CHAPTER II

Review of Related Literature and Studies

This chapter presents a brief discussion of the literature reviewed by the researchers

which further enriched the conceptualization of the study and helped in describing the cognitive

design that guided the conduct of the researcher.

Foreign Literature

Inventory Systems Summary

According to the U.S. Small Business Administration, “Inventory refers to stocks of

anything necessary to do business” (U.S. Small Business Administration, 2010) The U.S. Small

Business Administration publication describes what constitutes successful inventory

management balancing cost versus benefits of inventory, including Maintaining a wide

assortment without spreading the rapidly moving items too thin, Increasing inventory turnover

without sacrificing service, Keeping stock low without sacrificing performance, Obtaining

lower prices by making volume purchases, Maintaining an adequate inventory without an

excess of obsolute items.

Wal-Mart Inventory System

Wal-Mart runs its stores on a perpetual inventory system. This system records the

quantity of items sold as items are purchased. The computer system at Wal-Mart constantly

keeps up with additions or deductions from inventory and tells management what items are on

hand. The organization also conducts counts of employee manual counts of inventory

periodically. When an item arrives at the Wal-Mart distribution center it is scanned into the

inventory system. When the items are purchased by the consumer, the point-of-sale system

reduces the inventory from that purchase. According to Wal-Mart’s Gail Lavielle, a leaner

inventory will help clear out store clutter and help Wal-Mart focus on specific brands and

products that consumers want (The Associated Press, 2006).

(Hinsdale: Holt, Richard and Winston Sounders College Publishing, 2000)

According to Mr.Eugene F. Brigman, Fundamentals of Financial Management, 5th ed.,

Companies are increasingly employing Inventory System. A computer start with an inventory

counts in memory. Withdrawals are recorded by the computer as they are made, and the

inventory balance is constantly revised. When the recorded point is reached, the computer

automatically places an order, when this new order is received, the recorded balance is

increased. Retail stores have carried this system quite far, each item has a magnetic codes, and

as on item is checked out, it passes over an electronic reader, which then adjusts the computers

inventory balance, at the same time the price is fed to cash register tape. When the balance

drops to the recorder point, an order is place. The researcher aim to develop a automated

inventory system which is technically, operationally, and economically. The method used by the

researcher to develop a automated inventory system is Descriptive Method. The researcher

conduct several interviews in order to gather information about the present existing conditions

of the inventory system, knowing its problems and enhancing it by developing an automated

inventory system. Questionnaires were also distributed to all interviewees for additional

information. Using the descriptive method, the researchers also observe the functionality of the

present inventory system, which help them discover that Electronic Data Processing is

Advantageous than other.

Malcolm E. White Published at 2003; Merchandising means selling products to retail

customers. Merchandisers, also called retailers, buy products from wholesalers and

manufacturers, add a mark-up or gross profit amount, and sell the products to consumers at a

higher price than what they paid. When you go to the mall, all the stores there are retailers, and

you are a retail customer. Retailers deal with an inventory, all the goods (products) they have for

sale. They account for inventory purchases and sales in one of two ways. Periodic and Perpetual.

As the names suggest these methods refer to how often the inventory account balances are

updated. 

Source: Online Article (http://www.middlecity.com/ch06.shtml)

Companies need Inventory System

According to Eugene F. Brigman, in the book of Fundamentals of Financial Management

published at year 2000 in the publishing company of Holt, Richard and Winston Sounders

College Publishing; Companies are increasingly employing Inventory System. A computer start

with an inventory counts in memory. Withdrawals are recorded by the computer as they are

made, and the inventory balance is constantly revised. When the recorded point is reached, the

computer automatically places an order, when this new order is received, the recorded balance is

increased. Retail stores have carried this system quite far, each item has a magnetic codes, and as

on item is checked out, and it passes over an electronic reader, which then adjusts the computers

inventory balance, at the same time the price is fed to cash register tape.

Inventory System Consist

An inventory control system is used in many warehouses to track the location, quantity,

and status of goods that are to be sold. Shipping and receiving of products is scheduled by an

inventory control system. Inventory control uses barcodes and RFID tags to track specific items.

An audit, or a physical count of inventory, is used to find out how many items are in an

inventory. Inventory taking is often required in order to get an accurate count for accounting

valuation purposes. Some inventory items have barcodes attached to them or imprinted on them.

These barcodes can be read during an audit by barcode reading devices.

Source: Online Article (http://www.nationalbarcode.com/articles/inventory-control-system.htm)

Steps for Inventory Management

This section of the paper looks at fundamental definitions and explanations relating to

Inventory Control, Management and Planning. Typical conflicts within the organization that may

affect inventory and what can be done to resolve and avoid these.

According to article of Dr Geoff Relph, Witek Brzeski and Gail Bradbear, published at

year 2003; A simple stock classification method is discussed that gives details about the ABC

technique, Pareto distribution and takes a look into further class level and part level analysis.

There is a worked example of an ABC classification with valuable information about creating

alternative scenarios and varying parameters for class boundaries and order frequency per class.

The results are shown in a series of statistical tables.

Source: Online Article (http://www.inventorymatters.co.uk/portfolio/the-first-steps-to-inventory

management?type=publication)

Advantages of Inventory System

According to Kj Henderson, they have a three major advantages by using of inventory

system these are (Time savings, Accuracy, and Consistency) which helps a lot for a bussiness

man to increase the sales of their business.

Time Savings

As the old saying goes, “time is money”. The amount of time that can be saved by

a business is, perhaps, the biggest benefit of using a computerized inventory system. A

great example of this benefit is the retail industry. In cases where a shop maintains all

data manually, its manager must reconcile each sales receipt with every piece of physical

inventory. Depending on the size of the establishment and how many different products

are sold, this can be a daunting and time consuming task. If that same store, however,

used a computerized point of sale, POS, system, the master inventory list would be

updated electronically each time a sale is made. The only thing a manager would have to

do each day is print out the report highlighting the inventory to be restocked.

Accuracy

An additional benefit of using a computerized inventory system is the accuracy it

ensures. Eighteenth century English poet Alexander Pope is often quoted as having said,

“To error is human.” When an inventory list is maintained by hand, the margin of error

widens with each update. If one mathematical calculation is wrong or one typo is made,

disaster may occur. For instance, if a clerk accidentally adds a zero to the end of a

purchase order, a business could potentially end up paying for 10,000 units of

merchandise as opposed to the 1,000 that is actually needed.

Consistency

A small business operates most efficiently when its processes are executed in a

consistent manner. By using a computerized inventory system, a business owner can

ensures that all orders, reports and other documents relating to inventory are uniform in

their presentation, regardless of who has created them. This will allow ease of reading. In

addition, uniformity creates a professional appearance, which can go a long way to

impress associates, such as potential investors.

Source: Online Article (http://smallbusiness.chron.com/benefits-using-computerized-inventory-

system-2044.html)

Disadvantages of Inventory System

According to Neil Kokemuller, by using of Inventory system they have some

disadvantages by using of this. These are (Customer Needs, Inventory Costs, Coordination, and

Risks).

Customer Needs

Balancing the goals of avoiding stock outs while minimizing inventory costs is at the

heart of just-in-time inventory. One of the main benefits of automated and efficient

inventory replenishment systems is that you can quickly respond to reduced inventory

levels. Companies are now equipped to pull back on stock in a given product category

and ramp up inventory in another as customer needs and interests change.

Inventory Costs

Minimization of inventory management costs is a primary driver and benefit of

just-in-time practices. Inventory management has costs, and when you reduce the amount

of holding space and staff required with JIT, the company can invest the savings in

business growth and other opportunities, points out the Accounting for Management

website. You also have less likelihood of throwing out product that gets old or expires,

meaning reduced waste.

Coordination

A disadvantage of managing a just-in-time inventory system is that it requires

significant coordination between retailers and suppliers in the distribution channel.

Retailers often put major trust in suppliers by syncing their computer systems with

suppliers so they can more directly monitor inventory levels at stores or in distribution

centres to initiate rapid response to low stock levels. This usually means build-up of

technology infrastructure, which is costly. This coordinated effort is more involving on

the whole than less time intensive inventory management systems.

Risks

Just-in-time inventory is not without risks. By nature of what it is, companies

using JIT intend to walk a fine line between having too much and too little inventory. If

company buyers fail to adjust quickly to increased demand or if suppliers have

distribution problems, the business risks upsetting customers with stock outs. If buyers

over compensate and buy extra inventory to avoid stock outs, the company could

experience higher inventory costs and the potential for waste.

Source: Online Article (http://smallbusiness.chron.com/advantages-disadvantages-justintime-

inventory-21407.html)

Professional Inventory Management

According to Dr Geoff Relph, Witek Brzeski and Gail Bradbear; Inventory can be call as

Professional Inventory Management if they meet the terms; (Good Inventory, Extending Stock

Classification for Greater Control, A worked example showing the impact of moving from 3 to 6

classes, Buffer Stock Methodology, Simple buffer stock, Stochastic buffer stock, A worked

example showing the impact of simple safety stock and stochastic safety stock.)

Source: Online Article (http://www.inventorymatters.co.uk/portfolio/professional-inventory-

management?type=publication)

High-level Inventory Management

According to Johnson and Kaplan author of the book of Relevance Lost, (Book published

year 1997; Publishing Company, Harvard Business School Press) It seems that around

1880 there was a change in manufacturing practice from companies with relatively homogeneous

lines of products to horizontally integrated companies with unprecedented diversity in processes

and products. Those companies (especially in metalworking) attempted to achieve success

through economies of scope - the gains of jointly producing two or more products in one facility.

The managers now needed information on the effect of product-mix decisions on overall profits

and therefore needed accurate product-cost information. A variety of attempts to achieve this

were unsuccessful due to the huge overhead of the information processing of the time. However,

the burgeoning need for financial reporting after 1900 created unavoidable pressure for financial

accounting of stock and the management need to cost manage products became overshadowed.

In particular, it was the need for audited accounts that sealed the fate of managerial cost

accounting. The dominance of financial reporting accounting over management

accounting remains to this day with few exceptions, and the financial reporting definitions of

'cost' have distorted effective management 'cost' accounting since that time. This is particularly

true of inventory. Hence, high-level financial inventory has these two basic formulas, which

relate to the accounting period. (First the Cost of Beginning Inventory at the start of the period +

inventory purchases within the period + cost of production within the period = cost of goods

available. Second the Cost of goods available − cost of ending inventory at the end of the period

= cost of goods sold). The benefit of these formulas is that the first absorbs all overheads of

production and raw material costs into a value of inventory for reporting. The second formula

then creates the new start point for the next period and gives a figure to be subtracted from the

sales price to determine some form of sales-margin figure.

Manufacturing management is more interested in inventory turnover ratio or average

days to sell inventory since it tells them something about relative inventory levels. (Inventory

turnover ratio (also known as inventory turns) = cost of goods sold / Average and Inventory =

Cost of Goods Sold / ((Beginning Inventory + Ending Inventory) / 2)) and its inverse Average

Days to Sell Inventory = Number of Days a Year / Inventory Turnover Ratio = 365 days a year /

Inventory Turnover Ratio.This ratio estimates how many times the inventory turns over a year.

This number tells how much cash/goods are tied up waiting for the process and is a critical

measure of process reliability and effectiveness. So a factory with two inventory turns has six

months stock on hand, which is generally not a good figure (depending upon the industry),

whereas a factory that moves from six turns to twelve turns has probably improved effectiveness

by 100%. This improvement will have some negative results in the financial reporting, since the

'value' now stored in the factory as inventory is reduced.

While these accounting measures of inventory are very useful because of their simplicity,

they are also fraught with the danger of their own assumptions. There are, in fact, so

many things that can vary hidden under this appearance of simplicity that a variety of

'adjusting' assumptions may be used. These include: (Specific Identification, Weighted

Average Cost, Moving-Average Cost, FIFO and LIFO).

Inventory Turn is a financial accounting tool for evaluating inventory and it is not

necessarily a management tool. Inventory management should be forward looking. The

methodology applied is based on historical cost of goods sold. The ratio may not be able to

reflect the usability of future production demand, as well as customer demand.

Source: Book (Relevance Lost, p. 126)

Introduction to model of the Perishable Inventory

According to the book of Timothy S. Vaughan, that published in year 1994 (Book of

Book (A model of the Perishable Inventory System with referenct to consumer-realized product

expiration; Publishing Company, Operational Research Society Ltd). The introduction of unit

perishability has significant effect on inventory policy for a large number of commodities. A

significant amount of research has been presented which addresses the trade-offs between

ordering, carrying, shortage, and outdate costs for perishable inventory. A model of the

perishable inventory system which incorporates the effects of consumer-realized product

expiration. This model represents a synthesis of two distinct directions in the perishable

inventory literature, and addresses the simultaneous determination of inventory ordering and

outdate policy for a perishable item with random demand and random lifetime.

Source: Book (A model of the Perishable Inventory System with referenct to consumer-realized

product expiration, Vol. 45, No. 5, p. 519)

The Advantages of a Computerized Inventory Management System

According to Bonnie Conrad, Computerized Inventory Management System give

advantage to the business like first, the Speed and Efficiency. A computerized inventory

management system makes everything from inputting information to taking inventory easier.

Doing a hand count of inventory can take days, but with a computerized inventory management

system, the same process can be done in a matter of hours. Second the Document Generation,

once the computerized inventory management system is in place, managers and workers can use

it to automatically generate all kinds of documents, from purchase orders and checks to invoices

and account statements. Managers can also use the system to automatically order products when

they run low. Third, the Timely Data with a manual system, the data is only as accurate and up to

date as the last hand count. With a computerized inventory management system, the management

team can pull a report and instantly see how many units are on the floor, how many have sold

and which products are selling the fastest.

Source: Online Article (http://smallbusiness.chron.com/advantages-disadvantages-

computerized-inventory-management-system-22513.htmll)

Disadvantages of a Computerized Inventory Management System

According to the article of Johnson Braham if they have advanatages by using of

Inventory System, they have also Disadvantages in using a computerized Inventory. First the

Reliance on Technology, with a computerized inventory management system, the company is at

the mercy of its technology. Outside factors like a power failure or the loss of Internet or network

connectivity can render the system temporarily useless. Second the Accuracy Issues, a

computerized system alone does not ensure accuracy, and the inventory data is only as good as

the data entry that created it. Companies that plan to use a computerized inventory management

system need to have a system in place to validate their data and check the numbers reported by

the system. A select hand count or targeted audit may be necessary to ensure the integrity of the

system. Third the Risk of Fraud, any computerized system carries the risk of intrusion, and with

a computerized inventory management system comes the risk of fraud as well. A dishonest

vendor could hack the system to receive payment for products never delivered, or a dishonest

employee could redirect checks to themselves.

Source: Online Article (http://smallbusiness.chron.com/advantages-disadvantages-

computerized-inventory-management-system-22513.html)

Types of Inventory Management Systems

According to Kenneth Hamlett they have different types of Inventory Managment

systems, first the Manual which is many small business owners, especially if the business has

very few products, keep track of inventory manually. The easiest way to perform manual

inventory management is to use a spreadsheet. For example, a small bakery might use a

spreadsheet to keep track of inventory purchases and usage. The owner can also set up the

spreadsheet to calculate when ingredients need to be reordered. At the start of each week, the

owner manually counts the raw ingredients and components she has on hand. She enters these

values in the spreadsheet. She also enters her expected usage based on existing orders. Using the

appropriate spreadsheet formulas, she determines if she has enough materials for the week or if

she’ll need to purchase more. Manual systems allow the small business owner to manage

inventory with very little investment in systems or training. Maintaining data integrity is a major

downside to managing inventory using a spreadsheet. A single data entry or formula error can

cause major inaccuracies in the data output. Second the Barcode, Inventory management systems

that use barcode technology increase the accuracy and efficiency of managing inventories. All

major retailers use barcode technology as part of an overall inventory management program.

Barcode technology facilitates the movement of inventory within the confines of the warehouse

(from one location to another) or from the supplier to the warehouse (receiving) and from the

warehouse to the customer (picking, packing and shipping). Third the Radio Frequency

Identification, Companies that use RFID typically move thousands of pieces of inventory

through their doors. RFID uses two types of technology to manage inventory movements--active

and passive technology. Active RFID technology uses fixed tag readers assigned throughout a

warehouse. Anytime an item with an RFID tag passes the reader, the movement of the item is

recorded in the inventory management software. Active systems work best in environments that

require real-time inventory tracking or where inventory security problems exist. Passive RFID

technology requires the use of handheld readers to monitor inventory movement. Just as in an

active system, once an inventory item’s tag is read, the movement data are transmitted to the

company’s inventory management software. Because RFID technology has a reading range of up

to 40 feet using passive technology and 300 feet using active technology, it greatly increases the

accuracy of moving inventory around a warehouse.

Source: Online Article (http://smallbusiness.chron.com/types-inventory-management-systems-

2195.html)

Use of Inventory System

According to the article of Pete Abilla that published in Novemver 16, 2011; they tackle

the different cause of using inventory system. First to Stop products from spoiling, if you have

too many products in your warehouse, you increase the risk that they will become obsolete,

damaged, spoiled or stolen before you can sell them all. Depending on which industry you’re in,

you’re probably more worried about some of these risks than others. For example, if you’re in

the technology industry, you don’t want your expensive products to become outdated, damaged

or stolen, but you probably don’t care about their freshness date. Food producers, on the other

hand, put product spoilage high on the list of inventory management concerns. Second to Stop

paying hidden costs, having too much inventory doesn’t just increase your risk of paying more in

the future; it costs you more money all the time. Where will you store the extra inventory? You

may need to buy a larger warehouse than you really need or rent trailers if your warehouse isn’t

big enough. Plus, you have to provide security to prevent theft. And don’t forget about the

money that’s tied up in inventory that you could have used to hire personnel or grow your

business in other ways. Third to Stop disappointing customers, on the other end of the inventory

spectrum, if you have too few products in your warehouse, you face a whole other set of risks.

Your customers don’t want to wait too long to get their orders shipped to them. So if you run out

of the products they’re looking for or if your picking, packing and shipping processes are too

slow, you could drive customers away. Fourth to Stop wasting time, inventory management can

be time-consuming, especially if you’re trying to do it by hand or in Excel spreadsheets. Speed is

everything in business. How fast you reorder products, ship customer orders and update your

inventory records could make or break your company. That’s why an automated inventory

management system is so important. Scanning product barcodes and setting up automatic reorder

points can save valuable time by streamlining complex processes. Fifth the Start planning ahead,

you can’t afford to be purely reactionary in your inventory management. You need to start

planning ahead and being proactive. Instead of being unprepared for sudden spikes in sales, try

to notice these trends ahead of time by monitoring social media channels for mentions of certain

products and looking at historical records to spot seasonal upticks in sales. All of this is easier

said than done. It goes back to having a powerful inventory management system to free up your

time and do most of the data analysis for you.

Source: Online Article

(http://www.shmula.com/why-use-an-inventory-management-system/9501/)

Perpetual Inventory System

According to article of Rosemary Peavler, a perpetual inventory tracking system is a

method of immediately accounting for inventory sales in the inventory account, if there is no

theft or spoilage. It is an inventory management system where store balances of inventory are

recorded after every transaction. It eliminates the need for the store to close down constantly for

inventory stock-taking as perpetual inventory systems allow for continuous stock-taking.

Perpetual inventory systems keep a running account of the company's inventory.

Perpetual inventory systems involve more record-keeping than periodic inventory

systems. Every inventory item is kept on a separate ledger. These inventory ledgers contain

information on cost of goods sold, purchases, and inventory on hand. Perpetual inventory

management systems allow for a high degree of control of the company's inventory by

management. Perpetual inventory management is generally used by companies who have the

ability to scan the inventory items sold and who use point-of-sale inventory systems.

Source: Online Article (http://bizfinance.about.com/od/Inventory-Management/a/perpetual-or-

periodic-inventory-which-should-your-company-use.html)

Periodic Inventory System

According to the article of Michelle Mckinley, a periodic inventory system does not

require day-to-day tracking of physical inventory. Purchases, cost of goods sold, and inventory

on hand cannot be tracked until the end of the accounting time period when a physical inventory

is performed and ending inventory is compared against the sum of beginning inventory and

purchases. Cost of ending inventory can be calculated by using the LIFO or FIFO inventory

accounting methods, or other less common methods. Periodic inventory management allows a

company to know beginning inventory and ending inventory but it does not track inventory on a

daily basis. This means there is lost information. Business owners cannot tell if inventory was

sold or if it was stolen, lost, or spoiled. 

If you own a start-up business without much money, periodic inventory management is

definitely better because you can get by with just a cash register and a simple accounting

procedure. If you sell services rather than products, you may not need an inventory management

system unless you own a restaurant or you are in the hospitality business. As your business

grows, you will probably want to switch over to a perpetual inventory management system as it

allows you to know the balance in your inventory account at any point in time. Large businesses

typically have perpetual inventory systems rather than periodic inventory systems since the rest

of their financial and accounting systems are computerized.

Source: Online Article (http://bizfinance.about.com/od/Inventory-Management/a/perpetual-or-

periodic-inventory-which-should-your-company-use.html)

Local Literature

Computer-based system is a complex system wherein information technology plays a

major role. It makes the work easier, faster and more accurate. Due to that fact, the automated

scheme has become essential to small and big companies for they are expected to give the best

services possible. Nevertheless, some businesses still prefer sticking with the system that is not

integrated with technology. Probable causes are computer illiterate staff and lack of funds.

Companies, especially the big ones are recommended to switch from manual to automated

systems because this will improve the efficiency and productivity of the business which will

uplift the industry’s reputation.

One of the most sought after automated systems of different companies is a purchasing

and inventory system which comes hand in hand. A purchasing and inventory system is very

important in every organization because a good purchase and inventory management can create

excellent productivity. Primarily, i6nventory work consists of input, output and restock. Input is

a process of buying new products into the inventory and replacing the old products with the new

ones. Meanwhile, output is a procedure of taking out the products from the inventory for sales or

usage and refill is a process of increasing the number of existing products in the inventory in

order to fulfill the insufficient products or escalating demands. Most of the retailing market is

using traditional way in the inventory management system where a person is assigned to check

and record the stock by hand using pen and paper. It is where operations with regards to all the

stock will be archived.

(2010, 09). Computer-Based Inventory System. StudyMode.com. Retrieved 09, 2010, from

http://www.studymode.com/essays/Computer-Based-Inventory-System-401903.html

Lopez (1978) conducted a study on a restaurants in baguio city and found out that: 1.

Restaurants are largely sole proprietorships in organization, they are mostly owned by Filipinos,

although many others are owned by Chinese and Americans; 2. Most restaurant personnel are

male, single and predominantly high school graduates; 3. In terms of available facil;ities and

practices, the following are found: a) on service facilities, entrance and exits are properly

situated, good furniture and fixtures, parking space available, good lighting and ventilation; b0

on control of operations, promotion of the

Lewis (2002) stated that the reason for using computers vary from person to person.

Some of the computers in business are to perform accuracy, to be as productivity, to decrease

bottle necks or hassles to alter cash flows or to simples elevate your status.

Sybex Inc (1999) stated that visual basic provide a graphical environment in which the

users usually designed the forms and control that become the building block of tour application .

Visual Basic support many useful tools that will help the user more productivity.

The hardware of a POS system is also distinctive and important. A typical system

includes a display screen for the clerk, a customer display, a cash drawer, a credit card swiping

system, a printer, and a bar code scanner, along with the computer loaded with the POS software.

Custom features may be added or removed, depending on the industry. A restaurant POS system,

for example, may have a feature which prints order tickets directly in the kitchen, or a grocery

store may have an integrated scale for weighing goods.

Most small businesses underestimate the importance of managing their inventory. They

do not realize that many headaches and fire drills are caused by the lack of control and

knowledge of their inventory. Whether it is a lack of knowledge of the quantity or specs of a

certain product, businesses too frequently use outdated inventory systems. Insufficient systems

do not allow them to get the most out of their inventory, because when used properly, inventory

management systems allow businesses to make a concise, real time analysis of products and

markets that help them make better business decisions. Inventory management systems also

allow businesses to better serve their customers since they keep a detailed and accurate record of

purchase histories and trends so they can reorder products more efficiently restaurant business

was primarily through tie-ups with travel agencies, while advertising through radio was utilized

only by some establishments.

The mission of hotel and restaurant education school is to educate future workers and

leaders of the industry; however, there is a prevailing apptrehension that teachers will become

too academic in their approach and lose contact with reality. Thus, there is a need for schools to

select faculty, students and curricula that produce “reflective practitioners” and not scholars clark

1989.

Some define fast food restaurants as limited mean restaurants that do not have table

service(eherts and gisler, 1989). Most fast food restaurants are parts of large well known chains.

There are also small chains of just a few restaurants as well as single unit operation. Naturally,

fast food restaurant, as their name implies, serve food much faster. These restaurants often boast

of getting food to their customers in less than a minute after an order is taken. They also have

fewer choices of mean items, furthermore, fast food restaurants, the hamburger has has remained

king. There are more hamburger chains compared to any other category of fast food chains such

as those that specialize in chicken, seafood, roast beef sandwiches, Mexican food, Chinese food,

pizza, spaghetti and dozens more.

Janes (2001) stated that computers are extremely reliable device and very powerful

calculators with some great accessories applications like word processing problem for all of

business activities, regardless of size, computers have three advantages over other type of office

equipment that process information because computer are faster, more accurate more

economical.

Reyes (2005) task would be time consuming to accomplish manually and more practical

with the aid of computers field in cabinet.

Dioso (2001) stated that computer assist careful intelligent planning, organizing,

actuating and controlling .This maybe observed from the past that they monitor production

activities, solve scientific problem and help arrive in tentative answer to a multitude of involve

conditions.

Ralph M. Stair (1999) emphasized that the development of technology through the years

have enabled us to do more with less effort. From the orientation of the light bulb to the

industrial revolution and beyond, we have continuously tried to in a more efficient means of

doing tasks.

(2011, 11). Review of Related Foreign Literature. StudyMode.com. Retrieved 11, 2011, from

http://www.studymode.com/essays/Review-Of-Related-Foreign-Literature-823615.html

It is without a doubt that one of the major roles played by today in almost every area in

the society particularly in business and marketing is the computerized system. This system

enables us to make very detailed work and follows accurate directives without error. This study

is prepared for the implementation of the Sales Inventory System in Borderless Hub Philippines,

Inc. located in Rm. 306-307 Pink Walters Building Quimpo Boulevard, Davao City. In order to

know the problem, we conducted an interview with the managing team for sales, billing, and

inventory. This led us to problems like the manual time-consuming record of documents, billing

errors and difficulty in data retrieval.

The basic advantages of the proposed system are to make the process fast and well-

organized which means that they can process much more quickly than humans. Data retrieval has

to be searched in lots of registers slowly and it wastes a lot of time. The current system that the

company uses is manual receipt recording. It makes the data not reliable enough as it is hand

written and there is a high probability of errors to occur. Data recording consumes a lot of space

since it is stored in cabinets and folders. It is also prone to data loss where it could be missing

because of improper file management.

Inventory is a company’s merchandise, goods and materials that are contained in the store

factory at any given time. The employees need to know how many units of their products are

available for reservation and sales and the items that are sold. All of these rely on the inventory

system to present solutions. The sales inventory system would provide service to the user, input

information to the database, summarize the inquiry of bills, and manage the product releases and

storage. This would generate a faster improvisation of work given less time and effort.

(2012, 10). Sale Inventory System. StudyMode.com. Retrieved 10, 2012, from

http://www.studymode.com/essays/Sale-Inventory-System-1117762.html

Inventory control systems maintain information about activities within firms that ensure

the delivery of products to customers. The subsystems that perform these functions include sales,

manufacturing, warehousing, ordering, and receiving. In different firms the activities associated

with each of these areas may not be strictly contained within separate subsystems, but these

functions must be performed in sequence in order to have a well-run inventory control system.

In today's business environment, even small and mid-sized businesses have come to rely

on computerized inventory management systems. Certainly, there are plenty of small retail

outlets, manufacturers, and other businesses that continue to rely on manual means of inventory

tracking. Indeed, for some small businesses, like convenience stores, shoe stores, or nurseries,

purchase of an electronic inventory tracking system might constitute a wasteful use of financial

resources. But for other firms operating in industries that feature high volume turnover of raw

materials and/or finished products, computerized tracking systems have emerged as a key

component of business strategies aimed at increasing productivity and maintaining

competitiveness. Moreover, the recent development of powerful computer programs capable of

addressing a wide variety of record keeping needs—including inventory management—in one

integrated system have also contributed to the growing popularity of electronic inventory control

options

Given such developments, it is little wonder that business experts commonly cite

inventory management as a vital element that can spell the difference between success and

failure in today's keenly competitive business world.

http://www.studymode.com/essays/Sales-And-Inventory-System-784556.html

Studies rely on information researched by the proponents. Related literature and studies

help the researcher understand the topic better because this may clarify vague points about the

problem. It also guides the proponents in making comparisons between his findings with the

findings of other similar studies. We research and gather this all information by internet,

magazines and books.

According to the article in Cleantouch Class Management System it stated that, to

provide complete computerized operations in any school. Students can be managed through Bio-

Data (GR No. Allotment), Attendance, Fees, Examination, Leaving modules. Staff records can

be computerized by Bio-Data > Staff Salary > Leaving modules. Accounting module is

integrated with all other modules to getting rid of transaction duplication.

Asen, Judith. 2008. Differential Object Marking: Iconicity 17:673-711.

According to the articles in SKG Computer Solutions it stated that, Handling this study

center/school/college very well, is very tedious task to manage. The data on registers or maintain

the database manually. Therefore, the School Management System software is provided for you.

It is errorless and appropriate version. It is the computerized system to manage the data of

studycenter/school/college. [software.techrepublic.com.com/abstract.aspx?d,2008]

According to Eleonora Alekseykina , she stated that Reliable and fast school management

software with the great customers support. It'll help you with your daily school management

routines and deliver you from your paperwork.

[http://download.cnet.com/School-Management-System/3000-2065_4-10538769.html,2009]

Inventory is one of the most important in monitoring a stock that take place in business

activity. The inventory system does the entire task in computing the value with inventory (cost

and quality) and handling data or information. Inventory System maintains an orderly flow of

supplies, raw materials, or finished goods through an office shop/factory because of items in any

inventory. Represents cost, they need to be controlled. The purpose of inventory system for

management are to keep inventory levels and cost at desire minimums while maintaining to

proper safeguards over materials to places and people who need them.

Inventory review refers to the time interval between counting inventories. Periodic

review systems have a set schedule for conducting an inventory count. Transactional review

systems update the inventory count after each transaction. Periodic review is less resource

intensive but more prone to creating shortages and inventory discrepancies while transactional

review is more accurate but requires more resources.

Inventory costs can be broken into several categories: the actual cost of the inventoried

product, the cost of storage and the cost of unmet demand if inventory is not available to fill

orders. Additional costs include transportation and ordering costs incurred when replenishing

inventory. Each of these costs is unique to individual businesses and can vary widely.

(Warren R. Planret, 2002)

Inventory means goods and materials, or those goods and materials themselves, held

available in stock by a business. This word is also used for a list of the contents of a household

and for a list for testamentary purposes of the possessions of someone who has died. In

accounting, inventory is considered an asset.

http://www.studymode.com/course-notes/Inventory-System-1128684.html

It is little wonder that business experts commonly cite inventory management as a vital

element that can spell the difference between success and failure in today's keenly competitive

business world. Writing in Production and Inventory Management Journal, Godwin Udo

described telecommunications technology as a critical organizational asset that can help a

company realize important competitive gains in the area of inventory management. According to

Udo, companies that make good use of this technology are far better equipped to succeed than

those who rely on outdated or unwieldy methods of inventory control.

Automation can draidatically affect all phases of inventory management, including

counting and monitoring of inventory items; recording and retrieval of item storage locations;

recording changes to inventory; and anticipating inventory needs, including inventory handling

requirements.

http://www.studymode.com/essays/Review-Of-Related-Studies-Inventory-732920.html

Foreign Studies

Automation can draidatically affect all phases of inventory management, including

counting and monitoring of inventory items; recording and retrieval of item storage locations;

recording changes to inventory; and anticipating inventory needs, including inventory handling

requirements. Effective Inventory Analysis. Get Data Related to Effective Inventory Analysis.

For many distributors, inventory is the largest and perhaps the most important asset. Inventory

ties up more money than buildings or equipment, and is often less “liquid.” It is crucial, then,

that distributors develop and use a comprehensive set of tools that allows close monitoring of the

performance of inventory investments. Read more about simple measurements that can help you

maximize your investment in inventory.

According to the study of Edwin Bello and his fellow researchers of Computerized

Monitoring and Inventory of Stock with Warning Level dated March 2005, many firms have

thousands of items of inventory which require some form of control. The usage calculations and

record keeping chores would soon become overwhelming were it not for the computer and its

unique information storage and retrieval capabilities.

http://www.studymode.com/subjects/related-studies-in-pos-page2.html (2011, 09). Chapter Ii:

Related Literature and Studies of Inventory System.StudyMode.com. Retrieved 09, 2011, from

http://www.studymode.com/essays/Chapter-Ii-Related-Literature-And-Studies-767850.html

Local Studies

According to the study of Anna Marie Beltran Distor of Proposed Sales Monitoring

System issued 1995, the accelerated work structure of the company proper monitoring is

essential in order to keep track of the company’s sales activities. Her system aims to come up

with an efficient, and accurate mechanized system of preparing invoices that will keep trSack of

the daily transaction and generate reports. Important information will be provided by this study

in order to prove that the computerization of the company’s operation and achieve a more

reliable and efficient means of monitoring day to day activities. Her system focuses on the

analysis and design of the sales monitoring system which will monitor the stacks inventory of the

sales departments. This system of hers is somewhat related to our study but our system focuses

more on the inventory monitoring system of a trading company.

Popular author of Accounting, Waldo T. Passion (1990) in his book stated that, to

improve their efficiency and reduce their cost of operation. Reports are more timely and

accurate. Computers have large capacity to store data and tremendous speed to manipulate and

recall data to the format a user wishes to use which the introduction of microcomputer

computation of business is more affordable.

Synthesis

The proponents believe that every literature and every studies stated in this research is

similar on the present study . The proponents relate and differentiate the research based on the

flow of their transaction from the proposed study. The transaction and process and also the

design specialization will easy help to acquire and accommodate and communicate with the user.

The proponents get and use other research in this chapter, in which it helps to them, because they

get knowledge during creating the systems.

This Review of Related Literature and Studies, illustrate the specific and general task of

the Inventory Management System, also the types of Inventory that gives a lot of knowledge for

everyone before entering into business and using Inventory. In this chapter the proponents put a

different opinion of others interms of Inventory, the Literatures and studies should get on the

Book articles on the internet.

Inventory Management system, tackled how you manage your inventory whether manual

or computerized, both of that having advantages and disadvantages for the business, this chapter

gives an idea also for the reader to review what’s use of Inventory to the business.