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James Mutinda Kithuka

Jomo Kenyatta University of Agriculture and Technology (JKUAT)


Dr. Wario Guyo, PhD.

Jomo Kenyatta University of Agriculture and Technology (JKUAT)


Dr. David Kiarie, PhD.

Jomo Kenyatta University of Agriculture and Technology (JKUAT)



CITATION: Kithuka, J., M., Guyo, W., Kiarie, D. 2021. Influence of Cost Risk on Performance of Manufacturing Firms in Kenya. International Journal of Human Resource and Procurement. Vol. 10(8) pp 32 – 50.



The study aimed at assessing the influence of cost risk on performance of manufacturing firms in Kenya. Both descriptive and explanatory research designs were adopted. The unit of observation was the supply chain administrators of manufacturing firms in Kenya. Stratified sampling was conducted on all the one thousand one hundred and twenty three manufacturing firms registered by KAM, simple random sampling was carried out on the strata to identify a sample size of 295 firms. The study relied mainly on primary data which was collected through semi-structured questionnaires that were administered to administrators charged with the management of supply chain within the selected firms. Data analysis was done using descriptive statistics (percentages, mean and standard deviation) and inferential statistics through SPSS version 24. The results revealed that cost risk had a significant and positive influence on the performance of manufacturing firms in Kenya. Information flow had a significant moderating effect on the relationship between cost risk and performance of manufacturing firms. It was concluded that through the cost risk and managing the risks appropriately, the manufacturing firms are able to optimize operational costs and achieve the best out of outsourcing logistics, thus enhancing performance. The study recommended the need for supply chain managers and the entire manufacturing industry to consider key strategies of managing the cost risk during the outsourcing processes, as a way of saving operational costs and enhancing performance.

Keywords: Cost Risk, Logistics Outsourcing, Information flow, Firm Performance, Manufacturing firms.


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