INVENTORY MANAGEMENT AND CUSTOMER SATISFACTION



INVENTORY MANAGEMENT AND CUSTOMER SATISFACTIONCASE STUDY: NZOIA SUGAR COMPANYBYMWANZO EUNICE07/K/2904/EXTA 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 UNIVERSITYSEPTEMBER 2011DECLARATIONI 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 EUNICE07/K/2904/EXTDEDICATIONI 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. APPROVALThis 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. NAKKUSIGNATURE…………………………………DATE……………………………………………(SUPERVISOR)ACKNOWLEDGEMENTI first pass my sincere gratitude to the almighty God who kept me strong throughout the course and has enabled me to complete this dissertationGreat 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.TABLE OF CONTENTS TOC \o "1-3" \h \z \u DECLARATION PAGEREF _Toc303952993 \h iDEDICATION PAGEREF _Toc303952994 \h iiAPPROVAL PAGEREF _Toc303952995 \h iiACKNOWLEDGEMENT PAGEREF _Toc303952996 \h iiTABLE OF CONTENTS PAGEREF _Toc303952997 \h iiLIST OF TABLES PAGEREF _Toc303952998 \h iiABSTRACT PAGEREF _Toc303952999 \h iiCHAPTER ONE: INTRODUCTION PAGEREF _Toc303953001 \h 21.1 Background of the Study PAGEREF _Toc303953002 \h 21.2 Problem Statement PAGEREF _Toc303953003 \h 21.3 Purpose of the Study PAGEREF _Toc303953004 \h 21.4 Objectives of the Study PAGEREF _Toc303953005 \h 21.5 Research Questions PAGEREF _Toc303953006 \h 21.6 Scope of the Study PAGEREF _Toc303953007 \h 21.6.1 Subject scope PAGEREF _Toc303953008 \h 21.6.2 Geographical scope PAGEREF _Toc303953009 \h 21.6.3 Time scope PAGEREF _Toc303953010 \h 21.7 Significance of the Study PAGEREF _Toc303953011 \h 2CHAPTER TWO: LITERATURE REVIEW PAGEREF _Toc303953013 \h 22.1 Introduction PAGEREF _Toc303953014 \h 22.1.1 Definition of Inventory PAGEREF _Toc303953015 \h 22.2 Types of Inventory PAGEREF _Toc303953016 \h 22.2.1 Production Inventory PAGEREF _Toc303953017 \h 22.2.2 Finished goods PAGEREF _Toc303953019 \h 22.2.3 Supplies PAGEREF _Toc303953020 \h 22.3 Costs Associated with Inventories PAGEREF _Toc303953021 \h 22.3.1 Acquisition Costs PAGEREF _Toc303953022 \h 22.3.2 Carrying Costs. PAGEREF _Toc303953023 \h 22.3.3 Cost of Stock out PAGEREF _Toc303953024 \h 22.4 Justification for Holding Inventory PAGEREF _Toc303953025 \h 22.5 Inventory Control and Management PAGEREF _Toc303953026 \h 22.5.1 Inventory Management Technique PAGEREF _Toc303953027 \h 22.5.2 The Economic Order Quantity Concept PAGEREF _Toc303953028 \h 22.5.3 ABC Model PAGEREF _Toc303953029 \h 22.5.4 Just in Time PAGEREF _Toc303953030 \h 22.5.5 Material Requirement Planning PAGEREF _Toc303953031 \h 22.5.5.1 Features of MRP at plant or MRP Area level PAGEREF _Toc303953032 \h 22.6 Importance of Inventory Management Systems PAGEREF _Toc303953033 \h 22.6.1 Inventory Orders PAGEREF _Toc303953034 \h 22.6.2 Stock Maintenance PAGEREF _Toc303953035 \h 22.6.3 Price Levels PAGEREF _Toc303953036 \h 22.7 Customer Satisfaction PAGEREF _Toc303953037 \h 22.8 Indicators of Customer Satisfaction PAGEREF _Toc303953038 \h 22.8.1. Quality Product and Services PAGEREF _Toc303953039 \h 22.8.2 Price and Value PAGEREF _Toc303953041 \h 22.8.4 Relationship between Inventory Management and Customer Satisfaction PAGEREF _Toc303953042 \h 22.9 Conclusion PAGEREF _Toc303953043 \h 2CHAPTER THREE: METHODOLOGY PAGEREF _Toc303953045 \h 23.1 Introduction PAGEREF _Toc303953046 \h 23.2 Research Design PAGEREF _Toc303953047 \h 23.3 The Study Population PAGEREF _Toc303953048 \h 23.4 Survey PAGEREF _Toc303953049 \h 23.4.1 Sample Siz Population e PAGEREF _Toc303953050 \h 23.4.2 Sampling Method PAGEREF _Toc303953051 \h 23.5 Sources of Data Collection PAGEREF _Toc303953052 \h 23.5.1 Primary Sources PAGEREF _Toc303953053 \h 23.5.2 Secondary Sources PAGEREF _Toc303953054 \h 23.6 Data Collection Instruments PAGEREF _Toc303953055 \h 23.6.1 Questionnaires PAGEREF _Toc303953056 \h 23.7 Data Analysis and Presentation PAGEREF _Toc303953057 \h 23.7.1 Editing PAGEREF _Toc303953059 \h 23.7.2 Coding PAGEREF _Toc303953060 \h 23.7.3 Tabulation PAGEREF _Toc303953061 \h 23.7.4 Data Analysis PAGEREF _Toc303953062 \h 23.8 Limitations PAGEREF _Toc303953063 \h 2CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS PAGEREF _Toc303953065 \h 24.1 General Information PAGEREF _Toc303953066 \h 24.1.2 Gender of Respondents PAGEREF _Toc303953067 \h 24.1.3 Age Bracket PAGEREF _Toc303953068 \h 24.1.4 Level of Education PAGEREF _Toc303953069 \h 24.1.5 Duration of Respondents in Service PAGEREF _Toc303953070 \h 24.2 Inventory Management Techniques PAGEREF _Toc303953071 \h 24.2.1 Determining the Best Level of Inventory for Production PAGEREF _Toc303953072 \h 24.2.2 Production of Inventory at the Right Time PAGEREF _Toc303953073 \h 24.2.3 Scheduling Procedure for Production Process PAGEREF _Toc303953074 \h 24.2.4Measuring Inventory According to Value PAGEREF _Toc303953075 \h 24.2.5 Cost Associated with Inventory PAGEREF _Toc303953076 \h 24.2.6 Electronic Ordering of Inventory PAGEREF _Toc303953077 \h 24.2.7 Price of Finished Products PAGEREF _Toc303953078 \h 24.3.1 Building Trust to Customers PAGEREF _Toc303953079 \h 24.3.2 Delivering Products with a Proposed Order PAGEREF _Toc303953080 \h 24.3.3 Retaining of Customers PAGEREF _Toc303953081 \h 24.3.4 Responses to Customer Complains PAGEREF _Toc303953082 \h 24.3.5 Courtesy to Customer PAGEREF _Toc303953083 \h 24.4.4 Availability of Products in Store PAGEREF _Toc303953084 \h 24.4.5 Production of Best Quality Product PAGEREF _Toc303953085 \h 24.5 Finding the Relationship between Inventory Management and Customer Satisfaction PAGEREF _Toc303953086 \h 24.5.1 Correlation between Inventory Management and Customer Satisfaction. PAGEREF _Toc303953087 \h 2CHAPTER FIVE: SUMMARRY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS PAGEREF _Toc303953089 \h 25.1 Introduction PAGEREF _Toc303953090 \h 25.2 Summary of the Findings PAGEREF _Toc303953091 \h 25.3 Conclusion PAGEREF _Toc303953092 \h 25.4 Recommendations PAGEREF _Toc303953093 \h 25.5 Area of Further Study PAGEREF _Toc303953094 \h 2APPENDIX A: Questionnaire for Staff PAGEREF _Toc303953095 \h 2APPENDIX B: Questionnaire for Clients PAGEREF _Toc303953096 \h 2REFERENCES PAGEREF _Toc303953097 \h 2LIST OF TABLES TOC \o "1-3" \h \z \u Table 1: Sample size PAGEREF _Toc335985394 \h 2Table 2: Gender of respondents PAGEREF _Toc335985412 \h 2Table 3: Showing results on Age bracket PAGEREF _Toc335985414 \h 2Table 4: Level of Education PAGEREF _Toc335985416 \h 2Table 5: Duration in service PAGEREF _Toc335985418 \h 2Table 6: Showing response regarding level of inventory for production PAGEREF _Toc335985421 \h 2Table 7: Showing results on right time of production PAGEREF _Toc335985423 \h 2Table 8: showing response on production process PAGEREF _Toc335985425 \h 2Table 9: Showing results on inventory value PAGEREF _Toc335985427 \h 2Table 10: Showing results on minimal costs associated with inventory PAGEREF _Toc335985429 \h 2Table 11: Showing results on electronic ordering of inventory PAGEREF _Toc335985431 \h 2Table 12: Showing results on price level PAGEREF _Toc335985433 \h 2Table 13: Showing results on trust PAGEREF _Toc335985434 \h 2Table 14: Showing results on product delivery PAGEREF _Toc335985436 \h 2Table 15: Showing results on retained customers PAGEREF _Toc335985438 \h 2Table 16: Showing results on customer complaints PAGEREF _Toc335985440 \h 2Table 17: Showing results on courtesy PAGEREF _Toc335985442 \h 2Table 18: Showing results on follow up PAGEREF _Toc335985443 \h 2Table 19: Showing results on products availabity PAGEREF _Toc335985445 \h 2Table 20: Results on quality product PAGEREF _Toc335985447 \h 2Table 21: Correlation between inventory management and customer satisfaction PAGEREF _Toc335985450 \h 2ABSTRACTInventory 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.CHAPTER ONEINTRODUCTION1.1 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.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 standards1.2 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 StudyTo find out the inventory management techniques adopted by Nzoia sugar companyTo examine the measures of service quality in Nzoia sugar companyTo find out the relationship between inventory management and customer satisfaction in Nzoia sugar company.1.5 Research QuestionsWhat 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?1.6 Scope of the Study1.6.1 Subject scopeCONCEPTUAL FRAMEWORKInventory management techniques measurement of customer satisfactionA BC ModelJust in timeEOQ conceptMRPQuality serviceQuality productService deliveryFeedback analysisSource: 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 Kenya1.6.3 Time scopeThe study covered a period of two years from 2009 to 20101.7 Significance of the StudyThe study will be vital to the management of Nzoia sugar company to effectively improve on the quality of inventory management systemThe 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.To act as a ground for the future scholars or academics in future research in the field of improving inventory management.CHAPTER TWOLITERATURE REVIEW2.1 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).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 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) includesDelivery cannot be exactly matched with the usage rate day by dayEconomies 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.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.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 analysisClassify the items of inventories determining the expected use in units and the price per unit for each item.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 pute 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 bine 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 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 areas2.6 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 OrdersInventory 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 automatically when current stock hits a predetermined minimum levels. Electronic ordering known as electronic Data interchange (EDT), 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.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 Satisfaction2.8.1. 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 qualityThe 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 service2.8.4 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.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 loyaltyAcquiring 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 time2.9 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) CHAPTER THREEMETHODOLOGY3.1 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 sizeTypes of respondents Simple size Management 6Staff 10Customers 14Total 30Source: Primary data 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 sources3.5.1 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 Instruments3.6.1 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 PresentationData processing includes editing, coding and tabulation before data is analyzed3.7.1 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.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.CHAPTER FOURDATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGSThis 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 companyTo 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 respondentsGenderFrequencyPercentages %Male 1757Female 1343Source: Primary dataFrom 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. 4.1.3 Age BracketTable 3: Showing results on Age bracketBelow 2562026-35186036-45517Above 4613Total30100Source: Primary dataFrom 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 EducationRespondentsFrequencyPercentage%O level827A level27Diploma930Degree1126Total30100Source: Primary dataFrom 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.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 serviceRespondentsFrequencyPercentages %Less than 3 years14473-6years9307-9 years620More than 9 years13Total30100Source: Primary dataFrom 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 Company4.2.1 Determining the best level of inventory for productionTable 6: Showing response regarding level of inventory for productionResponseFrequency PercentagesStrongly agree1240Agree930Not sure00Disagree310Strongly disagree620Total30100Source: Primary dataThe 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 productionResponseFrequencyPercentage %Strongly Agree827Agree00Not sue27Disagree413Strongly disagree1653Total30100Source: Primary dataFrom 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 processTable 8: Showing response on production processResponse Frequency Percentage Strongly Agree623Agree310Not sure13Disagree517Strongly disagree1550Total30100Source: Primary dataFrom 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 valueTable 9: Showing results on inventory valueResponseFrequency PercentageStrongly agree413Agree1240Not sure00Disagree827Strongly disagree620Total30100Source: Primary dataThe 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 CompanyTable 10: Showing results on minimal costs associated with inventoryResponseFrequencyPercentages Strongly agree1757Agree516Not sure00Disagree827Strongly disagree00Total30100Source: Primary dataFrom 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.4.2.6 Electronic ordering of inventory Table 11: Showing results on electronic ordering of inventoryResponseFrequencyPercentageStrongly agree620Agree517Not sure27Disagree723Strongly disagree1343Total30100Source: Primary dataFrom 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 productsTable 12: Showing results on price levelResponseFrequencyPercentage%Strongly agree517Agree00Not sure620Disagree413Strongly disagree1443Total30100Source: Primary dataFrom 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 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 customersTable 13: Showing results on trustResponseFrequencyPercentagesStrongly agree723Agree27Not sure27Disagree517Strongly disagree1446Total30100Source: Primary dataThe 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 productsTable 14: Showing results on product deliveryResponseFrequencyPercentageStrongly Agree1550Agree723Not sure00Disagree620Strongly agree27Total30100Source: Primary dataThe 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 customersTable 15: Showing results on retained customersResponseFrequencyPercentages %Strongly agree517Agree13Not sure310Disagree827Strongly disagree1343Total30100Source: 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 complainsTable 16: Showing results on customer complaintsResponseFrequencyPercentage %Strongly agree1447Agree620Not sure00Disagree00Strongly disagree1033Total30100 Source: Primary data 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 customerTable 17: Showing results on courtesyResponseFrequencyPercentage %Strongly agree1757Agree826Not sure00Disagree310Strongly disagree27Total30100Source: Primary dataThe 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 inventoryTable 18: Showing results on follow upResponseFrequencyPercentages %Strongly agree723Agree27Not sure413Disagree620Strongly disagree1137Total30100Source: Primary dataThe 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 of any complain which may result into repeat of same errors which may lead to customer dissatisfaction. 4.3.7 Availability of products in storeTable 19: Showing results on products availabityResponsefrequencyPercentage %Strongly agree413Agree27Not sure00Disagree723Strongly agree1757Total30100Source: Primary dataFrom 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 productTable 20: Results on quality productResponseFrequency Percentages %Strongly agree1963Agree310Not sure00Disagree827strongly disagree00Total30100Source: Primary dataThe 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 4.5 Finding the Relationship between Inventory Management and Customer Satisfaction4.5.1 Correlation between inventory management and customer satisfaction.Table 21: Correlation between inventory management and customer satisfactionInventory managementCustomer satisfactionInventory Pearson correlationManagement sig.(2-tailed) N1.000.30.83**.00030Customer Pearson correlation Satisfaction sig.(2-tailed) N.83**.000301.000.30**. Correlation is significant at the 0.01 level (2-detailed)Source: Primary dataFrom 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.CHAPTER FIVESUMMARRY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS5.1 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.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 StudyThe 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.APPENDIX A: QUESTIONNAIRE FOR STAFFMAKERERE UNIVERSITYCOLLEGE OF BUSINESS AND MANAGEMENT SCIENCE Dear RespondentsI am a Bachelor of commerce student at Makerere University conducting a research on inventory management and customer satisfaction and is purely academic in natureYou 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 APlease tick the box that corresponds with your answer1) Gendera)Male b)Female2) AGEa) Below 25years b) 26-35yearsc) 36-45years d) above 46 year3) Level of educationa)O level b)A levelc) Diploma d) Degree4) How long have you worked with Nzoia Sugar Companya) Less than 3 yearsb) 3-6 years c) 7-9 yearsd) More than 9 years SECTION B 5) Fill the table below using the likert scale: SD (Strongly agree), D (disagree), NS (not sure), A (agree), SA (strongly agree) QUSTIONSSDDNSASA1Inventory management determines the optimal level that minimizes carrying and ordering costs in Nzoia sugar company.2Inventory management attempts to reconcile the problem of storage costs and ordering costs in Nzoia sugar company.3Suppliers in Nzoia sugar company deliver quality product on time.4Nzoia sugar company produce its goods exactly on time to meet customer demand as expected5Nzoia sugar company has a scheduling procedure for production process of several levels of procedure.6Nzoia sugar company combines inventory on the basis of their value7Nzoia sugar company has minimized the level costs incurred SECTION CUsing a likert scale tick the appropriate box :a)SD strongly agree b)D disagree c)NS not sure d)Agree e)SA Strongly AgreeQuestionSDDNSASA1In providing services as expected by the customers Nsc has build trust to its customers.2Staff in Nsc delivers products to its customers with a proposed order.3Through delivering the products and services on time Nsc has retained its customers.4Nzoia sugar company has a procedure for delivering of products to its customers5Products in Nsc are delivered to customer per the raised order.6Staff in Nzoia sugar company responds to customers complaints7Staffs in Nzoia sugar company have courtesy to its customers when delivering products.8Marketing staff in Nzoia sugar company ensures that there is follow up after service delivery.9The product is delivered on time as expected by the customers.APPENDIX B: QUESTIONNAIRE FOR CLIENTSMAKERERE UNIVERSITYCOLLEGE OF BUSINESS AND MANAGEMENT SCIENCEDear RespondentsIam a Bachelor of commerce student at Makerere university conducting a research on inventory management and customer satisfaction and is purely academic in natureYou 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 APlease tick the box that corresponds with your answer1) Gendera)Male b)Female2) AGEa) Below 25years b) 26-35yearsc) 36-45years d) above 46 year3) Level of educationa)O level b)A levelc) Diploma d) Degree4) How long have you worked with Nzoia Sugar Companya) Less than 3 yearsb) 3-6 years c) 7-9 yearsd) More than 9 yearsFill in the table below using a likert scale as provide, SD (strongly disagree), D (Disagree), NS (not sure), SD (strongly agree) and A (Agree)QuestionsSDDNSASA1Staff in Nzoia sugar company responds to customers complaints2Nzoia sugar company delivers its product on time as expected by the customer3There are no delays in the delivery of products in Nzoia sugar company5The products are available when an order is made in Nzoia sugar company.6Staff in Nzoia sugar company has courtesy to its customers when delivering products7Nzoia sugar company provides best quality sugar to its customers.8There is always feedback from the marketing staff in Nzoia sugar company. 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