Capstone-Chapter-1-3.docx

SOUTH EAST ASIAN INSTITUTE OF TECHNOLOGY
COLLEGE OF INFORMATION AND COMMUNICATION TECHNOLOGY
National Highway, Crossing Rubber, Tupi, 9505
South Cotabato, Philippines
CHAPTER l
INTRODUCTION
RATIONALE OF THE STUDY
Point of Sale systems is very important to a business that involves sales,
even if it is only a small convenience store or a big company. The point of Sale
system helps to automate the sales invoices of every customer in the store and
can easily record every sale transaction of the customer. In that way, the staff does
not take a lot of time servicing a single customer and can make the transaction
faster. Retail businesses also need an Inventory system for managing their stocks
and tracking the volume available for every product. Being aware of your stocks in
your store helps you to manage well your business and avoid future problems in
terms of under stocking. The inventory system can also track the transactions
when adding a product in the store and automatically update the volume of every
product that is available.
There are several problems encountered in the company, one of them has
the capability to reduce the performance of the employees and the company itself,
and those problems have not been given a solution. Their staff has experienced
difficulties in working in the company because the current system that they use
cannot monitor the stock levels in the inventory that will lead to understocking or
overstocking. Furthermore, the current system cannot generate proper receipts
due to bugs and errors that can lead to a problem for the customers also. The

company is located at Public Market, Barangay Poblacion, B. Cornejo Sr. St, Tupi,
South Cotabato, and is in action for a few years. As time passes by, the company
has grown and has another branch built located at Purok 2-A, Brgy. Poblacion,
Tupi, South Cotabato. Their staff are only a few and vary from the cashier,
assistant, and manager. They use pieces of equipment like a barcode scanner,
system unit, monitor, and printer that will help them reduce the workload and
efficiently and effectively increase the productivity of the company. The business
process of the company using the current system is only scanning of items and
giving appropriate change to the customer. While having our system can scan
items, generate proper billing statements, adding of stocks to the inventory, and
can generate sales reports.
The main problem in the company is that the current system lacks
maintenance and cannot function properly due to some issues. These problems
occurred because of bugs, errors, and some external factors that affect the
hardware component of the system. Initially, the system functions properly as it
should be, but due to some issues, the system malfunctioned unable to do the task
it's required to perform. During the billing phase, the printer produces some
unknown characters, adding items in the inventory is no longer operable. The
manager, assistant, and cashier noticed the malfunctionality of the system and
experienced the malfunctionality of the system, and decided to take action before
the company’s performance dropped to the bottom.

The benefits of the system when it is implemented are the following: It
can generate detailed reports that enable the manager to monitor the performance
of each branch, it can produce proper billing statement that allows the customer to
review their purchased items. Furthermore, the system can monitor the availability
and quantities of stocks to avoid understocking and overstocking, items in every
branch.

OBJECTIVES OF THE STUDY
The system will help the manager to automate the sales and invoice of
every customer and also to keep track of every transaction in the inventory of every
branch. Then, all the data of every branch will be uploaded to the main server.
Specific Objectives:
 With this system, the current system will be improved that has a centralized
system and can monitor every branch’s performance.
 The proposed system will improve the current system that it can able to monitor
the availability and quantities of stocks to avoid under stocking.
 With this system, the current system will be improved that can able to
automatically generate detailed sales reports for the owner or manager to
evaluate the sales performance of the branch.
 This system will improve the current system that can able to generate printed
receipts to help the customers review their purchases.
 This system will improve the current system that can able to add or update an
item/product in the inventory.

SCOPE AND LIMITATION OF THE STUDY
Scope of the study
The proposed system is not only applicable to The Exit convenience store
but also to other stores that also have more than one branch to manage.
This system will automate the invoice of every customer by the use of a
barcode scanner that can automatically record the sales, then it will print
the receipt for the customer. The proposed system also has an inventory
system that can monitor the available products and their volume, the
transactions of every product when adding stocks to the inventory. Also, this
system has a main server that is stored online to centralize all the branches.
For Point of Sale system:
- Sales Invoice
- Invoice printing
For Inventory system
- Adding Product
- Searching of Product
- Updating a Product

Limitation of the study
The proposed system main server cannot add, edit or delete a product. The
Point of Sale and Inventory system cannot also be accessed or used online by the
manager or staff.
SIGNIFICANCE OF THE STUDY
This project aims to help the store of Mr. Mercado to summarize sales,
monitor stocks, and record, transactions that can greatly help the business process
of the store. It can help his business to be more successful and more competitive
in the business sector.
Staff
One of the beneficiaries of the system that can make their workload a lot
easier than in manual transactions.
Owner
The one that can greatly benefit from the system. It will help the owner to
track the sales, logs, inventory, stocks, and transaction records.
Customer
One of the beneficiaries of the system to help them automatically calculate and
review their purchases made in the store.

Researchers
This study will serve as an experience for the researchers to gain and improve
their current skills in developing a Point of Sale and Inventory system. This will also
help the researcher to prepare for their future jobs as they already have an
experience and knowledge about how to develop the said system.
Future researchers
The Exit Point of Sale system will serve as a guide to future researchers for them
to have an idea on how to develop this kind of system.

FLOW OF THE STUDY
INPUT PROCESS OUTPUT
 Branch data
upload
 Enter product
name
 Choose
category
 Customer order
 Input item
details
 Compute data
of every
branch
 Database
query
 Database
query then
evaluate
 Product
barcode
scanning
 Inserting to
database
 Generate
reports of every
branch
 Product details
 Generate report
 Print receipt
 Item added

Definition of Terms
Point of Sale – is a tool for the staff to execute the payment for goods of the
customer where sales tax may become payable.
Centralized system – this is the main server of the store where all store
branches’ data is combined.
Performance – refers to the performance of every branch of the store.
Under stocking – lesser stock of product needed.
Over stocking – excessively large inventory of goods.
Bugs – is an error, flaw or fault in a computer program or system that causes it
to produce an incorrect or unexpected result, or to behave in unintended ways.

Chapter 2
Review of Related Literature and Studies
This chapter includes ideas, finished thesis, generalization of conclusion,
methodologies and others. Those that were include in this chapter helps in
familiarizing information that are relevant and similar to the present study.
Foreign Literature
POS for Inventory Management
A point-of-sale (POS) is the location where customers of a small business
exchange money for the products or services sold by the small business. A POS
transaction occurs when a customer buys or returns a product or service and
occurs either at a brick-and-mortar store, on a mobile app, or in online checkout.
Using the right POS system for managing inventory is one of the best
decisions a business can make. Particularly in retail operations, but also for any
business that sells products, inventory management using a POS system can save
money for small businesses (Carlson, 2021).

Nothing can drag down the profitability of a business like carrying the wrong
amount of inventory. An inventory tracking system as part of a POS system can
help a business know when to order inventory to prevent stockouts and how to
avoid having too much inventory on hand, which can eat into profitability
(Carlson,2021).
Sales and Inventory Monitoring System
According to Bianca, Demand Media (2011), Sales and Inventory
Monitoring System using this type of system, a company makes strategic business
decision regarding raw materials purchased, production scheduling pricing, and
other decisions in the supply, Sales and Inventory data enables the company to
increases or decreases of products in the factory so that the company won’t have
too finished goods stored in its warehouse.
.

Local Literature
According to PLDT (2011), small and medium enterprises, who long for a
point-of-sale (POS) system that can track how much they sell and how much stock
they have left at their stores in real-time and from anywhere, can now turn to PLDT
SME Nation.
In the study from Averuin, et.al. (2009), entitled “Monitoring and inventory
and discovery Mail.com”, it stated that: “It will minimize the difficulty of the manager
in processing inventory because physical counting products, stocks and computing
inventory summary will be the system job. It will monitor the availability of products,
items to prevent under stocking, overstocking and running out of stocks. The
system will also simplify the transaction between dealer and supplier relationship
because of the updated supplier information and price list of items will correspond
to collaboration with other supplier.
According to De Leon and Ferrer (2009) Under the Korean Red Ginseng
Enterprise Sales and Inventory System, the researchers came up with a
computerized sales and inventory system. The proponents used database to easy
access of files and for easier and faster processing of the selling and inventory
transaction. The program was designated to generate reports such as monthly
reports, inventory reports, sales invoice and list of items.

RELATED STUDIES
Foreign
SALES AND INVENTORY MANAGEMENT SYSTEM
The retail industry is one of the industries that is growing in fast pace where
the number of retail business keep on increasing from time to time in order to meet
the demand from consumers of specified areas. There are different types of retail
shops available for consumer to choose ranging from hypermarket to mini market
according to their convenience. Most of the shops can be found in residential
areas, streets, or in a shopping mall. Basically, retail store sells wide range of
goods and services from wholesaler or supplier to the end-user. Thus, the nature
of retail business required a good management of inventory level in order to meet
the demand of the customers.
The traditional way retailer keeps their sales and inventory details is in
spreadsheets which are not effective anymore when the size of the shop gets
bigger. This is because more items will be made available in a larger quantity, thus
tracking the sales made with inventory level in the shop would be complicated and
time consuming for the retailer. Besides, the situation gets worst when the retailer
does not have proper method to determine items purchased by their customers.
Thus, this project will provide solution for retailers that are still using
traditional way in keeping their inventory data like ‘Rahmath Store’ in Taman Maju,

Tronoh by creating inventory system. Sales and Inventory Management System is
a computer- based system that provides the shop structure for maintaining and
controlling goods to be stocked. The approach of Sales and Inventory
Management System is commonly used to avoid product overstock or outrages by
integrating daily ‘Point of Sales’ with store’s inventory level (ALEEM, 2013).
An Analysis of Point-of-Sale Systems Physical Configurations and Security
Measures in Zimbabwean SMEs
This paper undertook to establish the correlation between the Point-of-Sale
configurations (setup) employed by Small and Medium Enterprises and the
security controls and measures implemented for the prevention and detection of
possible security threats. Quantitative data was collected from 30 Small and
Medium Enterprises in the retail sector using a self-administered questionnaire.
The participants were selected using purposive sampling. The data was analyzed
using descriptive statistics and the Chi square test was used to test for correlation
between the variables. The research showed that only three of the recommended
security measures for Small and Medium Enterprises are directly affected by the
Point-of-Sale configuration in use and these are: Password Policy; Physical
Security and Antivirus.
Small and medium enterprises (SMEs) represent a substantial part of retail
businesses in Zimbabwe. Most of these enterprises have since migrated from the

use of cash registers and manual sales systems to the use of electronic systems
known as Point of Sale (POS) Systems. This change has ominously enriched
check-out counter services, improved efficiency and accountability and also
enhanced the stock taking aptitudes of merchants. The introduction of electronic
POS systems has, conversely, presented new risks in terms of guaranteeing the
security and integrity of data (Sai, 2017).
The Power of Point of Sale: Improving Growth, Profit, and Customer Service
in a Retail Business
This project seeks to answer how a retail business can benefit from
implementing an electronic point of sale and inventory management system.
Furthermore, it seeks to discover how that system can inform the decision-making
procedures of management regarding business functions such as ordering,
product positioning, inventory control, customer service, sales projections,
demand forecasts, marketing efforts, and seasonality of products. Finally, the
project explores how a new point of sale and inventory management system can
benefit customers and improve the overall retail experience.
There are three main systems that can increase the profitability of a
business when updating from manual checkout processes. The first is a Point of
Sale (POS) system, the second is an Inventory Management (IM) system, and the
third is a Customer Relationship Management (CRM) system. Updating POS and

IM systems are explored within the scope of this project. The initial POS system
includes the technology used to complete and record sales transactions on the
sales floor. Typically, it involves barcoded items, scanning devices, a checkout
interface or terminal, and additional features. This recorded information enters a
database which is either stored on a company server (normally bought as a
software package) or stored on a cloud-based server (Software as a Service
[SaaS]). A POS system is the foundation for the other two systems to function.
Inventory information collected by point-of-sale equipment is summarized
into useful data by the Inventory Management system. The Inventory Management
system tracks inventory levels for every item on the sales floor according to its
stock keeping unit. It is able to produce accurate and current inventory counts
based on sold and damaged items which is accessible from either a company
computer (software package) or through a POS terminal (Software as a Service).
An IM system is highly recommended because consistent item tracking helps
improve inventory decisions and reduce inventory costs. These two systems work
well together: demand planning from the POS system can coincide with inventory
levels and ordering policies from the IM system to greatly reduce costs.
The third system is the Customer Relationship Management system. This
system manages interactions with current and future customers at both retail and
wholesale levels by creating individual customer accounts. Each account links
customer information with past purchases collected at the POS system. This
information is accessible at any time and is used for marketing campaigns, post-

purchase email reminders, newsletters, etc. The CRM system is meant to better
serve customers, increase customer willingness to pay, and retain customer
loyalty. It helps to keep the customer satisfied after a purchase and provides
detailed records of individual customer histories. Automated email reminders can
be sent to customers after a purchase with specific care instructions and product
recommendations tailored to their purchase. However, this system does not affect
the core operations of a business, and should be viewed as an extra benefit as
opposed to a fundamental need (Cote, 2015).
Local Studies
An Inventory System for Marisol Groceries Store
Technology has a big impact in our modern lives. People are now living in
information age. In a world where everything can be manipulated. The researchers
use technology to extend our abilities and that makes people as the most important
part of any technological system. Through this, people can be more productive as
a human. People apply technology in almost everything in our lives, at work, to
extract materials, for communication, transportation, learning, manufacturing,
creating artifacts, securing data, scaling businesses and so much more. By
technology, thinking of other ways to make our work easier, faster and more
reliable. Just like in the business world, they used different kinds of information
systems so that it can be more competitive.

Inventory system is a tracking mechanism that informs the owner of the
business the amounts of raw materials, supplies, or final products that are readily
available. It is really important for businesses because it helps them know what
products are still available for the following days and weeks. Through this, it allows
them to order supplies or products in advance, so they would have everything they
need at all times. Some of the businesses are not into computerized inventory
system and still are using the manual process that is why they have a hard time at
monitoring their products. Manual inventory system relies heavily on the action of
people which increases the possibility of human error. People might forget to
record a transaction or simply miscount the number of goods or products. This
results in needless additional orders that increase the business inventory carrying
costs and using up precious storage space. Inaccurate physical count could also
result to the failure to order enough quantities of a product, meaning the business
could run out of a crucial item at the wrong time.
One of the business that we know that is still using this kind of system is the
Marisol Grocery Store that is why The researchers proposed the “Inventory System
for Marisol Grocery Store”. This system is an offline system that helps the owner
to track what products are still available and what products are out of stock. This
will compute which products were sold, which products were left, and which
products are in need of replenishment. By the means of that the said business will
be able to cope up with the competitive business world (Asaytona, et al., 2016).

Simplified Barcode-Based Point of Sales and Inventory Management System
with Replenishment Decision
The grocery store companies have many targets. Through their business
plans, they typically detail those targets well before the start of new fiscal years.
Such businesses can better achieve their targets by remaining customer-focused,
delivering their customer-wanted products and services. That is why most grocery
store companies have built detailed marketing plans to achieve their key goals.
Marketing strategies help the owner identify their target customers better and the
definition of the shop. To improve the current system in some small grocery stores,
the researchers established a study entitled ―Simplified Barcode-based Point of
Sales and Inventory Management System with Replenishment Decision‖ for a
grocery store. A Real-time Tracking Point of Sale, Inventory and Sales
Management and an upgraded system was established to the Grocery Point of
Sale, Inventory, and Sales Management System. The system allows the
administration to manage and track the stock and sales. The system also can
maintain and organized records according to the desired outcome. It can also
create user accounts for security reasons. It also has the following additional
features: User-Friendly, CPU-Friendly, Data Safety, Special Roles and
Permissions. The established system used a barcode system integrated with an
inventory management process for records keeping of products. Barcode
technology is a marking system with spaces and bars that are written side by side
on the item, such as paper (Panganiban & Bermusa, 2020).

Sales and Inventory System of Edmar Marketing
Edmar Marketing currently does its sales and inventory manually. As such,
it takes time to locate certain files for reports and the entries in the monitoring sheet
are not clear, thus, creating confusion. The project is an automated Sales and
Inventory System which has an array of functions involving sales and inventory
that can be of very big help to the company. It aims to make files updated and easy
to locate, hence, data and information become accurate and orderly which may
provide a faster alternative or means in doing the inventory. The system inventory
may also be harder to cheat because the coming in and going out of stocks are
recorded in the system. The warehouse personnel are more accurate in their
reports and can save more time by using the system. Since the system user has
saved time, the personnel in-charge can then be more productive in terms of output
which can be beneficial to the company (Abacahin, et. al., 2012).

Chapter lll
METHODOLOGY
This chapter presents a description of the system design selection and
description of respondents, research instruments, data collection procedure, and
statistical treatments used.
Environment
The study took place at Tupi, South Cotabato specifically in
the establishment of Mr. Mercado named “The Exit”. The establishment has
another branch at Purok 2-A, Brgy. Poblacion, Tupi, South Cotabato and is
having difficulties in recording information due to the lack of tool to use to
record information.

SDLC
Cycle
Software Engineering Methodology
Figure: 1.1 System Development Life Cycle (SDLC) Diagram
Requirement gathering and analysis
This phase will gather information about the project. The owner of The Exit
will be interviewed to know what is his expectations for the project and also what
is the problems encountered with the current system and problems without the
system in another branch. This phase will also evaluate the process of the store
on how the business works. After the gathering of information, it will be analyzed
Requiremnts
Gathering &
Analysis
Design
Implementation
or Coding
Testing
Deployment
Maintenance

to formulate the possible outcome, and what equipment’s are needed for the
system.
Design
After gathering information and analyzing, designing of system will follow.
In this phase, designing of User Interface will be done, on what will be the
functions of the system and how it looks will be. This phase will also design the
database for the system on what data will be needed to input and stored for the
system to work.
Implementation or coding
The next phase is implementation of the design planned in the previous
phase. The design document will turn into source code that will be coded in
JAVA programming language for the Point of Sale and Inventory system in each
branch, MYSQL for back-end, and PHP for the central server. In this phase,
coding the system design and functionalities are needed to proceed to the next
phase.
Testing
Once the coding is complete, the system will be tested thoroughly to
determine if there are any defects or errors found in the system and fixed it
before it will be deployed in the store. Testing also will allow the owner of The

Exit to suggest what function he wants to be added and the set up he needs
when it will be deployed in the store.
Deployment
When the testing is done and nothing defects or errors found in the
system and also the expectation of the owner of The Exit is met, it is ready to
deploy and can be used already the Point of Sale system for their customers and
the Inventory system to manage their stocks.
Maintenance
After the deployment of the system in The Exit and if there are problems
comes up regarding the system, it is the developers responsibility to fixed the
problems that occur in the system.

Planning/Conception-Initiation Phase
Business Model Canvas
Figure 1.2 Business Model Canvas
This is the strategic management and lean start up template for the
development of the The Exit Point of Sale System. This is the overview that lays
out both what is the system for and how it will run.
Key Activities
Key Partners Value
Proposition
Customer
Relationships
Customer
Segments
Cost Structure Revenue Streams
Key
Resources
Channels
- The Exit
- Hosting
- ISP
- Maintenance
- Project cost
- Talent fee
- Retail sales
- System
Testing
- System
Deployment
-System
Maintenance
-Centralized
system
-Stocks
Monitoring
-Sales Reports
-Printed
Receipts
-Inventory
update
- Personal
Assistance
- Retail
Customers
- Point of Sale
system
- POS equipment’s
-Employee/cashier
-Financial
resources
- Physical
Store
Computer
Monitor
Receipt printer
Barcode scanner
Employee’s salary
ISP
Web host

Gantt chart
Figure 1.3 Gantt chart
This chart illustrates this capstone project’s schedule. This illustrates the
start and end of the terminal elements and summary elements of the project.
Terminal elements and summary elements comprise the work breakdown
structure on the development of the The Exit POS System.
Month NOV DEC JAN FEB MAR APR MAY
DESCRIPTION
PLANNING
ANALYSIS
DESIGN
IMPLEMENTATION
TESTING &
INTEGRATION
MAINTENANCE

Functional Decomposition Diagram
This diagram shows the breakdown of The Exit Point of Sale
System from the high – level function, process, and organization down to the
lower level.
Figure 1.4: This figure shows the flow of The Exit Point of Sale system.
Admin/Owner
Add, edit, delete
user
Add, update,
delete product
Barcode scanning
Product voiding
View sales report
View inventory
Forecast product
Upload data
View branch's
performance
Employee/Cashier
Barcode
scanning
product voiding
Upload data
Customer
Checkout
Payment
The Exit Point of Sale System

Analysis Design Phase
Use Case Diagrams
Figure 1.5 The Exit Point of Sale System Use Case Diagram
Add, update,
delete product
Add, edit, delete
user
Barcode scanning
Product voiding
View sales report
View inventory
Forecast product
Checkout
Upload data
View branch’s
performance
Payment
Customer
Employee/Cashier
Admin/owner

DATABASE DESIGN

ENTITY RELATIONSHIP DIAGRAM

DATA DICTIONARY
Branch table
Field Name Field Type Length Description Key
id Int 11 Indicates ID of
the branch
PK
name Varchar 100 Indicates the
name of the
branch
Table 1.1: Branch Table
Status table
the status
PK
name of the
status
Table 1.2: Status Table
Supplier table
the branch
PK
name of the
branch

phone Varchar 13 Indicates the
phone number
of the supplier
Table 1.3: Supplier Table
Order table
id Int 11 Indicates ID of the
branch
PK
date Varchar 100 Indicates the date
of order
product_id Int 11 Indicates the ID of
the products
FK
quantity Int 11 Indicates the
stored quantity of
the product
user_id Int 11 Indicates the ID of
the user.
FK
branch_id Int 11 Indicates the ID of
the branch
FK
Table 1.4: Order Table
Users table
id Int 11 Indicates ID of the
branch
PK
type Varchar 45 Indicates the date
of order
username Int 45 Username of the
employee
password Int 45 Password of the
employee

status_id Int 11 Indicates the ID of
the status.
FK
employee_id Int 11 Indicates the ID of
the employee.
FK
Table 1.5: Users Table
Product table
the product
PK
name Varchar 100 Name of the
product
price Decimal 10, 2 Price of the
product
expiration_date Date 11 Date when the
product will
expire
quantity of the
product
branch_id Int 11 Indicates the ID
of the branch
FK
status_id Int Indicates the ID
of the status.
FK
Table 1.6: Product Table

Transactions table
the product
PK
product_id Int 11 Indicates the ID
of the product
FK
date Date 11 Date when the
transaction is
created
quantity of the
product
branch_id Int 11 Indicates the ID
of the branch
FK
status_id Int Indicates the ID
of the status.
FK
Table 1.7: Transaction Table
Employee table
the product
PK

first_name Varchar 45 First name of
the employee
middle_name Varchar 45 Middle name of
the employee
last_name Varchar 45 Last name of
the employee
gender Char 1 Gender of the
employee
birthdate Date Birthdate of the
employee
address Varchar 255 Address of the
employee
phone Varchar 10 Phone number
of the
employee
Table 1.8: Employee Table

NETWORK DESIGN
The proposed system uses a computerized network that consists of the
main computer linked with checkout terminals and supported by different
hardware features starting from barcode scanners to scan the product and
ending with receipt printing terminals.

Network Topology

Technological Stack
Figure 1.8: Vehicle Rental System Technology Stack
Software specification
 Windows 7 or higher
Hardware specification
 CPU Processor Speed: 2.4 GHz or higher
 RAM: 4GB or higher
Program specification
 PHP
 JAVA
 MYSQL
Windows
Operating
System
HTML
CSS
PHP
JAVA MYSQL

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