ase Study Ordering and Receiving Inventory Process Leven River Nursery Pty Ltd

Ordering Inventory

When the purchase officer receives the identified products report from the product researcher, they contact each supplier via phone and ask them to fax details of the volumes of stock available, the product price and the lead time for delivery for each of the products on the report. When a supplier fax is received, the purchase officer inputs the information from the supplier fax and the identified product report into a potential products screen on the central computer. After all relevant product details have been entered,the purchase officer saves the potential product data, and then the supplier fax is stamped input and filed by the supplier name in an awaiting approval file. Every Wednesday night at 9 pm, the computer automatically checks to see if there are any new potential products, and then sends a message to the product manager requesting they review and approve the potential products. If there are no new potential products, then no message is sent to the product manager. The product manager indicates

whether products are approved for purchase by entering either y (for an approved product) or n (for aproduct not approved) into a checkbox located beside each product. The computer automatically updates the product status in the relevant datastore. Every Friday afternoon, the purchase officer prints two copies of the approved product report on the local printer, then retrieves the supplier faxes from theawaiting approval file. The matched supplier faxes are attached to the first copy of the approved product report and filed; the second copy of the approved product report is sent to the sales manager. If any potential product is not approved, the supplier fax relating to that product is disposed of in the rubbish

bin.

Receiving Inventory

The delivery driver delivers the goods, along with two copies of a delivery docket, to the warehouse officer.

The warehouse officer checks that none of the cartons looks damaged and that the number of cartons is correct, and then signs both copies of the delivery docket. The first copy of the delivery docket is returnedto the delivery driver. The warehouse officer retrieves the matching purchase order from their awaiting goods file and opens each of the cartons to verify that the correct number of products have been delivered. Once the goods have been checked, they are placed in the packing room, which is a small area close to the loading dock, designed to be readily accessible from both the warehouse and the loadingdock. The purchase order is attached to the second copy of the delivery docket and filed in a goods

received file.

Required

Prepare a document flowchart for the ordering inventory and receiving inventory sub-cycles of the expenditure cycle of Leven River Nursery Pty Ltd.

In no more than 200 words, evaluate the internal control of the receiving inventory sub-cycle of Leven River Nursery Pty Ltd