CHAPTER 1

1.0 Introduction
Inventory management is the practice of monitoring and keeping track of a company's stock
items. Inventory control assures that the business will always have what it needs. By keeping
the cost as low as feasible, materials and products Excellence in supply chain management
starts with effective inventory management. Warehouse must keep an eye on storage because
the old artificial method of managing inventory has several drawbacks, including low
efficiency, inadequate security, and a tendency to accumulate a lot of files and data over
time, which makes it difficult to identify, update, and maintain. The inventory management
system is a fundamental component of businesses, and the corporate decision makers and
managers are essential. As a result, you must set up a comprehensive inventory management
system based on an agile supply chain. This system must be able to offer users adequate
information and efficient querying, reflect inventory timely and dynamically, and enable
managers to shift their analysis from qualitative to quantitative

 The Inventory Management System (IMS) is a crucial tool for organizations to efficiently
manage and control their inventory.

 This project aims to design and implement an IMS that will streamline the inventory
processes, reduce manual errors, and enhance overall productivity.

 The system will incorporate features such as real-time tracking, automated notifications,
and comprehensive reporting to provide a comprehensive solution for effective inventory
management.

1|Page
1.1 Background of the study
Inventory management is a critical aspect of business operations that involves the planning,
monitoring, and control of inventory levels. An efficient inventory management system is
essential for businesses to optimize costs, improve customer satisfaction, and ensure smooth
operations.

By addressing these issues through the implementation of a robust Inventory Management

System, the project seeks to enhance efficiency, accuracy, and overall effectiveness in inventory
control and management.

Inventory management refers to the various techniques and controls used to ensure that any
stored resources used to satisfy current and future needs of the organization are in right place at
the right, in right quantity. The different types of inventories include raw material, work in
progress inventory, finished goods and supplies such stationary etc.

The inventory management techniques that can be used in managing inventories include; The
economic order quantity (EOQ) approach. The just in time approach, the activity-based Costing
technique, re-order point. Business performance refers to the measure of returns on an
investment and performance is one of the most measures of business performance. The challenge
of the manager is how much Inventory to keep. Too much inventory creates cost mounting to
storage and other kind of carrying cost. Yet too little inventory can lead to interruption in
production and sale. Leading to losses hence, affecting organization performance.

According to Pandey (2018) inventory Is stock of the product a firm is manufacturing for sale
and the components that makes up a product. Finn holds inventories in form of rnw materials,
Work in progress, finished goods and supplies. 1 These inventories facilitate smooth production
and sale operation, guard against the risk of unpredictable changes in usage rate and delivery
time and take advantage of quantity discount and price frustrations. In managing inventory, the
firm's objectives should be in consonance with the wealth Maximization principle. To achieve
this firm should determine the optimum level of inventory. Efficiently controlled inventories
make the firm flexible and thus leading to increasing level of Mismanagement for the firm and
its performance (Pandey 1997). According to the auditor's report, stated that the major cause of
fall in levels of performance is mismanagement of inventories for examples stocks are being
stolen by un trust worthy workers. Some other problems also related to delay in production

2|Page
which might also be a poor inventory Management system. Inventory management has an impact
on business performance.

1.2 Problem statement

The current problem in inventory management, which this project aims to resolve, are associated
with manual and traditional inventory tracking systems. These problems include:

1. Manual Errors:

I. Dependence on manual data entry leads to errors such as typos, miscalculations,

and misplaced records.

II. Inaccurate inventory levels can result in stock outs or overstock situations.

2. Limited Visibility:

1. Lack of real-time tracking makes it difficult to have an up-to-date view of current

inventory levels.

2. Inability to promptly identify and address low stock situations or surplus

inventory.

3. Inefficient Processes:

1. Cumbersome manual processes for recording and updating inventory transactions.

2. Time-consuming efforts in tracking product movement, leading to delays in

decision-making.

3|Page
1.3 Objectives.

• To automate the process of tracking inventory levels and transactions.

• To eliminate manual errors in inventory management.

• To provide real-time visibility into stock levels.

• To design and develop a user-friendly Inventory Management System

• To design a system that provides User Management

• To create a system that will provide admins with notifications

1.3 Significance of the study

The proposed Inventory Management System (IMS) holds significant importance for
organizations across various industries due to the following reasons:

1. Efficiency Improvement:

1. The IMS automates manual inventory processes, reducing the likelihood of errors
and improving overall efficiency.

2. Streamlined workflows and real-time tracking enhance the speed and accuracy of
inventory transactions.

2. Enhanced Decision-Making:

1. Comprehensive reporting and data visualization provide valuable insights into

stock levels, sales trends, and other critical metrics.

2. Informed decision-making regarding restocking, promotions, and order fulfilment

is facilitated by readily available and up-to-date information.

4|Page
1.4 MODULES AND SCOPE
MODULES

 Real-time tracking of stock levels.

 Automatic adjustment of inventory after each transaction.
 Barcode scanning for quick and accurate data entry

SCOPE

The scope of the Inventory Management System (IMS) project encompasses various aspects that
define its boundaries, objectives, and deliverables. The scope outlines what the system will and
will not do, helping to manage stakeholders' expectations and guide the development team.

Using a good kind of inventory management process is essential for any retail company. The
daily transaction of goods in a retail company is huge and it is important for the company to keep
track on every single item that comes to it and given to the customers. A big company with a
proper market hold should definitely use all the necessary procedures to check the inventory in a
daily basis (Marino & Zotteri, 2016).

• Profitability- In case of determining the profit of a company the inventory management plays a
great role. Tesco has a good reputation in the market and it is essential for them to know how the
inventory management works. The simple concept is not to store a huge amount or a low
amount. A low amount cannot supply adequate amount that is needed and a huge amount can be
wasted with passing time and changing demand of the customers (Hançerlioğulları et al., 2016).

• Getting the right product- In a controlled environment it is really easy to find the best kind of
solution that is possible. In case of inventory management of a company it is important to keep
an eye on the products that are in demand. They should order those things that are getting
consumed by the people really fast rather than on those which are not that much customer loved.
In this way they can keep the right product in their stock to fulfill the customer needs and get
good revenue at the end of the year (Habte et al., 2017).

5|Page
Idea of products to be ordered- a right inventory management system provides the idea of which
product to order again and which should not be taken under consideration as a customer loved
one. In this way the inventory will stay full with those things only that are going to be consumed
fast. The company can present the people that they have the capability of delivering the needed
items and people will come back to them whenever they need any kind of other stuffs that they
have not taken from Tesco before (Gregory, 2015). By providing the particular product that
company will be the only place where the customer can rely on.

To check the stock: There are many kinds of strategies that are helpful to determine whether the
inventory system is working efficiently or not. A properly managed inventory system will help in
giving idea that will ensure whether the stocks are adequate sort not. If an on-demand product is
lacking in quantity then the inventory management system will give recommendation to the
authority that there is a lack in the storage. In this way the storage will get filled up with proper
items that are necessary to meet the customer demand and there will be no lack of any kind of
products (Damron et al., 2016

1.6 Research methodology of the proposed system

 This project proposes the development and implementation of an advanced Inventory

Management System (IMS) designed to address the challenges inherent in manual
inventory tracking and streamline the processes associated with inventory management.

 The system aims to provide organizations with a comprehensive solution that enhances
efficiency, reduces errors, and facilitates informed decision-making through real-time
tracking, automated notifications, and robust reporting features.

6|Page
 CONCLUSION

In conclusion, the proposed Inventory Management System (IMS) represents a strategic solution
to address the challenges inherent in manual inventory tracking and enhance overall operational
efficiency. The comprehensive design of the IMS, incorporating real-time tracking, automated
notifications, and robust reporting features, aligns with the organization's objectives to optimize
inventory processes and facilitate data-driven decision-making. The scope, encompassing user
management, scalability considerations, and integration capabilities, positions the IMS as a
versatile tool adaptable to the organization's evolving needs.

7|Page
 CHAPTER TWO:

LITERATURE REVIEW

2.0 Introduction

This chapter presents a comprehensive literature review on inventory management systems and
other related topics;

Definition of inventory

According to Walgembach (2012), inventories are the merchandise owned by the company and
held for resale to customers in the ordinary course of business. Pandey (2000) concurred and
added that inventories are classified as current assets because typically they will be sold within
the year or during a firm's normal operating cycle if it should be longer than a year for retailing
firms Inventories are often the largest and most valuables current assets. Other scholars like
Dopuchetal (2017), Lucey (2014), and Van Horne (2000) agree with other Scholars in their
definition of inventories as noted above and noted that inventories are raw work in progress and
finished goods in a typical manufacturing setting, stock in transit, in "backrooms" and on shelves
are inevitable. Kilby (2001) defined inventories as stocks of the product a company is
manufacturing for sale and components that make up that product.

2.1.2 The Need for Inventories in the organization's Operations

According to Kakuru (2010), if production and delivery of goods were instantaneous, there
would be no need for inventories except as a hedge against price changes. Horngren (1982) and
Kakuru (2021) noted that despite the marvels of computers, automation and scientific
Management the manufacturing and merchandising process still do not function quickly enough
to avoid the need for having inventories. Inventories 5 must be maintained so that the customer
May be immediately or at least quickly ' enough so that he/she does not turn to another Source
of. In turn, production operations cannot flow smoothly without having inventories of direct
materials, work in progress, finished goods, parts and supplies. According Kilby (2001), most
well managed companies find it necessary and desirable to maintain large varied inventories. The
prevailing affluence of our society and the related buyer habits now considered customary have
probably made, large, variable inventories an operating necessity for most retailing firms.

8|Page
Walgembach et al (2012) noted that the business factors could justify the existence of relatively
Large inventories The only way a firm can sell more in a period that it can purchase or produce
is Hav:ng beginning inventories. Beginning inventories are particularly important to seasonal
industries or markets. Morse (1981) and Lucey (1991) also noted that many firm especially those
that sell in seasonal Markets buy in excess of their needs when supply prices are favorable. They
store the goods for a period of time and then maintain sales during the period of unfavorable
supply price. Dopuch et al (1989) noted that inventories are crucial in every business
organization. The reason is that they are cushions;

i) To absorb planning errors and unforeseen fluctuations in supply and demand and,

ii) To facilitate smooth production and marketing operations.

iii) To facilitate smooth production and marketing operations. Douchetal further noted that
inventories help to isolate or minimize the interdependence of all Parts of the organization (for
example, departments or fictions) so that each may work effectively. For example, many parts
and subassemblies may be 6 purchased or manufactured, Stored and used as needed. This avoids
nerve-racking reliance on the pinpoint timing of Deliveries from others. According to
walgebachetal (1982), the availability of attractive quality discounts may justify buying in excess
of its current sales requirements and therefore creating additional Inventories Since inventories
are needed to satisfy the needs of customers and to ensure smooth operations Most organizations
maintain substantial investments in a large number of inventory items (Morse, 1981) Because of
the tremendous detail involved in separ9tely reviewing each item, Inventory decision must be
based whether on the judgment, of clerks or on formal policies established by management and
thus inventory controls should be observed.

2.1.3 Reasons for Managing Inventories

According to Morse (1981), inventory management is an extremely important but difficult task.
Inventories being an important element in the production and sales processes they must be
properly managed to ensure smooth operations. According to Morse (1981), Homgren (1982),
Lucey (1991) in profit making organizations, Inventory management is necessary to ensure that
the organization overcomes the costs of Keeping and to maintain an optimum level of inventories
if such organizations are to Remain profitable The scholars agreed that the most common costs

9|Page
associated to investment in Inventories are ordering costs; carrying costs and stock-out costs and
these can only be overcome By maintaining an optimum level of investment in inventory.

(7. a) Ordering costs;

These were defined as costs of acquisition and transportation of the raw materials (Lucey, 1991
and Horngren (2013). The ordering costs usually consist of clerical costs of preparing purchase
Order or production order and special processing and receiving costs relating to the number of
Orders processed. Morse (1981) agreed with other scholars and added that ordering costs include
incremental costs of processing the requisition for goods (prepared by the storeroom and sent to
the purchasing department, the purchase order, the receiving reports, and the voucher (prepared
by the treasurer's office).

b) Carrying costs:

According to Lucey (1991), these are the costs incurred on maintaining a given level of
inventory and they include; material handling costs, insurance, pilferage and obsolescence costs.
Usually, these costs are affected by such factors as insurance, personal property taxes, variable
storage costs, deterioration and obsolescence, in the case of fixed costs such as deprecation and
property taxes or storage facilities, they should be included elsewhere, holding costs/carrying
costs should also include an imputed opportunity cost (Morse, 1981). Morse observed that the
interest rate on borrowed money is frequently used as the imputed opportunity cost. However,
the rate of return management desires to earn on inventory investment in a better choice.

c) Stock out Costs

According to Morse (2015), Kilby (2011) and Dopuch et al (2015), these costs are incurred
when a firm has inadequate stocks and yet an item is demanded. They result from under stocking
and short deliveries and lead to missed opportunities as well as consumer dissatisfaction. This
makes it crucial for the organization to maintain an optimum level of inventories and thus the
need for an effective inventory management system.

10 | P a g e
8 d) Optimum inventory level

According to Pandey (2015), usually there are two danger points that management always wants
to avoid and the optimal level of investment in inventories lies somewhere between them. They
noted that the first danger point is that of inadequate inventories, which disrupts production and
may lead to loss of sales, while the second danger point is that of excessive inventories, which
may lead to unnecessary carrying costs and obsolescence risks. Therefore, in organization where
inventory management is effective, the management will always average out the two extreme
ends and get the optimal investment in inventories. To achieve this, some techniques were
developed.

2.1.4 Inventory Control Techniques

Pandey (2019), Morse (2020) and Walgembach et al (2015) concur that the major goal of
inventory management "is to discover and maintain the optimum level of investment in all types
of inventories, from raw materials and supplies to finish goods".

The scholars suggest the following techniques for any effective inventory management system;

A-B-C Approach to inventories the scholars noted that, the ABC approach to inventories enables
several different methods of inventory management to be applied to the same inventory. It is
based on the premise that in most inventories, a small percentage of items account for a large
percent of the annual dollar usage. At the other extreme, a large percent of the inventory items
accounts for a small percent of the annual dollar usage.

This analysis enables management to place its efforts where the results will be greater and
therefore sometimes referred to as "Always Better" control. It helps management to ensure
optimal and profitable investment in inventories. 9 Just in time just in time is a system that aims
at producing the required items of quantity at the exact time specified. This system assumes
exact inventories. In this case, holding costs will not arise and obsolescence costs will be highly
reduced. Performance Business performance is the justification of its good performance. Indeed,
the profits of a business are the end results of operations and an indication of its good
performance (Griffith, 2001).

11 | P a g e
 According to Herman son et al (1987), performance is the organization's ability to generate
income. Performance must be reflected on in income statement of the organization to certify that
the income generated is greater than the input cost. According to Musumeno (2001), the
principle motivating force in any business is performance. Musumeno noted that, although profit
maximization is not the only motive in business, it is the most important. Therefore, there should
be adequate rectums on capital invested if any business is to be considered successful. The
argument for this was that the success of any business basically depends on the performance that
it enjoys.

2.2 Relationship between Inventory Management and Performance

According to Lynch (2005) the main objective of inventory management is to minimize the total
cost of relevant costs to ensure profitable operations. Because of the value attributed to inventory
management, two cardinal decisions must be faced if the inventory management system is to
ensure profitable operations that is,

i) How much we buy (or manufacture) at a time?

ii) When we buy (or manufacture)? 10 According to Pandey (1998), in many cases where
inventory management decisions have been effective, inventory-planning models have been
developed and implemented focusing especially on the twin problems of inventory size and
timing. Usually, inventory management models are designed to achieve a balance between the
costs of acquiring and holding inventory.

The costs are the ones that affect organizational performance (Kakuru, 2001; Dopuch et al,
1981; Morse, 1981). The models are developed in order to help management maintain
inventories at optimal level that will help the organization to realize profits. To be specific, the
objective of inventory management models is to maintain adequate inventory levels at minimum
inventory costs. They specify the economic order quantity and re-order point and if well
observed, companies earn profits.

12 | P a g e
2.3 Economic Order Quantity and Performance

According to Holmgren (1982), Lynch (2) and Pandey (1998), economic order quantity is the
quantity of inventory that should be ordered at once. They further noted that, the quantity of
inventory ordered at once affects inventory ordering and holding costs and will ultimately have a
bearing on performance. For instance, if a few large orders are placed, annual ordering costs will
be low, but annual holding costs will be high. Conversely, if many small orders are placed, over
all ordering costs will be high but annual holding costs will be low. To be profitable, it is
necessary to determine if increasing the order size to obtain large volume discounts and slight
lowering costs will be more offset at a higher holding cost. The scholars agreed that performance
will only be achieved at optimum level of relevant costs i.e. holding costs and ordering costs.

2.3.1 Re-Order Point and Performance

According Lynch (2005) like Pandey (1995), this is the level at which an order for additional
inventory should be placed. Because inventory cannot be ordered and 11 received instantly,
orders for additional inventories should be placed before current stocks are depleted. The re-
order point must consider both the lad time required to replenish stocks after an order is placed
an inventory demand during 'the lead time. Morse (1981) agreed with other scholars and further
observed that, because of the variation in lead-time and the daily demand for inventory,
inventories are cushion to prevent "stock out" and the resulting loss of sales or disruption of
production, As already noted above, in a merchandising establishment, stock out costs includes
the extra costs of processing back orders and opportunity cost of lost sales. While the opportunity
cost of lost sales is frequently specified as the selling price less the invoice price, opportunity
costs are considered greater if dissatisfied customers subsequently patronize other
establishments. In this case, the performance of an organization remains fragile if no proper
controls are considered greater if dissatisfied customers subsequently patronize other
establishments. In this case, the performance of an organization remains fragile if no proper
control is ensured.

13 | P a g e
 SIMILAR WORKS

QuickBooks Quick Books is the leading accounting software for small businesses. Manage all
your finances with either our licensed or online version. Instant access to customer, vendor and
employee information. Free support and upgrades with online version.

QuickBooks is an application which were used by many small organizations as there accounting
software. This has a very detail accounting module with covering most of the needs. Also
facilitate to maintain customers, vendors, invoices and purchase orders in the system. Since this
software is a standalone windows application one main computer should be in place to have the
software and there is only one user access to the system. If we need to get access with multiple
users a higher subscription should be purchased and it will cost a significant amount for the
purchase.

QuickBooks Online Screen

14 | P a g e
Sales binder

Sales binder is the easiest-to-use, full-featured online inventory management system for any
small-medium enterprise (SME). Key features include: invoicing, estimates, purchase orders,
barcoding, reporting, account management CRM), multiple locations, item variations, custom
user permissions, a full API and many online integrations. Sales binder is subscription-based
web application which handle by a USA company. The subscription can be monthly or annually.
There are difficulties to add more fields to the system as required for the client to keep client and
vehicle information since the software have no feature as such.

15 | P a g e
 Features of the system

 Inventory Tracking

The system is good to give operation updates on the cost of goods sold but does have track
of (GPS) coordinates to ensure that product

 User Management

User management is a very important component on a system for it provides an advanced

authentication and privacy to the system through signing up and login platform of the users.

 Reporting

This system does the whole reporting requirement but is not with an automated calculator
and reporting component as required in the real time world.

16 | P a g e
  Perpetual inventory system is one of the already existing systems that deals well with
inventory tracking but does not have the capacity to give notification.

 The system is good to give operation updates on the cost of goods sold but does not have
track on the (GPS) to monitor whether products are being delivered to the intended
destination as required.

 Inventory investigation is also vital, errors in inventory records are easier to investigate as
detailed data is recorded at a transaction level, and however the system is lacking
automated error check. And as a result

The present paper focuses on the review of existing literature in the field of Inventory
Management which helps in capturing both conceptual and research-based studies. A Number of
studies have been conducted to find the determinants of investment in inventories and the

17 | P a g e
process is still going on. The present study is the summary of critical points of a particular topic
consisting of essential findings as well as theoretical and methodological contributions. My
paper shall discuss conceptual studies of both Indian and other nationals.

Abramowitz and Modigliani (1957) they highlighted the relationship between capacity utilization
and inventory investment. Existing stock of inventories was expected to adjust to the desired
levels. Thus, the variable, existing stock of inventories, was essential to be negatively related
with the desired stock. The result was that there is positive relation among the ratio of inventory
to sales and inventory investment. High ratio of stocks to sales in the past suggests requirement
of high levels of inventories in the past and promising high investment in inventories in the
current period also

Krishna Murthy (1964) Study was aggregative and dealt with inventories in the private sector of
Indian economy as a whole for the period 1948-61. This study used sales to represent demand for
the product and suggested the importance of accelerator. Short term rate of interest had also been
found to be significant.

R.S. Chadha (1964) Study had been made on inventory management practices of Indian
companies. The analysis suggested application of modern scientific inventory control techniques
like operations research. These modern scientific techniques furnish opportunities for the
companies, Companies can minimize their investment in inventory but there is continuous flow
of production. He argued that industrially advanced countries, like, USA, were engaged in
developing highly sophisticated mathematical models and techniques for modernizing and
redefining the existing tools of inventory investment.

National Council of Applied Economic Research (NCAER) (2014)

Conducted a study in 1966 regarding working capital management of three industries namely
cement, fertilizer and sugar. This study mainly devoted to ratio analysis of composition,
utilization and financing of working capital for the period of 1959 to 1963. The study reveals that
inventory constituted a major portion of working capital i.e., 74.06 per cent in the sugar industry
followed by cement industry (63.1%) and fertilizer industry (59.58%). It was observed that
inventory had not managed properly. So far as the utilization of working capital was concerned,

18 | P a g e
cement and fertilizer industry had better implementation of working capital. The sugar industry
had huge accumulation of stocks so there was inefficient utilization of working capital heavily.

Krishnamurthy and Sastry (2016). It is the most comprehensive study on manufacturers’

inventories. They used the CMI data and the consolidated balance sheet data of public limited
companies published by the RBI, in order to analyses each of the major components, like the raw
materials, goods-in-process and finished goods, for 21 industries over the period ranging from
1946-62. The study was a time series one although there were some inter-industry cross-section
analyses that were carried out in the analysis. The Accelerator represented by change in sales,
bank finance and short-term interest rate was found to be an important determinant. The
utilization of productive capacity and price anticipations was also found to be relevant in the
study.

George (2012) it was the study on cross section analysis of balance sheet data of 52 public
limited companies for the period of 1967- 70. Accelerator, internal and external finance variables
were considered in the formulation of equations for raw materials including goods-in-process
inventories. However, equations for finished goods inventories conceive only output variable.
Deliberation was given on accelerator and external finance variables.

Mishra (1975) It is the study of six major public sector enterprises. He concluded that (i)
inventory constitutes the most important component of working capital of public enterprises (ii)
efficiency of working capital funds employed in receivables is terribly low in the selected
enterprises and (iii) In all units both the current assets and the quick ratios are greater than their
standards. Enterprises need proper control on receivables.

Lambrix and Singhvi (2016) Adopted working capital cycle approach in working capital
management, also suggested that investment in working capital can be optimized and cash flows
can be improved by reducing the time frame of physical flow starting from the receipt of raw
material to the shipment of finished goods, i.e., inventory management, and by improving the
terms and conditions on which firm sells goods as well as receipt of cash.

Pradeep Singh (2008) In his study made an attempt to examine the inventory and working capital
management of Indian Farmers Fertilizer Cooperative Limited (IFFCO) and National Fertilizer
Limited (NFL). He concluded that the overall position of the working capital of IFFCO and NFL

19 | P a g e
is satisfactory. But there is a need for improvement in inventory in case of IFFCO. However,
inventory was not properly utilized and maintained bay IFFCO during study period. The
management of NFL must try to properly utilize the inventory and try to maintain the inventory
as per the requirements. So that liquidity will not interrupt Capkun,

Hameri and Weiss (2014) statistically analyzed the relationship between inventory performance
and financial performance in manufacturing companies using the financial information of a large
sample of US-based manufacturing firms over a 26-year period, that is, 1980 to 2005. They
inferred that a significant relationship existed between inventory performance along with the
performance of its components and profitability. Raw material inventory performance was highly
correlated to gross profit and operating profit. Work in progress inventory was highly correlated
to gross profit measures while finished goods inventory performance was more correlated with
operating profit measures.

Gaur and Bhattacharya (2011) Attempted to study the linkage between the performance of the
components of inventory such as raw material, work in progress and finished goods and financial
performance of Indian manufacturing firms. The study revealed that finished goods inventory as
inversely associated with business performance while raw material inventory and work in
progress did not have much effect on same. They emphasized that instead of focusing on total
inventory, an attempt should be made to concentrate on individual components of inventory so as
to adequately manage the same. They concluded that managers not paying heed to inventory
performance may become weak in combating competitors.

Eneje et al (2012) Investigated the effects of raw materials inventory management on the
profitability of brewery firms in Nigeria using a cross sectional data from 1989 to 2008 which
was gathered for the analysis from the annual reports of the sampled brewery firms. Measures of
profitability were examined and related to proxies for raw materials inventory management by
brewers.

The Ordinary Least Squares (OLS) stated in the form of a multiple regression model was
applied in the analysis. The study revealed that the local variable raw materials inventory
management designed to capture the effect of efficient management of raw material inventory by
a company on its profitability is significantly strong and positive and influences the profitability
of the brewery firms in Nigeria. They concluded that efficient management of raw material

20 | P a g e
inventory is a major factor to be contained with by Nigerian brewers in enhancing or boosting
their profitability.

Nyabwanga and Ojera (2012) They Highlighted the association between inventory management
practices and business performance of small-scale enterprises (SSEs), in Kisii Municipality, Kisii
County, Kenya. They used a cross-sectional survey study based on a small sample size of 79
SSEs. The study inferred that inventory comprised the maximum portion of working capital, and
improper management of working capital was one of the major reasons of SSE failures.

The empirical results disclosed that a positive significant relationship existed between business
performance and inventory management practices with inventory budgeting having the
maximum influence on business performance ensued by shelf-space management. The study
suggested that by following effective inventory management practices business performance can
be enhanced.

Dave Piasecki (2001) He focused on inventory model for calculating the optimal order quantity
that used the Economic Order Quantity method. He points out that many companies are not using
EOQ model because of poor results resulted from inaccurate data input. He says that EOQ is an
accounting formula that determines the point at which the combination of order costs and
inventory costs are the least. He highlights that EOQ method would not conflict with the JIT
approach.

He further elaborates the EOQ formula that includes the parameters such as annual usage in
unit, order cost and carrying cost. Finally, he proposes several steps to follow in implementing
the EOQ model. The limitation of this literature is that it does not elaborate further relationship
between EOQ and JIT. It does not associate the inventory turns with the EOQ formula and fails
to mention the profit gain with the quantity is calculated.

Gaur, Fisher and Raman (2005) in their study examined firm-level inventory behavior among
retailing companies. They took a sample of 311 public-listed retail firms for the years 1987–2000
to examine the relationship of inventory turnover with gross margin, capital intensity and sales

21 | P a g e
surprise. They observed that inventory turnover for retailing firms was positively related to
capital intensity and sales surprise while inversely associated with gross margins. They also
suggested models that yield an alternative metric of inventory productivity, adjusted inventory
turnover that can be used in study of performance analysis and managerial decision-making.

Farzaneh (1997). Presented a mathematical model, to assist the companies in their decision to
switch from EOQ to JIT purchasing policy. He defines JIT as “to produce and deliver finished
goods just in time to be sold, sub-assemblies just in time to be assembled in goods and purchased
material just in time to be transformed into fabricated parts”.

He highlights that the EOQ model focuses on minimizing the inventory costs rather than
minimizing the inventory. Under the ideal condition where all the conditions meet, it is
economically better off to choose the JIT over the EOQ because it results in purchase price,
ordering cost. Rich Lavely (2013) Asserts that inventory means “Piles of Money” on the shelf
and the profit for the firm. However, he notices that 30% of the inventory of most retail shops is
dead.

Therefore, he argues that the inventory control is facilitate the shop operations by reducing rack
time and thus increases profit. He also elaborates the two types of inventory calculations that
determine the inventory level required for profitability. The two calculations are “cost to order”
and “cost to keep”. Finally, he proposes seven steps to inventory control.

Soni (2012). Made an in-depth study of practices followed in regard to inventory management in
the engineering goods industry in Punjab. The analysis used a sample of 11 companies for a
period five years that is, 2004–2009 and was done using panel data set. The adequate and timely
flow of inventory determines the success of an industry. She concluded that size of inventory
enhanced marginally over the period as compared to a hike in current assets and net working
capital. Inventories constituted half of the working capital which was due to over stocking of
inventory as a result of low inventory turnover especially for finished goods and raw materials.
Rise in sales and favorable market conditions lead to a rise in inventory levels. It was also
inferred that sales increased more as compared to inventory.

Lwikietal (2013) a survey conducted on all the eight (8) sugar manufacturing firms in Kenya
established that there is generally positive correlation between each of inventory management

22 | P a g e
practices. Specific performance indicators were proved to depend on the level of inventory
management practices. They established that Return on Equity had a strong correlation with lean
inventory system and strategic supplier partnerships. As such, they concluded that the
performance of sugar firms could therefore be stated as being a function of their inventory
management practices.

Perpetual Inventory System Another method of inventory control is the maintenance of inventory
control on a continuous basis. After the material are received into the stores, the storekeeper will
arrange for the storing of each item in the allotted rack, bin, shelf or other receptacles and attach
a card to each bin for the purpose of making entries there-in, relating to the receipts, issues and
balance. The bin card or the locker card, this becomes a perpetual inventory record for each item
of stores. If the stores balance is recorded on continuous basis after every receipt and issue, the
record is said to be one of perpetual inventory and the method of recording is called the perpetual
inventory system. Thus, the perpetual inventory is a method of recording store balance after
every receipt and issue to facilitate regular checking and to obviate closing down for stock
locking.

Abramovitz and Modigliani (1957) they highlighted association connecting capacity utilization
and inventory investment. Existing level inventories was expected for adjust with required levels.
Thus variable, existing stock of inventories, was essential to be negatively related with © 2018
JETIR August 2018, Volume 5, Issue 8 [Link] (ISSN-2349-5162) JETIRA006108
Journal of Emerging Technologies and Innovative Research (JETIR) [Link] 615 the
required stock. The result was may be positive relation among the ratio of inventory to sales and
inventory expenditure. High ratio of stocks to sales in the past suggests requirement of high
levels of inventories in the past and promising high expenditure involves in inventories in the
current period also.

Krishna Murthy (1964) Investigation was aggregative and dealt with inventories in the private
sector of Indian financial system aggregative during period 1948-61. This investigation used
sales to represent requirement of product and suggested the importance of accelerator. Short term
rate of interest had also been found to be significant. R.S. Chadda (2014) Investigation had been
made on inventory management practices of Indian companies. The analysis suggested
application of modern scientific inventory control techniques like operations research. These

23 | P a g e
modern scientific techniques furnish opportunities for the companies, Companies can minimize
their expenditure in inventory however there is continuous running production. He argued that
industrially advanced countries, like, USA, were engaged in developing highly sophisticated
mathematical models as well as techniques for modernizing and redefining the existing tools on
inventory expenditure.

National Council of Applied Economic Research (NCAER) (1966) Conducted a study in 1966
regarding working financial management on three production organization namely cement,
fertilizer and sugar. This study mainly devoted to ratio analysis on composition, utilization and
financing about working fund during 1959 to 1963. The study reveals that inventory constituted
a major portion of working fund i.e., 74.06 per cent in the sugar company followed on Cement
Company (63.1%) and Fertilizer Company (59.58%). It was observed that inventory had not
managed properly. So far as the utilization about working fund was concerned, cement and
Fertilizer Company had better implementation about working fund.

The sugar company had huge accumulation of stocks so there was inefficient utilization of
working fund heavily. The administrative reforms commission (2016) has made some
recommendations for reducing inventory levels.

The RBI study group (25) appointed to frame guidelines and to lay down norms for bank credit
applicable to all classes of industrial borrowers (popularly known as Tandon Committee Report),
has classified inventories prescribing inventory norms for fifteen industries. The committee on
inventory control (26) appointed by Bureau of Public Enterprises (BPE) in 1972 examined
inventories of the three public sector undertakings , Hindustan Shipyard Limited (HSL),
Hindustan Cables Limited (HCL), National Mineral Development Corporation Limited
(NMDCL). The committee fixed inventory levels for HSL and made some concrete
recommendations to reduce inventory levels in all the three undertakings Krishnamurthy and
Satyr (1970) It is the most comprehensive study on manufacturers’ inventories. They used the
CMI data and the consolidated balance sheet data of public limited companies published by the
RBI, in order to analyse each of the major components, like the raw materials, products-in-

24 | P a g e
process and finished products, for 21 industries during 1946-62. That study was time series one
although there were some inter-industry cross-section analyses that were carried out in the
analysis. The Accelerator represented by change in sales, bank finance as well as short-term rate
of interest was found to be an important determinant. Also utilization of manufacturing
efficiency with price anticipations was also found to be relevant on study. George (1972) It was
study on cross section analysis of balance sheet data of 52 public limited companies for period of
1967- 70. Accelerator, internal and external finance variables were considered in formulation of
equations for raw items that includes goods-in-process inventories. However, equations for
finished goods inventories conceive only output volatile. Deliberation was given on accelerator
and external finance volatiles.

Mishra (1975) It all about the study on six major public sector enterprises. He concluded that

(i) inventory constitutes most important component of working fund of

public enterprises
(ii) (ii) efficiency of working funds employed in receivables is terribly low
in selected enterprises and
(iii) (iii) In all units both current assets and quick ratios are greater than
their standards. Enterprises need proper control on receivables.
Bansal(1976) in his study on Materials Management: A case Study of Bharat Heavy Electricals
Limited, Bhopal Unit, (BHEL), has evaluated the existing systems of inventory management. He
emphasizes. The need for automatic replenishment system in the undertaking offer studying the
application of ABC analysis and EOQ technique of inventory control.

He also points out the accumulation of surplus stores and non-moving items in the organization
and recommends that the surplus and absolute stores which are no longer required should be
disposed of as early as possible at the best available price. Further, he suggests the preparation of
monthly class wise statements on inventories for effective control over them and the introduction
of reconciliation system of stores ledgers with account ledgers to avoid misappropriation of
stores, and spares for production and operation are above their actual consumption level. The
inventories in general are found to be above their routine requirements.

25 | P a g e
The holdings of stores and spares corresponding to two to three year’s requirements should be
considered excess.

Lambrix and Singhvi (2017) Adopted working fund cycle approach in working fund
management, also suggested that investment in working fund can be optimized and cash flows
can be improved by reducing the time frame of physical flow starting from the receipt of raw
material to the shipment of finished goods, i.e., inventory management, and by improving the
terms and conditions on which firm sells goods as well as receipt of cash.

Lal (2017) He studied Modi Steels Limited as a case study, his study focused on inventory
management. He originated a model which involve price variable in inventory management;
earlier price variable in inventory was not considered in that company.

The © 2018 JETIR August 2018, Volume 5, Issue 8 [Link] (ISSN-2349-5162)

JETIRA006108 Journal of Emerging Technologies and Innovative Research (JETIR)
[Link] 616 analysis recommended solid policies, which would look after internal and
external factors, ultimately it would help in bringing in efficient working capital management.

Farzaneh (1997) Presented mathematical model, to assist industries on their decision to switch
from EOQ to JIT purchasing policy. He defines JIT as “to produce and deliver finished goods
just in time to be sold, sub-assemblies just in time to be assembled in goods and purchased
material just in time to be transformed into fabricated parts”. He highlights economic order
quantity model describes how minimizing expenditure on inventory rather than minimizing stock
inventory can. In ideal condition where all the conditions meet, it is economically better off to
choose the JIT over the EOQ because it results on purchase price, request price.

Rich Lavely (1998) He claims the stock inventory means “Piles of Money” on the shelf and the
profit for the firm. However, he notices that 30% stock of maximum retail shops being dead.
Thus, he argues the stock control is facilitate shop operations by minimizing rack time and thus
increases business margin. He also elaborates two types on stock calculations which determine

26 | P a g e
stock level required for business margin. There are two calculations such as “ordering cost” and
“keeping cost”. Finally, he proposes seven steps for controlling of inventory.

Dave Piasecki (2011) He focused on various model of inventory to calculating optimum

purchase quantity which used the EOQ method. He points out that many companies are not using
EOQ model because of poor results resulted from inaccurate data input. He says that EOQ is an
accounting formula which determines point at which combination of ordering costs and stock
inventory costs are the least. He highlights that EOQ method would not conflict with the JIT
approach. He further elaborates the EOQ model formula that includes parameters like yearly
usage on unit, order cost and carrying cost. Finally, he proposes several steps to follow in
implementing the EOQ model. Now this literature limitation is as it does not elaborate further
association among EOQ and JIT. It does not associate stock turns with EOQ so fails for mention
profit gain with associated stock is calculated.

Sambasiva Rao. K (2002) According his investigation on Materials Managing in Public Sector
Ship Building Industry evaluates. Output of materials managing and identifies some problems
faced by materials managing in the heavy engineering industry. This investigation method
involves the 68-documentary evidence and survey of expert opinion. He evaluates the existing
purchase systems and lead time involved on procurement of stock item and advised the long lead
time shall be reduced. His research points at additional stock in terms on month’s production cost
in all the engineering units.

He also highlights some of the problems in the area on materials managing such as delay in
customer part on supplying own stock item, existence and disposal of surplus and non-moving
items, excessive lead times and excessive dependence on imports. He claims that administrative
and procurement lead times for organization are on the higher side according to peculiar nature
of industry. He suggests liberalized purchase procedures, increased capital powers to the
personnel, opening up of liaison offices in various countries to reduce the lead time.

Gaur, Fisher and Raman (2005) In their study examined firm-level inventory behavior among
retailing companies. They took a sample on 311 public-listed retail firms for years 1987–2000

27 | P a g e
for investigate relationship on stock turnover about gross margin, capital intensity, sales surprise.
All observed that stock aggregate turnover for retailing company was positively related to capital
intensity with sales surprise while inversely related gross margins.

S. Singh (2006) Analysed stock control exercises on single fertilizer company named IFFCO.
He statistically examined stock level according consumption, sales as well as other variables
along growth on these variables with inventory patterns. He concluded increments in
components of stocks lead to increment in the proportion on stock in current assets.

The special attention was made in stores with spares for calculate excess purchases resulting
Pradeep Singh (2008) In his study made an attempt to investigate stock with working capital
managing Indian Farmers Fertilizer Cooperative Limited (IFFCO) / National Fertilizer Limited
(NFL). He concluded that overall position of the working fund of IFFCO / NFL is satisfactory.
But there arises need for improvement in stocking as situation of IFFCO. Although stock was not
properly utilized as well as maintained bay IFFCO during investigation period. Also managing
organization of NFL surely try to properly utilize stock with try to care stock according to
requirements. So that liquidity will not interrupt. Capkun, Hameri and Weiss (2009) statistically
analysed the association among stock levels with fund situation in manufacturing companies
using capital information on large sample on US-based production units over a 26-year period,
during, 1980 to 2005. According to them a significant relationship existed between inventory
performance along with the performance of its components and profitability.

Gaur and Bhattacharya (2011) Attempted to study the linkage between the performance of the
components of inventory such as raw material, work in progress and finished goods and financial
performance of Indian manufacturing firms. The study revealed that finished goods inventory as
inversely associated with business performance while raw material inventory and work in
progress did not have much effect on same. They emphasized that instead of focusing on total
inventory, an attempt should be made to concentrate on individual components of inventory so as
to adequately manage the same. They concluded that managers not paying heed to inventory
performance may become weak in combating competitors. © 2018 JETIR August 2018, Volume
5, Issue 8 [Link] (ISSN-2349-5162) JETIRA006108 Journal of Emerging Technologies
and Innovative Research (JETIR) [Link]

28 | P a g e
Eneje et al (2012) He researched the changes of raw stock inventory management system with
margin of Beer Company in Nigeria during data from 1989 to 2008 which had gathered for
analysis from the annual reports of the sampled brewery firms. Measures of profitability were
examined and related to proxies for raw materials inventory management by brewers. The
Ordinary Least Squares (OLS) stated in the form of a multiple regression model was applied in
the analysis. Research analyzed that local variable raw stock inventory managing system design
such a way to capturing changes of efficient management of raw stock inventory on behalf of
company in terms of their margin is significantly strong and positive and influences the
profitability of the brewery firms in Nigeria. They concluded that efficient management of raw
material inventory is a major factor to be contained with by Nigerian brewers in enhancing or
boosting their profitability.

Nyabwanga and Ojera (2012) Their research concentrate relationship among inventory
management with business performance of small scale enterprises (SSEs), in Kisii Municipality,
Kisii County,Kenya. They used a cross-sectional survey study based on a small sample size of 79
SSEs. The study inferred that inventory comprised the maximum portion of working capital, and
improper management of working capital was one of the major reasons of SSE failures. The
empirical results disclosed that a positive significant relationship existed between business
performance and inventory management practices with inventory budgeting having the
maximum influence on business performance ensued by shelf-space management. The study
suggested that by following effective inventory management practices business performance can
be enhanced.n loss of profit.

Sahari, Tinggi and Kadri (2012). They focused on association among the inventory management
system and company performance corresponding to fund capability. Therefore according to that
reason, they looked 82 sample construction company in Malaysia during period of 2006– 2010.
Using the regression and correlation analysis methods, they deduced that inventory management
is positively correlated with firm performance. In addition, the results indicate that there is a
positive link between inventory management and capital intensity.

Soni (2012) .Made an in-depth study of practices followed in regard to inventory management in
the engineering goods industry in Punjab. The analysis used a sample of 11 companies for a
period five years that is, 2004–2009 and was done using panel data set. The adequate and timely

29 | P a g e
flow of inventory determines the success of an industry. She concluded that size of inventory
enhanced marginally over the period as compared to a hike in current assets and net working
capital.

Inventories constituted half of the working capital which was due to overstocking of inventory as
a result of low inventory turnover especially for finished goods and raw materials. Rise in sales
and favourable market conditions lead to a rise in inventory levels. It was also inferred that sales
increased more as compared to inventory.

Lwiki et al (2013) a survey conducted on all the eight (8) sugar manufacturing firms in Kenya
established that there is generally positive correlation between each of inventory management
practices. Specific performance indicators were proved to depend on the level of inventory
management practices. They established that Return on Equity had a strong correlation with lean
inventory system and strategic supplier partnerships. As such, they concluded that the
performance of sugar firms could therefore be stated as being a function of their inventory
management practices. Panigrahi (2013) According to his analysis inventory management
practices used by Indian cement firms and their effects must be on working fund efficiency. The
study also investigated the relationship between profitability and inventory conversion days.

The study, using a sample of the top five cement companies of India over a period of 10 years
from 2001 to 2010, concluded there must be exist inverse relationship among conversion period
of inventory and profit margin.

Madishetti and Kibona (2013) Found that a well-designed and executed inventory management
contributes positively to a small or medium-sized enterprises (SMEs) profitability. They studied
the association between inventory conversion period and profitability and the impact of
inventory management on SMEs profitability. They took a sample of 26 Tanzanian SMEs, and
used the data from financial statements for the period 2006–2011. Regression analysis was
adopted to determine the impact of inventory conversion period over gross operating profit. The
results cleared out that significant negative linear relationship occurred between inventory
conversion period and profitability.

30 | P a g e
Srinivas Rao Kasisomayajula (2014) His research title based on the” Inventory Management in
Commercial Vehicle Industry in India”. There were five sample firms had preferred for study.
The study concluded that all the units in the commercial vehicle industry have significant
relationship between Inventory and Sales. Proper management of inventory is important to
maintain and improve the health of an organization. Efficient management of inventories will
improve the profitability of the organization.

Edwin Sitienei and Florence Memba(2015) Conducted a study on Effect of Inventory

Management on profitability of Cement Manufacturing Companies in Kenya. The study
concluded that Gross profit margin is negatively correlated with the inventory conversion period,
increase in sales, which denotes the firm size enriches the firm’s inventory levels, which pushes
profits upwards due to optimal inventory levels. It is also noted that firms inventory systems
must maintain an appropriate inventory levels to enhance profitability and reduce the inventory
costs associated with holding excessive stock in warehouses. © 2018 JETIR August 2018,
Volume 5, Issue 8 [Link] (ISSN-2349-5162) JETIRA006108 Journal of Emerging
Technologies and Innovative Research (JETIR) [Link] 618

31 | P a g e
 CONCLUSION
The Inventory Management System (IMS) is useful for both the companies (industries), and
customers. An in-depth study on the implementation of the system has been conducted. An
investigation of the existing paper-based system has been conducted to identify the relevant
features of various components, and methods needed for developing an automated system.
Currently, most companies have no existing online and offline inventory systems. Development
of this system creates convenience to customers to make transactions 24/7, and the companies
can perform services more efficiently. The payment system also makes it convenient for both the
service providers and the customers. For failure of any business only inventory management is
responsible. Now to fights for failure there are various ways so we could begin from there.
Hence using various latest technology, we could maintain and minimized our inventory. Thus, by
learning, implementing and evaluating we could do our business with managed inventory.

In any business, make it big or small, we must understand that taking good care of our inventory
is very important. If we as managers do not understand the concept of good inventory
management, we must learn to be familiar with it and its applications.

32 | P a g e
 CHAPTER THREE

REQUIREMENTS SPECIFICATIONS

Non-Functional Requirements:

The definition for a non-functional requirement is that it essentially specifies how the
system should behave and that it is a constraint upon the systems behavior. One could
also think of non-functional requirements as quality attributes for of a system. Non-
functional requirements cover all the remaining requirements which are not covered by
the functional requirements.

They specify criteria that judge the operation of a system, rather than specific behaviors,
for example: “Modified data in a database should be updated for all users accessing it
within 2 seconds.”

 2.1 Performance:

11. Response Time:

The system should provide quick response times for user interactions.

Performance The system should be fast and quickly accessible. Customers are always in a
hurry so the user needs to be able to give the service to the customer as quick as possible. In
order to increase the system speed certain areas are improved in data retrieval and update
procedures. The system loading time, processing time and query and reporting time should
be fast.

2.2 Availability:

12. System Uptime:

33 | P a g e
 Availability metrics serve, to quantify the time at which a system is actually available for
use. In this sense it needs to consider the intervals in which the asset is inactive because it is
faulty, or simple routine maintenance.

The system should have high availability to ensure uninterrupted operations, ensure proper
functionality, therefore avoiding out of service condition for inspection or repair work.

The system should ensure normal operation by operating under provided conditions (for
example at a given speed) to achieve intended purpose.

The asset’s up-time (the total time in which the equipment is actually operational.) The
system needs to be available from anywhere by any device. The management needs to be
able to logging and see what is happening in the system any time. Availability of system for
each licensed user. This system will available for 24 hours.

 2.3 Reliability:

13. Data Accuracy:

Since the customer will depend on the application, it should be always available and can be
accessed easily. Application maintenance and disaster recovery plans has to be taken in place
in case of emergency. Such as up to date firewalls, anti-virus applications and database
backups, application host backups.

Every calculation is accurate to the fraction. User will hesitate to use the system if there is a
single deviation in the application. It is critical to be accurate because financial transactions
are also handled by the system.

 2.4User Management
14. Signup and login:
User management is a very important component on a system for it provides an advanced
authentication and privacy to the system through signing up and login platform and it
recognize users by verifying the details registered in the system.

 2.5 Monitor inventory changes.

15. Update and Notification

34 | P a g e
 While the current system is lacking update and notification, the proposed system will be
circling back to step one, the system will re-update the database based on the newly
received inventory as your warehouse team scans and adds it through their ware house
management system.
The proposed system will update inventory and general ledgers continuously and
automatically with each transaction. Periodic systems depend upon physical counts to
update ledgers at set intervals.

 2.6 Easy Investigation:

16. Reporting
With a continuous stream of transactional data, you can investigate stock discrepancies
more efficiently and accurately. Micro-level data collection gives you more accurate
inventory numbers to work with, making it easier to detect and prevent instances of
shrinkage, counting errors and theft. In a periodic system, these discrepancies are easy to
overlook as it uses a physical inventory count to balance year-end inventory and calculate
(COGs) cost of goods.

 2.7 Security Requirements

The users who have permission to use the system will have the ability to change their
password time to time. The user authentication will be done by the system. There will be
a facility to assign expiry dates for the users when necessary

 Maintainability
The system is designed to adapt the new changes without affecting other components.

 Processing Time
Processing time can be highly effected to the response time of a web application.
Powerful processing power and optimized server-side coding will lead the application to
master processing.

35 | P a g e
 Functional Requirements of the System
With the requirements of the client, the system will define under following categories,
 Customer Management
 User Management
 Product Management
 Inventory Management
 Billing & Payments
 Reporting
Customer Management
Customer management module includes every function related to customer. Creating new
Customer, updating customer information and lookup on history transactions are key
functions.
Therefore, system shall categorize customers into two areas as general customer and
vehicle customer. General customers are buying goods without a vehicle no reference.
And vehicle customer needs to have a vehicle no. Also, vehicle customers then
categorized with their vehicle type. All the transactions and payments are shown on
customer account interface and can be filtered by multiple parameters.

User Administration
All user management activities are done in User Management sub module.
Manage Users
The system shall support the concept of user. Every user of the system has a name and a
Password. The name must be unique within the installed instance of the system. In
addition,
Every user has a set of properties: Full Name, Full Business Title (Company Name,
Position),
E-Mail Address, Phone, Working Address, Alternative Phone, and Alternative Working

36 | P a g e
 Address. Each user is uniquely identified by its name within the system.
The system shall provide the authenticated user the ability to change his or her password
and to store the change. The user profile contains the user-specific configurable
parameters of the system. The user profile is associated with one and only one user that is
registered in the system (has a user name and a password). The user must be able to
change his or her profile and save the changes.
The system should be capable of view users, adding new users, modify existing users and
delete existing users and the accessibility to the options is managed by the permission
levels.
Manage Roles
The system shall support the concept of user role. The role has the unique name within
the installed instance of the system and a set of permissions that are assigned to this role.
The permission determines explicitly what the user belonging to this role allowed to do in
the system. Every user of the system must be associated with at least one of the roles. The
user can belong to many roles. If the user is member of several roles, the deny permission
take over the grant one.
The system should be capable of view roles, adding new roles, modify existing roles and
delete existing roles and the accessibility to the options is managed by the permission
levels.

Manage User Logins

The system shall allow users to login to the system by specifying his or her name and
password before he or she can work with the system. If the password is invalid or the
user’s name does not exist in the system, the user is not allowed to login and must enter
the name and password again. There are no limit of the login tries. After successful login
the system shall associate the user with the user roles and configure appearance of GUI
according the user profile. After the login the main
Functionality of the system according the user’s permissions is available. After the login
the user becomes the authenticated and authorized user.

37 | P a g e
 User Activity Monitor
Every user function is captures and logged in a user log for further use. The accessibility
to the options is managed by the permission levels.
Product Management Keep track of the products with status and availability for
invoicing. This includes product management with altering product details, reorder levels
and stocks, manage rates on products.

User Friendliness

System shall have a simple, clean and eye-catching user interface. User interface design
has been done by considering user experience standards. Minimized mouse clicks. User
can navigate through the form elements via keyboard entries. Refreshing page for every
user action is not recommended in modern web.

38 | P a g e
 CONCLUSION

The final step in the requirements gathering is verifying that the documents accurately
and completely communicate the needs and expectations of the client. The requirements
are reviewed and formally approved.

During this step, the analyst can also develop acceptance criteria and start to write test
cases for the final solution. The idea was created using research conducted to Store as a
foundation. Thus, the planning and analysis steps in the development of the system are
based on the information gleaned from the interview with the observer.

In addition, because this would be the store's first computerized system, its capabilities
were solely geared at resolving the problem of inventory management. Due to the
workers' lack of IT knowledge, the interface design is also classed as "user friendly,"
meaning that anyone may use the system, regardless of background in IT. Due to time
restrictions, the developer is unable to add many functionalities to the system; as a result,
the developer has a limited number of suggestions for additional work in the future.

39 | P a g e
CHAPTER 4: DESIGN SPECIFICATION.

Chapter 4 details the design specification for a Integrated Inventory Management System. This
chapter will explain in some reasonable detail the main aspects of the architectural and design
elements. A focus will be made on ensuring that the various components are well-structured,
functional, and secure. Design specifications can then be broadly categorized into four key areas:
data design, application design, user interface design, and security.

4.1. Data Design

Objective: To design a strong, scalable data architecture which enables efficient data storage,
retrieval, and management across multiple branches.

a. Database Structure:

A relational model in designing the database involves tables that represent key entities products,
Bland, Reporting, inventory, and Administrative Users. Each table has a unique primary key to
guarantee data integrity, while foreign keys establish relationships among these entities.

This would avoid data redundancy and guarantee consistency through the use of normalization
techniques. The database has been designed for huge volumes of data, and the application of
indexing on frequently enquired columns ensures good performance.

Data Flow Diagrams (DFDs):

• DFDs depict the flow of information through a system—from entry via the user interface to
storage within the database. These diagrams emphasize problem areas such as bottlenecks and
indicate smooth flows of data processing.

• The flow of data is divided into different levels. It ranges from a high-level context diagram
(Level 0) to the detailed DFDs (Levels 1 and 2), breaking down the processes in detail.

Entity-Relationship Diagrams (ERDs):

40 | P a g e
• ER diagrams are visual representations of the several entities and relationships that exist in a
database. These diagrams provide an outline of what the data model should look like and help a
developer maintain all the necessary relationships.

• The ERD contains all the primary keys and foreign keys, along with relationship cardinality,
such as one-to-many or many-to-many, that defines the exact structure of data.

4.2. Application Design

The objective is to outline the architecture and functionality of the application in order to ensure
conformance to the requirements and its performance.

System Architecture:

- It follows a three-tier architecture: presentation layer (user interface), application layer

(business logic), and data layer (database). This separation of concerns enables better
maintainability, scalability, and security for applications.

It is developed on the model-view-controller, a design pattern at a higher level of abstraction,

further decoupling data management, user interface, and control logic to make the system easier
to administer and extend.

Modules and Components:

This system is then sub-divided into modules, such as customer management, Admin
management, and reporting. In fact, every module is basically designed to be an independent yet
interdependent unit for modular development and testing.

Components of each module are responsible for a certain type of task: either data input,
processing, or output. These components interact with each other through well-defined interfaces
for smooth integration.

Workflow Diagrams:

Workflow diagrams are drawn for each module, showing the sequence of operations and
decision points in the application. This helps understand the flow of various processes and
measures the possibility for optimization or even automation in some cases.

41 | P a g e
The workflows will ensure that the operations inside every module are oriented towards the goals
of the whole system, and user interactions are user-friendly and effective.

4.3. User Interface Design

•Fix an intuitive interface that will enhance user experience and make it easy to run through all
actions on the system.

User Interface Layout:

- The design of the interface focuses mainly on the ease of use and accessibility. This is in terms
of the uniform navigation structure, clearly labeled buttons and forms, and a responsive design
accommodating various devices and different screen sizes.

The key interface elements, such as menus, dashboards, and data entry forms, will be designed
and developed to minimize user effort and reduce chances of errors.

User Experience Considerations:

• Apply user experience design principles to ensure that the system, when used, is not only
functional but also pleasurable. This would consider the visual hierarchy, color schemes,
typography, and feedback mechanisms such as notifications and error messages.

• The system includes user feedback loops to further refine the interface based on the needs and
preferences of users.

Wireframes and Prototypes:

Wireframes are prepared to play a visualization role in layout and user interface design. These
wireframes serve as blueprints, leading the development team toward a design in line with the
goals of the project.

Interactive prototypes are developed to simulate the user experience whereby stakeholders test
the interface prior to its full-scale development. This iterative process helps in the identification
of the usability issues at a quite early stage for resolution.

42 | P a g e
4.4. Security
Objective: Establish proper security measures for the protection of sensitive data and integrity of
the system.

• Data Encryption:

All sensitive data, be it users' credentials, personal information, and financial transactions, are
encrypted at industry-standard algorithms, like AES-256, while in transit and at rest. This will
ensure that even in cases where data is intercepted or accessed in an unauthorized manner, it
shall remain secure.

• Access Control:

It implements RBAC, allowing access to different areas of the system based on user role and
privileges. Said another way, this means there is access for configuration and management tools
for administrative users and limited access for regular users based on their roles, such as
customer or admin.

The mechanisms of authentication, like multi-factor authentication, are in place to enhance

security from unauthorized access.

Vulnerability Management:

– Security tests and vulnerability scanning on a regular basis help identify and address probable
system weaknesses. There should be patching of known vulnerabilities, updating of software
components, and hardening of the environment on the server.

– Security logs of system activities are kept, making monitoring and auditing possible for
detection and investigation of suspicious activities.

– Compliance with the Security Standards:

43 | P a g e
It is developed to be compliant with the relevant security standards and regulations, such as the
General Data Protection Regulation and the Data Protection Act 2021 of Zambia. This will help
the system ensure that it is working with best practices in securing privacy and protection of
data. It provides regular security training to administrators and users, raising security best
practice awareness to minimize the possibility of a security breach due to human error.

44 | P a g e
CHAPTER 5: TESTING (TEST DATA, TEST PLAN AND TEST REPORT).

Chapter 5 of this documentation treats testing for the Inventory Management System. This is
very essential to make sure that the system functions as expected, satisfies all stipulated
requirements, and has no defects. Testing itself is divided into three main parts: Test Data, Test
Plan, and Test Report.

1. TEST DATA

Objective: The objective is to create and use representative data to test the functionality of a
system under various conditions.

- Types of Test Data:

- Normal Data: Data that would normally be expected to be input in usual operating conditions,
such as valid inputs that should be correctly processed by the system, like correctly formatted
customer’s information, and financial transactions.

- Boundary Data: Inputs to a system that exercise the boundary values of the constraints will
ensure that the system handles edge cases well. For example, the minimum and maximum values
for inventory levels.

— Invalid Data: This is information that goes beyond the anticipated parameters, such as wrong
formats, out-of-range values, or even malicious inputs. It is used to test a system for its ability to
handle its errors and prevent security vulnerabilities like SQL injection or XSS attacks.

Large Data Sets: Voluminous data is used to test the system for performance and scalability by
simulating vast numbers of student records against peak loads of the system, simultaneous
transactions, or accesses by users.

- Data Preparation:

Scenarios are prepared to obtain realistic test data so that the test data is full scale and covers all
possible use cases. It is stored in a secure Test Database, far away from the production
environment, so as not to affect real operations. Automated scripts can be used to generate large
data sets and ensure consistency and repeatability of the test data for multiple test rounds.

45 | P a g e
2. TEST PLAN

Objective: To define, overall, the strategy and approach that will be used in testing the system to
ensure all functionalities are fully checked.

- Testing Phases:

• Unit Testing: It is the testing of each module and component of the system separately to ensure
that they work fine standalone. This targets the smallest blocks of your application, usually a
single function or method, and ensures that the pertinent difficulties in the development cycle are
identified at the earliest possible time.

- Integration Testing: System modules are integrated after unit testing and their interaction
amongst each other is tested. This phase checks that different parts of the system work with each
other as desired and that data flows smoothly between components.

- System Testing: The entire system is tested as an integrated unit for the satisfaction of specified
requirements. In this phase, the whole system is tested for functional, performance, and security
testing to prove it works as expected under actual circumstances.

- User Acceptance Testing (UAT): UAT means the testing of the system by end-users in a
controlled environment. This phase checks whether the system is going to meet their needs and
expectations; it also allows the detection of any last-minute issues prior to deployment.

- Test Scenarios:

Test Scenarios: These are designed from the system's requirements and use cases. Every scenario
projects some situation that the system should be able to handle, like user login, data entry,
generation of reports, and error handling.

- For every test scenario, specific test cases are formulated that describe what should be done,
what results could be expected, and criteria for test pass or failure.

46 | P a g e
- Testing Tools:

Automated testing tools are applied to automate the testing process, mainly in unit and
integration testing. These tools support running the test cases, comparing the actual results with
the expected outcomes, and producing reports. Manual testing is applied at scenarios that require
more complexity, especially at the UAT stage, where human judgment is necessary in assessing
the usability and general experience of the system.

3. TEST REPORT

Objective: The test process outcome is to be documented, therefore giving a very clear record
regarding the performance of the system and issues encountered in the process.

- Test Case Results:

- The results for each test case are documented based on the pass or fail of a test. Detailed
information is kept regarding failed tests, including error messages, screen shots, and logs that
may help in the diagnosis of, and fixing, the problem.

A test matrix summarizes test case results, providing a big-picture view of overall system
performance and pinpointing areas that need attention.

Defect Tracking

In the case of any defects or issues found during testing, they are logged in a Defect Tracking
System. Each defect has a severity level (for example, Critical, High, Medium, and Low) and a
priority for fixing.

All information pertaining to an issue, such as the steps to reproduce it, the environment in which
it occurred, and who is responsible for its resolution, are maintained in the defect tracking
system.

47 | P a g e
- Test Coverage Analysis:

Test coverage is analyzed to ensure that all the system functionalities have been tested. This has
a stake in which parts of the code base are run during testing but also finds out gaps that need
more testing.

The test-coverage report allows for checking that no critical areas of the system are omitted and
a comprehensive really good testing process has been undertaken.

- Final Report and Sign-Off:

A final test report is compiled, outlining the whole testing process, major findings, and
recommendations. This report will include an executive summary, detailed test results, defect
analysis, and remaining risks or issues.

This report will be reviewed and approved for key stakeholders, with sign-off obtained before
deployment to the production environment. This will seal off that the system is ready to use and
the identified problems have been addressed to an acceptable level.

48 | P a g e
CHAPTER 6: IMPLEMENTATION.

This chapter focuses on the implementation of the Inventory Management System, such as
deployment, user training, and transition from old systems in order to go live smoothly and
successfully.

1. DEPLOYMENT STRATEGY

Objective: Clearly outline a structured approach for the deployment of the system in a live
environment.

a. Environment Setup

First, setting up a production environment that includes a web server and a database server. All
essential software and dependencies—PHP, MySQL, and the required extensions—are installed.

This environment is also tested to a great extent so that it will be as proximal as possible to the
development and test environments to reduce the chance of issues during deployment.

- Staging Environment:

- System deployment into a staging environment very much alike to production: This would
allow the last testing and validation to occur under conditions very close to live.

- The staging environment means the final round of tests, including performance, load, and
security assessment testing, takes place to make sure that the system is ready to go to production.

- Data Migration:

- If this system is to replace an existing solution, a data migration plan will be implemented.
This will involve the extraction of data from the old system, transformation into the schema of
the new system, and then loading into the new database.

- Data integrity checks are run to ensure that all data has migrated accurately and completely.
Backup procedures are also in place to help safeguard the data during the migration process.

- Go-Live Plan:

49 | P a g e
 - Detail a go-live plan regarding steps to deploy the system into production, including a
timeline, assignments, and what to do in case of failures or other unexpected problems.

- Go-live is carefully coordinated with respect to the least disruption of the users; this includes
considerations for downtime, user communication, and availability of support.

2. USER TRAINING

Objective: The purpose is to assist users in acquiring knowledge and skills necessary to operate
the system effectively.

- Training Program Development:

- A comprehensive training program would be developed to envelop each and every aspect of the
system, keeping in view the different sets of users: administrators, clients, and customers.
Theoretical and practical components will both be included in the training program so that users
would be comfortable with the functionality of the system.

It develops user/training materials such as user manuals, video tutorials, quick reference guides
for the training process, and further assistance to users.

- Training Sessions:

Interactive training sessions will be conducted for the users to learn the system by experiencing it
hands-on. Demonstration sessions will be interactive, interesting, and informative on major tasks
in the system related to Data Entry, Generation of Reports, System Navigation, etc.

During the training, users are encouraged to ask questions and try out the system while
instructors walk them through it, drawing attention to all the issues.

- Ongoing Support:

- There is follow-up support after the actual training to ensure users are still in a good position
to use the system effectively. This includes a helpdesk for immediate support and follow-up
sessions to deal with any issues that arise later or to use advanced features effectively.

Feedback is taken from users themselves to fine-tune the training program me for betterment of
the user experience.

50 | P a g e
3. TRANSITION MANAGEMENT

Objective: To ensure smooth transition from the existing system to the new Multi-Department
inventory Management System with minimum disruption and ensure continuity.

- Change Management:

• Change management strategy: This would enable users to get adjusted to the new system.
Communication in terms of change, benefit from the new system, and the impact on daily tasks
is clearly explained.

• Early engagement of the user with regular updates to keep the users informed and involved is
done. This will help in building acceptance and reduce resistance to the new system.

- Parallel Running: In some cases, there is a parallel running phase in which the old and the new
systems are run in parallel for some time. This allows users to get familiar with the new system
while having the old system still at hand such that at least the loss in functionality or data is not
affecting immediately during that transition.

At this stage, data entered in both systems are checked for consistency and to ensure that
problems with the new system do not exist.

Cutover Plan:

Once the user is comfortable using the new system, a cutover plan is executed to switch fully
from the old system to the new one. A cutover plan consists of final data migration, user
transition, and the decommissioning of the old system.

• Every cutover activity will be well planned and conducted in a manner to reduce average
downtime and disruption. Once cutover is completed, close monitoring of the new system would
be done so that it can run as expected and also fixing of all the issues as soon as possible.

- Post-Implementation Review:

- A post-implementation review is carried out for evaluating the success of the implementation
process. This would involve obtaining feedback from the users, assessing system performance,
and finally looking at the efficiency of the user training and transition management strategies.
51 | P a g e
- The lessons learned from the implementation are documented for application on future projects.
Any problems or enrichments outstanding following implementation are noted for attention in a
future update or release.

4. SYSTEM DOCUMENTATION

Objective: Extensive documentation is to be developed in order to ensure the proper functioning,

use, and maintenance of the system.

- User Documentation:

- Detailed user guides covering all uses of the system are provided. This will be user-friendly
with step-by-step instructions, screenshots, and troubleshooting tips.

- The same shall be regularly updated in view of changes or any new features added to the
system.

- Technical Documentation:

Technical documentation would be targeted at system administrators and developers. This

includes system architecture, database schema, configuration settings, and integration points.

Another important inclusion in the documentation is maintenance procedures, backup and

recovery plans, and system upgrade processes, all of which ensure that the system can be
properly managed and maintained over time.

- Support Documentation:

Provide documentation for helpdesk and support staff on the most common issues and their
resolution, escalation procedures, and user support. This support should have enough
documentation itself to provide timely and effective solutions to the users so that it helps in
enhancing the overall satisfaction of the system.

52 | P a g e
CHAPTER 7: CONCLUSION AND RECOMMENDATION

Integrated inventory Management System is the one developed for application in the companies
running their units in various locations, attending to the multiple requirements of stock taking.
Across each part of this whole documentation, we have elaborated on how our system is geared
towards a strong, scalable, secure, and user-friendly solution. In other words, implementation of
this system can be a sure way to fill up the gaps between organization with regard to
administration, communication, and just the art of management at large.

Its architecture is three-tiered and designed in such a manner that makes use of a Model-View-
Controller pattern instance, and thus can be easily scaled and maintained. It allows the system to
be able to grow along with institutions served with increasing numbers of students, staff, and
branches without losing performance or security.

It has passed rigorous testing cycles from the unit, through integration, the system, and user-
acceptance levels to ascertain its reliability and intended function. The system will be ready to
protect sensitive information and maintain its integrity, with meticulous attention to security
measures covering data encryption, role-based access control, and vulnerability management.

The successful deployment and training phases have further prepared the users and
administrators to use the system effectively, with a smooth transition from the legacy systems
and the rein fabrication of the feeling of ownership and confidence in this new system.

53 | P a g e
RECOMMENDATIONS
With a service of this nature, which is so robust that deployment is certain, a few
recommendations might be considered for its further development in the future to be continued
with success and

Continuous Improvement.

The system could be revised and maintained on a regular basis, as this could reflect user
feedback and changes in technology, thereby ensuring relevance, effectiveness, and suitability
for the ever-changing needs of Business Company.

New functionalities like advanced analytics, mobile apps, or even AI-powered insight features
can be included in future releases.

- User Training and Support:

Focus in maximizing the potential of this system will be on the ongoing training and support. To
this effect, a continued training program needs to be formed such that all new staff members are
trained and existing users are kept abreast with new features and best practices.

- A support system should be made available through the use of a help desk and follow-up that
would serve to help the user to overcome and optimize the use of the system.

- Data Protection and Compliance:

- With data privacy and security growing in priority, so will the demand for constant vigil on
security measures. Auditing security for identification and rectification of vulnerabilities should
be done on a regular basis.

Evolving regulation compliance—such as protection of personal data—and industry standards

should be at the top of the list to ensure the system's legal compliance and users' trust.

- Monitoring Scalability and Performance:

- Monitor the growth in scope and the engaging of more users with the performance and extend
where the system can withstand greater loads without any reduction in the quality of service.
Frequent performance testing and optimization should be done to enhance this feature.
54 | P a g e
 - Make considerations such as cloud-based solutions or possibly going to a distributed
architecture to support the system with scalability and high availability.

- User Feedback and Community Engagement:

- Users can provide a lot of valuable insight into the system and collaborate in the process of its
improvement. There would only be a need to support forums, users groups, or at least feedback
channels to collect ideas and mutual problem solving.

- Going further and engaging the users in the development process either by treating them as
beta testers or conducting pilot programs for the new functionality will guarantee that updates
will be in sync with what the users want and expect.

- Interfacing of the system with Other Systems:

- Fuse with other inventory tools or platforms, for example perpetual inventory Management
Systems (PIMS), or even financial management software to give a wholesome and seamless
experience to the users.

55 | P a g e
References

56 | P a g e