inventory management and customer satisfaction a case study

INVENTORY MANAGEMENT AND CUSTOMER
SATISFACTION
A CASE STUDY; THE NATIONAL MEDICAL STORES
BY
AMIRO REDEMPTA
08/U/11082/EXT
A RESEARCH REPORT SUBMITTED TO MAKERERE
UNIVERSITY IN PARTIAL FULFILLMENT FOR THE AWARD
OF THE DEGREE OF BACHELOR OF COMMERCE
(EXTERNAL) AT MAKERERE UNIVERSITY
JULY, 2012
1
DECLARATION
I Amiro Redempta, declare that this project report is my original work and has never been
submitted for any award in any university or institution.
Signed……………………………………..
Date………………………………..
AMIRO REDEMPTA
i
APPROVAL
I certify that the candidate was under my supervision. His work is original and worthy for the
award of Bachelor of Commerce Degree of Makerere University.
Signed -----------------------------Supervisor Mr. CHRISTOPHER MUGANGA
Date ----------------------------------
ii
DEDICATION
I dedicate this piece of work to my step mum Omaido, big sister Diana and my fiancé kukunda
Allan. These people have done a lot in my academic career thanking them is not enough but I
just wish them blessings. I am so proud of you.
iii
ACKNOWLEDGEMENT
I wish to extend my sincere gratitude to my supervisor; MR. MUGANGA CHRIS who heartedly
contributed a lot towards the success of this work.
I wish to thank so much the management of national medical store for helping me in carrying
out research in their organization
More thanks go to my step mother MISS. OMAIDO CATHERINE and my big sister
KARUHANGA DAINA who contributed a lot to my education.
Still special thanks go to my parents ABITEGEKA NOELINE (R.I.P) and ASOMUN SAM
(R.I.P) And uncle KEN (R.I.P) these did a lot in my life and education though they haven‟t
enjoyed my success.
I also extend my sincere thanks to my fiancé ALLAN KUKUNDA for the love and care and who
has always given me support through all my struggles in life.
Further more I wish to thank my sisters and brothers, my sweet aunties and Uncle OTAI
JOSEPH, Uncle EPODOI ANDREW, Cousin BUSINGE EDGAR
Lastly but not least, special regards to my group members In the procurement class NICK,
LEAH GITAU, EUNICE, HASSAN, AKITUI CAROL, HORACE, MOSES. ANTHONY,
KABUGO, ELVIS, CHRIS OPONG and my best friends KIBULE ALI,PATRICK, ALIZIK.
These guys I adore them and love them so much not forgetting my church UNIVERSITY
COMMUNITY FELLOWSHIP (UCF)
iv
TABLE OF CONTENTS
DECLARATION ............................................................................................................................. i
APPROVAL ................................................................................................................................... ii
DEDICATION ............................................................................................................................... iii
ACKNOWLEDGEMENT ............................................................................................................. iv
TABLE OF CONTENTS ................................................................................................................ v
LIST OF TABLES ......................................................................................................................... ix
ABBREVIATIONS ........................................................................................................................ x
ABSTRACT ................................................................................................................................... xi
CHAPTER ONE ............................................................................................................................. 1
Introduction ................................................................................................................................. 1
Background of the study ............................................................................................................. 1
Problem statement ....................................................................................................................... 3
Purpose of the study .................................................................................................................... 4
Objectives of the study ................................................................................................................ 4
Research questions ...................................................................................................................... 4
scope of the study ........................................................................................................................ 4
Significances of the study ........................................................................................................... 4
CHAPTER TWO ............................................................................................................................ 6
LITERATURE REVIEW ............................................................................................................... 6
v
Introduction ................................................................................................................................. 6
Inventory management ................................................................................................................ 6
2.0 Systems of inventory management ....................................................................................... 7
The economic order quantity model............................................................................................ 7
Just in time (JIT) inventory system ............................................................................................. 9
ABC analysis ............................................................................................................................... 9
Materials Requirement Planning (MRP) supplies ..................................................................... 10
Perpetual inventory cost control ................................................................................................ 11
Material cost reports .................................................................................................................. 11
2.1 Levels of customer satisfaction ........................................................................................... 11
Factors influencing customer satisfaction ................................................................................. 12
How to measure customer satisfaction ...................................................................................... 14
2.2 Relationship between inventory management and customer satisfaction ........................... 14
Conclusion................................................................................................................................. 15
CHAPTER THREE ...................................................................................................................... 17
METHODOLOGY ....................................................................................................................... 17
Introduction ............................................................................................................................... 17
Research designs ....................................................................................................................... 17
Study population ....................................................................................................................... 17
Study size .................................................................................................................................. 17
Sampling design ........................................................................................................................ 17
vi
Sources of data .......................................................................................................................... 18
Data collection instruments ....................................................................................................... 18
Data processing, presentation and analysis ............................................................................... 18
CHAPTER FOUR ......................................................................................................................... 20
PRESENTATION, DISCUSSION AND ANALYSIS OF RESEARCH FINDINGS ................. 20
Introduction ............................................................................................................................... 20
General findings ........................................................................................................................ 20
Findings on the type of inventory held by the national medical store ...................................... 25
4.0 Findings on invetory management systems ........................................................................ 26
4.1Findings on customer satisfaction ........................................................................................ 28
4.2 Findings on the relatonship between inventory management and customer satisfaction. .. 31
CHAPTER FIVE .......................................................................................................................... 33
SUMMARY, CONCLUSION AND RECOMMENDATIONS. .................................................. 33
Summary ................................................................................................................................... 33
5.0 Inventory management ........................................................................................................ 33
5.1Customer satisfaction ........................................................................................................... 33
5.2 The relationship between inventory management and customer satisfaction ..................... 33
Conclusion................................................................................................................................. 34
5.3 Recommendations ............................................................................................................... 34
Recommendations on inventory management .......................................................................... 34
Recommendation on customer satisfaction ............................................................................... 35
vii
Recommendation for further research ....................................................................................... 35
REFERENCE................................................................................................................................ 36
APPENDICES .............................................................................................................................. 37
Questionnaire ............................................................................................................................... 37
Introductory Letter ........................................................................................................................ 37
viii
LIST OF TABLES
Table 1.1 showing the gender of the respondents……………………………………………21
Table 1.2 showing the age of respondents in National Medical stores………………………21
Table 1.3 showing the educational background of the respondents…………………………22
Table 1.4 showing position held by respondents in the organization………………………23
Table 1.5 showing the level of inventory kept in National Medical Stores…………………24
Table1.0 showing whether economic order quantity system of inventory is used in National
medical
stores……………………………………………………………………………………………26
Table1.2 does the corporation use re-order level system……………………………………27
Table2. Showing how respondents describe inventory management in national medical
stores……………………………………………………………………………………………..27
Table 1 showing factors that influence customer satisfaction levels in National Medical
Stores…………………………………………………………………………………………….28
Table2 showing the extent to which problems are met while meeting customer
needs……………………………………………………………………………………………29
Table 3 showing problems most experienced when meeting customer satisfaction………30
Table1 showing how the staff respond to the statement that inventory management has got a
significant role on customer satisfaction……………………………………………………31
Table3 showing respondents reaction to the inventory management systems employed in
National Medical Stores………………………………………………………………………..32
ix
ABBREVIATIONS
Abbreviations
meaning
NMS
National Medical Stores
MRP
Material Requirement Planning
J.I.T
Just In Time
C.I.E
Control by Importance Exception
CC
Carrying Costs
OC
Ordering Costs
TD
Total Demand
EOQ
Economic Order Quantity
AMC
Average monthly consumption
CAP
Chapter
x
ABSTRACT
The study was carried out on National Medical Stores on the topic “inventory management and
customer satisfaction”. The researcher wanted to know whether there existed a relationship
between inventory management and customer satisfaction. The research was based on the objects
below;

To establish the inventory management systems used in national medical stores

To establish the level of customer satisfaction in National medical stores

To examine the relationship between inventory management and customer satisfaction
With the help of management scholars like Richard J.Tersine (1982).T.Lucey (1986), Colin
Drury (1995) and many others, and the research carried out from NMS. It was found out that the
two variables that is; inventory management and customer satisfaction are related.
From the intensive research done on the topic above, the researcher concludes that there is a high
correlation between inventory management and customer satisfaction.
Therefore it is advisable for all firms‟ be-it service or product oriented to put in place agood
inventory management policy.
xi
CHAPTER ONE
Introduction
The study is about inventory management and customer satisfaction particularly in national
medical stores. This first chapter covers the statement of the study, the statement of the problem,
the purpose of the study, the objectives, the questions, the scope of the study and the
significances.
Background of the study
inventory management is well known for influencing many business operations so with this
knowledge the researcher decided to go a head and carry out a study on how
inventory
management relate to customer satisfaction. But this time the researcher is to carry out the study
in national medical stores.
Inventory is a term used to mean materials and supplies that a business holds either for sale or
production process as inputs (Arnold, 1998).in accounting inventory is considered an asset.
In the USA and Canada the term has developed from a list of goods and materials in stock by a
business.
Inventory in simple terms can be defined as parts and materials on one hand or the value or
quantity of raw materials, components, assemblies, consumables, work in progress and finished
good stock that are kept or stored for use as the need arises (Kenneth lysons, 2000)
Inventory management is primarily about specifying the shape and percentage of stocked
goods. It‟s required at different locations within a facility or within many locations of a supply
network to precede the regular and planned course of production and stock materials.
Inventory management is a system which ensures that right quality of materials is available in
the right quantity at a right time and at the right place with the amount of investment (jain and
narang, 1986) inventory management also involves systems and processes that identify inventory
requirements, set targets, provide replenishment techniques, report actual and projected
inventory status and handles all functions related to tracking and management of materials.
1
There are mostly three kinds of inventory, raw materials, work in progress and finished goods
which are used to facilitate more production and sales operations.
Inventory level management, this deals with the amount of goods and supplies that an
organization should keep in stock so as to maintain production levels or sales levels and for the
smooth running of the business. There should be an optimum level of all types of stock
maintained from raw materials to finished goods so as to prevent interruptions in production
(Nair, 1985)
Firms that maintain proper inventory management, increase customer relations and customer
satisfaction due to uninterrupted supply. A satisfied customer will always buy again and again
the organization‟s products and even convince others to join hence retaining customers (Drury,
1995)
A customer is sometimes known as a client, buyer or purchaser, a customer is the recipient of a
good, service, product or idea obtained from a seller, vendor or supplier for a monetary or other
valuable consideration. Customers are generally categorized into two types;

An intermediate customer r trade customer (more informally “the trade) who is a dealer
that purchases goods for re-sale.

An ultimate customer who does not in turn resale the things bought but either passes
them to the consumer or actually is the consumer. A customer may or may not be a
consumer, but the two notions are distinct even though the terms are commonly confused,
a customer purchases goods, a consumer uses them.
A customer can never be won in an argument because he has the last word; he will not come if
he chooses (Balunywa 2003)
Customer satisfaction is a term frequently used in marketing, is a measure of how products and
services supplied by a company meet or surpass customer expectation. Once a customer doesn‟t
meet her/ his expectation from the product or service then complains will be inevitable. This
state may lead her to try out other products yet this does not favor brand loyalty. While for a
customer who will feel positively satistified are likely to express their delight.
2
Firms generally ask customers whether their products or services have met or exceeded
expectations thus expectations are a key factor behind satisfaction. The way a supplier also
expresses herself while supplying a good is very vital since it helps in creating satisfaction, so
behavior breeds a key and deciding factor for customer satisifaction.Behavior that help rather
than hinder are just common sense(balunywa, 2003).so for the above reasons its essential for
business to effectively manage customer satisfaction.
The study it is intended to find out how the national medical store is dealing with inventory
management, and how it satisfies its customers.
National medical store is an autonomous government corporation established by NMS Act (CAP
207), which came into effect on 3rd December, 1993. National medical store is concerned with
the procurement, storage, and continuous distribution of pharmaceutical products and other
medical supplies in a financially viable and sustainable manner. NMS operates five warehouses,
four at its headquarters in Entebbe and one in Kampala, it ensures that only safe efficacious
medicines are procured, stored and distributed so as to satisfy their consumers.
Inventory management is a strong tool towards meeting delivery deadlines, customer fulfillment,
high quality products and all customer satisfaction and increasing loyalty and trust for the firm
(Lacey, 1986)
Problem statement
A good inventory management frame work is a requirement for every organization. National
Medical Stores has faced a challenge of how to balance high quality of customer service while
maintaining the specialized practices and procedures demanded by pharmaceutical inventory
management.
Much as National Medical store has tried to offer a unique service like providing on-time
deliveries, fast response times to customer needs, the company has continued to face problems of
customer complains which has led to dissatisfaction of customers this could be due to
weaknesses in the inventory management.
Any business which doesn‟t manage their stock will be jeopardizing its performance (tersine,
1982) so NMS should check it‟s inventory and manage it so as to avoid dissatisfaction of
customers.
3
Purpose of the study
The main purpose of the study is to establish the relationship between inventory management
and customer satisfaction using the case study of the national medical stores.
Objectives of the study
(a) To establish the inventory management systems used in national medical stores
(b) To establish the level of customer satisfaction in NMS
(c) To examine the relationship between inventory management and customer satisfactio
Research questions
The study was intended to provide solutions to the following questions
(a) What inventory management systems used in national medical stores?
(b) What is the level of customer satisfaction in National medical store?
(c) What is the relationship between inventory management and customer satisfaction?
scope of the study
Content scope
The study focused on the relationship between inventory management and customer satisfaction
in National Medical Store. Inventory management is the independent variable and customer
satisfaction the dependent variable.
Geographical scopes
The study is limited to National Medical Stores (U) located at Nsamizi road plot 4-12 Entebbe
town. Mainly the accounts, procurement and store department will be considered.
Time scope
The research will cover a period of six months.
Significances of the study
The study will help the National medical stores and other organizations on improving their ways
of managing inventory and to ensure the smooth flow of supply to enable customer satisfaction
4
The research will benefit people who wish to carry out more research on this topic especially
business students and it will be used as a reference.
It will help the new investors who wish to supply such products to appreciate different methods
of inventory management levels
It will also benefit me (the researcher) because its one of the requirements of a reward of a
degree of commerce external
5
CHAPTER TWO
LITERATURE REVIEW
Introduction
This is a chapter that makes a critical review on the major issues on existing literature on
inventory management as an independent variable and customer satisfaction as the dependent
variable. It also talks about the relationship between the two variables and then the conclusion.
Text books, news letters and reports will be used to collect the information.
Inventory management
Inventory is defined as materials and supplies that a business or institution holds either for sale or
to provide input or supplies to the production process (Arnold, 1998)
Inventory is a very important because shows items in stocking location and that serve to
decouple successive operations in the process of manufacturing a product and distributing it to
consumers. An organization‟s inventory may consist of a list of goods and materials held
available in stock. Therefore inventory is „anything‟ the organization owns that it plans to sell
(Kenneth lysons, 2000)
Inventory management is primarily about specifying the shape and percentage of stocked
goods. It‟s required at different locations within a facility or within many locations of a supply
network to precede the regular and planned course of production and stock materials. It ensures
that right quality of materials is available
The scope of inventory management concerns the fine lines between replenishment lead time,
carrying costs of inventory, asset management, inventory forecasting, inventory valuation,
inventory visibility, future inventory price forecasting, physical inventory, available physical
space for inventory, quality management, replenishment, returns and defective goods and
demand forecasting. Balancing these competing requirements leads to optimal inventory levels,
which is an on-going process as the business needs shift and react to the wider environment.
Inventory management involves a retailer seeking to acquire and maintain a proper merchandise
assortment while ordering, shipping, handling, and related costs are kept in check. It also
involves systems and processes that identify inventory requirements, set targets, provide
6
replenishment techniques, report actual and projected inventory status and handle all functions
related to the tracking and management of material. This would include the monitoring of
material moved into and out of stockroom locations and the reconciling of the inventory
balances. Also may include ABC analysis, lot tracking, cycle counting support etc. Management
of the inventories, with the primary objective of determining/controlling stock levels within the
physical distribution function to balance the need for product availability against the need for
minimizing stock holding and handling costs.
2.0 Systems of inventory management
These relate to technologies that are developed by companies to ensure effective and efficient
inventory management. Such technologies focus on the entire supply chain, since in this
inventories are born. Companies need to control the types of quantities of materials they
purchase, plan which products are to be produced and in what quantities and ensure that they are
able to meet current and future customer demand, all at the lowest cost possible. Thus, a good
inventory management system is very vital in the workings of an effective supply chain.
Organizations that embrace, implement, lead and master these technologies and inventory
management methods have potential to develop a significant competitive edge over their rivals
(Jeff Ashcroft, 2005).in practice these systems include;
The economic order quantity model
It‟s an optimal ordering quantity for an item of stock that minimizes costs while maximizing the
benefits of holding inventory. That is to say cost of carrying and ordering stock is minimized
(Narang, 1986). To be able to calculate a basic economic order quantity (EOQ) certain
assumptions are necessary and they are:

Assume that the annual demand is known

Assume that the costs of ordering are known and it is the same irrespective of the
size or quantity ordered.

Assume that all what is ordered is sold

Assume that the price per unit is uniform through out the year.

Assume stock holding is known and constant.

Lead times are known and constant
7
The formula of EOQ is given by.
EOQ=2.OC.TD/CC
Where cc= carrying costs per order
Oc=ordering cost per order
Td=total demand per annum.
Also the following diagram can e used to illustrate EOQ
Diagram 1:
Source: Jain and Narang, 1986
Economic order quantity system has been critized due to its unrealistic assumptions that demand
is certain, what is ordered is sold; the price is uniform through out the year, lead time is known.
These to some extent are not applicable like in the following ways;
The demand for a product cannot be known because it keeps on changing depending on the
number of factors for example prices, quality and so many others.
8
It‟s not true that whatever is ordered is sold because sometimes it remains unsold. There is a
degree of uncertainty here so to avoid this uncertainty a firm should maintain a level of safety
stock. The price of a product cannot be uniform through out the year or constant because due to
factors like inflation, demand fluctuation the prices keep on changing. Lead time is not known
since it keeps on changing depending on the suppliers and efficiency of the procurement
department
Just in time (JIT) inventory system
It is defined s „an inventory control philosophy whose goal is to maintain just enough material in
just the right time to make just the right amount of product‟ (Lee white, 2004). It is „the exact
adjustment of production to quantity and time held‟ JIT is a demand pull system where the
Demand for a product dictates the production requirements. It looks at inventory as waste and
should be eliminated as much as possible.
For JIT to work, two things must happen;
(a) All parts must arrive where they are needed, when they are needed and in the exact
quantity needed.
(b) All parts that arrive must be usable parts.
Just in time system has been critized because it is risky and exposes suppliers and consumers to
supply shock due to large demand changes, JIT is not realistic because customers demand
constantly change so the shortages which occur due to stock out causes a huge loss.
ABC analysis
In any inventory, which contains more than one stock item some items will be more important to
the organization than others. Some items must have a very high usage rate. So if they ran out
many customers would be disappointed.ABC analysis is also known as „control by importance
and exception‟ (C.I.E). (Jain and Narang, 1986).
Items of inventory are classified on the basis of investment involved. ABC analysis measures the
significant of each item in terms of value. Items with highest value are classified as „A‟ items.
„B‟ Items represent relative low value and under simple management. They represent 50% of the
9
stock. And „C‟ items represent relatively low value and under simple control (Pandey, 1995).
Under the ABC analysis, there is more concentration on important items.
To implement the ABC Analysis, the following steps are involved;

Clarify the items of inventory, determining the expected use in units and the price per
unit.

Determine the total value of each item by multiplying the expected units by its unit price.

Rank items according to the value giving first rank to those with the highest value.

Compute the percentage of number of units of each item to the total units of all items and
ration of total value of items to the total value of items.

Combine items on the basis of the relative value to the three categories that is AB and C.
This system can be critized, it looks at ranking products according to their values but it doesn‟t
show the right method it determines the value because each person defines value of the product
in different ways. For example one might say the laboratory syringes are of high value due to
physical packaging while another might value them high due to their prices
Materials Requirement Planning (MRP) supplies
It is a product-oriented computerized technique aimed at minimizing inventory and maintaining
delivery schedules. It relates the dependent requirements for the, materials and components
comprising an end product to time periods known as „buckets‟ over a planned horizon(typically
one year) on the basis of forecasts provided by marketing or sales and other input information.
Note: a „bucket‟ is a time period to which MRP relates e.g. one week etc.
Some times MRP is known as “time phased requirements planning” (tersine, 1982)
This is system is unrealistic to a small extent because it looks at only the materials and yet a firm
also needs to look at its resources and the distribution system so as to manage the inventory.
10
Perpetual inventory cost control
The chartered institute of management accountant, London defines perpetual inventory as „ a
system of records maintained by the controlling department
which reflects the physical
movement of stocks and their current balance.‟
It is the system of ascertaining balance after every receipt and issue of materials through stock
records to facilitate regular checking and avoiding closing down the for firm stock taking.
Under this system the critic is that it strains the store staff due to its continuous stock taking.
Material cost reports
It helps management in exercising effective material control and taking appropriate decision
Material cost reports serve as a means of communication usually in written form of facts, relating
to material which should be brought to the attention of the various levels of management who
can use the to take suitable action for the purpose of inventory control.
2.1 Levels of customer satisfaction
A customer is the recipient of a good, service, product or idea obtained from a seller, vendor or
supplier for a monetary or other valuable consideration. He is not an interruption on our work.
He is the purpose of it. He is not an outsider on our business. He is part of it.
A customer is many things;

A person who buys or uses goods or services of an organization

A person who brings in his wants its an organizations work to satisfy his wants
Customers are those people who enable the organization to exist. They are the purpose of a
business. A customer can never be won in an argument because he has the last word; he will not
come if he chooses (Balunywa 2003),
The statement that customer can never be won is not realistic because if the provider is skilled
enough and good at strategizing then instead the provider will win the argument.
Customer satisfaction. Once a customer doesn‟t meet her/ his expectation from the product or
service then complains will be inevitable. This state may lead her to try out other products yet
11
this does not favor brand loyalty. While for a customer who will feel positively satistified are
likely to express their delight.
Firms generally ask customers whether their products or services have met or exceeded
expectations thus expectations are a key factor behind satisfaction.
The way a supplier also expresses herself while supplying a good is very vital since it helps in
creating satisfaction, so behavior breeds a key and deciding factor for customer satisfaction.
Behaviors that help rather than hinder are just common sense (balunywa, 2003).so for the above
reasons it‟s essential for business to effectively manage customer satisfaction.
Factors influencing customer satisfaction
1. The product or
service
3. The customer’s needs and
expectations
4. Customer satisfaction or
dissatisfaction
2. The behavior of provides
Source; Balunywa, 2003
The product or service
The nature of a product or service is very important in influencing customer satisfaction. Product
quality is measured by performance, reliability and durability. This is besides aspects like
aesthetic features of the product. The quality of the product is what the customer perceives rather
than what actually is.
The behavior of the internal customers
Customers want to feel good n any transaction. Consequently, the behavior of the people they
contact with is vital in determining their satisfaction. Customers always see every body they deal
12
with in the organization, whether it is the security guard, the cleaner or the chief executive. The
behavior of employees therefore, however trivial, is important in influencing customer
satisfaction.
The customer’s needs and expectations
These are very important n meeting customer satisfaction. The needs are the desires or want that
need to be fulfilled. The deficiency he feels is his need which the product or service will address.
However much the product meets these needs, it may not necessary result in customer
satisfaction. The product may solve the problem but if it doesn‟t meet the customer‟s
expectations, the customer will still be dissatisfied. Therefore satisfaction can be met when both
the needs and expectations are met
Customer satisfaction or dissatisfaction
Satisfaction is a subjective feeling. However, we should appreciate that the customer satisfaction
is not the direct opposite of dissatisfaction. When a customer doesn‟t meet her/ his expectation
from the product or service then complains will arise. This state may lead her to try out other
products yet this does not favor brand loyalty. While for a customer who will feel positively
satisfied are likely to express their delight. The way a supplier also expresses herself while
supplying a good is very vital since it helps in creating satisfaction, so behavior breeds a key and
deciding factor for customer satisfaction. Behaviors that help rather than hinder are just common
sense (balunywa, 2003).so for the above reasons it‟s essential for business to effectively manage
customer satisfaction.
Getting feedback from customers
The statistics later in this chapter reveal that customers go away because of behavior of service
providers. For this reason it is always important to always get feedback from customers on a
continuous basis.
13
How to measure customer satisfaction
Customer satisfaction as we have is a result of meeting and or exceeding customer expectation.
This involves offering a product a customer cannot resist. The product should be reliable,
functional, serviceable, durable depending on its nature and priced. Besides the behaviors of
providers should be good such that it‟s simple to measure customer satisfaction, one should have
an instrument which enables one to get feedback from the customer. Here is how to go about it.
Construct a brief written survey questionnaire
Questionnaires are common means of finding out from customers whether they are happy with
the service/products or not. The questionnaire should reveal the strength and weakness of the
organization. Besides questionnaires, customers can be surveyed by phone. National medical use
this to get feedback from their customers.
Get feedback from ex customers
Customers may leave due to many reasons so you need to know why customers quit. It is
important that one tries to find out from those customers why they left because they will give
you a more candid evaluation of your product, service and the organization. This will enable you
improve your product or service by leaving out the negative elements in your products or service.
Correct mistakes or weakness that are identified by the survey
When feedback is received from the survey, address the issues raised. Correct mistakes in the
product or behaviors.
2.2 Relationship between inventory management and customer satisfaction
There is a very strong relationship between material or sock management and customer
satisfaction.
Tersine, 1982 noted that in any undertaking, neglecting the management of inventories will be
jeopardizing its long term profitability and may fail ultimately. And Thomas, 1980, further noted
that few customers will be willing to wait for such an extended period of time on their purchases
and if demand occurs for an item out of stock the economic loss occurs to the firm as the
14
customer will go in for a close substitute which leads to lost trust and reputation of the firm‟s
good will and above all loss of customer satisfaction.
It is possible for both distributors and customers to experience greater productivity and
profitability. The answer lies in better inventory management (schreibfeder, 2001). Competition
continues to increase as new distribution channels evolve and existing distribution channels
expand. This increased competition creates more demanding customers that require greater
product availability and more value-added services. Because of the lower margins, most
distributors have fewer profit dollars to meet these new challenges. The end result; more has to
be done with fewer resources.
Most customers regard the following as the definition of superior customer service;

When materials ordered are delivered as promised

When the right quality of the right item is received at the right location.

When the materials are received in good condition with any necessary documentation

When the supplier provides quick responses to inquiries.
Customer satisfaction analysis, the customer service level is a great tool used for determining
how well one is servicing the customers. But some companies make it even better. They know
that having a product in stock doesn‟t ensure customer satisfaction. These customers want to be
sure that an order completely meets the expectations. They utilize a tool that is often called the
customer satisfaction analysis. This analysis reflects the percentage of line items that are filled
correctly. Ed Hear (1994) noted that the best criterion for gauging the effectiveness of the
manufacturing operations is inventory but this is not limited to this only.
Conclusion
After looking at various literatures in this research, therefore I conclude that Inventory
management is typically a concern of all firms in a competitive environment whether a product
or service oriented. It is noted from the above discussion that there is a strong correlation
between inventory management and customer satisfaction. Improper management of inventory
leads to stock out costs and delayed delivery. Tersine, 1982 stated that “a customer cannot sit and
wait for a delayed production and stock out when the competitor has the same product”.
15
A satisfied customer will buy again and convince even other to join him/her hence increased
customer satisfaction. Proper inventory management increases the reputation of the firm and its
good will as it does not fall short of deliveries and its customers are happy about its practices.
16
CHAPTER THREE
METHODOLOGY
Introduction
This chapter mentions and describes the methods and the process of how the research was
carried out. It covers items of research designs, sources of data, sampling designs, study
population, sample size, data collection methods and tools, data presentations, processing and
analysis techniques used
Research designs
The researcher used both analytical and descriptive research designs that were based on the
results from the questionnaires and interviews. Longitudinal design was used to observe the
general change and trends of the corporation‟s sales. And both quantitative and qualitative
techniques of research constituted the study since it involved parties to understand the findings.
Explanatory research design was also used so as to explain the variables by associating them
with the study and it was used because the researcher was interested in explaining why and how
these variables behave the way they do.
Study population
The study was carried out in national medical stores situated plot 4-12 Nsamizi road Entebbe.
The population consisted the staff of national medical stores.
Study size
For the purpose of accuracy and also time factor of the study, the researcher interacted with 16
employees sought to have relevant and technical information about the topic.
Sampling design
The research used simple random sampling where by the respondents had a chance of being
selected as a sample from the population. This was used since the sample was of great
importance in the interest of wider generalization of the study and to minimize bias. The
researcher used stratified design since he categorized the study population into management,
employees and the respondents were randomly chosen from target population to minimize biases
17
Sources of data
Primary source
This data obtained for the first time from respondents. Primary data was obtained through
personal interviews with respondents, observations and self: Administered questionnaires.
Secondary source
Secondary data was obtained through the organization brochures, statistical report from bank of
Uganda, bulletins, annuals profitability reports and general members survey ,textbooks, other
students research work, journals, company's sales records and newspapers.
Data collection instruments
Questionnaires
Data was got through questionnaires which were carefully administered to respondents. The
questions were open-ended and close-ended with the questionnaire mainly based on
predetermined and standardized questions. They focused on inventory management and
customers‟ satisfaction.
Interview guide
Structured interview guide was used to collect data from senior management in National
Medical Stores. This was to allow face to face interaction and respondents easily gave
information needed.
Data processing, presentation and analysis
Data processing
The questionnaires were collected directly from respondents and the researcher was able to
clarify any issue which was needed to be cleared to respondents and then the data was reviewed,
edited then
recorded and grouped according to the study parameters and later on it was
presented and analyzed.
Data presentation
18
Data was presented according to research findings after processing mainly in form of tables,
discussion and graphs. The tabulated data helped in determining the relationship between the
variables and was able to determine the validity of the data so as to draw conclusions.
Data analysis
Data analysis was carried out in a view of providing answers to the questions raised in chapter
one. Microsoft excel was used to regress the research variables in order to determine the
relationship between
independent variable and the dependent variable that is inventory
management and customer satisfaction.
19
CHAPTER FOUR
PRESENTATION, DISCUSSION AND ANALYSIS OF RESEARCH FINDINGS
Introduction
This chapter presents findings, interpretation and the discussion of the data. Here findings were
got from primary and secondary sources. The study involved administering questionnaires to a
sample of management personnel and customers. The findings collected have been used to relate
inventory management and customer satisfaction. All the findings are in line with the objectives
and research questions of the study. The objectives of the study were:
(a) To establish the inventory management systems used in national medical stores
(b) To establish the level of customer satisfaction in NMS
(c) To examine the relationship between inventory management and customer satisfaction
General findings
Table 1.1 showing the gender of the respondents
Gender Frequency Percentage (%) Cumulative percentage (%)
Male
9
56.25
56.25
Female
7
43.75
100
Total
16
100
Source: primary data
The table above shows that 56.25% of the respondents who carried out inventory management in
National Medical stores were male while 43.75% of the respondents were female.The males are
more because there is a lot of heavy work which is supposed to be done by men compared to
softer work meant for women.
20
Table 1.2 showing the age of respondents in National Medical stores
Age (years)
Frequency Percentage (%) Cumulative percentage (%)
18-25
1
6.25
6.25
26-35
8
50
56.25
36-45
4
25
81.25
46-50
2
12.5
93.75
50 and above 1
6.25
100
Total
100
16
Source: primary data
The table above shows that 50% of the respondents were in the age bracket between the 26-35
because they are focused, determined and energetic hence able to carry out the inventory
management to satisfy the customers, 25% of the respondents are between 36-45 years, 12.5%
respondents are in the age bracket of 46-50 years while 6.25% were both between 18-25, 50 and
above.
21
Table 1.3 showing the educational background of the respondents.
Educational level frequency Percentage (%) Cumulative percentage (%)
Primary
Nil
0
0
Secondary
1
6.25
6.25
Certificate
2
12.5
18.75
Diploma
3
18.75
37.5
Degree
9
56.25
93.75
Post graduate
1
6.25
100
Total
16
100
Source: primary data
The results in the table above shows that 56.25% of the respondents were degree holders because
they were acquainted with inventory management system and had relevant and technical
information, 18.75% were diploma holders and they supplemented the degree holders since they
had reliable knowledge on inventory management, 12.5% were certificate holders, 6.25%were
both secondary and postgraduate holders.
22
Table 1.4 showing position held by respondents in the organization.
Position
Frequency Percentage (%) Cumulative percentage (%)
Accountant
Nil
0
0
Production manager Nil
0
0
Sales executive
2
12.5
12.5
Store team
9
56.25
68.75
Others
5
31.25
100
Total
16
100
Source: primary data
The table above shows that 56.25% of the respondents were the store team since they directly
deal with stock taking, recording ,monitoring ,keeping and managing ,31.25% included the
pickers and packers,12.5 were sales executives who distributed the stock of the National Medical
Stores.
23
Table 1.5 showing the level of inventory kept in National Medical Stores
Level of inventory Frequency Percentage (%) Cumulative percentage (%)
Very high
12
75
75
High
4
25
100
Medium
Nil
0
Low
Nil
0
Very low
Nil
0
Total
16
100
Source: primary data
The table above shows that 75% of the respondents said the level of the inventory kept in
National Medical Stores is very high because satisfying the needs of the end users is their
priority while the rest acknowledged the inventory to be of high levels.
Table 6 showing inventory type that occupies the highest levels of NMS’ stock
Form of inventory
Yes No Not
Frequency percentage Cumulative
sure
Semi processed
1
Finished products
2
1
frequency
4
25
25
5
5
31.25
56.25
Finished products bought 7
7
43.75
100
16
100
for sale
Total
13
2
1
Source: primary data
24
From the above table 43.75% of respondents said yes that finished products are bought and are
then resold while 31.25% of them said that finished products are also stored. Out of 25%
remaining one respondent said that semi products are kept, two of them didn‟t agree to semi
product and another respondent wasn‟t sure if semi products are stocked.therefore these results
mean that National Medical stores stock finished goods not unprocessed goods.
Findings on the type of inventory held by the national medical store
Research has shown that NMS takes inventory/stock of its supplies as a fundamental factor to its
success. From the interview and observation, the following were revealed, National Medical
Stores stock replenishment policy requires that the “stocking of trading stocks shall, as much as
possible, be in such a manner that maximum stock held at any one time should not exceed 1
year‟s quantity”. This is to minimize stock-outs, total stock holding costs as well as overstay of
drugs in the store. The inference is that, the Maximum length of time a drug should be kept in the
store is one year. Stock at National Medical Stores includes;
 Pharmaceutical products in a financially viable and sustainable manner.
 It distributes various drugs which include; Uganda Essential Drug Kits, STI drugs,
Family Planning Products
 Anti-Malaria drugs
 Laboratory equipments
 AD
Syringes,
Aminophyline,
Bendrofluazide
Chloromphenicol
tablet,
Erythromycin,
,Ranitidine
Sheeting
stearate
Blade,
McIntosh,
red
scalpel
rubber
,Albendazole Gentian violet ,BP methylrosanililium Catgut chr, Mebendazole, Needle
infusion, Quinine, Plaster, adhesive zinc oxide, Nystatin pessary
Source: primary data
25
4.0 Findings on inventory management systems
Table1.0 showing whether economic order quantity system of inventory is used in National
Medical Stores
Response frequency Percentage (%) Cumulative percentage (%)
Yes
13
81.25
81.25
No
2
12.5
93.75
Not sure
1
6.25
100
Total
16
100
Source: primary data
From the above table the biggest percentage of respondents showed that NMS uses economic
order quantity system, 12.5% said no while 6.25% were not sure about the system. This shows
that this technique is commonly used in National Medical Stores.
Table1.1showing where ABC Analysis technique is employed in NMS
Response Frequency Percentage (%) Cumulative percentage (%)
Yes
10
62.5
62.5
No
3
18.75
81.25
Not sure
3
18.75
100
Total
16
100
Source: primary data
With the above table it was also shown that 62.5% of respondents accepted that ABC analysis
technique is used and the rest said no and others not sure if it‟s used. This means that this system
is also used though other staffs are ignorant of its existence.
26
Table1.2 does the corporation use re-order level system
Response Frequency Percentage (%) Cumulative percentage (%)
Yes
8
50
50
No
6
37.5
87.5
Not sure
2
12.5
100
Total
16
100
Source: primary data
The table above showed that 50% of respondents said yes that re-order quantity was used as a
system while 37.5 said no and 12.5 were not sure of the system of didn‟t understand it. These
results show that re-order quantity is used at a smaller extent compared to the two above this is
because ABC and Economic order quantity are cheaper and reliable.
Table2. Showing how respondents describe inventory management in national medical
stores
Description
Frequency Percentage (%) Cumulative percentage (%)
Very effective 9
56.25
56.25
Effective
7
43.75
100
Less effective
Nil
0
Not effective
Nil
0
Not sure
Nil
0
Total
16
100
Source: primary data
27
From the above table 56.25% of respondents described inventory management in NMS as very
effective. This is because they priotize their customer needs, they keep on monitoring their
average monthly consumptions so as to keep on track, they keep appropriate levels of inventory
and customers get their orders on time. While 43.75% said its effective because they do their best
to satisfy their customers and get few complains whatsoever.
4.1Findings on customer satisfaction
Table 1 showing factors that influence customer satisfaction levels in National Medical
Stores.
Factors
Yes No frequency Percentage
The nature of product
1
Nil 1
6.25
Behaviors of internal customers
1
Nil 1
6.25
Accepting and recognizing customer complains 4
Nil 4
25
Segmentation of market into regional basis
3
Nil 3
18.75
Good reputation
3
Nil 3
18.75
Meeting deadline
4
Nil 4
25
Total
16
16
100
Source: primary data
The results got from the above table showed that 25% of respondents said that satisfaction is
influenced by meeting deadlines and due to this customers get their orders in time hence they are
satisfied while 18.75% of respondents thought that segmentation of their market and their good
reputation influences their customer satisfaction.6.25% of them said its due to the nature of the
and also the behaviors of customers there was no response on any who disagreed with these
factors so all the above factors influence in many ways the customer satisfaction in National
Medical Stores.
28
Table2 showing the extent to which problems are met while meeting customer needs.
Problem
Very
Large
Medium
large
extent
extent
2
0
Low Very
frequency Percentage
low
(%)
extent
Short deliveries
Nil
Expired drugs
Nil
Irregular
Nil
6
customer Nil
N
1
2
5
31.2
0
2
2
0
10
62.5
1
1
6.25
customer orders
Poor
services
Poor
inventory Nil
Nil
0
management
Total
16
100
Source: primary data
The table above shows that 62.5% said that irregular customer orders was the main problem
faced because there seem to take very long to order. 31.25% said it was due to short deliveries
and only 6.25% said it was poor customer service. This means that these problems are faced but
irregular customer orders rank as the biggest problem NMS faces.
29
Table 3 showing problems most experienced when meeting customer satisfaction
Problem
frequency Percentage (%) Cumulative percentage (%)
Short deliveries
5
31.25
31.25
Expired drugs
Nil
0
31.25
Irregular customer orders
10
62.5
93.75
Poor customer service
1
6.25
100
Poor inventory management Nil
0
Total
100
16
Source: primary data
The table above shows that 62.5% of the respondents said that the corporation experience
irregular customer orders due to changes in stock levels and replenishment made by suppliers,
the health centers and hospitals send their orders late. 31.25% of the respondents said that they
experienced a problem of short deliveries due to poor picking of supplies. While 6.25% of them
said it was poor customer service due to logistical challenges on side of their customers mostly.
30
4.2 Findings on the relatonship between inventory management and customer satisfaction.
Table1 showing how the staff respond to the statement that inventory management has got
a significant role on customer satisfaction.
response
Frequency Percentage (%) Cumulative percentage (%)
Strongly agree
13
81.25
81.25
Agree
3
18.75
100
Disagree
Nil
0
Strongly disagree Nil
0
Not sure
Nil
0
Total
16
100
Source: primary data
From the above table, it shows that 81.25% of the respondent strongly agree that inventory
management has an important impact on customer satisfaction and they commented on the
reason for their answer and said that there can be stock outs if not well managed so its important
to manage inventory, it brings about good reputation to the organization and assured reliability
from customers hence satisfaction.18.75% of them agreed because customers orders will be
supplied incase they order them in time. While no one disagreed on this as shown above.
Table 2 showing if respondents think inventory management affects customer satisfaction.
Response Frequency Percentage (%) Cumulative percentage (%)
Yes
16
100
No
Nil
0
Total
16
100
100
Source: primary data
31
The table above shows that all the respondents agreed that inventory management affects
customer satisfaction because if stock is managed well customers will receive their orders in
good condition and no stock outs and if not managed then expect customer complains.
Table3 showing respondents reaction to the inventory management systems employed in
National Medical Stores
response
frequency Percentage (%) Cumulative percentage (%)
Very satisfied
8
50
50
Satisfied
8
50
100
Dissatisfied
Nil
0
Very disadissatisfied Nil
0
Not bothered
Nil
0
Total
16
100
Source: primary data
The above table proves that 50% of respondent were strongly satisfied with the inventory
systems used in NMS because they are able to minimize costs, they have short lead times, are
able to monitor stock movements, these techniques help them to meet the corporation‟s mission
and vision statements for which its obliged to serve and most of all they help in provision of high
quality products. The other halve are satisfied also.
32
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS.
Summary
5.0 Inventory management
It was found out that, the national medical store uses the following methods of inventory
management: it uses mostly economic order quantity followed by ABC analysis and then
re-order level system.
Also the researcher found out that, finished goods bought for sale are the highest types of
inventory kept, followed by finished products and 25% are semi processed goods and they
mainly stock medical supplies and equipments.
5.1Customer satisfaction
Colin Drury (1995) noted that “a satisfied customer will buy again and some times even
convince others to join him in buying the product”. This is proved in this research carried out
through the respondents in their own understanding defining customer satisfaction as meaning
repetitive buying.
On further scrutiny, the respondents showed that customer satisfaction is influenced by the
following factors: National medical store recognizes customers‟ right to make complains and
even encourages the submission of any complain about the products. NMS do monitor them and
also provide customers with what they need so as to meet their expectations. Hence satisfaction,
Customers to NMS have been segmented on regional basis so as to satisfy them in time, In order
to enhance its operations country wide national medical store has established a direct links and
maintains a consultative feedback, NMS has a reputation of supplying customers with good
quality products, It has good customer services, Meeting delivery deadlines and Proper inventory
management.
5.2 The relationship between inventory management and customer satisfaction
The relationship between the two variables that is customer satisfaction and inventory
management was analyzed using the descriptive and interpretative methods. The results obtained
from the respondents indicate that to a very large extend inventory management influence
33
customer satisfactions. The proper inventory management helps national medical store to prove
best offers to its customers resulting in less customer complain. Since the respondents have
proved that customer complains are low this therefore proves that NMS satisfies its customers.
Conclusion
From the research carried out, the national medical store has good inventory management policy
and its levels of customer satisfaction are high. Due to few customer complains, it is proof that
the national medical store is performing well though it faces problems like existence of expired
drugs at both NMS premises and health centers countrywide which Remain undestroyed for an
average period of six (6) years, NMS does not supply drugs and medical supplies to meet Public
health units‟ needs as per their orders some times, NMS does not maintain proper procurement
plans in accordance with the stock Replenishment policy and uses unreliable Average Monthly
Consumption which they do not even comply with, NMS carries out needs assessments but uses
data based on actual AMC(Average Monthly Consumption) sales for the Previous six months
which excludes customer orders that are not honored resulting in Improper projections of drugs
to procure, NMS receives stores and distributes drugs procured by third parties but the document
aigned by both parties lack clear terms of coordination related to joint procurement planning,
Leading to duplicate procurement of drugs, NMS does not have a clearly spelt out policy on the
standard time it should take to process. This creates no obligation for prompt processing of
customer orders by NMS; Market forces also cause problems when meeting customer
satisfaction.
5.3 Recommendations
In light of the above discussion, it is seen National medical store is doing well though it faces
some problems as already mentioned. The researcher suggests the following ideas for the firm:
Recommendations on inventory management
NMS should concentrate on replenishing the regional stores this will enable NMS to be
customer-focused at the regional level, while at the national level the focus will be on the
replenishment of the regional centers.
NMS should enhance its capacity to generate annual estimates of national drug needs to
guide them in procuring sufficient quantities to hold in stock and for use by other stakeholders in
accordance with the NMS Act.
34
NMS should revise and enforce the buffer stock policy to match the response time from
suppliers so as to avoid stocks running out. This would minimize the capital locked in idle stock.
NMS management should champion the effort to cause the parties to amend their MOUs to
incorporate joint procurement planning and shared stock position reports to encourage stocking
drugs in adequate quantities to avoid duplicate deliveries, expiries, stock deficiencies and
enhance the coordination of the procurement of drugs.
NMS should consider introducing effective and efficient drug information inquiry desks to
enable health centers to obtain information on drugs‟ availability.
National Medical Stores shouuld Acquire an updated software package with limited
breakdown.
Recommendation on customer satisfaction
NMS should use appropriate data to procure the right type and quantities of drugs to meet
customer requirements.
The Management of National Medical Stores should put in place appropriate systems and
develop staff capacity for collection, processing and use of appropriate data for decision making in conducting the needs assessment.
NMS should consider opening regional centers from which customers could personally
collect their individual orders.
5.5 Recommendation for further research
More research should be carried out on other systems of inventory management apart from
those researched on.
Further research should be carried out about other authors on what they say on customer
satisfaction a part from those mentioned.
Also further research should be carried out on the relationship between inventory
management and customer satisfaction.
35
REFERENCE
1. D.A Ojiambo, 2001. Uganda Accountant news letter.
2. Donald waters, 1987.operations management (producing goods and services), the Dried End
Press.U.S.A
3. Drury C, 1995. Management Cost Accounting 3rd Edition, Chapman and Hill Limited,
Hongkong
4. Jon Schiebfeder, 2001. Superior Customer Services Through Effective Inventory
management,(joins@effective inventory.com).
5. J.Waswa Balunywa, 2003. Business Management-4th Edition.
6. Kakuru Julius, 1998. Financial Management 1st Edition
7 Keane, 2001. Customer relationship Management,( [email protected]).
8. Nair N.K, 1985. Purchasing and materials Management, Mc Graw-Hill
9. Richard J.Tersine, 1982. Principles of Manufacturing and Materials Management 2nd Edition,
DP ELBS Publication London.
10. T.Lucey, 1996. Costing, 5th Edition DP Publication Great Britain Publications.
36
APPENDICES
Appendix A
MAKERERE UNIVERSITY
QUESTIONNAIRE
Dear respondents,
The researcher is a student of Makerere University, undertaking a research study as part of the
fulfillment of the Degree of Bachelor of Commerce.
National medical stores was chosen as the researcher‟s case study and you have been considered
to be one of the respondents. The researcher therefore humbly seeks to get your opinion about
the issue in the questionnaire to facilitate a study about inventory management and customer
satisfaction. Your opinion will be kept highly confidential and specifically for academic
purposes. Your cooperation will be highly appreciated.
SECTION A
PERSONAL INFORMATION
Tick (
1.
) where appropriate
What is your gender?
Male
2.
female
What is your age?
18-25 years
26-35 years
36-45 years
46-50 years
37
Above 50years
rs
3. Educational background?
Primary
Diploma
secondary
Degree
certificate
post graduate
Others (specify)
4.
Position or office held in the organization.(tick appropriate)
a)
Accountant
b)
Production manager
c)
Sales executive
d)
Store manager
e)
Others(specify)
5.
6.
Indicate the levels of inventory kept in National Medical Store
a)
Very high levels
b)
High levels
c)
Medium levels
d)
Low levels
e)
Very low levels
What type of inventory occupies the highest levels of your inventory?
38
Forms of inventory
yes
No
Not sure
Semi processed products
Finished products
Finished goods bought for sale
SECTION B
INVENTORY MANAGEMENT SYSTEMS
(1)
Which inventory systems are used in National medical stores? Tick the appropriate
System
Yes
No
Not sure
Economic order quantity
Just in time
ABC analysis
Material requirement planning
Perpetual inventory cost control system
Material cost reports system
Re-order level system
2(a) with an effective inventory system in place, a corporation has to hold enough inventories,
not over stocked, not even under stocked and same time costs should be minimized.
39
In light to the above statement how do you describe inventory management in National
medical stores?
a) Very effective
b) Effective
c) Less effective
d) Not effective
e) Not sure
(b) Briefly comment on your answer in 2(a) above……………………………………
SECTION C
CUSTOMER SATISFACTION
(1) What are the common factors that influence customer satisfaction levels in National
medical stores? Tick the appropriate
Factor
Yes
No
Not sure
The nature of product
The behavior of internal
customers
Acceptance
and
recognizing of customer
complains
Segmentation into regional
basis
Good reputation
Meeting deadlines
40
(2)To what extent are the following problems met in meeting customer needs?
Problem
Very
large
Medium
Low
Very low
large
Short deliveries
Expired drugs
Irregular
customer
orders
Poor
customer
service
Poor inventory
(3)Which of the following problems is most experienced?
a)
short delivery
b)
expired drugs
c)
irregular customer orders
d)
poor customer service
e)
poor inventory management
(4)is this problem
a)
Continuous?
b)
Periodical?
c)
Irregular?
(5)What is the cause of the above problem?
………………………………………………………………………………………….
41
SECTION D
RELATIONSHIP BETWEEN INVENTORY MANAGEMENT AND CUSTOMER
SATISFACTION
(1)Research has it that inventory management plays a big role in determining customer
satisfaction in an organization. In light with the above statement, do you agree that
inventory management has got any significant role on customer satisfaction of
national medical stores?
a) Strongly agree
b) Agree
c) Disagree
d) Strongly disagree
e) Not sure
Comment on your answer in (1) above
………………………………………………………………………………………………
………………………………………………………………………………………………
…………………………………………………………………………………..
(2)Do you think that inventory management at National medical stores affects its
customer‟s satisfaction
Yes
No
If yes how does it affect its customer
satisfaction?............................................................................................................................
...............................................................................................................
(3)As a staff in National medical stores, are you satisfied with the inventory management
systems used in the corporation?
a) Very satisfied
b) satisfied
c) dissatisfied
d) very dissatisfied
42
e) not bothered
Briefly comment on your answer
………………………………………………………………………………………………
………………………………………………………………………………………………
(4)What can be done to improve on the inventory management of National medical
stores……………………………………………………………………………………
……………………………………………………………………………………….
43