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THE IMPACT OF QUALITY RAW MATERIALS ON CUSTOMERS SATISFACTION

CHAPTER ONE 

INTRODUCTION 

1.1   BACKGROUND TO THE STUDY 

A raw material which could also be known as feedstock or most correctly unprocessed materials is a basic material that is used to produce goods, finished products, energy or intermediate materials which are feedstock for future finished product. Over the years business organizations are continuously faced with ethical dilemma as to what standard of raw material to use in production, how t source these materials and at what price could they be made available. Managers in purchasing and production department have a choice to make, their choice of raw material will determine if the finished product will serve the purpose for which it was produce and at the end create value for the customer. The use of quality raw materials will reduce customers dissatisfaction because quality finished product is expected to be the end of the production process. Raw materials that have the appropriate properties and high qualities are very attractive and necessary to ensure that the end product maintains a high standard suitable for its purpose. Hence, quality raw materials has in time past played a vital role in customers satisfaction and this forms the foundation of this project work. 

1.2   STATEMENT OF THE PROBLEM 

There is no research without an identified problem. In this research work however, some problems have been identified which could reduce the impact quality raw materials has on customers satisfaction. They include: Use of substandard raw materials for product.High cost of quality raw materials. Scarcity of quality raw materials. Ethical misconduct of purchasing managers.   

1.3   OBJECTIVES OF THE STUDIES 

This study is focused on the impact of quality raw materials has on customer’s satisfaction. This it hope to achieve by: 

1. To determine the effect of substandard raw material on customers satisfaction. 

2. To effect of non- availability of quality raw material on customer  satisfaction 

3. To examine the effect high cost of raw materials on customer’s satisfaction.

4. To determine the effect of ethical misconduct of purchasing manager on customer satisfaction. 

5. To determine the impact of quality raw materials on customer’s satisfaction. 

1.4   RESEARCH QUESTIONS 

As this project unfolds, these are questions that marathon the researchers mind, they include: To what degree does substandard raw materials affect customer’s satisfaction? Does scarcity of quality raw materials affect customer’s satisfaction? To what extent does high cost of quality raw materials affect customer’s satisfaction?What impact does ethical misconduct of purchasing officers and manager’s plays on customer’s satisfaction? What impact does quality raw materials have on customer’s satisfaction? 

1.5   HYPOTHESIS FORMULATION          

A hypothesis is a tentative statement which will be proven or subject to test. Below are some formulated hypothesis which would be subjected to test during the course of this project.                                                     

Ho:there is no significant relationship between substandard raw materials and customer’s satisfaction.  

H1: there is a significant relationship between substandard raw materials and customer’s satisfaction.  

Ho: there is no significant relationship between quality raw materials and customer’s satisfaction.  

H1: there is a significant relationship between quality raw materials and customer’s satisfaction.  

Ho: there is no significant relationship between high cost of quality raw materials and customer’s satisfaction.  

H1: there is a significant relationship between high cost of quality raw materials and customer’s satisfaction.

1.6   SCOPE OF THE STUDY          

This study focuses on the impact of quality raw materials on customer’s satisfaction in Agbarho delta state. In other to effectively and efficiently study this relationship, Rich well bakery Agbarho was chosen as a case study. 

1.7   SIGNIFICANCE OF THE STUDY          

The study will be of great significance to the bakery owners as it will help them know the impact of quality raw material plays on customer’s satisfaction. The satisfied customer’s is the best advertiser and this will enhance the organization’s wealth. It would also be of great significance to the customers due to the fact that quality raw materials will lead to a quality finish product which will satisfy customers’ needs. In conclusion it will add to the bulk of existing knowledge about the impact quality raw materials had played on customers’ satisfaction. 

1.8   LIMITATION OF THE STUDY          

There are some factors that limited this success of this study, these factors include the high rate of transport to the bakery being chosen as case study. The economic meltdown is another limitation as there was not enough finance available for the research.Lastly, not all the customers in the selected region were sampled or solicited information from. 

1.9   OPERATIONAL DEFINITION OF TERMS. 

There are some terms that need to be defined, these include: 

ü Customer: the online business dictionary defines a customer as a party that receives or consumes products (goods and services) and has the ability to choose between different products and suppliers. 

ü Satisfaction: this is the customer level of approval when a company product perceived performance with his or her performance.

ü Raw material: this is a basic material that is used in the production of goods, finished p or intermediate materials which are feed products, energy or intermediated materials which are feedstock for future finished goods.

ü Feed stock: this is raw material or input fed into a process for conversion into something different or output. Wheat flour is a feed stock for bakery.

ü Substandard raw material: those are raw materials that are not up to the quality required for the production of a standard finished product.

ü Impact: this is a measure of the tangible and intangible effects on consequences of one thing or entity’s action or influence upon another.     

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