Polytechnic University of The Philippines 1: The Problem and Its Background

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES 1
Chapter 1
THE PROBLEM AND ITS BACKGROUND
Introduction
One of the essential factors that contributes to the success of a business is their
supervision of inventories. The organization should establish an optimal inventory
management to properly utilize and check how well the responsible officers address any
issues regarding inventories. Inventory management aims to keep inventories on optimal
level ― without excess and stockouts. It intends to minimize the different cost components,
such as the costs of supply inventory, ordering and carrying costs, and costs that results from
insufficient or excessive inventories, without compromising the quality. Some concerns
involving inventory management is of great importance to the competitive market. It can
interfere with the profitability of a business. Restaurants are one of the businesses that have
complex operations relating inventories, hence, an effective inventory system is inevitable.
The inventory management practices of Max’s Restaurant is the concentration of this
study. Max’s Restaurant, started in 1945 by Maximo Gimenez, is a Philippine-based
restaurant which serves fried chicken and other Filipino dishes. As time passes, it became
popular and grew to be known as “The house that fried chicken built”. It has expanded not
only in the Philippines but in other country as well. It has established itself as a household
name in the Philippines, an institution, and a proud Filipino tradition.
As the restaurant grows, managing of inventories became complicated. During the
past few years, Max’s Restaurant rely purely on manual inventory system. The said system
deals only with the monitoring of the products or stocks used by the restaurant. Thus, many
problems in managing inventories can be encountered such as the security, products
miscomputation, data loss, time consuming, manual checking and file storage. Although
technological progress has been increased, the restaurant still uses manual inventory
operation. It is the main reason why the researchers chose to study the inventory
management practices of Max’s Restaurant – to know how they still manage to use manual
operations despite of the changes especially in technology, and the problems mentioned
above. This research therefore intends to examine the effectiveness of their management
inventory practices and to develop recommendations to improve their existing system.
Theoretical Framework
Considering inventories as one of the assets that the businesses should focus into,
various theories about inventory management are created in order to help them optimized
the production and storage of units of products, and to minimize costs.
This study identified the theories that will be used in this study into three – (1) the
Inventory Control Theories, (2) Inventory Valuation Methods and (3) Theory of inventory
management based on demand forecasting. Under the Inventory Control theories are the
Just in Time and Inventory Depletion. Just in time inventory system is an inventory control
that aligns raw material orders from suppliers directly with production schedules. It promotes
making product only when necessary to fill orders, rather than making inventory in advance
and storing it. Another theory of inventory control is Inventory Depletion, a concept where the
management creates or buys inventories as units are depleted. As inventories begin to
deplete, an order is placed. This system takes into consideration the amount of time it takes
to make and deliver an item, from the time suppliers are purchased to the time the order
arrives at a customer’s business.

On the other hand, the three main inventory valuation methods are Specific
Identification, First in, First Out (FIFO) and the Weighted Average Method. Specific
Identification inventory costing assigns the actual cost to an identifiable unit of product. It is
applicable to use when purchasing and selling large inventory items. The First in, First Out
(FIFO) assumes that the first goods purchased are the first goods to sold. With FIFO, the
cost of inventory reported on the balance sheet depicts the cost of the inventory most recently
purchased. The weighted average method uses a weighted average unit cost in assigning
the cost of inventories.
In the theory of inventory management based on demand forecasting, the
management should have an efficient system of deciding what, when and how much to order.
Demand forecasting is making predictions about the future target sales based on historical
data and other information. It is a great help to inventory management by providing
information such as amount of inventory to order and store, computing the lead time and
inventory turns.
These theories were used in this study to relate and understand further the level of
effectiveness of the inventory management practices of Max’s Restaurant. The restaurant
also applies the FIFO method in valuing their inventories. After receiving the orders, they will
record all stocks in their manual stock card and will arrange it in a FIFO system. This method
helps them avoid spoilage of their stocks. In determining what, when and how much to order,
Max’s Restaurant uses a forecasting model based on their target sales. They are guided by
their previous sales and constantly monitor their average daily quantity sales so that
inaccurate forecasts will be avoided. This forecasting model helps them know the movement
of their stocks and from there, they decide on what, when and how much amount of
inventories to order.
Conceptual Framework
INPUT PROCESS OUTPUT

Profile of the Assessment of Effectiveness of
Respondents effectiveness of the inventory management
 Age inventory management practices of Max’s
 Sex practices of Max’s Restaurants in
 Civil Status Restaurants in Selected Cities in
 Highest Selected Cities in National Capital
Educational National Capital Region assessed
Attainment Region
 Number of years of Recommendations
experience in Presentation, Analysis
inventory and, Interpretation of
management data gathered through
 Number of survey questionnaire
trainings attended
 Job position level
Aspects in the
effectiveness of
inventory management
practices of Max’s
Restaurants in Selected
Cities in National
Capital Region
 Controlling and
overseeing
ordering
 Receiving of
inventory
 Storage and
maintenance of
inventory
 Tracking and
regulating of
inventory usage
FEEDBACK
Figure 1. Research Paradigm

The conceptual framework discussed about the stream of the study to be taken. It is
exhibited in a diagram or paradigm that structures the scope of the study; what this study
plans to prove or invalidate. The research paradigm that filled in as the guide of the study is
the Systems Approach or also called the Input-Process-Output Method. As per this model, a
framework has streams of data, materials, and energy that enter the framework from the
environment as information sources which undergo process and exits as output.
The input was the data that streamed and entered the framework from the
environment. It is made out of the respondents' profile as far as individual characteristics and
socioeconomics. The characteristics incorporate information on age, sex, civil status, highest
educational attainment, number of years of experience in inventory management, number of
trainings attended, and their job position level. Aspects incorporated into this study are
controlling and overseeing ordering inventory, receiving of inventory, storage and
maintenance of inventory, and the tracking and regulating of inventory usage.
To assess the level of effectiveness of inventory management of Max’s Restaurant,
the information gathered underwent process. The process box recognize the course of action
embraced to gather data, exhibit, examine, and interpret the information. The information
were gathered by the use of survey questionnaire. The output box mirrors the recognizable
proof of the significance of the respondents' evaluation on the effectiveness of the inventory
management of a fine dining restaurant when grouped by profile. Significant output can be
utilized by the restaurant to enhance the system in dealing with their inventories to maintain
a strategic distance from waste of goods and to upgrade the execution of the restaurant
concerning inventory management. Since inventory is a major factor in determining the sales,
this in turn will support referral for increment sales later on that will add to the development
of the restaurant. The arrows encompass the flow of information in the study process. The
feedback loops connects the input to the process, and to the output making it to be
continuous.
Therefore, this study sought to use the conceptual framework in the figure above to
determine how effective the implementation of the current inventory management practices
of Max’s Restaurant is and the efficiency of the procedures in case some problems are
encountered. This will also help the restaurant to improve or change their current
management practices into a better one.
Statement of the Problem
This study aimed to assess the level of effectiveness of inventory management
practices of Max’s Restaurants in Selected Cities in National Capital Region.
Specifically, it pursued to answer the following sub-problems:
1. What is the profile of the respondents in terms of the following variables?
1.1 Age
1.2 Sex
1.3 Civil Status
1.4 Highest Educational Attainment
1.5 Number of years of experience in inventory management
1.6 Number of Trainings Attended
1.7 Job Position Level
2. What is the level of effectiveness of the inventory management practices of Max’s
Restaurants in Selected Cities in National Capital Region as assessed by the
respondents in terms of the following aspects?
2.1 Controlling and Overseeing Ordering Inventory

2.2 Receiving of Inventory
2.3 Storage and Maintenance of Inventory
2.4 Tracking and Regulating of Inventory Usage
3. Is there a significant difference in the respondents’ assessment on the level of
effectiveness of the inventory management practices of Max’s Restaurants in Selected
Cities in National Capital Region when they are grouped according to profile?
Hypothesis
There is no significant difference in the respondents’ assessment on the level of the
inventory management practices of Max’s Restaurants in Selected Cities in National Capital
Region when they are grouped according to profile.
Scope and Limitations
The study focused on the level of effectiveness of measures engaged with the
inventory management of Max’s Restaurants in Selected Cities in National Capital Region.
The researchers selected only the branches from the National Capital Region as the basis
of study. The selection of the said location is brought about by the fact that it is the capital
region of the country and it is the center of businesses. The improvements on the inventory
control on restaurants in National Capital Region is a basis and serves as an industry
benchmark on other restaurants in the country.
This study focused on the process undertaken in their inventories for the purpose of
assessing the efficiency of their practices and improve those if needed. Recent studies show
that Max’s Restaurant uses manual inventory processes. The research will study and analyze
the different practices involved from receiving the inventory to the issuance from the stock
room, and other related incidents currently undertaken to improve the management of their
inventory.
The study did not undertake the different practices in each branch of the Max’s
Restaurant but will merely talk over the processes of managing their inventories.
The arrangement of the study is in order of its method in inventory from controlling
and overseeing, receiving, storing and maintaining and lastly, the regulating of their inventory
usage.
The researchers conducted a survey on restaurant managers, kitchen supervisors
and stock clerks, all from National Capital Region branches, from ages 20 and up. The
questions focused on the level of effectiveness of the practices concerning inventories are.
From their answers, the researchers determined the practices that instigate their inventory
management to become effective.
Significance of the Study
The results of the study will be of great benefit to the following:
Food Industry/Restaurants. The outcome of this study will help businesses
specially the food industry to have enough knowledge on the importance of proper inventory
management and help them understand how malpractices in the management of their
inventory really affects the performance of the business. It also helps them to improve or
change their current practices to have a better inventory management so that malpractices
will be avoided.
Organization/Management. The study will help the organization assess the
effectiveness of their procedures in managing their inventories and for them to understand
that an optimal inventory management is essential. This will also test whether the managers
are performing well in line with the organization’s goals, efficient inventory management and
finally, profit yielding.
Suppliers. This study will help the suppliers become aware of the significance of their
role towards a business’ success. Furthermore, this analysis will assist them in
understanding how lead times affect the business.
Employees. This study will help the employees distinguish the importance of proper
management of inventories in minimizing their cost and at the same time maximizing the
organization’s profit. It will also help them recognize what appropriate course of actions are
needed for their division to oversee the inventories with ease.
Repeat Customers. The result of this study will be of big help to the customers in
understanding how actions of the management concerning their inventory affect the
movement of the price of a business’ products or services.
Future Researchers. The outcomes of this study will help the future researchers in
understanding inventory management in the future. This study may serve as their model for
their researches related to inventory. They may also use this as their reference for a more
successful and thorough exploration.
Definition of Terms
To further understand the study, the following terms were conceptually and
operationally defined:
Controlling and Overseeing Ordering Inventory. This refers to one of the aspects
of inventory management. This aspect involves the process on how to properly control and
oversee inventories in terms of ordering. It encompasses the right time and the right quantity
of inventories to be ordered.
Demand forecasting. This refers to the making of predictions and estimations about
the future target sales based on historical data and other information. This technique is also
used to determine future trends. It is a great help to inventory management by providing
information such as amount of inventory to order and store, computing the lead time and
inventory turns.
First in, First out. Also known as FIFO method. This method assumes that the first
goods purchased are the first goods to be sold. For some businesses, this is the most
appropriate method for it avoids spoilage or deterioration.
Inventory. This refers to physical resources that the organizations maintained on hand
with the intention of converting and/ or selling it.
Inventory Management Practices. This refers to the practices of a business to keep
their inventories at optimal level- without excesses and stockouts including controlling and
overseeing ordering inventory, receiving of inventory, storage and maintenance, and tracking
and regulating of inventory usage. These practices help the organization properly manage
their inventories to minimize inventory costs while maximizing profits.
Just in Time. This refers to one of the inventory control that promotes ordering or
making product only when necessary to fill orders, rather than making inventory in advance
and storing it.
Periodic Inventory System. This refers to one of the method to track inventory levels
by the use of physical counting. The management only places an order when the inventory
goes below the reorder level.
Perpetual Inventory System. Also known as continuous system. This method tracks
inventories by monitoring it constantly. It provides continuous recording of increasing and
decreasing inventories on a day- to- day operations.

Receiving of Inventory. This refers to the aspect of inventory management that
includes the proper procedures on receiving of inventories and the responsibilities of the
receiving department.
Specific Identification. This refers to one of the method used in tracking inventories
that identifies the unit sold with a specific purchase making the ending inventories consist of
units on hand. It is applicable to use when purchasing and selling large inventory items.
Storage and Maintenance of Inventory. An aspect of inventory management that
focuses on the layout of storage, the policies and procedures inside the storage and the
proper maintenance of inventories.
Weighted Average. Another method to track inventories that has no specific pattern
of physical flow.
Tracking and Regulating of Inventory Usage. This refers to the one of the aspects
of inventory management that encompasses tracking the physical flow of goods and
appropriately regulating the inventory usage.

Chapter 2
REVIEW OF LITERATURE AND STUDIES
This chapter presents the related literature and studies that were found significant to
the topic after the thorough and in- depth search done by the researchers. In particular, it
acquires the meaning of inventory and inventory management including controlling and
overseeing ordering inventory, receiving of inventory, storage and maintenance of inventory,
and tracking and regulating of inventory usage. These were gathered to understand deeper
the research to be done, to answer the problems in the study and to analyze the results and
findings.
Inventory Defined
Schroeder, Roger G. (2011) defines inventory as a stock of materials used in
production process and meeting customer demands. These are goods that the organization
kept on hand to satisfy customers’ needs. These are raw materials, work in process and
finished goods that the companies maintain for different reasons such as to save time, satisfy
economic objectives and as a buffer against uncertainties as stated by Maryam Abassi
(2011). According to Porter and Norton (2008), raw materials are the basic inputs before
adding any direct labor or manufacturing overhead in making a product. Work- in- process
are materials that already entered the production process but not yet finished. Inventories
that completed the production process and ready for sale are finished goods.
Chitale and Gupta (2014) describes inventory as an idle resource of any kind having
an economic value. These are held in an unproductive state awaiting for future use.
Valix (2008) also defines inventories as assets which are available for sale in the
ordinary course of business, in the production process for such sale or in the form of materials
or supplies to be used in the cycle of production or in rendering of services.
Inventory Management
Inventory management is very essential to every organization, because inventory lying
idly on the shop or warehouse can incur costs and burden owners as stated by Samson and
Daft (2012). Quiwa (2015) discussed that investors believe that the largest part of a
company’s operational costs is on logistics management system where inventory
management shares a big portion of its costs hence, a company with sound inventory
management is needed.
According to Heck (2009), inventory and stock are often used to relate to the same
thing but when it comes to inventory management, there is a slight difference. Abargos (2015)
further explained that the scope of inventory is broader than stock. Inventory management
can be defined as “management of materials that are moving and resting”.
Levy and Weitz (2012) defined inventory management as the process by which a
company attempts to have the right amount of the right inventory at the right time in the right
place and meet the company’s financial objectives. It involves various activities which are
performed by management in order to have constant stock, maintain production, minimize
different inventory costs and to reduce loss resulting from production stoppage as described
by Saleemi (2009).
Mercado (2008) stated that inventory management aims to meet customers’
satisfaction while keeping inventory costs at lowest possible while producing profit for the
firm. Geno (2015) set forth that its objective is to hold inventories at the least possible costs
without compromising its quality. Its primary function is to manage inventories with regards
to its quantity and value (Kappauf, et. al., 2012).
Controlling and Overseeing Ordering Inventory
Deciding when and how much inventory to order directly affects controlling and
managing the inventory levels. The overseeing and control of ordering inventories is as
important as planning and control of production activities. Inventory management dependably
revolves around the two central inquiries of when to replenish the inventory and the amount
to order. Wensing, T. (2011) ordinarily discover two choices parameters for every one of the
two inquiries that might be joined to form an inventory policy. On behalf of the main inquiry,
management can either submit a request each settled period or when the stock position falls
underneath a specific value. The order volume may either be a fixed amount or might be
resolved as the distinction between a value (the so-called order-up-to-level) and the inventory
position. Considering the undertaking of deciding current stock levels, the management may
include the further choice of how regularly the stock status ought to be resolved. One may
either need to set up a settled audit period or persistently survey the stock levels. A sound
inventory management gives accurate information about the right time, right place and right
amount to order in order to avoid stockouts and excessive stocks as well as to minimize
costs such as ordering carrying, and stockout costs.
As defined by Janat Shah (2009), ordering costs are all fixed costs associated with
placing an order, carrying costs are costs that incurred while holding inventories, and
stockout costs are consequences of running out of stocks. Schneider and Sollenberger
(2009) stated that the ordering costs do incorporate expenses of putting orders and
additionally expenses of getting and dealing with shipments. Likewise, by putting in visit
requests, the organization might lose amount discounts that could be gotten by buying in
mass. And the investment funds to be gotten from submitting substantial requests is more
than the adjustment for the increased storage costs. Typically, the cost of ordering
increments as orders are put more frequently, however the cost of capacity diminishes.
According to Waller and Esper (2014), proper managing of inventories includes best
timing or amount of when and how much inventory should be ordered depending upon the
magnitude and uncertainty of demand. Thus, an optimal inventory management provides
efficient methods for deciding what, when and how much to order.
One of inventory control method is the Just in Time (JIT) that was originated in Japan.
Kee- Hung Lai and T. C. E. Cheng (2009) defines JIT as a concept of ordering, delivering
and manufacturing products just when needed. It is described as a fact that the company
orders only what needed, when needed and the amount of inventory needed. It also
eliminates costs associated with time, work and storage space as discussed by Jorge Luis
Garcia- Alcaraz, et. al. (2016). According to Wagner and Silveira (2009), JIT processes being
implemented in the organization has the highest application of JIT. This is because
organization and the supplier should have a good relationship and believe because when
there is demand from factory, the suppliers can supply them on time. The first way to
implement JIT is build a good relationship with the suppliers, customers and also sub-
contractor to reduce inventory “buffer” to few hours.
Siegel, et. al., (2015) discussed that in a JIT manufacturing, the philosophy is to order
or produce a product when it is needed and to produce it in quantities demanded by
customers. It is a demand-pull rather than a traditional “push” approach. Each operation
produces only what is necessary to satisfy demand of succeeding operation. Its principal goal
is to eliminate waste and the principal measure of success is how much or how little inventory
there is. As stated by Lu, D. J. (2018) JIT intends to supply to each procedure what is
required, when it is required, and in the amount it is required. At whatever point there is a
production design, it implies that the organization is looking to achieve JIT. They need to do
their work systematically; expel abundance work; dispose of waste, unevenness, and
irrationality and raise their profitability. As indicated by Weygandt, Kimmel, and Kieso (2015),
an essential target of JIT process is to eliminate all assembling inventories. Inventories
adversely affect net income since they tie up assets and storage room that could be put to
more beneficial uses. JIT endeavors to take out inventories by utilizing a pull approach in
assembling.
The organization should have accurate computed lead time to properly manage their
inventories in terms of ordering. As defined by Goldstein and Rungtusanatham (2009),
replenishment lead time is the time it takes from when the order is taken to when it is delivered
to the customer. For a make-to-order process lead time depends on a number of things, such
as the time from order placement to the start of work plus the throughput time of the producer
plus delivery time to the customer. According to Digiesi, et. al., (2016), lead times exist in
supply chains, and influence inventory levels. In general, lead times measure the time slack
between the placement of an order and its receipt.
Another method in controlling and overseeing inventory is to know the Economic Order
Quantity (EOQ). As defined by Parasuraman (2014), EOQ is a measure used to find the
optimal quantity that needs to be ordered at a given point in time, given the cost of placing
the order and the storage cost, as well as the amount required. Each organization must
decide the quantity of items or units to order each time it gains stock from its providers said
Choi (2014). The EOQ model prescribes the ideal order amount for organizations that limits
the aggregate order and holding cost under a moderately restrictive set of assumptions.
Muckstadt and Sapra (2010) also indicated that the purpose of the EOQ model is to decide
the amount to buy (order quantity) and when to place the order (the reorder point). The
ongoing idea over these models is the suspicion that request happens ceaselessly at a
steady and known rate.
However, Piasecki, Dave (2009) notices that in the present leading technology,
numerous organizations are not exploiting the key inventory models. There are different
programming bundles in supporting organizations with stock control, yet in the event that the
information inputted are wrong, it might prompt poor outcomes. So as to have appropriate
outcomes for any inventory model, accurate item costs, activity costs, forecasts, history, and
lead times should be set up. Because of awful information, organizations have had terrible
involvement with some stock models, and that is one reason they don't exploit the EOQ
model. He likewise clarifies that another reason behind why an organization does not exploit
the EOQ model is on the grounds that administration does not know how it functions.
Another tool to help the management in their order decisions is to order based on
forecasted demand. The management should have an efficient system of deciding what,
when and how much to order. A good forecasting strategy will help you determine what, when
and how much to order. It provides right information such as amount of inventory to order
and store, computing the lead time and inventory turns. As described by Lewis, Colin (2012),
forecasting is an important requisite to operational activities. It makes the possibility to plan
the level of activity which is to be expected. It relates to historical patterns through objective
computation based on past information. According to Hirschey (2009), to have an accurate
forecast, factors such as the distance of the future demand from the present, the lead time
available, the level of quantity needed, and the cost and benefits associated with the
forecasting problem, should be considered.

Receiving of Inventory
One of the most complicated functions and warehouse processes in inventory
management is the receiving of inventories. As defined by R. S Saxena (2009), receiving is
the process where you confirmed that you have received what you ordered. It answers the
questions, “Does the materials received matched the purchase order?” and “Do you place it
in your warehouse quickly?” The management must consider the average warehouse
receives, counts and inspects items of varying shapes and sizes from vendors whose picking,
packing, and shipping practices are all different. Receiving system does not only inspect the
materials, it also maintains information about vendors and manufacturers (R.
Panneerselvam, 2012).
As stated by Agrawal and Smith (2015), a good inventory management ensures that
the received inventories complies with the bill- of- materials, and will be sent to its proper
location. Whittington and Pany (2008) illustrates that the receiving department is an
independent sector that is mainly accountable for determining the right amount of quantities
received, discerning of damaged or defective merchandise, presenting the receiving report
and the prompt transfer of goods received to the stores department. Thus, the sector is
responsible for all the inventories received by the company. And proper procedures which
cover receipt are necessary to assure the stewardship of this function. It is needed to
examine all incoming goods properly, mark them with tags, record them as having been
received and process data related to that material accurately.
Bragg (2009) discussed the proper procedures in terms of receiving inventories. First,
the receiving staff should inspect the incoming goods. When the goods arrived, the staff
should compare it to the description on the bill- of- materials and the authorizing purchase
order. If there is no purchase order or if there is any discrepancies, reject the delivery. The
staff should also inspect the quality and the quantity of the received goods. After entering the
receipt in the receiving log, make a copy of bill of lading and sent it to the accounting
department and the inspected items will be sent to storage after it have been identified and
tagged.
Storage and Maintenance of Inventory
The coordination and management of the supply, storage, and distribution of
materials, goods, parts, and products defines inventory control (Mokhtari, 2018). Common
problems to all enterprise in any sector of a given community are the control and maintenance
of inventories. Some of the decisions made in holding inventory are to identify the place in
storing the inventory held, equip and obtain the suitable storage room, and have appropriate
procedures for holding and controlling the stock (Jaber, 2009). In doing so, the management
must implement the proper inventory control system that includes the option to maintain the
stock and make it secure in good conditions. He also discussed the importance of holding
stock, which is the availability of stocks give the company flexibility because when inventories
are needed, there’s no need to order more and wait for the orders to come. He also stresses
the disadvantages of storing inventory. First, inventories may become obsolete and
deteriorate. Second, the company may incur additional costs such as renting, insurance, staff
and other costs associated therein. According to Digiesi et al. (2016), in evaluating holding
costs, there are three cases considered: first, lead time and deterministic demand; second,
constant lead time and stochastic demand; third, stochastic lead time and deterministic
demand. Agrawal and Smith (2015) also said that maintaining a high level of inventory can
lessen the opportunity to effortlessly recognize the discrepancies and it can make the
operations of the company more complex. Also, stores with stored inventory most likely have
more units stored in storage areas in effect of employee errors in replenishment process,
expecting more product misplacement in the industry.
Kappauf et al. (2012) talked about warehouse management in their book Logistic Core
Operations with SAP (Inventory Management, Warehousing, transportation, and
Compliance). Warehouse management gives information about the inventory, like the
location of the item, and it also provides the status on the quality of the material inside the
warehouse. Without warehouse management, the storage of inventory wouldn’t be as
effective as the other aspects of inventory management. Quantity-based management is
done in warehouse management. And with the help of a flexible organizational management,
the physical and internal structure of the warehouse occurs. There are different types of
storage- the bulk storage, open storage high rack storage, shelf storage, and picking areas.
Each defines organizational or spatial circumstances- storage and an area for storing
equipment and others. An interim storage type represents a special type of storage. These
forms serve as an interference point between inventory management and warehouse
management. WM movement type, also known as the reference movement type, controls
the movement of the materials from the perspective of the warehouse management and
selects on the type of interim storage to be used. In the storage area, there is usually a goods
receipts area where the management updates the inventory. The warehouse must include
receiving area for goods, issuing area, posting change zones, and an interim storage area
for differences.
Sharifi et al, (2015), Rezaei (2016), and Taleizadeh et al. (2016) assumed that in
traditional model of inventory control, inventories are expected to be stored for an infinite
amount of time while for deteriorating items, different models were suggested. Many authors
used a constant deterioration rate, can also be variable depending on the situation, to deal
with the problem regarding deterioration, and the management should have a proper control
to avoid production stoppage and customer dissatisfaction.
Tracking and Regulating of Inventory Usage
Management should have efficient system of tracking and regulating the inventory
usage to have an adequate amount of inventories to be kept. According to P. Narayan and
Jaya Subramanian (2008), an optimal inventory control system provides information to have
an effective management on flow of materials, efficient utilization of people and equipment,
coordination of internal activities and communication with customers. It can control the level
of inventory by determining when and how much to order as stated by S. Bobby Rauf (2011).
It helps the management to know the size of inventories should maintain to avoid excessive
stocks and stockouts. Prem Vrat (2014) states that it is important to maintain the right amount
of physical stock in the warehouse to take care of anticipated demand because unavailable
inventories can result to delays in production and can lead to lost sales. Furthermore, as the
management wants to meet customers’ needs, they also want to have an appropriate amount
of inventory because voluminous inventory levels will unnecessary tie up the company
money that might be used for better purposes. While too little inventory can result in lost sales
and unsatisfied customers. An inadequate inventory can cause production discontinuance
and can result to delayed shipments (Ed C. Mercado (2008).
To have an effective inventory management, organizations should develop methods
to keep track of the inventory levels. S. Bobby Rauf (2011) demonstrate the two general
classifications of systems to track inventory namely periodic and perpetual review policy.
Under periodic system, management only placed an order when the inventory goes below
the reorder level. On the other hand, in a perpetual, also known as continuous system,
inventories are constantly monitored. An order is placed whenever inventories exceeds or
goes below the specified level. This method keeps track of on- hand inventory by the use of
point of sale (POS) information and as inventory received, a bar code scans.
Naseem Ahmed (2008) differentiates the two methods in his book “Financial
Accounting” as follows, in periodic inventory system, inventories are tracked by physical
counting and checking of all items of inventory at year- end and is confirmed from the book
entry. On the contrary, perpetual review system provides continuous recording of increasing
or decreasing the amount of inventories on a day- to- day basis. It shows a running record of
inventories on hand. Zenaida Vera Cruz- Manuel (2013) states that the main difference
between periodic and perpetual system is that in periodic, there is no inventory balance can
be determined at any point in time because there is no detailed recording under this method.
While in perpetual, it records continuously the movement of inventories and shows the
balance any point in time.
Another method in tracking inventory usage is to have a physical flow of inventory
method. Physical flow of inventory method is the way how the items taken from the inventory.
It includes controlling into and out the rates of the flow of inventories. There are three main
methods used, Specific Identification, First In, First Out (FIFO) and Weighted Average
Method.
Specific Identification identifies the unit sold with a specific purchase. Thus, the ending
inventory consists the remaining units on hand. Under the FIFO method, the first units sold
are assumed to be the first purchased, making the ending inventory the most recent
purchases. While in Weighted Average Method, the units sold and the ending inventory is an
average of the purchase. This method has no specific pattern of physical flow. These was
described by Carl S. Warren, et. al., (2009). According to Edmonds, et. al., (2010), inventories
usually move physically on a FIFO basis where the first items purchased by the management
are the first items sold to customers.
A stock card can also be used in tracking inventories. Stock card contains complete
description of the item such as the reorder point, location and unit of issue. An example of
stock card is a Kanban Card. Timothy McLean (2017) defined Kanban card as a pre-
prepared card that represents inventories. The card is detached from the stockroom when
inventory is consumed and sent to purchasing department to trigger or let them know that a
replacement stock is needed. Once the stock arrives, the cards are attached again to the
stockroom and the cycle continues. Reid and Sanders (2010) states that for the use of
inventory records to be effective, inventory records should reflect correctly the amount of
materials available.
Organizations should know not only to properly track inventory but also to regulate
their inventory usage. As stated by Mandeep Mittal, et. al. (2016), inventory management is
the process whereby the inventories are regulated, to make sure that the cost associated
with the system is at the minimum. Management can control inventory items by applying the
ABC Classification. It recognizes the relationship of value and usage to the quantity of items
carried in inventory. According to Franklin T. Agamata, CPA, MBA (2009), ABC Classification
System classifies inventories into three classes, A, B, C, respectively. Class A contains high
value, which are the critical items; Class B being the middle and Class C are the low value
items. It was also defined by Wilson and Hill (2014) as a method that prioritize the items in
an inventory system as A being the most important, B and C as the items thought to have a
lesser impact or importance.
Another means to regulate inventory usage is determining properly the minimum level
of inventory or safety stocks. Edward H. Frazelle, Ph. D. (2012) literally defines safety stock
as items maintain on hand when replenishment arrives. It is a necessity to support the target
levels of inventory availability when the demand is variable during the lead time or length of
a lead time. Raiborn and Kinney (2009) describes safety stock as the inventories maintained
on hand by the management in case of fluctuating usage or for covering delays in lead time.
Safety stocks are items that purchased usually ahead of time before they are actually needed
to serve as an element of safety and cover demand uncertainties as defined by Robert M.
Monczka, et. al., (2010).
Tony Wild (2017) stated that management should have correct level of stock to
maintain. Stock control serves as a balancing act between conflicting requirements of the
company, and inventory management objective is to resolve this conflicts in the best interest
of the business. A sound inventory management maintains accurate records and physical
control all over inventories from the time they enter the business, process for production, and
until they are shipped and sold to customers.
Synthesis of the Reviewed Literature and Studies
With the above mentioned literature and studies, the researchers were guided to
understand further the study relating inventory management. These sources corresponds to
the present study and practices which stated that a proper and effective inventory
management is mandatory and essential in every organization today. It is crucial because
inventories are one of the greatest assets of a company hence, a sound management is
needed. The company will meet an optimal inventory management with the proper inventory
control and with the coordination of the four aspects namely controlling and overseeing
ordering inventory, receiving of inventory, storage and maintenance of inventory, and
tracking and regulating of Inventory usage respectively.

Inventory management is a vital part of restaurant operations. Inventory management
system helps restaurants to track their ingredients used in a dish. It allows them to control
and plan each and every aspect of stock, keeps a good flow of supply and to maximize their
profit (The Restaurant Times, 2015).
In terms of controlling and overseeing ordering inventory, there are three studies used:
Just in Time (JIT), Economic Order Quantity (EOQ), and the Forecasting method. JIT’s
philosophy is to order products only when needed and to produce it in quantities demanded
by customers (Siegel et al., 2015). The EOQ is used to find the optimal quantity needed to
be ordered at a given point in time (Parasuraman, 2014). As for Max’s Restaurant, they used
a forecasting model. As stated by Hirschey (2009), forecasting is an important task because
all decisions about ordering of inventories relies on future expectations. Max’s Restaurant
decides what, when and how much to order by the use of their forecasting model that was
based on their previous and target sales.
Receiving of inventory is the process where the management confirms if the received
stocks tallies on what they ordered and if they should place it in the warehouse or not. The
receiving department is responsible in determining the right amount of quantities received,
discerning of damaged or defective merchandise, presenting the receiving report and the
prompt transfer of goods received to the stores department (Whittington and Pany, 2008). It
is the responsibility of stock clerks of Max’s Restaurant to inspect and check accurately all
the incoming goods. Upon receiving, the stock clerks count physically the items and
compares it to the delivery receipt. They not only inspect the quantity but also the quality of
the items received.
Some of the decisions made in holding inventory are to identify the place in storing the
inventory held, equip and obtain the suitable storage room, and have appropriate procedures
for holding and controlling the stock (Jaber, 2009). In terms of storage and maintenance of
inventory, the restaurant sustains a good ventilation inside the stockroom to maintain the
good quality of the products. They also have a separate place for the food items and non-
food items.
With regards to the fourth aspect, Max’s Restaurant used stock cards and the First in,
First Out (FIFO) method in tracking their inventories. As discussed by Edmonds, et. al.,
(2010) under the FIFO method, inventories move physically where the first items purchased
by the management are the first items consumed and sold, making the remaining inventories
to be the most recent purchases. This method helps the restaurant to avoid spoilage and
shrinkage of their stocks. To regulate their inventory usage, Max’s Restaurant also determine
their proper level of safety stocks. As defined by Raiborn and Kinney (2009), safety stocks
are the inventories kept on hand by the management in case of shifting usage and demand,
and to cover the delays in lead time.
The reviewed literature and studies served as an idea and guide to the researchers
for a better understanding and analyzing the inventory management of Max’s Restaurant.
These include processes, theories and controls on how to effectively manage the inventories
from the point of ordering to tracking of usage.

Chapter 3
METHODOLOGY
This chapter described the research methodology used in the study. This contains
method of research, population, sample size and sampling technique, description of
respondents and the instrument used to conduct the study. The researchers explained the
procedures to gather necessary data and information including statistical treatments.
Method of Research
The researchers used the descriptive approach of research to gather information and
describe current existing conditions, events or systems necessary to the chosen field of the
study. This enables the researchers to assess, examine and interpret the theoretical meaning
and findings, and hypothesis development for further studies.
Descriptive research is concerned with the present and seeks to determine the status
and phenomenon under examination. It defines situations and patterns of occurrence in
relation to variables such as people, time and place. It examines trend of characteristics of
population. Its objectives are to determine present conditions and connect to present needs,
to review immediate status of phenomenon, to find facts and to examine the relationships
between traits and characteristics or trends and patterns (Y. K. Singh, 2010).
The researchers found it as an appropriate method to use, based on the above
definition because it encompasses all the data gathered necessary to assess the level of
effectiveness of inventory management practices of Max’s Restaurants in Selected Cities in
National Capital Region.

Population, Sample Size and Sampling Technique
Population is defined as a broad aggregating of counts of the people living in a country.
It is any class of persons having one or more common characteristics belonging to an
organization that are of interest to a researcher. A sample is simply a subset of the
population. It comprises individuals representing the study population as discussed by
Kumar, Ranjit (2014).
The research population for this study comprised all the employees involved in the
management of inventories of Max’s Restaurants in Selected Cities in National Capital
Region. These include the Restaurant Manager, the Shift Managers, the Stock Clerks, and
other inventory related positions. A total number of 58 branches and 3 respondents in each
branch, the computation of the population (N) will be:
𝑛 = 58 × 3
𝑛 = 174
The Slovin’s formula was used to calculate the appropriate minimum number of
respondents needed from the population. It can be computed by:
𝑁
𝑛=
1 + 𝑁𝑒 2
Where:
n = number of sample
N = total population
e = error tolerance level
In substituting the variables, we get:
174
𝑛=
1 + 174(0.05)2
𝑛 = 122
From the total population of 174 of Max’s Restaurants in Selected Cities in National
Capital Region, the sample size is 122.
Description of Respondents
The respondent’s personal profile like age, sex, civil status, highest educational
attainment, number of years in service, number of trainings attended and their job position
were asked. In this study, the selection of the respondents was based upon the involvement
on the management of the inventories on their respective branch, whether they are the
Restaurant manager, Shift manager, Stock Clerk, or other inventory related position.
Research Instrument
For viable and perfect information gathering, survey and interview were widely used.
Survey method is the most broadly utilized procedure for information accumulation, while
interviews are appropriate technique to utilize while investigating professionals' points of view
because of the subjective idea of the data. Consequently, these techniques have been
generally used to extract the most important data and help in better examination of the
information.
The researchers outlined an interview as one of the data accumulation instrument for
this study. The shift or kitchen managers were interviewed. The interview questions aimed at
eliciting relevant data concerning management in Max's Restaurants. Questions relating to
ordering inventory, receiving, storage and maintenance, tracking and regulating inventory
usage such as policies and procedures were asked for the interview.
A questionnaire outlined by the researchers was likewise utilized as a part of the study.
The substance of the instrument depended on the findings of the interview conducted with
the kitchen supervisor of the various branches of Max's Restaurant in selected cities in
National Capital Region and also on the data from the literature reviewed. The questionnaire
has two parts. Part 1 contains the personal data of respondents and part 2 is for assessing
the level of effectiveness of inventory management practices of Max’s Restaurant.
The instrument was structured in the modified Likert fashion, on a 5 – point scale,
ranging from “very effective” (5), through “effective” (4), “somewhat effective” (3), “less
effective” (2), to “not effective” (1). Subjects were then instructed to respond to the degree of
effectiveness with the statements contained in the instrument.
Data Gathering Procedure
Survey questionnaire is the main tool used to gather necessary data. The researchers
interviewed the stock clerk, shift managers (kitchen supervisor), and restaurant managers of
each branch. Each representative in the branch who was ready to partake got a letter with
the data about the research and a questionnaire. Survey forms were left and gathered a few
days after because of the bustling schedules of the respondents amid their work hours. At
the point when stock clerks, shift managers, and restaurant managers have finished the
surveys, the information accumulated were tabulated and were given to an analyst for data
analysis.
Statistical Treatment of Data
To interpret and analyze, the researchers organized and categorized the data
gathered in this study. The data collected were coded, tallied, tabulated and analyzed to
summarize and interpret the results using descriptive statistical measures such as the
following:
1. Frequency Distribution. This refers to the data tabulated by category class intervals
without the conforming frequency for each class. This was used to identify the respondents
based on their personal profile such as age, sex, civil status, highest educational attainment,
number of years of experience in inventory management, number of trainings attended and
job position level. It is an assortment of the data that presents the frequency of various values
or groups of values of variables.
2. Percentage Distribution. It was used to measure the responses as percentage of the
number of respondents who participated in the survey. It is calculated by dividing the
frequency with the sample total number of respondents being studied. It is calculated as
follows:
𝑓
%= × 100
𝑛
Where:
% = percentage
ƒ = frequency
100 = constant value
N = number of cases or sample
3. Ranking. Distribution of ranks were used to determine different factors and for
sharing the significance of the items assessed. It is a descriptive measure in addition
to percentage, to describe numerical data.
4. Weighted Mean. It was used to measure the statistical mean of response of the various
choices to provide in the different part of the survey questionnaires used. It was computed
by the formula:
𝑓𝑥
𝑥= ∑
𝑛
Where:
x = weighted mean
∑ƒx = the sum of all the products of ƒ and x, ƒ being the frequency of each weight
and x as the weight of each operation
n = total number of respondents
5. Analysis of Variance. This was used to test the differences between two or more means.
It was employed to ascertain if there is any significant differences between the means of
classes of data. The variances on the answers of the respondents because of their age, sex,
civil status, highest educational attainment, number of years of experience in inventory
management, number of trainings attended and their job position level were examined and
analyzed.
6. Likert Scale. This was used to weigh down the results of the response.
Scale Value Range Verbal Interpretation
5 4.21- 5.00 Very Effective
4 3.41- 4.20 Effective
3 2.61- 3.40 Somewhat Effective
2 1.81- 2.60 Less Effective
1 1.00- 1.80 Not Effective

Chapter 4
RESULTS AND DISCUSSIONS
This chapter presented, analyzed and interpreted the data gathered that went
statistical treatment. In order to answer the questions communicated with the statement of
the problem, the tabulated data were studied and examined. Analytical tables are arranged
in accordance to the sequence of specific questions.
1. Profile of the Respondents
1.1 By Age
Table 1
Frequency and Percent Distribution of Respondents’ by Age
Age Frequency Percent

20 years old &
17 10.8
below
21 – 30 years old 91 57.6
31 – 40 years old 46 29.1

41 years old and
4 2.5
above
Total 158 100.0
Table 1 displays the frequency and percent distribution of respondents as to the
employees’ age. It can be seen in the table above that out of 158 respondents, 91 or 57.6%
were ages 21 to 30 years old, 46 or 29.1% aged 31-40, 17 or 10.8% aged 20 years old and
below and 4 or 2.5% were 41 years old and above. The results showed that most of the
respondents were middle-aged employees. It can be concluded that Max’s Restaurants

mostly hire experienced employees but with consideration to their ages to have a flexible
workforce.
1. 2 By Sex
Table 2
Frequency and Percent Distribution of Respondents’ by Sex
Sex Frequency Percent
Male 81 51.3
Female 77 48.7
Total 158 100.0
Table 2 shows the distribution of respondents according to their sex. 81 or 51.3% of
the respondents were male while 77 or 48.7% of them are female. The result shows that
there is not much gap between the gender of the respondents but still the male outnumbers
the female respondents.
1.3 By Civil Status
Table 3
Frequency and Percent Distribution of Respondents’ by Civil Status
Civil Status Frequency Percent
Single 116 73.4
Married 42 26.6
Total 158 100.0
Table 3 presents the distribution of respondents’ as to their civil status. Out of 158
respondents, 116 or 73.4% of the respondents were single while 42 or 26.6% of the
respondents were married. None of the employees were legally separated and
widowed/widower. It can be concluded that most of the respondents were single. Since the
average age of the respondents belong to young adults group, this is the age at which, a
person starts to build his career and prioritizes work over married life.
1.4 By Highest Educational Attainment
Table 4
Frequency and Percent Distribution of Respondents’ by Highest Educational

Attainment
Highest
Educational Frequency Percent
Attainment
High School 17 10.8
Diploma in
45 28.5
Vocational Training
Bachelor’s Degree 96 60.8
Total 158 100.0
Table 4 shows the frequency and percent distribution of respondents in terms of the
highest educational attainment. It can be noted that 96 out of 158 or 60.8% of the
respondents gained bachelor’s degree. It also shows that 45 or 28.5% of the respondents
had diploma in vocational training while 17 or 10.8% of the respondents obtained high school.
The results indicate that most of the respondents achieved bachelor’s degree which
implies that the company hired those who have enough knowledge about inventory
management.
1.5 Number of Years of Experience in Inventory Management
Table 5
Frequency and Percent Distribution of Respondents’ by Number of Years of

Experience in Inventory Management
Number of Years
of Experience in
Frequency Percent
Inventory
Management
3 years and below 88 55.7
4 – 6 years 34 21.5
7 – 9 years 17 10.8
10 years and above 19 12.0

Total 158 100.0
Table 5 exhibits the frequency and distribution of respondents as to the number of
years of experience in inventory management. As shown in the table above, majority of the
respondents have been in operation of inventory management for 3 years and below which
stands for 88 or 55.7%. However, 34 or 21.5% of the respondents had 4 – 6 years of
experience concerning with inventory management, then 19 or 12% of the respondents had
10 years and above of experience dealing with inventory management, nonetheless, 17 or
10.8% of the respondents had 7 – 9 years of experience regarding inventory management.
The results reflect that utmost of the respondents interviewed in selected Max’s
Restaurants acquired 3 years and below of experience in relation to inventory management
which entails that most of the employees were still new in the environment of inventory
management. It may indicate that the restaurant does not consider the years of experience
that much. As stated by Isabel Thottam ( 2018), experts agree that the number of years of
experience is not important as long as you have the skills and determination.
1.6 Number of Trainings Attended
Table 6
Frequency and Percent Distribution of Respondents’ by Number of Trainings

Attended
Number of
Trainings Frequency Percent
Attended
3 and below 85 53.8
4–6 46 29.1
7–9 12 7.6
10 and above 15 9.5
Total 158 100.0
Table 6 presents the frequency and percent distribution of respondents related to
number of trainings attended. It can be deduced from the table that 85 or 53.8% of the
respondents garnered 3 and below training attended. Furthermore, 46 or 29.1% of the
respondents had 4 – 6 trainings attended, then 15 or 9.5% of the respondents earned 10 and
above trainings attended while 12 or 7.6% of the respondents acquired 7 – 9 trainings
attended.
The results point out that maximum of the respondents yield 3 and below with regards
to trainings attended since most of the respondents were between 21 – 30 years of age and
for they were still in the process of development in the field of inventory management.
1.7 By Job Position Level
Table 7 below exhibits the frequency and percent distribution of the 158 respondents
by job position level.

Table 7
Frequency and Percent Distribution of Respondents’ by Job Position Level
Job Position Level Frequency Percent

Top Level
8 5.1
Management
Middle Level
63 39.9
Management
Rank and File 87 55.1
Total 158 100.0
It can be noted from the table that from the total of 158 respondents from different
branches in selected cities in National Capital Region, 87 or 55.1% of the respondents
are employees designated as rank and file, 63 or 39.9% are part of the middle level
management, and 8 or 5.1% came from the top level management.
It can be concluded from the results that most of the respondents belonged to rank
and file level because the restaurant needs at least two stock clerks per shift manager in
managing inventories. Rank and file employees are solely responsible for managing the
inventories and day-to-day operations of the business. They also perform job functions that
support the organization’s strategic plans, goals and processes. Without them, production
levels will decrease and very few organizations will survive as discussed by Ruth Mayhew
(2018).
2. Respondents’ Assessments on the Effectiveness of Inventory Management
Practices of Max’s Restaurants in Selected Cities in National Capital Region
2.1 In terms of Controlling and Overseeing Ordering Inventory
Table 8 displays the respondents’ assessments on the effectiveness of inventory
management practices in terms of controlling and overseeing ordering inventory.

Table 8
Respondents’ Assessments on the Effectiveness of Inventory Management Practices

in Terms of Controlling and Overseeing Ordering Inventory
Controlling and Overseeing Ordering Inventory Verbal

Mean Rank
(COOI) Interpretation
Web ordering system 4.53 1 Very Effective
Forecasting model based on target sales 4.32 5 Very Effective
Computed lead time 4.35 3.5 Very Effective

Matrix used to determine amount of inventory to
4.35 3.5 Very Effective
order
Stock Requisition Log Sheet 4.49 2 Very Effective
Grand Mean 4.41 Very Effective
The above mentioned practices in table 8 were all interpreted very effective. The web
ordering system is helpful for the company in determining the amount of inventory necessary
to satisfy customers’ demand on a daily basis (4.53), stock requisition log sheet helps them
determine the inventory that is mostly and least needed to request from the commissary to
avoid spoilage of goods (4.49), lead time is computed properly to maintain the required level
of inventories in the stock room (4.35), operative matrix in determining the size of inventory
to forestall overstocking and spoilage (4.35), and using their past sales as basis in ordering
inventory for a particular period (4.32).
The company uses its sales from a certain period in the past to establish their target
sales for the current time. The amount of inventory being ordered is patterned from the total
inventory used or sold from the past period. Forecasting of inventory is primarily used
especially during special occasions. Although the result articulates that it is a very effective
practice, improvement is still needed. In determining the level of inventory to be ordered, the
company may opt to consider some factors that affect the sales like the customers’
preferences altered by inflation and increased number of competitors in the market. With this
consideration, managers may now project properly and without excess the inventory to be
needed. Taken as a whole, the respondents determined that the inventory management
practices observed in Max’s Restaurants in selected cities in National Capital Region with
respect to ordering their inventory were very effective with a grand mean of 4.41.
2.2 In Terms of Receiving of Inventory
Table 9

in Terms of Receiving of Inventory
Verbal
Receiving of Inventory: (ROI) Mean Rank
Interpretation
Store receiving checklist 4.66 1 Very Effective
Online/ Branch Complaint Form 4.42 5 Very Effective
Monthly Encoding to System of Orders 4.45 4 Very Effective
Physical Count upon Orders’ Arrival 4.51 3 Very Effective
Actual Item Receipt vs. Delivery Receipt 4.61 2 Very Effective
Table 9 presents the level of effectiveness of inventory management practices with
regards to Receiving of Inventory. The practices mentioned are all construed as very
effective: store receiving checklist helps the responsible employees match the
inventories ordered from the commissary with what they have actually received got a
mean of 4.66, comparing the actual item receipts and the delivery receipts to check if
what had been stated was same as the quantity and quality of inventories delivered
and received by the stock clerk that got a mean of 4.61, updating the records by encoding
their transactions in the system at least once a month (4.45), and easily resolve
problems related to the quality and quantity of the inventory using the online or
branch complaint form (4.42).
Even if the practices are all inferred as very effective, there are still some points that
needed some improvement to achieve the company’s goal, to have a sound inventory
management. Monthly encoding of orders to the system seem like one of those practices that
must be improved. Updating the records monthly may not help in monitoring the current level
of the inventories. This would not also give the current data to the decision making officers
of the company whenever they want the information about the inventory. They may elect to
have their data updated at least each delivery from the commissary or if they found it not
convenient, every end of the week. With this procedure, actual figures of the inventory will
be more reliable and easy to access for it is more up to date than what the monthly encoding
procedure can offer. Constantly monitoring the level of inventories can also give accurate
information on when and how much to order. Another practice that should be developed is
their online or branch complaint form. They use this form when the product delivered does
not meet the requirement of a quality product. The processing of the complaint may take
some time which makes the product unused for quite some time too. The online complaint
form itself is efficient since it is convenient to everyone but the processing time makes it less
effective. To improve this practice, the commissary of the company should have the
grievance of the branch processed immediately to help increase their productivity.
In general, respondents assessed that the inventory management practices of Max’s
Restaurant in selected cities in National Capital Region with regards to the aspect, receiving
of inventory showed that these procedures and practices are all very effective with a grand
mean of 4.53.
2.3 In Terms of Storage and Maintenance of Inventory
Table 10
in Terms of Storage and Maintenance of Inventory
Verbal
Storage and Maintenance of Inventory: (SMI) Mean Rank
Interpretation
Quality Reference Guide 4.57 1 Very Effective
Averaging the usage of every items 4.46 5.5 Very Effective
Training and Engagement of Stock Clerks 4.54 2.5 Very Effective
Time Schedule Of Requisition 4.46 5.5 Very Effective
Stockroom Layout 4.40 7 Very Effective

Key Result Area stating the responsibility and
4.49 4 Very Effective
accountability of stock clerks
Consolidation of all items required 4.54 2.5 Very Effective
Table 10 shows the effectiveness of inventory management practices in terms of
storage and maintenance of inventory aspect. It can be seen from above that the following
practices were all very effective, Quality Reference Guide is a guide that helps them check
the correct quality of their inventories (4.57), Consolidation of all items required before the
end of shift of the stock clerk on duty and Training and Engagement of stock clerks (4.54).
Averaging the Usage of every Items and Time schedule of requisition that helps them to know
the appropriate time to order (4.46), and lastly the Stockroom layout requiring a qood
ventilation to maintain the quality of all the products inside the warehouse (4.4).
However, the table shows that Stockroom layout, Averaging the Usage of Every Items
and Time Schedule of Requisition ranked last. A proper stockroom layout will enable long-
term success that is why the researchers recommend that the restaurant should maintain
an efficient stockroom by utilizing every single inch of it. They should develop a layout
wherein materials can be moved quickly between different areas and perform a stockroom
assessment to evaluate processes and practices to further improve them. Averaging the
usage of inventories is used to compare overall sales volume and to help them determine
inventory losses that may have occurred due to theft or shrinkage but the restaurant may
implement an efficient point-of-sale system and study their daily profit margins report to locate
suspicious losses. Time Schedule of Requisition helps the stock clerks to monitor easily the
quality and level of inventories. However, this schedule sometimes cannot be followed
especially when there is emergency such as stock-outs. It may be better to constantly monitor
it so that the management can maintain an optimal inventory level. Overall, the restaurant’s
storage and maintenance of inventory were very effective (4.49).
2.4 In Terms of Tracking and Regulating Inventory Usage
Table 11
Respondents’ Assessments on the Effectiveness of Inventory Management

Practices in Terms of Tracking and Regulating Inventory Usage
Tracking and Regulating of Inventory Usage: Verbal

Mean Rank
(TRIU) Interpretation
Security Features ( Issuance Logbook, CCTV) 4.62 3 Very Effective
Use of Stock Cards 4.57 5.5 Very Effective
Inter-branch Transactions 4.57 5.5 Very Effective
FIFO Method 4.73 1 Very Effective
Templates to monitor variances 4.61 4 Very Effective
Manual Tally as a backup file 4.66 2 Very Effective

Table 11 indicates the level of effectiveness of inventory management practices in
terms of tracking and regulating inventory usage aspect. The respondents identified that the
following practices mentioned above were very effective. FIFO method that helps them avoid
spoilage or shrinkage making the inventories on hand the most recent purchases (4.73) and
Templates to monitor variances easily (4.61) ranked first while Use of Stock Cards to track
and regulate inventories (4.57) and Inter-branch transactions in case of emergency (4. 57)
are both ranked last. Stock card is used as a record of the status of the inventories held
inside the stockroom. Nevertheless, as stock cards are placed in cabinets or trays, physical
identification of stock may not be as easy as it is as entries are made based on documents.
The management may develop a stock control system that keeps track using a computer
software. On the other hand, inter-branch transactions is already effective. However, Max’s
Restaurants still process these transactions manually. They may opt to acquire an online
processing to make this practice more efficacious and can save time. In general, the
respondents recognized that the inventory management practices as to Tracking and
regulating of inventory usage were very effective with a computed grand mean of 4.63.
Table 12
Grand Verbal
Aspects Rank
Mean Interpretation
Controlling and Overseeing Ordering Inventory 4.41 4 Very Effective
Receiving of Inventory 4.53 2 Very Effective
Storage and Maintenance of Inventory 4.49 3 Very Effective
Tracking and Regulating of Inventory Usage 4.63 1 Very Effective
Table 12 displays the summary of the level of effectiveness of inventory

management practices of selected Max’s restaurants in Metro Manila. All of the
aspects namely, Tracking and regulating of inventory usage ranked as 1st, then
Receiving of Inventory ranked as 2nd, Storage and Maintenance of Inventory which
ranked as 3rd, and Controlling and Overseeing Ordering Inventory which ranked last
are all very effective with grand means of 4.63, 4.53, 4.49, and 4.41 respectively
3. Significant Difference in the Respondents’ Assessment on the Level of
Effectiveness of Inventory Management Practices of Max’s Restaurants in
National Capital Region When Grouped by Profile
3.1 By Age
Table 13
Significant Different of Respondents’ Assessments on the Effectiveness of Inventory

Management Practices by Age
F- p-
Aspects Decision Remarks
value value
Controlling and Overseeing Ordering

1.263 .289 Accept Ho Not Significant
Inventory
Receiving of Inventory 1.685 .172 Accept Ho Not Significant
Storage and Maintenance of Inventory 2.509 .061 Accept Ho Not Significant
Tracking and Regulating of Inventory

2.724 .046 Reject Ho Significant
Usage
Table 13 discloses if there is any significant difference in respondents’ assessment on
the level of effectiveness of inventory management practices of Max’s Restaurants
when grouped by age.

It can be seen from the table above that the following aspects: Controlling and
Overseeing Ordering Inventory, Receiving of Inventory, and Storage and Maintenance
of Inventory got a p- value greater than the assumed level of significance which is
0.05. Controlling and Overseeing Ordering Inventory acquired an F- value of 1. 263
and p- value of .289, Receiving of Inventory earned an F-value of 1.685 and p- value
of .172 and lastly, Storage and Maintenance of Inventory got an F- value of 2. 509
and p- value of 0. 061. It can conclude that when the respondents were grouped by age,
there is no significant difference, thus null hypothesis is accepted.
On the other hand, the aspect Tracking and Regulating of Inventory Usage
posted an F- value of 2. 724 and a p- value of 0.046 which p- value is lower than 0.05. It
means that the perceptions of the respondents on the level of effectiveness of inventory
management practices in terms of tracking and regulating usage does significantly different
thus reject null hypothesis. As stated by Rudolph, et. al, (2017), at different management
levels, age- related operations are important factors to determine various outcomes. It may
indicate that as business evolves, managing of inventories such as when it comes to tracking
and regulating inventory usage, also became complex. As discussed by Braga (2016),
people will have different insights, principles and ways of getting things done because of age
diversity. Age may affect the performance of a job of certain individuals. As workers age,
their physical and mental abilities tend to change.
3.2 By Sex
Table 14 below shows if there is any significant difference in respondents’ assessment
on the level of effectiveness of inventory management practices of Max’s Restaurants in
selected cities in National Capital Region when they are grouped according to sex.
Table 14
Significant Different of Respondents’ Assessments on the Effectiveness of

Inventory Management Practices by Sex
t- p-
value value

-.853 .395 Accept Ho Not Significant
Inventory
Receiving of Inventory -.505 .615 Accept Ho Not Significant
Storage and Maintenance of Inventory .317 .752 Accept Ho Not Significant

-.910 .364 Reject Ho Significant
Usage
As shown on Table 13, Controlling and Overseeing Ordering Inventory received
a computed t- value of -. 853 and a p- value of .395, Receiving of Inventory had a t-
value of -.505 and a p- value of .615 and Storage and Maintenance of Inventory with
a t- value of .317 and a p- value of .752. Since the p- values are large, greater than
0.05, it indicates weak evidence against the null hypothesis and there is no significant
difference, so it can be accepted.
On the contrary, the aspect Tracking and Regulating of Inventory Usage posted
a t- value of -.910 and p- value of .364 which is less than 0.05, the assumed level
of significance, indicating a significant difference making the null hypothesis rejected.
According to Jeff Gau (2018), sex differences in the work environment exist. Men and women
are different. He indicated that women are more organized than men. They are usually the
greatest planners. They are multi-taskers and have a high attention to details. These traits
can be the reason why there is a significant difference on the perception of the respondents
on the level of effectiveness of inventory management practices when they are grouped by
sex.
3.3 By Civil Status
Table 15

Management Practices by Civil Status
t- p-
value value

-.751 .454 Accept Ho Not Significant
Inventory
Receiving of Inventory -.423 .673 Accept Ho Not Significant

.359 .720 Accept Ho Not Significant
Usage
All of the aspects namely, Controlling and Overseeing Ordering Inventory, Receiving
of Inventory, Storage and Maintenance of Inventory, and Tracking and Regulating of
Inventory Usage have no significant difference in respondents’ assessment on effectiveness
of Inventory Management Practices when they are grouped by Civil Status thus, a null
hypothesis is accepted.
Controlling and Overseeing Ordering Inventory got a t- value of -.751 and a p- value
of .454, Receiving of Inventory acquired a t- value of -.423 and a p- value of .673, Storage
and Maintenance of Inventory got a t- value equal to .135 and a p- value of .892, and Tracking
and Regulating of Inventory Usage earned a t- value of .359 and p- value of .720.
3. 4 By Highest Educational Attainment
Table 16

Management Practices by Highest Educational Attainment
F- p-
value value

Inventory

Usage
Table 16 indicates the significant difference in the respondents’ assessment on the
level of effectiveness of inventory management practices of Max’s Restaurants in Metro
Manila when clustered in terms of highest educational attainment. Looking at the table, it can
be clinched that there was no significant difference in the assessment on the aspects
provided, namely: Controlling and Overseeing Ordering Inventory, Receiving of Inventory,
Storage and Maintenance of Inventory, and Tracking and Regulating of Inventory Usage;
consequently, accepting the null hypothesis.
Controlling and Overseeing Ordering Inventory received a computed F- value of
.531 and a p- value of .589, Receiving of Inventory had a F- value of 1.014 and a p-
value of .365, Storage and Maintenance of Inventory with a F- value of .173 and a
p- value of .841 while Tracking and Regulating of Inventory Usage posted an F- value
of .337 and p- value of .714 respectively.

3. 5 By Number of Years of Experience in Inventory Management
Table 17

Management Practices by Number of Years of Experience in Inventory Management
F- p-
value value

Inventory

Usage
Table 17 shows the significant difference in the respondents’ assessments on the level
of effectiveness of inventory management practices of Max’s Restaurants in Metro Manila
when grouped in terms of number of years of experience in inventory management.
From the table below, it can be deduced that there was no significant difference in the
assessment on the aspects provided, namely: Controlling and Overseeing Ordering
Inventory with an F- value of .514 and p- value of .673, Receiving of Inventory with an F-
value of 1.066 and a p- value of .365, Storage and Maintenance of Inventory with an F- value
of .784 and p- value of .505, and Tracking and Regulating of Inventory Usage with an F-
value of .427 and a p- value of .734; henceforthedly, the null hypothesis was accepted.
3.6 By Number of Trainings Attended
Table 18 presents if the respondent’s perception in level of effectiveness of inventory
management significantly differ when they are gouped by number of trainings attended.
Table 18

Management Practices by Number of Trainings Attended
F- p-
value value

2.729 .046 Reject Ho Significant
Inventory
Storage and Maintenance of Inventory 1.417 .240 Accept Ho Not Significant

Usage
Table 18 shows if there is any significant difference in respondent’s assessment on
the effectiveness of Inventory Management Practices of Max’s Restaurants when they are
grouped by Number of Trainings Attended. In the table above, it can be seen that the
Receiving of Inventory attained an F- value equal to 1. 730 and a p- value equal to .163,
Storage and Maintenance of Inventory garnered an F- value of 1. 417 and p- value of .240,
and Tracking and Regulating of Inventory Usage received a computed F- value of .785 and
a p- value of .504. All the said aspects have p- values that are greater than the assumed
level of significance which is 0.05, and a null hypothesis is accepted. It can be concluded that
the assessments on the level of effectiveness of their inventory management practices were
not significantly different when grouped by Number of Trainings Attended.
In contrast, Controlling and Overseeing Ordering Inventory obtained an F- value of
2.729 and a p- value of .046. In terms of this aspect, there is a significant difference and a
strong evidence against the null hypothesis, so it should be rejected. This means that in terms
of controlling and overseeing ordering inventory, employees have different perception
because of the number of trainings attended. As stated by Nassazi, Aidah (2013), employees
are one of the greatest assets of an organization. So in order to maximize their job
performance, management should equip them through effective trainings.
3.7 By Job Position Level
Table 19

Management Practices by Job Position Level
F- p-
value value

1.566 .212 Accept Ho Not Significant
Inventory
Receiving of Inventory .078 .925 Accept Ho Not Significant

Usage
Table 19 displays the significant difference in the respondents’ assessment on the
level of effectiveness of inventory management practices of Max’s Restaurants in Metro
Manila when gathered in terms of by job position level. Based on the table, it can be construed
that there was no significant difference in the assessment on the aspects provided, namely:
Controlling and Overseeing Ordering Inventory which received a computed F- value of 1.566
and a p- value of .212, Receiving of Inventory which earned an F- value equal to .078 and a
p- value of .925, Storage and Maintenance of Inventory that got an F- value of .146 and a p-
value of .865, and Tracking and Regulating of Inventory Usage which acquired an F- value
of .172 and a p- value equal to .843; thus, the null hypothesis was accepted.
Chapter 5
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS
This chapter discussed the summary of the carried out research work, conclusions
drawn, and the recommendations prepared as an outcome relative to the effectiveness of
inventory management practices of Max’s Restaurants in selected cities in National Capital
Region.
Summary
The overall objective of this study is to test the effectiveness of inventory management
practices of selected Max’s Restaurants. Descriptive research method was used by the
researchers to collect all the necessary information considering the type of data collected
through the use of survey questionnaire as a tool in testing the hypothesis and finally
answering the statement of the problem and any questions related therein. The findings,
conclusions, and the recommendations of this study are made based on the statistical tools
that the researchers employed; these are Frequency Distribution, Percentage Distribution,
Ranking, Weighted Mean, and Analysis of Variance.
Findings
The following findings were drawn based on the gathered data and information:
1. Profile of the Respondents
By age, 91 or 57.6% were ages 21 to 30 years old, 46 or 29.1% aged 31-40, 17 or
10.8% aged 20 years old and below and 4 or 2.5% were 41 years old and above.
By sex, 81 or 51.3% of the respondents were male while 77 or 48.7% of them are
female.
By Civil Status, 116 or 73.4% of the respondents were single while 42 or 26.6% of the
respondents were married. None of the employees were legally separated and
widowed/widower.
By highest educational attainment, 96 out of 158 or 60.8% of the respondents gained
bachelor’s degree. It also shows that 45 or 28.5% of the respondents had diploma in
vocational training while 17 or 10.8% of the respondents obtained high school.
By number of years of experience in inventory management, majority of the
respondents have been in operation of inventory management for 3 years and below which
stands for 88 or 55.7%. However, 34 or 21.5% of the respondents had 4 – 6 years of
experience concerning with inventory management, then 19 or 12% of the respondents had
10 years and above of experience dealing with inventory management, nonetheless, 17 or
10.8% of the respondents had 7 – 9 years of experience regarding inventory management.
By number of trainings attended, 85 or 53.8% of the respondents garnered 3 and
below training attended. Furthermore, 46 or 29.1% of the respondents had 4 – 6 trainings
attended, then 15 or 9.5% of the respondents earned 10 and above trainings attended while
12 or 7.6% of the respondents acquired 7 – 9 trainings attended.
By job position level, 87 or 55.1% of the respondents are employees designated
as rank and file, 63 or 39.9% are part of the middle level management, and 8 or
5.1% came from the top level management.
2. Respondents’ Assessment on the Level of Effectiveness of Inventory Management
Practices of Max’s Restaurants in Selected Cities in National Capital Region

In terms of Controlling and Overseeing Ordering Inventory, the web ordering system
got a mean of 4.53, stock requisition log sheet of 4.49, computed lead time of 4.35, matrix in
determining the size of inventory of 4.35, and forecasting model based on target sales of
4.32. Taken as a whole, the respondents determined that the inventory management
practices observed in Max’s Restaurants in Metro Manila with respect to ordering their
inventory were very effective with a grand mean of 4.41.
In terms of Receiving Inventory, store receiving checklist got a mean of 4.66, actual
items receipt vs. delivery receipt of 4.61, physical count upon orders’ arrival of 4.51, monthly
encoding to system of orders got a mean of 4.45, and online or branch complaint form of
4.42. In general, respondents assessed that the inventory management practices of Max’s
Restaurant in receiving aspect showed that these procedures are all very effective with a
grand mean of 4.53.
In terms of Storage and Maintenance of Inventory, the following practices were very
effective, Quality reference guide with a mean of 4.57, Consolidation of all items required and
Training and engagement of stock clerks of 4.54, Key result area stating the responsibility
and accountability of stock clerks of 4.49, Averaging the usage of every items and Time
schedule of requisition of 4.46, Stockroom layout of 4.4. Overall, the respondents determined
that the inventory management as to storage and maintenance of inventory aspect were very
effective with a grand mean of 4.49.
Lastly, with regards to Tracking and Regulating Inventory Usage, respondents
identified that the following practices were very effective: Security features (Issuance
Logbook, CCTV) with a mean of 4.62, Use of Stock Cards of 4.57, Inter-branch transactions
of 4.57, FIFO method of 4.73, Templates to monitor variances of 4.61, and Manual tally as a
backup file of 4.66. Overall, the respondents recognized that the inventory management
practices as to Tracking and regulating of inventory usage were very effective with a grand
mean of 4.63
3. Significant Difference in the Respondents’ Assessment on the Level of
Effectiveness of Inventory Management Practices of Max’s Restaurants in Selected
Cities in National Capital Region
By age, Controlling and Overseeing Ordering Inventory, Receiving of Inventory,
and Storage and Maintenance of Inventory got a p- value greater than the assumed
level of significance which is 0.05. Controlling and Overseeing Ordering Inventory
acquired an F- value of 1. 263 and p- value of .289, Receiving of Inventory earned an
F-value of 1.685 and p- value of .172 and lastly, Storage and Maintenance of Inventory
got an F- value of 2. 509 and p- value of 0. 061. It can conclude that when the respondents
were grouped by age, there is no significant difference, thus null hypothesis is accepted. On
the other hand, the aspect Tracking and Regulating of Inventory Usage posted an F- value
of 2. 724 and a p- value of 0.046 which p- value is lower than 0.05. It means that the
perceptions of the respondents on the level of effectiveness of inventory management
practices in terms of tracking and regulating usage does significantly different thus reject
null hypothesis.
By sex, Controlling and Overseeing Ordering Inventory received a computed t-
value of -. 853 and a p- value of .395, Receiving of Inventory had a t- value of -.505
and a p- value of .615 and Storage and Maintenance of Inventory with a t- value of
.317 and a p- value of .752. Since the p- values are large, greater than 0.05, it
indicates weak evidence against the null hypothesis and there is no significant difference,
so it can be accepted. On the contrary, the aspect Tracking and Regulating of Inventory
Usage posted a t- value of -.910 and p- value of .364 which is less than 0.05, the
assumed level of significance, indicating a significant difference making the null
hypothesis rejected.
By civil status, all the aspects namely, Controlling and Overseeing Ordering Inventory,
Receiving of Inventory, Storage and Maintenance of Inventory, and Tracking and Regulating
of Inventory Usage have no significant difference in the respondents’ assessment on
effectiveness of Inventory Management Practices of Max’s Restaurants thus, a null
hypothesis is accepted. Controlling and Overseeing Ordering Inventory got a t- value of -.751
and a p- value of .454, Receiving of Inventory acquired a t- value of -.423 and a p- value of
.673, Storage and Maintenance of Inventory got a t- value equal to .135 and a p- value of
.892, and Tracking and Regulating of Inventory Usage earned a t- value of .359 and p- value
of .720.
By highest educational attainment, Controlling and Overseeing Ordering Inventory,
Receiving of Inventory, Storage and Maintenance of Inventory, and Tracking and Regulating
of Inventory Usage; there is no significant difference consequently, accepting the null
hypothesis. Controlling and Overseeing Ordering Inventory received a computed F-
value of .531 and a p- value of .589, Receiving of Inventory had a F- value of 1.014
and a p- value of .365, Storage and Maintenance of Inventory with a F- value of .173
and a p- value of .841 while Tracking and Regulating of Inventory Usage posted an
F- value of .337 and p- value of .714 respectively.
By number of years of experience in inventory management, there was no significant
difference in the assessment on the all aspects provided, namely: Controlling and
Overseeing Ordering Inventory with an F- value of .514 and p- value of .673, Receiving of
Inventory with an F- value of 1.066 and a p- value of .365, Storage and Maintenance of
Inventory with an F- value of .784 and p- value of .505, and Tracking and Regulating of
Inventory Usage with an F- value of .427 and a p- value of .734;therefore the null hypothesis
was accepted.
By number of trainings attended, Receiving of Inventory attained an F- value equal to
1. 730 and a p- value equal to .163, Storage and Maintenance of Inventory garnered an F-
value of 1. 417 and p- value of .240, and Tracking and Regulating of Inventory Usage
received a computed F- value of .785 and a p- value of .504. All the said aspects have p-
values that are greater than the assumed level of significance which is 0.05, and a null
hypothesis is accepted. It can be concluded that the assessments on the level of
effectiveness of their inventory management practices were not significantly different when
grouped by Number of Trainings Attended. In contrast, Controlling and Overseeing Ordering
Inventory obtained an F- value of 2.729 and a p- value of .046. In terms of this aspect, there
is a significant difference and a strong evidence against the null hypothesis, so it should be
rejected. This means that in terms of controlling and overseeing ordering inventory,
employees have different perception because of the number of trainings attended.
By job position level, it can be construed that there was no significant difference in the
assessment on the aspects provided, namely: Controlling and Overseeing Ordering
Inventory which received a computed F- value of 1.566 and a p- value of .212, Receiving of
Inventory which earned an F- value equal to .078 and a p- value of .925, Storage and
Maintenance of Inventory that got an F- value of .146 and a p- value of .865, and Tracking
and Regulating of Inventory Usage which acquired an F- value of .172 and a p- value equal
to .843; thus, the null hypothesis was accepted.
Conclusions
Based on the preceding findings, the researchers concluded the following:

1. Majority of the respondents are between 21 – 30 years old, male, single, graduated with
a bachelor’s degree, have less than or equal to 3 years of experience in inventory
management, attended 3 and below trainings, and in the rank and file position level of
inventory management.
2. Based on the respondents’ assessment on the effectiveness of inventory management
practices of Max’s Restaurants in selected cities in National Capital Region, the most
effective inventory management under the first aspect- controlling and overseeing
ordering inventory is the web ordering system. For the second aspect- receiving of
inventory, the most effective is having a store receiving checklist; for the third aspect-
storage and maintenance of inventory, the most effective is the use of quality reference
guide; for the last aspect which is the tracking and regulating inventory usage, the most
effective system is the use of FIFO method. Among the four aspects given, the
respondents evaluated that the tracking and regulating of inventory has the most effective
inventory management system in each branch of Max’s restaurant.
3. Controlling and overseeing ordering inventory has no significant difference in terms of
age, sex, civil status, educational attainment, number of years of experience on inventory
management, and job position level but has a significant influence in terms of number of
trainings attended according to the respondents’ assessment. Significant difference
occurs when the p-value is less than 0.05 that results to the rejection of the null
hypothesis; putting it differently, the null hypothesis is accepted if there is no significant
difference. Receiving inventory and storage and maintenance of inventory, on the other
hand, has no significant difference on age, sex, civil status, educational attainment,
number of years of experience on inventory management, number of training attended,
and in job position level. Lastly, tracking and regulating of inventory usage has also no
significant influence on civil status, highest educational attainment, number of years of
experience in inventory management, number of training attended, and in job position
level but has a significant difference on age and sex of the respondents.
Recommendations
The researchers made the following recommendations after the in-depth analysis of
the data and based on the conclusions drawn.
1. Since Max’s Restaurants’ forecasting model based on target sales is a form of projection
about future demand interpreted through consumer preferences, opinions and attitudes,
the restaurants may opt to monitor the customers’ interests using suggestion or survey
forms to maintain its effectiveness.
2. The processing of the complaint may take some time which makes the product unused for
quite some time too. To ensure the consistency of effectiveness of this practice, the
commissary of the company should have the grievance of the branch processed
immediately to help increase their productivity.
3. The researchers recommend that the restaurant should maintain an efficient stockroom by
utilizing every single inch of it. They should develop a layout wherein materials can be
moved quickly between different areas and there also be enough aisle space for
employees to go through. And to further improve them, it is also important to perform a
stockroom assessment to evaluate current processes and practices.
4. a. The management may elect to develop a stock control system that keeps track using a
computer software. Computerized stock control runs the same as the manual stock cards
but it is more flexible to use, more convenient in terms of utilizing work time, any
information is easier to retrieve, and the monitoring of inventory incase the re-order level
is reached.
b. Max’s Restaurants still process these transactions manually. They may opt to develop
an online processing to make this practice more efficacious and can save time.
5. Averaging the usage of inventories is used to compare overall sales volume and to help
them determine inventory losses due to theft or shrinkage, or due to damaged goods
because of mishandling but Max’s Restaurants may implement an efficient point-of-sale
system and study their daily profit margins report to locate suspicious losses to make it
easier.
6. Time Schedule of Requisition helps the stock clerks to monitor easily the quality and level
of inventories. However, this schedule sometimes cannot be followed especially when
there is emergency such as stock-outs. It may be better to constantly monitor it and to
have a strict rules and regulation so that the management can maintain an optimal
inventory level.
7. Have a pop-up notification system that enables the management to know about the
expiration dates of the products.
8. Based on the survey, most employees of Max’s Restaurants acquired a small number of
trainings. The researchers suggest that they conduct more trainings/ seminars relating
inventory management.
9. To future researchers:
a. They are encouraged to go further study and articulate other topics relating inventory
management practices.
b. They should devote themselves to the study wholeheartedly and understand deeper
the nature of the topics.

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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES 1

THE PROBLEM AND ITS BACKGROUND

supervision of inventories. The organization should establish an optimal inventory

issues regarding inventories. Inventory management aims to keep inventories on optimal

insufficient or excessive inventories, without compromising the quality. Some concerns

involving inventory management is of great importance to the competitive market. It can

complex operations relating inventories, hence, an effective inventory system is inevitable.

The inventory management practices of Max’s Restaurant is the concentration of this

study. Max’s Restaurant, started in 1945 by Maximo Gimenez, is a Philippine-based

name in the Philippines, an institution, and a proud Filipino tradition.

As the restaurant grows, managing of inventories became complicated. During the

problems in managing inventories can be encountered such as the security, products

inventory practices and to develop recommendations to improve their existing system.

the production and storage of units of products, and to minimize costs.

management creates or buys inventories as units are depleted. As inventories begin to

arrives at a customer’s business.

the cost of inventories.

In the theory of inventory management based on demand forecasting, the

data and other information. It is a great help to inventory management by providing

effectiveness of the inventory management practices of Max’s Restaurant. The restaurant

INPUT PROCESS OUTPUT

Figure 1. Research Paradigm

environment as information sources which undergo process and exits as output.

educational attainment, number of years of experience in inventory management, number of

controlling and overseeing ordering inventory, receiving of inventory, storage and

maintenance of inventory, and the tracking and regulating of inventory usage.

To assess the level of effectiveness of inventory management of Max’s Restaurant,

management practices into a better one.

Statement of the Problem

This study aimed to assess the level of effectiveness of inventory management

practices of Max’s Restaurants in Selected Cities in National Capital Region.

Specifically, it pursued to answer the following sub-problems:

1. What is the profile of the respondents in terms of the following variables?

1.3 Civil Status

1.4 Highest Educational Attainment

1.5 Number of years of experience in inventory management

1.6 Number of Trainings Attended

1.7 Job Position Level

2. What is the level of effectiveness of the inventory management practices of Max’s

Restaurants in Selected Cities in National Capital Region as assessed by the

respondents in terms of the following aspects?

2.1 Controlling and Overseeing Ordering Inventory

2.2 Receiving of Inventory

2.3 Storage and Maintenance of Inventory

2.4 Tracking and Regulating of Inventory Usage

3. Is there a significant difference in the respondents’ assessment on the level of

effectiveness of the inventory management practices of Max’s Restaurants in Selected

There is no significant difference in the respondents’ assessment on the level of the

inventory management practices of Max’s Restaurants in Selected Cities in National Capital

Region when they are grouped according to profile.

Scope and Limitations

inventory management of Max’s Restaurants in Selected Cities in National Capital Region.

control on restaurants in National Capital Region is a basis and serves as an industry

benchmark on other restaurants in the country.

The researchers conducted a survey on restaurant managers, kitchen supervisors

management to become effective.

Significance of the Study

The results of the study will be of great benefit to the following:

Food Industry/Restaurants. The outcome of this study will help businesses

Organization/Management. The study will help the organization assess the

finally, profit yielding.

understanding how lead times affect the business.