Effectiveness of Vendor Managed Inventory Systems in Retail Supermarkets in Kenya

Benson Kuira Irungu and Kenneth Lawrence Wanjau.

Abstract

Every business exists to make profit. In the 21st century, these profits are realized in a myriad of ways including cost savings, improvement of working capital and reduction of risk. This paper sought to find out the contribution of adoption of Vendor Managed Inventories, also known as Consignment Stock Management, as a strategy that shrewd business executives in the retail supermarket chains could use to gain competitive advantage by leveraging on inventory supplier reliability, lower
administrative costs, and strong buyer/supplier relationships to grow revenues and reduce risk. Data from procurement managers in 24 retail supermarkets with a branch network of more than three in Nairobi was analyzed. The findings suggest that VMI has been effective in retail supermarkets by improving stock management, cash flows and risk management. VMI seeks to accomplish a deeper integration and collaboration between the members of the supply chains in order to cope
with the ever decreasing time window for product and service fulfillment and the requirements for the improvement of operational efficiency.

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Collective Efficiency and Its Effects on Infrastructure Planning and Development for Small Manufacturing Enterprises in Kenya

Stephen Irura Nganga, George Mark Onyango and Bonaventure Wanjala Kerre.

Abstract

This paper explores the extent of use of collective efficiency among the wood enterprises in Kenya and its effect on the infrastructure planning and development. Small manufacturing enterprises are known to contribute to economic dynamism, entrepreneurship and industrial development in less developed countries. However, they are handicapped by lack of capacity to accumulate capital, develop infrastructure and acquire technologies necessary for competing in a liberalized global market individually. Data was obtained from 284 wood enterprises owner/managers selected through multistage sampling in western Kenya and by use of questionnaires, observation checklists and documentary analysis. Data analysis by regression shows that infrastructure development is affected linearly by collective efforts. The paper
recommends that industrial infrastructure planning in Kenya should be informed by the Collective efficiency, Networking, Systems approach and Constructivism paradigms so as to anchor the small manufacturing enterprises in the industrialization process. The paper also recommends that a Jua Kali development authority should be established to address the needs of the small manufacturing enterprises sector borrowing from the export processing zones authority model.

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The Effects of Interest Rate Spread on the Level of Non-Performing Assets: A Case of Commercial Banks in Kenya.

Kenneth Wanjau and Ngetich Collins.

Abstract

This study sought to establish the effects of interest rate spread on the level of Non Performing Assets in commercial banks in Kenya. This study adopted a descriptive research design on a sample of all commercial banks in Kenya operating by 2008 which are 43 in number. The study used questionnaires to collect data from primary data sources and secondary data, collected from Bank Supervision Report, to augment the primary data findings. The study used both quantitative and qualitative techniques in data analysis to the relationship between the interest rate spread and loan non-performance. The data were presented using graphs, table and pie-Charts. The study concludes that interest rate spread affect performing assets in banks as it increases the cost of loans charged on the borrowers, regulations on interest rates have far reaching effects on assets nonperformance, for such regulations determine the interest rate spread in banks and also help mitigate moral hazards incidental to NPAs. Credit risk management technique remotely affects the value of a bank‟s interest rates spread as interest rates are benchmarked against the associated nonperforming assets and non-performing assets is attributable to high cost of loans. The study recommends that commercial banks in Kenya should assess their clients and charge interest rates accordingly as ineffective interest rate policy can increase the level of interest rates and consequently NPAs. They apply stringent regulations on interest rates charged by banks so as to regulate their interest rate spread and enhanceperiodic/regular credit risk monitoring of their loan portfolios to reduce the level of NPAs.

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Modeling a Hierarchical System with Double Absorbing States

Lydia Musiga, John Owino and Patrick Weke.

Abstract

This paper describes a Markov Chain transition model for predicting expected numbers of successful graduates and unsuccessful dropouts from an education system, thus the Double absorbing states. This is an improvement on the Single Absorbing State model (see Musiga et al 2010) where successful and unsuccessful dropouts were grouped together. The major limitation of the Single Absorbing State model was the inability to determine the proportions of students who successfully graduated from and unsuccessfully dropped out of the system. The theory of Absorbing Markov Chains is used due to its adaptability to the representation of absorbing rates, transition rates and dropout rates for both successful and unsuccessful students, from an education system. The Double Absorbing States model enables us to predict the numbers of expected qualified personnel vis-à-vis the numbers of unsuccessful dropouts from a system.

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The Relationship between Exchange Rate Uncertainty and Investment in Some of Sub-Saharan African Countries

Masood Soleymani and Ahmad Akbari.

Abstract

This paper examines the relationship between exchange rate uncertainty and domestic investment by using the fixed effect approach of panel data model. The results of the theoretical part show that there is nonlinear relationship between these two variables, it means exchange rate uncertainty and investment. We selected fifteen countries of the Sub- Saharan African countries and used the GARCH (1,1) approach to obtain the uncertainty of exchange rate for every country. The results of the estimation show that there is a negative relation between exchange rate uncertainty and investment and the share of investment from growth of GDP in these countries, is very small. In addition, the investment in these countries is very sensitive to exchange rate uncertainty not only in period of t but also about the exchange rate uncertainty in the other periods. The other result is that the share of investment from growth of GDP through two periods (it means the growth of GDP and its lag) is approximately same.

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