Suppose that the purchasing department of a furniture manufacturer acquired a large shipment of new cloth from a foreign supplier. The cloth looked normal, with no apparent flaws, but it was subject to easy tears and rips. Suppose the flaw was undetected during production, and the upholstered furniture was shipped to distributors and subsequently sold.

Required:

a. Where do you think the most important risks to the company arise in this situation?
Explain.

b. Suggest one or more controls that would help avoid a similar problem in the future.