Business Case for Inventory and Sales System

Project Name: St. Marys Inventory and Sales System

Date: August 24, 2015
1.0 Business Profile
It was in the year 2013, in the month of January, that St. Marys bookstore was created by
Mrs. Jean Esguerra and her husband from their family friend. It is widely known in
Mendiola especially in San Beda College as it is where most books of professors in San
Beda entered into consignment are available. It offers school supplies, novelty, snack
products and general merchandise and also provides services such as ID photography and
lamination. It is much more appreciated by customers as it offers services such as
bookbinding and photocopying which are granted of lease rights from other businesses.
2.0 Project Objectives
It is the mission vision of St. Marys to continue its services for the convenience of
students. Selling merchandise and supplies and offering services in use of photocopiers
and bookbinders. It is the goal of every business to increase its sales with a corresponding
increase in its net income which could only be done efficiently. It should also be
accompanied by selling quality products at a lower price compared to its competitors,
making a predominant advantage for both the business and customers as well. Its aim is
to continue expanding when it comes to their products to give utmost service to its
customers. These are the primary of goals of St. Marys bookstore, through the project
indorsed for this business which is Inventory and Sales system, it is expected that the
business would make a step closer to the achievement of its goals. Providing an easy
access to their inventories, more organized tracking of their sales and inventory turnover
will not only save them the time and the hassle but it will also be an efficient tool to earn
more money in light of spending less cost.
3.0 Current Situation and Problem/Opportunity Statement
Having basis from the gathered information about St. Marys bookstore, it was found out
that they do not keep a regular count of inventory or even a weekly count of inventory.
They confide with the assurance that such issue is not a problem as they keep track as to
what is bought through a logbook as they are the ones who does the selling. However,
when asked about its current inventory or net sales, or other important financial data, they
couldnt give an answer. It is proven that the methods they use for managing their
inventories are not effective and may even lead to risks such as errors or theft. This
problem may eventually lead to the downfall of the business since not keeping track of
their markup records and without quick and easy access to the needed information to

monitor the business's progress will lead to not keeping up with the changing prices of
the market, considering their competitors. Also, in light of these, the business would be
prone to producing excessive stock which results from over delivery from a supplier or
from poor ordering and management of stock by a buyer for the stock. This is associated
with loss of revenue owing to additional capital bound with the purchase or simply
storage space taken.
To address such problem, there is a need for an Inventory and sales system. The ISS
project aims to track sales activity and inventory simultaneously. Furthermore, it is
responsible for updating inventory levels, by recording transaction entries for products
purchased and for the whole production process.

4.0 Critical Assumptions and Constraints

The Inventory and Sales System (ISS) project shall be undertaken with the following
presumptions:
Requirement of five (5) months for the development of the ISS system.
Requirement for the budget is approximately PHP180000, in consideration of the
business purchasing power .
The developers will work closely and carefully with the client in order to fulfill the
client's requests and requirements while having a complete understanding of the
operations of the business particularly its inventory system and recordkeeping
procedures.
The ISS will be designed in a user-friendly manner that it will not only be
understood and utilized well by the owner-manager but by the staff as well.
The staff is computer literate to use such system.
It is still in question as to how much income the ISS system will bring; but it promises
improved recordkeeping procedures which gives access to timely and accurate financial
data and smart forecasting providing long-run benefits, one of which is cost efficiency.
5.0 Analysis of Options and Recommendation
Out of all the options, the 3rd option is considered the most efficient and effective in its
production. In order to give the reason as to why this is the best choice, there is a need to
consider what other options can be done to solve such problem.
In order to monitor effectively the inventories, one may tally the changes in its number
more frequently. Such that reductions in the number of a particular product should be
recorded as purchases continues to increase, deducting sales from its beginning inventory
to keep track to its inventory and sales for the day. It could also be done weekly by
counting the inventory at the start of the week then another count at the end of the
week.Hiring more employees can also be considered. The disadvantages of these options
are the time and effort needed. Such processes need plenty of time. Obtaining inventory

count daily or weekly can be very tedious, moreover it is costly. Hiring more staff would
mean an increase in distribution of salaries/ wages and so it is considered not cost
efficient.
Through the use of an inventory system such hassles and problems with cost efficiency
will be solved. Having an efficient tracking inventory, will give up-to-date data regarding
all needed office supplies, raw manufacturing materials and merchandise for sale, an
organization will drastically increase its bottom line. Also this saves money as it prevents
reordering unnecessary goods. Using a computerized inventory system, ensures
uniformity in the presentation of all orders, reports and other documents relating to
inventory.
6.0 Preliminary Project Requirements
The Inventory and Sales System (ISS) project shall be undertaken with the following
features / requirements:

Quickly Browse, Search, Filter, and Find Inventory

Automatic monthly demand calculation in units, days, or months
Locator system that allows you to name locations and use multiple warehouses
Classification of products (models, revisions, shades, etc.)
Locate and move, cycle counting
Insert pictures of your inventory items
Fixed or open warehouse locations
Cost and price per item
Direct receiving and direct issuing
Tracking and Logging of inventory and actions over time
A per-client requirement, records the attendance of the staff

7.0 Budget Estimate and Financial Analysis

The estimated budget allocation for this project amounts to PHP 180,000
8.0 Schedule Estimate
In consideration of all the requirements needed, the project is expected to be completed
within five months.

9.0 Potential Risks

Possible risks that will affect the implementation of the project are:

The risk of intrusion could also lead to a risk of fraud. This happens when a
deceitful staff manages to hack the system redirecting the payment of products to
himself.
Mistakes made by staff in entering inaccurate information on the system
especially on prices of products will greatly affect production.
Failing to update records might also jeopardize the whole production