Inventory Management and Customer Satisfaction. A Case of Spear Motors Limited Kampala

ABSTRACT The purpose of the study was to establish or investigate the relationship between inventory management and customer satisfaction in Spear Mctors Limited Kampala basing on the following objectives, to examine inventory management techniques used in organization, to find out the factors affect customer satisfaction in organizations, to establish the relationship between inventory management and customer satisfaction. The researcher used descriptive and quantitative research designs. Correlation co-efficient was used to determine the relationship between inventory management and customer satisfaction. The sample size of 70 respondents was selected using stratified random sampling. Self-administered questionnaires were used to collect data. Primary data was collected through use of questionnaires and secondary data was collected from magazines, journals and articles. Data was collected, edited and analyzed. According to the findings, the organization involves in production planning, in~ritories are reviewed periodically which improves customer satisfaction. The study showed positive relationship between inventory management and customer satisfaction at Pearson correlation coefficient r0.997. It was also concluded that inventory management techniques were effectively considered in Spear Motors Limited Kampala. It was recommended that management of Spear Motors Limited Kampala should provide fringe benefits to workers in order to improve on their behaviors. Also was recommended that management of SPEAR MOTORS LIMITED LAMPALAshouId ensure that inventory management techniques are practiced by people with trained qualifications skils.

TABLE OF CONTENTS

DECLARATION

APPROVAL

DEDICATIONS

ACKNOWLEDGEMENT iv

TABLE OF CONTENTS v

LIST OF TABLES ix

LIST OF ABBREVIATIONS x

ABSTRACT

CHAPTER ONE 1

INTRODUCTION

1 .0 Introduction 1

1.1 Back ground of the study

1.2 Statement of the problem 2

1.3 Purpose of the study 2

1 .4 Objectives 2

1 .5 Research questions 2

1.6 Scope ofthe study 3

1.6.lConceptual scope 3

1.6.2 Geographical scope 3

1.6.3 Time scope 3

1.’~ Significance of the study 3

CHAPTER TWO 4

LITRATURE REVIEW 4

2.1 Introduction 4

2.2 Inventory management 4

2.3 Techniques of inventory management 5

2.3,1 Perpetual inventory management technique 5

2.3.2 Periodic review inventory management technique 5

2.3.3 Just in time inventory management technique 6

2.3.4 A B C Analysis inventory management technique 6

2.3.5 Economic order quantity inventory management technique (EOQ) 7

2.3.6 Material requirement planning (MRP) 8

2.4 Customer satisfaction 9

2.5 Factors affecting customer satisfaction 10

2.5.1 Ability to be flexible 10

2.~.2 Technological changes 11

2.5.3 Accessibility 11

2.5.4 The nature of the product 11

2.5.5 Surveying customers 12

2.6 Relationship between Inventory management and customer satisfaction 12

2.7 Conclusion 13

CHAPTER THREE 15

RESEARCH METHODOLOGy

3.0 Introduction 15

3.1 Research design 15

3.2 Study population 15

3.3 Sample size 15

3.4 Sampling methods procedure 16

3.5 Data sources 16

3.5.1 Primary data 16

3.5.2 Secondary Data 16

3.6 Research instrument 16

3.7 Data processing 17

3.8 Data analysis 17

3.9 Anticipated limitations to the study 17

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CHAPTER FOUR .18

PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS 18

4.0 Introduction 18

4.1Responserate 18

4.2 Personal Data 18

4.2.1: Gender of respondents 18

4.2.2: Age of respondents in years 19

4.2.3 Level of respondents’ qualification 19

4.2.4 Marital status of the respondents 20

4.2.5 Length of service in Spear Motors Limited Kampala 20

4.3 Findings on techniques of inventory management 21

4.3.1 Findings on perpetual inventory management technique 21

4.3.2 Findings on inventory management technique 22

4.3.3 Findings on inventory management technique 23

4.3.4 Findings on ABC analysis inventory management technique 24

4.3.5 Findings on EOQ inventory management technique 25

4.3.6 Findings on MRP inventory managemem ~hnique 25

4.4.1 Findings on factors affecting customer satisfaction 26

4.4.2 Findings on technological changes as a factor affect customer satisfaction 27

4.4.3 Findings on accessibility as a factor affect customer satisfaction 29

4.4.4 Findings on the nature of the product 30

4.4.5 Findings on surveying customers as factor affect customer satisfaction 31

4 .5 Relationship between inventory management and customer satisfaction 32

CHAPTER FIVE 33

SUMMARY DISCUSSION, CONCLUSION AND RECOMMENDATIONS 33

5.0 Introduction 33

5.1 Summary of the major findings 33

5.1.1 Inventory management techniques 33

5.1.2 Findings on factors affecting customer satisfaction 34

5.1.3 Findings on the relationship between inventory management and customer satisfaction 35

V

5.2 Conclusions .35

5.3 Recommendations .35

5.4 Areas for further research 36

REFERENCES 37

APPENDICES 40

QUESTIONNAIRE 40