Impact of Inventory and Warehousing Costs in Total Logistics Cost of Manufacturing Companies in Southwestern, Nigeria

The research aims to analyse the impact of cost parameters of total logistics cost with emphasis on Inventory and warehousing costs, with a view to minimizing cost and enhance effective warehousing services in manufacturing companies. The inventory is basically the carrying cost, while the warehousing costs include Picking/Retrieval costs, packing costs and loading costs. The research adopted case study approach. Twenty manufacturing companies formed the sample of the study, based on multi stage sampling techniques that incorporated cluster, stratified and purposive sampling methods. Apart from parametric test statistical techniques adopted, data analyses were done using a software application that incorporated Cobb-Douglas production function, which was packaged and tailor-made for the study. It was revealed that there were relationships between components of warehousing and inventory, however, most of the inventory carrying cost components (capital, storage and space, inventory risk costs) was significant. In other words, Inventory risk cost has a significant relationship with most of all variables (dependent and independents). The research recommends that companies should adopt scientific warehousing management system that is information technology in orientation, as well as lay emphasis on inventory in attempt to cut cost, simultaneously maintaining customers service.