(BQ) Part 2 book "Corporate accounting information systems" has contents: Corporate transaction processing - the revenue cycle, Risk and risk exposure: fraud management and computer crime, accounting information systems development - managing change, accounting information systems audit - towards a world of CAATs,.and other contents. | 6/1/07 11:06 Page 433 Creditor-based expenditure cycle n wastage costs – the costs associated with the disposal of products, n reworking costs – the costs associated with the reworking of poor-quality products, and n opportunity costs – the costs resulting from the loss of custom owing to the receipt of faulty products and, in rare instances, services. Purchase acquisition stage The purchase acquisition stage is concerned with three key issues: n what products/services should be ordered, n when the products/services should be ordered, and n what volume, or more appropriately how much, of a product/service should be ordered. For the moment, we will look at issues associated with the acquisition of purchased products only and consider issues associated with the acquisition of services later in this section. Products and the purchase acquisition stage For products, the purchase acquisition stage is essentially concerned with stock management – that is determining an answer to a question which superficially appears to be simple and straightforward, but is in fact deceptively complex. So what is the question? The question is: how much stock should the company/organisation hold/possess? There are essentially three possible answers to this question: n retain/maintain a very small stock of products/no stock of products – that is as little stock as possible, or n retain/maintain a large stock of products – that is hold as much stock as possible, or n retain/maintain a moderate stock of products – that is a pre-determined/calculated level of stock. So which is the correct answer? Well, that depends, perhaps somewhat unsurprisingly, on a range of factors which we will look at in detail in Chapter 11. Services and the purchase acquisition stage Although cost benefits/cost efficiencies are often cited as important factors in the decision to ‘buy in’ a service from an external agent/service provider, in general a .
