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E-Com Software: Hosting Edition Merchant Edition Snowbird Flyer
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Inventory
System
The primary purpose of the
Inventory System (I/V) is to file receipts and disbursements of inventory for
reference by the various reports provided.
Through analysis of the reported data, you can see cost trends for
products, cost history from vendors for the same products, usage of products
over a period of time, which products turn faster than others by dollar volume,
where to place products within the warehouse based upon quantity volume
movement, etc. Since the
information is stored in a data base format with each entry containing a full
six digit date, most of the reports ask for a date range to be specified by the
operator. This gives you the
ability to have the system report data compiled by the day, week, month,
quarter, year, or any other period desired.
Most reports ask for a level of detail which gives you control over the
amount of information produced. Multiple warehouses are maintained by
assigning a two character code to each. The
warehouse code is entered by the operator on the various programs that either
receive or disburse inventory, allowing the flexibility of receiving or
disbursing from any warehouse known to the system. You can also transfer inventory that can be physically moved
from one warehouse to another. You can print a price list and master
catalog with one of the report programs. The
catalog can be sorted by product code, vendor code, group, type, or description.
The program allows you to define a beginning and ending code so you can
print a segment of the catalog. In most warehouses, 80% of the movement
is by 20% of the products. Similarly,
80% of the dollars moving through the inventory comes from 20% of the products.
Since the goal of inventory control is to have items in stock close to
100% of the time when they are needed, but also to have the absolute minimum
dollar invested, you should break the inventory down by classifications.
The A,B,C classification design follows the following definitions:
A - high-dollar movement
B - medium-dollar movement
C - low-dollar movement This classification does not attempt to
define the significance of a product. Just
because a product is classified as a C does not mean it is acceptable to allow
the stock to deplete. It simply
gives us a basis to define the attention one should place on the control of the
products. Since A products have a
high dollar amount of movement, one can afford to spend some time, analysis, and
effort to manually define their stocking levels and reorder quantities.
The B products are controlled by the computer automatically, by using an
economic order quantity that considers cost of ordering and cost of storage.
A product that is classified as C is also controlled by the computer but
with a simple minimum and maximum level to maintain on hand. The minimum is high enough to handle the normal usage rate
with the maximum taking into consideration a safety stock level. The I/V Classification Report
automatically assigns classifications to each product based on history of usage.
You should have at least one year of history in the inventory system
before using this program to assign classifications.
History can be keyed in for prior periods if the automatic classification
is desired before the system has been in place for a year.
The classifications can also be assigned manually to serve the same
purpose to the rest of the reporting system that concerns itself with low stock
levels. Reports of inventory currently on hand
are provided to show information by product and by warehouse.
An I/V Aging Analysis Report ages the dollars on hand for each product
into date columns which gives management an idea of how long certain product
dollars have been in the inventory. Usage reports are provided in the form
of sales reports. Sales can be
reported for any range of products and for any period of time by product,
customer, or division. Purchases reports include detail and
summary information for any range of products and period of time.
The order of the information is by product or by vendor. A program is provided that calculates
reorder points and quantities based on the classification code assigned to each
product. The program skips A
products because those are defined by manual methods.
B products are assigned a reorder point and economic order quantity
factors such as lead time, cost of ordering, and cost of storing the product.
C products have a minimum stocking quantity established based on
historical usage. A safety factor
is then applied that establishes the maximum.
This program is run periodically to keep the information valid with
current trends. At the end of each inventory posting,
the low stock report advises of any products sold since the last posting that
have dropped below their reorder point or minimum stocking level.
Another report checks the entire warehouse inventory and advises the
purchasing department what to order, the quantity to order, and the last five
purchases showing vendor, quantity, and cost of those orders. A status program allows the operator to
obtain instant on-hand status for a product at all warehouses.
The information shown includes quantity on order, last vendor, last cost,
average lead time to receive the product, and other information to help answer
questions that arise if the product is not in stock. The I/V System also has a complete
design for a physical inventory which includes cycle counting. Count tags can be entered and printed for audit purposes.
Posting the count tag information produces an Physical Adjustment File.
Reports from the Physical Adjustment File show the book to physical
adjustment necessary for both quantity and cost per product per warehouse.
This file posts the inventory files, making automatic adjustments of book
to physical count. Another report lists items that were not counted and adjusts
their quantity and cost on hand to zero if desired. Additional Features:
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