JDM Lechon Manok Sales and Inventory System with SMS Notification

CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the review of related literature and studies. It shows the

similarities, differences, as well as the synthesis of the study to compare the different

studies conducted and literature that help the researchers broaden their knowledge and

achieve their goal respectively.

Related literature

The following are the literatures explored by the researchers to provide

information and ideas in developing the proposed system.

Local Literature

According to PLDT (Manila, Philippines) (2011), small and medium enterprises,

who long for a point-of-sale(POS) system that can track how much they sell and how

much stock they have left at their stores in real-time and from anywhere, can now turn to

PLDT SME Nation. “Inventory System for Best Choice Rice Dealer” by Bisagas,

Arivada, and Tanteo (October 2009). The process of counting the sacks of rice is done

manually, which corresponds to difficulty in tallying the number of available stocks and

sold items. The Manual generation of inventory reports such as daily, weekly, quarterly

and annual inventory list of records remains as one of their key problem since the

establishment of the business. The transaction processing system for Best Choice Rice

Dealer will minimize the difficulty the owner in processing inventory. It will monitor the

availability of product items for reorder to prevent under stocking, overstocking or

running out of stocks. The system will also generate necessary reports of inventory such

as sales reports.

According to Averion, Gaela, and Libo (2009), entitled “Monitoring and

Inventory for discovery Mall.com”, it stated that: “It will minimize the difficulty of the

manager in processing inventory because physical counting products, stocks and

computing inventory summary will be the system job. It will monitor the availability of

products, items to prevent under stocking, over stocking and running out of stocks. The

system will also simplify the transaction between dealer and supplier relationship because

of the updated supplier information and price list of items will correspond to

collaboration with other supplier.”

According to Junaito Villegas (2009), entitled “Inventory controls are key to

dissuade employees from stealing” states that: “Computers can only do much, but

coupled with inculcating honesty among staff and instituting the appropriate deterrents,

they can work very well in minimizing losses and pilferages. It is therefore highly

advisable to do both the manual and the computerized inventory system in a retail and

wholesale business.”

According to Josefina Estolas (2009), in exploration, we find new techniques,

knowledge, even developed new substances, gadgets, equipments, processes or

procedures, imagination and skill is employed by the researcher. The commodities, new

devices, services, in technology are needs of man for a better fuller life which is concern

of the research. These useful arts are the product of the technological environment and

the end-user is society in general.

 According to Sanders (2010), Computer-based system is a complex system

wherein information technology plays a major role. It makes the work easier, faster and

more accurate. Due to that fact, the automated scheme has become essential to small and

big companies for they are expected to give the best services possible. Nevertheless,

some businesses still prefer sticking with the system that is not integrated with

technology. Profitable causes are computer illiterate staff and lack of funds. Companies,

especially the big ones are recommended to switch from manual to automated systems

because this will improve the efficiency and productivity of the business which will up

lift the industry’s reputation. One of the most sought after automated systems of different

companies is a purchasing and inventory system which comes hand in hands. A

purchasing and inventory system is very important in every organization because a good

and inventory management can create an excellent productivity. Primarily, inventory

work consists of input, output and restock. Input is a process of buying new products into

the inventory and replacing the old products with the new ones. Meanwhile output is a

procedure of taking out the products for the inventory for sales or usage and refill the

insufficient products or escalating demands. Most of the retailing market is using

traditional way in the inventory management system where a person is assigned to check

and record the stock by hand using pen and paper. It is where operations with regards to

all the stock will be archived.

Foreign Literature

According to Hold (2010) article, “Inventory refers to stocks of anything

necessary to do business”. The U.S Small Business Administration publication describes
what constitutes successful inventory management balancing cost versus benefits of
inventory, including: Maintaining a wide assortment without sacrificing service; Keeping
stock low without sacrificing performance; Obtaining lower prices by making volume
purchases; and Maintaining an adequate inventory without an excess of obsolute items.

According to Henderson (2008), Inventory System Consist: An inventory control

system is used in many warehouse to track the location, quantity and status of goods that

are to be sold. Shipping and receiving of products is scheduled by and inventory control

system. Inventory control uses barcodes and RFID tags to track specific items. An audit,

or a physical count of inventory, is used to find out how many items are in an inventory.

Inventory taking is often required in order to get an accurate count for accounting

valuation purposes. Some inventory items have barcodes attached to them or imprinted

on them. These barcodes can be read during an audit by barcode reading devices.

According to Oludare O., et. al (2013), SMS is an acronym used in the world of

communications technology. It stands for Short Messaging Service which is a protocol

used in communications that gives way to the exchange of short text messages from one

mobile telephone device to another. SMS or text messaging largely dominates today’s

means of communication since seventy-four percent of all cell phone users send and

receive text messages nowadays. The technology behind SMS has paved the way for the

rapid growth of improvement of text messaging that has now allowed users to broadcast

SMS text messages not just from mobile phones but also from computers with the use of

SMS software and through public SMS gateways. The link between text messaging to

SMS technology now conotates the terminology of “SMS” as the act of texting or

sending text messages even with the use of a different communications protocol

According to Janes (2011), stated that computers are extremely reliable device

and very powerful calculators with some great accessories applications like word
processing problem for all of business activities, regardless of size, computers have three

advantages over other type of office equipment that process information because

computer are faster, more accurate more economical. Inventory management systems

were created to help dealerships implement, maintain, and fine-tune their inventory plans.

Dealers who use inventory management systems realize quicker vehicle turns and a

higher ROI than dealers that don’t. Choosing the right system can make a significant

contribution to your inventory management efforts. This strategy helps a lot to come up

with a successful outcome. (Zierden, 2009).

According to the U.S. Small Business Administration , pp 1-2 (2010), The U.S.

Small Business Administration publication describes what constitutes successful

inventory management (balancing cost versus benefits of inventory), including:

Maintaining a wide assortment without spreading the rapidly moving items too thin,

Increasing inventory turnover without sacrificing service, Keeping stock low without

sacrificing performance , Obtaining lower prices by making volume purchases,

Maintaining an adequate inventory without an excess of obsolete items.

Related Studies

The following are research studies explored by the researchers to provide

information and ideas in developing the proposed system.

Foreign Studies

According to a recent Aberdeen Group study (2012), companies are prioritizing

supply chain visibility, inventory optimization, supply chain analytics, and supply chain

out sourcing as ways to cut supply chain management (SCM) costs this year.
 According to IBM (2012), Innovations such as just-in-time manufacturing bar

codes and RFID tags have revolutionized supply chain management. Unfortunately these

innovations have brought with it staggering amounts of data to deal with. This white

paper outlines some of the major factors affecting inventory and supply chain

management.

According to Aparanjitha (2008), this project is aimed to developing in online

Sales and Inventory Management System (SIMS) for a departmental store. This system

can be used to store the details of the inventory, update the inventory based on the sale

details, produce receipts for sales, generate sales and inventory reports periodically, etc.

This is one integrated system that contains both the user component (used by salesperson,

sales manager, inventory managers, etc.) and the admin component (used by the

administrators for performing admin level functions such as adding new items to the

inventory, changing the price of an item, etc.). This system runs on multiple terminals,

offer GUI to its users and connects to a common database(s)The proponent acquires

knowledge on real time inventor, generations of receipts and security features where in

restricted information are only accessible by employees, managers, administrators, etch.

The proposed system can be accessible by employees, administrators and customers,

making online transaction possible.

According to Thomas M. McHugh (2011) computerized inventory management

systems provide many benefits that are hard to obtain using paper methods or an in-house

spreadsheet. Systems that are specific to the lab can be used relatively quickly without a

significant learning curve or system customization. The ability to analyze the inventory,

item usage, purchasing history, and other areas (e.g., lot numbers, equipment) are
important improvements to spreadsheets and paper systems. If the system includes

equipment tracking, it can be used to determine the capital asset as well as track the

service history and lifespan of equipment. The ability to streamline and automate many of

the inventory control tasks will be increasingly important to reduce hands-on time while

improving the analysis of trends, reducing stock-outs, and avoiding expiring reagents.

The ability to ensure that the right reagent in the right quantity is present at the right time

is critical to laboratory operations. Given that reagents are approximately one-half of

most labs' operating budgets, a continued focus on this expense will assist the laboratory

in continuing to provide accurate and timely laboratory testing at the lowest cost.

According to the U.S. Small Business Administration (2010), “Inventory refers to

stocks of anything necessary to do business”. The U.S. Small Business Administration

publication describes what constitutes successful inventory management (balancing cost

versus benefits of inventory), including;

1) Maintaining a wide assortment without spreading the rapidly moving items too thin,

2) Increasing inventory turnover without sacrificing service,

3) Keeping stock low without sacrificing performance,

4) Obtaining lower prices by making volume purchases,

5) Maintaining an adequate inventory without an excess of obsolete items.

Anyone in business must understand the business of inventory. Below is a look at six

different inventory systems as well as a comparison of the advantages and disadvantages.

Local Studies

According to J.De Leon and M. Ferrer (2009), Under the Koread Red Ginseng

Enterprise Sales and Inventory System, the researchers came up with a computerized

sales and inventory system. The proponents used database to easy access of files and for

easier and faster processing of the selling and inventory transaction. The program was

designated to generate reports such as monthly reports, inventory reports, sales invoice

and list of items.

According to de Alday, Espino, Ragudo (2010), the replacement of the manual

system with the proposed system provided more efficient and accurate processing of

transaction. The said system is much reliable, eliminated errors and inaccurate

information, and provided valuable reports with integrity. Also stated in the research,

“Sales and Inventory System For Schema Megacenter” (Almeda, Dañez, Geronimo), the

proposed system are not just only accurate, realiable, and fast in processing transactions

rather it is also provided more systematic way of transacting with the members and

through the billing system also helped the employees to save a lot of time on transaction

processing.

According to Laranang, Maaño and Nañola (2009), states that business nowadays

takes the advantage of using modern technology to improve their status and ensuring an

efficient and newer way to make their work easier. They state that the main problem of

the Osaka Iridology is what modern effective tool must be use in creating and developing

a sales and inventory system that will manage efficiently their transaction. So they

develop a system that inclusively for the transaction of Osaka Iridology, such as

monitoring of their medicine and their daily sales.

According to Mr. Gragasin (2010) et,al. Entitled “A customized Point of Sale and

Inventory System for Anespee Enterprise Hardware Carangian” concluded that the

implementation of the Developed system increases the business efficiency and effectively

in terms of every transaction that they have. Managing the records such as employee,

customer, suppliers and transaction is faster and easier than using the manual paper based

system.The researchers propose a customized system that would likely be adapted by the

locale to speed up its processes and increase the efficiency of the business.

Synthesis of Literature and Studies

JDM Lechon Manok Sales and Inventory System with SMS Notification is a

system that serve as the sales and inventory system for the owner/workers. The system

will contain available products, daily sales and so on. It is also a system that owner and

trusted workers can have use to. Moreover, the cited literature and studies served as

guideposts in the conduct of the study.

The similarities between the proposed system and the previous researches are the

technology utilized and the idea of beneficial factors to the users. In this case, both

systems aim to develop a crucial factor to fulfill the needs of the society. Both,

emphasizes to reach everyone with a better function of system and technological

purposeful usage.

Similar to the cited literature and study, the present study shows the use

computerized sales and inventory system as a method of monitoring and providing

information to the managers.

Definition of Terms

SMS – stands for Short Message Service and is also commonly referred to as a "text
message"

RFID (Radio Frequency identification) Tags - is an ID system that uses small radio
frequency identification devices for identification and tracking purposes.

POS (Point of sale) – system is the place where your customer executes the payment for
goods or services bought from your company.

ROI (Return of Investment) - is usually expressed as a percentage and is typically used

for personal financial decisions, to compare a company's profitability or to compare the
efficiency of different investments.

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