Effective and efficient inventory management is critical to any successful organization. This study tries to assess the current inventory management practice and develop an inventory management model for East Amhara Water Works Construction Enterprise improvement. According to the Ethiopian construction sector, including East Amhara Water Works Construction Enterprise projects, the main problems with inventory management were high stock outs, rush ordering, and unplanned and urgent purchasing items, as well as high non-moving and obsolescence stocks. In this study, 55 questionnaires were distributed. Out of 55 questionnaires that were distributed to the purposively elected employees of the East Amhara Water Works Construction Enterprise, 52 (91.33%) of them were collected back and used for the analysis. Questionnaires, interviews, and case studies were used as data collection instruments. Data were analyzed by using the analytical hierarchy process. The inventory management model was developed by an excel developer. The analytic hierarchy process analysis result shows that the main inventory management ineffectiveness and influencing contributing factors were availability of items as required (21.64%), cost of the item as required (17.48%), time of availability of the item (17.32%) and, staff development and capacity (22.3%), applying inventory control techniques inventory modeling (21.8%), and information technology adopted in inventory operation representing issues (21.3%) issues respectively. Therefore, the study concludes that the main contributing factors to inventory management are ineffectiveness and influence on the organization which results in high stock outs and nonmoving obsolescence items, rush orders, and unexpected and urgent purchasing items. All projects were planned with a huge amount but the performed achievement work amount was very far from the planned amount, and as result, the organization can take inventory management controlling system to improve and get back the project schedule. Generally, this study recommend the organization can be achieved through intensive training, an integrated motivation scheme, and awareness, by using an inventory management model, and modern software. Key words: Ineffectiveness, influencing Factor, Inventory, Inventory Management Model, Carrying Cost, Stock Balance and Re-order Level.