IMPACT OF INVENTORY MANAGEMENT SYSTEM IN RETAIL STORES OVER CUSTOMER SATISFACTION - A CASE STUDY OF HYPERSTAR KARACHI

Abstract

Purpose- The purpose of this study was to find out the impact inventory management system in letail stoies over the satisfaction level of customers. Methodology/Approach- The data for study was collected by using likert scale questionnaire filled by 300 employees performing different functions related to inventory management of Hyperstar Karachi. Relationship between variables regarding performance of inventory management system and customer satisfaction was determined. Variables used for fonning opinion about inventory management system were accuracy of inventory records, accuracy of demand infonnation, information sharing with suppliers, effective replenishment process and effective reordering and delivery of inventory. Findings- The analysis of relationship between different variables of inventory management system and customer satisfaction showed that there is a strong positive relationship between the perfonnance of inventory management system and customer satisfaction. If the inventory is managed by the use of modem technologies and methods to improve efficiency and effectiveness of the processes involved, it directly improves the level of customer satisfaction. Practical implications- The results of this study can help the retail stores in improving their level of customer satisfaction by introducing process improvements in their inventory management system. When the customer satisfaction level improves, customers gets satisfied and visits the store regularly which increases the sales of retail stores. Furthermore if customers are happy with the availability of products in a particular retail store, they will tell their friends/family about this which increases the potential customers of that store. Ultimately, the customer base and loyalty of customers increases which in return increases the sales and profitability of the stoie.