BTC1110 Lecture Notes - Lecture 14: Intrusion Detection System, Cash Management, Physical Security
6 Jun 2018
School
Department
Course
Professor
Expenditure Cycle –Week5
Sorts of Control: Ordering Goods and services
-Ensure that we select the right goods at right quality at right time at right price
Ordering items not needed (Wrong item)
-Edit checks on order (accuracy and completeness check)
-Review and approval
-Perpetual inventory system
Purchased at inflated prices
-Price lists
-Competitive bidding (what you are expect to pay)
-Job rotation in purchase function
(Things un-done if person regularly move to the other roll; e.g. vocation)
-Separate supplier selection & authorization duties
-Require staff to disclose gifts and relationships with suppliers
Poor Quality
-Approved supplier list
-Monitor rejection/ return rate
-Collect supplier performance data evaluate regularly
Right amount & Right time
-Use established methods determine order point
(E.g. economic order quality algorithm, materials requirements planning)
Efficiency Measures:
1. Aggregate purchases acquisitions:
-Administration cost driven by no. of purchase orders processed
-Combine requisitions for a vendor:
Reduce no. of PO documents
Obtain volume discounts
2. Automate Transactions:
-Use EDI to transmit purchase orders (Standardize the purchasing systems)
-Use vendor-managed inventory system***
(Everyone can gain benefit!!! )
3. Use a reserve auction
Document Summary
Ensure that we select the right goods at right quality at right time at right price. Edit checks on order (accuracy and completeness check) Competitive bidding (what you are expect to pay) Job rotation in purchase function ((cid:47)things un-done if person regularly move to the other roll; e. g. vocation) Require staff to disclose gifts and relationships with suppliers. Use established methods (cid:198)determine order point (e. g. economic order quality algorithm, materials requirements planning) Administration cost driven by no. of purchase orders processed. Combine requisitions for a vendor: (cid:198)reduce no. of po documents (cid:198)obtain volume discounts: automate transactions: Use edi to transmit purchase orders (standardize the purchasing systems) Use vendor-managed inventory system*** (everyone can gain benefit!!! (cid:45) : use a reserve auction. Only authorized people can go to the inventory. Separate inspection and authorization duties (*when dealing with non-physical products (cid:198)need someone to sign the order (cid:198)verify the services) Invest in security market rather than paying early.
