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Problems

21 September, 2015 - 11:32

1.

The Sell-It-All Company is a wholesale distributor of office supplies. It sells pencils and pens, paper goods (including computer paper and forms), staplers, calendars, and any other items that you would expect to find in an office, excluding furniture and other major items such as computers. Sales have been growing at 5 percent per year during the last several years. Mr. Big, the Sell-It-All president, recently attended a national office supplies convention. In conversations during that convention, he discovered that sales for Sell-It-All’s competitors have been growing at 15 percent per year. Arriving back home, he did a quick investigation and discovered the following:

  • Sell-It-All’s customer turnover is significantly higher than the industry average.
  • Sell-It-All’s vendor turnover is significantly lower than the industry average.
  • The new market analysis system was supposed to be ready two years ago but has been delayed for more than one year in systems development.
  • A staff position, reporting to the president, for a person to prepare and analyze cash budgets was created two years ago but has never been filled.

Mr. Big has called on you to conduct a systems survey of this situation. You are to assume that a request for systems development has been prepared and approved. Make and describe all assumptions that you believe are necessary to solve any of the following:

 

a.

What are the specific goals of this systems survey?

 

b.

Indicate specific quantifiable benefits and costs that should be examined in assessing the economic feasibility of any solutions that might be proposed. Explain how you would go about quantifying each benefit or cost.

 

c.

Propose and explain three different scopes for the systems analysis. HINT:What subsystems might be involved in an analysis?

2.

a.

Conduct research of current literature and databases to find a report of an enterprise system development project failure. Prepare a report or presentation (subject to your instructor’s instructions) describing the failure. Include in your report the elements of feasibility and project risk that may have been miscalculated or mismanaged and led to the project failure.

 

b.

Conduct research of current literature and databases to find a report of an e-business system development project failure. Prepare a report or presentation (subject to your instructor’s instructions) describing the failure. Include in your report the elements of feasibility and project risk that may have been miscalculated or mismanaged and led to the project failure.

3.

David’s Used Cars is a used car dealership owned and operated by David Steele. Steele has about 200 cars in stock and sells or buys an average of 10 cars per day. Steele buys cars that are trade-ins from new car dealers, repossessions from banks, and cars sold at auctions by municipal towing yards and insurance companies. Steele currently employs two full-time salespeople as well as five full-time mechanics who repair and prepare the cars for resale. Steele rarely accepts a car in trade as part of the payment for a car he is selling. Steele uses the following procedures relative to the purchase and sale of used cars.

Steele creates a folder for every car that he purchases. He accumulates information on a car in the folder. The folders are maintained in a filing cabinet alphabetically by car make and model. Each car and corresponding folder is assigned a five-digit sequence number for accurate identification on the lot and in advertisements. Each folder contains a preprinted master sheet. Initially, Steele enters the make, model, and year of the car, the purchase date, the name and address of the owner, the price paid, the odometer reading, the car lot parking space number, and the check number used to pay for the car. Steele and one of the mechanics then prepare a second form, a checklist of 25 descriptive criteria used to evaluate the car’s condition. Each criterion is evaluated as poor, fair, good, or excellent. Steele then enters onto the master sheet the selling price he would want for the car if no repairs were made. He also makes out a price sticker and attaches it to the windshield of the car. If a repair is made, the mechanic fills out a repair description that contains a detail of the repairs, the cost, and the estimated retail value of the repairs based on a price list of industry averages for various standard repairs. Steele files this in the appropriate folder and enters the cost and retail values onto the master sheet. If the repair affects any of the evaluation criteria, he makes the appropriate adjustment to the affected criteria and to the price sticker on the car. When a car is sold, Steele enters the date, selling price, salesperson, and customer name and address onto the master sheet.

Steele approves all sales. All sales are for cash or cashier’s check. Steele has a checking account used solely for car sales and purchase transactions. He uses another account for all other expenses. He transfers money to the second account from the sales and purchase account. After a car is sold, Steele places the corresponding folder in a drawer in his desk. Every Friday, he calculates the salespeople’s commissions based on the selling price recorded in the folder. He pays commissions for sales from the previous Friday to Thursday of the current week. He then files the folders by sequence number in the closed car file.

Steele’s system is not without problems. Sometimes Steele forgets to change the prices on the car stickers to reflect repairs that have been made. This error frequently is not discovered until an agreement to sell a car to a customer has been reached. He occasionally files the current Friday’s folders for cars sold this week in the closed car file, along with the folders for cars on which the sales commissions already have been paid. As a result, the salespeople do not receive their proper commission for the cars they sold in the most recent week. He also has found that some cars are on display on the lot for a long time before they are sold. However, Steele has not had the time to look at this problem closely enough to identify all such cars and to get them sold.

In spite of occasional help from his daughter, Steele still spends a lot of time on paperwork. This frustrates him because the information is still frequently inaccurate and processing the paperwork takes time away from managing the business and selling more cars. He believes that the inefficient use of his time is costing him money.

Steele has had no formal business education and has never used a computer. The thought of having to learn about computers scares him. However, he has read about how well computers can simplify manual clerical operations. He has also read that once a computer system has information stored in it, information can be used to generate all kinds of reports that would be useful for analyzing a business and improving cash flow. Steele has hired you to help determine what functions could be automated and how the information would have to be organized to perform those functions.

 

a.

Identify two significant operational deficiencies and two significant informationsystem control deficiencies. Next to each deficiency, suggest a potential solution. Present your answer in the following form:

   

Deficiency

Proposed Solution

   

Operational:

 
   

1.

 
   

2.

 
   

Information system control:

 
   

3.

 
   

4.

 
 

Operational deficiencies would comprise process effectiveness, efficiency of resource use, and security of resources. Here, the process covers the acquisition, repair, and sale of used cars, as well as the payment of commissions. The resources are the inventory of cars, cash and checks, and the inventory file folders. Informationsystem control deficiencies would undermine the goals of information validity, completeness, or accuracy of the records (e.g. folders) accompanying the operational process.

 

b.

Suggest some possible effects that the installation of a computerized information system might have on (1) the organizational structure of David’s Used Cars (job functions, realignment of duties, reporting responsibilities, etc.), and (2) the behavior of salespeople, mechanics, customers, or Steele himself.

4.

Appendix 6A: For each problem described, list and explain the documentation you would recommend for gathering and analyzing related facts. Note: It is notnecessary to simulate the documentation. Confine your answer to a listing and brief explanation (one to two sentences) for each type of documentation that you recommend.

 

a.

College admissions office is experiencing a decline in applications.

 

b.

College admissions office is experiencing a decline in the percentage of students coming to the college after being accepted by the college.

 

c.

College is experiencing an increase in the number of unpaid tuition bills.

 

d.

Faculty member has noticed that fewer students are signing up for her classes.

5.

Appendix 6A: For each problem described, list and explain the documentation you would recommend for gathering and analyzing related facts. Note: It is not necessary to simulate the documentation. Confine your answer to a listing and brief explanation (one to two sentences) for each type of documentation that you recommend.

 

a.

Insufficient parking at Enormous State University (ESU).

 

b.

Overcrowding in dormitories/apartments/student center at ESU.

 

c.

Inadequate computer support services for students and faculty at ESU.

 

d.

Getting photocopying done in the Marketing department at ESU.

6.

Conduct research on ISO 9000-3 (see Table 6.5) and the Capability Maturity Model (see Table 6.6). Compare and contrast the requirements of those two standards with each other and with the procedures described in this chapter.