TABLE OF CONTENTS
Title Page
i
Approval page ii
Declaration
iii
Certification
iv
Dedication
v
Acknowledgements
vi
Table of content
vii
List of tables
ix
Abstract x
CHAPTER
1: INTRODUCTION
1.1 Background
of the Study 1
1.2 Statement
of Problem 3
1.3 Objectives
of the Study 4
1.4 Research
Questions 5
1.5 Hypothesis
of the Study 5
1.6 Significance
of the Study 6
1.7 Scope of the Study 7
CHAPTER 2:
REVIEW OF RELATED LITERATURE
2.1 Conceptual Literature 8
2.1.1 Meaning
of Inventory 8
2.1.2 Types
of Inventory 10
2.1.3 Reasons
for Holding Inventory 11
2.1.4 Inventory
Control 12
2.1.5 Purchasing
Inventory 13
2.1.6 Inventory
Cost and Accounting 15
2.1.6.1 Costs of Holding Stock 16
2.1.6.2 Costs of Obtaining Stock 16
2.1.6.3 Stock-Out Costs 17
2.1.6.4 Cost of the Stock 17
2.1.7 Inventory
Management and Techniques 18
2.1.7.1 Inventory Management 18
2.1.7.2 Techniques of Inventory Management 20
2.1.8 Importance
of Inventory Management 28
2.1.9 Concept
of Customer Service 31
2.1.10 Reasons for Customer Service 32
2.2 Theoretical
Literature 34
2.2.1 Theory
of Inventory and Production 34
2.2.2 Application
Control Theory 35
2.3 Review
of Empirical Literature 35
2.4 Summary
of Literature Review 38
CHAPTER 3: RESEARCH
METHODOLOGY
3.1 Research
Design 40
3.2 Area
of Study 40
3.3 Population
for the Study 40
3.4 Sample
and Sampling Techniques 41
3.5 Instrument for Data Collection 41
3.6 Validation of Instrument 41
3.7 Reliability
of Instrument 42
3.8 Data
Collection Technique 42
3.9 Method
of Data Analysis 42
CHAPTER
4: DATA ANALYSIS AND INTERPRETATION
4.1 Questionnaire
Administration 44
4.2 Demographic
Characteristics of the Respondents 44
4.3 Inferential
Statistics and Hypotheses Testing 45
4.4 Discussion
Findings 58
CHAPTER
5: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
of Findings 60
5.2 Conclusion 61
5.3 Recommendation 62
References 63
LISTS OF TABLES
Table 4.1 Questionnaire
Administration and collection 44
Table
4.2 Distribution of Respondents
According to Age Range 45
Table
4.3 Distribution of Respondents
According to Marital Status 46
Table
4.4 Distribution of Respondents
According Educational Level 47
Table
4.5 Distribution of Respondents
According Position 48
Table
4.6 Distribution of Respondents
According Department 49
Table
4.7 Distribution of Respondents
According Experience 50
Table 4.8 Descriptive Statistics 52
Table 4.9 Regression
Estimate for the Relationship between Inventories
Management Practices and Customer Service in
Food Service
Establishments in Umuahia Metropolis 53
CHAPTER
1
INTRODUCTION
1.1 Background
of the Study
Inventory
management is a critical issue or function in the business world. In food
service business, the success of any firm is to a large extent dependent on how
well inventory is ordered, purchased, stored, and utilized. The level of
competition in food service industry is such that nothing should be left to
chance, as such every business activity or function should be carried out in
the most effective and efficient way. Successful business firms or organization
have some competitive advantage over their competitors particularly with
regards to customer services.
Hence,
the level of customer service commitment of any food service establishments
influences and/or contributes in defining the image that customers will have
about that establishment. Issues concerning the freshness of menu offerings as
well as their availabilities agitate the minds of many a consumer during
decision making session prior to choosing a food service establishments either
for lunch or dinner. Therefore, inventory management practices should be given
serious attention in food service operation if the goal of achieving customer
service is to be realized.
In
a highly competitive food service industry, attracting customers with dedicated
service and high quality food along with satisfying them and making them into
loyal customers is critical for the success of the business (Gilbert, Ronald,
Cleopatra, Mark, and Moutinho, 2014). The importance of providing quality
services in food services has attracted intense attention among researchers and
service managers.
Conventionally,
quality service is believed first to be a key factor in satisfying customers
and in boosting income as well as increasing market share (Ryu and Han, 2018).
Indeed, previous studies found that providing high service and food quality in food
service can enhance customer satisfaction and loyalty directly even in
unacceptable dining environment (Ha and Jang, 2010; Wall and Berry, 2017).
Customers perceive and evaluate service based on performance of food service
during service delivery (Ha and Jang, 2010). Understanding the factors which
affect customers’ satisfaction and loyalty requires identifying the indicators
of service quality in food services and their relationship with customer services
(Namkung Namkung, Novelli, Schmitz and Spencer, 2011).
According
to Imeokparia, (2013) inventory management involves all activities put in place
to ensure that customers have the needed product or service. It involves the
purchasing, manufacturing, and distribution functions to meet the marketing
needs and organizational needs of availing the product to the customers.
Inventory management is primarily involved with specifying the size and
placement of stocked goods. Inventory consists of all goods owned and held for
customer satisfaction. Inventory is a necessary evil to any organization
although, there are various costs that accrue as a result of keeping inventory.
It is therefore important for any organization to keep a good balance between
the amount of inventory to keep at any one time so as to ensure that both
internal and external customers are satisfied without causing the organisation
to incur high inventory costs. Inventory management is required at different
locations within a facility or within multiple locations of a supply network to
protect the regular and planned course of production against the random
disturbance of running out of materials or goods (Williams, 2015). The scope of
inventory management also concerns the fine lines between replenishment lead
time, carrying cost 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.
With
a balance of these requirements, it is possible to reach an optimal inventory
level, which is an on-going process as the business needs shift and react to
the wider environment (Ogbo, Onekanma, and Ukpere, 2014). Food service establishments have gained increased
acceptance and patronage over the years as more brands keep coming up yearly,
hence increased competition and quest for market share. In 2017 alone,
Kilimanjaro, Apples and Roots opened new food service establishments in
Umuahia, Abia State to compete with already existing local food services that
have won the heart of the consumers.
With
this yearly increase in food services in Nigeria, there is need for the
managers of these food services to strategically plan their activities to reduce
cost and serve the market better. In these decisions, inventory management is
sacrosanct. Food service establishments deal with highly perishable products
which should be taken care of with finesse to prevent causing the organisation
a great loss. Stocks are kept in such a way that tasty meals are available to
customers who need them at any time of the day. To make this possible,
inventory management plays an important role of storing and preserving the
ingredients needed to prepare these meals to ensure they are accessible
whenever they are required.
Inventory
management saturates decision making in incalculable firms and has been widely
considered in the scholarly and corporate circles (Rosa, Mayerle, and Goncalves,
2010). The key questions which inventory management tries to answer are: when
to order, how much to order and how much stock to keep as safety stock (Wanke,
2014).
Thus,
this present research is being carried out to determine how inventory
management practices could impact customer service in food service operation.
1.2 Statement
of Problem
Meeting
customer expectations in terms of delivering fresh and nutritionally palatable
and warrant-satisfying menu offerings on a regular basis is seemingly becoming
a challenge to service establishments these days. A casual observation reveals
that some customers of food service operations hardly stick with them as the
customers have become multi-dimensional in their consumption patterns,
defecting or switching at will.
Customers
often complain about the quality of menu offerings served at certain food
service establishments as not meeting their expectations in terms of being
fresh and palatable. At some other time, customers complain about the
unavailability of certain meals or menu offerings at one time or the other.
These raise critical issues such as; what factors influence the freshness of
menu offerings in food service operation, what factors determine the
palatability of menu offerings in food service operations, what inventory
management practices are in operation in food service operations, is there any
correlation between inventory management practices and customer service in food
services operation in Umuahia.
Furthermore,
in the course of literature review for this study, it was discovered that there
is no empirical evidence that explains the direct relationship between
inventory management practices and customer service in food service operations.
These are the gaps in literature that this present study attempt to fill and
are therefore the motivation for this study.
1.3 OBJECTIVES
OF THE STUDY
The
main objective of this study is to determine the relationship between inventory
management practices and customer service in food service establishments\ in
Umuahia metropolis. The specific objectives seek to determine;
i.
The influence of Just In
Time (JIT) as an inventory management practice on customer service in food
service establishments in Umuahia metropolis;
ii.
The effect of Refrigeration
as an inventory management practice on customer service in food service establishments
in Umuahia metropolis;
iii.
The influence of Stock
Taking as an inventory management practice on customer service in food service establishments
in Umuahia metropolis;
iv.
The extent to which Average
Weekly Usage (AWU) as an inventory management practice influence customer
service in food service establishments in Umuahia metropolis;
v.
The influence of Vendor
Managed Inventory (VMI) as an inventory management practice on customer service
in food service establishments in Umuahia metropolis;
vi.
The influence of Economic
Order Quantity (EOQ) as an inventory management practice in customer service in
food service establishments in Umuahia metropolis.
1.4 RESEARCH
QUESTIONS
The following research questions were formulated to
guide the study;
1. What
influence does Just In Time (JIT) as an inventory management practice have on
customer service in food service establishments in Umuahia metropolis?
2. What
effect does Refrigeration as an inventory management practice have on customer
service in food service establishments in Umuahia metropolis?
3. To
what extent does Stock Taking as an inventory management practice influence
customer service in food service establishments in Umuahia metropolis?
4. What
influence does Average Weekly Usage (AWU) as an inventory management practice have
on customer service in food service establishments in Umuahia metropolis?
5. What
effect does Vendor Managed Inventory (VMI) as an inventory management practices
have on customer service in food service establishments in Umuahia metropolis?
6. To
what extent does Economic Order Quantity (EOQ) as an inventory management
practice affect customer service in food service establishments in Umuahia
metropolis?
1.5 HYPOTHESIS
OF THE STUDY
The following hypotheses were formulated at 0.05
level of significance to focus the study;
Ho1:
There is no significant relationship between Just-In-Time
(JIT) as an inventory management practice and customer service in food service establishments
in Umuahia metropolis.
Ho2: There is no significant relationship
between Refrigeration as an inventory management practice and customer service
in food service establishments in Umuahia metropolis.
Ho3: There is no significant relationship
between Stock Taking as an inventory management practice and customer service in
food service establishments in Umuahia metropolis.
Ho4:
There is no significant relationship between Average
Weekly Usage (AWU) as inventory management practice and customer service on
food service establishments in Umuahia metropolis.
Ho5:
Vendor Managed Inventory (VMI) as an inventory management
practice has no significant relationship with customer service in food service establishments
in Umuahia metropolis.
Ho6:
Economic Order Quantity (EOQ) as an inventory management
practice has no significant relationship with customer service in food service establishments
i
1.6 Significance of the Study
The
findings of this study will benefit the following groups; operators of food service
establishments, customers of food service establishments and future
researchers/students
The
findings of this study will help food service operators to know the inventory
management practices that improve customer service, Particularly in terms of
enhancing availability of materials, elimination of stock-out cost, and reduced
inventory cost etc.
The customers of food service establishments will
benefit from the findings of this study in the form of improved customer
service on account of the implementation of the findings of this study by the
operators of food service establishments.
To future researchers/ students, the findings of
this study will contribute to the body of existing knowledge as students and
future researchers might want to review the work in the course of their studies
and research works.
1.7 Scope of the Study
The
content scope of this study focuses on the relationship between inventory
management practices and customer service in food service establishments in
Umuahia Metropolis.
Geographically,
the study was carried out in Umuahia metropolis, Abia state.
In terms of unit scope, employees of food
service establishments formed the respondents for the study.
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