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Inaccurate time card/ labor ticket recorded. Inappropriat

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Inaccurate time card/ labor ticket recorded. Inappropriate allocation of ... There are four master files that are used to produce various reports and input ... – PowerPoint PPT presentation

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Title: Inaccurate time card/ labor ticket recorded. Inappropriat


1
Flowchart 1by Karen ChuiSuki KwokChristina
Liu Daniel JaranillaHuong Tran
2
Production Process
  • There are four major information flows in the
    Production Process. They are Acquisitions/Payment
    Process, the Production Process, the
    Sales/Collections Process and the Planning
    Control Process (read by columns in the
    flowchart).

3
Process
  • The Acquisitions/Payment Process includes
    making an order for raw materials and receiving
    them from the vendor. Cost info is gathered from
    the Acquisitions/Pay Process in the form of
    direct labor, direct materials, and applied
    overhead. They are then compared to our standard
    (budgeted) costs.

4
Process
  • The Production Process has many different
    steps, but in essence includes turning raw
    materials into finished goods. When a production
    order is issued, the required raw materials are
    taken out of inventory to be used for work in
    process. The Production Order gives our
    employees the OK to start making products.

5
Process
  • Finished Goods Inventory Management determines
    whether or not productions should continue or
    stop. To determine if the company is under or
    over producing, graphs with Sales and Production
    can be considered to make sure that inventories
    are appropriate. Additionally, comparing
    Finished Goods Inventory with competitors can
    help management decide if Inventory is short or
    in excess.

6
Process
  • The Sales/Collection Process is taking a
    customer order and determining cost of goods
    sold. The Sales Order helps our production
    order, which uses the finished goods inventory to
    determine how much is on hand. If there are not
    enough finished goods on hand to fulfill the
    order then the needed materials are authorized
    and given to create new products. Lastly, the
    Planning Control Process is for determining the
    cost standards for generating profit. The
    different management levels are able to control
    the cycle of production through various inventory
    reports that are given to them.

7
Threats
  • 1. Receiving incorrect information from other
    systems
  • Incorrectly input/ transform information from
    previous procedures such as incorrectly price,
    quantity, destinations etc.
  • 2. Computer system fails
  • Technical problems
  • Virus break-in
  • Power outage

8
Threats
  • 3. Over or Under production
  • Graphs with Sales and Production
  • Comparing Finished Goods in Inventory with
    competitors

9
Threats
  • 4. Missing inventory
  • Incorrectly record information on the receiving
    report
  • Inventories was stolen or lost during the
    production process
  • Inventory dismiss due to incorrectly count

10
Threats
  • 5. Overhead is incorrectly applied
  • Inaccurate time card/ labor ticket recorded
  • Inappropriate allocation of overhead cost
  • Inaccurate cost data

11
Controls
  • There are four master files that are used to
    produce various reports and input into other
    systems. It is important to have backups and
    regular backups on site and offsite.
  • Get approval to fulfill production orders and
    authorization for raw materials purchases.
  • Inventories should be safeguarded (locked up) in
    access control facilities.
  • Master files and backups should be kept in places
    that are accessible only to authorized personnel
    (possibly by warehouse key)
  • To ensure data from vendor invoices and receiving
    reports entered into the Raw Materials Inventory
    master file accurate and valid, bar code scanning
    should be utilized instead of entering the data
    manually.

12
Controls
  • Use online data processing
  • Use RFID tags for inventory (better than bar
    coding since items can be covered in dirt and can
    still be put into the system)
  • Do periodic inventory counts
  • Distribute reports to other areas of production
    responsibility (instead of just to management)
  • Periodic quality checks (to maintain the standard
    that our customers expect)
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