Inventory management and cost control in a perishable goods environment: a case study of Bakers Inn sales and distribution

Abstract

The study investigated the effectiveness of inventory management systems and their effect on cost control in a perishable goods company and took Bakers Inn Sales and Distribution (Zimbabwe) as a case study. The issue was the absence of empirical findings supporting the use of particular inventory techniques on cost control because of the short shelf life of bread. The aim was to list the existing methods used for stock control, evaluate any difficulties, and make recommendations. Case study design was adopted, which is quantitative descriptive. Primary data was gathered from employees in five depots in the Southern Region by using a Google Forms questionnaire. The questionnaire proved to be reliable. Results indicated that manual FEFO and day-to-day stock rotation were common and technological batch tracking of expiration dates was not common. The main challenges faced were return logistics costs, load shedding, generator fuel costs, poor roads and poor mobile connectivity. The hypothesis tests showed that there is a significant positive relationship between inventory management techniques and cost control, while there is a significant negative correlation between challenges faced in the inventory of perishables and cost control. The study finds that, although waste is partly reduced by manual practices, it is caused by infrastructure shortcomings to hinder cost control. It suggests that batch tracking be enabled through a bar code system, introduce a 'nearing expiry' bread pricing mechanism, develop formal partnerships with secondary markets and introduce sales incentives based on net sales.