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Chapter 3
THE EXISTING SYSTEM
Company Profile
Alekzandra Skin Essentials is a sole proprietorship business located at
Assumption Road, owned and managed by Ms. Sandra Miranda Erorita. The
business started from a humble beginning. At first, Ms. Sandra Miranda
Erorita used the beauty products from Droplets for personal use. Until one
day, her friends noticed the positive effects of the products she is using and
asked her if she could sell the products for them because they are having
difficulty to order such product. From then, the business grew and expanded
into six branches in Baguio City.
In the business, the owner herself approves purchase orders, approves
notice for damaged goods and receives inventory report. Their products
include lotions, body scrubs, soap, cream toners, perfume, hair care, foot
care and face cream. Stem cell sets, Kojic soaps and lotion are the most sold
products, while body scrubs is the least product sold. Their selling transaction
ranges from 30 to 50 transactions per day.
After five years of hard work, determination and strong faith in God,
the business succeeded.
Narrative of the Existing System
Purchasing
The existing inventory system of Alekzandra Skin Essentials is
maintained manually by a minimal number of staff in every branch, in which
they are also the ones who records, sells, and count the inventories. The staff
is the one who will count the inventory and report to the owner if they need
to purchase stocks. The list is then given to the owner, who will be the one to
place an order for purchase from different suppliers. After the payment
through online banking is confirmed, the supplier will then deliver the
products to the main office at Palma Street.
Upon the arrival of the goods, the owner will check the quantity and
the quality of the purchased items. If there are discrepancies, the owner will
inform the supplier and if there are damaged goods, the owner will return

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them, though these rarely happens. After the inspection, the goods will be
delivered to the branch requesting the order. The receiving branch will now
inspect it manually whether the number of goods received matches the
purchase order and prepares a receiving report. At the end of the week, when
the stocks are on its minimum quantity, same procedure will be done.
Selling
Prices of the goods are based on a 40% mark-up for products that are
purchased on retail while 30% for wholesale products, then the staffs will
label the prices of the products that are to be displayed. Once the customer
decided what product to purchase, the staff will compute the total amount to
be paid and then the customer will give the payment, which is made through
cash basis. The staff will then record the transactions manually in the logbook
but most transactions are not recorded especially, when the owner is not
around or when it is only a small transaction.
Problem Areas
It is in this phase of the study that the researchers will identify the
problems encountered by Alekzandra Skin Essentials. These problems are
subject to improvement and have been focused upon for the overall
betterment of the company. This will facilitate the researchers to come up
with a plan to eliminate or minimize the problems in the existing system.
Based on the interview, the researchers identified the main problem
areas. In methodology, the way of recording the inventories is time
consuming. In the money area, at times they experience incompatible
records of cash with the actual cash on hand. When it comes to manpower,
the staffs arent that knowledgeable about proper accounting of products.
Other times, they commit erroneous computations since all are done
manually. However, the researchers found out that they dont have any
problems regarding machineries.