Vagabonds

Technological Institute of the Philippines
Research Compendium, 2023
Streamlining at Guiguinto, Bulacan using Inventory

Management System of Cychlo Auto Parts
Biagtan, Mac bryan. Dela Rosa, Alberto Jr. Malig, Robin Gabriel. Pagkalinawan, Jomar.
mmbbiagtan@tip.edu.ph, madelarosajr@tip.edu.ph, mrgsmalig@tip.edu.ph,
mjapagkalinawan@tip.edu.ph
Students, Industrial Engineering Department

Technological Institute of the Philippines - Manila
CHAPTER I
ABSTRACT:
Streamlining processes in Guiguinto, Bulacan with specific focus on

improvement on operations efficiency involving IMS developed by Cychlo Auto
Parts. This paper explores the obstacles encountered by automotive suppliers in
Guiguinto, Philippines and how IMS can be used as a transformative instrument for
management. For the moment, the supply chain system of the automotive part
industry in Guiguinto is complicated; with multiple products’ offerings and
increased attention placed on accuracy and promptness. To this end, Cychlo Auto
Parts has perfected an advanced IMS designed to address the peculiarities of the
local market. The goal of IMS is to smoothen inventory work flows by digitising
operations including orders placement, item tracking, and supplier administration.
The use of sophisticated algorithms coupled with current information analysis makes
the system less prone to mistakes. This boosts its precision in inventory
management. Lastly, the IMS creates a common system for managing all the supply
chain components with effective communication. The interconnected approach helps
in observing the whole chain of the inventory, from procuring to shipping, for
prompt decision making and adjustment on product variation, depending on the
existing market conditions. The survey used information received from Cychlo Auto
Parts users in Guiguinto about the impact of IMS implementation. An overview of
primary benefits indicates improved operational efficiency, less overstocking, and
smoother shipments.
1 INTRODUCTION
Automobiles are a complex product with several parts and elements made of
materials such as textiles, glass, plastic, electronics, rubber, steel, and other metals
that go through various manufacturing processes. To develop, Cychlo Auto Parts
and all small businesses, especially those in the auto parts industry, must evaluate
their workplaces.
Inventory control is crucial for small businesses like Cychlo Auto Parts to
track down all records more quickly and easily. Cychlo Auto Parts keeps all of its
records using traditional inventories and logbooks, which requires them to work
more and take longer to complete. The issues Cychlo Auto Parts encounters
include precisely regulating the quantity of the products, identifying and
prioritizing supply that is in high demand, making purchases, comprehending the
background of their supplier, and interpreting sales statistics. Uncertainty in the
data can result in over- and understocking, which can result in extra expenses and
missed sales if it is not properly managed.
1.1 BACKGROUND OF THE STUDY
The auto parts supply business under investigation is an established player

in the market with a reputation for offering top-notch auto components to a variety
of customers. The management of the company's inventory system is given a lot
of attention because it is crucial to the smooth running of the business. Given the
wide range of components, from big engines to tiny screws, the need for such a
management system becomes imperative. Maintaining correct records, and timely
replacement is a challenging responsibility for the business.
When Cychlo Auto Parts first opened its doors four years ago, there were
just three people involved in the business. The owner, who made the purchasing
for the necessary supply, the seller who dealt with the client, and the other person
who helps the seller determine what the needs of the consumers are. Traditional
inventory is still used in this business, logbooks are used to keep track of all daily
operations.
As time went by the business expanded over time and operations became
more sophisticated, however Cychlo Auto Parts still used traditional inventories
and needed to switch to a powerful digital inventory management system because
of technology evolution. This inventory management system not only makes sure
that parts are stored and retrieved easily and in a systematic manner, but it also
helps to reduce mistakes, overstocking, and stockouts, promotes better space use,
and improves customer service by making sure that orders are filled accurately
and promptly. This study will help Cychlo Auto Parts and small business in their
inventory management by understanding the importance of using advanced
technology and the digital inventory management system.
1.2 STATEMENT OF THE PROBLEM
This study is designed to address the challenges and problems facing the
workers in the Cychlo Auto parts. With this in mind, there are questions that the
researchers would like to answer to guide them in this study such as:
● What are the primary issues and difficulties that the employees at
Cycho Auto Parts face in managing their inventory that need to be
addressed through root cause analysis?
● How can ABC analysis be used by Cychlo Auto Parts to mitigate the
risk and cost of having too much inventory on hand?
● How do the supply chain disturbances affect the stock management
system in Cychlo Auto Parts Supply.
● How is forecasting important in enhancing inventory management
practices of auto parts suppliers, and what are the barriers involved
in effective demand forecast?
● Does the Pareto Principle facilitate effectiveness and profitability
when applied in the inventory management systems at Cyclo’s Auto
Parts Supply Company?
● What are the vital digital technology software that Cychlo Auto Parts
Supply should include to boost its stock control system?
1.3 OBJECTIVES OF THE STUDY
General Objectives
This research will address the lack of planning and inventory control
influence the management of Cychlo Auto Parts. This system will help manage
and improve functionality of spare parts management and may lead to increased
efficiency and effectiveness thereby enabling users to operate with greater
efficiency. Furthermore, the system has the capability to efficiently manage and
regulate inventory resources, facilitating the strategic allocation and optimal
utilization of these resources. The implementation of an inventory control system
has the potential to decrease the amount of space needed for storing inventory,
reduce the time required to manage inventory, and lower carrying costs.
Additionally, such a system can effectively handle variations in simulation
utilization. The implementation of a systematic inventory management approach
has the potential to yield significant time and cost savings, thereby enabling
workers to allocate their efforts towards value-added endeavors that contribute to
the enhancement of the company.
Specific Objectives
a) To enhance the inventory management of Cychlo Auto Parts
b) To determine the impact of poor handling and lack of supplies in Cychlo

Auto Parts in terms of sales
c) To identify the many components of supplies that support Cychlo Auto Parts
sales
d) To analyze the supply needed in forecasting of demand
e) To minimize both overstocking and under-stocking of inventory.
f) To develop a continuous supply of materials and stock so that production

should not suffer at the time of customer’s demand.
1.4 GAPS
An auto parts supply company's inventory management system is a

crucial component of efficiency and profitability. According to existing research,
many of these systems presently track, manage, and replace inventories using
technologies like barcoding and Radio Frequency Identification (RFID). The
study also identifies a number of holes in these systems. First off, there is a
widespread problem with inventory accuracy caused by human data input
mistakes, lost products, and delayed updates. Numerous studies predict the
development of real-time inventory management systems, but the auto parts
supply industry appears to be only just beginning to use them. Second, there is a
severe lack of integration between different supply chain operational components.
Due to the inability to transmit vital information regarding supply and demand
instantly, situations of overstocking or understocking are frequently the result.
Thirdly, research suggests that using predictive analytics for inventory
management has an obvious flaw. Smaller companies have not yet adopted
artificial intelligence (AI) for inventory forecasting, despite several large-scale
auto corporations starting to do so. The analysis also reveals a need for this
industry's inventory to be managed responsibly. The inventory management
systems have not yet been routinely updated to take into account the trend of
returning, reusing, recycling, or remanufacturing auto components. In conclusion,
these gaps offer chances for future study and advancement of the inventory
control systems used in the auto parts supply industry.
1.5 SCOPE AND LIMITATIONS
The scope of this study will only be focused on Cychlo Auto Parts Supply
that is located in Guiguinto Bulacan. The researchers conducting this study will be
visiting the business where all available workers are present. This study will only
be conducted within August-December 2023. To conduct an analysis of the
manufacturing process and supply control of Cychlo Auto Parts in order to
identify potential gaps and provide a methodology for enhancing inventory
management. The use of an efficient inventory monitoring system may assist
Cychlo Auto Parts in maintaining an accurate track of their parts inventory,
enabling them to reliably determine the lead time required to procure necessary
components for car repairs and optimize the scheduling of service appointments.
This research has the potential to assist Cychlo Auto Parts in enhancing its
operational efficiency and augmenting its profitability by reducing the time spent
on parts retrieval and allocating more resources towards activities aimed at
company improvement. This research uses root cause and ABC analysis
methodologies to discover the fundamental factors contributing to inventory
difficulties. By doing so, operations may implement appropriate corrective
measures to enhance inventory management, minimize expenses, and boost
productivity. The efficacy of inventory management streamlining in the study may
be compromised if the implementation and adherence to the inventory structure
system are not executed with thoughtful consideration.
1.6 SIGNIFICANCE OF THE STUDY
The study of the Inventory Management System (IMS) of the supply of auto
components can be quite advantageous to many groups and industries.
1) The information offered by this study will be of great use to car parts
supplier business owners. They gain insight into how effectively managing
inventory may reduce expenses, boost earnings, and simplify operations. It also
aids in making educated decisions that facilitate business growth and expansion,
minimizing surplus and shortages, and predictive forecasting.
2) By using the results of this study, the inventory management staff can
improve their knowledge and proficiency. They are able to comprehend how an
organized IMS may eliminate errors, lighten the workload, and improve the
effectiveness and efficiency of their work.
3) A well-managed IMS also indirectly benefits the customers. Customers will

be more satisfied if they can find the car parts they need when they need them
thanks to effective inventory control.
4) The study might also act as a springboard for researchers starting more
ambitious studies. It offers a base on which they can construct their investigation.
This enables them to learn more about the real-world applications of inventory
management in the car parts sector. For suggesting changes or coming up with
novel ideas, this insight can be crucial.
5) The study may also be useful to other parties involved in the supply chain,
including investors, suppliers, and even scholars or experts in the sector. Investors
may be reassured of the management's effectiveness, suppliers may receive
insights to help them comprehend and respond to the company's demands more
effectively, and students or researchers may utilize the study as a foundation for
future research or as career guidance. Investigating the importance of the IMS
study in auto parts thus has numerous advantages.
1.7 ASSUMPTIONS
To understand how an auto supply company operates through its inventory

management system, several assumptions can be assumed for some
understanding. This suggests that the organization may be trying to optimize their
inventory control with the objective of maintaining optimum stock levels and
minimizing expenses. The amount of stock kept by the company has to be
sufficient so as to serve customers’ needs promptly even with avoidance of
excessive inventory holding costs. Also, it is possible to suggest that the business
applies the automated system of stock keeping. It is a management information
system that keeps current records at all times and thus gives reliable data
regarding stocks, sales, and the reordering process hence informed decisions and
ease work in controlling inventories. Moreover, one can easily assume that the
auto supply industry obtains its inventory across various suppliers as well as
manufacturers with an attempt to provide a variety of options and affordable
prices across the marketplace. It is assumed that the company works with its
partners in order to have a stable distribution system. Additionally, it could also be
presumed that the market for automotive parts and accessories is cyclical in nature
implying sales surges may occur at some given intervals or seasons of the year.
Knowledge on these assumptions leads one into understanding how auto parts’
industry inventory management systems, as well as strategies aimed at enhancing
the efficiency with which these materials are tracked.
1.8 HYPOTHESIS
The null hypothesis is that in auto parts supplier firms, an efficient

inventory management system influences neither efficiency nor satisfaction as
well as profitability. It implies that an efficient inventory system will not impact
the company’s effectiveness. Primary operational metrics such as inventory cost,

sales volume, and time-related efficiency will not show any significant
improvement.
Alternative hypothesis (Ha) states that a lack of an adequate inventory

management system will result in a significant increase in operational efficiency,
and profits among auto parts supplier organizations. The alternative hypothesis, as
opposed to the null hypothesis, states that a well-designed inventory management
system will improve company performance and provide help to the economy.
CHAPTER II
2 RELATED LITERATURES
This part will discuss and concisely examine significant literature and
studies in connection to the research paper’s purpose. The purpose of this chapter
is to present persuasive evidence by synthesizing substantial research on the issue.
The conceptual foundation of the study is based on a review of the appropriate
literature and investigations.
IIoT is the application of IoT in businesses. In order to automate

inventory, RFID is essential. The precise and quick transfer of information makes
it easier to oversee the operations of the business. Global organizations can adopt
IIoT for inventory management since the IIoT system can identify, store, and
manage every inventory item on its own. Costs can be cut while maintaining
effective responsibility for businesses. The suggested model can be applied to the
enterprise's inventory management for automation and demand forecasting. There
is still room for research in this area because businesses have not yet adopted IIoT
technology.
(Cloud, 2017)
In the study made by Pinçe, Turrini, and Meissner. (2021), their study
comes to the conclusion that because of the irregularity and uncertainty in the
demand pattern, intermittent demand forecasting for spare parts is a challenging
assignment. Since they can't reliably foresee erratic demand, conventional
forecasting techniques frequently fall short in this regard. Forecasting accuracy
could be considerably improved by implementing more sophisticated forecasting
models that make use of statistical and machine learning approaches. The use of
these models, however, may be hampered by a number of issues, including the
necessity for a significant amount of historical data and high computing costs. The
study emphasizes the possibility of hybrid models that integrate the benefits of
diverse approaches as well as the growing significance of contextual data like
maintenance schedules and product life cycles. It is also recognized as a critical
area for future research and development to integrate demand forecasting with
inventory management and decision-making procedures.
The study conducted by Cisse, Xue, and Agyemang. (2022), their study
offers a thorough analysis of several stock management methods, classifications,
and rules for the National automobile chamber of commerce (N.A.C.C.) vehicle
parts manufacturing company. In their study using contemporary forecasting
models, such as artificial intelligence and machine learning techniques, they found
out that it can considerably increase the accuracy of predicting client demand.
These approaches have an advantage over traditional models since they are more
adaptable and can take into account changes in consumer purchasing patterns and
market developments. The study also supported the idea that improving and
maintaining operational efficiency requires appropriate stock management. It is
clear that strategic stocking of automotive components based on precise demand
estimates can lead to lower storage costs, fewer instances of stockouts and excess
inventory, and more customer satisfaction. According to their study, classification
findings, systematic categorization of vehicle parts can help with effective
resource allocation, stock management, and order prioritizing. In turn, this would
simplify the processes and cut down on wasteful stocking expenses.The study
emphasized how crucial it is to create firm, transparent policies to oversee
operations. The National automobile chamber of commerce (N.A.C.C.) vehicle
parts manufacturing organization have found the adoption of rules that support
forecasting accuracy, stock management effectiveness, and categorization
efficiency to be invaluable.
In the study conducted by Kaushik et al., (2019), the optimal policy curve
approach case study on inventory reduction they found that this strategy can be
particularly helpful in effectively managing inventory levels, cutting storage costs,
and limiting stockouts. The company in their study was able to maintain a better
balance of commodities thanks to the application of the optimal policy curve
technique. Inventory levels were kept low without sacrificing service levels,
which resulted in significant cost savings. Their study also found that a reasonable
tradeoff between holding costs and scarcity costs can be achieved with correct
implementation of this policy. The program demonstrated exceptional adaptability
to variations in demand patterns, assisting in continually maintaining ideal
inventory levels regardless of the state of the market. Their study came to a
conclusive conclusion with the suggestive finding that using the optimal policy
curve approach can significantly improve inventory management, resulting in
increased operational effectiveness and overall profitability. However, to
guarantee its long-term success, ongoing observation and adjustment are
necessary. Although useful, the strategy necessitates a well-thought-out
implementation plan and is not a one-size-fits-all answer. When using this

process, an organization's and its market's distinct qualities should be taken into
account.
In the study made by Nirmala et al., (2022), utilizing ABC (Always

Better Control) and VED (Vital, Essential, Desirable) analysis, their study of
inventory management and control system demonstrates its high effectiveness in
managing and controlling inventory. According to them it not only aids in cost
management but also avoids overstocking and understocking of merchandise. The
ABC analysis makes it easier to find high-value things and enables managers to
concentrate their attention on them. Contrarily, the VED analysis is useful in
medical contexts where it is important to categorize inventory according to its
criticality. Overall, the application of ABC and VED analysis streamlines the
inventory management procedure, makes the best use of resources, and enables
businesses to make wiser judgments about their inventory management practices.
It also raises effectiveness, profitability, and client happiness. But for these
strategies to be implemented successfully, ongoing oversight, frequent
evaluations, and adjustments to the changing business environment are necessary.
Therefore, it is advised that businesses incorporate these analyses into their
inventory management procedure to get the most out of them.
In the research of Singh, and Verma. (2018), their study on supply chain
of inventory management illustrates how crucial it is to firms' overall success.
According to them, maintaining a balance between stock availability and stock
holding costs requires effective inventory management. It helps to manage the
flow of goods, optimize storage requirements, and ultimately increase customer
satisfaction. Therefore, inventory management is an essential part of supply chain
management and has a big impact on how profitable and sustainable a business is.
Businesses must constantly improve and implement efficient inventory
management techniques if they want to remain competitive.
In the study made by Gani et al., (2020), to make a manufacturing

organization environmentally sustainable, they first need a set of quantifiable
sustainability indicators, which they then adopt. According to them this is because
manufacturing industries are required to put a lot of effort and focus on
environmental sustainability, which includes, reduced use of natural resources,
making products that consume less material, resources, and produce less waste,
produce less negative impact on the environment, contain less hazardous
materials. Their study offers practitioners insight into the relative significance of
sustainability indicators and the extent to which they can be used for sustainability
assessment. According to them this methodology can be helpful in identifying
aspects of environmental sustainability that need further focus. From their study
they came up with a conclusion, focusing attention, resources, and expertise on
the sustainability issues that need the greatest attention can be highly beneficial
for the management of the manufacturing industry. The application of indicators

for sustainability evaluation in manufacturing industries may benefit from this
study's contribution to the body of knowledge.
In the research of Wang, Dang, and Nguyen, N. (2020), to the best of their
knowledge, the extent of the inventory problem under inquiry is filled in their
paper, which addresses certain important gaps. The fourfold contribution of their
paper. First, the Arena software is used to simulate some values of the backlog
quantity, average inventory amount, matching total cost of inventory holding, and
backlog penalty in order to increase statistical power for the response surface
analysis. Second, Minitab software analyzes the replicates of the inputs and
outputs from the Arena simulation to determine the best levels of the parameters
(such as order amount, reorder point, target stock, and inventory review policy) in
order to obtain the realistic values of answers. Third, the efficiency of the
suggested computational model is tested using actual data in a numerical example
of the top air compressor producers in Thailand. The managerial implications of
the model's findings provide a roadmap for decision-makers to choose the best
replenishment level in order to minimize the total cost (i.e., holding and penalty
cost) as much as possible. In order to support various replenishment levels, they
are compared in terms of monetary values. The solution obtained using the
heuristic approach can, in the end, be very different from those obtained using
optimization methodologies, but it is still a rapid and workable solution for the
decision-maker to handle their difficulties one at a time. Therefore, they
concluded that in deciding the appropriate levels of elements to enhance
warehouse performance, warehouse supervisors, managers, and policymakers may
find this study to be a useful reference.
In the study conducted by Evdokimova. (2021), in the said study the

analytical system RapidMiner Studio, segmentation and clustering techniques
were used to divide the customers of the truck auto parts business into groups.
Clients are classified into groups of 97,146 and 317 clients based on the volume of
transactions, according to ABC data purchases. The results of the XYZ analysis
were wrong because of the unevenness and seasonality of the purchases made.
Because 95% of consumers are grouped into one cluster, the clustering results
from the K-means and X-means algorithms cannot be utilized to manage customer
contact. The Expectation-Maximization strategy divided the consumer base most
effectively, with 49 customers making up the best group, 261 buyers making up
the average, and 250 buyers making up the worst.
In the study of Bhasin. (2020), the goal of this research was to manage
inventory so that maintenance teams may carry out criticality analysis on spare
parts, optimize reorder points, and periodically plan cycle counts. This has the
potential to save thousands annually in carrying costs and reduce the amount of
downtime experienced, hence enabling a preventative maintenance plan.
Implementing a methodology centered on continuous improvement in order to

systematically identify and remove bottlenecks within the inventory management
process.
In the research made by Chopra, and Meindl. (2019), the study covers
supply chain management, including inventory management. Inventory
management is important, and the book analyzes different methods to improve its
efficiency. Integrating inventory management with supply chain planning is also
stressed in the book. If the supply chain strategy promotes manufacturing cost
efficiency, an inventory management plan to decrease inventory costs is
necessary. The goal of inventory management discussion provides a thorough
foundation for understanding the different ways that might maximize inventory
management, making it relevant to the study issue.
2.1 MAJOR CONCEPTS
In the research of Alkahtani, Hidri, and Mrad. (2023), any organization

aiming to avoid significant cost and resource burdens must engage in outsourcing.
They claimed that in order to deal with the constrained resources of a corporation,
their research was built on the mathematical modeling of process outsourcing.
Data from the automotive spare parts sector were taken into account in the
proposed supply chain model. The information from the car component
manufacturing sector shed light on the ramifications of the suggested supply chain
model, which was centered on controlling lot size, inventory, reworking,
outsourcing, and creation of a multi-stage manufacturing system. To reduce the
overall cost of the supply chain, the manufacturing and outsourcing quantities for
each vendor were optimized.
In the study made by Da Silva, Rodriguez. (2011), this study's primary

goal was to locate and categorize the production procedures of a business in the
automotive components sector that had problems with supply chain management.
They gathered the data for this study from a variety of sources, such as
semistructured, in-person observation, and document analysis. They also added
that without any kind of inventory control of raw materials in process and finished
product, the company may have had low-volume production, high inventory costs,
and consequently higher financial costs.
In one study made by Perks, and Delport. (2023), prior to Covid-19,

judgments made about inventory control had an impact on how effectively ACMs
were managed in SA, but this was not the case during the lockdown. Given that
the data was gathered in late 2020, the results today (2023) might be different.
Prior to COVID-19, key decisions regarding inventory control involved analyzing
the lead times of incoming raw materials, using an electronic system to specify
inventory status specifications and track the movement of inventory items, sharing
inventory levels, and developing a replenishment procedure to guarantee
continuous ordering of necessary items.
Based on the adoption of an agile supply chain inventory management

system, the production of auto parts operations will be able to make decisions
more quickly and accurately, shorten the production cycle, increase production
efficiency, ensure on-time delivery, boost user satisfaction and service levels, and
use fewer materials because of poor management, wasted labor, and backlogs of
unfinished work. (Agile Supply Chain, 2012).
The study conducted by Ramos et al., (2020), states that gaining profit
margins without changing resource allocation is possible with inventory control.
The creation of a conceptual technique for inventory problems, followed by a
spreadsheet model that includes a dynamic logic of rearrangement policy, is the
contribution of this publication. A superior alternative order policy can be created
for a single-step supply chain by statistically analysing the dynamic
rearrangement point, the static rearrangement point, and the results of the
spreadsheet-based strategy and the analytical approach technique. point of
rearrangement and current rules of order. It was assessed using a demand that was
chosen at random. In order to ensure a higher degree of service efficiency in a
single-step supply chain, the goal of this work is to establish the optimal order
policy with a low total inventory cost.
In the research of Atnafu, and Balda. (2018), the study presents empirical
support for a paradigm that identifies five main characteristics of inventory
management practices and explains the connection between inventory
management practices, competitive advantage, and organizational performance.
Their study arrived at the following conclusions based on the information
collected from respondents: All of the hypotheses were confirmed and show a
strong positive influence of inventory management practice on organizational
performance and competitive advantage of MSEs in the manufacturing sub-sector.
The results of thier study also suggest that there is an intermediary competitive
advantage between inventory management methods and organizational
performance.
In the study made by Achetoui, Mabrouki, and Mousrij. (2019), their

primary goal is to present an overview of the contributions made by the literature
on the supply chain for spare parts management. In their study they have
determined a few positive perspectives that make up a fruitful area of research,
like the growth of frameworks for measuring performance in the network of spare
parts distribution and evaluation of organizational development.
In the research of Mashayekhy, et al., (2022), this research looked into

how Industry 4.0 technology, notably IoT, will affect inventory management.
According to them it is advantageous to transform a supply chain into an
integrated supply chain 4.0. Given the differences between fourth-generation
technology and earlier generations, it appears that traditional inventory
replenishment strategies are not sufficiently responsive to new technologies and
are unable to handle IoT systems.The trend and potential of IoT opportunities in
the field of sustainable inventory management were investigated based on a
review of the literature. Their findings demonstrate that numerous industries are
conducting more study on this subject. Numerous journals are releasing more
articles in this research area and paying close attention to this subject. The main
focus of this study is on the platforms and mechanisms that enterprises are using
to adopt new technology. This subject is anticipated to receive more attention in
the future because each organization needs a unique solution to change to a higher
level of high technology.
In the study of (Kumar, 2022), this study came up to the conclusion that
the supply chain management of the automotive industry may be impacted by the
observation process and financial performance analysis. Information pertaining to
various financial execution pointers and the store network the executives marker
has been removed from all fundamental vehicle organizations. Financial study has
determined that, in the cases of Maruti Suzuki India Ltd., Hero MotoCorp Ltd.,
and Bajaj Auto Ltd., the correlation between financial factors and the inventory
turnover ratio, a measure of supply chain management, is statistically significant.
From the study made, the Regression analysis has produced various findings.
Mahindra & Mahindra Ltd.'s independent variables only account for 84.9 percent
of the change in the dependent variable, while Maruti Suzuki India's independent
variables account for 99.7 percent. Factors outside of Hero MotoCorp Ltd. are
responsible for the dependent variable's change. The change in the dependent
variable at Bajaj Auto Ltd. is brought on by variables outside the company.
Synthesis
The study provides challenge with regard to the auto parts business
industry,to improve stock inventory in order to develop knowledgeable choices
regarding product selection, pricing, production plans, and supply chain
management. Cisse, Xue, and Agyemang. In 2022, their work is a detailed
assessment on various stock management procedures and classification by NACC
vehicle parts manufacture company. Case Study: Optimal Policy Curve Approach
to Inventory Reduction by Kaushik et al., (2019) identified that this plan is
efficient towards managing inventory levels, storage costs, and stockouts

minimization. A study of the inventory management and control system by
Nirmala et al., (2022) shows that in spite of being complex, ABC(Always Better
Control) and VED(Vital, Essential, Desirable) techniques used in it are very
efficient for managing and Singh, and Verma. Their study of inventory
management in supply chain (2018) presents how important it is for general
organizational success of firms. According to Gani et al., (2020), for
manufacturing organizations to be made environmentally friendly, they should
come up with a list of measurable sustainability indicators that serve as a guide.
Evdokimova. In this study, RapidMiner Studio was used for analysis along with
the customer segmentation and clustering approaches as a result to separate the
clients of the truck auto parts company into various communities. Bhasin. (2020)
adopting a systematic approach using a technique of continuous improvement so
as to eliminate bottlenecks that are present within the inventory management
processes. Chopra, and Meindl. Inventory management is part of supply chain
management of (2019). By implementing inventory control, Ramos et al., (2020),
explains that it’s possible to gain profit margins without switching resource
allocation. Atnafu, and Balda. In 2018, this study provided empirical proof for a
paradigm that posits five main attributes of inventory management practices and
discussed the relationship among them and their effects on firms’ competitiveness
and performance. In this study, Mashayekhy, et al., (2022) explored how Industry
4.0 technology specifically Internet of things IoT and will influence warehousing.
The combined contribution in this research serves to advance a more extensive
study on an auto parts supplies firm’s inventory management system.
CHAPTER III
3 METHODS
4
CONCEPTUAL FRAMEWORK
The utilization of a conceptual framework is of utmost importance in research

endeavors as it provides a structured approach for understanding and addressing
the research problem in a systematic manner. The present study focuses on the
domain of inventory management procurement at Cychlo Auto Parts. It aims to
elucidate the conceptual framework that underlies this crucial aspect of the
business's operations. By identifying the fundamental elements and their
interconnections, this research seeks to shed light on the various factors that
influence the procurement process at Cychlo Auto Parts. The utilization of this
framework enables a comprehensive evaluation of current methodologies and the
recognition of possible domains requiring improved performance.
Figure 3.1 The Conceptual Framework of the Study
3.2 FISHBONE DIAGRAM (RCA)
The fishbone diagram reveals many fundamental reasons contributing to

Cychlo Auto Parts Supply issues in their inventory management system. Supplier-
related concerns, including delivery delays, discrepancies in stock availability,
and poor communication, can all lead to inventory shortages and customer
unhappiness. Improper inventory management procedures, such as insufficient
forecasting and demand research, ineffective tracking systems, and erroneous
stock levels, can lead to overstocking or understocking, resulting in lost sales or
increased holding costs. A lack of understanding about stock turnover rates further
hampers ineffective inventory management. Internal operations are critical, with
deficiencies in qualified people, coordination between sales and inventory
management, space limits, and quality control procedures resulting in operational
inefficiencies and possibly consumer discontent due to returns or faults. Finally,
economic issues such as changeable market demand, customer preferences,

pricing variations, and limited financial resources impact small enterprises' ability
to properly manage their inventory. The interpretation of the fishbone diagram
emphasizes that Cychlo Auto Parts Supply must address supplier-related issues,
improve inventory management practices and internal operations, and consider
economic factors in order to improve their auto parts supply and overall inventory
management capabilities.
3.2 RESEARCH DESIGN
A mixed-methods strategy that includes both quantitative and qualitative

research has been selected as the research methodology for this study. The Cychlo
Auto Parts Supply inventory system will be used to gather quantitative data such
as inventory turnover rates, hold costs, order lead times, and service levels. The
researcher will interview the company owner in-depth as well as other important
players in the inventory management process in order to get qualitative data.
3.3 RESEARCH LOCALE
This study was conducted in Guiguinto Bulacan. The business owner and 8
workers, who work there for almost 6 months to a year, were personally
interviewed guided by the survey questionnaire at Cychlo Auto Parts Supply in
order to address the typical problems and challenges they face at present. The
researchers will able to assess the historical data such as purchase order and the
previous sales of the business.
3.4 RESPONDENTS
To ensure that the participants accurately represented the population of

interest, the researchers used purposive sampling. It is frequently employed in
qualitative research to gain a thorough understanding of particular events.
Because it uses resources sparingly, purposeful sampling is advantageous when it
is impossible to collect data from all participants. Eight participants were chosen
to respond to the survey questionnaire that the researchers had created. All of the
aforementioned participants are employed by Cychlo Auto Parts Supply. The
prepared example questions were examined to identify the problem's underlying
causes. The key to gathering precise and accurate data that will aid the researchers
in reaching a better conclusion will be to assess and evaluate the historical records
of their business, which include purchase order items, supply return rates, and
previous business sales, in addition to the product and supply data. The
researchers will utilize a fishbone diagram as a tool for a root cause analysis for
the data collected from the surveyed interviews to provide a visual representation
of the cause and effect of the detected problems. For the historical information
obtained from the prior purchase of supply and sales, the researchers will also
apply the Pareto Principle and ABC Analysis.
3. 5 DATA GATHERING TOOL
Interview
In this study, the researchers used personal interviews as useful tools for
the researchers to utilize when conducting effective qualitative research since they
allow them to explore and explain more information as well as gain a deeper
understanding of the common causes and effects of problems in the company.
Observation Data
In this study the researchers used data analysis software that are essential
for interpreting the data collected. Tools such as analyze Google sheets
application is used to analyze patterns, trends and correlations and generate
meaningful insights from the accumulated data that transform raw data into
understandable format providing insights for informed and real-time decisions.
SOURCES OF DATA
Primary Sources
The business owner and other key workers were interviewed as the
researchers' primary sources for the study of the inventory management system of
Cychlo Auto Parts Supply since they had a thorough awareness of the company's
procedures and difficulties. The data provided directly from the business's past
and present order purchase records will serve as the main sources for information
on supply orders and purchases. These records will illustrate the inflow of goods
into the inventory, including lead times and costs. Sales records, which may be
received directly from the company, are another important source for this study's
assessment of previous and present sales data. They also provide as a real-time
indicator of how stock is moving through the system.
Secondary Sources
Business reports will be used in this study as secondary sources of data
for the inventory management system of Cychlo Auto Parts Supply. These reports
frequently include useful information on normal inventory turnover rates and
usual management techniques within the auto parts supply business. Government
statistics are also one of the secondary sources of information for data from other
organizations or industries that can give context for the workforce and economic
issues influencing the auto parts supplier industry. As a secondary source of data,
other academic studies, published works, and dissertations on comparable topics
might offer theories, approaches, and information that can be used in the study.
3.6 RESEARCH TOOL
Root Cause Analysis

Root cause analysis (RCA) refers to a methodical approach used to
determine the fundamental factors behind a particular problem or issue. The use of
Root Cause Analysis (RCA) may serve as an effective mechanism for optimizing
inventory management processes at Cychlo Auto Parts. This can be achieved via
the implementation of the following strategies:
● Applying of Root Cause Analysis (RCA) may be employed to discover the

fundamental factors contributing to bottlenecks within the inventory
management process, hence facilitating their subsequent elimination.
Upon the identification of the underlying factors, Cychlo Auto Parts may
proceed to implement measures aimed at mitigating these causes and
enhancing the efficacy of its inventory management procedures.
● Implementing Root Cause Analysis (RCA) may be employed as a method
to uncover the underlying factors contributing to elevated inventory costs.
After the identification of the main causes, Cychlo Auto Parts may
proceed to mitigate them via the implementation of Just-in-Time (JIT)
inventory management principles or by engaging in negotiations to get
more favorable pricing terms with suppliers.
● The enhancement of inventory accuracy may be achieved via the use of
Root Cause Analysis (RCA) as a method to uncover the underlying factors
contributing to inventory accuracy issues. After the identification of the
underlying factors, Cychlo Auto Parts may proceed to enhance inventory
accuracy via the implementation of a Warehouse Management System
(WMS) or by refining its inventory counting protocols.
● The use of Root Cause Analysis (RCA) might be effective in identifying
the underlying factors responsible for customer satisfaction issues
pertaining to inventory management, including occurrences like stockouts
and delayed delivery. Upon the identification of the underlying reasons,
Cychlo Auto Parts might proceed to implement measures aimed at their
elimination, hence enhancing customer satisfaction.
ABC Analysis
The ABC analysis is a well-recognized classification approach that utilizes

the Pareto Principle to ascertain the prioritization of inventory management for
distinct products. Cychlo Auto Parts has the potential to enhance its inventory
management via the use of ABC analysis. This method involves the classification
of inventory items into distinct categories based on their quantity and cost. By
dividing products into high-, medium-, and low-volume classes and/or high-,
medium-, and low-cost classes, the company may simplify its inventory
management processes. The approach known as the Pareto Principle sometimes
referred to as ABC cycle counting, operates on the assumption that around 20% of
the parts stored in a warehouse are responsible for approximately 80% of the
sales. The things referred to as "A" items are those that exhibit high velocity or
possess significant value. Cychlo Auto Parts can use inventory management
software to categorize products as A, B, or C, and then do more frequent counts
for the A items while conducting fewer regular counts for the B and C items.
Once the "inventory A" items have been identified, Cychlo Auto items may
proceed to define certain specifications to maintain a balanced inventory level.
Furthermore, Cychlo Auto items can conduct cycle counts, which are
rudimentary audits of a designated portion of the inventory, specifically focusing
on class-A things, on predetermined dates to guarantee precision. Through the use
of ABC analysis, Cychlo Auto items may effectively manage their inventory
stocks by prioritizing the most often utilized things. This strategic approach
enables the streamlining of procurement processes and ultimately enhances the
accuracy of predicted outcomes.
Pareto Analysis
The Pareto chart is a graphical tool used to identify the predominant factors
contributing to an anomaly or problem. Pareto charts are constructed based on the
Pareto principle, which postulates that 80% of the outputs may be ascribed to 20%
of the inputs.
● Cychlo Auto Parts might will use a Pareto chart as a means to identify the
key elements that are responsible for its inventory expenditures. Upon the
identification of the primary factors, Cychlo Auto Parts may focus its
efforts on reducing the associated expenses.
● The objective of this research is to identify the key elements that

contribute to inaccuracies in inventory management. Cychlo Auto Parts
have the capacity to use a Pareto chart as a method for identifying the key
components that contribute to its inventory accuracy challenges. Following
the identification of the primary factors, Cychlo Auto Parts may shift its
focus towards improving the precision of its inventory management.
It illustrates the standardized process of perception and evaluating within

the framework of a conventional methodology that accommodates a wide range of
modifications and contexts.
CHAPTER IV
Results and Discussion
In this chapter, researchers present the outcome as well as an analysis of the

study entitled “Streamlining at Guiguinto, Bulacan using Inventory Management
System of Cychlo Auto Parts” The Researchers of Cychlo Auto Parts Supply is a
reputable supplier of high-quality auto parts in the Philippines. The store sells
parts for a wide range of vehicles, from cars and trucks to motorbikes and
scooters. Cychlo Auto Parts Supply also sells tools and accessories, making it a
one-stop shop for all of your automotive needs. Cychlo Auto Parts Supply is an
important resource for the Filipino automotive community. The store provides
motorists with a dependable source for quality parts and services, and helps in the
smooth and safe operation of automobiles. Furthermore, Cychlo Auto Parts
Supply contributes to the local economy by giving job opportunities and
increasing the tax base.
Demographic Profile and Preliminary Data of Respondents
Figure 4.1 Age of the Respondents
Based on the data we gathered on our survey, both 37.5 percent are 26-33 years
old and the other is 34-41 years old respondents, both of 12.5 percent are 42-48
years old and 18-25 years old and the rest is 0 percent respondents.
Figure 4.2 Position of the respondents
Based on the data we gathered on our survey, 25 percent is Auto parts

technician and the other 25 percent is Sales representative, the rest is 12.5 percent
for Customer service, Inventory manager, Marketing coordinator and lastly is
General manager.
Figure 4.3 How long have you been working in Cychlo Auto Parts Supply
Based on the data we gathered on our survey, 62.5 percent respondents are
working there almost 3-4 years ago, 37.5 percent have been working there almost
2 years ago, the rest 3-6 months and 1 year is 0 percent.
Figure 4.4 Satisfied with the current inventory system
Based on the data we gathered on our survey, 75 percent of respondents were

very unsatisfied with the current inventory system of cychlo auto parts, 25 percent
of the respondents very rarely satisfied with the current system.
Figure 4.5 Rate with the current inventory system
Based on the data we gathered on our survey, 62.5 percent respondents

answered extremely inefficient the current system of Cychlo Auto Parts Supply,
while 25 percent rarely and the 12.5 percent frequently.
Figure 4.6 The most error prone tasks involved in inventory management
Based on the data we gathered on our survey, According to the respondents the
error prone tasks involved in inventory management, first is the results in
incorrect inventory levels which lead to stockouts that has 100 percent, second is
the process of physically counting inventories to ensure its accuracy is known as
cycle counting that has 100 percents lastly the Miscommunication with suppliers,
such as incorrect orders or delayed shipments, 37. 5 percent is When the incorrect
item is picked or packed, it might result in customer dissatisfaction and refunds.
Forecasting Sales of Auto Parts Using the Holt-Winters Model
In this section, we will use the Holt-Winters model to forecast the monthly
sales of 12 auto parts based on historical data from January 2024 to August 2025. The
Holt-Winters model is a time series forecasting method that uses three exponential
smoothing components: level, trend, and seasonality. The model can capture the
variations and patterns in the data and produce accurate forecasts for future periods.
The assumptions and smoothing constants are:

▪ α (level)=0.2
▪ β (trend)=0.1
▪ γ (seasonality)=0.3
▪ s=4 is the length of the seasonal cycle.
▪ tw=1 is the time weight for the trend component.
▪ Xt is the actual demand at time t.
▪ Lt is the level component at time t.
▪ Bt is the trend component at time t.
▪ St is the seasonal component at time t.
▪ Ft is the forecasted demand at time t.
▪ The calculations are as follows:
Calculations for 1st to 4th month of Forecast Demand of Air Filter

For the first month, we set:
For the second month, we have:
For the third month, we have:

For the fourth month, we have:
Summary Holt-Winters Model for the 1st four months of Air Filter:
Forecast AIR Leve Tren Seasona Forecas

Month FILTER l d l t
1/1/2024 15 15 7.5 0
2/1/2024 22.5 22.5 7.5 0 30
3/1/2024 30 30 8.25 0 38.25
4/1/2024 37.5 37.5 9 0 46.5
The charts below show the forecasted demand for the 12 products of Cychlo
Auto Parts, based on the Holt-Winters method applied to the monthly sales data
from January 2020 to December 2023.
Figure 4.7 Product Demand Forecast for Air Filter
Figure 4.8 Product Demand Forecast for Battery

Figure 4.9 Product Demand Forecast for Bearing
Figure 4.10 Product Demand Forecast for Cylinder Liner

Figure 4.11 Product Demand Forecast for Clutch Disc
Figure 4.12 Product Demand Forecast for Clutch Cover

Figure 4.13 Product Demand Forecast for Fan Belt
Figure 4.14 Product Demand Forecast for Fuel Filter

Figure 4.15 Product Demand Forecast for Oil Filter
Figure 4.16 Product Demand Forecast for Oil Seal

Figure 4.17 Product Demand Forecast for Piston
Figure 4.18 Product Demand Forecast for Piston Ring
The charts compare the actual and forecasted sales values, as well as the
mean absolute percentage error (MAPE) of the forecasts. The charts also indicate
the optimal values of the smoothing parameters alpha, beta, and gamma for each
product. The last point on each chart is the forecast for the next month (September
2023).
MILP Model
The study in Chapter 4 aims to analyze the inventory management system of Cychlo
Auto Parts Supply, focusing on optimizing the procurement process to meet demand
efficiently. Utilizing the Holt-Winters forecasting model, the study forecasts monthly
sales and employs a MILP model to minimize the total cost of inventory
management, including ordering, holding, and packaging costs.
This is a mathematical model that can be used to optimize the inventory

management decisions, such as how much to order, when to order, and how to
allocate the inventory among different products. The model consists of an objective
function and a set of constraints. The objective function is a linear expression that
represents the goal of minimizing the total inventory cost, which includes ordering
cost, holding cost, and shortage cost. The constraints are linear equations or
inequalities that represent the physical and logical limitations of the inventory system,
such as demand, capacity, lead time, and inventory balance. The variables in the
model can be either continuous or integer, depending on the nature of the decision.
For example, the order quantity can be a continuous variable, while the order
frequency can be an integer variable.
To formulate a MILP model for Cychlo Auto Parts, the following notation can be
used:
i: index for product type,i=1,2,...,m
t: index for time period,t=1,2,...,n
dit: demand for product i in period t
qit: order quantity for product i in period t
yit: binary variable indicating whether an order is placed for product i in period t
yit=1 if yes,yit=0 if no
sit: inventory level for product i at the end of period t
bit: backlog quantity for product i at the end of period t
K: fixed ordering cost per order
ci : variable ordering cost per unit of product i
hi: holding cost per unit of product i per period
pi: shortage cost per unit of product i per period
The objective function can be written as:

The constraints is Inventory balance:
s¿ =si ,t −1+ q¿ −d ¿ + b¿ , ∀ i, t
The MILP model was utilized on the inventory data for Cychlo Auto Parts and the
outcomes were as follows:
Table 4.2 MILP Model Variables and Calculations Summary
Month Co xt hi It Ft Min. C
Jan 15000 100 8000 328.6 335 4128800
Feb 18000 120 10000 266.5 290 4825000
Mar 20000 110 9000 315.9 310 5043100
Apr 16000 90 8500 332.5 345 4266250
May 22000 130 9500 293.9 320 5652050
Jun 25000 150 12000 312.7 335 7502400
Jul 23000 140 11000 289.4 305 6403400
Aug 19000 100 8300 315.5 325 4518650
Sep 21000 120 9200 334.7 355 5599240
Oct 17000 80 8800 312 315 4105600
Nov 20000 110 10500 333.3 340 5699650
Dec 18000 100 9800 307 310 4808600

Cost vs Min Cost

30000
25000
20000
15000
10000
5000
0
1 2 3 4 5 6 7 8 9 10 11 12
Figure 4.25 MILP Model Cost vs. Minimized Cost Histogram
This MILP model provides a structured approach to managing inventory by

considering the trade-offs between ordering, holding, and packaging costs to meet
customer demand efficiently. The model’s output will guide Cychlo Auto Parts
Supply in making strategic decisions regarding inventory levels and order timings.
The summary table will present a clear overview of the monthly costs and facilitate
the evaluation of the inventory management system’s performance.
Moving Average
A time series forecasting method called the Moving Average model

determines the average of the sales amounts over a given number of periods. Here,
we employ a 3-month moving average, which means we take the average of last
month's sales and the sales from the two months prior.
Here, we examine how the Moving Average model is used to analyze and
predict inventory trends at Cychlo Auto Parts. One popular time series forecasting
technique is the Moving Average model, which calculates the average of a series of
successive data points over a specified period of time. This model is good at
identifying underlying trends and reducing short-term oscillations.
Model Implementation:
To deploy the Moving Average model to our inventory data, we computed the
moving average for a selected window size, which denotes the number of months
included in each average calculation. For our evaluation, we adopted a simple three-
month moving average. The formula for the moving average (MA) at each temporal
juncture (t) is articulated as:
1
M A t= ×(Sale s t−2 + Sale st −1+ Sale s t )
3
This equation averages the sales figures for the current month and the two
antecedent months. The moving average is then determined for each ensuing month
in the dataset, offering a smoothed portrayal of the inventory trend.
The Moving Average model was utilized on the inventory data for Cychlo
Auto Parts and the outcomes were as follows:
Table 4.3 Moving average sales and sales forecast
Month Sales Amount 3-Month Moving Average
Jan 12000 -
Feb 20000 -
Mar 15000 15666.67
Apr 18000 17666.67
May 16000 16333.33
Jun 25000 19666.67
Jul 22000 21000.00
Aug 17000 21333.33
Sep 21000 20066.67
Oct 19000 19000.00
Nov 23000 21000.00
Dec 20000 20666.67

Sales vs 3-Month Moving Average

30000
25000
20000
15000
10000
5000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Figure 4.26 Moving Average Sales vs. Forecasted Sales
The monthly inventory amounts and their corresponding three-month moving

averages are summarized in the table. The moving average provides a smoothed
representation of the inventory trend, making it easier to identify underlying trends
and patterns. Notably, because of the window size requirement, moving average
calculations are not performed for the first two months.
In summary, Cychlo Auto Parts can forecast and analyze inventory trends
with great accuracy by using the Moving Average model. The three-month moving
average strikes a harmony between adaptability to alterations and the attenuation of
short-term perturbations. Augmented analysis and juxtaposition with alternative
forecasting models can amplify the precision and dependability of future inventory
prognostications.
Exponential Smoothing
This is a more sophisticated technique that assigns different weights to the

past data, giving more importance to the recent observations and less importance to
the older ones. The exponential smoothing method can adapt to changes in the
demand pattern and produce more accurate forecasts than the moving average
method. However, this method also has some drawbacks, such as requiring an initial
forecast value, being unable to capture seasonality or trend in the data, and being
sensitive to the choice of the smoothing parameter.
The formula for the exponential smoothing method is:
F t=α X t −1+(1−α )F t−1
where:
 Ft is the forecast for period t
 Xt−1 is the actual demand for period t-1
 Ft−1 is the forecast for period t-1
 α is the smoothing parameter, a value between 0 and 1 that determines how

much weight is given to the recent observation
The assumptions and initial values are:
 α=0.2 is the smoothing parameter
 The historical data of monthly sales of 12 auto parts from January 2024 to
August 2025 are given in the paper
 The initial forecast for January 2024 is the average of the sales from January
2023 to December 2023. For example, for auto part 1, the initial forecast is:
12
1
F Jan= ∑ X i
12 i=1
1
F Jan= (12000+ 20000+15000+18000+16000+25000+ 22000+17000+21000+19000+ 23000+20000)
12
F Jan=19000
For February 2024, the forecast for each auto part is the weighted average of
the actual demand for January 2024 and the forecast for January 2024. For example,
for auto part 1, the forecast is:
F Feb=α X Jan+(1−α)F Jan
F Feb=0.2× 12000+ ( 1−0.2 ) ×19000
F Feb=17600
Similarly, for the other months, the forecasts are calculated as follows:
F Mar=0.2× 20000+(1−0.2)×17600=18400
F Apr =0.2 ×15000+ ( 1−0.2 ) × 18400=17320
F May =0.2 ×18000+(1−0.2)×17320=17776
F Jun=0.2 ×16000+(1−0.2)×17776=17220.8
F Jul=0.2 ×25000+(1−0.2)×17220.8=19376.64
F Aug =0.2× 22000+ ( 1−0.2 ) ×19376.64=20101.31
F Sep=0.2 ×17000+ ( 1−0.2 ) ×20101.31=18981.05
F Oct=0.2× 21000+(1−0.2)×18981.05=19784.84
F Nov =0.2× 19000+(1−0.2)×19784.84=19427.87
F Dec =0.2 × 23000+(1−0.2)×19427.87=20542.3
The table of results for the whole year (Jan-Dec) is shown below:
Table 4.4 Exponential Smoothing sales and sales forecast
Month Sales Amount Forecast
Jan 12000 19000
Feb 20000 17600
Mar 15000 18400
Apr 18000 17320
May 16000 17776
Jun 25000 17220.8
Jul 22000 19376.64
Aug 17000 20101.31
Sep 21000 18981.05
Oct 19000 19784.84
Nov 23000 19427.87

Dec 20000 20542.3
The graph below shows the actual and forecasted sales for each month, using the
exponential smoothing method with a smoothing parameter of 0.2:
Figure 4.26 Exponential Smoothing Sales vs. Forecasted Sales
The forecasted sales follow the general pattern of the actual sales, but are
smoother and less responsive to fluctuations. The exponential smoothing method
gives more weight to the recent observations and less weight to the older ones, and
thus adapts to changes in the demand level over time. However, the method also
tends to lag behind the actual sales, especially when there are sudden peaks or drops
in the data. The method also does not capture any seasonality or trend in the data, and
assumes that the future sales will be similar to the recent past. Therefore, the
exponential smoothing method may not be the most accurate or reliable method for
forecasting the sales of auto parts, and may need to be combined with other methods
or adjusted with additional factors.
Cost Benefit
One of the objectives of this study is to evaluate the performance of different

forecasting models for the monthly sales of auto parts. To measure the accuracy and
reliability of the forecasts, two error metrics are used: the mean squared error (MSE)
and the mean absolute error (MAE). These metrics quantify the deviation between
the actual and predicted values of the sales, and reflect the quality of the forecasting
models.
The MSE is defined as the average of the squared differences between the
actual and predicted values. The MSE gives more weight to larger errors than smaller
ones, and thus penalizes outliers more severely. The MSE can be calculated as:
n
1
MSE= ∑ ¿¿
n t=1
where Xt is the actual value at time t, ^

X t is the predicted value at time t, and n
is the number of observations.
The MAE is defined as the average of the absolute differences between the
actual and predicted values. The MAE gives equal weight to all errors, regardless of
their magnitude, and thus is less sensitive to outliers. The MAE can be calculated as:
n
1
MAE= ∑ ∣ X − ^X t ∣
n t =1 t
where Xt , ^
X t , and n are the same as above.
The MSE and MAE are useful indicators of the errors associated with the
forecasting models, and can be used to compare their performance. However, they do
not provide information about the benefits or costs of using the forecasts for decision
making. For this purpose, a cost-benefit analysis is conducted to assess the trade-off
between the accuracy and the value of the forecasts. The cost-benefit analysis
considers the following factors:
 The inventory holding cost, which is the cost of storing the unsold auto parts
in the warehouse. This cost depends on the inventory level and the unit
holding cost per period.
 The stockout cost, which is the cost of losing potential sales due to
insufficient inventory. This cost depends on the demand level and the unit
profit margin per sale.
 The ordering cost, which is the cost of placing and receiving orders from the
suppliers. This cost depends on the order quantity and the fixed ordering cost
per order.
The cost-benefit analysis aims to find the optimal order quantity that minimizes
the total cost of inventory management, while satisfying the expected demand. The
optimal order quantity is determined by using the forecasts generated by the different
models, and comparing the resulting total costs. The model that produces the lowest
total cost is considered the most beneficial for the decision making. The details of the
cost-benefit analysis are presented in the next section.
The following table shows the mean absolute error (MAE) and the mean squared
error (MSE) of each method. The MAE and MSE are common measures of
forecasting accuracy, where lower values indicate less error. The table also shows the
complexity and implementation cost of each method.
Table 4.5 Classification of Forecasting Methods in Cost Benefit Analysis
Forecasting MAE MSE Complexity Implementation Cost

Method
Holt- 0.021 0.001 High High

Winters
MILP 0.023 0.001 Very High Very High

Model
Moving 0.034 0.002 Low Low

Average
Exponentia 0.032 0.002 Moderate Moderate

l Smoothing
Based on the table, we can see that Holt-Winters has the lowest MAE and
MSE, followed by MILP Model, Exponential Smoothing, and Moving Average. This
means that Holt-Winters and MILP Model are more accurate than Exponential
Smoothing and Moving Average, but they are also more complex and costly to
implement. Therefore, the best forecasting method depends on the trade-off between
accuracy and cost that Cychlo Auto Parts is willing to accept. Therefore, the Holt-
Winters Model seems to offer the most precise forecasting due to its consideration of
level, trend, and seasonality. However, the MILP Model may provide the best cost
optimization for inventory management. The Moving Average Model and
Exponential Smoothing offers simplicity and ease of use, which can be beneficial for
quick trend analysis. The choice of model would depend on the specific needs and
constraints of the research study. The figures from the current page suggest that the
Holt-Winters Model provides a detailed forecast, while the MILP Model offers a
structured approach to cost minimization, and the Moving Average Model gives a
straightforward trend analysis.
Annual and Monthly Sales Forecast (Brand)
Figure 4.19 Sales of ISUZU
The Isuzu auto parts sales are presented in a line cart, showcasing the units
sold for each part through a trend line. The chart highlights the oil filter as the most
sought-after part, ranking highest, with the clutch cover as the least popular, located
at the bottom. The cumulative percentage line helps to illustrate the percentage of
total sales attributable to each part. Based on the figure, it is clear that the top-
performing parts, namely the oil filter, battery, bearing, and fuel filter, account for
over 80% of total sales. Therefore, it is recommended that Cychlo Auto Parts
Supply focuses its marketing and sales efforts on these four parts to maximize
revenue. Conversely, the chart also indicates that the least popular parts, which
include the clutch disc, clutch cover, fan belt, and piston ring, account for less than
10% of total sales. In light of this, it may be prudent for Cychlo Auto Parts Supply
to minimize its inventory or even discontinue these parts.
Figure 4.20 Sales of FUSO
According to the figure, the top-selling spare parts for FUSO vehicles are
cylinder liners and batteries, which account for 20% and 18% of sales,
respectively. When combined, these two parts contribute to nearly 40% of total
sales. Other parts, such as bearings, oil filters, and fuel filters, each represent
approximately 8-9% of sales. The remaining parts make up a smaller percentage
of sales.
Figure 4.21 Sales of JEEP
The chart depicting Jeep parts sales, showcases various categories and their
corresponding cumulative sales percentages. The bars are arranged in descending
order, indicating the top-selling categories. The chart reveals that the four most
popular parts - Cylinder Liner, Piston, Oil Filter, and Bearing - contribute to over
70% of the total sales. This suggests that by prioritizing these four parts, Jeep can
significantly increase its overall sales. The remaining parts may still be
significant, but Jeep should focus on the top four initially to achieve the greatest
impact.
Figure 4.22 Sales of TOYOTA
The Pareto chart exhibits Toyota's total sales for each car part, arranged in
descending order of sales. The highest-selling part is located on the left, while the
lowest-selling part is on the right. The cumulative line chart depicts the percentage
of total sales that each part contributes. According to the figure, the battery is the
top-selling part, accounting for over 25% of total sales. Moreover, the piston, fuel
filter, and air filter are also popular, as each of them accounts for more than 15%
of total sales. The remaining parts, on the other hand, contribute less than 10% of
total sales. Toyota can utilize this line chart to prioritize its sales and marketing
efforts. For instance, the company should focus on selling more batteries, pistons,
fuel filters, and air filters since they make up a significant portion of total sales.
Additionally, Toyota may want to consider reducing the number of parts it offers,
as many of these parts contribute very little to total sales.
Figure 4.23 Sales of MULTICAB
The line chart is an invaluable tool for gaining insights into the distribution
of sales for Multicab vehicle parts. It illuminates the significant impact that a
select few parts have on overall sales performance, with Cylinder Liner, Bearing,
and Oil Filter comprising over 70% of total sales. These key parts are crucial
drivers of the company's profitability and should receive top priority in terms of
inventory management, supply chain optimization, and marketing efforts.
It's important to note that while the remaining parts may contribute less to
total sales, they should not be disregarded. The Clutch Disc, Fan Belt, and Oil
Seal, for example, collectively account for a sizeable 15% of sales. Although they
may not be as significant individually, their combined contribution is substantial.
Therefore, it's crucial to strike a balance between focusing on the major
contributors while ensuring that the other parts receive appropriate attention.
Figure 4.24 Sales of Spare parts sold per month
Based on the data, it appears that the oil filter is currently the top-selling
automotive spare part, followed by the fuel filter and air filter. Conversely, the
piston ring and piston seal seem to be the least popular. Sales of all spare parts
have experienced a gradual increase over the past year, with a minor dip in July
2023. May 2023 saw the most significant boost in sales, with a 22% rise from the
previous month. Overall, the automotive spare parts market is steadily expanding,
likely due to several factors such as the growing number of vehicles on the road
and the increasing average age of cars, leading to more demand for repairs and
maintenance.
350
300
250
200
150
100
50
0
ISUZU FUSO JEEPNEY MULTICAB TOYOTA
AIR FILTER BATTERY BEARING CYLINDER LINER

CLUTCH DISC CLUTCH COVER FAN BELT FUEL FILTER
OIL FILTER OIL SEAL PISTON PISTON RING
Figure 4.25 Different companies
This table showcases the varying quantities of automotive parts sold by

different companies in the Philippines. According to the data, the air filter is the
most in-demand part, followed by the battery and the bearing. Conversely, the
piston ring is the least popular part. Among the brands, FUSO is the most sought-
after, with Isuzu and Jeep following close behind. Conversely, Multicab is the
least popular brand. The table is organized in a descending order based on the
total number of parts sold, with the most popular parts listed at the top and the
least popular ones at the bottom.
PISTON RING PISTON RING
PISTON PISTON
OIL SEAL OIL SEAL
OIL FILTER OIL FILTER
FUEL FILTER FUEL FILTER
FAN BELT FAN BELT
CLUTCH COVER CLUTCH COVER
CLUTCH DISC CLUTCH DISC
CYLINDER LINER CYLINDER LINER
BEARING BEARING
BATTERY BATTERY
AIR FILTER AIR FILTER
0 100 200 300 400 500 600 700 800 900
Figure 4.26 Top No. of sales per parts
The graph offers a clear representation of the sales figures for each part,
highlighting the parts that are in high demand and those that are not. The most
sought-after parts are the bearing, oil filter, fuel filter, oil seal, and fan belt, which
are crucial for the proper functioning of vehicles and machinery. The fan belt, in
particular, is relatively inexpensive and easy to replace, which could explain its
popularity. In contrast, parts such as pistons, cylinder liners, clutch covers, piston
rings, and clutch discs are less popular, suggesting that they are either less
essential or more expensive to replace. Furthermore, these parts may not require
frequent replacement, as they are less prone to wear and tear. Overall, this graph
provides valuable insights for businesses that sell these parts and for consumers
who wish to make informed purchasing decisions.
Forecasting Sales per items
The graph depicts the projected sales of various automotive parts for the
next two years. It shows a general uptick in sales for all items, except for piston
rings. The highest growth in sales is expected for air filters, followed by batteries,
bearings, and cylinder liners. There are several potential reasons behind this
predicted increase in sales, such as the global economy's recovery from the
COVID-19 pandemic and the rise in electric vehicle popularity, which may be
driving demand for specific parts like batteries and electric motors. Additionally,
the aging global vehicle fleet is likely to lead to a higher demand for replacement
parts. The forecast also indicates some differences in sales between items. For
instance, the sales of air filters are projected to increase by a greater percentage
than the sales of piston rings. This discrepancy may be due to air filters being
relatively inexpensive and easy to replace, while piston rings are more costly and
complicated. All in all, the forecast suggests that the automotive parts market will
experience growth in the coming years, driven by various factors such as the
increasing demand for new vehicles, the popularity of electric vehicles, and the
aging global vehicle fleet.
ABC Analyses
As per the ABC analysis of Toyota auto parts, the categorization of the
items provides insight into their value and contribution towards the revenue. The
A items, which include oil filter, battery, bearing, fuel filter, cylinder liner, oil
seal, and piston, are of significant value and play a crucial role in generating
revenue for the company. On the other hand, the B items, comprising clutch disc,
piston ring, and air filter, also have importance but to a lesser extent. Lastly, the
clutch cover and fan belt have the least contribution to the revenue generated by
the company.
The A items for Fuso autoparts are batteries, clutch discs, cylinder liners, air
filters, clutch covers, bearings, and oil seals, play a critical role in driving the
revenue. The B items, including oil filters, pistons, and fuel filters, are also
significant, albeit to a lesser degree. Finally, the piston rings and fan belts make
the smallest contribution to the company's revenue.
For Jeepney autoparts, the A items are cylinder liners, batteries, pistons, oil
filters, bearings, piston rings, and fuel filters. The B items, including oil seals,
clutch discs, clutch covers, and air filters, also hold significant importance but to a
lesser degree. Lastly, fan belts contribute the least.
For Multicab, it is noticeable that there is no income generated from

batteries and clutch cover. However, it is promising that 26% of the revenue came
from cylinder liner.
An equal proportion for A items – bearing and battery, contribute to the

revenue, followed by oil filter with 1% difference. Together with the rest of the
analyses, fan belt contribute the least, maintaining its category as C item.
APPENDICES
Appendix A Product Demand Forecast
The tables represent the total quantity of items purchased on the company and
the forecasted monthly.
Table 1. Air Filter
Forecast Air Level Tren Seasonal Forecast

Month Filter d
1/1/2024 10 10 3.5 -0.75
2/1/2024 13.5 13.5 3.5 0.75 13.5
3/1/2024 12 13.1 2.9 -1.25 13.1
4/1/2024 17 15.7 3.5 0.25 14.8
5/1/2024 20 18.2 4.1 1.25 18.9
6/1/2024 7 14.1 2.1 -4.75 21.9
7/1/2024 6 10.9 -0.1 -4.25 10.9
8/1/2024 3 7.9 -1.5 -3.75 10.3
9/1/2024 13 10.9 0.6 -0.25 6.4
10/1/202 12 11.7 1.1 0.75 11.1
4
11/1/202 17 14.1 2.1 1.25 12.9
4
12/1/202 22 17.7 3.5 0.25 16.9
4
1/1/2025 10 14.9 2.5 -0.75 20.9
2/1/2025 13 14.5 2.1 0.75 16.2
3/1/2025 10 13.1 1.1 -1.25 16.1
4/1/2025 15 14.5 1.7 0.25 12.5
5/1/2025 17 16.1 2.3 1.25 15.9
6/1/2025 7 12.5 0.7 -4.75 18.2
7/1/2025 8 9.9 -0.7 -4.25 12.6
8/1/2025 6.5 7.9 -1.5 -3.75 8.7
Table 2. Battery
Forecast Battery Level Tren Seasonal Forecast

Month d
1/1/2024 6.5 6.5 1.5 -0.75
2/1/2024 8 8 1.5 0.75 8
3/1/2024 8.5 8.5 1.4 0.25 8.5
4/1/2024 9 9 1.4 0 8.8
5/1/2024 9.5 9.5 1.4 0.25 9.4
6/1/2024 1.5 5.9 -0.4 -4.25 9.9
7/1/2024 1 3.9 -1.5 -3.75 5.1
8/1/2024 2 3.1 -1.7 -1.75 2.4
9/1/2024 7 5.1 -0.4 0.25 1.4

10/1/202 6 5.1 -0.4 0.75 4.7
4
11/1/202 7 5.7 0.1 0.25 5.4
4
12/1/202 10 7.7 1.5 0 6.1
4
1/1/2025 1 5.5 0.1 -0.75 8.7
2/1/2025 8 6.5 0.7 0.75 4.8
3/1/2025 10 8 1.4 0.25 7.2
4/1/2025 11 9.4 1.7 0 9.2
5/1/2025 13 11 2.1 0.25 10.6
6/1/2025 1 7.5 0.1 -4.25 12.6
7/1/2025 1 5.5 -1.1 -3.75 7.6
8/1/2025 6.5 5.7 -0.9 -1.75 4.4
Table 3. Bearing
Forecast Bearing Leve Tren Seasonal Forecast

Month l d
1/1/2024 36.5 36.5 16.5 -1.75
2/1/2024 53 53 16.5 -1.75 51.25
3/1/2024 47.5 51.8 14.9 -3.75 67.75
4/1/2024 54.5 56.2 14.4 -2.75 63.05
5/1/2024 64 63.1 15.1 -0.75 67.85
6/1/2024 27 49.1 8.1 -13.75 77.45
7/1/2024 22 38.9 1.9 -13.25 43.45
8/1/2024 16 31.1 -2.3 -12.75 28.55
9/1/2024 34 33.7 -0.1 -9.25 16.05
10/1/2024 47 41.3 3.1 -8.75 24.35
11/1/2024 53 48.1 5.1 -7.75 35.65
12/1/2024 57 54.5 6.5 -6.75 45.45
1/1/2025 37 49.1 4.1 -9.75 54.25
2/1/2025 42 46.5 3.1 -10.75 43.45
3/1/2025 52 49.1 3.9 -8.75 39.85
4/1/2025 55 52.3 4.7 -7.75 44.25
5/1/2025 62 57.5 6.1 -5.75 49.25
6/1/2025 27 46.1 1.1 -13.75 58.05
7/1/2025 25 38.1 -2.9 -13.25 34.35
8/1/2025 26.25 32.65 -4.55 -12.75 22.25
Table 4. Cylinder Liner
Forecast Cylinde Level Tren Seasona Forecast

Month r Liner d l
1/1/2024 2.5 2.5 0 0
2/1/2024 2.5 2.5 0 0 2.5
3/1/2024 5 4.5 1.5 0.5 2.5
4/1/2024 4.5 4.5 1.5 0 6
5/1/2024 4 4.3 1.3 -0.5 6
6/1/2024 3.9 0.9 -0.5 4.8
7/1/2024 1 2.9 -0.1 -1.5 4.3
8/1/2024 1 2.1 -0.5 -1.5 1.8
9/1/2024 3 2.5 0.1 0.5 1.1
10/1/202 3 2.7 0.3 0 3.1
4
11/1/202 4 3.1 0.5 0.5 3
4
12/1/202 5 3.9 0.9 0 4.1
4
1/1/2025 2 3.3 0.5 -0.5 4.8
2/1/2025 2 2.9 0.1 -0.5 3.3
3/1/2025 5 3.7 0.7 0.5 2.5
4/1/2025 4 3.7 0.7 0 4.9
5/1/2025 2 3.1 0.1 -0.5 4.4
6/1/2025 2.7 -0.3 -0.5 2.6
7/1/2025 2 2.3 -0.5 -1.5 1.9
8/1/2025 2.5 2.25 -0.55 -1.5 0.8
Table 5. Clutch Disc
Forecast Clutch Leve Tren Seasona Forecast

Month Disc l d l
1/1/2024 6 6 1 0
2/1/2024 7 7 1 0 7
3/1/2024 8.5 8.5 1.5 0.5 8
4/1/2024 9 9.5 1.9 -0.5 10
5/1/2024 8.5 9.3 1.7 -0.5 10.9
6/1/2024 1.5 6.3 -0.1 -4.5 10.5
7/1/2024 3 5.1 -0.7 -2.5 6.2

8/1/2024 1 3.7 -1.1 -3.5 4.4
9/1/2024 7 5.5 0.3 0.5 2.6
10/1/2024 8 6.7 0.9 0 5.8
11/1/2024 3 5.3 0.1 -2.5 7.6
12/1/2024 7 6.1 0.5 -0.5 5.9
1/1/2025 6 6 0.5 0 6.6
2/1/2025 7 6.5 0.5 0 6.5
3/1/2025 9 7.5 0.9 0.5 7
4/1/2025 9 8.5 1.3 -0.5 8.9
5/1/2025 10 9.3 1.5 -0.5 9.3
6/1/2025 1.5 6.3 -0.1 -4.5 10.3
7/1/2025 3 5.1 -0.7 -2.5 6
8/1/2025 1 3.7 -1.1 -3.5 4.2
Table 6. Clutch Cover
Forecast Clutch Leve Tren Seasona Forecast

Month Cover l d l
1/1/2024 2.5 2.5 -0.5 0
2/1/2024 2 2.2 -0.5 -0.5 2
3/1/2024 7 5.2 1.5 2.5 1.7
4/1/2024 2.5 4.2 0.5 -1.5 8.7
5/1/2024 6 5.4 0.9 1.5 3.7
6/1/2024 6 5.9 1.1 1.5 7.8
7/1/2024 1 4.1 0.1 -3.5 8
8/1/2024 3.3 -0.3 -3.5 1.6
9/1/2024 3 3.1 -0.3 -0.5
10/1/2024 4 3.5 -0.1 0 2.6
11/1/2024 3 3.3 -0.1 -0.5 3.4
12/1/2024 3 3.2 -0.1 -0.5 2.8
1/1/2025 3 3.1 -0.1 0 2.6
2/1/2025 3 3.1 -0.1 -0.5 3.1
3/1/2025 9 5.1 1.5 2.5 2.6
4/1/2025 2.5 4.1 0.5 -1.5 8.6
5/1/2025 6 5.3 0.9 1.5 3.6
6/1/2025 6 5.8 1.1 1.5 7.7
7/1/2025 1 4 0.1 -3.5 7.9
8/1/2025 2.5 3.4 -0.3 -3.5 1.5
Table 7. Fan Belt
Forecast Fan Level Tren Seasonal Forecast

Month Belt d
1/1/2024 15 15 -7.5 0
2/1/2024 7.5 7.5 -7.5 0 7.5
3/1/2024 15. 15.5 -2.5 2.5 0
5
4/1/2024 18 18 -1.5 1.5 15.5
5/1/2024 26. 26.5 5.5 3.5 17.5
5
6/1/2024 29. 29.5 7.5 3.5 35
5
7/1/2024 5.5 17.5 -3.5 -9 40
8/1/2024 4 11 -6 -10 14
9/1/2024 14 12 -4.5 -5.5 5
10/1/2024 15 13 -3.5 -4.5 7.5
11/1/2024 14 13.5 -2.5 -5.5 9.5
12/1/2024 15 14.5 -1.5 -4.5 10.5
1/1/2025 15 15 -0.5 0 8.5
2/1/2025 7.5 11.5 -2.5 0 14.5
3/1/2025 15. 14.5 -1.5 2.5 9
5
4/1/2025 18 16.5 0.5 1.5 16.5
5/1/2025 26. 21.5 3.5 3.5 18.5
5
6/1/2025 29. 24.5 5.5 3.5 28.5
5
7/1/2025 5.5 16.5 -1.5 -9 33.5
8/1/2025 4 11.5 -4.5 -10 15
Table 8. Fuel Filter
Forecast Fuel Leve Tren Seasonal Forecast

Month Filter l d
1/1/2024 32.5 32.5 0.5 0
2/1/2024 32 32.4 0.4 -0.5 33
3/1/2024 33 33 0.4 0 32.3
4/1/2024 39 38.2 2.2 1.5 33.4
5/1/2024 49.5 47.8 5.8 3.5 41.9
6/1/2024 30 40.8 3.8 -9.5 57.1
7/1/2024 19 31.8 -0.2 -10.5 35.1

8/1/2024 7.5 22.8 -3.2 -11.5 21.1
9/1/2024 16 19.8 -1.2 -5.5 8.1
10/1/202 35 29.8 3.8 -0.5 14.3
4
11/1/202 41 37.8 6.8 0 33.1
4
12/1/202 54 48.8 10.8 1.5 44.6
4
1/1/2025 34 43.8 8.8 0 60.6
2/1/2025 29 38.8 6.8 -0.5 52.6
3/1/2025 27 34.8 4.8 0 45.1
4/1/2025 35 35.8 5.8 1.5 39.6
5/1/2025 46 41.8 8.8 3.5 43.1
6/1/2025 26 36.8 5.8 -9.5 53.6
7/1/2025 15 29.8 2.8 -10.5 33.1
8/1/2025 19.75 25.65 0.55 -11.5 22.1
Table 9. Oil Filter
Forecast Oil Leve Tren Seasonal Forecast

Month Filter l d
1/1/2024 34.5 34.5 17.5 0
2/1/2024 52 52 17.5 0 52
3/1/2024 37 47.5 12.5 -5 69.5
4/1/2024 36 44 9 -6 60
5/1/2024 60.5 58 13 2.5 53
6/1/2024 19.5 41 4 -14.5 71
7/1/2024 15 30 -3 -15 45
8/1/2024 11 22 -6 -16 27
9/1/2024 26 23 -4 -5 16
10/1/202 38 30 1 -6 19
4
11/1/202 47 39 5 -5 31
4
12/1/202 70 53 11 2.5 44
4
1/1/2025 37 48 8 0 66.5
2/1/2025 42 46 7 0 56
3/1/2025 37 43.5 5.5 -5 53
4/1/2025 36 41 4.5 -6 44
5/1/2025 60.5 51 9.5 2.5 39.5

6/1/2025 19.5 39 4.5 -14.5 63
7/1/2025 15 29 -1.5 -15 43.5
8/1/2025 11 21.5 -4.5 -16 27.5
Table 10. Oil Seal
Forecast Oil Level Tren Season Forecast

Month Seal d al
1/1/2024 17.5 17.5 7.5 0
2/1/2024 25 25 7.5 0 25
3/1/2024 37 37 12 0 32.5
4/1/2024 34.5 36.5 11 -2.5 49
5/1/2024 49.5 48.5 14 2.5 47.5
6/1/2024 2 33.5 3 -19.5 64.5
7/1/2024 14.5 25.5 -2 -18.5 39.5
8/1/2024 9 18.5 -5 -19.5 21.5
9/1/2024 24 21.5 -3 -15.5 4.5
10/1/2024 21 20.5 -2 -14.5 18.5
11/1/2024 31 25.5 1 -13.5 18.5
12/1/2024 34 31.5 5 -12.5 26.5
1/1/2025 20 28.5 3 -19.5 36.5
2/1/2025 27 28.5 3 -18.5 31.5
3/1/2025 38 34.5 6 -15.5 31.5
4/1/2025 31 33.5 5.5 -14.5 38.5
5/1/2025 47 41.5 9.5 -2.5 35
6/1/2025 2 29.5 0.5 -19.5 49
7/1/2025 14.5 23.5 -2.5 -18.5 30
8/1/2025 12.7 19.25 -4.75 -19.5 21
5
Table 11. Piston
Forecast Piston Level Tren Seasona Forecast

Month d l
1/1/2024 2.5 2.5 0 0
2/1/2024 2 2.4 -0.1 -0.5 2.5
3/1/2024 3.5 3.1 0.4 0.5 1.9
4/1/2024 3.5 3.4 0.5 0 3.5

5/1/2024 3.5 3.5 0.5 0 3.9
6/1/2024 2 2.9 -0.1 -1 4
7/1/2024 1 2.1 -0.5 -1.5 1.8
8/1/2024 1 1.5 -0.7 -1.5 0.6
9/1/2024 3 2.1 -0.1 0.5 0.8
10/1/2024 2 2 -0.1 -0.5 2.5
11/1/2024 4 3.1 0.4 0.5 1.9
12/1/2024 5 4.1 0.9 0 3.5
1/1/2025 2 3.1 0.1 0 5
2/1/2025 2 2.9 -0.1 -0.5 3.2
3/1/2025 2 2.7 -0.1 0 2.8
4/1/2025 3.5 3.1 0.4 0 2.6
5/1/2025 3.5 3.4 0.5 0 3.5
6/1/2025 2 2.9 -0.1 -1 3.9
7/1/2025 1 2.1 -0.5 -1.5 1.8
8/1/2025 1 1.5 -0.7 -1.5 0.6
Table 12. Piston Disc
Forecast Piston Level Tren Seasona Forecast

Month Disc d l
1/1/2024 4.5 4.5 -2 0.75 -
2/1/2024 2.5 3.1 -1.86 0.4 2.25
3/1/2024 5 3.68 -1.66 0.68 2.48
4/1/2024 6.5 4.54 -1.32 0.72 4.94
5/1/2024 6 5.23 -0.89 0.58 6.18
6/1/2024 1 4.59 -1.1 0.11 4.34
7/1/2024 2 3.87 -1.29 0.26 1.49
8/1/2024 1 3.1 -1.46 0.16 2
9/1/2024 4 3.18 -1.32 0.63 1.64
10/1/2024 4 3.34 -1.19 0.6 3.18
11/1/2024 5 3.67 -0.97 0.68 3.34
12/1/2024 6 4.13 -0.66 0.73 4.67
1/1/2025 4 4.3 -0.53 0.47 5.13
2/1/2025 2 4.14 -0.62 0.24 3.77
3/1/2025 2 3.9 -0.76 0.26 2.14
4/1/2025 8 4.52 -0.38 0.89 2.9
5/1/2025 5 4.82 -0.08 0.52 5.52
6/1/2025 1 4.46 -0.26 0.11 4.74
7/1/2025 - 4.17 -0.43 - 1.46
8/1/2025 - 3.74 -0.6 - 1.97
CHAPTER V
Conclusion:
Criteria
Speed and Integration and Maintenance
Alternatives Efficiency Compatibility and Support Security Scalability
Holt Winter 3 2 8 10 5
MILP 4 4 5 15 10
Moving Average 5 4 5 12 10
Step 3. Calculate the weight using subjective, objective or hybrid

methods (follow the steps of the used weighting method : Rank Sum
Straight Rank Exponent
Criterion Rank Rank Sum Rank Reciprocal (p=2)
Normali Normali
Weight Normalize Weight ze Weight ze
Speed and
Efficiency 1 5 0.33 1 0.44 0.1111 0
Integration and
Compatibility 3 3 0.2 0.33 0.15 2.7778 0.12
Maintenance and
Support 5 1 0.07 0.2 0.09 13.4444 0.56
Security 4 2 0.13 0.25 0.11 7.1111 0.3
Scalability 2 4 0.27 0.5 0.22 0.4444 0.02
Total 15 1 2.28 1 23.89 1

n 5
Step 4: Construct normalized decision matrix (using Rank

Sum for the Weight)
Weight 0.3 0.2 0.07 0.13 0.27
Criteria Speed and Integration and Maintenance
Holt Winter 3 2 8 10 5
MILP 4 4 5 15 10
Moving Average 5 4 5 12 10
4.1. Calculate
(Σxij^2)^1/2
Holt Winter 1 0.4 0.53 1.33 1.33
MILP 1.33 0.8 0.33 2 2.67
Moving Average 1.67 0.8 0.33 1.6 2.67
Σxij^2)^1/2 2 1.41 1.1 2.22 2.58
4.2 Calculate rij

Holt Winter 1.5 1.41 7.3 4.5 1.94
MILP 2 2.83 4.56 6.75 3.87
Moving Average 2.5 2.83 4.56 5.4 3.87
Step 5: Construct the weighted normalized decision matrix

(using Rank Sum for the weight)
Holt Winter 0.22 0.14 0.01 0.03 0.14
MILP 0.17 0.07 0.01 0.02 0.07
Moving Average 0.13 0.07 0.01 0.02 0.07
Step 6: Determine the ideal and

negative ideal solutions.
6.1 Determine the Ideal

Solution
Holt Winter 0.22 0.14 0.01 0.03 0.14
MILP 0.17 0.07 0.01 0.02 0.07
Moving Average 0.13 0.07 0.01 0.02 0.07
A*= 0.22 0.14 0.01 0.03 0.14
6.2 Determine the

Negative Ideal Solution
Holt Winter 0.22 0.14 0.01 0.03 0.14
MILP 0.17 0.07 0.01 0.02 0.07
Moving Average 0.13 0.07 0.01 0.02 0.07
A*= 0.13 0.07 0.01 0.02 0.07
Step 7: Calculate the separation measures for each alternative.
7.1 Ideal Solution

Criteria Speed and Integration and Maintenance Scalabili Σ(vj*–
Alternatives Efficiency Compatibility and Support Security ty vij)2
Si* = [ Σ (vj*– vij)2 ] ½
Holt Winter 0 0 0.00003 0 0 0.00003 0.0055
MILP 0.00309 0.005 0 0.0001 0.00474 0.01292 0.1137
Moving Average 0.0079 0.005 0 0.00002 0.00474 0.01767 0.1329
Criteria Speed and Integration and Maintenance Scalabili Σ(vj*–

Alternatives Efficiency Compatibility and Support Security ty vij)2
Si* = [ Σ (vj*– vij)2 ] ½
Holt Winter 0.0079 0.005 0 0.0001 0.00474 0.01774 0.1332
MILP 0.00111 0 0.00003 0 0 0.00114 0.0338
Moving Average 0 0 0.00003 0.00002 0 0.00005 0.0074
Step 8: Calculate the relative closeness to the ideal solution Ci*
Alternatives Ci Remarks
Holt Winter 0.9605 Best
MILP 0.2291 3rd
Moving Average 0.0526 2nd
Step: 9 Conclusion
Based on the data provided, the Holt-Winters technique outperforms other

forecasting algorithms, with an average moving average (AMA) of 0.9605. This
means it is the most accurate predictor of future values. The moving average
approach is likewise a viable choice, with an AMA of 0.9526. However, the Mixed
Integer Linear Programming (MILP) technique is less effective, with an AMA of
only 0.2291. The Holt-Winters approach is a sort of exponential smoothing that
considers both the trend and seasonality of the data. This makes it an excellent
choice for data containing both of these qualities. The moving average method is
simpler, using the average of the most recent data points. This can be an effective
method for data that is not trending or seasonal. The MILP approach is a more
advanced method for optimizing a set of constraints. This can be a suitable
alternative for data that is extremely complex or has a large number of variables. It is
vital to remember that the optimal algorithm will differ based on the data set. It is
usually a good idea to experiment with multiple solutions to find which one works
best for your specific problem.
Recommendation:
Real-time Tracking:
In order to track inventory levels, set up a real-time tracking system. This helps to
reduce stockouts, prevent overstocks, and improve overall inventory accuracy.
Integration with Other Systems:
Integrate the IMS with other essential systems, such as sales, procurement, and
accounting. This ensures smooth communication among departments, reducing
manual data entry and errors.
Demand Forecasting:
Use demand forecasting techniques to predict future demand trends. This helps to
optimize stock levels and ensure that the right products are available at the right time.
Supplier Collaboration:
Set up a collaborative platform with suppliers to improve communication and

streamline the procurement process. This can help you maintain ideal stock levels
and negotiate better terms.
Security Measures:
Implement strong security measures to secure critical inventory data. This comprises
user access limits, data encryption, and periodic security assessments.
Mobile Accessibility:
Provide mobile access to the IMS, allowing employees to view real-time inventory
information from anywhere. This is especially beneficial for employees who need to
verify inventory levels on-the-go.
Reporting and Analytics:
Include thorough reporting and analytics capabilities to gain insight into inventory
performance. Customizable reports can help you make more informed decisions
about restocking, pricing, and product promotions.
Scalability:
Make sure the IMS is scalable to meet future development. The system should be
able to handle an increasing number of products, transactions, and users while
maintaining acceptable performance.
Training and Support:
Provide proper training and continuing assistance to staff utilizing the IMS. This aids
in increasing the system's efficiency and swiftly correcting any difficulties.
Regular Updates and Maintenance:
Keep the IMS software up to speed with regular upgrades that provide new features,
bug fixes, and increased security.
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Technological Institute of the Philippines

Research Compendium, 2023

Streamlining at Guiguinto, Bulacan using Inventory

Students, Industrial Engineering Department

Streamlining processes in Guiguinto, Bulacan with specific focus on

1.1 BACKGROUND OF THE STUDY

The auto parts supply business under investigation is an established player

1.2 STATEMENT OF THE PROBLEM

1.3 OBJECTIVES OF THE STUDY

a) To enhance the inventory management of Cychlo Auto Parts

b) To determine the impact of poor handling and lack of supplies in Cychlo

d) To analyze the supply needed in forecasting of demand

e) To minimize both overstocking and under-stocking of inventory.

f) To develop a continuous supply of materials and stock so that production

An auto parts supply company's inventory management system is a

1.5 SCOPE AND LIMITATIONS

1.6 SIGNIFICANCE OF THE STUDY

3) A well-managed IMS also indirectly benefits the customers. Customers will

To understand how an auto supply company operates through its inventory

The null hypothesis is that in auto parts supplier firms, an efficient

the company’s effectiveness. Primary operational metrics such as inventory cost,

Alternative hypothesis (Ha) states that a lack of an adequate inventory

IIoT is the application of IoT in businesses. In order to automate

implementation plan and is not a one-size-fits-all answer. When using this

In the study made by Nirmala et al., (2022), utilizing ABC (Always

In the study made by Gani et al., (2020), to make a manufacturing

for the management of the manufacturing industry. The application of indicators

In the study conducted by Evdokimova. (2021), in the said study the

Implementing a methodology centered on continuous improvement in order to

2.1 MAJOR CONCEPTS

In the research of Alkahtani, Hidri, and Mrad. (2023), any organization

In the study made by Da Silva, Rodriguez. (2011), this study's primary

In one study made by Perks, and Delport. (2023), prior to Covid-19,

Based on the adoption of an agile supply chain inventory management

In the study made by Achetoui, Mabrouki, and Mousrij. (2019), their

In the research of Mashayekhy, et al., (2022), this research looked into

efficient towards managing inventory levels, storage costs, and stockouts

The utilization of a conceptual framework is of utmost importance in research

Figure 3.1 The Conceptual Framework of the Study

3.2 FISHBONE DIAGRAM (RCA)

The fishbone diagram reveals many fundamental reasons contributing to

economic issues such as changeable market demand, customer preferences,

3.2 RESEARCH DESIGN

A mixed-methods strategy that includes both quantitative and qualitative

3.3 RESEARCH LOCALE

To ensure that the participants accurately represented the population of

3. 5 DATA GATHERING TOOL

3.6 RESEARCH TOOL

Root Cause Analysis

● Applying of Root Cause Analysis (RCA) may be employed to discover the

The ABC analysis is a well-recognized classification approach that utilizes

● The objective of this research is to identify the key elements that

It illustrates the standardized process of perception and evaluating within

Results and Discussion

In this chapter, researchers present the outcome as well as an analysis of the

Demographic Profile and Preliminary Data of Respondents

Figure 4.1 Age of the Respondents

Figure 4.2 Position of the respondents

Based on the data we gathered on our survey, 25 percent is Auto parts

Figure 4.4 Satisfied with the current inventory system

Based on the data we gathered on our survey, 75 percent of respondents were

Figure 4.5 Rate with the current inventory system

Based on the data we gathered on our survey, 62.5 percent respondents