A system study on the warehousing of DP Lube Oil Marketing Center

• Main Authors: Layug, Ria Gail, Pe, Cherry, Viray, Carla Michaela
• Format: text
• Language: English
• Published: Animo Repository 2002
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11991
• Institution: De La Salle University

Executive Summary. D.P. Lube Oil Marketing Center was established in 1977 with an initial capital of less than a hundred thousand pesos. Initially, the company is located in Balintawak but later on move to Cubao where it is presently located. The company is a distributor of Shell lubricant products and they are the sole distributor of these products for most part of Luzon. Currently the system is experiencing a deviation between the computer count and physical count by 5,707 units. The effects of the problem are a potential loss of Php 10, 698,511.14 of unaccounted inventories, overstocking worth Php 1,858,790.70, opportunity loss due to cancelled order worth Php 14,802.83 and understocking of products. The causes of this problem are due to the present storage system of the warehouse, which is randomized and encoder tends to forget to encode documents in the computer. In order to solve this problem, changing the storage policy to dedicated and adopting a bar code system in the warehouse will be implemented. The one time cost of implementing the new system is Php 136,928.22 and has a yearly cost of 1,390.00. A manual simulation was performed to determine the cost of the proposed system. The proposed system incurs a cost worth Php 30,237.89. The quantitative benefits of the proposed system are the easier storing and retrieving of products and the accurate count of inventories in the warehouse. The net benefit of the new system is Php 1,844,957.99 with a pay back period of less than a year. The implementation of the proposed system will be done once the management approved the new system. After approving the new system canvassing of equipment for the bar code and re-layouting of the warehouse will be done. Training and monitoring of the new system follows in order to have a smooth and right operation. The proponents recommend reviewing the storage policy every year since demand may vary year after year. Another recommendation is to include a computer program that will remind the checkers and encoder when re-ordering is needed already. This program will also include how many stocks are still there in the warehouse.