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Inventory Flowchart Page 2. Step 1 - Receipt of Documents. Five documents are received from Purchase Ordering, Receipts Procedure, Sales Procedure, and Return Procedure: Merchandise Reorder Report – tells inventory manager when to reorder the inventory to avoid stock-out
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Step 1 - Receipt of Documents • Five documents are received from Purchase Ordering, Receipts Procedure, Sales Procedure, and Return Procedure: • Merchandise Reorder Report – tells inventory manager when to reorder the inventory to avoid stock-out • Receiving Report - shows details about the inventory received; shows quantity, condition, and date received • Shipping Report – describes goods being shipped; includes quantity shipped and other relevant data • Credit Memo – authorizes the crediting of the customer’s account • Purchase 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 Purchases Transaction File Merchandise Inventory Master File Open PurchaseOrder
Step 3 – (Continued) • Updated Receipts data Receipts Transaction File Open PurchaseOrder Merchandise Inventory Master File
Step 3 – (Continued) • Updated Shipping data Merchandise Inventory Master File
Step 3 – (Continued) • Updated Return data Merchandise Inventory Master File
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 reportInventory Management. • Summary of Merchandise ReceiptsReceiving 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