Inventory management is a critical aspect of business operations, particularly for apparel manufacturers, as it can significantly impact a company’s profitability and competitiveness. This study investigates the factors affecting the inventory management system of Ethiopian apparel manufacturing industries. The researchers used a descriptive research method, collecting data through interviews, recorded data, and questionnaires from selected apparel companies. The study found that the Ethiopian apparel manufacturing industries are facing various inventory management problems, including stockouts, delays in raw material delivery, record discrepancies, and irregular supplies. Using correlation analysis and multiple regression analysis, the researchers determined that the variance in inventory management is primarily due to improper store record keeping, supplier selection, employee knowledge, incentive schemes, and inventory ownership. The findings of this study provide valuable insights for companies to improve their inventory management practices, optimize the use of resources, and enhance their overall competitiveness in the global market. The research also serves as a reference for further studies in this field.