Reliability of the Instruments

The researchers needed to make sure that the data drawn from

instrument are in quality. To attest this, the researchers sought assistance to

the research adviser and statistician to examine and validate the research

instrument. Further, to test the reliability of the instrument, Cronbach’s Alpha

was used. Cronbach’s Alpha, developed by Lee Cronbach in 1951, is

measure of internal consistency. Or how closely a group of items are related

to one another. It is regarded as a scale reliability indicator. Moreover, it is

used to test if the multiple-question Likert Scale questionnaire are reliable

(Salkind, 2015).

Table 2. Table of Cronbach Alpha

Cronbach’s Alpha Internal Consistency

ɑ > 0.91 Excellent
0.9 > ɑ > 0.71 Good
0.7> ɑ > 0.6 Acceptable
0.6>ɑ > 0.5 Poor
0.50> ɑ Unacceptable

As the research statistician stated, the acceptable range for Cronbach

Alpha test of reliability is above 0.6, the higher the better.

Ethical Consideration

Since the researchers conducted the outside validation in times of

pandemic, necessary countermeasures are made before engaging with the

business entities representative. The researchers also had to obtain

permission from business owners / managers / supervisor before collecting

data regarding the business, with that the necessary letter of permission with
the signature of research adviser were provided on them. The researchers

also made sure that each of the twenty (20) representatives of the business

who took part in the survey did so freely, and that the information gathered

would be kept confidential.

Pilot Study

Profitability and Inventory Management questionnaire was used to test

the reliability of the research instrument. Researchers collects data from

twenty (20) Small-Medium Enterprises that sells merchandise in Tiaong,

Quezon. With the approval of the establishment and written instruction, the

sampled respondents were given enough time to answer the forty-five (45)

statements. After all the data were collected from twenty (20) enterprises, it

was tested and analyzed through the use of SPSS.

Table 3. Level of Practice of Inventory Management in terms of

Procurement

Procurement Mean Std. Deviation

a. Obtaining several or list of suppliers/vendors
4.55 0.510
to where the company should order from
b. Assuring the high quality of goods to be
4.90 0.308
purchased from suppliers/vendors
c. Negotiating contracts that would mostly
4.65 0.587
benefit the company through cost reduction.
d. Considering payment terms that can minimize
4.80 0.410
the overall cost of inventories.
e. Providing contingency plans in ordering goods
or materials in cases of sudden change or
disruption in the process of procurement like the 4.40 0.681
implementation of lockdowns due to COVID-19
prevention.
Table 3.1. Procurement Reliability Statistics

Cronbach's Cronbach's Alpha Based

Procurement
Alpha on Standardized Items
.620 .623 .6

The table 3 shows the procurement practices in Inventory Management

of Small-Medium Enterprises in Tiaong, Quezon that are considered as

merchandising entities, wherein the mean responses ranges from 4.40 to 3.90

with a standard deviation of 0.308 – 0.681. While the overall value for the

Cronbach’s Alpha of Procurement is 0.6.

Table 4. Level of Practice of Inventory Management in terms of

Accumulation
Accumulation Mean Std. Deviation
a. Using classification systems like ABC
classification wherein high value items are
4.50 0.688
classified separately with normal and low value
items.
b. Forecasting or formulating safety stocks to
avoid stock-out cost when products ordered are 4.40 0.754
still in transit
c. Ordering products just-in-time for those to be
consumed immediately to avoid excessive 4.25 0.851
storage costs.
d. Owning warehouse or storage facilities and
providing management policies by training
sufficient number of personnel to have 4.55 0.686
organized storing of inventories to avoid
obsolescence or wastage.
e. Reorientation of strategy to provide more
inventory on hand to avoid inventory shortage
4.40 0.681
due to production shutdowns caused by COVID-
19 pandemic.
Table 4.1. Accumulation Reliability Statistics

Cronbach's Cronbach's Alpha Based

Accumulation
Alpha on Standardized Items

.655 .644 .7

The accumulation practices in inventory management of Small-Medium

Enterprises in Tiaong, Quezon that are considered merchandising entities are

shown in table 4 and 4.1 with mean responses ranging from 4.25 – 4.55 with

a standard deviation from 0.681 – 0.851. The overall value for Accumulation’s

Cronbach’s Alpha is 0.7.

Table 5. Level of Practice of Inventory Management in terms of Valuation

Valuation Mean Std. Deviation

a. Valuating inventories through first-in, first-out

(FiFo), or weighted average valuation method to 4.55 0.826
provide best value for inventories requiring it.

b. Applying inventory systems like periodic

and/or perpetual inventory systems in 4.40 0.754
determining cost of inventories up to date.
c. Evaluation through lower of cost and net
realizable value of inventories due to events
affecting such like the sudden decline or 4.35 0.587
abnormal price hike brought by crisis like
COVID-19 pandemic

d. Excluding obsolete or wasted inventories in

estimating total amount of ending inventories for 4.15 1.040
a certain period.
e. Having the ability to recover inventory
balances due to potential non-fulfillment of sales
4.30 0.733
and purchase contracts due to supply chain
disruption
Table 5.1. Valuation Reliability Statistics

Cronbach’s Cronbach’s Alpha Based

Alpha on Standardized Items Valuation

.790 .809 .8
The table 5 and 5.1 indicates valuation practices in inventory

management of Small-Medium Enterprises that are in merchandising industry

in Tiaong, Quezon. The mean of the statements ranges from 4.15 – 4.55 that

indicates highly practiced and standard deviation ranging from 0.587 – 1.040.

It also shows the cronbach’s alpha of 0.8.

Table 6. Level of Practice of Inventory Management in terms of

Distribution
Distribution Mean Std. Deviation
a. Allocating the products properly based on
demand to generate more sales and avoid 4.75 0.444
excessive stocks.
b. Retaining loyalty from customers by
perfecting distribution of products to intended 4.75 0.550
customers
c. Minimizing to its extent the amount of delivery
4.40 0.681
cost of inventories to be distributed or sold.
d. Having fast distribution to customers to
increase sales and dispose inventories with 4.50 0.761
sustained value
e. Implementing COVID-19 prevention protocols
in warehouses/storage facilities and stores while
4.90 0.308
handling or transferring inventories to ensure
continuance of operations

Table 6.1. Distribution Reliability Statistics

Cronbach's Cronbach's Alpha Based
Alpha on Standardized Items Distribution

.712 .710 .7
Table 6 and 6.1 refers to the practicability of inventory management o

Small-Medium Enterprises that sells merchandise in Tiaong, Quezon. The

mean response for the distribution techniques, ranges from 4.40 – 4.90,

indicates that it is highly practiced by the respondents. It also presents the

standard deviation ranging from 0.308 – 0.761. In addition, the cronbach’s

alpha of 0.7 for the distribution.

Table 7. Level of Practice of Inventory Management in terms of Security

Security Mean Std. Deviation
a. Installation of CCTVs to be more beneficial
than costly for security of inventories to avoid
4.30 1.218
theft or misappropriation.

b. Restricting access to inventories by assigning

limited personnel to handle and secure
inventories against likelihood of theft or 4.35 0.745
misappropriation that would result to greater
loss.
c. Applying for insurance of inventories to
enhance opportunity for claims against events 4.40 0.940
covered by insurance plan.
d. Encrypting data or securing information
related to inventories to disseminate proper 4.20 1.056
pricing and maintain competitive advantage.
e. Protecting inventories and its storage by 4.40 0.940
installing or creating policies in the use of
protective equipment or space against fire, flood,
or even transmission of viruses and other
 disastrous events that would incur physical
losses.

Table 7.1. Reliability Statistics of Security

Cronbach's Cronbach's Alpha Based

Security
Alpha on Standardized Items
.811 .831 .8

The table 7 and 7.1 shows the security practices in Inventory

Management of Small-Medium Enterprises in Tiaong, Quezon that are

considered as merchandising entities, wherein the mean responses ranges

from 4.40 to 4.20 with a standard deviation of 0.745 – 1.218. While the overall

value for the Cronbach’s Alpha of Procurement is 0.8.

Table 8. Level of Practice of Inventory Management in terms of

Documentation
Documentation Mean Std. Deviation
a. Monitoring or tracking of inventories manually
simultaneous to computerized systems to
provide an extensive preview of its balances in 4.30 0.923
quantity or cost and prices

b. Proper documenting of inventories through

the application of periodic or perpetual inventory 4.65 0.587
system, whichever is more applicable
. Maintaining complete and accurate invoices for
organized record keeping relating to inventory to
4.65 0.671
provide sufficient information or evidences for
certain use to add value or deduct cost
d. Using historical information regarding 4.30 0.979
 inventories to record prediction of future trends
or seasonal demand to forecast sales and
inventory budget
e. Acknowledgement of electronically or digital
documentation of activities relating to inventories
4.15 0.875
to adapt to changes brought by COVID-19
restrictions

Table 8.1 Reliability Statistics for Documentation

Cronbach's Cronbach's Alpha Based

Alpha on Standardized Items Documentation
.856 .856 .9
The table 8 and 8.1 shows the documentation practices in Inventory

Management of Small-Medium Enterprises in Tiaong, Quezon that are

considered as merchandising entities, wherein the mean responses ranges

from 4.65 to 4.15 with a standard deviation of 0.587 – 0.979. Meanwhile, the

documentation variable has an overall cronbach’s alpha of 0.9.

Table 9. The Profitability of SMEs during Regular Period

Regular Period Mean Std. Deviation
a. The ratio of revenue generated from sales
4.30 0.733
compare to the cost of sales is:
b. The ratio of revenue generated from sales
compare to the overall cost and operating 4.20 0.696
expenses is:
c. The use of funds in the distribution and overall
4.20 0.768
conduct for continuity of operations is:
d. The ratios of change on the net operating
income to change in total capital during the 4.35 0.745
period is:
 e. The amount of income earned during the
4.25 0.786
period in relation to the capital invested is:

Table 9.1 Reliability Statistics for Profitability during Regular Period

Cronbach's Cronbach's Alpha Based

Regular Period
Alpha on Standardized Items
.947 .947 .9

The table 9 and 9.1 presents the reliability statistics of profitability of

Small-Medium Enterprises that engage in merchandising business in Tiaong,

Quezon during regular period, with the mean response ranging from 4.20 –

4.35 which means highly profitable. Meanwhile the standard deviation is

ranging from 0.696 – 0.768. It also presents the overall cronbach’s alpha for

regular period, 0.9.

Table 10. The Profitability of SMEs during Peak Season

Peak Season Mean Std. Deviation
a. The ratio of revenue generated from sales
4.50 0.761
compare to the cost of sales is:

b. The ratio of revenue generated from sales compare

4.35 0.813
to the overall cost and operating expenses is:

c. The use of funds in the distribution and overall

4.05 0.826
conduct for continuity of operations is:
d. The ratios of change on the net operating income
4.45 0.759
to change in total capital during the period is:
e. The amount of income earned during the period
4.25 0.786
in relation to the capital invested is:

Table 10.1 Reliability Statistics for Profitability during Peak Season

Cronbach’s Cronbach’s Alpha Based
Alpha on Standardized Items Peak season
.929 .930 .9
The table 10 and 10.1 shows the reliability statistics of profitability of

Small-Medium Enterprises that sells merchandises in Tiaong, Quezon during

peak season. It has a mean response ranging from 4.05 – 4.50 that means

highly profitable and standard deviation from 0.759 – 0.826. The overall value

of cronbach’s alpha is 0.9 for the statements of profitability during peak

season.

Table 11. The Profitability of SMEs Amid Crisis (COVID-19 Pandemic)

Amid Pandemic Mean Std. Deviation
a. The ratio of revenue generated from sales
4.00 0.973
compare to the cost of sales is:
b. The ratio of revenue generated from sales compare
3.95 0.945
to the overall cost and operating expenses is:
c. The use of funds in the distribution and overall
3.90 0.912
conduct for continuity of operations is:
d. The ratios of change on the net operating income
4.15 0.933
to change in total capital during the period is:
e. The amount of income earned during the period
4.00 0.918
in relation to the capital invested is:

Table 11.1 Reliability Statistics for Profitability Amid Crisis

Cronbach’s Cronbach’s Alpha Based Amid

Alpha on Standardized Items Crisis

.973 .973 1
The table 11 and 11.1 refers to the reliability statistics of profitability of

Small-Medium Enterprises that engage in merchandising business in Tiaong,

Quezon during amid crisis. With the mean response ranging from 3.90 – 4.15
and standard deviation of 0.973 – 0.912. Furthermore, it has an overall value

of cronbach’s alpha of 1.

In conclusion the Cronbach’s Alpha of all variable exceeds the value of

0.60, which concludes good internal stability and consistency for the items

included in the instrument. The result of the Cronbach’s Alpha affirmed that

the instrument can be therefore applied as the items have good reliability

(International Journal of Development and Sustainability, 2018). As stated by

International Journal of Development and Sustainability (2018), research

instrument that is structured as quantitative considers the collection of all

quantifiable data as the most crucial part in raising the credibility of the study.

With this, to obtain a good result of reliability test researchers designed and

conducted a proper pilot study, which aimed of to evaluate the level of

reliability on the research instrument.