CHAPTER 1

THE BACKGROUND AND ITS SETTING

Introduction

Many people’s everyday lives now revolve around their businesses, especially

entrepreneurs. According to well-known professors William Pride, Robert Hughes, and

Jack Kapoor (2022), business is ‘the organized effort of individuals to produce and sell,

for a profit, the goods and services that satisfy society’s needs.’ A business, then, is a type

of economic activity that involves the exchange, purchase, sale, or development of goods

and services for profit and customer satisfaction.

In the previous study of Hary Bahadur Bhandari (2017), inventory is a critical

component of any successful business. Inventories are current assets. These are tangible

assets held by an organization. In manufacturing concerns, inventories include stock of

materials, semi-finished goods (work in progress), finished goods, packing materials,

factory supplies, and spares. Service organizations like schools, campuses, and hospitals

also need materials or supplies. All forms of inventories hold some economic value.

Thus, the sum of raw materials, semi-finished goods, finished goods, spare parts,

supplies, and other consumable stores is known as inventory.

Additionally, the process of ordering, storing, using, and selling a company’s

inventory is known as inventory management. This comprises raw material, component,

and finished product management, as well as storage and processing of such

commodities. Maintaining the optimum level of inventory in any organization requires

inventory management. It is concerned with minimizing relevant inventory costs such as

purchase costs, ordering costs, and carrying costs.

In the article by Lena Mong’Ina Ondari (2016), it says that inventory management

is critical to increasing the efficiency and competitiveness of businesses. A suitable

amount of inventory is required for effective inventory management. A large inventory

carries the risk of spoilage, theft, damage, or shifts in demand. On the other hand, a

shortage of inventory when and where it’s needed can be extremely detrimental.

Inadequate inventory frequently affects business operations and increases the possibility

of bad customer service.

According to Caroline Banton (2022), efficiency is the maximum possible level of

performance, requiring the fewest inputs and producing the most possible result.

Efficiency entails using fewer superfluous resources, including one’s own time and

energy, to produce a given output. Efficient inventory management empowers executives

to make informed decisions, optimize resources, and drive overall business performance.

Moreover, efficient inventory management plays a vital role in the operations and

profitability of a business like a school canteen. The school canteen is one of the services

provided for learners in school when it comes to food. The canteen is a hub of delicious

food and camaraderie in elementary, junior, and senior high schools. A canteen is

essentially a designated area where students can buy food, drinks, and snacks during their

breaks to keep them nourished and alert for their studies. According to DepEd Order No.

8, 2007 entitled Revised Implementing Guidelines on the Operation and Management of

School Canteens in Public Elementary and Secondary Schools, these guidelines are
hereby issued in order to rationalize the operation and management of school canteens in

the public school system to eliminate malnutrition, promote healthy eating habits, and

serve as a laboratory for home economics, retail trade, and health and nutrition teaching,

providing hands-on training for students.

Furthermore, Malino National High School (MNHS) has a canteen in junior high

school managed by Ms. Patricia Nicole Ocampo, while the senior high school canteen is

managed by Ms. Jhen Cubacub Gozun. The canteen managers are both from the

Technology and Livelihood Education (T.L.E.) Department. The school canteen can be

managed by a school teacher or the school may hire outside personnel, but Malino

National High School chooses teachers from the T.L.E. department to manage the canteen

and make inventory efficient. Having an efficient canteen inventory management system

enables improved planning and budgeting. The canteen can determine how much food is

required to satisfy the appetites of the students by precisely projecting demand for

various food items. This helps ensure a smooth experience for everyone involved by

preventing overstocking or running out of supplies.

Finally, an efficient canteen inventory management system also encourages

transparency and responsibility. It helps in keeping track of sales, revenues, and expenses,

enabling the school administration to evaluate the canteen’s viability and make decisions

on how best to run it. This allows for continuous improvement, ensuring that the canteen

remains a vibrant and enjoyable space for students to refuel and unwind.
 In this research, the researchers seek to answer the question: What are the factors

affecting the inventory management of the junior and senior high school canteens at

Malino National High School?

This study aims to examine the factors affecting the efficiency of inventory

management. It will indicate the different factors that affect effective inventory

management. Likewise, it will also help to formulate plans and policies regarding the

inventory management of the junior and senior high school canteens at Malino National

High School. It will also provide a base for further studies by researchers on related

topics.