Capacity Buffering and Demand Uncertainty of Manufacturing Firms in Rivers State, Nigeria

This study examined the relationship between capacity buffering and demand uncertainty of manufacturing firms in Rivers State, Nigeria. The measures of demand uncertainty used are demand forecasting accuracy and inventory turnover. The study adopted a cross-sectional survey research design. The target population was the 34 manufacturing firms registered with the Manufacturing Association of Nigeria, as obtained from the 2023 updated Directory of Rivers State zone of the association. However, the study elements were 80 which comprised managers from the production, marketing and operations departments of the respective 34 manufacturing firms. Data for the study was collected through structured questionnaire. The five-point Likert scale was used to measure the responses from the respondents. Data was analyzed using mean and standard deviations with charts for the primary analysis of the study variables, while inferential statistics such as the Spearman Rank Order Correlation Coefficient was used to test the hypotheses. The results of the study showed that there is moderate positive relationship between capacity buffering and demand forecasting accuracy. The study also revealed a strong positive relationship between capacity buffering and inventory turnover. The study concludes that capacity buffering has a significant relationship with demand forecasting accuracy and inventory turnover of manufacturing firms in Rivers State, Nigeria. The study therefore recommends that manufacturing firms should integrate capacity buffering strategies such as overtime shifts, flexible labor and machine redundancy into their demand forecasting models. Again, this alignment enables firms to better accommodate fluctuations in customer demand, thereby improving the accuracy and reliability of forecasting results.