Simple Inventory System

 

Much of the systems analysis and design, as mentioned above, consists of developing a sufficient understanding of a system to document it.  Consider the following example of a simple inventory system:

 

Decisions

• What to reorder
• When to reorder it
• How much to reorder

 

Transactions and Processing

• Place an order
• Receive merchandise
• Withdraw goods from inventory

 

Information and Its Flow

• Quantity on hand for each item
• Historical usage of each item
• Forecasts of usage
• Cost of each item
• Holding Costs
• Reorder costs
• Interest cost (to finance inventory)

 

Coordination and Communications

• Communication between the warehouse and purchasing
• Communication between marketing (forecasts) and purchasing
• Communication with vendors
• Coordination of inventory replenishment among above departments and with vendors

 

Individuals of Functions Involved

• Warehouse managers
• Stock clerks
• Receiving clerks
• Purchasing agents
• Vendors

 

Several other systems are also related to this one, including purchasing and accounts payable. The information above serves only to describe the simple inventory systems.  We could further documents this system by going into more detail,  especially concerning the flow of information. We could prepare data-flow diagrams, which are discussed later in this chapter, to help visualize how the system works. We could also document the various decisions in narrative form to provide a better understanding of the inventory system.