Exam 12: The Purchasing Process

In an entity-relationship (E-R) diagram for the purchasing process, you would expect that the word yield would appear in the diamond showing the relationship between:

When the data on the inventory record indicate a need to replenish the stock, the inventory system prepares a purchase order.

To prevent duplicate purchase requests and to allow the requesting department to ensure that a purchase order has been created, the purchasing department should ______________________________.

E-procurement is the use of information technology to automate significant portions of the procurement process.

With continuous replenishment (CRP) a vendor obtains a buyer's current sales, demand, and inventory data in real time and replenishes the buyer's inventory.

Digital signatures allow the vendor to determine that the sender of the message has the authority to send it and thus prevents an unauthorized purchase.

The purchase receipts data is an event data store with each record reflecting a receipt of goods and services.

In a database containing (among others) six relations-VENDORS, PURCHASE_REQUISITIONS, PURCHASE_ORDERS, PURCHASE_RECEIPTS, INVENTORY, and EMPLOYEES-you would expect that the attribute Vend_No (vendor number) would be the primary key in the ____ relation.

Management should exercise the control plan of ______________________________ to ensure that an appropriate supplier has been selected and that the correct goods and services, for the correct amounts, are being purchased.

______________________________ reorders inventory when the item reaches a certain inventory level that was determined in advance based on the item's sales rate.

______________________________ tags identify an instance of an item, not just an item type (e.g., this box of Huggies, not any box of Huggies).

According to the context diagram for the purchasing process, when a purchase order is sent to the purchaser, the vendor responds by sending the goods along with a packing slip.

When large or expensive items are purchased, most organizations make use of a procedure to obtain competitive bids from multiple vendors. The document used to obtain competitive bids is called a(n):

The document one business sends to another business that identifies the goods or services to be purchased is a:

The purchase order master data is a compilation of open POs and includes the status of each item on order.

The ______________________________ supervisor is responsible for receiving incoming goods, signing the bill of lading presented by the carrier, reporting the receipt of goods, and making prompt transfer of goods to the appropriate warehouse or department.

A retailer could misread a demand signal doubling its normal order and the wholesaler could respond and also double its order resulting in four times the retail order. This is an example of the ______________________________ effect.

The typical purchasing process would capture and record data related to the day-to-day operations of all of the following except:

Required: Using the DFD in TB Figure 12.7 and the narrative description above, identify the words that belong in items 1 to 15 of Diagram 3.0 (TB Figure 12.8). -Below is a narrative describing the "Receive goods and services" portion (bubble 3.0) of the purchasing process described in Chapter 12. Narrative Description The vendor packing slip, which accompanies the purchased inventory from the vendor and identifies the shipment, triggers the receiving process. As indicated by bubble 3.1 of the figure, goods arriving at the receiving department are inspected and counted, and these data are matched against the vendor packing slip and the "PO receiving notification" (i.e., the blind copy of the PO). Nonconforming goods are denoted by the reject stub out of process 3.1. Notation of rejected goods is added to the vendor service record in the vendor master data. After the count and condition of the goods has been obtained, process 3.1 completes the receiving report by noting the quantity received. Once annotated with the quantity received, the PO receiving notification becomes a receiving report, which is the document used to record merchandise receipts. Process 3.2 compares the receiving report data to the information stored in the PO master data-a process that often is automatically completed by the information system. Bubble 3.2 also reflects the following activities: - Data about vendor compliance with the order terms are added to the vendor service record on the vendor master data. - The receiving report data is stored as a copy of the receiving report document or electronically. Receiving report data is sent to the accounts payable process. A copy of the receiving report is sent to the warehouse (i.e., "Stock notice") with the goods. - The inventory master data are updated to reflect the additional inventory on hand. - The cost of the inventory received is relayed to the general ledger process (see the data flow "GL inventory received update"). - Finally, the PO master data are updated to reflect the receipt of the goods.

Which of the following items is not a control plan of the purchasing process?