Lecimore Company has a centralized purchasing department managed by Tawanda Mason. Tawanda has established policies and procedures to guide the cleri¬ cal staff and purchasing agents in daily department operations. She is satisfied that these guidelines conform to company objectives and that no major problems exist in the regular operations of the purchasing department.

Lecimore’s internal audit department recently performed a routine operational audit of the purchasing department. Initial audit findings are as follows:

• All significant purchases are made on a competitive basis. The probability of timely delivery and supplier reliability is taken into account on a subjective basis.

• Quality acceptability requirements are provided to all potential suppliers.

• The materials manager of the inventory stores department (not the purchasing department) checks supplier adherence to quality specifications. The materials manager inspects the goods upon arrival and ensures that only goods meeting minimum quality standards are transferred to the storeroom.

• The materials manager prepares all purchase requests, which are based on the production schedule for the next four months.

The internal audit staff then observed the purchasing department’s operations and noted the following:

• One supplier provides 90% of the crucial raw materials Lecimore uses. This supplier has a reliable delivery record and has been the low bidder for several years.

• As production plans change, rush orders are made by production directly to the purchasing department. As soon as the production department announces changes, purchasing orders the appropriate materials. Tawanda is proud of her staff’s quick response time to such orders. Materials on hand are not reviewed before these orders are placed, however.

• Materials that had been ordered for cancelled production runs are placed into inventory for future use.

• The purchasing department absorbs the cost variances, if any, associated with rush orders because Tawanda believes this is a way of being a “good team player.”

• The materials manager accepts partial and advance shipments and notifies the purchasing department of the receipt of the goods. The purchasing department is responsible for following up on partial shipments; no action is taken to dis¬ courage advance shipments.

Required

a. Identify weaknesses and inefficiencies in the purchasing procedures that Tawanda developed for Lecimore.

b. Suggest ways to overcome those weaknesses or inefficiencies.