Beccan Company is a discount tire dealer operating 25 retail stores in a large metropolitan area. The company purchases all tires and related supplies using the companys central purchasing department to optimize quantity discounts. 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, designated reorder points, and optimum order quantities for each type and size of tire and other related supplies. Beccan has a state-of-the-art computer system and uses the following five documents in its inventory control system.

Retail stores requisition. The retail stores electronically submit a retail store requisition to the central warehouse when they need tires or supplies. The warehouse shipping clerk fills the orders from inventory and authorizes store deliveries.

Purchase requisition. The system notifies the inventory control clerk when the quantity on hand for an item stored in the central warehouse falls below the designated reorder point and prepares a purchase requisition. The inventory control clerk adjusts the purchase requisition as needed, approves it, and forwards it to the purchasing department.

Purchase order. The system uses the data in the purchase requisition to prepare a purchase order and tentatively select a vendor based on selection criteria built into the system such as price and availability. The purchasing agent adjusts the order or vendor selection as needed, approves it, and e-mails it to the vendor. A copy of the purchase order is sent to accounts payable.

Receiving report. For every purchase order, the system prepares a receiving report showing the goods ordered, but not the quantities ordered. When the goods arrive, the receiving clerk enters the date they arrived and the quantity of each item received. The completed receiving report is sent to accounts payable.

Invoice. Vendors send Beccan an electronic invoice that shows the goods shipped, their prices, and the total amounts owed. The following departments are involved in Beccans inventory control system:

Retail stores. Each store counts its inventory at the end of every quarter and reconciles it to the corporate database. On a weekly basis, each store reviews its inventory to determine what to requisition from the central warehouse. When a store runs out of inventory, or is dangerously low, it can send a rush order to the warehouse.

Inventory control department. Responsible for the maintenance of all perpetual inventory records, including quantity on hand, reorder point, optimum order quantity, and quantity on order for each item carried.

Warehouse department. Maintains the physical inventory of all items carried in stock. All orders from vendors are received (receiving clerk) and all distributions to retail stores are filled (shipping clerks) in this department. Purchasing department. Places all orders for items needed by the company.

Accounts payable department. Maintains all open accounts with vendors and other creditors. Accounts payable reviews and reconciles the vendor invoice, purchase order, and receiving report. Any discrepancies are cleared up, and the vendor invoice is paid within 10 days of the receipt of goods by electronically transferring the amount due to the vendors bank account.

REQUIRED a. Prepare a BPD that documents Beccans business processes.