Flowchart Example

A5. Motor Building Industry (MBI) Incorporated develops and manufactures natural-gas powered motors. Capital tools are the larger, more-prominent assets of the organization. Because of their long life and significant value, considerable attention is devoted to their acquisition and use. The following procedures are used in acquiring capital tools for MBI Inc.

A capital tool is defined as any individual item that costs over $10,000. Capital tools must be requested by a department manager and reviewed and approved by the capital tool planning committee. The department manager prepares a purchase request and a copy (which is filed numerically) and sends the original copy to the planning committee. The planning committee reviews all purchase requests and decides whether to approve the tool request. The committee remits disapproved purchase requests to the requesting manager and forwards approved purchase requests to MBI's purchasing department.

Approved capital tools are purchased by the purchasing department manager. Using the approved purchase request, a purchasing agent prepares a purchase order and a copy for each order. The original is filed numerically and the copy is sent to MBI's receiving department. Each tool is assigned to only one purchasing agent, and the assignment is made according to the vendor from whom the tool is intended to be purchased. Several vendors are assigned to each purchasing agent to establish a personal relationship with the vendor and secure a more favorable price because of their knowledge of the vendor.

Receiving clerks at the dock receive the tools, inspect them, match the tool to a purchase order, complete a receiving report, and route the tool to the department that originally requested it. Receiving clerks send the receiving report to the treasury department and file a copy alphabetically. Purchase orders are filed numerically. Occasionally, tools are received that were never ordered. Even...