INVENTORY MANAGEMENT OF DAIRIES IN NEPAL

Abstract

The dairy industry plays a vital role in global food supply chains, providing essential products such as milk, yogurt, cheese, and butter. Efficient inventory management and supply chain practices are crucial for ensuring the profitability and sustainability of dairy operations. This study investigates inventory management, supply chain practices, and profitability within the dairy industry, focusing on two case studies: Dairy Development Corporation (DDC) and Sujal Dairy. The background of the study is rooted in the need to understand the factors influencing profitability and supply chain management in dairy industries, given the challenges posed by fluctuating demand, perishable products, and complex supply chains. The research objectives are twofold: firstly, to explore the relationships between key variables such as Economic Order Quantity (EOQ), inventory turnover, stockout rates, and profitability; and secondly, to assess the effectiveness of inventory management and supply chain practices in driving profitability in DDC and Sujal Dairy. The methodology encompasses descriptive statistics, correlation analysis, regression modeling, and ANOVA testing, providing a robust framework for examining the complex interactions between variables and identifying significant predictors of profitability and supply chain management. The findings of the study reveal significant correlations between inventory turnover, EOQ, and profitability in both DDC and Sujal Dairy, underscoring the importance of efficient inventory management practices. Additionally, strong positive correlations between stockout rates and supply chain management effectiveness highlight the critical role of inventory availability in ensuring smooth supply chain operations. Comparative analysis between the two dairy industries elucidates similarities and differences in profitability, supply chain management practices, and inventory costs, emphasizing the need for tailored strategies to address operational challenges and capitalize on opportunities for improvement. KeyWords: Inventory Management, Dairy Industry in Nepal, Supply Chain Management, cost efficiency, Inventory Turnover, Stockout rates, EOQ