Title: The Effect Of Inventory Management Practices On The Profit Margin Of Small Enterprises
Authors: Barrientos
Rizzaline M.
Dominguez
Angelyn
Ducut
Rachela Mae D.
Miranda
Raiven Nicole M.
Alan Y. Cabaluna
PhD
Jason Y. Carreon
CPA
MBA
Volume: 10
Issue: 7
Pages: 343-348
Publication Date: 2026/07/28
Abstract:
This study examines the effect of inventory management practices on the profit margins of small enterprises in San Fernando, Pampanga. This research employed a quantitative research design and analyzed data from respondents through a modified survey questionnaire. The study specifically examines the impact of practices such as just-in-time (JIT), ABC analysis, and the economic order quantity (EOQ) model on business profitability. The findings reveal a significant relationship between inventory management practices and the profit margins of small businesses. This indicates that effective inventory management plays an important role in business performance, as it directly affects sales revenue, cost of goods sold, and profit margin. Moreover, proper inventory control helps reduce unnecessary expenses, streamline production processes, and improve operational efficiency. On the other hand, poor inventory management can lead to stockouts, which negatively impact sales and increase costs. In conclusion, inventory management practices not only enhance daily operations but also contribute substantially to the financial success of small enterprises. Problems such as overstocking and stockouts, which may result in lost sales opportunities, can be minimized through the implementation of structured inventory systems. By adopting effective inventory strategies, small businesses are better able to manage resources, lower overhead costs, and ultimately increase profitability.