1.1 INTRODUCTION

 Inventories are part of the strengths of any business and can be applied as the firm’s own strategy in building its competencies. Through their application of the traditional counting, weighing, and recording systems, the inventory has never been the same in the intervention of technologies that can provide additional competency. However, it should be noted that inventory management is hardly a modern innovation. According to (Zipkin, 2000), the earliest humans kept caches of food and stone tools. Readers familiar with the bible will recall that Joseph was, among other things, a remarkably proficient inventory manager. Returning to here and now, the person who runs a business that involves selling products has a different viewpoint on inventories. This operation may serve about 70 busy, demanding people, and provides several dozen types, colors, and sizes of products, as well as hundreds of other kinds of supplies. It takes a serious, conscious effort to monitor all these items, to estimate their usages, to order new supplies from wholesalers at appropriate times, to decide when to discontinue rarely bought items and when to add attractive new ones, and so forth. These are the typical concerns of inventory management at the retail level; the operators of most retail businesses face basically the same set of problems (Zipkin, 2000). The basic, essential function of inventory management system is the ability to perform the main business transactions. Such transactions include product registration, customer and vendor tracking, tracking payment processes, purchase and order processing, and the ultimate goal of maximising sales and profits. An example; the order processing is used to provide 2 management information on stock, sales, delivery notes, invoices, and so on. Such data or information is used for decision making at management levels (Whiteley, 2004). In order for businesses to have relevant and adequate information for proper management and decision making, it is common practice for businesses to invest in inventory management systems. These systems perform many activities among which is processing data into information that involve activities such as calculating, comparing, sorting, classifying, and summarizing data. These activities organize, analyze, and manipulate data, thus converting them into information for end users including managers who need it for decision making (O’brien, 2003). There are basically three fundamental reasons for all businesses to acquire or implement the use of inventory management systems. According to (O’brien, 2003) these are found in the three vital roles that these systems can perform for a business enterprise. These roles include support for its business processes and operations, support for decision making by its employees and managers, and support of its strategies for competitive advantage. In Uganda, the business sector is flourishing and many companies are dealing in the sale of various goods and products including electronics, electricals, and their accessories. Such companies include Appliance World Limited, New Master Electronics Ltd, Cellular Service Logistics, Anisuma Traders Ltd, Segofer Technical Services which is the case study, and so on (Uganda Business Directory 2008-2010). All the above companies have or need to invest in inventory management systems in order to be able to gain competitive advantage, satisfy customer needs, and maximize pofits which is the ultimate goal of every business/company.