7 Sales and Inventory Systems.doc.pdf

Please download to get full document.

View again

of 10
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Information Report
Category:

Documents

Published:

Views: 4 | Pages: 10

Extension: PDF | Download: 0

Share
Related documents
Description
Business Systems Sales and Inventory Systems Page 1 of 20 SALES AND INVENTORY SYSTEMS From this point forward, the students must learn and apply the business processes to develop a computer-based system. They should have a background on the different business transactions. It would be impossible for them to create such systems if they do not know the logical flow of the processes. The two Sales Systems concepts are very much related to each other especially in the retail type of business. There
Tags
Transcript
  Business SystemsSales and Inventory Systems *Property of STI  Page 1of 10 Sales and Inventory SystemsPage 1 of 20 Inventory Control Processes and ConceptsPage 2 of 20 Inventory Terminologies Page 3 of 20  SALES AND INVENTORY SYSTEMS From this point forward, the students must learn and apply the business processes to develop a computer-based system. They should have a background on the different business transactions. It would be impossible for them to create such systems if they do not know the logical flow of the processes.The two Sales Systems concepts are very much related to each other especially in the retail type of business. There is another type of inventory system wherein it focuses on the manufacturing type of business.On why sales should be connected to an inventory system, the reason is that there is a link between the two since the quantity ofproducts in the warehouse or stockroom is lessened when a sales transaction occurs.The first type of business process that will be discussed is the Inventory control processes and concepts. [Sales and Inventory Systems, Page 1 of 20]Inventory Control Processes and Concepts What is Inventory? Inventory  is defined as a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold. It is considered as the lifeblood of the business since a list of goods that a business has on hand for sale to their customers. In a manufacturing firm, this may be both raw materials and finished goods. In a retail business, inventory may be considered as the items for resale. [InventoryControl Processes and Concepts, Page 2 of 20]Inventory Terminologies There are several inventory terminologies wherein students must understand and be familiar with. To enumerate some are: Category  A group of items that are related; may also be considered as classification; example: canned goods, plastic ware, etc. Product The term used to describe all goods and services soldwhich is under a certain category Physical counting The determination ofinventory quantity by actual count. Annual physicalcount is done when business transactions are halted and personnel would go to the stockroom and count the number of items. An alternative is cycle counting wherein the accuracy of inventory records is checked by determining a small group of items. This small group will be counted daily and checked with the records. [Inventory Terminologies, Page 3 of 20]  Business SystemsSales and Inventory Systems *Property of STI  Page 2of 10 Inventory Terminologies (cont.)Page 4 of 20  Inventory Terminologies (cont.) Backorder   An unfilled customer order or commitment. A backorder is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand. Economic order quantity (EOQ)EOQ is calculated to balance expected cost of acquisition for stock against the expected costs to hold the stock. Finished goods  A product sold as a completed item or replacement part; any item subject to a customer order or sales forecast. Reorder point (ROP)Sum ofthe forecasted requirements during replenishment lead time plus a safety stock Safety stock  Amount of stock planned to be available to protect against uncertainty in demand or stock. [Inventory Terminologies (cont.), Page 4 of 20] Inventory Terminologies (cont.)Page 5 of 20  Inventory terminologies (cont.) Stock status  A report of what is on hand,what is due in and what is owed to customers Raw Materials Items to purchased by the company to be converted to finished goods via a manufacturing process Work in process (WIP) May also be called work in progress or in-process inventory; refers to the raw materials that have started the value-adding activity in the manufacturing plant. This may also be referred to the raw materials that have been moved from the storage area to the working place. [Inventory Terminologies (cont.), Page 5 of 20] Inventory Terminologies (cont.)Page 6 of 20  Inventory Terminologies (cont.) Lead time Number of days or amount of time needed between ordering and receiving goods Fast-moving items Items that must be immediately placed by the company to their suppliers to avoid out-of-stock situation. Slow-moving items Products that do not meet the number of products that must be sold in given number of time. [Inventory Terminologies (cont.), Page 6 of 20]  Business SystemsSales and Inventory Systems *Property of STI  Page 3of 10 Inventory ProcessesPage 7 of 20  Inventory Processes To illustrate, an inventory system handles the following functions:1. Monitoring of stocks whether items are out-of-stock, below the reorder point, or overstocked. Ifthe items are out-of-stock or below the reorder point, a Purchase Order (PO) should be prepared requesting the needed materials.2. Ordering of raw materials (for manufacturing) or goods (for resale) from suppliers . Once the PO is finalized, the prepared PO is then forwarded to the suppliers. A sequential and unique PO number is generated to serve as reference for delivery later on. The number of items to be reordered is based on the EOQ. Note that the lead time is needed to compute for the EOQ.3. Replenishment of quantity and updating of records of items once orders are delivered to the company  .A Delivery Receipt (DR) or Receiving Slip from your supplier will be forwarded to your company. This will be the basis on how much quantity will be added to your current stocks-on-hand. In case the quantity delivered is not complete, a backorder occurs.4. Monitoring ofInvoice for billing purposes.  An invoice is defined as document that contains the PO number as reference, names and addresses of the buyer and the seller, the date and terms of the sale, a description of the goods, the price of the goods, and the mode of transportation used to ship the goods. The seller calls the invoice a sales invoice; the buyer calls it a purchase invoice. [Inventory Processes, Page 7 of 20] Inventory Processes (cont.)Page 8 of 20  Inventory Processes (cont.)5. Physical counting of stocks-on-hand; either through annual physical counting or cycle counting.6.  Adjustment of inventory; incases where there is a discrepancy between the actual physical count and stock status report, an adjustment is recorded using a Stock Adjustment Form to reconcile the records.7. Generation of reports; several reports can be generated from the database. To enumerate some are: ã Detailed inventory report ã Summarized inventory report ã Reorder List ã Item Master List ã Purchase Order List ã  Adjustment report ã Fast-movingand slow-moving items report ã Back order List [Inventory Processes (cont.), Page 8 of 20]  Business SystemsSales and Inventory Systems *Property of STI  Page 4of 10 Inventory DocumentsPage 9-16 of 20  Inventory Documents Several documents have been enumerated earlier. It would be just for the students to see how each of them looks like and what the use for each. The succeeding section enumerates all the important documents used in an inventory processing.1. Purchase Order  -A formal request to a vendor topurchase goods or services. This document may be sent in either hardcopy or electronic format. 2.Receiving slip
Recommended
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks