The objective of this study was to analyze the inventory management practices in thernorganization in order to identify the inventory management challenges and its contributingrnfactors for challenges and recommend solutions for improvement. It was carried out usingrncase study at Sur Construction Company. In this organization, stocks outs, rush ordering,rnunplanned and urgent purchasing items observed frequently while high non-moving andrnobsolescence was available as a problem. In this research sample of 120 employees was inrnused by purposive sampling technique and the return rate was 98 which is 82% response rate.rnQuestionnaires, interviews, and secondary data from reports and internet was used as datarncollection instrument, analyzed by Microsoft excel software applying descriptive statistics.rnAccording to these data, the overall inventory practice was not effective; and the majorrninventory management challenge was the availability of item on time in complete set. Thernfinding shows that the main contributing factor for this problem was staff capacity havingrnskill gap and awareness in implementing inventory management technique. Accordingly,rnstaff development and capacity enhancement strategy including training, empowerment andrnmotivation scheme design was recommended.rnKey Words: Inventory, Construction, Obsolescence, Staff capacity