Abstract
This study investigated the effect of various inventory management factors on firms efficiency. These factors included Capacity Utilization, Inventory Accuracy, Lean Inventory, and Stock Availability. Data was collected by the use of likert scale questionnaire from 250 individuals from different departmental stores in Karachi. Data was analysed using Structural Equation Modeling. The results showed Inventory Accuracy, Lean Inventory, and Stock Availability have positive and significant impact on efficiency. However, Capacity Utilization doesn’t seems to affect efficiency. Hence, main indicator of inventory control comes out to be inventory accuracy which allows having an effective control of the outputs of the different goods.