Letter

Topics: Inventory, Marketing, Cost of goods sold Pages: 7 (761 words) Published: October 8, 2014

CHAPTER I:
Introduction
A. Background of the Project
Company Profile
MARCH 23 PAINT CENTER
Owner: Julieta Belga
Revenues: Php 900,000/monthly
Employees: 3 employees
Industry: Paint Retailer

March 23 Paint Center opened its door for business in 2000. Its name originated from the anniversary of the owner with her partner- Mr.Balbino Belga. As a paint retailer firm, it does not only include paint as its main product of selling but also the other things needed in painting like thinner, paint brushes, and many more. It is a profit-generated firm and does not recognize losses. For its 14 years of business, the firm has been producing, developing and advising on paints for both professional markets and home decorating channels. The company is in a monopolistic competition. Prices depend on its rivals. Today’s innovation enables it to meet the demand of global market. It has its suppliers from Manila with different brands of paints. It offers different brands for the different tastes of its consumers. Some of the brands are Rich’s, Rosco, Prime, Boysen, Meyer, Guilde, Davies', Welcoat, and etc. It uses a Just-in-time inventory system and order cycle method of inventory. It places an order for more supplies when the inventory runs out. Usually, 160 boxes of different gallons of paint and brands are delivered to the firm monthly. One box contains 4 gallons of paint. Like any business organization, it has its slack season which starts from June and ends in August having summer as its peak season. Firm usually earns Php 900,000 monthly. It has a fixed revenue of 10% in the slack season and 20-30% based on sales in the rest of the year, not considering the losses that may be incurred. Workers mix paints customized by the buyers. The firm commonly orders primary colored paints in order for the mixer to blend them with other paints.

Locale of the Study
March 23 Paint center can be found at Quezon District, Maharlika Highway, Bantug Bulalo, Cabanatuan City. From Araullo University, it’s on the left portion of the road, across McDonalds, and along the highway. It can easily be located for it belongs to the lane of paint centers. Refer to the figure below.

Organization Structure

Figure 1.2 Organization Structure

IT equipment and Facilities
Small businesses, like March 23 Paint Center, do not usually consider technological facilities as one of their essential needs to grow in their industry. In believing that it is enough to have a cash book as a record for their daily transactions, they use a manual system for their business instead of a computerized system. The company doesn’t also involve technological facilities in its inventory counting, maintenance and security. It uses Just-in-time inventory system wherein inventory is only replenished when sold. Quantitative records of every product brand sold are not kept. The company only uses the number of boxes in its stockroom as basis for inventory count. The company’s manual system may be appropriate for its daily operation but it would be more convenient if it will adopt a system that would organize its daily business transactions. The old method poses a probability that a failure and loss of productivity will occur. If the company will consider employing technology in its business, efficiency will be achieved. Hence, good customer relationship can also be established.

B. Objective of the Study
General objective
The overall objective of this study is to evaluate the flow of business transactions of an entity using only a manual system. It also aims to present the pros and cons regarding the use of journals, ledgers, and logbooks to account for day to day transactions. Specific Objective

This study aims to propose a computerized system to an SME selling various kinds of products, particularly paint and the like. Specifically, this study points out to an inventory system which may be useful to...
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