= f: 5;: : , :‘o. IO...- \ a .. 0, .J ’a 5 1f". REA h‘c'n .." 4" x: u: - '\ . ”294;. 2-H}: . ‘ :VE " I‘VE.‘ I..." I. - V" V‘ ' . J“ :4 ' ‘ k --4' \ .‘5 -4".‘ ' f." \H‘f THESI’ .; ' - o )1 l'!,‘. . I..‘ H . . h ; .. .. 2| \ n ‘ A fl, 0/. Ir - i I l * ( r'. ". ‘l i I ' 1 ru' 'VV. ..‘ \ . 4; ‘ b '1 \ l I_'; . ' Q I 1. .I " .' v . o 7' I i‘ I . ; . " (I o ‘r a: ‘. \ u" . N . _ '1' I I- -3 . - \ I. C / I ) v ,A. ‘l I l ‘- ‘1 . -. g t , I , 'r‘ j ‘ . '. I .\ l _. .“ ‘2‘ . n \ ‘ N 0. ' , .‘l ’4. - ’ ,\ . ' " 1 .r“ ' u'1 . . ‘ b I n ,l .47 I , , l .. " '(l . I ’ .— ‘l . (If I Il'. - v. .‘ l ' a l l s l ‘\ \ I ‘ ‘ .'l. Va ‘ "l _ '. I This is to certify that the ' l . - - I . thesis entitled INVENTORY CONTROL TECENIQUES FOR A GROCERI WAREHOUSE ‘ ".'\"‘J ’.‘. presented bg FRANK W. TUPPENY, JR. .m-fiivh . has been accepted towards fulfillment of the requirements for J AAA—degree in WSINESS . . CURRICULUM IN FOOD DISTRIBUTION ‘ . r / Major pJerssor ‘ - ' »- l, '1 Date July 3: 1952 0-169 J ‘1“.M‘lm -. -. —-'. A .o-— “- . ' t u .- u- . ‘ I I——- ..--.-H.-‘.L got. I..- o ”a... ‘_ b-C-o.-- ‘0 Q P“-..-'I .l - INVENTORY COUTROL TECHNIQUES FOR A GROCERY WAREHOUSE BY Frank Wordley lumeny A THESIS Submitted to the School of Graduate Studies of Michigan State College of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER 0F ARTS Department of General Business Curriculum.in Food Distribution 1952 upl“.. ..:)'b /’J”,¢‘:‘NL‘ If); 0‘)- Acmmuansm-mms The writer wishes to express his appreciation to the American Stores Company for their help in making this study’ possible. Special thanks go to Mr. M; C. ISett, warehouse Specialist and Mr. W. C. Ferguson, Personnel Director of the American Stores Company, Philadelphia, Pennsylvania. Recognition is also due the many companies and individuals especially’Miss Jean Osgood, Director of Government Services of the National Association of Food Chains and Hr. R. J. Burns, , Resident Manager of the International Business Machines Corporation office, Lansing, Michigan, who have contributed information for this thesis- Appreciation is also due to Dr. Kenneth Wilson, Director of the Curriculum in Food Distribution, for his interest, guidance, and helpful suggestions in the preparation of this thesis. (‘ffltf—v “Y‘:L.‘J “'f' _~- .‘ Sn...) ‘7 TABLE OF CONTENTS CHAPTER I. II. III. IV. INTRODUCTION . . . . . . . . . . The Purpose of this Study . . Need for Such an Analysis . . ScOpe and Limitations . . . . Procedure . . . . . . . . . . THE RECEIVING DEPARTMENT . . . The Receiving Clerk . . . . . Motor Truck Receiving . . . . Railroad Receiving . . . . . Methods of Receiving . . . . Standardization . . . . . . . The Receiving Record . . . . COOperation and Team werk . . MATERIALS HANDLING . . . . . . . Equipment Commonly Used . . . Mbvemant to the Storage Area . Storage Area Layout . . . . . Movement to the Selection Area Selection of the Store Order . Control Problems in Order Selection Checking the Store Order . . . . . . THE PUNCHED CARD SYSTEM . . . . . . . . The Tabulating Card . . . . ... PAGE CHAPTER The Tub FileSystem . . . . ... . . Master Card and Pattern Card . . Commodity Detail Card . . . . . . The Tub File . . . . . . . . . . Signal Cards . . . . . . . . . . Calculating the Inventory . . . . Pulling the Store Order . . . . . Tabulating the Store Order . . . Movement and Inventory Report .I. The Electronic Calculator Machine System Inventory Master Card . . . . . . Detail Transaction Cards . . . . The Electronic Calculator Run . . The New Inventory Card . . . . . The Stock and Output Report . . . Duties of the Cost Section . . . Duties of the Key Punch Section . Receipts . . . . . . . . . . . . Transfers and Adjustment Vouchers Store Orders . . . . . . . . . . Advantages of the Electronic Calculator Relative Merits of the Two Types of Equipment- International Business Machines (IBM) and System Remington Rand . . . . . . . . . . . . . . . PAGE I - a O o a O t . w p I Q 0 c n 9 r a s o . a . . c o o a . n c 1 n I . . . e n o c i Q n V . O . I O C o . a o I 0 Q . a a a . o . v I O . o O o . o o . o . a 0 CHAPTER v. THE PERIODIC PHYSICAL INVENTORY Inventory'Forms card-S . O O O O O O O O O Book'Forms . . . . . . . . . Date and Time Schedule . . . . Gut-Off Date 0 o o o o o o 0 Organization of the Personnel The Inventory Chief Selection of Other Personnel The Inventory Teams Instructions . . . . . . . Other Preparations . . . . . Plan of the Warehouse Arrangement of Merchandise Taking the Inventory . . . Card Hangers Counters . . Checkers . . Recorders . SPOtCheCkooooooooo Continuous Physical Inventory VI. SUMMARY AND CONCLUSIONS . . . . BIBLIOGRAPHYoooooooooooo PAGE 56 56 S6 57 59 6O 61 61 62 6H 65 65 65 66 66 67 67 68 68 69 69 72 8O LIST OF FIGURES FIGURE 1. 2. 3. 7. 8. 9. 10. 11. 12. 13. An example of a grocery warehouse receiving record . . . . f . . . . . . . . . . . . . . An example of a railroad car unloading record Established standards for palletizing mer- chandise in The Benner Tea Company warehouse A page from a preprinted store order form . . A page from a store order form printed with an IBM accounting machine . . . . . . . . . . . An example of an eighty column tabulating card (actual size) . . . . . . . . . . . . . . . Tub file cards . . . . . . . . . . . . . . . Electronic calculator cards . . . . . . . . . A page from a stock status report . . . . . . An example of a merchandise transfer . . . . . An example of an adjustment voucher . . . . . A page from a warehouse inventory book . . . . An example of an organization chart for the physical inventory . . . . . . . . . . . . . PAGE 11+ 25 33 35 43 47 #9 SO 58 63 CHAPTER I INTRODUCTION Prior to werld War I, the management of many retail food companies seemed content to remain somewhat in the dark con- cerning their supply of goods on hand. Needless to say, this changed rapidly, due in large part, to the Federal Income Tax Law of 1913. Currently the Bureau of Internal Revenue and also the state regulatory bodies demand accurate inventory statisa tics. In addition, there are other groups who are interested in accurate inventories such as bankers requested to extend credit, investors contemplating the purchase of stocks, under- writers considering the sale of securities, and auditors called in to examine the companies' books. However, even these various groups did not change the thinking of management come pletely and, until a decade ago, inventories were still being called ”the graveyard of American Business." Purpose of this Study Many times inventories have been allowed to grow to unwieldy and impossible size. Also, they have contained an ill-assortment of poorly chosen or obsolete goods which have suffered tragic losses in value or proved quite unsalable. Every dollar added to or subtracted from the total value of the inventory is reflected in like amount in the profit and loss account. Therefore, since mercantile concerns frequently Ila-Ill All. flx ililllll'lI‘l 2 show over half of their assets in the form of inventories, the problem of inventory control is a highly important one. Much has been written on this problem in terms of systems but the focal point of all these various books and articles pertains to the manufacturing industry. very little seems to have been written which applies directly to the food distribution industry and, what has been written, is mainly concerned with material control systems. Any term such as material control system, perpetual inventory, or stores con- trol systems seems to imply impersonal matters such as forms, systems, and procedures. Granted that forms, systems, and procedures are a highly necessary part of inventory control, they are still written in terms of the staff or accounting point of view. Therefore, the primary purpose of this study is to make available some techniQues of inventory control to the line personnel who are directly responsible for the control of inventories in grocery warehouses. Need for Such an Analysis It is extremely difficult to disassociate the purpose and the need for inventory control and, therefore, the need was briefly mentioned in the previous section. However, a few points need further elaboration. Assuming that the control of inventories is actually a line function, then the amount of material available to line personnel in the grocery warehouse is practically non-existent. II ll.llll‘ The various forms, systems, and procedures are the tools of inventory control and must be operated by peOple. The grocery warehouse supervision, eSpecially the foreman or first line supervisors who are directly responsible for the control of the inventory, are probably one of the most important groups Operating these tools and yet are relatively uninformed on' inventory control matters. Therefore, there is a definite need for information on inventory control from a line rather than a staff point of view. In addition, a study of this type ‘will provide the accountants and other staff personnel with a better appreciation of the inventory control problems as the line functionaries see them. ‘ In short, there is a definite need for a study*which will provide the warehouse supervision with a view of the office problems.and conversely provide the staff peeple a view of the warehouse problems. Scope and Limitations This study is concerned primarily with the problems of inventory control within the confines of the grocery warehouse. waever, one chapter is devoted to the punch-card or tabulating machine systems. This was done because it is the heart of the inventory*control system and it is felt that a thorough understanding of the machine system of record keeping is of ' prime importance to the warehouse supervision. Without such knowledge, the warehousemen cannot fully appreciate the office problems and, therefore, may be reluctant to cooperate on certain matters. The text of this study is necessarily limited in some other respects, the first of which is the type and size of the warehouse. Since one-story warehouses are generally recognized as being the most efficient, this study is limited to one- story grocery warehouses. It is further limited to those warehouses which are large enough to utilize modern materials handling equipment such as fork lift trucks and pallets. A second limitation is in the field of accounting. No mention is made of the valuation of inventories, the prepara- tion of financial statements, or the determination of costs as related to capital investment.“ It is felt that they are not a part of inventory control per se but rather are end products of a prOperly functioning control system. In fact, the title itself limits the study accounting-wise since it suggests the study of techniques of inventory control and not accounting for inventories.‘ It is limited further to the machine system of record keeping since the warehouse that is large enough to use mechanical handling equipment is usually able to utilize efficiently a mechanical record system. Finally, this study is limited in viewpoint to a certain extent. As mentioned previously, this is written from the warehouseman‘s point of view and, therefore, it is concerned primarily with control in terms of the physical handling and movement of the merchandise. Procedure The grocery warehouse is a distribution center for the retail outlets served by it. Its primary function is to provide a temporary storage place for large amounts of various items purchased by the buying department. This merchandise is stored until needed by the retail units at which time, a store order is assembled and delivered via motor truck. The flow of merchandise from the receiving dock to the shipping platform follows a definite pattern and requires considerable control en route. It would seem logical then, in a study such as this, to follow this flow of merchandise and discuss, step by step, the inventory control problems as they would naturally arise. In addition, a chapter is devoted to the machine tabu- lation section of the accounting department since it is the function of the tabulating section to process the stéreorders and maintain all inventory records. Finally, a chapter is included which covers the periodic physical inventory process since it is the warehouse personnel who are responsible for the physical count and/or weight of the goods. CHAPTER II THE RECEIVING DEPARTMENT Physical inventory control becomes a reality when the truck backs up to the receiving platform or when the seal is broken on the railroad freight car door. The purpose of the receiving department is to get the merchandise from the carrier to the selection line or storage area as quickly and economically as possible. In conjunction with this function of materials handling, is the control of the merchandise being received from a quantity and quality standpoint. The role played by the receiving department in this control function is brief but highly important. Perpetual inventory records are meaningless if a clerk mischecks the merchandise or places the wrong item code number on the receiving ticket. The Receiving Clerk The king-pin of the whole receiving operation is the receiving clerk. It is the clerk‘s duty to see that the mer- chandise is unloaded and handled in a manner consistent with company policy and practice. It is the responsibility of the receiving clerk to see that the incoming items agree with the shipper's invoice both in description and amount. Any excess, shortage, or damage must be so noted on the receiving record. 7 1 for Since the majority of warehouse operations use pallets the handling of merchandise, the goods are unloaded directly onto these pallets. Therefore, the clerk must keep some form of tally on the number of pallet loads as they move out of the truck or railroad car. Space is provided for this tally on the six narrow lines at the bottom of the receiving record shown in Figure 1. In addition, the clerk should mark each pallet load in some manner2 indicating the item code number and date received. This marking facilitates quick identi- fication and rotation of the stock so that a first-in, first- out inventory procedure can be practiced. Inspection is also one of the functions of the receiving clerk. Obviously, the clerk cannot open every case and package, but a spot check of a few cases will usually give a goOd indication of the physical condition of any particular shipment. If company policy is such that samples are re-- quired for laboratory testing, then the clerk can combine the physical inapection with the withdrawal of samples. As indicated by the foregoing discussion, the job of the receiving clerk is a highly important one in the inventory control procedure. TherefOre, the individual clerk must be an intelligent, well-trained and reliable person. In addition, l A Pallet is a legless platform on which goods are placed for handling and storage purposes. 2. Black crayon or white chalk seems to be the easiest and fastest method of marking pallet loads of merchandise. chose.» anabfiooon endosong 5.809% a no 0330 ed .H charm \u\-.~..o d n. a. m 333.23 pawn .4m -3. x“ .wm- NM -Nfi Ix Q as \x .5“ HMOKVRxQK m 0 .hfli \VAX \hfiflw §%§&Q.®kdr§§etm em . kn Hmok $9?an mac 33 seat. \stvti tit: ted {at m. ti II I m Stud. xv? Sosa S N at, E52... 4 \\N\ .N 28 D 2.3—.“ l; a s a”: «can s as; .d\.\< nkkhk \i‘ V». %\.uo\e\tw\. a? aoaawcm \(QR§K\RL...\\\<%\eQ\rm S >80 «Jami; amooum ez_>_moum the clerk must posSess the ability to write clearly and legibly since one of the most important features of the job is the recording of the data on the prOper forms. Motor Truck Receiving Motor truck receiving is commonly known by such names as odd lot, small lot, and less-than-carload receiving. As the name indicates, truck receiving is usually associated with small and/or mixed shipments. To a large extent, this is still true since the motor truck lends itself to this type of cartage. However, it is evident that the motor truck is making larger inroads into the field of transportation and conse- quently, is hauling ever increasing amounts of carlot ship- ments. The problem of control in relation to small and/or mixed shipments is‘increased due to the fact that: l. The truck driver does the unloading. 2. The small lots are unloaded rather rapidly as com-- pared with a full truck or carload. The receiving clerk,then, must instruct the driver as to the correct pallet pattern or block3,to use and in addition, he must do the same amount of paper work for each and every shipment regardless of size. This means that the clerk has less time to.count, inspect, and record each small lot. 3 A pallet pattern or block is a definite pattern used when stacking goods on a pallet so that the most economical use can be made of the pallet in terms of the number of cases per pallet and so that each item is uniformly palletized to facilitate counting. 10 The number of trucks that the receiving clerk can handle efficiently is limited by the factors mentioned above. As found by one company, three trucks seem to be the optimum number for the average receiving clerk. Any number above three increases the possibility of errors which can cause the downfall of any inventory control procedure. Railroad Receiving Essentially the railroad receiving function is the same as the truck receiving and the duties of the receiving clerk are very similar. The two important differences are: 1. Warehouse employees unload the cars. 2. There is usually not more than two or three different items in any one car. Because of these two factors, it is possible for one clerk to take care of the entire railroad receiving Operation in most food chain store warehouses provided that: l. A reliable employee in each car keeps a tally of the number of cases or packages unloaded.1+ 2. The sole duty of the clerk is the inSpection of the merchandise and the recording of the receiving. Since damage tends to be more prevalent in rail ship; ments as compared to truck shipments, it is highly important that any damaged merchandise be properly recorded. This aids both rapid filing of damage claims and the accuracy of the perpetual inventory record. 'h See Figure 2. CAR UN-LOADING RECORD mm‘uawaomcmocamm- woes... "‘3‘ - MUM 1 M }"“ oflUL MW 9 .____ . KindofCal w CatNunIIer A SeaKEaetfiidL Seale.Weet3ide Ioehmfloethflnd leeiaBmanouthEnd ConditionofCar,CarF|oot,Roof,Etc- Seahluokenby Checker WRITE DETAILS OF SHORTAGB. LOSS OR DAMAGE. BELOW MikkmmmbaMuflxr: D- 19.... W (WW) 1'. Til-[fie De’t. flab Office WUCATE (Ca-r!) Te I. I. DUPLICATE (Phi) To Coat Dept. Iain Office QUADRUPUCATE (White) Warehou- Copy Note carefully the condition at every package. Do not use the term "Bad Order" or "Damned" to deecribe damages. A full definite account of the character and extent of the damage must alwaya be given. State I! damage was eaoeed by hamper loading, nails la ear. defectiveorineoflldent paekingor eating. leaky or dirty car. If Morabategeiegreatreportto‘rrafllc Department. Fev- JU-w I. '- IH‘I . . Figure 2. fin ettetnplc of a railn ad c::..:~ mlloadiig record 12 Methods Of Receiving The present emphasis on Operating efficiency in food warehouses has led to the development Of low cost, high-speed receiving operations. Pallets, electrically powered hand jacks, electric and gasOline fork lift trucks, roller and skate conveyors, power belt-conveyors, and other types Of materials handling equipment have all helped to increase the speed and efficiency of the receiving Operation. A recent study5 listed thirty~five different ideas on receiving methods and there are many more besides those listed. However, the method Of physical handling is not as important as the speed and efficiency since these two factors go hand in hand with good inventory control. Two of the prerequisites Of an inventory control system are that: 1. The receiving record be as accurate as possible. 2. The receiving record be transmitted to the tabulating department immediately upon completion. Therefore, an efficient receiving Operation can be of great assistance to the inventory control system if it is to work prOperly. Another factor in the receiving Operation which can aid inventory control immeasurably is standardization. Regardless of what method is used to receive the merchandise, the important thing to remember is that the established pallet pattern for the various size cases should be used consistently and also, 3 Kaylin, S. O. Receiving...35 Ways to Avoid Bottlenecks. Chain Store Age. 27(August, 1951), p. 132 13 there should be no deviation from the warehouse regulations regarding the number of layers per pallet. This standard- ization enables the receiving clerk to make a fast, accurate tally of the goods as they are unloaded. In addition, it saves a good deal of time and expense during the periodic physical inventory checks. Nothing is more,frustrating to a person taking a physical inventory than to have to count a large num- ber of pallet loads of a given item when the pallet pattern and number of layers on each pallet varies. This consistency in palletizing is so important both from.a materials handling and inventory control standpoint that some companies have worked out a set of standards re- garding palletized merchandiSe. The Benner Tea Company even made up a chart which was mounted in the receiving depart- ments so that it served as a useful reminder to the workers.6 Figure 3 is a partial example of such a chart. Since all warehouses do not use the same size pallets, this chart should not be taken as a guide. Rather it is presented as an example Of one of the ways to standardize the receiving operation. The Receiving Record 7 The primary receiving document is the receiving slip. The information contained in the receiving slip is vital to 6 Ibid, p. 139. 7 See Figure 1. Number Size of Can in Layer Hi 2% No. 2 cans 11 M in NO. 2-3:;- cans 8 1+ #8 NO. 1 cans 8 h 2% NO. 303 cans 15 h 6 10 lbs. sugar 8 12 5 lbs. sugar 6 12 #6 oz. cans 8 5 '12 No. 303 glass 11 7 Figure 3. Established Standards for Palletizing Merchandise in the Benner Tea Company Warehouse. 15 the prOper Operation of any perpetual inventory system. Any inaccuracies in the receiving information will be reflected throughout the entire system. Therefore, the receiving record must be a medium Of communication that effectively transmits clear and concise information to the various departments concerned, such as purchasing, tabulating, and accounting. Five adverbs can be used in determining the information to be contained in the receiving record: who, when, what, where, and why.8 Egg? The form would answer such questions as: Jho is the vendor? Who is the receiver? Who is the shipper? This is necessary in order to establish responsibility. Eggp? The year, month, and the day the tem was received is necessary to fit into the planned time schedule of the inventory control procedure. flhgt? This is the heart Of the receiving document. What was the item received? What quantity? What type pack- age? What. brand? What size? This is the place for standard- ized'uode numbers and abbreviations. Ehegg? This adverb may pertain to the specific receiving department handling the merchandise. It also may apply to certain cOmpanies who use location codes. EEK? Why were only ninetybseven cases received when the invoice called for one hundred? QueStiOns such as this are 8‘ Melnitsky, Benjamin. Management of Industrial Inven- Egr . Neg YOrk and Chicago: ConoveréMast Publications, Inc., 5%, p. O. l6 extremely important to the various departments concerned with inventory control. An explanation on the receiving ticket should eliminate much confusion and unnecessary communication with the receiving department. To assist the clerk in filling out the receiving record speedily and accurately, it is highly important that a cata- logue Of merchandise descriptions be kept in the department. Since practically all items carried in the warehouse are found on the store order form, it is possible to supply the clerk with a copy Of this form to use as a guide for code num- bers and descriptions. However, this form reflects only the items currently in stock in the warehouse and since there is a constant fluctuation in the variety of items carried'at any one time, the receiving department shOuld also keep a master catalogue Of all items that were ever handled. It is extremely important that the receiving records be forwarded to the tabulating or accounting departments as quickly as possible. This is neCessary because the re- ceiving must be recorded in the prOper manner before the merchandise can be shipped to the retail outlets. This is a crucial point, particularly in the case Of an out-Of-stock item, since the confusion resulting from a shipment of an item for which the billing department has no receipt is tremendous. The question now arises as to how the record can be trans- mitted to the accounting or tabulating departments. Where the receiving departments and the Office are adjacent, or close 17 together, it is very Simple for a clerk to deliver the completed records periodically. However, where the two departments are a considerable distance apart, it may prove economical to install a pneumatic tube system similar to those found in large department stores. In so far as inventory control is concerned, this pneumatic tube is probably the most satisfactory method since each record can be forwarded immediately upon completion. Cooperation As stated by Melnitsky, "lacking the active c00peration of other departments, receiving must travel an extremely rough and bumpy road ~ a trip which contributes little to the ease and comfort of its inventory control passenger."9 This cooperation is important within the warehouse itself. When the receiving department has an extremely heavy day, arrangements should be made so that they have extra men and machines. Otherwise, overtime work may be necessary, the men become overly tired, and as a result, the work is careless and mistakes are made more easily. ' Even more important is the cooperation necessary between the buyer or buyers and the receiving department. The buyer should attempt, whenever possible, to schedule incoming shipments so that the receiving work load is leveled out. 9 Ibid, p. 167 In addition, the buyer should insist that all essential documents accompany the shipments, especially the packing slip. The inclusion of the shipping documents greatly expedites the receiving operation. CHAPTER III MATERIALS HANDLING After the merchandise has been received, it must then be moved to the storage and selection areas. This movement comes under the heading of materials handling. As the term materials handling implies, it refers to the transportation or movement and handling of materials. In this case, the materials are the several thousand grocery items normally carried in a ware- house and the transportation and handling is limited to the movement within the confines of the grocery warehouse. The modern warehouse uses mechanized handling systems to move the merchandise throughout the plant and the following list shows some of the equipment most commonly used.1 1. Pallets and skids 2. Fork trupks 3. Low lift and high lift platform trucks h. Mbtorized pallet hand trucks 5. Continuous overhead chain conveyor or towline 6. Four wheel hand trucks 7. Pallet racks 8. Mechanized and gravity floor conveyors Much has been written on the subject of materials han- dling so, rather than to become involved in a discussion of l :fiark, David M. Egrehouse Materials Handling in the Foo in Industr . Unpublished M.A. thesis. Michigan State College, l9)l, 91 numb. leaves, 8 figures. 20 pure materials handling, an attempt has been made to touch on this subject only as it relates to inventory control.2 There are four major movements or processes involved in transporting the merchandise from the receiving area to the shipping platform and each will be discussed in the sequence in which it is performed. Movement to the Storage Area The merchandise has been palletized by the truck driver or the company employees in the receiving department. If it is a large shipment, the bulk of it must be put into the storage area with possibly a few pallet loads being placed on the selection line. 'Sometimes, in the case of small ship- ments of one or two pallet loads, it is possible to place the entire shipment on the selection line. This presupposes that the stock on the selection line has been sufficiently depleted to permit the placement of new stock. If it is not, then the inventory control system is not functioning prOperly or the buyer is (intentionally or not) overbuying. The full pallet loads are moved to the storage and/or selection area by several methods, the two most important being the fork lift truck and the "train” of four wheel trucks. The difference between these two Operations is primarily in the amount of equipment involved. The fork lift truck 2 For an excellent discussion on this subject, see Park, David M. Wa e ouse L terials Handlin in t e Food Chain Igdustrz. Ibid. 21 completes the movement and storage of the full pallet loads as one continuous operation. In other words, when just a fork lift truck is used by itself, it performs both the transpor- tation and storage functions. The warehouse "train", on the other hand, is merely a transportation device. The pallet loads are placed on four wheel trucks which are coupled to- gether and motivated by a gasoline or electrically powered tractor which corresponds to a railroad locomotive. This train then requires a fork lift truck to place the pallets on the trucks and, when it reaches the allotted storage space, another fork lift truck must remove and stack the pallet loads. A certain degree of care must be exercised to prevent damage while the merchandise is in transit. Any sudden starts, stOps, turns, or accidents which cause the merchan- dise to be damaged are costly both in terms of money and inventory control. If this damage problem is not carefully supervised, the merchandise might'possibly end up in the waSte can. The result of this action would be an over- statement of the perpetual inventory record. The resulting discrepancy between the book and physical inventory can cause the buying department to underbuy and possibly result in an ‘ out-of-stock item. This effect of damage on the inventory control system may possibly be somewhat exaggerated but the point is that this could happen under certain extreme con- ditions and, therefore, the discussion helps to illustrate the necessity for keeping damage to a minimum. 22 In the storage or reserve area, the layout is highly important to good inventory control not to mention efficient materials handling. Obviously, the most efficient use of the reserve area from a pure storage point of view would be to eliminate all aisles and utilize every cubic foot of Space. However, it must be kept in mind that this storage is only temporary and the selection line must be replenished from the reserve stock. Therefore, it is necessary to provide easy access to all merchandise in the storage area. Certain items require, because of their high turnover, that a very heavy inventory be maintained while others, in the low turnover class, may only require that one pallet load be held in reserve. This presents a problem in terms of lay- . out since the space provided for a heavy inventory item may be completely unsatisfactory for storing one or two pallet loads of a giVen item. By way of illustration, suppose that no section is provided in the reserve area that is less than six pallet lengths deep (that is, six pallet lengths from aisle to aisle). Assuming that the pallet loads can be stacked four high, then there will be twenty-four pallet loads in each row. Now suppose that several items are received consisting of two pallet loads each. In order to utilize the storage space to the fullest extent, it is necessary to put these three or four items of two pallet loads each in the Space provided for twenty- four pallet loads. As more items are received, they are also put into this same section with the result that the items in 23 the center of the section are "buried". Now suppose that one of the "buried" items is needed in the selection area. The resulting confusion in first trying to find the item and second, in moving eight or ten pallet loads to reach it, is tremendous. Not only is this type of Operation costly but it may also re- sult in a temporary out-of—stock situation during the time it takes to locate and remove the item. It is also possible that the "buried" item will not be found for a prolonged period of time and possibly not even during the periodic inventory. As was pointed out by the illustration, the solution to this problem lies in a sensible storage area layout. Space must be provided not only for the heavy inventory items but also for the "odd lot" (as the small receivings are called) merchandise. Movement to the Selection Area The selection area is the assembly line of the grocery warehouse. It is here that the order for the retail outlet is selected by a warehouseman usually termed a selector or order- picker. For convenience and rapidity of selection, a small portion of each item (usually one or two pallet loads depending on the turnover) is arranged in code number sequence along an aisle or series of aisles. The order-picker or selector then takes the store order or portion thereof and proceeds along the selection line assembling the items called for on the order. The selection line requires replenishment from time to time and this is usually done by a fork lift truck. The NC! "53 I. OPOCEIY ORDER KI ”K" mucous-“Va- “mar nous "(HMNCMMT 0w: Minn tun nus-0d: sar-senvnce AND SEIVlCE STORES noon m1: act 1‘). cow-u m 't a-r W‘ lilo-:- I. m _ "4- NOV AVAluul. lug-nu: W h! Han-f. “kw-Om mu... sienna-an Mun-hung... can-g! I t Oahu-uni an... I ”has... cur-A..." flnu I H h m mm ”a on “9"" "”0" "M .......... _ 2314 .u--..... «III-u 3101 . ..-..._.,.., - *- —-—- WY“W Hal Mm MEXICO"! "In“. M Mflfi-WAC ”2‘ I9--|9. |.. 3110 M "on..- I..- v. mm m Wot-do“ m P m Am Golden so.- 2‘“ IL Ian. 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LRASICAIIOY‘ “ ”no-81‘0“ II. 3139 MMICAIIO" CI. -81.. Compbolh Tomo'o Me. ‘I 13% on. to. 3 2‘! _I__~ P. L YOMAYO JU1CE_- u a. 6”: It 2812 ‘2'.”"?.'2“.‘.1°.’§’¥5'... No.04 ”lam Figure 40 1.1.1.1- A page from I. preprinted store order form no: 7/31 .I‘II' ADJ 0RD! POI-‘12! D I D C I I P T 1 O N DIVA“. .IYAIL r , CANNED SHRIMP a. s L 3» NET snalu 24 50 IDL LG SHRIMP CANNED HERRIN PL KIP SN L TOM TOMATO P N BEARD COD MCGOIAN STEAK 1. RE ICY POINT RED L PINK ICY PNT RED SAL IDL RED PL PINK L CHUN ‘40. UNIT. watt. DEPT 1' o ' I. ' N E 2 STORE NO. cu. . can. PAOI no. 3 4 no: no. 3 4 has I. An. “actor. orderhnprtntoddthcmm «counting mount. ' 25 Operator must check his line, note what items are needed, and then proceed to the reserve area to obtain them. The lift truck Operator is an important cog in the inven- tory con rol system since he is responsible for putting the merchandise in its prOper place on the selection line. As previously noted, the receiving clerk placed the item code num- ber on each pallet load and this number aids the lift truck Operator in finding the correct item. However, the receiving clerk is not infallible and, therefore, each fork lift oper- ator should be supplied with a current catalogue of all the merchandise so that a doubtful item or an item without a num- ber can be easily checked. A close control here can be a real help to the inventory control system since a misplaced item on the selection line will cause an understatement of one item and an overstatement of another on the book inventory. In “other words, the physical stock of the misplaced item will be depleted while the book inventory remains constant and the book inventory of the item code number under which the merchandise has been placed will be depleted while the physical stock re- mains constant. In addition, the store will not get the mer- chandise ordered and conversely, will get merchandise not ordered. Selection of the Store Order It was noted previously that the selector proceeds along the selection area aisles assembling the individual store orders. William H. Meserole of the United States Department 27 of Commerce stated that "this is the job of pulling down, case-bybcase, the block of goods which have been kept intact because of commodity likeness, and building it up into a new block having destination likeness."3 Each block of goods has an item code number prominently displayed above it which correSponds to the item code number on the store order form. In the majority of chain store grocery warehouses, the selec- tion of the order is done entirely by these code numbers. That is, the selector determines the amount ordered for any particular commodity on the order form and then locates this commodity by means of the code number displayed above it. To facilitate this process, the merchandise is arranged in code number sequence which correSponds to the arrangement on the order form. The warehouseman gets the goods from the stack, places them on a four wheel hand truck, and pushes them to the shipping dock. There are some variations in this process, since some warehouses make use of chutes, conveyors, and other mechanical devices to aid or replace the four wheel truck. However, no matter how the order-picking job is done, the goods have to be handled case by case. / The problem of inventory control in the area of order selection is increased due to the fact that it is a manual job performed by peOple and people tend to make mistakes. One of 3 Meserole w. H. Streamlined Wholesale Grocery‘Ware- houses. United States Department Of Commerce. washington, D. 0., Industrial Series No. 18, l9h5, p. 6%. 28 the most common errors is the selectidn of the wrong item. This may seem rather picayune since each commodity is designated by'a large code number and all the selector needs to do is find the number corresponding to the one on the order form. waever, it seems to be very simple for a selector, eSpecially one whose mind is preoccupied, to look at the correct number and then walk to the wrong pallet load. A variation of the same mistake occurs when the selector looks at the wrong number on the order form and then proceeds to select that item. When pallet racks or stands are used so that one pallet load may be placed above another without impeding the selection, it is very easy for the selector to take a case of merchandise from the top pallet when he actually wanted one from the bottom and vice versa. Another common error is in the case of "brokené package"Vor ”Split-case" merchandise. These are commodities which are packaged in units too large for the retail unit to handle and, therefore, must be broken down into a reasonably sized multiple. For example, three ounce cans of sardines are usually packed one hundred per case. If the shipping unit is fifty cans, then the case must be Split in half for the stores ordering one unit. It is not inconceivable that the selector might put a full case of one hundred cans (two units) on the hand truck when the store order called for one unit. Finally, when the selector places the commodity on the hand truck, the descriptive label should be in plain view and it must be so arranged that every case can be easily counted. If 29 , the case has no label or if it is such an Odd shape that it is not practical to place it with the label showing, then the selector should mark the item code number on the case where it 'can be seen. This facilitates the checking operation and eliminates the need for handling the merchandise'while checking it. It also opens up a new field for errors since the selector may mark the wrong number on the case. This can cause no end of confusion to the checker who checks the merchandise against the store order or invoice prior to shipment to the retail store. Before proceeding with the discussion on-checking, it may'be' well to present some suggestions for improving the inventory control system On the selection line. First, there is a need for a good sound training program.to instruct the selectors in the basic fundamentals of the order selection system. Second, the assembling line itself must be intelligently arranged and maintained not only to increase the efficiency of the operation, but also to reduce the possibility of errors. Finally, the _ first line supervision should aim at developing a team-Spirit attitude in the warehousemen as one way of increasing the efficiency and accuracy Of the selection process. Checking the Store Order The checking operation is usually a purely clerical Job. Therefore, it does not normally include a physical handling of the goods. This is the process which supposedly eliminates any and all errors which were made during one or more of the ‘warehouse processes. 30 As the order is assembled on the four wheel hand trucks, it is moved to the shipping dock. Here it is aligned in a designated spot so that after checking, it can be loaded directly into the carrier without further movement. The checker counts the number of items on the truck and compares his count with the selector’s count which is indicated in an appropriate spot on the order sheet. If they agree, the load is then assumed to be correct. If they do not, then the load must be checked item for item against the invoice or order sheet to determine where the mistake has been made. This method is called the piece-count system. A variation of this method is used by some warehouses and while it requires more time, it is probably more accurate. This is the item by item check of each commodity. However, at a recent Warehousing and Delivery Clinic Of the National Association of Food Chains, it was found that the majority of companies represented did not check by items.h Some of the reasons given were 1) "It is all in the company"; 2) ”costs too much to check"; and 3) "watch and spot check for dishonesty”. Theoretically, at least, the piece-count system Should be sufficient if all the other operations are relatively free from error. However, many times this is not the case and, therefore, from a pure inventory cone. trol point of view, the item check would be the better system. 1% 1fiZtional Association of Food Chains' Summary Report 0g the Wapehpusing agd Delivery Clinic. National Association of Food Chains, Washington, D. 0., January 15-17, 1950, 37pp. 31 After each truck is checked and all errors are corrected, the checker writes the number of pieces on that truck on one of the cases and also on the order sheet. When the complete order is finished, the checker writes the total number of pieces On the order form. This final, total count enables the truck driver to be certain that he has the entire order and it enables the store manager to do likewise when the order is delivered to the retail outlet. The completed order is now fully checked and ready for delivery to the store which completes the handling of the‘ merchandise within the confines of the grocery warehouse. The perpetual inventory record has been mentioned several times in this chapter and the preceding one and will be fully discussed in Chapter IV. . CHAPTER IV THE PUNCHED CARD SYSTEM Some method must be employed which will provide a close control over the physical stock in the warehouse and also provide accurate statistical information concerning the ware- house inventory. As mentioned previously, the grocery warehouse that uses modern materials handling equipment is usually able to efficiently utilize a mechanically Operated perpetual inven- tory record. These mechanical systems,then, provide the nec- essary data for the control of grocery warehouse inventories. The Tabulating Card The tabulating card is the basis of the mechanical ac; counting system. Information from source documents, such as receiving records and store orders, is transcribed into tab- ulating cards in the form of punched holes in predetermined positions on the card. All necessary data such as quantity, item code number, description, pack, size, et cetera are in- corporated in one of these cards for each item in the ware- house. International Business Machines Corporation cards con- tain eighty columns while Remington Rand cards contain ninety columns. Figure 6 is an example of an eighty column card. The tabulating cards are divided into "fields" which define a section of the card where one particular type of infor- mation will always appear. A on: :33 v v.30 wflpdgpdp E33 3:38 dd no 0320 5. 6 33¢ szezzzzncz283:88:33;883588333ausscttzosstaluslxaansllaananualaasset-uan....a..~.. aamaoano..aaaon.one...u.-«cacao-o...-con-a...cacao...coo-ooauooouuoo-uaooauan... ..........................a......................-.............................. ....a..............~.......................~........~........~.._........._...~. ............................................-................................... an..an“.........a..»....ma.........a.......................p.....a.n¢.....mm...n .....m........~....................w............s................q.......m...... a..n.......a..w..................a..........~......................a...........¢ ---an---~a-------~.------~«uuuuuuuuuuw----.w~.---.-~. ...........__..........................................t........_.._._-.._......m '22:!222-=I.83....3.I.'33I.‘3“...3..33'8:l§.."lI...fi.“3.fi.II...I.Cl I a c n o a o a a . l I a I \ . o o . ‘ 3% In order to compile the facts that are recorded in these cards, they are placed in one of a group of machines depending upon the type of information desired. A contact is made through the punched hole which activates the machine so that it prints the desired information. There are two systems which employ tabulating cards currently being used to control grocery warehouse inventories, the tub file system and the electronic calculator system. The Tub File System 1 on file In this system there is a master record card for each commodity carried in the warehouse. This card con- tains a complete description of the commodity including the code number, pack, size, and weight. In addition, space is provided for posting the quantity of merchandise received, date, card numbers, and current cost. This master record card is manually prepared and is filed in a compact visible rotary -;file. In addition to the master card, a commodity pattern or setup card is also filed in the rotary file. The pattern card is prepared by a key punch machine operator who reads the source document (master card) id by depressing keys, automatically converts the information into punched holes in the tabulating card. 1 See Figurefi7 for an example of some of the various types of cards used in the tub file system. ‘\.0(9‘.\° 7| 1| 7. ’I ’1 " 1' 1' u a. . 7 7 1I’I’I'I’I7I17I I’I ! 7. hub (‘11. cards. (Top to bottom) (a) stool: and output card; (b)(o)(d) conmodity detail cards; (a) pattern card; (1') meter card. 36 As mentioned in Chapter II, the receiving record is transmitted to the accounting department as soon after the merchandise is unloaded as is possible. A clerk then pulls the master card and pattern card from the rotary file for each commodity on the receiving record. The receiving data are entered on the master card and the pattern card is for- warded to the machine section. In the machine section, a commodity detail card is pre- pared for each case or package of merchandise received. This operation is performed on the reproducing punch machine. One unit of the machine reads the master card while the other unit punches blank cards which become duplicates of the master card. In addition, the machine has an attachment which end prints the item code number and card number in bold print on the left end of the card. The cards are numbered consecutively from one to whatever number of units of the commodity were received. The decks of numbered commodity detail cards are filed on end so that the code and card number are uppermost in a tub file from which this system gets its nrue. The file is actually a large table with sides so that a shallow tub is formed. The tub is divided into sections which run across the table and are just wide enough to hold a tabulating card standing on end. Each group of commodity detail cards representing the amount of every item in the warehouse is arranged in the tub file from the lowest item code number to 37 the highest. This arrangement is the same as the arrangement of the store order form and is usually the same as the ware- house selection line setup. An index card separates each commodity group and contains a brief description of the comp modity and the item code number. The commodity detail cards are filed in front of the index separation card in strict numer- ical sequence with the high number card next to the index card. Additional supplies of merchandise are usually received before current stocks are depleted. Each receipt is handled in the manner mentioned above. Commodity detail cards are reproduced from the pattern card and are numbered starting with the number one again. These cards, representing the new merchandise, are filed in front of the commodity detail cards representing the current stock and are separated by a high divider card. When very heavy receipts are made by the grocery ware- house such as a year’s supply of Campbell's Tomato Soup, it may not be practical to reproduce a commodity detail card for every case of merchandise. Therefore, only enough cards are reproduced for current needs and the balance to be punched is entered on a punch.up notice which is filed in the tub file in lieu of the commodity detail cards. When additional cards are needed, they are reproduced thereby reducing the balance on the punch.up notice. Signal cards are placed at proper intervals for each commodity. They are the minimum stock signal danger signal a a 38 and out-of-stock signal cards and are removed successively as the commodity cards are selected for billing. These cards are separated and listings are made of all the items that have reached the reorder point, danger point, and out-of- stock point. These listings are then forwarded to the buying department for appropriate action. The tub file actually represents a very compact miniature warehouse since every case or package of merchandise in the I ‘warehouse is represented by a commodity detail card in the tub file. The inventory for any particular item may be easily calculated in this tub file system simply by referring to the highest numbered card next to the index card. This num; ber represents the book inventory. If more than one receipt of merchandise is represented in the tub file for a commodity, it is necessary to add the highest numbered card next to the index card to the highest numbered card next to the high divider in order to obtain the inventory amount. In the tub file system, the tabulating cards used in preparing the retail outlet invoice must be manually selected. The preprinted order form showing the quantities of mer- chandise desired by the retail outlet is either mailed to the office or brought to the office by the truck driver who made the last delivery to that store. In the accounting department, the order is given to a clerk who selects the 39 cards used in preparing the invoice. The clerk pulls a card from the tub file for each unit of every commodity on the order sheet, always pulling the highest numbered card first. When the commodity detail cards have been pulled for the entire order, the prOper store address card and invoice number card are selected and the entire pack of cards is forwarded to the machine section. In the machine section, the prepunched cards are fed into a tabulating machine. This machine is a combined adding, subtracting, and printing mechanism. As the cards pass through the machine, they actuate various counters and printing mechanisms which reproduce the number of units ordered, item code number, description, and retail price in printed form. This part of the invoice is sent to the ware- house to be used in selecting the order for the store. There is also a stub part of the invoice form which is detached and kept as an office record. The information that appears on this stub is the number of units, item code number, retail and cost value of each unit. The basic document prepared in the tub file system, in so far as inventory control is concerned, is the report on the movement and current inventory of each item in the grocery warehouse. This report is usually prepared weekly or monthly in the following manner. A card is key punched for each receipt and contains the quantity, item code number, description, and cost value. r. .‘ #0 Then the high.number cards for each item are pulled from the tub file and these cards together with the receipt cards and cards representing the beginning inventory from the previous period are run through the tabulating machine. The tabulator adds the receipts to the beginning inventories and subtracts the high.number commodity detail cards to get the movement for each commodity. The tabulating machine prints this information together with the amount shown on the high number commodity detail card which represents the ending inventory. Before refiling the high numbered detail cards, they are reproduced so that they can be used as the beginning inventories for the next period. COpies of this report are given to the buyers and other persons concerned with the control of warehouse inventories such as the branch.manager and warehouse superintendent. The two principal advantages of the tub file system are: 1. Inventory control. It provides a comparison of warehouse count with file count. 2. Buying control. It makes possible a low inventory in- vestment and a reduction of out-of-stock items. The Electronic Calculator Machine System The usual procedure for inventory control and billing is the prepunched unit inventory file mentioned in the pre- vious section. However, where the size of the inventory is large, this system is rather cumbersome. Therefore, an Ml entirely new method of billing and inventory control has been developed by the International Business Machines Corporation. In the new system, the prepunched unit inventory file is replaced by a small file of single inventory cards, one for each commodity. Each inventory card contains all the necessary description and inventory data such as:2 code number description inventory quantity current inventory valuation year-to-date issues current unit cost unit retail unit tax on order quantity minimum.balance date of last transaction The inventory card also serves as a master card for billing extensions. The inventory master cards are processed through the calculating punch machine with the detail transaction cards which are key punched from source documents for the following 2 Anon. IBM Application Repont-60h Electronic Calcula- tion Enncn for Billing and Inventory Control. New York: Internation : Business Machines Corporation, 1950, p. l #2 types of transactions:3 warehouse receipts warehouse receipts (damaged) return to vendors purchase orders credit billing regular debit billing special debit billing Since the greatest majority of cards which must be manually key punched are regular debit billing cards, only a minimum of key punching is necessary. The reason for this is the fact that the debit billing cards are used in con-- junction with the inventory master cards which already contain all of the pertinent information. Therefore, it is only necessary to the cards. Prior to the transaction cards and merged behind inventory trailer group. The cards key punch the item code and quantity into calculating punch runs, all the detail are sorted into item code number sequence the inventory master cards. Then a blank* card is collated behind each commodity are then processed through the electronic calculating punch machine where the retail, cost, and tax extensions are calculated, checked, and punched on billing 3 See fiigure 3 for an example of some of the various types of cards used in the electronic calculator system. announced-Inluuiuvl «non-occulnunhnlnnn. \\\\\I|\“\‘\\\\\\\\\\\\\\\\\\“\|\\\I\\\ 111111111 1131!!! ‘tllt 21121211121 13311113131 "ld4lOOOOQQI "‘SSSSSS «as. k ‘asocovod: _ ‘/ “I... \ ¥‘ ' I\_1_~ .QQQQQQQQQQ utun p .. A “~-_ I i . 1:: "ft "(AMI inIQIQ-u '.,vI. nu -' , 'IM'JII; "‘0' Aca\.\1.;.1‘ u” v .Dvfivvt... .. It. °' COOK 9y I .1", ‘19 Figure 8 r. .uaillf‘. . :L3thxqglul “04 2r; ’ (b) 1:15:32“ 1.1;... “"18- (To 1 (o) billing c stmry Card, to both.) ( ’ (f) ”ator £2,13de “rend (51):”. ° frozen an cards. (If there is not sufficient stock on hand for any particular item, then the billing card is "x“ punched in column one, "no stock".) Then the description, unit retail, unit tax; et cetera are gang punched1+ into all the detail and trailer cards but the unit cost is gang punched into only the detail transaction cards. Finally, the calculator adds the receipts to the be; ginning inventory, subtracts the quantity on the debit billing cards from this total, and punches the answer into the inventory trailer card. The inventory trailer card, con- taining all descriptions and the newly calculated inventory figure at the completion of the calculating punch run, he- comes the new inventory master card for the next day’s trans; actions. 1 After the calculating punch Operation is completed, the cards are sorted to obtain the billing cards. The regular billing cards are then sorted to select all “no stock" cards which are used to compile the out-of-stock report. The remain- ing cards are sorted by store number behind store heading cards and billing and shipping documents are prepared on the tabulat- ing machine in a manner similar to that in the tub file system. The remaining cards, all of which are non-billing cards, are processed on the electronic calculating machine for 4 Gang punching is the term used to describe the cper- ation whereby information contained in master cards is repeated or transferred to each succeeding card. 1+5 current inventory totals and the following calculations are punched into the trailer cards; new inventory quantity new inventory valuation new'unit cost new issues year-to-date new on order If the sum.of the new inventory quantity, plus the new‘ on order quantity is less than the minimum.reorder point, the reorder control "x" is punched. This item.would then appear below reorder point on the daily inventory report. The final step is the punching of the trailer card to identify it as the new master card and the old master card is "x" ,punched in the card code column so that it may be sorted. All the cards are separated into various groups and the trailer card is filed as the current inventory and is used as the master card for the next day‘s transactions. After the new (or ending) inventory master card is developed, it is merged with the old (or beginning inventory) master card and all the receipt, transfer, and adjustment cards for every commodity in the warehouse. These cards are then processed in the tabulating machine to develop the stock and output report. This document (sometimes called a stock status report) is compiled on both a daily and a weekly basis. It is a summary of the day‘s or the week’s trans- actions and contains the unit cost, item code number, pack, 'C h6 abbreviated description, opening balance, receipts, balance, shipments, minimum reorder point, and stock available.' Whenever the letters "CR“ appear after the amount in the last column, it means that the amount shown is that much below the minimum reorder point. Carbon copies of this report are made and distributed to those persons who are vitally interested in the amount of stock on hand, such as the buyers and the warehouse superintendent.5 In one food chain, the tabulating department is divided into three sections and the procedure described above is actually the function of one of these sections- the machine section. This machine section cannot proceed with its function until all the necessary data are supplied to it in the form of punched cards. The other two sections then, are the cost section and the key punch section whose function it is to provide the necessary data for the Operation Of this electronic calculator punch system. Therefore, in order to provide a complete picture of this system, the functions and duties Of the cost section and key punch section are discussed below: Cog; Section 1. Records quantity ordered and purchase order numbers on stock record cards. 5 See Figure 9. phonon aspen. 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Z: .3. z... . .2122: . . . . vv up“ .31 . can ; 3.... us a...mu A". known“; . . «a. ; onurll:Mn| .apfl-s- : em: as... use: ace. ea "unmade a . - - er nu. -«. L- ..d I- niche :5... so .2. 2. «mamas... J . . n u u tat... a: p.. re... . hdldfiv4 . #8 2. computes the cost of the merchandise received and enters the total cost and freight charges on the receiving ticket. 3. Checks the code number, description, pack, size, and cost shown on the receiving ticket against the stock record card. %. Records quantities received, unit cost, total cost, date, and receiving ticket number on stock record card. 5. Notifies buying department of any change in cost, pack, or size of the latest receiving. 6. Sets up Stock record cards for new items received. 7. Forwards the receiving ticket to the key punch section. 8. Enters item code, unit cost, and total cost on all merchandise transfers and forwards transfers to key punch: section.6 9. Maintains records of spot checks taken by the ware- house. 10. Makes up adjustment vouchers to correct any dis- crepancies between the physical and book count.7 Kev Punch Section The general function of the key punch section is the punching of cards which reflect the movement of merchandise 6 See Figure 100 7 See Figure ll. - . I" 18772 awnnucaullnonllnccmuuuvv 'I‘N’FII Dan m... m ..__...- /_./L..- DRUG-I'YIOI I" 78772 Figure 10. An mp1. of a non-chandise transfer .8998 g a. «o oil... .2 .3 rant Jill}; giilxiuzi sgliiuv—IJ’G INT-“h J i t a... .50”an nl'l ri’ Ill‘ilnlx'r'ln'nlr' n01 m0m