Inventory Flowchart 2 Merchandising Company

1. Inventory Flowchart 2Merchandising Company Aracely Drlik Jason Gutierrez Jeffery Hua Kurniawan Mualim (Vincent)

2. Inventory Management Flowchart 2 From Purchase Ordering From Receipts Procedure From Sales Procedure From Return Procedure Receiving Report Shipping Report Shipping Report Merchandise Reorder Report Purchase Memo Enter Receipts Data Enter Shipping Data Enter Purchase Order Data Enter Return Data Add Quantities Received to On-hand Balances Deduct Quantities Shipped from On-hand Balances Change On-Hand Balances to Reflect Adjusted Quantities Insert Quantity Ordered into Inventory Records Purchase Transaction File Merchandise Inventory Master File Open Purchase Order Receipts Transaction File *Merchandising Company NOT Manufacturing Company Print Daily Print Reports

3. Inventory Management Flowchart 2(Merchandising Company) Print Daily Print Reports Open & Overdue Purchase Orders Report Inventory Status Report Expected Stock-Out Report Summary of Merchandise Receipts Inventory Usage Report Merchandise Reorder Report Purchase Order To Purchasing Manager To Inventory Management To Receiving Manager

4. From Purchase Ordering Merchandise is ordered from vendor Merchandise Reorder Report The Merchandise Reorder Report is received and typed into the database Enter Purchase Order Data Purchase Order data are entered into the system. Process: Quantity ordered is entered into the inventory records which would increase the on-order inventory Insert Quantity Ordered into Inventory Records Data are stored in the Purchase Order file (PO is a note until Receiving Dept receive it), Purchase Transaction file, and Merchandise Inventory Master file for record keeping Purchase Transaction File Merchandise Inventory Master File Open Purchase Order Print Daily Print Reports Reports are printed daily

5. From Receipts Procedure Receipts are collected from merchandise purchased from vendor Receiving Report Receiving Report is received from the receiving department Enter Receipts Data Receipts data are entered electronically (Media) Add Quantities Received to On-hand Balances Process: Quantities received are added to on-hand inventory balances Data are stored on the Purchase Order file (PO will close once all merchandise are received), Merchandise Inventory Master file (Inventory will increase), and Receipts Transaction file for record keeping Open Purchase Order Merchandise Inventory Master File Receipts Transaction File Print Daily Print Reports Reports are printed daily

6. From Sales Procedure Sales made to customers Shipping Report Shipping report is received from the actual sales order Enter Shipping Data Shipping data are entered into the system Process: Quantities shipped are deducted from the on-hand inventory balances Deduct Quantities Shipped from On-hand Balances Data are stored on the Merchandise Inventory Master file for record keeping (Inventory will decrease once the merchandise is shipped to customers) Merchandise Inventory Master File Print Daily Print Reports Reports are printed daily

7. From Return Procedure Merchandise are returned from customers Shipping report and Purchase memo are retrieved from previous transaction. Purchase memo will reflect the number of merchandises returned. Shipping Report Purchase Memo Enter Return Data Returned data are entered into the system Process: Quantities returned are added to the on-hand inventory balances, thus adjusting the overall inventory balance Change On-Hand Balances to Reflect Adjusted Quantities Data are stored on the Merchandise Inventory Master file for record keeping (Inventory increases once the merchandise is returned) Merchandise Inventory Master File Reports are printed daily Print Daily Print Reports

8. Print Daily Print Reports Open & Overdue Purchase Orders Report Open Purchase Orders report show any orders that have not been received or shipped from vendors. Overdue Purchase Order report will follow up any past due merchandises that have not been received from the vendors Purchase Order To Purchasing Manager The two reports will be sent to the Purchasing Manager for review

9. Print Daily Print Reports The Expected Stock-out report predict when the merchandise in the inventory will run out. (Planning Tool) Inventory Status report will reflect the current on-hand inventory balances Inventory Status Report Expected Stock-Out Report Inventory Usage Report Merchandise Reorder Report Inventory Usage report will reflect the merchandises that are shipped to customers Merchandise reorder report will contain the items that will need to be reordered To Inventory Management These four reports are sent to the Inventory Management for review

10. Print Daily Print Reports Summary of Merchandise Receipts Summary of Merchandise receipts will show the merchandises that are received from vendors Summary of Merchandise receipts are sent to the Receiving Manager for review To Receiving Manager

11. Possible Controls • Data Input Controls: • Data that are entered electronically into the computer should be checked for accuracy and completeness of data. • Data Loss and File Reconstruction Capability: • It is necessary to maintain backup or duplicate copies of current databases (data files, programs and documentations) and stored at other remote locations for security purposes.

12. Possible Controls (Continued) • Resource Theft and Loss Control – Inventory • Merchandise stored in the on-hand inventory should be kept locked in the storeroom or warehouses with access limited to authorized employees and checked frequently to minimize/avoid any possible theft. • Economic Decrement Reversal Controls • Sales returns from customers can be controlled with an integrated enterprise information system. Only an authorized employee with the proper password and access code are able to authorize a sale return event. • Merchandise sold to clients should be double checked for errors with the shipping report before shipping the merchandise out. Merchandise received from vendors should be reconciled with receipts to match the merchandise ordered and purchased.