Third Draft

COLLEGE OF BUSINESS
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CHAPTER 1
THE PROBLEM AND ITS BACKGROUND
Introduction
Most businesses nowadays predict their sales for future period in order to have a
preparation for the actual sales. It is known as estimating sales which is a method
considered being very valuable management tool. Businesses are doing this to provide
interrupted production, sales and/or customer-services
Estimating sales is a prediction of a business's unit and sales for some future
period of time, up to several years or more. These forecasts are generally based
primarily on recent sales trends, competitive developments, and economic trends in the
industry, region, and/or nation in which the organization conducts business. Inventory
management is primarily about specifying the size and placement of stocked goods. 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 materials or goods.
Inventory plays an important role in the operation of convenience store because
it is the lifeblood of the business operations of merchandising company for it shows the
financial activities of a business for a limited period of time. It helps the manager/owner
to analyse the flow of business operation whether it is manage effectively and efficiently
1
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COLLEGE OF BUSINESS
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or if the business is earning or losing. A thorough management of inventory is necessary
to avoid possibility of shortages that would greatly affect the operation of the business.
There are large numbers of convenience stores established in Batangas City
which are having an issue about monitoring their sales and inventory. This problem
usually causes two things: out-of-stocks and overstocks. Out-of-stocks means that
products are not available for sale due to high sales are not expected by the business,
while overstocks means that products are excessive and are not usually being bought
by the consumers. These two problems are caused by poor planning of estimating sales
and inappropriate managing of inventory. It is a challenge that the convenience stores
have to face this undesirable situation. Convenience stores needs to have a good
system on how they should estimate their sales and how to manage their inventory in
order to have a well business management.
With the information above, the researchers were motivated to focus on this
study of the effects of estimating sales to inventory management for the reason that it
will help any business improve its forecasting performance and inventory management.
The researchers believe that by conducting the study, they would be able to discuss the
actual effects of the stated variables. For the future researchers, this will serve as a
reference and guide for their future studies and those who want to engage in this kind of
business.
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Conceptual Framework
This study took the concept of Hurlbut (2012) about sales forecasting and
inventory management for independent retailers. It says that everything starts with a
good solid sales forecast. From there, a business can plan how much inventory well
need to have to support that plan. Business can also determine accurately how much
inventory they need to buy. Effective inventory management begins with a carefully
developed sales forecast. Only then can inventory levels be planned, and merchandise
receipts scheduled throughout the season. This is the key to eliminating both out-ofstocks and over-stocks. This study likes to express the effects of estimating sales to
inventory management of convenience stores in Batangas City.
Base on the theory of Hurlbut,estimating sales plays a vital role on inventory
management while in the present study it points out on how would estimating sales
affects inventory management on convenience stores in Batangas City.This theory gives
additional information on how a business should give emphasis on estimating theirs
sales and how it would be effective on managing inventory on retailers. This will help in
order to run the business efficiently.
Through estimating sales a business can predict their future sales that would
help them in managing their inventory. The estimates must be reliable and effective in
order to avoid overstocking and/or out-of-stock of inventories. It also highlights that outof-stocks resulting from unexpectedly high sales, and overstocks from unexpectedly low
sales but they are really the flip side of the same problem. Both result from inadequate
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planning and sales forecasting. Aproperinventory management will serves as guide in
controlling the number of stocks to be sold in small businesses.
This study wanted to know if estimating sales in terms of territory, consumer
preference, and product life cycle is related to inventory management in terms of time
and size of order; demand of customers, and procedures adapted by the business. The
concepts of this study are presented in the conceptual paradigm (Figure 1).
Estimating
terms of:
sales
in
Territory
Consumer
preference
Product life cycle
Inventory management
in terms of:
Time and size of
order
Demand
of
customers
Procedures adapted
by the business
Input
Gathering data
through survey
and questionnaire
Statistical test
and analysis of
data
Presentation of
Findings
Process
Effect of estimating
sales to inventory
management
of
Convenience Stores
Output
Figure 1
Conceptual Framework on Estimating Sales and it Effects to Inventory
Management of Convenience stores
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In this study, the researchers used the IPO or Input-Process-Output system
approach. The paradigm shows a summary on how the researchers will conduct this
study. On the first box with the label of input are estimating sales in terms of territory,
consumer preference, and product life cycle. These factors are important to consider in
doing estimating sales. This is followed by how to manage inventory in terms of time
and size of order; demand of customers, and procedures adapted by the businesswhich
are factors that are considered in managing inventory. The researchers presumed the
relationship of the variables so as to determine how they play their role in an operation
of a business like convenience store. The researchers believe that estimating sales has
a big role in business operation, most of all in managing inventory. Those tools are
included for the progress of the study. It will be served as the basis to know the effects
of estimating sales to inventory management. The second box labelled as process
indicates how the researchers will conduct the data gathering through survey and
questionnaire followed by statistical test and analysis of data. The third box labelled as
an output provides for the effect of estimating sales to inventory management. The
effects are we can identify excess/old stock, ensure enough supply of goods, know
when and how much to purchase goods. It helps to decrease the cost of handling of
goods and maintain logs of inventory movement into and out of the storerooms.
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Statement of the Problem
The purpose of this study was to determine the effect of estimating sales to
inventory management of convenience stores in Batangas City. Specifically, it seeks to
answer the following questions:
1. How do convenience stores estimate their sales in terms of:
1.1. Territory;
1.2. Consumer preference, and
1.3. Product life cycle?
2. How do convenience stores manage their inventory in terms of:
2.1. Time and size of order;
2.2. Demand of customers, and
2.3. Procedures adapted by the business?
3. Is there any significant effect of estimating sales to inventory management of
convenience stores in Batangas City?
4. What guidelines on estimating sales may be proposed to utilize the inventory
management of convenience stores in Batangas City?
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Hypothesis
There is no significant effect of estimating sales to inventory management of
convenience stores in Batangas City.
Assumptions of the study

The researchers made the following assumptions in conducting this study:
1. That the researchers could finish the thesis on time;
2. That the information gathered by the researcher would be useful, valid and reliable;
3. That the managers of convenience stores would be cooperative and trustworthy in
answering the questionnaire.
Scope, Delimitation and Limitation of the Study

The coverage of this study is the effect of estimating sales to inventory
management of convenience stores in Batangas City and the methods of estimating
sales they used in terms of territory, consumer preference, and product life cycle.It also
included how convenience stores manage their inventory in terms of time and size of
order, demand of customers, and procedures adapted by the business. The study also
considers the personal information of a participants and profile of the business such as
type of business ownership and length of business operation.
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The researchers delimited this research to convenience stores that does not
estimate their sales. The participants included only the convenience stores in Batangas
City. It also delimited to small sari-sari stores. The study also delimited to other scope of
inventory management concerning the fine lines between replenishment lead time,
carrying costs of inventory, asset management, and inventory visibility, and physical
inventory, available physical space for inventory, replenishment, returns and defective
goods. The study did not consider the factors affecting the profitability of the business.
The researcher set boundary to focus more on their subject considering the availability
of time and resources.
The results and findings of the study were based on the information and facts
gathered by the researchers from all the participants responses on the questionnaire
that was used. Although the research was carefully prepared, the researchers are still
aware of its limitations. This research were limited from the response made by the 24
participants of the total 35 population as obtained from the list provided by Business
Permit and Licensing Office (BPLO). The researchers have that the desire of including
the total population; however some of them have been closed already. And also the
researchers had no direct control over the participants, there always the possibility of
erroneous data gathered through questionnaire
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Significance of the Study
This research study is about the effect of estimating sales to inventory
management of convenience stores in Batangas City. This study will give information
about methods in estimating sales and how these affect the inventory management.
The researchers believe that this study is very important to the following:
Owners and Managers of the convenience stores and other related businesses
could make use the study conducted as a guide for them to developed sales forecast.
And also it avoids the problem regarding inventory in terms of out- of- stocks and
overstocks.
This study would give awareness to the businessmen or future businessmen of
the importance of estimating sales to obtain a good operation of their business.
Therefore, the findings have a great help in operating their business.
To the students taking up business courses, it would give additional information
for their future profession.
And finally, for the future researchers, the findings will serve as a reference and
guide for their future studies.
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Definition of Terms
Terms here are conceptually and operationally defined for better understanding
of the readers.
Consumer Preference.This is a desire to buy the product and is convinced that
the purchase would be wise. (Diola et.al.2009)
Convenience store.Inthis study arestores that stock a range of everyday items
such as groceries, snack foods, toiletries and others. These are stores which carry a
limited line of high turn-over convenience goods and are usually open over long hours,
seven days a week. (Diola et.al.2009)
Estimating Sales.In this study it refers to the process of predicting businesss
sales in the future.
Inventory.Stocks of goods intended to sale. (Diola et.al.2009)
Inventory management.This refers to the practice of planning, controlling
inventory so that it contributes to business profitability, pricing decisions and strategies,
either by reducing cost of goods sold or by increasing sales (Liwag et.al.2003). In this
study, this term refers to managing of finished goods for sale.
Inventory Valuation. This isaprocess of measuring cost of inventories. (Valix
et.al.2013)
Product life cycle.A graphic representation of a products sales history from its
birth, or market beginning, to its death, or withdrawal from the market.(Diola et.al.2009)
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Sales. In this study it refers to the exchange of goods or services for an amount
of money or its equivalent.
Stocks.In this study, it refers to the supply of goods available for sale in a store.
Territory.In this study It is an area of land that belongs to or is controlled by a
government.
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CHAPTER 2
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter presents the review of related literature and studies in an attempt
not only to clarify but also qualify certain ideas in the present study. The researchers
gathered similar or related viewpoints from books and unpublished thesis and some
articles in the internet.
How to Estimate Sales

The sales forecast is usually the primary planning document for a business. Even
if the general economy is robust, an organization needs a promising sale forecast
before it can be aggressive about capitalizing on new opportunities. Strategic planners
themselves may not be involved in making sales forecast, but to develop master plans,
they rely on forecasts that the marketing unit makes. (Dubrin, 2006)
Forecasting is important to practically all marketing organizations. Without a short
term forecast, sales managers would not have a logical basis for assigning workloads or
deciding where to concentrate the sales effort without a long- term forecast, sales
managers would not know how many salespeople the firm will need or how many
should be promoted to a sales management position. The mere fact that a forecast has
to be done admits that uncertainty crisis in the process. In fact, and every forecast can
be only so accurate.
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In many industries, managers still determine sales forecast by comparing this
years sales with last years sales at the same time period. But consider how much
information is not taken into account with this approach. Forecasting is not only
important, but it can be complex too.
Estimating for a new product is the most difficult type of forecast since no
historical sales data available. It is particularly difficult when the product is very different
from the companys current product mix. A popular forecasting method for consumer
packaged goods products is a counting method called test marketing. By carefully
selecting a few representative market areas, marketing managers can observe the
impact on sales of various combinations of the marketing mix and use measures of
market share in these small markets to forecast the total market. (Hair et. al., 2010)
Even for small businesses, an accurate sales forecast is an important part of
business planning, as it gives you what you need to manage expenses and measure
profit and growth. If your forecast is very far off from actual sales, you could find yourself
with much more inventory and staff than you needed to do business. Don't let
forecasting intimidate you; however, as any business leader will tell you that at best, it is
an educated guess.
There are steps on how to estimate sales. First, analyze your historic sales data.
Look especially to seasonal trends as well as year-on-year growth. If you have a startup company or new product with no historic sales data, look to competitors or other like
businesses in the area, trade associations or even your local Chamber of Commerce for
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guidance. Second, involve your marketing and sales teams in the forecasting process,
as they are in the best position to inform you about current consumer trends and
purchasing behaviors. Third, define your target market. Also, take projected
demographic and economic growth in your market into consideration. Fourth, put
together all of the information you have gathered and estimate what your sales will be
for each month for one year, as well as an annual figure for years 2 and 3. Professional
business planner Tim Berry recommends that you make projections at the unit level,
whatever a unit is for your business. If your business is a law firm, a unit would be one
hour of attorney's fees, or if you own a car service, a unit would be a client ride. If you
sell multiple products or services, forecast each of them individually. Fifth, vet your sales
forecast against the supply chain. This step is fairly easy for some businesses, such as
restaurants, as the number of tables and seats is the limiting factor for sales. If you
manufacture goods or purchase them from a wholesaler, make sure that they can
sufficiently supply enough goods to meet your forecast. And lastly, determine your cost
of goods sold to ensure that you will have the funds to sustain projected growth. Include
manufacturing, sales, marketing and any other fixed costs associated with selling your
products.(http://smallbusiness.chron.com/estimate-accurate-sales-projections13704.html)
Some other businesses used sales forecasting instead of estimating sales. Your
sales forecast is the backbone of your business plan. People measure a business and
its growth by sales, and your sales forecast sets the standard for expenses, profits and
growth.
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When it comes to forecasting sales, don't fall for the trap that says forecasting
takes training, mathematics or advanced degrees. Forecasting is mainly educated
guessing. So don't expect to get it perfect; just make it reasonable. There's no business
owner who isn't qualified to forecast sales--you don't need a business degree or
accountant's certification. What you need is common sense, research of the factors, and
motivation to make an educated guess.
Your sales forecast in a business plan should show sales by month for the next
12 months--at least--and then by year for the following two to five years. Three years,
total, is generally enough for most business plans.
If you have more than one line of sales, show each line of sales separately and
add them up. If you have more than 10 or so lines of sales, summarize them and
consolidate. Remember, this is business planning, not accounting, so it has to be
reasonable, but it doesn't need too much detail. Here are some tips to get you started:
Develop a unit sales projection. Where you can, start by forecasting unit sales
per month. Not all businesses sell by units, but most do, and it's easier to forecast by
breaking things down into their component parts. Product-oriented businesses obviously
sell in units, but so do a lot of service businesses. For example, accountants and
attorneys sell hours, taxis sell rides, and restaurants sell meals.
Use past data if you have it. Whenever you have past sales data, your best
forecasting aid is the most recent past. There are some statistical analysis techniques
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that take past data and project it forward into the future. You can get just about the
same results by projecting your two most recent years of sales by month on a line chart
and then visually tracking it forward along the same line. Statistical tools are a nice
addition, but they're rarely as valuable in a business plan as human common sense,
particularly if it's guided by analysis.
Use factors for a new product. Having a new product is no excuse for not having
a sales forecast. Of course you don't know what's going to happen, but that's no excuse
for not drafting a sales projection. Nobody who plans a new product knows the future-you simply make educated guesses. So break it down by finding important decision
factors or components of sales. If you have a completely new product with no history,
find an existing product to use as a guide. For example, if you have the next great
computer game, base your forecast on sales of a similar computer game. If you have a
new auto accessory, look at sales of other auto accessories. Analysts projected sales of
fax machines before they were released to the market by looking at typewriters and
copiers.
Break the purchase down into factors. For example, you can forecast sales in a
restaurant by looking at a reasonable number of tables occupied at different hours of
the day and then multiplying the percent of tables occupied by the average estimated
revenue per table. Some people project sales in certain kinds of retail businesses by
investigating the average sales per square foot in similar businesses.
Be sure to project prices. The next step is prices. You've projected unit sales
monthly for 12 months and then annually, so you must also project your prices. Think of
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this as a simple spreadsheet that adds the units of different sales items in one section,
then sets the estimated prices in a second section. A third section then multiplies units
times price to calculate sales. The math is simple--the hard part is making that
estimated guess of unit sales.
A fourth section of your projected prices will set the average costs per unit. You
want to set costs because a lot of financial analysis focuses on gross margin, which is
sales less cost of sales. For financial reasons, cost of sales, also known as costs of
goods sold and direct costs, are different from the other expenses that come out of
profits.
The cost of sales isn't what you pay salespeople or for advertising. It's the
amount you pay to buy what you sell. This is usually easy to understand. In any retail
store, for example, the cost of goods sold is what the store pays for the products it sells.
In service businesses, the costs of sales can be less obvious, but it can still be figured
out.
Finally, in a fifth and final section, you multiply unit sales times average cost per
unit to calculate your cost of sales. This gives you a sales forecast that you can use for
the rest of your financial projections. The first place you'll use it is at the beginning of
your profit and loss statement, which normally starts with sales and cost of sales.
Of course, not all businesses fit easily into the units sales model. Some business
plans will have sales forecasts that project dollar sales only, by line of sales, and then
direct costs, by other factors. For example, a taxi business might simply estimate total
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fares as its sales forecast and gasoline, maintenance and other items as its cost of
sales. A graphic artist might stick with the simple dollar-value sales forecast and project
cost of sales as photocopies, color proofs, etc. In the end, it's always your plan, so you
have
to
make
the
decisions
that
are
best
for
you.
(http://www.entrepreneur.com/article/77674)
The study conducted by Recintoet. al. (2000) entitled The effects of sales
budget in establishing selling prices of drugstores in Lipa City found out that unit price
approach was the common approach of sales budgeting. The use of unit price approach
will plan first the unit to be sold and the unit sales price for each product. This approach
will serve as a check if unit sales price for each product is matching with the unit to be
sold of each product.
There are following methods may be done in estimating or forecasting sales.
These are Sales Trend Analysis, under this method the product life cycle is used in
making the forecast. In using this, it is essential that the company estimate what part of
the life cycle is the product; Sales Force Composite Method, under this method, each
salesman estimates the sales in his particular territory; Executive Opinion Method under
this method, the views of a number of top executive are culled to arrive at a sales
estimate. Industry Trend Analysis Method, under this method, the relationship between
expected industry sales and the company sales in terms of market share determined;
Correlation Analysis Method, this is a more scientific means of forecasting sales by
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using regression analysis; and Multiple Approach Method, this method uses a
combination of the various methods discussed. (Anastacio et. al., 2010)
Managing Inventory
Inventory management is not glamorous, but it can make difference between
success and failure for a small firm. The larger the inventory investment, the more vital
proper inventory management is. Inventory management is particularly important in
small retail or wholesale firms, as inventory typically represents a major financial
investment by these firms. Achieving the general objective of inventory management
requires pursuing more specific sub goals of inventory control of ensuring continuous
operations, maximizing sales, protecting assets, and minimizing inventory investment.
Protecting inventory against theft, shrinkage and deterioration and minimizing cost
likewise contribute to operational efficiency and business profits (Longenecker.at. 2006)
Maintaining the proper level of inventory is one of the operation managers most
important tasks. Keeping too much inventory in stock means a business is spending too
much on holding costs. Holding too inventory may prevent a company from filling
orders. Too much inventory of company appears to be holding too much inventory given
its limited warehouse space. It needs to reduce inventory levels or obtain more storage
space. Too little inventory of company is losing money because it has run out of
merchandise to sell. It needed to keep larger stocks of inventory on hand. The right
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amount of inventory, the manager has made sure that inventories of raw materials are
sufficient. (Byars, 2006)
Inventory management has two basic goals. The first is to avoid running out of
stock and angering and dissatisfying customers. Consequently, this goal seeks to
increase inventory levels to a safe level that wont risk stock outs. The second is to
efficiently reduce inventory levels and costs as much as possible without impairing daily
operations. Thus, this goal seeks a minimum level of inventory. The following inventory
management techniques- economic order quantity (EOQ), just-in-time inventory (JIT),
and, materials requirement planning (MRP)- are different ways of balancing
these
competing goals. (Williams, 2007)

Managers of manufacturing and sales organization face the problems of how
much inventory to keep on hand. If a firm maintains a large inventory, goods can be
made quickly, customers can make immediate purchases, or orders can be shipped
rapidly. However, stocking goods is expensive. The goods themselves are costly, and
the money tied up in inventory cannot be invested elsewhere. Three decision making
techniques used as manage inventory and control production: the economic order
quantity (EOQ), the just-in-time (JIT) system, and brief mention of LIFO versus FIFO.
(Dubrin, 2006)
To effectively manage the inventory, it is important to have a system to keep tract
of the inventory on hand and on order, a reliable forecast of demand, Knowledge of lead
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time Reasonable estimates of inventory holding cost, ordering cost and shortage cost
and classification system for inventory items.
The study conducted by Recintoet. el. (2000) entitled The effects of Sales
Budget in Establishing Selling Prices of Drugstores in Lipa City found out that unit price
approach was the common approach of sales budgeting. The use of unit price approach
will plan first the unit to be sold and the unit sales price for each product. This approach
will serve as a check if unit sales price for each product is matching with the unit to be
sold of each product.
The study conducted by Candavaet. al., (2002) entitled Inventory System
Applied by Selected Shopping Centers in Batangas City found out that the use of Bar
Code Technology/Swiping was a very effective solution to minimize problems in physical
counting.
The study conducted by Marasiganet. al., (2011) entitled The Effects of
Inventory Management Technique to the Pricing Strategies of the owners of Grocery
Stores in Batangas City found out that most of the owners employ their inventory
management technique by means of ABC inventory analysis which is focused in the
managerial attention especially to the firms item that is quickly sold by their customers.
Also the concept of this system is easy to understand and easy to implement as the
only way to employ it is by paying a special attention to the most important items.
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The study conducted by Maulion et. al., (2004) entitled Control Procedures on
Errors and Irregularities in Inventory Management employed by Feed Mill Companies in
Lipa City discuss the control procedures employed by feed mill companies to prevent
errors and irregularities in inventory management. The previous researcher found out
that inventory is one of the largest assets in a company; necessary control procedures
should be applied in its management. And also they found out that the use of material
requisition form is the major control procedure applied by feed mill companies under the
objective of transaction authorization.
Estimating Sales in Relation with Inventory Management

According to Hurlbut (2012), the problem usually boils down with inventory
management issues: out-of-stocks and overstocks. At first glance, the two issues
appear unrelated out-of-stocks resulting from unexpectedly high sales, and overstocks
from unexpectedly low sales but they are really the flip side of the same problem. Both
result from inadequate planning and sales forecasting.
In sales forecasting process, one of the first things that often emerge is that they
have not been actually forecasting sales at all. Their focus instead has been solely on
how much to buy. When an independent retailer focuses on how much to buy, they
usually start by looking at how much theyve bought in the past.
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If we know how much inventory we want to end the month with, and how much
we expect to sell during the month, and then subtract how much inventory were going
to start the month with, we can calculate how much we need to bring in during the
month. In other words, everything starts with a good solid sales forecast. From there,
we can plan how much inventory well need to have to support that plan. Only then can
we
determine
accurately
how
much
inventory
well
need
to
buy.
(http://www.hurlbutassociates.com/retail-perspectives-blog/bid/52261/Sales
Forecasting-and-Inventory-Management-for-Independent-Retailers)
A good sales forecast takes into account relevant sales and inventory histories,
to identify extraordinary sales and inventory levels and any other unusual patterns. It
drills down to the department, category and sub-category level, as appropriate, to
identify opportunities and trends, as well as the potential impacts of increased
competition, emerging technology, changes in promotional patterns and new product
introductions. It rolls up from the subcategory, category and department levels to a total
forecasted sales increase that can be tested against the realistic expectations of what
can be actually achieved. It plans in both units and sales dollars, so that the plan is well
balanced between unit sales and the average selling price of each unit sold. It is
dynamic, so that it can be continually updated and adjusted as each month passes and
additional information is developed. It identifies the most likely level of sales for any
given month, not the level that might be possible if things broke just right.
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As a result, it has a bias toward a flat sales forecast for any given department, category
or subcategory, unless there is specific reason to forecast an increase or decrease.
Thus, effective inventory management begins with a carefully developed sales
forecast. Only then can inventory levels be planned, and merchandise receipts
scheduled throughout the season. This is the key to eliminating both out-of-stocks and
over-stocks. (http://www.businessknowhow.com/money/estimatesales.htm)
Synthesis of Reviewed Materials

The reviewed materials from books, under graduate theses ad internet were
important to the present study since they provide information which helped the
researchers to intensify the understanding of the study. The reviewed literatures are
closely related to the present study since they tackled the effects of estimating sales to
inventory management. Likewise, they also helped the researchers in their
comprehension and analysis of how estimating sales would be a support plan in
managing inventory. It also gave additional ideas about the importance of estimated
sales in managing inventory. These related literature supported the findings of the study
conducted by the researchers.
The study conducted by Recinto et. al. (2000) points out the effects of sales
budget in establishing selling prices. The previous and present studies are similar
because they both consider sale as their one primary subject. However, the differences
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between the two studies are their participants. And the previous study focus on how the
sales budget affect the selling price while the present study focus on how the estimating
sales affect inventory management.
The study by Candava et.al., (2002) discussed the inventory system applied by
selected shopping centers. The previous and present studies are similar in sense of
giving information how to manage inventory. However, the studies differ in purpose,
since the former study aimed to determine and evaluate the inventory system adopted
by the Shopping Centers in Batangas City. On the other hand, the present study deals
with the determination of effect of estimating sales to inventory management of
convenience store in Batangas City.
The study conducted by Marasigan et. al., (2011) are similar to the present study
since they both used descriptive method of research with the questionnaire as the main
instrument for the gathering of data. On the other hand, they have different concept
since the past study focus how inventory management technique affects the pricing
strategies while the present study focus on how the estimating sales will affect the
inventory management.
The study conducted by Maulion et. al., (2004) are similar to the present study
because they are concerned on giving idea about inventory management in terms of
procedures adapted by the business. The difference between the past and present
studies is that they focused on different participants.
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Overall, the reviewed materials helped the researchers to know if estimating
sales has a significant effect to inventory management of convenience stores in
Batangas City. They served as guide to the researchers by providing meaningful and
reliable source of information which resulted to a better research work. They also
provide gainful insights on the continuous increase of convenience stores in the present
economy.
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CHAPTER 3
METHODOLOGY
This chapter represents the discussion of the research methodology used by the
researchers in conducting the study about the effects of estimating sales to inventory
management of convenience stores in Batangas City. Research methodology includes
the research design, participant of the study, data gathering instrument, data gathering
procedure and statistical treatment of data.
Research Design
This study intended to determine the effect of estimating sales to inventory
management of convenience stores in Batangas City. This research study used the
descriptive survey method, which is generally considered comprehensive research
using the library, the questionnaire, observation and others.
Descriptive research is defined as the research method employed in the studies
in order to test the hypothesis or to answer the questions concerning the status of the
subject.
Descriptive design was used to gather pertinent required data through the use of
questionnaires. This serves as a tool in acquiring information with regard to the facts
and literatures.
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Participants of the Study
Based on the information gathered by the researchers from Business Permits
and License Office in Batangas Municipal Hall there were twenty five (25) convenience
stores in Batangas City, as of February 2015. Twenty four (24) convenience stores
completely answered the questionnaire and one store refused to answer due to issues
of confidentiality.
Profile of Participants
The profile of the participants presented in this section includes the data on age,
civil status, gender, educational attainment and years of service. This was included in
the study to shed some light on the demographic characteristics of participants. The
frequency and percentage distribution of the profile of the participants is presented in
table 1.
In terms of age, the majority of the participants are within the range of 20 35
years old with the frequency of 15 equivalents to 62.50% of the total sample population.
This is because within this age, the knowledge of an owner of a business like small
store is enough to cope up with the demand of work and responsibilities of their
business. Four (4) participants account for 16.67% of the total sample of population
belonging to the 31 35 years old bracket. Within 26 30 years and above 40 years,
there are two (2) participants in each bracket with a percentage of 8.33%. Lastly, one
(1) participant falls within the 36 40 years old category.
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Table 1
Profile of Participants
Profile Variables
Frequency
Percentage
Age
20-25
15
62.50
26-30
8.33
31-35
16.67
36-40
4.17
40 and above
8.33
24
100
20
83.33
TOTAL
Civil Status
Single
Married
Separated
3
1
12.50
4.17
TOTAL
24
100
Female
14
58.33
Male
10
41.67
24
100
23
95.83
High School
4.17
TOTAL
24
100
Gender
TOTAL
Educational Attainment
College
With respect to civil status, majority of the participants with a frequency of twenty
(20) equivalents to 83.33% are single. Three (3) participants are married with a
percentage of 12.50% while one (1) participant is separated with a percentage of
4.17%. These findings may be due that the number of younger population are working
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in the convenience stores because they have a flexible time to handle a store that open
long hours.
In terms of gender, the majority of the participants are female with a frequency of
14 equivalent to 58.33% while 10 or 41.67%are male participants. This means that in
the business, the role of females are increasing into the field. Therefore, there is no
more gender-specific.
With regard to educational attainment, the majority of the participants are college
graduates with the frequency of 23 or 95.83%. And only one (1) participant is high
school graduate with a percentage of 4.17% This portrays that most of the managers or
staff in the convenience stores are educated enough to manage and do their work.
Profile of the Convenience Stores
The profile of the convenience stores includes the basic information as to type of
business ownership, length of business operation, average monthly sales in pesos and
number of employees. The frequency and percentage distribution of the profile of
convenience stores are shown in the table 2.
Type of business ownership is classifies as sole proprietorship, partnership,
corporation and cooperative. Majority of the participants are sole proprietorship which
gained the frequency of twelve (12) or 50% participants. Three (3) of the participants
are partnerships, while corporation has nine (9) participants or 37.50%. This indicates
that majority of the participants chose to establish a sole proprietorship because of the
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some advantages in putting up such business organization. One advantage would be
the relative ease in management, simple capital structure, internal control measures
that would safeguard assets (e.g. inventory) are easy to update and implement.
The length of the business operation of the convenience stores in Batangas City
was taken into considerations. The table indicates that thirteen (13) out of twenty five
(25) of the participants have operational years of 1 5 years with a percentage of
54.17%.
Less than one (1) year and 6 10 years have both four (4) frequency
equivalent to 16.67 %. And three (3) or 12.50% participants have operational years of
11 15 years. This shows that that majority of the participants length business
operations are relatively new.
It is may be due to the fact that new investment
opportunities can be found in Batangas City particularly.

In terms of average monthly sales in pesos, most of the convenience stores have
average monthly sales of less than 50,000 pesos with a frequency of 11 equivalent to
45.83%. This is may be due that convenience store is only a small store and its
sometimes part of gas or petrol station wherein customers are few. Six (6) convenience
stores have 50,000 pesos to 100,000 pesos with a percentage of 25% while four (4)
convenience stores have more than 500,000 pesos. And three (3) or 12.50% of total
sample population have 100,000 pesos to 500,000 pesos average monthly sales.
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Table 2
Profile of the Business
Profile Variables
Frequency
Percentage
Type of Business Ownership

Sole Proprietorship
12
50.00
Partnership
12.50
Corporation
37.50
24
100
Less than 1 year
16.67
1 to 5 years
13
54.17
6 to 10 years
16.67
11 to 15 years
12.50
24
100
11
45.83
P50,000 P100,000
25.00
P100,000- P P500,000
12.50
P500,000 above
16.67
TOTAL
Numberof Employees
24
100
Below 5
11
45.83
5 to 10
37.50
11 to 15
8.33
Above 20
8.33
24
100
TOTAL
Length of Business Operation
TOTAL
Average Monthly Sales in Peso
P50,000 below
TOTAL
With regard to number of employees, the table shown that most of the
convenience stores operate with five (5) below employees with a frequency of eleven
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(11) equivalent to 45.83%. Nine (9) stores have 5 10 employees or 37.50%. While
Above 20 and 11 15 numbers of employees are both have a frequency of two (2)
equivalent to 8.33%. The participants of the study are most small convenience stores; it
shows that only small numbers of employees are needed to operate the store.
Data Gathering Instrument

The researchers used questionnaires as data gathering instrument to generate
information required by the study.
The researchers read books, related unpublished materials and exchanged
opinions and ideas to formulate a draft of questionnaire. The first draft of the
questionnaire was submitted for revision.
The final draft of questionnaire was submitted to the adviser for approval last
May 5, 2015. A questionnaire was distributed to the participants for the purpose of
gathering data. It was composed of three parts. Part I had the personal profile of the
participant in terms of name, age, civil status, and gender. Part II dealt with the profile of
the business in terms of type of business ownership and length of business operation.
Part III served as the questionnaire proper of the study which includes how convenience
stores estimate sales in terms of territory, consumer preference and product life cycle. It
also includes how convenience stores manage inventory in terms of time and size of
order, demand of customers and procedure adapted by the business.
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The type of questionnaire used in the study was the checklist method wherein
the participants could find it easy to answer a question. Participants can be made their
answer by putting a check mark on the items that correspond to their answer.
Data Gathering Procedure

The researchers gathered data necessary for the completion of the study.
Gathered information came from books, unpublished materials and online reference
materials. From the consulted resources, the researchers conceptualized the chosen
topic which was eventually proposed to the research adviser for approval. After the
approval of thesis proposal, the statement of the problem was established. A draft of
questionnaire immediately followed and presented to the research adviser. The
questionnaire was revised according to the given suggestions and recommendations by
the adviser and was then again presented to the adviser for correction and approval.
The researcher looked for a CPA validator that has knowledge on how to conduct a
research study to validate the questionnaire, to improve the content of the questionnaire
and to effect some corrections.
Upon the approval of the questionnaire, the researchers went to the Municipality
of Batangas City to ask from Permits and License Division for the list of convenience
store in Batangas City. Then, the researchers proceeded with the task of preparing letter
of request to ask permission from the participants and distributing the questionnaires to
the participants for them to answer.
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The survey was conducted last May 2015 in Batangas City. Since the locations of
the businesses are all located in Batangas City, it was easier for the researcher to
personally distribute the questionnaires to the managers/owners of convenience store.
The participants were given one week to answer the questions listed on the
questionnaire. The researchers then collected personally the distributed questionnaire
and proceeded to make a tally of responses to each question. The data gathered were
tabulated, interpreted, and analysed for the conclusion and formulation of findings and
recommendations of the study.
Statistical Treatment of Data

The application of statistics is very important in analyzing the data gathered.
Statistical tools help the researchers to measure the results that will serve as the basis
for quantitative analysis and interpretation of data. For the purpose of the study, the
following statistical tools were used:
Percentage Method. This is a descriptive method tool that is particularly useful in
expressing relative frequency of survey responses. This method is used in presenting
the profile of the participants and the profile of the convenience stores.
Weighted mean. This is another descriptive statistical tool that is synonymous
with average. It is a procedure for combining the means of two or more groups of
different sizes. It was used to indicate particular item is more than once in a total that
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said item was given in a difference ways as to result. It was also used to weight the
degree of gravity of the effect.
Pearson RCorrelation. This method was used to measure and evaluate the effect
of estimating sales to the inventory management of the convenience store in Batangas
City. It was defined as parameter test used to measure the degree of relationship
between variables.
CHAPTER 4
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
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This part of the paper presents, analyzes and interprets data gathered from the
survey conducted by the researchers. The data are presented in tabular form, for easier
comprehension. For clarity of presentation and consistency in the discussion, the data
are presented according to the objectives of the study.
1. Estimating Sales of Convenience Stores in Terms of Territory, Consumer Preference
and Product Life Cycle
This section presents ways on how the convenience stores in Batangas City
estimate their sales. Estimating Sales is defined as a prediction of a businesss units
and sales for some future period of time, up you several years or more. It is the
managements primary tool for predicting the volume of attainable sales. Managers
prepare this to determine the type and level of demand for both current and potential
new products. Estimating sales may be general if they calculate aggregate sales
attainable in an industry. Conversely, estimating may be very specific, detailing data by
individual products, sales territories, types of customers and so forth.
The following focus on how convenience stores estimate their sales in terms of
territory, consumer preference and product life cycle.
1.1 Territory. Territory is the customer group or geographical area for which an
individual salesperson or a sales team holds responsibility. Territories can be defined on
the basis of geography, sales potential, history, or a combination of factors. Companies
strive to balance their territories because this can reduce costs and increase sales.
Table 3 shows that knowing presence of competitors has the weighted mean of
3.33 while knowing the number of population within the territory has the weighted mean
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of 2.88. Having sufficient sales people in your territory has the weighted mean of 3.00,
achieving appropriate balance among customer group has the weighted mean of 3.08
and implementing policies in particular territory in estimating sales has the weighted
mean of 3.17. The overall composite mean is 3.09 with the verbal interpretation of
Moderate Extent. This indicates that territory moderately affects the estimating salesof a
convenience store; which means managers of convenience stores must be considered
territory in sales estimating. It is because territory for a business is one of the most
important decisions to make and can affect many aspects of how it operates, such as
total sales and how costly it is to run and also the territory must be easily accessible and
provide the customer with a feeling of safety.
Territories can be defined on the basis of geography, sales potential, history, or a
combination of factors. Companies strive to balance their territories because this can
reduce costs and increase sales.
Sales potential forecast can be used to determine sales targets and to help
identify territories worthy of an allocation of limited resources. A sales potential forecast
is a forecast of the number of prospects and their buying power. It does not assess the
likelihood of converting potential accounts. Sales potential can be represented in a
number of ways. Of these, the most basic is population, i.e., the number of potential
accounts in a territory (https://en.wikipedia.org/wiki/Sales_territory).
Table 3
Weighted Mean and Verbal Interpretation of Territory and its Effect on Estimating
Sales of Convenience Stores
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Territory
1. Having sufficient sales people in your
territory
Weighted
Mean
3.00
Verbal
Interpretation
Moderate Extent
2.88
Moderate Extent
3.17
Moderate Extent
3.08
Moderate Extent
3.33
Moderate Extent
2. Knowing the number of population within

the territory
3. Implementing policies in particular territory
in estimating sales
4. Achieving appropriate balance among
customer group
5. Knowing presence of competitors
Composite Mean
3.09
Legend: Scale Range

1.00 1.49
1.50 2.49
2.50 3.49
3.50 4.00
Moderate Extent
Verbal Interpretation
No Extent at All
Slight Extent
Moderate Extent
To a Great Extent
1.2 Consumer Preference. Consumer preferences are defined as the subjective

(individual) tastes, as measured by utility, of various bundles of goods. They permit the
consumer to rank these bundles of goods according to the levels of utility, or the total
satisfaction of consuming a good or service. It analyzes how consumers maximize the
desirability of their consumption as measured by their preferences subject to
limitations
on
their
expenditures,
by
maximizing
utility
subject
to
consumer budget constraint.

Table 4 shows that knowing consumers order of their preference has the
weighted mean of 3.29, conducting survey in order to estimate sales and identifying
personal factors such as age, lifestyle, etc. of each consumer affect estimating the
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sales, they both has the weighted mean of 2.83, identifying prior demand of customers
has the weighted mean of 3.21 and the buying habits of customer, with the weighted
mean of 3.17. The overall composite mean is 3.07 verbally interpreted as Moderate
Extent. This indicates that consumer preference moderately affects the estimating sales
of a convenience store which means that managers of convenience stores should
consider also the importance of knowing the preferences of their customers in order to
determine which products are in demand and which are not. Businesses need accurate
information about changes in consumer preferences to maximize sales.
Consumer preferences describe the reasons for the people make when selecting
products and services. Analyzing the factors that determine consumer preferences
helps businesses target their products towards specific consumer groups, develop new
products and identify why some products are more successful than others. These
includes advertising, social institutions, cost, consumer income and available substitute.
(http://www.ehow.com/info_8116011_factors-affecting-consumerpreferences.html)
The
individual consumer has a set of preference and values whose determinations are
outside the field of economics. It measured in terms of satisfaction the consumer
obtains from consuming various combinations or bundles of goods.
Table 4
Weighted Mean and Verbal Interpretation of Consumer Preference and its Effect
on Estimating Sales of Convenience Stores
Weighted
Mean
3.17
2.83
Consumer Preference
1. Buying habits of customer
2. Conducting survey in order to estimate
sales
40

Verbal
Interpretation
Moderate Extent
Moderate Extent
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3.21
Moderate Extent
2.83
Moderate Extent
3.29
Moderate Extent
3. Identifying prior demand of customers

4. Identifying personal factors such as age,
lifestyle, etc. of each consumer affect
estimating the sales
5. Knowing consumers order of their
preference
Composite Mean
3.07
Legend: Scale Range

1.00 1.49
1.50 2.49
2.50 3.49
3.50 4.00
Moderate Extent
No Extent at All
Slight Extent
Moderate Extent
To a Great Extent
1.3 Product Life Cycle. Product life cycle is the cycle through which every product
goes through from introduction to withdrawal or eventual demise. Stages are:
Introduction: When the product is brought into the market. Here, there's heavy
marketing activity, product promotion and the product is put into limited outlets in a few
channels for distribution. Sales take off slowly in this stage. The need is to create
awareness, not profits. The second stage is growth. In this stage, sales take off, the
market knows of the product; other companies are attracted, profits begin to come in
and market shares stabilize. The third stage is maturity, where sales grow at slowing
rates and finally stabilize. Products get differentiated, price wars and sales promotion
become common and a few weaker players exit. The fourth stage is decline. Here,
sales drop, as consumers may have changed. Product is no longer relevant or useful.
Price wars continue, several products are withdrawn and cost control becomes the way
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out
for
most
products
in
this
stage
(http://economictimes.indiatimes.com/definition/Product-Life-Cycle)
Table 5 shows that determining good description of product if whether they have
stocks of product has the weighted mean of 3.71 and understanding the stages of your
products according to product life cycle with the weighted mean of 3.50, which both has
the verbal interpretation of to a Great Extent. It means that the concept of product life
cycle has a big role in business because its useful in measuring the state of a product
in correlation to the expectations of the consumers and it will help to identify when
products should be ordered or not. It is an ideal tool that enables forecast future sales.
Establishing relationship between the factors depends directly on the maturity of
a product in the market has the weighted mean of 3.46, comparing last year sales of a
particular product with the weighted mean of 3.38 and requiring executive insights in
order to know the stages of the product with the weighted mean of 3.33, which all has
the verbal interpretation of Moderate Extent. The overall composite mean is 3.48 and
the verbal interpretation of Moderate Extent. This indicates that product life cycle still
moderately affects the estimating sales of a convenience store; thus those factors
havent too much impact on estimating sales because it is not necessary for the
convenience stores to compare last year sales and required executive insight in order to
provide accurate and reliable sales estimate.
Table 5
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Weighted Mean and Verbal Interpretation of Product Life Cycle and its Effect on
Estimating Sales of Convenience Stores
Product Life Cycle
1. Comparing last year sales of a particular
product
Weighted
Mean
3.38
Verbal
Interpretation
Moderate Extent
3.50
Great Extent
3.71
Great Extent
3.33
Moderate Extent
3.46
Moderate Extent
2. Understanding the stages of your products

according to product life cycle
3. Determining good description of product if
whether they have stocks of product
4. Requiring executive insights in order to
know the stages of the product
5. Establishing relationship between the
factors depends directly on the maturity of
a product in the market
Composite Mean
Legend: Scale Range
1.00 1.49
1.50 2.49
2.50 3.49
3.50 4.00
3.48
Moderate Extent
No Extent at All
Slight Extent
Moderate Extent
To a Great Extent
As products move from the growth stage to the maturity phase, the primary
motive is improving sales to maximize profits. Even though demand for products at this
moment may naturally level off, the companies may spend less on advertising and
promotion. This is because when products reach the maturity phase, the companys
brand awareness is already well-established in the marketplace. The product life cycle
is an integral process in management of any product and revolves around the
introduction, growth, maturity and decline stages. For emerging businesses, the cycle
concept is an ideal tool that enables marketers to forecast future sales and plan new
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marketing
strategies
(http://yourbusiness.azcentral.com/objectives-product-life-cycle-
14585.html).
2. Inventory Management of Convenience Stores in Terms of Time and Size of Order,

Demand of Customers and Procedures adapted by the Business
This section of the research deals with how convenience stores manage their
inventory in different terms, that is, time and size of order, demand of customers and
procedures adapted by the business. PAS 2 defined inventories as assets, which are
held for sale in the ordinary course of business, in the process of production for such
sale or in the form of materials or supplies to be consumed in the production process or
in the rendering of services (Valix and Peralta, 2013).
2.1 Time and Size of Order. Inventory management determine when to order and how much
to order. Management should warrant a good inventory system because the effects of
mismanagement of inventory could result in the following: (a) Under-stocking and (b)
Over-stocking. With these possible effects, inventory should be taken with utmost care
and must address two major concerns: Timing of order and size of order (Anastacio, et.
al., 2010).
Table 6 shows that updating the time and size of order daily has the weighted
mean of 3.67, controlling the time and size of order has the weighted mean of 3.63,
making reasonable estimates of inventory ordering cost and using well created units of
measuring like pcs., lbs., etc. Will make stock better to organize has the mean of
3.50 and all of these have the verbal interpretation of to a Great Extent. While using a
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system to keep track of the inventory has a weighted mean of 3.41 and verbal
interpretation of Moderate Extent. The overall composite mean is 3.54 and verbal
interpretation of to a Great Extent. This indicates that time and size of order greatly
affects the inventory management of convenience store; thus significant consideration is
needed.The greater the size of order or the lower the order placement, the larger the
average stock level held in storage on the basis of order quantity. It also know which
special orders sell on occasion and have those products available in a limited quantity
to keep the inventory costs down and to develop a positive reputation for quickly filling
special orders.
Table 6
Weighted Mean and Verbal Interpretation of Time and size of order and its Effect
on Inventory Management of Convenience Stores
Time and size of order
1. Using a system to keep track of the
inventory
Weighted
Mean
3.42
Verbal
Interpretation
Moderate Extent
3.50
Great Extent
3.50
Great Extent
3.67
Great Extent
3.63
Great Extent
3.54
Great Extent
2. Making reasonable estimates of inventory

ordering cost
3. Using well created units of measuring like
pcs,lbs, etc. will make stock better to
organize
4. Updating the time and size of order daily
5. Controlling the time and size of order
Composite Mean
Legend: Scale Range
1.00 1.49
1.50 2.49
2.50 3.49
No Extent at All
Slight Extent
Moderate Extent
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3.50 4.00
To a Great Extent
The data in table 6 reveal that using making reasonable estimates of inventory
ordering cost, using well created units of measuring like pcs, lbs, etc. , updating the
time and size of order daily and controlling the time and size of order would greatly
affect the inventory management of convenience stores. It means that the greater the
size of order or the lower the order placement, the larger the average stock level held in
storage on the basis of order quantity. It also know which special orders sell on
occasion and have those products available in a limited quantity to keep the inventory
costs down and to develop a positive reputation for quickly filling special orders.
To effectively manage the inventory one must have reasonable estimates of
inventory holding cost, ordering cost and shortage cost and knowledge of lead time
(Anastacio, et. al., 2010). Lead time is the time that elapses between the placing of an
order (either a purchase order or a production order issued to the shop or the factory
floor) and actually receiving the goods ordered. If a supplier cannot supply the required
goods on demand, and then the client firm must keep an inventory of the needed goods.
The longer the lead time, the larger the quantity of goods the firm must carry in
inventory
(http://www.referenceforbusiness.com/management/Int-Loc/Inventory
Management.html)
2.2. Demand of Customer. Discerning customer demand is a critically important
and continuous process. Companies routinely obtain information from market research,
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such as customer surveys and test-marketing campaigns, and through feedback from
sales personnel (Hilton, 2008).
Table 7 shows that making reliable forecast of customer demand has the
weighted mean of 3.54 and verbal interpretation of to a Great Extent. While having a
sales representative has the weighted mean of 3.13, making plan related in the number
of their customers has the weighted mean of 3.21, considering customers opinion on
the product has the weighted mean of 3.38 and setting up strategic goals for service
level to create customers demand has the weighted mean of 3.46 and all of these have
a verbal interpretation of to Moderate extent. The overall composite mean is 3.34 and
verbal interpretation of Moderate Extent. This indicates that demand of customers
moderately affects the inventory management of convenience stores. It means that the
demand of customers should consider in managing inventory of convenience stores to
have the flexibility in their supply chain to reduce/increase inventory level as demand
changes. Businesses that excel at managing inventory have a strong understanding of
demand.
Table 7
Weighted Mean and Verbal Interpretation of Demand of customers and its Effect
on Inventory Management of Convenience Stores
Demand of customers
1. Making reliable forecast of customers
demand
Weighted
Mean
3.54
Verbal
Interpretation
Great Extent
3.38
Moderate Extent
2. Considering customers opinion on the

product
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3. Having a sales representative
4. Making plan related in the number of their
customers
3.13
3.21
Moderate Extent
Moderate Extent
5. Setting up strategic goals for service level

to create customers demand
Composite Mean
3.46
Moderate Extent
3.34
Legend: Scale Range

1.00 1.49
1.50 2.49
2.50 3.49
3.50 4.00
Moderate Extent
No Extent at All
Slight Extent
Moderate Extent
To a Great Extent
The data in table 7 indicate that making reliable forecast of customers demand
would greatly affect the inventory management of convenience stores. Proper Inventory
Management process requires a reliable demand forecast of demand that allows
calculating proper orders, reconciling the cost of these orders with the buyers open-tobuy budgets, and working out appropriate allocation and replenishment quantities
(http://www.retalon.com/retalon-solutions/inventory-management-solutions).
There are steps in developing a reliable demand forecast: (1) Understand historic
demand and look at the drivers that influence demand; (2) Monitor market trends. Avoid
the tendency to make decisions based simply on media information, and instead
become intimately aware of the dynamics of your marketplace. This can be done
through continuous communication with friendly competitors, customers, bankers, and
other individuals who are attuned to your marketplace. (3)Identify and track key
indicators. Maintaining a view of the changing demographics in your sales regions can
create
good
window
into
your
future
demand
(http://ww2.cfo.com/growth-
strategies/2011/10/three-tips-for-creating-a-reliable-demand-forecast/).
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The data in table 7 indicate also that considering customers opinion on the
product, having a sales representative, making plan related in the number of their
customers and setting up strategic goals for service level to create customers demand
would have moderate affect in inventory management of convenience stores. One of
the functions of inventory management is to meet consumers demand. Creating a
successful forecast demand ensures that you have enough inventory for the upcoming
sales period. A demand forecast looks at sales data from the past to determine the
consumer demand in the future. With an accurate demand forecast, you will have
operations that are more efficient, better customer service, and a reduced lead time on
manufacturing products. An accurate demand forecast will help you avoid high cost
operations,
poor
customer
service,
and
shortage
of
product
(http://www.wikihow.com/Forecast-Demand).
2.3 Procedures adapted by the business. The Inventory Management Policy and
Procedure minimizes inventory and costs of inventory ownership. The Procedure
ensures the best inventory practices are employed and align with overall company
financial objectives and meet operational needs. It applies to all departments involved in
managing inventories including the Finance, Accounting, Purchasing, Sales and
Operations (http://www.bizmanualz.com/shop/inventory-management-policy-procedure).
Table 8 shows that providing adequate facilities for handling storage of inventory
has the weighted mean of 3.63 and verbal interpretation of to a Great Extent, while
using of bar code technology/swiping has the weighted mean of 3.21 and verbal
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interpretation of Moderate Extent. Assigning appropriate number of employees has the
weighted mean of 3.46 and verbal interpretation of Moderate Extent. The overall
composite mean is 3.48 and verbal interpretation of Moderate Extent. This indicates that
procedures adapted by the business moderately affect the inventory management of
convenience stores. An equable consideration is needed.
Table 8
Weighted Mean and Verbal Interpretation of Procedures adapted by the business
of order and its Effect on Inventory Management of Convenience Stores
Weighted
Mean
3.54
Verbal
Interpretation
Great Extent
2. Providing adequate facilities for handling

storage of inventory
3.63
Great Extent
3. Assigning appropriate number of

employees
3.46
Moderate Extent
4. Conducting periodic inventory cost

5. Using of bar code technology/swiping
Composite Mean
3.54
3.21
3.48
Great Extent
Moderate Extent
Moderate Extent
Procedures adapted by the business

1. Establishing processing and recording
procedure
Legend: Scale Range

1.00 1.49
1.50 2.49
2.50 3.49
3.50 4.00
No Extent at All
Slight Extent
Moderate Extent
To a Great Extent
The data in table 8 shows that establishing processing and recording procedure,
providing adequate facilities for handling storage of inventory and conducting periodic
inventory cost would have greatly affect in inventory management of convenience
stores. According to Maulion et. al.,2004, the management should consider the quantity
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of inventory that the business handles in choosing the period of conducting physical
count. And the accountants or auditors must be aware of the procedures affecting
inventory.
The Inventory Process Procedure outlines guidelines for controlling inventory
stock for ultimate salability, usability and traceability, and ensuring efficient selection and
delivery of products.
The data in table 8 shows also that assigning appropriate number of employees
and using of bar code technology/swiping would moderately affect inventory
management of convenience stores. Codes, including barcodes, can make the whole
process much easier but it can still be quite time-consuming. Checking stock more
frequently - a rolling inventory - avoids a massive annual exercise, but demands
constant attention throughout the year. Radio Frequency Identification (RFID) tagging
using handheld readers can offer a simple and efficient way to maintain a continuous
check on inventory. With regard to employees, managers should train staff about
security systems and disciplinary policies and procedures. Training about the cost of
stock theft will help, as many people aren't aware of the implications for company
turnover and job security (http://www.infoentrepreneurs.org/en/guides/stock-control-andinventory/).
3. Effect of Estimating Sales to Inventory Management of Convenience Stores in Batangas

City.
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This section answers the third objective of the study. The significant effect of
estimating sales to inventory management of convenience stores in Batangas City was
investigated by matching the independent variables: territory, consumer preference and
product life cycle with the dependent variables: time and size of order, demand of
customer and procedures adapted by the business. The hypothesis of the study posted
in the introductory part was tested in the part of this paper. The Pearson R was used to
test the hypothesis that territory, consumer preference and product life cycle has
significant effect to inventory management. The aforementioned method was said to be
the most appropriate and applicable method in order to come up with the reliable
results. The results are presented in Tables 9, 10 and 11. Table 9 shows the Pearson
correlation and the corresponding verbal interpretation of the effect of estimating sales
to the inventory management of convenience stores in terms of time and size of order.
The first and perhaps most important key to better estimating is a complete
understanding of what it actually is and-of equal importance what it is not. A sale
estimating is a management process, not a computer program. This distinction is
important because it affects so many areas across an organization. Regardless of
whether business sells goods or services, it must have a clear picture of how many of
those goods or services it can sell, in both the short and long terms. That way, it can
plan to have an adequate supply to meet customer demand. Estimating is critical to a
business production or operations department. Adequate materials must be obtained at
the lowest possible price; adequate production facilities must be provided at the lowest
possible cost; adequate labor must be hired and trained at the lowest possible cost; and
adequate logistics services must be used to avoid bottlenecks in moving products from
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producers to consumers. None of these fundamental business functions can be
performed effectively without accurate sales forecasts.
Sufficient capacity must be maintained to produce planned volume of goods. The
production capacity should be assessed and coordinated to avoid shortage (Russell,
2000). Maximum capacity and demand are determination productive scheduling to
avoid excess production that would hamper inventory level management.
Table 9 shows that the following: territory, consumer preference and product life
cycle has a Pearson correlation of 0.484, 0.636 and 0.771 correspondingly, all of which
verbally translate to significant because these three factors should have to be
considered in making sales forecast. The more accurate the sales forecast the better
prepared your business will be to manage its inventory.
Table 9
Pearson Correlation and Verbal Interpretation of the Effect of Estimating Sales to
Inventory Management in terms of Time and Size of Order
Time and Size of
Order
Territory
Pearson
Correlation
0.484
p-value
Significance
0.016
Consumer
Preference
0.636
0.001
Product Life
Cycle
Legend:
0.771
<0.001
S Significant
NS Not Significant
Territory is significant in inventory management in terms of time and size of order

because influences the size and quality of a businesss target customer base, which in
turn affects sales forecast predictions. Time of order is the time elapsing between the
submittal of requisition or order and shipment of material by the supplying activity. Size
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of order is the volume or amount of the product that you will order. Convenience stores
must know the presence of competitors in their territory in order to set the time and size
of order properly so that the store can prevent under stocking or overstocking of goods.
Product life cycle is significant in inventory management in terms of time and size
of order because its not enough to just have the right number of products in stocks you
also need to know how long you should selling them. The product life cycle
management needs to become just as important as your inventory management in the
beginning of a products life, its best to keep inventory and production levels low so it
wont be too hard to make changes to the product. As early adopters start to pay
attention to the product and spread the word, theyll need to slowly raise the inventory
levels to keep up with the new found demand. As it grow into new markets, it will need
to optimize inventory levels in multiple locations to make sure they have enough
products in each location to meet demand. Its critical to keep delivery times short and
manufacturing lines running to stay ahead of the competition.
Consumer preference is also significant in estimating sales in terms of time and
size of order. In the psychology literature, preferences can be regarded as an
individuals attitude towards a set of objects, typically reflected in an explicit decisionmaking process. It explains that evaluative judgement in the sense of liking or disliking
an object, which is the most distinctive definition used in psychology. Nevertheless, it
does not mean that a preference is inevitably constant over time. Preference can be
notably modified by decision-making processes, such as choices, even in an
unconscious way. Customer preference can be defined as tending to indicate choices
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among neutral or more valued options with acceptance indicating a willingness to
tolerate the status quo or some less desirable option. Why do people sometimes act
inconsistently over time engaging behaviour that would have been rejected if
contemplated in advance and that may be regretted after the fact? This question has
puzzled generations of social scientists. One view, espoused by Marshall (1890) in the
opening quote, is that time-inconsistent behaviour arises from unpredictable changes in
moods and tastes.
Product life cycle is significant to estimating sales in terms of time and size of
order because it can affect the availability and hence the ability to use past sales data
for statistical forecasting. It means that the availability of data and possibility of
establishing relationships between the factors depend directly on the maturity of a
product, and hence the life cycle stage is a prime determinant of the forecasting method
to be used. It must consider the stage of the PLC for which it is making the forecast.
Table 10 show the Pearson correlation and the corresponding verbal
interpretation of the effect of estimating sales to inventory management of convenience
store in terms of demand of customers. The following: territory, consumer preference
and product life cycle has the Pearson correlation of 0.496, 0.626 and 0.857
correspondingly, all of which verbally interpreted as significant.
Table 10
Inventory Management in terms of Demand of Customers
Demand of
Customers
Pearson
Correlation
p-value
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Significance
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Territory
0.496
0.014
Consumer
Preference
0.626
0.001
Product Life
Cycle
Legend:
0.857
<0.001
S Significant
NS Not Significant
Territory in inventory management is significant in terms of demand of customers

because it helps in achieving the greater number of target consumers that will result in
gaining more profits.
Product life cycle in inventory management is significant in terms of demand of
customers because it helps in knowing what products are going to produce, phase out
and improve. It means that managers need to have product life cycle in order to
appropriately plan the corresponding levels of production, inventory, sales staff,
distribution, marketing, and advertising. It is one of the major demand patterns that need
to be accounted for in order to maintain the desired inventory levels.
Consumer Preferences in inventory management is significant in terms of
demand of customers becausethe consumer be able to rank the products according to
the amount of satisfaction obtained from them.By predicting sales, managers can more
accurately plan for what products needed. It allows to make informed decisions about
what consumers need, how much they need and when they need the product to avoid
over stock and have products go bad . In other words, the consumer has different
preferences over the different combinations of goods defined by the set of commodity
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bundles. The level at which a customer desires your product can affect the demand of
customers. As more customers want a product or service, the demand increases, and
as they want it less, the demand decreases. The level of inventory can change
depending on the season, types of advertising they see or information they receive from
friends and family.
Table 11 show the Pearson correlation and the corresponding verbal
interpretation of the effect of estimating sales to inventory management of convenience
store in terms of demand of customers. The following: territory, consumer preference
and product life cycle has the Pearson correlation of 0.556, 0.579 and 0.729
correspondingly, all of which verbally interpreted as significant.
Table 11
Inventory Management in terms of Procedures adapted by Business
Procedures
adapted by
Business
Territory
Pearson
Correlation
p-value
Significance
0.556
0.005
Consumer
Preference
0.579
0.003
Product Life
Cycle
Legend:
0.729
<0.001
S Significant
NS Not Significant
4.
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Introduction
Sales forecasting is the prediction of future performance based on available
information about past performance. The forecast that your sales force provides is the
source of information that allows managing virtually all aspects of your business. It is
much easier than you think and much more useful than you imagine. Businesses that
uses sales forecasting tends to perform better than those that dont.
If there is no production limitation, the sales forecast serves as the starting point
in the preparation of the master budget plan. It is even considered as the cornerstone or
foundation of budgeting because all the other budgets in the entire master plan depend
upon it, either directly or indirectly. There are factors to consider in making a sales
forecast: the companys past sales volume; economic and political conditions;
conditions in the industry top which the company belongs; competition; market research
studies; pricing policies of the firm as well as those of the competitors; government
control and regulations affecting the company; the companys own sales and its planned
advertising and promotional activities; the companys productive capacity and other
limitations affecting productions; and the change in demand for the product due to
seasonal variations (Management Advisory Services, Rodelio S. Roque).
Being the foundation of budgeting, the sales forecast plays a very important role
in the development of the master budget plan. As mentioned earlier, all the other
budgets in the entire master plan depend upon it. Hence, extra care should be
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exercised in making a sales forecast, since any gross overstatement or understatement
bin the sales forecast might about the same errors in the master budget plan.
Objective
Sales forecasting provides a business with a set of predictions about the kinds of
sales it can expect on a month-to-month basis, typically within a one-year timetable.
Many sales forecasts use statistical data and techniques, such as regression analysis,
to make predictions. Other approaches make educated guesses about how current
economic and social trends will play out in the future and the impact of those trends on
sales. A sales forecast helps businesses manage several key objectives.
to make reasoned decisions about how to spend

to determine appropriate staffing levels for those periods
to make tentative plans for materials purchasing and production levels

to show what kind of return on investment the business is likely to
generate for potential investors
The first objective explains about budgeting while a sales forecast only offers a
prediction, it allows the business owner to use the forecast to set a static budget for
each month that covers payroll, rental costs and utilities in order to keep valuable staff
during low profit periods. The business owner also can use the forecast to plan
implementation of an expensive change initiative right after a peak sales period,
because the business can ensure enough working capital to support the project . The
second objective is for seasonal businesses that experience a large upswing in demand
only at certain times, the sales forecast can help to determine appropriate staffing levels
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for those periods. Tax preparation services; see heavy demand in the spring. If the
forecast calls for double the sales in the spring, the business might hire one additional
person, while a forecast of quadruple the sales might call for two or three additional staff
members. In other cases, an anticipated slow period may lead the owner to trim hours
across the board, rather than reducing total staff . The third objective explains about the
businesses can use sales forecasts to make tentative plans for materials purchasing. If
there is a predictable drop-off in demand during summer months and a correlated drop
in material costs due to lower demand, the business might reduce production levels and
increase material purchasing during those months. Some businesses choose to use
predictable downtime to increase available stock as preparation for anticipated
upswings in sales. And the last objective tells that sales forecast also can help business
owners secure additional funding. Unlike the present value of a business, typically
based on assets, the sales forecast helps to show what kind of return on investment the
business is likely to generate for potential investors. A sales forecast that shows
projected sales in excess of the present value of the business makes a strong argument
for investing, since the investors can anticipate a higher return on investment .
A manager generally assumes that when asking a forecaster to prepare a
specific projection, the request itself provides sufficient information for the forecaster to
go to work and do the job. This is almost never true. Successful forecasting begins with
a collaboration between the manager and the forecaster, in which they work out
answers to the following questions. What is the purpose of the forecasthow is it to be
used? This determines the accuracy and power required of the techniques, and hence
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governs selection. Deciding whether to enter a business may require only a rather gross
estimate of the size of the market, whereas a forecast made for budgeting purposes
should be quite accurate. The appropriate techniques differ accordingly.
In the narrow sense, the objective of forecasting is to produce better forecasts.
But in the broader sense, the objective is to improve organizational performancemore
revenue, more profit, increased customer satisfaction. Better forecasts, by themselves,
are of no inherent value if those forecasts are ignored by management or otherwise not
used to improve organizational performance.
Rationale
In virtually every decision they make, managers today consider some kind of
forecast. Sound predictions of demands and trends are no longer luxury items, but a
necessity, if managers are to cope with seasonality, sudden changes in demand levels,
and price-cutting maneuvers of the competition, strikes, and large swings of the
economy. Forecasting can help them deal with these troubles; but it can help them
more, the more they know about the general principles of forecasting, what it can and
cannot do for them currently, and which techniques are suited to their needs of the
moment, potential of forecasting to managers, focusing special attention on sales
forecasting for products as these have matured through the product life cycle, also
included is a rundown of forecasting techniques. To handle the increasing variety and
complexity of managerial forecasting problems, many forecasting techniques have been
developed in recent years. Each has its special use, and care must be taken to select
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the correct technique for a particular application. The manager as well as the forecaster
has a role to play in technique selection; and the better they understand the range of
forecasting possibilities, the more likely it is that a companys forecasting efforts will
bear fruit.
The selection of a method depends on many factorsthe context of the forecast,
the relevance and availability of historical data, the degree of accuracy desirable, the
time period to be forecast, the cost/ benefit (or value) of the forecast to the company,
and the time available for making the analysis. These factors must be weighed
constantly, and on a variety of levels. In general, for example, the forecaster should
choose a technique that makes the best use of available data. If the forecaster can
readily apply one technique of acceptable accuracy, he or she should not try to gold
plate by using a more advanced technique that offers potentially greater accuracy but
that requires nonexistent information or information that is costly to obtain. This kind of
trade-off is relatively easy to make, but others, as we shall see, require considerably
more thought.
A good sales forecast has the following attributes; it takes into account relevant
sales and inventory histories, to identify extraordinary sales and inventory levels and
any other unusual patterns; it drills down to the department, category and sub-category
level, as appropriate, to identify opportunities and trends, as well as the potential
impacts of increased competition, emerging technology, changes in promotional
patterns and new product introductions; it rolls up from the subcategory, category and
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department levels to a total forecasted sales increase that can be tested against the
realistic expectations of what can be actually achieved; it plans in both units and sales
dollars, so that the plan is well balanced between unit sales and the average selling
price of each unit sold; it is dynamic, so that it can be continually updated and adjusted
as each month passes and additional information is developed; it identifies the most
likely level of sales for any given month, not the level that might be possible if things
broke just right. As a result, it has a bias toward a flat sales forecast for any given
department, category or subcategory, unless there is specific reason to forecast an
increase or decrease (http://www.hurlbutassociates.com/retail-perspectives)
Monitoring and Control
The sales forecasting procedures applied by companies differ from one firm to
another, depending on the companys budgetary system, organizational structure,
objectives, and other factors that affect the budgeting process. Such varying procedures
may, however be generalized into two basic approaches: the statistical approach and
the internal estimates approach.
The statistical approach involves the study of general business and market
conditions with the use of trend and correlation analyses; the trend analysis for
instance, assume that the convenience store had the following sales for the past three
years; 2012-1,500 units, 2013-1,800 units, 2014-2,160 units; using trend analysis it may
be observed that the sales increased by 20% for each year. Assuming that thev general
market and business conditions indicate that the trend will continue for the year 2015,
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the sales forecast for such year may be placed at 2,592 units (2,160 x 120%). The next
one is the correlation analysis ; in this analysis, a change in one number is forecasted in
terms of a change in another number, if an identifiable association or relationship exists
between those two numbers. In sales forecasting, correlation analysis is applied by
associating sales with another figure, which is considered as a market or economic
indicator that bears an identifiable relationship with sales.
The second one is the internal estimates approach requires the participation of
all personnel concerned in the budgeting process. In some businesses, sales estimate
originate from the salesmen (or account executives). Accordingly, these salesmen are
the best source of sales forecasting data because they are the ones who deal directly
with the customers, hence; they know what is really going on in the market in relation to
the companys products.
Each salesman makes his own sales estimate per product, customer type, area
or territory, or any other classification that may prove useful for purposes for preparing
the sales forecast. These estimates are then submitted to the salesmens immediate
sales supervisor. The sales supervisor summarize and adjust these estimates and
submit the same to their manager, and so on, up to the highest or chief sales officer,
who in turn summarizes and adjusts such estimates, considering all the internal and
external factors affecting sales forecasts. The adjusted sales forecast becomes the
basis for preparing the formal sales budget for the company as whole. This procedure is
called the sales staff procedure since it involves mostly the sales personnel.
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Another internal estimates approach used by companies is the so called group
executive judgment. In this case, a committee is formed, composed of top company
officers or executives engaged in production, sales, finance, purchasing, credit and
collection and other segment of the administration. These committee members forecast
sales by sharing their ideas, knowledge, experiences and other pertinent data from their
respective segments. The formal sales budget is developed based on the sales forecast
prepared by the group (Management Advisory Services, Rodelio S. Roque).
Again, if the forecast is to set a standard against which to evaluate
performance, the forecasting method should not take into account special actions, such
as promotions and other marketing devices, since these are meant to change historical
patterns and relationships and hence form part of the performance to be evaluated.
Forecasts that simply sketch what the future will be like if a company makes no
significant changes in tactics and strategy are usually not good enough for planning
purposes. On the other hand, if management wants a forecast of the effect that a
certain marketing strategy under debate will have on sales growth, then the technique
must be sophisticated enough to take explicit account of the special actions and events
the strategy entails.
In other words, everything starts with a good solid sales forecast. From there, we
can plan how much inventory well need to have to support that plan. Only then can we
determine accurately how much inventory well need to buy.
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Effective inventory management begins with a carefully developed sales
forecast. Only then can inventory levels be planned, and merchandise receipts
scheduled throughout the season. This is the key to eliminating both out-of-stocks and
over-stocks.
CHAPTER 5
SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
This chapter presents the summary, findings, conclusions and recommendations
of the researchers regarding the analysis of the effects of estimating sales to inventory
management of convenience stores in Batangas City.
Summary
This study intended to determine the effects of estimating sales to inventory
management of convenience stores in Batangas City.
Specifically, this study sought answers to the following questions:
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1. How do convenience stores estimate their sales in terms of:
1.1. Territory;
1.2. Consumer preference, and
1.3. Product life cycle?
2. How do convenience stores manage their inventory in terms of:
2.1. Time and size of order;
2.2. Demand of customers, and
2.3. Procedures adapted by the business?
3. Is there any significant effect of estimating sales to inventory management of
convenience stores in Batangas City?
4. What guidelines on estimating sales may be proposed to utilize the inventory
management of convenience stores in Batangas City?
The researchers applied the descriptive method of research to determine and
analyze the effects of estimating sales to inventory management of convenience stores
in Batangas City. This study covered twenty four (24) convenience stores. In order to
gather the necessary data a self-constructed questionnaire was utilized. The
questionnaire was divided into two parts: (1) profile of the participants and the business
and (2) questionnaire proper which is composed of information on effects of estimating
sales to inventory management of convenience stores.
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The researchers used the percentage distribution for interpreting the profile of the
participants and business and Pearson correlation for determining the hypothesis
formulated is accepted or rejected.
Findings
From the information gathered and analyzed, the study revealed the following
findings:
1 Estimating Sales of Convenience Stores

Territory. Convenience stores in Batangas City have a moderately extent in estimating
sales in terms of territory. It gained the composite mean of 3.09. This means that having
sufficient sales people,knowing the number of population, implementing policies in
estimating sales,achieving appropriate balance among customer group and knowing the
presence of competitors are considered in estimating sales in territory.

Consumer Preference. Based on the data gathered, the estimating sales of the
participants in terms of consumer preference is 3.07 composite mean. This means that
the participants were able to identify or know the prior demands of customers.
Product Life Cycle. The estimating sales of product life cycle of convenience store is
moderately extent. It gained the composite mean of 3.48 this means comparing last
year sales of products, understanding the stages of the products, determining a good
description of products, requiring and establishing the maturity of the products in the
market are considered in the inventory management of the convenience stores.
2 Inventory Management of Convenience Stores

1 Time and Size of Order. Convenience stores in Batangas City have great extent
inventory management in terms of time and size of order. It gained the composite
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mean of 3.54. This means that using system to keep track of inventory, making
reasonable estimates of inventory ordering cost, using well-created units of measuring,
updating and controlling of the time and size of order are considered in the inventory
management of convenience stores.
2 Demand of customers. Based on the data gathered, the inventory management of the
participants in terms of demand of customers is 3.34 composite mean. This means that
the participants were able to set up goals for service level and make reliable forecast of
customers demand.
3 Procedures adapted by the business. Based on the data gathered, the inventory
management of the participants in terms of procedures adapted by the business is 3.48
composite mean. This means that the participants are establishing procedure,
providing adequate facilities for handling storage of inventory, assigning appropriate
employee, conducting periodic inventory cost, and using bar code of technology.
3 Effects of Estimating Sales to Inventory Management
Based on the data gathered, the effect of estimating sales to inventory
management is on the great extent evidenced by the composite mean of 3.63. This
means that the participants were able to identify the excess/old stock by looking at
sales records to find out which items are good sellers and which are slow moving
dont forget to look at seasonal trends, ensure enough supply of goods, know when
and how much to purchase goods, help to decrease the cost of handling of goods and
maintain logs of inventory movement into and out of the storerooms.
Conclusions
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Based on the information gathered and interpreted, the researchers have
reached the following conclusions.
1 The convenience stores in Batangas City have moderate level of estimating
sales in terms of territory, consumer preference and product life cycle.
2 The convenience stores in Batangas City have moderate level of managing
inventory in terms of time and size of order, the demand of customers and the
procedures adapted by the business.
3 The null hypothesis was rejected. Thus, the participants had different inventory
management in terms of territory, consumer preference and product life cycle
when estimating sales.
Recommendations
The following are humbly recommended by the researchers from the conclusions
derived in this study:
Managers/Owners should conduct an evaluation concerning the basis used in

estimating sales. Such evaluation should focus on how the basis employed helps
in achieving the organizations profit objectives, and because such evaluation
may result in increased revenue, increased customer retention, decreased costs
and increased efficiency.
2 Managers/Owners should focus on all inventory level management as there is no

denying that it is a tricky job because so many factors can affect future sales; by
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determining current stock levels and the value of the stock, managers may use
accounting or stock control software to track individual stock items.
3 Managers/Owners should have an accurate estimate and managing inventory in
terms of the territory, consumer preference and product life cycle of businesses
by having the right level of stock to satisfy customer needs, by working out which
items of stock sold make the most gross margin because it has significant part in
achieving future objectives.
4 Future researches should be conducted on the premises of this study; admittedly,
such issue is addressed on a case-to-case basis, thus, impairing comparability.
Nevertheless, it is important that a follow up study should be carried out to
ascertain the effects of estimating sales to inventory management of
convenience stores in Batangas City.
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Education, Asia Pte Ltd. 2000
B. UNPUBLISHED MATERIALS
Marasigan, Mark Anthony A., Orlina, Madelyn V. and Alvin C.Tatlonghari.The Effects
of Inventory Management Technique to the Pricing Strategies of the
Owners of Grocery Stores in Batangas City, Undergraduate Thesis,
University of Batangas,
2011.
Galit, Sherryl M., MaderazoLilibeth L., and Ronalyn N. Maulion,. Control Procedures
on
Errors and Irregularities in Inventory Management by Feed mill
Companies in
Lipa City, Undergraduate Thesis, University of Batangas,
2004.
Liwag, Karen V., Chavez, Toneonette R. and Mary Joy P. Semira. The Effects of
Inventory Management Control on the Profitability of Merchandising Firms in
Rosario, Batangas University of Batangas, 2003
C. ON-LINE RESOURCES
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&ACCOUNTANCY
http://www.hurlbutassociates.com/retail-perspectives-blog/bid/52261/Sales-Forecastingand-Inventory-Management-for-Independent-Retailers (January 08, 2015)
http://www.businessknowhow.com/money/estimatesales.htm (January 26,2015)
http://smallbusiness.chron.com/estimate-accurate-sales-projections-13704.html
(January 26, 2015)
https://en.wikipedia.org/wiki/Sales_territory (August 12, 2015)
http://economictimes.indiatimes.com/definition/Product-Life-Cycle ( August 12, 2015)
http://www.referenceforbusiness.com/management/Int-Loc/InventoryManagement.html
(August 03, 2015)
http://www.retalon.com/retalon-solutions/inventory-management-solutions (August 03,

2015)
http://ww2.cfo.com/growth-strategies/2011/10/three-tips-for-creating-a-reliable-demandforecast/). August 03, 2015

http://www.wikihow.com/Forecast-Demand August 03, 2015
http://www.bizmanualz.com/shop/inventory-management-policy-procedure (August 03,
2015)
http://www.infoentrepreneurs.org/en/guides/stock-control-and-inventory/.
2015)
(August
03,
http://yourbusiness.azcentral.com/objectives-product-life-cycle-14585.html. (August 27,

2015)
APPENDIX A
LETTER OF INQUIRY
(Office of the Mayor)
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COLLEGE OF BUSINESS
&ACCOUNTANCY
February 11, 2015

HON. EDUARDO B. DIMACUHA
City Mayor
Batangas City
SIR:
We are requesting from your good office to provide us the list of convenience store
operating in Batangas City. The said list will be used in our research for thesis writing
entitled EFFECTS OF ESTIMATING SALES TO INVENTORY MANAGEMENT OF
CONVENIENCE STORES IN BATANGAS CITY.
Hoping for your consideration and favorable action.
Very Truly Yours,
(Sgd)Rhica May H. De Torres

(Sgd)Rhealyn M. Bucal
(Sgd)Krizza Mae R. De Leon
(Sgd)RusselBercasio
Noted by:
(Sgd)Dr. Jesus P. Briones

Research Adviser
APPENDIX B
LETTER OF REQUEST
(RESPONDENTS)
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&ACCOUNTANCY
May 5, 2015
Dear Sir / Madam:
The undersigned are Fourth Year Accountancy students of the University of
Batangas, as a requirement in Research 102, Research Implementation and
Presentation, are conducting a research about EFFECTS OF ESTIMATING SALES TO
INVENTORY MANAGEMENT OF CONVENIENCE STORES IN BATANGAS CITY. In
relation to this, questionnaires will be distributed in gathering data and we have chosen
you to be one of our participants.
We shall appreciate it very much if you could lend little of your time to answer the
questionnaire attached. We assure you that all information gathered will be treated with
confidentiality and will be used only for research purposes.
Thank you very much and we are hoping for your kind response regarding this
matter.
Very truly yours,
(Sgd)Rhica May H. De Torres
(Sgd)Rhealyn M. Bucal
(Sgd)Krizza Mae R. De Leon
(Sgd)RusselBercasio
Noted by:
(Sgd)Mr.Doringer P. Cabrera, CPA, MBA
Research Adviser
APPENDIX C
QUESTIONNAIRE
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The purpose of this survey is to find out the effect of estimating sales to inventory
management of convenience stores in Batangas City. All information is important in
conducting our research. We assume that all answers will be respected and kept
confidential.
Name: ________________________________________
Position: ______________________________________
Name of convenience store: ______________________
Store Address: _________________________________
Telephone Number: _____________________________
Direction: Please read the items below and supply the necessary information.
Put a check ( / ) on the space provided.
I. Personal profile of participant
Age:
( ) 20-25 years old
( ) 26-30 years old
( ) 31-35 years old
Civil status:
( ) 36-40 years old

( ) 40 years old and above
( ) Single
( ) Widower
Gender:
( ) Married
( ) Separated
( ) Male
( ) Female
Highest Educational Attainment:

( ) Elementary
( ) Highschool
( ) Post Graduate
( ) College
( ) Vocational
Others please specify: ___________
Years of service
( ) 5 below
( ) 6-10
( ) 11-20
( ) 21-30
( ) 31-40
( )40 above
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COLLEGE OF BUSINESS
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II. Profile of the Business
Type of Business Ownership:
(
(
(
(
) Sole proprietorship
) Partnership
) Corporation
) Cooperative
Length of Business Operation:

( ) Less than a year
( ) 1-5 years
( ) 6-10 years
( ) 11-15 years
others please specify: ___________
Average Monthly Sales in Peso
( ) 50,000 below
( ) 50,000-100,000
( ) 100,000-500,000
( ) 500,000 above
Number of employees
( ) Below 5
( ) 5-10
( ) 11-15
( ) 16-20
( ) above 20
III. Questionnaire Proper

Direction: Please answer the following questions based on the degree. Please
check ( / ) your answer.
Legend: 4 to a great extent
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COLLEGE OF BUSINESS
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3 to a moderate extent
2 to a slight extent
1 no extent at all
1. How does your convenience store estimate sales in terms of:

1.1. Territory
4
a. Having sufficient sales people in your territory

b. Knowing the number of population within the territory
c. Implementing policies in particular territory in estimating
sales.
d. Achieving appropriate balance among customer group.
e. Knowing the presence of competitors
1.2. Consumer Preference
4
a. Buying habits of customer.

b. Conducting survey in order to estimate sales.
c. Identifying prior demand of customers.
d. Identifying personal factors such as age, lifestyle, etc. of each
consumer affect estimating the sales.
e. Knowing consumer's order of their preference.
1.3. Product Life Cycle

4
a. Comparing last year sales of a particular product.
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COLLEGE OF BUSINESS
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b. Understanding the stages of your products according to
product life cycle.
c. Determining a good description of product if whether they
have stocks of product.
d. Requiring executive insights in order to know the stage of the
product.
e.Establishing relationships between the factors depends
directly on the maturity of a product in the market.
2. How does yourconvenience stores manage inventory in terms of:

2.1. Time and size of order
4
a. Using a system to keep track of the inventory.

b. Making reasonable estimates of inventory ordering cost
c. Using well created units of measuring like pcs, lbs, etc. will
make stock better to organize.
d. Updating the time and size of order daily.
e. Controlling the time and size of order.
2.2. Demand of customers

a. Making reliable forecast of customers demand.
b. Considering customers opinion on the product.
c. Having a sales representative.
d. Making plan related in the number of their customers.
e. Setting up strategic goals for service level to create
customers demand.
2.3 Procedures adapted by the business
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a. Establishing processing and recording procedure
b. Providing adequate facilities for handling storage of
inventory
c. Assigning appropriate number of employees
d. Conducting periodic inventory cost
e. Using of bar code technology/swiping
3. How does estimating sales affect your inventory management?

4
a. Identifying excess/old stock
b. Ensuring enough supply of goods
c. Knowing when and how much to purchase goods
d. Helping to decrease the cost of handling of goods
e. Maintaining logs of inventory movement into and out of the
storerooms
APPENDIX D
LIST OF PARTICIPANTS
1. Seven Eleven 7/11 - Alangilan
2. Seven Eleven 7/11 - P. Burgos
3. Seven Eleven 7/11 - UB
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4. Seven Eleven 7/11 - Terminal II
5. Seven Eleven 7/11 - Pallocan
6. Seven Eleven 7/11 - Balagtas
7. Seven Eleven 7/11 - P. Prieto
8. Quick Stop - Terminal III
9. Berbets Octane
10. Dreaming Forest
11. Petron - P. Burgos
12. Petron - Calicanto
13. Petron - Kumintang
14. Petron - Diversion
15. ZedxianFastbite
16. Lucky Eight
17. Petron - Balagtas
18. Stuff Corner
19. Mini Stop - Kumintang
20. Mini Stop - Alangilan
21. Shell - Pallocan
22. Shell - Cuta
23. Gayuma Pharmacy & Gen. Mdse.
24. Top Star Pharmacy & Trading
CURRICULUM VITAE
RHICA MAY H. DE TORRE
A-80 Poblacion, San Pascual, Batangas
rmhdetorres@gmail.com
+63915-914-9223
81
COLLEGE OF BUSINESS
&ACCOUNTANCY
PERSONAL BACKGROUND
Age
Birthday
Birthplace
Civil Status
Nationality
Languages
:
:
:
:
:
:
19
May 4, 1996
Bauan, Batangas
Single
Filipino
Filipino, English
EDUCATIONAL BACKGROUND
Tertiary
University of Batangas
National Rd, Hilltop, KumintangIbaba, Batangas City
Bachelor of Science in Accountancy
2012 present
Secondary
St. Bridget College Batangas

M.H. Del Pilar St., Batangas City
2008 2012
Primary
San Pascual Central School

San Pascual, Batangas
2002 2008
With Honors
SEMINARS ATTENDED:
1stYoung Entrepreneurs Summit
Theme: Start Small, Hitting it Big in Business
July 24, 2015 at University of Batangas Auditorium Batangas City
The World of Accountancy Profession: Be Aware, Be a CPA!
February 20, 2015 at University of Batangas Auditorium Batangas City
12th Business Lecture Series
Theme: Empowering Youth Entrepreneurs through Spirit, Intellect, Purpose
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COLLEGE OF BUSINESS
&ACCOUNTANCY
Basic Principles of Taxation and Tax Remedies
January 27, 2015 at University of Batangas Batangas City
Theme: Competency Requirements for Business Professionals and
Entrepreneurs Meeting the Challenges and Globalization
July 24, 2014 at University of Batangas Gymnasium Batangas City
2nd Leadership Encounter: Jesse M. Robredo Caravan of Good Governance
Asilish Asian Bridges Affiliate Orientation
February 28, 2014 at Unvrsity of Batangas Western Hall Batangas City
Theme: Unleashing Young Entrepreneurial Spirit: Innovate, Integrate, Motivate
Theme: Unleashing Excellence-Fad and Style Entanglement to Business
Operation
February 28, 2013 at University of Batangas Gymnasium Batangas City
ORGANIZATIONS:
Junior Philippine Institute of Accountants
University of Batangas Batangas Chapter
June 18, 2012 Present
CURRICULUM VITAE
RHEALYN M. BUCAL
GuitnaTimbain, Calaca, Batangas
rhealynbucal@gmail.com
+63935-487-3303
83
COLLEGE OF BUSINESS
&ACCOUNTANCY
PERSONAL BACKGROUND
Age
Birthday
Birthplace
Civil Status
Nationality
Languages
:
:
:
:
:
:
19
February 26, 1996
Calaca, Batangas
Single
Filipino
Filipino, English
Tertiary
2012 present
Secondary
Calaca Academy
Admana St. Calaca, Batangas
2008 2012
With Honors
Primary
Calaca Central School

Admana St. Calaca, Batangas
2002 2008
SEMINARS ATTENDED:
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COLLEGE OF BUSINESS
&ACCOUNTANCY
February 28, 2014 at Unvrsity of Batangas Western Hall Batangas City
Operation
ORGANIZATIONS:
CURRICULUM VITAE
KRIZZA MAE R.DE LEON
KumintangIbaba, Batangas City
krizzamaerdeleon@yahoo.com
+63905-865-8378
85
COLLEGE OF BUSINESS
&ACCOUNTANCY
PERSONAL BACKGROUND
Age
Birthday
Birthplace
Civil Status
Nationality
Languages
:
:
:
:
:
:
19
March 20, 1996
Mamburao, Occidental Mindoro
Single
Filipino
Filipino, English
Tertiary
2012 Present
Secondary
Mamburao, Occidental Mindoro National high School

2008 2012
With Honors
Primary
Payompon Elementary School

2002 2008
With Honors
SEMINARS ATTENDED:
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COLLEGE OF BUSINESS
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February 28, 2014 at Unversity of Batangas Western Hall Batangas City
Operation
ORGANIZATIONS:
Association of Student Assistant
University of Batangas- Batangas
November 2012 - Present
CURRICULUM VITAE
RUSSEL BERCASIO
San Francisco, Mabini, Batangas
tmci_russel@yahoo.com
09479513201
87
COLLEGE OF BUSINESS
&ACCOUNTANCY
PERSONAL BACKGROUND
Age
Birthday
Birthplace
Gender
Civil Status
Nationality
Languages
:
:
:
:
:
:
:
22
February 24, 1993
Paracale, Cams. Norte
Female
Single
Filipino
Filipino, English
Tertiary
Hilltop KumintangIbaba, Batangas City
Bachelor of Science in Business Administration- Accounting
Management
2011-present
Secondary
Anselmo A. Sandoval Memorial National High School

Mabini, Batangas
2007-2011
Valedictorian
Primary
Mainaga-San Francisco-Calamias Elementary School

Mabini Batangas
2011
Salutatorian
SEMINARS ATTENDED
Operation
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COLLEGE OF BUSINESS
&ACCOUNTANCY
8th Business Lecture

Globally Focused Education for Globally Prepared Future Professionals
August 19, 2011 at University of Batangas Gymnasium Batangas City
ORGANIZATIONS:
2011 2013
Junior Philippine Association of Management Accountants
2015-Present
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COLLEGE OF BUSINESS

Assumptions of the study

Scope, Delimitation and Limitation of the Study

How to Estimate Sales

competing goals. (Williams, 2007)

Estimating Sales in Relation with Inventory Management

Synthesis of Reviewed Materials

It is may be due to the fact that new investment

opportunities can be found in Batangas City particularly.

Type of Business Ownership

Less than 1 year

Data Gathering Instrument

Data Gathering Procedure

Statistical Treatment of Data

2. Knowing the number of population within

Legend: Scale Range

1.2 Consumer Preference. Consumer preferences are defined as the subjective

consumer budget constraint.

Campuses: Hilltop MH del Pilar Pallocan East Pallocan West Lipa

3. Identifying prior demand of customers

Legend: Scale Range

2. Understanding the stages of your products

2. Inventory Management of Convenience Stores in Terms of Time and Size of Order,

2. Making reasonable estimates of inventory

2. Considering customers opinion on the

5. Setting up strategic goals for service level

Legend: Scale Range

2. Providing adequate facilities for handling

3. Assigning appropriate number of

4. Conducting periodic inventory cost

Procedures adapted by the business

Legend: Scale Range

3. Effect of Estimating Sales to Inventory Management of Convenience Stores in Batangas

Territory is significant in inventory management in terms of time and size of order

Campuses: Hilltop MH del Pilar Pallocan East Pallocan West Lipa

Territory in inventory management is significant in terms of demand of customers

to make reasoned decisions about how to spend

to make tentative plans for materials purchasing and production levels

1 Estimating Sales of Convenience Stores

presence of competitors are considered in estimating sales in territory.

2 Inventory Management of Convenience Stores

Managers/Owners should conduct an evaluation concerning the basis used in

2 Managers/Owners should focus on all inventory level management as there is no

http://www.retalon.com/retalon-solutions/inventory-management-solutions (August 03,

http://ww2.cfo.com/growth-strategies/2011/10/three-tips-for-creating-a-reliable-demandforecast/). August 03, 2015

http://yourbusiness.azcentral.com/objectives-product-life-cycle-14585.html. (August 27,

February 11, 2015

Very Truly Yours,

(Sgd)Rhica May H. De Torres

(Sgd)Dr. Jesus P. Briones

( ) 36-40 years old

Highest Educational Attainment:

Campuses: Hilltop MH del Pilar Pallocan East Pallocan West Lipa

Length of Business Operation:

III. Questionnaire Proper

1. How does your convenience store estimate sales in terms of:

a. Having sufficient sales people in your territory

a. Buying habits of customer.

1.3. Product Life Cycle

2. How does yourconvenience stores manage inventory in terms of:

a. Using a system to keep track of the inventory.

2.2. Demand of customers

3. How does estimating sales affect your inventory management?

St. Bridget College Batangas