Chapter 1

PROJECT OVERVIEW
Background of the Study
There are many purposes of information technology, one is to reduce
uncertainly where people could do jobs in a more accurate and allows people
to do something that has not yet been done before also reduce cycle time can
yield a much more efficient process resulting in cost and time saving and
customer satisfaction. And another purposes of information technology is to
reduce the cost of creation, improve archiving, mining of data and speeding
up decision-making process.
A computer is one of the most influential forces available in modern
times. Due to its memory, high speed and perfection, its application can be
extended to almost infinite levels. Millions of complex calculations can be
done in mere fraction of time. Difficult decisions can be made with accuracy
for comparatively little cost. Computers are widely seen as instruments for
future progress and as tools to achieve substantiality by way of improved
access to information by means of video conferencing and e-mail. Indeed
computers have left such on impression on modern civilization that we call
this era as the information age.

A computerized inventory system improves customer-service metrics

and fulfilment rates. It greatly reduces the amount of paper works involved,
increases customer satisfaction, eliminates duplication of duties, eliminates
costly over stocking or stocks out, provides just in time inventory system,
reduce storage space needed for stocking materials, ease of time and effort
for physical inventory.(Bakaya et al, 2010)
Inventory management systems are designed to monitor product
availability, determine purchasing schedules and cycle out obsolete or
unsold product. The availability of product is just one way in which an
inventory management system attempts to create customer satisfaction. A
comprehensive understanding of the impact of inventory control on
customer satisfaction helps you to create an effective inventory management
system. Good inventory control means that your time to fulfil orders stays
low. If you use your inventory management system to analyze product sales,
you can have your popular items in stock and ready to instantly fulfil any
customer's order. You also know which special orders sell on occasion and
have those products available in a limited quantity to keep your inventory
costs down and to develop a positive reputation for quickly filling special
orders. 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.
Inventory is a companys 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 inventory management 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.
In this study Mr. W.Bagby explains that by managing the inventory it
becomes easier for the organization to meet the profit goals, shorter the cash cycle,
avoid inventory shortage, avoid excessive carrying costs for unused inventory, and
improve profitability by decreasing cash conversion and adopt JIT system.
According to this study companies need to get smart about inventory. Boosting
financial performance is another benefit that comes from better inventory
management. Infect large number of manufacturers enjoy savings and better
performance by choosing the approach of inventory reduction. For this company
needs to maximize the cash flow and profitability and this includes keeping a
watchful discerning eye on charge in supply and demand.(Wolf Bagby, 1996)

Every

business,

companies,

manufacturers

and

retailers

are

particular with their inventory. It is important not to have an excessive

inventory to avoid overhead expenses. Manufacturers and Retailers need to
ensure that they have enough number of a given item in stock depending on
its trends of sales. Our Inventory System software provides real time
assessment of items in stock. As each item is sold, the inventory database is
automatically updated. When the inventory level is at its minimum, it
automatically creates a purchase order sent to the supplier. As soon as the
order has arrived, the inventory database is automatically updated and the
system will issue a notification to the accounting department for the
suppliers invoice and purchase order copy. Through this inventory system
software, suppliers can offer their customers a value added service by
performing the replenishment planning task for their business partners. Besides
giving the supplier increased visibility into actual demand, it also recognizes that
suppliers often may have more knowledge and control over the logistical
processes involved. By increasing visibility into actual demand as well as
inventory levels. This allows suppliers to make better decisions on how to deploy
goods across various customers locations, which leads to increased customer
service levels, lower transportation costs, reduced inventory levels and lower
sales cost.

A food-processing-and-distribution company typically stores products

in a warehouse before shipping them to customers. Inventory management
is therefore important to the food-processing-and-distribution industry
because of the large amount of products typically stored. Large amounts of
stored products increase inventory cost and management cost and can
reduce warehouse efficiency. Restated, inventory management should be the
primary focus of the food-processing-and-distribution industry, especially
for perishable foods. This study is therefore important to build up a system
to predict possible forthcoming inventory. This study surveyed experts to
identify key issues associated with inventory management in the foodprocessing-and- distribution industry, and analyzed sequential patterns to
find rules based on analytical results from the survey. This study also
proposed a model for inventory prediction. Through this proposed prediction
model, the best accuracy of inventory prediction could reach up to 66.3%.
Through the sequential patterns based on expert opinions, the foodprocessing-and-distribution industry can manage inventory efficiently and
accurately.( Elsevier B.V.,2013)

Inventory Systems for Philippines (PHILCOM) is a competitive business

company that exercise manual system in their transaction such as
purchasing of stock, inventory ordering of product and providing sales

report. Philcom uses an existing manual system in everyday transactions.

Cashier literally writes down the customers order in a common printed
receipt use also by the store or shop without computerized system. If the
counter has lots order in hand at a time, it will cause delay. Using calculator
to compute payments and having no fixed discounts in every items
purchased will makes a bad effect in the product list and records. (Prezi,
2013).

The company that we are going to propose a system humbly started with
cement trading as a business. As the market demand of the cement supply
increased, the company acquired trucks for delivery in the local market.
Also, the company is capable of selling cement, hauling, and engineering
projects. The company experiences problems on inventory report so as we a
developer we proposed the Inventory Management System for the JMP
Trading to give them the solution of their problem based on their inventory
report in their way of selling process. They can easily add new products,
update existing products, add stocks in their record and they can view the
generation report up to date. This proposed system will help the company to
improve and gives them an accurate data. 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 handwritten 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.

Company Profile
Founded in 1988, the company humbly started with cement trading
as a business. As the market demand of the cement supply increased, the
company acquired trucks for delivery in the local market.
As the companys financial status improved and its area of operations
widened, it acquired a fleet of tractor and trailer trucks to meet the
increasing demands of the adjacent regions. Then it engaged into buying,
repairing and reconditioning of trucks and heavy equipments and selling
those as well as personal use. And in the year 2012 the company started to
accept some horizontal and vertical construction projects of the local
government and some private entities.

To date, the company is capable of selling cement, hauling, and

engineering projects.
Vision
To provide quality product and services that exceeds the standard
Of our valued customers.
Mission
To attain a smooth and long-term relationships with our customers
and providing quality services on business operation.
Objective
To offer the highest quality hardware at competitive prices to our
customers. We strive to offer excellent customer service, and work with our
customers to provide innovative design and function in all of our hardware.
Goal
To fulfil our customer satisfaction.

Organizational Chart

Moises P. Alamay
Owner

Joel Marquez
Secretary

Prime Corpuz

Vergil Flores

Office Staff

Office Staff

Conceptual Framework
Conceptual Framework is a group of concept that are broadly defined
and systematically organized to provide a focus, a rationale, and a tool for
the integration and interpretation of information. Usually expressed
abstractly through word models, a conceptual framework is the conceptual
basis for many theories, such as communication theory and general system
theory. (Elsivier, 2009)
In addition to the development of conceptual frameworks, stress the
need to conduct case studies focusing on their practical applicability in
firms in order to overcome gaps between theory and practice. These case
studies enable researchers to increase their practical knowledge given that
aspects involving understanding about environments complexity and the
managerial efforts made by firms become evident. (Rego et al, 2011)
The developers input process is the existing procedures used by
Manager in the following areas; monitoring of stocks, managing inventory
and customers. The problems encountered by the Manager, features of the
proposed system and the hardware/software requirements.

In the block process, the developers will use the Agile SDL Model
which is composed of the Concept, Initiation, Construct Iteration, Release
Iteration and Product of System.
On the output process, the output is the Inventory Management
System of JMP Trading.
Figure 1.1 shows the research paradigm that will be used in the
development of Inventory Management System of JMP Trading.
As what the project studies aim is to provide Inventory Management
System in order for the business manager and staff can easily monitor their
stocks, create reports

Statement of the Problem

This project study aimed to design and develop Inventory Management
System for the JMP Trading. Specifically, it sought to answers to the
following question:
1. What are the existing procedures of the JMP Trading in the areas of:
a. Inventory;
b. Billing;

c. Report Generation?
2. What are the problems encountered in the existing procedures of JMP
Trading in the areas
a. Inventory;
b. Billing;
c. Report Generation?
3. What are the features to be adopted in the propose Inventory
Management System?
4.

What

security

measures

will

be

implemented

in

the Inventory

Management System of JMP Trading?

Statement of the Objectives
The objective of this study is to design and develop Inventory
Management System of JMP Trading. Specifically, it sought to attain the
following:
1. To identify the existing procedures adopted by JMP Trading in the areas
of:
a. Inventory;
b. Billing;
c. Report Generation.

2. To identify the problems encountered in the existing procedures by JMP

Trading in the areas of:
a. Inventory;
b. Billing;
c. Report Generation.
3. To determine the features that can be adopted in the design and
development of JMP Trading Inventory Management System.
4. To identify the security measures that can be adopted in the propose and
Inventory management System.
Importance of the Study
The Inventory Management System of JMP Trading will not only be
beneficial to the company but also to the clients and the suppliers. In
undertaking this project study, the researchers also take in consideration
the other beneficiaries as well.
The Company- The study will help the company progress their products,
lessen multiple errors and exert less efforts concerning transaction
workflow.

The Owner- This study will help the owner save time and give greater
flexibility when conducting a physical inventory, marking down prices,
printing tags, and selecting and summarizing data for reports.
The Employees- This study will help the employees in their task in terms of
business transactions, keeping and retrieving of files in an efficient and
reliable way. It will lessen their time in organizing clients records and errors
will be avoided.
The Clients- The study will help the client through the system by taking
less time for them to wait for their receipt because the calculation of the
product is easy to compute by the proposed system.
The Suppliers- This study will help the suppliers to trace all invoices and
reports of the products.
The Researchers- Through this project study, the researchers will be able to
learn not just by theories but through application. The project study allowed
the researchers to determine the appropriate methodology, tools and
features in developing the system
The Future Researchers- In undertaking this project study, the researchers
also take in consideration future researchers who will undertake the same
project study or related studies and use for future references.
Scope and Delimitation

The proposed system aimed to design and develop an Inventory

Management System that will provide inventory record on all transactions of
the company.
The study focused on the Inventory Management System of JMP
Trading, specifically on inventory of products, stocks, and purchased orders.
It is made to identify the predominant problem in the operation that needs
improvement in order to make the process efficiently.
The system has the capability to trace admin user transactions. The
administration has the authority to access the system. The system also
capable of generating of reports.
D e fi n i t i o n o f T e r m s
In order to fully understand the proposed system the following terms
were defined operationally and conceptually.
Administrator- It is a person who has the full access to the System.
Database- It is a Storehouse of the data.
Distribution- Is the process of moving a product from its manufacturing
source to its customers.
Documentation- Detailed information based on the process used in
creating the system.

End-user- It is the people will use the System.

Enterprise- Is an organization that trade product into the market.
Information- Is a collection of datas gathered within the transactions that
are useful.
Sales- The exchange of goods or services for an amount of money or its
equivalent.
Security- It is the protection of information and property from theft, while
allowing the information and the property to remain accessible and
productive in its intended user.
Software- It is a collection of computer programs, procedures and
documentation that perform some tasks on a computer system. It is
software used by the researchers to develop the system like Visual Studio
2010 and MySql.
System- It is a combination of hardware, software and data communication
devices.
System Design- Defines the architecture and interface for the System to
satisfy specified requirements.
System Development Life Cycle (Agile Model)- Are the basic methodology
used in this project study.

Transaction- It is a current process of data.