Enhancement of Pharmacy Inventory Control System Thesis: Significance of the Study

Significance of the Study

For MDC, the result of the study can provide the management a view of their current pharmacy inventory control system. MDC can adopt the recommendations to be done by the researchers to improve the efficiency and effectiveness of their pharmacy inventory control system.
For other similar organizations, the study can provide insights and basis for other healthcare institutions and pharmacies to improve their system.
For educators and students, the study can provide topics for classroom discussions and serve as reference for inventory management.
For future researchers, this research can provide basis and references for future studies related to inventories.
Researchers of this Study. The researchers, being the main participants, will gain knowledge and experience to improve their skills. This research is a major requirement to complete the Bachelor of Science in Accountancy program of the Colegio de San Juan de Letran-Calamba.

Enhancement of Pharmacy Inventory Control System Thesis: Scope and Limitations

Scope and Limitations of the Study

The study intends to evaluate the current pharmacy inventory control system of MDC. It will focus primarily on the pharmacy inventory and not on the inventory of the organization as a whole. It will cover medicines and laboratory supplies maintained by the pharmacy and will not involve inventory of equipments and other supplies maintained by the other departments of the organization.
The results of the study will be based on interviews, observation, cooperation, and answers given by the employees involved in the Pharmacy Inventory Control of MDC. Facts, concepts and related theories will be the basis of recommendation of the researchers.
The study will be done at #33 Gov. Carpio St. Pob. 4, Sto. Tomas, Batangas during the Academic Year 2009 - 2010.

Enhancement of Pharmacy Inventory Control System Thesis: Definition of Terms

Definition of Terms

Cost-flow assumption – is the beginning point used to determine the value of the ending inventory and the cost assigned to the cost of goods sold (Eisen, 2007).

Economic Order Quantity (EOQ) – it is the optimum amount of goods to be ordered each time the inventory level drops at the pre-determined reorder point.

First-In, First-Out (FIFO) Method – it is a cost-flow assumption generally use by business entities in assigning cost to their inventories. This method assumes that the first units brought are the first units sold.

Internal control – it is a system of procedures and forms established in a business to safeguard its assets and help ensure the accuracy of the information provided by its accounting system.

Inventory – it is an asset acquired and maintained by an entity which are held for sale or as supplies in the business operations.

Inventory control system – it is a set of policies and controls that monitors level of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be.

Lead time – it is the period between placing an order and receiving delivery used in the computation for economic order quantity (EOQ).

Last-In, Last-Out (LIFO) Method – this method assumes that the most recent cost of goods acquired should be charged at the most recent sales made

Periodic system – it is an inventory tracking system that determines inventory levels only at fixed points in time through the use of physical inventory counts (Bragg, 2004).

Perpetual system – it is an inventory tracking system that determines inventory levels on an ongoing basis by making incremental adjustments to inventory records based on individual production transactions (Bragg, 2004).

Safety stock – it is the buffers or reserve stock kept on hand to protect against stock outs caused by delayed deliveries or increased demand.

Reorder Point (ROP) – it is the designated inventory level at which it is appropriate to replenish stock (Siegel, Shim, and Hartman, 1997). It is set such that the inventory level will reach zero at about the time the replenishment is expected to arrive.

Weighted average method – it is a cost-flow assumption that yields a cost that is representative of the cost of the product over the entire accounting period. The average cost is weighted by the number of units purchased at each cost (Carroll, 2006).

Enhancement of Pharmacy Inventory Control System Thesis: Review of Literature

CHAPTER II

REVIEW OF LITERATURE

Inventory can be the largest investment a pharmacy can make. Dealing with inventory can be intricate unless an organization has a good inventory control system. The purpose of this system is to maximize efficiency and effectiveness. Efficiency is to minimize inventory costs and effectiveness is to meet the customer demands.

Inventory control involves maintaining adequate stock of medications, as well as storing those medications in a safe and secure manner. It also means keeping track of the purchasing and distribution of the medications. Good inventory control allows the pharmacy to have enough medications on hand to fill prescriptions and orders, without having so much stock that drugs deteriorate before they can be used (Askew and Smith-Stoner, 2001).

Inventory Acquisition

Purchasing is not just a routine function to keep inventories on the shelf. However, since pharmacies literally spend a lot to acquire medications and other goods, purchasing is actually a substantial investment process. According to the research of Desselle and Zgarrick (2008), the objective of purchasing is to obtain the right products in the right quantity at the right price at the right time from the right vendor. Right quantity means having just enough products on hand to cover consumer demand at any given time. In order to estimate the minimum quantity needed to meet the demand, the purchasing agent must know how many items on hand, when to order, and how much to order.

Most businesses place an order for replenishment of inventory when the inventory level is already at low point. This low point is predetermined by the management using the reorder point (ROP) system.
A reorder point is simply a level of inventory that is designated as the signal to replenish. Whenever the inventory level reaches the reorder point, a replenishment order is placed. It is set such that the inventory level will reach zero at about the time the replenishment order is expected to arrive. Generally, the quantity to reorder depends on the level of demand and other factors such as market availability, storage space available, and shelf life considerations (Mercado, 2007). Formula for computing the reorder point is:

ROP = (Demand per time period x Lead Time) + Safety Stock

Lead time is the period between placing an order and receiving delivery. When lead time and demand are not certain, the firm must carry out extra units of inventory, called safety stock, as protection against possible stock-outs (Siegel and Shim, 2006). Minner (2000) defined safety stock as the expected inventory just before the next order arrives.

Using this technique of reordering requires a system that can track the inventory level at any given time. This can be accomplished using a perpetual accounting record or a visual method.

Desselle and Zgarrick (2008) explain that too much inventory ties up pharmacy’s money without having adequate return on investment. On the other hand, having too little inventory may result in lost sales and profits when the product is not available for purchase. Not having enough products available also may result in the loss of customers in the future. The management therefore must know the right amount of inventory to order while maintaining the right amount of stock. To determine this, the purchasing agent must identify the economic order quantity (EOQ).

EOQ is the optimum amount of goods to order each time to minimize total inventory costs (Shim and Siegel, 2000). It describes the level of inventory and reorder quantity at which the combined costs of purchasing and carrying inventory are at a minimum. Purchasing or ordering costs include costs of placing the order and received goods while
carrying or holding costs include the storage, handling, property tax, and insurance costs, as well as the required return rate on the inventory investment (Siegel, Shim, and Hartman, 1997).
The classical formula for EOQ model is

Where: D = annual demand in units;
O = unit ordering cost;
H = annual holding or carrying cost per unit

Inventory Protection and Storage

Proper storage of inventory is vital. Improper storage can cause a product to ruin, resulting in a loss of inventory and money. According to Bizmanualz, Inc. (2008), storage refers to protecting inventory from both damage and shrinkage or theft.

Damage control includes insuring and keeping inventory clean and properly sheltered. According to Yadav (2008), proper environmental control (i.e., proper temperature, light, humidity, conditions of sanitation, ventilation, and segregation) must be maintained wherever drugs and supplies are stored. Proper control is required such as expiry dates of drugs stored must be considered. With regards to safety, proper consideration should be given to the safe storage of poisons and flammable compounds.

Control over shrinkage is directed at human error (data entry, POS error, receiving errors, etc.) and customer or employee theft. Human error is a continual possibility. Successful business systems acknowledge this fact and incorporate preventative and detective controls to mitigate the anticipated human error. Preventative controls include written POS procedures, supervisory control, use of logs, cash-up reports and other checklists. Detective controls include cycle inventory counts, exception reports, and gross margin analyses.


Improper inventory also produce a higher risk of theft and fraud. Customer theft protection involves many elements from security to customer return policies. Businesses should focus on high-dollar merchandise that can be easily hidden and carried out of the store. Also, employee theft protection must be given proper attention.

Employee theft protection involves two important ingredients: maintaining a high level of security and eliminating the easy opportunities for theft. A high level of security is maintained when cycle count exceptions are followed, medicines are stored properly and shelved quickly, and unresolved damage claims, customer returns and returns to vendors are not allowed to build up.

Eliminating easy opportunities for theft involves structural security as well as numerous written employee procedures. A well-lit storage space, restricted areas, and installation of security cameras are example of structural security features. Written procedures that reduce opportunities for theft include limiting storage access only to designated personnel, mandating all employees to exit and enter only through the front door, preventing employee from ringing up a sale for him/her or family members, monitoring customer returns, and proper cash drawer and petty cash usage.

Coltman and Jagels (2003) provide the following control practices that should be used for product storage:
1. Immediately after goods have been delivered and all receiving checks performed, they should be moved to storage areas or sent directly to the departments that requested them. Proper storage facilities should be used.
2. Storage areas should be locked when the storekeeper is not present. Access to storerooms should be limited to the storekeeper and other authorized employees.
3. Storekeepers should not maintain or have access to formal inventory records, nor should accounting department employees who maintain those records have access to storerooms except to take inventories.
4. Inventory counts of stored products should be taken periodically by accounting office employees and compared to perpetual inventory cards (if used). A perpetual inventory card is maintained for each separate item in stock. It has recorded on it, for each item, quantities received in and quantities issued from the storeroom to provide a running balance of what should be in inventory.
5. The best procedure for taking inventory is to make two accounting office employees responsible. One completes the actual physical count; the other compares this with the perpetual inventory card figure and then records the actual count on an inventory sheet.
6. If there are any significant differences that cannot be reconciled between the inventory count and what should be in inventory according to perpetual inventory cards, the differences should be investigated to determine the cause.
7. To aid in inventory count, preprinted inventory sheets that list items in the same order as they are located on storeroom shelves should be used.

Inventory Obsolescence and Disposal

According to Bragg (2006), there is inevitably a certain amount of inventory that will not be used, due to excessive purchasing of materials beyond a company’s needs or customers not buying certain items. In the pharmacy’s perspective, inventory (specifically drugs) becomes obsolete because of its limited shelf life. Obsolete inventory can constitute a large portion of the total inventory, so it is suggested to consider giving controls in this area.

Bragg further explains that the primary risks associated with obsolete inventory are that the inventory will not be promptly recognized as obsolete, that inventory will be improperly designated as obsolete, and that dispositioned inventory will be accidentally reordered. He also provided some controls dealing with these risks.
Regularly complete an obsolete inventory review. The best way to ensure that obsolescence is recognized promptly is to conduct a regularly scheduled obsolescence review of the entire inventory, typically using an obsolescence report.
Move obsolete inventory to segregated area. It is much easier to review and leave as-is obsolete inventory if it is congregated in a single area rather than scattered throughout the warehouse.
Match obsolescence authorization to tagged obsolete inventory. It is possible that warehouse employees will deliberately tag inventory as being obsolete, so they can remove it from the warehouse or acquire it at a low price from the company. To avoid this problem, periodically compare the obsolete inventory review procedure to tagged obsolete inventory,
to ensure that only authorized items are tagged. Any other items marked as obsolete should immediately be brought to the attention of the warehouse manager and internal audit manager as being a possible case of fraud.

Moini (2004) also provided some controls in disposing expired stock. He explains that expired, deteriorated, contaminated, or other non-reusable drug products should be removed immediately from usable pharmacy stock and disposed of. Expired drugs should be placed into containers labeled with “expired drugs – DO NOT USE” or any similar understood warning. Disposal requirements for most drugs that have expiration date are listed in the package inserts. Expired drugs and their disposal should be documented regardless of whether they are put into biohazard bags for collection by approved biohazard disposal companies, returned to pharmaceutical representatives, or disposed of in any other way.

Inventory Measurement and Tracking System

There are two ways to measure the inventory and cost of goods sold. These are:

Periodic System. This method has historically been the one used by pharmacies because it requires much less record keeping, as opined by Carroll in 2006. It is based on costing out physical counts at both beginning and ending periods. The cost of goods sold is calculated by adding purchases to the beginning inventory and subtracting the ending inventory (Toomey, 2000).
The major disadvantage of this method is the requirement of conducting a complete physical inventory count to obtain a calculation of the inventory cost. With this, calculation of the inventory will be costly and time-consuming. Accuracy may also be an issue in this procedure.
Perpetual System. In perpetual system, detailed records of each inventory purchase and sale are maintained. This system provides a current record of inventory on hand and cost of goods sold to date (Robles and Empleo, 2007). This method keeps the accounts current and accurate because the balances are updated constantly. It continually accumulates all incoming and outgoing transaction quantities of an inventory item so that, at any time, there is a record of the current balance on hand (Mercado, 2007).

Carroll (2006) provides the following advantages of the perpetual system:
1. It provides the cost of goods sold without a physical inventory. Consequently, financial statements can be generated easily and inexpensively at any time during the year.
2. It provides information that managers can use to control inventory levels. Individual inventory accounts show frequency of sales for each stock keeping unit (SKU). Managers can use this to determine optimal purchase quantities and maximum and minimum inventory levels for SKUs.
3. It provides a basis for measuring shrinkage. Shrinkage refers to the amount of inventory that is lost, broken, or stolen. Shrinkage is estimated by comparing the inventory level recorded in the inventory account with that found by a physical inventory. The difference between these two levels represents shrinkage.

Bragg (2004) pointed out that the perpetual inventory system is highly recommended because it avoids expensive periodic inventory counts, which also tend not to yield accurate results. Also, it allows the purchasing staff to have greater confidence in determining the inventory on hand for purchasing planning purposes. Accountants can complete period-end financial statements more quickly, without having to guess at ending inventory levels.

Inventory Valuation

Determination of inventory cost is the major aspect of financial reporting. Whether the periodic or the perpetual system is used, it is necessary to use a specific method for the assignment of costs to the ending inventory as well as to the cost of goods sold. Assignment of costs can be complex because goods are usually purchased at different costs during the accounting period. Thus, there must be a consistent procedure in assigning costs which is called the cost-flow assumption (Eisen, 2007). There are three cost-flow assumptions that can be used:
First-In, First-Out (FIFO) Method. This is based on the assumption that the first units brought are the first units sold. The oldest cost assigned to the inventory is the cost assigned to the goods first sold. Consequently, the most recent cost is assigned to the ending inventory. Although business organizations are free to choose among a number of inventory methods, many adopt FIFO simply because there is a tendency to dispose of goods in the order of their acquisition (Eisen, 2007). This method, though not as accurate as specifically identifying the item being sold, would give a close approximation of value.

Last-In, Last-Out (LIFO) Method. This method assumes that the most recent cost of goods acquired should be charged at the most recent sales made. Thus, the assignment of the cost to the ending inventory represents the cost of all earlier purchases, without regard to the order in which the goods are actually sold, since it is assumed that the goods are all the same and readily interchangeable (Eisen, 2007).

Weighted Average Cost Method. This method yields a cost that is representative of the cost of the product over the entire accounting period. The weighted average cost of a unit of inventory is determined and all units are assigned this cost. The average cost is weighted by the number of units purchased at each cost (Carroll, 2006).

Eisen further notes that in accounting periods where costs remain relatively constant, the FIFO method is probably the most appropriate. If it is important that replacement costs relate as closely as possible to the cost of the goods sold, the LIFO method is better. The weighted average method is a third option, even though it does not necessarily bring about the matching of costs and revenue. Its simplicity may have a cost-saving effect.




Principles of Internal Control

To meet the purpose of an inventory control system, the management must apply internal controls in its business. A broad definition of internal control was given by Trenerry (1999):
“A system of controls and checks instituted by the various levels of management that are independent and interdependent and are integrated into the financial and non-financial activities and operations of a business to ensure that the business operations are conducted efficiently and effectively and operating results for all aspects of the business are reliably reported to ensure management decision-making is well based and that all relevant laws and regulations are complied with.”

The objectives of internal control are to provide reasonable assurance that: (1) assets are safeguarded and used for business purposes; (2) business information is accurate; and, (3) employees and managers comply with laws and regulations (Warren, Reeve, and Duchac, 2008).

Coltman and Jagels (2003) discuss some basic principles that provide a solid foundation for a good internal control. Some of them are the following:
Establish preventative procedures. Internal control procedures should be established so that they minimize and/or prevent theft. This is much more effective than suffering losses from theft or fraud and having a system that detects the culprits only after the event.
Establish management supervision. Complete absence of any controls will yield some employees to temptation and become dishonest. If management does not care, why should the employees?
Monitor control systems. Any system of control must also be monitored to ensure that it is continuing to provide the desired information. The system must therefore be flexible enough to be changed to suit different needs.
Establish responsibilities and prepare written procedures. Once the designated person is established, that person must be given a list of receiving procedures, preferably in writing, so if errors or discrepancies arise, that person can be held accountable.
Maintain adequate records. Another important consideration for good internal control is to have good written records. Without good records, employees will be less concerned about doing a good job.
Separate record keeping and control of assets. One of the most important principles of good internal control is to separate the functions of recording information about assets and the actual control of the assets.
Limit access to assets. The number of employees who have access to assets such as cash and inventory should be limited. The larger the number of employees with access, the greater is the potential for loss from theft or fraud.
Divide the responsibility for related transactions. Responsibility for related transactions should be separated so the work of one person is verified by the work of another. This is not to suggest duplication of work—that would be costly—but to have two tasks that must be carried out for control reasons done by two separate employees. This procedure keeps one person from having too much control over assets and may prevent their theft.
Set standards and evaluate results. One of the requirements of a good internal control system is not only to control the obvious visible items, such as cash or inventory, but also to have a reporting system that indicates whether all aspects of the business are operating properly. Once procedures have been established and the various employees have been given detailed written guidelines about how to perform tasks, standards of performance should be established.
Create an audit trail. Most good internal control systems are based on having an audit trail that documents each transaction from the time that it was initiated through source documents and defined procedures through to the final recording of the transaction in the operation’s general ledger. A good audit trail allows each transaction, where necessary, to be tracked again from start to finish.
Supervise the system and conduct reviews. One of management’s major responsibilities in internal control is constant supervision and review of the system. This supervision and review is necessary because the system becomes obsolete as business conditions change. Also, without continuous supervision the control system can collapse.

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.

Enhancement of Pharmacy Inventory Control System Thesis: Theoretical Framework

Theoretical Framework

The theoretical framework that will be used in this study is the Input-Process-Output Model. In the IPO model, a process is viewed as a series of boxes (processing elements) connected by inputs and outputs. Information of material objects flow through a series of tasks or activities based on a set of rules or decision points. Flow charts and process diagrams are often used to represent the process. What goes in is the input; what causes the change is the process; and what comes out is the output (Harris and Taylor, 1997).

Figure 1 illustrates the basic IPO model:

Figure 1. The IPO model

The IPO model will provide the general structure and guide for the direction of the study. Substituting the variables of this study on the IPO model, the researchers came up with the conceptual framework.

Enhancement of Pharmacy Inventory Control System Thesis: Conceptual Framework

Conceptual Framework

Handling stocks in every organization is an important issue in every business. A well-structured inventory system would give the organization proper control of their stocks.
This study will be using the input-process-output diagram to come up with an enhanced pharmacy inventory control system for MDC.

Input. The first variable is the current pharmacy inventory control system of MDC as provided based on interviews and observations by the researchers. It will include policies and procedures provided by the management currently implemented for purchasing, receiving, storage, issuing and reporting of inventory.

Process. After identifying the inputs, the current pharmacy inventory control system of MDC will be evaluated using the SWOT analysis. After the strengths and weaknesses of the current system are identified, the enhancement of the current pharmacy inventory control system of MDC will follow. During this phase, management and accounting theories, concepts, and techniques will be followed to enhance the current system. Also, the organizational requirements of MDC will be taken into consideration for the enhancement. Before the final output, feedback from the management will be taken for comments and suggestions to be added for the final output.

Output. The output will be the result of the careful analysis and discussion of the researchers and the client’s management. The output will be an enhanced pharmacy inventory system for MDC to be recommended for the client.

Figure 2 shows the conceptual framework of the study using the input-process-output diagram.



Figure 2. Conceptual framework

Enhancement of Pharmacy Inventory Control System Thesis: Research Methodology

CHAPTER III

RESEARCH METHODOLOGY

The purpose of this chapter is to explain the methods and procedures to be followed in the research project. This chapter will review the research questions of the study, the research design used to carry out the study, the tools used to gather data, the research respondents, and the procedures to be used for conducting the study. It will also include an overview of how to treat research data gathered by the researchers.

Enhancement of Pharmacy Inventory Control System Thesis: Research Design

Research Design

The study will use an action type of research to assess the current pharmacy inventory control system of MDC. The researchers will be using a descriptive methodology to describe the issues and topics in the pharmacy inventory system of MDC.

Enhancement of Pharmacy Inventory Control System Thesis: Research Locale

Research Locale

The study will be conducted at MDC located #33 Gov. Carpio St. Pob. 4, Sto. Tomas, Batangas. The pharmacy inventory control system of the clinic will be the focus of the study because of the organization’s need for a better, more efficient and effective system to be adopted for more security and control.

Enhancement of Pharmacy Inventory Control System Thesis: Research Respondents

Research Respondents

The researchers will gather the information through the following respondents: the company’s manager, the cashier, the laboratory technician, and the pharmacist of MDC. These personnel will provide imperative aid to complete the study.

Enhancement of Pharmacy Inventory Control System Thesis: Research Gathering Tools

Research Gathering Tools

The researchers will conduct personal interviews with the chosen respondents to inquire about the implemented policies and procedures of MDC. Questionnaires will also be at hand to seek further information about their inventory control procedures. These questionnaires will have close-ended questions and/or “yes or no” questions. Moreover, the researchers will carry out non-participant observations and walk-through observations to verify the results of the interview and questionnaires.
Secondary data, which will be taken from related literatures, will be used to support the enhancement of the current inventory system.

Enhancement of Pharmacy Inventory Control System Thesis: Data Gathering Procedures

Data Gathering Procedure

To start with the process, the researchers will provide a letter of request asking for their permission to conduct the study. After the approval, personal interviews and walk-through observation will be scheduled and questionnaires will be prepared. The respondents will be given enough time to answer the questionnaires. During the interview, there will be a thorough discussion with the respondents of their inventory control management.
The walk-through observation will be conducted on the same day of interview. Researchers will have a closer look of how the organization’s policies and procedures are performed and complied. A non-participant observation to be done separately from the walk-through observation will verify the undertaken walk-through observation and interviews.

Enhancement of Pharmacy Inventory Control System Thesis: Treatment of Data

Treatment of Data

The researchers will use qualitative analysis of the information gathered from the interview, and questionnaires. The analysis will be graphed into a flowchart to show the results and to give a clear view of MDC’s current inventory control system. Results of the observations will also be taken into consideration.
From the results of the qualitative analysis, data will be processed using the SWOT analysis to identify strengths and weaknesses. The review of literature will be used to improve the current system of MDC.

Enhancement of Pharmacy Inventory Control System Thesis: RESEARCH INSTRUMENTS

RESEARCH INSTRUMENTS

Questionnaire

This questionnaire will be used in gathering the primary data needed in conducting the study. The questions are based on inventory controls.

Inventory Acquisition
Are inventories maintained at a level as to avoid consistent stock-outs, or spoilage/obsolescence?
Are reorder points established for key stock items?
Is responsibility for purchasing, receipt of goods, and invoice approval assigned to provide division of duties?

Inventory Protection and Storage
Does the facility have a proper environmental control (i.e., proper temperature, light, humidity, conditions of sanitation, ventilation, and segregation)
Are inventories arranged so that the earliest received will be issued first?
Is there physical control over inventory stock?
Is the person responsible for inventory someone other than the bookkeeper?

Inventory Obsolescence and Disposal
Are damaged and obsolete goods physically segregated?

Inventory Measurement and Tracking System
Are periodic physical inventories taken?
Are perpetual or periodic inventory records maintained to reflect value and quantities of inventories?
Are stock item activity reports maintained for each stock item?

Inventory Valuation
Has an acceptable inventory valuation method been adopted?

Other Controls
Are all inventory transactions evidenced by the proper supporting documentation, i.e., purchase orders, requisitions, adjustment memos, physical counts, etc.?
Are effective control procedures established to ensure that inventories are used properly and for authorized purposes?

Enhancement of Pharmacy Inventory Control System Thesis: References

REFERENCES


Askew, G., & Stoner, Marilyn, S. (2001). Assisting in the pharmacy. Florence, Kentucky: Cengage Learning.

Bizmaualz, Inc. (2008). Accounting and bookkeeping procedures for internal control. St. Louis, MO: Author.

Bragg, S. M. (2004). GAAP implementation guide. Hoboken, New Jersey: John Wiley & Sons, Inc.

Bragg, S. M. (2005). Inventory accounting: A comprehensive guide. Hoboken, New Jersey: John Wiley & Sons, Inc.

Bragg, S. M. (2006). Accounting control best practices. Hoboken, New Jersey: John Wiley & Sons, Inc.

Carroll, N. V. (2006). Financial management for pharmacists: A decision-making approach (3rd ed.). Boca Raton, Florida: Lippincott Williams & Wilkins.

Coltman, M. M., & Jagels, M. G. Hospitality management accounting (8th ed.). Hoboken, New Jersey: John Wiley & Sons, Inc.

Desselle, S. P., & Zgarrick, D. P. (2008). Pharmacy management: Essentials for all practice settings (2nd ed.). New York: McGraw-Hill Companies.

Duchac, J, Reeve, J. M., & Warren, C. S. (2008). Financial and managerial accounting (10th ed.). Florence, Kentucky: Cengage Learning.

Eisen, P. J. (2007). Accounting (5th ed.). New York: Barron's Educational Series.

Empleo, P. M., & Robles, N, S. (2007). Intermediate Accounting (Vol. 1). Mandaluyong City: Millenium Books, Inc.

Hartman, S., Shim, J. K., & Siegel, J. G. (1997). Schaum's quick guide to business formulas: 201 decision-making tools for business, finance, and accounting students. New York: McGraw-Hill Companies.

Mercado, E. C. (2007). Hands-on inventory management. Boca Raton, Florida: Auerbach.

Minner, S. (2000). Strategic safety stocks in supply chains. New York: Springer.

Moini, J. (2004). The pharmacy technician: A comprehensive approach. Florence, Kentucky: Cengage Learning.

Peterson, A. M. (2004). Managing pharmacy practice: principles, strategies, and systems (Vol. 18). USA: CRC Press

Shim, J. K., & Siegel, J. G. (2000). Financial management (2nd ed.). Hauppauge, New York: Barron's Educational Series.

Toomey, J. W. (2000). Inventory management: principles, concepts and techniques. New York: Springer.

Trenerry, A. (1999). Principles of internal control. Sydney, Australia: UNSW Press.

Yadav, A. V. (2008). Hospital and clinical pharmacy (15th ed.). Tamil Nadu: Pragati Books Pvt. Ltd.

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