i

THE EFFECTS OF TRANSPORTATION SYSTEM TO THE JUST-IN-TIME

INVENTORY SYSTEM OF MANUFACTURING COMPANIES IN SECOND
DISTRICT OF BATANGAS PROVINCE





A Thesis Proposal Presented to the
Faculty of College of Business and Accountancy
University of Batangas
Hilltop, Batanags City










In Partial Fulfillment of the Requirement
For the Degree of Bachelor of Science in Commerce
Major in Accounting Management









By:

RODRIGUEZ, MICHAEL B.
ANONUEVO, JERRREMAEH B.
BAGUI, SARANIE MAY R.
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ACCEPTANCE AND APPROVAL SHEET

This thesis entitled THE EFFECTS OF TRANSPORTATION SYSTEM
TO THE JUST-IN-TIME INVENTORY SYSTEM OF MANUFACTURING
COMPANIES IN THE SECOND DISTRICT OF BATANGAS PROVINCE
prepared and submitted by MICHAEL B. RODRIGUEZ, SARANIE MAY R.
BAGUI AND JERREMAEH ANONUEVO in partial fulfillment of the requirements
for the degree of bachelor of Science in Commerce Major in Accounting
Management, nas been examined and is recommended for acceptance and
approval.

_____________________
DR. JESUS P. BRIONES
Thesis Adviser


Accepted and approved in partial fulfillment of the requirements for the
degree of Bachelor of Science in Commerce Major in Accounting Management.


_________________________
MR. DANTE G. CALINGASAN
Dean, College of Business and Accountancy



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ACKNOWLEDGEMENT

The researchers wish to extend their deepest gratitude and sincere
appreciation to those who shared assistance and moral support to make this
research possible. Heartfelt gratitude is hereby express to the following:
Dr. Jesus P. Briones, their adviser, for his all-out encouragement,
assistance and suggestions in completing the study;
To the University of Batangas library staff who gave the researchers easy
and hassle-free access to the library facilities;
To all the participants, who spent their precious time in answering the
questionnaire;
To their parents, brothers and sisters, relatives and friends for their
sustained moral support and concern;
And above all, to the Lord Almighty, the Greatest Teacher, for giving the
writers the strength, wisdom and strong determination to make the study
possible.





The Researchers

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DEDICATION

This humble piece of work is
sincerely dedicated to all the people who
helped and guided us in performing this study,
To our Almighty God,
for his divine guidance and for the strength and wisdom.
To our parents who served as our inspiration.
To our research adviser
for the challenges and pieces of advice.
To our friends for the support and courage they gave.
We dedicate this work to all of you,
Deeply from our Hearts!





Michael
Saranie
Jerremaeh


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ABSTRACT
Title : THE EFFECTS OF TRANSPORTATION SYSTEM
TO THE JUST-IN-TIME INVENTORY SYSTEM
OF MANUFACTURING COMPANIES IN THE
SECOND DISTRICT OF BATANGAS PROVINCE
Researchers : Rodriguez, Michael B
Bagui, Saranie May R.
Anonuevo, Jerremaeh B.
Type of Document : Unpublished Undergraduate Thesis
Degree Course/Major : Bachelor of Science in Commerce
Major in Accounting Management
School : University of Batangas
Address : Hilltop, Batangas City
Number of Pages :
Month and Year Completed : March 2011
Thesis Adviser : Dr. Jesus P. Briones

________________________________________________________________
Statement of the Problem
As the title implies, this research study was conducted in order to
determine and analyze the effects of transportation system to the just-in-time
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inventory system of manufacturing companies in second district of Batangas
province
The study sought to answer the following questions:
1. How do owners and suppliers of manufacturing companies in second district of
Batangas province manage their transportation system for the proper facilitation
of:
1.1. Cost of ordering;
1.2. Accessibility of ordering; and
1.3. Frequency of ordering?
2. How do owners of manufacturing companies in second district of Batangas
province apply just-in-time inventory system in terms of:
2.1. Selecting Suppliers; and
2.1.1. Location of Suppliers
2.1.2. Type of Suppliers
2.1.3. Acquiring Goods from the Suppliers
2.2. Management and Handling of Inventories?
2.2.2. Accounting System for Inventories
2.2.3. Measurement of Inventory
2.2.4. Cost of Inventories
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3. Is there a significant difference on the effects of transportation system to the
just-in-time inventory system of manufacturing companies in second district of
Batangas province?
4. What are the implications of the findings of the study to the just-in-time
inventory system of manufacturing companies in second district of Batangas
province?

Research Methodology
The researchers used a descriptive method as the research design in
obtaining the needed information with the aid of questionnaires. The managers of
manufacturing companies in the second district of Batangas province are the
researchers participants. The study used various statistical tools like percentage
distribution and chi-square test to analyze and interpret the data gathered.

Findings
The study yielded the following findings:
1. Transportation System management for the Proper Facilitation of:
1.1. Cost of Ordering. Both method (direct ordering and peddling) are the
methods prefer by the manufacturing companies in the second district of
Batangas province in the management of transportation system for the proper
facilitation of cost of ordering. It gained 95% of the participants.
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1.2. Accessibility of Ordering. In terms of accessibility of ordering, quick
responses from the suppliers got 10 or 50% and having flexible workers also got
10 or 50% of the participants. It implies that it requires the combination of quick
response to suppliers and having flexible workers in order to have accessible
ordering.
1.3. Frequency of Ordering. The manufacturing companies in the second
district of Batangas province order their raw materials weekly in order to minimize
cost in transportation. It earned 13 or 65% of the participants. They estimate the
right amount of inventories that will cover the production for the whole week.

2. Just-In-Time System Application in terms of:
2.1. Selecting Suppliers
2.1.1. Location of Suppliers. Manila is the most preferable location
of the suppliers. It is because Manila is very near to Batangas province and it can
provide quality and cheaper materials. It gained eight (8) or 40% of the
participants.
2.1.2. Type of Suppliers. Based on the data gathered,
manufacturing and merchandising firms are the suppliers of manufacturing
companies in the second district of Batangas province. They could have the
complete raw materials if they prefer both manufacturing and merchandising
firms. It earned nine (9) or 45% of the participants.
2.1.3. Acquiring of Goods from the Suppliers. Based on the data
gathered, ordering goods via telephone ranked first on the mode of acquiring
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goods from the suppliers because it is effective, convenient and saves time and
money. It earned eleven (11) or 55% of the participants.
2.2. Management and Handling of Inventories
2.2.1. Accounting System for Inventories. According to the
managers of the manufacturing companies in the second district of Batangas
province, periodic inventory method is the most convenient and easiest method
of accounting system for inventories because it saves time in counting the
inventories since it was done monthly, quarterly or yearly. It earned 15 or 75% of
the participants.
2.2.2. Measurement of Inventories. Based on the data gathered,
direct method is the most preferable method in measuring inventories. It is easier
to use since the inventory is recorded at the net realizable value. It earned 10 0r
50% of the participants.
2.2.3. Cost of Inventories. Manufacturing companies in the second
district of Batangas province use cost of purchase as basis in inventory costing. It
is more preferable because other indirect costs are excluded. It earned 8 or 40%
of the participants.

3. The Effects of Transportation System to the Just-in-Time Inventory
System of Manufacturing Companies in the Second District of Batangas
Province.
According to the manufacturing companies in the second district of
Batangas province, saving time in producing is the primary factor that shows the
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significant effect of the transportation system to the just-in-time inventory system
of the manufacturing companies in the second district of Batangas province. It
gained 18 or 90%.
Chi-square test was the used in statistical treatment of data. Selecting
suppliers and management and handling of inventories under cost of ordering
has significant effects to the just-in-time inventory system of manufacturing
companies in the second district of Batangas province. It gained a chi-square
value of 20.00 and 21.20 and probability value of 0.000008 and 0.000025
respectively. Meanwhile, management and handling of inventories under the
accessibility of ordering has significant effects to the just-in-time inventory system
of manufacturing companies in the second district of Batangas province. It
earned 14. 83 chi-square value and probability value of 0.002. Moreover,
selecting suppliers under accessibility of ordering has no significant effect to the
just-in-time inventory system of manufacturing companies in the second district
of Batangas province. It gained chi-square value of 6.80 and probability value of
0.08. Lastly, selecting suppliers and management and handling of inventories
under frequency of ordering has no significant effects to the just-in-time inventory
system of manufacturing companies in the second district of Batangas province.
It gained chi-square value of 4.25 and 2.60 and probability value of 0.12 and 0.27
respectively.

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4. Implications of the Findings of the Study to the Just-in-time Inventory
System of Manufacturing Companies in Second District of Batangas
Province.

The findings of the study are essential not only to the management of the
manufacturing companies in the second district of Batangas province who
participated in this research study but also to the management of manufacturing
companies in general. The said findings can be of use to the operation and
growth of the business to maximize their knowledge and ability to properly
manage and facilitate their just-in-time inventory system. It can further benefits
the suppliers of the manufacturing companies in the second district of Batangas
province, as this study can give them knowledge in transportation system and its
proper facilitation.

Conclusions
Based on the findings of the study, the researchers derived the following
conclusions:
1. In order to properly facilitate the transportation system, direct ordering and
peddling should be use in order to lessen the cost of ordering. The combination
of quick responses from the suppliers and having flexible workers is needed in
order for the ordering to be accessible. Moreover, in order to avoid excessive
delivery cost charges, manufacturing companies order their raw materials
weekly.
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2. Just-in-time inventory system can be properly applied with the right selection
of suppliers with respect to their location and distance and the proper
management and handling of inventories.
3. There is no significant difference on the effects of transportation system to the
just-in-time inventory system of manufacturing companies in the second district
of Batangas province.
4. The findings of this study are essential not only to the management of
manufacturing companies in the second district of Batangas province who
participated in this research study but also to the management of manufacturing
companies in general.

Recommendations
Based on the finding and conclusions, the researchers offer the following
recommendation:
1. Manufacturing companies should devise more methods in order to properly
facilitate transportation system and make it more effective.
2. Manufacturing companies must further improve their just-in-time inventory
system in order to avoid losses, obtained from surpluses and shortages.
3. Accounting for inventories should be given proper attention in order to improve
the facilitation of just-in-time inventory system
4. Future researchers should conduct a more comprehensive study about the
effects of the transportation system to the just-in-time inventory system of the
manufacturing companies in the second district of Batangas Province.
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TABLE OF CONTENTS

PAGE
TITLE PAGE.... i
ACCEPTANCE AND APPROVAL SHEET ii
ACKNOWLEDGEMENT. iii
DEDICATION iv
ABSTRACT.. v
TABLE OF CONTENTS. xiii
LIST OF TABLES AND FIGURES xv

CHAPTER
I. THE PROBLEM AND ITS BACKGROUND.. 1
Introduction.. 1
Conceptual Framework.. 3
Statement of the Problem.. 5
Hypothesis 7
Assumptions of the study... 7
Scope, Delimitation and Limitation of the Study 7
Definition of Terms.. 11

II. REVIEW OF THE RELATED LITERATURE

Transportation System and its Management.. 15
Just-in-Time Inventory System and its Application 21
Just-in-Time Inventory System Application through Selection of
Suppliers. 28
Just-in-Time Inventory System Application through Management
and Handling of Inventories.... 31
Synthesis of Reviewed Materials. 34


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III. METHODOLOGY
Research Design 36
Participants of the Study 37
Data Gathering Instrument 40
Data Gathering Procedure. 41
Statistical Treatment of Data.. 42
IV. PRESENTATION, ANALYSIS AND INTERPRETATION OF
DATA 46

V. SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS. 65

Summary 65
Findings. 67
Conclusions... 71
Recommendations 72

APPENDICES

A. Bibliography...... 74
B. Letter of Request. 76
C. Questionnaire... 77
D. Curriculum Vitae.. 80




















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LIST OF TABLES

TABLE PAGE

1 Frequency and Percentage Distribution of the Profile
of the Participating Manufacturing Companies in the
Second District of Batangas Province 38

2 Frequency, Percentage and Rank Distribution of Cost
of Ordering of the Manufacturing Companies
in the Second District of Batangas Province 46

3 Frequency, Percentage and Rank Distribution
of Accessibility of Ordering of the Manufacturing
Companies in the Second District of Batangas Province 47

4 Frequency, Percentage and Rank Distribution
of Frequency of Ordering of the Manufacturing
Companies in the Second District of Batangas Province 48

5 Frequency, Percentage and Rank Distribution of Location
of Suppliers of the Manufacturing Companies in the Second
District of Batangas Province 50

6 Frequency, Percentage and Rank Distribution of Types
of Suppliers of the Manufacturing Companies in the Second
District of Batangas Province 51

7 Frequency, Percentage ad Rank Distribution of Acquiring
Goods from the Supplier of the Manufacturing Companies
in the Second District of Batangas Province 52

8 Frequency, Percentage and Rank Distribution of Accounting
System for Inventories of the Manufacturing Companies
in the Second District of Batangas Province 54

9 Frequency, Percentage and Rank Distribution
of Measurement of Inventories of the Manufacturing
Companies in the Second District of Batangas Province 55

10 Frequency, Percentage and Rank Distribution of Cost
of Inventories of the Manufacturing Companies in the Second
District of Batangas Province 56


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TABLE PAGE

11 The Effects of Transportation System to the Just-in-Time
Inventory System of Manufacturing Companies in the Second
District of Batangas City 58

12 The Effects of Transportation System to the Just-in-Time
Inventory System of Manufacturing Companies in the Second
District of Batangas Province 60