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Unformatted text preview: 11-12.WeaknessesRecommended Improvements1.Raw materials may be removed from the storeroom upon oral authorization from one of the production foremen.1.Raw materials should be removed from the storeroom only upon written authorization from an authorized production foreman. The authorization forms should be prenumbered and accounted for, list quantities and job or production number, and be signed and dated.2. Alden's practice of monthly physical inventory counts does not compensate for the lack of a perpetual inventory system. Quantities on hand at the end of one month may not be sufficient to last until the next month's count. If the company has taken this into account in establishing reorder levels, then it is carrying too large an investment in inventory. 2.A perpetual inventory system should be established under the control of someone other than the storekeepers. The system should include quantities and values for each item of raw material. Total inventory value per the perpetual records should be compared with the general ledger at reasonable intervals. When physical counts are taken, they too should be compared to the perpetual records....
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- Spring '11