CHAPTER ONE

1.0 INTRODUCTION
Inventory is a list for goods and materials, or those goods and materials themselves, held
available in stock by a business. Inventory management is the active control program which
allows the management of sales, purchases and payments. Modern inventory management
systems must have the ability to track sales and available inventory, communicate with
suppliers in near real-time and receive and incorporate other data, such as seasonal demand.
They also must be flexible, allowing for a merchant’s intuition and, they must tell a store
owner when is time to reorder and how much to purchase.
Inventory management is primarily about specifying the size and placement of stocked
goods. Inventory management is required at different locations within a facility or within
multiple locations of a supply network to protect the regular and planned course of
production against the random disturbance of running out of materials or goods. The scope of
inventory management also concerns the fine line between replenishment lead time, carrying
costs of inventory, asset management, inventory forecasting, inventory valuation, inventory
visibility, future inventory price forecasting, physical inventory, available physical space for
inventory, quality management, replenishment, returns and defective goods and demand
forecasting. Balancing these competing requirements leads to optimal inventory levels, which
is an on-going process as the business needs shift and react to the wider environment. (Tim,
1998).
Inventory to many small and medium business owners is one of the more visible and tangible
aspects of doing business. Raw materials, goods in process and finished goods all represent
various forms of inventory. Each type represents money tied up until the inventory leaves the
company as purchased products. Likewise, merchandise stocks in a retail store contribute to
profits only when their sale puts money into the cash register (Barnes et al., 2009).
In a literal sense, inventory refers to stocks of anything necessary to do business. These
stocks represent a large portion of the business investment and must be well managed in
order to maximize profits. In fact, many small and medium businesses cannot absorb the
types of losses arising from poor inventory management. Unless inventories are controlled,
they are unreliable and inefficient (Frank et al., 2009).

1.1 STATEMENT OF PROBLEM

When customers purchase items, details of the purchase such as item bought, quantity, cost
price/selling price, etc. are put down in a notebook. Being a small-scale business, the owner
keeps no records of customer identity, neither are receipts prepared after a transaction. At the

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end of the day, the sales records are assessed to check profit, most items bought, etc. When
the shop is close to running out of a particular item, the manager goes to the market to
purchase such an item, and this is usually done on a weekly basis. Stock-taking is usually
done daily, by comparing quantity of goods bought in the month, with those sold and those
remaining. Profits and losses over the day are also calculated. This study is an attempt to
develop a system which will automate this whole process, cutting down on the manual input
and processing involved in it. With a database of items linked to a sales module, which
carries out Point of Sale activities, the stock is monitored more efficiently, and records over a
period can easily be compiled in a few seconds. Also, receipts can be easily generated for the
customer, based on the Point of Sale service.

1.2 PROJECT JUSTIFICATION

Inventory control systems are the rules for large enterprises, but smaller businesses and
vendors use them. The Inventory control System designed for a small scale and medium scale
enterprise can be used to store the details of the inventory, update the inventory based on the
sale details, produce receipts for sales, generate sales and inventory reports periodically etc.

1.3 AIM AND OBJECTIVES

This project is aimed at developing an Inventory Control System for a Coca-Cola Bottling
Company. The design has the following objectives:
 Make sales to customer.
 It checks for items that have been sold, the items that are left, and the items that
should be bought.
 It lists out the items that have been sold, the item that are left, and the items that
would be bought.

1.4 PROJECT SCOPE

Although different stores and enterprises have different modes of operation in terms of
inventory and sales management, there are certain basic features common to all such stores
such as sales, stock keeping and cash management. Such features are identified and
implemented in the design, such that the system can only be implemented in small-scale
business enterprises.

1.5 PROJECT METHODOLOGY

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 To be able carry out the project, a thorough survey of literature will be done to be able to
understand the field of information and the appropriate programming language to use. This
gives an in depth understanding on the website to be developed and also informed us on how
to conduct the system investigation.
The project shall be ascertain by analyzing the background of the existing system, through
succinct observation, literatures (from library and the internet) will be utilized for review,
questionnaire will be employed if necessary.
The compilation of all information gathered through all adopted methodology will therefore
be gathered and forwarded to my supervisor for subtraction and addition to ascertain a
proceed onto the next step.
The success of the highlighted stage will therefore lead to the system design of the new
system, and will be tendered to my supervisor for necessary amendment. The permission to
proceed from this stage will therefore lead to the implementation of the development of the
software; however, it shall be tendered before my supervisor for validation before
documentation of the software developed for the new system.
The system will be developed with PHP, HTML, BOOTSTRAP, JAVASCRIPT and
MYSQL, throughout the process of implementation both the internal and external
documentation will be taking. The developed system will be demonstrated to our supervisor
to ensure compliance with the system design.

1.6 DEFINITION OF TERMS

For more explanation on this project work, the following terms was extracted from this
project to enable anyone to understand and have knowledge of the work. This includes:
 Computer-is an electronic device which accepts an input data, process it, and produce a
useful result, which perform arithmetic and logical operations. It contains input, output
and general processing unit and auxiliary storage.
 Record- is the collection of related information that can be looked at and used in the
future.
 Economic order quantity – (EOQ) - amount of inventory that should be ordered at one
tie so that the associated annual cost of inventory can be minimized.
 Inventory - inventory means a schedule of items held at a particular time for sale,
production of goods and services or is in the process of production for each sale (wip).
Inventory is also called stock, hence the two terms “stock and inventory” are used
interchangeably here.

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 Last in – first out (lifo) -  a cost flow assumption that the inventory last acquired is used
first.
 Lead time - time interval between placing an order and recurring inventory.
 Ordering cost - clerical cost of preparing a purchase order or production order and
processing and receiving. Cost relating to the number of orders processed.
 Periodic inventory system - system whereby the cost of goods sold is computed
periodically by replying solely on the physical counts are not keeping day-to-day records
of units sold or on hand.
 Perpetual inventory system - a continuous order of additions to or reduction in material,
work in progress and cost of goods sold on a day-to-day basis.
 Profitability - a term used to measure the relationship of profit to investment that
generated the profit. It measures the effectiveness and efficiency of a firm’s use of
resources at its disposal.
 Recorder cost - quantity level at which a new order should be placed.
 Stock safety - minimum or buffer inventory used as a caution against reasonably
expected maximum usage.
 Stock-out-cost - cost that induce expensive spending, loss of contribution margins and
loss of customer’s goodwill.
 Viability - here, it refers to profitability and growth - the perpetual inventory system. This
may be defined as a method of recording store balances after every receipt issued to
facilitate regular checking and to obtain closing down for stock taking.

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 CHAPTER TWO
LITERATURE REVIEW
2.1 BACKGROUND THEORY OF STUDY

Each day, people all over the world partake in numerous sales transactions across the world,
creating a stable flow of significance which forms the strength of character of our economies.
Trade of buying and selling things has been going for centuries, so naturally that way the
inventory management system has always been in existence in some manner, at least. In most
cases, sales signify a transaction that takes place among two parties where the consumer
receives goods (tangible or intangible), service or assets in exchange for money from the
merchant. According to Chase, Jacobs and Aquilano (2004), inventory is the stock of any
item or resource used in an organization. A stock system is the set of policies and controls
that monitor levels of stock and determine what levels should be maintained, when stock
should be replenished, and how large orders should be. Pycraft et al (2000) defined inventory
or stock as “the stored accumulation of material resources in a transformation system. So a
manufacturing company will hold stocks of materials, a tax office will hold stocks of
information and a theme park will hold stocks of customers ( when it is customers which are
being processed we normally refer to the stocks of them as queues). During the early ages,
there was no technology 300 years ago, and surely no tag or bar code readers, but people
have always tried to make things easier in the trading process, adopting innovative
technologies within the line. In accordance to the study of Navarro (2012), Sales and
Inventory System, computer is general purpose device which can be programmed to carry out
the finite set arithmetic or local operation, the computer has a big role in our nation today
because of technology. Wherever you go, a computer exists, especially in business it makes
the procedure 5 easy and sourced by programming the manual system into a computerized
system. The role of technology in our life today has a big impact. Meanwhile, inventory
means the resources, unmanufactured goods and finished products that are considered to be a
part of a business’s resources that are ready for sales. Back then, merchants had to note down
purchases and look out for how many items were sold that day, and how many of them were
left. In the study from Averion, Gaela, and Libo (2009) entitled “Monitoring and Inventory
for discovery Mall.com”, it stated that: It will minimize the difficulty of the manager in

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processing inventory because physical counting products, stocks and computing inventory
summary will be the system job. It will monitor the availability of products, items to prevent
under stocking, over stocking and running out of stock. The system will also simplify the
transaction between trader and supplier relationship because the updated supplier information
and price list of items will correspond to collaboration with other suppliers. Certainly there
were no sales forecasting apps, merchants had to estimate future needs themselves, which
sometimes not very accurate, and possibly will easily slow down the business. One of the
occasions that had the most significant effect on individuals since the beginning is positively
the Industrial Revolution, which expanded productivity and large-scale manufacturing. The
organizations developed thus improved stock administration. Inventory management likewise
entails the significant associations between recharging lead time, resource management,
conveying expenses of stock, future stock value determining, actual stock, accessible stock
space, request estimating and substantially more. By adjusting these contending prerequisites,
an organization will find their ideal stock levels. This is an endless cycle, as the organization
should move and respond to its current circumstance as it changes and develops.
Inventory Management system is administered by the clients, who haul products to the point
it gets unavailable, and second by the organization that pushes the products to be unavailable
dependent on requests and requests. According to Lambert (2001), stock can be categorized
into six distinct forms which are: Cycle stock is inventory that results from the replenishment
process and is required in order to meet demand under conditions of certainty, that is, when
the firm can predict demand and replenishment times (lead times) almost perfectly: In-transit
inventories. In transit are items that are en route from one location to another. This is the brief
history of Inventory Management System, its inception and up to date usage, a brief history
of the PHP programming language which will be used to implement. PHP is defined as PHP
Hypertext Preprocessor and is an open source general-purpose server-side scripting language
originally designed for web development to produce dynamic web pages. Moreover, it 6 was
the first server-side scripting language that was specifically designed to be embedded into
HTML elements for server-side processing and execution . (Angela Bradley, 2013).

2.2 RELATED WORKS

2.2.1 Zoho Inventory Management System (www.zoho.com)

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Zoho is one of the most familiar distributors of applications and solutions to small scale
businesses. It can be used by e-Commerce Businesses, Online sellers, Retailers, Wholesalers,
Small and Medium sized businesses. Zoho possesses 45 Software as-a-service (SaaS) items
intended to manage business from start to finish. The organization has made a remarkable
imprint with Zoho Office Suite, Zoho Cost, Zoho Receipt, and Zoho Social to give some
examples.
ADVANTAGES
 The system has widespread distribution functions.
 It integrates tracking reports of inventory across several warehouses.
 The system also incorporates the trading and purchasing sort functionality.
 It has vast ecommerce potentiality and support for tags and bar coding.
 Zoho have a potent email promotional marketing too

2.2.2 Sortly Inventory Management System (www.sortly.com)

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Sortly is an easy inventory application and item tracking system that allows you to visualize
track items and any of their details including quantity, price, condition, notes, etc. Unlike
other inventory applications, it's very easy to understand how to go around the application.
It's designed in such a way that you can start the system running in time, all by yourself.
ADVANTAGES
One of the greatest absences this application has is that of not pushing instant notifications. It
doesn't notify the admin when explicit items are pulled from stock. Also, the upkeep of the
application system shouldn't be excessively escalated. Maintenance shouldn't be too labor
intensive. Frequently and it is hard to track down help.
2.3 CURRENT METHOD IN USE
The existing system for the wholesale services was characterized by manual field registration
and file based system which was susceptible to an excessive number of mistakes, data
redundancy and the difficulty of updating information about the goods in stock are but just a
few of the challenges the company faces.
2.4 APPROACH TO BE USED IN THIS STUDY
The approach to be used to design and implement an online inventory control system is
strictly to:
 Build a dynamic website upon my research analysis
 Make use of HTML, CSS, BOOTSTRAP, JAVASCRIPT and PHP to design program
and implement the system
 Utilize and ascertain a standard database oriented program to perform CRUD(Creating,
Reading, Updating and Deleting) functions.