AIS Chapter 5 Q5 & 7

Q5:How does the procedure for determining inventory requirements differ between a basic batch-processing system and batch processing with real-time data input of sales and receipts of inventory ?what about for the procedures the receiving department uses?

(Reorder point) : inventory level of an item which signals the need for placement of a replenishment order, taking into account the consumption of the item during order lead time and the quantity required for the safety.

The answer :

• a batch system that employs real –time data entry of sales orders typically will update inventory in real-time also thus when sale depletes the inventory level to the reorder point , the system will flag it for reorder more quickly than in a basic batch system where inventory is updated in batch mode (i.e., at the end of the day).
• The sooner the item is ordered, the sooner it will be received.