Investigation of Sustainable Inventory Management system and its challenges in Adama Agricultural Machinery Manufacturing Industry

Abstract

The Adama Agricultural Machinery Industry (AAMI) was founded in September 1978 E.C. with the goal of improving and mechanizing the agricultural sector while supporting the Ethiopian Metal Industry. To perform this case the company was under threatening because of different types of problems (the increase in the inventory level and obsolete inventory). The purpose of this thesis is to investigate the factors affecting the sustainable inventory management and propose strategies to overcome the challenges of AAMI. The primary and secondary data sources were used for analysis of the existing inventory management system. The primary data collected by using questionnaire and interviews whereas the secondary data collected from the document analysis. The ABC analysis used to classify inventories. The result have shown that the A-items shares 70.82% in values and 16.48% in quantity, B-items in turn shares 19.94% in value and 26.37% in quantity whereas the C-item shares 9.24% in value and 57.14% in quantity. The higher and medium HP tractors shares more than 80% in price, so they need special attention to balance and optimize the stock level. The annual production and demand computed to forecast the future demand and production for tractors. The forecasted value shows the average demand of tractors expected to be increased 85.8% in 2018E.C compared to 2012E.C production year. Conclusion and recommendation were drown.