Management System

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To create a more effective system, the proponent needs to know the measure of responsibilities and boundaries of the proposed system.

Scope. In general, this study is mainly focused on the inventory of supplies of Norzagaray Municipal Hospital. It also includes the monitoring of food distribution to the patient. The system covered the following; it will automatically determine the level and availability of stocks, monitor the daily usage of supplies, handling transactions on purchasing, receiving and returning of items, retrieving and updating of records on inventory and suppliers information and provides a summarize list or reports on items availability, purchasing, supplies daily usage, wastages and users logs.

Limitations. For its limitation, the study intends to evaluate the current supplies and apparatus inventory control system of Norzagaray Municipal Hospital. It will focus primarily on the supplies and apparatus inventory and not on the inventory of the organization as a whole. It will cover supplies maintained by the hospital and will not involve inventory of hospital pharmacy. It cannot detect the stolen items and the expiration date of each item.

Chapter 2

REVIEW OF THE RELATED LITERATURE AND STUDIES

This chapter presents the review of related literature and studies underlying the framework of the study as well as the operational definition of terms.

Foreign Literature

Shim and Siegel (1999) says that the purpose of inventory planning is to develop policies that will achieve an optimal investment in inventory. This objective is achieved by determining the optimal level of inventory necessary to minimize inventory related costs.

Inventory-related costs fall into three categories:

● Ordering costs, which include all costs associated with preparing a purchase order

● Carrying (holding) costs, which include storage costs for inventory items plus the cost of money tied up in inventory

● Shortage (stock out) costs, which include those incurred when an item is out of stock. These include the lost contribution margin on sales plus the lost customer goodwill.

Many inventory planning models are available. They all try to answer basically the following two questions:

● How much to order?

● When to order?

ABC analysis Ghulam (2000) says maintaining inventory through counting, placing orders, receiving stocks and so on takes personnel time and costs money. When there are limits on these resources the logical move is to try to use the available resources to control inventory in the most efficient way; to achieve this, an ABC analysis is one way to control the inventory effectively. ABC analysis is based on the Pareto principle, after the nineteenth-century Italian philosopher who illustrated graphically the fact a small portion of the population owned that most of the wealth in Italy. It is sometimes called the 80:20 rule, as 20% of the population owned 80% of the wealth.

The automation process gives enormous contribution to businesses, offices and even in government establishments according to Lake, in the journal called “Content Management and n Automation for the Government Enterprise” state that: the pressures of the costs associated with advance information technologies have further encouraged automation of paper business processes. (http://www.homelanddedjournal.com) “Retrieved 08-26-09”.

Visual Basic (VB). is the third-generation event-driven programming language and integrated development environment (IDE) from Microsoft for its COM programming model. VB is also considered a relatively easy to learn and use programming language, because of its graphical development features and BASIC heritage.

According to I.T Hawryszkiewycz in his book entitled “Introduction to System Analysis and Design” 3rd Edition (2005) stated that one of the most important factors in building systems is to develop a good understanding of the system and its problems. This is necessary in order to identify the correct system requirements and provide solutions that are acceptable to an organization and its personnel. (p.62)

According to Petroutsos in his books entitled “Mastering: Database programming with Visual Basic 6” (2006) stated that since corporations based, when it comes to designing a very large database, most corporations will hire consultants to do the job. Medical companies, for example, with large computer installations and an army of programmers, database administrators and all kinds of computer specialists, usually outsource design of their database. From time to time, they’ll bring consultants to tune the database, as well. (p.39)

Local Literature

Inventory Measurement and Tracking System

There are two ways to measure the inventory and cost of goods sold. These are: Periodic System. This method has historically been the one used by pharmacies because it requires much less record keeping, as opined by Carol in 2006. It is based on costing out physical counts at both beginning and ending periods. The cost of goods sold is calculated by adding purchases to the beginning inventory and subtracting the ending inventory (Tom, 2000).

The major disadvantage of this method is the requirement of conducting a complete physical inventory count to obtain a calculation of the inventory cost. With this, calculation of the inventory will be costly and time-consuming. Accuracy may also be an issue in this procedure. Perpetual System. In perpetual system, detailed records of each inventory purchase and sale are maintained. This system provides a current record of inventory on hand and cost of goods sold to date (Robles and Empleo, 2007). This method keeps the accounts current and accurate because the balances are updated constantly. It continually accumulates all incoming and outgoing transaction quantities of an inventory

Bragg (2004) pointed out that the perpetual inventory system is highly recommended because it avoids expensive periodic inventory counts, which also tend not to yield accurate results. Also, it allows the purchasing staff to have greater confidence in determining the inventory on hand for purchasing planning purposes. Accountants can complete period-end financial statements more quickly, without having to guess