Answers to Workshops and Study Questions
Setup Workshop
1 Pur/Mfg should be set to P for purchased items. In addition, you enter the purchasing lead time and the purchasing (PO) site. If the item needs to be inspected, you should set Ins Reqd = Yes and enter an inspection lead time. Minimum, Maximum, and Order Multiple can also apply depending on the type of product, as does Reorder Point.
2 Use Purchase Requisition Browse/Inquiry. The requisition number should be the planned order number, unless you changed it during the approval.
3 Use Supplier Maintenance and Supplier Remit-to Maintenance.
4 Use Supplier Item Maintenance.
5 When you entered the supplier item number, the system retrieved your item number and the supplier's quoted cost.
6 When a requisition is referenced on a purchase order, the system subtracts the purchase order quantity from the requisition quantity. If the purchase order quantity is greater than or equal to the requisition quantity, the requisition is deleted automatically.
7 Line item type M for Memo indicates a non-inventory purchase.
8 Like any other PO, you need to enter the item, quantity, unit of measure, and unit cost. Since the purchase is non-inventory, the location information is not really needed. The key here is that you should always enter the appropriate GL expense account in the Purchases field for this type of PO.
Setup Study Questions
1 Requisitions can be entered manually or created by approving an MRP planned purchase order.
2 First, you need to set Approvals Required = Yes in Purchasing Control. Then, set up approval codes for only the one site. Do not set up any for the other site.
3 Line item unit cost defaults from:
• Price list and discount table specified in the supplier item table
• Supplier item quote cost, if no price list is specified and if the order quantity exceeds the quote quantity
• GL material cost for the item
4 True.
5 A purchase order line item of type S identifies a SUBCONTRACT purchase. This type of purchase order normally specifies the WORK ORDER (NUMBER, ID, and OPERATION).
6 False. Receivers are created regardless of whether or not you are using Accounts Payable. Receiver Type indicates whether you print them.
Processing Study Questions
1 Purchase order receipts processed for line item type M or S do not affect inventory.
a Receipts of line item type M decrease the balance (credit) in the GL EXPENSED ITEM RECEIPTS account and increase the balance (debit) in the PURCHASE EXPENSE account on the PO line.
b Receipts of line item type S normally increase the balance (debit) in the GL WORK IN PROCESS account.
2 False. Multiple sites, locations, lot/serial numbers, and lot references can be specified on any line item receipt.
3 False. The Purchase Order Returns transaction generates a return document that can be printed using Purchase Return Document Print.
4 Purchase Order Returns can be processed only against open orders. If the PO is closed, the system prompts you to reopen it; then process the return against it.
5 False. You have to put the items on order manually. The system does not assume you will be replacing them.
6 PO price variance is calculated as the difference between the PO cost and the GL cost, multiplied by the number of items received. It is only calculated for inventory items, and is created at the time of PO receipt.
7 False. This creates a subcontract rate variance, not a PO price variance.
Processing Workshop
1 You can cancel the backorder during the PO Receipt or you can go into Purchase Order Maintenance and change the line item status to X, for canceled.
2 Since the line item was canceled, if it was the only line item on the order, the whole order is canceled. The first thing you must do is reopen the purchase order. After that, you must fix your error. The best way is to reverse the original entry by processing a negative receipt
(-999). Then receive the correct quantity of 99.
Do not use a Purchase Order Return to Supplier to correct this error, since this would look bad on the supplier performance report, and you would not want that.
3 Use Purchase Order Returns.
4 Use Purchase Receipt Browse/Inquiry and the Transactions Detail Browse/Inquiry.
5 Items and PO lines set up as Inspection Required = Yes are received into the inspection location specified in Purchasing Control. If inspection is not required, the location defaults to the location on the PO line, which defaults from the location entered in Item Inventory Data Maintenance.
Blanket Order Workshop (Exercise 2)
1 Release = Yes and Quantity to Release.
Blanket Order Study Questions
1 Quantity to release should be entered and the Release field set to Yes.
2 False. Blanket orders are not considered by MRP.
3 The first time you release a purchase order from blanket order number BP3, the purchase order number is set to BP3001.
4 True. Once the quantity has been reached, no more releases can be processed until the open quantity is increased inside the blanket order.
5 Usually you set up this type of quote as Recurring = Yes, with Blanket Order Quantity [12000] and Quantity to Release [2000]. You can also set Release = Yes, and since releases are to be on a regular basis (biweekly), you can set Cycle Code = BI.