Evaluation of Inventory Management Practice in Food Processing Industries in Lagos: Analytical Hierarchy Process Approach

Abstract

A survey of food processing industries was conducted to examine different inventory strategies in order to establish the most acceptable inventory practices in Lagos State, Nigeria. The criteria for selection of those inventory techniques are accuracy, cost, stock out, fraud, time, delivery, storage space, product type, features, efficiency, nature of production system, customer satisfaction, trained or qualified staff, the effectiveness of information technology system used, organizational factors, process capability, problem recurrence and characteristics of manufacturing systems. The purpose of the research is to select best inventory management practices in the food processing industry in Lagos State, Nigeria. Structured questionnaires were designed and given to various category of managers in one hundred and fifty (150) food processing industries between the period of October 2020 to December 2020. The Analytical Hierarchy Process (AHP) steps were implemented using Spice Logic Software to compute the criteria weights, criteria priority and the overall priority for inventory alternatives practiced. Based on the highest overall priority, the Analytical Hierarchy Process indicates that the best inventory strategies are Economics Order Quantity (EOQ), Minimum Order Quantity (MOQ), First-in-First Out / Last-in-First Out (FIFO/LIFO), and Safety Stock Inventory, in that order to enhance food processing industry for optimal production or manufacturing, preservation of foods, easy marketing and distribution tasks, increasing food consistency which includes availability of many foods, transportation of perishable foods over long distances, and ensuring the survival of modern supermarkets. The recommended inventory techniques for food processing industries are critical to minimizing inventory costs. As much as this study was designed for Lagos State, similar survey should be carried out for other states, including other industries apart from the food processing industries.