Conceptual model: Prepare a data model with cardinalities for the operating events, agents, and resources in the expenditure cycle process described above. Use crows feet notation for cardinalities. The data model can be hand-drawn but neatness is required. (If you use Lucid Chart use the Flowchart Process symbol for events.)

Feed My Starving Children

Feed My Starving Children (FMSC) is a non-profit organization committed to feeding hungry children around the world. Their approach includes the development of a food mixture that is easy and safe to transport, simple to make with only boiling water, and culturally acceptable worldwide. The basic dry food mixture includes rice, high protein soy nuggets, vegetables, vitamins and flavoring. The following describes the companys expenditure cycle.

Description of the Expenditure Cycle

The FMSC expenditure cycle begins when a food production manager reviews inventory records. When it is determined that inventory is needed for production of the food mixture, the manager manually prepares a purchase requisition. A carbon copy of the requisition is filed in the production department numerically. The original purchase requisition is forwarded to the purchasing department.

After receiving the requisition, a purchase order clerk prepares the purchase order using the ERP system. The purchase order clerk may negotiate price as well as combine requisitions and/or orders to achieve the lowest cost with the highest-rated vendor. Note that vendors permit back-orders. The ERP process accesses the vendor and inventory master files and updates the purchase order transaction file. Three copies of the purchase order are subsequently printed. One copy is sent to the vendor. One copy is filed in the purchasing department numerically along with the purchase requisition. The last copy is forwarded to the accounts payable department and filed in the Accounts Payable Pending temporary file numerically.

An important part of FMSC operations are the warehouse captains who monitor incoming goods. Warehouse captains are located at the receiving dock. Captains are responsible for receiving, inspecting and recording each delivery for correct items, quantity and quality. When a delivery comes in, a captain reviews the goods and manually creates a receiving report. The captain prints a copy of the related purchase order from the ERP system and compares the receiving report to the purchase order for quantity or item differences. If there is a difference, the captain works with the department manager to resolve the discrepancy. When no differences exist, the captain stamps the original receiving report approved and keys the data into the ERP system to update the receiving transaction file. The general ledger is automatically updated when changes are made to these records. The approved receiving report and the purchase order print out are sent to the accounts payable department.

The approved receiving report and purchase order are received in the accounts payable department where a cash disbursement clerk manually creates a check on carbon copy based on the supporting documentation. Vendors allow FMSC to make partial payments by the 20th of each month for all deliveries made during the preceding months. The original check is mailed to the vendor and the carbon copy is sent to the accounting department and filed by check number along with the supporting documentation. The accounting department scans all carbon copy checks into the ERP system to update the disbursement transaction file.

Some vendors allow inventory items to be returned and will work with the warehouse captain to coordinate that process.