CHAPTER 1,2,3 (With Page Number)

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ACLC College of Butuan City
HDS Building, 999 J.C. Aquino Avenue, Butuan City
CHAPTER I
COMPANY BACKGROUND
Mom’s Finest Buffet Palace, as its name suggests is a type of dining place
where diners pick and serve themselves food from the counter where the dishes are
placed.Mom’s also offers catering services for a minimum of 50 people with a price of
₱150 per head. They only rent the service vehicle they use in order to get to the venue
where they would render their service. It is a corporation founded on August 23, 2007
owned and operated by its shareholders namely Ms. Nanette Khe, Ms. Analita Tan,
and Ms. Maria Theresa G. Tiong together with their husbands who are also
shareholders of the company. The business began with a capital worth of
₱800,000.00. Mom’s Finest Buffet serves local dishes such as Pork Adobo, Four
Season, Stir-fried Noodles, Fried Chicken, Beef Steak, Caldereta, and a lot more with
a current price of P180.00 per head. Theyalso accept catering serviceswhich the
number of people to be catered starts at fifty (50) headsonwards having the price of
₱150.00 for each person. The business is located at Rudy Tiu Building III, North
Montilla Boulevard, Butuan City where the company has been renting from the time it
started up to present. The marketing strategies they are using are word of mouth and
building good relationship with its customers.
The business has five (5) employeesfilling the positions of the chef, the chef’s
assistant, the waiter, the utility staff, and the manager who also at the same time fills
in the cashier’s position. The Operational Hours of the restaurant is between 11:00
A.M. and 9:00 P.M.Some of Mom’s Finest Buffet’s competitors are Budget Foods,
Roldan’s Eat-all-you-can, Kulinarya De Dabaw, Ollie’s, Cabalen, etc. Its target market
is the lower class to middle class individuals of Butuan City, Agusan Del Norte.
1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

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RESEARCH INNOVATION EXTENSION DIVISION
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PARTNERS
MANAGER/CASHIER
a
m
o
Assistant
u Utility
Chef Waiter
Cook
n Staff
t
o
Figure 1.Organizational Chart of Mom’s
f Finest Buffet Palace
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Owners- mandate the over-all operations
0 and changes in the business. The owners
0
are involved with budgeting and monitoring
, the in-coming and out-going inventories.
0
Manager- is responsible for overseeing
0 and leading the work of the people in the
0
restaurant. Manager is also involved
. in overseeing goods purchased and stored.
0
Cashier – its job is tomanage cash 0 and sales transactions. This position is filled in by
.
the manager herself.
Chef– responsible for cooking the dishes in the menu that is to be served to the
customers and ensuring the quality and taste of their food. The chef is involved in
determining the items that needs to be purchased for food preparation.
Assistant Cook- is responsible for fulfilling routine services and other duties in the
kitchen and maintain as well as all the utensils and materials. Assistant cook helps in
purchasing of goods and transferring them from the storage room to the kitchen.
Waiter– although the business is a self-service type the waiter’s job is to assist
customers and aid whatever dining needs and concerns they may have, and checks

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on the customers to ensure that they are enjoying their meals and take action to correct
any problems. Waiter helps in purchasing goods, transferring them, and monitoring.
Utility Staff– maintains the cleanliness of the entire place. Its job includes the proper
disposal of wastes, garbage segregation, and sanitizing areas susceptible to bacteria
such as the comfort room and kitchen. The utility staff is also involved in purchasing
and monitoring inventories.
Case overview
Mom’s Finest Buffet Palace has one service door that serves as both its
entrance and exit. It has fifteen (15) tables and fifty (50) chairs to accommodate the
customers. It also has a front desk that serves as the counter where customers’
concerns are attended and payments are received by the cashier.
According to the conducted preliminary interview, Mom’s Buffet’s daily routine
includes its employees coming to the restaurant at 8:00 AM to prepare the place for
incoming customers. The chef also starts cooking and preparing the menu that they
would serve for lunch and dinner such as Pork Adobo, Four Seasons, Bihon, Fried
Chicken and Beef Steak. However,if the dishes are all consumed during lunch, the
chef would have to cook the same dishesto cater more customers until dinner time.
From the management perspective they just let their guests find their seats
since it is a self-service type of diner. According to the manager, they have two menus
which consist of five dishes each that they alternately serve every week which includes
rice, a couple of desserts, and fruits. The restaurant is open for the customers at 11:00
AM and closes at 9:00 PM during weekdays and Saturdays, and 11:00 A.M. to 2:00
P.M during Sundays.
According to the management, they get their supplies such as meat and
vegetables and other ingredients mostly from Langihan Public Market and Goodyear
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Enterprises, also they are supplied with chicken drumstick by Magnolia which is
located in Taguibo, Butuan City. The price of the chicken they get from Magnolia is
₱150/kilo which is cheaper compared to the Goodyear’s price which is ₱180/kilo.
When they order chicken from Magnolia, the manager said they would first make a
phone call to the supplier to place order; Magnolia would immediately prepare and
deliver the order as long as the supply is readily available.However, they also stated
that there are times when Magnolia is not able to supply the chicken that they need
forcing them to buy somewhere else which would costs them an additional 30 pesos
per kilo if they buy from Goodyear.
According to the manager, during purchasing process, they only determine
which items are needed to be acquired and purchase its quantity according to their
personal judgment. The manager said that since during the years 2016 to 2018 there
were too many stocks of inventories, some goods were not used especially those that
has best-before dates which got expiredsuch as the Soy Sauce, Vinegar, and other
perishable goods that has life span not longer than 2 to 3 days which are the
vegetables and fruits. They were only found out to have reached the expiration dates
when the manager one time was able to check their stocks because according to her
she realized that there were already too many items in their storage room. Those
expired and spoiled items were then thrown so as for it not to be mixed with items
that can still be used for production. Moreover, the left-over food which are not sold
for the day or were not fully consumed by customers are then consumed by
employees or immediately disposed.
Purchasing is done when someone checks and finds out that an ingredient is
running out. For instance when they are running out of pork or there is totally no more
pork left; that will be the time the management does purchasing. And when they do
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this they usually buy them in bulks. The manager said they would buy and store up
twice or thrice the amount they need for the whole week. The manager added that
there were times when some of these goods started to spoil or be damaged long
before it is needed for food preparation.
In addition, the manager who is also in charge of the inventories said that there
was never an instance where she listed down those ingredients that got spoiled and
expired but asks the male employees to dispose them immediately. They also said
that they are not able to consistently check the shelf life of the goods because
according to the manager herself, she cannot keep track on this because she has a
lot of things to do since she also serves as the cashier.
Table 1.Sales Data of Mom’s Finest Buffet Palace for the years 2014 -2018
YEAR SALES
2014 ₱6,267,750.00
2015 ₱6,991,710.00
2016 ₱5,836,270.00
2017 ₱4,426,100.00
2018 ₱4,085,982.00
In the table above for the Sales of Mom’s Finest Buffet, it can be observed that
the movement was increasing during years 2014 towards 2015. Although it was on
2015 that the sales were on its highest which amounted to ₱6,991,710.00, there was
only a 2.33% increase from 2014. However, on the following year (2016) the
restaurant’s sales began to decline. The sales went down 9% from the previous year’s
sale which amounted to ₱5,836,270.00. On the following year (2017) there has been
a 24.16% decrease which was an amount of ₱4,426,100.00. On the following year
(2018) the sales went down to a 7.68% decrease amounting to ₱4,085,982.00. The
manager said that prior these years, the business’s sale were much higher, the

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manager claims that there were even instances when the sales were higher than the
cost of preparing food.
According to the manager, the time when they were at their highest sales was
during the years 2011 to 2013. Manager said that these were their most prosperous
years because the sales were much higher also yielding them high profits. Employees
were still given bonuses and other benefits aside from their SSS and PhilHealth
compensations. However, even with this positive result the business went on with their
same patterns in terms of its service. Food served did not change and there was no
addition in the menu. The business also still does not have a branch despite of its
ability to expand during those prosperous years.
When the business began to experience some shortages and sales were
beginning to lower down, the management tried to make more effort into drawing more
customers by promoting their business in social media. It was in 2016 that the
restaurant created a page in Facebook which showed and advertise the kind of service
they render and uploaded photos of their food to entice people to visit their buffet place.
It can also be seen in some posted photos that there were famous personalities who
have dined in at the place. The management also posted posters and tarpaulins on
different parts of the city as its other way of promoting their business. However, despite
the extra effort of the management it can still be seen that the sales still continued to
decline. As of today, the management has not been updating its Facebook page since
it can be seen that the last time they posted an ad for their business was July of last
year.
Table 2.Ending Inventories Data of Mom’s Finest Buffet Palace for years 2014 – 2018
YEAR ENDING INVENTORY

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2014 ₱92,362.25
2015 ₱79,724.75
2016 ₱212,268.50
2017 ₱289,105.70
2018 ₱332,605.15
ENDING INVENTORY
AS OF DECEMBER 31, 2014
ITEM DESCRIPTION UNIT QUANTITY UNIT PRICE PAID AMOUNT
MEAT
Pork 24 Kilograms ₱180.50 per kilo ₱4,332.00
Beef 18 Kilograms ₱230.00 per kilo ₱4,140.00
SEA PRODUCTS
Barilis Fish 16 Kilograms ₱300.00 per kilo ₱4,800.00
Shrimp 13 Kilograms ₱95.50 per kilo ₱1,241.50
POULTRY PRODUCTS
Chicken Legs and Wings 28 Kilograms ₱130.00 per kilo ₱3,640.00
Quail Eggs 11 Trays ₱85.00 per tray ₱935.00
Eggs 16 Trays ₱160.00 per tray ₱2,560.00
NOODLES/PASTA
Pancit Canton 28 Kilograms ₱200.50 per kilo ₱5,614.00
Bihon 24 Kilograms ₱190.75 per kilo ₱4,578.00
Macaroni 14 Kilograms ₱ 160.50 per kilo ₱2,247.00
VEGETABLES
Broccoli 9 Kilograms ₱185.00 per kilo ₱1,665.00
Cauliflower 15 Kilograms ₱145.50 per kilo ₱2,182.50
Carrots 22 Kilograms ₱25.00 per kilo ₱550.00
Potato 20 Kilograms ₱50.25 per kilo ₱1,005.00
Mushroom 14 kilograms ₱110.00 per kilo ₱1,540.00
FRUITS
Tomato 15 kilograms ₱45.00 per kilo ₱675.00
Mango 35 kilograms ₱157.75 per kilo ₱5,521.25
Watermelon 24 kilograms ₱ 80.75 per kilo ₱1,938.00
CONDIMENTS
Garlic 12 kilograms ₱47.00 per kilo ₱564.00
Ginger 8 kilograms ₱110.00 per kilo ₱880.00
Kalamansi 15 kilograms ₱45.00 per kilo ₱675.00
₱
Del Monte Tomato Sauce 18 kilograms 125.75 per kilo ₱2,263.50
Cooking Oil 50 kilograms ₱45.50 per kilo ₱2,275.00
BEVERAGES

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Softdrinks 19 cases (8oz.) ₱125.00 per case ₱2,375.00

CROP PRODUCTS
Rice 10 sacks ₱3,000.00 per sack ₱30,000.00
Corn Starch 25 kilograms ₱45.00 per kilo ₱1,125.00
per
Corn 24 cans (425g) ₱35.75 425gcan ₱858.00
TOTAL PAID AMOUNT ₱92,362.25
ENDING INVENTORY
MEAT
Pork 22 kilograms ₱180.50 per kilo ₱3,971.00
Beef 12 kilograms ₱230.00 per kilo ₱2,760.00
SEA PRODUCTS
Barilis Fish 11 kilograms ₱300.00 per kilo ₱3,300.00
Shrimp 7 kilograms ₱95.50 per kilo ₱668.50
POULTRY PRODUCTS
Chicken Legs and Wings 24 kilograms ₱130.00 per kilo ₱3,120.00
Quail Eggs 15 trays ₱85.00 per tray ₱1,275.00
Eggs 13 trays ₱160.00 per tray ₱2,080.00
NOODLES/PASTA
Pancit Canton 25 kilograms ₱200.50 per kilo ₱5,012.50
Bihon 22 kilograms ₱190.75 per kilo ₱4,196.50
Macaroni 18 kilograms ₱ 160.50 per kilo ₱2,889.00
VEGETABLES
Broccoli 10 kilograms ₱185.00 per kilo ₱1,850.00
Cauliflower 19 kilograms ₱145.50 per kilo ₱2,764.50
Carrots 13 kilograms ₱25.00 per kilo ₱325.00
Potato 15 kilograms ₱50.25 per kilo ₱753.75
FRUITS
Tomato 15 kilograms ₱45.00 per kilo ₱675.00
Watermelon 24 kilograms ₱80.75 per kilo ₱1,938.00
CONDIMENTS
Red Onion 8 kilograms ₱47.75 per kilo ₱382.00
Ginger 4 kilograms ₱110.00 per kilo ₱440.00
Del Monte Tomato Sauce 13 kilograms ₱125.75 per kilo ₱1,634.75

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BEVERAGES
Softdrinks 16 cases (12oz.) ₱145.50 ₱2,328.00
CROP PRODUCTS
Corn Starch 20 kilograms ₱45.00 per kilo ₱900.00
per 425g
Corn 28 cans (425g) ₱35.75 can ₱1,001.00
ENDING INVENTORY
MEAT
Pork 74 kilograms ₱200.00 per kilo ₱14,800.00
Beef 59 kilograms ₱260.00 per kilo ₱15,340.00
SEA PRODUCTS
Shrimp 22 kilograms ₱100.00 per kilo ₱2,200.00
POULTRY PRODUCTS
Milk 31 kilograms ₱ 75.75 per kilo ₱2,348.25
NOODLES/PASTA
Macaroni 103 kilograms ₱160.50 per kilo ₱16,531.50
VEGETABLES
FRUITS
Tomato 43 kilograms ₱45.00 per kilo ₱1,935.00
CONDIMENTS
Garlic 26 kilograms ₱47.00 per kilo ₱1,222.00
Red Onion 24 kilograms ₱47.75 per kilo ₱1,146.00
Ginger 15 kilograms ₱110.00 per kilo ₱1,650.00
Lemon Grass 13 kilograms ₱10.00 per kilo ₱130.00

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Green Onion 14 kilograms ₱15.00 per kilo ₱210.00

Bell Pepper 18 kilograms ₱35.00 per kilo ₱630.00
Silver Swan Soy Sacue 24 gallons ₱125.00 per gallon ₱3,000.00
Mother's Best Oyster Sauce 15 (140oz.) ₱67.50 per 140oz. ₱1,012.50
BEVERAGES
Softdrinks 18 cases (12oz.) ₱145.50 ₱2,619.00
CROP PRODUCTS
Corn Starch 223 kilograms ₱35.00 per kilo ₱7,805.00
Corn 204 cans (425g) ₱29.50 per 425g can ₱6,018.00
Tapioca 39 kilograms ₱110.50 per kilo ₱4,309.50
ENDING INVENTORY
MEAT
Pork Meat 211 kilograms ₱190.00 per kilo ₱40,090.00
Beef Meat 174 kilograms ₱215.00 per kilo ₱37,410.00
SEA PRODUCTS
Shrimp 26 kilograms ₱100.00 per kilo ₱2,600.00
NOODLES/PASTA
POULTRY PRODUCTS
VEGETABLES
Cabbage 28 kilograms ₱80.00 per kilo ₱2,240.00
Potato 26 kilograms ₱47.50 per kilo ₱1,235.00
CONDIMENTS
per
Mother's Best Oyster Sauce 13 (140oz.) ₱70.25 140oz. ₱913.25

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Garlic 65 kilograms ₱ 45.00 per kilo ₱2,925.00

Red Onion 57 kilograms ₱ 46.50 per kilo ₱2,650.50
Tomato 30 kilograms ₱ 45.00 per kilo ₱1,350.00
Kalamansi 42 kilograms ₱40.00 per kilo ₱1,680.00
FRUITS
Tapioca 75 kilograms ₱100.00 per kilo ₱7,500.00
Watermelon 68 kilograms ₱ 75.00 per kilo ₱5,100.00
BEVERAGES
ENDING INVENTORY
MEAT
Pork Meat 139 kilograms ₱190.00 per kilo ₱26,410.00
Beef Meat 97 kilograms ₱215.00 per kilo ₱20,855.00
SEA PRODUCTS
NOODLES/PASTA
CROP PRODUCTS
POULTRY PRODUCTS
Egg 34 trays ₱150.00 per tray ₱5,100.00
CONDIMENTS
per
Silver Swan Soy Sauce 32 gallons ₱120.45 gallon ₱3,854.40
per
Silver Swan SukangPuti 14 gallons ₱97.50 gallon ₱1,365.00
per
Mother's Best Oyster Sauce 38 (140oz.) ₱65.50 140oz. ₱2,489.00
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Red Onion 20 kilograms ₱46.50 per kilo ₱930.00
VEGETABLES
Cabbage 15 kilograms ₱79.00 per kilo ₱1,185.00
FRUITS
BEVERAGES
₱ per
Drinking Water 50 gallons 20.00 gallon ₱1,000.00
Shown above is the annual data of the ending inventories gathered by the
researchers from the record of inventories disclosed by Mom’s Buffet’s management.
It can be observed from the table above that the ending inventories of the business
have been increasing during the years 2016 to 2018. Prior this increase, it can be seen
that during 2014 to 2015 the ending inventories were in a decreasing movement. The
increase in the ending inventories is caused by the overstocking that happened during
2015 towards 2016 since the management’s method of purchasing is in bulks. This
increase indicates that the restaurant has purchased more goods than it has used for
food preparation. It was found out that too much stock were kept which some has
already spoiled and expired before it were supposed to be used which according to
the manager made their funds become scarce during those years.

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However, the problem about these spoiled ingredients is that it can no longer
be retrieved since the manager has never listed these wastes and how often did the
ingredients spoil during those years.The manager also added that when this happened
their management started to lay off some employees and cut costs to save funds, the
air-conditioner is only turned on when there are a lot of customers but when there is
only one or a couple of them, they only use the electric fan. The manager also claims
that some ingredients were reduced in certain serving amount. For instance, instead
of putting four (4) cans of liver spread in their Chicken Caldereta, they now only put
two (2) cans of it, the manager added.
Moreover, the manager also stated that originally from the time it started, the
price was ₱120.00 per head, due to customer demand and other factors such as the
inflation the management decided to increase their price to ₱150.00per head in 2014.
However, manager said they kept changing their prices from 2016 to 2018 due to
insufficiency of funds. From ₱165.00 in 2015 it increased to ₱170.00 per head in 2016
and another five-peso increase in 2017 making the price ₱175.00 per head, and again
increased to ₱180.00 in 2018. It was also during these years that the debts of the
business started to grow higher. According to the manager, since their establishment
is on lease which costs ₱50,000.00 per month, they still have balance that is yet to be
paid.
Table 3. Food Wastage Data of Mom’s Finest Buffet Palace for years 2014-2018
YEAR FOOD WASTAGE

2014 ₱62,250.00
2015 ₱36,300.00
2016 ₱283,730.00

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2017 ₱1,943,900.00
2018 ₱2,466,000.00
Shown on the table above is the amount of wasted food incurred during the
given years. It can be observed that on the first two years (2014-2015) the wastage
was way lower than the following years; in fact it was in a decreasing movement which
was positive during the time since it depicts that food cooked and prepared during
those years were all sold and consumed. Meanwhile, on 2016 the amount of wastage
started to go up 87.21% from previous year following an 85.40% increase in 2017 and
a 21.17% increase in 2018. This wasted amount of food refers to those foods that
were left uneaten during operations. This can be derived by subtracting the actual
earnings of the day from the expected earnings. However, according to the manager,
there were instances where the expected earnings were not met yet the whole serving
was fully consumed. It depicts the differences of the consumption capacity between
customers, which is why the management came up to a strategy of delaying the refill
of the emptied pots so as to control the number of times customers refill their plate.
Despite the drastic increase in the restaurant’s food waste, the management
did not reduce or change their estimation of the amount of food they would prepare
which is good for 100 hundred persons. The management of Mom’s continued
operating with its same pattern in estimating the number of customers they expect to
dine.
Table 4. Total Number of Customers of Mom’s Finest Buffet Palace (2014-2018)
YEAR NUMBER OF CUSTOMERS

2014 41,785
2015 42,374
2016 34,331
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2017 25,292
2018 22,700
It can be observed on the table above that the number of customers were
higher during the years 2014 and 2015 also indicating that the sales during these years
were higher than that of the following years. At the beginning of 2016, the number of
customers started to decline which continued until 2018. According to some
customers, they find the current price per head just a little too costly. Moreover,
manager said that even during peak hours which are during 12:00 P.M. to 2:00 P.M.
their customers were not as many as the prior years. She also added that the rise of
more food businesses in the city affected their number of customers since during these
years food parks, food chains, and other food-servicing businesses were starting to
open.
Employee’s sentiments
Based on the interview conducted by the researchers to Mom’s Buffet’s
employees, they said that the organization has a friendly environment and an equal
treatment for all. They share experiences and happiness for being part of the
company. Although not all of them are given the minimum wage of Butuan, they said
it is enough because they are given meals for free any time during work hours. The
manager and the chef are given the daily minimum wage which is ₱320.00; the rest of
the workers’ pay is ₱224.00 per day, and these salaries are given twice every month.
Some of the employees prefer to not deduct their salaries to compensate for their SSS
and Philhealth benefits in order for them to get their full salaries during pay day.
In terms of the restaurant’s inventory management, most employees say that
when they purchase goods for production, they usually buy in bulks and they do this
without doing prior reviews on previously bought items. When the researchers asked

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the manager if she knew about the First-In, First-Out (FIFO) method of inventorying
goods, she says that she just does estimations and does not have rotations and proper
listing, recording, and labeling of goods.
Customers’ feedback
According to some of the customers of Mom’s Finest Buffet palace corporation,
they were satisfied on the food that the restaurant offers because of their quality and
taste. Some customers also said that the price is reasonable which is ₱180.00 per
head. However, others said that the price is quite high for an eat-all-you-can diner
which is why they opt to dine in other eat-all-you-can restaurants where the prices are
cheaper. At the same time some of them suggested that the restaurant would care to
put more variations with their desserts and fruits since they only serve Tapioca, Maja
Blanca, Maraconi Salad, and Watermelon for fruits. Letche Flan or Mango Float would
certainly be a nice addition said one customer. They also said that the restaurant’s
ambiance is quite dull, although they have a television but it does not really entertain
the customers.
Moreover, based on the brief conversation the researchers have with some of
the customers met at the location, when customers ask for assistance the employees
are slow to attend to them and also when the stock pots are emptied it is not refilled
immediately leaving customers waiting & unsatisfied with the amount of food they have
consumed. Some customers’ complaints are about the dishes they serve because
according to them it lacks variety considering they only have a couple of menus that
consists of five dishes that is served every other week. Another complain from a
customer is the taste of the food; she claims that the beef steak served is somehow
bland and four seasons are lacking cauliflower but has more carrots on it.
Case Problem
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Based on the preliminary evaluation, some of the problems that the restaurant
is facing are the following: (1) increased ending inventories from years 2016 to 2018;
and (2) increasing amount of food wastage from years 2016 to 2018.
Objectives of the Study
Specifically it aims:
1. To assess the inventory management practices of Mom’s Finest Buffet Palace.
2. To identify the causes of the continuous increase in the ending inventories of
Mom’s Finest Buffet Palace for the years 2016 – 2018.
Scope and limitations
This study focuses on the Inventory Management Practices of Mom’s Finest
Buffet Palace, more specifically in the areas of Inventory Planning,Inventory Ordering,
and Inventory Monitoring. Furthermore, the databeing used in this study is limited to
the company’s disclosed financial statements, record of inventories, and the annual
sales data during the years 2014 to 2018.
Definition of Terms
Terms were defined according to their operational functions.
Ending inventories. These are goods or ingredients that were left unused
during the year.
Inventories. These are goods purchased, stored, and used by the company.
Inventory management. This is the overall handling of the acquired, stored,
used, and those left inventories of the business.
Inventory monitoring. Is the process of observing, checking, and tracking of
all acquired, used, and remaining inventories.

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Inventory ordering. Is the process of acquiring the goods needed for food
preparation of the restaurant.
Inventory planning. This is process of menu designing, budgeting, and
estimation of number of customers.

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CHAPTER II
REVIEW OF RELATED LITERATURE
This chapter contains literature reviewed from the online platforms that served
as background for the conducted study. Reviewed articles acquired discussed the
importance and role of inventory management in every business specifically on food
industries and the practices involved in the process. Areas of the inventory
management reviewed for related literature were inventory planning, inventory
ordering, and inventory controlling.
According to LaMarche, Stubenrauch, Corti, &et. al. (2016) inventory planning,
inventory ordering, and inventory monitoring are functions relating to inventory
management. Business owners pay close attention to inventory as it usually
represents the second largest expense in their business. Inventory planning includes
creating forecasts to determine how much inventory should be on hand to meet
consumer demand. Inventory ordering and inventory monitoring are both functions that
involve process of controlling by which managers procure, count, and maintain
inventory items in the business.
Inventory Planning
Greenough, Fowler, & Beckwith (2017) stated that planning is the very
foundation of effective inventory control.Good inventory management, like everything
else, starts with good planning.Inventory planning touches a number of supply chain
components and includes all the decision-making responsibilities associated with the
acquisition and deployment of inventory, which can include raw materials, work-in-
progress, and finished goods depending on the type of business one is engaged in.
Good inventory planning supports a number of vital business objectives including:

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customer service and satisfaction, supply chain efficiency, control of costs, accurate
sales and demand forecasting. The physical impact of poor inventory planning can
manifest itself in a number of ways, which include: Excess inventory and
obsolescence, Inventory shortages and out-of-stocks, frequent back-ordering, tension
between your company and its suppliers, customer dissatisfaction, excesses and/or
shortages of storage. It is based on the effective integration of processes, governance,
people, and technology. Before one can develop and implement a structure of
governance for inventory planning, a company will need to assess and implement the
necessary asset-mix, composed primarily of information-technology and people.
Morfydd, Metcalf, & et. al (2018) explains that conducting an inventory planning
like any other planning process always involves gathering and assembling ideas and
opinions from people who are directly involved with managing of inventories. This
process of planning must always align with the business’s goals and objectives from
which the management determines which course of actions it must take in order to
achieve their goal. Since inventory planning directly involves people and would be
impossible to carry out without the same, it is important that these individuals has a
clear picture of where the company is heading in order to come up with strategies and
tactics in proper handling and controlling of inventories. It is important that inventory
managers know what the business is trying to offer to its consumers; after having a
clearer understanding of what the business is dealing with, the manager then identifies
the kind inventory items the business needs to procure which is a very important
aspect in inventory management not only to be able to put the right materials into a
product but also to put right amount of items in the shelves. Another part of the
inventory planning process is the determination of commodity prices from supplier to
supplier which is a strategic way of minimizing inventory costs.

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According to Stockford & Roxborough (2019) business owners usually create
internal policies and procedures for inventory planning. Managers and employees
must follow these policies and procedures when handling the company’s inventory.
Policies and procedures outline who can order inventory, how inventory flows through
the company, accounting policies for valuing inventory and procedures to deal with
obsolete goods. Inventory planning has several benefits for companies who derive the
majority of their revenue sales from inventory.
McLeod, Queffelec, &Marsman (2018) stated that inventory planning are
medium-term decisions usually spanning between six months and one year. Inventory
planning are made within the limitations of the overarching strategic supply chain
decisions, in other words, they are planned towards accomplishing and executing the
strategic level decisions. Inventory planning aims at creating medium-term schedules,
and plans with the aim of better utilizing the configuration established, and at the same
time identifying medium-term policies related to production, material planning,
distribution, and storage. Furthermore, inventory planning help in ensuring efficiency
in production, distribution, and other operations that add value to the product and to
maintain a specified level of service and product quality in a cost-effective way.
Capturing inventory planning decisions in configuration and network design problems,
lead to improved solutions in terms of optimal network infrastructure that enhance the
usage and allocation of production, storage, and distribution resources to meet the
end users’ demand with a specified service level and cost.
(Bennet 2016 & Sedaris 2015) explains that reporting and analytics are critical
features of restaurant inventory management that help in restaurant operations. The
sales reports and raw material usage helps forecast and create plans. Profit and loss

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reports are generated depending on the stock sale and consumption. Analyze
inventory trends - a manager can analyze the inventory trends to make informed
decisions such as deciding the menu. Detailed reports based on the consumption of
each stock gives insights on which ingredient is the most popular, and needs to be
utilized more in the recipes.
Allen, Grossman, & Cohn (2018) believe that inventory management cannot
fall entirely on one person – especially in enterprise restaurants or businesses with
multiple locations. Managers and shift leaders should be delivering detailed inventory
reports whenever they clock out and alerting the team of any major outage or issues.
This responsibility also falls on the restaurants line of cooks and back-of-house staff
who should be making notes of spillage, errors, and rotten food whenever they come
across it. Teaching staff to become inventory experts or dedicated mathematicians
might be tough, but it's easier if the manager incorporates an easy-to-use inventory
system for their employees.
Inventory Ordering
Rehwaldt and Neveu (2019) explain that ordering is the mechanical part of
inventory management. They are the programs that take our forecasts, actual orders,
safety stock, and order quantities and turn them into purchase orders or production
orders. Due to their mechanical nature, there’s not a lot of theory when it comes to
ordering systems. Basic ordering systems include periodic review, fixed order point,
min-max, and multi-bin systems.
Base on the study of Balle (2017), evaluating the items the store might buy is
one of the first steps of the inventory ordering and purchasing process. The
management should always be concerned with the quality and ensure that they do not

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receive a low-quality product. The suppliers and the retail store should create an
agreement listing all the conditions like price, price discounts, rules of return,
exchanges, freight payment and payment terms. In ordering stocks, a purchase order
containing all the exact items that a store needs for inventory is sent to the suppliers
to serve as commitment to buy the items. A purchase order is used as a reminder of
what inventory do they have. This can help to avoid double ordering of merchandise
through connecting with a POS they can easily track their inventory and it’s easier for
them to decide the ideal number of inventories to be ordered (Hiiemaa, 2018).
There are three (3) parameters used to know when the store needs to re-stock
their inventory to not cause a late order again. First, the maximum inventory is one of
the parameters. This sets the maximum number of units to keep in the inventory for a
given item. The level varies from one company to another based on their requirements
and scale. Second parameter is the minimum inventory. This replenishment parameter
sets the level of minimum inventory that the store wants for their stock. If the stock
goes below the set quantity, it can cause problems in meeting customer demand. The
third parameter is the re-order point. This point states when an item reaches a certain
stock level, it needs a replenishment order. There is generally a re-ordering policy that
is used to determine this point (Johnson, 2018).
Accurate information of stock levels enables the store to improve ordering
efficiency. A store can use inventory database to determine opportunities to reduce
delivery costs by grouping certain orders and maintaining suitable stock levels. Having
supplier information on hand also makes it easier to place orders or find other suppliers
if one cannot keep up with the delivery requirements (Warren, 2015).

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According to lnasur (2019) it is necessary that a restaurant manager knows the
amount of perishable goods it needs for a given period of time. This is why it is
important that a manager keeps a record of inventories and reviews them regularly or
during purchasing periods in order to get a better idea of the needed amount of items.
For example, there has been an estimated amount of goods that are needed to be
used for the entire week, ordered or purchased goods should have been stored maybe
one or a couple of weeks prior the usage. However, estimating how often and how
much to order is also one of the controls of ordering. Every time a supplier’s truck
stops, the costs to the supplier, and consequently the restaurant or foodservice
operation, go up as well. It would stand to reason, then, that less-frequent orders would
be best for the organization. However, this is not always true for two reasons. First, if
fewer orders are being placed, the inventory level must be higher. Finally, some goods
cannot be stored for an extended length of time and may need to be ordered
frequently.
Inventory Monitoring
Waselcouch, Bunch, and Headey (2018) explain that monitoring inventory
generally deals with the tracking and checking of inventories and all other practices
involved in the same. It also deals particularly on the recording of all acquired
materials, used materials, wasted materials, and the residual materials.
Howes & Lainsbury (2018) believes that regardless of whether you have a
specialized inventory management system or run on a paper spreadsheet, be sure
you are tracking everything that comes in and out, every time. Hold your employees
accountable for checking inventory before signing for it. Also, when you check
inventories daily instead of weekly, bi-weekly, or monthly, you'll be able to track and
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respond to minute by minute changes in your restaurant, allowing you to make timely
adjustments to your restaurant's inventory planning and your provision deliveries.
Knowing where things are and being able to access them quickly increases sales and
keeps your workforce on task. You might consider adhering labels to your shelves to
identify what’s stored there, or drawing out a map of the stockroom. Try chunking your
inventory into groups (dry goods, freezer, refrigerator, paper supplies, office supplies,
uniforms, etc.) to make it easier to locate what’s needed quickly. Taking inventory is
an unpopular task at most restaurants, but one that is critical to controlling food costs
and improving profitability. Yet, when we speak with restaurant owners, many admit
that they either do a poor job at it, or do it infrequently. In most cases, the underlying
issue is a lack of structure around the inventory-taking process.
According to Ghosh (2018), counting the materials received, making physical
inspection of products received, comparing the products received with the description
on the purchase order, making a record of products received, and notifying the supplier
should be done to discover discrepancies and damage in products.
McKay, Cooke, & Lajongquiere (2019) suggest that managing the restaurant
inventory is essential to avoid wastage. Also, ordering when required helps avoid
wastage. Make sure that items are being used on a First in First out (FIFO) basis. That
is, use the older stock first. Only when the previous stock has been used up, use the
newly purchased items to prevent wastage. Determining shelf-life is an integral part of
inventory management for restaurants. Each item in the inventory has a specified shelf
life. Some items like rice can last for years, while some, like vegetables, have a life
before they spoil. Therefore, managing the shelf life of perishables is essential.
Managing of shelf life involves tracking thedate it was stored, awareness of a

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perishable good’s ideal usage period, and identifying its best-before labels. For each
of the items in the inventory, the manager can specify for how long they can be
preserved and subsequently used, before getting spoiled. If due to slow sales or some
other reason, the items were not used during that period, the manager will be notified,
along with the reason for the incident.
(Green, 2017) explains that FEFO, First Expired, First-Out, is similar to FIFO in
that items closest to the expiration will be shipped first. The “E” refers to the expiration
date of the product. The APICS Dictionary defines FEFO as “a picking methodology
assuring that the usage shelf life of items is optimized.”
First Expire, First Out (FEFO) is the products closest to expiration in your
inventory are shipped first, according to Harris, (2015). Batilong, (2016) explains that
the level of controlling you need over expiration dates will ultimately depend on the
types of food you handle. Products with the earliest expiry date are sold first regardless
of when they were received in the FEFO inventory management method.
Wilmington, Smith, & et. al., (2015) says that FEFO is mainly used in the food
industry and where it is necessary to monitor the expiration date or period of durability,
based on According to Wilmington, et al (2015). First Expired First out (FEFO) is an
inventory management method that allows for products with the shortest shelf-life to
be distributed first. The FEFO method requires, regardless of the date of entry or
acquisition, that inventory with the earliest expiration date (or shortest shelf-life) to be
handled first.

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CHAPTER III
METHODS OF RESEARCH AND PROCEDURE
This chapter discusses the research method used, methods of data collection
and development instrument, sampling design and statistical treatment.
Research Method Used
The type of research method used in this study is descriptive research. It is
descriptive because it describes the situation of the inventory management practices
of Mom’s Finest Buffet Palace, specifically on the inventoryplanning, inventory
ordering, and inventory monitoring areas of the restaurant.
Methods of Data Collection and Development Instruments
In gathering the data needed for the study, the researchers made a letter of
consent to respondents in conducting the survey. After the approval, the researcher
fully explained the purpose of research in every respondent and assured them that
their views are confidential and will only be used for academic purposes.
The researchers made a structured questionnaire, a rating scale type question.
The questionnairewas set in four categories: Inventory Planning, Inventory Ordering,
and Inventory Monitoring.
The researchers waited for the respondents and survey questionnaires were
given personally during their break time. The researchers assistedthe respondents in
answering the survey, so that, whenever the respondents have any queries regarding
the survey questions, the researchers could then attend to them. The researchers
waited until such time the respondents are done answering the questions. After the
respondents answer the questionnaires, the data sheets will be collected. The data
will be collected within a day.After collecting all the necessary data, these data will be
encoded. The data will be tallied and counted based on the individual response. The
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data will be interpreted through the use of weighted mean. Weighted mean will be
used to identify each answer where they frequently belong. Finally, a research report
will be written from the analyzed data in which conclusions and recommendations will
be made.
Sampling Design
The researchers will be using purposive - complete enumeration sampling
method. Purposive because the respondents of the study are the employees involve
in food preparation processand those who are involved in the inventory management
of Mom’s Finest Buffet Palace. Complete enumeration because all the staff
participating in managing of inventories and food preparation process were considered
as key participants in this study. The participants involved are the three (3) owners,
the manager, the chef, the assistant cook, the waiter, and the utility staff, totaling to
eight (8) respondents that will take part in this research study.
Statistical Treatment
The researchers will be using the Weighted Mean in presenting the data.
Frequency Distribution will be used in organizing the data and Likert Scale Model in
analyzing the data.
Rating Scale Rating Verbal Description Qualitative Description

3.26 - 4.00 4 Always Practices are implemented
and followed at all times.
2.51 – 3.25 3 Often Practices are implemented
and followed most of the
time.
1.76 – 2.50 2 Sometimes Practices are implemented
and followed a few
instances; rarely
implemented and followed.
1.00 – 1.75 1 Never Practices are not
implemented and followed.

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shareholders of the company. The business began with a capital worth of

building good relationship with its customers.

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

determining the items that needs to be purchased for food preparation.

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

disposal of wastes, garbage segregation, and sanitizing areas susceptible to bacteria

and monitoring inventories.

concerns are attended and payments are received by the cashier.

According to the conducted preliminary interview, Mom’s Buffet’s daily routine

P.M during Sundays.

₱150/kilo which is cheaper compared to the Goodyear’s price which is ₱180/kilo.

per kilo if they buy from Goodyear.

According to the manager, during purchasing process, they only determine

employees or immediately disposed.

before it is needed for food preparation.

lot of things to do since she also serves as the cashier.

a 24.16% decrease which was an amount of ₱4,426,100.00. On the following year

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

cost of preparing food.

ability to expand during those prosperous years.

YEAR ENDING INVENTORY

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

Softdrinks 19 cases (8oz.) ₱125.00 per case ₱2,375.00

TOTAL PAID AMOUNT ₱92,362.25

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

Cooking Oil 38 kilograms ₱45.50 per kilo ₱1,729.00

TOTAL PAID AMOUNT ₱79,724.75

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

Green Onion 14 kilograms ₱15.00 per kilo ₱210.00

TOTAL PAID AMOUNT ₱212,268.50

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

Garlic 65 kilograms ₱ 45.00 per kilo ₱2,925.00

TOTAL PAID AMOUNT ₱289,105.70

Garlic 22 kilograms ₱45.00 per kilo ₱990.00

TOTAL PAID AMOUNT ₱332,605.15

researchers from the record of inventories disclosed by Mom’s Buffet’s management.

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

two (2) cans of it, the manager added.

YEAR FOOD WASTAGE

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

Table 4. Total Number of Customers of Mom’s Finest Buffet Palace (2014-2018)

YEAR NUMBER OF CUSTOMERS

customers started to decline which continued until 2018. According to some

Based on the interview conducted by the researchers to Mom’s Buffet’s

In terms of the restaurant’s inventory management, most employees say that

1BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION 2019

listing, recording, and labeling of goods.

According to some of the customers of Mom’s Finest Buffet palace corporation,

Objectives of the Study

1. To assess the inventory management practices of Mom’s Finest Buffet Palace.

2. To identify the causes of the continuous increase in the ending inventories of

Mom’s Finest Buffet Palace for the years 2016 – 2018.

Scope and limitations

This study focuses on the Inventory Management Practices of Mom’s Finest

Buffet Palace, more specifically in the areas of Inventory Planning,Inventory Ordering,

sales data during the years 2014 to 2018.

Terms were defined according to their operational functions.

during the year.

Inventory management. This is the overall handling of the acquired, stored,

used, and those left inventories of the business.