Plastic money transaction processing problems and their impact on inventory turnover: case of OK Hwange (2016-2017)

Abstract

Inventory turnover ratio is a very important performance measure regards the efficiency and speed at which organisations turn inventories held into cash and/or sales. This research examined the impact of the continued decline of inventory turnover ratio on the profitability and survival of OK Hwange during the dominance of plastic money. This is because big supermarkets such as OK Hwange charge low mark ups over and above their costs with the aim of maximising sales volumes to remain profitable and competitive. To generate the information needed in fulfilment of this study, the researcher used both primary and secondary data collection methods. Information obtained through questionnaires and/or likert scales were presented on graphs, charts, tables and also analysed in percentage terms. Study findings have showed that OK Zimbabwe was failing to maintain and/or increase inventory turnover ratio during the time period when the use of plastic money as a retail payment system was dominant. The study also revealed that the decline in inventory turnover was due to problems affecting the transaction processing speed of plastic money. The following factors have been identified as have been hindering the efforts of big supermarkets dominantly using plastic money retail payment systems to increase and/or maintain inventory turnover ratio: poor network connectivity of plastic money retail payment systems, high dependency on smooth electricity supply of plastic money systems and the significant decline in cash supply in the economy. In conclusion, the researcher recommended strategies/measures to improve the efficiency of plastic money transaction processing speed which in turn will result in increased sales volumes, increased cost of goods sold and decreased closing inventories thereby resulting in high inventory turnover ratio.