Inventory systems are tracking systems that inform the amount of raw materials, supplies or final products have readily available. Updated each time you sell an item or use raw materials to create and to know what you available for the following day or week. This type of system allows ordering products in advance, so you have everything you need at all times.
Man has come along his way in doing business transactions with each other. Inventory system put you a head in game. It helps you conduct business transactions with ease as you have to press a few keys. It liberates you from a countless paper works as computation of the day’s scale and keeping track of inventory done automatically. Technology has influenced and greatly simplified almost in every aspect of life today. It is amazing what technology has done to our society and how dependent we have on it. Having computers in the workplace has enabled the business to us more efficiently and has contributed in having an all around.
As what we have observed in the Paper Mill they are using manual method in inventory in each item that can take time and effort. With these things, we, the researchers, hope that upon the completion of this “Proposed Computerization in Inventory System” will find it of company. Through the use of system, unnecessary loss of the time spent on the computation of payments will be minimized and greater customer’s satisfaction will be achieved.
Background of the Study
In 1984 Danao Paper Mill was down due to economic declined and management of the Durano Company, that time they will produced 65 grams per meter of paper for cement packaging used only and during that time also it was loan to a certain bank sequestration follow for they have no longer pay the capital and interest. Therefore the bank make an auction, will things won’t be easy to acquire this plant due to reconsider it will take time to pass and win the bidding but later the bank grant and award the ownership to Mr. Frederick Ong. Then it was the rehabilitation in year 2000 till mid of 2002, from 2002 mid completion of the rehabilitation, will then to start paper mill operation are far enough due to lack of permits, secure of necessary permits would be lately approved by different government agencies and from 2002 to June 06, 2006 officially the paper mill start the operation for four years of procuring the permits to operate.
Inventory is basically the total amount of goods and materials held in stock by a factory, store and other business. An inventory system is a process whereby a business keeps track of the goods and material it has available. In its simplest sense it can be done manually by a count at the end of each day. In this way it is possible to keep a record of the goods coming in to the business and goods being sold. The same case applies in Paper Mill Inc. and as a result, the inventory system becomes prone to human error and would be more time consuming and security is also being risked.
Since manual inventory consumes a lot of time and is susceptible to errors, it would be helpful to build a system that will automate the transactions from acquisition of the product description to updating the inventory database. The automated inventory system will improve employees’ work efficiency by automating routinely and time consuming tasks such as the time spent in taking down product information. As a result, the time can be used in more productive activities. The accuracy of the current system will also be improved, since the automated inventory system would eliminate the need of constantly encoding length details of products by having an inventory database.
The team proposed the Computerized Inventory System is the volitional break of the operative material flow; and thus deliberately composed stocks develop. Inventory System needs a storage that means a room, building or area to store the item. The in-pouring items are called storage input, the outpouring items are called storage output. Therefore inventory system contains all activities and considers all consequences, which are connected with the storage of items. On the one hand there is the mere technical and logistical aspect of inventory system, for example the storage layout. On the other hand there are general questions, which are related to the total stock of a company.
One of the most important decisions is about the quantity of inventories. Therefore a lot of mathematical models have been developed, which are summarized under the concept of Inventory system within the scope of Operations Research.
For the stock of a retail market the outflow is induced through customer sales and the replenishment is secured through orders. The stock disposal therefore consists of ordering the right quantity (lot size) at the right time. Less order produces less order costs; but for a higher level of order quantity the storage costs rise. The advantage of a great inventory is that there is a high level of service and most customer requirements can be fulfilled. Real (short term) inventory problems are those, who deal with order costs, storage costs and the service level.
Problems of long term inventory system do not belong to this issue, because the order costs are considered global and not for each order. The situation is similar with intermediate storages. This storage is strongly bound to production and we cannot speak of a proper inventory problem. But the results of inventory system theory can be used for the disposal of intermediate storages.
Handling stocks in every organization is an important issue in every business. A well structured inventory system would give the organization proper control of their stocks. This study will be using the input-process-output diagram to come up with a computerized inventory system for Paper Mill Inc.
Input The first variable is the current inventory system of PMI as provided based on interviews and observations by the researchers. It will include policies and procedures provided by the management currently implemented for purchasing, receiving, storage, issuing and reporting of inventory.
Process After identifying the inputs, the current inventory system of PMI will be evaluated using the SWOT analysis. After the strengths and weaknesses of the current system are identified, the computerization of the current inventory system of PMI will follow. During this phase, management and accounting theories, concepts, and techniques will be followed to enhance the current system. Also, the organizational requirements of PMI will be taken into consideration for the enhancement. Before the final output, feedback from the management will be taken for comments and suggestions to be added for the final output.
Output The output will be the result of the careful analysis and discussion of the researchers and the client’s management. The output will be a computerized inventory system for PMI to be recommended for the client.
Fig. 1.4 Conceptual Frameworks
Statement of the Problem
General problem of the Paper Mill is the inefficiently rate of manually mandating a system or necessary manual inventory system is widely known due to the time consumed of manually recording of the transactions being done, security of data is at risk, and inaccuracy of data. The authors considered the problems encountered in using manual inventory system.
Significance of the Study
The system will provide the owner and the employees faster recording of transactions and counting of their supplies. It will also offer a much efficient and reliable system that can record their transactions digitally. Since they are using manually, the said system will help great to them. In business transaction, time is very important, having the traditional way of computing and recording would take time, and the purpose of this system is to lessen this time and spend it in much more important matters.