Inventory Management of Selected Book Stores in the

Province of Batangas

By:
Mark John Arriola
Leslie Garcia
Hazel Jean Jolongbayan
Introduction

Every business regardless of the type of products or service that it sells

holds a form of inventory in its daily business operations. Inventory is the most

important factor to be considered in a business, as it is the core of the business.

Thus, inventory means an item of value and asset in the books of the company.

This is the most important category of item that needs to be focused upon for in

its management lies the business efficiency as well as profits.

Inventory management thus involves continuous monitoring of inventory

levels, smart planning and quick decision making in the part of the management

of a business. Without inventory management it would be difficult for any

business to maintain, control, and be able to handle the needs of their

customers. Every business organization considers inventory as the asset that

provides sustained competitive advantage in the business environment. As the

needs of business increase, they must in turn increase demands on their

suppliers. In order for suppliers to have the goods their customers need, it is

necessary for them to maintain excellent and accurate inventory management.

The importance of inventory management in an organization is quite high as the

optimum level of inventory is vital for achieving higher levels of profits and cash

flows in the organization.

Almost all areas of the business activity are interrelated and connected to

the inventory it has. It is hard to imagine any merchandising and manufacturing

entity that would not require inventory support. Thus, proper and efficient
inventory management should never be taken for granted. Due to the importance

of inventory on business, entity must devote enough time and effort on

emphasizing, evaluating and implementing its inventory control and

management.

A bookstore’s inventory plays a very important role in its overall

performance. A bookstore’s inventory is its biggest investment of all. Bookstore

business depends on their inventory management as with any other business.

The significance for owners or managers of bookstores is greatly based from

inventory forecasts and strategies. Working in bookstore inventory management

keeps an accurate count of the product and maintain an organized item inventory

which is also considered essential to the business. Timely orders and

maintaining regular deliveries are also important so that the business will be able

to meet the specific needs and wants of target market.

Effective inventory management of bookstores will result to smooth and

effective winning. It ensures the business to have the right inventories, at the

right place, at the right time, to drive improved margins, minimize inventory levels

and avoid excess and shortage conditions. Without an effective strategy,

companies can make critical mistakes, tie up capital in excess inventory, create

picking errors in the warehouse, and even miss sales opportunities due to out-of-

stock products. Your company may also rely on inventory management systems

to assess your current assets, balance your accounts, and provide financial

reporting.
 Inventory management is important to bookstore businesses in

maintaining the right balance of stock. You don’t want to lose a sale because you

didn’t have enough inventory to fill an order. When you have control over your

inventory, you’re able to provide better customer service. It will also help you get

a better, more real-time understanding of what’s selling and what isn’t.

One the other hand, you don’t want to have excess inventory taking up

space in your warehouse unnecessarily. Too much inventory can trigger profit

losses whether a product expires, gets damaged, or goes out of season. Key to

proper inventory control is a deeper understanding of customer demand for your

products.
Statement of the Problem

This study attempts to assess the Inventory Management of Selected

Book Stores in Batangas Province. Specifically this study ought to answer the

following:

1. What is the profile of Book Store in terms of:

1.1 Forms of business organization;

1.2 Number of years of operation; and

1.3 Capitalization?

2. How may the company assess their inventory management in terms of:

2.1 Demand;

2.2 Lead Time;

2.3 Procurement;

2.4 Static and Dynamic problems;

2.5 Cost?

3. Is there a significant difference on the statement of the inventory

management of Book Store when grouped according to profile?

4. Based on the findings, what plan of action maybe proposed?

Theoretical Framework

A “General Framework for Inventory Models” was developed by

Barry Shore in his book Operations Management, within which these

models will eventually be placed:

First we will consider demand. According to Barry Shore, inventory

decisions are made with a reference to a future demand. Inventories are

used to satisfy the demand requirements, so it is essential to have reliable

estimates of the amount and timing of demand.

The second aspect of this framework is the knowledge the firm

have of the lead time. The lead time is the period between the time when

an order is placed and the time when it is received. In addition, managers

need to know the extent to which demand and lead time may vary; the

greater the potential variability, the greater the need for additional stock to

reduce the risk of shortage.

The third aspect has to do with purchasing merchandise. When the

firm established purchasing plans, inventory decisions were but on the

many factors that were considered.

The fourth aspect has to do with whether the inventory decision is

made only once or whether it is continually made. Static case is quite

unlike the more common case where an order is but one a sequence of

orders through time. In the dynamic case, however, one decision directly

affects the next, and it is necessary to reflect the situation in the analysis.
 The major aspect of this framework is the cost structure of the

problem. In some cases, price discounts are relevant, while in the other

they are not. Stock outs may be acceptable in one situation and quite

unacceptable in another. Shortage cost or stock out cost results when

demand exceeds the supply of inventory on hand. These costs can

include opportunity cost of not making a sale, loss of customer goodwill,

late changes and similar costs. The other relevant cost are holding or

carrying cost and ordering cost.

Significance of the Study

The result of this study will provide knowledge and ideas on the

assessment of the inventory management of the following:

To the Owners and Managers of Book Stores, the result of this

study can be used as a guide on how to improve their inventory system

and provide information about their inventory management practices.

To the Employees, the result of this study gives them idea on how

to satisfy their customers, improve their performance and to know the

importance of proper inventory management.

To the Customer, the result of this study helps them to know if they

will be satisfied and if their needed will be accommodated.

 To the College of Accountancy, Business, Economics, this will

be a big help in encouraging more students that may be expose to the

world of production and operations for future jobs that inventory

management plays critical importance for the success of the business.

To the Researcher, this study helps them to get great opportunity

to enhance their skills and performance and become knowledgeable on

how importance the inventory management in business.

To the Future Researcher, the findings of this study can be a

guide or source of information and also give relevant information needed

in related literature.