Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 5

e) Inventory Management Techniques Modern inventory management practices are based on well-recognized inventory techniques. Though these techniques were developed many years ago, they still perform well from a theoretical and application point of view. Inventory techniques such as economic order quantity (EOQ) and just-in-time (JIT) are popularly used in conjunction with other techniques, for instance, material replacement planning (MRP) and bin card systems to improve the efficiency of inventory management practice. EOQ and JIT techniques are discussed in the section below due to their significant contribution to the rationalisation of inventory management approach and assisting in the formulation of control policies i. Economical Order Quantities The technique determines the optimum order size for individual inventory items, which minimises both total stock holding and ordering costs (Langfield-Smith, Thorne & Hilton, 2006). A benefit of the EOQ technique is that it is robust as it gives satisfactory answers even with substantial variation existing in its parameters. ii. Just in time (J.I.T) Just in time inventory management technique helps in reducing inventory costs by avoiding holding excess inventories and mishandling raw materials. Itsgoal is to maintain just enough material in the right place and at the right time ensuring that just the right amount of the productis available at any given time (Anichebe & Agu, 2013).It is essentially an inventory management technique where inventory is acquired only when required in the business for the production process to improve the return on investment of the business by reducing in-process inventory and its associated costs (Sushma & Bhupesh, 2007). For the just-in-time technique to work successfully, the quality of the parts must be very high because defective materials could halt the operations of the assembly line, there must be dependable relationships and smooth cooperation with suppliers. f) Theoretical Framework This study is underpinned by three theories namely adaptive structuration theory, stock diffusion theory and scientific management theory. i. Adaptive Structuration Theory (AST) Structuration theory was first proposed by Anthony Giddens in his constitution of the society in 1984, which was an attempt to reconcile social systems and the micro/macro perspective of organisational structure. Dimitrios (2008) borrowed from Giddens to propose AST and the rise of group decision support systems. AST provides the model whereby the interaction between advancing information technologies (IT), social structures, and human interaction is described, and social structures, rules, and resources are provided by IT as the basis for human activity. AST is a viable approach to studying how IT affects inventory management because it examines the change from distinct perspectives. AST is relevant in today’s inventory management practice due to the expanding influence that advancing technologies have had concerning the human-interaction aspect of AST and its implication on socio-biologically inspired structuration in the security software application. ii. Stock Diffusion Theory The stock diffusion theory was pioneered by Braglia, Gabbrielli and Zammori (2013) with the intention of deriving the probability distribution of the stock consumption and that of the reorder time. There are three considerations of the stock diffusion theory which are the storage space requirement, how quickly inventory is sold and how to avoid inventory from becoming outdated before it is sold. These considerations can prevent shortages and wasteful spending which in turn reduces the operational cost of the store and increases its profit (Braglia et al., 2013). iii. Scientific Management Theory The theory consists of the works of Fredrick Taylor who started the era of modern management in the late nineteenth and early twentieth centuries. Taylor consistently sought to overthrow management by the rule of thumb and replace it with actual timed observations leading to the one best practice (Watson, 2002). Taylor advocated for the systematic training of workers in the one best practice rather than allowing them personal discretion in their tasks. He further argued that the workload would be evenly distributed between the workers and management with management performing the science and the workers performing the labour, each group doing the work for which it was best suited. Taylor’s strongest positive legacy was the concept of breaking a complex task down into several sub-tasks and optimising the performance of the subtasks, hence, his stopwatch measured time trials (Ogbo, Onekanma & Ukpere, 2014). As a result, Taylor proposed three underlying principles of management. Firstly, there is a need to develop a science of work to replace old rule-of-thumb methods, pay and other rewards linked to the achievement of optimum goals, measures of work performance and output. Failure to achieve these would in contrast result in a loss of earnings. Second, workers should be scientifically selected and trained on the recent method of inventory management strategies and models to achieve the best 3 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) C © 2022 Global Journals Analysis of the Impact of Inventory Management Practices on the Effectiveness of Retail Stores in South Africa Ramakrishna (2005) AST’s appropriation process, therefore, provides a good model to analyse the utilisation and penetration of new technologies in retail stores.