Effect of Inventory Management Practices on Liquidity of Public Technical Training Institutions in Rift Valley Region, Kenya

ABSTRACT: Technical training institutions in Kenya perform one of the major roles in educating highly skilled artisans, craftsmen, technicians and technologists with the aim of bringing economic growth. Public technical training institutions to operate normally, it should have enough liquidity capabilities. However, there has been occurrence of the liquidity problem in technical training institutions. This has led to early closure of technical training institution each term, none payment of suppliers on due date, shortage of practical materials used by students in workshops, shortage of food for boarding students, none payment of salaries to none teaching staff and delayed salaries for part time lecturers. Specifically, the study intended to determine the effect of inventory management practices on liquidity of public technical training institutions in Rift Valley Region, Kenya. This study was guided by Economic Order Quantity model which is aligned to objective of the study. The study adopted census survey due to fewer number of respondents. Accessible population was 38 respondents comprising of 19 principals and 19 accountants. Questionnaires were self-administered. The pilot test was administered using five questionnaires to public technical training institutions in Nyanza region. Cronbach’s alpha coefficient above or equal to 0.70 was considered sufficient for reliability test. The data collected was analyzed, with respect to the study objectives, using both descriptive and inferential statistics. Descriptive statistics include frequencies, percentages, mean, standard deviation and variance. Inferential statistics included product moment correlation analysis and multiple regression. The study findings indicated that inventory management practices (β = 0.344; ρ < 0.05) was significant to liquidity of public Technical Training Institutions in Rift Valley Region. The study recommended that public technical training institution should put in place effective inventory control systems to their supply chain department.
KEY WORDS: Inventory Management Practices & Liquidity