5-24. The Berridge Company (Document Flowcharts) The Berridge Company is a discount tire dealer that operates 25 retail stores in a metropolitan area. The company maintains a centralized purchasing and warehousing facility and employs a perpetual inventory system. All purchases of tires and related supplies are placed through the company's cen- tral purchasing department to take advantage of the quantity discounts offered by its suppliers. The tires and supplies are received at the central warehouse and distributed to the retail stores as needed. The perpetual inventory system at the central facility maintains current inventory records, which include designated reorder points, optimum order quantities, and balance-on-hand information for each type of tire or related supply. The participants involved in Berridge's inventory system include (1) retail stores, (2) the inventory control department, (3) the warehouse, (4) the purchasing department, (5) accounts payable, and ( outside vendors. The inventory control department is responsible for maintenance of the perpet- ual inventory records for each item carried in inventory. The warehouse department maintains the physical inventory of all items carried by the company's retail stores. All deliveries of tires and related supplies from vendors are received by receiving clerks in the warehouse department, and all distributions to retail stores are filled by shipping clerks in this department. The purchasing department places every order for items needed by the company. The accounts payable department maintains the subsidiary ledger with vendors and other creditors. All payments are processed by this department. The documents used by these various departments are as follows: Retail Store Requisition (Form RSR). The retail stores submit this document to the central ware- house whenever tires or supplies are needed. The shipping clerks in the warehouse department fill the orders from inventory and have them delivered to the stores. Three copies of the doc ument are prepared, two of which are sent to the warehouse, and the third copy is filed for reference. Purchase Requisition (Form PR). An inventory control clerk in the inventory control depart ment prepares this document when the quantity on hand for an item falls below the designated reorder point. Two copies of the document are prepared. One copy is forwarded to the pur- chasing department, and the other is filed. Purchase Order (Form PO). The purchasing department prepares this document based on infor mation found in the purchase requisition. Five copies of the purchase order are prepared. The disposition of these copies is as follows: copy 1 to vendor, copy 2 to accounts payable department, copy 3 to inventory control department, copy 4 to warehouse, and copy 5 filed for reference. Receiving Report (Form RR). The warehouse department prepares this document when ordered items are received from vendors. A receiving clerk completes the document by indicating the vendor's name, the date the shipment is received, and the quantity of each item received. Four copies of the report are prepared. Copy 1 is sent to the accounts payable department, copy 2 to the purchasing department, and copy 3 to the inventory control department. Copy 4 is retained by the warehouse department, compared with the purchase order form in its files, and filed together with this purchase order form for future reference. Invoices. Invoices received from vendors are bills for payment The vendor prepares several copies of each invoice, but only two copies are of concern to the Berridge Company: the copy that is received by the company's accounts payable department and the copy that is retained by the vendor for reference. The accounts payable department compares the vendor invoice with its file copy of the original purchase order and its file copy of the warehouse receiving report. Based on this information, adjustments to the bill amount on the invoice are made (e.g. for damaged goods, for trade discounts, or for cash discounts), a check is prepared, and the payment is mailed to the vendor. Requirements 1. Draw a document flowchart for the Berridge Company using the symbols in Figure 5-7. 2. Could the company eliminate one or more copies of its RSR form? Use your flowchart to explain why or why not 3. Do you think that the company creates too many copies of its purchase orders? Why or why not? Document Document flow Journal or ledger Multiple copies of a specific document Flow of physical goods (inventory, etc.) Information flow (without document flow) Envelope for mailing or distributing bills, checks, etc. Adding machine tape total utilized for batch control Keying operation Manual operation Permanent file of manual documents (letter inside symbol indicates file sequence order) A = alphabetically N=numerically D = chronologically (year, month, day) On-page connector between two points on a flowchart Off-page connector between two points on a flowchart Duh Annotation symbol for comments or further descriptions Electronic data communication FIGURE 5-7 Common document flowcharting symbols