Question: You have been tasked with understanding the relationship between sales orders and purchase orders to acquire raw materials. Currently, production sites are individually responsible for

You have been tasked with understanding the relationship between sales orders and purchase orders to acquire raw materials. Currently, production sites are individually responsible for all purchases. The benefit of this decentralized organization is that the sites can quickly respond to changes in production demand. The downside is that sourcing for purchases is not coordinated between the sites. There is a concern that some sites' purchasing departments have been buyingmore raw materials than needed.
Your manager has asked you to analyze purchases compared to sales. You prepared the following analyses.
Ortho Inc.
Sales Orders Vs. Purchase Orders
\table[[Ortho Inc.],[Correlation between Purchases and Sales,],[Purchase Orders],[Purchase Orders,1,],[Sales Orders,0.750363942,1]]
Click here to view the Excel.
How do these analyses help evaluate if the sites are purchasing more raw materials than they need?
List some additional analyses that would be useful.
Create additional analyses and interpret your results.
You have been tasked with understanding the

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!