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Kudler Fine Foods Systems Development

Essay by   •  November 23, 2010  •  Case Study  •  2,249 Words (9 Pages)  •  1,729 Views

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Systems Development Life Cycle Paper

Company Description

Kudler Fine Foods is a specialty food store, which has three locations in the San Diego area. The store's owner, Kathy Kudler, opened the first store in 1998, with a second store opening in 2000 and the third location opening in 2003. There is no central purchasing. Instead, each store manager places purchase orders directly with the suppliers. The owner also places orders from time to time on specialty items or items purchased in bulk. The store managers are encouraged to combine purchases with the other store managers when possible to take advantage of bulk quantities. Accounting data is provided by the cash registers that are used in each store at check-out to record all items for daily sales transactions.

The company has had a problem of keeping enough of some items in stock and tying up money in items that are not moving well. Kudler's business success depends on being able to provide total customer satisfaction, so efficient inventory control is essential.

Overview of Existing Computer System

The current POS system provides sales figures daily which have to be manually input into the accounts receivable module of the accounting software system. The current system is an outdated cash register system, which has no interface to the accounting software package. There is no report available with this system to forecast future sales based on historical information. Each store manager enters purchase orders from each location directly to the AP module. The current computer system does not have an inventory control module, so there is not a good system for monitoring low inventories or to trace items that are not moving well.

Summary of Computer-related Needs and Problems

Since there is not always good communication between the store managers when ordering product, excess inventory is a concern. With their other responsibilities, the store managers probably do not do the best job of combining purchases with other stores to take advantages of the economies of scale. They have found themselves in a position where they have been short on hot merchandise due to a failure to anticipate the demand.

The other problem area this project is targeting is the sales forecasting function for each store and for the business as a whole. The stores have historically had a difficult time trying to forecast what and how much of certain items to carry throughout the fiscal year. Equally difficult has been trying to determine the "turning points" of increasing sales to decreasing sales - in other words, when to keep certain items in stock due to high demand and when to keep inventory low due to low demand. This weakness has left them with merchandise that they have had to discount at a loss in order to clear that merchandise from their shelves. The opposite has also been true. This purchasing system is obviously not efficient.

Objectives of this Project

The objective of this project is to implement a centralized system that links the three stores together in order to accurately track sales and company profits and provide an accurate forecasting tool. One requirement of this centralized system is inventory tracking. All new shipments would be entered into this system by the store manager as each shipment arrives. Each time the store employees scan items at the cash register for purchase, the total items are deducted from the inventory available in the system. This will enable store managers to accurately track total inventory and allow them to order additional items when necessary. Reports will be generated so that the purchasing managers will have a current count of every store's inventory to assist in re-ordering of products.

The second objective of this project is to find an efficient tool for forecasting sales for each location and for the business as a whole. This inventory control system should be able to solve the problems mentioned. The purchasing manager and the store owner should be able to determine at what volumes the store manager and inventory manager will be alerted when additional items needs to be ordered. This may change on a month-to-month basis depending on the demand of the item as determined by forecasting. Once the volumes are set by these individuals, the store manager and inventory manager will be updated via a pop-up screen that indicates which items are low and the quantity left in the store. The alert will also include a recommendation for the quantity needed that will be based on the quantities ordered during the previous year and month to help the manager determine how much should be ordered.

Another objective of the centralized system is forecasted reporting broken down by store item as well as overall store sales. By forecasting, the system can sync up total items sold for all stores to determine the demand for each item over a specified period. Purchasing managers can use this reporting to ensure store managers are not ordering too much or too little of a certain product. Forecasting allows buyers, purchasing managers, owners, and store managers to see month-by-month trends over yearly periods to assist in budgeting. Forecasting also allows marketing to project low sales periods throughout the year, which helps in creating strategies to increase sales through promotions, etc.

The last requirement within the new system is centralized purchasing. Since the stores are not always able to communicate with each other on items needed, this system will automatically combine all store orders that go to the purchasing manager. Store managers will enter items needed through the centralized system. These orders will then be sent to directly to the purchasing manager in an order database to verify and approve the orders. The assistant buyer will be able to ensure the items are ordered in bulk when available to reduce costs and take advantage of possible volume discounts. In addition, this will help the owner and purchasing manager audit the process from beginning to end to ensure proper quantities are being ordered and accounted for in the tracking system.

There are going to be budget constraints on whatever solution we put forth, so we need to see what monies can be allocated to our project so we can determine the scope. There is $144,900 in the information technology capital budget, which is allocated between web site development ($45,000), replacement of finance and accounting system ($22,500),

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