Jill Hellyer, the managing director of Stanley Defence Parts Pty Ltd, is interested in improving the picking,
packing and shipping inventory process (a process within the revenue cycle) in her own business, and has
asked the managing director of Derby Advanced Systems Pty Ltd whether she can observe Derby’s processes.
The managing director of Derby agrees (because he is keen to become a supplier to Stanley Defence Parts).
The following is what Jill observes.
Brief Description of the business of Derby Advanced Systems Pty Ltd
Derby Advanced Systems sells advanced electronic components to manufacturers of a variety of specialised
defence products. The business only accepts orders for components through their secure website and
customers must pay using credit card at the time of ordering components online.
Some information about the sales order process at Derby Advanced Systems Pty Ltd
After orders are completed at the end of the day (10.00 pm), the computer system automatically prints a
picking ticket (barcoded sales order number, items and quantities) for each sales order taken online during
the day, on the printer in the warehouse. At the same time, the computer system also produces a report
called a ‘credit card check file’, which lists all of the credit card details (customer name, credit card number
and expiry date) from the day’s sales orders showing accepted and rejected payments. This report is available
to the shipping officer through the computer system.
Description of the picking, packing and shipping inventory process at Derby Advanced Systems Pty Ltd
At the start of each day the warehouse officer collects the picking tickets from the warehouse printer and
picks the required goods from the warehouse shelves. If any of the goods are not available, the warehouse
officer puts back any goods they have already picked for the order and places the picking ticket in a folder on
their desk labelled ‘awaiting goods’. If all the goods are available, the warehouse officer takes the goods and
the picking ticket to the shipping department. The shipping officer scans the sales order number from the
picking ticket, and the computer displays the customer order on the screen. The shipping officer manually
checks each item picked against the original sales order and the picking ticket. The shipping officer also
checks the name on the sales order against the names highlighted (as rejected payments) on the credit card
check report. If the name on the order matches a name on the credit card check report, the goods and the
picking ticket are sent back to the warehouse with a note attached indicating that they cannot be shipped
due to non-payment. Once they are satisfied that the credit card payment is not invalid, and the correct
items are being shipped, the shipping officer checks a box on the sales order to indicate that shipping is
complete. The computer updates the sales order and inventory data. The computer also prints a delivery
slip for the order on a printer in the shipping department. The shipping officer attaches the delivery slip to
the goods and places them on the loading dock. Every day at 3.00 pm a carrier picks up the goods from the
loading dock and delivers them to the customers.
a. Prepare a document flowchart for the picking, packing and shipping inventory process of the
revenue cycle of Derby Advanced Components Pty Ltd. This document flowchart must be
completed using Microsoft Excel and uploaded to the Part B assignment submission folder on
b. In no more than 500 words, evaluate the internal control of the picking, packing and shipping
inventory process of Derby Advanced Components Pty Ltd. This evaluation must be uploaded to
the Part B assignment submission folder on MyLO in either Microsoft Word format or PDF format.
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