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Production and Inventory Cycle - Coggle Diagram
Production and Inventory Cycle
PRODUCTION PLANING AND DESIGN
Authorisation by production planning department of CPO or IPO
Orders accepted by production processing department/ factory manager and they sign for it
CJC/ IJC generated to capture all costs
raw materials
direct labour hours
machine hours
Three main functions : Production planning and design, Production processing and Inventory management
Production Processing
production department or factory manager should prepare pre numbered RMIs.
All raw materials used should be listed on the daily production report
Time spent on each stage of production should be captured on CJC or IJC and reconciled @ the end of each day
Shift foreman or production manager should inspect each stage of production before products move to the next production stage, and they should authorize by signing or job card
Quality control inspection should be performed to detect any apparent defects before the move to finished goods store
Inventory management
Inventory management system is made up of four main controls
Production entries must be supported by the relevant documents
Storage and dispatch of manufactured inventory
Maintenance of inventory master files
Physical and monitoring controls
Controls against weaknesses
Safeguarding - Completeness, Existence
Issue of raw materials to production - Completeness, Validity
Recording - Completeness, Accuracy
Documents in the process
Customer Production Order - CPO
Inventory Production Order - IPO
Raw material issues slip - RMI
Customer Job card - CJC/ Inventory Job card - IJC
Job transfer/ inventory
movement sheet - Good received note - GRN
Inventory master files – Raw
mat., WIP & Finished Goods
Daily production report
Completed production report
Transfer to finished goods note
Picking slip and delivery notes
Inventory Count Sheet
Inventory adjustment form
Substantive testing - audit procedure that examines the financial statements and supporting documentation to see if they contain errors - assertions =existence, completeness, rights and obligations, accuracy and valuation, and presentation and disclosure