College of Business Administration and Accountancy

Inventory Management and Control

Of

LCMM Enterprises Pacific Hill

Brgy. Palo Alto, Calamba City

A Business Research

Presented to the

Faculty of College of Accountancy of

University of Perpetual Help System- DALTA

Calamba Campus

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College of Business Administration and Accountancy

In Partial Fulfillment of

The Requirements for the Degree of

Bachelor Science in Accountancy

S. Y. 2017-2018

BY

Lampitoc, Jeanette V.

Rivera, Chazrina Anne M.

Wasala Herath Mudalige, Shelah A.

Calamba City, Laguna/September, 2017

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 College of Business Administration and Accountancy

APROVAL SHEET

This undergraduate thesis entitled Inventory Management and Control of

LCMM Enterprises-Pacific Hill, Palo Alto Calamba City prepared and submitted by

Lampitoc, Jeanette; Rivera, Chazrina Anne and Wasala Herath Mudalige, Shelah,

in partial fulfillment of the requirements for the degree of Bachelor of Science in

Accountancy has been examined and recommended for acceptance and approval for final

defense.

Mr. Alfredo Willy, CPA

Adviser

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ACKNOWLEDGEMENT

We would like to thank to our almighty God, who gave us life and for the

knowledge and wisdom that he given to us. And to all the people who helped and

supported us from the start up to end of this project.

We wish to express our sincere gratitude to our thesis adviser Mr. Alfredo Willy

for providing some ideas, guidance and encouragement to fulfill this project.

To our Dean Mr. Lamberto Reyes, thank you for all the support that we received

from your good office.

To our beloved parents and husband, thank you for always be at our side and for

all the financial support that we received. To all our friends and classmates, for their

wonderful collaboration and for supported us greatly and were willing to help us.

To the owner and management of LCMM Enterprises, for all the support and the

information provided by your team.

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DEDICATION

We dedicate this project to our almighty God who gave us strength and

knowledge to fulfill this study and to our beloved families especially to our dear parents

and husband for all the love and guidance. For always been there all the time to support

and understand us and keep on believing of what we could do in this project and for

being our inspiration and sources of strength as our motivation to complete this project.

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 College of Business Administration and Accountancy

ABSTRACT

Title of the study: Inventory Management and Control of

LCMM Enterprises- Pacific Hill Palo Alto Calamba

Researchers: Lampitoc, Jeanette

Rivera, Chazrina Anne

Wasala Herath Mudalige, Shelah

Degree: Bachelor of Science in Accountancy

Adviser: Mr. Alfredo Willy, CPA

The overall objective of the study was to find out the impact of inventory

management and performance of small-medium enterprises in Calamba considering

LCMM Enterprises-Palo Alto as the focus of the study. The study was guided by three

objectives; to find out the techniques of inventory management used at LCMM

Enterprises, to examine the relationship between inventory management and performance

of LCMM Enterprises, to find out the challenges faced by LCMM Enterprises in

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managing the inventories. Data was collected using a questionnaire and interview guide

in which both qualitative and quantitative methodologies were used to analyze data.

The study concluded that proper merchandise handling techniques at LCMM

Enterprises-Palo Alto include inventory requirement points, recording, issue of

inventories from the store that were previously purchased and arrangement of some

company inventories according to the order of their importance. LCMM Enterprise

practices Just in Time method of inventory for some selected items, but some other

items like office supplies, uniforms or movable items they are treated different. But for

those movable items or fast moving items, they do have a buffer or extra on it when they

are producing or buying it from the supplier. The challenges faced by the LCMM

Enterprises in managing the inventories include minimal loss in inventories;

predetermined products demand; opportunity costs; timing and schedule of their

merchandise purchasing and deliveries; deadlines given by the customer which is LCMM

Enterprises practices Just in Time method of inventory for such of their selected

products. LCMM Enterprises could gather an order from their customer through e-mail,

phone calls and text messages and customers could create purchase order through email.

Lastly, LCMM Enterprises business performance in relation to their inventory

management and control is profitable in accordance to the management team, their gross

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profit ranging from P.700- 1,700,00 a month. Profitable because the expenses incurred is

lesser due to that they have only five (5) employees including the owner and they could

keep their cost down because of their method of inventory that they could save from

handling fees, security fees and storage fees.

The study recommended management in SMEs to always forward planning,

continue monitoring on all their merchandise deliveries, keep their trusted employees

with the company if possible, centralized the purchase and store function or consult an IT

consultant if they could able to have an ERP system to track the items easier and to

gather an order easier as well, top management in most organizations to emphasis on the

proper inventory management techniques and measuring the efficiency of deviations to

identify weaknesses in managing inventories and the managers to undertake forward

planning.

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 College of Business Administration and Accountancy

TABLE OF CONTENTS

Title Page i

Approval Sheet iii

Acknowledgement iv

Dedication v

Abstract vi

Table of Contents ix

List of Appendices xii

Chapter

I. The Problem and its Background 1-9

Introduction 1

Background of the Research 2

Objective of the Study 3

Significant of the Study 4

Scope and limitation 5

Locale of the Study 6

Type of Research Method 6

Definition of Terms 7

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II. Review of Related Literature 10-29

Introduction 10

Foreign Related Literature 10-25

The meaning of Inventory 10

Inventory Theory 11

Categories of Inventory 12

Inventory Control Techniques 13

Objective of Inventory Management 16

Reasons for Holding Inventories 17

Inventory or Stocks Control 18

Inventory Control 19

The Need for Inventory Control 20

The Importance of Inventory Control 23

Problems of Inventory Control 24

Local Related Literature 26

Synthesis 27

III. Market Aspect 30-36

Introduction 30

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Business Name, Nature and Information 31

Uses and User of the product 32

Geographical areas of dispersion 34

Factors affecting supply and demand 34

Marketing Strategy 35

IV. Technical Aspect 37-41

Introduction 37

Plant location and Plant size 37

LCMM Office 38

Storage Area 39

Production Area 40

Days of Operation 41

Permit and Licenses 41

V. Management Aspect 42-44

Introduction 42

Organizational Chart 43

Forms of Business Organization 44

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Disadvantages and Advantages 44

VI. Conclusion and Recommendation 45- 47

I. Conclusion 45

II. Recommendation 47

LIST OF APPENDICES

APPENDIX TITLE PAGE

I Request Letter to the Company 49

II Questionnaire 50

III Permit and Licences 54

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