Topics: Requirements analysis, System requirements, Inventory Pages: 24 (6601 words) Published: May 22, 2013
Chapter 1


Background of the Study

Sales and Inventory System is a process wherein a business keeps track of the goods and materials that is available and record its sales every transaction. The term inventory means the total amount of goods or materials contained in a store or factory at any given time while sales means an act of selling of a product or service in return for money or other compensation. Sales and inventory system could monitor the movements of the stocks as well as the sales transactions (“Small Business Management”, n.d.).

A successful relationship between sales and inventory operations involves either a predictable rhythm of inventory turnover as a result of consistent sales, or dependable communication between the two. In order for the system to function smoothly, the sales must have a clear idea of how long it takes the inventory to acquire more products, through production or ordering, and must plan its orders accordingly (Jane, 2011).

Companies take an inventory of the supplies on a regular basis in order to avoid running out of popular items. Others take an inventory to ensure the number of items ordered matches the actual number of items counted physically. Companies take an inventory every quarter in order to generate numbers for financial reports and tax records. Ideally, most companies want to have just enough inventories to meet current orders.

Due to the fact that Sales and Inventory System is already available, still many companies operate manual processes. AMCO Water Metering Systems, the widest product portfolios in the water metering industry is one of the companies that still using manual sales and inventory system. The manual process of the company slows down its warehouse and distribution operations. Workers only used paper forms for them to record product moves and take annual physical inventories and later enter the data on a stationary computer (Albright, 2010).

According to Flores et. al (2012), Bsomar Marketing is using manual procedure on their Sales and Inventory System. Bsomar Marketing sells cylinder gas, nitrogen gas and oxygen tanks. The company encountered problems when it comes to the stock in and stock out of their supplier, computing the profits, the daily and monthly records.

According to Jane (2011), inventory system operated by hand is also referred to as manually operated inventory system. A manual inventory is updated, maintained and controlled without using technical system. This means the business updates the inventory by physically counting the inventory items on a regular basis. The owner must track the inventory sales on daily basis. Manually operated inventory system can be problematic in terms of communication streams. Since the inventory is operated by hands, each update from inventory must be updated daily. If an employee forgets to inform the manager of removed items, the overall total of available items is flawed and can cause the overall inventory value to be skewed as well.

The impact of inaccurate inventory records on the performance of retailers can be severe because the stores rely on the inventory record to make important operational decisions. Tracking the inventory record manually is very time-consuming. If there is an error in the inventory record, items may not be ordered in a timely fashion, resulting in out-of-stock situations or excess inventory.

The continuing trends of computers are integrated in different fields of society. Automation of work is already spreading and leading in the world of business because of the enhancement that it brings to the management system like production, financial, marketing, human resources and other similar transaction. In this modern world, technology evolves. Computerized businesses exist with high-technology featured system and one of these is the processing, sales and inventory system (Dooley, 2009).

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