explain

Cycle counts: Supposed to be monthly, but only three were done by June. May count found timber short (-210 sheets), steel long (+42 cartons), and compound down (-5 bags). o Some count sheets had changes without explanation. Usage variances: One batch used 8.7% more compound than standard, explained as "humidity." Another batch used fewer brackets, but the BOM wasn't updated. Obsolete stock: Old brackets flagged in April were still in racks in June. Insurance: Survey in May noted "adequate housekeeping" but advised better humidity control. AB sends order instructions (Ol) by email. PB prints and pins them to a whiteboard. Revisions are emailed but not logged properly. Example: AB first ordered 1,000 units, then increased to 1,200, then reduced to 1,100. PB produced 1, 180 and kept 80 as "buffer stock." QC: PB keeps two samples per batch. One QC sheet flagged "marginal" compound viscosity. External testing of timber moisture was fine. Scrap: Three cases of uneven compound application caused scrap of 3.6% (above tolerance). Supervisor approved it. Power dip: A short outage in May caused issues with mixing compound. Stock was tagged "use first" but no expiry dates were adjusted, Customer complaint: BuilderCo in Victoria reported missing brackets and poor adhesion in 37 kits, AB opened a case, but no root cause analysis was done. PB prepares shipping documents, but often after the truck has left. AB receives them after the goods are already on the water. Shipment X (May): Packing list showed 1, 100 kits. AB warehouse received only 1,063 kits (short by 37). PB said they were on another shipment, but that shipment was for a different product. Shipment Z (June): Packing list said 1,090 cartons of steel. AB received 984 cartons; 7 were damaged, 9 missing. Insurance claim not finalised. Other issues: Inconsistent Incoterms (FOB vs. DDP). . Sometimes AB invoices customers when PB ships, not when goods arrive. One fumigation certificate had a smudged signature but was still accepted. PB keeps shipping photos on a USB stick, not backed up. AB invoices customers based on PB shipping documents. Receivables: At 30 June, AR was $6.8m, with 18% over 60 days due. Credit notes (Apr-Jun): $412k issued, mostly for wrong quantities and unapproved discounts. Quarterly reconciliations: Performed late (Q4 done in July). Year-end invoices: MetroBuild NSW: Invoiced 29 June for 2,000 kits. Delivery occurred in July. BuildRight VIC: Invoiced 30 June for 1,000 cartons. GRN on 1 July showed 16 cartons short/damaged. Credit note raised later. Customer confirmations: MetroBuild confirmed balance but noted delivery after June. BuildRight confirmed partial receipt. Pricing: Price list showed AUD 179 per kit, but invoice charged AUD 185. No record of approval for surcharge. Banking error: $250k payment in June was misallocated to the wrong customer until July. Communication is mainly by email and Teams. PB cannot access AB's SharePoint. Version control of files is poor, with multiple "final" versions of production schedules. . Oversight: AB COO visited PB in April and recommended stronger controls, but changes were not implemented. No internal audit function exists