Flowchart 1 by: Karen Chui Suki Kwok Christina Liu Daniel Jaranilla Huong Tran

Production Process There are four major information flows in the Production Process. They are Acquisitions/Payment Process, the Production Process, the Sales/Collections Process and the Planning Control Process (read by columns in the flowchart).

Process The Acquisitions/Payment Process includes making an order for raw materials and receiving them from the vendor. Cost info is gathered from the Acquisitions/Pay Process in the form of direct labor, direct materials, and applied overhead. They are then compared to our standard (budgeted) costs.

Process The Production Process has many different steps, but in essence includes turning raw materials into finished goods. When a production order is issued, the required raw materials are taken out of inventory to be used for work in process. The Production Order gives our employees the OK to start making products.

Process Finished Goods Inventory Management determines whether or not productions should continue or stop. To determine if the company is under or over producing, graphs with Sales and Production can be considered to make sure that inventories are appropriate. Additionally, comparing Finished Goods Inventory with competitors can help management decide if Inventory is short or in excess.

Process The Sales/Collection Process is taking a customer order and determining cost of goods sold. The Sales Order helps our production order, which uses the finished goods inventory to determine how much is on hand. If there are not enough finished goods on hand to fulfill the order then the needed materials are authorized and given to create new products. Lastly, the Planning Control Process is for determining the cost standards for generating profit. The different management levels are able to control the cycle of production through various inventory reports that are given to them.

Threats 1. Receiving incorrect information from other systems Incorrectly input/ transform information from previous procedures such as incorrectly price, quantity, destinations etc. 2. Computer system fails Technical problems Virus break-in Power outage

Threats 3. Over or Under production Graphs with Sales and Production Comparing Finished Goods in Inventory with competitors

Threats 4. Missing inventory Incorrectly record information on the receiving report Inventories was stolen or lost during the production process Inventory dismiss due to incorrectly count

Threats 5. Overhead is incorrectly applied Inaccurate time card/ labor ticket recorded Inappropriate allocation of overhead cost Inaccurate cost data

Controls There are four master files that are used to produce various reports and input into other systems. It is important to have backups and regular backups on site and offsite. Get approval to fulfill production orders and authorization for raw materials purchases. Inventories should be safeguarded (locked up) in access control facilities. Master files and backups should be kept in places that are accessible only to authorized personnel (possibly by warehouse key) To ensure data from vendor invoices and receiving reports entered into the Raw Materials Inventory master file accurate and valid, bar code scanning should be utilized instead of entering the data manually.

Controls Use online data processing Use RFID tags for inventory (better than bar coding since items can be covered in dirt and can still be put into the system) Do periodic inventory counts Distribute reports to other areas of production responsibility (instead of just to management) Periodic quality checks (to maintain the standard that our customers expect)