Chapter II

Chapter II

REVIEW OF RELATED LITERATURE AND STUDIES

This This chapte chapterr pres present ents s a brief brief discu discuss ssion ion of the the litera literatu ture re revie reviewe wed d by the the researchers which further enriched the conceptualization of the study and helped in describing the cognitive design that guided the conduct of the researcher.

Related Literature (Foreign)

 As said by Lesonsky, Lesonsky, Rieva (1!". #Tr #Tracki acking ng $nve $nventor ntory# y#,, &aga &agazi zine ne,,

inve invent ntor ory y

'an 'anage' age'en entt

soft softw ware, are,

a co'puter based

tracking inventory levels, levels, orders, orders, sales and deliver iveriies

%ntre %ntrepr prene eneur  ur  sys syste'

for 

can also lso be used sed in the the

'anufacturing industry to create a work order , bill of 'aterials and 'aterials  and other production related docu'ents. )o'panies use inventory 'anage'ent syste' to avoid product overstock and outages. $t used to be a tool for organizing inventory data data that  that before was generally generally stored in hardcopy for' or in spreadsheets. spreadsheets. $t is often associated associated with and is si'ilar to distribution software , as distributors that can co'pete with less cash tied up in inventories which have a distinct advantage over their co'petitors Soure! Tracking $nventory (*++". $n %ntrepreneur-

http-www.entrepreneur.co'article*1!/*

Malcolm E. White Published at 2003 0 &erchandising 'eans selling products to

retail custo'ers. &erchandisers, also called retailers, buy products fro' wholesalers and 'anufacturers, add a 'arkup or gross profit a'ount, and sell the products to consu'ers at a higher price than what they paid. hen you go to the 'all, all the stores there are retailers, and you are a retail custo'er. Retailers deal with an inventory, all the goods (products" they have for sale. They account for inventory purchases and sales in one of two ways. 2eriodic and 2erpetual. As the na'es suggest these 'ethods refer to how often the inventory account balances are updated.

Soure! 3nline Article ( http://www.middlecity.com/ch06.shtml  )

&iddleton4s, #5ey 6actors in 7elp 8esk 9uccess (An analysis of areas critical to help desk develop'ent and functionality."# fro' the :ritish Library R;8 Report *<=, the :ritish Library 1 stated that a help desk is a resource intended to provide the custo'er or end user with infor'ation and support related to a co'panies or  institution>s products and services. The purpose of a help desk is usually to troubleshoot proble's or provide guidance about products such as co'puters, electronic e?uip'ent, food, apparel, or software. )orporations usually provide help desk support to their custo'ers through various channels such as tollfree nu'bers, websites, instant 'essaging, or e'ail. There are also inhouse help desks designed to provide assistance to e'ployees. Soure! &arcellla, R. and &iddleton, L. -5ey 6actors in 7elp 8esk success-

http-books.google.co'.phbooksabout5ey@6actors@in@7elp@[email protected]'l idB%i=CDgAA)AAE;redir@escBy

 According to the book of Ti'othy 9. Faughan, that published in year 1< (:ook of :ook (A 'odel of the 2erishable $nventory 9yste' with reference to consu'er realized product eGpiration0 2ublishing )o'pany, 3perational Research 9ociety Ltd". The introduction of unit perishability has significant effect on inventory policy for a large nu'ber of co''odities. A significant a'ount of research has been presented which addresses the tradeoffs between ordering, carrying, shortage, and outdate costs for  perishable inventory. A 'odel of the perishable inventory syste' which incorporates the effects of consu'errealized product eGpiration. This 'odel represents a synthesis of  two distinct directions in the perishable inventory literature, and addresses the si'ultaneous deter'ination of inventory ordering and outdate policy for a perishable ite' with rando' de'and and rando' lifeti'e. Soure! :ook (A 'odel of the 2erishable $nventory 9yste' with reference to consu'er

realized product eGpiration, Fol.
 According to Eohnson and 5aplan author of the book of Relevance Lost, (:ook published year 1=0 2ublishing )o'pany, 7arvard :usiness 9chool 2ress" $t see's that around1!!+ there was a change in 'anufacturing practice fro' co'panies with relatively ho'ogeneous lines of products to horizontally integrated co'panies with unprecedented diversity in processes and products. Those co'panies (especially in 'etalworking" atte'pted to achieve success through econo'ies of scope  the gains of 

 Cointly producing two or 'ore products in one facility. The 'anagers now needed infor'ation on the effect of product'iG decisions on overall profits and therefore needed accurate productcost infor'ation. A variety of atte'pts to achieve this were unsuccessful due to the huge overhead of the infor'ation processing of the ti'e. 7owever, the burgeoning need for financial reporting after 1++ created unavoidable pressure for financial accounting of stock and the 'anage'ent need to cost 'anage products beca'e overshadowed. $n particular, it was the need for audited accounts that sealed the fate of 'anagerial cost accounting. The do'inance of financial reporting accounting over 'anage'ent accounting re'ains to this day with few eGceptions, and the financial reporting definitions of >cost> have distorted effective 'anage'ent >cost> accounting since that ti'e. This is particularly true of inventory. 7ence, highlevel financial inventory has these two basic for'ulas, which relate to the accounting period. (6irst the )ost of :eginning $nventory at the start of the period I inventory purchases within the period I cost of production within the period B cost of goods available. 9econd

the

cost

of

goods

availableJcost

of

ending inventory at the end of the period B cost of goods sold". The benefit of these for'ulas is that the first absorbs all overheads of production and raw 'aterial costs into a value of inventory for reporting. The second for'ula then creates the new start point for the neGt period and gives a figure to be subtracted fro' the sales price to deter'ine so'e for' of sales'argin figure. &anufacturing 'anage'ent is 'ore interested in inventory turnover ratio or average days to sell inventory since it tells the' so'ething about relative inventory levels. ($nventory turnover ratio (also known as inventory turns" B cost of goods sold  Average and $nventory B)ost of Doods 9old  ((:eginning

$nventory I %nding $nventory"  *"" and its inverse Average 8ays to 9ell $nventory B Hu'ber of 8ays a Kear  $nventory Turnover Ratio B / days a year $nventory Turnover Ratio. This ratio esti'ates how 'any ti'es the inventory turns over a year. This nu'ber tells how 'uch cashgoods are tied up waiting for the process and is a critical 'easure of process reliability and effectiveness. 9o a factory with two inventory turns has siG 'onths stock on hand, which is generally not a good figure (depending upon the industry",whereas a factory that 'oves fro' siG turns to twelve turns has probably i'proved effectiveness by 1++M. This i'prove'ent will have so'e negative results in the financial reporting, since the >value> now stored in the factory as inventory is reduced. hile these accounting 'easures of inventory are very useful because of  their si'plicity, they are also fraught with the danger of their own assu'ptions. There are, in fact, so 'any things that can vary hidden under this appearance of si'plicity that a variety of >adCusting> assu'ptions 'ay be used. These include- (9pecific $dentification, eighted

Average

)ost,

&ovingAverage

)ost,

6$63

and

L$63".

$nventory Turn is a financial accounting tool for evaluating inventory and it is not necessarily a 'anage'ent tool. $nventory 'anage'ent should be forward looking. The 'ethodology

applied

is

based

Soure! :ook (Relevance Lost, p. 1*"

Related Literature (Loal)

on

historical

cost

of

goods

sold.

$nventory is one of the 'ost i'portant in 'onitoring a stock that take place in business activity. The inventory syste' does the entire task in co'puting the value with inventory (cost and ?uality" and handling data or infor'ation. $nventory 9yste' 'aintains an orderly flow of supplies, raw 'aterials, or finished goods through an office shopfactory because of ite's in any inventory. Represents cost, they need to be controlled. The purpose of inventory syste' for 'anage'ent are to keep inventory levels and cost at desire 'ini'u's while 'aintaining to proper safeguards over  'aterials to places and people who need the'. $nventory review refers to the ti'e interval between counting inventories. 2eriodic review syste's have a set schedule for conducting an inventory count. Transactional review syste's update the inventory count after each transaction. 2eriodic review is less resource intensive but 'ore prone to creating shortages and inventory discrepancies while transactional review is 'ore accurate but re?uires 'ore resources. $nventory costs can be broken into several categories- the actual cost of the inventoried product, the cost of storage and the cost of un'et de'and if inventory is not available to fill orders. Additional costs include transportation and ordering costs incurred when replenishing inventory. %ach of these costs is uni?ue to individual businesses and can vary widely. Soure! (Warre !. Plaret" 2002)

Eanes (*++1" stated that co'puters are eGtre'ely reliable device and very powerful calculators with so'e great accessories applications like word processing

proble' for all of business activities, regardless of size, co'puters have three advantages over other type of office e?uip'ent that process infor'ation because co'puter are faster, 'ore accurate 'ore econo'ical.

Reyes (*++/" task would be ti'e consu'ing to acco'plish 'anually and 'ore practical with the aid of co'puters field in cabinet.

Ralph &. 9tair (1" e'phasized that the develop'ent of technology through the years have enabled us to do 'ore with less effort. 6ro' the orientation of the light bulb to the industrial revolution and beyond, we have continuously tried to in a 'ore efficient 'eans of doing tasks. Soure! (20##" ##). !e$iew o% !elated &orei' iterature. tudyMode.com. !etrie$ed ##" 20##" %rom http://www.studymode.com/essays/!e$iew*+%*!elated*&orei'*iterature* ,236#-.html 

ith respondents that cover the country4s 1! to < yearold population, the study shows that <+.
(2hilippine 8aily $n?uirer0 11-/ p' N 9aturday, &arch th, *+1"

http://busiess.iuirer.et/###--/more*%ilipios*ow*shoppi'*olie

Related Studie" (Foreign)

 Auto'ation can draidatically affect all phases of inventory 'anage'ent, including counting and 'onitoring of inventory ite's0 recording and retrieval of ite' storage locations0 recording changes to inventory0 and anticipating inventory needs, including inventory handling re?uire'ents. %ffective $nventory Analysis. Det 8ata Related to %ffective $nventory Analysis. 6or 'any distributors, inventory is the largest and perhaps the 'ost i'portant asset. $nventory ties up 'ore 'oney than buildings or  e?uip'ent, and is often less Oli?uid.P $t is crucial, then, that distributors develop and use a co'prehensive set of tools that allows close 'onitoring of the perfor'ance of  inventory invest'ents. Read 'ore about si'ple 'easure'ents that can help you 'aGi'ize your invest'ent in inventory.  According to the study of %dwin :ello and his fellow researchers of  )o'puterized &onitoring and $nventory of 9tock with arning Level dated &arch *++/, 'any fir's have thousands of ite's of inventory which re?uire so'e for' of control. The usage calculations and record keeping chores would soon beco'e overwhel'ing were it not for the co'puter and its uni?ue infor'ation storage and retrieval capabilities. Soure! http://www.studymode.com/subects/related*studies*i*pos*pa'e2.html  (20##" 01). hapter i: !elated iterature ad tudies o% $etory ystem.tudyMode.com. !etrie$ed 01" 20##" %rom http://www.studymode.com/essays/hapter*i*!elated* iterature*4d*tudies*565,-0.html 

There has been a signiQcant a'ount of previous work done in the 'onitoring of  co'puter hardware device. $n particular, &oha''ed %L 9hobaki conducted a study which O3nchip &onitoring for Hon$ntrusive 7ardware9oftware 3bservabilityP bears the 'ost si'ilarity to this work. $n this thesis work the authors propose a solution to the proble' where the 'onitoring and troubleshooting of co'puter hardware device beco'e i'portant part in 'aintaining observability of the co'puter syste'. 7e stated that today4s co'puterbased products are co'pleG and re?uire eGtensive efforts to design and test. They are co'pleG because they co'prise 'any co'ponents, co'pleG software and hardware, and features a lot of functionality. This is a trend which is clearly seen in the consu'er electronics 'arket, and in stateoftheart industrial syste's. The develop'ent of these products tends to be as challenging as it is increasingly ti'e consu'ing, eGpensive, and errorprone. Therefore, the developers need to cut down the develop'ent ti'e and i'prove ?uality, which turn, de'ands better tools and develop'ent 'ethodologies. 7e stated also that the one i'portant aspect in the develop'ent process is observability, the ability to observe the syste'4s behavior at various abstraction levels in the design. These observations are re?uired for 'any reasons, for instance, when looking for design errors, during debugging, during opti'ization of algorith's, for eGtraction of design data, and a lot 'ore. 3bservability is however not an issue restricted to develop'ent purpose only, it 'ay also be necessary after the deploy'ent to develop'ent purpose as well for error recovery, for surveillance issues, for collection of statistical 'easure'ent concerning the use of hardware devices.

9hobaki, &. %. (*++<" 3n)hip &onitoring for Hon$ntrusive 7ardware 9oftware O#"er$a#ilit%- http-www.'rtc.'dh.sepublications+=/.pdf 

 According to the study of %dwin :ello and his fellow researchers of  )o'puterized &onitoring and $nventory of 9tock with arning Level dated &arch *++/, 'any fir's have thousands of ite's of inventory which re?uire so'e for' of control. The usage calculations and record keeping chores would soon beco'e overwhel'ing were it not for the co'puter and its uni?ue infor'ation storage and retrieval capabilities. Soure! (http://www.studymode.com/subects/related*studies*i*pos*pa'e2.htm)l  (20##"01). haper i: !elated iterature ad tudies o% $etory ystem.tudyMode.com.!etrie$ed 01" 20##" %rom http://www.studymode"com/essays/hapter*i*!elated*iterature*4d*tudies* 565,-0.html "

 According to Kansong Liang,2rofessor at :eiCing niversity of Technology who conducted a thesis, OThe 8evelop'ent of an $ntelligent $nventory &anage'ent 9yste'P, surveys and classifications of co'puter inventory 'odels can provide useful infor'ation for 'akers who want to use the 'odels. :ut the applications of these 'odels in 'aking decisions for inventories with large nu'bers of ite's would involve a substantial nu'ber of nu'erical calculations. To facilitate the 'odels application, efforts have been 'ade over the past four decades to develop co'puterized inventory syste's to help in solving these proble's. $n 1+s $:& introduced an inventory package called $&2A)T-

$nventory &anage'ent 2rogra' and )ontrol Techni?ues for the whole and retail trade. 3ther co'puter 'anufacturers followed with very si'ilar syste's. $)L introduced its syste' 9)AH0 9e'en4s developed its syste' 73R%9T. Actually, inventory packages like $&2A)T are criticized for not being based on truly opti'al algorith's but on heuristic, co''on sense acco'panied by 'athe'atical solutions for si'plified 'odels which involves so 'any eGceptions and restrictions that it is ?uite difficult to gain insight into the funda'entals. Soure! Liang, K. (1="- The 8evelope'ent of An$ntelligent $nventory 9yste'-

http-usir.salford.ac.uk1
 Auto'ation can radically affect all phases of inventory 'anage'ent, including counting and 'onitoring of inventory ite's0 recording and retrieval of ite' storage locations0 recording changes to inventory0 and anticipating inventory needs, including inventory handling re?uire'ents. %ffective $nventory Analysis. Det 8ata Related to %ffective $nventory Analysis. 6or 'any distributors, inventory is the largest and perhaps the 'ost i'portant asset. $nventory ties up 'ore 'oney than buildings or e?uip'ent, and is often less Oli?uid.P $t is crucial, then, that distributors develop and use a co'prehensive set of tools that allows close 'onitoring of the perfor'ance of inventory invest'ents. Read 'ore about si'ple 'easure'ents that can help you 'aGi'ize your  invest'ent in inventory.  According to the study of %dwin :ello and his fellow researchers of  )o'puterized &onitoring and $nventory of 9tock with arning Level dated &arch *++/, 'any fir's have thousands of ite's of inventory which re?uire so'e for' of control.

The usage calculations and record keeping chores would soon beco'e overwhel'ing were it not for the co'puter and its uni?ue infor'ation storage and retrieval capabilities. Soure! (*+11,+".)hapter ii- related literature and studies of inventory tudy'ode.co'.

http-www.study'ode.co'essays)hapter$iRelatedLiteratureAnd9tudies ==!/+.ht'l

Related Studie" (Loal)

 According to Ronalyn D. Tolentino who conducted a thesis O)o'puter:ased $nventory, Record 5eeping and &onitoring 9yste' for the 2roperty and %?uip'entP, the world we live in has been transfor'ed i''ensely with the advent used of the infor'ation. Today, al'ost every aspect of the hu'an life is influenced by the rapid advance'ent of technology providing us with the novel opportunities and fresh challenges. This is 'anifested in all sectors of the econo'y- co''unication, education, health services, entertain'ent, finance, publishing, retailing, and other areas. $ndeed, infor'ation technology has 'ade an indelible 'ark in our lives. )o'puterized inventory syste' is a co'puter progra' that track inventory and creates auto'ated replenish'ent order. Through this the organization brings potential i'prove'ent in accuracy and speed through better analysis of inventory trends, including the pattern of processing and recording. 6urther'ore, i''ediate result will be

'ore ti'ely and accurate infor'ation about ite' presently on hand. Additional e?uip'ent and property personnel could encounter fewer burdens, less effort on processing transactions, and 'ay avoid 'isplacing or loss of records. Record keeping beco'es increasingly difficult to handle to an organization and business, especially with 'any e?uip'ent and property. Ade?uate ti'e is needed to evaluate and storage to organization that4s its proper register. 7owever, through co'puters and vast databases available nowadays, keeping the recorder large volu'e see's to be a natural pheno'enon, to an organization re?uiring a proper place to store all essential infor'ation. Through this, spoilage or 'isplacing records can be avoided, and infor'ation can be ac?uired in Cust a click away. Thus, the researcher co'es up with the co'puterization ai' for an enor'ous innovation and i'prove'ent in the eGisting 'anual syste'. The researchers believes that the use of co'puters is the best solution the researcher think that would answer the eGisting proble' in ter's of  operations and functions of inventory, record keeping and 'onitoring syste'. Soure!http-p'book.ce.c'u.edu1<@3rganization@and@se@of@2roCect@$nfor'ation.h

t'l

 According to the study of Anna &arie :eltran 8istor of 2roposed 9ales &onitoring 9yste' issued 1/, the accelerated work structure of the co'pany proper  'onitoring is essential in order to keep track of the co'pany4s sales activities. 7er  syste' ai's to co'e up with an efficient, and accurate 'echanized syste' of  preparing invoices that will keep track of the daily transaction and generate reports. $'portant infor'ation will be provided by this study in order to prove that the

co'puterization of the co'pany4s operation and achieve a 'ore reliable and efficient 'eans of 'onitoring day to day activities. 7er syste' focuses on the analysis and design of the sales 'onitoring syste' which will 'onitor the stacks inventory of the sales depart'ents. This syste' of hers is so'ewhat related to our study but our syste' focuses 'ore on the inventory 'onitoring syste' of a trading co'pany. Soure! (Anna &arie :eltran 8istor, 2roposed 9ales &onitoring 9yste' issued 1/"

2opular author of Accounting, aldo T. 2assion (1+" in his book stated that, to i'prove their efficiency and reduce their cost of operation. Reports are 'ore ti'ely and accurate. )o'puters have large capacity to store data and tre'endous speed to 'anipulate and recall data to the for'at a user wishes to use which the introduction of  'icroco'puter co'putation of business is 'ore affordable.

 A study fro' 5atrina Tan, :usiness in )yberspace, %ntrepreneur 2hilippines &agazine &ay 1, *++=, 9K3 :now, $nc., which stands for 9tart your 3nline :usiness How, is a co'pany whose business is to help other people start their own businesses. $t recently launched the 2hilippines> first online 'arketplace for goods and services, bringing together buyers and sellers through an online eb portal that serves as a co'plete virtual office. (p.
 According to :ravo, 9.R.&., Depolane, E.5., $sidro, A. of Hational :ookstore. The 'aintenance and control of inventories are co''on proble's to all organizations in any sector of the econo'y. The businesses that have a difficulty in solving proble's of 

inventory are slowly restricted to beco'ing a profit'aking organization and conse?uently, 'aking a shortage in production, stockouts, da'aged and obsolete goods. To be able to achieve a good perfor'ance of business, a new study of concept and techni?ues in handling inventory effectively should be adopted.

S&NT'ESIS

The proponents believe that every literature and every studies stated in this research is si'ilar on the present study. The proponents relate and differentiate the research based on the flow of their transaction fro' the proposed study. The transaction and process and also the design specialization will easy help to ac?uire and acco''odate and co''unicate with the user. The proponents get and use other  research in this chapter, in which it helps to the', because they get knowledge during creating the syste's. This Review of Related Literature and 9tudies, illustrate the specific and general task of the $nventory &anage'ent 9yste', also the types of $nventory that gives a lot of  knowledge for everyone before entering into business and using $nventory. $n this chapter the proponents put a different opinion of others in ter's of $nventory, the Literatures and studies should get on the :ook articles on the internet.  After reading all the literatures and studies 'entioned before, the proponents believed that the 'entioned related literature and studies are very significant to proponent4s study. The proponents decided to 'ake the syste' online through web due

to the co'pany>s current situation. The said co'pany needs 'ore eGposure and advertise'ents to the public. And having an advance syste' can affect the develop'ent and ?uality of business. 8evelop'ent through technology affects the way of 'anaging the business which is handled today but in order for the online and LAH syste' to have the predicted i'pact on the business industries it 'ust have considerable advantages over traditional 'anage'ent process. These advantages can be achieved if these co'panies have a thorough and effective web presence, advertise properly and 'ake sure there is sufficient a'ount of  infor'ation present regarding the business on the web. The study also show that in order for the syste's to be 'ore effective it should offer an i'proved infor'ation sharing, offers operational efficiency and cost effectiveness to the business. The effectiveness of online syste's does see' to outweigh traditional 'ethods in a nu'ber of core factors0 its use is being criticized as its security is vulnerable to so'e hackers and spa''ers, it eGcludes so'e of the custo'ers without internet access. 9everal theorists have therefore proposed a co'bination of the different ways of online and traditional 'ethods in order to obtain effectives in online syste's.

DEFINITION OF TERS

This section defines only those ter's that are basic to the research being conducted.

Ae""i#ilit%  A general ter' used to describe the degree to which a product, device,

service, or environ'ent is accessible by as 'any people as possible. Adini"trator  A person responsible for running technically advanced infor'ation

syste's. Client  ser4s that are login inside the syste' Data#a"e  A syste'atized collection of data that can be accessed i''ediately and

'anipulated by a dataprocessing syste' for a specific purpose. De#ugging  is a 'ethodical process of finding and reducing the nu'ber of bugs, or 

defects, in a co'puter progra' or a piece of electronic hardware, thus 'aking it behave as eGpected. 8ebugging tends to be harder when various subsyste's are tightly coupled, as changes in one 'ay cause bugs to e'erge in another. &any books have been written about debugging (see below- 6urther reading",as it involves nu'erous aspects, including interactive debugging, control

flow, integration

testing, log

files,

'onitoring (application, syste'", 'e'ory du'ps, profiling, 9tatistical 2rocess )ontrol, and special design tactics to i'prove detection while si'plifying changes. E**iien%  the ratio of useful work to resources (processor and 9torage" eGpended. Funtionalit%  The capacity of a co'puter progra' or application to provide a useful

function.

+arent"  )lothing for 'en and wo'en. In*oration Tehnolog%, $s the application of co'puters and teleco''unications

e?uip'ent to store, retrieves, trans'it and 'anipulate data in the conteGt of a business of 'anpower.

Internet  $s a global syste' of interconnected co'puter networks that use the

standard $nternet protocol suite to serve billions of users worldwide. In$entor%  a detailed, ite'ized list, report or record of things in one4s possession,

especially a periodic survey of all goods and 'aterials in stocks. ar-eting  $dentifying and understanding the clientscusto'ers and giving the' what

they want. Net.or-  $s a collection of co'puters and devices that facilitate co''unications

a'ong users and allows users to share resources. Order"  A condition or co'prehensible agree'ent of purchasing products to %l Drande

6ashion 7ouse. Seurit%  3bCective is to establish rules and 'easures to use against attacks over the

$nternet. So*t.are  any of the written progra's, flow charts, etc. including general subroutines

that 'ay be inserted in co'puter progra'. Trou#le"hoot / 6iGing a proble' on device or a co'puter. U"er   An agent, either a hu'an agent (enduser" or software agent, who uses

a co'puter or network service. We#"ite  A set of interconnected webpages, usually including a ho'epage, generally

located on the sa'e server, and prepared and 'aintained as a collection of infor'ation by the staff of %l Drande 6ashion 7ouse.