ITCMSY2 Case Study

Milestone 2
Streamlining Inventory Management:
A Case Study on Cloud Integration for Enhanced POS and
Inventory Tracking at Kwik-E-Mart

LEE, Chyle Andrei

SANTIAGO, Kyle Alexander
TAN, Lind Matthew C.
July <>, 2023
 I. Public Cloud Products and Services
Given the background and requirements of the franchise, the group has researched
public cloud products and services and came up with six different categories and thirteen
different products and services for potential implementation, which include options for:
Compute, Database, Storage, Networking & Content Delivery, Analytics, and finally
Security, Identity, and Compliance. These are the main components of the proposed cloud
integration and are the key points to consider when doing a comparison with different
cloud service providers. The group listed multiple cloud service providers and compared
their similarities as shown in the table below.

Cloud Products and Services

Category AWS Google Cloud Microsoft Azure Remarks
Amazon Elastic Platform for Google App Platform for Azure App Platform for These services
Beanstalk deploying and Engine deploying and Service deploying and provide
managing web managing web managing web platforms for
applications applications on applications on deploying,
without Google Cloud Azure without scaling, and
worrying about without infrastructure managing web
infrastructure. infrastructure management. applications and
management. services. They
offer automated
deployment,
scaling, load
balancing, and
infrastructure
management,
allowing
developers to
focus on
application
development
Compute
without
worrying about
the underlying
infrastructure.
Amazon Serverless Google Cloud Serverless Azure Functions Serverless These are
Lambda computing Functions computing computing serverless
service to run service for service for computing
code in response executing code running services that
to events in response to event-driven allow you to run
without events without code without code without
managing server server provisioning or
servers. provisioning. management. managing
servers. You can
execute your
code in response
to events or
triggers, and you
only pay for the
actual compute
 time your code
consumes.
Amazon Step Workflow Google Cloud Workflow Azure Logic Workflow These services
Functions service for Workflows orchestration Apps service for provide
orchestrating service for orchestrating workflow
and coordinating managing and automating orchestration
complex complex business and coordination
business business processes. for building and
processes. processes. managing
complex
business
processes or
workflows.
They allow you
to define,
visualize, and
execute
workflows that
integrate with
various services
and systems.
Amazon RDS Managed Google Cloud Managed Azure Database Managed These are
relational SQL relational for MySQL relational managed
database service database service database service database
with automated with automated with automated services that
backups, backups, backups, provide
patches, and patches, and patches, and scalable, highly
scaling. scaling on scaling on available, and
Google Cloud. Azure. fully managed
relational
database
instances. They
take care of
database
administration
tasks such as
backups,
patches, and
automatic
scaling,
Database allowing you to
focus on your
application's
data.
Amazon Data Google Cloud Data Azure Synapse Data These are data
Redshift warehousing BigQuery warehousing Analytics warehousing warehousing
service for fast service for service for services that
analysis of large analyzing large analyzing large enable you to
datasets using datasets with datasets with analyze large
columnar high-speed high-speed amounts of data
storage. queries. analytics. quickly. They
are designed for
running
analytical
queries on large
datasets and
offer features
like columnar
storage, parallel
processing, and
 integration with
other analytics
tools.
Amazon S3 Scalable object Google Cloud Scalable object Azure Blob Scalable object These are
storage service Storage storage service Storage storage service scalable object
for storing and for storing and for storing and storage services
retrieving files, retrieving files, retrieving files, that provide
images, and images, and images, and secure, durable,
backups. backups on backups on and highly
Google Cloud. Azure. available storage
for various types
Storage of data, such as
files, images,
videos, and
backups. They
offer simple
APIs for storing,
retrieving, and
managing
objects.
Amazon Content delivery Google Cloud Content delivery Azure CDN Content delivery These are
CloudFront network service CDN network service network service content delivery
for low-latency, for fast and for efficient network (CDN)
high-speed efficient content content delivery services that
content delivery. delivery. with low help deliver
latency. content, such as
web pages,
videos, and
images, to users
with low latency
and high
transfer speeds.
They cache
content at edge
locations
worldwide,
reducing the
Networking & load on your
Content origin servers.
Delivery Amazon API Service to Google Cloud API Azure API Service for These services
Gateway create, secure, Endpoints management Management creating, provide tools
and manage service for securing, and and features to
APIs with creating, managing APIs create, publish,
access control securing, and with policy secure, and
and policy managing APIs enforcement and manage APIs
enforcement. on Google analytics. (Application
Cloud. Programming
Interfaces).
They act as
gateways or
proxies for your
APIs, enabling
you to control
access, monitor
usage, and apply
policies to your
API endpoints.
 Amazon Monitoring and Google Cloud Monitoring and Azure Monitor Monitoring and These services
CloudWatch logging service Monitoring observability observability provide
for gaining service for service for monitoring,
insights into tracking tracking observability,
application and performance and performance and and logging
infrastructure health of Google health of Azure capabilities for
performance. Cloud resources. resources. your cloud
resources. They
collect and
analyze metrics,
generate alerts,
and enable you
to gain insights
into the
performance,
availability, and
health of your
applications and
infrastructure.
Analytics
Amazon SQS Managed Google Cloud Managed Azure Service Managed These are fully
message Pub/Sub messaging Bus messaging managed
queuing service service for service for messaging
for decoupled reliable and decoupled and services that
and scalable asynchronous allow
asynchronous asynchronous communication. decoupling of
communication. communication. application
components and
asynchronous
communication
between
distributed
systems. They
provide reliable
and scalable
message
queuing and
publish-subscrib
e capabilities.
Amazon IAM Identity and Google Cloud Identity and Azure Active Identity and These services
access IAM access Directory access provide identity
management management management and access
service for service for service for management
controlling controlling controlling (IAM)
access to AWS access to access to Azure capabilities for
resources. Google Cloud resources. securing your
Security, resources. cloud resources.
Identity, & They allow you
Compliance to define and
manage user
identities, roles,
and permissions
to control access
to your cloud
services and
data.
Figure 1.0 - Public Cloud Products and Services Comparison

Additionally, the group also researched optional, but useful tools and services that
 may be implemented into the cloud system integration if the budget permits it. The group
found options for an extra NoSQL database that may be used for faster and more efficient
report generations, as well as a AI/Machine learning forecasting service that can be fed
info in order to generate more and more accurate

INNOVATION
Category AWS Google Cloud Microsoft Azure Description
Amazon Fully managed Google Cloud Fully managed Azure Cosmos Globally These are
DynamoDB NoSQL Bigtable NoSQL DB distributed NoSQL
database for fast database for NoSQL database
and scalable large-scale database for services that
storage and storage and storing and offer highly
retrieval of real-time access retrieving scalable,
unstructured to structured structured and low-latency, and
data. data. unstructured globally
data. distributed
Database storage for
unstructured or
semi-structured
data. They are
designed for
applications that
require high
throughput and
low latency data
access.
Amazon Machine Google Cloud Machine Azure Machine These services
Forecast learning-based AI Platform learning Forecasting learning-based provide machine
service for platform for service for learning-based
accurate and training, accurate and forecasting
automated deploying, and automated capabilities to
forecasting. managing forecasting. predict future
models on trends or
Analytics & Google Cloud. patterns in your
Machine data. They offer
Learning automated
model training,
evaluation, and
deployment,
making it easier
to build accurate
forecasting
models.
Figure 1.1 - Optional Public Cloud Products and Services Comparison for Innovation and Redundancy

II. Evaluation of the Case Study

The focus of this proposal will be on the challenges that Kwik-E-Mart faces,
which are disruptions in the supply chain, inaccurate sales forecasting, and inability to
meet their customer’s demand. In the previous setup, each branch operated with its own
cashiers who recorded sales in their localized point-of-sale (POS) system. Additionally,
the stock manager would manually review and analyze the inventory. Subsequently,
higher-level management would oversee and assist these managers with their inventory
analytics tasks, if required. However, higher management often has difficulty when it
comes to properly managing lower management, due to a lack of transparency within the
system, communication issues, and the tendency for micromanagement from higher
management. Upon further analysis, it becomes evident that the problems in the store can
be categorized into three key primary areas, which are: transaction-related issues,
customer-related issues, and issues concerning higher management. To further elaborate
on the old system, the group has constructed a BPMN diagram found in the figure below.

Figure 2.0 - Business Process Modeling Notation for Kwik-E-Mart’s Old Inventory Management System

The purpose of this BPMN diagram is to represent how Kwik-E-Mart operates. It

starts with the store opening for the day. Customers can browse the products available.
When customers have chosen the items they want to buy, they go to the counter to check
out. However, if their desired item is sold out, they will exit the store. The cashier scans
the items into the store's computer system, and the customer pays for the products. After
the payment, the customer receives a receipt, ending the purchase process. At the end of
the day, the stock controller manually inspects and logs the inventory and generates a
report summarizing the stock status. The branch manager reviews the report to which he
will base what products need to be restocked. In some cases, the branch manager will
submit the report to higher management where they will develop a new purchase strategy
which will be instructed to the branch manager. After that, the branch manager
communicates to the branch stock controller which products need to be replenished.
Finally, the stock controller brings in new stock to replace the items that are running low.

The proposed solution for this case study is on the enhancement of the POS and
inventory management system by shifting it into the cloud. This could provide
automation and optimization in stock tracking which could greatly improve the store’s
inventory management practices that would tackle the case study’s main problem
statement. Furthermore, the proposed solution would solve the inefficiencies and
inaccuracies of the manual stock checking practices that the company employs by
directly tackling the root cause of the problem.
III. Proposed Solutions
A. Chosen Cloud Computing Tools and Services

To address the inventory management challenges that are faced by Kwik-E-Mart,

the group proposes a cloud-based inventory system. After plotting out the public cloud
services and products, the group has decided to choose Amazon Web Services (AWS) as
the primary cloud service provider due to its cost efficiency and potential for innovation
compared to its competitors. AWS offers scalable and flexible solutions that can adapt to
Kwik-E-Mart’s inventory needs. Adjusting the store’s capacity based on demand
fluctuations would allow the store to prevent overstocking and/or understocking an item.
Additionally, AWS can provide tools that would enable the tracking of stock levels. This
would ensure accurate inventory data. By being able to monitor these data, the store can
take proactive actions to optimize their supply chain.

The proposed system will provide realistic changes to enhance the store’s
inventory process for managing. Subsequently, it would also improve customer
satisfaction and stock inventory reliability. Higher management will also be aided
because a centralized and monitored inventory management system will allow them
real-time visibility into stock levels, make informed decisions, and properly assess and
communicate with lower management.
 Figure 3.0 - AWS Service Architecture

The system will consist of multiple AWS products and services in order to ensure
the consistency and seamless functionality of the system, which will be integrated into an
app to be used as both a POS system and inventory management system. The following
are the selected AWS products and services:

● Amazon Elastic Beanstalk: To be used in the application layer for the deployment
and management of applications, its auto scaling feature allows the application to
handle varying levels of traffic efficiently across the different branches.
● Amazon RDS: To be used to provide a managed relational database, with features
like data redundancy, backups, and scalability, to ensure the safe keeping of stock
data.

● Amazon S3: S3 provides object storage for storing static files, such as order
reports and product documentations, which will be used for the graphical user
interface of the application for higher management.

● Amazon SQS: To be used for message queuing, in order to send alerts to higher
management about any alerts regarding each branch. It can help higher
management perform inventory-related tasks asynchronously, by allowing them to
have an easier way to manage lower management, ensuring smooth operations.

● Amazon Forecast: This service could be used for AI-powered inventory

forecasting. It leverages machine learning to analyze historical data, external
factors, and trends to predict future demand accurately. Using Amazon Forecast
can optimize inventory levels, reduce costs, and minimize stockouts, however,
this can be considered optional for the cloud integration of their inventory
management and POS system as it does not directly target the root cause of the
problem of Kwik-E-Mart. By utilizing this tool, we can consider it to be an
innovative solution that aims to enhance the quality of life for the higher
management, but not directly target the root cause of the transaction-related
issues, customer-related issues, or higher management issues.

● Amazon API Gateway: Will act as an entry point for external applications, APIs,
and services to interact with the inventory management system. Additionally, it
will serve as a centralized hub for request routing, authentication, and
authorization, which ensures secure and controlled access to the inventory
management system.

● Amazon Lambda: To be used to execute business logic and processing tasks, and
will be integrated with other services, such as RDS and SQS, to perform
inventory-related operations and handle data processing efficiently.
● Amazon CloudFront: To be the content delivery network (CDN) provider used to
improve the performance and availability of the application, as well as cache
static assets, reduce latency, and enhance overall user experience.

● Amazon CloudWatch: Will be used to collect and track various metrics, logs, and
events from different components of the system, which enables proactive
monitoring, alerting, and troubleshooting, ensuring the inventory management
system's stability and performance.

● Amazon Step Functions: To provide a convenient visual workflow service for

simplifying the lives of developers and cloud architects by coordinating various
AWS services and custom business logic. It enables the creation of scalable and
manageable complex workflows for tasks like order processing or inventory
replenishment, particularly in the realm of inventory management.

● Amazon Redshift: To be used as the data warehousing service for advanced

analytics and reporting. This will be used by higher management to analyze large
volumes of historical data and generate insights for inventory management
decisions.

● Amazon IAM: To enforce secure access control, adhere to the principle of least
privilege, and ensure the overall permission security with the application and
database layers of the system.

● Amazon DynamoDB: a NoSQL database service that can be used for fast and
scalable storage of non-relational data, specifically for report generation and
redundancy. While optional it can complement the relational database (RDS) and
provide additional flexibility in the case that Kwik-E-Mart needs it for future
proofing purposes.

● Amazon Forecast: This service could be used for AI-powered inventory

forecasting. It leverages machine learning to analyze historical data, external
factors, and trends to predict future demand accurately. Using Amazon Forecast
can optimize inventory levels, reduce costs, and minimize stockouts, however,
 this can be considered optional for the cloud integration of their inventory
management and POS system as it does not directly target the root cause of the
problem of Kwik-E-Mart. By utilizing this tool, we can consider it to be an
innovative solution that aims to enhance the quality of life for the higher
management, but not directly target the root cause of the transaction-related
issues, customer-related issues, or higher management issues.

B. Pricing Estimate
To compute the pricing estimate, the group utilized the AWS Pricing Calculator,
which can be found in this link. The group inputted their assumptions for the percentage
of system use based on the utilization and size of Kwik-E-mart for the application, and
came up with this estimate summary:

Figure 4.0 - AWS Cost Estimate Results

Some of the services, such as Amazon CloudWatch, AWS Identity and Access
Management (IAM), and Amazon Simple Queue Service were free of charge, while most
had on-demand pricing. Additionally, AWS Elastic Beanstalk was also for free or charge
because its fees are already included in the Amazon S3 bucket instance that we chose.

For Amazon CloudFront, we assumed that there would be around 90GB per
month of data transfer and outflow, which would amount the total cost to around USD
9.45 monthly. AWS Step Functions brought only around USD 0.10 of cost monthly. For
Amazon Redshift. We chose a single dc2.large instance with 2 vCPU’s and 15 GB of
memory, which amounts to around USD 120.45 monthly. For Amazon S3, we assumed
the use of around 1TB which costs around USD 25.00 per month. For Amazon API
Gateway, we assumed an average of 4.5 million requests per month, which amounts to a
cost of USD 5.63 monthly. For Amazon RDS, we chose one db.m3.medium instance,
which has 1 vCPU, 3.75GB of Memory, and an average of 25% resource utilization,
which brings its monthly total to USD 78.36. For the other optional services, such as
Amazon DynamoDB and Amazon Forecast, we assumed approximately 100GB of usage
for DynamoDB and 100 hours of training per month for Forecast. The total cost for
DynamoDB would amount to USD 28.50, while the cost for Forecast would be USD
32.80.

In summary, the total cost of ownership (TCO) for one month of our proposed
cloud system integration including the optional services for AI forecasting and
DynamoDB for faster report generation would amount to around USD 300.20 monthly
and USD 3,602.40 annually. Without it, it would only cost around USD 238.9 monthly
and USD 2,866.8 annually.