183
TRUE/FALSE1. Specifying control goals is the first step in building a control matrix. ANS: T
2. In the control matrix the M stands for present controls. ANS: F
3. A control matrix is a tool that assists in evaluating the control goals and recommended control plans of an information system.
ANS: T
4. Control efficiency addresses whether the control goals are being achieved. ANS: F
5. Control effectiveness addresses how individual control plans achieve multiple control goals. ANS: F
6. The purpose of security controls is to ensure that entity resources are protected from loss, destruction, disclosure, copying, sale, or other misuse.
ANS: T
7. The following symbol represents a computer process.
ANS: F
8. The following symbol represents a manual process.
9. The following symbol represents manual keying.
ANS: T
10. The following symbol represents automated keying.
ANS: F
11. Control redundancy addresses whether multiple control plans are directed toward the same control goal.
ANS: T
12. The purpose of input goals is to ensure input validity, input completeness and input accuracy. ANS: T
13. The use of the letter P in a control matrix represents a missing control plan. ANS: F
14. The most error prone and inefficient steps in an operations or information process is master file updates.
ANS: F
15. A control plan that makes it easier to prepare the document initially and later to input data from the document is called document design.
ANS: T
16. Written approval takes the form of a signature or initials on a document to indicate that the proper person has authorized the event.
ANS: T
17. Online prompting helps guide the online entry of data by defining the acceptable length of each data field and often dictating the acceptable format of certain fields.
18. Preformatted screens describes a computer system's asking the user for input or asking questions that the user must answer.
ANS: F
19. Programmed edit checks are edits automatically performed by data entry programs upon entry of the input data.
ANS: T
20. Another name for a reasonableness check is a credit limit check. ANS: F
21. Dollar totals represent a summarization of any numeric data field within the input document or record. ANS: F
22. The edit that compares calculations performed manually with those performed by the computer to determine if a document has been entered correctly is referred to as mathematical accuracy checks. ANS: T
23. A check digit is an extra digit that is added to an identification number to help control the accuracy with which the number is entered into a computer system.
ANS: T
24. Interactive feedback checks help ensure input completeness by informing the user that the input has been accepted and recorded.
ANS: T
25. The control plan called data verification is designed to reduce the possibility that one person will misread or miskey data.
ANS: F
26. A dependency check employs data encryption--specifically public-key cryptography--to authenticate a system user's identity and to verify the integrity of a message transmitted by that user.
ANS: F
27. A digital signature tests whether the contents of two or more data fields bear the correct logical relationship.
ANS: F
28. An exception and summary report reflects the transactions that were accepted by the system and processed and those that were rejected by the system.
29. Master data control plans regulate transaction processing by calculating control totals at various points in a processing run and subsequently comparing these totals.
ANS: F
30. Document/record counts are simple counts of the number of documents entered. ANS: T
31. A count of the number of invoices being paid by all of the customer remittances is a type of batch control total called a line or item count.
ANS: T
32. The total dollar value of all invoice totals in a batch of sales invoices is called a hash total. ANS: F
33. A hash total is the general term to describe the summation of data that would not normally be totaled except for control purposes.
ANS: T
34. A turnaround document is a document that is printed as an output of multiple computer processes and is used to capture and input a previous transaction.
ANS: F
35. Batch control plans regulate information processing by calculating control totals at various points in a processing run and subsequently comparing those totals.
ANS: T
36. In order to implement either a batch sequence check or cumulative sequence check, transactions must be captured on prenumbered documents.
ANS: T
37. Dollar totals are a summarization of the dollar value of items in the batch. ANS: T
38. In a batch sequence check a computer program sorts the transactions into numerical order, checks the documents against the sequence number range, and reports missing, duplicate, and out-of-range event data.
ANS: T
39. The cumulative sequence check provides input control in those situations in which the serial numbers are assigned within the organization but later are not entered in perfect serial number sequence. ANS: T
40. Data encryption is a process that employs mathematical algorithms and keys to encode data so that it is unintelligible to the human eye.
ANS: T
MULTIPLE CHOICE
1. The two primary steps in preparing the control matrix include
a. specifying control goals, recommending control plans
b. specifying control plans, specifying input goals
c. specifying the control environment, identifying information process goals d. specifying control procedures, identifying process goals
ANS: A
2. The purpose of __________ control goals is to ensure the successful accomplishment of the goals set forth for the business process under consideration.
a. efficiency
b. effectiveness
c. security d. input ANS: B
3. The purpose of __________ control goals is to ensure that all resources used throughout the business process are being employed in the most productive manner.
a. efficiency
b. effectiveness c. security d. input ANS: A
4. The purpose of __________ control goals is to ensure that entity resources are protected from loss, destruction, disclosure, copying, sale, or other misuse..
a. efficiency b. effectiveness
c. security
d. input ANS: C
5. Immediately endorsing incoming checks satisfies the control goal of a. ensure effectiveness of operations
b. update completeness and accuracy c. input accuracy
d. ensure security of resources
6. The purpose of input goals is to ensure that
a. input validity, completeness, and accuracy
b. update completeness and accuracy c. input accuracy
d. none of the above ANS: A
7. In a control matrix the coding P-1 means a. process 1
b. process 1 is present
c. process 1 is missing d. none of the above ANS: B
8. In a the columns representing control goals in a control matrix, the coding M-1 means a. a major control plan
b. a missing control plan
c. process 1 is missing
d. none of the above ANS: C
9. The most error prone and inefficient steps in an operations or information process is a. report generation
b. master data update
c. data entry
d. none of the above ANS: C
10. The columns in a control matrix contain headings describe the system's:
a. control goals
b. control plans
c. control environment d. control procedures ANS: A
11. In the control matrix, the rows represent: a. control goals of the operations system
b. recommended control plans including present and missing controls
c. control goals of the information system d. control goals of the management system ANS: B
12. Having too many control plans directed at the same control goal is called: a. control efficiency
b. control effectiveness
c. control redundancy
d. control completeness ANS: C
13. Which of the following symbols represents manual keying? a. b. c. d. a. Symbol a. b. Symbol b. c. Symbol c. d. Symbol d. ANS: B
14. Which of the following symbols represents a manual process? a.
b.
d. a. Symbol a. b. Symbol b. c. Symbol c. d. Symbol d. ANS: C
15. Which of the following symbols represents a computer process? a. b. c. d. a. Symbol a. b. Symbol b. c. Symbol c. d. Symbol d. ANS: A
16. As an exception to the general rule, which one of the following is not necessarily included in the systems flowchart?
a. control plan for input accuracy
b. control plan for ensuring efficient employment of resources
c. control plan for ensuring effective employment of resources d. none of the above
ANS: B
17. Which of the following control plans does not address the control goal of input accuracy? a. document design
b. written approvals c. preformatted screens d. online prompting ANS: B
18. Which of the following is a control plan in which the source document is designed to make it easier to prepare the document for input?
a. document design
b. written approval c. preformatted screens d. online prompting ANS: A
19. Which of the following is a control plan that takes the form of signatures or initials on a document to indicate that a person has authorized the event?
a. document design
b. written approval c. preformatted screens d. online prompting ANS: B
20. Which of the following is a control plan that controls the entry of data by defining the acceptable format of each data field?
a. document design b. written approval
c. preformatted screens
d. online prompting ANS: C
21. Which of the following is a control plan that requests user input or asks questions that the user must answer? a. document design b. written approval c. preformatted screens d. online prompting ANS: D
22. A user mistakenly enters the data June 31. The programmed edit check that will detect this error is: a. online prompting
b. mathematical accuracy check c. preformatted screen
d. reasonableness check
ANS: D
23. Which of the following reflects a summarization of any numeric data field within the input document or record?
a. reasonableness check or limit check
b. document/record hash totals
c. mathematical accuracy check d. check digit verification ANS: B
24. Which of the following compares manual calculations to computer calculations? a. reasonableness check or limit check
b. document/record hash totals
c. mathematical accuracy check
d. check digit verification ANS: C
25. A control that can be used to ensure that all of the characters of a social security number are entered by a data entry clerk is:
a. dependency check b. rejection procedures
c. preformatted screens
d. turnaround documents ANS: C
26. A written approval in the form of a signature or initials on a document indicating that a person has authorized the event achieves the control goal of:
a. input validity
b. input completeness c. input accuracy d. update accuracy ANS: A
27. A control that can be used to reduce the likelihood of a transposition occurring when an account number is entered through a remote terminal is:
a. check digit verification
b. data encryption c. preformatted screens d. reasonableness checks ANS: A
28. Which of the following control plans is designed to achieve the goal of input completeness? a. key verification
b. interactive feedback check
c. programmed edit check d. written approvals ANS: B
29. A control whose primary purpose is to ensure greater input accuracy is: a. tickler file
b. preformatted screens
c. interactive feedback checks d. procedures for rejected inputs ANS: B
30. Not knowing whether input data has been accepted by the information system, the user enters the data again, resulting in duplicate event data. The control plan that helps to prevent this error is:
a. key verification
b. interactive feedback check
c. check digit verification d. online prompting ANS: B
31. Which of the following control plans is designed to achieve the goal of input accuracy?
a. key verification
b. interactive feedback check c. batch sequence check d. cumulative sequence check ANS: A
32. A control in which two people key the same inputs into a system where they are automatically compared is called:
a. online prompting
b. key verification
c. computer matching procedures d. a redundancy check
ANS: B
33. Which of the following control plans is designed both to authenticate a system user's identity and to verify the integrity of a message transmitted by that user?
a. coding schemes
b. digital signature
c. preformatted screens d. checking of digit verification ANS: B
34. A control that is primarily directed at ensuring input validity is:
a. digital signature
b. preformatted screens c. interactive feedback checks d. online prompting
ANS: A
35. In the control matrix for data entry with master data, digital signatures addresses all of the following control goals except:
a. ensure security of resources b. input completeness
c. input validity
d. input accuracy ANS: C
36. A sales representative enters the customer's account number and the system retrieves certain data about the customer from master data. This control plan addresses all of the control goals except:
a. ensure efficient employment of resources b. input completeness
c. input accuracy
d. update completeness
ANS: D
37. A digital signature is aimed primarily at ensuring which of the following information system control goals? a. input validity b. input completeness c. input accuracy d. update completeness ANS: A
38. All of the following are types of programmed edit checks except:
a. a proximity check
b. a document/record hash total c. a mathematical accuracy check d. a reasonableness check
ANS: A
39. Which of the following is not a programmed edit check?
a. online prompting
b. check digit verification c. dependency checks d. limit checks ANS: A
40. A control report generated by a system that shows data about transactions that were accepted or rejected during a transaction processing step is called a(n):
a. violation report
b. exception and summary report
c. variance report d. program change log ANS: B
41. Which of the following is a batch control total that represents the minimum level of control for input completeness? a. dollar totals b. record counts c. hash totals d. item counts ANS: B
42. A summation of customer account numbers taken from a batch of sales invoices would be classified as a: a. record count b. line count c. dollar total d. hash total ANS: D
43. Which batch control total generally has no other purpose than control? a. dollar totals
b. record counts
c. hash totals
d. item counts ANS: C
44. Which of the following types of batch totals is likely to be most effective in assuring the control goal of input accuracy? a. line counts b. document/record counts c. item counts d. hash totals ANS: D
45. When they are sent to a customer and returned with the payment, remittance advices are examples of: a. batch control totals
b. computer-prepared documents c. written approval controls
d. turnaround documents
46. Which of the following activities is not part of the computer agreement of batch totals: a. A batch total is manually computed prior to data entry.
b. Data shown on source documents are key entered or scanned. c. The computer produces a report that includes a batch total.
d. A person reconciles the manual and computer batch totals.
ANS: D
47. Which of the following controls requires that documents be prenumbered before it can be implemented?
a. completeness check
b. sequence check
c. batch total matching d. key verification ANS: B
48. Inputting a range of numbers comprising a batch and then inputting each serially numbered document is characteristic of the control plan called:
a. cumulative sequence check
b. batch sequence check
c. suspense file of missing numbers d. computer agreement of batch totals ANS: B
49. Which of the following statements related to tickler files is false?
a. A tickler file is reviewed on a regular basis for items that do not clear the file on a timely basis.
b. A tickler file can consist of documents or computer records.
c. A tickler file addresses the control goal of update accuracy.
d. A tickler file addresses the control goal of input completeness. ANS: C
50. The process of encoding data so that it may only be read by someone having a key is called: a. a coding scheme
b. encryption
c. dependency checks d. check digit verification ANS: B
51. Plaintext and ciphertext are terms associated with __________. a. coding schemes
b. hash totals
c. programmed edit checks
d. data encryption
COMPLETION
1. Specifying ___________________ is the first step in building a control matrix. ANS: control goals
2. In the control matrix the P stands for __________ controls. ANS: present
3. A _______________ is a tool that assists in evaluating the control goals and recommended control plans of an information system.
ANS: control matrix
4. Control ________________ addresses whether the control goals are being achieved. ANS: effectiveness
5. Control ______________ addresses how well individual control plans achieve multiple control goals. ANS: efficiency
6. The purpose of __________ controls is to ensure that entity resources are protected from loss, destruction, disclosure, copying, sale, or other misuse.
ANS: security
7. The following symbol represents a(n) ______________.
ANS: manual process
8. The following symbol represents a(n) ______________.
ANS: computer process
9. The following symbol represents ______________.
10. Control _________________ addresses whether multiple control plans are directed toward the same control goal.
ANS: redundancy
11. The purpose of input goals is to ensure input validity, input ___________, and input _________. ANS: completeness, accuracy
12. The use of the letter M in a control matrix represents a(n) ____________________. ANS: missing control or missing control plan
13. The most error prone and inefficient steps in an operations or information process is (are) ____________.
ANS: data entry or when humans enter data into the system
14. A control plan that makes it easier to prepare the document initially and later to input data from the document is called ____________________.
ANS: document design
15. ____________________ takes the form of a signature or initials on a document to indicate that the proper person has authorized the event.
ANS: Written approval
16. ____________________ help guide the online entry of data by defining the acceptable length of each data field and often dictating the acceptable format of certain fields.
ANS: Preformatted screens
17. ____________________ describes a computer system's asking the user for input or asking questions that the user must answer.
ANS: Online prompting
18. ____________________ are edits automatically performed by data entry programs upon entry of the input data.
ANS: Programmed edit checks
19. Another name for a(n) ____________________ check is a limit check. ANS: reasonableness
20. ____________________ represent a summarization of any numeric data field within the input document or record.
21. The edit that compares calculations performed manually with those performed by the computer to determine if a document has been entered correctly is referred to as ____________________. ANS: mathematical accuracy checks
22. A(n) ____________________ digit is an extra digit that is added to an identification number to help control the accuracy with which the number is entered into a computer system.
ANS: check
23. ____________________ help ensure input completeness by informing the user that the input has been accepted and recorded.
ANS: Interactive feedback checks
24. The control plan called ____________________ is designed to reduce the possibility that one person will misread or miskey data.
ANS: key verification
25. A(n) ____________________ employs data encryption--specifically public-key cryptography--to authenticate a system user's identity and to verify the integrity of a message transmitted by that user. ANS: digital signature
26. A(n) _____________ and ______________ report is a computer-generated report that reflects the events--either in detail, summary total, or both--that were accepted by the system and rejected by the system.
ANS: exception and summary
27. ____________________ regulate transaction processing by calculating control totals at various points in a processing run and subsequently comparing those totals.
ANS: Batch control plans
28. ____________________ are simple counts of the number of documents entered. ANS: Document/record counts
29. A count of the number of invoices being paid by all of the customer remittances is a type of batch control total called a(n) ____________________.
ANS: line or item count
30. The total dollar value of all invoice totals in a batch of sales invoices is called a(n) ____________________.
31. A(n) ____________________ is the general term to describe the summation of data that would not normally be totaled except for control purposes.
ANS: hash total
32. A(n) ____________________ is a document that is printed as an output of one computer process and is used to capture and input a subsequent transaction.
ANS: turnaround document
33. In the control matrix for data entry with batches, the control plan “compare picking tickets and packing slips” helps to ensure the control goals of effectiveness of operations and ensure ________________. ANS: security of resources
34. In order to implement either a batch sequence check or cumulative sequence check, transactions must be captured on ____________________ documents.
ANS: prenumbered
35. _______________ are a summarization of the dollar value of items in the batch. ANS: Dollar totals
36. In a(n) ____________________ a computer program sorts the transactions into numerical order, checks the documents against the sequence number range, and reports missing, duplicate, and out-of-range event data.
ANS: batch sequence check
37. The ____________________ provides input control in those situations in which the serial numbers are assigned within the organization but later are not entered in perfect serial number sequence.
ANS: cumulative sequence check
38. ____________________ is a process that employs mathematical algorithms and keys to encode data so that it is unintelligible to the human eye.
PROBLEM
1. The workings of the control plan computer agreement of batch totals are described in Chapter 9 as follows (paraphrased):
• First, one or more of the batch totals discussed in Chapter 9 are established manually (assume this is done in the billing department).
• Then, the manually prepared total must be entered into the computer and is written to a computer batch control totals file (assume that the keying is done in a data entry unit of the data center).
• As individual transactions are entered, a computer program accumulates independent batch totals and compares these totals with the ones prepared manually and entered at the start of the processing.
• The computer then prepares an "Error and Summary Report," which usually contains details of each batch, together with an indication of whether the totals agreed or disagreed.
Required:
Prepare a system flowchart to diagram the above process. Assume that batches of transactions are input through a network computer device located in the billing department; the network computer is wired directly to a centralized mainframe computer.
2. The workings of the control plan batch sequence check are described in Chapter 9 as follows (paraphrased):
• First, the range of serial numbers composing a batch of documents is entered (assume that key entry is done in a data entry unit of the data center).
• Then, data from each individual, serially prenumbered document is entered. • Finally, the computer program sorts the event data into numerical order, checks the
document numbers against the sequence number range, and prints a "Report of Missing, Duplicate, and Out-of-Range Numbers."
Required:
Prepare a system flowchart to diagram the above process. Assume that batches of documents are input through a network computer (NC) device located in the billing department; the NC is connected directly to a centralized mainframe computer.
ANS: Report of missing, duplicate, or out of range numbers Prenumbered source documents Prenumbered source documents Key individual events Key serial number range Record Number Change
Sort events into numerical
order
Check documents against sequence number range & print report of missing, duplicate,
and out of range numbers Event data Sorted event data Number table Record event data Data center
Data entry Computer
3. Figure TB-9.3 shows eight flowchart segments taken from the Chapter 9 flowcharts. The segments--identified A through I--have been stripped of almost all labels.
Segment B Segment C Segment D Segment E Segment F Segment G Segment H Segment I Segment A Required:
On the blank line to the left of each numbered description that follows, place the capital letter of the flowchart segment from Figure TB-9.4 that best matches that description. Since there are ten descriptions, one answer space will be left blank.
FLOWCHART DESCRIPTION
Answers
_____ 1. After resolving discrepancies, a data entry clerk keys corrections. The computer processes the corrections and a screen message confirms that the corrections were accepted.
_____ 2. The computer edits/validates input by reference to data residing in a master data, records event data and prints a single error and summary report.
_____ 3. The user resolves discrepancies displayed by the computer system and keys in any corrections that are necessary.
_____ 4. The computer records events in event data, updates the master data, and a screen message confirms that the input has been accepted.
_____ 5. An employee in a user department assembles source documents into batches and prepares batch totals.
_____ 6. At a remote location, a user enters data into a central computer system. The system edits the input and displays a message on screen informing the user of any errors.
_____ 7. A data entry clerk enters batch totals and the data from source documents. The master data is updated and a screen message is displayed.
_____ 8. A data entry clerk enters data on a source documents. The computer edits the input and a screen message is displayed for any input errors.
_____ 9. A user compares output totals shown on an error and summary report with input totals shown on a batch control tape.
ANS: Description Flowchart Number Segment 1. F 2. C 3. G 4. A 5. B 6. H 7. I 8. E 9. D 4. The following is a list of 14 control plans.
Control Plans
A. Enter data close to the originating source B. Preformatted screens
C. Interactive feedback checks D. Programmed edit checks E. Document design F. Key verification G. Written approvals H. Digital signatures I. Rejection procedures
Required:
Listed below are eight system failures that have control implications. On the blank line to the left of each number, insert the capital letter from the list above of the best control plan to prevent the system failure from occurring. (If you can't find a control that will prevent the failure, then choose a detective plan or, as a last resort, a corrective control plan). A letter should be used only once.
SYSTEM FAILURES
Answers
_____ 1. A clerk logged on to an online cash receipts system by entering the date of April 38, 20XX, instead of the correct date of April 28, 20XX. As a result, all cash receipts recorded that day were posted under an incorrect date.
_____ 2. Wabash Company enters shipping notices in batches. Upon entry, the
computer performs certain edits to eliminate those notices that have errors. As a result, many actual shipments never get recorded.
_____ 3. At Nouveau Boutique, several different sales clerks prepare sales slips during the day. The sales slips are then keyed into the computer at Nouveau
Boutique at the end of the day. However, numerous errors occur because the layout of the sales slips is difficult for the data entry clerk to follow.
_____ 4. Pitney Co. recently converted to an online order entry system. Clerks key in customer order data at one of several PCs. In the first week of operations, every sales order produced by the system was missing the data for the customer's "ship to" address.
_____ 5. A computer hacker gained access to the computer system of East Suburban Bank and entered a transaction to transfer funds to her bank account in the British West Indies.
_____ 6. Data entry clerks at the Videotron Company use key-to-disk units to prepare a variety of inputs for entry into the computer and the computer performs an agreement of batch totals. Recently, a number of errors have been found in key numeric fields. The supervisor would like to implement a control to reduce the transcription errors being made by the clerks.
_____ 7. At Cosmo Co., field salespersons call on customers and take customer orders by recording them on sales order forms. The forms are mailed by each salesperson each night to Cosmo's central data center for processing. The company has been besieged by customer complaints about how long it takes to receive their orders and about being shipped incorrect goods.
_____ 8. Ajax, Inc., recently installed a new cash receipts system. A clerk keys in remittance data through a terminal located in the accounts receivable department. On the first day of operations, because of a program bug, all remittances entered failed to get posted to the accounts receivable master file. Although the computer performs an agreement of batch totals, the clerk had no idea that the system did not perform the master data update process.
_____ 9. At Infotech Inc., data entry clerks receive a variety of inputs from many departments throughout the company. In some cases, unauthorized inputs are keyed and entered into the computer.
ANS: System Failure Answer 1. D 2. I 3. E 4. B 5. H 6. F 7. A 8. C 9. G
5. The following is a list of 8 control plans: Control Plans
A. Populate inputs with master data E. Document design B. Cumulative sequence check F. Preformatted screens
C. Turnaround documents G. Dependency check
D. Document/record counts H. Hash total
Required:
Listed below are eight statements describing either the achievement of a control goal (i.e., a system success) or a system deficiency. On the blank line to the left of each number, insert the capital letter from the list above of the best control plan to achieve the described goal or to address the system deficiency. A letter should be used only once, with four letters left over.
CONTROL GOALS OR SYSTEM DEFICIENCIES
Answers
_____ 1. Helps to achieve the information systems control goal of input accuracy by ensuring that dates are properly entered as MM/DD/YY.
_____ 2. According the control matrix for data entry with batches, by using a pre-recorded bar code to trigger an event, this control plan ensures effectiveness of operations and improves efficiency by reducing the amount of data that must be input and by improving the speed and productivity of data entry. In addition, this control plan improves input validity, and improves input accuracy.
_____ 3. This control plan could help prevent the entry of inconsistent data elements, such as entering a tax code for a customer to whom sales should be
_____ 4. According to the control matrix for data entry with master data, when the order entry clerk types in the customer number, the system automatically retrieves the customer's name, address, and other standing data from the customer master data. In this way, resources are used more efficiently. _____ 5. This control plan should prevent a field salesperson from omitting data
elements when filling in the sales order form on his/her notebook computer. _____ 6. In entering a batch of remittance advices into the computer, an operator
made several errors in keying the customer identification numbers. However, the errors were detected when the total of the customer ID numbers that were input did not agree with the corresponding total calculated from the source documents.
_____ 7. This control plan helps to identify duplicate, missing, and out-of-range document numbers by comparing input numbers with a previously stored number range.
_____ 8. This batch control total does not help to ensure input accuracy, nor would it detect the fact that one record in a batch was removed and substituted with another.
ANS:
Control Control Goal/ Goal/ System System Deficiency Answer Deficiency Answer
1. F 5. E 2. C 6. H 3. G 7. B 4. A 8. D
6. The following is a systems flowchart for data entry with master data available. Create a control matrix based on this flowchart.
Use the following columns for your control matrix from left to right: 1. Recommended control plans
Control Goals for the Operations Process 2. Ensure effectiveness of operations 3. Ensure efficient employment of resources 4. Ensure security of resources
Control Goals for the Information Process 5. For the (blank) inputs, ensure:
Divide this column up into IV, IC, IA columns 6. For the (blank) master data, ensure:
Divide this column up into UC, UA columns Use a legend: IV = Input Validity IC = Input completeness IA = Input accuracy UC = Update completeness UA = Update accuracy ANS:
Chapter 10—The Order Entry/Sales (OE/S) Process
TRUE/FALSE
1. The order entry/sales (OE/S) process includes the first four steps in the order to cash process. ANS: T
2. The first step in the order-cash process is sales order processing. ANS: F
3. Customers expect convenient and timely access to information about their order from order initiation to product delivery.
ANS: T
4. The OE/S process helps support the decision needs of the accounting department. ANS: F
5. One of the primary functions of the OE/S is to create information flows which support the repetitive work routines of the sales order, shipping, and credit departments.
ANS: T
6. The flow of information from OE/S to marketing managers is an example of horizontal information flows.
ANS: F
7. The flow of information from OE/S to the credit department is an example of vertical information flows.
ANS: F
8. For companies using enterprise systems CRM systems often share the same underlying database and gather data about the firm’s customer population.
ANS: T
9. A sales order form is a business document that captures vital customer and order data and facilitates the credit-granting and shipment functions of the order entry/sales (OE/S) process.
ANS: T
10. Data base management systems are designed to provide detailed data for a specific set of users while avoiding the costly development and extensive time delays that come from the development of a comprehensive data warehouse.
ANS: F
11. A CRM system is designed to manage all the data related to customers, such as marketing, field service, and contact management data.
ANS: T
12. Sell-side systems use the Internet to automate and manage corporate vendors and purchases. ANS: F
13. Buy-side systems are designed to allow a company to market sell deliver and service goods and services to customers throughout the world via the Internet.
ANS: F
14. XML is a generalized system for the customized tagging of data to enable the definition, transmission, and interpretation of data exchanged by systems over the Internet.
ANS: T
15. The buzzword in CRM which means the grouping of customers into categories based on key characteristics is itemization.
ANS: F
16. In the OE/S process context diagram, the one input that creates the seven outputs of inventory sales update, shipping’s billing notification, sales order notification, bill of lading, packing slip, payroll data for commissions, and customer acknowledgement is the customer order.
ANS: T
17. When a source document provides authority for a business activity to occur, the source document is said to trigger the activity.
ANS: T
18. If a check of the customer master data shows that the goods requested on a customer order are not in stock, an exception routine called a back order is initiated.
ANS: F
19. A packing slip authorizes the warehouse to remove goods from the warehouse and send them to the shipping department.
ANS: F
20. A picking ticket is affixed to the inventory package sent to the customer and identifies the customer and the contents of the package.
ANS: F
21. Vendor acknowledgements are sent to vendors to notify them that their orders have been accepted and to inform them of the expected delivery date.
ANS: F
22. A bill of lading is the document representing the contract between the shipping company and the common carrier.
ANS: T
23. In the OE/S process level 0 diagram, the sales order notification is sent to billing/AR/CR from the bubble for validate sales order.
ANS: T
24. If a customer refuses to accept a back order, then the sales order is terminated as shown by the accept data flow.
ANS: F
25. A customer acknowledgement is sent to the customer to notify him or her of the order’s acceptance and the expected shipping date.
ANS: T
26. A customer acknowledgement is sent to the billing department to notify them of a pending shipment. ANS: F
27. In the E-R diagram for OE/S, SALES_ORDERS activates the STOCK_PICK. ANS: T
28. In the E-R diagram for OE/S, STOCK_PICK triggers the SALES_INVOICES. ANS: F
29. In the E-R diagram for OE/S, SHIPMENTS generate the SALES_INVOICES. ANS: T
30. The marketing data is a repository of a variety of sales-oriented data, some of which results from recording sales events and some of which does not produce event data, such as a customer inquiry. ANS: T
31. The inventory master data normally contains standing data about each customer, such as name, billing and ship-to addresses, and telephone number.
ANS: F
32. The customer master data is a data store that contains data identifying the particular characteristics of each customer.
ANS: T
33. The completed picking ticket file provides an audit trail of authorized inventory transfers made between the warehouse and the shipping department.
ANS: T
34. Records in the sales order master data are created upon the completion of a sales order and are closed out once the order has been shipped.
ANS: T
35. OCR devices that use light reflection to read differences in code patterns in order to identify a labeled item.
ANS: F
36. Bar code readers are used to recognize patterns of handwritten or printed characters. ANS: F
37. Output devices that capture printed images or documents and convert them into electronic digital signals that can be stored in computer media are called scanners.
ANS: F
38. When a customer service representative enters data into the OE/S system, the first screen prompt is usually for the customer number.
ANS: T
39. A tickler file is one that is reviewed on a current and regular basis for the purpose of taking action to clear the items from that file.
ANS: T
40. Preformatted screens in the order entry/sales process is a control plan that involves the detailed comparison of the individual elements appearing on two source documents.
ANS: F
41. One-for-one checking in the order entry/sales process is a control plan that simplifies the data entry process, and may prevent the customer service representative from omitting data, to fill in certain fields, and reject incorrectly formatted fields to reduce input errors.
42. Online prompting in the order entry/sales process is a control plan that advises the customer service representative to check their data entries before moving on.
ANS: T
43. Interactive feedback checks in the order entry/sales process is a control plan that tells the customer service representative that the order and shipments have been accepted.
ANS: T
44. Customer credit check is a control plan that ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.
ANS: T
MULTIPLE CHOICE
1. The order entry/sales (OE/S) process is part of the __________ cycle. a. revenue
b. expenditure c. conversion
d. general ledger/financial reporting ANS: A
2. The order entry/sales (OE/S) process handles the processing and shipment of a customer order while another process actually bills the customer. With such a configuration, you would not expect the OE/S system to interface directly with the __________.
a. billing/accounts receivable/cash receipts process b. inventory process
c. general ledger process d. human resource process ANS: D
3. The OE/S process includes the first four steps in the order to sales process. The order of these four steps is
a. pre-sales activities, sales order processing, picking and packing, shipping b. pre-sales activities, picking and packing, sales order processing, shipping c. pre-sales activities, picking and packing , shipping, sales order processing d. none of the above
ANS: A
4. The primary function of the order entry/sales (OE/S) process includes: a. identifying decisions made by marketing personnel
b. highlighting the key organizational features of the marketing function c. producing financial statements
ANS: D
5. In addition to the warehousing function, the three primary departments that you would expect to be part of a typical order entry/sales (OE/S) process are:
a. sales order, shipping, and credit
b. sales order, shipping, and accounts receivable c. sales order, credit, and accounts receivable d. credit, shipping, and accounts receivable ANS: A
6. The ultimate goal of the OE/S process is
a. to ensure accuracy of order entry and sales events
b. to ensure increasing sales volume through the OE/S process c. to provide value to the customer
d. none of the above ANS: C
7. From the standpoint of good internal control, which of the following managers should not report (either directly or through an intermediate supervisor) to the vice president of marketing? a. manager--new product development
b. manager--customer sales and service c. manager--credit department d. manager--sales order department ANS: C
8. When the sales order department acknowledges a customer order, it is an example of a: a. vertical information flow
b. horizontal information flow
c. both vertical and horizontal information flow d. neither vertical nor horizontal information flow ANS: B
9. When the sales-related data are captured in the sales order department and then the information flows to the managers housed in the marketing department, it is an example of a:
a. vertical information flow b. horizontal information flow
c. both vertical and horizontal information flow d. neither vertical nor horizontal information flow ANS: A
10. Which of the following is a horizontal information flow?
a. sales order department requests credit approval from credit department b. sales order department acknowledges the order to the customer
c. warehousing sends completed picking ticket to shipping d. all of the above are horizontal information flows
11. With companies facing global competition, firms are recognizing that their most important asset is? a. inventory
b. machinery and equipment c. cash
d. a happy customer ANS: D
12. The OE/S process addresses the decision needs of managers of various sales and marketing functions through the use of:
a. vertical information flows b. horizontal information flows
c. both vertical and horizontal information flows d. neither vertical nor horizontal information flows ANS: C
13. When the sales manager uses ZIP code data taken from customer order forms to plan an advertising campaign, she is using ____________ that might be associated with the OE/S process.
a. horizontal information flows b. vertical information flows
c. both vertical and horizontal information flows d. neither vertical nor horizontal information flows ANS: B
14. Which of the following statements related to ERP support for horizontal information flows in the OE/S process is false?
a. Once the sales order department releases the order to credit approval, the document would be automatically routed electronically to the credit department and queued for their approval. b. Once the shipping department releases the shipment, the information would be entered into
the ERP system at the shipping location to record the order as shipped.
c. An ERP system requires the business to change the information flows of the business process.
d. The sales order department’s response to the customer would be automatically triggered by the ERP system.
ANS: C
15. Which of the following statements identifies a recent trend in today's business environment? a. Establishing an E-Business web site provides the business with a competitive advantage. b. The most important asset of a business today is its IT infrastructure.
c. IT managers must increase their annual expenditures for hardware, software, and telecommunication technology.
d. The quality of customer service influences the ability of a business to compete in a global marketplace.
16. Which is an example of vertical reporting by the order entry/sales (OE/S) process? a. The credit manager notifies sales order processing that a customer's credit has been
approved.
b. Sales by geographical region are reported to the manager of customer sales and service. c. The shipping department notifies sales order processing of all shipments made for a
particular period of time.
d. The sales order department acknowledges a customer order. ANS: B
17. ______________ applications in organizations are usually viewed as being focused on either operational or analytical applications.
a. data mining b. data warehousing c. data entry
d. market segmentation ANS: B
18. ______________ is intended to allow the use of sophisticated statistical and other analytical software to help an organizations’s members develop insights about customers, processes and markets.. a. data mining
b. data entry
c. e-commerce module d. market segmentation ANS: A
19. For a company using an ERP system, what is the most effective tool to assist marketing managers in identify smaller portions of the customer population?
a. e-commerce module b. data entry
c. data mart
d. market segmentation ANS: C
20. ___________ systems use the Internet to automate and manage vendors and purchases with the predominate technology being electronic data interchange (EDI).
a. Customer relationship management b. Buy side
c. Sell side
d. none of the above ANS: B
21. ___________ applications can handle both B2B and B2C transactions. a. Customer relationship management
b. Buy side c. Sell side
d. none of the above ANS: C
22. The grouping of customers into categories based on key characteristics is called a. customer relationship management
b. segmentation c. XML
d. web services ANS: B
23. In the context diagram for an order entry/sales (OE/S) process the OE/S process has 6 outputs which include all of the following except
a. the billing/accounts receivable/cash receipts process b. the carrier
c. the general ledger process d. the marketing process ANS: D
24. A data flow or event that causes a process to begin is called a: a. tickler
b. trigger c. document d. validity check ANS: B
25. A process for out-of-the-ordinary or erroneous events is called: a. exception routine
b. summary report c. corrective routine d. normal routine ANS: A
26. An example of a "rejection procedure" is a(n): a. back order process
b. inventory subroutine
c. customer acknowledgment process d. sales order processing process ANS: A
27. In a logical DFD for the order entry/sales (OE/S) process, which of the following data stores would you expect to be updated by the process complete sales order?
a. customer master data
b. accounts receivable master data c. marketing data
d. inventory master data ANS: D
28. In a logical DFD for the order entry/sales (OE/S) process, which of the following data stores is least likely to interact with the process validate sales order?
a. general ledger
b. accounts receivable master data c. marketing data
d. inventory master data ANS: A
29. In a typical order entry/sales (OE/S) process, validating a sales order likely would involve all of the following processes except:
a. checking the customer's credit b. verifying inventory availability c. completing the sales order d. completing the picking ticket ANS: D
30. Before a shipping notice is prepared by shipping personnel, they should match the details of which of the following pairs of data flows?
a. The picking ticket and a copy of the sales order earlier sent to shipping from the order entry department.
b. The completed picking ticket and a copy of the sales order earlier sent to shipping from the order entry department.
c. A copy of the sales order earlier sent to shipping from the order entry department and the bill of lading.
d. The completed picking ticket and the bill of lading. ANS: B
31. According to the logical flow diagrams of the OE/S system, which of the following data stores provides data to the system but is not updated by it?
a. shipping notice data b. sales order master data c. marketing data d. customer master data ANS: D
32. For a typical order entry/sales (OE/S) process to check a customer's credit, all of the following data stores likely would be consulted except the:
a. inventory master data b. customer master data
c. accounts receivable master data d. sales order master data
ANS: A
33. A document that is used when filling a sales order to authorize the movement of goods from a warehouse to shipping is called a:
a. shipping order b. packing slip c. picking ticket d. blind authorization ANS: C
34. In an order entry/sales (OE/S) process, you could expect that a sales order notification would be sent to a. the billing/accounts receivable/cash receipts process
b. the customer
c. the general ledger process d. the warehouse
ANS: A
35. At the time that the shipping notice is prepared and disseminated, two data stores within the order entry/sales (OE/S) process normally are updated. Those two data stores are the:
a. customer and accounts receivable master data b. accounts receivable and sales order master data c. accounts receivable master and shipping notice data d. sales order master and inventory master data ANS: D
36. Which of the following documents represents a formal "contract" between two parties? a. shipping's inventory notification
b. packing slip
c. customer acknowledgment d. bill of lading
ANS: D
37. Which of the following data stores is designed primarily to serve the vertical information needs of the organization rather than the horizontal information flows?
a. inventory master data b. marketing data c. shipping notice data d. customer master data ANS: B
38. Which of the following data is least likely to be stored in the customer master data? a. customer number
b. billing address c. ship-to address d. open invoices ANS: D
39. Which document may show a number of items which are different from the number of items actually shipped to a customer?
a. completed picking ticket b. bill of lading
c. sales order d. packing slip ANS: C
40. In an entity-relationship (E-R) diagram for the order entry/sales (OE/S) process, you would expect that the word trigger would appear in the diamond showing the relationship between which of the
following pairs of entities?
a. CUSTOMER and SALES ORDER b. CUSTOMER and SHIPMENT c. STOCK PICK and SHIPMENT d. SALES INVOICE and SHIPMENT ANS: C
41. Which of the following attributes would not be contained in the related relational table? a. customer_street attribute in the Customers relation
b. quantity_on_hand in the Inventory relation c. shipping_company in the Sales Order relation d. invoice_total in the Sales Order relation ANS: D
42. In a database containing (among others) four relations--CUSTOMERS, SALES ORDERS,
SALES_ORDER Line item INVENTORY, and SHIPMENTS--you would expect that a combination of the SO_No and Item_No attributes would be the primary key for the __________ relation.
a. CUSTOMERS b. SALES ORDERS
c. SALES_ORDER Line item INVENTORY d. SHIPMENTS
ANS: C
43. Which of the following goals is not an example of a process goal of the typical order entry/sales (OE/S) process?
a. to provide timely responses to customer inquiries b. to provide timely acknowledgments of customer orders c. to provide timely updates to general ledger accounts d. to provide timely shipments of goods to customers ANS: C
44. In constructing a control matrix for an order entry/sales (OE/S) process, the principal data input(s) to the information system likely would be:
a. customer inquiries and customer order inputs b. customer inquiries and shipping notice inputs c. customer order and shipping notice inputs d. customer order
ANS: C
45. The file most important for ensuring validity of inputs is the: a. customer master data
b. accounts receivable master data c. marketing data
d. completed picking ticket data ANS: A
46. The primary reason that direct entry of sales order data by sales personnel enhances efficiency is because:
a. it increases the likelihood of erroneous data being input b. sales personnel can enter data faster than data entry clerks c. fewer data items need to be entered by sales personnel d. the need for data entry clerks is eliminated
ANS: D
47. The control plan preformatted screens is directed primarily toward achieving the information process control goal of ensuring:
a. sales order input validity b. sales order input accuracy c. sales order input completeness d. sales order update completeness ANS: B
48. The control plan interactive feedback check helps to achieve the sales order input control goal of: a. sales order input validity
b. sales order input accuracy c. sales order input completeness d. shipping notice input accuracy ANS: C
49. In the OE/S process, the document that represents an independent authorization to ship goods to the customer is the:
a. bill of lading b. sales order
c. customer acknowledgment d. none of the above
ANS: B
50. In the control matrix of the OE/S process, regarding shipping notice inputs, which of the following control goals is ensured by the control plan “compare input data with master data”?
a. input completeness and input accuracy b. input completeness and input validity c. input validity and input accuracy d. none of the above
ANS: C
COMPLETION
1. The order entry/sales (OE/S) process includes the first four steps in the ________________ process. ANS: order-cash
2. The first step in the order-cash process is ______________. ANS: pre-sales activities
3. _______________ expect convenient and timely access to information about their order from order initiation to product delivery.
ANS: Customers
4. The OE/S process helps support the decision needs of the _____________ department. ANS: marketing
5. One of the primary functions of the ____________________ is to create information flows which support the repetitive work routines of the sales order, shipping, and credit departments.
ANS: order entry/sales (OE/S) process
6. The flow of information from OE/S to marketing managers is an example of _______________ information flows.
ANS: vertical
7. The flow of information from OE/S to the credit department is an example of _______________ information flows.
ANS: horizontal
8. For companies using enterprise systems, _____________________ systems often share the same underlying database and gather data about the firms customer population.
ANS: CRM
9. A(n) ____________________ form is a business document that captures vital customer and order data and facilitates the credit-granting and shipment functions of the order entry/sales (OE/S) process. ANS: sales order
10. ____________________ are designed to provide detailed data for a specific set of users while avoiding the costly development and extensive time delays that come from the development of a comprehensive data warehouse.
ANS: Data marts
11. A __________________________________ is designed to manage all the data related to customers, such as marketing, field service, and contact management data.
ANS: customer relationship management system
12. _____________ systems use the Internet to automate and manage corporate vendors and purchases. ANS: Buy-side
13. _____________ systems are designed to allow a company to market, sell, deliver, and service goods and services to customers throughout the world via the Internet.
ANS: Sell-side
14. _______________ is a generalized system for the customized tagging of data to enable the definition, transmission, and interpretation of data exchanged by systems over the Internet.
ANS: XML
15. The buzzword in CRM which means the grouping of customers into categories based on key characteristics is ____________________.
ANS: segmentation
16. In the OE/S process context diagram, the one input that creates the six outputs of inventory sales update, sales order notification, bill of lading, packing slip, payroll data for commissions, and customer acknowledgement is the ______________.
ANS: customer order
17. When a source document provides authority for a business activity to occur, the source document is said to ____________ the activity.
ANS: trigger
18. If a check of the inventory master data shows that the goods requested on a customer order are not in stock, an exception routine called a(n) ____________________ process is initiated.
ANS: back order
19. A(n) ____________________ authorizes the warehouse to remove goods from the warehouse and send them to the shipping department.
ANS: picking ticket
20. A(n) ____________________ is affixed to the inventory package sent to the customer and identifies the customer and the contents of the package.
ANS: packing slip
21. ____________________ are sent to customers to notify them that their orders have been accepted and to inform them of the expected shipping date.
ANS: Customer acknowledgments
22. A(n) ____________________ is the document representing the contract between the shipping company and the common carrier.
23. In the OE/S process level 0 diagram, the ____________ notification is sent to billing/AR/CR from the bubble for validate sales order.
ANS: sales order
24. If a customer refuses to accept a back order, then the sales order is terminated as shown by the __________ data flow.
ANS: reject
25. In the ER diagram for OE/S, SALES_ORDERS activates the __________________. ANS: STOCK_PICK
26. In the ER diagram for OE/S, STOCK_PICK triggers the __________________. ANS: SHIPMENTS
27. In the ER diagram for OE/S, SHIPMENTS generate the __________________. ANS: SALES_INVOICES
28. The ____________________ data is a repository of a variety of sales-oriented data, some of which results from sales order events, and some of which does not produce event data, such as a customer inquiry.
ANS: marketing
29. The ____________________ data normally contains standing data about each customer, such as name, billing and ship-to addresses, and telephone number.
ANS: customer master
30. The ____________________ file provides an audit trail of authorized inventory transfers made between the warehouse and the shipping department.
ANS: completed picking ticket
31. Records in the ____________________ master data are created upon the completion of a sales order and are closed out once the order has been shipped.
ANS: sales order
32. _________________ are devices that use light reflection to read differences in code patterns in order to identify a labeled item.
ANS: Bar code readers
33. _________________ is used to recognize patterns of handwritten or printed characters. ANS: Optical character recognition
34. Input devices that capture printed images or documents and convert them into electronic digital signals that can be stored in computer media are called ____________.
ANS: scanners
35. When a customer service representative enters data into the OE/S system, the first screen prompt is usually for the ________________.
ANS:
customer number
alternatively the answer could be customer name
36. A(n) ____________________ file is one that is reviewed on a current and regular basis for the purpose of taking action to clear the items from that file.
ANS: tickler
37. ____________________ is a control plan that involves the detailed comparison of the individual elements appearing on two source documents.
ANS: One-for-one checking
38. ____________________ is a control plan that simplifies the data entry process, and may prevent the customer service representative from omitting data, to fill in certain fields, and reject incorrectly formatted fields to reduce input errors.
ANS: Preformatted screens
39. ____________________ is a control plan that advises the customer service representative to check their data entries before moving on.
ANS: Online prompting
40. ____________________ is a control plan that tells the customer service representative that the order and shipments have been accepted.
ANS: Interactive feedback checks
41. ____________________ is a control plan that ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.
PROBLEM
1. The Figure below shows a portion of the horizontal perspective of an OE/S process. The following functional titles, data flow descriptions, and external entities have been omitted.
Functional Titles A. Credit department B. Sales order department C. Shipping department D. V.P. finance
E. V.P. logistics
Data Flow Descriptions
F. Customer places order.
G. Sales order department requests credit approval from credit department.
H. Credit department informs sales order department of disposition of credit request.
I. Sales order department acknowledges order to the customer.
J. Sales order department notifies shipping department of sales order.
K. Sales order department notifies warehouse and B/AR/CR process of shipment.
L. Warehouse sends completed picking ticket to shipping.
M. Shipping department informs sales order department of shipment.
N. Shipping department informs carrier, B/AR/CR process, and general ledger process
of shipment.
External Entities O. B/AR/CR Process P. B/AR/CR Process Q. Carrier R. Customer S. CustomerT. General Ledger Process
Required:
Complete Figure TB-10.1 by inserting the letter corresponding to the: (a) functional titles into the boxes,
(b) data flows descriptions in the circles next to each data flow, and
VP Marketing Ware- house Entities in the relevant environment of the OE/S Process
ANS:
2. The figure below is an order entry/sales (OE/S) process level 0 DFD. A narrative of the process follows.
Narrative Description
How does the OE/S process then validate a customer order? First, it verifies the availability of requested inventory by consulting the inventory master data. If a sufficient level of inventory is on hand to satisfy the request, the order is forwarded for further processing, and produces the data flow “Inventory available order.” Conversely, if a customer orders goods that are not in stock, the process runs a special back order routine. If the customer refuses to accept a back order, then the sales event is terminated and the order is rejected, producing the “Reject” data flow. Information from the order (e.g., sale region, customer demographics, and order characteristics that reflect buying habits) that has potential value to marketing would be recorded in the marketing data.
After assuring inventory availability, the next process establishes the customer’s existence and then approves credit. The system uses the customer master data and accounts receivable master data to determine where the customer is located and from what parts of the organization they make purchases. This allows an organization to readily determine the amount of credit available to that customer worldwide. If the customer has exceeded their credit limit, the order is rejected and produces a “Reject” data flow.
How does the process complete the sales order? The next process receives an accepted order. It then completes the order by adding price information, which is ascertained from the inventory master data. Then, the process performs the following activities simultaneously:
1. Updates the inventory master data to allocate the quantity ordered to the sales order
2. Updates the sales order master data to indicate that a completed sales order has been created Then the system disseminates the sales order. This includes the following data flows:
1. A picking ticket authorizes the warehouse to “pick” the goods from the shelf and send them to shipping. The picking ticket identifies the goods to be picked and usually indicates the warehouse location.
2. A customer acknowledgment is sent to the customer to notify him or her of the order’s acceptance and the expected shipment date.
3. A sales order notification is sent to the billing department to notify them of a pending shipment
Required:
From the DFD in the figure below and the narrative description above, explode bubble 1.0 into a lower-level diagram showing the details of that process.
ANS:
3. The narrative that follows is of process 3.0 in the level 0 DFD shown in the figure below.
Narrative Description
This narrative describes activities that normally take place in a shipping department. The process first receives two data flows; namely, the completed picking ticket, and data retrieved from the sales order master data table. The shipping clerk matches the quantity of the goods with the quantity on the picking ticket, and the quantity stored in the sales order data store. If the details agree, the matched sales order is forwarded to the next process. If the details of the data flows do not agree, the process rejects the order and initiates procedures for resolving any discrepancies.
When the next process receives the matched sales order and it produces and disseminates notices of the shipment and updates the sales order and inventory master data tables. The sales order master data is updated to reflect that the goods have been picked, packed, and shipped. The inventory master data is updated to change the quantity allocated for the sales order to an actual shipment, thus reducing the quantity of inventory on hand. We generally expect the dissemination of notices will include the following data flows:
