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