ASSESSING THE EFFECTIVENESS OF INVENTORY MANAGEMENT

PRACTICES ON FINANCIAL PERFORMANCE:

A CASE STUDY OF LOURDES PHARMACY IN OZAMIZ CITY

Interview Guide Questions

I. Inventory Management Practices

Generic Questions Follow-up Questions

1. Can you describe the
inventory management
technique are you currently
using?
1.1. How do inventory management techniques differ for
every kind of product?
1.2. How does your current system deliver accurate reports on
your inventory stock and past demands to help you make
informed decisions for future purchasing and order?

2. Can you describe the steps in
your procurement process?
2.1. How does your procurement process work?
2.2. What are your basis in purchasing stocks? How does it
work?
2.3.Do you have the same supplier with all of your stocks?
2.3.1. If yes, what is the usual lead time of the procurement of
stocks?
2.3.2 If not, do they have the same lead time?

3. Can you describe the steps
when receiving inventories?
3. 1 Who receives the stocks ordered?
3. 2. Are there instances that the delivery of stocks is delayed?
How do you handle it?
3.3. What do you do when you receive damaged or incorrect
products?

4. How are the inventories 4.1 How do you organize the stocks in the stockroom? Are
stored in the stock room? they stored according to their:
4.1.1. Usage
 4.1.2. Brand or Manufacturer
4.1.3. Alphabetical order
4.1.4. Type
4.2.How does your rotation of stock work when new
inventory is placed? (FIFO or FEFO)
4.3.Are there stocks that need to be stored in a specialized
storage?
4.4 How do you store stocks with hazardous formulations?
4.5 How does your rotation of stock work when new
inventory is placed? (FIFO or FEFO)

5. In what manner are the 5.1 Are they organized according to their usage,
inventories kept in the brand/manufacturer, alphabetical order or type? And why is
storefront? that so?
5.2 What is the current status of your inventory turnover? Is it
high or low? Considering that you are classified as a retail
industry?
5.3. How often do you count stocks to maintain accuracy in
the storefront?

6. How are stocks that have 6.1 How do you monitor the expiration date of the stocks?
expired handled? 6.2. How do you dispose of nearly-expired stocks?
6.2.1. Do you sell it at a discounted price or promo?
6.3 How do you dispose of those expired products?

7. How do you handle when 7.1. Has your pharmacy experienced stockouts? How do you
stock outs happen? handle it?

8. How long are stocks 8.1. What is the average period for holding fast moving
typically held? stocks?
8.2. What is the average period for holding slow moving
stocks?
II. Challenges Faced when Managing Stocks

How often do you experience the Follow-up Questions

following challenges in your business? ● How do you handle this?

● What are the possible causes?
● Are these problems recurring? If
so, when do you usually
experience these?

1. Running out of inventory (stock)

2. Loss of sales resulting from

shortage of inventory (stock)

3. Selling inventory (stock) below cost

price just to dispose of it

4. Theft of inventory (stock)

5. Physical inventory (stock) that does

not match the records

6. Piling up of inventory (stock) that is

not moving

7. Inability of suppliers to meet the

orders made

8. Unable to keep up with the demand

from customers

9. Increasing number of damaged

inventory (stock)

10. Increasing number of inventory

(stock) with a passed expiry date

11. Misplaced items in store that

cannot be traced

12. Errors due to incompetent staff

 13. Rising storage costs

III. Financial Ratios

1. Current Ratio

● How much is the current assets?

● How much is the current liabilities?

2. Inventory turnover

● How much is the beginning inventory?

● How much is the purchase and other costs?

● How many much is the ending inventory

3. Gross Profit Margin Ratio

● How much is the net sales?