Chapter 2, Problem 7CE

Explanation of Solution

Returning allocated inventory:

• Inventory is allocated for determining if future orders have available inventory.
• The allocated inventory must be returned when an order is rejected due to unapproved credit or special terms.
• The customer will be notified that the order was not approved if credit or special terms are not approved.
• The customer can then resubmit the order and the new credit limit will be checked.
• A notification of the rejected order will be sent to the person who releases the reserved inventory for the order...