Post on 20-Nov-2020
INVENTORY MANAGEMENT AND CUSTOMER SATISFACTION
CASE STUDY: NZOIA SUGAR COMPANY
BY
MWANZO EUNICE
07/K/2904/EXT
A RESEARCH REPORT SUBMITTED TO THE COLLEGE OF BUSINESS
AND MANAGEMENT SCIENCE IN PARTIAL FULFILMENT OF THE
REQUIREMENT FOR THE AWARD OF DEGREE OF
BACHELOR OF COMMERCE
MAKERERE UNIVERSITY
SEPTEMBER 2011
i
DECLARATION
I Mwanzo Eunice, hereby declare that this research report is my original work and has never
been submitted for any other degree to other institutions of higher learning before.
Signature………………………………Date…………………………..
MWANZO EUNICE
07/K/2904/EXT
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DEDICATION
I dedicate this work to my beloved mother Mrs. Mwanzo, my brothers Allan all my friends like
Duke, Miriam, James, Virginia and others who contributed to the success of my research work.
May God richly bless you.
ii
APPROVAL
This is to certify that this research report on inventory management and customer satisfaction by
Mwanzo Eunice has been under my supervision and it’s ready for submission.
MS: VICTORIA .B. NAKKU
SIGNATURE…………………………………DATE……………………………………………
(SUPERVISOR)
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ACKNOWLEDGEMENT
I first pass my sincere gratitude to the almighty God who kept me strong throughout the course
and has enabled me to complete this dissertation
Great thank goes to my supervisors Ms Victoria B Nakku for her encouragement and guidance
towards writing this report.
Special thanks to my dearest parents Mr. and Mrs. Mwanzo for there encouragement and
financial support toward this journey
I wish to appreciate every one who stood with me spiritually, financially and morally towards the
achievement of my goal.
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TABLE OF CONTENTS
DECLARATION..............................................................................................................................i
DEDICATION................................................................................................................................ii
APPROVAL....................................................................................................................................ii
ACKNOWLEDGEMENT...............................................................................................................ii
TABLE OF CONTENTS................................................................................................................ii
LIST OF TABLES..........................................................................................................................ii
ABSTRACT....................................................................................................................................ii
CHAPTER ONE: INTRODUCTION..............................................................................................2
1.1 Background of the Study........................................................................................................2
1.2 Problem Statement.................................................................................................................2
1.3 Purpose of the Study..............................................................................................................2
1.4 Objectives of the Study..........................................................................................................2
1.5 Research Questions................................................................................................................2
1.6 Scope of the Study.................................................................................................................2
1.6.1 Subject scope.......................................................................................................................2
1.6.2 Geographical scope.............................................................................................................2
1.6.3 Time scope..........................................................................................................................2
1.7 Significance of the Study.......................................................................................................2
CHAPTER TWO: LITERATURE REVIEW.................................................................................2
2.1 Introduction............................................................................................................................2
2.1.1 Definition of Inventory.......................................................................................................2
2.2 Types of Inventory.................................................................................................................2
2.2.1 Production Inventory...........................................................................................................2
2.2.2 Finished goods....................................................................................................................2
2.2.3 Supplies...............................................................................................................................2
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2.3 Costs Associated with Inventories.........................................................................................2
2.3.1 Acquisition Costs................................................................................................................2
2.3.2 Carrying Costs.....................................................................................................................2
2.3.3 Cost of Stock out.................................................................................................................2
2.4 Justification for Holding Inventory........................................................................................2
2.5 Inventory Control and Management......................................................................................2
2.5.1 Inventory Management Technique.....................................................................................2
2.5.2 The Economic Order Quantity Concept..............................................................................2
2.5.3 ABC Model.........................................................................................................................2
2.5.4 Just in Time.........................................................................................................................2
2.5.5 Material Requirement Planning..........................................................................................2
2.5.5.1 Features of MRP at plant or MRP Area level..................................................................2
2.6 Importance of Inventory Management Systems....................................................................2
2.6.1 Inventory Orders.................................................................................................................2
2.6.2 Stock Maintenance..............................................................................................................2
2.6.3 Price Levels.........................................................................................................................2
2.7 Customer Satisfaction............................................................................................................2
2.8 Indicators of Customer Satisfaction.......................................................................................2
2.8.1. Quality Product and Services.............................................................................................2
2.8.2 Price and Value...................................................................................................................2
2.8.4 Relationship between Inventory Management and Customer Satisfaction........................2
2.9 Conclusion.............................................................................................................................2
CHAPTER THREE: METHODOLOGY........................................................................................2
3.1 Introduction............................................................................................................................2
3.2 Research Design.....................................................................................................................2
3.3 The Study Population.............................................................................................................2
3.4 Survey....................................................................................................................................2
3.4.1 Sample Siz Population e.....................................................................................................2
3.4.2 Sampling Method................................................................................................................2
3.5 Sources of Data Collection....................................................................................................2
3.5.1 Primary Sources..................................................................................................................2
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3.5.2 Secondary Sources..............................................................................................................2
3.6 Data Collection Instruments...................................................................................................2
3.6.1 Questionnaires.....................................................................................................................2
3.7 Data Analysis and Presentation..............................................................................................2
3.7.1 Editing.................................................................................................................................2
3.7.2 Coding.................................................................................................................................2
3.7.3 Tabulation...........................................................................................................................2
3.7.4 Data Analysis......................................................................................................................2
3.8 Limitations.............................................................................................................................2
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF
FINDINGS.......................................................................................................................................2
4.1 General Information...............................................................................................................2
4.1.2 Gender of Respondents.......................................................................................................2
4.1.3 Age Bracket.........................................................................................................................2
4.1.4 Level of Education..............................................................................................................2
4.1.5 Duration of Respondents in Service....................................................................................2
4.2 Inventory Management Techniques.......................................................................................2
4.2.1 Determining the Best Level of Inventory for Production...................................................2
4.2.2 Production of Inventory at the Right Time.........................................................................2
4.2.3 Scheduling Procedure for Production Process....................................................................2
4.2.4Measuring Inventory According to Value...........................................................................2
4.2.5 Cost Associated with Inventory..........................................................................................2
4.2.6 Electronic Ordering of Inventory........................................................................................2
4.2.7 Price of Finished Products..................................................................................................2
4.3.1 Building Trust to Customers...............................................................................................2
4.3.2 Delivering Products with a Proposed Order.......................................................................2
4.3.3 Retaining of Customers.......................................................................................................2
4.3.4 Responses to Customer Complains.....................................................................................2
4.3.5 Courtesy to Customer........................................................................................................2
4.4.4 Availability of Products in Store.........................................................................................2
4.4.5 Production of Best Quality Product....................................................................................2
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4.5 Finding the Relationship between Inventory Management and Customer Satisfaction........2
4.5.1 Correlation between Inventory Management and Customer Satisfaction..........................2
CHAPTER FIVE: SUMMARRY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS..............................................................................................................2
5.1 Introduction............................................................................................................................2
5.2 Summary of the Findings.......................................................................................................2
5.3 Conclusion.............................................................................................................................2
5.4 Recommendations..................................................................................................................2
5.5 Area of Further Study............................................................................................................2
APPENDIX A: Questionnaire for Staff...........................................................................................2
APPENDIX B: Questionnaire for Clients.......................................................................................2
REFERENCES..............................................................................................................................2
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LIST OF TABLES
Table 1: Sample size.................................................................................................................. 2Table 2: Gender of respondents..................................................................................................2Table 3: Showing results on Age bracket...................................................................................2Table 4: Level of Education.......................................................................................................2Table 5: Duration in service.......................................................................................................2Table 6: Showing response regarding level of inventory for production....................................2Table 7: Showing results on right time of production................................................................2Table 8: Showing response on production process.....................................................................2Table 9: Showing results on inventory value.............................................................................2Table 10: Showing results on minimal costs associated with inventory.....................................2Table 11: Showing results on electronic ordering of inventory..................................................2Table 12: Showing results on price level....................................................................................2Table 13: Showing results on trust.............................................................................................2Table 14: Showing results on product delivery........................................................................2Table 15: Showing results on retained customers......................................................................2Table 16: Showing results on customer complaints...................................................................2Table 17: Showing results on courtesy.......................................................................................2Table 18: Showing results on follow up.....................................................................................2Table 19: Showing results on products availabity......................................................................2Table 20: Results on quality product..........................................................................................2Table 21: Correlation between inventory management and customer satisfaction.....................2
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ABSTRACT
Inventory management refers to the stock of the products a firm is manufacturing for sale and the
component that makes up a product. Inventory management is a vital requirement in
manufacturing companies, where by keeping inventory adds value to the company operations in
many ways such as creating bulk inventory and effective service delivery to customers.
Inventory also help in avoiding unnecessary working capital, also it acts as insurance against
error in demand forecast .The study was based on the following research objectives; to find out
inventory management techniques in Nzoia sugar company, to find out measures of service
quality and the relationship between inventory management and customer satisfaction
The researcher used descriptive research design and stratified sampling method with a sample
size of 30 respondents, Primary and secondary data collection method were used and the
questionnaires were close ended to enable the respondents to understand and answer them
appropriately with ease.
The study revealed that the inventory management technique used was Economic order quantity
EOQ and that there existed a positive relationship between the variables as conceptualized,
correlation coefficient was used to establish the relationship between inventory management and
customer satisfaction. Pearson correlation show a very strong relationship of 0.83** between
inventory management and customer satisfaction.
From the summary of the findings the following recommendations were made by the researcher
such as, the company should emphasize on Economic Order quantity since it attempts to
reconcile the problem of how much inventory should be added when inventory is replenish.
Also the company should improve on the production scheduling procedure so that they can
produce good quality products which are desirable to customers’ thus building trust to customers.
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CHAPTER ONE
INTRODUCTION
1.1 Background of the StudyInventory management to a layman may be defined as a system used in a firm to control the firm
investment in inventory. According to (T LUCY 1996) it involves the recording and monitoring
of stock levels, forecasting future demands and decides when and how many to order
Customer satisfaction refers to an internal feeling which cannot be directly observed. A customer
feels satisfied when a product or service and behavior meets his/her needs and exceeds his/her
expectation ( Kortler 1998). Indicators of customer satisfaction include service delivery, quality
product or service, customer retention and feedback analysis.
Saxen (2003) argues that, it is important to put in mind there are several functions of inventory
management: raw materials, meaning the raw materials and the company must keep on hand for
production: Work in progress inventory which include any of the goods that are in the production
process and finished goods inventory or products that are already to ship to customers. Without
inventory management it would be difficult for any company to maintain control and be able to
handle the needs of the customers.
Pandey (1996) asserts that stock of finished goods has to be held because production and sales
are not instantaneous. A firm cannot produce immediately when goods are demanded by a
customer therefore to supply finished goods on a regular basis there stock has to be maintained
for sudden demand from customers, incase the firm’s sales are seasonal in nature substantial
finished goods inventories should be kept to meet the peak demand. Failure to supply products to
customers when demanded would mean loss of the firm’s sales to competitors.
Saleemi (2001) adds that having an adequate supply of a particular product to meet customer
demand is crucial to both sales increase and customer service, If customers comes to business to
purchase a product and it is out of stock the sales is lost forever and the customer will probably
go to competitors to find what they need.
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Nzoia Sugar Company is a government owned entity which deals in the manufacture and
distribution of sugar. The company holds different types of inventories which include raw
materials, work in progress and finished product that is sugar, using just-in-time and EOQ
model. The company was awarded the Diamond Mark of quality on 22nd August 2006 by the
Kenya Bureau of standards for producing high quality brown sugar which meets the international
standards
1.2 Problem StatementIt is important to acknowledge that proper inventory management is crucial in an organization to
facilitate customer satisfaction. However improper management of stock has lead to delays of
product delivery to the market causing customer complaints as evidenced by NSC survey report
2009/2010 which shows that the number of customer complaints increase from 23% to 58% due
to poor service delivery in term of inadequate stock in place. Therefore the company should
emphasize on quality service and good inventory turnover to reduce the level of customer
complaints.
1.3 Purpose of the StudyThe purpose of the study was to establish the relationship between inventory management and
customer satisfaction using case study of Nzoia Sugar Company.
1.4 Objectives of the Study• To find out the inventory management techniques adopted by Nzoia sugar company
• To examine the measures of service quality in Nzoia sugar company
• To find out the relationship between inventory management and customer satisfaction in
Nzoia sugar company.
1.5 Research Questions• What are the inventory management techniques adopted by Nzoia sugar company?
• What are the measures of service quality in Nzoia Sugar Company?
• What is the relationship between inventory management and customer satisfaction?
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1.6 Scope of the Study
1.6.1 Subject scope
CONCEPTUAL FRAMEWORK
Inventory management techniques measurement of customer satisfaction
Source: Developed by the researcher from several literature reviews Inventory management
techniques include ABC model, just in time, EOQ model, material requirement planning and can
be measured by quality of service or product, feedback analysis, customer retention and service
delivery.
1.6.2 Geographical scopeThe study is based on Nzoia sugar company located 5km off Webuye-Bungoma highway in
Bungoma south district western Kenya
1.6.3 Time scopeThe study covered a period of two years from 2009 to 2010
1.7 Significance of the Study• The study will be vital to the management of Nzoia sugar company to effectively
improve on the quality of inventory management system
• The study will benefit the management of Nzoia Sugar Company to employ
efficient/competent personnel in proper inventory management.
• The study will benefit other companies from different methods of managing inventory
levels.
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A BC Model
Just in time
EOQ concept
MRP
Quality service
Quality product
Service delivery
Feedback analysis
• To act as a ground for the future scholars or academics in future research in the field of
improving inventory management.
CHAPTER TWO
LITERATURE REVIEW
2.1 IntroductionThis chapter gives a view of the selected existing knowledge from literature on inventory
management. It covers the overview of the types of inventory kept ,inventory management
techniques, costs of keeping inventory ,indicators of customer satisfaction and the relationship
between inventory management and customer satisfaction.
2.1.1 Definition of inventoryMany scholars have come up with several definition of inventory Arnold 1998 defines inventory
as materials and supplies that a firm or an institution carries or holds either for sale or to provide
inputs or supplies to the production process.
According to (Pandey 1990) inventory management is stock of the product a firm is
manufacturing for sale and the components that makes up a product. Firm hold inventory in a
form of raw material, work in progress, finished goods and supplies. These inventories facilitates
production and sales operation, guard against the risk of unpredictable changes in usage and
delivery time and take advantage of quality discount and price frustration.
Donnely (1990) states that inventory management and control process are very useful in
determining the optimum level of inventories and finding answers to the problem of economic
order quality, the re-order point and safety stock.
2.2 Types of Inventory
2.2.1 Production InventoryThese are raw material, parts and components that enter the firm’s product during the production
process. They may be of two general standards industrial items purchased of the shelf and special
items manufactured to the company’s specifications examples includes sugar (Donald W.
Dodler etal 1994).
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2.2.2 Work in process Work in progress (WIP) or in-process inventory includes the set at large of unfinished items for
products in the production process. These items are not yet completed and are waiting in a queue
for further processing or in buffer storage. (Pandey 1999)
2.2.3 Finished goodsThis is a type of inventory which composes of completely manufactured products which are
ready for sale. Inventories of raw materials and work in progress facilitate production while that
of finished products is required for smooth marketing operations (professor munene 1999). The
inventories serve as a link between the production and consumption of goods.
2.2.4 SuppliesAccording to (Van Horne 1995) supplies are also another form of inventory maintained by the
firm .These materials do not enter directly into production but are necessary for production
process, the purchase and maintenance of inventory involves a lot of costs which are discussed
below.
2.3 Costs associated with inventoriesDebler and Burts (1996) stress that from the managerial point of view: two categories of costs
are associated with inventories (lyson and Farrington 2006) also state that the economies of
inventory management and stock control are maintained by the analysis of the costs incurred in
obtaining and carrying inventories under these categories.
2.3.1 Acquisition costsJulias kakuru (1998) asserts that many of the costs incurred in placing an order are incurred
irrespectible of the size for example, the cost of an order will be the same respectable of weather.
Preliminary costs-preparing the requisition vendor selecting negotiation, Placement cost-order
preparation stationary postage, Post placement cost-progressing receipts of goods material
handling inspection and payment of invoices.(Julias kakuru 1996).
2.3.2 Carrying costs These are cost incurred for maintaining a given level of inventory. These costs are usually
expressed as a figure and as a percentage of the average inventory (Donnelly Gibson
1990).Carrying costs include storage costs, insurance costs, taxes, determination and
obsolescence. If a firm maintains high level, the carrying costs will be high which will lead to a
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rise in the market. A high price will be attached to such goods which will lead to low sales and
eventually low profits (T.Lucy1996).
2.3.3 Cost of stock outPandey (1999) asserts that these are costs of being without inventory. Stock out costs are the
most important costs that the firm endeavor to avoid by maintaining a certain level of stock in
the stores for continuous production. Such costs include costs of production stoppages caused by
work in progress stock outs and raw material, loss of future sales because customers may go
elsewhere which will lead to loss of customer goodwill and hence loss of profits.(T Lucy 1996).
2.4 Justification for Holding InventoryLonergman (2001) points out that justification must be evident if inventory are required to be
held. Justification for holding inventory according to (lonergman 2001) includes
Delivery cannot be exactly matched with the usage rate day by day
Economies of scale associated with buying or manufacturing in large quantities more
than offset the cost of stocking.
Operation risk requires the holding of stock to guard against the breakdown or Program
me changes.
For work in progress where completely balanced production flow is impractical for
example vanishing furniture and allowing for drying time.
For finished products where the holding of buffer stock between production and customer
is available.
Owing to fluctuations in the price of the commodity, it is desirable to acquire stock when
prices are low.
In order material may appreciate value maintain in storage for example sugar.
In order that a range of product may attract customers from which selection is done on
short time delivery scale.
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The buying organization is located far from supply sources and long lead times are
inevitable. This is frequently the case with extracting sectors.
The above reasons for holding inventory or stock of material apply to greater or less degree
regardless of weather the organization is within the public sector or whether the company is in
service or manufacturing sector.
Morris and Jessop (1994) argue that keeping inventory adds value to the company’s operation in
many ways. These include creating bulk and breaking smoothing and supervising.
Saleemi (2001) adds that a well-planed inventory scheme helps an efficient smooth and effective
service to the customer at a lesser cost with the assistance of lower investment through planned
but reduced inventories. Inventories help in avoiding unnecessary working capital and
inventories act as insurance against error in demand forecast.
2.5 Inventory Control and ManagementInventory management is defined as the system in a firm to control the firm’s investment in
inventory. It involves the recording and monitoring of stock level, fostering future demand and
deciding on when and how to order. The objective of inventory management is to minimize in
total, the cost associated with inventory (T Lucy, 1996).
According to Saleemi (1997), inventory control refers to a planned method of purchasing and
storing materials at the lowest possible cost without affecting the production distribution
schedule. Inventory control therefore is a scientific method of determining what, when and how
much to have in stock for a given period of time.
2.5.1 Inventory Management TechniqueInventory is essential in an organization for production activities maintenance of plant and
machinery and other operational requirements (saxen 2003). The normal tendency is to have
more inventories so that most of the items are available whenever needed.
Inventory management is part of the company assets in the balance sheet and therefore always
under close scrutiny of managerial staff is paramount importance. There is any increase in the
down time machines due to shortage of raw material leads to production loss.
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2.5.2 The Economic Order Quantity Concept The EOQ is the number of units that a company should add to inventory with each order to
minimize the total costs of inventory such as holding cost and order costs s(fuller 2003)
The economic order quantity (EOQ) attempts to reconcile the problem of how much inventory
should be added when inventory is replenished. If the firm is buying raw material, it has to
decide lots in which it has to be purchased on each replenishment shortage ordering costs.
(saxen 2003)
It is the calculating method used to determine the best level of inventory for production while
being the most cost effective for holding and ordering EOQ as it is referred to, it has been around
since the rise of modern manufacturing process back in the early 20th century. The first model for
EOQ was design in (1913 by F.W. Harris)
EOQ is common in manufacturing companies where the ordering of stock is constant and
repetitive. It is primarily used for purchase-to-stock distribution and makes purchase–to-stock
manufacturers. These are businesses that have multiple orders, release dates for their products
and have to plan their components. (lonergman 2001)
2.5.3 ABC ModelIt is possible to utilize the concept of ABC model in formation of rational inventory policy which
should give the best possible service level to production while minimizing investment costs
(fuller 2000) .ABC analysis tend to measure the significance of each item of inventory in terms
of value.
The high value items are classified as A items and would be under tightest control, C items
represent relatively least values and would be under simple management. The ABC analysis
concentrates on important items and is also known as control by important and exception.
(Fuller 2000)
Steps in implementation of ABC analysis
• Classify the items of inventories determining the expected use in units and the price per
unit for each item.
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• Determine the total value for each item by multiplying the expected units by its unit
price.
• Rank the items in accordance with the total value, giving first rank to the items with
highest total value and so on.
• Compute the ratio (percentages) of number of units of each item to total units of all items
and the ratio of total value of each item to total value of all items.
• Combine items on the basis of their relative value to form three categories A, B and C.
2.5.4 Just in Time Gillingham and lysons (2003) defines JIT as a philosophy of manufacturing based on planned
elimination of all waste and on continuous improvement of productivity. it has also been
described as an approach with the objective of producing right part in the right time.JIT is a new
system of inventory management system that was developed by the japanese.Its aim is to match
the usage of material with delivery of material from external supplies ,it advocates for near zero
inventory level. Suppliers should endeavor to deliver quality material on time to avoid rejects
and delays in production. Therefore the company should build a close relationship with its
suppliers to ensure efficiency in production (management studies journal 2004).it should
improve profits and return on investment by reducing inventory level, reducing variability,
improving product quality, reducing production and delivery lead times and reducing costs.
2.5.5 Material Requirement PlanningAccording to fuller (2003) material requirement planning is a scheduling procedure for
production process that have several levels of production given information describing the
production requirement of several finished goods of the system, the structure of the production
system, the current inventory for each operation and the lot sizing procedures for each operation,
MRP determines a schedule for the operation and raw material practice.
The main function of Material requirement planning is to guarantee material availability that is it
used to procure or produce the requirement quantities on time both for internal purpose and for
sale and distribution. This process involves the monitoring of stock and in particular, the
automatic creation of procurement proposals for purchasing and production.MRP tries to strike
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the best balance possible between optimizing the service level and minimizing costs and capital
lock up. (Grubbstrom, Robert W,2002)
Bernard W.Taylor (2000) argues that the MRP components assist and relies MRP controllers in
their area of responsibility. The MRP controller is responsible for all related to specifying the
type quantity and time of the requirement, in addition to calculating when and for what quantity
an order proposal has to be created to cover these requirements. The MRP controller needs all
the information on stock, stock reservation and stocks on order to calculating quantities and also
needs information on lead times and procurement times to calculate dates. The MRP controller
defines a suitable MRP and lot-sizing procedure for each material to determine procurement
proposal.
2.5.5.1 Features of MRP at plant or MRP Area levelYou can plan material requirement at plant level or for different MRP area with MRP at plant
level, the system adds together stocks from all of the individual customer stock, to determine
total plant stock. The requirements are combined in the planning and procurement elements are
created for these pegged requirements with unknown sources. Individual storage locations can be
planning separately or be excluded from planning. (Grubbstrom, Robert W,2002)
In the case of MRP area level only the stock from the storage locations or subcontractors
assigned to the respective MRP area are taken into account. Only the requirement in this MRP
area is combined and procurement elements are created for them. This enables you to plan
material requirements specifically for certain areas
2.6 Importance of Inventory Management SystemsInventory management is an important part of a business because inventories are usually the
largest expenses incurred from business operations. Most companies will use an inventory
management system that will track and maintain the inventories required to meet customer
demand. Most systems used by companies are linked to meet the management or accounting
information systems increasing the effectiveness of their operations. (Kamukama Nixon 2006)
2.6.1 Inventory Orders
Inventory management system help business order inventory by accurately recording consumer
sales. Electronic inventory systems can track sales in a real time- time format, ordering inventory
10
automatically when current stock hits a predetermined minimum levels. Electronic ordering
known as electronic Data interchange (EDT)1, allows companies to maintain the proper amount
of stock by not increasing costs through over- ordering of inventory .EDI also ensures placed
orders are placed immediately, ensuring shortly amounts o lead times to receive new
inventory(kamukarna Nixon 2006) .
2.6.2 Stock MaintenanceComputerized inventory management system allows companies to properly order and maintain
several different types of goods. Different styles, colors or size can easily be managed to ensure
that consumers demand is met through offering a variety of goods. Most companies use
inventory management to keep stock items separate from similar goods this allows management
to determine which items are selling and which items need to be reduced from inventory based
on poor sales. (Saxena 2003)
2.6.3 Price LevelsProperly managing goods is largely based on the cost of the goods incurred by the business using
inventory management system will help companies find the lowest price on inventory items and
ensure that the best deals are reached when purchasing these items. Purchasing goods by
volumes also help companies to lower there costs on inventory, ensuring that low prices are
assured to consumers. Inventory management system track costs from purchased goods and can
prepare a report indicating which vendors have the lowest cost on goods. (Saxena 2003)
2.7 Customer SatisfactionOrganization that enjoy long-term prosperity and grow do so because they have a constant
attention and willingness to examine re-examine and improve on basic factors that many people
regard as obvious. Perhaps the most over looked is the value of satisfied customers, one way to
achieve strong and long relationship is to ensure that customers are satisfied. satisfaction
according to (Crosy & Stephen 1987) is an emotional reaction which influences attitudes and it’s
(Anderson & Nanis 1990) defines satisfaction as the specific consumption overall evaluation of
the relationship between two channel members(.Gronroos 1994) view satisfaction as an insider
perspective, the customer own experience of a relation where the customer had to give to get
something. This means that the domain of customer satisfaction evaluation is linked to perceived
value, repeat purchase and customer loyalty towards the supplier.1 (http://www.itbp.com/opsmanagement/.ebm/material requirements htm 15 July 2003)
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According to (jones & sasser 1995) achieving custorner satisfaction is the primary goal for most
firms today and increasing customer satisfaction leads to positive word of mouth and will lower
the marketing expenditure. A study by (crosy & Stephen 1987) found that satisfactory interaction
with the company personnel, satisfaction with the product provided (the extent to which a
product satisfies customer needs) and satisfaction either the organization are attributed to the
level of customer relationship. Satisfaction is an important criterion which has to be fulfilled for
building trust and increasing the intentions to continue in a relationship. Higher levels of
satisfaction have also been found to lead to higher levels of commitment (Kelly &Darisl994) :
that is the more satisfied a customer is with a supplier the more committed they become to their
customer relationship Customer satisfaction generally arises from an individual perceived
products performance compared with expectations. if organizations are to understand customer
satisfaction they need to consider customer expectations how they perceive the delivery of
products relative to these expectations and whether this conforms to there expectations or not
( berry & prasuraman 1991) thus customer satisfaction will depend on the extend to which
customer expectations are fulfilled for organization to be able to understand and respond to
customer needs they should enforce management of inventory techniques to enhance a good
relationship with customers.
2.8 Indicators of Customer Satisfaction
2.8.1. Quality Product and Services Oakland (1993) defined quality simply as meeting the customer’s requirements and
expectations. Quality of product and service of are those with distinguishing characteristics or
attributes, having superiority over those alternatives and are more suited for the intended use.
Acceptability of a product or service depends on its ability to function satisfactorily and continue
to meet customer’s requirements over a period of time or its reliability.
Quality has to be managed since it cannot just happen. Smith (1994) asserts that quality is the
output of the standard agreed which implies that quality is designed or planned and to among
others the reputation of a firm is built on.
The level of customer satisfaction varies depending on the operating environment scarcity of the
commodity and other factors. If a firm is operating in a market where quality appears to be a
minor or a non-existent issue, its management may feel that it is possible to disregard quality
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The quality of tangible product is usually straightforward. Forward determination for customers
to make comparison between physical products is a matter of feature to feature analysis. The
challenge for customers and for organization lies in evaluating service quality which may be the
only way customers truly differentiate between one complete product offering, and another. For
this reason organization and their marketers live or die by understanding how consumers judge
service quality.
Based upon the nature of customer viewpoints and behavior quality service is typically measured
by the customer in terms of products the customer expects to receive. Thus it is important for
every organization especially service organizations to determine what customers expect and then
develop service products that meet or exceed their expectations. (lornergman E.200 1)
2.8.2 Price and ValueValues are ideas and beliefs which individuals hold of what is right and wrong, what is good and
bad. What satisfies and what does not satisfy, what is preferable and what is not, what is of
importance and what is not important. Valued product or services are those of higher preferences
to customers of importance in use/available and affordable. (Anderson 1992).
Fornell (1992) argue that price is the way in which value is transferred and it could be major
determinants in the position and value of the product or services in the market. If the product or
services does not meet the expectation, the customer feels unhappy, disappointed and perhaps
even cheated. The benefit you provide and the needs should be directly related to the cost and
how it compares with the customer’s perception of its value. To be able to do this, the
organization should identify customer feelings of the value or acceptability of your products or
service
2.8.4 Relationship between Inventory Management and Customer SatisfactionSaleemi (1999) considers inventory management to be an important issue in satisfaction of
customers. Many organizations have adopted inventory management techniques such as just in
time to match the usage of material and delivery from the suppliers which leads to customer
satisfaction since products are delivered on time. (Jordan 1997) asserts that it’s important to have
accurate inventory records, clear finished goods will be supplied to customers which lead to
customer satisfaction and fulfillment of their needs and expectation.
13
Storage of inventory and predetermines the system stock which is a vital tool to achieve
effective and efficient inventory systems. (Kakuru 1998) storage of goods that is raw materials
and finished goods shall be properly implemented because by doing so credit is extended so as to
build long term customer relationship with rewards for customer loyalty
Acquiring of raw materials is done by purchasing manager departments with the organization.
(Kakuru 1998) when raw materials are acquired at the right time this leads to production and
supplies of goods to customers at the expected time
2.9 ConclusionIt is noted from the above discussion that there is a strong correlation between inventory
management and customer satisfaction. Improper inventory management leads to delayed
delivery. (Tersine 1982) stated that a customer cannot sit and wait for a delayed production
when the competitor has the same products.
A satisfied customer swill buy inventory again and convince others to join hence increased
customer satisfaction. Proper inventory management increases the good reputation of the firm
and its good will as it does not fall short of deliveries and its customers are happy about its
practice (Balunywa 2003)
14
CHAPTER THREE
METHODOLOGY
3.1 IntroductionThis chapter contains the research design, survey population, sampling design source of data,
data collection and data analysis.
3.2 Research DesignThe researcher used descriptive research design to describes the phenomenon as it exists
Therefore it is undertaken in order to ascertain and be able to describe the characteristics of the
variable of interest in a situation .It will take the description of inventory management techniques
and customer satisfaction.
3.3 The Study PopulationThe study area was Nzoia Sugar Company and the study population consisted of the manager,
and staff. Survey was also made on some customer to get more information.
3.4 Survey PopulationThe survey population was 50 respondents and these comprise the managers, staff and
customers.
3.4.1 Sample SizeA sample size 30 respondents was used for the study.
Table 1: Sample size
Types of respondents Simple size
Management 6
Staff 10
Customers 14
Total 30
Source: Primary data
15
3.4.2 Sampling MethodThe researcher adopted stratified sampling method whereby the population was divide into non-
overlapping groups called stratum, it enables separate estimates of population’s parameters to be
obtained for each stratum without additional sampling.
3.5 Sources of Data CollectionThe researcher used both primary and secondary sources
3.5.1 Primary sourcesThis refers to raw facts collected or generated for a given research and it is gathered originally
for the first time for a specific research problem. Therefore the researcher will directly go to the
field to collect data with the assistance of the letter of introduction from the school.
3.5.2 Secondary sources This refers to data which already exists. Therefore the researcher reviewed records related to the
study which enabled him to compile and analyze the data from text book newsletters journals
stock taking, sheets and annual reports.
3.6 Data Collection Instruments
3.6.1 QuestionnairesThe questionnaires were closed ended to enable the respondents to understand them and answer
them appropriately with ease. It will include the likert scale that is Agree, strongly agree, not
sure, disagree, and strongly disagree.
3.7 Data Analysis and Presentation
Data processing includes editing, coding and tabulation before data is analyzed
3.7.1 EditingEditing was done to ensure that the data are accurate consistent uniformly entered and are
arranged to facilitate coding and tabulation.
3.7.2 CodingThis involves transcribing the data from the questionnaire to a coding sheet which was then
punched into the computer.
16
3.7.3 TabulationThe data was arranged in columns and rows to facilitate a basis for various statistical
computations.
3.7.4 Data AnalysisThis was done in form of expressing responses as squares correlation of the population and by
use of frequency distribution tables and SPSS.
3.8 Limitations• Rigidity of the staff in releasing the data: This is a great problem given the industrial
environment this makes the respondents especially management cautions about the data
availed to the researcher.
• Financial constraints: The research is costly in terms of data collection and getting the
report typed such costs included typesetting transport meals and telephone bills.
• Time constraints: Time allocated to complete the research report was quite short. This put
a lot of stress on the researcher since there were other course units to cover.
17
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS
This chapter presents the findings of the study in reference of objectives in chapter one. The
findings are presented and analyzed using frequency tables and finally the relationship between
the variable is established with the aid of computer program called SPSS. These findings are
presented in line with relevant variables objectives of the study and research questions. These
specific objectives from which the study research question are drawn include
To find out inventory management techniques in Nzoia sugar company
To find out measures of service quality in Nzoia sugar company
To find out the relationship between inventory management and customer satisfaction in
Nzoia sugar company.
4.1 General informationThe data in this section contains gender, age group, level of education and length of years
worked n Nzoia Sugar Company.
4.1.2 Gender of respondentsThe respondents were asked about their gender status and below were their respondents.
Table 2: Gender of respondents
Gender Frequency Percentages %
Male 17 57
Female 13 43
Source: Primary data
From the above table 57% of the respondents were male and 43% were female. This implies that
Nzoia sugar company do not have bias in employing workers therefore it employ a gender
balanced workforce.
18
4.1.3 Age Bracket
Table 3: Showing results on Age bracket
Below 25 6 20
26-35 18 60
36-45 5 17
Above 46 1 3
Total 30 100
Source: Primary data
From the above table 20% of the respondents were below 25 years, 60% of the respondents fell
between the ages 26-35 years, 17% of the respondents were between 36-45years and 3% of the
respondents were above 46 years. Basing on the results obtained, the researcher found that the
majority of the respondents, 60%were between the ages of 26-35, implying that the Nzoia sugar
company is interested in employing young employees who are highly productive and efficient.
4.1.4 Level of EducationRespondents were asked to show their education levels and below were responses.
Table 4: Level of Education
Respondents Frequency Percentage%
O level 8 27
A level 2 7
Diploma 9 30
Degree 11 26
Total 30 100
Source: Primary data
From the above table 27% of the respondents were were o level,7% of the respondents were A
level 30% of the respondents were Diploma holders and 36% of the respondents were Degree
holders. Basing on the results obtained, majority of the respondents 36% were degree holders.
This implies that the respondents were knowledgeable and hence would understand and interpret
the questions.
19
4.1.5 Duration of respondents in serviceRespondents were asked for how long they had worked with Nzoia Sugar Company and below
were the responses.
Table 5: Duration in service
Respondents Frequency Percentages %
Less than 3 years 14 47
3-6years 9 30
7-9 years 6 20
More than 9 years 1 3
Total 30 100
Source: Primary data
From the above table 47% of the respondents have been in the company for less than 3 years
30% of the respondents have been in Nsc between 3-6years 20% of the respondents have been in
Nsc between 7-9years and 3% of the respondents had worked for more than 3years. Basing on
the results obtained 47% of the respondents had worked in Nzoia Sugar Company for less than 3
years. This implies that Nzoia sugar company took part in recruiting new work force due to large
work load hence they employed efficient workers because of their efficient skills.
4.2 Inventory management TechniquesThe respondents were asked to give response towards the inventory management techniques used
in Nzoia Sugar Company
20
4.2.1 Determining the best level of inventory for production
Table 6: Showing response regarding level of inventory for production
Response Frequency Percentages
Strongly agree 12 40
Agree 9 30
Not sure 0 0
Disagree 3 10
Strongly disagree 6 20
Total 30 100
Source: Primary data
The table above shows that 40% of the respondents strongly agree,30% of the respondents
Agree10% of the respondent Disagree 20% of the respondents strongly disagree. This implies
that Nzoia Sugar Company attempts to reconcile the problem of how much inventory should be
added when inventory is replenished hence this helps to control shortages when an order is raised
by customers thus leading to customer satisfaction.
4.2.2 Production of inventory at the right time
Table 7: Showing results on right time of production
Response Frequency Percentage %
Strongly Agree 8 27
Agree 0 0
Not sue 2 7
Disagree 4 13
Strongly disagree 16 53
Total 30 100
Source: Primary data
21
From the table above 27% of the respondents strongly agree with existence of just in time 7%
were not sure, 13% disagreed and 53%strongly disagreed with the existence of just in time .This
implies that Nzoia Sugar Company delays in the production of its products leading to improper
management of inventory hence customer dissatisfaction.
4.2.3 Scheduling procedure for production process
Table 8: Showing response on production process
Response Frequency Percentage
Strongly Agree 6 23
Agree 3 10
Not sure 1 3
Disagree 5 17
Strongly disagree 15 50
Total 30 100
Source: Primary data
From the above table 23% strongly agree of the respondents, 10%Agree, 3% of the respondents
were not sure 17% disagree 50% strongly disagree with the employment of material requirement
planning. This implies that the company has a poor production scheduling procedure which may
in turn lead to production of poor quality products that do not satisfy customers hence customer
dissatisfaction.
4.2.4Measuring inventory according to value
Table 9: Showing results on inventory valueResponse Frequency Percentage
Strongly agree 4 13
Agree 12 40
Not sure 0 0
Disagree 8 27
Strongly disagree 6 20
Total 30 100
Source: Primary data
22
The tables above shows that 13% of the respondents strongly agree, 40% of the respondents
agree, 27% disagreed, 20%strongly disagree respectively. This implies that Nzoia Sugar
Company tends to maintain the quality of its product by classifying inventory according to its
value which may result into production of good quality sugar hence leading to satisfaction.
4.2.5 Cost Associated with inventoryThe respondents were asked to determine the level of costs associated with inventory in Nzoia
Sugar Company
Table 10: Showing results on minimal costs associated with inventory
Response Frequency Percentages
Strongly agree 17 57
Agree 5 16
Not sure 0 0
Disagree 8 27
Strongly disagree 0 0
Total 30 100
Source: Primary data
From the table above 57%of the respondents strongly agree, 16%of the respondents agree 27%
of respondents strongly disagreed with the minimization of costs associated with inventory. This
implies that Nzoia sugar company strive to avoid inventory costs by maintaining the required
level of inventory for continuous production as per orders sequence so that they can meet
customer demands hence leading to customer satisfaction.
23
4.2.6 Electronic ordering of inventory
Table 11: Showing results on electronic ordering of inventory
Response Frequency Percentage
Strongly agree 6 20
Agree 5 17
Not sure 2 7
Disagree 7 23
Strongly disagree 13 43
Total 30 100
Source: Primary data
From the findings 20% of the respondents strongly agree, 17% Agree, not sure 23%disagreeand
43% of the respondents disagreed on the use of electronic in recording inventory. This implies
that Nzoia Sugar Company do not use electronic data interchange in ordering inventory which
may lead to shortages due to lead times which may in turn steer customers away from the
company hence leading to unsatisfied customers.
4.2.7 Price of finished products
Table 12: Showing results on price level
Response Frequency Percentage%
Strongly agree 5 17
Agree 0 0
Not sure 6 20
Disagree 4 13
Strongly disagree 14 43
Total 30 100
Source: Primary data
From the above table 17% of the respondents strongly agreed, 20% were not sure, 13% disagreed
and 43% of the respondents strongly disagreed on the basis that inventory management systems
helped Nzoia Sugar Company set the lowest price finished products. This implies that the
Company do not base on inventory management system when setting prices for their products
24
meaning that inventory management system concentrate on maintaining inventory in place hence
not meeting customer expectation leading to dissatisfaction of customers.
4.3.1 Building trust to customers
Table 13: Showing results on trust
Response Frequency Percentages
Strongly agree 7 23
Agree 2 7
Not sure 2 7
Disagree 5 17
Strongly disagree 14 46
Total 30 100
Source: Primary data
The table shows that 23% of the respondents strongly agree 7% agreed, 7%not sure17% disagree
and 46%strongly disagreed on the issue of trust towards the company. This implies that Nzoia
Sugar Company does not produce the required quantity of products to its customers as per their
expectations which may result into mistrust thus customer dissatisfaction.
4.3.2 Delivering products with a proposed orderRespondents were asked to give response towards the mode of delivering products
Table 14: Showing results on product delivery
Response Frequency Percentage
Strongly Agree 15 50
Agree 7 23
Not sure 0 0
Disagree 6 20
Strongly agree 2 7
Total 30 100
Source: Primary data
25
The table above shows that 50%of respondents strongly agree, 23% agree 20%disagreed
7%strongly disagreed on the fact that products are delivered on proposed order. This implies that
Nzoia sugar company staff delivers the products to its customers per the raised order which
means that they meet their expectations hence customer satisfaction.
4.3.3 Retaining of customers
Table 15: Showing results on retained customersResponse Frequency Percentages %
Strongly agree 5 17
Agree 1 3
Not sure 3 10
Disagree 8 27
Strongly disagree 13 43
Total 30 100
Source: Primary data
The table shows that 17% of the respondents strongly agree 3% Agree 10% not sure 27%
disagree 43% strongly disagree with customer retain .This implies that the quantity of products
in Nzoia sugar company is inadequate meaning that the products are not delivered to customer as
per there expectation steering up customers to run away leading to poor customer retention hence
customer satisfaction..
4.3.4 Responses to customer complains
Table 16: Showing results on customer complaintsResponse Frequency Percentage %
Strongly agree 14 47
Agree 6 20
Not sure 0 0
Disagree 0 0
Strongly disagree 10 33
Total 30 100
Source: Primary data
26
The above table shows that 47% of the respondents strongly agree,20% agree 33%
disagreed .This implies that Nzoia sugar company strive to maintain the inventories at proper
levels and in turn giving customers proper services as they fall due hence customer satisfaction.
4.3.5 Courtesy to customer
Table 17: Showing results on courtesyResponse Frequency Percentage %
Strongly agree 17 57
Agree 8 26
Not sure 0 0
Disagree 3 10
Strongly disagree 2 7
Total 30 100
Source: Primary data
The above shows that 57% of the respondents strongly agree, 26% agreed10% disagreed and 7%
disagreed respectively. This implies that Nzoia sugar company staffs are courteous to its
customers when delivering good quality products hence customer satisfaction.
4.3.6 Feedback analysis on inventory
Table 18: Showing results on follow upResponse Frequency Percentages %
Strongly agree 7 23
Agree 2 7
Not sure 4 13
Disagree 6 20
Strongly disagree 11 37
Total 30 100
Source: Primary data
The table indicates that 23% and 7% of the respondents agreed 13% were not sure 20% and 37%
of the respondents disagreed with customer follow up. This implies that Nzoia sugar company do
not analyze the clients response about the product and also do not take collective action in case
27
of any complain which may result into repeat of same errors which may lead to customer
dissatisfaction.
4.3.7 Availability of products in store
Table 19: Showing results on products availabityResponse frequency Percentage %
Strongly agree 4 13
Agree 2 7
Not sure 0 0
Disagree 7 23
Strongly agree 17 57
Total 30 100
Source: Primary data
From the table above finding shows 13% strongly disagreed, 7% agreed 23% disagreed and
57%strongly disagreed with availabity of products when ordered. This implies that Nzoia Sugar
Company some times maintain insufficient inventory to meet customers’ needs hence leading to
customer dissatisfaction.
4.3.8 Production of best quality product
Table 20: Results on quality productResponse Frequency Percentages %
Strongly agree 19 63
Agree 3 10
Not sure 0 0
Disagree 8 27
strongly disagree 0 0
Total 30 100
Source: Primary data
The above table shows that 63% of the respondents strongly agree, 10% agree and 27%
disagreed on the quality of product. This implies that Nzoia Sugar Company manages its raw
material inventory through use of efficient inventory management system which result into
production of quality products which satisfy customer expectation thus customer satisfaction
28
4.5 Finding the Relationship between Inventory Management and Customer Satisfaction
4.5.1 Correlation between inventory management and customer satisfaction.
Table 21: Correlation between inventory management and customer satisfactionInventory
management
Customer satisfaction
Inventory Pearson
correlation
Management sig.(2-tailed)
N
1.000
.
30
.83**
.000
30
Customer Pearson
correlation
Satisfaction sig.(2-tailed)
N
.83**
.000
30
1.000
.
30
**. Correlation is significant at the 0.01 level (2-detailed)
Source: Primary data
From the table above findings show that there is a positive relationship between inventory
management and customer satisfaction evidenced by a correlation coefficient between the
variables of 0.83. This implies that inventory management may be one of the factors that lead to
customer satisfaction where by Inventory management systems helps in controlling of shortages
when an order is raised by customers thus satisfying customer demands.
29
CHAPTER FIVE
SUMMARRY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 IntroductionThis chapter include: Summary of the findings, conclusion, recommendation and area of further study.
5.2 Summary of the FindingsThe findings showed that the most preferred inventory management techniques in Nzoia Sugar
Company is Economic order quantity EOQ.This shows that the company strive to minimize
ordering and carrying cost by determining the optimal level in inventory management.
The findings revealed that customers in Nzoia Sugar Company do not offer the best services to
its customers since there are delays in product delivery leading to customer complaints and also
the companies do not retain customers due to limited quality of products in the company.
The findings showed that inventory management had significant relationship on customer
satisfaction as shown by the positive correlation coefficient between inventory management and
customer satisfaction.This revealed that proper inventory management techniques such as
Economic order quantity may lead to customer satisfaction especially when an order is placed
and delivered on time as expected by the customers.
5.3 ConclusionThe study focused on finding the inventory management techniques that is mostly used in Nzoia
Sugar Company, the indicators of customer satisfaction and the relationship between inventory
management and customer satisfaction.
From the findings the most preferred inventory management technique is Economic order
quantity which helps in minimization of costs associated with inventory which contributes to
findings the best price level to customers.
30
In addition the study revealed that customer satisfaction depend on quality of services provided
to customers that is timely delivery of products, trust from customers, courtesy to customers and
feedback analysis which brings about customer satisfaction.
5.4 RecommendationsThe researcher made the following recommendations basing on the research objectives findings
and analysis in line with others who have written on the same research.
Nzoia Sugar Company should also emphasize on Economic order quantity since it attempts to
reconcile the problem of how much inventory should be added when inventory is replenished.
The company should also strive to improve inventory management techniques so that they can
produce quality products to customers leading to retaining of their customers.
In addition Nzoia sugar company should improve on production scheduling process so that they
produce the best quality products which are desirable to its customers and thus build to trust to
its customers leading to a positive impact towards to the company.
5.5 Area of Further Study
The researcher carried out this study in Nzoia sugar company as an area of interest to find out the
relationship inventory management between inventory management and customer satisfaction
but that aside, the study was not wide extensively leading to hindrances, for instance limited
time, finance and uncooperativeness of some staff. Therefore further research should be carried
out in other companies such as Nile breweries, Mukwano industries and in banks such as Equity
and stanbic bank. Also further research should be carried out on the impact of inventory
management on profitability.
31
APPENDIX A: QUESTIONNAIRE FOR STAFFMAKERERE UNIVERSITY
COLLEGE OF BUSINESS AND MANAGEMENT SCIENCE
Dear Respondents
I am a Bachelor of commerce student at Makerere University conducting a research on inventory management and customer satisfaction and is purely academic in nature
You are requested to spend a few of your valuable time to answer the questions as presented below: The information will be treated with utmost confidentiality only for academic purpose and your cooperation will be highly appreciated. Thank you in advance for your participation.
SECTION A
Please tick the box that corresponds with your answer
1) Gender
a)Male b)Female
2) AGE
a) Below 25years b) 26-35years
c) 36-45years d) above 46 year
3) Level of education
a)O level b)A level
c) Diploma d) Degree
4) How long have you worked with Nzoia Sugar Company
a) Less than 3 years
b) 3-6 years
c) 7-9 years
d) More than 9 years
32
SECTION B
5) Fill the table below using the likert scale: SD (Strongly agree), D (disagree), NS (not sure), A (agree), SA (strongly agree)
QUSTIONS SD D NS A SA
1 Inventory management determines the optimal level that minimizes carrying and ordering costs in Nzoia sugar company.
2 Inventory management attempts to reconcile the problem of storage costs and ordering costs in Nzoia sugar company.
3 Suppliers in Nzoia sugar company deliver quality product on time.
4 Nzoia sugar company produce its goods exactly on time to meet customer demand as expected
5 Nzoia sugar company has a scheduling procedure for production process of several levels of procedure.
6 Nzoia sugar company combines inventory on the basis of their value
7 Nzoia sugar company has minimized the level costs incurred
33
SECTION C
Using a likert scale tick the appropriate box :a)SD strongly agree b)D disagree c)NS not sure d)Agree e)SA Strongly Agree
Question SD D NS A SA1 In providing services as expected by the customers
Nsc has build trust to its customers.2 Staff in Nsc delivers products to its customers with
a proposed order.3 Through delivering the products and services on
time Nsc has retained its customers.4 Nzoia sugar company has a procedure for delivering
of products to its customers5 Products in Nsc are delivered to customer per the
raised order.6 Staff in Nzoia sugar company responds to customers
complaints7 Staffs in Nzoia sugar company have courtesy to its
customers when delivering products.
8 Marketing staff in Nzoia sugar company ensures that there is follow up after service delivery.
9 The product is delivered on time as expected by the customers.
34
APPENDIX B: QUESTIONNAIRE FOR CLIENTSMAKERERE UNIVERSITY
COLLEGE OF BUSINESS AND MANAGEMENT SCIENCE
Dear Respondents
Iam a Bachelor of commerce student at Makerere university conducting a research on inventory management and customer satisfaction and is purely academic in nature
You are requested to spend a few of your valuable time to answer the questions as presented below: The information will be treated with utmost confidentiality only for academic purpose and your cooperation will be highly appreciated. Thank you in advance for your participation.
SECTION A
Please tick the box that corresponds with your answer
1) Gender
a)Male b)Female
2) AGE
a) Below 25years b) 26-35years
c) 36-45years d) above 46 year
3) Level of education
a)O level b)A level
c) Diploma d) Degree
4) How long have you worked with Nzoia Sugar Company
a) Less than 3 years
b) 3-6 years
c) 7-9 years
d) More than 9 years
35
Fill in the table below using a likert scale as provide, SD (strongly disagree), D (Disagree), NS (not sure), SD (strongly agree) and A (Agree)
Questions SD D NS A SA
1 Staff in Nzoia sugar company responds to customers complaints
2 Nzoia sugar company delivers its product on time as expected by the customer
3 There are no delays in the delivery of products in Nzoia sugar company
5 The products are available when an order is made in Nzoia sugar company.
6 Staff in Nzoia sugar company has courtesy to its customers when delivering products
7 Nzoia sugar company provides best quality sugar to its customers.
8 There is always feedback from the marketing staff in Nzoia sugar company.
36
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