Describe the problems with Fitter Snacker's sales quotations and orders

Answer 1

Giving a customer a price quotation and then taking the customer's order should be a straightforward process, but at Fitter it is not. For a new customer, the sales process begins with a sales call, which might be over the telephone or in person. At the end of the sales call, the salesperson prepares a handwritten quotation on a form that generates two copies. The original quotation goes to the customer, and the middle copy is first faxed and then mailed to the sales office; the salesperson keeps the bottom copy for his or her records. On the quotation form is a toll-free number that the customer can call to place an order.
A number of problems can occur with this process, including the following:
• The salesperson might make an error in the sales quotation. For example, a salesperson in the Direct Sales Division might offer both a quantity discount and a discretionary discount. If the salesperson is not careful, the two discounts combined might be so deep that the company makes little or no profit on the order.
• Salespeople fax a copy of their sales quotations to the sales office, but sometimes a customer calls to place an order before the fax is transmitted. In such cases, the sales clerk has no knowledge of the terms of the sale (which are outlined on the quotation) and must ask the customer to repeat the information. On the other hand, even if the quotation has been faxed, the data might not have been entered into the customer database, so the customer might still need to repeat the order information. This situation can also lead to a duplicate order.
• The fax received by the sales office is a copy of a handwritten form, and might not be legible.
When customers place an order, they usually inquire about the delivery date. To get a shipping date, the sales clerk must contact the warehouse supervisor and ask whether the customer's order can be immediately shipped from inventory, or whether shipping will be delayed until a future production run is delivered to the warehouse. However, because the warehouse supervisor is generally too busy to get an updated inventory count, total all the orders waiting to be filled, and find out how many other orders are in process in the sales office, she can only estimate the shipping date.
Once the sales clerk has the warehouse supervisor's estimated shipping date, she determines the shipping method and how long delivery will take. Next, the clerk checks the customer's credit status. For new customers, the clerk fills out a paper credit-check form that includes basic customer data and the amount of the order. The form goes to Accounting, where accountants perform the credit check and then return the credit-check form showing the customer's credit limit. If the order is from an existing customer, the clerk checks a paper report from Accounting that shows the customer's current balance, credit limit, and available balance. However, because the report is generated weekly, it might not reflect a customer's most recent payments or orders. If a customer's available credit is less than the amount of the current order, assuming there are no other orders outstanding, the clerk calls the customer to determine what action the customer wants to take (reduce the amount of the order, prepay, or dispute the amount of credit granted).
Once the order details have been finalized, the sales clerk enters the order into the order-entry system. The computer program performs four important tasks. First, it stores the customer's order data, which are used later to analyze sales performance at the division level. Second, it prints out a packing list and shipping labels for the warehouse to use to pick, pack, and ship the customer's order. Third, it produces a data file of all current transactions for the Accounting Department to use for preparing invoices (this file is also used for financial, tax, and managerial accounting, which is discussed in Chapter 5). And fourth, the data file is copied to a USB key each evening for uploading into the company's PC-based accounting system.