Examine the process activities and transactions for the supply chain and production management process shown in Figure 12-3.

a. Using the example transactions listed in the same figure, describe which transactions or estimates are impacted by the different activities listed in the process.

b. Describe which accounts are impacted by each of the transactions.

Figure 12-3

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Process Objectives Identify legitimate resource needs. Establish reliable supply chain meeting quality, cost, and delivery needs. Obtain resources at the best price given quality and other constraints. Minimize production costs, using vendors as part of the design process Ensure availability of resources at time and place needed. Minimize procurement and transaction costs. Minimize storage and handling costs. Protect resources and inventory from loss or unauthorized use. Make payments for legitimate obligations only. Produce goods and services that meet cost and quality targets. Maximize use of capacity. Minimize and control spoiled and defective units and properly handle by-products. Minimize and control waste. Capture and effectively utilize supplier and production information. Capture, process, and report information necessary for process improvement. Process Activities Identify resource needs Vendor selection Finalize Design with Vendor Authorize Order purchase entry Receiving Resource handling Authorize payment Return processing Payment processing Production design Production planning/ scheduling Production Quality control Packaging Costing Warehousing Information Feeds Strategic plan and budget Process Data Streams Information Generation Material and component requirements Cost targets and procurement policies Information Feeds Quality standards Manufacturing specifications Vendor history and profiles Sales forecasts and customer orders Capacity parameters Inventory levels Routine Transactions Purchases Material receipts Disbursements Production Transfer pricing Cost allocation Spoilage Defective units By-products Waste and disposal Approved suppliers Material requisitions Material and component acquisitions Information Generation Contract terms and negotiated prices Supplier performance measures Standard cost schedules Production plan and schedule Production statistics Payments Delivery schedules Changes in inventory levels and costs Accounting Impact of Activities Non-routine Transactions Long-term supplier contracts Standard cost revisions Commodity hedging Vendor returns and ad- justments Accounting Estimates Inventory valuation Environmental cleanup costs Vendor allowances or rebates