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Asian Development Foundation College

Tacloban City

Chapter I
The Problem and its Background
From the very earliest moments in the modern history of the
computer, the people and the business world have witnessed the
proliferation of computer system that obliges to meet the goal of
Information technology.









communication readily available through computer.

With its excellent standards and innovative brand of services, its
aims are to provide business to prefer outrageous performance of Online
Sales and Inventory System of ACME Tacloban Hardware.
Through this advancement in information, traditional business
managers are threaten with decrease of sales and fluctuation of profit if
they would stick to their old manual system of handling business
transactions. That is why computerized system is recommend to make
transactions faster, accurate, efficient and effective. This study is gear
towards this goal.

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Online Sales and Inventory of Tacloban ACME Hardware is an

inventory control system that is design to enhance the productivity of a
companys material department. This system will help them to transact
through online, and for delivery.
Since the transactions were done manually, like book keeping,
billing, information and inventory, it gave a hard time recording ordered
items and keeping the records of stocks. Thus, proposed Online Sales
and Inventory System of Tacloban ACME Hardware will help them to
lessen to eliminate problems on sales, storage and retrieval of inventory
data for the inventory status.
Statement of the Problem
This study aimed to develop an Online Sales and Inventory System
of ACME Hardware. Specifically it sought to answer the following
1. What problems are commonly encountered on the current Sales
and Inventory System of Tacloban ACME Hardware?
2. What must be proposed to improve the current Sales and
Inventory System?

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3. What are the input needed to develop a system that can improve
the current Sales and Inventory System?
4. What are the assessment of the respondents on the developed
Online Sales and Inventory System of Tacloban ACME Hardware in terms
a. Content
b. Usefulness

Theoretical Framework
There are various problems in the existing sales and inventory
system has been detected using manual system in the preparation of the
Sales and Inventory in every company. The problem in the record
transaction as: Delays, errors, omission, and the like result of
misinformation to the management of the availability of stock and sold
items. Because of this problem its affect the effective decision on the part
of the management.
A proposed online sales and inventory system would eliminate all
this problems. Efficiency in the process obtained and brings satisfaction
for both management and company.
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Sales and Inventories are materials stored, waiting for processing,

or experiencing processing. They are everywhere throughout all sectors of
the economy. Observation of almost any company balance sheet, for
example, reveals that a significant portion of its assets comprises
inventories of raw materials, components and subassemblies within the
production process, and finished goods. Most managers dont like
inventories because they are like money placed in a drawer, assets tied
up in investments that are not producing any return and, in fact,
incurring a borrowing cost.
They also incur costs for the care of the stored material and are
subject to obsolescence. In the last two decades there has been a spate of
programs developed by industry, all aimed at reducing inventory levels
and increasing efficiency on the shop floor.
Nevertheless, in spite of the bad features associated with
inventories, they do have positive purposes. Raw material inventories
provide a stable source of input required for production. A large inventory
requires less replenishment and may reduce ordering costs because of
economies of scale. In-process inventories reduce the impacts of the
variability of the production rates in a plant and protect against failures
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in the processes. Final goods and inventories provide for better customer
There are other kinds of inventories, including spare parts
inventories for maintenance and excess capacity built into facilities to
take advantage of the economies of scale of construction. Because of
their practical and economic importance, the subject of inventory control
is a major consideration in many situations. Questions must be
constantly answered as to when and how much raw material should be
ordered, when a production order should be released to the plant, what
level of safety stock should be maintained at a retail outlet, or how in
process inventory is to be maintained in a production process. An
inventory is represented in the simple diagram of Fig. 1. Items flow into
the system, remain for a time and then flow out. Inventories occur
whenever the time an individual enters is different than when it leaves.
During the intervening interval the item is part of the inventory.
Flow in Inventory level
(Residence Time)

Flow Out

Figure 1. A system Component with inventory

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Figure1 represents a manufacturing process that takes a fixed

amount of time. A product entering the box at one moment leaves the
box one hour later. Products arrive at a rate of 100 per hour. Clearly, if
we look in the box, we will find some number of items. That number is
the inventory level. The relation between flow, time and inventory level
that is basic to all systems is inventory level = (Flow rate) (Residence
time) (1) where the flow rate is expressed in the same time units as the









products/hour) (1 hour) = 100 products.

These questions are amenable to quantitative analysis with the
help of inventory theory. The application of scientific knowledge of
managing sales and inventory control which is called computer-assisted
instruction is given importance today. What is given emphasis in the job
market are variety of issues and opportunities for the graduates to realize
and be aware the importance of computer skills they need to acquire to
the present demand of the modern version of computer era.

Conceptual Framework

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The study would focus on trying to come up with a better

alternative in terms of Sales and Inventory System, which at the present
is being done manually for the most part.
The said alternative would be the Online Sales and Inventory
System of Tacloban ACME hardware.
It is expected that upon its implementation, all processes
connected to Online Sales and Inventory System of ACME would be more
efficient and effective.

from books


Programming &
System Testing


Online Sales and

Inventory System
of Tacloban ACME


Fig. 1.1: A schematic diagram of the development of the proposed

Online Sales and Inventory System of Tacloban ACME Hardware.

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Scope and Delimitation of the study

This study is delimited to the assessment of the existing sales and









introduction of online sales and inventory system. It is further delimited

to the identification of the significance of the new system to the company,
the costs relevant to its implementation and the persons involved in its
The study is further delimited to the suggestions which are offered
by the researchers with regards to the use of the proposed system.
The study limited itself to the respondents mentioned above,
because the researchers believed that such information needed for the
purposes of the study could be gathered.
This proposed system study is an important aspect in coming up
with Online Sales and Inventory System of Tacloban ACME Hardware.
One of the objectives of the study was to keep track the outgoing
products, availability of products, and the number of items or remaining
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In this research study the manual process or system used by the

said hardware was replaced by the automated one.
Significance of the Study
With the implementation of the Online Sales and Inventory System
of Tacloban ACME Hardware will be able to closely monitor its inventory
and sales flows, accurate and updated reports, systematic record keeping
and other intangible advancement thus providing quality service to its
Specifically, information offered by the study would be greatly
beneficial to the following:
Customer. This system will provide them an accurate information,
fast transaction and accessibility.
General Manager. This system will provide him with accurate,
speedy and updated information and reports, keep track with the
movements of inventories and efficient flow of sales transactions used in
decision making.
Employees. This system will help them in the effective and efficient
performance of their tracks more specifically in the recording and

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preparations of reports.
Researcher. This system will serve to a more in depth development
and implementation of sales and inventory system and related studies.
Future Researcher. This system will serve as guide to a more in
depth development and implementation of sales and inventory system
and related studies.

Definition of Terms
The following terms are defined operationally, some conceptually to
give the reader a clear understanding of the terms used in the study.
Cost benefit. Analysis is done to determine how well, or how poorly, a
planned action will turn out.

As a person or organization that a market believes will

benefit from the goods and services offered by the marketers serve
as client that buys items.

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Refers to the people or the working taskforce of Tacloban

ACME Hardware, who serve the clients by way of verifying the

clients order.
Inventory report. This is a written document describing the list of
supplies on hand.

This is the making of an itemized list of merchandises or

supplies on hand. The process of listing articles, supplies of

materials with the description quantity and value of each item.

Refers to the proposed computerized system that can be

accessed by the user from one pc to another through internet.

Online Ordering System.

E-commerce functions where a company

allows customers to order products or services via other website.


Is a naturally occurring or designed sequence of operations

or events, possibly taking up time, space, expertise or other

resource, which produces some outcome. A process may be
identified by the changes it creates in the properties of one or more
objects under its influence.

Net income from business.

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An organized list of instructions that, when executed, causes

the computer to behave in a predetermined manner. Without

programs, computers are useless.

Is the collection of computer programs and related data that

provide the instructions telling a computer what to do.

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Chapter II
Review of Related Literature and Studies
Foreign Literature
According to Jeff Wourio, online sales and inventory system are
designed to immediately record any and all sales and inventory
transactions. Not only does that mean timely and accurate sales
tracking, but this system also lets one readily identify inventory levels,
particularly when what you have on the books doesnt jibe with actual
stock. Little is more maddening to a business owner than watching his or
her staff bogged down with inefficient, unproductive responsibilities,
from double-checking his inventory disparities to seemingly endless
cash-register reconciliation. Perhaps the greatest advantage to a
comprehensive point-of-sale network is the freedom it can afford on
personnel to devote their energy to what genuinely matters the most
helping customers.
According to Donald Reimer and Ravi Nayar they disclosed that
maintaining the right inventory levels is tough challenge. If not properly
managed, the inventory can result in a significant expense. Looking over

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the shoulder is the lender who is concerned about the cost of carrying
too much inventory which can affect profitability.
Fortunately, there are management information systems that exist
which use microcomputers and variety of industry specific software. The
cost of carrying inventory today has become a major expenditure and
requires immediate attention. The benefits of inventory control far
outweigh the costs. Any reduction in inventories, whether it is raw
material, work-in-process, finished goods or supplies, can have a
dramatic impact on your bottom line.
Industry averages suggest that a 20 percent reduction in inventory
is achievable with an online inventory control system. For a company
with a yearly sales volume of $1 million, such a reduction would result in
savings of $14,400 per year and would free up $48,000 of new dollars for
reinvestment. For a company with a yearly sales volume of $10 million,
the figures are proportionately higher:$144,000 per year in savings and
$480,000 in a new dollar for reinvestment.
According to that was
founded in 2002,Unique Data Solutions began consulting with hardwood
lumber companies to grasp the unique requirements of the hardwood
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lumber industry, and after years of

research and development,

Lumbergear software was rolled out. Despite the fact that we come from
modest beginnings and have come a long way, they continue to provide
their customers with quality service and innovative technology solutions.
Lumbergear sales and inventory software is a powerful, affordable
and easy to use lumber business management system that increases
efficiency in the workplace. They give control of hardwood lumber
inventory and costs. The system also features a core set of modules that
make it possible to run lumber operations effectively, and get products to
customers on time.
The aforementioned lumbergear system specifically helps manage
and maintain inventory and costs for hardwood lumber and distribution,
and wholesale operations. Lumbergear is flexible system that can be
used by wholesalers, kiln facilities, hardwood and softwood lumberyards,
brokers, lumber sales, and sawmills.
LumberCell is a new software add-on that works hand in hand
with Lumbergear in real-time. A mobile transaction processing system,
and is compatible with the most hand held devices such as Blackberry,
Pocket PC, and others. LumberCell allows mobile workers to be
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productive on the road. A Non-Parametric Asymptotic Analysis of

Inventory Planning with Censor and Demand of Columbia, School of
Operations Research and Information Engineering, Cornell University,
Ithaca, NY 14853. They conduct a stochastic inventory planning with lost
sales and instantaneous replenishment, where contrary to the classical
inventory theory; the knowledge of the demand distribution is not
available. Furthermore, they observe that only the sales quantity in each
period and lost sales are unobservable, that is, demand data are
The manager must make an ordering decision in each period based
only on historical sales data. Excess inventory is either perishable or
carried over to the next period. In this setting, they propose nonparametric adaptive policies that generate ordering decisions over time. It
shows that the T-period average expected cost of our policy differs from
the benchmark newsvendor cost-the minimum expected cost that would
have incurred if the manager had known the underlying demand
Local Literature

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Salavador P. Catelo denoted the importance of the Philippine Retail

Food over the past decade. The Philippines witnessed a substantial
growth in the retail industry. Although there is dearth of recent literature
and statistics to support this observation, a reconnaissance of places
especially in the urban areas can attest to this. Growth is seen not only
in terms of numbers but more visible in terms of size, investment on
structure and modernization in operation.
Digal (2001) pointed out that the Philippine retail industrys
performance comprises about 11 percent of the Gross Domestic Product
(GDP) in 1997. There are clear indications that this magnitude has been
more or less maintained in the past 3 years. Total retail sales in 2002
increased by 11.1 percent and its GVA contributed 10.6 percent to GDP
in the same year. About seventy-three percent (72.84 %) of this share
was in the trade sub-sector while 25.43 percent was in the service sector.
From 1981 to 1997, the industry grew by 5.83 percent annually,
outpacing the average annual GDP growth rate of 2.27 percent over the
same period.
Combined with the wholesale sector, the industry absorbed 15
percent of the countrys employed labor in 1998 (Digal, 2001). The food,
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beverage and tobacco industry contributed 37 percent of the total

employment in the wholesale and retail industry in the Philippines in
1995. Within the food sector, 87 percent of the total employment comes
from small food retailers with less than 10 employees (Digal, 2001).
In the Philippines, food retailing industry involves a wide array of
sellers from the sidewalk vendors, wet and dry markets, sari-sari stores,
groceries, supermarkets, hyper marts, warehouse and discount clubs
and convenience stores. Food means brisk business. Food is intricately
linked with its culture and traditions. In the family, food accounts for 43
percent of total expenditures. Outside the home, eating has become
lucrative for the retail business. Expenditures for dining out, excluding
corporate representation registered an average growth rate of 15 percent
to 20 percent per annum in the last 10 years. In the quick service or fast
food segment, the total market in 2000 was over PhP 30 B. (Palma,
2005). According to the Family Income and Expenditure Survey (FIES) of
the National Statistics Office (NSO), household spending on food
increased by 26 percent from 1997 to 2000. Personal consumption
expenditure (PCE) on food and beverages in 2002 reached about PhP 448

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B from PhP 401.7 B in 1998, or an average annual growth rate of about 3

percent (Omana, 2005).
Motor Image Pilipinas (MIP), exclusive distributor of Subaru in the
Philippines reported a year-end sales performance of 602 units, marking
an increase of 100 percent from 2007. It also registered the biggest
growth in performance in the Philippine automotive industry based on
the figures released by the Chamber of Automotive Manufacturers of the
Philippines (CAMPI). Subaru has been the fastest growing automotive
brand since its arrival in 2006 and Motor Image has announced plans to
expand its business in 2009.
Since its arrival in 2006, Motor Image Pilipinas has continued to
sustain its growth in the market with Subaru establishing itself as the
premier sport-luxury in the country. In 2008, Motor Image launched three
new models that further strengthened its position in the market; the
luxury SUV Tribeca, the 300-hp WRX STI and the third generation
compact SUV, the Forester. Aside from these three models, Motor Image
has also made available other well- known Subaru models such as the
Outback, the Legacy and Impreza 2.0R variants.

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According to Henry Sy started to work at an early

age of 12, usually manning the small family sari-sari store and preparing
the traditional way of recording the sales and inventory control. Shortly,
Sy thought of selling small portions of their grocery items to
accommodate customers buying small volumes of products. Thus, the
concept of retail marketing came to his mind. He entered the buy-andsell industry to obtained funds to start his own retail business. Sy
imported retail products from the US and sold it in the Philippines and
the rest as they say was history. Mr. Sy is now the CEO and the founder
of the SM Prime Holdings- one the largest publicly-listed companies in
the Philippine Stock Exchange.
Related Study
An Online Inventory Control System can also help company with
new inventory management techniques such as Just-in-time (JIT). Such
techniques cut the use of company resources such as warehousing,
equipment and personnel. However these techniques require error-free
environments and better control over inventory since the buffer zone to
compensate for the errors is less.
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Computer technology has provided opportunities for improving

instruments management. Online inventory management system has the
capability to manage and process large volumes of data quickly and
provide reports that help the healthcare facility do a better job of
managing its surgical instrument inventory. It is important to be aware of
which systems are currently available in the marketplace and what they
offer. Most computer management systems track the instrument set
through all processes and service. Others have additional options, such
as instructional features online, instruments preventive maintenance
reminders, and employee tracking for productivity.
Although an automated system may require a substantial initial
investment, it has proven to be a cost effective instrument management
program. According to Valerie DeVries, RN, sterile processing manager at
Lenox Hill\hospital in New York City. It may cost thousands of dollars,
but its worth it. Now we can find the trays. At Lenox Hill, we have a
outrageous volume of instruments inventory. However, the system




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When it comes to inputting data, bar coding, is a valuable tool.

Inputting data using a bar code system is a definite time saver over
annual input as long as the information is recorded at time of use. Bar
coded trays and a bar code scanner provide improved tacking of
instrument sets. Using a tray system that provided a location for labeling
as well as the ability to bar code is a clear advantage.
Improving information management has become the critical issue
for most small retailers, says Judy Newdom, a principal of Computer
Sciences Corporation national retail practice, based in Cleveland, As a
result, cash registers at many small businesses have been transformed
into Online POS Systems. Silverman say he selected the upgraded
CounterPoint software after evaluating other packages because it would
run on the assortment of POS hardware his firm already had. Switching
to competing POS software would have required Blades to purchase new
hardware, he says.
The new version of CounterPoint gives the company a quicker, a
more accurate, and more detailed picture of its sales and inventory than
the previous version. Moreover, the program can be tied into the firms
accounting software. Dynamics, from Great Plains Software Inc. of Fargo,
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N.D. This enables each sale to be entered instantly into the accounting
The aforementioned related studies seem to reveal the strengths
and weaknesses of the Sales and Inventory System both local and
abroad. Thus, the writes cited the aforementioned studies since it served
as a guide to the present study.
The Quasem Dry Cells Ltd is an old and premier manufacturing
company of Bangladesh. The factory of the company is situated in
Tangail district. The company mainly produced various types of batteries.
The demand of the product of the company is high. So, the company has
to follow a proper inventory management system. The company follows
Safety Stock inventory management system.
Safety stock system helps the company to fulfill its market demand.
For instance, the demand of inventory is likely to fluctuate from time to
time. In particular, at certain points of time the demand may exceed the
anticipated level. In other words, a discrepancy between the assumed
and actual usage rate of inventory is likely to occur in practice. Similarly,
the receipt of inventory from the suppliers may be delayed beyond the




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transportation and other bottlenecks. Thus, a firm would come across

situations in which the actual usage of inventory is higher than
anticipated level and or the delivery of the inventory from the suppliers is
delayed. The effect of increased and or slower delivery would be a
shortage of inventory. That is, the firm would face a stock-out situation.
This, in true, as explained in detail below, would disrupt the production
schedule and alienate the customers. The company would, therefore, be
well advised to a keep a sufficient safety margin by having additional
inventory to guard against stock-out situation. Such stocks are called
Safety Stock. This would act as a buffer or cushion against a possible
shortage of inventory caused either by increased usage or delayed as the
minimum additional inventory to serve as a safety margin or buffer or
cushion to meet an unanticipated increase in usage resulting from an
unusually high demand and or an uncontrollable late receipt of incoming
RFID Tracks Jewelry Sales, Inventory of Middle East, they created
a study wherein once the tag is applied to a piece of jewelry, a store
employee uses a handled interrogator

to capture the tags unique

identification number, then again on a daily basis for inventory

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management. Any attempt to cut the cord disables the tag, making it
impossible to transfer it from one piece of jewelry to another one that is
cheaper in an attempt to disguise a theft. The data related to those daily
read is transferred to an inventory database managed by TJSs software
service, and TJS forwards a daily report to the bank. The database
contains detailed information on each piece of jewelry. The system can be
operated as a stand-alone system or integrated with the stores IT system.
Handheld interrogators manufactured by Feig Electronics, or by PDA
reader module supplier ACG, can be waved a few inches above the
jewelry to retrieve information about the item from the database. When
the store sells a product, employees scan the label once, and then cut the
tag, disabling it. The tags are then returned to Sokymat, which removes
the chips from the hard plastic cases and put them into new casings.
While the system offers special advantages to the Middle East, where
bank ownership is an attractive option, the system has also caught the
attention of jewelry retailers worldwide. From a technical point of view,
its a solution for the whole world, Nasser says. Not everyone needs a
financing solution; instead, its about inventory management. TJS

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charges the stores a monthly fee for the system, depending on the size of
the retailer.
By June, Nasser says, its system will be deployed at 25 locations.
The company is not the only one offering an RFID solution for jewelry
retailers. French RFID systems manufacturer Tagsys and Swiss auto-ID
software solutions provider Solid have co-developed a 13.56 MHz RFID
system aimed at increasing inventory accuracy and reducing theft. Swiss
watch and jewelry maker de Grisogono has developed the system at its
stores in Geneva and Paris, and also plans to roll it out across all 15
worldwide retail locations by the end of the year.
A prototype warehouse sale order and inventory system via Pocket
PC phone using GPRS communication has been created for sales
departments in tire factories to manage with sales orders effectively and
efficiently. This prototype will work as the order-center for administrators,
sale persons and customers. This warehouse sales order system has
been created using PHP, which is server side script and MySQL, which is
a database program. The application has five sections: Firstly, a product
data management system and sale order data management through
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Secondly, a sale person-order system through website via a

computer PC or laptop. Thirdly, a customer-order system through website
via a computer PC or laptop. Fourthly, sale person-order system through
website via a pocket PC phone. Fifthly, a summary report system for the
manufacturing department and director.
The system will require an internet network for a computer PC or
laptop, and the GPRS communication network for a pocket PC phone.
After the application was implemented by sale persons, customers and
administrators, the result of order products through websites was very
satisfactory. It decreased the order processes, and at the same brought
information technology to apply to the sale process. It reduces the
processing time by 77.98 percent and increased satisfaction for all users.
Local Study
Michael Cruzs of De La Salle College of Saint Benilde a graduate of
Bachelor of Science in Business Administration, Major in Information
Services Management by 2004-2007 and Senior Business Systems
Analyst of KFC Philippines. He conducted a research study on Enterprise
Content Management to any store or company which tackles sales and

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inventory control that aims to help concessionaires in their inventory

stocking and as well as in preparing their sales report.
A Research Study of Longjas Trading Online Sales and Inventory
was conducted by the students of Leyte Normal University Computer
Science Department. They develop a system with high levels of reliability
and availability required of business-to-consumer Websites that requires
not only great technology, but also great operational processes. Building
a scalable, highly available application is a necessary process in
becoming functional as an e-commerce entity.
They have tried developing the most basic modules required in an
online business, using MySQL-server, PHP and Apache Web server. All of
the key processes and tools are covered in this store from retail storefront
to back end management.
Another research study with the title name Sales Inventory for
Gaisano Capital Tacloban Branch, that was conducted by the group of
researchers of Eastern Visayas State University Bachelor of Science in
Information Technology Students. The study also deals with sales
inventory wherein the customer will purchase the item, and then the
cashier will scan the barcode to the barcode reader machine and
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automatically compute the sold items, available and generate sales

inventory report. The objectives of their research study is to have an
accurate sales, stock, availability of an items, lessen the work load of the
management employee and have smooth flow of sales inventory.


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Chapter III
This chapter contains the discussion of the research design, the
locale of the study, the respondents of the study, research instruments,
and validation of instruments, research procedure and statistical
treatment of the data used in the study.
Research Design
The descriptive method of research will be use in this study with
the questionnaire as the main tool in gathering the needed data. Also use
to obtain information concerning the current status of the phenomena to
describe what exists with respect to variables or conditions in a
situation. The methods involved range from the survey which describes
the status quo and deals with everything that can be counted and
studied to justify the validity of the research study that is beneficial to
the company, schools and future researcher.
The method revealed the personal background of the company and
the status of the system, as well as certain perceptions of the type of
system, how the present system works, as well as certain files and the
common problem encountered in using their present system.
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The different personnel in the company will also be interviewed in

order to document the exact work of each employee and so that the data
that have been gathered will be analyse and interpreted by the researcher
in the development of the propose system.
Research Locale of the Study
The study was conducted at Tacloban ACME Hardware at Rizal
Ave., Tacloban City. The main objective of their company is to meet the
satisfaction of Utheir customers and to have a quality products.




Rizal Avenue


Salazar Street


Del Pilar Street

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Respondents of the Study

The respondent of this research includes the Branch Manager (1),
sales lady (4), Cashier (1), Delivery Boy (1), Stockman (1), and Customer
(250) with the total of two hundred fifty eight (258) respondents of
Tacloban ACME Hardware.
Research Instruments
Since this study is designed to implement the proposed Online
Sales and Inventory System, the researchers used questionnaire and
interview as instruments in gathering data and information.
Validation of Instruments
The gathered data by the researcher was validated by Krystel Ann
Doyon, branch manager of Katrina
Research Procedure

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The researcher have ask permission from the branch Manager of

Tacloban ACME Hardware before gathering data and information needed
in the study regarding the history of the business and the problems
encountered in their current system through a proposal letter and
permission to conduct interviews.
Statistical Treatment of Data
The data gathered will be tallied, organized analysed and
interpreted with the use of appropriate tools such as the following.

Percentage Formula:


* 100

P = Percentage
f = Frequency
n = Total number of Respondents
Weighted Mean. This was used to determine the respondents
assessment of the system in term of content, manner of presentation,
and usefulness of materials.

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The qualitative description of the weighted mean was determined

using the following scales.

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