Conceptual Model: Draw an REA model with cardinalities for the operating events in purchase acquisition process described above. Make sure you differentiate between the operating events and the information events.

The Purchase Acquisition Procedures

Because this is a small business, the company has chosen not to require purchase requisitions. The purchase acquisition process begins when the store manager creates a purchase order for the inventory items needed. The store manager creates a purchase order for goods needed based on a variety of factors. Most orders are focused on a 6-12 month lead time and are expected to be fulfilled over a period of time involving multiple deliveries. The purchase order is communicated by the store manager to farmers either online or by fax machine. All suppliers require a 5-20% deposit at the time of order. The deposit payment is made by the store manager using the company credit card.

The receiving clerk is responsible for receiving and inspecting each delivery at the store for correct items, quantity and quality. When the goods arrive from a supplier, the receiving clerk compares the goods to a purchase order printed from the system and if differences or deficiencies exist, the manager helps to resolve the difference. If there are no differences between the purchase order and the goods received, the receiving clerk keys in the information to update the received goods transaction file and two copies of the receiving report are subsequently printed. One copy of the receiving report is filed in the receiving department by date. The other receiving report and purchase order are sent to the accounts payable department. Goods that fail inspection will be returned within 24 hours.

After the supplier invoice is received in the accounting department, the matching documents are pulled from the Accounts Payable pending file. An accounting clerk reviews the documents and manually creates a 2-part carbon check. Suppliers require the market to pay in full by the 15^th of each month for all deliveries made during the preceding month. The carbon copy of the check is scanned into the system by the accounting department in order to update the cash master file. The carbon copy check and all supporting documents are filed in accounting by supplier name.