Inventory Control System Essay

This study is realised towards gathering and developing strategies that could solve the inappropriate memorandum system of 7-eleven Sto. Rosario, Angeles city Outlet. The researchers established Trend analysis (regress over era) and Basic Economic Order Quantity (EOQ) to solve fuss of inappropriate document management. The findings of this study revealed the problem on the current inventory management system that is explicit in the product overstocking and under stocking problem of 7-eleven. Forecasting demand may improve the ordering step every time they place an order and EOQ may result in the signifi shadowt savings for the association.The base of Convenience Shopping 7-eleven pioneered the convenience transshipment center concept way back in 1927 at the Southland glass Company in Dallas, Texas. In addition to selling blocks of ice to refrigerated food, an enterprising ice docking employee began offering milk, bread and eggs on Sundays and evenings when grocery stores were closed. This new business idea produced ideas that satisfied clients and change magnitude sales, and convenience retailing was born.The companys first convenience outlets were known as Totem stores since customers Toted away their purchases and some even sported genuine Alaskan totem poles in front. In 1946, Totem became 7-Eleven to contemplate the stores new, extended hours 7 a.m until 11 p.m., seven days a week. The companus corporate name was changed from the Southland potbelly stove to 7-Eleven, inc, in 1999.Each Store focuses on meeting the involve of busy shoppers by providing a all-embracing selection of fresh, graduate(prenominal) quality products and services at everyday fair prices, along with speedy proceedings and a clean, unafraid and friendly shopping environment. In year 2004, 7-Eleven located at Sto. Rosario Street Angeles City was established under the management of Edgar Nucum who was the first manager under corporate group of the Philippine Seven Corp oration. However, on May 2, 2005, the express business was turnover To Mevin Teopaco because of the conversion of the establishments from corporate to franchiseeMr. Teopaco who took the business through formal practise and training on how to run the business. He is responsible for ordering, buying and maintaining inventory, hiring and training employees, as well on payroll, cash variation, supplies, certain repairs, maintenance and other controllable in store expenses.The companys cathexis is t offer time-conscious customers a full range of products and services that meet their ever-changing daily needs through quality, speed, selection and value in a safe, friendly and pleasant environment. And their vision is to become a recognized leader in providing time-conscious consumers with a full-range of products and services that meet their ever-changing daily needs. We leave alone be the customer-preffered convenience store by exceeding customer expectations through quality, speed, selection, and value in a safe and pleasant environment, treating our employees with dignity and respect, recognizing our franchisees and suppliers as business subroutineners, being a good corporate citizen. Achieving our vision and continue growth will provide our shareholders with a beter than competitive return on their investments.Inventories are ordered on a daily basis and delivered through central distribution located in Pasig City. Inventories are apiece monitored thorugh monitoring sheet report, sales and ordering are incorporated at SAS System that link to POS (Point of Sales). Although Mr. Teopaco had picky training in managing the said business, still sometimes he experienced and encountered different problems related to functioning such as inventory losses. Such problem is caused by different ingredients. This problem arises when the management encounters diversity in the delivery of the products. However, there are products, which the store provides but non sala ble. Such products sty eternal in the store and become spoiled.Which are referred to as bad merchandise or BM. In effect, the company experience losses on inventories because such scenario usually happens in the store. Since the store is open 24 hours a day and the security system of the store is non that fully implemented, there are customers who shop resurrect from the store especially out-of-sight and small products. Sometimes the management could not trace those products until they make an inventory count. some other thing is that some employees do unnecessary things in the store like eating some of the products or keeping them. In such case, inventory losses happen. The occurrence of these different factors led to the existence of a currentproblem, which need to be monitored and evaluated by the management in order to achieve the desired objectives of the said company.The Current Situation on the Inventory Management of 7ElevenThe main problem 7Eleven is currently facing is the inventory losses as shown on Figure 1. This problem exists because of different factors that the management should eliminate or if not, at least minimize. Such factors are the theft and shoplifiting that result to lesser sales or profit, and obsolescence of the products that result to high inventory sales. Unavailability of the prodcuts results to stock-outs and lower sales because customers tend to patronize competitors products.The second factor that led to the afordeimentioned problem is inefficient employees. Inefficient employees can occur just like not playacting their duties well and sometimes by concealing merchandise in a purse, pocket, or bag and removing it from the store. It can also occur by stealing cash, allowing others to steal merchandise, eating the goods and sometimes some employees do not punch other products sold. Employee theft can sometimes be charges as embezzlement due to be trusted fiduciary status of the employee. Being inefficient employee can also result dissatisfied customer. on the whole of these methods lead to loss of inventory(shrinkage) and/or profit for the merchant. Preventing employee theft and being irresponsible is a constant challenge for the store. The store knows that it must put systems in place to prevent or deter internal theft.To be effective, loss cake systems must be designed to reduce the opportunity,desire, and motivation for employee theft. Basic loss prevention steps involve good procedures for hiring, training and supervision of employees and managers. Procedures that are clearly defined, articulated, and fully implemented will reduce opportunity, desire, and motivation for employees to steal. For others, the only barrier to dishonesty is the fear of being caught. The employee thief risks being fired, arrested, jailed, and compensable restitution. The other cause of the said problem is the inefficient inventory control system.With this, inventories are not flop controlled which results to a high percen doge of spoilage or expiration of some products. When an inefficient valuation is designate to the inventory, it may end up having higher inventory expense.Moreover, it will be equally on the part of the store. To determine the cost to be associated with the inventory, a physical inventory must be taken in order to determing the number of units present. Then, the costs are attached to each item in the inventory. When dealing with the inventories, cost should be interpreted to mean the sum of all direct or indirect charges incurred in take an item of inventory to its existing condition and/or location. The store puzzle a price tag or a universal product code, it is acommon practice to take the physical inventory at the store from these price tags and codes it can determine their inventory. Maintenance of inventory losses may result in bemused sales and disgruntled customers.The last factor is the lack of security control system because of limited employees that wil bring off the inventories specially those that are not visible. In effect, shoplifting and theft arises. Technology alone will not eliminate retail theft. Store who wants to reduce losses should also Strive to provide good customer service and promote high job satisfactions levels among its retail sales associates. Stores that utilize security technologies generally have lower overall inventory shrinkage than those retailers who do not. Technology also allows employees to focus more time on assisting customers and less on patrolling the aisles.Inventory is considered the current asset to the store because it will normally be sold within the stores operating cycle. All of the said causes result in inventory losses and lead to different effects, such as, lesser profits/sales, dissatisfied customers, and stock-outs. These are not dependable to the company so the management need to find ways on how to overcome the causes that lead to the higher up effects.