XYZ Merchandise

Padada, Davao del Sur, 8007

09503687943
xyzmerchandise@gmail.com

TO: CHARLON SANOH, COO

FROM: RONEL NAVAREZ, Head in Accounting Department
RE: PROPOSAL TO SOLVE ISSUE ON INCREASE IN INVENTORY COST AND LOSSES
DATE: APRIL 23, 2020

Sir:

Thank you for providing us with the opportunity to submit our project proposal.
This is with regards to solve the issue concerning the increase in inventory cost
and loss in inventory. Along with this letter we provide a detailed proposal that
includes the timeline and necessary actions to take. Let us know if you have any
questions or want any modifications. We will feel honored if our proposal will be
accepted by the organization.

Looking forward to a positive response, a chance to serve and a good working

relationship. Thank you

Attached here is the following project proposal.

Sincerely Yours,

Rnavarez
RONEL NAVAREZ
XYZ Merchandise
Padada, Davao del Sur, 8007
09503687943
xyzmerchandise@gmail.com

The following are the details of the project proposal:

PROJECT PURPOSE
To present solution to existing issue on increase of inventory cost and losses in
inventory.

PROPOSED SOLUTION
The proposed solution is to create a Warehouse Management and Control
System with an integrated Inventory Control Monitoring System (ICMS)-based
technology.

ADVANTAGE
This will upgrade the entire inventory handling process by providing an
automated, systematic and accurate warehouse management cycle that is
efficient and updated real-time processes.

To illustrate, pallets, cases, cartons, and all other storage items will be coded
using ICMS, in which all items will be checked and monitored by this system.
These codes are recognized by readers installed in the shelves and transporting
equipment. As a result, all movements of goods within the warehouse are
tracked and accounted; use of space, equipment and labor is maximized; and
retrieval of goods as needed becomes systematic – all of these contributing to
increased customer service, productivity level, and warehouse utilization.

Area of savings Description Savings Metric

Increased Sakes Faster Order Incremental sales
processing and data
availability and
improved client
relationships
On-time delivery Increased order Expediting costs
processing and cost for return
processing
 Area of Description Savings Metric
Savings
Reduction of Safety Eliminate extra stock, Annual carrying
stock increase turns and cost
improve cash use
Reduction of loss Tighter inventory control Product write-off
and shrinkage by location costs
Reduce shelf life Tighter inventory control Product write-off
losses due to by lot costs
expiration issues
Reduced product Minimized handling Product write-off
damage, scrap and costs
rework
Reduce of reams Shipping the right Product write-off
products at right time costs

Disadvantage
This will be costly considering the reengineering process, employee training and
installations.

Summary
The utilization of this system will result to higher efficiency, reduction of cost and
increase in revenue. This system should be implemented for in gives a lot of
benefit. The benefit also includes the customer satisfaction because of less
defective products sold to them. Though it is expensive but this project will serve
the organization in the long run.