New Era University

College of Accountancy

9 Central Ave, New Era, Quezon City, 1107 Metro Manila

Inventory Management of Hardware Businesses in Batasan, Quezon

City

By:

Belleza, Ed Mark

Cordero, Angelika May

Gaila, Jackilyn

Gregorio, Diane

Lumugdang, Chzebelle Deniel

3BSA3
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Chapter 1

INTRODUCTION

Background of the Study

Inventory management is the part of supply chain management that aims to

always have the right products in the right quantity for sale, at the right time. When done

effectively, businesses reduce the costs of carrying excess inventory while maximizing

sales. Good inventory management can help you track your inventory in real time to

streamline this process.

In order to run a business smoothly and effectively, businesses must have a

wellfunctioning inventory management system. If a business has a weak or ineffective

inventory management system, it might cause a lot of trouble like loss of products,

deterioration of products or way to disturb the executive of orders to day-to-day

operation.

By effectively managing your inventory you can have the right products in the right

quantity on hand and avoid products being out of stock and funds being tied up in excess

stock. You can also ensure your products are sold in time to avoid spoilage or

obsolescence, or spending too much money on stock that’s taking up space in a

warehouse or stockroom.
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Inventory management of retail businesses may greatly affect the profitability of the

business. Since hardware businesses invest largely on inventories, they may be exposed

to huge risk and losses.

Literature Review

Inventory Management

According to David Luther (2020) article, inventory management is one of

the pillars of a successful retail operation. Retail inventory management

techniques help stores and ecommerce sellers satisfy customers, reduce costs, and

increase profits. Retail inventory management is the process of ensuring you carry

merchandise that shoppers want, with neither too little nor too much on hand. By

managing inventory, retailers meet customer demand without running out of stock

or carrying excess supply. In practice, effective retail inventory management

results in lower costs and a better understanding of sales patterns. Retail inventory

management tools and methods give retailers more information with which to run

their businesses, including: product locations, quantities of each product type,

which stock sells well and which does not, by location and sales channel, profit

margin by style, model, product line or item, Ideal amount of inventory to have in
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back stock and storage, how many products to reorder and how often, when to

discontinue a product, how changing seasons affect sales.

Inventory management is vital for retailers because the practice helps them

increase profits. They are more likely to have enough inventory to capture every

possible sale while avoiding overstock and minimizing expenses. From a strategic

point of view, retail inventory management increases efficiency. Decreases

Inventory Costs, when you know how much stock you have and how much you

need, you can pinpoint inventory levels more accurately, thereby reducing storage

and carrying costs for excess merchandise. Other savings include shipping,

logistics, depreciation, and the opportunity cost that comes from not having an

alternative product that might sell better. Minimizes Out-of-Stocks, to avoid

disappointing customers and missing sales, retailers want to avoid running out of

inventory. Retailers can use inventory management tools to determine how much

stock is “just right” to have on hand, neither too much nor too little. Improves

Profit Margins, with lower inventory costs and enough supply to fill every order,

retailers improve profitability. Prevents Spoilage and Obsolescence, inventory

management helps retailers address another costly inefficiency that happens when

products expire or become obsolete. Reduces Shrinkage, shrinkage is inventory

loss due to shoplifting, product damage, vendor mistakes or fraud, employee theft

and administrative errors. Improves Customer Satisfaction, when customers get

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the products, they want faster with fewer mistakes or out-of-stocks, it increases

customer loyalty.

Inventory represents an important decision variable at all stages of product

manufacturing, distribution, and sales, in addition to being a major portion of

current assets of many organizations. Too much and too low inventories bring

down the level of profitability of an organization. Therefore, whether it is a

manufacturing or a merchandising organization, the goal should always be the

same, that is, to ensure the inventory is ready and at the same time inventory is at

a low level (Kungu, 2019).

Stock and Lambert (2011) assert that inventory serves five purposes in the

firm. Thus, inventory provides protection from uncertainties in demand and order

cycle, enables the firm to achieve economies of scale, balances supply and

demand, enables specialization in manufacturing, and acts as a buffer between

critical interfaces within the supply chain.

According to Hashmi (2016), inventory management is significant

because it still needs intentions so the conventional and simple methods of

managing the inventories are lacking in best systems, which is also lagging them

in sharing of information and management of their inventories well in

downstream members.
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To exercise inventory planning and control, the understanding of the

factors influencing inventory management is necessary. This will enable hardware

businesses to select an appropriate inventory management practice in their

enterprise.

Through the role of inventory management practices of a firm, their

inventory cost on order quantity and hence on inventory performance is well

explained in theory; an empirical evaluation of the same is not done so far in the

context of SMEs, particularly in developing countries.

Inventory is one of the more evident and tangible components of doing

business for many business owners. In a retail store, merchandise stocks

contribute to profits only when they are sold, and money is received at the cash

register. These stocks account for a significant amount of a company's investment

and must be managed carefully in order to maximize profitability. Many small

businesses, in fact, are unable to tolerate the types of losses that result from

inadequate inventory management. Inventories are unreliable, inefficient, and

costly unless they are controlled.

The relevance of these literatures to this study is that they suggest that

though all categories of inventory are important, inventory must be categorized or

classified in accordance to their relative impact or value and treated differently.

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Weakness of Manual Inventory Management

Even the smallest businesses need to implement some form of inventory

control system to keep an accurate merchandise count, as well as for accounting

purposes. Business owners generally have a choice between using a computerized

or a manual inventory system. A manual system offers a number of potential

advantages and disadvantages.

In one study its findings showed the challenges facing the manual system

of inventory management system are as follows; the manual system requires

everyday counting of items in the inventory, human errors are very prevalent

during counting and recording and in case of disaster like fire or flood or poor

communication, all the manual inventory records will be damaged and

irretrievable. Based on the findings this paper highlights the possible solutions to

the above problems; a computerized inventory management system to order and

update the stocks was designed and goods were supplied to implement the

possible solutions (Abiyose, 2015).

A manual inventory system depends on many active people, which

increases the possibility of human error. The person may forget to record a

transaction or only the wrong count of items. This decision on additional orders

need not increase inventory costs of the company and use valuable storage space.
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Calculation physically inaccurate can also result in not ordering really a product,

meaning business could run out a single item criticality in the wrong time.

Profitability Ratio

Profitability refers to earnings of companies that are generated from

revenues and after deducting all expenses incurred during a given period. Khaled

Al-Jafari and Samman (2015) mentioned it is considered one of the most

important goals that management of every company strives to achieve and

without it companies will cease.

Inventory turnover is generally known to be an effective indicator of

operational efficiency; however, Gaur et al. (2005) suggested the use of a new

empirical measure—adjusted inventory turnover—for performance comparison

across years or across firms, by controlling some variables affecting inventory

turnover ratios of companies. They observed that gross margin, capital intensity,

and sales surprise were the factors influencing the firms’ inventory turnover ratios

in the retail industry. In subsequent work, Gaur and Kesavan (2015) found that

company size and sales growth rate also affected inventory turnover ratios of

retail companies.
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In another study, Dedunu (2018) considered the relationship between a

company's performance and inventory management. The study used inventory

days as a dependent variable and gross profit and net profit as an independent

variable. According to the analysis result, the researcher identified inventory

management and gross profit had a positive relationship, net profit had a negative

relationship and inventory management significantly affected gross profit margin

and net profit margin.

Han et. al (2013) mentioned that inventory turnover is critical in the

manufacturing industry because it can tell how fast the products are moving out

of the factory. Higher inventory turnover indicates less cash being tied up in

slow-moving products that are not being sold. In addition, inventory turnover

measures are objective and publicly available from companies’ financial

statements. It is also a signal of how efficiently products are moving along the

manufacturing supply chain. Determining the speed of sales can be a useful

benchmark for evaluating firms’ competitiveness. Moreover, his works also

considered gross margin, capital intensity, firm size, debt cost, and demand

uncertainty as control variables for inventory supply in the manufacturing

industry.

According to James (2021) gross profit margin is a measure of

profitability that shows the percentage of revenue that exceeds the cost of goods
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sold (COGS). The gross profit margin reflects how successful a company's

executive management team is in generating revenue, considering the costs

involved in producing their products and services. In short, the higher the number,

the more efficient management is in generating profit for every dollar of cost

involved.

The gross profit margin is calculated by taking total revenue minus the

COGS and dividing the difference by total revenue. The gross margin result is

typically multiplied by 100 to show the figure as a percentage. The COGS is the

amount it costs a company to produce the goods or services that it sells

If a company's gross profit margin wildly fluctuates, this may signal poor

management practices and/or inferior products. On the other hand, such

fluctuations may be justified in cases where a company makes sweeping

operational changes to its business model, in which case temporary volatility

should be no cause for alarm.

According to the study of Tulsian (2016) entitled Profitability Analysis (A

comparative study of SAIL & TATA Steel). The main purpose of a business unit

is to make profit. The profitability analysis is done to throw light on the current

operating performance and efficiency of business firms. It should be duly noted

that net income figure alone is not very helpful in determining the efficiency and

performance of the business firm unless it is related to some other figures such as
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sales, cost of goods sold, operating expenses, capital invested etc. Thus the

profitability ratios are calculated to enlighten the end result and comparison of

business firms which is the sole criterion of overall efficiency of business

concern.

It is evident from the gross profit ratio of Tata Steel showed a decreasing

trend and so is the case with SAIL, which shows inefficiency of the management,

however on the basis of the average it can be concluded that Tata Steel performed

better as the decrease is less than the decrease in the gross profit ratio of SAIL.

Therefore it is suggested that management of both the companies should increase

the gross profit ratio by controlling cost of goods sold and by increasing sales and

try maintaining the same position in future also.

Inventory Method

FIFO Method

FIFO assumes that any sale of an item is from the oldest batch on hand and is

relevant when the prices you bought it at fluctuate when you have large numbers

of nearly identical items, specific identification may not be worth the effort. First

In, First Out, or FIFO, might be better.

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This method will give you a very accurate representation of your inventory,

which can be beneficial if you buy batches of the same item at varying prices,”

stated (Abir, 2021). “It will often mirror reality as older units of a stock-keeping

unit (that scannable barcode) tend to be sold before the newer ones in ideal

circumstances. “The downside is that it takes more effort to track different costs

within the same stock-keeping unit for different batches of purchases. For

example, if you sell a particular shirt with one universal product code (UPC) that

was bought in three batches, it’s harder to track a different cost for each batch

than one cost for the entire UPC.

LIFO Method

LIFO, as the name suggests, is basically the opposite of FIFO. It treats the

last items bought as the first ones sold. Here is what (Abir, 2021) has to say about

this method. “LIFO is when you attribute specific costs to individual items or

batches of items based on their actual cost, and you reduce your cost as you sell

items with the last items added being removed from inventory first. This method

only makes sense when it actually mirrors reality where the newest items are sold

first, and older items can sit there for a long time.” It is not a particularly common

method, he explains, because this rarely happens in retail.

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Weighted Average Method

Lastly, if the prices of the products you buy hardly change then you can use an

even easier method called Weighted Average Costing. With the weighted average

method, you use a pool of cost for all units of a particular stock keeping unit. Any

purchase is added to the pool of cost, and the pool of cost is divided by all units

you have on hand. “The benefit is that it’s much easier to track than specific

costing because you don’t need to know exactly which batch a sold unit was part

of, which is especially helpful when you have many identical units,” says

(Abir, 2021). It may also give you a more accurate costing method than the retail

method—which does not compensate for discounts or differing margins across SKUs.

Specific Identification Method

This is when you assign a specific cost to each item in your store. Abir says this

method makes the most sense for retailers that have a lot of different items,

especially if they were bought from various sources. “A good example would be

an antique dealer,” says Abir. Specific identification methods depend on the size

of your retail business, according to the Corporate Finance Institute (CFI). For the

specific identification method to suit your retail business, you need to be able to

identify the location, cost, and sale amount of every stock-keeping unit (SKU)

confidently and accurately in your inventory. The bigger your business and its

inventory, the harder that becomes. The CFI suggests specific identification is
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better suited to small businesses because it can give them a more accurate profit

and loss statement, with reliable numbers on income and losses and normal

spoilage of inventory (due to things like accidental damage).

Retail Inventory Method

The retail method provides the ending inventory balance for a store by measuring

the cost of inventory relative to the price of the goods. In essence, it determines

how much expense to recognize this period versus the next period. The retail

method assumes that all your inventory has a consistent markup, explains

(Abir Syed, 2021) CPA of UpCounting. “So, you take the total value of what you

have for sale, reduce it by its markup, and use that number as your cost.”

The benefit of this method, explains Abir, is that it is extremely easy to calculate

and can work when you have weak inventory cost tracking. “The main con is that

it’s generally not very accurate, especially if you have prices that fluctuate at

different times of the year (which most retailers do), and if you have products

with different markups.”

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Theoretical Framework

This study adopts to the EOQ Model. EOQ is the purchase order quantity for

replenishment that minimizes total inventory costs. The purchase order is triggered when

the inventory level hits the reorder point. The following illustrates the EOQ Model

EOQ is the order quantity that minimize total holding costs and ordering costs for

the year hence increasing company profits. EOQ model is a formula to determine the

ordering quantity that will minimize total inventory costs that is ordering and carrying

costs. The carrying cost rises with large orders because the more inventories that are

ordered the larger the amount of inventory held by the company. Ordering costs on the

other hand decline with large orders

The EOQ is calculated in order to minimize a combination of costs such as the purchase

cost (which may include volume discounts), the inventory holding cost, the ordering cost,
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etc. The order quantity optimization is complementary to the safety stock optimization

that focuses on finding the optimal threshold to trigger the reorder.

Economic Order Quantity (Wilson EOQ Model)

One of the most widely used models is the EOQ model in determining the optimal

inventory level under operational management. This mathematical model was developed

by F.W Haris year 1913 but still R.H. Wilson is given credit for his early in-depth

analysis of the model. the model is also known as the Wilson EOQ model. According to

this model, some costs (ordering cost) decline with inventory holdings, while others

(holding cost) rise and that the total inventory-associated cost curve has a minimum point.

This is the point where total inventory costs are minimized.

Since inventory costs directly impacts the profitability of the company, the EOQ Model

highlights the effect of inventory management on the profitability of hardware

businesses.
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Conceptual Framework

• Effective and

efficient inventory

management

practices

Figure 2. Inventory Management

The conceptual framework was designed to bring forth a pictorial or diagrammatic

view of the study’s dependent and independent variables. The independent variables are

variables that predict the amount of variation in the dependent variable. Thus, the value of
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the dependent variable depends on any change in the independent variable. This study’s

independent variable was represented by the inventory management practices while the

dependent variable focused on operational performance measured in terms of

Profitability, Reliability, Responsiveness, Cost Efficiency.

Fig. 2 presents the conceptual framework of the study. From Fig. 2, operational

performance is dependent on the inventory management practices of the manufacturing

firms. As such, any change, positive or negative, in inventory management practice is

likely to cause a change in firm performance in the same vein. Therefore, this framework

was very important as it clearly revealed the effect that inventory management practices

could have on the operational performances of manufacturing firms. This will help inform

policies and practices of the manufacturing firms in a bid to improve their operational and

overall performance levels.

Statement of the Problem

This study attempts to determine the effect of inventory management on the profitability

of hardware businesses in Batasan, Quezon City. Specifically, the study endeavored to

answer the following:

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1. How does hardware businesses practice Inventory Management in Batasan,

Quezon City in terms of:

1.1 Ordering

1.2 receiving

1.3 storing

1.4 sales

2. How may the profitability of the hardware businesses be measured in terms of:

2.1 Gross Profit Margin

Scope and Limitations

This study will investigate the inventory management of the hardware businesses.

This was done to have an understanding about the hardware businesses perspective and

the inventory management practiced.

The respondents of the study were composed of all hardware businesses within

the area of Batasan Hills, Quezon City. A short questionnaire that consists of
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closed-ended questions will be used on which the researchers will personally distribute.

The respondents that will partake in the survey will only be owner/managers as these are

the key decisionmakers with an in-depth knowledge on the inventory-management

practices employed by their businesses and should be able to supply reliable information

needed by the researcher.

Another limitation in this study is to consider that financial statements are reliable.

Significance of the Study

Management of Hardware Entities – This study will serve as a tool for evaluation of

the inventory management they use. This will enable them to stress out the effectiveness

of their current inventory method. The findings will make them aware of whatever

problem, possible solutions and recommendations to further enhance the factors that

contribute to achieving the proper management of inventories for their merchandise.

Other Hardware Entities – For the hardware entities/owners who would like to check

on some of inadequacy regarding the management of inventories, then it could better be

addressed through this research.

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Future Investors – This study will provide relevant information to the future

managers/owners who would like to indulge with hardware merchandising business to

better facilitate the management of inventories that will help the hardware owners

successfully manage their own hardware merchandising entity if proven to be working

efficiently with the chosen hardware merchandising entities.

Government – This study is beneficial to the government as the valuation of tax

obligations in all businesses must account for the value of their trading stock at the end of

each income year (closing stock) and at the start of the next income year (opening stock).

Plus, the corporate tax of any business is directly related to inventory management. The

First In, First Out (FIFO) method increases corporate tax liability. In contrast, the Last In,

First Out (LIFO) method decreases corporate tax liability.

Academe – This study contributes faculty members handling accounting and other

business subjects to be able to deliver to their students the most recent inventory

management practices used in hardware merchandising entities.

Future Researchers – This study will be an effective tool and reference for the future

researchers who would intend to make further relevant study particularly on the inventory

methods of hardware merchandise entities.

Definition of terms
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These are some of the words and terms that were used in this project. Their definitions

are given within this to further understand their meaning.

Cost efficient. The act of saving money without wasting time and money. It is measured

by comparing the costs of business against the revenue generated.

Effective. It is the ability to achieve a desired goal.

Inventory. Products which are available for sale. It is an asset that is intended to be sold

in the ordinary course of business.

Inventory costs. It is the total costs associated with ordering and holding of inventory.

Inventory management. It is the tracking and controlling of inventory. It governs the

entire flow of goods from purchasing right through to sale, ensuring that you always have

the right quantities of the right item in the right location at the right time.

Ordering. It is the activity of requesting for products from a business.

Profitability. It is a company’s capability of generating profits from its operations.

Receiving. The act of handling products into a warehouse.

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Reliability. The quality of being able to be trusted because of working or performing

well.

Responsiveness. The ability to respond purposefully and within an appropriate

timeframe to customer requests.

Selling. A transaction where a products is being exchanged for money.

Storing. To take in or hold supplies or goods as for the retail sale.

Warehouse. A place that is used to store commercial merchandise or products.

Chapter 2

METHOD

This chapter deals with the procedures and techniques used by the researcher in

completing the study. It includes research design, population, sampling, sources of data,

and data analysis.

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Research Design

The study adopted descriptive research design. This design utilized quantitative and data,

which enabled the researcher to have an in-depth examination of the proposed study. It

was also intended to provide answers to the research question. The design was chosen

since it was deemed to be the most effective to significantly contribute of to the depth and

specificity of the study. Given that the aim of the proposed study is to focus on the

performance of an organization with regards to their inventory management system and

to critically assess inventory control procedures of those hardware based on their

inventory classification, storage method and material inspections that results in inventory

lost.

Popilation and Sampling

The researchers have chosen all hardware businesses located in Batasan, Quezon City to

be their respondents. The total amount of the population will be gathered from the

records of the Municipality of Quezon City.

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Data Gathering

The researchers will prepare a letter of request signed by their thesis adviser and

Dean of College of Accountancy to be submitted first to the municipal of Quezon City to

obtain the total number of hardware stores located at batasan, Quezon city. After that, the

researchers will be able to gather information from the management of hardware stores in

which copies of the questionnaires will be personally disseminated.

The result of the data gathering will be tallied and tabulated according to the frequency of

items checked by the researchers. The results will be interpreted by the statistician using

statistical tools. The result will help the researchers to arrive at the interpretation of the

study.

Data Analysis

With the data collected being numerical scores, which can be analyzed, interpreted and

summarized using standard statistical procedures; descriptive statistics were employed to

organize, analyze, interpret, and summarize the data collected. To carry this task out, the

Statistical Package for Social Sciences (SPSS) version 22.0 was employed. This software

is useful in the handling of complex data manipulations and analyses. It is fairly fast and

easy to use. It allows the use of percentages, graphs, charts, means and a score of other
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useful interpretations from a simple pull-down menu. It was then decided that it would be

the best to use in this survey.

1. Spearman rank-order

The Spearman rank-order correlation coefficient (Spearman’s correlation, for

short) is a nonparametric measure of the strength and direction of association that

exists between two variables measured on at least an ordinal scale will be used in this

study. It is denoted by the symbol rs (or the Greek letter ρ, pronounced rho). The test

is used for either ordinal variables or for continuous data that has failed the

assumptions necessary for conducting the Pearson's product-moment correlation

2. Cross Tabulation

Cross tabulation is a method to quantitatively analyze the relationship between

multiple variables.

Also known as contingency tables or cross tabs, cross tabulation groups variables to

understand the correlation between different variables. It also shows how correlations

change from one variable grouping to another.

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Cross tabulations are used to examine relationships within data that may not be readily

apparent. Cross tabulation is especially useful for studying market research or survey

responses. Cross tabulation of categorical data can be done with through tools such as

SPSS, SAS, and Microsoft Excel.

3. Multiple Linear Regression (MLR)

Multiple linear regression (MLR), also known simply as multiple regression, is a

statistical technique that uses several explanatory variables to predict the outcome of a

response variable. The goal of multiple linear regression (MLR) is to model the linear

relationship between the explanatory (independent) variables and response

(dependent) variable.

Source of Data

Questionnaire/Test

Survey Questionnaires

We, the researchers from New Era University, as part of our studies, are carrying out
research on the Inventory Management of Hardware Businesses in Batasan, Quezon City.
Your participation in answering candidly the following questions would be a great
contribution to this paper. Please be assured that the responses you give are for academic
purposes only.

By beginning the survey, you acknowledge that you have read this information and agree
to participate in this research, with the knowledge that you are free to withdraw your
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participation at any time without penalty. Your participation is appreciated. Thank you for
taking time to assist us in our educational endeavors.

A. Respondent and Business Profile

Name (optional): __________________________________________

Age: ____________________________________________________

1. How long has been your business in operation?

o Less than 1 year o

1-5 years o 6-10
years o Above 10
years
2. How many employees does your company have?

o 1-20 o 21-50 o
51-100 o More
than 100

Please use the following scale to answer Question 5.

Instructions: For each statement, please check whether you Strongly Agree, Agree,
Neutral, Disagree or Strongly Disagree

3. To what extent do you agree with the following statements about how your business
orders inventory (stock)?
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B. Inventory Management Strongly Agree Neutral Disagree Strongly

Practices Agree Disagree

Ordering

i. We rely on common
sense to determine the
quantity of inventory
(stock) to order
ii. We use an equation to
calculate the quantity of

inventory (stock) to
order
iii. We order a fixed
quantity of inventory
(stock) periodically
iv. We order inventory
(stock) in bulk to take
advantage of the trade
discounts
v. We order inventory
(stock) when we receive
an inquiry from our
customer
vi. We receive our
inventory (stock)
automatically from our
suppliers without even
placing an order
vii. We order only when we
run out of stock
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viii. When our inventory

(stock) reaches a
certain level, we
automatically place an
order
ix. When we place an
order, we receive our
inventory (stock)
without delay
Storing

4. Does your business use a warehouse for storage of inventory (stock)?

€ Yes
€ No
If Yes, proceed to Question 5 and 6, if No, proceed to Question 13

Please use the following scale to answer Question 5.

Instructions: For each statement, please check whether you Strongly Agree, Agree,
Neutral, Disagree or Strongly Disagree

5. To what extent do you agree with the following statements about storage of stock in
your business?

Strongly Agree Neutral Disagree Strongly

Agree Disagree

i. We insure all our

inventory (stock) in the
warehouse
ii. We own our warehouse
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6. Do you plan in advance before ordering inventory (stock) for the warehouse in your
business?

€ Yes
€ No
If Yes, proceed to Question 7, if No, proceed to Question 10
7. Do you prepare inventory (stock) budgets in your business?

€ Yes
€ No
8. Do you compare inventory (stock) ordered to the budgets regularly in your business?

€ Yes
€ No

9. Do you update the inventory (stock) budgets regularly in your business?

€ Yes
€ No

10. Do you conduct stocktaking in your business?

€ Yes
€ No

11. If Yes, to Question 10, how often does your business conduct stocktaking?

€ Daily
€ Weekly
€ Monthly
€ Every 6 months
€ Annually
€ Other (please specify) ____________________
 New Era University
College of Accountancy

9 Central Ave, New Era, Quezon City, 1107 Metro Manila

12. Do you track the movement of inventory (stock) from the time an order is placed to
the time the stock is received?

€ Yes
€ No
13. Does your business have dedicated staff that manage the warehouse?

€ Yes
€ No
If Yes, proceed to Question 14, if No, proceed to Question 15
Please use the following scale to answer Question 14.

Instructions: For each statement, please check whether you Strongly Agree, Agree,
Neutral, Disagree or Strongly Disagree

14. To what extent do you agree with the following statements about inventory (stock)
control by your staff in the warehouse?

Strongly Agree Neutral Disagree Strongly

Agree Disagree

i. Our warehouse staff

verify delivery, receipt,
and storage of stock
ii. Our warehouse staff
have access to our
accounting records
iii. We have clear
procedures followed by
staff when receiving and
issuing stock from our
warehouse
 New Era University
College of Accountancy

9 Central Ave, New Era, Quezon City, 1107 Metro Manila

iv. Access to our

warehouse is restricted
to authorized staff only
v. Our staff use computers
to record inventory
(stock) received
vi. Our staff use computers
to record inventory
(stock) issued
vii. Our staff can determine
inventory (stock)
balance at any time
viii. Our staff use a
barcoding system to
monitor movement of
inventory (stock) in the
warehouse

Please use the following scale to answer Question 1.

Instructions: For each statement, please check whether you Strongly Agree, Agree,
Neutral, Disagree or Strongly Disagree

15. To what extent do you agree with the following statements about how your
business received your orders from suppliers?

Receiving Strongly Agree Neutral Disagree Strongly

Agree Disagree

i. Receiving, issuing,
accounting, and storing
responsibilities are
properly segregated.
ii. We match the delivery to a
purchase order.
 New Era University
College of Accountancy

9 Central Ave, New Era, Quezon City, 1107 Metro Manila

iii. We conduct a quality

check to ensure the
items are not damaged
or malfunctioning.
iv. We identify each item in
a delivery and ensure
that it is
properly labeled with a
bar coded tag.
v. We allocate storage space
for inventory received.

vi. We check the contents of

each delivery we order.

vii. Inventory are removed

from the inventory
system only
when
issued
viii. We stored inventory
according to material
groups

ix. Material stock level are

monitored effectively

Please use the following scale to answer Question 2.

Instructions: For each statement, please check whether you Strongly Agree, Agree,
Neutral, Disagree or Strongly Disagree

2. To what extent do you agree with the following statements about how your business
deliver your orders to customer?
 New Era University
College of Accountancy

9 Central Ave, New Era, Quezon City, 1107 Metro Manila

B. Sales Strongly Agree Neutral Disagree Strongly

Agree Disagree

i. We deliver the order with

additional costs (shipping
fee)
ii. We have systems
or processes in place
to ensure order fulfillment
accuracy
iii. We have no delays in
delivery
iv. We check the contents of each
order made
v. Inventory items are
properly recorded and up to
dated