Fact Pattern:

This information is to be included in a final communication made following an inventory control engagement for a tent and awning manufacturer. The issue relates to overstocked rope.

The quantity on hand at the time of the engagement represented a $10-$year supply based on normal usage.

The organization had held an open house of its new factory $2$ months prior to the engagement and had used the rope to provide safety corridors through the plant for visitors. This was not considered when placing the last purchase order.

Rope is reordered when the inventory level reaches a $1-$month supply and is based on usage during the previous $12$ months.

The quantity to be ordered should be adequate to cover expected usage for the next $6$ months.

The purchasing department should review inventory usage and inquire about any unusual fluctuations before placing an order.

A public warehouse was required to store the rope.

The purchasing agent receives an annual salary of $$59,000.$