Day: January 30, 2026

The organisational structure at Alex Manufacturing Ltd is as follows.

The production department is headed by Arthur, whose deputy is Jonny.

Arthur reports to the managing director, Alex.

There are several other departments (sales and marketing, accounting, purchasing, HR and internal audit).

• Which ONE of the following statements reflects the ideal situation concerning purchase ordering?

Select ONE answer:

1. Arthur and Jonny should requisition materials as production needs dictate, but orders should be placed by the purchasing department
2. Arthur and Jonny should make purchase orders as production needs dictate
3. Arthur should make purchase orders, although Jonny could make requisitions as production needs dictate
4. Arthur and Jonny should requisition materials as production needs dictate. Still, orders should be placed by the purchasing department, having been authorised by Alex

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Arthur and Jonny should requisition materials as production needs dictate, but orders should be placed (and by implication authorised) by the purchasing department. The managing director, Alex, would not be involved in authorising normal purchasing transactions in a company with a purchasing department. Someone other than the production department leaders should authorise purchases.
2. Not correct
3. Not correct
4. Not correct

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