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Irene P. Albanez Rea E. Lacson Cristito O. Lizada

MARCH 2012

2 Table of Contents

CHAPTER I INTRODUCTION State of the Problem Objectives of the Study Significance of the Study Scope and Delimitation of the Study II REVIEW OF RELATED LITERATURE Theoretical Framework

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Conceptual Framework III METHODOLOGY

Time and Place of the Study Respondent of the Study Research Instrument Planning Interview Analysis Design Definition of Terms

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3 CHAPTER I INTRODUCTION Traditionally, a business organization consists of capital, labor and new materials. However, the introduction of computerization in the field of business, education and the like, has modified the component of the organization as such, it has provided information a rightful place as an addition to the key resources of the organization. Information is all around us, yet it is not for free and its strategies use for positioning a business in the competitive world should not be taken for granted. The ready availability of computers has created a sudden inflow of information in all aspects of society more particularly in the business world. The management of computer generated information differs from that of the manually produced data. Virtually a computer can do anything that can be done with a pencil and paper not to mention a calculator of a typewriter today. Nowadays, computer are just as dept at storing and manipulating facts, peoples names, description of products, and titles of books customers preferences. It has become easier and more costly justified to do so. Considered as the same efficient, fastest and accurate data processor, computer is truly an amazing machine. It is so fundamental to our modern society that without computers, our economy would grind to a halt. In the last few decades, computers have radically altered business practices, not just in the developing countries but also around the world. This was not until the mid GOs when computers were vastly expensive could afford. Computers began to revolutionize the business world the IBM introduced. Its system/360 mainframe in April 1964. Since then computers have continued to shrine and to provide more power for less money.

4 Using computer in business has a wide range of benefits such as: higher efficiency, tighter control over operation, lower cost, fewer errors, improved customer service, better planning and organization of operation and distribution activities, better informed decisions, and loss reliance on labor intensive clerical process. Computer also hold a vital role in many systems within the organization and inventory management system is one of those inventory must be properly kept to meet peak demand.

Statement of the Problem This study will primarily focused on the present set-up of the Naning Pharmacy so as to determine its existing problems to its individual employee to overcome the following problem;

1. Is there a system to improve the slow retrieval of the records due to manual operations? 2. Is it possible that the system can ensure the safety of any transaction against losing? 3. Is there a system that can monitor the inflow and outflow of stocks in Naning Pharmacy.

Objective of the study The main objective of the study is to propose a computerized system on the inventory operations of the Naning Pharmacy to improve the process of manual system. Being manipulated regarding the file maintenance such as the inflow and outflow of stocks. Specifically, it aimed to: 1. create a system that can speed up the record retrieval of stocks in the Naning Pharmacy.

5 2. Design a system that can ensure the safety of any transaction against losing; and 3. Establish a system that can monitor the inflow and outflow of the stocks in the Naning Pharmacy. Significance of the study If this study will be implemented , the personal in-charge will the first benefit from this system because it will help them volume of paper works enter inventory operation. Likewise, the proposed system will enhance the the existing records system to serve and provide faster and more accurate information needed by their clients. Scope and Delimitation of the study The researchers limited to study only to the inventory records of all the stocks in the Naning Pharmacy. The inventory system concerns the file maintenance such as the inflow and outflow of the stacks. It is limited further to the retrieval replacement of records and generating of printed outputs.


6 This chapter presents the review of related literature and studies on inventory control. The studies reviewed here, however vary from the present research in terms of the scope and methodology. Today, computers are found in organizations of every kind and size. In fact, it is becoming increasingly difficult to find an organization that does not have one. Recognizing this trend, companies or firms, which have none, could not function or compete with others without them. All organizations, except very small ones, need stock records that show what has happened and what is the current inventory status. The collection of stock records forms the inventory status file, which may be called the item master file-usually a computer file. Philippine accounting tradition follows the practice of pricing year end inventories at cost for market, whichever is lower. The departure from any experience costs basis is generally defended on the grounds of conservation. A more logical justification for cost of market inventory valuation is that a full stock is necessary to expedite production and sales. If physical

deterioration, obsolesce, and price decline occur or if stock when finally utilized cannot be expected to realize its stated cost plus a normal profit margin, the reduction of inventory occurs if: 1. 2. 3. held for sale in ordinary course of business in process of production for such sale, or to be currently consumed in the production for goods or services to be available for sale. (http://www.swifo.com/sw inven.html) Llanera et. Al. (2000) stated that management of inventory forms must be utilize budget in the process of controlling organizational sub-system. But management must also control its level of inventions of goods or stocks, otherwise financial resources will be depleted. At the same time,

7 inventories are high enough to satisfy customers demand promptly. Thus, the management of inventions requires a fine balance between cost and costumer satisfaction. Despite the substantial shift in the different firms and even in other sort of business from manufacturing to service economy, materials (for conversion on sale) continue to represent the major components of business cost. In manufacturing, these costs of goods are sold; in retailing, about 82 percent; in wholesaling, about 92 percent; and in general service, 6 percent. The

accumulation of these materials in the form of inventories is a significant variable for a manager to monitor the control. In one form or another, inventory exists in all organizations whether business or non-business. Since the inventory is costly, the organization must store it, move it from place to place and safeguard it. Many reasons exist for keeping inventories. But the most important purposes are 1. To promote costumer service. Inventory contributes to customer services by providing delivery services of the product that is available when demanded. Thus having inventory is vital to keeping customers. 2. To promote manufacturing flexibility. Inventory promotes the use of multi product manufacturing in two ways. First, the inventory of new materials enables the manufacturers to produce the specific product on schedule. Unless there are new materials and components in the hand, the change over is impossible. Second, selling the finish goods inventory can satisfy any demand for the product not presently produced. 3. To promote certainly in production /operation. Inventories serves as hedge against the lost production or sales due to unprocessed shortage and forecasting errors. To promote production smoothing. The purpose of inventory is to meet the

8 demand during period of peak sale without having increase the rate of production. To promote the profits though price speculation. A final, secondary purposes of inventory is that during periods of inflation, a firm can profit by buying inventory at the lower price holding it until prices increase, and setting it as a profit. Conceptual Frameworks Before computers were invented, data were collected and processed by hand. The data were often copied and recopied more than once before it could be processed into information. Transcribing hand copy data into computer usable forms often does data collection for early computer.

CHAPTER III METHODOLOGY Having in mind the mentioned objectives, the researchers will formulate a plan whereby they could determine the problems/difficulties of the Naning Pharmacy.

9 Time and Place of the Study This study will be conduct at Naning Pharmacy , Villareal Highway Tabuc, Mambusao Capiz. The design and development of this proposed system will be conduct at Capiz University Polacion Campus next Academic Year 2012-2013.

Respondents of the study The respondents of study will be the drugstore Sales Lady and Bookkeeper whose services in efforts have made Naning Pharmacy become good drugstore in terms of business services to the public. Through her, the researchers gained reliable information and gathered useful data as bases for the study. The researcher will also come in contact with the drugstore owners, Mr. & Mrs. Elmer Arevalo, who might gave some insights and information about the present system.

Research Instrument The following will be use in gathering the needed data. Planning The researchers will identify an institution where they could propose a computerized system. They have chosen an inventory system. Particularly the Naning Pharmacy since manual

10 system is used in inventory transaction. The group will be conducted an interview to find out the problems in the present system. For this, they can formulate objectives to solve the problems. Interview The group will be conduct an interview with the owner of the drugstore and the bookkeeper to provide all data needed in study. Analysis The information gathered by the researchers will then analyzed so as to come up with a better system. Design The researchers will make inventory system that easy to handle and manipulate for the benefits of students and faculty. Definition of Terms Bookkeeping is the systematic recording of business accounts. (According to James O'Brien, 1992). Computer refers to an electronic device used to manipulate data into useful information (Joseph S Valacich, 1996, as cited by Llanera et.al., 2000). Computerized Customer according to Webster (1992), as cited by Llanera et. al., 2000, is a person wishing to make a purchase from a store of a firm. As used in the study, it refers to the one that buy or patronizes. Data refers to the facts of truths given or admitted and used as a basis for conclusions (Henry C. Lucas, Jr., 1996, as cited by Llanera et. al., 2000).

11 Design refers to drawing a plan or outline, or sketch (Jeffrey A. Hoffer, 1996). Drugstore Inventory is the statement of financial accounting standards No. 4 of ASC II, as cited by Llanera et. al., 2000. Constitute items or tangible personal properties which are (1) held for sale in the ordinary course of business; (2) in the process of production for sale; (3) and to be currently consumed in the production of goods or services to be available for sale. Pharmacy System