Confetti Shoes

CONFETTI SHOES

A CASE ANALYSIS

BY: BERNADINE EMELY L. CASTRODES

1. EXECUTIVE SUMMARY

In the year 1983, Confetti shoes opened a shoe boutique at Greenbelt Square in Makita. The store is an instant success in selling ladies shoes operated by Mrs. Bello and her employees composed of a cashier who is also the store manager with fixed monthly salary and eight salesgirls divided into two, four student trainees and four salesgirls. Student trainees are paid daily with below minimum wage requirement while the four salesgirls are paid the minimum wage prescribed by law either a permanent or regular employee.

In 1987, Confetti Shoes put up another branches at Shoemart Edsa and in Angeles, Pampanga. Mrs. Bello called out her friend, Edna Perez, an Accounting teacher in a downtown university to get some more opinions about the system controlling the inventory, unrecorded sales and also about the new outlets.  

Edna Perez visited the outlets and interviewed the Confetti staff as promised to Mrs. Bello. Mrs. Perez figured out the following sales book and its format, the posting of stock cards that do not matched from the Greenbelt store to the other outlets. Also, the daily cash deposits do not tally with the sales book. The store manager explained that sometimes, discounts from 10% to 20% are given to customers which are friends with Mrs. Bello.

After making the survey, Mrs. Perez and Mrs. Bello had another meeting. Mrs. Perez asked Mrs. Bello what she does when she visits the outlets. After hearing her answer, Mrs. Bello asked her is there an alternative ways for the system in order to minimize the loss incurred.

1. STATEMENT OF THE PROBLEM

For the owner to solve the issue regarding its system of recording sales, handling of cash and inventory management, is there an alternative way to control the operation activities of the store?

1. POINT OF VIEW

The problem is addressed to Mrs. Maria Isabel Bello, owner-manager of Confetti Shoes who by all means will decide and implement the probable changes in the shoe company.

1. ALTERNATIVE COURSES OF ACTION

• Another person should be assigned handling cash and recording of sales in the cash register. Pros: Employees can focus on their job and has proper job distribution which results to efficiency and effectiveness of their work. Cons: The management should hire another employee and should prepare for additional expenses.
• Mrs. Bello should be strict in implementing the daily record of sales in the stock cards that should be done every closing on every outlet.  Pros:  It will be easier for Mrs. Bello to check the stocks that need to be replenished and to be more organized. Cons: More jobs for the employees.
• Mrs. Bello should implement the use of cash receipts in all Confetti shoes outlets. Pros: Recording of sales will be easier because this will serve as reference in recording their sales to the sales notebook. Cons: Additional work for the employees.
• Mrs. Bello should control her shoe company by using the Merchandise Claim Counter System and Economic Oder Quantity. Pros: Using these controls, the recording of sales will be monitored and cash will equal the recorded sales. The Merchandise Claim Counter System assures management that sales are recorded in the cash register at the merchandise claim counter area and protect the stocks from shoplifter. EOQ will monitor its inventories at the optimum level considering the operating requirements and financials resources. Cons: None.

1. RECOMMENDATION

To solve the problem regarding the system of recording of sales, handling of cash and inventory management, Mrs. Bello must assign another person who is responsible on recording of sales in the sales notebook and handling of cash for the owner can easily identify who is accountable for any error or mistake. Must strictly maintain adequate records, for cash receipts to be properly deposited. Confetti Shoes must developed a control tool to monitor its sales and inventory to safeguard the company’s assets. Mrs. Bello must evaluate its inventory purchases from time to time, by computing its economic order quantity, reorder point and by having its merchandise claim counter system to identify the number of order needed in every outlets.