Which of the following is NOT a red flag for a need recognition scheme?

Ordering materials at the optimal reorder point is not considered a red flag for a need recognition scheme because it is a standard practice in inventory management. The optimal reorder point is determined based on careful inventory analysis to ensure that materials are ordered just in time to meet production demands without overstocking. This procedure demonstrates effective inventory control, which is essential for maintaining operational efficiency.

In contrast, the other options highlight potential issues that could indicate fraudulent activities. A large number of surplus items written off as scrap may suggest that materials are being ordered unnecessarily, which may be indicative of manipulation or mismanagement. The absence of a satisfactory list of backup suppliers could signify a lack of oversight or preparation for supply chain challenges, which might enable fraudulent ordering practices. Unusually high stock and inventory levels can raise suspicions about the necessity for such amounts, potentially pointing to fraudulent schemes to inflate inventory assets or misappropriation of funds.

Overall, optimal reorder point practices contribute to legitimate supply chain management, distinguishing it from the warning signs related to fraudulent activities in need recognition schemes.