Influence of Inventory Control Practices on Procurement Performance of Public Hospitals in Trans Nzoia County
Keywords:
Economic order quantity, First in first out, Inventory Audit, Inventory control practices, Safety Stock OrderingAbstract
Hospitals procure almost all the products that they use for both pharmaceutical and non-pharmaceutical purposes, food items, cleaning agents among others. A significant amount of hospitals’ expenditure goes to purchasing of these items. However, poor inventory control of these products lead to loss, misuse, lack of accountability and poor management of these products. This study looked at the relationship between inventory control practices and procurement performance of public hospitals in Trans Nzoia County with regards to use of economic order quantity, safety stock ordering, first-in-first-out and inventory audit. The main objective of this study was to assess the influence of inventory control practices on procurement performance of public hospitals in Trans Nzoia County. A survey research design was used in this study. The study was conducted in public hospitals in Trans Nzoia County which comprised of Kitale County Hospital, Mt. Elgon Hospital and six sub-county hospitals (Endebes, Kwanza, Cherang'any, Saboti, Kapsara and Matunda Sub-County Hospitals). The study employed census as the sampling technique. The sample size for this study was 47 respondents comprising of heads of departments of procurement and stores, their assistants as well as employees working in those departments. A structured questionnaire was used for collecting data. The research instrument was pretested at Kapenguria County Referral Hospital and Chepararia sub-county hospital; West Pokot County. Collected data was analyzed using statistical package SPSS.
Pearson correlation and multiple linear regression were used for inferential analysis. The study found out that the use of economic order quantity had significant influence on procurement performance of public hospitals in Trans Nzoia County. However, EOQ did not take into account changing consumer demand and seasonal changes in inventory costs. Safety stock ordering had significant influence on procurement performance of public hospitals in Trans Nzoia County. Hospitals always had safety stocks of its inventories. Safety stock ordering absorbed the variability of customer demand and was used to protect the hospital from stock-outs caused by inaccurate planning. High level of safety stock ordering led high customer satisfaction. However, high level of safety stock ordering led to high holding costs for the hospitals. FIFO had a positive significant influence on procurement performance of public hospitals in Trans Nzoia County. FIFO resulted in a higher ending inventory and lower cost of inventory. Inventory audit had a positive significant influence on procurement performance of public hospitals in Trans Nzoia County. Inventory audit ensured timely and adequate identification and evaluation of inventories and enabled the hospitals evade risks associated with stock such as unnecessarily high stock levels. The study recommended that hospitals should find a complementary inventory control practice to the use of EOQ which takes take into account changing consumer demand and seasonal changes in inventory costs.
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