EFFECT OF INVENTORY MANAGEMENT ON CUSTOMER SATISFACTION IN THE PUBLIC SECTOR: A CASE STUDY OF MAARA DISTRICT OFFICES.MERCY KAGENI MUTEGIA RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF BACHELOR OF MANAGEMENT (PURCHASING AND SUPPLIES MANAGEMENT OPTION) OF THE MANAGEMENT UNIVERSITY OF AFRICAMAY 2018DECLARATION AND RECOMMENDATIONDeclaration This project is my original work and has not been presented for an award of a diploma or conferment of a degree in any other university or institution.Signature…………………… Date………………….Mercy Kageni MutegiRecommendation This thesis has been submitted for examination with my approval as Management University of Africa university supervisor. Signature…………………… Date ………………….
.COPY RIGHT©2018All rights are reserved. No part of this projct may be reproduced or transmitted in any form or by any means or mechanical, including photocopying, recording or any information storage or retrieval system, without permission in writing from the author or Management University of East Africa.DEDICATONThis research project is dedicated to my dear family for the Great support throughout the study period.
ACKNOWLEDGEMENTI would like to thank God for giving me wisdom and patience to complete my research proposal. Many thanks to my supervisor Dr. E. Awour for guidance during the research project writing .My sincere gratitude goes to my workmates for moral and financial support they offered me throughout the course and to my class colleagues for their moral support and encouragement .Many entrepreneurs also provided great help in making available information that appears in text and supplements- much of it for the first time in college material.Finally I acknowledge the staff and lectures of the Management University of East Africa for their professional support towards completion of this great work.ABSTRACTThis study examines the effects of inventory management on customer satisfaction and the vital role it plays in check the performance of government offices.
Concerns about effectiveness of inventory management practices been raised by Kenyan which may be as a result of many factors. The purpose of this project was to establish effect of inventory management on customer satisfaction in the public sector. The study was set to achieve four objectives namely: to determine the effect of inventory shrinkage on customer satisfaction in Maara District Government Offices; to determine the effect of just-in-time policies on customer satisfaction in Maara District Government Offices; to find out how material requirement planning of inventory management affects customer satisfaction in Maara District Government Offices and to determine how forecasting of inventory management affects customer satisfaction in Maara District Government Offices. The study was informed by assimilation theory.
This research adopted a descriptive research design. The target population was the employees and the Maara Government offices. Stratified random sampling was used to select the 100 respondents who were composed of 8 staff members working in the Agriculture procurement offices and 5 members from Gender & Social services office, 8 members from Water Ministry procurement office, 29 members of Registrations of person’s office and 50 support staff members Questionnaires were used for data collection. Piloting of the instruments was done in Meru County. To validate the research questionnaire, test retest technique was used. Instruments were validated by experts’ judgments competent in research techniques. Data was analyzed using Ms Exel computer package. Data was presented by use of frequencies, percentages charts and graphs.
The findings of this research may help the Maara governments to improve the inventory management practices and hence foster customer satisfaction. From the findings of the study, the researcher concludes that to a great extent inventory shrinkage affect customer satisfaction in Maara District Government Offices. Also the just-in-time policies of inventory management affect on customer satisfaction in Maara District Government Offices and they would be instrumental in bringing the desire to develop a stable relationship with customers and confidence in the service delivery. The researcher further concludes that material requirement planning of inventory management affect customer satisfaction to a great extent in Maara District Government Offices and also forecasting in inventory management affect customer satisfaction in Maara District Government Offices.
From the findings its recommended that the government should develop policies that guide on effective implementation of inventory management practices. Also the government offices should audit the inventory management practices vis-a vis the customer requirements to foster effective service delivery.TABLE OF CONTENTS PAGE TOC o “1-3” h z u DECLARATION AND RECOMMENDATION PAGEREF _Toc520207491 h iiCOPY RIGHT PAGEREF _Toc520207492 h iiiDEDICATON PAGEREF _Toc520207493 h ivACKNOWLEDGEMENT PAGEREF _Toc520207494 h vABSTRACT PAGEREF _Toc520207495 h viTABLE OF CONTENTS PAGEREF _Toc520207496 h viiCHAPTER ONE: INTRODUCTION PAGEREF _Toc520207497 h 111.1 Background to the Study PAGEREF _Toc520207499 h 111.2 Statement of the Problem PAGEREF _Toc520207500 h 141.3 Objectives of Study PAGEREF _Toc520207501 h 141.
4 Specific Objectives PAGEREF _Toc520207502 h 151.5 Research Questions PAGEREF _Toc520207503 h 151.6 Significance of the Study. PAGEREF _Toc520207504 h 151.7 Limitations of the Study PAGEREF _Toc520207505 h 151.8 The scope of the Study PAGEREF _Toc520207506 h 16CHAPTER TWO :LITERATURE REVIEW PAGEREF _Toc520207507 h 172.
1 Introduction PAGEREF _Toc520207509 h 172.2 Theoretical Review PAGEREF _Toc520207510 h 172.2.1 Assimilation Theory PAGEREF _Toc520207511 h 172.
2.2 Resource – Based View Theory PAGEREF _Toc520207512 h 172.2.3 Resource Dependency Theory PAGEREF _Toc520207513 h 182.3 Empirical Literature PAGEREF _Toc520207514 h 182.3.1 Inventory Shrinkage PAGEREF _Toc520207515 h 182.
3.2 Just in Time PAGEREF _Toc520207516 h 192.3.3 Material Requirement Planning PAGEREF _Toc520207517 h 212.3.4 Forecasting PAGEREF _Toc520207518 h 222.
4 Critical Review PAGEREF _Toc520207519 h 242.4 Summary and Gaps to be filled by the study PAGEREF _Toc520207520 h 242.5.1.
Inventory Shrinkage PAGEREF _Toc520207522 h 252.5.2 Just-In- Time PAGEREF _Toc520207523 h 252.5.3 Material Requirement Planning PAGEREF _Toc520207524 h 262.5.4 Forecasting PAGEREF _Toc520207525 h 262.
6 Operationalization of Study Variables PAGEREF _Toc520207526 h 26CHAPTER THREE:METHODOLOGY PAGEREF _Toc520207527 h 273.1 Introduction PAGEREF _Toc520207529 h 273.2 Research Design PAGEREF _Toc520207530 h 273.3 Target Population PAGEREF _Toc520207531 h 273.
4 Sample Design PAGEREF _Toc520207533 h 283.5 Data Collection Procedure PAGEREF _Toc520207535 h 283.5.1 Questionnaires PAGEREF _Toc520207536 h 283.6 Data Analysis Methods PAGEREF _Toc520207537 h 293.6 Validity and Reliability of Research Instrument PAGEREF _Toc520207538 h 293.6.
1 Validity PAGEREF _Toc520207539 h 293.6.2 Reliability PAGEREF _Toc520207540 h 29CHAPTER FOUR PAGEREF _Toc520207541 h 30DATA ANALYSIS PRESENTATION AND INTERPRETATION PAGEREF _Toc520207542 h 304.1 Introduction PAGEREF _Toc520207543 h 304.2 Response Rate PAGEREF _Toc520207544 h 304.3.2 Age of Respondents PAGEREF _Toc520207546 h 304.
2.3 Working Experience PAGEREF _Toc520207548 h 314.2.4 To establish the effects of inventory shrinkage o customer satisfaction PAGEREF _Toc520207550 h 324.2.5 To find the effect of JIT on customer satisfaction PAGEREF _Toc520207555 h 344.2.6 To identify the effect of material Requirement Planning on customer satisfaction PAGEREF _Toc520207559 h 364.
2.7 To determine the effects of forecasting on customer satisfaction PAGEREF _Toc520207563 h 38CHAPTER FIVE PAGEREF _Toc520207566 h 40SUMMARY OF FINDINGS, CONCLUSION & RECOMMENDATIONS PAGEREF _Toc520207567 h 405.1 Introduction PAGEREF _Toc520207568 h 405.
2 Summary PAGEREF _Toc520207569 h 405.3 Conclusions PAGEREF _Toc520207570 h 415.4 Recommendations PAGEREF _Toc520207571 h 415.5 Suggestions for Further Research PAGEREF _Toc520207572 h 41QUESTIONNAIRE PAGEREF _Toc520207573 h 42REFERENCES PAGEREF _Toc520207577 h 46WORK PLAN PAGEREF _Toc520207578 h 48BUDGET PAGEREF _Toc520207579 h 49LIST OF TABLES TOC o “1-3” h z u PAGE Table 3.1 Target Population14Table 3.2 Sample Size15Table 4.1:Gender Distribution of the Respondents17Table 4.
2 Age of Respondents18Table 4.3 Working Experience19Table 4.4 Influence of Inventory Shrinkage on Customer Satisfaction20Table 4.5 Rate the Effectiveness of Inventory Systems in Terms of Securing Resources from Theft PAGEREF _Toc518724275 h 21Table 4.
6 extent to which various aspects of inventory shrinkage affects the customer satisfaction22Table 4.7 Extent to which government officers control inventory shrinkage23Table 4.9 Extent to which Just in Time policies affects the customer satisfaction25Table 4.
10 Extent to which Government Offices prioritizes Just in Time policies..26Table 4.11 Effectiveness of MRP27Table 4.12: Extent material requirement planning affects the customer satisfaction28Table 4.13: Extent to which Material Requirement Planning is Prioritized in Government Offices28Table 4.
14 Effect of Forecasting29Table 4.15 Extent of forecasting30LIST OF FIGURES TOC o “1-3” h z u PAGEFigure 1.1: Conceptual framework showing the Relationships between the Variables of the Study.12CHAPTER ONEINTRODUCTION1.1 Background to the StudyMany scholars have come up with several definition of inventory.
Arnold (1998) defines inventory as materials and supplies that an organization 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 the product a firm is manufacturing for sale and the component that makes up a product. Firms hold inventory in form of raw materials, work in progress finished goods and supplies. These inventories facilitates production and guards against the risk of unpredictable changes in usage and delivery time and take advantage of quantity discount and price fluctuations.
Donneley (1990) state that inventory management and control process are very useful in determining the optimum level of inventories and findings answers to the problem of economic order quantity, the re-order point and safety stock.Inventory as a business concept evolved in the early 1950’s. This was mainly due to increasing globalized supply chain logistics Richard (2003).
This can be defined as having the right item in the right quantity at the right time at the right price in the right condition to the right customer and is the science of the process and incorporates all industry sectors. The goal of inventory management is to manage the fruition of the project life cycles supply chains and resultant efficiencies Gareth (1998). This is in tandem with Chase, Jacobs and Aquiline (2004) where they considered inventory as the stock of any item or resource used in organization. An inventory system is the set of policies and controls that monitor levels of inventory and determine what levels should be maintained, when stock is replenished and how large orders should utilized. Inventory management is defined as a system used in a firm to control the firm investment in inventory. According to Lucy (1996) it involves the recording and monitoring of stock levels, forecasting future demands and deciding when and how many to order. Customer’s satisfaction refers to an internal feeling which cannot be directly observed. A customer feels satisfied when a product or service and behavior meets and exceeds the expectation (Kotler, 1988).
Indicators of customer satisfaction include service delivery, quality product or service, customer retention and feedback analysis. The main aim of inventory management is to hold inventories at the lowest possible cost, given the objectives ensure uninterrupted supplies for ongoing operations. When making decisions on inventory management has to compromise between the different cost components such as the cost of supplying inventor, inventory holding costs and cost resulting from insufficient inventories (Baden et al, 2002).
Pandey (1996) asserts that stock of finished goods has to be held because production and sales are instantaneous. A firm cannot produce immediately when goods or services are demanded by a customer and therefore stock needs leads to an increased percentage of complaints when some needs are not met which portrays the inefficiency especially in government offices (Nsc Survey, 2010).According to Wild, (2002) inventory management is the activity which organizes the availability of items to the customers, coordinates the purchasing, manufacturing and distribution functions to meet the customer needs. This role includes the supply of consumable, spare parts, obsolescent items and all other supplies. Inventory enables an organization to support the customer services. Logistics such as manufacturing activities in situations where purchasing or manufacturing of the items is not able to meet the demand of customers. Lack of satisfaction could arise, either because of the low speed of purchasing or manufacturing is too protracted.
Clodfelter (2003) adds that a good inventory control system offers proper relationship between inventory management and customer satisfaction. This relationship cannot be well maintained without inventory management procedures in place. The store or department can become overstocked or under stocked.Emphasizing the pertinence of the inventory management, Gourdin (2001) posits that inventory is the one area of logistics that has received a great deal of management attention over the life cycle of production process in any firm. Holding excessive stocks is simply too expensive. Therefore, a great deal of effort has been expended to eliminate unnecessary inventory without compromising customer service and production process. However, there are numerous situations where inventory simply must be held particularly when meeting the needs of global customers where other logistics are involved besides just availability of goods or services when need arises. Managements goals should be to hold only what is necessary to satisfy customer requirements and manage it effectively (Gourdin, 2001).
Inventory problems preoccupy profit-making organizations and nonprofit institutions as well. Inventories are common in agriculture, manufactures, wholesalers, retailers, hospitals, churches prisons etc. Indeed, inventories are also relevant to the family unit in relation to, pharmaceutical products, food and so forth. This indicates how inventories are important and deserve a serious attention in order to achieve organizational objectives.
Customer satisfaction is regarded as a key factor in the business strategy of every organization. It is a benchmark to which an organization must set its objectives. A company is successful when its products or services meet expectations and requirements of customers.
If a company aims for customer retention, customer satisfaction is the best way to retain customers’ future purchases (Taylor ; Baker, 1994, Cronin ; Taylor, 1992, and Parasuranman et al., 1998). Jamal and Naser (2003) stated, “Service quality has been described as a form of attitude that results from the comparison of expectations with performance”. Individual needs, wishes and expectations with regard to the value of the product or service can be measured by some of the following elements, such as friendly and helpful salesperson, informed advice, reasonable price, high quality, and long guarantee period Raab, Ajami et al.,(2008).However, it is noticeable that customers evaluate and perceive quality of service on the grounds of physical objects surrounding the service environment, such as staff, facilities, infrastructure and the image of the organization.
This argument is also supported by Wakefield and Blodgett (1999), and Dabholkar et al (1996) that physical surroundings of the organization providing services affect perceptions, responses and behavioural intentions of customers on service quality. Some other studies also found that convenience and competitiveness influence customer satisfaction. Infact, the two factors relate respectively for example the place where banks or their branches are located and prices of service provided by banks. If banks are located in a place customers can easily access, they can do business with the bank more conveniently (Levesque ;McDougall,1996). In addition, competitiveness also make prices of the provided service cheaper. Support for this argument comes from studies of Laroche and Taylor (1988) and Levesque and McDougall (1996).”Customer satisfaction in retail banking is also likely to be influenced by the perceived competitiveness of the bank’s interest rate.
Nonetheless the relationship between competitiveness and convenience are not the only factors of satisfaction to customers since industries are affected by environmental factors, such as the aggressiveness of the competition, degree of switching cost, and the level of perceived risk Kumar and Reinartz (2006). According to Hoffman and Bateson (2006), customer satisfaction is a possible task in an organization. In includes a wide range of improvements of activities such as quality of products and services, reasonable pricing, human resource development and in –time deliveries.
Enrichment of these factors can narrow down gaps between customer expectations and perception. These gaps exist if what customers expect to receive is less than their expected level. Quality and innovation of products and services are always stimulated by modifying and improving the features, styles and characteristics. Changes in attributes of products and services aim to increase customer perceptions and create competitive advantages due to the uniqueness.Moreover, new features can formulate the company’s image as an innovator and win the loyalty of market segments that value these features Kotler and Keller (2006). Reasonable pricing is not easy task in any company. Although high customer satisfaction is reached by lowering the company’s price of products and services, but doing this may lower its profits Kotler and Keller (2006). Therefore, reducing prices is not ultimate goal for every company to satisfy customers’ needs.
However, it is likely that price is important to customers because of limited incomes that restrict the purchasing power McColl-Kennedy and Kiel (2000). Thus, pricing products and services should be in concert with many factors, including internal and external dimensions of the company, such as production and operation costs, quality of products and services, prices of competitors and customers’ needs in doing so, the company can set a price that can both satisfy customers and earn profits.In general, competitive price may be regarded as the most reasonable level for a company. Distribution can facilitate the physical exchange of products and a service between businesses and the customer Burrow (2009) and have four main functions: location of service facilities, pick-up and delivery services, design of the channel, and determination of the supply channel to supply products and services to customers in a timely manner McColl-Kennedy and Kiel, (2000).
Depending on types of products and services, convenient location and a current business network, a company can distribute its products directly or indirectly to customers. By any means, distribution must be efficient and satisfy customers’ needs in terms of minimum of logistics costs, on-time deliveries, the lowest defective level or the highest level of security (Hoffman & Bateson, 2006).1.
2 Statement of the ProblemLack of efficient and user friendly management tools in inventory management have been identified as a major cause of customer dissatisfaction in government offices. In order to attain the governments’ objectives, customer needs should be satisfied. Customers needs have n been prioritized and on a one to one basis with interests to satisfy them. Information about customer’s preferences, attitudes towards particular products and service satisfaction has not been collated to form specific customer profiles which are not based on assumptions. The researcher anticipated that proper inventory management techniques can be useful in the government offices as a major measure towards ensuring customer satisfaction especially where the dissatisfaction arises as a result of shortage of resources to the service providers. The study focused on inventory management in government offices to satisfy the customer. Because of the pertinence related to this matter, Bertoloni & Rizzi (2002) highlight that the optimal management of inventories is a primary objective for all the institutions to stock sufficient materials to enhance customer satisfaction. As a matter of fact, inventories have important implications, for both the financial and the economic importance of the organization, more so it helps ensure that customer need are met on time as required, thus ensuring that the organization good will is maintained.
Therefore, it is widely acknowledged that, an optiomal inventory management policy allows organizations to achieve higher service delivery to the customers. In general terms, inventory management policies should be aimed at lowering the holding costs through higher inventory rotation, but without triggering substantial stock outs and backorders, caused by demand peaks and or lead time delays. The policies on inventory management are largely violated by the government institutions leading to inefficiency in service delivery practices. The current study sought for the impact of inventory management on customer satisfaction in Tharaka Nithi County offices.1.3 Objectives of StudyThe impact of inventory management on customer satisfaction in government offices, a case study of Tharaka Nithi County , Maara District Goernment offices.1.
4 Specific ObjectivesTo determine the effect of inventory shrinkage on customer satisfaction in Maara District Government Offices.To determine the effect of just-in-time policies on customer satisfaction in Maara District Government Offices.To find out how material requirement planning of inventory management affects customer satisfaction in Maara District Government Offices.To determine how forecasting of inventory management affects customer satisfaction in Maara District Government Offices.
1.5 Research QuestionsTo what extent does inventory shrinkage affect customer satisfaction in Maara District Government Offices?What is the impact of just-in-time policies of inventory management on customer satisfaction in Maara District Government Offices?To what extent does the material requirement planning of inventory management affect customer satisfaction in Maara District Government Offices?How does forecasting in inventory management affect customer satisfaction in Maara District Government Offices?1.6 Significance of the Study.
Inventories management have a significant impact on customer satisfaction in an organization. This is specifically because large stock may affect cash flow without necessarily improving resources and small stock may facilitate poor service delivery. The result of the study will be used to identify challenges associated with inventory management in government offices then suggest effective measures to strengthen the operations in the government offices of Tharaka Nithi County. This effect would improve and strengthen customer service delivery in Maara Dc`s office. In addition, the research will add to the existing literature the effective measures and policies on inventory management.
1.7 Limitations of the StudySome respondents restrained from supplying information fearing the possibility of contravening the public service oath of secrecy, since information required privacy. The researcher informed the respondents that it was just for academic research purpose and made them understand that the research has no harm and information shared is confidential. Some officers have no idea of what happens in the stores since there are specific officers assigned the duty of managing the inventories, hence their assumptions were misleading and inaccurate.
Finally, not all respondents were willing to fill the questionnaire during working.1.8 The scope of the StudyThe research was conducted in various government offices in Maara District. The researcher took one month when undertaking the survey because the researcher intended to get valid information on the subject in study.
The study focused on the impact of inventory management on customer satisfaction in government offices in order to provides possible and effective solutions that improve customer satisfaction. The aim of this is to determine the impact of inventory management system to the performance of the staff towards service delivery to the customers.CHAPTER TWOLITERATURE REVIEW2.1 IntroductionThis chapter gives a view of the selected existing knowledge from literature on inventory Management. This chapter sought to show how other researchers in the past have dealt with the same a related problem. The section focused on theoretical review addressing material resource planning, just in time, material requirement planning and forecasting. The chapter also presents critical review, summary on gaps to be filled by the study and conceptual framework.
2.2 Theoretical ReviewThis section highlights the main theories that the researcher used to conceptualize the variables of the study. For an organization to satisfy it customers it’s imperative that it employs effective inventory Management approaches .inventory management approaches plays an important role in the reduction of costs and the optimization of performance in organizations. The study was guided by assimilation theory and 2.2.
1 Assimilation TheoryAssimilation theory was coined to fit the dissonance theory by Festinger’s (1957). Dissonance theory states that consumers make cognitive comparison between the expected product expectations and the perceived performance of the product (Peyton, Pitts & Kamery, 1979). Consumers also try to reduce and avoid disagreement by making adjustments concerning their perceptions about a certain product and try to bring them more in line with their expectations and needs. Consumers also try to reduce the worry between their expectations and the actual performance of the product by raising the level of satisfaction through the minimization of the importance of the experience that have been disconfirmed or by distortion of the expectations so that they can match with the product performance perceived (Olson &Dover, 1979).
This theory has been modified to incorporate the inventory management practices as key measures towards the adjustment that the consumer can make in order to get satisfied with the product of any nature. The researcher felt that however much the consumer want to assimilate the inconsistencies in the product to realize satisfaction, it is also possible after continuous management of inventory to ensure that the inventories are maintained at optimum levels 2.2.2 Resource – Based View TheoryResource – Based View Theory was postulated by Penrose (1959) with a description of a firm as an administrative organization and a collection of productive resources, both physical/material and human that provide a firm a variety of services. Thus, it is observed that a tight relationship between the resources and the services provided in relation to the services offered by an organization. As argued by Penrose, (1980); Resource – Based View Theory of the firm places focus on the inside of the firm, its resources and capabilities, to explain the profit and value of the firm. In this view customer satisfaction becomes a key tenet of firm’s existence and this is only sustained if resources are sufficient and available on time which is a function of effective .inventory management techniques 2.
2.3 Resource Dependency TheoryResource dependency theory posits that no single firm has all the resources and functions needed to operate successful. This therefore means that organizations have to enter into exchange relationships with other organizations. Moreover, organizations will behave differently and anchor their decisions on both internal processes and external negotiations and interactions within their markets. Consequently, organizations are always involved in different forms of in the process of interacting with one another. In their exchange relations, organizations strive for competitive advantage thus becoming partly dependent on the exchange partner.
Resource dependency theory suggests that some organizations have more power than others due to their interdependency characteristics and their social positions. Organizations survive based on their effectiveness to manage the demand of partners that they depend on. Thus, organizations survive based on their abilities to acquire and maintain resources. While purchasing power influences the choice of what purchasing strategy to practice, less-powerful buyers should be able to increase their purchasing power by practicing strategies that favorably change the level of sources of power Through a proper inventory management techniques the organization is able to maintain proper flow of resources and hence satisfy its customers .
2.3 Empirical Literature This section highlights studies related to the inventory management on customer satisfaction to reveal what has been done and precisely show the gap for the current study.2.3.1 Inventory Shrinkage Ogbo and Onekanma (2014) agree that having inventory in your store has an added advantage for the organization since customers will be satisfied instantly leading to improved performance rating. With inventory in your firm, an organization has the advantage of timely delivery and stock out are anticipated with accuracy.
Firms carry inventories for a variety of reasons. Inventories perform significant functions in the total production system and since “it is physically impossible and economically impracticable for each stock of item to arrive exactly where and when it is needed”, there is need to keep some amount of inventory at any point in time. Transparency in inventory management techniques is absolutely important because it eliminate corruption, biased procurement process, procuring substandard good for the organization that proof to be extremely costly (Githui, 2012). The government found itself practicing unethical supply chain management practices as well as lacking in transparency and fairness. Thus, inventory management techniques in organizations need ethical practices that promote good corporate governance among procurement managers (Miller, 2010). Also, virtue ethics promotes integrity, utilitarian principle appreciates happiness promotion and reverse of wrong doing, Kantian theory on the other hand states that an individual doesn’t benefit personally but promotes the goodwill of the organization and the Kantian theory promoted moral agents for supply chain management.
The gap Githui, (2012) identified was analysis of government procurement officers on integrity and therefore the study did not cover the knowledge and application of inventory management technique by procurement officers to gauge supply chain performance. The cardinal objective of inventory management is the maintenance of an optimum level of inventory necessary to support the production system at any time and at the least cost possible. The attainment of this objective entails taking decisions with respect to the determination of an appropriate order quantity, when to place the order and how much inventory to carry per unit of time. These various decision variables will, at any time, dictate the behaviour of any inventory system. Inventory ordering systems reflect part of the strategies available to an organization in meeting its inventory management objectives. Stock shortages are a headache for most organizations as expressed by Mazanai (2012) and it leads to customer’s dissatisfaction which eventually leads to low performance of a firm.
Organizations ought to ensure that their inventory is monitored from time to time to avoid stock outs. Due to the manual system of checking and validating, the stochastic nature of demand and lead time is not achieved. Also, lack of automated systems, stock outs are experienced often and replenishment is done hurriedly leading to costly inventory management and likewise low performance standards. Firms that have centralized stock holding have an advantage because they are able to control the stocks and avoid stock duplication in their subsidiaries.
Since high value stocks are held, there are instances where the organization will have too much stock in their warehouse implying a huge part of their cash is tied down with stocks. Also, a proper inventory management system is lacking causing frequent stock outs for the organization. The study did not address inventory management techniques that enhance service levels ensuring stocks are distributed on time and at the right place meeting customer’s demands.2.3.
2 Just in TimeJust-in-time (JIT) inventory management techniques contribute greatly to the working of an organization. Therefore inventory management requires keen attention for an organization to achieve good procurement practices. A study was undertaken between 1981 and 2000 in the US to analyze inventory management and was found out that organizations that kept too Much inventory in their warehouse operated an inefficient supply chain, while those that Kept very few inventory in their warehouse were very efficient (Lai and Cheng, 2009). Thus, it was found out that keeping moderate inventory is good and it enables an organization to operate under minimal expenses of holding costs as well as keeps setup cost at bare minimum, eliminate unwanted lead time and produce goods as per customers order.Logistics activities and the associated import/export trade account Dillingham 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 an integrated, problem-solving management approach aimed at improving quality and facilitating timeliness in supply, production and distribution Davy et al.(1992).In face of the challenges of global competition, business firms are con titrating more on the needs of customers and seeking ways to reduce costs, improve quality a d meet the ever-rising expectation of their customers. To these ends, many of them have identified logistics as an area to build cost and service advantages.
On the other hand, the Just-in-Time (JIT) management approach, which has long been proven effective in the manufacturing sector in increasing quality, productivity and efficiency, improving communication and decreasing costs and waste, might enhance the chances of firms to achieve cost and service advantages through logistics. However, the potential of JIT has not been widely recognized in logistics as compared to in manufacturing.Similar to manufacturing, logistics employs processes that add value to t e basic inputs used to create the end product. As the focus of JIT is on business processes, not products, the management principles of JIT can be replicated and applied in logistics This book sets out to explore the possibilities of employing JIT to manage logistics activities, and provide an introduction to the application of JIT in the major areas of business logistics, which mainly deals with inter-organizational move-store activities. These move-store activity in business logistics can, in general, be categorized into four core elements, namely 1) customer service; 2) order processing; 3) inventory management; and 4) transportation manager it, and a number of supporting elements including materials handling, packaging, purchasing warehousing and so on.The expanding global competition, emerging new technologies and improved communications have increased customers’ expectation of full satisfaction with the products and services that they purchase.
These changes have, in recent years, brought to many manufacturing and service firms the challenges of improving the satisfaction of their customers a d the quality of their products and services. Faced with these challenges, business firms won vide are prompted to look for ways to reduce costs, improve quality and meet the ever-escalating demands of their customers. One successful solution has been the adoption of JIT manufacturing systems, which involve many functional areas of a firm such as manufacturing, engineering, marketing and purchasing, among others.In the past decades, JIT has been primarily applied to manufacturing.
Its obvious application with measurable outcomes in manufacturing has made JIT relatively easy to employ in a manufacturing environment. Although JIT has achieved a strong foothold) in manufacturing, its application in business logistics is relatively recent for many firms. Yet many developed and. developing economies are experiencing a rapidly growing service base, or instance, in Hong Kong, logistics has evolved as one of the pillar business sectors.
JIT is a new system of inventory management system that was developed by the Japanese. Its aim is to match the usage material on time to avoid rejects and delays in production. Therefore the governing should build a close relationship with its suppliers to ensure efficiency in production management studies journal, (2004)Just in time inventory system helps in reducing inventory costs by avoiding carriages of excess inventories mishandling raw materials like printing ink, papers for drafting letters, pens, folders, envelopes and postage stamps. JIT purchasing recognizes high costs associated with holding high inventory level Kurtz, (1993) and as such it has become important in most organizations to order inventory just in time of use so as to cut costs of holding inventor) like storage, lighting, heating, security, insurance and staffing.For just in time method to work successfully, there must be dependable relationships and smooth co-operation with suppliers. Ideally the supplier should be located next to the offices with dependable transportation available Heinz, (1994).2.
3.3 Material Requirement PlanningMaterials Requirements Planning (MRP) is a computer-based production planning and inventory control system which is concerned with both production scheduling and inventory control. It is a material control system that attempts to keep adequate inventory levels to assure that required materials are available when needed. The main purpose of MRP software is to facilitate the calculation of requirements of materials and timing Slack et al.
, (2001) by converting three inputs, bill of material, inventory data and master production schedule, into two main outputs namely planned order releases and reschedule notices Lunn and Neff, (1992). Thus it is a technique for determining the quantity and timing for the acquisition of dependent demand items needed to satisfy master production schedule requirements.MRP has been of one the productivity tools used by industries in the developed economies to create competitive advantage in the global economy. It has played important roles in inventory management of manufacture of complex industrial products (Schuster et al., 2000).
For instance the number of MRP Systems in use by American Industry grew from a handful in the early 1960’s to 150 in 1971. By 1981, the number of MRP Systems in the USA is reported to have risen to over 8,000 and by 1989 $1.2 Billion worth of MRP software was sold to the American Industry Ozguret al.
,(2006).MRP is generally applicable in situations of multiple items with complex bills of materials and is especially suited to manufacturing settings where the demands of many of the components and subassemblies- depend on the demands of items that face external demands. While demands for end items are independent the demands for components used to manufacture end items. The distinctions between independent and depend on the demands are important in classifying inventory items and in developing systems to manage items within each demand classification Starr, (1996), Essentially, MRP systems were developed for effective and efficient management of dependent demand items. While MRP is not useful for job shops or for continuous processes that are tightly linked Volman et al.
, (1997), the MRP system is suitable for products that do not satisfy the order point policy (OPP) models, wherein the demand of the end product is independent or an end product orders may be placed periodically Starr, (1996). MRP systems depend on information input from other planning functions components. The Master Production Schedule (MPS) is a significant input that drives the MRP system. Primarily, MPS identifies the quantity of the particular products that manufacturer is going to produce by combining two independent demands namely customer orders and forecasted demand. Sources of MPS data include forecast, firm customer orders, safety stock requirement and internal demands. In actual practice and in the production management literature the use of forecasting is generally an accepted input into master production scheduling Campion, (1982).This inventory technique determines what components are needed and when they should be ordered so that they are likely to be available when needed, Louis, (1981) Bernard W.
T (2000) argues that the MRP components assist and relies MRP controller in the r area responsibility. The MRP controller is responsible for all related to specifying the type quantity and time requirements, 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 information on stock, stock reservation and stocks order to calculating quantities and also needs info nation 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.
Emphasizing on the pertinence of the use of MRP in business organizations Chandra et al (2101) underline that without a MRP Model, it is impractical and tedious to plan, requirements required during the future time horizons. Krajewski and Ritzman (1999) note that MRP translates or explodes, the master production schedule and other sources of demand in) the requirement for all subassemblies, components, and raw materials needed to produce parent items. This process generates the material requirements plan for each component item.2.3.
4 ForecastingFor companies where customer order lead time is shorter than the supply lead time, forecasting expected demand as accurately as possible is a necessity to avoid high supply chain costs. The quality of forecasting differs in terms of accuracy from company to company, but usually there is a level of uncertainty which is buffered by safety stock in either finished goods inventory or work in progress or purchased parts somewhere in the supply chain. Planners will be able to gather available data from historical usage know future events but often rely heavily on personal experience to establish a future forecast to plan material against. Now what happens when the sales don’t match the forecast? It is common to find that when the inventory levels are too high, the purchasing team is told to hold back ordering any more material. When stock is too low, an immediate reaction is to increase the safety stock of that item, or customer orders are prioritized. Reactive strategies such as these often compound the problem and r act to what has just happened rather than looking ahead and predicting what is about to happen.
Planners are often under immense pressure to achieve service level targets with less and less inventory, and therefore run at levels just above (or maybe in some cases just below) a comfortable minimum, and fire-fight issues as they occur in order to fulfill orders on a daily basis.The current economic climate has meant that some companies are facing; down-turn in demand, which results in excess stock which was manufactured / procured when levels were much higher. Other’s are facing a change in the product mix, so different products are being sold in replacement, for example value or cheaper brands compared to higher value items. The key to outperforming in this environment is to become as predictive as possible and make decisions as early as possible when there is a signal that demand patterns are changing. This doesn’t mean react to every change in demand signals, but realize what is significant a d change the inventory policy as appropriate rather than waiting until it is too late and then e-fight a second best solution to the situation.Companies often forecast on a monthly basis as it is too onerous a task to collate the data required more frequently.
However, if the demand profile of an item changes in the first week of a new month, the only way it is noticed is when the stock disappears, and then it is too late. By monitoring usage data on a daily basis and predicting future demand profiles, decisions can be made a lot earlier and therefore more cost effective as more options are available at the time the decision is being take. For example, demand has reduced, but a purchase order was already placed with a supplier. With this knowledge, a buyer may be able to reduce or cancel the order given enough time, rather than wait until the material is already supplied and the problem becomes one of excess stock.Forecasting using historical usage is a good place to start given no other information about future sales. Obviously, if customer forecasts are available then these must be ken into account also, as well as particular events and promotions and other areas of market in diligence. The blend of knowledge regarding the patterns and trends of the history, with the personal knowledge about the future leads to the most accurate future demand plans.
To the naked eye, finding patterns in historical data is difficult and incredibly time consuming for lots of products. However, to mathematical algorithms, vast amounts of data can be processed automatically giving scientifically improved results in terms of forecast accuracy. Auto-adapt e forecasting, such as found in the add one Inventory Optimizer software enables the highest accuracy of forecast based on history, with the least effort.
This is done by the system automatically trying every forecast model and parameter set in the library against each item and eking the best match’ giving the best outcome. Additional information on future known demand then easily added to the base forecast.With a sophisticated system monitoring new data on a daily basis and automatically choosing the best forecast to use, the role of the planner changes to one of decision support analysis, inputting new information or market intelligence regarding future demands, and managing by exception where action is required.
The role of software as a decision support tool is paramount to enabling an efficient planning process. The computer systems can number-crunch high volumes of data according to the rules that you have decided to plan with. Then, based on new information such a new forecast which has been updated with daily transactions, the plan for an individual product may need refining It is alerting the planners to these products which enables them to concentrate their time on the problems which need their attention and skill to resolve rather than spending hours trawling through an excel spreadsheet.We now turn to the issue of forecasting returns under the assumption that all policies concerning returns have been determined and data collection on returns has started. The first step in any forecasting exercise is to build a forecast model that models the variables to be predicted as a function of the explanatory variables Box and Jenkins, (1976). For example, the variable to be predicted may be the return quantity in the next period and the explanatory variables can be past sales. This forecast model will have a number of parameters that need to be estimated using historical sales and returns data. Once the validation and estimation phase is complete, we have a fully specified forecast model.
As the second step, forecasts of future returns are made using parameter estimates obtained from this forecast model and historical information. 2.4 Critical ReviewIn spite of numerous efforts by past researchers and major organizations, the impact of major past studies has not contributed towards the realization customer satisfaction in government offices. This demonstrates that the explained major past activities under the theoretical review have got very little contribution towards addressing the major components that deal with customer satisfaction government offices not unless quick steps are taken to ensure implementation of various invention techniques.
2.4 Summary and Gaps to be filled by the studyInventory management has been researched by many researchers however little or no attention. Has been given to government offices. The procurement manuals for various levels of the government are intended to articulate the principles and practices to be observed by the procurement entities in the procurement of goods and services. The manuals make reference to other sectors that articulate in a more comprehensive manner the procurement process to be observed in procurement of particular items that excludes typing, printing and postage materials. The Dc’s office need to design an enabling environment for effective inventory management to take place. The researcher asserts the need to put up just in time policies, material requirement planning, avoid inventory shrinkage and improve on forecasting methods as a way of inventory management in order to fully satisfy their customers.
2.5 Conceptual FrameworkA conceptual framework in this study was intended to assist the researcher to develop awareness and understanding of the situation under scrutiny and to communicate the intended outcome. Inventory shrinkage Just-in-Time Customer Satisfaction Material Requirement Planning Forecasting Independent Variables Dependent VariableFigure SEQ Figure * ARABIC 1.1: Conceptual framework showing the Relationships between the Variables of the Study.2.
5.1. Inventory Shrinkage Inventory control systems enable a business to determine and maintain an optimum level of investment in inventory in order to achieve required operational performance Inventory shrinkage addressed the un predicted stock outs and stock theft that could lead to ineffectiveness of service providers that would subsequently lead to dissatisfaction of the customers.Just-In- TimeJIT 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. Therefore, this inventory technique will be useful in eliminating customer dissatisfaction challenges, reduce costs, improve quality and meet the ever-escalating demands of their customers.2.5.3 Material Requirement PlanningMaterial requirement planning is on based production planning and inventory control system which is concerned with both production scheduling and inventory control.
It is a material control system that attempts to keep adequate inventory levels to assure that required materials are available when needed. This inventory technique determines what components are needed and when they should be ordered so that they are likely to be available when needed hence ensuring that customers get what they need at the right time.2.5.4 ForecastingFor companies where customer order lead time is shorter than the supply lead time, forecasting of the expected demand should be as accurately as possible to avoid high supply chain costs. The quality of forecasting differs in terms of accuracy from institution to institution, but usually there is a level of uncertainty which is buffered by safety stock in either finished goods inventory or work in progress or purchased parts somewhere in the supply chain. Therefore, to improve customer satisfaction planners will be able to gather available data from historical usage know future events but often rely heavily on personal experience to establish a future forecast to plan material against.
2.6 Operationalization of Study Variables Variable Indicator Measurement Inventory Shrinkage Extent of Shrinkage 5 point likert scale Just- in –Time Extent of JIT Practice 5 point likert scaleMaterial Requirement Planning Extent of Material Requirement Planning 5 point likert scaleForecasting Extent of Material Forecasting Practices 5 point likert scaleCHAPTER THREEMETHODOLOGY3.1 IntroductionThis chapter contains the Research Design of the Study, Target Population, Sample design, Sample Size, Data Collection Procedures, Data Analysis Methods and Validity and Reliability of Instruments. 3.2 Research DesignKothari (2004) defines research design as the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It is the conceptual structure within which research is conducted; it constitutes the blue print for the collection of, measurement and analysis of data. Kombo and Tromp (2006) notes that a design is used to structure the research, to show how all of the major parts of the research project work together to try to address the central research question. The study adopted descriptive research design.
Descriptive research design is appropriate for this study since it allows researchers to gather information on the existing conditions of the phenomenon under investigation without any manipulations of the variables (Orodho, 2004). The major purpose of descriptive survey is the description of state of affair as it exists at present, in this case the researcher has no control over the variable, and one can only report what has happened or what is happening. The main data collection instruments was a questionnaire which purposed to collect both qualitative, quantitative and factual information as pertains the impact of inventory management on customer satisfaction in government offices, a case study of Maara District Government Offices..3.3 Target PopulationA population is a group of individual, objects or items from which s triples are taken for measurement kombo and tromp (2006) it is a complete set of individuals: cases or objects with some common observable characteristics, mugenda and mugenda (2003). They are the larger groups from which a sample is taken. The target population of the study was the staff at the district head quarters, which consists of a target population of 200 members of staff.
Table 3.1 Target PopulationCategory Target population percentageAgriculture procurement office 16 8.Gender & Social services office 10 5.Water Ministry procurement office 16 8.Registrations of persons office 58 29Support staff 100 50TOTAL 200 100Source Maara District (2018)3.4 Sample DesignThe researcher administered random sampling in a situation where the all the respondents had an equal chance of participating in the study. At this point, stratified sampling was employed where the technique gives the researcher freedom to employ consistent style of respondent in the study. This ensured an equal and unbiased chance of respondents participating in the study.
The target population was divided into five respondent groups to be determined by the percentage that was selected from each category.Table 3.2 Sample SizeCategory Sample size Percentage %Agriculture procurement office 8 8Gender & Social services office 5 5Water Ministry procurement office 8 8Registrations of persons office 29 29Support staff 50 50TOTAL 100 100Source Maara District (2018)3.5 Data Collection ProcedureThe data was collected using questionnaires. The researcher developed questions which were issued to the staff of Maara District Government officers. Permission to collect data was sought from each office before issuing of the questionnaires. The researcher issued the questionnaires physically to the respondents selected for the study and picked them as agreed with the respondents.
The questionnaires were checked for completeness and consistency of information and latter cleaned for the purposes of analysis. During data collection each person was asked to answer the same set of questions in a predetermined order. The data supplied was later used to make inferences and conclusions about the issue under investigation. The questionnaire developed ensured that the respondents remain anonymous and as Borg & Gal (2003) observes the information supplied was more truthful is likely dependable for the study. 3.5.
1 QuestionnairesThe data was collected by issuing questionnaire to the respondents. The questionnaire was organized into five sections with section one seeking for demographic characteristics of the respondents and the other four sections seeking questions to answer each research question of the study. The questionnaire contained both open ended and closed ended questions.3.6 Data Analysis MethodsData analysis began with the process of data cleaning and this process did not identify any incomplete questionnaire. Data analysis involved handling and studying the data in order to establish the facts and meanings.
Research study involved both qualitative and quantitive utilization of data analysis. After data cleaning the researcher coded it into the computer for analysis and specifically used the MS Excel computer Package to generate information which was presented in Frequency tables, percentages. The responses on open-ended questions was difficult to comprehend since the questionnaires revealed great variations in the items requested but the researcher developed the themes that aided in the descriptive narrative report . 3.6 Validity and Reliability of Research Instrument3.
6.1 ValidityThis refers to the extent which an instrument used measures what it was supposed to, Palata (2003). The questionnaire was valid since it proved to the above population characteristics which necessitated its use. The questionnaires used were approved by the supervisor before being issued to the respondent and tested them during a piloting visit.3.6.2 ReliabilityMugenda & Mugenda (2003) define reliability as a measure or degree to which a research instrument yields consistent results or data after repeated trials.
Orodho, (2005) says reliability of an instrument is the consistency of producing reliable results, that is, the degree to which the empirical indicators are consistent across two or more attempts to measure the theoretical concept. Reliability was achieved through test and retest technique which formed part of the piloting exercise. The questionnaires were reliable since retesting of the questionnaires revealed fair degrees of consistency of the answers from the respondents CHAPTER FOURDATA ANALYSIS PRESENTATION AND INTERPRETATION4.1 IntroductionThis chapter contains the data presentation and interpretation of study findings. The demographic characteristics analyzed included gender, age and working experience. The other sections were organized the research questions that the study was meant to address.4.
2 Response Rate The response rate was 70% which was owned to the keen interest extended by the researcher to distribute all the questionnaires herself and make detailed follow up to collect them back for analysis. 4.3 Demographic Characteristics 4.
3.1Gender Distribution of the Respondents The researcher for the gender distribution of the respondents. The findings are presented in the Table 4.
1.Table 4.1:Gender Distribution of the Respondents Respondents Frequency Percentage %Male 45 64Female 25 36Total 70 100Source: Author (2018) The results indicate that most respondents were male at 64% and 36% being female. This reveales a dominance of male employees in the Maara District Government Offices 4.3.2 Age of RespondentsThe study sought information on the distribution of Maara District Government staff members who participated in the study by age. This information is presented in Table 4.2.
Table 4.2 Age of Respondents Age Frequency Percentage %18-25 years 20 2826-35 years 25 3636 and above 25 36Total 70 100Source: Author (2018)The findings in Table 4.2 indicates that majority of the respondents were aged within the age bracket of 26-35 years and 36 years and above at 36% whereas respondents aged between 18-25 years responded the least with 28% respectively.
This give an impression that the information provided was rich with accuracy due to a higher percentage mature respondents that give information on the research study 4.2.3 Working Experience The study further sought information on respondents working experience. This information is presented in Table 4.3.Table 4.
3 Working Experience Working experience Frequency Percentage %Below 5 years 10 145-10 years 30 4310-15years 25 3615 years and above 5 7Total 70 100Source: Author (2018)The chart indicates that majority of the respondents comprising 43% had worked for the organization between 5-10 years, whereas 36% had worked in the organization for 10-15 years. The least response comprised of 14% having worked below 5 years and 7% with 15 years and above respectively. Based on the importance of the study, clear and accurate information was paramount and existence of a large percentage of the respondents with a wealth of experience in how government inventory system works was a valuable for the study.4.2.4 To establish the effects of inventory shrinkage o customer satisfaction The study sought the opinion of respondents on whether inventory shrinkage influence customer satisfaction in government offices. The findings are presented in Table 4.
4.Table 4.4 Influence of Inventory Shrinkage on Customer SatisfactionCategory Frequency Percentage %Yes 65 93No 5 7Total 70 100Source: Author (2018)The findings in Table 4.4 are further illustrated in Figure 4.4According to the findings in Table 4.4, 93% of the staff responded yes indicating that inventory shrinkage influence customer satisfaction whereas a small group of respondents comprising of 7% responded no.
The researcher sought for the rate the effectiveness of inventory systems in terms of securing resources from theft by employees of government. The findings are presented in Table 4.5.Table 4.
5 Rate the Effectiveness of Inventory Systems in Terms of Securing Resources from TheftRating the effectiveness Frequency Percentage%Very effective 40 57Effective 20 29Average 5 7Not at all 5 7Total 70 100Source; Author (2018)According to the findings in Table 4.5 and Figure 4.5 the respondents felt that the inventory systems are very effective at 57% whereas 29% responded effective while 7% rated them average. Only 7% disagreed with opinion that inventory systems secure resources from theft by employees of government. This implied that the government inventory systems are successful in minimizing stock theft by employees.The respondents were also required to indicate whether there would be improved customer satisfaction in government offices if goods are replenished on time in the inventory. Majority of the respondents reiterated that stock outs at government offices of valuable gods affects the service delivery to customers. Majority also mentioned that the inventory control systems do no reveal the goods to be procured on time or ther is laxity on the procurement officers to procure goods on time These results imply that Inventories perform significant functions in the service delivery to customers.
In the same line of study, Githui (2012) observed that transparency in inventory to management techniques is important because it eliminate corruption, biased procurement process, procuring substandard good for the organization that proof to be extremely costly. Miller (2010) also added that virtue ethics promotes integrity, utilitarian principle appreciates happiness promotion and reverse of wrong doing promotes the goodwill of the organization. The respondents were requested to rate the extent to which various aspects of inventory shrinkage affects the customer satisfaction in government offices. The findings are presented in Table 4.6.Table 4.6 extent to which various aspects of inventory shrinkage affects the customer satisfactionView Frequency PercentageVery small extent 14 20Small extent 21 30No opinion 0 0Great extent 22 32Very great extent 13 18Total 70 100Source: Author (2018)From the findings on Table 4.6 majority of the respondents felt that the inventory shrinkage affect customer satisfaction with 32% indicating this was to a great extent and 18% to a very great extent.
However other respondents30% and 20% felt that this was to small extent and very small extent respectively. This implies that half of the respondent felt that inventory shrinkage is there in government offices.The respondent were asked to rate the extent to which government officers control inventory shrinkage. The findings are shown on Table 4.7.Table 4.7 Extent to which government officers control inventory shrinkageView Frequency PercentageVery small extent 15 22Small extent 20 28No opinion 0 0Great extent 22 32Very great extent 13 18Total 70 100Source: Author (2018)From the findings on Table 4.7 majority of the respondents felt Government office controls inventory shrinkage with 22% and 28% indicating this was to a very small extent and small extent respectively. However the other respondents 32% and 18% felt that Government offices control inventory shrinkage to very great extent and great extent respectively. The findings reveal moderate concern for inventory shrinkage control.4.2.5 To find the effect of JIT on customer satisfaction To establish the effect of JIT on customer satisfaction, the respondent were asked to rate the extent to effectiveness of JIT on customer satisfaction. The findings are shown on Table 4.8.Table 4.8 Effectiveness of JITFrequency Percentage%Very effective 55 79Effective 5 7Average 5 7Not at all 5 7Total 70 100Source: Author (2018)Further illustration of Table 4.8 is in Figure 4.8. According to the findings in Table 4.8 majority of the respondents comprising of 79% felt that JIT is very effective to customer satisfaction as compared to 7%who responded effective, average and not at all to the effect of respectively. Therefore JIT policies are very effective is addressing the concerns of customers and hence leading to customer satisfaction.The respondents were asked to rate the extent to which Just in Time policies affects the customer satisfaction in government offices. The findings are shown on Table 4.9 Table 4.9 Extent to which Just in Time policies affects the customer satisfactionView Frequency PercentageVery small extent 3 4Small extent 4 6No opinion 0 0Great extent 35 50Very great extent 28 40Total 70 100Source: Author (2018)From the findings on Table 4.9 majority of the respondents felt that Government offices considers JIT policies as factor in customer satisfaction with 50% and 40% indicating this was to a very great extent and great extent respectively. However a small percentage of 10% felt that felt that Government offices do not considers JIT as instrumental to the customer satisfaction . This is in line with the Gounaris, (2005) who found that JIT policies brings the desire to develop a stable relationship customers, a willingness to maintain the relationship with customers, confidence in the stability of the relationship, and investments in the relationship thus improving ustomer service delivery. The respondents were asked to rate the extent to which Government offices prioritizes Just in Time policies. The findings are shown on Table 4.10.Table 4.10 Extent to which Government Offices prioritizes Just in Time policies..View Frequency PercentageVery small extent 1 2Small extent 3 4No opinion 0 0Great extent 35 50Very great extent 31 44Total 70 100Source: Author (2018)From the findings on Table 4.10 majority of the respondents felt that Government offices considers prioritizes JIT policies with 50 % and 44% indicating this was to a great extent and very great extent respectively. However a small percentage of 6% felt that Government offices do not prioritize JIT policies. This implies a Government office considers service to customers as crucial. These findings are indeed supported by Stanko et al., (2007) where they observe that JIT policies develop the culture of effectiveness in services of a firm and this promotes customer satisfaction.4.2.6 To identify the effect of material Requirement Planning on customer satisfaction To establish the effect of Material Requirement Planning on customer satisfaction, the respondent were asked to rate the extent to effectiveness ofMRP on customer satisfaction. The findings are shown on Table 4.11.Table 4.11 Effectiveness of MRPFrequency Percentage%Very effective 55 79Effective 5 7Average 5 7Not at all 5 7Total 70 100Source: Author (2018)According to the findings in Table 4.11 majority of the respondents comprising of 79% felt that MRP is very effective to customer satisfaction as compared to 7%who responded effective, average and not at all to the effect of respectively. Therefore MRP techniques are very effective is addressing the concerns of customers and hence leading to customer satisfaction.The respondents were also asked to rate the extent material requirement planning affects the customer satisfaction in government offices.The findings are illustrated in Table 4.12.Table 4.12: Extent material requirement planning affects the customer satisfactionView Frequency PercentageVery small extent 0 0Small extent 3 4No opinion 0 0Great extent 37 52Very great extent 30 44Total 70 100Source: Author (2018)The findings on Table 4.12 illustrate that majority of the respondents felt that material requirement planning affects the customer satisfaction with 52% and 44% indicating that this is to a great extent. Only 4% of the respondents felt that that cmaterial requirement planning does not affects the customer satisfaction An item was included in the questionnaires which sought from the respondents the extent to which material requirement planning is prioritized in government offices. The findings are illustrated in Table 4.13. Table 4.13: Extent to which Material Requirement Planning is Prioritized in Government OfficesView Frequency PercentageVery small extent 0 0Small extent 2 4No opinion 0 0Great extent 26 52Very great extent 22 44Total 50 100Source: Author (2018)The findings on Table 4.13 illustrate that majority of the respondents felt that material requirement planning is prioritized in government offices with 52% and 44% indicating that this is to a great extent. Only 4% of the respondents felt that material requirement planning is prioritized in government offices 4.2.7 To determine the effects of forecasting on customer satisfactionTo establish the effect of forecasting on customer satisfaction the researcher requested the respondents the opinion on whether or not forecasting of the required resources by service provider is a factor in customer in customer satisfaction. The findings are presented in Table 4.14. Table 4.14 Effect of ForecastingCategory Frequency Percentage%Yes 42 60No 28 40Total 70 100Source: Author (2018)Further illustration of Table 4.14 is in Figure 4.14The majority of respondents comprising of 60% answered yes indicating that forecasting has an effect on customer satisfaction in inventory management as compared to 40% of respondents who answered no.An item was included in the questionnaire seeking for the extent to which forecasting influence inventory management in trying to satisfy customer. The findings are presented in Table 4.15Table 4.15 Extent of forecasting Extent of the effect forecasting Frequency Percentage %Very great extent 30 43Great extent 25 36Average 10 14Not at all 05 7Total 70 100Source: Author (2018)According to the findings in Table 4.15, majority of respondents comprising of 43% expressed that forecasting affects customer satisfaction to a very great extent, 36% to a great extent, 14% on average and not at all 7%. This implies that an organization that has effective forecasting techniques anticipates wit accuracy the needs and this in turn improves on customer service and customer satisfaction.CHAPTER FIVESUMMARY OF FINDINGS, CONCLUSION & RECOMMENDATIONS5.1 IntroductionThe chapter presents the summary of the findings; conclusions and recommendations arising from the results the study. The chapter also presents the suggestions for further research.5.2 SummaryThe study sought to answer four research question whos summary of results are as follows:The effects of inventory shrinkage o customer satisfaction According to the findings the respondents felt that inventory shrinkage influence customer satisfaction. They mentioned that the inventory systems are very effective at 57% whereas 29% responded effective while 7% rated them average. Only 7% disagreed with opinion that inventory systems secure resources from theft by employees of government. This implied that the government inventory systems are successful in minimizing stock theft by employees. On the extent to which various aspects of inventory shrinkage affects the customer satisfaction in government offices, the respondents felt that the inventory shrinkage affect customer satisfaction with 32% indicating this was to a great extent and 18% to a very great extent. However other respondents 30% and 20% felt that this was to small extent and very small extent respectively. This implies that half of the respondent felt that inventory shrinkage is there in government offices.The effect of JIT on customer satisfaction According to the findings the respondents comprising of 79% felt that JIT is very effective to customer satisfaction as compared to 7%who responded effective, average and not at all to the effect of respectively. Therefore JIT policies are very effective is addressing the concerns of customers and hence leading to customer satisfaction. The findings on the item seeking the extent to which Just in Time policies affects the customer satisfaction in government offices, where the respondents felt that Government offices considers JIT policies as factor in customer satisfaction with 50% and 40% indicating this was to a very great extent and great extent respectively. However a small percentage of 10% felt that felt that Government offices do not considers JIT as instrumental to the customer satisfaction . This was collaborated with the Gounaris, (2005) who found that JIT policies brings the desire to develop a stable relationship customers, a willingness to maintain the relationship with customers, confidence in the stability of the relationship, and investments in the relationship thus improving ustomer service delivery. The effect of material Requirement Planning on customer satisfaction According to the findings in the respondents comprising of 79% felt that MRP is very effective to customer satisfaction as compared to 7%who responded effective, average and not at all to the effect of respectively. Therefore MRP techniques are very effective is addressing the concerns of customers and hence leading to customer satisfaction. The respondents felt that material requirement planning affects the customer satisfaction with 52% and 44% indicating that this is to a great extent. Only 4% of the respondents felt that that material requirement planning does not affects the customer satisfaction The effects of forecasting on customer satisfactionThe majority of respondents comprising of 60% answered yes indicating that forecasting has an effect on customer satisfaction in inventory management as compared to 40% of respondents who disagreed. On the extent to which forecasting affect customer satisfaction , majority of respondents comprising of 43% expressed that forecasting affects customer satisfaction to a very great extent, 36% to a great extent, 14% on average and not at all 7%. This implies that an organization that has effective forecasting techniques anticipates wit accuracy the needs and this in turn improves on customer service and customer satisfaction.5.3 ConclusionsFrom the findings of the study, the researcher concludes thatto a great extent inventory shrinkage affect customer satisfaction in Maara District Government Offices. Also the just-in-time policies of inventory management affect on customer satisfaction in Maara District Government Offices and they would be instrumental in bringing the desire to develop a stable relationship with customers and confidence in the service delivery. The researcher further concludes that material requirement planning of inventory management affect customer satisfaction to a great extent in Maara District Government Offices and also forecasting in inventory management affect customer satisfaction in Maara District Government Offices.5.4 RecommendationsFrom the findings of the study, the following recommendations are suggested:The government should develop policies that guide on effective implementation of inventory management practices.The government offices should audit the inventory management practices vis-a vis the customer requirements to foster effective service delivery.5.5 Suggestions for Further ResearchTo further understand the effect of inventory management practices on customer satisfaction in public service, the researcher suggests the following areas for further study. Factors analysis of the inventory management practices and customer satisfaction levels.The role of inventory management practices on effectiveness of service delivery in public sector. QUESTIONNAIREThe researcher is a student pursuing a degree purchasing and Supplies Management. At the Management University of Africa. The research is to investigate impact of inventory management on customer satisfaction in Maara District, Tharaka Nithi County. Kindly spare time and assist with the information for this study. It will be appreciated when you Give your finest responses to the items in this tool. All information given will be treated with Utmost confidentiality. It will be used only for academic purpose.SECTION A: PERSONAL DATAInstructions: Tick as appropriate1. Gender Male Female2. Age 18-25 26-35 36 and above3. Working experience below 5 years 5-10 years 10-15 years 5 years and above SECTION Bi)Do you think inventory shrinkage influence customer satisfaction in government offices?satisfaction in government offices? Yes Noii) How can you rate the effectiveness of inventory systems in terms of securing resources from theft by employees of government? Very effective Effective Average Not at alliii) Do you think there would be improved customer satisfaction in government offices if goods are replenished on time in the inventory ?…………………………………………………………………………………………….…………………………………………………………………………………………….……………………………………………………………………………………………………………………..iv) Provide a response to show the extent to which you agree with the following opinion regarding inventory shrinkage in Government offices.Very small small No Great Very greatextent extent opinion extent extentOpinion Inventory shrinkage affects the competitiveness customer satisfaction in government offices. Government offices control inventory shrinkage SECTION Ci) How can you rate the effectiveness of Just in Time polices in ensuring customer satisfaction in government offices ? Very effective Effective Average Not at allii) Provide a response to show the extent to which you agree with the following opinion regarding Just- in- Time policies in Government offices.Very small small No Great Very greatextent extent opinion extent extentOpinion Just in Time policies affects the customer satisfaction in government offices. Just in Time policies are prioritized in government offices.iii) From your experience, what is some unique intervention can be applied to improve customer satisfaction in inventory management? Explain………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………SECTION Di) How could you rate the effectiveness of material requirement planning in inventory management in government offices?Very effective EffectiveAveragePoorii) Provide a response to show the extent to which you agree with the following opinion regarding material requirement planning in Government offices.Very small small No Great Very greatextent extent opinion extent extentOpinion Material requirement planning affects the customer satisfaction in government offices. Material requirement planning is prioritized in government offices.PART 4 1.To determine how forecasting on inventory management affect customer satisfaction government in offices i) Do you feel forecasting influence inventory management?YesNo ii) To what extent does forecasting influence inventory management in trying to satisfy customer?Very great extentGreat extentAverage Not at all iii) What are some of the implications of forecasting in inventory management?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………iv) Is forecasting a unique tool in inventory management?YesNoIf yes explain ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………REFERENCESBertline, M. & Rizzio, A. (2002).:Inventory Management 12th Edition Person Education Inc. Upper saddle .River .New Jersey USABloomberg D J (2002). 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International Journal of Logistics Management,Vol. 13 No. 1, pp. 15-30WORK PLAN TIME ACTIVITY JANUARY2018 FEB – APRIL 2018 MAY 2018 JUNE 2018Presentation and approval of research topic Proposal Development and approval Data Collection Analysis and Presentation Project compiling SOURCE: AUTHOR 2018BUDGETDETAILS KSHSTransport and travelling Expenses 5,000Stationery 3,000Secretarial Expenses 3,500Photocopy and Binding 6,500Miscellaneous 2,000TOTAL 20,000