Exeter Manufacturing Pty Ltd is a medium size manufacturing company producing toy figurines. A production schedule...

 

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Exeter Manufacturing Pty Ltd is a medium size manufacturing company producing toy figurines. A production schedule is normally issued to the line supervisors two weeks before an actual production run. The company does not keep inventory of raw materials in hope to reduce cost, although occasionally the raw materials do not arrive in time for a production run. The production process begins with a production supervisor, Railey, determining the type of materials and calculating the amount needed for each production run. Once completed, she calls regular suppliers and issues a 2-copy of purchase order. The top copy is sent the supplier and the second copy is sent to the purchase department. When the materials are received, a storeroom clerk signs a supplier's delivery note. He does not check the consignment because there is no procedure requiring him to do so. The delivery note normally contains a reference to the Exeter's purchase order number. The storeroom clerk notes down on a piece of paper, the delivery note number and the purchase order reference number as written on the delivery note. The piece of paper is later sent to the purchase department. The storeroom clerk then files the delivery note for future reference. At the purchase department, a staff takes a copy of the purchase order and staples the document together with the storeroom's note and files them. She then calls Railey to inform that the materials are ready to be collected. When a supplier invoice is received by the account, Tracey, an account manager issues, prepares and signs a 2-copy payment voucher for the materials ordered. The first copy is sent to the supplier and the second copy is kept in the account department. Required: a. Create a system flow chart to map the process in the Exeter case. b. Identify 5 (five) weaknesses of the Exeter's procurement process. For each of the weaknesses, explain a possible risk the company is exposed to c. Provide 5 (five) internal control mechanisms to improve the Exeter's procurement process. Explain your answer. Exeter Manufacturing Pty Ltd is a medium size manufacturing company producing toy figurines. A production schedule is normally issued to the line supervisors two weeks before an actual production run. The company does not keep inventory of raw materials in hope to reduce cost, although occasionally the raw materials do not arrive in time for a production run. The production process begins with a production supervisor, Railey, determining the type of materials and calculating the amount needed for each production run. Once completed, she calls regular suppliers and issues a 2-copy of purchase order. The top copy is sent the supplier and the second copy is sent to the purchase department. When the materials are received, a storeroom clerk signs a supplier's delivery note. He does not check the consignment because there is no procedure requiring him to do so. The delivery note normally contains a reference to the Exeter's purchase order number. The storeroom clerk notes down on a piece of paper, the delivery note number and the purchase order reference number as written on the delivery note. The piece of paper is later sent to the purchase department. The storeroom clerk then files the delivery note for future reference. At the purchase department, a staff takes a copy of the purchase order and staples the document together with the storeroom's note and files them. She then calls Railey to inform that the materials are ready to be collected. When a supplier invoice is received by the account, Tracey, an account manager issues, prepares and signs a 2-copy payment voucher for the materials ordered. The first copy is sent to the supplier and the second copy is kept in the account department. Required: a. Create a system flow chart to map the process in the Exeter case. b. Identify 5 (five) weaknesses of the Exeter's procurement process. For each of the weaknesses, explain a possible risk the company is exposed to c. Provide 5 (five) internal control mechanisms to improve the Exeter's procurement process. Explain your answer.

Answer rating: 100% (QA)

a System Flow Chart 1 Supplier sends invoice to Account Manager Tracey 2 Tracey reviews invoice and ensures accuracy 3 Tracey prepares 2copy payment voucher 4 First copy of payment voucher sent to sup... View the full answer