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ANALYSI S General Merchandise and Poultry Supply
for Mercado’s

A Thesis Proposal
Presented to The faculty of
College of Business and Accountancy
Manuel S. Enverga University foundation
Lucena City

In Partial fulfillment of
The Requirements for the Degree of
Bachelor of Science In Business Administration
Major in Management Information System

Aureada, Marissa
Caballero, Gena Marie Z.
De Vera, Joyce Anne
Enriquez, Christian J.
Laborte, Mara Kaye E.
Mercado, Joselito Jr.

September 2012
Computerized Inventory Management Control System

Chapter 1

THE PROBLEM AND ITS SETTING

Background of the Study

Nowadays most businesses uses computerize transaction in their system

to minimize their time and effort in transacting with their clients. Computerization
made it plausible on businesses to keep up the demand of the business
industries. Certainly, some of small scale businesses still rely with the use of
manual operating system. It may have worked on small businesses as they don't
have a lot of stocks and they can keep up their records by manually counting the
goods that they acquire in their transactions and the goods sold at the end of
each day. However for large scale business that feature high volume turnover of
raw materials and/or finished products, computerized management tracking
systems have emerged as a key component to the degree of success and
competitiveness of the business.

In this time of age, the computers have deep important impact on different
kinds of businesses. For small scale and for large scale businesses they offer
their services with relevant softwares. They help up in keeping up record of sales
in small scale business and helps in avoiding costly audits which cannot be
afforded by small scale business. For Large scale, they help in keeping up
updated records, communicating over long distance and centralization of
organization. This is why the business world is in great debt to the computers
because it made their jobs easier.

An inventory management control systems is basically a process that

maintain information about activities within firms that ensure the delivery of

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products to the 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. (Bergin, Sarah 2000)

With the use of the computer and its softwares, business organizations
can easily complete business management functions covering financials, sales,
purchases, inventory, and operations. No need for manual system of operating
the business. The recent development and upgrading of computer usage into
more powerful computer programs and softwares has made managing business
transactions a lot more efficient and easier.

The Mercado’s General Merchandise and Poultry Supply(MGMPS)

a store that offers various supplies such as groceries, rice and feeds. With its

growing numbers of customers and products the business can’t keep up with

organizing their daily inventory. MGMPS uses manual inventory system in order

to know the products available for sale.

This study will introduce Computerized Inventory Management Control

System for Mercado’s General Merchandise and Poultry Supply to improve their

process of inventory and will provide the user to easy access on information of

their current inventory.

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Computerized Inventory Management Control System

Statement of the Problem

The main purpose of the study is to improve and develop a new Inventory

Management Control System which will make their inventory more effective and

accurate and to improve the overall of Mercado’s General Merchandise and

Poultry Supply. The following problems should be answered;

1.

Specific Objective

For the attainment of the researcher’s goals, the researchers

considered the following specific objective.

1. To identify the MGMPS business related profile.

2. To describe the current inventory of MGMPS in terms of:

2.1 Supplies and Stocks

2.2 Sales

2.3 Number of Customers

3. To identify the problems encountered in the present inventory system.

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4. To develop a reporting system which will summarize daily transaction,

thus create a well-controlled overview of the result of operation.

Significance of the Study

This study aims to create a new Inventory System for Mercado’s General

Merchandise and Poultry Supply (MGMPS). The implementation of the proposed

system will help MGMPS develop and maintain an efficient and functional

Inventory management system. This new system will make their inventory more

effective and efficient thus making their jobs easier. By using this new system the

management can summarize daily transaction, thus create a well-controlled

overview of the result of operation. This study will be beneficial for the following:

Management It will be beneficial for the management because it would be easier

for them to record and access daily transaction of their sales and

purchases as to keep track of their present Inventory.

Employees The proposed system will be beneficial for the employees because

the new system will serve as instrument for effective and accurate

recording of daily transaction and will reduce workload of the employees.

Customers The customers will also benefit from this study because they can

easily know what and how much stocks are available for them to use or

purchase.

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Computerized Inventory Management Control System

Researchers Through this study, it will broaden our knowledge as student in MIS

and give them the opportunity to test their skills in developing an efficient

inventory system.

Future Researchers This study will serve as a guide and reference to the future

researchers, as it function as a source of inputs by providing information.

Scope and Delimitation of the Study

This research study focuses on the current inventory system of

Mercado’s General Merchandise and Poultry Supply in Claro M. Recto St.

Lucena City, with its problems and solutions. It will give MGMPS the capability to

easily track the available stock and replenish the items which is out of stock. This

study will be conducted until the problems and solutions of the present inventory

system are identified. This study will not tackle other elements found or

conceived outside of its scope.

Definition of Terms

The following are terms that the researcher used for better understanding

about the concepts in the study. The terms are defined operationally, as how

they are used in the study.

MGMPS (Mercado’s General Merchandise and Poultry Supply) the business firm

where the study is being conducted.

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Computerized Inventory Management Control System

Inventory is the total amount of goods and/or materials contained in a store

available for sale, use to satisfy customer needs.

Inventory Management Control is a suite application which streamlines and

automates all the activities related to processing of customer orders and

inventory control in an organization.

Manual Inventory In the study, it is the process of recording and counting the

stocks manually to know the total number of stocks available for sale.

Stock are the products available for sale in the store.

SWOT analysis (alternately SLOT analysis) - is a strategic planning method

used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and

Threats involved in a project or in a business venture. It involves specifying the

objective of the business venture or project and identifying the internal and

external factors that are favorable and unfavorable to achieve that objective.

(http://en.wikipedia.org/wiki/SWOT_analysis).

Theoretical Framework

Stevenson (2007).”Management in Information System” said that firms

that experience seasonal pattern in demand often build up inventories during

preseason periods to meet over highly requirements during seasonal periods.

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These inventories are aptly named seasonal inventories. Inadequate control of

inventories can result in both under and overstocking of items. Under stocking

results in missed deliveries, lost sales, dissatisfied customers and production

bottlenecks; overstocking unnecessarily ties up funds that might be more

productive elsewhere. Although overstocking may appeared to be lesser of the

two evils, the price tag for excessive over stocking can be staggering when

inventory cost are high and matters can easily get out of hand. The overall

objective of inventory management is to achieve satisfactory levels of customer

service while keeping inventory cost within reasonable bounds. One of the

functions of inventory is to protect the firm against stockouts. Delayed deliveries

and unexpected increase in demand increase the risks of shortage. Delays can

occur because of weather conditions, supply stockouts, deliveries of wrong

materials, quality problems, and so on. The risks of shortage can be reduced by

hording safety stock, which are stock in excess of average demand to

compensate for variabilities in demand and lead time.

This theory from William Stevenson provided insight and ideas which can

be helpful to solve their operational problem. It presented that with the use of

good inventory management will result in smooth operations.

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Conceptual Framework

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Figure 1. Paradigm of the Study

The research study aims to look for a solution to make the Inventory system

accurate, efficient, and reliable. This will lead the introduction of the

computerized inventory management control system for the Mercado’s General

Merchandise and Poultry Supply.

The present problem encountered by Mercado’s General Merchandise

and Poultry Supply are the incoming and outgoing stocks can’t be monitored

precisely.

This study will be using the input-process-output diagram to come up with

a computerized inventory management control system.

Input. The variables are the Business related profile and the present inventory

system of MGMPS which was gathered by the researchers in terms of

observation and interviews.

Process. After identifying the input, the present inventory system will be

evaluated and assess using SWOT analysis. After the strengths and weaknesses

of the current system are identified, the development of the solution of the

present inventory will follow. Before the final output, feedback from the

management will be taken for comments and suggestions to be added for the

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output.

Output. The output will be the result of the evaluation and assessment of the

present inventory system which undergone through SWOT analysis. The output

will be the computerized inventory control management system.

CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the relevant references and materials that have

been gathered by the researcher about the proposed system entitled

“Computerized Inventory Management Control System for Mercado’s General

Merchandise and Poultry Supply”.

In order to support our study, the researchers used aid-reference from

different books, unpublished studies, research papers and information from the

internet.

Business Profile

Owner : Zenaida Mercado and Lito Mercado

Location : 118 Claro M. Recto St. Lucena City, Quezon

Operation duration : 1990

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Starting Capital : Php. 35,000

Gross Income : 90 million

No. of Variety : 500
Of Product for Sale

No. of Incoming : 1500 Sacks per week

Stocks Delivered

No, of Outgoing : 400 Sacks per day

Stocks

No. of Customer : 90 walk in, 20 large shipment delivery

per day

No of Employees : 9 employees

Foreign Literature

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From http://tutorial-computer.com/database/database-design-tutorial-

computer/50-how-important-database-design“Database Design is the database

structure that will be used as plan to store and manage data. The database

management system (DBMS) is the software used to implement a database

design. Modern database and computer applications development software is

so easy to use that many people can quickly learn to implement a simple

database and develop simple applications within a week or so, without giving

design much thought. As data and reporting requirements become more

complex, those same people will simply (and quickly!) produce the required data

by incorrectly adding more columns of tables to the database. That's how data

redundancies and all their attendant anomalies develop, thus reducing the

"database" and its applications to a status worse than useless”.

Database Management System (DBMS)

DBMS is consisting of a collection of interrelated data and a collection of

programs to access that data and a collection of programs to access that data.

According to Silberschatz, Abraham(2006)“The primary goal of a DBMS is to provide an

environment that is both convenient and efficient for people to use in retrieving and

storing information.” In addition: “Database Systems are designed to store large bodies

of information. The management of data involves both the definition of structures for the

storage of information and the provision of mechanism for the manipulation of

information”.

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Computerized Inventory Management Control System

Information System

Information System is the key part of Information Technology. It can be

any organized combination of people, hardware, software, communication

networks, and data resources that collects, transforms, and disseminates

information in an organization. According to James A. O’ Brien“The role of most

information systems was simple: transaction processing, record

keeping, accounting, and other electronic data processing (EDP) applications.

Then another role was added as the concept of Management Information

System (MIS) was conceived. This new role focused on developing business

applications that provided managerial end users with predefined management

reports that would give managers the information they needed for decision-

making purposes.”

Inventory System

Inventory systems are extraordinarily diverse and they differ along many

dimensions. According to Paul H. Zipkin (2000).“Every inventory lies between

two activities or process, which we call the supply process and the demand

process. The supply process comprises the production transportation and/or

other activities that add new stock to the inventory while the demand process

describes the various activities that use and thus subtract material from the

inventory”

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Inventory Counting Systems

Inadequate control of inventories can result in both under and over

stocking of items. Under stocking result in missed deliveries, lost sales, and

dissatisfied customers; overstocking unnecessarily ties up funds that might be

more productive elsewhere. The overall objective of inventory management is to

achieve satisfactory levels of customer service while keeping inventory cost with

reasonable bounds.

According to Wiiliam J. Stevenson“Inventory counting systems can be periodic or

perpetual. Under a periodic system a physical count of items in inventory is

made at periodic intervals in order to decide how much to order of each item. In

perpetual inventory system also known as continual system it keeps track of

removals from inventory on a continuous basis, so the system can provide

information on the current level of inventory for each item.”

Local Studies

In order to gather relevant information and ideas, the

researchers looked-up on the following studies:

A thesis entitled “Inventory Management and Just-In-

Time(JIT): Solution to the problems encountered by the Sentrong

Pamilihan Ng Producktong Agriculturasa Quezon” Lucena City. By

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Michelle V. Alarva et.al.‚ If materials arrive just as they are needed

stocks of work in progress can be eliminated.

Relevant to the study another thesis entitled A Computerized Monitoring System

of Scheduled Call List for Coca Cola Bottlers Philippines Incorporation, Lucena City,

(March 2006) by Francess N. Campos et al., the researcher found out the problems

regarding the traditional manual system that was used by the company. The existing

system results into long or slow access for data retrieving, encoding manually and

wasting time in checking data, and difficulties in finding data needed.They recommend a

Computerized Monitoring System that provides them with the efficient and accurate

monitoring system essential to be a leading beverage group in the Philippines.

A thesis entitled “Intranet-Based Inventory System For Queen Margarette Hotel”.

(March 2006).by Handria A. Butawan et al‚. An Intranet is a private network that is

contained within an enterprise. It may consist of many interlinked local area network and

also use leased line in the Wide Area Network. Typically an intranet includes connection

through one or more gateway computer to the outside Internet. The main purpose of

intranet is to share company information and computing resources among employees.

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CHAPTER III

RESEARCH DESIGN AND METHODOLOGY

Methodology of the Study

Methodology refers to the theoretical analysis of the methods appropriate

to a field of study or to the body of methods and principles particular to a branch

of knowledge. The Research Methodology section presented the research

design‚ research locale‚ Sources of Data‚ data gathering procedures.

Research Design

This study intends to assess the existing Inventory System of Mercado’s

General Merchandise and Poultry Supply (MGMPS). The researchers agreed to

utilize a Descriptive Research Design. Descriptive Research Design which refers

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to the efficiency and effectiveness of policies‚ instruments or the variables that

may be considered.

The sole purpose of which is to explore the strategies being used by

MGMPS and identify the possible solution to their problems. The process also

facilitated the gathering of data and for having enough information needed in the

study.

Research Locale

The Study is conducted in Mercado’s General Merchandise and Poultry

Supply located at Claro M. Recto St. Lucena‚ Quezon.

Source of Data

The respondents of the study were composed of the manager and

employees of MGMPS. They were chosen as respondents because they are the

one who know how their present system works and what are the problems

needed to be solved.

Information for this study was collected using four methods. These were 1)

Interviews, 2) questionnaires, 3) interviews and 4) observation

Data Gathering procedures

Information for this study was collected using four methods. These were 1)

Interviews, 2) questionnaires, 3) interviews and 4) observation

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Another tool used by the researchers in gathering data is the use of library

and internet research. That provided more information and insight about the

study.

Reference

Internet

http://www.wisegeek.com/what-is-inventory.htm feb 25,2012

http://www.essortment.com/small-business-tips-pen-paper-vs-computerized-

inventory-tracking-23815.html

http://www.in-the-philippines.com/small-business-in-the-philippines

Books

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Silberschatz,Abraham(2006). Database System Concept:.McGraw-Hill

Publication.

O'Brien, J A. (2008). Introduction to information systems: essentials for the e-

business enterprise. McGraw-Hill, Boston, MA

Beynon-Davies P. (2009). Business Information Systems. Palgrave, Basingstoke

Laudon, Kenneth C.; Laudon, Jane P. (2009). Management Information

Systems: Managing the Digital Firm (11 ed.). Prentice Hall/CourseSmart.p. 164.

Stevenson, William J.,(2007). Operation Management

Jeffrey Ullman and Jennifer widom 1997: First course in database systems,

Prentice-Hall Inc., Simon & Schuster, Page 1,

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