Question

With respect to transaction and Stock type, discuss how the following two scenarios would be entered into the ERP system. Scenario 1 An order of 100 Deluxe Touring Tyres is received from an existing vendor. Inspection is not required. Stock can be assigned for immediate use.

Scenario 2

An order of 100 Professional Touring Tyres is received from a new vendor. Quality inspection is required. After inspection, the tyres cannot be used because there are damages.

Answer 1

Scenario 1

As the tyres are received from the existing trustworthy vendor , there is no inspection required, so the entry of this purchase should be made as soon as the tyres are purchases from the vendor.

Scenario 2

As the tyres are purchases from a new vendor, we cannot directly use it for further production without inspection. So when purchases are made, we should enter the purchase transaction, and after inspection , if there is any damaged tyres we should  reverse the purchase entry to record the purchase return transaction.