When automatic purchase orders are generated, to help make sure that goods are ordered for products that the company still needs, the company should
A) have all purchase orders approved by the purchasing manager.
B) have suppliers automatically replenish the shelves.
C) ensure that re-order points are monitored.
D) have receiving reports matched to the purchase order amounts.

Question

Quizplus · Accepted Answer

To ensure that goods are ordered only for products that the company still needs, it is important to monitor re-order points. Re-order points are the minimum inventory levels that trigger the creation of purchase orders. By monitoring re-order points, the company can ensure that purchase orders are only created when there is a genuine need for the product, and not simply because the automatic purchasing system has a set schedule. The other options listed are also important in the purchasing process, but do not directly address the issue of ordering goods only for needed products.

When Automatic Purchase Orders Are Generated, to Help Make Sure