ABSTRACT

Nigeria is the largest producer and consumer of rice in West Africa, but her local rice supply – demand deficit has persistently expanded due to losses incurred during storage and as a result of poor warehousing management. This study was therefore carried out to analyze the effect of warehousing management systems (WHS) on sales sustainability, profitability and efficiency of rice distributors in Ebonyi State, Nigeria. The respondents (120 rice distributors) for this study were selected via a multi stage random sampling method and data generated through the use of structured questionnaire. Data collected were analyzed using simple descriptive tools like tables, means, percentages and frequencies as well as econometric tools like Ordinary Least Square, ordered probit, bivariate probit and Z-test. Findings show that majority of the rice distributors (88%) are males, aged between 50 – 59 years (mean age of 54 years), married (93%) and followed by singles (7%). The monthly mean loss of about N4,000 and N2,000 for the traditional and modern warehousing system users respectively imply that the use of the traditional system of warehousing attracted more losses than the modern. Findings show that while majority (76%) of the traditional WHS users had sustainability value of 0.50 – 0.75, majority of the modern WHS users (92%) had sustainability value of 0.76 – 1.00 therefore suggesting that sales are more sustained with modern WHS. The profitability index, rate of return on investment and marketing efficiency values were higher for modern WHS users (0.380, 0.613 and 61.9 respectively) than traditional WHS users (0.369, 0.585 and 58.5 respectively). Although the market was generally inefficient at 61.3 and 58.5 for modern and traditional warehousing system respectively. The probit result of factors affecting the choice of various warehousing systems by rice distributors showed that the number of employees was positively signed and significant at 1% level while firm age, firm location, stock volume, credit, firm type and capital were negatively signed and significant at 1%, 1%, 1%, 5%, and 1% level respectively. The result also showed that number of customers, firm location, market training, and credit access positively influenced sales sustainability at 10%, 1%, 5% and 5% level respectively while number of competitors and warehouse maintenance cost negatively influenced sales sustainability at 1% and 5% level respectively. In addition, education, experience and volume of purchase were positively influenced and significant at 1%, 10% and 1% level respectively as factors influencing market efficiency while age of the respondent, household size, transportation cost, interest rate and labour cost were all statistically significant at 1% level and negatively influenced market efficiency. Z-test analysis of difference in mean sales sustainability, marketing efficiency and profit of modern and traditional WHS were all statistically significant at 1% level implying that warehousing system significantly influenced the sales sustainability, marketing efficiency and profit of rice distributors in Ebonyi state. Therefore it is recommended that provision of modern storage facilities such as warehouses in the study area and distributors should be enlighten on the use of modern warehousing system which sustain sales and enhances profitability.