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Problems

19 January, 2016 - 12:35

1.

Read the following article and answer the questions that follow: Milo Geyelin, “Doomsday Device: How an NCR System For Inventory Turned Into a Virtual Saboteur,” Wall Street Journal (August 8, 1994): A1.

 

a.

At the start of Hooper Specialty’s inventory system conversion project, how would you characterize it in terms of size, degree of definition, technology familiarity, and organizational readiness? Note: See Chapter 6 for a description of these concepts. Your answer should include several risks for Hooper.

 

b.

Given the risks that you identify in answering part a, as well as the control principles discussed in this text, what measures could Joe Hopper have taken to prevent, detect, or correct problems with the NCR inventory system?

 

c.

Next, consider the situation from the point of view of NCR. What risk did they face? What measures could they have put in place to prevent, detect, and correct problems with the inventory software they acquired from Taylor Management Systems?

2.

Using the Web sites listed in Technology Insight 7.2 as a starting point, answer the following questions:

 

a.

Select sites (or parts of sites) that describe two similar software or hardware products. Write a summary that compares and contrasts the information provided about those products.

 

b.

Select two sites that provide demos of a system. Write a report that compares and contrasts those demos in terms of the functionality and what you are able to learn about the system from the demo.

 

c.

Select two sites that provide tests of a system. Write a report that compares and contrasts those tests in terms of the functionality and what you are able to learn about the system from the test.

3.

Obtain a computer operations “run manual” from an actual organization. Your college or university might be a source.

Prepare a report that summarizes the contents of the run manual. Comment on the apparent reason for including each major item in the manual. If you are unsure of the reason for including certain material, interview the computer operations manager to determine the reason.

4.

The Boston Edison Company provides electric service to the residents and businesses of Boston and several other eastern Massachusetts communities. This problem concerns the following hypothetical billing procedures for Boston Edison.

Field personnel take electric meter readings 10 days prior to the end of each customer’s monthly billing cycle. These personnel key the meter readings into handheld units. In computer operations at the home office, the meter reading units are read by the computer, which also accesses the stored customer records and other necessary data. The quantity of kilowatts consumed and the amount due are computed, and the bill is printed (a sample bill is shown in Figure 7.4). Customers return the top half of their bills with their payments.

Because of the steady growth in number of customers and the increased need for managerial information, Boston Edison’s management has decided to upgrade its customer billing system. The new system will retain the present meter reading procedures, but the rest of the system will be modernized. The new system should also enable users to access customer records when desired and should provide improved information for decision making.

For each numbered item on the Boston Edison bill (Figure 7.4), indicate the immediate (versus ultimate) source of the item. For instance, the immediate source of the current meter reading would be the meter reading unit (i.e., event data), as opposed to the ultimate source, which is the meter itself. Some items may have more than one source. You have the following choices:

  • C = customer records (a combination of customer and accounts receivable master data)
  • CG = computer generated (such as a date or time supplied by the system)
  • CC = computer calculated
  • ED = event data
  • CO = console operator (such as batch totals or a date to be used)
 
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Figure 7.4 Boston Edison Bill to Accompany Problem 7-4 
 
 

Arrange your answer as follows:

   

Item No.

Source

   

1.

C

   

2.

?

   

3.

CG

   

etc.

 

5.

Assume that you are working with a payroll application that produces weekly paychecks, including paystubs. Listed below are 20 data elements that would appear on the paycheck/paystub. For each numbered item, indicate the immediate (versus ultimate) source of the item. For instance, the immediate source of the number of exemptions for an employee would be the employee master data, as opposed to the ultimate source, which is the W-4 form filed by the employee. Some items may have more than one source, as in the case of item 1. You have the following choices:

  • E = employee master data
  • T = time records (these are in machine-readable form and show, for each employee for each day, the time punched in in the morning, out at lunch, in after lunch, and out in the evening)
  • H = table of hourly wage rates (i.e., wage rate “class” and hourly rate for each class)
  • W = table of state and federal income tax withholding amounts plus FICA tax rate and annual “cutoff” amount for FICA wages
  • CG = computer generated (such as a date or time of day supplied by the system)
  • CC = computer calculated
  • CO = console operator (such as batch totals or a date to be used)
 

Arrange your answer as follows:

   

Item No.

Source

   

1.

T, E

   

2.

?

   

Etc.

 
 

The items to be considered are as follows:

 

Number

Description

 

1.

Employee identification number

 

2.

Social security number

 

3.

Employee name

 

4.

Employee address

 

5.

Regular hours worked

 

6.

Overtime hours worked

 

7.

Pay rate classification

 

8.

Hourly pay rate

 

9.

Regular earnings

 

10.

Overtime earnings

 

11.

Total earnings

 

12.

Deduction for federal income tax

 

13.

Deduction for state income tax

 

14.

Deduction for FICA tax

 

15.

Union dues withheld (flat amount based on length of service)

 

16.

Net pay

 

17.

Check number (same number is also preprinted on each check form)

 

18.

Year-to-date amount for items 11 through 14

 

19.

Pay period and date

 

20.

Date of check (employees are paid on Wednesday for the week ended the previous Friday)

6.

Shown in Figure 7.5 is a flowchart that depicts the computer logic for updating sequentialinventory master data for either of two types of events: goods received or goods issued.

Develop data to test the logic of the inventory update program. The test data should allow for all possible combinations of master data and event data records. Note: There can be more than one event for a particular part number; be sure to provide for this possibility.

7.

Read the scenario below and answer the following questions:

Fleet Shoe Company is having problems with its automated distribution system. The main warehouse is almost at a standstill and retailers are getting few if any Fleet shoes. Fleet had received recognition for its state-of-the-art warehouse system. However, just prior to switching over to this new system, Fleet scrapped the system’s software and computer hardware and adopted a new architecture. During the development, there had been very high turnover of IT staff and Fleet had fired its lead systems integrator.

The new system was to automate the movement of goods in the warehouse and was to include tilting trays, conveyor belts, lifting equipment, and scanners. To operate properly, such systems require quite a bit of fine-tuning. The goal was to increase capacity, boost productivity, cut staff by 50 percent, and cut the time to get orders out the door to 24 hours. The software, not the hardware, seemed to be the problem. It was designed to run under UNIX, but Fleet decided to use fault-tolerant computers that run a proprietary (i.e., hardware specific) operating system. When the software vendor went out of business, they had not completed porting (i.e., transferring) their software to the proprietary operating system.

Fleet’s choice to replace the original platform was a computer system that itself ran warehouse management software. It is this option that brought Fleet to it knees. The new system was slower than expected. To get shoes to retailers, Fleet shipped directly from overseas factories and warehouses. Comments from industry specialists and consultants pointed out the chaos that often results from instantaneous changeovers. Another speculated that Fleet did not place much importance on warehousing and rather concentrated on other aspects of its operations.

 

a.

How would you characterize this project in terms of size, degree of definition, technology familiarity, and organizational readiness?

 

b.

Describe specific risks or concerns that you have for this project. Clearly explain why each is a risk or concern and the specific actions that you would recommend to mitigate the risk or concern.

 
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Figure 7.5 Program Flowchart to Accompany Problem 7-6