Inventory Flowchart Page 2

Step 1 - Receipt of Documents Five documents are received from Purchase Ordering, Receipts Procedure, Sales Procedure, and Return Procedure: I. M erchandise Reorder Report – tells inventory manager when to reorder the inventory to avoid stock-out II. R eceiving Report - shows details about the inventory received; shows quantity, condition, and date received III. S hipping Report – describes goods being shipped; includes quantity shipped and other relevant data IV. C redit Memo – authorizes the crediting of the customer’s account V. P urchase Memo - document indicating the amount and terms of the purchase return

Step 2 – Data Entry Data from the five documents are keyed into the computer. The computer does the following processes: Insert quantities ordered into inventory records Add quantities received to on-hand balances Deduct quantities from on-hand balances Change on-hand balances to reflect adjusted quantities

Step 3 – Update Master Files Updated Purchase Order data Updated Purchase Order data Open Purchase Order Purchases Transaction File Merchandise Inventory Master File

Updated Receipts data Updated Receipts data Open Purchase Order Merchandise Inventory Master File Receipts Transaction File Step 3 – (Continued)

Updated Shipping data Updated Shipping data Merchandise Inventory Master File Step 3 – (Continued)

Updated Return data Updated Return data Merchandise Inventory Master File Step 3 – (Continued)

Step 4 – Printing Reports Once all the data are stored, then the following reports are printed daily: Open & Overdue Purchase Orders report - lists the current inventory on order as well as any that has yet to be received Inventory Status Report - the current inventory after all the buying, selling, and returning have been completed for the day Inventory Usage Report – shows which and how much inventory have been used Expected Stock-Out Report – the possibility of not having enough inventory, which is attached to the Merchandise Re-Order Report Merchandise Re-Order Report – tells the inventory manager when to reorder the inventory to avoid stock-out Summary of Merchandise Receipts – records all merchandise that’s received within the day

Step 5 – Sending Reports Open and Overdue Purchase Order Report and Purchase Order  Purchasing Manager. Inventory Status Reports, Inventory Usage Report, Expected Stock-Out Report, and Merchandise reorder report  Inventory Management. Summary of Merchandise Receipts  Receiving Manager.

Improving Technology Automate the “Expected Stockout and Merchandise reports” to avoid human errors/stockouts The reorder report should revolve around either JIT or MRP II RFID tags should be placed on inventory received from vendors after being logged

Improving Technology The credit memo should be electronic so the computer will automatically update the customer’s account. Instead of keying in shipping data, use bar codes to ensure accuracy.

Created By Connie Lam Julianne Carrido Jeffrey Chui Patrick Javillo Crystal Cheng Angelita Chandra