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The revenue cycle (in retailing firms) or the conversion cycle (in manufacturing firms) actually initiates this activity. When inventories are reduced by sales to customers or usage in production, the system determines if the affected item in the inventory subsidiary file have fallen to their reorder points. If so, a record is created in the open requisition file. Each record in the open requisition file defines a separate inventory item to be replenished. At the end of the day, the system sorts the open requisition file by vendor number and consolidates multiple items from the same vendor onto a single requisition...
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