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                   INVENTORY MANAGEMENT PRACTICES OF SMALL, MEDIUM AND MICRO 
                            ENTERPRISES IN THE CAPE METROPOLE, SOUTH AFRICA. 
                                                                  
                                                               by 
                                                                  
                                                                  
                                             RUTENDO MELODY KANGURU 
                                                                  
                                                                  
                          Thesis submitted in fulfilment of the requirement for the degree 
                                                                  
                                                                  
                         MAGISTER TECHNOLOGIAE: Cost and Management Accounting 
                                                                  
                                                                  
                                in the Faculty of Business and Management Sciences 
                                                                  
                                                                  
                           at the Cape Peninsula University of Technology, Cape Town. 
                 
                 
                Supervisor: Dr Peter Kamala   
                 
                 
                Cape Town  
                 
                 
                October 2016 
                 
                 
                                                                  
                                                                  
                                                 CPUT copyright information 
                This  dissertation/thesis  may  not  be  published  either  in  part  (in  scholarly,  scientific  or 
                technical journals), or as a whole (as a monograph), unless permission has been obtained 
                from the University. 
                 
                 
                 
                 
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                                  DECLARATION 
                                         
          I,  Rutendo  Melody  Kanguru,  declare  that  the  contents  of  this  thesis  represent  my  own 
          unaided  work  and  that  the  thesis  has  not  previously  been  submitted  for  academic 
          examination towards any qualification. Furthermore, it represents my own opinions and not 
          necessarily those of the Cape Peninsula University of Technology. 
           
           
          Rutendo Melody Kanguru                          October 2016 
           
           
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                                   ABSTRACT 
           
           
          Small, medium and micro enterprises (SMMEs) in South Africa are perceived to be failing 
          partly due to ineffective management practices. Using a questionnaire survey, this study 
          sought to determine the inventory-management practices of SMMEs operating in the Cape 
          Metropole,  and  to  evaluate  the  effectiveness  of  the  inventory-management  practices 
          currently used by these entities. In addition, the study sought to determine the challenges, if 
          any, that are experienced by SMMEs from the inventory-management practices currently 
          used. This study was motivated by a dearth of research on inventory-management practices 
          of SMMEs. 
           
          The findings of the study revealed that most of the SMMEs used ‘Rule of Thumb’ as an 
          inventory-management  practice.  Regarding  the  effectiveness  of  the  practices  used,  the 
          study revealed that the SMMEs investigated were perceived to be moderately effective, with 
          SMMEs  practising  good  inventory  management  techniques  such  as  warehousing, 
          stocktaking, budgeting, good ordering habits and segregation of warehouse duties. 
           
          In  relation  to  the  challenges faced by SMMEs  from the inventory-management practices 
          currently  used,  the  findings  suggested  that  theft,  shortage  of  inventory,  errors  due  to 
          incompetent staff, physical inventory not matching up with records and an inability to keep 
          up with the demand of the customers were some of the main challenges faced. 
           
          This study contributes to the literature on inventory-management practices of SMMEs and 
          fills the gap of knowledge in this neglected area of research. The findings of this study are of 
          significance  to  the  decision-makers  of  SMEs  as  they  will  be  enlightened  on  the  best 
          practices and different inventory-management practices that are vital for their businesses’ 
          survival  and  that  have  been  adopted  by  their  competitors.  This  should  enable  them  to 
          evaluate  their  own  inventory-management  practices  and  to  decide  whether  to  improve, 
          change or continue with their current practice. The South African Government could also 
          draw on the findings of this research to inform its future intervention strategies meant to 
          improve the survival rates of these entities. This could be in the form of the creation of short 
          courses meant to assist SMMEs to improve their inventory-management practices.  
           
           
           
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                            ACKNOWLEDGEMENTS 
          
          
         I wish to thank: 
          
             My Heavenly Father, The Son and The Holy Spirit, from whom I drew the strength to 
              make it possible to finish this thesis;  
             Dr Kamala for his supervision, encouragement and support;  
             My Mother and Father for their support throughout this journey; and 
             All my friends, mentors and loved ones who encouraged me in words and deeds. 
          
          
          
          
          
          
          
          
           
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
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