Weak inventory management system at hong hung general hospital

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYEN THI HOANG YEN

WEAK INVENTORY MANAGEMENT
SYSTEM AT HONG HUNG
GENERAL HOSPITAL

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2021

1


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

NGUYEN THI HOANG YEN

WEAK INVENTORY MANAGEMENT
SYSTEM AT HONG HUNG
GENERAL HOSPITAL
MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Dr. DOAN ANH TUAN

Ho Chi Minh City – Year 2021

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Weak Inventory Management System at Hong Hung General Hospital

Table of Contents
List of tables...............................................................................................................................5
List of figures............................................................................................................................. 6
Executive Summary.................................................................................................................. 7
Acknowledgments..................................................................................................................... 8
1. Company overview................................................................................................................9
1.1 Hung Duy Corporations...................................................................................... 9
1.1.1 Overview.............................................................................................9
1.1.2 Organization structure.......................................................................10
1.2 Hong Hung General Hospital............................................................................10
1.2.1 Hong Hung Logo...............................................................................11
1.2.2 Mission, Vision, Value...................................................................... 12
1.2.3 Organization structure.......................................................................13
1.2.4 Finance and Accounting Department................................................ 13
1.2.5 Inventory work-flow at Hong Hung Hospital................................... 15
2. Symptoms...........................................................................................................................17
2.1 Decrease inventory turnover............................................................................. 17
2.2 Decrease profit margin......................................................................................19
3. Problems identifications................................................................................................... 21
3.1 Potential problems.............................................................................................21
3.1.1 Weak inventory management............................................................22
3.1.2 Poor financial planning..................................................................... 23
3.2 Validating problems.......................................................................................... 24
3.2.1 Weak inventory management............................................................24

3.2.2 Poor financial planning..................................................................... 25
3.2.3 Main problem....................................................................................27
4. Cause validation................................................................................................................ 29
4.1 Potential causes................................................................................................. 29
4.1.1 Lack of integrated solutions for whole range of business
functionalities............................................................................................................29
4.1.2 Unclear task work-flow and impact.................................................. 30
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Weak Inventory Management System at Hong Hung General Hospital

4.1.3 Imprecisely inventory planning and forecasting............................... 30
4.2 Validating causes...............................................................................................31
4.2.1 Lack of integrated solutions for whole range of business
functionalities............................................................................................................31
4.2.2 Unclear task work-flow and impact.................................................. 31
4.2.3 Imprecisely inventory planning and forecasting............................... 32
5. Alternative solutions......................................................................................................... 33
5.1 Proposal solutions:............................................................................................ 33
5.1.1 Solution 1: Two-bins system (Kanban system).................................34
5.1.2 Solution 2: Microsoft Dynamic 365 (ERP solution).........................36
5.2 Evaluation and solution decision:..................................................................... 37
5.3 Action plan........................................................................................................40
5.4 Expected outcome............................................................................................. 51
6. Supporting information....................................................................................................52
Appendices...............................................................................................................................55
References................................................................................................................................ 65

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Weak Inventory Management System at Hong Hung General Hospital

List of tables
Table 1 : Competitor comparison (Source: Internal survey)..................................................... 11
Table 2 : Inventory turnover from 2017 - 2020 of Hong Hung General Hospital (Source:
Internal Report of Financial Statement)....................................................................................17
Table 3 : Gross profit margin 2017 - 2020 of Hong Hung General Hospital............................19
Table 4 : Advantages and Disadvantages of Alternatives Solutions......................................... 39
Table 5 : Project Plan to implement Kanban system from June, 2021 to Jun, 2022.................50

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Weak Inventory Management System at Hong Hung General Hospital

List of figures
Figure 1 : Hung Duy Organization Structure (Source: Internal organization chart).................10
Figure 2 : Hong Hung General Hospital Organization Structure (Source: Internal organization
chart)......................................................................................................................................... 13
Figure 3 : Finance Organization Structure - Hong Hung General Hospital..............................13
Figure 4 : Existing inventory control work flow at Hong Hung hospital (Source: Summarized
by author based on interview)................................................................................................... 16
Figure 5 : Inventory turnover graph (Source: Internal Report of Financial Statement)............18
Figure 6 : Initial Cause - Effect Map (Source: Consolidated by author).................................. 21
Figure 7 : Updated Cause - Effect Map (Source: Consolidated by author).............................. 28
Figure 8 : Final Cause - Effect Map (Source: Consolidated by author)....................................29
Figure 9 : Theoretical grounding & critical analysis (Source: Consolidated by author).......... 33
Figure 10 : Fish bone analysis diagram of the week inventory management (Source:

Consolidated by author)............................................................................................................ 33
Figure 11 : Application Programming Interface (API) (17)......................................................35
Figure 12 : Two-bins system process (Sources: GREGORY SCHMIDT) (18)........................ 35
Figure 13 : Microsoft Dynamics 365 functionaries (Source: erpsoftwareblog) (20)................37
Figure 14 : Evaluation Proposal Plan by author....................................................................... 39
Figure 15 : Project implementation plan form proposal by author........................................... 40

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Weak Inventory Management System at Hong Hung General Hospital

Executive Summary
As strategic plan aligned with Hong Hung General Hospital’s vision is ³WR
EHFRPH WKH OHDGLQJ SURYLQFLDO JHQHUDO KRVSLWDO LQ WHUPV RI SURIHVVLRQDO TXDOLW\
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turning point of expansion business up to triple capabilities. This signal is an
opportunity to serve community health-care needs, offer expanded services and
improve your hospital’s bottom line. Expansions last on average about four to five years
but have been known to go on anywhere from 10 months to more than a decade to be stable,
in this case to challenge company how to plan properly resources including finance, people
and technology.

Recently, loss profit margin and reduction inventory turnover are issues need to
discover. Through interviewing relevant key persons in charge to identify main
problem, poor inventory management system has experienced to evaluate efficiency
when separating operational activities by department. Information has been the key
point to look at for a better organization and new developments to give any decisions.

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SDUDPHWHUV DQG IXWXUH HYHQWV´ (1) Toward main problem, potential causes are Lack of
integrated solutions for whole range of business functionalities, unclear task work flow
and impact, imprecisely inventory planning and forecasting. In this paper, in-depth
interviews, literature review and historical data are supported, main cause is validated
to focus on “Lack of integrated solution for whole range of business functionalities”
and effective solution proposed in order to improve inventory management in
particular and the accounting management system in general.

7


Weak Inventory Management System at Hong Hung General Hospital

Acknowledgments
The paper has not been successful if having no any supports and
encouragements of my thesis supervisor - Dr. Doan Anh Tuan. I would like to take this
chance to show my gratitude to valuable suggestions and precious time during period
of study: first of all from course “Corporate Finance” to motivate me to choose
Finance field in my final thesis.
During proposal thesis review, Dr. Tran Phuong Thao and Dr. Nguyen Phong
Nguyen as examining committee, I would raise my sincere gratitude for their precious
comments and advice helped my thesis journey to take on its final shape.
I would like to give big thanks to my mother who is always besides me any
decisions to make me now. Also, I am grateful to have experienced with wonderful
classmates and my trust team together from 1st course to final course at ISB. I must
also send my sincere thankfulness to Hong Hung General Hospital management
especially Mr. S Hong - Board of Supervisors who gives all favorable conditions to

have interview with key persons in charge, provide data and input comments to fulfill
whole picture of organization during action plans.
Last but not least, I want to express my biggest “Thank You” to all great people
who make me feel fortunate to have them in my life.

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Weak Inventory Management System at Hong Hung General Hospital

1.

Company overview
1.1 Hung Duy Corporations
1.1.1 Overview

Hung Duy Trading Industry Transport Import - Export Company Limited (Hung
Duy) was established in 1994 as Tapioca starch factory and now becomes corporation
operating in all brands divided into 05 fields with total headcount of 1339 up to
December 31st 2020:
1. Tapioca starch manufacturing: Hung Duy has 2 factories locating in Hoa Hoi
Industrial Zone and Ninh Dien Industrial Zone in Tay Ninh Province.
2. Distribution: total 12 prestigious brands in the market up to now: Vina Kyoei
Steel, Castrol Petrol Oil, Binh Tay Steel Wire Netting, Unilever, Vinamilk, Kinh Do,
Thanh Thanh Cong, Abbott Nutrition, Kimberly-Clark, Masan Consumer, FES (with
Pho Cafe brand) and Tuong An (oil products)
3. Transportation: company has more than 60 trucks with capacity from 01 ton
to 40 tons per truck
4. Industrial Trees: area of 250 hectare (ha) to plant rubber trees
5. Health-care: Hong Hung General Hospital (precursor of Cao Van Tri General

Hospital in 2007)
6. Hospitality: Cana Commercial and Entertainment, Sunrise Hotel, Victory
Hotel (2)

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Weak Inventory Management System at Hong Hung General Hospital

1.1.2 Organization structure

Figure 1: Hung Duy Organization Structure (Source: Internal organization chart)

1.2 Hong Hung General Hospital

Hong Hung General Hospital (HHH) was founded in 1996 as Hong Hung
health-care , precursor of Cao Van Tri General Hospital in 2007 is located on an area
of over 40,000 m2, in the center of Hoa Thanh town, Tay Ninh province, with design
in harmony with nature, full facilities along with modern medical equipment and
experienced medical staffs will bring the peace of mind cure and safe - quality healthcare experience. Hong Hung General Hospital has the overall design including 02
buildings: a 05-storey building and a 07-storey one. This project is expected to be
implemented through 02 stages with the total scale of 600 beds. Phase 01 was started
in April 2018 and officially go into operation on October 10th, 2020 with the 5-storey
building and the scale of 300 beds.
Headcount landing in 2020 is 480 and plan to extend more 50 headcount in
2021 (planing to operate some functional departments).
Main Competitors: Le Ngoc Tung General Hospital (in same Tay Ninh province)
provided better service under better infrastructure than precursor Cao Van Tri of Hong
Hung General Hospital (HHH) before Oct 2020 with higher price. From date officially
10

Weak Inventory Management System at Hong Hung General Hospital

go into operation, HHH improves infrastructures and services but still keeps
competitive prices (a little bit higher than before but still cheaper than main
competitor). It is sure that quality always is core value to maintain during time and
also signature of HHH in Tay Ninh province.
Before

After Oct/2020

Le Ngoc Tung Cao Van Tri
General
General
Hopital (LNT) Hopistal (CVT)
Quality

Le Ngoc Tung
General
Hopital (LNT)

Hong Hung General
Hospital (HHH)
(precursor of CVT)

Better

Better

Price

Higher

Higher

(a little bit higher than
before but still cheaper than
LNT)

Infrastructure

Better

Better

Better

Service

Faster

Faster

Table 1: Competitor comparison (Source: Internal survey)

1.2.1 Hong Hung Logo

With many years of experience working and developing in the health-care
section in particular and in other sections also, we have concluded that:

“COORDINATION” is the prerequisite for sustainable development. That is basis of
the formation of the logo and the brand of Hong Hung General Hospital. The whole is
a harmonious combination of these elements. This is a stylization and combination of:
 Letter H: Hong Hung Hospital (Hong Hung
Hospital)
 Red cross symbol: symbolizing humanity,
responsibility, neutrality and impartiality.
 Flower shape with 4 heart-shaped petals:
representing Hong Hung's core values: Ethics - Safety
- Quality - Innovation

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Weak Inventory Management System at Hong Hung General Hospital

The combination of all is a closed, circular link; a fine, rhythmic connection; is
the readiness to meet the multi-faculties of the medical staff, a thoughtful, accurate,
rhythmic, ready-to-meet combination of Hong Hung General Hospital and the medical
staff to ensure safety and efficiency in medical examination and treatment
1.2.2 Mission, Vision, Value

Vision: To become the leading provincial general hospital in terms of professional
quality, meeting the JCI standards and be a place to study, research and train healthcare workforce of Tay Ninh province.
Mission: Based on the mission of "people-centered", Hong Hung General Hospital is a
provider of safe and quality health-care services, satisfying the needs and desires of the
people; a happy working environment, always learning, researching and creating;
sharing benefits for the community and actively contributing to the development of the
health-care and education of Tay Ninh province.
Core value: Ethics - Safety - Quality - Creativity

 Ethics: All of our applying methods to patients must be based closely on the
foundation of morality
 Safety: Always working together to build a safe hospital environment for patients
and health-care workers.
 Quality: The quality management system ensures the comfort, friendliness,
timeliness and efficiency.
 Creativity: Always encourage and support staff in studying, researching and
applying scientific advances in hospital activities.

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Weak Inventory Management System at Hong Hung General Hospital

1.2.3 Organization structure

Figure 2: Hong Hung General Hospital Organization Structure (Source: Internal organization chart)

1.2.4 Finance and Accounting Department
Finance and Accounting Department has total 15 headcounts: 8 headcounts in the administration

office (including 1 vacant) and 7 headcounts working directly with customers.

Figure 3: Finance Organization Structure - Hong Hung General Hospital
(Source: Internal organization chart)

Finance Accounting department focuses on mostly accounting operations such as
posting, following-up account receivable and account payable, recording warehouse… that is
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Weak Inventory Management System at Hong Hung General Hospital

maintained in ERP FAST Business Online. Reporting line to Chief Finance Officer (CFO) is
02 General Accountants: 01 headcount for tax accounting and 01 headcount for managerial
accounting. The scope of work under managerial accounting is limited to consolidated data
and hasn’t involved in any strategic proposals to CFO. As comment of Ms. HA (CFO), she
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Management systems have been implementing from 2019 are ERP FAST
Business Online and hospital management’s system of VNPT HIS:
 FAST Business Online web-based ERP software is developed on the web
platform, allowing access and work anytime, anywhere, from any devices.
FAST Business Online is a total Enterprise Resource Planning (ERP) solution,
covering most operations of professional departments, from finance and
accounting, buying-selling-inventory, to production administration, human
resource management and administration customer relationship.
Solution from FAST company is good but when applying to the hospital, it just
limits to maintain accounting data from submitted documents from departments
but hasn’t yet synchronized with inventory management module of hospital
management’s system. Daily operational activities, warehouse accountant will
extract data from hospital management’s system then split into 6-8 template excel
files to import into FAST software to record inventory information.
 VNPT - HIS Smart medical ecosystem. that includes all of the necessary
professional features to improve the medical examination and treatment
process, including: reception, examination, inpatient treatment, subclinical,
pharmaceutical supply management, hospital fee payment, statistical reports,

and so on. Not only does this system actively participate in medical
examinations and procedures, but also remote control to help reduce the load
on medical facilities during medical examination and treatment. (3)
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Weak Inventory Management System at Hong Hung General Hospital

Pharmaceutical Department is key owner of supply management in HIS system
that records all warehouse operations and provides for effective management to be
able to manage materials’ storage and locations in many units and stock expiration
date in the Pharmaceutical warehouse. The limitation of HIS system is that it only
tracks items until they are delivered to the Consumable Department, assuming that
the entire amount is consumed. This information will be collected and imported
into the FAST system.
1.2.5 Inventory work-flow at Hong Hung Hospital
To clarify about inventory process, we go through work-flow including IN and OUT
process that is implementing now:
Inventory Received Process (IN)
 Step 1: Pharmaceutical department receives goods & invoices, issue “Inventory
Received Note” to confirm “Received” status then input data in Hospital Inventory
Management - VNPT HIS
 Step 2: Send invoices, signed “Inventory Received Note” to Warehouse
Accountant
 Step 3: Warehouse Accountant to extract data from HIS, cross check with invoices
and signed “Inventory Received Note”.
 If matched, extract data and convert to template file to upload in FAST software
(Duration: 1 week/time and complete in 1 working day if all are properly
completed)
 If variance data, return to Pharmaceutical department to adjust then submit

again to Accounting Department until it matches
 If return goods, cancellation/adjustment invoices need signatures of Warehouse
Accountant
 If wrong received goods, will solve in Pharmaceutical department.
15


Weak Inventory Management System at Hong Hung General Hospital

Inventory Delivery Process (OUT)
 Step 1: Pharmaceutical Department receives request from Consumable
Departments (cross-check and approved basing on Bill of Materials (BOM) set
from Board of Management) then export Medical equipment, medicines (drugs),
issue “Inventory Delivery Note” to confirm “Delivered” status then update data in
Hospital Management - VNPT HIS
 Step 2: Warehouse Accountant records data in FAST
 In-patient: Pharmaceutical Department sends data to Warehouse Accountant 01
time/month (based on actual data recording in Pharmaceutical Department (not
actual data from Consumable Department)
Out-patient: after 24hours, data will be available because cashiers are in charge
of maintaining data right after issuing invoices
Stock check process
Stock check will organize periodic warehouse inventory (monthly/quarterly or
extraordinary examination). Accounting Department will inform to Pharmaceutical
Department and Pharmaceutical Department will work with Consumable Departments
to request update stock and documents to share as proofs.

Figure 4: Existing inventory control work flow at Hong Hung hospital (Source: Summarized by
author based on interview)

16


Weak Inventory Management System at Hong Hung General Hospital

2. Symptoms
2.1 Decrease inventory turnover

Inventory is a significant and important asset for retailers because it reflects
what a company has to offer its customers for prompt-time purchase; nonetheless,
considerable costs are associated with holding inventory. In this thesis, inventory
turnover is used as a metric of inventory performance. This measure is closely
monitored by senior executives at both retail chain and store levels in practice, and is
the only performance measure on inventory management available to other
stakeholders through publicly available financial statements (4).
Inventory turnover rate is derived by dividing Cost of Goods Sold (COGS) by
average inventory, which is determined by averaging beginning and ending inventory
quantities over a specified time period. (5)
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Table 2: Inventory turnover from 2017 - 2020 of Hong Hung General Hospital (Source: Internal
Report of Financial Statement)

The time span of this paper is from 2017 to 2020, that is from the year of 2017
before business expansion. In 2018 hospital had built new location to move Cao Van
Tri hospital in Ton Duc Thang street to Pham Van Dong street in the same Hoa Thanh
District, Tay Ninh province.
Based on internal report from 2017 to 2019 of HHH, average inventory amount
has trend increment of 4% and 36% in order 2018, 2019 versus 2017. In 2020, under
17


Weak Inventory Management System at Hong Hung General Hospital

impact of Covid-19 crisis, revenue decreases with number roughly equivalent to year
2017 but average inventory has higher then 2017 and 2018 as well.

Figure 5: Inventory turnover graph (Source: Internal Report of Financial Statement)

Inventory turnover has increase double digit from 6.34 to 13.00 then falls to
11.89 times in 2019 and 11.02 times in 2020. Decreasing inventory turnover from
2018 to 2020 means inventory holding longer than previously measured time periods.
The slight drop rate maybe indicate temporary problem for several periods during
expansion business but company needs to have a look to have proper planning or find
solution to control inventory not too much or too little on hand.
In Table 2 above shows results that the efficiency of using materials from 2019
is not as good as in 2018. Details can be specifically listed down as below:
 Firstly, the cost of goods sold increased by 24% due to the selection of high-priced
health insurance drugs, which was also warned by the Vietnam Social Security in
monitoring the use of health insurance fund.
 Second, the number of inventory turnover turns down 1.11 times in 2019 and 0.87
times in 2020 to indicate that company has holding more inventory. In the
condition of limited storage’s space, hospital warehouses are overloaded and

cramped, this point needs to be considered careful.
18


Weak Inventory Management System at Hong Hung General Hospital

 Third, there is an unusual increase in the use of consumables and testing chemicals,
the rate of increase is much more than double the increase in cost of goods sold.
According to the 2018 report, the saving of consumables and testing chemicals is
very good, but the results in 2019 and 2020 need to be reviewed and strictly
controlled to avoid waste in 2021.
In general, lower inventory turnover results in difficulty to generating their
inventory into sales. When the inventory turnover ratio is well-managed, cash flow is
improved, and inventory is well-controlled to optimize profit. Therefore, decrease
inventory turnover is a symptom need to be focused on this paper.
2.2 Decrease profit margin

Table 3: Gross profit margin 2017 - 2020 of Hong Hung General Hospital
(Source: Internal Report of Financial Statement)

Gross profit margin is calculated by Revenue deducts Cost of Sales (COGS).
Gross profit margin refers to ratio of gross profit to the sales, revenues of HHH
are higher 21%, 19% in order 2018, 2019 but COGS also bears more than double cost
in 2018 (113%) and 24% in 2019 (higher than revenue increment). In 2020, revenue
significantly drop 32% while COGS declined 26% (lower deduction of 6%). Rational
reasons occur profit margin fluctuation, author interviewed Ms. Ha, Mr. S Hong and
Ms. P to have multiple perspectives to evaluate:
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Based on financial information and interview feedback, the reduction profit
could be a result of assuming 100% consumption of Consumable Department’s
warehouse after delivering from Pharmaceutical Department’s warehouse. This way

can give inaccuracy financial information to evaluate efficiency by department,
specifically COGS. The reason is physical inventory stores in Consumable
Departments’ areas are higher than book value. Thus, company may over-exceed
stocks in warehouse to lead to out-of cash on hand to operate smoothly and somehow
lack of information to make decision.
In brief, failure control or high COGS recording can prove decreased gross
profit margin. Consequently, deduction gross profit margin is identified as a symptom
need to be resolved.
20


Weak Inventory Management System at Hong Hung General Hospital

3. Problems identifications

To find out the existing problems of HHH, author follows the several steps:
 First of all, literature review and research related to the identified symptoms,
combine and analyze with the company’s current data from their financial
statements, internal reports.
 Based on the indicators and ratios to assess the overall situation of the company,
potential issues and related questions are built.
 After that, we conducted depth interview with the related parties to involve in
process.
3.1 Potential problems

From 1st interview with Chief Accountant, Human Resources Manager, Board
Supervisors and Managerial Accountant, the author withdraws the “initial cause-andeffect” map is illustrated as below:

Figure 6: Initial Cause - Effect Map (Source: Consolidated by author)

After having deep-interviews with company representatives, literature review
and the internal reports of the departments, the symptoms identified can be driven by

21


Weak Inventory Management System at Hong Hung General Hospital

the list of potential problems which are: weak inventory management and poor
financial planning.
3.1.1 Weak inventory management

A manual inventory system is heavily dependent upon people's actions, which
increases the risk of human errors. The amount of time required to track stocks can be
used for more profitable purposes. This needs more time and space for keeping track
of paper records, identifying details and secure information.
The supply of material to patient care units plays an important part of the
hospital’s internal supply chain. As current process, Pharmaceutical Department
records data in VNPT HIS after delivering inventory to Consumable Departments’
warehouse then transfer information to ERP FAST Business by excel template
conversion. This is completion OUT process and have no any tracking systems how
many percentage used in Consumable Departments. This is big hole because there is
no control system of consumable supplies and nobody is assigned as key person in
charge by department. Reports have no meaning to evaluate department’s efficiency in
this situation. Besides, having no any systems to track inventory in Consumable
Departments’ warehouse that overrun operational cost need to pay attention of lower
profit margin as a result.
Inventory models have been proposed in the literature for several different
environments, depending on characteristics of the demand, of the inventory review
process, of lead and setup times, etc. As comments of Darling and Wise, it is stated

that good inventory management practices can generate huge savings in a hospital’s
operating budget, improving the quality of patient care and services. (6) As can be seen
that hospital also faces with significant delay in inventory record:
- Two unstable poles of hospital management system and accounting software,
reports have no real time because of different cut-off data. As current matrix, stock
report of HIS will display after 24 hours under Accounting role, then warehouse
accountant will extract data to convert FAST template to upload.
22


Weak Inventory Management System at Hong Hung General Hospital

- For periodical stock check, Accounting Department will inform scheduled
plan to Pharmaceutical Department then Pharmaceutical Department will request
Consumable Departments to provide supporting documents to share as proofs. Based
on shared documentations of Consumable Departments, warehouse accountant will
reconcile found discrepancies in EPR FAST Business. Actual operating activities must
be represented by transactions in financial records. Because financial documents and
records are internally created, there is a possibility that records can be manipulated by
inside parties. This action illustrates legalization process to fulfill its internal control
responsibilities and have no value in controlling. The analysis allowed identification of
undesirable effect is lack of measurement of performance indicators. As can be
observed, one process was particularly problematic, where most constraints were
found. (7)
As a result, inventory record is in-corrected resulting to different physical
inventory and record, impacting on high book value inventory compares to actual
value and these are possible reasons to manage failure of COGS. leading to
overestimate forecasting. For instance, weak inventory management system could be
considered as a potential problem of Hong Hung Genenral Hospital.
3.1.2 Poor financial planning

The purpose of a financial forecast is to assess present and future economic
conditions to guide policy and programmatic decisions. A financial forecast is a
budgeting tool that gives precise figures based on historical, current, and projected
financial conditions. This will help identify potential revenue and expenditure trends
that may have a short- or long-term impact on governments. (8) When inventory is
calculated incorrectly, revenues, COGS, and profits are impacted, inventory may be
erroneous. The analysis of decreased inventory turnover ratio in 2019, 2020 as table 2
indicates over storage in the aforementioned hospital.
As discussed with Mr. S Hong: ”Inventory maintains decentralized warehouses
in its inventory and distribution management system so data is not real-time. Revenue
in FAST splits cost center by impatient and outpatient so COGS must follow to
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