To streamline and improve the business process, an Australian clothing company recently automated its system. The functions of the system are described as follows:

i)A purchase requisition form is prepared and sent to the purchasing department. Upon receiving a purchase requisition, one of the five purchasing agents (buyers) verifies that the requester is indeed a department head. The buyer next selects the appropriate supplier by searching the various catalogues on file. The buyer then phones the supplier, requests a price quote, and places a verbal order. A pre-numbered purchase order is processed, with the original sent to the supplier and copies to the department head, receiving, and accounts payable. One copy is also filed in the open requisition file. When the receiving department verbally informs the buyer that the item has been received, the purchase order is transferred from the open to the filled file. Once a month, the buyer reviews the unfilled file to follow up on open orders.

ii)The receiving department gets a copy of each purchase order. When equipment is received, that copy of the purchase order is stamped with the date and, if applicable, any differences between the quantity ordered and the quantity received are noted in red ink. The receiving clerk then forwards the stamped purchase order and equipment to the requisitioning department head and verbally notifies the purchasing department that the goods were received.

iii)Upon receipt of a purchase order, the accounts payable clerk files it in the open purchase order file. When a vendor invoice is received, it is matched with the applicable purchase order, and a payable is created by debiting the requisitioning department's equipment account. Unpaid invoices are filed by due date. On the due date, a cheque is prepared and forwarded to the treasurer for signature. The invoice and purchase order are then filed by purchase order number in the paid invoice file.

iv)Cheques received daily from the accounts payable department are sorted into two groups: those over and those under $10 000. Cheques for less than $10 000 are machine signed. The cashier maintains the cheque signature machine's key and signature plate and monitors its use. Both the cashier and the treasurer sign all cheques over $10 000.

Required:

(a)Identify this type of transaction cycle. Name the main activities of this transaction cycle.

(b)Identify and describe 3 weaknesses relating to the above mentioned system.

(c)Identify and describe 3 improvements to the weaknesses you highlighted in (a).