Republic of the Philippines

CAVITE STATE UNIVERSITY

GENERAL TRIAS CITY CAMPUS
Town Proper, City of General Trias, Cavite, 4107
(046)437-0693
[email protected]

INVENTORY MANAGEMENT: A TOOL FOR IMPROVING PRODUCT STOCKING OF

UPDRIFT STORE MOLINO BRANCH IN THE CITY OF BACOOR.

GROUP 4

Agalos, Adrian

Cabauatan, Cheriza

Lugan, Shelly Marie

Marasigan, Mary Grace

Miquiabas, Morillia Bon

Robea, Stephanie

RESEARCH PROPOSAL

Background of the Study

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

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

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

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

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

The objective of this research is to identify an accurate inventory management system for
improving product stocking at the Updrift Store Molino Branch in the City of Bacoor.

This study aims to answer the following questions:

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

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

Scope of the Study

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

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

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

Relevance of the Study

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

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

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

Research Design

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

involves gathering information through communication by using open-ended questions or other
methods. The most widely employed method in qualitative research is the ‘in-depth’ interview
where in the interviewer can encourage the respondent to talk, ask supplementary questions or
ask respondents to further explain their answers. The researchers will conduct a one-one
interview to the owner or to the manager to collect and gather important details and to answer the
questions that they prepared. Semi-structured interview approach is the most appropriate to
address this issue. Open questions in the in-depth interview allow the respondent to explain their
point of view without being limited by preconceived categories provided. The interviewer also
has the opportunity to clarify any ambiguity about the instructions or questions and may allow
probes on questions to encourage the respondent to enlarge on, clarify, or explain answers.
 The interview will be conducted in the store’s location in the City of Bacoor, Cavite.
Prior to the interview, respondents will be informed about the purpose of the research, the need
to record the interview and the confidentiality and anonymity of the information given. The
recordings were complemented with notes that will be taken during the interview and
impressions, ideas and thoughts of the interviewer that arose from the interview.

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

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

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

Bibliography

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

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

IBM. (2022). What is Inventory Management? New York, United States. https://www.ibm.com/ph-
en/topics/inventory-management

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

Jaco, M. (2020). How an Inventory Management System can help your business, Zip Inventory.
https://zipinventory.com/en/blog/how-an-inventory-management-system-can-help- your-business.html

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

The earliest form of inventory management dates back over 50,000 years in which people
used “tally sticks” to count. Particularly in ancient Greek and Egyptian societies, inventory
management developed into slightly more accurate accounting and record-keeping systems over
time. (CITY Clean and Simple, 2022).

The study is titled as Inventory Management: A tool for Improving Product Stocking of
Updrift Store Molino Branch in the City of Bacoor, is conducted to determine the reasons of the
stock-out problems of the Store which can really affects their customers, sales and income. The
objective of this research is to identify an accurate inventory management system for improving
product stocking of Updrift Store Molino Branch in the City of Bacoor. This research aims to
answer the questions- what are the practices they used and what concepts and techniques will be
adapted to improve the inventory management of Updrift Store. To determine the stock out
problems and the accurate inventory management that are needed to improve, the researchers
will use qualitative approach which is we are going to conduct an interview to gather necessary
information for the research. At the end of this study, we will be able to determine the causes and
effects of stock-outs problems and recommend solutions that would probably help the owner or
the manager of Updrift Store Molino Branch in the City of Bacoor, Cavite.

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

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

CRITICAL REVIEW LITERATURE

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

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

The goal of inventory management is to have the right products in the right place at the right
time. This requires inventory visibility, which entails knowing when to order, how much to order, and
where to store goods. The basic steps of inventory management include purchasing inventory, storing
inventory, and profiting from inventory. (IBM, 2022)

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

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

Using inventory management has several benefits, all base around the effective used of
goods. The main benefits of an inventory management system is to help reduce waste costs,
reduce storage costs, maximize sales, free up cash, increase sale and improve productivity. (Jaco,
M. 2020).

Research Design

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

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

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

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

improving product stocking at the Updrift Store Molino Branch in the City of Bacoor. For the
research method, we are going to use descriptive method where in it would help the researchers
in establishing the “whys” and ‘how’s” of the phenomenon that is being studied.
 In sampling techniques, it has two types, the probability and non-probability. The
researchers will use the non- probability sampling where in people are selected using non-
random criteria, therefore not everyone has a chance of being chosen.

THEORETICAL FRAMEWORK AND HYPOTHESIS DEVELOPMENT

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

Inventory Management helps to prevent stock-out problems. Effective inventory management

requires a delicate balance of not having too much inventory (leading to overstocking) or too little
inventory (causing stock-outs). A company must use effective inventory management to make sure it has
adequate inventory on hand to meet client demand. An organization that manages its inventory poorly
risks losing money on potential sales that cannot be fulfilled or wasting money by keeping too much
goods on hand. (Keenan, M. 2022)

This research aims to know what are the inventory practices used by Updrift Store Molino Branch
in the City of Bacoor and what techniques or methods that are needed to improve on the store’s inventory
management. The figure below shows the importance of inventory management to stock-out problems
which would help in preventing the store’s in any stock-out problems.

Figure 1. Causes of stock-outs and Effective accurate Inventory Management

ACCURATE DEMAND
FORECASTING

Setting reorder
points
INNACURATE
RECORDS

Using safety stock and

buffers

SUPPLIERS
DELAY
STOCK- INVENTORY
OUTS MANAGEMENT
MISCALCULATED
FORECASTING
Determining stock-out
patterns

MANUFACTURING
DISRUPTION
Using Inventory
Software