Revised Thesis N

Westmead International School
College of Tourism and Hospitality Management
CHAPTER I
THE PROBLEM AND ITS BACKGROUND
Introduction
With people nowadays being too busy to find opportunities to spend
mealtime at home, restaurants have been an important place to them. Thus, in
turn restaurants need to consider customer satisfaction and their efficiency. With
the hospitality and culinary sectors continue to boom, the competition gets
intense for the existing restaurants. The key to survival is delivering well-
prepared foods and beverages at the right prices, however, the prices of staple
ingredients change all the time. Hence, restaurants need to maximize the
effectiveness and efficiency of the supply chain process. To address the issue
and thrive in the business competition, the inventory management becomes the
main pillar of the restaurants. (Granville, 2011)
Inventory turnover has been found significantly related to an index of
overall company performance. In fact, inventory management can be one of the
their most important assets. For others, taking inventory may be the least of
necessary tasks for restaurant owners, however, it is crucial in controlling the
food cost and reducing waste. More so, it is required at different locations within
a facility or within multiple locations of a supply network to protect the regular and
planned course of production against the random disturbance of running out of
Factors Affecting Inventory Management in Family-Owned Restaurants in Batangas City

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materials or goods. The scope of inventory management also concerns the fine
lines between replenishment lead time, carrying costs of inventory, asset
management, inventory forecasting, inventory valuation, inventory visibility, future
inventory price forecasting, physical inventory, available physical space for
inventory, quality management, replenishment, returns and defective goods and
demand forecasting.(Piasecki, 2002)
It is connected to business operations from planning the menu, to
determining how many guests it can feed, to control inventory and to determine
daily menu costs in a larger operation. A key component in effective kitchen
management is inventory control. By determining what supplies are on hand at a
given time, the management can plan food orders, and make menu item changes
if needed. Managing inventory is like checking a bank account, and taking
inventory helps determine food costs and allows to control food waste. An
accurate inventory keeps track of which ingredients are fresh and ensures that
storage room always have the items needed. (Mercado, 2000)
On this note, the researchers being future employees in the field of the
food industry have deemed necessary to investigate the restaurant inventory
management in family owned restaurants in Lipa and Batangas City. They
strongly believe that the conduct of this study will be a valuable contribution to
the food industry as it will provide insights and enlightenment. Given the
importance of inventory management, restaurant managers will be compelled to

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consider their own processes. The present study is guided by its statement of the
problem that is furnished with answers discussed in the next chapters.
Statement of the Problem
Generally, this study attempts to identify the inventory management of the
select restaurant respondents. Specifically, it seeks answers to the following
questions.
1. What is the demographic profile of the respondents from chosen
restaurants in Batangas City and Lipa City in terms of:
a. Gender;
b. Age;
c. Marital Status;
d. Educational Attainment; and
e. Occupation
2. What is the general inventory management procedures of the selected
restaurants in Batangas City and Lipa City?
3. What are the inventory management concerns and problems encountered
by the chosen family owned restaurants in Batangas City and Lipa City?
4. What internal and external factors affect the inventory management of
these selected family-owned restaurants?

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5. Is there a significant difference between Lipa City and Batangas City
family owned restaurants management in terms of internal and external
factors affecting inventory management?
Hypothesis of the Study
The study tests the following hypothesis:
There is no significant difference between Lipa City and Batangas City’s
family-owned restaurants as to the internal and external variables affecting the
inventory management.
Significance of the Study
This research is mainly focused on inventory management applied in
family owned restaurants. Thus, the study targets to be of valuable assistance to
restaurant managers and owners. Through the results of the study, they will be
informed of the importance of inventory management thereby adopting efficient
methods.
Likewise, the study is beneficial to restaurants’ finance and budget
officers. They will be enlightened of the necessity to be responsible for the
financials record and the preparation of the budget of the stocks. Through the
present study, information on inventory management will be accessed easily.
In the same manner, the present study can serve as basis and reference
for future researchers who might take interest in the similar research topic. The
findings and results of the study may be used as support to their literature.

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Scope and Limitations of the study
This study is designed to identify the factors affecting inventory
management in family-owned restaurant in Batangas City and Lipa City.
A questionnaire made by a researchers was used as a main tool in
determining the factors affecting inventory management in family-owned
restaurant in Batangas City and Lipa City.
Greater emphasis is put on the use of the inventory management of the
family owned restaurants in the City of Lipa and Batangas. The study covers 100
respondents from the select restaurants in Lipa and Batangas. It intentionally
excludes other cities in the Batangas province considering the time constraints
and accessibility to information.
Definition of terms
For better understanding of the research, the following terms are defined
conceptually and operationally for easy comprehension of the study.
Accounting. This refers to the activity of keeping detailed records of the
amounts of money the restaurant business receives and spends the skill or
practice of maintaining and auditing accounts and preparing reports on the
assets, liabilities, etc. of the food business (Investopedia, 2019). In the study, it

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means comprehensive and systematic recording of financial transactions of
select restaurants in Lipa and Batangas City.
Compliance. This means the attitude of yielding to a request or command
or taking steps to obligations. (Edmunds, 2018). In the study, it refers to fulfilling
the regulations of the family owned restaurants.
Customer Service. This pertains to any activity designed to increase the
level of customer satisfaction, like how these restaurateurs behave and treat their
customers to keep their patronage to their food business (Investopedia, 2019).
Operationally, this means actions taken by the select restaurants to take care of
the customers’ needs.
Efficiency. This pertains to the skill for implementing the change in the
business by considering the tools and processes (Martin, 2018). In the study, it
refers to the staff with competence, capable, skilled on doing the duties in the
restaurants.
Entrepreneur. It means a person or individual who a creates and runs a
business (Hayes, 2019). Operationally, it refers to the person who sets up the
family owned restaurant business, taking on financial risk in the hope of profit.
External factor. These pertain to the outside influences that can impact
the business (Business Dictionary, 2109). Operationally, this refers to the

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measures that affect the restaurants operations that are imposed by the
government or another organizations. It is a rule that affects the restaurants
business and involves taxes as well.
Finance. It serves as the basic form for the decision and planning and
budgeting (Woodruff, 2019). In the study, it refers to the restaurants economics
concerns with resource allocation as well as resource management, acquisition
and investment. It also deals with matters related to money and market.
Food industry. It includes such areas as the raising of crops and
livestock, manufacture of farm equipment and agrochemicals, food processing,
packaging and labeling. Storage, distribution, regulatory framework, financing,
marketing, retailing, catering, research and development, and education. The
Economic Research Service of the U.S Department of Agriculture (USDA) uses
the term food system to describe this entire enterprise. In the study, it pertains to
the family-owned restaurants belonging to this category.
Inventory. This pertains to any item, property held in stock by firm
(Britannica, 2019). Operationally, it refers to the inventory and stocks of the
family owned restaurants.
Internal Factor. These are influences within a company that may affect
operations and processes (Business Dictionary, 2019). In the study, this refers to

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the process or system that helps assure reliability, compliance, security, or
efficiency. Internal controls are effectively a set of checks and balances that are
critical to the restaurant business, especially as it becomes larger.
Inventory Control. It means regulating and involving warehouse
management (Tradegecko, 2019). It refers to the restaurants’ process of
effectively managing consumable supplies. It helps streamline storerooms and
provide supplies visibly because the inventory managers/supervisors know what
they have, where it is, and when to order more.
Inventory Cost. This refers to the cost related to storing and maintaining
its inventory over a certain period, described as a percentage of the inventory
value (annual average inventory, like for the restaurants average of the goods
bought from its suppliers/vendors during a year) on an annualized basis, and
always quite high, and costs alone represent generally 25% of inventory value on
hand (Tradegecko, 2019). In the study, same definition applies.
Inventory management. It is the management of inventory and stock, as
an element of supply chain management, which includes aspects such as
controlling and overseeing (Tradegecko, 2019). Operationally, it refers to the
management of the family owned restaurants in their stocks.

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Kitchen. This refers to the room in which food is cooked, a place with
cooking facilities, the personnel that prepares cook, food and serve food
(Merriam-Webster Dictionary). In the study, same definition applies.
Lead Time. It is the time it takes from the moment an item is ordered to
the moment it arrives (Business Dictionary, 2019). In the study, it pertains to the
days allowed for suppliers to deliver supplies to family-owned restaurants.
Marketing. This refers to the function that links the consumer, customer,
and public to the family owned restaurants through information used to identify
and define marketing opportunities and problems to generate, refine, and
evaluate marketing actions; monitor marketing performance; and improve
understanding of marketing as a process (American Marketing Association). In
the study, same definition applies.
Operating Cost. This refers to the key components of operating income
calculation for operating income is a crucial component of many financial
measures. Thus, the lower a company’s operating costs are, the more profitable
it generally is (Murphy, 2019). Operationally, this pertains to the expenses
associated with the maintenance of family-owned restaurants.
Restaurant. It is a place to buy food and eat meals. (Merriam-Webster
Dictionary). In the study, this is place owned and operated by family members.

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Process. It refers to a series of actions that produce something or that
lead to a result (Business Dictionary, 2019). In the study, it refers to the
systematic operations in the family owned restaurants.
Purchasing. This refers to the organized acquisition of goods and service
on behalf of the buying entity (Business Dictionary, 2019). In the study,
purchasing activities are needed to ensure that needed item are obtaining in a
timely manner and at a reasonable cost. A purchasing department is especially
necessary in the restaurant business, where large amount of goods from
suppliers are obtained on a recurring basis.
Reliability. It means the probability of failure free-performance (Business
Dictionary, 2019). In the study, it refers to the quality of personnel being reliable
and worthy of trust and depended on.
Security. It means securing the business in all possible means (Business
Dictionary, 2019). This refers to a pledge that the person in position will fulfill
some duty in the restaurant.
Stockpile. This means a pile or storage location, in addition, it refers to
the reserve supply of something essential accumulated within a country for use
during a shortage (Business Dictionary, 2019). In the study, it pertains to supply
for family owned restaurants’ consumption.
System. It pertains to the process of providing service or specific goods to
customers (Business Dictionary, 2109). Operationally, this refers to a treat

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prepared by some special method used by family owned restaurants to provide
service to customers.

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CHAPTER II
REVIEW OF RELATED LITERATURE
This portion of the research paper discusses the conceptual literature with
the topics and theories narrowed down to provide understanding of the present
study. It also includes conceptual framework which serves as a foundation of the
study.
Conceptual Literature
Inventory management is the process of managing inventory to meet
customer demand at lowest possible cost and with the minimum of investment. A
successfully implemented inventory program considers things such as
purchasing goods that commensurable with demand seasonal variation,
changing usage patterns and monitoring for pilferage (Byoungho, 2004).
Inventory Management as Tool to Efficiency. According to Persson
(2004), effective inventory management has been essential in the operation of
any business. Three different trends in the development of logistics solutions
within industry were identified; one trend is concerned with the increased
integration of logistics activities beyond organization boundaries with an aim to
reduce cost items such as capital costs for inventory and handling costs of flows.
Inventory as an asset on the balance sheet of companies has taken on increased
importance because many companies are applying the strategy of reducing their

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investment in fixed assets, like plants, warehouses, equipment and machinery,
and so on, which even highlights the significance of reducing inventory. Changes
in inventory levels affect return on assets (ROA), which is an important financial
parameter from an internal and external perspective. Reducing inventory usually
improves ROA, and vice versa if inventory goes up without offsetting increases in
revenue (Coyle et al., 2003).
Coyle, Bardi, and Langley (2003) stressed that effective inventory flow
management in supply chains becomes one of the key factors to success.
Emmett (2008) added that it is an important element both in the management of
individual companies and the supply chains as such. Regardless of whether the
inventory refers to raw materials, material, semi-finished or finished products, it is
an element which influences the operations of companies and supply chains and
should therefore be given adequate attention. Owing to frequent uncertainties in
the market development, fluctuating demand or production and changes in lean
times, the inventory management as such may be very complicated.
As to Kotler (2000), he likewise postulated that inventory management
refers to the entire activities involved in developing and managing the inventory
levels of raw materials, semi-finished materials and finished goods so that
adequate supplies are available and the costs of over stocks or under stocks are
low. Given the it encompasses all activities, Wild (2002) believes that the main
purpose of the inventory control function in supporting the business activities is to

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optimize the following three targets which are customer service, inventory cost
and operating costs.
Further, Barnes (2008) highlighted that inventory management is a branch
of management that deals with management of fixed and current assets. It also
entails the management of daily operational supplies critical specially in
restaurants. As to Gibson’ perspective (2013), inventory plays a major role and
its management goes a long way in assisting a firm to grow as it relates to its
external customers, as well as, internal customers. Schroeder (2000) also
stressed that inventory management has an impact on all business functions,
particularly operations, marketing, accounting, and finance.
Thus, Shapiro, (2009) advised that when it comes to demand planning
and as a result, restaurants need to be versatile in its management of its
inventory when it comes to periodic or seasonal inventories. Restaurants must
follow what Stevenson (2006), considers that is inventory management is a key
operations management activity, effective inventory management is critical to the
smooth operation of most business and their supply chains. Good inventory
management has an impact on operation, marketing and finance departments.
Poor inventory management hinders operations, reduces customer satisfaction
and raises customer satisfaction and raises operating.
Dutta (2014) likewise confirmed that the appropriate inventory
management is very important to an industry such as to the food industry,

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because of involvement of significant cost regarding raw materials, and these
costs include such expenses as storage costs, inventory risks, and the loss-of-
opportunity costs associated with tying up capital.
As pointed out by Wild (2000), inventory control in a restaurant is the
activity which organizes the availability of items to the requisitioned in the
kitchen. It coordinates the purchasing, manufacturing and distribution functions to
meet the customers’ need. This role includes the supply of current sales items,
new products, consumables among other supplies. Clodfelter (2003), added that
a good inventory management offers the proper relationship between sales and
inventory and can better be well maintained. Without inventory control
procedures in place, the storeroom can become overstocked or understocked.
Equally important, Gourdin (2001) noted that inventory is one area of
restaurant that has received a great deal of management attention over the past
decade. Inventory management provides a business with information needed to
take markdowns by identifying slow-selling menu. Discovering such items early in
the season will allow a business to reduce prices or make a change in marketing
strategy before consumer demand completely disappears.
As commented by Hugo, Badenhorst-Weiss and Van Rooyen (2002),
inventory is ensuring a sufficient level of stock and satisfying demands regarding
quantity, quality, time and place and to control prices. The basic characteristic of

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the system is that whenever stocks are replenished, the same fixed quantity is
ordered every time, and flexes when there are changes to customer’s taste.
Smaros (2003) stated that the inventory control reveals that for products
with stable demand a partial improvement of demand visibility can have products
replenishment frequencies of the restaurant inventory supplies. Merdith (2006)
confirmed that stock management as inventory operations is the combination of
systems and processes involved with inventory management as well as the
physical aspects of storage and material handling as to its direction and control
of activities with the purpose of getting the right inventory in the right place, at the
right cost. Effective stock management and security are imperative and must
cover the whole supply chain through to the final distribution to customers of the
restaurant.
On the other hand, Buxton (2001) looked at inventory management as the
ability of a firm to ensure that supplies of a restaurant are made available on a
consistent basis in the light of the company’s service policy to its kitchen and
customers demand. Inventory management is extremely important for the
investment of inventories, the largest current assets in retail establishments may
also be a material portion of the company’s total assets. If unstable items have
accumulated in the inventory, a potential loss exist, and product ordered from
suppliers are not available in the desired quantity, quality, there is an inefficient
purchasing procedure, will thus all result in excessive and unstable inventories.

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But when there are slight downward inventories in the business cycle, many live
merchandises move slowly, then stocks accumulate and bring about
obsolescence. To achieve this, if not stopped completely, management should
put much efforts and interest in inventory planning and control.
Hence, Jackson and Stent (2007) proposed a non-exhaustive list of
internal control measure as key indicators on its complement which include: staff
competency, segregation of duties, isolation of responsibility, access and
authorization, comparison reconciliations, and source document design. Ernst
and Young (2003) also added in their advisory and assurance manual proposed
that the inventory should include any procedure used and relied on by
management to prevent material misstatements, whether caused by error or
fraud from occurring during transaction processing or detect and correct on a
timely basis material misstatement that may occur in processing transaction.
Food business inventory is important, and its management is vital to the success
and cost reduction of the restaurant’s expenditure.
Likewise, Wild (2002) recommended proper keeping of inventory so that
when goods are ordered they are held at the storeroom for the least time
possible minimizing holding cost of inventory. Consequently, other operation cost
may increase inventory management costs like through the balance of ordering
costs, holding costs, safety stock and stock outs.

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Problems Encountered in Inventory Management. Inventory is planned
approach of determining what and when to order and how much to order and
how much stock so that costs associated with buying and storing are optimal
without interrupting production and sales. One of the reasons of taking inventory
is to determine food costs and to work out cost percentage (Scribd, 2013).
However, the temptation in small operations is to treat inventory control
casually. Perhaps, there are only one or two people doing the purchasing and
they are usually aware of the supplies that are on hand. It doesn’t eliminate the
need to track purchases against sales to see if they are managing the costs as
well as they can.
Schenkel (2018) revealed that the restaurant inventory management is
one of the trickier elements of running a kitchen, simply because there are so
many ways that small mistakes can affect the bottom line. If the manager under-
orders, the risk of having menu items during the busiest shifts, can leave the
restaurant guests with a bad impression of the service and menu. If the manager
over-orders, the risk is that extra product spoiling before it can be used. More so,
keeping track of the inventory can be further complicated by poor employee
behavior like sloppy prep waste, theft, and not sticking to FIFO (first in, first out).
Part of restaurant inventory management is being familiar enough with what the
standard inventory should look like that managers can spot when things are
wrong and get to the bottom of the problem right away.

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Thus, it is important to know what has arrived and what gets used every
day. This can easily be reconciled by doing a regular count of inventory. In larger
operations, the storage rooms and coolers may be on the kitchen, and therefore
a system is needed that requires to requisition supplies from the storeroom.
Restaurant need follow what Chase, Jacobs and Aquilano (2004) believe that is
identifying any item or resources used in organization and observing the set of
policies so to control the monitor levels of inventory and determine what selves
should be maintained when stock should be replenished, and how large order
should be.
In addition, Coyle (2003) stressed that the actors involved in downstream
distribution channels face a special challenge in keeping inventory at reasonable
levels due to the difficulty of forecasting demand and expectations of customers
about product availability. The challenge grows even bigger when they think
about the diversity of products in terms of their color or design, package type,
size and others. The aggregate demand needs to be broken down by various
specifications of the product into sub-total demand forecast to guide the stock
keeping units (SKUs) in the company to fulfill the final customer’s order. But the
sub-total demand forecasts could be diverse, reaching dozens, hundreds, or
even thousands of categories; in that case, they become truly difficult, complex
and time-consuming.

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The difficulty of forecasting demands accurately naturally results in two
problems, which are in opposite extreme, overstock and stock-out of inventory.
As restaurants strive to avoid lost sales from stock-out of inventory, there is a
tendency to overstock. Nevertheless, because keeping inventory is costly which
reduces the profit margin, they try to reduce the inventory level, so appears the
tendency to stock-out of inventory.
This is in consonance with Chalotra’s perspective (2013) which highlighted
that the essence of inventory management is to augment business operations to
ensure effective flow of goods, product, and service. In this context, inventory is
the aggregate list of items; a quantity of goods in stock or stock of the product
which an organization is producing for sale and the components that make the
sale. Thus, inventory management is the supervision of supply, storeroom and
accessibility of items to ensure an adequate inventory supply without excessive
oversupply. Inventory management is often associated with understanding the
inventory mix of a restaurant organization and the different levels of demand on
that inventory, depending on diverse external and internal factors that can exert
demand for quality and just enough quantity of menus in a given period.
On the other hand, Sandeep (2007) pointed that inventory management
can bring unwarranted losses if the restaurant always has stock outs, lack of
proper storeroom plans, receiving the wrong goods from the suppliers, as well
as, lack of proper documentation for goods procured. The inventory staff needs

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to understand and apply the inventory management techniques to ensure that
the restaurant organizations gets value for its money invested.
Graman and Magazine (2006), argued that today, the cost of holding
inventory, extensive product proliferation and the risk of obsolescence, especially
in rapidly changing markets, make the expense of holding large inventories of
finished goods excessive and that high demand items naturally have safety
stocks assigned to them, but in many restaurants, there are so many very-low-
demand items that keeping any stock of these items is unreasonably expensive,
so they argued that companies must provide good service while maintaining
minimal inventories.
James (2001) affirmed that inventories represent a sizeable investment
and a potential source of waste that needs to be carefully controlled. If managers
keep too much inventory on hand, they will waste money storing it and lose
money if inventories are damaged or stolen. On the other hand, managers who
run out of inventory may have to stop production until the necessary materials
are supplied, wasting time and labor. In most realistic inventory situations,
certainty does not exist. Both demand and acquisition lead time usually fluctuate
and cannot be completely predictable.
Utilization of Techniques to Effective Inventory Management. Many
factors affect inventory management, including the quality of supervisory and
operations personnel, counting and auditing procedures, security precautions

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and the relationships with suppliers. A business owner must assume
responsibility for all these factors and ensure operations are as foolproof as
possible.
When forecasting inventory requirements, both the internal and external
factors that affect the inventory flow are both taken in. Inventory management
must respond to external factors that affect inventory while actively managing the
internal factors under control. In all restaurants, the two greatest costs of
operation are the cost of staffing and the cost of purchasing inventory for use in
the practice or sale to third parties. In a kitchen, they need to control inventory
extends beyond foods and kitchen supplies.
One factor that affects a business is the cost of financing. If they are
externally financing the cost of stocking the inventory, it pays to watch interest
rates closely and plan purchases accordingly. Any tax rebates that are
associated with the business inventory costs are internal factors needed to be
considered. Similarly, any risks faced when purchasing inventory should also
help shape the buying decisions. Some of the other financial costs associated
with inventory management are straightforward and include aspects like storage
and transportation, as well as product insurance and maintenance. It is also
essential to consider some of the internal factors that affect inventory
management; the restaurants need to understand the lead times faced by the
suppliers and maintain stock levels accordingly. It may also prove worthwhile to

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find a backup supplier to use in case of unforeseen product demand or supplier
shortages. Namagembe (2010), recommended that chain partners implement
information technologies and collaborate among each other, so inventory
management could improve.
It has been mentioned that high levels of customer satisfaction directly
connected to better inventory management. Therefore, the Re-order level (ROL)
is critical for humanitarian organizations to achieve optimal efficiency and be
effective. They need to have two recorders level one that is normal whereas a
second one that is for emergency cases in case of disaster. This improves
performance and customer satisfaction. It is also emphasized that inventory
management need to be organized in logical way to facilitate the organization
knowledge of when to order and quantity to order. In economic order, it enables
the restaurant to plan their inventory replenishment on a timely basis such as
daily to weekly basis. It was found out that keeping moderate inventory is good
and it enables a food business to operate minimal expenses on it.
Management of inventory itself determines the way an organization will
thrust itself to high performance efficiency. The key aspect is that communication
which should be planned well from the beginning of business relations between
restaurant and its suppliers. It seeks to integrate the supplier more family into the
customer’s organization by using the point of sale which allows the supplier to
see the real time data of its customer’s inventory (Frahm 2003).

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In the same manner, Frahm (2013) suggested that inventory management
techniques and organizational performance need to be scrutinized so that the
food business organization does not utilize a huge chunk of its budget on holding
inventory. Therefore, the total cost model needs to be balanced by ensuring
purchase costs, ordering costs, and holding costs are minimal so that the firm
can reap good profits and maintains its budget all year round.
According to Wallin and Bucklin (2006), the most common inventory
management method is inventory speculation. They explained this by stating that
a firm like the restaurant would purchase items and physically hold this inventory
within its storeroom facilities before there is a demand from the preparing cooks
and consumers. There are several advantages to this inventory management
method being that there is an ability to respond quickly to demand or
requirement, as well as, the ability to protect itself against fluctuations in prices.
They have elaborated this point by stating that through inventory postponement,
a firm can minimize the risk of inventory obsolescence, reduce the opportunity
cost of having capital tied up in these items, and avoid acquiring inventory
storage and tracking expenses since this inventory is physically located with the
supplier.
On the other hand, Rietze (2004) analyzed that inventory postponement
refers to delayed decision-making about the product, and that it is beneficial to
delay commitment to product -specific characteristics as late as possible to avoid

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a mismatch between orders and inventory on hand. In addition, Bucklin (2006)
agreed that a firm operating under an inventory postponement approach would
deliberately delay purchasing and the physical possession of inventory items until
demand or usage requirement are known certainty.
More so, transparency in inventory management techniques is important
because it eliminates corruption, biased procurement process, procuring
substandard good for the restaurants that prove to be extremely costly (Githui,
2012). Hence, Susan (2000) stressed that accuracy of inventory records is
necessary to provide satisfactory customer service, determine replenishment of
individual items; ensure that material availability meets repair or project demand,
analyze inventory levels and dispose of excess inventory. Stock records also
provide the management with the information which is used to ensure
accountability through stocktaking and stock audit exercise.
Fellows and Rottger (2005) also agreed that having inventory in storeroom
has an added advantage for the restaurant since customers will be satisfied
instantly leading to improved performance of service crew. With inventory in the
restaurants through timely delivery, stock out is not experienced. According to
Waller (2002), most of the inventory reduction can be attributed to frequent
inventory reviews, order intervals, and deliveries. Frequently monitoring the
inventory levels can provide updated information about inventory levels. This
assists the inventory controller to make the right decisions on inventory

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replenishment, which in turn can reduce the cost and improve services
performance. However, frequently monitoring and make ordering if needed are
appropriate when the fluctuation of demand is high.
Meanwhile, Sezen (2005) suggested a guideline in monitoring and
ordering inventory. One important consideration is the cost of each review. Costs
related to the review process may include the cost of review personnel, ordering
and transportation costs. When the average inventories decrease, as the length
of the review period gets shorter. However, the total lost sales also increasing
sharply when longer review periods was applied. In terms of the safety stock
requirement, products having high variable demand may need shorter review
periods, and products with low fluctuating demand may require less frequent
reviews.
As to Leonard (2018), by knowing what supplies are on hand at a given
time, the manager will be able to plan food orders, calculate food costs since the
previous inventory, and make menu item changes if needed. By keeping an eye
on inventory, it is possible to note potential problems with pilferage and waste. As
emphasized by Muller (2007), inventory management is about more than
counting what companies got, it is about understanding business realities and
making decisions that balance current demand with future needs-while keeping
overhead and operating costs to a minimum.

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Accordingly, Krautter (2009) recommended that companies follow the
steps to have an effective inventory management system: develop a
mathematical model which describes the behavior of inventory; design and adopt
an optimal inventory policy with respect to the firm’s mathematical model;
develop a computerized information processing system that will provide
information on the current inventory levels; use the current inventory levels
information to apply the optimal inventory policy to replenish existing inventory
levels. Summing up, as business owners, they have ultimate responsibility to
oversee the inventory and ensure orders placed appropriately and regular audits
performed, hire inventory supervisor and/or manager to monitor duties
Synthesis of the study
The foregoing concepts and related studies have provided the researchers
with significant insights on inventory management and helped enrich the
interpretation of the findings of the present study.
The reviewed conceptual and research literatures were found important
and provided rich overview of the constructs relevant to the present study.
Furthermore, the research literature presented discuss some previous studies,
related to the topic. The knowledge provided by this literature serve as a guide of
the researchers to arrive at accurate results.

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Conceptual Framework
The study was hinged upon a model on the variables such as the internal
and external factors affecting the inventory problems of the family-owned
restaurants. For clearer understanding of this study, the researchers’ conceptual
framework and conceptual paradigm show the variables.
As the definition explains, the internal inventory is the internal control
process or system that helps assure, reliability, compliance security and
efficiency, and this internal control is the set of checks and balance, critical to any
business especially as it becomes larger.
As to the external inventory, it affects the family owned restaurant
operation as imposed by the government or another organization, or a rule that
affect the restaurant business.
As they are handled by restaurant staff whose duty is the inventory
Management of the food business, the staff profiles such as the personal
qualities of the inventory personnel, especially the gender, age, marital status,
educational attainment and occupation are identified.
The arrow shows that the inventory personnel are the entrusted staff to
handle the general inventory management procedures and make and act upon
decisions on the internal and external factors affecting the inventory
management.

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Inventory
Personnel
Internal General Inventory External

Factors Management Procedure Factors
Effect
Inventory Concerns and Problems

Encountered by the Family Owned-
Restaurants in Lipa and Batangas City
Figure 1
Conceptual Framework
The conceptual paradigm presents the essence of this study. The first box
shows the respondents profile specifically gender, age, status and educational
attainment. On the other hand, the direction of the arrow shows that there is a

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relationship between respondents’ profile and internal and external factors that
affect inventory management in the select restaurants. The dependent variables
are the factors affecting inventory management.

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CHAPTER III
RESEARCH METHODOLOGY
This chapter describes and explains in full detail how the present study is
conducted. It presents the research design, the subject of the study the data
gathering procedure the data gathering instrument, and the statistical tools and
treatment of data.
Research Design
The method of research utilized in this study is the descriptive method.
The researchers used this method because it describes the present inventory
management process and or system based on the perception of the select
respondents from family owned restaurants in Lipa and Batangas City.
Descriptive studies are valuable in providing facts which could form basis of
scientific judgement. They also play large part in the development of instrument
that can help measures things, events, or phenomenon by interviews,
observation, schedules, checklists, score cards, and rating scale, test and
questionnaires.
Subject of the study
A total of one hundred (100) inventory personnel respondents were
involved in this research. They were chosen using the random sampling
procedure based from the total population of the family-owned restaurants

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enlisted in Batangas City and Lipa City, respectively. Their demographic profile
encompassed their gender, age, marital status, educational attainment, and
occupation.
Data Gathering Procedure
The researchers studied and read several books, articles, and related
studies to collect data significant to the present study. Books and other reading
materials concerning inventory management in the restaurants had been
searched on school and local city libraries.
The data for this research were collected using the researcher-made
survey questionnaire. The survey was created using suitable questions modified
from related research and individual questions formed.
A request letter to conduct the study noted by the research adviser was
sent to concerned authorities and administrators to gain access to the data
needed in the conduct of the study. Given the approval, respondents sought for
the administrator of questionnaire. Thus, data were then tallied and were given
appropriate statistical treatment relative to the objective of the study.
Data Gathering Instrument
The researchers used primary and secondary sources of materials.
Whereas, they used a self- constructed survey questionnaire to serve as the

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main instrument to gather data from the respondents. The questionnaire items
were taken from readings of theories and literature which serve as bases to
formulate the items. Different articles, journals and books were also consulted for
questionnaire construction. The draft of the questionnaire was presented to the
research adviser several times for further critiquing and refinement of the items.
This underwent through validation from research expert and research adviser.
The comments and suggestions regarding the content of the instrument were
considered. Relevant books, journals and thesis were reviewed to gain insight on
concept related to the study.
Statistical Tools and Treatment of Data
To describe and interpret the data objectively, the following statistical
measures were used.
To solve for the number of participants per city, the researchers used the
frequency count and percentage formula,
(1)
Where:
P= percentage distribution
f= frequency count

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N= Total population
Frequency and Percentage. Frequency indicates the number of repeated
occurrence for a respondent. Percentage, on the other hand, displays the
percentage of observation or frequency count that exist for each data point or
grouping of data points, and it is used to determine the frequency count of the
responses of participants concerning their gender, age, marital status.
educational attainment and locality of the restaurant.
Weighted Mean. It refers to the arithmetic average of the overall response
of the participants. The weighted average of observed data is the result of
dividing the sum of the products of each observed value, the number of times it
occurs, and this other factor by the total number of observation. This statistical
treatment was used in this study to be able to determine the weighted average
and corresponding verbal interpretation of each specific response based on the
following Likert scale:
Weighted Mean Verbal Interpretation
4.50-5.49 Strongly Agree
3.50-4.49 Agree
2.50-3.49 Moderately Agree
1.50-2.49 Disagree
1.00-1.49 Strongly Disagree

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Analysis of variance or ANOVA. It is a statistical method used to test
difference between two or more weight means. This was used to resolve the
observed variance between sets of data to determine whether the difference
between two samples is explicable as random sampling variation with the same
underlying population. The formula used was correlation ranged in value from
+1.00. These will be the interpretation of range and to test the hypothesis
0= no correlation
0.0 to + 0.40 = slight correlation
1.0 +0.41 to + 0.70 = moderate correlation
2.0 +0.71 to + 0.99 = high correlation

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CHAPTER IV
PRESENTATION, INTERPRETATION AND ANALYSIS OF DATA
This chapter presents the results of the study to answer the problem
stated in the first part. The results are presented in tabular format with
interpretation and analysis to support the study.
1. Profile of Respondents
This part presents the first problem statement which shows the frequency
distribution of the demographic profile of respondents.
1.1 Gender. Table 1.1 presents the distribution of the demographic profile
respondents in terms of gender.
Table 1.1
Profile of Respondents in Terms of Gender
Gender Lipa City Batangas City

Freq. % Rank Freq. % Rank
Female 25 50 1.5 25 50 1.5
Male 25 50 1.5 25 50 1.5

Total 50 100 50 100
The table shows that there is an equal distribution of respondents as to the
managers or owners of restaurants in Lipa and Batangas City. The researchers
deem that having equal distribution of respondents will yield accurate results as
both genders are provided opportunity to evaluate their own inventory.

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Table 1.2
Profile of Respondents in Terms of Age
Lipa City Batangas City

Age Freq. % Rank Freq. % Rank
20 Below 1 2 5 4 8 4
21-30 19 38 1 22 44 1
31-40 10 20 3 16 32 2
41-50 13 26 2 6 12 3
51 Above 7 14 4 2 4 5
Total 50 100 50 100
It can be gleaned from the Table 1.2 that majority of the respondents belong
within the age bracket of 21-30 years old both from Batangas and Lipa City. This
receives the highest frequency of 22 or 38 percent in Batangas and 19 or 44
percent in Lipa.
On the other hand, 20 and below receives the least frequency in Lipa and 51
and above in Batangas City. The results reveal that both family owned
restaurants are managed by relatively young owners. The age also implies the
exact age of those who have graduated from university or college. It can be
concluded then that they have been prepared to take charge of the business.

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Table 1.3
Profile of Respondents in Terms of Marital Status

Marital Freq. % Rank Freq. % Rank
Status
Single 17 34 2 19 38 2
Married 33 66 1 31 62 1
Total 50 100 50 100
Table 1.3 shows the profile of the respondents with regard to civil status.
The result confirms most of the respondents in Lipa City are married having
received the frequency of 33. Likewise, the married respondents dominate in
Batangas City with frequency of 31 over 19 single owners. The shows that family
owned restaurants are managed by married ones. With the experience on the
responsibilities and handling expenses, married ones are deemed to make more
money when it comes to managing restaurants. This is confirmed by Stromberg
(2013) who stated that married people offer better rate of return in business.

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Table 1.4
Profile of Respondents in Terms of Educational Attainment
Educational Lipa City Batangas City

Attainment Freq. % Rank Freq. % Rank
Non-degree 12 24 3 18 36 2
Degree 17 34 2 21 42 1
Vocational 21 42 1 11 22 3
Total 50 100 50 100
It can be drawn from the table, 21 respondents with a percentage of 42
with vocational dominate in Lipa City. The same number of respondents
dominate in Batangas City, however, differs in educational attainment since the
latter finishes a degree program. The findings imply that family owned managers
have prior knowledge on managing a business. However, it must also be noted
that degree holders may have equipped themselves with skills concerning
inventory. Yet both educational degrees may often feature inventory
management courses, and students could learn about the technical aspects of
accurate record keeping, industry regulations and business communication.
Students are also provided with the training and skills necessary to oversee the
shipping, warehousing, transportation and other manufacturing-related
departments of a business as stressed by Baum (2015).

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Table 1.5
Profile of Respondents in Terms of Occupation
Occupation Lipa City Batangas City

Supervisor 10 20 2 15 30 2
Manager 8 16 3 11 22 3
Others 32 64 1 24 48 1
Total 50 100 50 100
Table 1.4 shows that others receive the highest frequency of 32 in Lipa
City. These others are indicated as chef, inventory personnel and the stock man
or woman. On the other hand, the supervisor receives the highest frequency in
Batangas City obtaining 15. With the results in Lipa City, it implies that family
owned restaurants consider employing inventory personnel. This goes to say that
they find the importance and benefits of inventory management to the
restaurants’ operations. Same thing with Batangas City, majority of the
respondents are supervisors, thus they are informed of the processes of
business which includes inventory management.
The next table presents the concerns and problems encountered in
inventory management by family owned restaurants. The results are interpreted
by considering the highest and least indicator.

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Table 2.1
Concerns and Problems Encountered in Inventory Management
A. Concern and Problems Lipa City Batangas City
Indicators WM RANK VI WM RANK VI
1. High operational cost 3.90 2 A 2.96 3 MA
2. Holding cost such as storage 3.48 8 MA 2.84 4 MA
and out of date
3. Insufficient supplies available 3.74 4 A 2.82 5 MA
or understock
4. Overstock supplies 3.56 6 A 2.80 6 MA
5. Stealing in small amount 3.86 3 A 2.54 9 MA
quantities
6. Fraud, dishonest dealings 3.52 7 A 2.66 8 MA
and tampering transpire on
vendors
7. Delayed delivery time 3.14 10 MA 3.00 2 MA
8. Personal concerns (ex. using 3.42 9 MA 2.76 7 MA
cellphone during work-time)
9. Maintenance of security 4.30 1 A 4.76 1 SA
services (CCTV, alarms)
10. Lack of training of the staff 3.62 5 A 2.42 10 MA
Composite Mean 3.65 A 2.96 MA
As drawn from the results, Table 2.1 reveals that the concerns and
problems receive a composite mean of 3.65 and verbal interpretation of Agree
and 2.96 and verbal interpretation of Moderately Agree in Lipa and Batangas
City, respectively. The respondents in Lipa City position the indicator,
maintenance of security services in the first rank with a weighted mean of 4.30
and verbal interpretation of Agree. Likewise, the same item receives the highest
mean of 4.76 and verbal interpretation of Strongly Agree for respondents in
Batangas City.
According to Hartman (2010) in today’s competitive marketplace,
businesses cannot afford to lose money anywhere within business operations.

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Hence, it is sad to note that the family owned restaurants fail to afford
maintenance security and alarms. On the other hand, the indicators that receive
the lowest weighted mean and verbal interpretation of Moderately Agree are
delayed delivery time and lack of training of staff obtaining 3.14 and 2.42 in Lipa
and Batangas City respondents, respectively.
This corroborates with the perspective of Sandeep (2007) who pointed
that inventory management can bring unwarranted losses if the restaurant
always has stock outs, lack of proper storeroom plans, receiving the wrong and
delayed goods from the suppliers, as well as, lack of proper documentation for
goods procured. The inventory staff needs to understand and apply the inventory
management techniques to ensure that the restaurant organizations gets value
for its money invested.
The table that follows presents the internal factors affecting the inventory
management of family owned restaurants.

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Table 2.2
Internal Factors Affecting the Inventory Management of the Selected
Restaurants in Batangas City and Lipa City
Internal Factors Lipa City Batangas City

Question WM RANK VI WM RANK VI
1. Missing items affect the 4.32 10 A 4.24 9 A
smoothness and seamless
inventory management
2. Understanding the lead 4.56 3 SA 4.20 10 A
time
3 Inventory personnel 4.48 6 A 4.60 3.5 SA
trained properly of any
inventory process/system
chosen
4 Ensuring a reliable back 4.32 9.5 A 4.50 6.5 SA
up supplier to prevent
product shortages or delay
of orders
5 Keeping good records of 4.54 4 A 4.50 6.5 SA
how much supplies cost and
when supplies were
purchased
6. Planning the spending 4.38 8 A 4.60 3.5 SA
of each inventory
management task such as
item ordering
7 Ensuring that the foods 4.52 5 SA 4.58 5 SA
are accurately labeled
8 Reliable group of 4.40 7 A 4.36 8 A
suppliers 4.62 2 SA 4.62 2 SA
9 Maintaining stock levels
accordingly 4..64 1 SA 4.78 1 SA
10. Purchasing the right
item in the right quantity in
the inventory
Composite Mean 4.48 A 4.50 SA
Table 2.2 reveals that respondents agree on the internal factors affecting
the inventory management as supported by their composite mean of 4.48 and
4.50 verbally interpreted as Agree and Moderately Agree in Lipa and Batangas
City, respectively. Among the items, the respondents in Lipa City position the
indicator, purchasing the right item in the right quantity in the inventory receiving
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a weighted mean of 4.64. The same item is rated by the respondents in
Batangas as the foremost internal factor affecting inventory management
obtaining a weighted of 4.78.
The findings are in consonance with Coyle (2003) who stressed that the
actors involved in downstream distribution channels face a special challenge in
keeping inventory at reasonable levels due to the difficulty of forecasting demand
and expectations of customers about product availability. The challenge grows
even bigger when they think about the diversity of products in terms of their color
or design, package type, size and others. The aggregate demand needs to be
broken down by various specifications of the product into sub-total demand
forecast to guide the stock keeping units (SKUs) in the company to fulfill the final
customer’s order. But the sub-total demand forecasts could be diverse, reaching
dozens, hundreds, or even thousands of categories; in that case, they become
truly difficult, complex and time-consuming.
On the other hand, the items that obtain the lowest mean are missing
items affect the smoothness and seamless inventory management and
understanding the lead time. They receive 4.32 and 4.20 and verbal
interpretation of Agree in Lipa and Batangas City, respectively.
The results corroborate with Nagamembe’s (2010) recommendation that
inventory management need to be organized in logical way to facilitate the

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organization knowledge of when to order and quantity to order. In economic
order, it enables the restaurant to plan their inventory replenishment on a timely
basis such as daily to weekly basis. It was found out that keeping moderate
inventory is good and it enables a food business to operate minimal expenses on
it.
Table 2.3
External Factors Affecting the Inventory Management of the Selected
Restaurants in Batangas City and Lipa City
External Factors Lipa City Batangas City
1. Restaurants are subject to 4.54 2 SA 4.54 2 SA
government lawful tax dues for
taxpayers using an inventory
method
2 Changing the job market and 4.38 3 A 4.54 2 SA
wages can affect consumer’s
willingness and ability to buy or
order supplies
3. Lower amount of supply due 3.84 9 A 4.30 7 A
to weather data such as typhoon
and winter
4. Changes in oil and gas prices 3.68 10 A 4.28 8 A
(have heavy) impact on both
hard costs and consumer
behavior
5. Fluctuations in raw material 3.94 8.5 A 4.42 5 A
costs can reveal more than just a
potential price change in the
product being manufactured
6 Consumers purchasing power 4.24 4 A 4.36 6 A
in other goods and services
7. Government imposed laws or 4.68 1 SA 4.44 4 A
rules, such as the ordinance on
waste management/no-
plastic/DOH cleanliness program
8. Importing products from other 4.16 6 A 4.16 9 A
country to support the inventory
supplies
9. Getting personal loan to stock 4.02 7 A 4.04 10 A
enough inventory (borrowed
money)

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10. Continual increase in the 4.18 5 A 4.54 2 SA

price of goods and products.
(Inflation)
Composite Mean 4.17 A 4.36 A
As revealed in Table 2.3 the external factors receive the composite mean
of 4.17 and 4.36 and verbal interpretation of Agree in Lipa and Batangas City,
respectively. Among the items, the indicator which is the government imposed
laws or rules, such as the ordinance on waste management/no-plastic/DOH
cleanliness program obtains the highest mean of 4.68 and verbal interpretation of
strongly agree for the respondents in Lipa. On the other hand, two items rated by
Batangas City respondents are placed in the same position which are restaurants
are subject to government lawful tax dues for taxpayers using an inventory
method and changing the job market and wages can affect consumer’s
willingness and ability to buy or order supplies with a weighted mean of 4.54.
With the unlawful taxes paid the family owned restaurants, it is imperative
then that they heed Frahm (2013) suggestion concerning inventory management.
Techniques and organizational performance need to be scrutinized so that the
food business organization does not utilize a huge chunk of its budget on holding
inventory. Therefore, the total cost model needs to be balanced by ensuring
purchase costs, ordering costs, and holding costs are minimal so that the firm
can reap good profits and maintains its budget all year round.
Table 2.4 that follows presents the general inventory procedure.

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Table 2.4
General Inventory Management Procedure
A. Procedures on General
Inventory Management Lipa City Batangas City
1.Classify and group its item 4.58 8.5 SA 4.48 10 A
which is consumable, perishable
and expendable
2. Classify supplies in the 4.86 4 SA 4.64 7 SA
shelves orderly
3 File records of orders and 4.90 2.5 SA 4.80 2.5 SA
receipts
4. Provide the current cost of 4.78 5 SA 4.76 4 SA
items purchased
5. Maintain records of back 4.90 2.5 SA 4.82 1 SA
ordered items
6 Pull out inventory items that 4.94 1 SA 4.70 6 SA
were purchased first (First In
First Out method)
7. Provide or supply inventory 4.60 6.5 SA 4.56 9 SA
records that maybe accounted
and audited
8. Manage the restaurant space 4.52 10 SA 4.74 5 SA
to combine family owned items
to avoid mix-up)
9. Provide regular checklist for 4.58 8.5 SA 4.80 3 SA
evaluating quality of stocked
items
10. Track purchasing in detail 4.60 6.5 SA 4.58 8 SA
and summary
Composite Mean 4.73 4.69 SA
With a composite mean of 4.73 and 4.69 for Lipa and Batangas City,
respectively, the respondents strongly agree on the indicated general inventory
management procedure. Among the items, the respondents in Lipa place the
indicator, pulling out inventory items that were purchased first (First In First Out
method) in the first rank having obtained a weighted mean of 4.94 and verbal
interpretation of strongly agree. On the other hand, the respondents in Batangas

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City rank the indicator, maintaining records of back ordered items, first with a
weighted mean of 4.82.
The results address with Schenkel (2018) indicated as problem with
inventory. She cited that keeping track of the inventory can be further
complicated by poor employee behavior like sloppy prep waste, theft, and not
sticking to FIFO (first in, first out). Part of restaurant inventory management is
being familiar enough with what the standard inventory should look like that
managers can spot when things are wrong and get to the bottom of the problem
right away.
Further, Susan (2000) stressed that accuracy of inventory records is
necessary to provide satisfactory customer service, determine replenishment of
individual items; ensure that material availability meets repair or project demand,
analyze inventory levels and dispose of excess inventory. Stock records also
provide the management with the information which is used to ensure
accountability through stocktaking and stock audit exercise.
The table that follows reveals the significance difference of the responses
of the respondents in Lipa and Batangas City in terms of inventory management.

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Table 2.5
Significant Difference between Lipa City and Batangas City in terms of

Inventory Management in a Family Owned Restaurant
Factors F-value P- F-critical Decision Verbal

value Ho Interpretation
Concern and Problems 9.13 0.01 4.41 Reject Significant
Internal Factors 0.09 0.77 4.41 Accept Not Significant
External Factors 3.06 0.10 4.41 Accept Not Significant
Procedures on General 0.35 0.56 4.41 Accept Not Significant

Inventory Management
It can be gleaned from Table 2.5 that there is a significant difference on the
responses between the Lipa City and Batangas City respondents on the
concerns and problems encountered. This is evidenced by the F-value of 9.13
resulting the P-value of 0.01. The results imply that the respondents view the
challenges and problems differently. This may be due to the difference in their
educational attainment.
More so, the internal factors external factors as well as the general
procedures on inventory management are rejected, thus deemed to be not
significant. The internal factors are supported by the F-value of 0.09 resulting in
the P-value of 0.77, whereas, the external factors are evidenced by the F-value
of 3.06 obtaining the P- value of 0.10. On the other hand, the procedures on
general inventory management are shown to have the F-value of 0.35 resulting
the P-value of 0.56.

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CHAPTER V
CONCLUSION AND RECOMMENDATIONS
This chapter discusses the conclusion and recommendations offered to
the present.
Conclusions
Based on the information, data and implications of data collected, the
respondents have come up with the following conclusions:
1. With the 100 respondents selected, gender is equally distributed. As for
the age, majority of the respondents belong within the age bracket of 21-
30 years old and married. In terms of educational attainment, majority of
the respondents from Lipa City have vocational with degree program for
Batangas City respondents. On the other hand, Lipa City respondents
have indicated others for occupation and supervisor for Batangas City
respondents.
2. With regard to concerns and problems encountered in inventory
management, both respondents rank the maintenance of security services
first.
3. As to internal factor affecting inventory management, purchasing the right
item in the right quantity in the inventory is the primary factor for both
respondents. As to external factors, respondents from Lipa City rated the

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government imposed laws or rules, such as the ordinance on waste
management/no-plastic/DOH cleanliness program first. On the other hand,
two items rated by Batangas City respondents are placed in the same
position which are restaurants are subject to government lawful tax dues
for taxpayers using an inventory method and changing the job market and
wages can affect consumer’s willingness and ability to buy or order
supplies.
4. In terms of general procedure on inventory management, respondents
from Lipa City deem that pulling out inventory items that were purchased
first (First In First Out method) the principal procedure, whereas,
respondents from Batangas City believe maintaining of records of back
ordered items chief procedure.
5. There is significant difference on the responses of respondents from Lipa
and Batangas in terms concerns and problems encountered in inventory
management.
Recommendation
Based on the conclusions drawn from the study, the researchers
recommend the following:

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1. Family owned restaurants must implement guidelines in the procedure
of their inventory management. As revealed in the previous tables, it
may be necessary for them to avail maintenance security system to
protect their business and operations.
2. Inventory personnel may be sent to trainings and workshops that
encourage and equip themselves with skills necessary to proper and
efficient inventory management.
3. The future researchers may explore other variables and propose an
action plan to strengthen their awareness and importance of managing
inventory.

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REFERENCES

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BOOKS
David J. Piasecki (2002) Inventory Management Explained: A Focus on

Forecasting Forecasting, Lot Sizing, Safety Stock and Ordering Systems
Antony Wild (2007) Best Practice in Inventory Management
Jon Schreibfeder (2011) Achieving Effective Inventory Management; Second

Edition Edition, New York. Ctd Inc.
John W. Toomey (1999) Inventory Management: Principles, Concepts and

Techni Techniques
Amar Sapra and J. A. Muckstadt (2001) Principles of Inventory Management:

When When You Are Down to Four, Order More
Geoff Relph (1998) Inventory Management: Advanced Methods For Managing

Inventory Inventory Within Business Systems
Haifeng Wang (2004) Inventory Management with Alternative Delivery Times
Darryl Landvater (2002) World Class Production and Inventory Management
Donald Fogarty (1998) Production Inventory Management; Plendx Books

Publishing Publishing
Ed C. Mercado (2000) Hands-On Inventory Management
John Christian Lang (2009) Production and Inventory Management with

Substitution Substitution
Paul Herbert Zipkin (2000) Foundation of Inventory Management; Third Edition,

P.W’s P.W’s Publications

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David Granville (2007) Excellence in Inventory Management: How to Minimize

Costs Costs and Maximize Service; Second Edition, New York:
Schocken Schocken Books Publishing
ELECTRONIC SOURCES
Rietze (2004), Inventory Management Systems. Retrieve from

https:www.managementstudyguide.com/inventory-management-systems.htm
Wallin and Bucklin (2006), Inventory Management. Retrieve from

https://www.investopedia.com/terms/i/inventory-
management.asp#ixzz5OJGtOs3T
Katie Schenkel (2018), Upgrading Your Restaurant Inventory System
https:www.rewardsnetwork.com/blog/upgrading-restaurant-inventory-
management-system/
Linda Ray (2016), Internal and External that Affect Inventory Management
https://yourbusiness.axcentral.com/internal-external-factors-affect-inventory-
management
Jackson and Stent (2007), Factors Affecting Inventory Operations
https://www.managementstudyguide.com/inventory-management-systems.htm
Schenkel (2018), The Inventory Factor: What’s Affecting Your Inventory
http://xperion.com.au/the-inventory-factor-whats-affecting-your-inventory/
Beamon (2007), Inventory Management Support Systems
https:www.//studyguide.com/inventory-management-support-systems
Kotler (2009) Developing and Managing Inventory
https:studymanagement.com.dmi/developing-and-managing-inventory

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Max Muller (2007), Counting Inventory Management
https:studymanagement.com.//countinginvnetorymanagement
Krautterv (2009), Effective Inventory Management System
https//www.eims.com./effective-inventroy-management-system
Emmett (2008), Element of Inventory Management
https.www.suppystock.com./elementofinventorymanagement.//
Coyle, Bardi,and Langley(2003), Effective Inventory Flow Management in Supply
Chains
https//www.irs.com./effective-inventroy-flow-management-in-supply-chains
Jones and Riley (2001), Changes of Inventory Management
https:www.management study.com/ the-changes-of- inventory- management
Power (2005), Developing Integrated Inventory Systems
https.www.inventory study.com.dy/ developing integrated inventory study
systems
Cagliano (2011), Adoption of Inventory Management Systems
https:// www.studyguidesystem.com/ adoption-of-inventory- management-
system
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APPENDICES

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Appendix A
Validation Letter
LETTER OF VALIDATION OF QUESTIONNAIRE
November 16, 2018
Ms. Sharmaine Brillo

Instruction
Dear Ms. Brillo
Warm Greetings!
We are the Bachelor of Science in Hotel and Restaurant Management student of
Westmead International School. We are currently undertaking a research entitled
“Factors Affecting Inventory Management in Family-owned Restaurant in
Batangas City and Lipa City”
In relation to this, we are respectfully seeking your help for the validation of our
questionnaire. Your positive response would be highly appreciated
Respectfully yours,
Kristine Monica M. Torres

Maricris H. Plata
Mary Joy G. Lontoc
Researchers
Prof, Armela Mercado

Thesis Adviser

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APPENDIX B
SAMPLE SURVEY QUESTIONNAIRE
Dear Sir/Ma’am
We are fourth year Bachelor of Science in Hotel and Restaurant
Management students, currently conducting a research study entitled “Inventory
Management in Family-Owned Restaurants in Lipa City and Batangas City’’
In this regard, we would like to request a little of your time to answer the
questions which will be used for academic purposes only.
Thank you very much.
Respectfully yours,
Maricris H. Plata
Mary Joy G. Lontoc
Researchers

and Lipa City
65
Part I: Demographic Profile
Personal Data of the Respondents
Fill in the blanks

Name: (optional)
1.1 Gender: ( ) Male ( ) Female
1.2 Age:
( ) 20-Below ( ) 21-30 ( ) 31-40
( ) 41-50 ( ) 51-Above
1.3 Marital Status: ( ) Single ( ) Married
1.4 Educational Attainment:
( ) Non- degree ( ) Degree ( ) Vocational
1.5 Occupation:
( ) Supervisor ( ) Manager ( ) other
Part II: Concerns and Problem encountered by family- owned restaurants in

terms of inventory management.
Kindly use the scale below for your answer, where,
(5) Strongly Agree (2) Disagree
(4) Agree (1) Strongly Disagree
(3) Moderately Agree

and Lipa City
66
By using the criteria above please check (√) your answer.

2.1 Concerns and Problems
(Encountered by family- owned restaurants in 5 4 3 2 1
terms of inventory management)
1 High operational cost

2 Holding cost such as storage and out of date
3 Insufficient supplies available or understock
4 Overstock supplies
5 Stealing in small amount quantities
6 Fraud, dishonest dealings and tampering transpire
on vendors
7 Delayed delivery time
8 Personal concerns (ex. using cellphone during
work-time)
9 Maintenance of security services (CCTV, alarms)
10 Lack of training of the staff
Part III: Instruction. Rate yourself of how the internal and external factors are
affecting the inventory problems of the family-owned restaurants. Please refer to
the scale for the criteria:
Direction: Please place a check mark (√) on your choice of answer.

A. Internal Factors
(It is the inside process that can 5 4 3 2 1
influence the restaurants to their
inventory management)
1 Missing items affect the smoothness and

seamless inventory management

and Lipa City
71
2 Understanding the lead time

3 Inventory personnel trained properly of any
inventory process/system chosen
4 Ensuring that you have a reliable back up
supplier to prevent product shortages or delay of
orders
5 Keeping good records of how much supplies
cost and when supplies were purchased
6 Planning the spending of each inventory
management task such as item ordering,
7 Ensuring that the food are accurately labeled
8 Reliable group of supplier
9 Maintaining stock levels accordingly
10 Purchasing the right item in the right quantity in

your inventory
B. External Factors (Measures that affect the

inventory operation that are imposed by the 5 4 3 2 1
government or another organization. It is a rule
that affects the company and involves taxes as
well.)
1 Restaurants is subject to government lawful
tax dues for a taxpayers using an inventory
method
2 Changing the job market and wages can affect
consumer’s willingness and ability to buy or
order supplies
3 Lower amount of supply due to weather data
such as typhoon and winter
4 Changes in oil and gas prices( have heavy)
impact on both hard costs and consumer
behavior
5 Fluctuations in raw material costs can reveal
more than just a potential price change in the
product being manufactured
s6 Consumers purchasing power in other goods
and services
7 Government imposed laws or rules, such as
the ordinance on waste management/no-

and Lipa City
73
plastic/DOH cleanliness program

8 Importing products from other country in order
to support the inventory supplies
9 Getting personal loan to stock enough
inventory (borrowed money)
10 Continual increase in the price of goods and
products. (Inflation)
Part IV: Instruction: Rate the family-owned restaurant general inventory

management procedure as to the following criteria, where,
Direction: Please put a checkmark (√) on your chosen answer.
4.1 Procedure in general inventory

management:
(A decision to do a simulation usually results 5 4 3 2 1
from a perception that simulation can help
resolve one or more issues associated with the
inventory management)
1 Classify and group its item which is consumable,
perishable and expendable
2 Classify supplies in the shelves orderly
3 File record of orders and receipts
4 Provide the current cost of items purchased

5 Maintain records of back ordered items
6 Pull out inventory items that were purchased
first ( First In First Out method)
7 Provide or supply inventory records that maybe
accounted and audited
8 Manage the restaurant space to combine family
owned items in order to avoid mix-up
9 Provide regular checklist for evaluating quality of
stocked items
10 Track purchasing in detail and summary

and Lipa City
74
APPENDIX B
SAMPLE SURVEY QUESTIONNAIRE
Dear Sir/Ma’am
We are fourth year Bachelor of Science in Hotel and Restaurant
Management students, currently conducting a research study entitled “Inventory
Management in Family-Owned Restaurants in Lipa City and Batangas City’’
In this regard, we would like to request a little of your time to answer the
questions which will be used for academic purposes only.
Thank you very much.
Respectfully yours,
Maricris H. Plata
Mary Joy G. Lontoc
Researchers

and Lipa City
65
Table 1.3
Profile of Respondents in Terms of Marital Status
Marital Status Freq. % Rank Freq. % Rank
Single 17 34 2 19 38 2
Married 33 66 1 31 62 1
Total 50 100 50 100
Table 1.4
Profile of Respondents in Terms of Educational Attainment
Educational Lipa City Batangas City
Attainment
Non-degree 12 24 3 18 36 2
Degree 17 34 2 21 42 1
Vocational 21 42 1 11 22 3
Total 50 100 50 100
Table 1.5
Profile of Respondents in Terms of Occupation
Occupation Lipa City Batangas City
Supervisor 10 20 2 15 30 2
Manager 8 16 3 11 22 3

and Lipa City
76
Others 32 64 1 24 48 1
Total 50 100 50 100
Table 2.1
Inventory Management in Family-Owned Restaurant in Lipa City and
Batangas City In Terms of Concern and Problems
A. Concern and Problems Lipa City Batangas City
1. High operational cost 3.90 2 A 2.96 3 MA
2. Holding cost such as storage 3.48 8 MA 2.84 4 MA
and out of date
3. Insufficient supplies available 3.74 4 A 2.82 5 MA
or understock
4. Overstock supplies 3.56 6 A 2.80 6 MA
5. Stealing in small amount 3.86 3 A 2.54 9 MA
quantities
6. Fraud, dishonest dealings 3.52 7 A 2.66 8 MA
and tampering transpire on
vendors
7. Delayed delivery time 3.14 10 MA 3.00 2 MA
8. Personal concerns (ex. using 3.42 9 MA 2.76 7 MA
cellphone during work-time)
9. Maintenance of security 4.30 1 A 4.76 1 SA
services (CCTV, alarms)
10. Lack of training of the staff 3.62 5 A 2.42 10 MA
Composite Mean 3.65 A 2.96 MA
Table 2.2
Batangas City In Terms of Internal Factors
Internal Factors Lipa City Batangas City
1. Missing items affect the 4.32 10 A 4.24 9 A
smoothness and seamless
inventory management
2. Understanding the lead 4.56 3 SA 4.20 10 A
time
3 Inventory personnel 4.48 6 A 4.60 3.5 SA
trained properly of any
inventory process/system
chosen
4 Ensuring that you have a 4.32 9.5 A 4.50 6.5 SA

and Lipa City
77
reliable back up supplier to

prevent product shortages
or delay of orders
5 Keeping good records of 4.54 4 A 4.50 6.5 SA
how much supplies cost and
when supplies were
purchased
6. Planning the spending 4.38 8 A 4.60 3.5 SA
of each inventory
management task such as
item ordering
7 Ensuring that the food are 4.52 5 SA 4.58 5 SA
accurately labeled
8 Reliable group of supplier 4.40 7 A 4.36 8 A
9 Maintaining stock levels 4.62 2 SA 4.62 2 SA
accordingly
10. Purchasing the right 4..64 1 SA 4.78 1 SA
item in the right quantity in
your inventory
Composite Mean 4.48 A 4.50 SA
Table 2.3
Batangas City In Terms of External Factors
External Factors Lipa City Batangas City
1. Restaurants is subject to 4.54 2 SA 4.54 2 SA

government lawful tax dues for
a taxpayers using an inventory
method
2 Changing the job market

and wages can affect 4.38 3 A 4.54 2 SA
consumer’s willingness and
ability to buy or order supplies
3 Lower amount of supply due

to weather data such as
3.84 9 A 4.30 7 A
typhoon and winter
4 Changes in oil and gas

prices (have heavy) impact on 3.68 10 A 4.28 8 A
both hard costs and consumer

and Lipa City
78
behavior
5 Fluctuations in raw material

costs can reveal more than
just a potential price change in 3.94 8.5 A 4.42 5 A
the product being
manufactured
6 Consumers purchasing
power in other goods and
services 4.24 4 A 4.36 6 A
7 Government imposed laws

or rules, such as the
4.68 1 SA 4.44 4 A
ordinance on waste
management/no-plastic/DOH
cleanliness program
8 Importing products from

other country in order to 4.16 6 A 4.16 9 A
support the inventory supplies
9 Getting personal loan to

stock enough inventory 4.02 7 A 4.04 10 A
(borrowed money)
10 Continual increase in the

price of goods and products. 4.18 5 A 4.54 2 SA
(Inflation)
Composite Mean 4.17 A 4.36 A

and Lipa City
79
Table 2.4
Batangas City In Terms of Procedures on General Inventory
Management
A. Procedures on Lipa City Batangas City
General Inventory
Management
1.Classify and group its 4.58 8.5 SA 4.48 10 A

item which is consumable,

shelves orderly
3 File record of orders and

receipts 4.90 2.5 SA 4.80 2.5 SA
4. Provide the current

cost of items purchased
4.78 5 SA 4.76 4 SA
5. Maintain records of
back ordered items 4.90 2.5 SA 4.82 1 SA
6 Pull out inventory items

that were purchased first
4.94 1 SA 4.70 6 SA
(First In First Out method)
7. Provide or supply
inventory records that 4.60 6.5 SA 4.56 9 SA
maybe accounted and
audited
8. Manage the restaurant

space to combine family
owned items in order to 4.52 10 SA 4.74 5 SA
avoid mix-up )
9. Provide regular
checklist for evaluating 4.58 8.5 SA 4.80 3 SA
quality of stocked items
10. Track purchasing in

detail and summary 4.60 6.5 SA 4.58 8 SA

and Lipa City
80
APPENDIX E
RESUME
KRISTINE MONICA M. TORRES

109 Bigain South, San Jose, Batangas
0936-684-7508
[email protected]
EDUCATION Westmead International School

Alangilan Batangas City
BS Hotel and Restaurant Management
2014-2018
Bigain National High School

Bigain South, San Jose, Batangas
2013-2014
INTERSHIP The Ascott Residences

TRAINING Makati City
August-October 2018
EXTRA CURRICULAR NC II Passer

ACTIVITIES Food and Beverages Service
February 2018
Platinum, Ibaan, Batangas
SEMINAR
ATTENDED
Hotel Immersion Acacia Hotel
February, 2016
Alabang, Muntinglupa, 1781 Metro Manila

and Lipa City
81
7th Annual Hospitality Tourism Forum 2017

“Raising the Bar for Customer Satisfaction”
February 10, 2017
Epic Event Center, Balagtas, Batangas City
Batangas Food Exposition 2017

“How To Handle Guest Complaints”
November 15, 2017
De La Salle Lipa, Lipa City
8th Annual Tourism & Hospitality Forum

“Developing Interpersonal Skills for Airlines and
Cruise Success”
March, 2018

“Guest Relation: Defining Superior Guest
Services”
November 9, 2018
CITHM Powered Seminar

“Hospitality Buffet: Catering the Needs for
Knowledge and Competence for Future
Industry Professionals”
December 5, 2018
LPU, Capitol Site, Batangas City
PERSONAL BACKGROUND
Age : 21
Birth Date : May 21, 1997
Place of Birth : Manila
Status : Single
Weight : 56kg
Height : 5’ 6ft.
Language : Filipino, English

and Lipa City
82
SKILLS : Computer Literate (MS Word, MS PowerPoint,

Publisher)
: Ability to adapt difficult situations
: Good Communication Skills
: Organizing and Leading
CHARACTERISTICS
: Able to work effectively and efficiently.
: Individual and a team player.
: Excellent adaptability and
flexibility to social situation.
: Works with less supervision
CHARACTER REFERENCES
Ms. Armela Mercado

09474837686
Program Chair of Tourism Management
College Department
Ms. Sherly Manalo

09283332439
Program Chair of Hotel and Restaurant Management
College Department
Mr. Hyman Jay Blanco

09177051293
Supreme Student Council Adviser
College Department
I hereby certify that the foregoing answers are true and correct to the best
of my knowledge belief and ability.

and Lipa City
83
APPENDIX E
RESUME
MARICRIS H. PLATA
Bucal Batangas City
09656157467
[email protected]

2014-2018
Batangas National High School

Batangas City
2011-2012
INTERSHIP Accacia Hotel Manila

TRAINING Filinvest, Alabang City
August-October 2018

February 2018
SEMINAR
ATTENDED
February, 2016

February 10, 2017
and Lipa City
84
Table 2.4
Batangas City In Terms of Procedures on General Inventory
Management
A. Procedures on Lipa City Batangas City
General Inventory
Management
1.Classify and group its 4.58 8.5 SA 4.48 10 A

item which is consumable,

shelves orderly
3 File record of orders and

receipts 4.90 2.5 SA 4.80 2.5 SA
4. Provide the current

cost of items purchased
4.78 5 SA 4.76 4 SA
5. Maintain records of
back ordered items 4.90 2.5 SA 4.82 1 SA
6 Pull out inventory items

that were purchased first
4.94 1 SA 4.70 6 SA
(First In First Out method)
7. Provide or supply
inventory records that 4.60 6.5 SA 4.56 9 SA
maybe accounted and
audited
8. Manage the restaurant

space to combine family
owned items in order to 4.52 10 SA 4.74 5 SA
avoid mix-up )
9. Provide regular
checklist for evaluating 4.58 8.5 SA 4.80 3 SA
quality of stocked items
10. Track purchasing in

detail and summary 4.60 6.5 SA 4.58 8 SA

and Lipa City
80
APPENDIX E
RESUME
KRISTINE MONICA M. TORRES

109 Bigain South, San Jose, Batangas
0936-684-7508
[email protected]

2014-2018
Bigain National High School

Bigain South, San Jose, Batangas
2013-2014
INTERSHIP The Ascott Residences

August-October 2018

February 2018
SEMINAR
ATTENDED
February, 2016

and Lipa City
81
Maricris H. Plata
Appendix E
Resumes
Mary Joy G. Lontoc
Sto Nino Taysan Batangas
0975-938-0512
[email protected]

2014-2018
Dagatan National High School

Dagatan, Taysan Batangas
2012-2015
INTERSHIP Somerset Millennium Makati

August-October 2018

February 2018
SEMINAR
ATTENDED
February, 2016

February 10, 2017
and Lipa City
87

“How To Handle Guest Complaints”
November 15, 2017
8th Annual Tourism & Hospitality Forum

“Developing Interpersonal Skills for Airlines and
Cruise Success”
March, 2018

“Guest Relation: Defining Superior Guest
Services”
November 9, 2018
CITHM Powered Seminar

“Hospitality Buffet: Catering the Needs for
Knowledge and Competence for Future
Industry Professionals”
December 5, 2018
LPU, Capitol Site, Batangas City
PERSONAL BACKGROUND
Age : 20
Birth Date : August, 02 1998
Place of Birth : Sto Nino Taysan Batangas
Status : Single
Weight : 45kg
Height : 5’ 4 ft.
Language : Filipino, English

and Lipa City
88
SKILLS : Computer Literate (MS Word, MS PowerPoint,

Publisher)
: Ability to adapt difficult situations
: Good Communication Skills
: Organizing and Leading
CHARACTERISTICS
: Able to work effectively and efficiently.
: Individual and a team player.
: Excellent adaptability and
flexibility to social situation.
: Works with less supervision
CHARACTER REFERENCES
Ms. Armela Mercado

09474837686
Program Chair of Tourism Management
College Department
Ms. Sherly Manalo

09283332439
Program Chair of Hotel and Restaurant Management
College Department
Mr. Hyman Jay Blanco

09177051293
Supreme Student Council Adviser
College Department
I hereby certify that the foregoing answers are true and correct to the best
of my knowledge belief and ability.

and Lipa City
89
Mary Joy G. Lontoc

and Lipa City
90

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Westmead International School

College of Tourism and Hospitality Management

THE PROBLEM AND ITS BACKGROUND

With people nowadays being too busy to find opportunities to spend

mealtime at home, restaurants have been an important place to them. Thus, in

main pillar of the restaurants. (Granville, 2011)

Inventory turnover has been found significantly related to an index of

overall company performance. In fact, inventory management can be one of the

necessary tasks for restaurant owners, however, it is crucial in controlling the

planned course of production against the random disturbance of running out of

Factors Affecting Inventory Management in Family-Owned Restaurants in Batangas City

lines between replenishment lead time, carrying costs of inventory, asset

management, inventory forecasting, inventory valuation, inventory visibility, future

inventory price forecasting, physical inventory, available physical space for

inventory, quality management, replenishment, returns and defective goods and

demand forecasting.(Piasecki, 2002)

It is connected to business operations from planning the menu, to

daily menu costs in a larger operation. A key component in effective kitchen

management is inventory control. By determining what supplies are on hand at a

if needed. Managing inventory is like checking a bank account, and taking

storage room always have the items needed. (Mercado, 2000)

food industry have deemed necessary to investigate the restaurant inventory

management in family owned restaurants in Lipa and Batangas City. They

importance of inventory management, restaurant managers will be compelled to

Factors Affecting Inventory Management in Family-Owned Restaurants in Batangas City

problem that is furnished with answers discussed in the next chapters.

Statement of the Problem

Generally, this study attempts to identify the inventory management of the

select restaurant respondents. Specifically, it seeks answers to the following

1. What is the demographic profile of the respondents from chosen

restaurants in Batangas City and Lipa City in terms of:

d. Educational Attainment; and

2. What is the general inventory management procedures of the selected

restaurants in Batangas City and Lipa City?

3. What are the inventory management concerns and problems encountered

4. What internal and external factors affect the inventory management of

these selected family-owned restaurants?

Factors Affecting Inventory Management in Family-Owned Restaurants in Batangas City

5. Is there a significant difference between Lipa City and Batangas City

family owned restaurants management in terms of internal and external

factors affecting inventory management?

Hypothesis of the Study

The study tests the following hypothesis:

There is no significant difference between Lipa City and Batangas City’s

family-owned restaurants as to the internal and external variables affecting the

Significance of the Study

This research is mainly focused on inventory management applied in

family owned restaurants. Thus, the study targets to be of valuable assistance to

informed of the importance of inventory management thereby adopting efficient

Likewise, the study is beneficial to restaurants’ finance and budget

officers. They will be enlightened of the necessity to be responsible for the

present study, information on inventory management will be accessed easily.

Factors Affecting Inventory Management in Family-Owned Restaurants in Batangas City

Scope and Limitations of the study

This study is designed to identify the factors affecting inventory

management in family-owned restaurant in Batangas City and Lipa City.

A questionnaire made by a researchers was used as a main tool in

determining the factors affecting inventory management in family-owned