Influence of Demand Forecasting System on Performance of Manufacturing Firms in Kenya

Abstract

This study aimed to investigate the influence of demand forecasting systems on the performance of manufacturing firms in Kenya. Without proper management, increasing product turnover will increase design and manufacturing costs. This study employed a descriptive survey research design to accomplish its goals since it has enough provision for the protection of bias and maximized reliability. The target population comprised of managers in manufacturing firms that are members of the Kenya Association of Manufacturers (KAM). KAM therefore provided the sampling frame for this study. As at 2017, KAM had a membership of 903 manufacturing firms. A sample of 90 respondents was drawn from this population. Primary data was collected using a semi-structured questionnaire which was self-administered. Data obtained was processed and analysed using descriptive and inferential statistics. The findings from the data analysis were visually represented through tables. The study revealed that demand forecasting system explained 7.6% of the change in performance of manufacturing firms in Kenya. The study concluded that demand forecasting system significantly influence performance of manufacturing firms in Kenya. This study recommends that manufacturing firms should use quantitative methods, qualitative methods, causal methods and time series for demand forecasting. Keywords: Manufacturing, Performance, Demand, Forecasting, firm, Kenya.