Chapter II

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter covers the conceptual framework of the researcher’s

proposed system. It also includes the local and foreign literature and studies,

definition of terms which defines the technical words and terms used in the

system.

Conceptual Framework

INPUT PROCESS OUTPUT

Figure 2.1 IPO Diagram

This shows the IPO (Input-process-output) diagram of the system

More Record that

Record Manual Record of contains Errors,
of Sales and Sales and
INPUT

Wasted time and

INPUT

Inventory lnventory for LMC

effort

Figure 2.2 Existing System Diagram

This is the existing system diagram illustrates the problem in the manual
style and system of the company; record that contains errors and wasted time
and energy.

Record
Computerized Less error of
of Sales, Records records,
Inventory INPUT

of Sales and Saves time and

Inventory for LMC effort efficiently
and Stocks
 INPUT

Figure 2.3 Researcher’s Proposed System

This is the researcher’s proposed diagram shows the solution to

problem; less errors and saves time and effort efficiently.

Review of Related Literature

This discusses the foreign and local literature. The informations indicated

were gathered in internet sites, journals and various books relating to the

researcher’s topic.

Foreign Literature

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, “Inventory refers to

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

Administration, 2010, pp 1-2). 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.

According to the Nicole Fallon(2013), investors in uncertain, rapidly

changing product markets likeconsumer electronics react more strongly to

customer satisfaction. Nokia, for example, saw a rise in its American Customer

Satisfaction Index (ASCI) figure in May, followed by reports of increased interest

from large institutional investors.

According to Stair and Reynolds (2009) on their book, Principles of

Information System, sales and marketing information systems are used to

develop new good and services (product analysis), determine the best location
for production and distribution facilities (place or site analysis), determine the

best advertising and sales approaches (promotion analysis), and set product

prices to get the highest total revenues (price analysis).

Cashman stated in her book “System Analysis and Design”,(2011) that

transaction processing system data generated by day-to-day business

operations. Transaction processing are efficient because they process a set of

transaction related commands as a group rather than individually to protect data

integrity however, TP systems ensure that if any single element of a transaction

fails, the system does not process the next transaction.

Sales are affected by maany factor besides advertsing, such as product

features, price and availability. Service is the anything which organization offers

to customers. It is the means by which customers needs are satisfied. Service

organizations nee to follow a strategic approach for effecctive service that can

increase customer satisfaction that influences the profitability (Ketler, 2009).

Local Literature

According to PLDT(Manila,Philippines,April 15,2011), small and medium

enterprises, who long for a point-of-sale(POS) system that can track how much

they sell and how muchstock 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.

In the study from 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.”

An article by Junaito Villegas (June 23, 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.”

Josefina Estolas in the book Fundamentals of Research (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.

Review of Related Studies

This presents both of foreign and local studies. Informations were

gathered in other dissertations and research projects in the internet and schools.

Foreign studies

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

prioritizing supply chain visibility, inventory optimization, supply chain analytics,

and supply chain outsourcing as ways to cut supply chain management (SCM)

costs this year.

 According to IBM(October 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.

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.

Based on the research entitled “Computerized Sales and Inventory system

for Ronmon Trading” (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.

Based on the research entitled “Computerized Sales and Inventory system

for Ronmon Trading” (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, reliable, 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.

In the study entitled “Osaka Sales and Inventory System” (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.

Definition of terms

The definition of terms are operationally and technically defined based on

the context of the study.

Conceptual Framework. Used in research to outline possible courses of

action or to present a preferred approach to an idea or thought.

Data. It refers to qualitative or quantitative attributes of a variable or set of

variables.

Data Flow Diagram. A graphical representation of "flow" of data through

out an information system

Hardware. Component devices which are typically installed into or

peripheral to a computer case to create a personal computer upon which system

software is installed including a firmware interface such as a BIOS and an

operating system which supports application software that performs the

operator's desired functions.

 Information. Any kind of event that affects the state of a dynamic

system.

Inventory. A list compiled for some formal purpose, such as the details

of an estate going to probate, or the contents of a house let furnished.

Sales- the act of selling a product or service in return for money or other

compensation.

Software. A conceptual entity which is a set of computer programs,

procedures, and associated documentation concerned with the operation of a

data processing system.

System. A set of interacting or interdependent components forming an

integrated whole.

SDLC (System Development Live Cycle). A process of creating or

altering information systems, and the models and methodologies that people use

to develop these systems.

TPS (Transaction Processing System). A type of information system that

collects, stores, modifies and retrieves the data transactions of an enterprise.