inventory management and customer...

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

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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.

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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

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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


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


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


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


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


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


Total 30 100


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


Total 30 100


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


Total 30 100


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



Agree 5 16

Not sure 0 0

Disagree 8 27


Total 30 100


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


Strongly agree 6 20

Agree 5 17

Not sure 2 7

Disagree 7 23


Total 30 100


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


Total 30 100


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


Strongly agree 7 23

Agree 2 7

Not sure 2 7

Disagree 5 17


Total 30 100


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


Strongly Agree 15 50

Agree 7 23

Not sure 0 0

Disagree 6 20

Strongly agree 2 7

Total 30 100


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


Total 30 100


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 %


Agree 6 20

Not sure 0 0

Disagree 0 0


Total 30 100


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 %


Agree 8 26

Not sure 0 0

Disagree 3 10


Total 30 100


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


Total 30 100


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


Total 30 100


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 %


Agree 3 10

Not sure 0 0

Disagree 8 27

strongly disagree 0 0

Total 30 100


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)


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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