CHAPTER THREE: THE ROLE OF INVENTORY MANAGEMENT ON CUSTOMER SATISFACTION

3.0 RESEARCH METHODOLOGY
3.1 RESEARCH DESIGN:
This chapter focuses on the techniques used in collecting and analyzing data. The  authenticity  and  validity of  any  research,  is  dependent on  the  researcher’s  ability to reach those currently and  directly concerned with the problem, so  as to find out from  them what their views,  ideas,  thoughts  and  feelings are on  the  subjects  under investigation.  Therefore,  this  study has  been based data, facts,  information  and opinions that  were gathered  through  questionnaires, as  well as interviews and participants observation which  were  answered by randomly selected  companies,  management, accountants and managers. The  study applied a case study research design because only one  entity  was being  studied  with  the  ultimate aim of  gathering  data from the  respondents on the role of  inventory  management   on customer  satisfaction. 

3.2             RESEARCH POPULATION
The population for the study is 193. The target population comprised of 130 employees that made up of five (5) departments working at Anambra Motor Manufacturing Company (ANAMMCO).  The case study used a census because the population was not large (Kotrein, (2006). Data   collection methods were not large.  They are classified as observation guides, interview guides, (for the management) questionnaire, (for both management and the customers) as well as available records in the organization.  The five departments include; stores department, Accounts department, product department, internal audit department as well as the managers involved in general administration.
3.3             SAMPLE  SIZE DETERMINATION:
Five departments have been selected out of the total number of departments in the company. These departments have been chosen on the basis of convenience and their relevance to the subject of study.
The Five selected departments are as shown in table 3-1 below
S/No
Departments
Staff Strength 
Percentage 
1
Stores
47
24.4
2
Accounts
68
35.2
3
Production
45
23.2
4
Internal audit
25
13.0
5
Managers
8
4.10

Total
193
100
    Source: Survey data
However  Stores department is made up of 24.4% staff, Accounts department  35.2% , production  department  23.3%,  Internal  audit 13.0%,  and   Managers 4.1% staff  respectively.
The  sample  size used  for  the study,  was systematically  determined using  Taro Yamani  Formula (Yamain,  1964:280). The formula is stated thus:


n  =        N
           1+N(e)2
Where:
n=Overall sample size
N=Total population size
I =Constant
e = Margin of error
5% was chosen as margin of error.
N=193
1.4825 =130
Thus, the overall sample size for the study is 130 which represents   67.3% of the target population. Bowley proportion allocation formula has been used in arriving at the number of questionnaire allocated to each sampled department / organization because of the differences in number of employees. The formular as quoted in Ranjan, (1976:137) is,
nh =NHn
           N                                     
where:
nh= number of units /categories allocated  to each department / organization
N = Overall population of the study 
NH = population in each department/ organization
N= Total sample size obtained.

Therefore: 
Stores Dept.=  47 x 130   =32.0
                                       193
Accounts Dept. = 68 x 130   =46.0
                                          193
Production Dept =45 x 130   =30.0
                                           193
Internal audit Dept = 25 x 130   =17.0
                                                            193
Managers = 8 x 130   = 5.0
                                    193
Table 3 -2 
Distribution of Questionnaire to the Five (5) Departments.
S/No
Departments
Staff strength 
 No of  questionnaire allocated
1
Stores
47
32
2
Accounts
68
46
3
Production
45
30
4
Internal audit
25
17
5
Manager
8
5

Total
193
130
Sources: Ezechukwu Field work
3.4             SOURCES OF DATA 
The basic raw materials with which statistical investigation is conducted are called data.  They are needed for the analysis and interpretation of problems.  They are two classes namely.

3.4.1                   PRIMARY AND  SECONDARY  DATA
Primary Data: This provided a presentation of   the   actual information that was obtained to accomplish the aim of the study.  This   primary data was gathered using both open ended   and closed ended questionnaires.  The questionnaires were self administered to the    five (5) departments who were selected for the purpose of analysis.
3.4.2                   SECONDARY  DATA:
Empirical  and  theoretical literature from  books,  journals, magazines and  internet  were  sourced for  the purpose of  collecting  secondary data.
Descriptive statistics in the form of frequency percentage and inferential statistics were used for analysis in the study (Mugenda and Mugenda, 1999). Statistical package for social sciences, computer software, was used to present the data in the form of frequency, tables and percentages.
3.5             COLLECTION OF DATA 
In this study, both quantitative and qualitative methods of data collection were used because of the nature of our scope. Questionnaires, constituted one of the instrument employed for the study.  A pretext was conducted, before the actual distribution of questionnaire so as to ascertain the suitability of the questionnaires and to determine the appropriateness of the attributes.  Ezejelue and Ogwo 9199:95), Asika (1991:76) Anyanwu (2000:42) and Osula (2001:232) have all supported the above approach.  

3.6             VALIDITY AND RELIABILITY OF RESEARCH INSTRUMENT. 
The validity and  reliability of   any research work of  this  nature  depends on  the researchers ability  to reach those currently  and directly concerned with  the problem in order  to find out from them  what their  views, ideas, thoughts and  feelings are on  the subjects, under investigation .
The  data  used  in  the development of  this  project  work were collected  from the various  levels of management in  the manufacturing  company,  Anambra Motor  Manufacturing  Company,  Enugu, through  the use of  questionnaire,   personal or  oral interviews which serves as auxiliary to the  questionnaire and it helps  in  explaining  certain  technical  questions  to the  respondents so that  they will not disagree in  their  response from the main objective of  the questions. Other sources of vital information are: Financial Journals, Magazines, Textbooks and internet. The various accounting and control books and documents used by the company for inventory control, were inspected and specimen copies and formats collected.
3.6.1.  INTERVIEW QUESTIONS
The questions used for conducting oral interviews with the different levels of management, strategic managers of the manufacturing companies. Specifically are listed below:
     i.                        Do your raw materials have any peculiarity?
  ii.                        What basic type of inventories do you maintain?
iii.                        What are the major costs you incur in holding and replenishing the inventories?
iv.                        What problems does your company encounter in keeping inventories?
   v.                        What inventory policies do you have?
vi.                        What factors influence your choice of the policies?
vii.                        Which Department or Sector’s is responsible for managing inventories?
(i) Who heads the department?
(ii) What is the relationship between the person and the financial manager?
viii.                        Do you employ any of the inventory control methods e.g. perpetual, periodic inventory method or ABC classification method?
ix.                         Comment, generally on the need and benefit for managing and controlling of inventories from your experience?
3.6.2 DESIGN AND ADMINISTRATION OF QUESTIONNAIRES
Due to the unique nature of the study, we used field survey approach. The field survey approach was justified on account of the variability of both the unit and phenomena under study. The field surrey was carried out on the five (5) department identified. The questionnaire through which the data were collected contained 16 questions each was administered on the Stores department, Accounts department, and Production department, internal Audit ,, as well as the managers involved in general administration. While eight (8) of the questions were in the of close- ended, one was an open- ended question.
The check list (close- ended ones) consists of prepared list of specific questions and a list of possible answer e.g. “Yes” and “No”.
In spite of the fact that these types of questions do not allow the respondent the opportunity to express his opinion, the researcher chose it because they are easy to administer and to fill. They keep the respondent’s mind fixed to the subject matter. It also facilitates the process of tabulation, analysis and scientific generation. In order to accommodate the flows of the checklist questions, the open-ended question was incorporated into the questionnaire. Though the open-ended question does not provide fixed answer, they allow the respondents enough room to reveal their motives and express their individual preferences. A copy of the questionnaire has been attached as one of the appendices at the end of the completed work.
3.6.3. Data Analysis Techniques.
The data for this research work were quantitatively and quantitatively collected. They were also statistically and socially analyzed to determine the management and control of inventory in manufacturing companies. Statistical analysis of data involved the following:
Ø Frequency table: for ascertaining the number of occurrences of phenomena of interest.
Ø Percentages
Ø Chi-square (X2)
The chi-square (x2) test can be used for one, two or more variables. The purpose of this test is to determine how well on observed set of data fits an expected set of subject. (Baridam 1995:171). Chi-square is applied in the following situation.
a.      When there are two variables drawn from independent samples each of which is categorized in two ways e.g. “Yes” or “No” responses.
b.      When the data are none metrics, when the data are expressed in frequencies (Asika, 1991:136).
The computation of chi-square ratio requires the determination of expected frequencies for each of the cells in the tables subtracting each cell, squaring this differences, dividing by the expected frequency / or the cell and then summing up all the quotation.
The formula for chi-square (X2) is thus:
X2        =          ∑ (0-e)2
                         e
Where:
X2  =  chi-square
o =    actual or Observed frequency
e=     expected frequency. Fig.II
Decision Rule:
        The null hypothesis (Ho) was accepted when the computed value of X2 was less than the tabulated value of X2 for (R-1)(C-1) degree of freedom.
Where: R=Number of rows.
C= Number of columns
        On the other hand, social analysis of data involved aspects of phenomenological analysis.
       Phenomenological is a new star in the research horizon. As a qualitative research parading, it basically seeks to make explicit and implicit structure and meaning of human experiences (Atkinson, 1972). The form of analysis is concerned with the in which we come to know live experiences of other. It is the search for “essence” that cannot be revealed by ordinary observation Uzoma, 1992). The researcher included phenomenological analysis in the study because certain types of behavioral phenomena elude quantification and statistical inference.



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