Related Study of Sales and Inventory System

CHAPTER II

Review of Related Literature and Studies

This chapter presents a brief discussion of the literature reviewed by the researchers which further enriched the conceptualization of the study and helped in describing the cognitive design that guided the conduct of the researcher.

Foreign Literature

Inventory Systems Summary

According to the U.S. Small Business Administration, “Inventory refers to stocks of anything necessary to do business” (U.S. Small Business Administration, 2010) The U.S. Small Business Administration publication describes what constitutes successful inventory management balancing cost versus benefits of inventory, including Maintaining a wide assortment without spreading the rapidly moving items too thin, Increasing inventory turnover without sacrificing service, Keeping stock low without sacrificing performance, Obtaining lower prices by making volume purchases, Maintaining an adequate inventory without an excess of obsolute items.

Wal-Mart Inventory System

Wal-Mart runs its stores on a perpetual inventory system. This system records the quantity of items sold as items are purchased. The computer system at Wal-Mart constantly keeps up with additions or deductions from inventory and tells management what items are on hand. The organization also conducts counts of employee manual counts of inventory periodically. When an item arrives at the Wal-Mart distribution center it is scanned into the inventory system. When the items are purchased by the consumer, the point-of-sale system reduces the inventory from that purchase. According to Wal-Mart’s Gail Lavielle, a leaner inventory will help clear out store clutter and help Wal-Mart focus on specific brands and products that consumers want (The Associated Press, 2006).

(Hinsdale: Holt, Richard and Winston Sounders College Publishing, 2000)

According to Mr.Eugene F. Brigman, Fundamentals of Financial Management, 5th ed., Companies are increasingly employing Inventory...