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Merchandising Company - Flowchart Page 2
1. Low inventory triggers the reorder point. From Purchasing Department, we receive the
merchandise reordering report and the purchase order data is then keyed into the
computer by an employee. The computer inserts the quantity ordered into the inventory
record. This is then stored offline in the Open Purchase Order File, Purchase Transaction
File, and Merchandise Inventory Master File.
2. Receiving Reports come in from the Receiving Department after the goods were
received. The Receipts Data is then keyed into the computer. The computer adds the
quantities received to the inventory on-hand, which are the on-hand balances. It is saved
offline in the Open Purchase Order File, Merchandise Inventory Master File, and
Receipts Transaction File. Inventory is debited. The open purchase order is closed.
3. Shipping Report comes in from shipping department and the information is keyed into
the computer as shipping data. The quantities shipped are deducted from on-hand
balances. It is saved offline in the Merchandise Inventory Master file. Inventory is
credited.
4. Credit Memos and Purchase Memos (Debit Memos) are generated when items are
returned from a purchase or a sale. The credit memo is filled out for returns to credit the
customer for the amount paid of the returned merchandise in good condition. A debit
memo is filled out when our company returned unwanted or damaged goods. An
example of an unwanted good would be merchandise that is in excess amount in our
inventory. The return data is keyed in to change on-hand balances to reflect adjusted
quantities. A credit memo would debit inventory and a debit memo would credit
inventory. It is saved offline in the Merchandise Inventory Master File. Conditions of
the returned goods are noted in the Merchandise Inventory Master File.
5. Based on the updates of the four storage files (Open Purchase Order File, Purchase
Transaction File, Receipts Transaction File, and Merchandise Inventory Master File) 6
reports are printed on a daily basis.
6. Based on the data in the Open Purchase Order File, an Open & Overdue Purchase Order
Report is generated along with a Purchase Order for the goods that need to be ordered.
Both the report and the purchase order are then sent to the Purchasing Manager for
review, approval and follow up of overdue orders.
7. At the same time an Inventory Status and Usage Report are generated. Inventory status
control is the activity of keeping track of all inventory as it moves through the company.
The Inventory Usage Report informs managers how much of a particular item in their
inventory is used/sold. These two reports are then sent to the inventory manager for
further consideration.
8. An Expected Stock-Out Report and a Merchandise Reorder Report are also generated.
The Expected Stock-Out Report informs managers of potential shortages in stock for
specific items in inventory. The Merchandise Reorder Report contains the information for
reordered items in inventory on a daily basis. These two reports are also sent to the
inventory manager for further consideration and approval.
9. A Summary of Merchandise Receipts is also created. It informs the Receiving manager
about all goods received (that were ordered through the purchasing department) on a
daily basis.