Republic of the Philippines

CAVITE STATE UNIVERSITY

GENERAL TRIAS CITY CAMPUS
Town Proper, City of General Trias, Cavite, 4107
(046)437-0693
cvsugeneraltrias@cvsu.edu.ph

INVENTORY MANAGEMENT: A TOOL FOR IMPROVING PRODUCT STOCKING OF

UPDRIFT STORE MOLINO BRANCH IN THE CITY OF BACOOR.

GROUP 4

Agalos, Adrian

Cabauatan, Cheriza

Lugan, Shelly Marie

Marasigan, Mary Grace

Miquiabas, Morillia Bon

Robea, Stephanie

INTRODUCTION

Many different companies have been under pressure to streamline their supply chain, minimize
large inventories, and cut holding costs on inventory. In the past, inventory management has
focused on not running out of finished goods. This caused manufacturers to stockpile large
amounts of raw materials, work in process, and finished goods. The extra finished goods would
be to protect them from going out of stock. Inventory management has always been and will
always be a top priority for organizations.

The research topic is about having an accurate Inventory Management is a Tool on

Improving Product Stocking of Updrift Store Molino Branch in the City of Bacoor. According to
G Priniotakis and P Argyropoulos, Inventory management is the process of monitoring and
controlling inventory level and ensuring adequate replenishment in order to meet customer
demand.

Businesses that manage their inventories well are destined for success. Inventory is one
of a company's most important assets. Lack of inventory can be negative in a number of
businesses, including manufacturing, retail, and food services. (Waida, M. 2018). The goal of
inventory management is to minimize the cost of holding inventory, while keeping stock levels
consistent and getting products into customers’ hands faster. Inventory management is the heart
of a successful retail business. (Keenan, M. 2022)

The study is conducted to determine the reasons for the stock-out problems of the Store
which can really affect their customers, sales and income. This research aims to answer the
questions, what are the inventory practices they are using, and what concepts and techniques will
be adapted to improve the inventory management of Updrift Store. The objective of the study is
to determine the causes and effects of the stock-outs problem of the store and identify an
accurate management system for improving product stocking at the Updrift Store Molino Branch
in the City of Bacoor, Cavite.

To determine the stock out problems and the accurate inventory management that are
needed to improve, the researchers will use a qualitative approach in which they are going to
conduct an interview to gather necessary information for the research. At the end of this study,
they will be able to determine the causes and effects of stock-outs problems and recommend
solutions that would probably help the owner and the manager of Updrift Store Molino Branch in
the City of Bacoor, Cavite.

The two main benefits of inventory management is that, it ensures you are able to
fulfill incoming or open orders and raises profits. Inventory Management benefits manager in
saving money, improves cash flows and help in satisfying their customers. It also helps them to
identify which and how much stock to order at what time.

This chapter of the study is divided and formulated into five parts including the
introduction, research proposal, critical literature review, research design, and the theoretical
framework and hypothesis development. The introduction outlines the overview of the report
which includes the research problem, research objectives and questions, the scope of the study,
research method, managerial relevance and the structure of this study. The second part is the
research proposal which introduces the research title, background of the study, statement of the
problem, scope and relevance, research design, and bibliography. The third part is the critical
literature review which provides the context for the study by introducing the importance of
inventory management and causes of stock-outs. The fourth part is the research design of this
study and the detailed implementation of the research method. The fifth part is the theoretical
framework and hypothesis development.

BACKGROUND OF THE STUDY

Nowadays, anyone can start their own business because people can sell and purchase
goods in any marketplaces. In the beginning, new entrepreneurs may be able to manage their
businesses, but they will struggle with difficulties when their businesses are growing bigger.
Therefore, the new entrepreneurs need to learn business knowledge to operate the businesses.
Inventory management is a crucial asset for businesses as it enables them to minimize the cost of
inventory on a company’s balance sheet when they receive these goods. A business can sustain
steady profitability and customer loyalty by preventing stock-outs. Understanding how to prevent
stock-outs can help you keep products ready for customers.

To make sure you have enough inventories on hand and to spot when there is a shortage,
inventory management is an ability that a business owner must learn. Having a good inventory
management system is important for any business, regardless of the size of your organization.
Inventory counts let you identify which stock is moving well, and inventory managers frequently
utilize this information to forecast stock needs and manage. You can use it to calculate the exact
prices and keep track of all your goods. Additionally, it can assist you in managing unexpected
shifts in demand while maintaining budgets for product quality and customer satisfaction.

Updrift Store is a family business. It is apparel that focuses on shoes and shoes related
accessories. The Updrift Store Molino Branch was the first branch that opened last August 14,
2021. Enlightened by the above premises, the researchers envision conducting a study about the
business problem regarding to the out of stock problem of the said store. The researchers come
up with this topic to figure out the main problem of the store regarding through their stock outs.
In this research, researchers can help the business to figure out the causes and the problems of
the business and able to formulate solutions and providing suggestions to better improve the
business situation.

Since the business was established in 2021, it is new and the mere fact that they were
facing problems like these, there is always a solution to every problem encountered. Moreover,
the researchers need to help the business to find ways how to manage the inventory to improve
the business growth and to search ideas or support the business to grow and also to help the
business to achieve their customer satisfaction and retention. The primary focus of this research
is to leverage a better inventory management system to streamline the processes, save time and
money, and make the most of the store’s storage spaces.

For analyzing this research, the researchers try to find out how to have a good inventory
management by collecting all necessary information to support the research ideas in the analysis.
The steps used in research are searching for the problem that the store are facing right now and
finding the related data and quotes that support the theme until making the conclusion of that
analysis.

STATEMENT OF THE PROBLEM

This study aims to answer the following questions:

1. What inventory practices are used by the Updrift Store Molino Branch to manage their
inventory?

2. How can inventory management concepts and techniques be further adapted to improve the
inventory management in the Updrift Store?

RESEARCH OBJECTIVES

This part of the study outlines the goal that the researchers want to achieve. At the end of this
study, the researchers will be able to:
· determine the causes and effects of the stock-outs problem of the store.

· identify an accurate management system for improving product stocking at the Updrift Store
Molino Branch in the City of Bacoor, Cavite.

SCOPE OF THE STUDY

The study was limited by the small sample size and the resources available to the
researcher. The study analyzes the product stocking problem of Updrift Store Molino Branch in
Bacoor City, which affects sales, profits, and customer satisfaction. The study focuses on the
shortage effect of supply and reduced profits of their business. This study will be done through
conducting an interview, and the researchers will prepare open-ended questions that can help
them see things from an owner's or manager's perspective as they gather feedback in their own
words. With this, the researchers can identify the reasons why stock-out happens to the store.

The interview will be done face to face to the store’s location in Molino, City of Bacoor
Cavite. The study will only focus on how to have an effective and accurate inventory
management which will help Updrift Store Molino Branch to monitor supply and meet product
trends to ensure there is always enough stock to fulfill customer orders and to also know the
demand among consumers and proper warning of a shortage of their product.

The qualitative interviews will be conducted with the manager or to the owner that
happily agreed to talk about their practices and attitudes. Consequently, opinions of the manager
or the owner that is not connected in the research study and do not want to share their opinion
about improving product stocking will not be included in the study.

RELEVANCE OF THE STUDY

This study is conducted to learn more about importance of having effective inventory
management to the businesses and to provide and recommend necessary information about
inventory management and also to show that having knowledge about inventory management is
essential in running a business.

For the researcher and students, it will help them to learn about how inventory works and
how to have effective inventory management which can help them on their future workplace or
businesses. This study will also help the business owner and staffs of Updrift Store to make it
easier for them to manage various locations, avoid stock-outs, and maintain correct records. The
effectiveness of the employees can greatly improve the general health of the company and it is
important for employees to learn on how to have effective inventory management because
inadequate inventory management can also lead to a loss in sales, with this, this research will
help them expand their knowledge on how to have accurate inventory management.

It will also help future entrepreneurs to properly manage their inventory, have the correct
products in the right quantities on hand, prevent product outages, and save money from holding
onto extra stock. Having effective inventory management will also help our school and teachers
to ensure that the school’s finances are used as effectively as possible.

CRITICAL REVIEW LITERATURE

Inventory management is the system a business uses to order, store, organize and move
inventory through their supply chain. It ensures businesses have the right amount of product in
the right place at the right time. The goal of inventory management is to minimize the cost of
holding inventory, while keeping stock levels consistent and getting products into customers’
hands faster. Inventory management is the heart of a successful retail business. (Keenan, M.
2022)

Businesses that manage their inventories well are destined for success. With the help of
inventory management software, companies can automate the process of ordering, storing, and
optimizing their goods in a single place. Inventory is one of a company's most important assets.
Lack of inventory can be negative in a number of businesses, including manufacturing, retail,
and food services. In addition to being a liability, inventory also carries a risk. It might be prone
to theft, damage, and spoilage. Sales might be impacted by having a huge inventory as well.
(Waida, M. 2018)

Inventory management aids businesses in determining which merchandise to order and in

what quantities, and when. From the time of purchase until the product is sold, inventory is
tracked. To make sure there is always adequate inventory to fulfill customer orders and that there
is proper notification of a shortage, the practice monitors trends and adapts to them. (Jenkins, A.
2020)

Product stocking is the act of refilling and keeping products in the store's backroom or
warehouse. Product stocking is the process of filling the store's shelves and displays with
merchandise for sale, generally referred to as "stock." Stock clerks in stores are in charge of
maintaining stocked shelves in their specific divisions and placing new orders for goods when
they run low. Stock replenishment is done with the use of an automated inventory management
system in larger retail operations. (Chris Joseph, 2022)

Just-in-time inventory management is a widely used technique in business. The goal is to

keep just enough stock on the shelves in the back room or warehouse so that clients can purchase
it. As little inventory as possible on hand keeps things fresh, minimizes waste, and lowers
storage and inventory costs. (Ho, J. 2021)

BIBLIOGRAPHY

Keenan, M. (2020). What is Inventory Management? How to Manage and Improve Stock Flow?
Ottawa, Canada: Shopify-E-Commerce Company.
https://www.shopify.com/ph/retail/inventory-management

Waida, M. (2022). What is Inventory Management and why is it important? Wrike, Inc.
https://www.wrike.com/blog/what-is-inventory-management/#Why-is-inventory-management-im
portant

Jenkins, A. (2020). What is Inventory Management? Benefits, Types, and Techniques, 2300
Oracle Way Austin, Texas.
https://www.netsuite.com/portal/resource/articles/inventory-management/inventory-management
.shtml

Chris Joseph. (2022) The Differences Between Merchandising & Stocking. Houston Chronicle
Newspaper.
https://smallbusiness.chron.com/differences-between-merchandising-stocking-22959.html
Ho, Justine. (2021) Why business owners are stocking up on inventory? Minnesota Public Radio.
https://www.marketplace.org/2021/06/15/why-business-owners-are-stocking-up-on-inventory/

VARIABLES

INVENTORY MANAGEMENT (DEPENDENT VARIABLE)

Inventory management involves all activities put in place to ensure that the customer has
the needed product or service. It coordinates the purchasing, manufacturing, and distribution
functions to meet the marketing needs and organizational needs of availing the product to the
customers. Organizations from small to large businesses can make use of inventory management
to track their flow of goods. (Miller, 2010)

IMPROVING PRODUCT STOCKING (INDEPENDENT VARIABLE)

Stocking is the process of replenishing and storing goods in the store's backroom or
warehouse. It is sometimes referred to as "stocking," and it involves placing items on the store's
shelves and showing displays for sale. (Joseph, C. 2022)

THEORETICAL FRAMEWORK

According to Miller (2010), inventory management involves all activities put in place to
ensure that customers have the needed product or service. It coordinates the purchasing,
manufacturing, and distribution functions to meet the marketing needs and organizational needs
of availing the product to the customers. Organizations from small to large businesses can make
use of inventory management to track their flow of goods. Inventory Management helps to
prevent stock-out problems.

Effective inventory management requires a delicate balance of not having too much inventory
(leading to overstocking) or too little inventory (causing stock-outs). A company must use
effective inventory management to make sure it has adequate inventory on hand to meet client
demand. An organization that manages its inventory poorly risks losing money on potential sales
that cannot be fulfilled or wasting money by keeping too much goods on hand. (Keenan, M.
2022)
This research aims to know what are the inventory practices used by Updrift Store Molino
Branch in the City of Bacoor and what techniques or methods that are needed to improve on the
store’s inventory management. The figure below shows the importance of inventory management
to stock-out problems which would help in preventing the store’s in any stock-out problems.

CONCEPTUAL FRAMEWORK

FIGURE 1. INPUT, PROCESS, OUTPUT MODEL (IPO)

HYPOTHESIS/SES

The main reason for this research is to prove that having accurate inventory management can
help on improving product stocking of Updrift Store.

METHODOLOGIES

This part of the study will discuss the research method and the detailed implementation of this
research. It explains the data collection and analysis methods that the researchers used in the
research. This part of the study includes the implemented research design, participants of the
study, sampling techniques, research instruments, research locale and the data gathering.
RESEARCH DESIGN

The researchers will be using Qualitative Approach in identifying data analysis. It

involves gathering information through communication by using open-ended questions or other
methods. The most widely employed method in qualitative research is the ‘in-depth’ interview
where the interviewer can encourage the respondent to talk, ask supplementary questions or ask
respondents to further explain their answers. The researchers will conduct a one-on-one
interview to the owner or the manager to collect and gather important details and to answer the
questions that they prepared. Semi-structured interview approach is the most appropriate to
address this issue. Open questions in the in-depth interview allow the respondent to explain their
point of view without being limited by preconceived categories provided. The interviewer also
has the opportunity to clarify any ambiguity about the instructions or questions and may allow
probes on questions to encourage the respondent to enlarge on, clarify, or explain answers.

The interview will be conducted in the store’s location in the City of Bacoor, Cavite.
Prior to the interview, respondents will be informed about the purpose of the research, the need
to record the interview and the confidentiality and anonymity of the information given. The
recordings were complemented with notes that will be taken during the interview and
impressions, ideas and thoughts of the interviewer that arose from the interview.

This study is conducted to identify an accurate inventory management system for

improving product stocking at the Updrift Store Molino Branch in the City of Bacoor. For the
research method, we are going to use a descriptive method where it would help the researchers in
establishing the “whys” and ‘how’s” of the phenomenon that is being studied.

In sampling techniques, it has two types, probability and non-probability. The researchers
will use the non- probability sampling which is the purposive sampling where people are selected
using non-random criteria, therefore not everyone has a chance of being chosen.

PARTICIPANTS OF THE STUDY

 The participants of the study are one of the crucial parts of a research study. Since the
researchers want to know the stock-out problem of Updrift Store they are going to conduct a
one-on-one interview with the manager of Updrift Store. The researchers will collect the
managers profile according to his/her:

a) Name
b) Age
c) How long does he/she working on the said store

After collecting the manager’s profile the researchers will ask some important questions about
the stock-out problem of the store. The researcher will only ask necessary questions that only
cover Inventory Management and Stock-out problems. The interview will be conducted in the
store’s location in Molino, City of Bacoor Cavite.

SAMPLING TECHNIQUES

Sampling techniques have two types, probability and non-probability. The researchers
will use the non- probability sampling, it is a method in which not all population members have
an equal chance of participating in the study, unlike probability sampling. Each member of the
population has a known chance of being selected. There are many types of non-probability
sampling, the type of sampling that the researchers will use is the purposive sampling where
people are selected using non-random criteria, therefore not everyone has a chance of being
chosen.

Purposive sampling (also known as judgment, selective or subjective sampling) is a sampling

technique in which a researcher relies on his or her own judgment when choosing members of
the population to participate in the study. In purposive sampling personal judgment needs to be
used to choose cases that help answer research questions or achieve research objectives.

RESEARCH INSTRUMENT

To determine the stock-out problems of Updrift Store the researchers will conduct a
semi-structured interview that serves as the principal research instrument in this study. Semi
Structured interviews are an effective method for data collection where the researcher wants: (1)
to collect qualitative, open-ended data; (2) to explore participant thoughts, feelings and beliefs
about a particular topic; and (3) to delve deeply into personal and sometimes sensitive issues.

The instrument for this inquiry will be made by the researcher. There will be four open-ended
questions throughout this interview. Since the researchers will be using open- ended questions, it
would be possible that the researcher will ask some follow up questions that are still connected to
the topic.

RESEARCH LOCALE

The study will be conducted in Cavite, Philippines. The respondent will be interviewed
specifically in the store’s location at Molino, City of Bacoor.

DATA GATHERED

In collecting data for this study, the researchers will use a qualitative approach which will
be done through face to face interview. First, the researcher will formally write a letter to the
manager of the Updrift Store, requesting their consent to conduct the study and the email address
or contact number of the respondents to facilitate the research instrument and the face-to-face
interview.

Due to the gradual relief of the health protocol because of the continuing vaccination program
and health and safety measures conducted by the government, the researcher may be allowed to
go to the store and give this formal letter personally. Once the request has been granted, a
face-to-face interview will be conducted with the manager and owner of the store. In order to
verify their responses, the researcher will also video the respondents' responses to the
questionnaire.