CHAPTER I

THE PROBLEM AND ITS BACKGROUND

1.1 Introduction

Recently, people have been relying on the benefits that technology is

offering. Technology is derived from discoveries of man; therefore, it

includes the use of both primitive and highly advanced tools and methods

of works. The inventions and the development of technology permitted

people to expand their work at the shortest possible time. With the

assistance of technology, people are now using the most important and

most highly developed machine man has ever invented: the computer.

Computer has changed the way people work specially in the field of

industry and commerce. Most businesses have used this in carrying out

different business transactions. Computer has been greatly valued for its

skill to execute tasks more hastily and more accurately than any human

being had. These tasks include solving numerical calculations, storing

necessary information, and organizing files that can be used by

management and other departments in the company in making economic

decisions.
 However, even with the existence of these highly developed

technologies, some business firms still prefer the manual system, which

requires more effort, time, costs, and resources, because of its simplicity.

Yet, it is apparent that as the business gets larger, its processes becomes

complicated and thus requires a more convenient tool, which will help

attain the company’s goals and objectives. Organizations have to consider,

acquire, allocate and control certain factors which are necessary to achieve

these goals and objectives. Inventory management, being one of these

factors, has always been a major preoccupation for the company’s survival

and growth.

The aim of inventory management is to hold inventories at the

lowest possible cost, given the objectives to ensure uninterrupted supplies

for on-going operations. When making decisions on inventory,

management has to find a compromise between the different cost

components, such as the costs of supplying inventory, inventory-holding

costs and costs resulting from insufficient inventories (Hugo, Badenhorst-

Weiss and Van Rooyen 2002:169).

One example of an organization that has a wide range of inventories

and still employs a manual system is 2M Trading was formally established

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to take part in the Philippine Economy's growth as it envisioned for making

the road in the circle of newly industrialized countries.

Mainly, 2M TRADING is focusing on various spare parts and services. It

source and supply various electromechanical parts, equipment’s and

accessories critical to Philippines growing economy: Electronics,

Semiconductor, Mold Industry and Highly Automated Industry. Therefore,

the researchers decided to come up with a study entitled “Computerized

Inventory System for 2M TRADING that shall convert its manual process

of managing the inventory into a computerized one. This modification

could help the aforementioned business perform this essential function with

more speed and accuracy.

Through this, the researchers may be able to make a corresponding

program that would answer the problem identified in the former part of this

research.

1.2 Statement of the Problem

1.2.1 General Problem

 Difficulty in checking overstock, under stock and out of stock

products.

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 1.2.1 Specific Problem

 Time consuming in looking for existing items in the

warehouse.

 Time consuming in preparing of inventory and updating

records.

 Unexpected losses of important records.

1.3Objectives of the Study

1.3.1 General Objective

 To build a computerized sales and inventory system that will

compute and records, updated data in database of 2Mtrading,

1.3.2 Specific Objective

 To provide a system that will check occurrences of out of

stock and under stock and over stock scenario by applying the

use by applying the use of recorder point for most

advantageous stock level.

 To provide a system that will lessen the time being used in

looking for existing item in the warehouse.

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  To provide system that will fastens the generation of

inventory report and updating records. All the data needed in

producing those report will be supplied by the system.

 To provide a system that will secure important records.

1.4 Significance of the Study

This study is deemed beneficial to the following:

1. 2M Trading. The developed Computerized Inventory System would

create positive impression towards the owner and staffs, revealing

the entity’s perseverance to adopt technology advancement to

improve their current system.

2. Owner and Staff. The developed system could lessen the

difficulties in managing the inventory count which is a key activity

of business logistics and a major preoccupation in the entity’s daily

activities. This would also minimize their time in doing a yearly

physical count because of the computerized system that can search

and update records quickly.

3. Customers. The system could lessen inconvenience to customers

when they make a purchase. It would be easily known if the certain

item they want to buy is still available or how many stocks are still

available.
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 4. Researchers. This study shall enhance their skills and knowledge in

advance technology by developing a system, and become more

aware of the existence and benefits of new technology.

5. Future Researchers. This study would serve as a guide in the area

of Inventory Transaction Processing System and in the conduct of a

similar study.

1.5 Scope and Limitations of the Study

The study focuses on the need for existing Sales and Inventory

System. The study is limited to the 2M Trading Malvar City, Batangas.

The major reason of the study is focus on designing the Sales and

Inventory System of 2M Trading using Computerized Sales and Inventory

System. Through this study, the proposed system will greatly help the

company in updating, maintenance of records of their products and

costumer and executing of reports systematically. The proposed system

includes certain processes limited to achieve the purpose including the

product entry, update stocks, sales, report and utilities. The system has

admin account wherein the user is limited to access to the sales modules

only.

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 The researchers will use Visual Basic.Net as the programming

language and Microsoft Access as their database.

Sales and Inventory System of 2M Trading using computerize

system is limited only to the official activities and products of 2M Trading.

1.6 Methodology

The researchers conduct a step by step process in order to come up

with an inventory system which will meet the objectives previously stated

and to provide a program which will of great help to the 2M TRADING

inventory management.

First, an interview was conducted in order to know the inventory

operations of 2M TRADING such as the manner in which inventories are

recorded, updated and purchased.

Second, previous studies in relation with the topic were gathered

from books, past theses and net, to properly and fully comply with the

current inventory needs of the said entity.

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 Third, an inventory system via VB.NET was then created. Using

this, inventory sold and purchased can easily be monitored and recorded,

inventory shortage may be prevented, and high cost due to labour,

inventory handling and ordering may be eliminated.

Through this, the researchers may be able to make a corresponding

program that would answer the problem identified in the former part of this

research.

1.7Conceptual Framework

INPUT PROCESS OUTPUT

FEED BACK
Figure 1: Conceptual framework

The staff encoded the merchandise information like name of item barcode,

item name, description, quantity, market price, sale price, and item sold this

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is the input. The system automatically inventorying the item and the sales

of each item every day or week even the month and this is the process, the

output will be the inventory and sales report that will receive of the staff

that encode for the merchandise or item information.

1.8 Definition of Terms

1. Sales – the activities involved in selling goods or services

2. Inventory- the stock of an item on hand at particular location or

business.

3. System- is a way of working, organizing or doing something which

follows a fixed plan does a particular kind of work or set of rules.

You can use system to refer to an organization or institution that is

organized in this way.

4. Business- is work relating to the production, buy and selling of

goods or services.

5. Program- is a set of instructions that a computer follows in order to

perform a particular task

6. Database- is a collection of data that is stored in a computer and that

is easily being used and added to.

7. Process - is a series of actions which are carried out in order to

achieve a particular result.

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 8. Visual Basic- a programming environment used to create ground

cell, graphical user interface (GUI) application for the Microsoft

windows family of operating system.

9. Data Flow Diagram - illustrate how data is processed by a system

in terms of inputs and outputs.

10. Framework - a basic conceptual structure.

11. Tax - an amount of money that paid in the government o they can

pay public services.

12. Technology - refers to methods systems and devices which are

result of scientific knowledge being used for practical purposes.

13. Excel – a popular spreadsheet program from Microsoft, available for

Macintosh and pc.

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