Following Is a Description of Out of Control Corporations' Inventory

question 36

Essay

Following is a description of Out of Control corporations' inventory purchasprocess for skateboard wheels. Identify the weaknessin the controls, and suggest possible improvements. When stock falls below 100 the computer automatically produca purchase requisition for more stock from the supplier. If there is a special promotion coming up, John (the marketing manager) might put in an extra purchase requisition for promotional stock. The computer numbers the dockets in sequence and sends them to the purchasing department. The purchasing department issua purchase order with their standard supplier when they receive an authorised purchase requisition. John used to work in purchasing, and is good friends with Frank who now managthe purchasing department. John sometimcovers a shift for Frank when he has a day off. When the order arrivat the warehouse receiving dock, the purchase order is compared to the goods received: The personnel check that the right typof wheels are included, the right number of wheels is included, and that they are undamaged. They then prepare a prenumbered receiving report and forward it to accounting along with the suppliers invoice. Accounting then enters the amounts from the supplier invoicinto the system.

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Definitions:

Products Increase

A term indicating that the amount of products formed in a chemical reaction increases over time.

Reactants Ratio

The proportion of the quantities of different substances reacting in a chemical reaction.

Reaction Determination

The process of identifying the specific chemical reaction or mechanism that occurs based on the reactants and products observed.

Decomposition Reaction

A chemical reaction in which a compound breaks down into two or more simpler substances.