventory management is primarily about specifying the size and
in an company, of any stock or services used. An inventory placement of stocked goods. Stock control is necessary at
system is a set of policies that regulate and track the level of different locations within a plant or within several locations
inventories and decide what level should be maintained and how within a supply network in order to maintain the normal and
large scheduled output schedule against the unexpected disruption
within supplies or products running out.
Inventory management is the tracking of products' stock,
availability and distribution to maintain sufficient supply without The spectrum of inventory management also includes the fine
unnecessary supply (Miller, 2010). Inventory management is lines of replenishment lead time, bearing inventory prices, stock
described as an art of making sure that an company keeps just control, inventory forecasting, inventory assessment, inventory
enough inventory stock to meet demand (Coleman, 2000; Jay & visibility, potential product price forecasts, physical inventory,
Barry, 2006). Stock is the supply, in an enterprise, of any product usable warehouse capacity, quality management, replenishment,
or services used. The distribution structure is the collection of refunds and damaged items, and demand forecasting. Balancing
regulations that regulate and track the volume of the distribution these overlapping demands results in optimum inventory rates, a
and decide what amount should be retained, how big orders can cycle that is continuing as market expectations change and
be made, and when stock should be filled up. respond to the broader environment (Ghosh & Kumar, 2003).

Inventory management is the tracking of products' stock, Ogbo (2011 ) claims that the key purpose of warehouse
availability and distribution to maintain sufficient supply without management and control is to tell managers how much of a good
unnecessary supply (Miller, 2010). to reorder, when to reorder the good, how much to position
orders and what the correct storage stock is to reduce stock-outs.
Inventory management ensures inventory supply anytime and The overall objective of the inventory is, therefore, to have what
wherever necessary by holding sufficient stock numbers and is needed and to minimize the number of times that one is out of
styles of product. The sum of all relevant operations necessary stock.
for the purchase, transportation, selling, disposal or usage of
inventory can be referred to as the management of inventories. Dobler & Burt (1996) note that IM is built to improve material
Inventory management must stock up as necessary and flow based activities. We add that warehouse management will
resourcefully utilize limited storage capacity so that the handle sourcing, quality monitoring, collection, warehousing,
warehouse room allocated is not surpassed. This is their duty to storage, preparation and shipment of goods. As mentioned
retain transparency for the product properties. They will follow above, numerous scholars have specific meanings for the
the target set to determine when to buy, how to buy and when to management of inventories. In the form of the product control of
order so that product is accessible on schedule and at the the building industry is associated with the preparation,
optimum cost (Benedict and Margeridis, 1999). Inventory recognition, acquisition, transportation, processing, obtaining,
management also requires preparing to coordinate and monitor transport and delivery of products.
the supply of goods from their original manufacturing unit to
internal processes to delivery to the point of sale (Smaros, et al., RESEARCH METHODOLOGY
2003). Research Design
The descriptive approach was the methodology employed in this
Inventories represent one of every manufacturer or industrial study. Descriptive research is important for analyzing
organisation’s biggest and most measurable assets. Intelligent circumstances, pointing out the issues and proposing practical
inventory management techniques can not only help raise approaches to the found issues (Singh, 2006). The research used
income but can also mean the difference between a profitable or systematic approaches to identify and interpret the knowledge
barely surviving company. The goal of inventory management is collected utilizing different data collection techniques.
to keep inventories at the lowest possible cost and to establish
goals to maintain continuous supply for ongoing operations. Source of Data
When making purchasing decisions, management must find a The research primarily used primary and secondary sources. The
balance between the specific cost factor, such as cost of product primary data sources include the employees that have a direct
delivery, cost of purchasing keeping and cost of adequate relationship in the inventory management system of the Agency.
inventories (Peterson & Silver, 1998; Zipkin, 2000). According to The secondary data sources were key documents archived in
Miller (2010), Inventory management is the process that different departments of the Agency that reflect previous
organizes the consumer connection to the products. inventory management history of the Agency.
To fulfill the consumer requirements, it combines the roles of Population, Sample technique and Size
buying, processing, and delivery. This function involves
providing current pieces of construction material, new buildings, The target populations for this study were 54 employees of
Dessie Construction and Housing Development Agency branch
consumables, obsolescent products, and all other supplies. Stock
Office. 18 company employees who were participating in the
helps a business to help the infrastructure, distribution, or

Journal of critical reviews 1236

 THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF
DESSIE, ETHIOPIA

inventory management system were selected using a purposive Analysis of Data and Discussion
sampling technique. This sampling technique is a non-probability
sampling method, which enabled the researcher to include Table 1: Inventory Policies and Procedures
relevant respondents who have a direct relation to the issue No. Items Mean S.D
under study by his judgment. This sampling technique helped the The organization has Inventory policies,
researcher to include all members of the target population under 1 4.00 0.52
procedures and manuals.
investigation. The policies and procedures are current,
2 3.53 0.96
in writing, and properly approved.
DATA COLLECTION These policies and procedures are clearly
The researcher employed three forms of data collection methods 3 stated and systematically communicated 3.6 0.94
to gather data. Those is the company's procurement and to the respective departments.
management processes questionnaires, interviews, and These policies and procedures support
secondary records. These methods helped triangulate the 4 3.71 0.87
internal control.
responses the respondents received. Triangulation believed Receiving, issuing, accounting and storing
several methods of calculating the survey anomalies to ensure 5 responsibilities are properly segregated 3.88 0.74
the validity of the results centered on the data obtained. for the responsible departments.
Source: Researcher’s Survey
Document Analysis
Documents are important sources of data in many areas of As one can be understood from the above table, the mean
investigation. When document analysis used in descriptive
research it took records, reports and minutes as a source of data. score X = 4.00 shows the respondents expressed their
In this regard, this study took such documents as a source of data agreement that the organization has inventory policies,
related to the inventory management system of the company. procedures and manuals with the least response variation as

Analysis of Data compared to the other items. The mean score X =3. 88 shows
In this study, the data obtained through questionnaires were the agreement of the respondents concerning receiving, storing
quantitatively analyzed using percentages, mean scores and issuing and accounting responsibilities are properly segregated
standard deviations. To facilitate the interpretation of the for the responsible departments.
quantitative data based on the mean scores using the following Moreover, the respondents have shown their agreement on these
intervals were used based on the suggestions of Agresti (2002) policies and procedures in supporting the internal control
From 4.5 – 5.0 strongly agreement system of the office with mean score 3.71 and slight response
From 3.45 – 4.45 agreement variation among themselves. The respondents of this study have
From 2.45 – 3.45 undecided (unable to give an opinion) shown their agreement that these policies are clearly stated and
From 1.45 – 2.45a disagreement, and Less than 1.45 strong are systematically communicated to the respective departments
disagreements on the items in each category. with mean X = 3.6 and relatively higher response variation.
Qualitative data research included gathering, recording and Finally, the respondents have shown their accord on the policies
describing the results; in brief, making sense of the data as and procedures confirming they are current in writing and
regards the meanings of the case by the participants, observing
trends, concepts, divisions and regularities. The data collected properly approved with the least mean score X =3.53 and the
through interview and documents are analyzed qualitatively and highest response variation as compared to the other items.
summarized in words.
Table 2: Inventory Control Mechanisms
ANALYSIS OF DATA
This chapter describes the demographic profile of respondents Items Mean S.D
and the analysis and discussion of the data collected through The management takes the appropriate
questionnaires, interviews and document analysis. steps to safeguard goods against risk of loss
1 by theft (e.g., goods kept in locked buildings, 2.76 1.41
Demographic Profile of Respondents rooms, or cages, access to which is granted
As depicted in the 93.75% of the respondents are males and only to authorize personnel).
6.25% are female. This indicates most of the human resource Inventory records are reconciled (and
working in the branch office is dominated by males. As shown in differences explained) to advantage reports
the the occupations of the respondents 27.78% are store-man, 2 regularly. (Current inventory is adjusted at 3.90 1.28
22.22% are engineers, 16.67% are accountants and 11.11% are year-end by fiscal year-end physical
managers, auditors and purchasers each respectively. This counts.)
indicates most of the respondents are store-man. Departments compare quantities received
As depicted in the same tables 83.33% of the respondents are 3 2.82 1.05
against receiving reports
first degree holders, 11.11% are in diploma level and the Materials are released from storerooms
remaining 5.56% are 2nd-degree holders. This indicates most of only based on requisitions which are
the human resources in the branch office are educated. On the 4 3.88 0.92
approved by a responsible official of the
same table, the respondents were also asked to indicate whether department.
they have experience in their job. The study shows that Adequate provisions are made for obsolete
77.78%are above five years, 16.67% are four years’ experience 5 3.06 1.12
and inactive items in inventories.
and 5.56% are one year of work experience. This shows the
Source: Researcher’s Survey
majority of the employees have at least five-year experience in
their respective occupations.

Journal of critical reviews 1237

 THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF
DESSIE, ETHIOPIA

Adequate provisions are made for the cut-

13 3.41 1.01
As the above table shows the participants of the study agreed off of receipts and issues.
that inventory records are reconciled (and differences explained) If applicable, issuing and billing procedures
to advantage reports regularly and adjusted at year-end by fiscal 14 are designed and correlated to ensure the 3.64 1.06
billing of all items
year-end physical counts with mean score X =3.90 and There are physical segregation and proper
materials are released from storerooms based on a formal 15 accounting control of merchandise on hand 2.35 0.86
request for official services and approved by a responsible that is not the property of the entity.
person in each department of the agency with the highest mean Source: Researcher’s Survey
score X =3.88 and least response variation (S.D= 0.92).
As it depicted in the above table the respondents have reflected
This indicated us the agency implemented efficient material their agreement on the inventory handling systems of the
management and effective control of inventories that help to organization for most of the items related to procedures for
achieve better operational results and reduce the risk of physical counts. According to their responses the procedures for
construction material loss or working capital on an annual basis. physical counts have provided the opportunity for properly
It has a significant influence on the profitability of the agency. accounting the goods that are consigned in and out (with
Meanwhile, the respondents were not willing to give their
opinion (since the mean scores fall in the interval from 2.45 – mean X =4.00), provided a room for adequate supervision
3.45 undecided) concerning the risk taken to prevent loss or
(with mean X =3.94), helped the management to make reviews
theft (Item 1 with X = 2.76), comparison of quantities received
and reconciliation to the inventory records (with
against receiving reports (Item 3 with X = 2.82) and the X
provisions made for obsolete and inactive items in inventories mean =3.88), helped the organization in recording counts on

(Item 5 with X = 3.06). permanent inventory count sheets (with mean X =3.82), were
used for clearly marking damaged and obsolete inventory (with
Table 3: Inventory Handling Systems
mean X =3.76), helped to clearly see the signing and dating of
Items Mean S.D
inventory count sheets by the person supervising the count (with
Procedures for physical counts provide the
1 2.41 0.95
use of adequate written instructions. mean X =3.70), were applicable in issuing and billing
Procedures for physical counts provide a procedures are designed and correlated so as to ensure the
2 3.94 0.94
room for adequate supervision.
The procedures for physical counts billing of all items(with mean X =3.64), the physical counts
3 provide for clearly marking damaged and 3.76 0.91 were useful in the process of rechecking of counts and
obsolete inventory.
The procedures for physical counts descriptions (with mean X =3.58) and helped to make careful
4 provide for the use of pre-numbered tags 2.29 1.03 investigation of significant overages and shortages (with
which are accounted for.
The procedures for physical counts mean X =3.52) with slight response variations respectively. On
provide for the counting of the items and the other hand, the respondents have reflected their
5 access to the tags only by employees who 2.17 0.76 disagreement on the use of the procedures of physical counts
are not responsible for the custody of the
particular items. inadequate written instructions (with mean X =2.41) and the
The procedures for physical counts use of pre-numbered tags which are accounted for the counting
provide for the rechecking of counts and of the items and access to the tags only by employees who are
descriptions (dual counts) where not responsible for the custody of the particular items (with
6 3.58 1.29
perpetual records are not maintained and
where variations from the perpetual mean X =2.29 and X =2.17 respectively). They have also
records are significant. insisted their disagreement on the procedures of physical counts
The procedures for physical counts concerning the adjustment of records for inventory discrepancies
7 provide for careful investigation of 3.52 1.30 after approval by a responsible official other than stores
significant overages and shortages. personnel and physical segregation and proper accounting
The procedures for physical counts control of merchandise on hand that is not the property of the
provide for prompt adjustment of records
8 for inventory discrepancies after approval 2.11 0.99 entity (with means X =2.11 and X =2.35). Finally, the
by a responsible official other than stores respondents hesitated to show their position regarding the role
personnel. of the procedures for physical counts inadequate provisions for
The procedures for physical counts
9 provide for recording counts on permanent 3.82 0.93 the cut-off of receipts and issues (with mean X =3.41).
inventory count sheets. Generally, the employees’ response reflected the use of physical
counts of inventories for different purposes. As far as Bhalla
The procedures for physical counts
(2000) is concerned five types of control devices are used
provide for the signing and dating of
10 3.70 1.33 inventory handling system.
inventory count sheets by the person
supervising the count.
The procedures for physical counts
11 provide for properly accounting for goods 4.00 0.88
that are consigned in and out.
The management reviews the
12 reconciliation of physical inventory counts 3.88 0.93
to the inventory records.

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 THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF
DESSIE, ETHIOPIA

Table 4: Perpetual Inventory Systems In purchasing materials, the organization

Items Mean S.D takes anticipated market trends,
Detailed perpetual inventory records are 6 transportation charges, and normal quantity 3.76 0.83
1 periodically reviewed for slow-moving 2.29 0.91 of purchase into consideration (Standard
items. price method).
A perpetual inventory system is (including Source: Researcher’s Survey
2 quantities and value) in use as to all major 3.41 1.16
classes of inventory. As shown Table 4 the mean scores X =3.76, X =3.64,
Perpetual inventory records are updated
3
promptly.
3.52 1.16 X =3.58 and X =3.52 with their minor differences among the
The postings to the perpetual inventory respective standard deviations the respondents have shown
4 records made promptly are from Pre- 2.41 1.05 their agreement on the different usage of inventory control
numbered, signed receiving reports. techniques by the branch office.
The postings to the perpetual inventory
5 records are made promptly from issue 3.56 1.14 Table 6: Stock Evaluation & Performance Measurement
requisitions. Items Mean S.D
In additions to perpetual inventory, records Targets are often arbitrarily set by
6 are referenced to supporting invoices to 3.88 0.84 management without full understanding
1 2.35 0.93
ensure easy verification of the records. and due consideration of whether they are
Inventories are taken without prior realistic
7 reference to quantities on perpetual 2.35 0.93 The organization gives priority for accurate
records. 2 recording of inventories to assure material 2.23 1.03
There are discrepancies between physical availability when orders are released.
8 counts and perpetual records investigated 3.58 0.95 The organization conducts regular auditing
3 3.52 1.06
and resolved. inventory records.
Source: Researcher’s Survey The organization uses a strong cycle
counting program, which leads to complete
As shown in the above table the mean scores X =3.88, 4 or partial elimination of the annual physical 2.41 1.10
inventory with its high costs and
X =3.58, X =3.56 and X =3.52 with their minor differences questionable accuracies.
among the respective standard deviations have shown their The internal control systems appear to be
agreement on the use of perpetual inventory systems are 5 adequate for the overall inventory system of 3.58 1.00
referenced to supporting invoices to ensure easy verification of the organization.
the records, helped the organization to identify discrepancies Source: Researcher’s Survey
between physical counts and perpetual records investigated and
resolved, gave chance to review posts using requisitions and As depicted in the above table the respondents are in agreement
update helped to update the records promptly. On the other concerning adequacy of the overall inventory system (with mean
hand, the respondents reflected their disagreement concerning
regular inventory records of slow-moving items (with X = 3.58) and regular auditing inventory practice of the

X =2.29). That means regular inventory records are not made organization (with mean X = 3.52) having slight response
for slow-moving items in this organization. Similarly, the differences. Meanwhile, the respondents have shown their
perpetual inventory records made promptly are not from Pre-
disagreement on the arbitrary target setting (with mean X =
numbered, signed receiving reports (with X =2.41) and 2.35) and in giving priority for Inventory Record Accuracy (with
inventories are not taken without prior reference to quantities
mean X = 2.23). Finally, the respondents were unable to share
on perpetual records (with mean X =2.35). Concerning the views regarding strong cycle counting program, which leads to
usage of perpetual inventory to all major classes of inventory, the complete or partial elimination of the annual physical inventory
respondent's position is neither agreement nor disagreement
with its high costs and questionable accuracies (with mean X =
(with mean X =2.41). 3.41).
Table 5: Inventories Control Techniques Table 7: Inventory Management Constraints
Items Mean S.D Items Mean S.D
The organization uses the ABC analysis of The organization has a storage problem in
Inventories (in this approach of inventory 1 4.18 0.85
1 3.37 1.16 its stock management system.
control high-value items are more closely There are significant losses of construction
controlled than low-value items). 2 materials in the company due to a lack of 3.65 0.80
The highest value items are under the tight quality production by industries/producers.
2 control and responsibility of the most 3.58 0.95 The organization respective departments
experienced personnel. 3 have qualified personnel who can properly 3.18 1.09
In the organization Materials received first manage their duties in inventory handling.
3 3.52 1.06
are issued first (First in first out). Due to work overload, the organization has
In the organization materials received last a problem of delivering inventory reports to
4 2.35 0.88 4 3.82 0.99
are issued first (Last in first out). the regional housing and construction
In the organization materials issued are Agency.
priced at the weighted average cost of The organization has a day to day recording
5 3.64 0.82 5 2.70 1.15
material in stock (Weighted average cost system of stock and bin card.
method). Source: Researcher’s Survey

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 THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF
DESSIE, ETHIOPIA

performance measurement in the agency prevented the overall

As the above table shows, the mean score X =4.18 signifies the inventory managing systems of the agency.
respondents' agreement that the agency has a storage problem in
its stock management system with a slight response variation. These create problems of knowing the amount and specific
numbers of materials in the storerooms and create problems of
The mean score X =3.82 for the item(4) shows the inventory management. In addition, the agency may not use
respondents agreement on the reporting problem to the regional systems of records, so the storekeeper and the respective
housing and construction Agency due to work overload with the departments have faced problems of quantitative record of
least response variation as compared to the other items. Besides, stores materials and their cost, receipt, issue and balance of each
item in the store
the mean score X = 3.65 revealed agreement among the
respondents regarding significant losses of construction Even though the agency used the regional inventory
materials in the company due to a lack of quality production by management policy, procedures and manuals, it faced to some
industries/producers. On the other hand, the mean score gaps. That is due to its context is differ from the other
organizations’ in the region and need its own conditions for
X =3.18 for the item (3) describes the respondents were implementing activities more specifically based on its rules and
unable to decide concerning the organization respective regulations, so the researcher recommended the agency to have
departments have qualified personnel who can properly manage its own inventory policies, procedures and manuals rather than
their duties in inventory handling. In addition to these, the mean using the others.
score X = 2.70 for the item(5) shows the respondents were Providing unique activities for auditors to count and check
unable to give their opinion (undecided) concerning the through inspection. It also controls its stock by taking physical
organization day to day recording system of stock and bin card counts annually for the advantage of reports at the end of the
with the highest response variation as compared to the other fiscal year. As a result, problems with the inventory do not
items. correct until the count could do, typically at the end of the fiscal
year, so the agency should improve its inventory control systems.
CONCLUSION
This paper has presented a brief overview of inventory Even though the agency had so many strong sides in having
management practices on Amahara National Regional State written instructions and procedures to provide physical counts,
Construction and Housing Development Agency Dessie City it had some weakness to make them familiar and applicable all of
Branch Office. It intended to provide a short and precise them by its employees. Therefore, the agency had faced to some
conclusion and implications of findings. A conclusion is done to problems of inventory handling systems in its day-to-day
indicate the outcome of the study and forward implications. activities because of those employees who did not implement the
agency’s written instructions and procedures that enable them to
However, the agency has its own currently written, well provide physical counts. As a result, the agency should make
approved, inventory policies, procedures and manuals, which are more familiar its policy, procedures and manuals to its
systematically communicated to the respective departments. employers and improve their inventory handling system.
This means each department has implemented its own inventory
Policies and Procedures in a better and organized way based on As some of the respondents stated that, perpetual inventory
their level of activities. Therefore, the agency used these policies, records did not periodically review to detect slow moving. This
procedures and manuals in each departments to support its means the work of recording an inventory did not implement
internal controlling system by making the inventory properly by the concerned bodies. Thus, appropriate choices on
management documents (Receiving, issuing, accounting and the removal, relocation, or discontinuance of various parts of the
storing responsibilities) familiar to its employees. According to product base may be challenging for the manager to make. The
the respondents, sufficient information is not given on these department will take its own steps to address the challenges of
items it is very difficult to explain the inventory control system of Perpetual Resource Systems.
the branch office at this stage. Even though the respondents
confirmed the existence of inventory policies and manuals to REFERENCES
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of all product products, stock rates may be tracked by physical f., 2001. New perspectives on Construction supply chain
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According to the respondents, the agency focused first on the Small and Medium-Sized Construction Enterprises. Proc. of
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The major of the respondents agree with the agency used such
Comparing the practices of U.S. and Japanese companies:
stock evaluation & performance measurement to complete or
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8. Naoum, S, (2007). Dissertation research and writing for
and numbers of items in the store, to identify usable and
cons traction students, Oxford: Butterworth – Heinemann.
despoiled materials. This shows that having stock evaluation &

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 THE FEASIBILITY OF INVENTORY MANAGEMENT SYSTEM IN CONSTRUCTION AND HOUSING DEVELOPMENT UNIT OF
DESSIE, ETHIOPIA

9. Nasir, H. (2008). A Model for Automated Construction

Materials Tracking. University of Waterloo: Master Thesis.
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and Statistics. New Delhi, New Age International plc
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