CHAPTER ONE

INTRODUCTION

1.0 Introduction

This chapter presents the introduction to web basedsales and inventory management system for fast food restaurant. It presents the following: introduction, background of the study, statement of the problem, aim and objectives of the study, significance of the study, scope of the study, organization of the research and definition of terms.

1.1 Background of the Study

Sales and inventory management is one of the basic problems of business organizations that need to effectively manage their financial information and stock records. It may cause a lot of paper work, if there is no automated system available. Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing stock of goods. This process usually involves controlling the transfer units in order to prevent the inventory from becoming too high or dwindling to levels that could put the operation of the company into jeopardy (Bailey and Farmer, 2012).

Inventory management is primarily about specifying the size and placement of stocked goods. It is an activity specifying the shape and percentage of stocked goods. Inventory management is required at different locations within a facility or within multiple supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also concerns the fine lines between replenishment and lead time, carrying cost of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns, defective goods and demand forecasting (Dobler & Burt, 2016). Planning and controlling of inventory management is concerned with the following basic questions:

1. Which items and how much of them should be on stock?
2. Where to store them?
3. How is the re-order point defined?

To compete more effectively in a global market place, it is important that firms understand the issue of inventory control and align their purchasing to the diverse environments in which they operate. It is a paradox to note that the organizations often complain of the non-availability of some items to meet their requirement and finance department is facing the problem of increasing locked up capital in assorted inventory (Burton, 2011). Inventory constitutes the most significant part of current asset in organizations. Because of the relative largeness of inventories maintained in business organizations, a considerable sum of an organization’s fund is being committed to them. It thus becomes absolutely imperative to manage inventories effectively so as to avoid unnecessary cost and ensure high level of customer service (Dobler & Burt, 2016).

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