Comprehensive Analysis on Effectiveness of Inventory Management Practices on the Performance of Wholesale Drug Dealers

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Bipul Ch. Kalita , Bapan Kalita


The resource management is one of the most significant strategies for organizational
effectiveness and sustainable development. The accurate and optimum utilization of resources
will contribute in long-term stability influencing the product lines, supply chain, logistics and
overall product development life cycle. This paper aims to identify the effective inventory
management practices and justify how inventory management influences the performance of
Wholesale Drug Dealers. To meet this purpose, the impact of inventory management on the
performance, inventory practices such as Just in Time, Economic Order Quantity, Inventory
Categorization Technique, Replenishment Principle and Material Requirements Planning have
been used. The target population of the study is 1952 licensed wholesale drug dealers of
Kamrup District of Assam, with a sample size of 325 dealers. A standard 5-point Likert scale is
used and hypotheses are tested through Pearson’s Chi-Square. An exploratory factor analysis has
been done to the categorical variables to know the important components for the study. The
predictive analysis is used to establish the cause and effect relationship between stock holding
and sales as well as stock holding and profit. The study reveals that there is linear relation
between stock holding and profit, and stock holding and sales. The structural equation model
established the effectiveness of various inventory management techniques on the performance of
Wholesale drug dealers. The authors suggest that the dealers require deep-level training by the
experts in order to execute appropriate inventory management practices efficiently.

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