Enhancement of Pharmacy Inventory Control System Thesis: Synthesis

Synthesis

This chapter discussed the related literatures about the inventory control system. The discussion started with the purpose of an inventory system and its scope. Functions of an inventory system, which are inventory acquisition, inventory protection and storage, and inventory obsolescence and disposal are also discussed. In the inventory acquisition section, the chapter provides some key points basically used in purchasing such as the reorder point (ROP) system and the economic order quantity (EOQ) model. In inventory protection and storage, controls against damage and shrinkage (due to human error or customer or employee theft) are provided. Meanwhile, in inventory obsolescence and disposal, control measures for obsolete stock are discussed in both accounting and pharmacy perspectives.

Accounting concepts are included in the discussion of inventory measurement and tracking system and inventory valuation. Two systems of inventory measurement, which are the periodic and perpetual system, are used to determine the number of units. Cost-flow assumptions, which are used in determining the value of inventory, have three different methods namely, FIFO, LIFO, and weighted average method. These methods provide certain advantages depending on the type of business.

The concept of internal control is also included in this chapter. Some basic internal controls provided in this chapter will aid in the efficiency and effectiveness of an inventory control system.

These reviews will serve as guideline in the study of enhancement of pharmacy inventory control system for MDC.