CHAPTER II

THERORITICAL FRAMEWORK
This chapter presents the Review of Related Literature and Review
of Related Studies.
Review of Related Literatures

Local Literature
IJCS-ASIS (Ian Jason Construction and Supply Automated Sales and
Inventory System).This sales and inventory system has no capacity
to print out sales invoice and record items that a particular
employee had purchased. It is also a non-customer handler system.

Foreign literature
Sales
In general, a transaction between two parties where the buyer
receives goods (tangible or intangible), services and/or assets in
exchange for money. An agreement between a buyer and seller on
the price of a security. Every day, millions of people take part in
countless sales transactions across the globe, creating a constant
flow of value which forms the backbone of our economies. Sales of
investment vehicles in the financial markets represent highly refined
value exchanges.
For example, consider a typical middle-class person purchasing their
first home. Obviously, a sale occurs when the home is sold to the
buyer. However, there are many layers of sales surrounding the
deal. Very likely, a lending institution would sell financing, via a
mortgage, to the homebuyer. Then, the lending institution likely sells
that mortgage to another individual as an investment. An
investment manager could earn living trading bundles of mortgages

and other kinds of debt financing.

(http://www.investopedia.com/terms/s/sale.asp)
Inventory
An itemized catalog or list of tangible goods or property, or
the intangible attributes or qualities.
The value of materials and goods held by an organization (1)
to support production (raw materials, subassemblies, work in
process), (2) for support activities (repair, maintenance,
consumables), or (3) for sale of customer service (merchandise,
finished goods, spare parts).
Inventory is often the largest item in the current assets
category, and must be accurately counted and valued at the end of
each accounting period to determine a company's profit or loss.
Organizations whose inventory items have a large unit cost
generally keep a day to day record of changes in inventory (called
perpetual inventory method) to ensure accurate and on-going
control. Organizations with inventory items of small unit cost
generally update their inventory record at the end of an accounting
period or when financial statement is prepared (called periodic
inventory method). The value of an inventory depends on the
valuation method used, such as first-in, first out (FIFO method or
last-in, first-out (LIFO) method. GAAP require that inventory should
be valued on the basis of either its cost price or its current market
price whichever is lower of the two to prevent overstating of assets
and earning due to sharp increase in the inventory's value in
inflationary periods. The optimum level of inventory for an
organization is determined by analysis. Called also stock in trade or
just stock.

http://www.businessdictionary.com/definition/inventory.html#ixzz2bx
Y4fH8D

Review of Related Foreign Studies

Silver Inventory System (Quartex LLC 2009)

A complete and inexpensive system for management of sales,
purchases and payments. This system serves as aid in creating
invoices, sale orders, and purchase orders, receiving lists, payment
receipts, product label with barcodes and any kind of report for
monitoring your business. This inventory system allows controlling
customer balances and vendor balances.
Strengths:
It has a simple intuitive interface. This involves the readiness to
sell and involve transaction as needed.
It provides separate product descriptions for individual items.
Weakness:
Errors frequently occur when voiding the items.
Lack of user security.

Weaknesses:
The system does not have a wall-to-wall function for the inventory
process.
The system cannot determine critical quantity of products.
Review of Related Local Studies
Trimax Inventory System (Camacho et.al.)
The system is capable of doing certain tasks like monitoring or
reporting the quality of stocks and reviewing the product batch
codes. However, the system still needs further studies about
inventory filing and monitoring of the products that are unorganized
because some of the product batch codes are not accurate.
Strengths:
The system has a back-up file database.
The system can check the over aged and non-moving inventories
of the inventory file.

Weaknesses:
The system cannot determine stocks of near or below critical
quantity level.
Inventory filing and monitoring of products are unorganized
because some of the product batch codes are not accurate.
GSM Automated Sales and Inventory System (Padrones et.al,
2009)
The system was conceptualized for using application software that
would solve the problems arising from the existing system, which is
manual, of the said company. Those fast and accurate productions of
income reports and an optimized flow transaction between the
management and customer were being made easier.
Strengths:
A message box is important because one can leave an urgent
message for the next user.
Fast and accurate productions of income reports and an optimized
flow transaction.
Weaknesses:
The system cannot determine critical quantity of products.
There is no function available for wall-to-wall inventory processes.