Conceptual Framework of Computerized Inventory System

The topic has been chosen for research is to critically evaluate the inventory management systems of retail industry in UK. This industry is continuously growing up with pleasure of customers even the fluctuation in customer choices. Moreover, this sector has been hugely impacted from 2008 to 2010 by the economic crisis, when customer did not have enough money to spend. As a result some retail businesses have incurred a loss and shut down their operation. Though some of the retailer took the challenge and continued their business to see the future success. But inaccuracy of stock count leads to poor availability in store level stock. Moreover employees’ inadequate level of skills and improper management clue to poor control of inventory management. As a result decrease the customer satisfactions therefore fall in revenues and ultimately collapse in profitability level. (Lussier, 2012)

According to Investopedia (2014) dictionary, inventory represents one of the most important assets that most business possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company’s shareholders/owners. There are several reasons for manufacturers to hold inventories: one is to meet the demand of production and sales operation; the other is to consider the market price. Generally, we would receive a lower price if we buy large stock of goods than a small amount of goods. However, overstocked inventories not only occupy plentiful funds, but also increase the costs including warehouse cost, insurance fee,

Retailers define inventory as intended sellable assets consisting of goods that are available for resale to customers. Manufacturers also maintain three components of inventory. These include “finished goods” which are goods that have been completed and are awaiting sales. Manufacturers may also have “work in process inventory” made up of goods being manufactured but not yet completed. The third category of inventory is “raw materials,” consisting of goods that are to be used in producing products. Overall, inventory should include all costs that are both ordinary and necessary to put the goods in place and in condition for their resale. For many companies, what they have in inventory represents a major

Operations is separate from the accounting department. The employees in operations handle promoting the products. Also, Operations is in charge of making the products. The company’s accounting system is handled in-house by the cashier and the bookkeeper and by the accounting firm hired to handle the businesses’ financial reporting. The cashier handles all sales through the register. The register is balanced against the drawer each night by the bookkeeper and a deposit made the same day. The bookkeeper gives the accountant the drawer receipts and bank receipts for journal entries and later reports. The accountant checks all cash received and payments made against bank statements and collected paperwork. There is not a single person assigned to do all duties.

To be successful in today’s business environment, an organization must be able to perform certain fundamentals accurately and efficiently. One of these elements is having an effective and efficient Inventory System Management (ISM). ISM enables one to have the knowledge of where his or her inventory is at every step of the way. This allows one to better interact with consumer and make sales. Choosing the right ISM can lead and pave the ground work for future business success and profitability.

The POS is a great indicator of items in stock and knows when to order more stocks of the items. Every time any item is sold, POS updates the server and the inventory amount changes. Remember that POS system is the location where a transaction or checkout takes place. POS systems are able to track the internal stock and automatically schedule the replenishment stock from external sources. This inventory management is an important part of Information Systems. Inventory management is mainly about specifying the size and placement of stocked goods. Inventory management is also required at different locations of the supply chain; this encompasses everything from replenishment lead time, carrying the cost of inventory, inventory and demand forecasting, inventory valuation, inventory visibility, price forecasting, quality management, and returns of defective goods. The inventory management needs to be handled in the efficient manner as it is

The Inventory Table contains the components that make up an Item. It is used for managing inventory and

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The inventory and production departments also have issues. Currently, inventory is done by the receiving area supervisor confirming the shipping documents against incoming orders by hand. This allows for human error and is not a quick or efficient way to do inventory. The same process is used when production takes items from inventory. The inventory system is only updated once daily when new raw materials arrive and then again once daily from production when the raw material is used. The lack of tracking and checking in a timely manner leaves the organization’s processes at a higher risk of failure. The inventory system does not currently communicate with the sales or with the Finance and Accounting applications. This may lead to a

Sales order processing 3. Picking and packing the goods 4. Shipping Process Definition and Functions To create information flows supporting: Repetitive work routines of the sales order department, the credit department, and the shipping department -Decision needs of those who manage various sales and marketing functions Horizontal Perspective Management Questions Using Data Mining to Support Marketing Data warehousing Data mining Global E-business E-business systems are divided into two categories: Buy Side -Systems use the Internet to automate and manage corporate vendors and purchases E.g. Electronic data interchange (EDI), Supply chain management (SCM) Sell Side -Systems are designed to allow a company to market, sell, deliver, and service goods and services to customers throughout the world via the Internet CRM Systems Cultivate customer relationships by prospecting, acquiring, servicing, and retaining customers Customer self-service systems Context Diagram Diagram 1: Validate Sales Order 1.1 - Verify inventory availability Diagram 1: Validate Sales Order 1.2 - Check credit Diagram 1: Validate Sales Order 1.3 - Complete sales order Diagram 1: Validate Sales Order External Data Flow of Process 1.3: A picking ticket authorizes the warehouse to “pick” the goods from the shelf and send them to shipping -A customer acknowledgment notifies the customer of the order’s acceptance and the expected shipment date -A sales order notification is sent to the billing

All retailers have a common goal in mind, and that is to make a profit. Companies earn a profit by first connecting customers with products, which can lead to an exchange of product for money. Without the ability to connect customers with products, no money exchange is possible and no profit is earned. It is, therefore, immensely important for retailers to have the right products, in the right quantities, at the right locations, and at the right time. Inventory Management Systems provide companies like L.L.Bean with the necessary information to achieve just that. L.L.Bean’s advanced inventory management system (IMS) connects customers with products, irrespective of the location of the product or the customer (Hoffsess, 2015).

Rather than simply control supply and materials to come up with an effective inventory control system, it fully integrates the computerized information to feed into all aspects of the company. Thus, accounting, human resources, facilities and finance have access to information about the upcoming needs of the company. A shared database of common information is available to all and therefore allows for a coordinated approach to managing the company.

Inventory is the total quantity of materials or goods contained in a factory or store at any given time. The owners of store need to be familiar with or know the exact figure of items on their storage areas and shelves in order to place losses or orders. Factory managers should know how the number of units of their goods that are available for client orders. The word inventory can be used for both the overall sum of goods and the work of summing them. In the case of racket science retailing, the company usually takes a record of its supplies on a regular manner in order to keep away from running out of common items. To some extent, the company takes inventory to make sure that the number of products ordered matches the real number of products or items counted physically. Normally, in cost accounting, averages or shortages after an inventory indicates a problem with theft (mostly referred to as 'shrinkage' in retails) or inaccurate accounting practices. Rocket science retailing also takes a record of stock after every trading

Nowadays, in an era that has advanced technology and a place in the world. Everything can be linked only at your fingertips in the times of rapidly developing with the sophisticated technology of today. Therefore, an inventory system is also not lagging behind in introducing a method of keeping an inventory data systematically and safely. The system plays a very important role in improving the competitiveness of a business. Usually, organizations today face too many challenges to achieve the cost, speed and reliability. Efficient inventory system really help in order to make sure the store’s performance and data record is always in good condition and secured from abusers. The system basically to ease the admin to manage the

The principal role of inventory management systems is to ensure that stores are adequately stocked. Companies use various methods to track and report inventory. Retail companies are perhaps the best entities to examine when attempting to understand inventory management systems. The type of inventory a company has determines the method they use. Retail companies use the retail inventory method as a base system. Last-in-First-Out (LIFO) and First-in-First-Out (FIFO) are the two systems that appear to be used more