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Production and inventory cycle - Coggle Diagram
Production and inventory cycle
Functions in the cycle
Input - Production Process - Output
Documents in the cycle
Daily production report
Completed production report
Inventory master files
Job transfer/inventory movement sheet(GRN)
Transfer to finished goods note
Customer job card/ inventory job card
Picking slip and delivery notes
Raw materials issue slip
Inventory count sheet
Inventory production order
Inventory adjustment form
Customer production order
Control objectives
Recording of costs when dealing with manufacturing/production environment
Taking custody of inventory and keeping it safe
Internal controls
Receipt should be acknowledged by the receiving department via a GTN
Accounting/costing department should monitor direct material,payroll and overhead allocation
Shift foreman should authorise goods before moving to the next stage
Inventory production should be based on trends/re-order levels or if out of stock
Raw materials should be accounted for on CJC/daily production report. Machines such as a clock in system should record time
A delivery note should be issued when goods are dispatached
Quality inspection should be done before moving to finished goods department
Possible weaknesses
puchase order issued for raw materials
Inventory ordered based on foremans judgement
Raw materials/hours not correctly noted
Employee goods inspection
no quality inspection
no goods transfer notes
No accuaracy tests
no delivery notes
Substantive testing
completeness
Validity
Accuracy
Existence
Possible risks
Missing documentation
Incorrect raw material issued and costs
Theft
No sales due to lack of stock
Unauthorised issue of raw materials
unrecorded or incorrectly recorded inventory