BU547 Lecture Notes - Lecture 6: Chief Operating Officer, Perpetual Inventory, Purchase Order
Document Summary
Lack of backup support will increase the possibility of making mistakes and gives seymour more opportunities to make frauds and steal orders. This may further lead to liquidity issue and potential going concern issue. Purchase order has to be created through company" system each time when seymour is dealing with any suppliers. The copy should be forwarded to the shipper/receiver, so it can be matched to packing slips when the goods arrive. This will make high possibility of losing materials. Employees and someone else will have greater chances to steal the order, and it will be very difficult to find out who is stealing the material because everyone has the access. This issue will lead to serious liquidity issue and potential going concern issue. Rhi should assign several employees to become warehouse administrators and only provide them the access. The door will open only when there is a shipment or delivery.
