1

CHAPTER I
INTRODUCTION

A. OVERVIEW
Inventory or stock pertains to the items and materials that a company hold for various
reasons like sales, repair or use.
Inventory management is a science of specifying the shape and placement of stocked
items. It is required on different departments of a company to do their regular and
planned course of production, stock of materials and processing of job requests.
Forecasting is a planning tool that enables companys in its attempts to cope with the
uncertainty of the future, relying mainly on data from the past and present and analysis of
trends.
Forecasting in handling the medicine inventory of SSC-R Medical Department is very
important. A very good forecast guarantees the continuous operation of the department in
giving its patients the medication they need in order to help then in their sickness.

B. STATEMENT OF THE PROBLEM

Specifically, the case study wants to find out the following:
1. What is the current process of handling the medicine inventory of San
Sebastian College-Recoletos de Cavite Medical Department?
2. What kind of forecasting method can the Medical Clinic use to effectively
handle its medicine inventory?

C. OBJECTIVES
General Objective
The main objective of the study is to come up with a forecasting method to use in
handling the medicine inventory of San Sebastian College-Recoletos de Cavite Main
Campus Medical Department.
Specific Objectives
The study specifically aimed to:
1.

Determine the existing problems of the current medicine inventory of the

2.

SSC-R Medical Department.

Determine the best forecasting method in handling the medicine inventory

3.

of the Medical Department.

To find out can inventory model does the medical department use in
handling its medicine inventory.

D. SIGNIFICANCE OF THE STUDY

This study will be beneficial to the following:
To Medical Department Personnel. With the help of the study, the medical personnel
can better manage, forecast and monitor the Medical Departments medicine
inventory.
To Property Personnel. The study will aid the property office in the effectives
scheduling of the purchasing of medicine for the Medical Department.

To San Sebastian College Recoletos de Cavite Main Campus Community. With the
help of forecasting, medicine unavailability may be lessened thus improving the
service to the community.
To San Sebastian College Recoletos de Cavite Main Campus. Better service of the
Medical Department can impact the schools popularity.

E. ASSUMPTIONS AND LIMITATIONS

The scope of the case study is to gather information about how the Medical
Department handles the medicine inventory of San Sebastian College-Recoletos de
Cavite Main Campus. The study will focus on the data of frequently used medicines
only. The study will cover the forecasting of medicines needed to be purchased in order
to continuously give their patients the needed medicines to help them in their sickness.
Other services like consultations and the likes offered by the department are not included.

CHAPTER II
REVIEW OF RELATED LITERATURE

1. How to Select the Right Inventory Forecasting Models

[http://www.eazystock.com/blog/2015/09/25/how-to-select-the-rightinventory-forecasting-models/]
Inventory forecasting models are critical elements of the
forecasting process as accuracy can drastically influence business
profitability.
It is becoming increasingly important and necessary for business
to predict their future demand in terms of inventory availability, sales
assumptions, costs and profits.
There are 2 main inventory forecasting models to consider for
enhancing inventory forecasting accuracy: Quantitative forecasting
that is a model based on historical data and Qualitative forecasting
that is less precise, and involves predicting demand based on less
measurable factors like market forces, economic demand and potential
demand.

There are two different models for monitoring inventory and

replenishment:

continuous

review

where

inventory

is

reviewed

continuously and Periodic review where stock levels across all storage
are monitored at set periods.

Long Term and Short Term Inventory Forecasting Models

These models provide information for making major strategic
decisions and demand pattern data from long term data sets can help
a company forecast for end of life products and new product
introductions to a growing industry.
Inventory forecasting cannot be in isolation, it is integral and all
stakeholders should be involved.

Everyone should be integrated to

make sure the business is efficient as possible.

Inventory forecasting software such as EazyStock can help
organizations to become more versatile by integrating advanced
inventory management capabilities into everyday business processes.

2. 4 Best Practices for Streamlining Hospital Supply Chain

Management

[http://hitconsultant.net/2013/08/05/4-best-practices-for-streamlininghospital-supply-chain-management/]
Bruce Johnson, CEO of GHX, outlines four best practices to streamline hospital
supply chain management to reduce rising healthcare costs and improve quality.
The supply chain is the second largest and fastest growing expense for providers;
with only labor costing most providers more. It is a key to creating better end-to-end
visibility about all of the products, devices and supplies in healthcare. Providers must
seek to automate and streamline the supply chain process to find savings- which can
reach up to 12 percent of supply chain costs.

By finding a unified procurement

management solution, a company can find ways to improve revenue streams.

Bruce Johnson, CEO of GHX sees working together in a group effort an active
contribution to recouping these lost costs.

"The ACO model will likely encourage

hospital network formation by rewarding the healthcare systems that integrate and can
reduce costs and improve quality".
In response to declining reimbursements, hospitals are working to understand
their most profitable service lines and looking for opportunities to form partnerships or
actual ownership structures that will allow them to focus on the services they can deliver
most cost-efficiently.

1. Driving Contract Price Visibility and Accuracy

Healthcare providers need improved ways to manage prices for items

being purchased both on- and off-contract. Best practices include identifying:
products that is frequently purchasing and at what prices; products that are being
purchased off-contract; identifying like-products and determining whether or not
they can be grouped into contracts for future purchases; and then assimilating
those items into group purchasing organization [GPO] or supplier contracts.

2. Preparing for Unique Device Identifiers

Unique Device Identifiers is the latest regulation to hit healthcare. The
initial deadline for compliance is not until 2014, both providers and suppliers
need to prepare for new requirements in order to create ways to capture the data
and most importantly, ways to leverage it.

Best practices include: creating new levels of collaboration amongst

providers and suppliers to identify ways to capture data needed by their
organizations; creating pathways and requirements for data sharing; and creating
quality, repeatable processes for data sharing among trusted business partners.

3. Creating Visibility into Demand Signals and Forecasting

Suppliers need visibility into provider demand for their products. Most
manufacturers have little visibility into the millions of dollars of product out in

the field, and in any business line, there is a necessity to have a projected plan for
the future where all the money will go. In supply chain management, companies
need to be able to forecast production, procurement and logistics. A best practice
is to connect the healthcare community with a shared infrastructure to create
greater visibility first, then enabling sources of aggregated data for improved
demand planning and forecasting.

4. Ensuring Accurate Product Data and Inventory Repositories

Providers need to be ready to buy the right product and suppliers need to
be ready to provide the right product. Best practices include: ensuring accurate
data sources for products and product identifiers; continuously enhancing a shared
repository of current information; enabling a view of items that providers have in
inventory; and providing tracking information of what providers actually use, and
in turn, need.

3. Push System Vs. Pull System Inventory Control

[http://smallbusiness.chron.com/push-system-vs-pull-system-inventory-control12650.html]
An inventory manager must be able to develop an effective inventory control
system to manage customer demand. The demand will control inventory costs, carrying

costs, ordering costs and storage costs. Inventory control systems are categorized as push
or pull models.

Push System
The push system of inventory control includes forecasting inventory to meet
customer demand. Companies predict which products customers will purchase and
determining what quantity of goods will be purchased. The company will in turn produce
enough product to meet the forecast demand and sell, or push, the goods to the consumer.
Disadvantages of the push inventory control system are that forecasts are often inaccurate
as sales can be unpredictable and vary from one year to the next. Another problem with
push inventory control systems is that if too much product is left in inventory.

Pull System
The pull inventory control system begins with a customer's order. Companies only
make enough product to fulfill customer's orders. One advantage is that there will be no
excess of inventory that needs to be stored, thus reducing inventory levels and the cost of
carrying and storing goods. However, one major disadvantage to the pull system is that it
is highly possible to run into ordering dilemmas, such as a supplier not being able to get a
shipment out on time. This leaves the company unable to fulfill the order and contributes
to customer dissatisfaction.

10

Push-Pull System
Companies have come up with a strategy they call the push-pull inventory control
system, which combines the best of both the push and pull strategies. Push-pull is also
known as lean inventory strategy. It demands a more accurate forecast of sales and
adjusts inventory levels based upon actual sale of goods. The goal is stabilization of the
supply chain and the reduction of product shortages which can cause customers to go
elsewhere to make their purchases. With the push-pull inventory control system, planners
use sophisticated systems to develop guidelines for addressing short - and long-term
production needs.

11

CHAPTER III
METHODOLOGY

With the use of a 3-month Moving Average of the Forecasting method, the
researcher tries to determine the expected no. of demand for medicines for the rest of the
year. Based on the recent six months inventory (march-august) of the SSCR Medical
Department, the researcher will try to determine the no. of medicines that needs to be
placed into order/purchase to avoid stock-out and for continuous service of the
department.
The researcher obtained the information through an informal interview from the
two nurses of SSCR Medical Clinic namely Mrs. Noemi Ocampo and Ms. Katherine
Valerio through the permission of Dr. Jamir Domingo, School Doctor and Ms. Melissa
Puti, Director for Student Welfare.
I. Medicine Usage
Table 3.1 below shows the inventory movement of the frequently used medicine
of the Medical Department. Medicine usage are shown on a per month basis.
Name of Medicine
1. Ambroxol
2. Buscopan
3. Cefalexin
4. Celestamine
5. Domperidone
6. Ibuprofen
7. Mefanemic Acid

March
5
17
8
8
5
10
14

April
0
7
0
3
2
4
19

May
21
15
4
25
32
9
21

June
18
40
0
60
39
29
56

July
10
40
0
137
16
17
36

12

8. Omeprazole
9. Paracetamol
10 Sinupret
.

27
87
60

7
47
38

37
124
17

Table 3.1-Frequently Used Medicines Usage

3-Months Moving Average Method

Formula:

3MA = (Month1 + Month2 + Month3) / 3

67
758
170

56
243
148

13

II. Medicine Inventory Movement

Table 3.2 below shows the inventory movement figures of the frequently used

0.

April

May

June

July

August

1.
2.
3.
4.
5.
6.
7.
8.
9.
1

Name of Medicine

March

medicines by the SSCR Medical Clinic.

Ambroxol
Buscopan
Cefalexin
Celestamine
Domperidone
Ibuprofen
Mefanemic Acid
Omeprazole
Paracetamol
Sinupret

5
206
50
266
274
77
284
261
406
144

0
189
42
251
269
63
256
227
288
72

300
176
42
248
267
59
235
220
241
34

632
1153
38
197
235
50
207
1146
2081
1114

614
1113
38
137
191
21
151
1081
1323
944

604
1073
38
137
175
4
115
1025
1566
796

Table 3.2-Inventory Movement Figures of Frequently Used Medicines

14

CHAPTER IV
DATA ANALYSIS AND RESULTS

I. Medicine Ordering, Purchasing and Inventory Monitoring

According to the informal interview with the two nurses, Mrs. Noemi Ocampo
and Ms. Katherine Valerio, the following procedures are used in dealing with ordering,
purchasing and inventory monitoring of their medicines.
A. Medicine Ordering
Before the medical medicine resources runs low, the medical department creates a
request letter containing all the medicines that needs ordering. The request letter
contains the medicine to be purchased including the quantity.
B. Medicine Purchasing
Upon receiving of the request letter of the medical department, the Property
Office is the one in-charge of purchasing. The medical department will then be
notified when the medicines arrived.
C. Inventory Monitoring
Once the medicines are received, the medical department updates the inventory.
All clients who avails medicines are recorded in a log-book on a daily basis. After
which it is tallied and reflected in the inventory. When the medical department
encounters stock-outs, the medical personnel just tells its client that medicines are not
available. Expired medicines are also checked and are reflected in the inventory.
Medicine monitoring is done manually.

15

II.

Medicine Usage
Using the five months data below (Table 4.1) gathered by the researcher
regarding the medicine usage of the Medical Department, the researcher tries to forecast
the medicine usage for the rest of the year 2016.

Table 4.1: Medicine Usage Five Months 2016

Using the 3-Month Moving Average of the Forecasting method, the researcher
come up with the following forecast data.

Table 4.2: Medicine Usage Forecast for rest of the year 2016

Based on table 4.2, there are cases that there is no usage of a certain medicine.
Upon the analysis of the data, the researcher found out that there are two reasons why this
situation happens. Either there is no demand for the medicine or the medicine is out of

16

stock. Although the data used are actual, these situations directly affects the forecast of
data.

0.

Name of Medicine

April

May

June

July

August

1.
2.
3.
4.
5.
6.
7.
8.
9.
1

Medicine Inventory Movement (Inventory Model)

March

III.

Ambroxol
Buscopan
Cefalexin
Celestamine
Domperidone
Ibuprofen
Mefanemic Acid
Omeprazole
Paracetamol
Sinupret

5
206
50
266
274
77
284
261
406
144

0
189
42
251
269
63
256
227
288
72

300
176
42
248
267
59
235
220
241
34

632
1153
38
197
235
50
207
1146
2081
1114

614
1113
38
137
191
21
151
1081
1323
944

604
1073
38
137
175
4
115
1025
1566
796

Table 4.3: Inventory Movement Figures of Frequently Used Medicines

When we graph table 4.3 as shown below, we can conclude that the medical
department uses An Order-Quantity, Reorder-Point Model with Probabilistic Demand.
This inventory model, when use, allows the department to replenish their inventory in
any given time where a stock-out is near.

17

Medicine Inventory Movement

2100
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
0

March

April

May

June

July

August

18

19

CHAPTER V
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

After the study was conducted and the information gathered, the researcher
arrived to a conclusion and also a recommendation to handle the medical inventory more
efficient and effective.

Summary and Conclusion

The medical department process of handling and maintaining their inventory is
satisfactory.

They have records of purchases, inventory of medicines and reports

generation processes. Although the process is acceptable to the medical department, the
study shows that the current policies and procedures of handling the inventory of the
medical department can be further improved.

Some problems that the researcher

discovered are as follows:

Ordering is not done on a regular basis.

Purchasing of medicines takes time.
Stock-outs or medicine unavailability are encountered.
Inventory handling and monitoring are done manually
Reports generation can be tedious and time-consuming.

Recommendations
In terms of procedures and policies, the researcher recommends the use of
forecasting when making or placing an order of a certain medicine and placing an order
in a regular basis. This is to avoid stock-outs or medicine unavailability.

20

The researcher, being a computer graduate highly recommend the computerization

of the medical department medicine inventory system.
The application once available, will greatly benefit the entire San Sebastian
College Recoletos de Cavite by greatly increasing the efficiency and effectiveness of
their existing medicine inventory system. With the proper monitoring
Redundancies, manual counting of medicines, tedious expiration date checking
and monitoring, log books usage, etc. can be minimized. This could also lessen the
recurring cost of the department.

21

REFERENCES

1. Forecasting [http://www.businessdictionary.com/definition/forecasting.html]
2. Inventory [https://en.wikipedia.org/wiki/Inventory]
3. Inventory Management
[https://www.google.com.ph/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0ahUKEwidk8ScoJPPAhWG
l5QKHSpVC4IQFgg-MAU&url=https%3A%2F%2Ffanyv88.com%3A443%2Fhttp%2Fwww.iarjournal.com
%2Fwp-content%2Fuploads%2FIBTC2015-p142148.pdf&usg=AFQjCNHL7PRul8kUM57-C8_WdSAxQ3Rv1Q&cad=rja]

22

APPENDIX A
DEFINITION OF TERMS
1. Forecasting
A planning tool that helps management in its attempts to cope with the uncertainty
of the future, relying mainly on data from the past and present and analysis of trends

2. Inventory
An itemized catalog or list of tangible goods or property, or the intangible
attributes or qualities.

3. Inventory Management
Is a science primarily about specifying the shape and placement of stocked goods.
It is required at different locations within a facility or within many locations of a supply
network to precede the regular and planned course of production and stock of materials

4. Inventory Model
Mathematical equation or formula that helps a firm in determining the economic
order quantity, and the frequency of ordering, to keep goods or services flowing to the
customer without interruption or delay.

5. Moving Average
A succession of averages derived from successive segments (typically of constant
size and overlapping) of a series of values.

23

APPENDIX B
RESEARCH DATA GATHERED

24

APPENDIX C
SYSTEM ACKNOWLEDGEMENTS

25

CURRICULUM VITAE

26

September 22, 2016

To Whom It May Concern:

This is to certify that I, Noemi I. Ocampo RN, the School Nurse, has been
interviewed by the Ricardo S. Aguilar Jr. for his case study entitled A Case Study of
SSC-RDC Medical Department Medicine Inventory. Also, this is to prove that I express
my support for the concept of his proposal; for I find that it will benefit the institution I
serve.

Respectfully yours,

Mrs. Noemi I. Ocampo, RN

School Nurse

27

September 22, 2016

To Whom It May Concern:

This is to certify that I, Ms. Kathrine Grace C. Valero, RN, the School Nurse, has
been interviewed by the Ricardo S. Aguilar Jr. for his case study entitled A Case Study
of SSC-RDC Medical Department Medicine Inventory. Also, this is to prove that I
express my support for the concept of his proposal; for I find that it will benefit the
institution I serve.

Respectfully yours,

Ms. Kathrine Grace C. Valero, RN

School Nurse

28

MABE
Times new romans, 12, double space
Sept 17.