Theoretical Framework

This research is related to inventory control. It also requires understanding that a

business is an entity that is highly susceptible to external effects. This section examines
the theories that have been chosen to represent behavior for the study's problem and
identifies the theoretical framework for the investigation. They offer the retailers a strong
framework for inventory control that includes reordering, receiving, storing, and
dispatching.
Inventory classification is the process of categorizing the items in an inventory
according to their demand, value, income they generate, carrying costs, etc. This is
similar to ABC analysis in that the inventory's products are divided into three groups:
Category A contains the 20% of products that generate 80% of the company's revenue,
Category B contains the 30% of products that generate 15% of revenue, and Category
C contains the 50% of products that generate the remaining 5% of revenue.
Inventory classification may assist a business in keeping track of its inventory by
decreasing the amount of product it keeps on hand and raising the inventory turnover
ratio. Both of which increase the effectiveness and decrease the overall cost of a
company's distribution network. Inventory items are often divided into three groups
using the ABC method. The ABC method offers a means to classify goods that will have
a significant impact on the overall cost of inventory. Additionally, it gives supply
managers a tool to pinpoint products that need special inspection and controls. Ballou
(2000) discovered that inventories must also be categorized using the terms Vital,
Essential, and Desirable (V-E-D), which essentially suggests that emphasis should be
placed on importance rather than value. The VED analysis is carried out to evaluate an
item's criticality and its impact on production and other services.

Storage Methods are important factors to consider when establishing a

warehouse since they allow a business to keep its items safely and securely for
operational efficiency. Stock control entails the purchase of storage systems, which are
the methods a company uses to maintain its inventory secure and free from
degradation. Ballou (2000). According to the statement, materials are equivalent to
money, and correct storage must be given significant consideration in order to keep
them safe from harm and theft. Bin cards and other store records should provide correct
balances, which will be periodically confirmed by the auditors. A corporation may use a
variety of storage techniques and inventory control models to manage its inventory.
They include: Periodic Stocks Review and Two bin System. Schaider (2000)

Saleemi (2007) state that, Periodic Stock Review is a given that this approach
entails setting stock levels for each item, which are then recorded in the stock control
system and utilized as a tool to indicate when a specific action is required. The
fundamental controls for stock levels are minimum, ordering, accelerating, and
maximum levels. Two bin systems is employed to provide a link between the order and
reorder operations. As was already established, an inconsistent supply of goods and
irregular consumption are not particularly healthy from the standpoint of a producer. The
two-bin technique is used to sort this unevenness. The merchandise is divided into two
heaps or bins in such a manner. The first stock (bin 1), which is the bigger of the two,
gets depleted throughout the time intervals between the stock's purchase and reorder.
At the moment the reorder is placed until the order is actually received, the second
stock (bin 2) may be utilized. There is a sizeable amount of standby in the second stock
that can be used in an emergency. (Smarus, 2008).

Material Codification can also be referred to as material identification. This has

to do with identifying each item in the inventory in a special way. Having a unique record
of each item in stores, work-in-process, or warehouse helps with controlling inventory
levels. It also helps with having effective control over loss, deterioration, obsolescence,
non-movement, or theft of inventory items. It is useful when ordering items for
operational departments, placing orders by the purchase department, receiving and
expediting the items upon receipt from the supplier, and receiving and expediting the
items once they arrive from the supplier. The first stage to an effective materials
management system is the unique identification of the materials, whether they are raw
materials, work-in-process, or finished commodities. If it's absent, the control Over
stocking by strict activities like inventory procedures is ineffective. Sree Rama Rao
(2008

According to (Macgrathy 2008) codification of material are organized in a way

that makes the storing, issuing, and identifying of stores in a systematic manner
possible goods typically become simple. It is an additional important component of
inventory control tasks. It facilitates accurate inputs in the bin cards, Inventory control
cards, and account codes and assists in preventing the duplication of products in the
inventory. Barcodes and other types of codes may significantly simplify the stock control
process. It comprises assigning codes to all categories of goods in the store for simple
tracking and control. Weelearjan (2000)

If there are many shop products, this approach is not appropriate. This inventory
management system makes it quick and simple to identify items, assuring accurate
material control, time savings in material handling, and removing the possibility of an
incorrect issue.

Material Inspection: According to Patric&Bruce (2000) quality is important all

along the supply chain, whether it's evaluating product quality at the supplier, keeping
an eye on product quality as it moves down the assembly line, or evaluating the final
product's quality before it is shipped to the client. The examination of goods as they
arrive at the site from your suppliers, nevertheless, is a crucial aspect of quality
monitoring. One of the most important steps in maintaining the overall quality of the
completed products is to guarantee that the components and raw materials are of the
right quality or specifications before the item ever reaches the plant. They include Visual
Inspection and
sampling

Visual Inspection is a type of inspection in which products are initially visually inspected
for flaws or other visible problems as they arrive at the delivery point. If the packaging is
damaged, items in packaging may also be rejected. Depending on the item being
received, the quality department may have special instructions for the warehouse.
Sample method is when a high quantity of a certain part is received as an incoming
delivery the warehouse may not be necessary to verify each and every piece. In these
situations, the quality department could advise that a delivery sample be examined.

Scope and Limitations of the Study

This study focuses on the inventory control techniques which are carried out in SIDC
Branches located in Batangas City. Specifically, the study is limited on the demographic profile
of SIDC Branches in Batangas City in terms of: form of business organization, total assets,
number of years in business and number of employees. Moreover, it also discusses the
techniques of inventory control which with regards to: inventory classification, storage methods,
material codification, and material inspection.

This study is restricted to the participating registered SIDC Branches in Batangas

City. This study is undertaken using survey questionnaires that are answered by the
managers, owner/s or employees of the SIDC. The study is conducted as of (anong
date ang ilalagay). This study does not include other areas in Batangas province other
than the aforementioned.