The research objective was to assess the impact of EEU inventory management practices onrnservice delivery. The study was a descriptive research design. The target populations for thernstudy were employees working at head office and 3 regions in Addis Ababa. Simple randomrnsampling techniques were applied to select a sample size of 110 employees from both managerialrnand non managerial positions. 97 employees (88.18%) response rate was obtained. Primary datarnwas mainly collected using self- administered questionnaires consisting of both open and closedrnended questions with 5 point Likert Scale. Data were also collected through documentsrnoverview, interview and observation guide. The collected data were quantitatively analyzedrnusing SPSS to produce descriptive statistics and regression analysis. The key findings from thernstudy revealed that: The utility was not effective in practicing modern inventory managementrntechniques instead there is poor inventory management system that results under stocking,rnoverstocking, high cost, high customer complaints and poor service delivery. The studyrndiscovered that poor procurement planning, purchase of unnecessary materials and bulkrnpurchase practices result the availability of excess amount of obsolete and non moving items.rnThe study also revealed that lack of adequate qualified and well trained staffs (i.e., skill gaps andrnawareness) impede in implementing effective inventory management techniques. Moreover, Lackrnof up to date inventory policy and procedure, poor recording and documentation practice, poorrncommunication, poor decision making among user departments, and poor inventory revaluationrnsystem all aggravate poor service delivery of the utility. The researcher recommends that there isrnneed for EEU management to emphasize applying Optimized Inventory ManagementrnTechniques, Implementing Integrated and Automated Inventory Management System, Recruitingrnadequate and qualified staffs, Developing Employees Capacity, Implementing Proper DisposalrnSystem, Developing Up-to-date Inventory Management Policies & Procedures. The study alsornsuggests that further study should be conducted to assess the Role of Management in adoption ofrnintegrated and computerized inventory control systemKey words: Effectiveness, Inventory, Inventory management practices, Service Delivery,rnObsolete and Inactive inventories, Staff Skills, Inventory Record Accuracy, documentation