A Thesis presentation
Presented to the Faculty of
College of Business and Accountancy
University of Caloocan City
Camarin Campus
Submitted by:
CONTRERAS, APRIL MAY E.
FALCOTELO, LAILANIE D.
GUIANALAN, EMA D.
JAVIER, CECILLE O.
LOZANO, DEZAVELLE A.
In Partial Fulfillment
Of the Requirements for the
Degree of Bachelor of Science
In Accounting Technology
Submitted to:
Dr. Zenith C. Camu, CPA
Thesis Adviser
UNIVERSITY OF CALOOCAN CITY
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CHAPTER I
Introduction
Inventories are essential for keeping the production wheels moving, keep
the market going and the distribution system intact. They serve as lubrication and
producing and delivering an order for a given products part, loner gan (2013)
the way they fill their warehouses (www.supplychain247.com). The latest trend in
inventory management is always the use of data analytics. Digital technology helps
make the use of advanced analytics easier. A company will have access and
visibility into more useful data about the efficiency of inventory management.
improvements. It can also help predict what actions that a business needs to make.
(magentone.over-blog.com)
operations are improved by providing the ability to oversee inventory levels, trends,
functions.
With a warehouse solution that allows you to run multiple facilities on the
same system, it’s easier to have complete visibility of your inventory and shift as
12 months, resulting in lost sales for retailers and lots of disappointment for in-
store shoppers. Globally, retailers recorded losses of a whopping $1.75 trillion due
spreadsheet or worse, not managing at all, then your business might be suffering
and it’s high time that you streamline your Inventory Management Processes.
Managing inventory can be very challenging, and when you are a growing
business it can be really painful. If you are facing issues in tracking your inventory
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and if it is getting difficult for you to optimize your warehouses and storage facilities
With the ever surging demand in products and services across several
evolved to ease the process of effective and efficient service delivery to customers
discipline charged with optimal use resources and for achieving overall operational
“Inventory” is one of the more visible and tangible aspects of doing business
raw materials, goods in process and finished goods. Shortage of inventory when
involved in developing and managing the inventory levels of raw materials, semi-
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supplies are available and the costs of over or under stocks are low.
Always (FELTA) with the aim of providing the academe with instructional materials
For over four decades, FELTA has been assisting in upgrading the quality
of education in the country through its multi-educational line that serves the
skills boxes in all subject areas in all levels, for the past 15 years; the introduction
of Micro slides, a new teaching tool for science, biology, physics, chemistry, earth
We choose FELTA Multi-media Inc. because they are the major educational
manufacturer and distributor with over almost 39 years of experience in the audio-
visual field. Media products enable our youth to construct, learn and grow in fruitful
Video Programs, FELTA works in association with the Cultural Center of the
awareness and interest in the latent Filipino culture. Felta’s video programs
FELTA has tied up with prestigious publishers worldwide. On the other hand, Felta
Multi-media Inc. is facing problems in accordance with their inventory. Felta Multi-
media Inc. in terms of their records are having variation with the physical inventory
1.1 Age;
1.2 Gender;
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1.5 Position;
Inc.?
5. Based on the above findings of the study, what Inventory Management Model
Hypothesis
study. They are in the best position to furnish the researcher with the information
This study will be conducted with limited amount of financial resources and
time framework.
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FELTA Multi-media Inc. The research will benefit the management and the
workers of FELTA Multi-media Inc. to know why there are challenges in their
inventory and to understand the importance of inventory. They are able to do their
inventory management practices and relate the findings to the real situation.
the future researchers. The study is going to add to the existing literature regarding
CHAPTER II
This chapter discuss the related and significant studies that have been
Process.
Related Literature
successful running and survival of business firm. (V. Vijaya Lakshmi and K.
Ranganath, 2016)
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In this context, ‘inventory’ is the aggregate list of items; a quantity of goods in stock
or stock of the product which an organization is producing for sale and the
components that make the sale. ‘Stock’ consists of a wide range of goods or
pivotal in this context because any ‘control’ is deemed a process by which events
are made to conform to a set plan. The term ‘control’ has familiar synonyms such
diverse external and internal factors that can exert demand for materials in a given
Dictionary, 2012).
are used for organizing, holding and replenishment of stock. The main goal – keep
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the inventories on optimal level, without stockouts and excesses. For this, two
To have enough inventories to fulfill orders of outer and inner clients in a manner
satisfying them. Or with other words – assure high level of customer service.
Usually this customer service level is measured as availability (fill rate). [2] To
minimize inventory carrying costs, first of all capital tied into inventories for
maximizing the company`s profitability. There are different types of inventory: [1]
pipeline stock – items that are en route from one location to another. They may be
considered part of cycle stock even they are not available for sale or shipment until
after they arrive at the destination. [3] Safety or buffer stock – held in excess of
level for customers. Makes the majority of inventory in the typical logistic system.
[4] Speculative stock – held some reasons other than satisfying current demand
may also lead to the manufacture of products at times other than when they are in
demand. [5] Seasonal stock – form of speculative stock that involves accumulation
of inventory before a seasonal period begins (or ends – in agriculture). [7] Dead
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stock - items for which no demand has been registered for some specified period
will sustain the organization’s daily operations at minimum costs. This covers
issues like determining the level of stock to order, when to order, establishing
receipt and inspection procedures and providing proper storage facilities. Without
proper stock control procedures in place, firms are likely to face two undesirable
In this context, ‘inventory’ is the aggregate list of items; a quantity of goods in stock
or stock of the product which an organization is producing for sale and the
components that make the sale. ‘Stock’ consists of a wide range of goods or
pivotal in this context because any ‘control’ is deemed a process by which events
are made to conform to a set plan. The term ‘control’ has familiar synonyms such
inventory, depending on diverse external and internal factors that can exert
demand for materials in a given period (Adebayo et al, 2012; Enikanselu, 2008;
place to accurately receive inventory is one of the most common small business
inventory management mistakes, and the data backs that up. According to the
mistakes that aren’t caught during the stock receiving process. A sound process
that includes checking all stock receipts against purchase orders minimizes these
losses.
There are three main systems that can increase the profitability of a
business when updating from manual checkout processes. The first is a Point of
Sale (POS) system, the second is an Inventory Management (IM) system, and the
IM systems are explored within the scope of this project. The initial POS system
includes the technology used to complete and record sales transactions on the
[SaaS]). A POS system is the foundation for the other two systems to function. 5
system tracks inventory levels for every item on the sales floor according to its
stock keeping unit. It is able to produce accurate and current inventory counts
based on sold and damaged items which is accessible from either a company
improve inventory decisions and reduce inventory costs. These two system work
well together: demand planning from the POS system can coincide with inventory
levels and ordering policies from the IM system to greatly reduce costs. The third
interactions with current and future customers at both retail and wholesale levels
with past purchases collected at the POS system. This information is accessible
at any time and is used for marketing campaigns, post-purchase email reminders,
newsletters, etc. The CRM system is meant to better serve customers, increase
customer willingness to pay, and retain customer loyalty. It helps to keep the
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their purchase. However, this system does not affect the core operations of a
need.
When updating from manual processes, the first system necessary is the
software helps to identify “not only daily and weekly POS performance, but also
inventory levels by SKU and location, order status, in-stock percentage (in-stock
ofstocks” (Shapiro, 2012). Further research shows that a POS system streamlines
thereby allowing for expedited inventory management for companies still doing this
counting manually (Casison, 2013). POS data can be used to create expected
sales forecasts based upon previous demand. This will impact purchase orders,
POS data can be used to forecast what end-users will buy” (Simon, 2013).
Forecasts are a very useful tool when considering how to price items and when to
reorder additional units because they identify the frequency at which items are
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sold. The flexibility and automation that a new point of sale system provides over
which can then be used to produce a variety of sales reports including: daily reports
with historical data, six week history reports, top selling categories, top margin
categories, top margin customers, top margin items, customer rank by sales, top
selling items, and sales by time of day (Polanz, 2012). Specifically for the retail
agriculture industry, a good system can show a manager which plants are making
the most money, which ones are stagnant, and which ones maintain the highest
holding costs. This knowledge is crucial when dealing with perishable goods.
(Youngblood, 2013).
POS systems can also tackle issues relating to seasonality that all garden
centers must consider. It is difficult to sell particular plants, such as fall blooming
flowering shrubs, during the start of the season comparative to others, like annuals
for window boxes or flower pots, which 7 would sell quickly during that time.
Conversely, that same flowering shrub might outsell an annual greatly at the end
of the season because its value is not subject to seasonal obsolescence. Often
retailers can reduce inventory holding, handling, and stock-out cost substantially”
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(Ehrenthal, Honhon, & Van Woensel, 2014). Without the proper technology, there
is a gap between a manager’s insight into trends and their actual patterns. A POS
system tracks the sale of individual categories of plants immediately when they
occur and manages every transaction completely. This provides management with
a greatly enhanced ability to plan orders, plant placements, and adjust strategies
for the seasonal nature of the industry (Lombardi, 2012). Wallitsch Garden center
replace its manual system and as a result experienced much greater flexibility in
pricing. The company had access to new data which allowed them to “price
products individually based on margin, rather than grouping products into one price
homogenized price. These products are then sold individually in the store with
using POS data to compare the price points offered by various vendors, and in turn
was able to make smarter purchasing decisions for those products. Overall, the
updated system helped manage and control inventory and increased the profits of
Coupling historical data trends with better buying helps to increase inventory
accuracy, reduce the need for end of year clearance sales, and ultimately reduce
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time buying policy as a result of having an electronic point of sale system, and
keeps a consistent flow of healthy products all deliverable within five days (Harvey,
2013). This system has also helped reduce end of year inventory significantly by
carefully managing inventory levels throughout the season. The just-in-time buying
system pushes those incremental costs back up the supply chain where, at the
the efficiency of purchasing. Point of sale and inventory management gathers the
accurately forecast seasonal sales and make better buying decisions for the
future”. Orders can be created more precisely and cost effectively. Garden centers
without forecast insight typically utilize push inventory systems, which requires
stocking large quantities of items and marketing them to sell as fast as possible.
As a result, inventory costs rise as research suggests that “every time an inventory
item has a birthday, it costs the retailer 30%” (Youngblood, 2013). This is explained
levels do; plants need water, fertilizer, adequate light conditions, and proper care.
Carrying costs are naturally high in the industry, and inventory left over at the end
of each year damages retailers’ margins. Both employees and customers are
advantage for garden centers of any size. Customer inquiries can be handled
much more quickly because “sales staff can locate stock on hand at any store
location right from the POS terminal, and check the status of backorders, enabling
[employees] to efficiently fulfill customer needs and move them through checkout
spend the day wandering the sales floor counting every item (Sandstrum, 2014).
better judgments and ultimately practice smarter selling. Data reports highlight
specific needs and eliminate guessing and biases that employees develop
throughout the course of their work (Sandstrum, 2014). If need be, repositioning
strategies can be applied to every item within the POS database. In particular high
turnover items, like annuals, are very difficult to price individually because each
However, there are clear trends in customer demand based upon color,
variety, and growth characteristics (upright, spreading, trailing, etc) which appear
in demand planning derived from POS data. A POS system with this ability will
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help able to track the sales data necessary to make better judgments on plant
placement so that management can choose high margin items to place along the
route to high turnover plants. There are challenges and capital investment a
garden center needs to recognize when implementing a POS system. While the
employee is new to the system. In addition, while small systems can cost in the
range of $1,000 to $2,000, larger more complete systems can cost in excess of
$75,000. (Bame, 2012). Estimates suggest that if a garden center is making about
$500,000 in revenue per year, then it is most likely losing money without a POS
system. Once a business takes the appropriate steps to implement a system and
then begins forecasting, issues can arise with demand planning based upon actual
sales data. Specifically, “in the event of a stockout, a backorder is not allowed, so
all unfilled demand is lost… Real-world systems rarely include backordering at the
retail store level and cannot record demand during stockout. Therefore, historical
demand does not actually represent the amount of demand in the system, but just
buying practices and smart ordering which helps to eliminate these issues.
Creating accurate sales forecasts and eliminating stockouts through better buying
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provide synergistic effects, which increase the value of both functions individually.
A forecast that best represents actual demand creates informed ordering, and
Businesses all over the world, especially ones that are in the Philippines,
need inventory management in order to fulfill their business goals and objectives.
take it literally and say that it is managing inventory and you wouldn’t be wrong.
overseeing, controlling, and handling the flow of inventory units that are used in
the production or distribution of goods. (Mendoza, 2018) The saying that time is
money is certainly the case for businesses. Delivering finished goods or receiving
raw materials or inventory is time sensitive. Delays affect production, delivery and
work schedules, take its toll on the bottom line of the company. (Chua, 2015)
suppliers from other countries are more readily able to provide products at more
reliable delivery schedules. Our traffic situation has enforced the implementation
of color-coding schemes, truck bans and even contributed to our ongoing port-
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Public transport, delivery trucks and shuttle services are also victim to the
perpetual traffic in Metro Manila. Instead of being able to do three or four round
trips, they are lucky to be able to do two, which translates to lost revenues and, in
many cases, a shift from profitable operations to a losing business. Public service
also suffers in that the available schedules become less frequent and the waiting
of which is to provide the best service to customer. When a customer calls for a
sales order, delivery must be done at the fastest possible time at the lowest
meet the challenge of serving customers on time. However, under the strategic
models change as the environment of business changes. But the core goal of
inventory management remains the same, that is, “make the customer happy” by
the firm is offering for sale and the components that make up the product. (Cabrera,
of inventory to ensure the smooth operation of the firm’s production and marketing
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functions and at the same time avoid tying up funds in excessive and slow-moving
to deal with. This white paper outlines some of the major factors affecting inventory
and supply chain management. Automation can practically affect all phases of
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
finished goods that are considered to be the portion of business’s assets that are
ready or will be ready for sale. Formulating a suitable inventory model is one of the
researches date back to the second decade of the past century, but the interest in
this scientific area is still great. Again considering the reliability of any process is
an important feature in the research activities. Values of some factors are very
characteristics and types of inventory control models that have been developed.
customer demand, meanwhile these inventories have holding costs and this is
frozen fund that can be lost. Therefore, the task of inventory management is to find
the quantity of inventories that will fulfil the demand, avoiding overstocks. This
stock levels and to apply an agent system for automation of inventory management
In the opinion of (Darya Plinere and Arkady Borisov, 2015) they mentions
[4] To take advantage of order cycles; [5] To hedge against price increases or to
have inventory due to inventory keeping costs. This situation makes inventory
inventory management. But in practice, low inventory level is not always a good
solution. Manufacturers need to maintain the right amount of inventory at the right
sounds good in theory, in practice, the balance of cost and benefit should be
considered.
that are ready for shipment. This often means posting the production of newly
completed goods to the inventory totals as well as subtracting the most recent
shipments of finished goods to buyers. When the company has a return policy in
account for any returned goods that are reclassified or second grade quality.
and ready for shipment at any given time. Inventory management is important for
keeping costs down, while meeting regulation. Supply and demand is a delicate
will be seen in the forms of increased revenue and profits, positive employee
(reserves) are created to carry out the normal activities of the company. Proper
and timely determination of the optimal inventory control strategy allows freeing a
increases the efficiency of resource use. Even though there are literally millions of
different types of products manufactured in our society, there are only two
fundamental decisions that one has to make when controlling inventory: [1] How
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large should an inventory replenishment order be? [2] When should an inventory
slower but cheaper. Such a strategy will be optimal inventory control, which
minimizes the sum of milestones costs associated with the production, storage and
inventory shortage per unit of time or for a specific (including infinite) amount of
time. Management models differ in the nature of the available information on the
properties of the simulated system. When the value of the model parameters is
the parameters of the system are random values with a known probability,
not change over time, it is called static, otherwise – dynamic. Static models are
used when receiving a one-time decision about the level of reserves for a certain
period, and dynamic – in the case of sequential decision-making about stock levels
or to adjust earlier decisions, taking into account the changes taking place. When
Single versus multiple items. This dimension considers whether a single item can
inventory management situations, the selling season for products is short, and
excess stock at the end of the season cannot be used to satisfy the demand of the
next season. In such cases, a single period model is required. When multiple
of future periods and are made at the start of each period. The decisions are then
implemented in the current period, and the problem resolved at the start of the
a single stocking point in isolation. In many real world cases, inventories of the
same item are kept at more than one location. In multi-echelon situations, the
orders generated by one location (e.g., a branch warehouse) become part or all of
Silver (2012) identifies three possible forms of lead-time. The first form is
replenishments arrive after a random time; and the final form is where seasonal
factors may affect the time it takes for an order to be fulfilled. A supplier usually
has limited capacity; therefore, order size restrictions are taken into account in this
of a certain type of products handled by the system. Lack of stock at the right time
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Almost all products have some type of peaks in their demand pattern,
variable demand is very important. A peak that not is representing the normal
demand pattern will give a too high value for the forecasting since the forecast is
based on historical data. In order to find those products, different peak values were
tried and then analyzed visually. Since the forecast is based on the last six months
so were the peaks. A peak was defined as a peak if there were one, two or three
values that were higher than a certain level above the average level and a
minimum average level. Different levels were tested and analyzed both by looking
at the peak products but also by looking at the other products to see that they did
not contain any products that should be allocated as peak products. (Daniel Arrelid
strategies that they see match for his or her sort of enterprise. Through doing this
they could decrease overhead fees and growth their purchaser pleasure by way of
having goods available when the consumer demands them hence enhancing the
and controlled in a manner wherein the records is real and correct so that there is
no overstocking and 5 minimal shortages are found out. Be aware that proper stock
management with the aid of the procurement characteristic also way having correct
constitute up to 50% of the full product fee, the money entrusted on stock, thereby
goals of maintaining appropriate level of inventory and minimizing waste. One way
track and update the information about the products, tools or equipment. One of
cost. Therefore, it is very important to determine the optimal stock and optimal time
models the demand rate is assumed to be a constant. But demand for physical
(http://dspace.cas.upm.edu.ph)
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we should only consider not only the system technical implementation itself but
also the business process which it is rooted. The biggest profit in the supply chain
of this process is to meet the customers demand quickly with the lowest cost.
ensure that the final consumer can get the products which they want to buy.
However, this kind of management is also apt to accumulate too many stocks in
the points of sales which lead the entire supply chain expose to high risk, from the
rising of inventory costs to the dull sales or products sold at a loss. Therefore,
cost loss of inventory owing to market changes. But the reaction speed to demand
could be affected. In Musara Mazanai’s research, his paper presents the findings
of the study that was conducted to investigate the impact of application of Just-In-
Time (JIT) inventory management system in the manufacturing sector SMEs. The
study revealed that the majority of SMEs in the manufacturing sector were not
management principles and cost efficiency, quality and flexibility were found. It is
illustration, Procter & Gamble drove out non value-adding supply chain costs to
save the company over $200 million by using an optimization model with an
interactive approach. One of the approaches which have long been proven
productivity, efficiency and decreasing waste is the just in time (JIT) management
enough to cover the normal sales demands of your business. Since you won’t have
actual sales and stocking figures from previous years to guide you during startup,
you must project your first year’s sales based on your business plan. When
calculating basic stock, you must also factor in lead time—the length of time
between reordering and receiving a product. For instance, if your lead time is four
weeks and a particular product line sells 10 units a week, you must reorder before
the basic inventory level falls below 40 units or you’ll have to wait for the product.
Insufficient inventory means lost sales and costly, time-consuming back orders.
Running out of raw materials or parts that are crucial to your production process
means increased operating costs, too. Your employees will be getting paid to sit
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around because there’s no work to do; when the inventory does come in, they’ll be
margin into basic inventory figures. To figure out the right safety margin for your
business, try to think of all the outside factors that could contribute to delays, such
as suppliers who tend to be late or goods being shipped from overseas. Once
you've been in business a while, you’ll have a better feel for delivery times and will
with seasonal product lines, such as clothing, home accessories, and holiday and
gift items. These products have a short “shelf life” and are hard to sell once they're
plumbing equipment, office supplies, or auto products, have more leeway because
it takes longer for these items to become obsolete. No matter what your business,
property tax on unsold inventory, and increased insurance costs. Buying excess
seem at first glance that the most expensive items in your inventory should receive
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the most attention. But in reality, less expensive items with higher turnover ratios
have a greater effect on your business than more costly items. If you focus only on
the high-dollar-value items, you run the risk of running out of the lower-priced
products that contribute more to your bottom line. Divide materials into groups A,
B, and C, depending on the dollar impact they have on the company (not their
actual price). You can then stock more of the vital A items while keeping the B and
C items at more manageable levels. This is known as the "ABC" approach. Often,
products. Companies that respect this “80-20 rule” concentrate their efforts on that
key 20 percent . Most experts agree it’s a mistake to manage all products in the
same manner. Once you understand which items are most important, you’ll be able
to balance needs with costs, carrying only as much as you need of a given item.
It’s also a good idea to lower your inventory holding levels, keeping smaller
quantities of an item in inventory for a short time rather than keeping large amounts
for a long time. Consider ordering fewer items but doing so more often.
A good inventory tracking system will tell you what merchandise is in stock,
what's on order, when it will arrive, and what you’ve sold. With such a system, you
can plan purchases intelligently and quickly recognize the fast-moving items you
need to reorder and the slow-moving items you should mark down or specially
promote.
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Theoretical Framework
Figure 1
Inventory Management Process
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general accounting and other logistics systems. The Inventory Management stores
item information for the Sales Order. It also stores sales and purchasing costs and
quantities available by location and places holds on locations from which you do
not sell items. They update the general ledger inventory account balances with any
The General Accounting allows you to track inventory accounting. After they
receive and create vouchers for purchased goods, the Purchase Management
updates the general ledger and creates accounts payable entries for payment. The
Sales Order Management retrieves item prices and costs for sales orders from the
Inventory Management. The Sales Management updates the general ledger and
to: [1] Use information from the Location Master, Item Master, Item Branch File,
Branch/Plant Constants, Item Location File, and Item Units of Measure Conversion
Factors tables [2] Suggest locations for Put away, Picking, and Replenishment
operations [3] Record warehouse transactions in the Item Ledger File table.
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Conceptual Framework
Inventory software programs now on the market let you track usage, monitor
changes in unit costs, calculate when you need to reorder, and analyze inventory
levels on an item-by-item basis. You can even control inventory right at the cash
register with point-of-sale (POS) software systems. POS software records each
sale when it happens, so your inventory records are always up-to-date. Better still,
you get much more information about the sale than you could gather with a manual
system. By running reports based on this information, you can make better
decisions about ordering and merchandising. With a POS system: [1] You can
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analyze sales data, figure out how well all the items on your shelves sell, and adjust
purchasing levels accordingly. [2] You can maintain a sales history to help adjust
your buying decisions for seasonal purchasing trends. [3] You can improve pricing
accuracy by integrating bar-code scanners and credit card authorization ability with
There are plenty of popular POS software systems that enable you to use
add-on devices at your checkout stations, including electronic cash drawers, bar-
code scanners, credit card readers, and receipt or invoice printers. POS packages
business's cash flow. Features to consider in a POS system include the following:
[1] Ease of use. Look for software with a user-friendly graphical interface. [2] Entry
of sales information. Most systems allow you to enter inventory codes either
entered, the systems call up the standard or sales price, compute the price at
multiple quantities and provide a running total. Many systems make it easy to enter
sales manually when needed by letting you search for inventory codes based on
Pricing. POS systems generally offer a variety of ways to keep track of pricing,
formulas. For example, if you provide volume discounts, you can set up multiple
prices for each item. [4] Updating product information. Once a sale is entered,
[5] Sales tracking options. Different businesses get paid in different ways. For
example, repair or service shops often keep invoices open until the work is
completed, so they need a system that allows them to put sales on hold. If you sell
expensive goods and allow installment purchases, you might appreciate a loan
calculator that tabulates monthly payments. And if you offer rent-to-own items,
you'll want a system that can handle rentals as well as sales. [6] Security. In retail,
it's important to keep tight control over cash receipts to prevent theft. Most of these
systems provide audit trails so you can trace any problems. [7] Taxes. Many POS
systems can support numerous tax rates-useful if you run a mail order business
and need to deal with taxes for more than one state.
Perhaps the most valuable way POS systems help you gain better control
of your business is through their reporting features. You can slice and dice sales
data in a variety of ways to determine what products are selling best at what time,
and to figure out everything from the optimal ways to arrange shelves and displays
to what promotions are working best and when to change seasonal promotions.
Reporting capabilities available in POS programs include sales, costs, and profits
and year to date. Special reports can include sales for each hour of the day for any
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time period. You can also create multiple formats for invoices, accounting
statements and price tags. Additional reports include day-end cash reconciliation
Definition of Terms
Demand – is the quantity of a good that consumers are willing and able to
the future uncertainty based on analyzing the present and past data available
(whatis.ciowhitepapersreview.com)
(www.myaccountingcourse.com)
of inventory (www.accountingtools.com)
or raw materials to be stored, tracking flow of supply of raw materials and goods
(www.whatissixsigma.net)
order preparation time, queue time, setup time, run time, move time, inspection
time, and put-away time. For make-to-order products, it is the time taken from
the time taken from the release of an order to production and receipt into finished
Warehouse – is a large building used for storing goods before they are
CHAPTER III
treatment of data.
Research Design
research design is a scientific method which involves observing and describing the
group, or thing behaves or functions in the present. It often involves some type of
comparison or contrast.
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COLLEGE OF BUSINESS AND ACCOUNTANCY
The data were collected from the employees of FELTA Multi-media Inc. The
list of the said employees is recorded for documentation. A total of thirty (30)
employees represents the whole one hundred (100) percent (100%) of the
respondents.
were personally distributed to them with guide questions to ensure that all relevant
Table 1
Demographic of Respondents
Age
Total 30 100%
Gender
Male 13 43%
Female 17 57%
Total 30 100%
Civil Status
Single 7 23%
Married 23 77%
Separated 0 0%
Widow 0 0%
Total 30 100%
Educational Attainment
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Vocational 0 0%
Post graduate 0 0%
Total 30 100%
Position
Supervisor/Manager 16 53%
Total 30 100%
Length of service
1-6 months 2 7%
Total 30 100%
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COLLEGE OF BUSINESS AND ACCOUNTANCY
Age. In terms of age, most of the respondents, 10 or 33%, are 22-25 years
old. This was followed by 6 or 20% respondents between 26-30 years old and 41-
50 years old.
Gender. With regard to gender, most of the respondents are female. The
female group was composed of 17 or 57% of the respondents and the remaining
77% were married. There were only 7 or 23% of the respondents who were single
the respondent, 24 or 80% was college graduate. Both college graduate and high
had been in service for more than 3 years. This was followed by 4 or 13%
respondents who had rendered 1-2 years of service. And 3 or 10% of the
Sampling Technique
Fraenkel, Wallen and Hyun (2012) state that in random sampling, “every
For the respondent of FELTA Multi-media Inc., 83% were selected from
study.
Research Instrument
The instruments used this study include the documentary analysis and
four parts. The first part aims to gather the profile of the respondents in terms of
age, gender, civil status, educational attainment, position, and length of service.
The second part aims to assess the inventory management process of FELTA
Multi-media Inc. The third part is the challenges encountered by the company in
relation to their inventory. The part four aims to identify the program that maybe
unpublished works were done on the same field of interest; and lastly, Websites
that contains news, articles, reports, and online publication that were related on
Validation
adviser for comments and suggestions then presented to the HR manager for
validation.
was also formulated, and it was also use a guide all throughout the research using
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secondary data from various sources that has already done conducted various
After the secondary data were gathered, the researchers will analyze the
data by using documentary analysis and eventually answer the statement of the
The following statistical techniques were used to analyze the gathered data
the respondents.
% = f/N x 100
Where: % = Percentage
f = Frequency
N = Number of respondents
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N = Number of respondents
Likert Scale. Using a Likert Scale, each of the indicators will be assessed
and scored from 1, 2, 3 and 4 depending on the degree in which the respondents
are experiencing it. The score will be guided using the following:
The first scale was used to illustrate the evaluation of FELTA Multi-media
Inc. in terms of demand forecasting; lead time forecasting; warehouse flow; and
stock rotation.
3 Great extent
2 Less extent
1 Not at all
The second scale below was used to present the frequency of the problems
Chapter 5
Summary of Findings
This is the summary of all the findings of the study conducted by the researchers
1. Summary of the profile of the respondents which includes Age, Gender, Civil
Corporation belonged to the age bracket of 21 – 25 years of age who got the
the civil status of the employees most are married respondents got the highest
frequency of 23 with the percentage of 77%. It may seem that the employees are
Eighty percent (80%) of the employees are in their baccalaureate degree with a
fifty-three percent (53%), as to the length of service the highest frequency is on the
employees who already work for more than three (3) years with 21 and percentage
of 30.
are planned and scheduled and the inputs are acquired accordingly for this got a
very great extent response from the respondents. Production planning and control,
per promised delivery dates. Getting a highest rate shows that FELTA Multi-media
Inc. make sure that the needs of the customer are being met and ensures
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materials, equipment and employees are all available to meet production goals for
a business.
provides an insight to upcoming cash flow, so that they can more accurately budget
to pay supplier. How you pay your suppliers on time will impact your company’s
reputation, and may affect whether or not suppliers continue to work with you.
Understanding how much cash they will have to pay will show whether you can
afford to pay suppliers on time. FELTA Multi-media Inc. manage to keep the trust
inventory and avoid wastage. The more inventory you hold, the more building
space you need to hold it. FELTA Multi-media Inc. ensures that they order just the
media Inc. are able to minimize cost to gain maximum profit by having a rating of
great extent. If not all items sold, inventory manage will face the problem of selling
products with their expiry date coming closer and closer. This will cause direct and
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indirect costs, for ex. unnecessary storage cost and the possibility of selling with
2.2 The result of the assessment of the respondents on the LEAD TIME
FORECASTING shows at great extent that the lead time used is efficient to control
the level of inventory. Stock-outs, as the name implies, occur when inventory, or
replenish materials immediately, production stops, which can be costly for the
time used by FELTA Multi-media Inc. is competitive enough to control the level of
their inventory.
The assessment of lead time forecasting shows at great extent that using an
accurate estimate of the actual lead time rather than depending on the quoted lead
time improved the service level especially with irregular vendor. Assessing the
actual lead time of irregular vendors helps FELTA Multi-media Inc. to know the
time elapses from ordering of goods to delivery of goods just in case they
The result of the assessment shows at that FELTA Multi-media Inc. needs
to improve their lead time variation used to supplement their safety stock in
addition to the demand variance for the respondents rate it at less extent.
customers want goods or service as fast as possible with minimal effort. According
to the assessment of the respondents of FELTA Multi-media Inc. Lead time can
affect at less extent the order timing as well as the quantity which you order. This
indicates that the delay in delivery doesn’t affect the order timing and quantity they
order for their lead time assumption remains constant despite of lead time
variation.
FLOW shows at less extent in data associated with your shipping and receiving
operation are recorded regularly. It indicates that some data involving shipping and
receiving of inventory of FELTA Multi-media Inc. are not recorded regularly by the
employees. It is important to know who places the orders because there is often a
operation, checking the packing slips and items for errors holds a large amount of
inventory problems for it is important to make sure what they’re shipping out
matches the orders placed because missing inventory can creep up on the next
checked for accuracy and all orders are double-checked before they go out the
extent. This shows that FELTA Multi-Media Inc. checks products as many times
going in and out of the loading dock are organized for receiving supplies from
vendors and shipping orders to customer. This can be happen because of the
unorganized listing of data. For example, the dispatcher has his lists of products
to be delivered with the courier. But in case of loss of products, the person who
data.
extent that supplies including deliveries from vendors, stocked inventory, or sold
products are labeled because the employees of FELTA Multi-Media Inc. make
signs and labels to direct their personnel through warehouse and find the inventory
fast and easy, and ideally without having bother the supervisors or other personnel
by asking for the product and directions they are needed to find.
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2.4 The result in the assessment of the respondents on the STOCK ROTATION
shows at great extent. The date of the products is checked when delivered, used
or put into display which FELTA Multi-Media Inc. ensures accuracy for the delivery
of the products. This also shows that the products of FELTA Multi-Media Inc. flow
smoothly as they make sure that their products are dated accordingly.
about the products with short life are stored or displayed at the front of the shelf is
at very great extent. This means that their inventories are organized neatly to the
room where it was delivered. This also explains that their inventories are easy to
Products with short life are stored and displayed, so it was with the products
with longer life. As the result says, it is at very great extent. The products with
longer life are stored or displayed at the back of the shelf greatly. As the products
are organized according to their dates, that’s why the products that have the latest
date are stored at the back of the shelf. For their inventories are organized by first
Products are always put in the correct order is at great extent. The products
are organized correctly. And the first in first out method is implemented smoothly.
Just like the result in the two paragraphs above, the placing of the product is in
proper order. The latest date is at the back of the shelf while the older is at the
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front of the shelf so that they can easily determine the product that should be ship
first. One more thing is they can easily monitor the inventories delivered.
Corporation
The problems encountered by FELTA Multi-media Inc. and the following are
the result of the interviews using formulated guide questionnaire to draw the
challenges often faced by the company. The results are as follows: (1) The
company doesn’t forecast maximum lead time to anticipate safety stock in case of
delay in delivery. (2) Delay in delivery doesn’t affect the order timing and quantity
they order for their lead time assumption remains constant despite of lead time
variation. (3) Data associated with shipping and receiving operation are not
recorded regularly. (4) Vehicles going in and out of the loading dock are not
organized for receiving supplies from vendors and shipping orders to customer.
5. Recommendation
a safety stock so that if there’s a delay in delivery the production of FELTA Multi-
The order timing and quantity the company’s order will now have a big difference
when such delay in delivery happens. So the researcher suggest that FELTA Multi-
media Inc. should consider the time between the initiation and completion of a
product before ordering to avoid differences in order timing and the quantity of
3. The result of the assessment clearly shows that data associated with
shipping and receiving operation are not recorder regularly. So the researchers
(POS) System that will enable the company to quickly access supplier contact
information, payment terms etc. Receiving stock is another task made easier by
a POS. Unlike manual inventory management methods, when you receive the
4.The results from the assessments clearly states that there is a need for
the researchers suggest that the vehicles going in and out of the loading dock
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should be organize and make sure that the schedule listed in the log book was
strictly being followed. In case the schedule wasn’t followed, the management
should monitor the vehicle being sent to receive supplies and ship orders to
customers so that in case of any fortuitous event the management knows who is
2. Should addressed the factors that would greatly affect the inventory
management process that came from the problems and challenges; and
For students:
management process.
management process;