Capacity Management Strategies and Service Quality in Petroleum Distribution Firms in Kenya
Abstract
Capacity is in the middle of every product or service an organization offers. No
business activity can take place without resources. The quality of product or service
offered depends heavily on the management of the resources involved. Capacity
Management is concerned with matching the capacity of the operating system and the
demand placed on that system. The study sought to establish the relationship between
capacity management strategies and perceived service quality in the oil distribution
sector in Kenya. To allow generalization of the research findings to several oil firms a
descriptive survey research was conducted. The entire population of 16 operation
managers was used to represent the oil companies. Stratified proportionate random
sampling technique was used to select the study sample for the customers. The study
population was 212 customers from which 64 were sampled. Data collected from
operation managers was to determine the capacity management strategies used in the
organization while sampled customers gave information on perceived service quality.
According to the study results, chase capacity management strategy is the capacity
management strategy mostly employed by firms in the oil distribution sector in
Kenya. The study also established that capacity management approach and service
context can interact and the interaction positively influences perceived service quality.
In conclusion the study found out that capacity management strategies have a positive
and significant effect on service quality in petroleum distribution sector in Kenya