AUTOMATED INVENTORY CONTROL MANAGEMENTSYSTEM OF

RHONNA APING COMPANY OF ITS MERCHANDISE

Submitted by:
Bathan, Benzell Ann P.
Management
Otadoy, Rhonna May B.
User
Uy, Johnna Paola Lou B.
Client

CS46B 10:30-12:00 MWF

SEPTEMBER 19, 2016

Table of Contents

Chapter

I.

Page

Company Background
I.1 Introduction

I.2 Problem Description

I.3 Statement of the Problem
4
I.3.1
I.3.2
I.3.3

II.

The Management
The User
The Client

The Project Design

II.1Project Objectives
5
II.2The Success Criteria
II.3Work Breakdown Structure
II.4The Respondents

5-6
7

8-9
II.5Reason Indicating the necessity of the Project
9-10
II.6Task Duration Table
III.

Project Organization

IV.

Terms and Terminologies

10-11
12-13

14

Chapter 1
Company Background

1.1

Company Information
Rhonna Aping is a medium-sized rapidly growing retailer of textiles.

The company specializes in providing the customer with authentic yet

affordable

textiles.

Rhonna

Apings

wide

range

of

offerings

include

everything from cotton and linen to asbestos, rayon, and nylon.

Rhonna Aping has developed close relations with suppliers and have
only had a few minor communication problems since the company was
started, none of which have disrupted the ordinary course of business. As the
company expands, many of the companys operations and processes will be
replaced with an improved system, but in the past, they seem to serve their
purpose adequately.
Rhonna

Apings

purchase

transactions

are

initiated

when

the

warehouse manager deems their inventory levels low and decides more
inventory is needed. This is monitored through the Inventory Subsidiary
Ledger. Once inventory level drops to a certain level, the warehouse
manager prepares a purchase requisition to the purchasing department.
When the purchasing department receives the requisition, it is used to
prepare five hard copies of the PO. One copy is filed in the department. A
second is sent to the receiving department. A third is sent to the AP
department. A fourth is sent to the inventory control department. A final
copy is sent to the vendor as placement of the order.
Shortly after receiving the PO, the vendor will send out both the goods
and a packing slip to Rhonna Apings receiving department. When good are
received together with the PO, the receiving department verifies them using
the packing slip, which is attached to the goods. After the receiving clerk has
successfully done this, he/she is responsible for creating three copies of a
receiving report, one of which is filed to the warehouse manager. The
manager then updates the inventory subsidiary ledger accordingly.
1.2

Problem Description & Scope

Rhonna Aping has been receiving complaints from customers about

frequent inventory stock outs. Under the current operating system,
ineffective inventory control management have triggered the management
to seek alternative solutions that will enable them to serve their customers
and meet the demands.
1.3

Statement of the Problem

This case study aims to propose a better system flow of the

organization for a more effective and efficient operations.

Specifically, it aims to answer the following problems:
Management: What process should be implemented to increase
the quality of inventory management of the merchandise for retail?
User: What level of threshold of the merchandise inventory
should be implemented that would provoke a restock of the items?How
would the company reduce, if not prevent, an inventory stock out in
the retail stores that would lead to a loss in sales?
Client: How would the company effectively and sustainably
reduce lead time, from the customers placement of order down to the
delivery of goods?

Chapter 2
AUTOMATED INVENTORY CONTROL MANAGEMENT SYSTEM OF
RHONNA APING COMPANY OF ITS MERCHANDISE

2.1

Project Objectives
Improve the companys operations both in the short and long run
Suggest a timely and efficient manner of replenishment of
inventory for the companys operations will run smoothly with
less inventory stock-outs and avoid a loss in sales.
Help the company meet the demands of its customers and
probably avoid a loss of sales due to inventory stock-outs.
Effectively and sustainably reduce the lead time, from the
placement of a customers order down to the delivery of the
ordered goods

2.2

Success Criteria
The

success

criteria

of

the

company

will

both

be

measured

qualitatively and quantitatively. Using quantitative measure, the company

will be monitoring and assessing the sales of the company, inventory levels,
and most especially its lead time.
Sales of the company. The company sales must not fall below the
projected sales of the management. Sales can reflect how a company
markets and produces its product. This, in turn, will measure the companys
efficiency in its operations.
Inventory levels. This is to monitor the inflow and outflow of
inventories as the company proceeds to continue its operations. After the
company sets a certain threshold, the inventory level must not fall below

that threshold. The company must be able to maintain its inventory levels up
to a certain number to be able to meet the demands of the market.

Lead time. Customers want the delivery of their products as soon as

possible following the placement of order. This will examine closely supply
chain management and project management and how effective the
implemented parameters are in the companys operations.
Qualitative measurement involves the improvements the company has
made to the company and customer feedback; customers and stakeholders
overall satisfaction with the companys operations.
Improvements. To further improve the companys operations, the
management is bound to implement certain activities and measurements in
order to be more effective and efficient in its operations. This will be done by
conducting meetings and implement monitoring sheets in which each
progress and/or problem of the said activity will be communicated to the
management. This will enable them to further improve and/or remove what
necessary and whats not.
Customer feedback. The company will be able to know how the
customer reacts to the way the company handles their operations. The
customers feedback will reflect the extent to how the company is perceived
by an external party. This will also convey the willingness of the customer to
purchase again from the said company.

2.3 Work Breakdown Structure

Task
Observe the current
inventory

system

implemented

Task Owner
Master Johnna CS

and

Company

Support

Ms. Piggy Bea

Approval
Rhonna Aping
Company

document it.
Make an analysis of
the

documented

system.

Find

Master Johnna CS

weak

Company

Ms. Piggy Bea

Rhonna Aping
Company

Ms. Piggy Bea

Rhonna Aping
Company

Ms. Piggy Bea

Rhonna Aping
Company

points and flag them.

Formulate
a
new
system that will meet
the

goals

Master Johnna CS

and

Company

objectives stated.
Implement the newly
formulatedautomate
d

inventory

Master Johnna CS

control

Company

management system
To check whether the
new

automated

inventory

control

management system
works

and

if

understandable

it

Ms. Piggy Bea

is

Master Johnna CS
Company

Rhonna Aping
Company

to

the user

Table 2.1 Work Breakdown

2.4 The Respondents

Respondents nature of employees/stockholders of Rhonna Aping Company

Table 2.2Organizational Composition

Table 2.2 shows the number of employees/stakeholders in the
company.The company is composed of eight (8) in the executive group, nine
(9) in the managerial/supervisory group and thirteen (13) office staffs who
will use the proposed inventory management system.

Respondents nature of employees/stockholders of Rhonna Aping Company

affirming theimplementation of the proposed automated inventory control
management system

Stockholders/ Employees

Frequency

Percentage (%)

Yes

No

Total

Yes

No

Total

Top executive/ owner

100%

0%

100%

Managerial/Supervisory

100%

100%

Personnel
Office Staff/ Rank and

11

13

84.62%

15.38

100%

File employees
Total Respondents

%
30

100%

Table 2.3 Frequency Table

Table 2.3 shows the response of the owner and the employees when
they were asked whether they agree to automate the inventory control
managementsystem or not. 28 out of 30 employees approved of the
automated inventory management and this implies that they find the change
in the inventory system beneficial for them and the company as a whole.
2.5 Reason indicating the necessity of the project
Through this proposed Automated Inventory Control Management, the
replenishment of the companys inventory will be more efficient and timely.
This will help the company be able to keep their inventory at a certain level
in order to keep up with the markets demand. Also, a more accurate and
reliable inventory control system can avoid inventory stock-outs lessening
customer complaints and preventing a loss in sales.

Having an efficient and effective system, the company will be able to

reduce the lead time from a customers placement of order to the delivery of
the said order. This, in turn, will improve customer feedback and might be
associated with the companys increase in sales.
2.6 Task Duration Table
Task
Observe

the

Planned No. of Days/

Actual No. of

Hrs

Days/Hrs

3 days

1 day

2 weeks

1 week and 5 days

1 week and 4 days

2 weeks and 4 days

2 weeks

1 week and 4 days

1 week

2 weeks

current

inventory

system

implemented and document

it.
Make an analysis of the
documented system. Find
weak points and flag them.
Formulate

new

system

that will meet the goals

and objectives stated.
Implement
the
newly
formulatedautomated
inventory

control

management system
To check whether the new
automated
control

inventory
management

system works and if it is

understandable to the user

Table 2.4 Task Duration Table

Observing the current inventory system and documenting it took the

project analysts a day. The said system was not complex and didnt take
much of the analysts time documenting such system. After observing and
10

documenting such system, the analysts are now to formulate a new system
that will improve and help the company meet its goals and objectives. The
allotted days to do so was 2 weeks, at most. But it took less than what was
allotted to come up with what was needed due to the companys problem
being clear. The third task was to implement the newly automated inventory
system. Implementing such system did not take much time due to the
company having no system regarding its inventory level management. This
made it easier to implement a new strategy because they did not need to
take down an old system for the new one to take its place. However for the
last

step,

monitoring

whether

the

new

system

works

and

if

its

understandable to users, took longer than what was expected. Due to the
company having no previous inventory management system, it took the
users longer to adjust to the new system. They werent able to adapt easily
to a more strict and timely update of their inventory levels.

Project 3
Project Organization
11

The following are the parties involved in the project:

User- Ms. Piggy Bea
Support the following task/s:

Observe the current inventory system implemented and

document it.
Make an analysis of the documented system. Find weak points

and flag them.

Formulate a new system that will meet the goals and

objectives stated.
Implement the newly formulated automated inventory
controlmanagement system.

Lead the following task/s:

To check whether the new automated inventory control

management system works and if it is understandable to the
user.

Management- Master Johnna CS Company

Support the following task/s:

To check whether the new automated inventory control

management system works and if it is understandable to the
user.

Lead the following task/s:

Observe the current inventory system implemented and

document it.
Make an analysis of the documented system. Find weak points

and flag them.

Formulate a new system that will meet the goals and

objectives stated.
Implement the newly formulated automated
inventorycontrolmanagement system.
12

Client-Rhonna Aping Company

Approve the following task/s:

Observe the current inventory system implemented and

document it.
Make an analysis of the documented system. Find weak points

and flag them.

Formulate a new system that will meet the goals and

objectives stated.
Implement the newly formulated automated inventorycontrol

management system.
To check whether the new automated inventory control
management system works and if it is understandable to the
user.

13

Chapter 4
Term & Terminologies
Purchasing Process
-

the formal process of buying goods and services.

Inventory Control Management

-

the practice of overseeing and controlling of the ordering, storage and

use of components that a company uses in the production of the items
it sells.

Inventory Stock outs

-

an event that causes inventory to be exhausted.

Operating System
-

system software that manages computer hardware and software

resources and provides common services for computer programs.

Merchandising
-

any practice which contributes to the sale of products to a retail

consumer.

Lead Time
-

the amount of time that elapses between when a process starts and
when it is completed.

Automated Inventory
-

is a system of keeping track of inventory on a perpetual basis. This

type of inventory ensures items are accounted for and that inflow and
outflow status is updated on a continual basis

Inventory Level
-The current amount of a product that a business has in stock.

14