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Question 3: Question 3 May 2020 Pepper operates a small chain of toy shops across Northern Ireland. All of the goods sold by Pepper
Question 3: Question 3 May 2020 Pepper operates a small chain of toy shops across Northern Ireland. All of the goods sold by Pepper are manufactured by Pepper's suppliers. Each month, Pepper orders goods from around 30 different suppliers. Pepper's main supplier is a UK-based wholesaler, Chili, and Pepper buys around 50% of its products from Chili. Pepper currently employs six staff in its purchasing team and, on average, these staff spend approximately 20% of their time identifying the need for items, 30% of their time completing requisitions and purchase orders, 25% of their time matching receipt documents to supplier invoices, 10% of their time making supplier payments, and 15% of their time responding to supplier queries. Stephen, Pepper's financial controller, is concerned that the purchases process is presently very labour-intensive, and that as staff are very busy, controls in the purchases process may not be effective. Particular concerns have been raised on the process and controls around making payments to suppliers. Additionally, it is not clear why inventory levels, and inventory write-offs, have increased dramatically in recent years. Requirement (a) Give THREE examples of outputs from Pepper's purchases process that might help Stephen to evaluate the purchases process. 3 Marks (b) Suggest and explain FOUR IT-related improvements to Pepper's purchases process that could increase the efficiency of this process. 8 Marks
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