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15 January, 2016 - 09:49

Case A: Klassic Grocers, Inc.

Klassic Grocers is an online grocery service that provides home delivery of groceries purchased via the Internet. Klassic operates in the greater Tulsa area and provides delivery to precertified customers. In order to be certified, the customer must establish a credit or charge line and rent a refrigerated unit to store delivered goods at their residence should they not be home at the time of delivery.

The order process is triggered by the receipt of an order over the Internet from a customer. The system receives the order from a customer including the customer’s name and ID number, and the list of items for purchase. The system accesses a customer database to ensure that the customer is in good standing and a refrigeration unit is in place at the residence. If the order is approved, it is automatically logged into the order database and an e-mail acknowledgement is sent to the customer. If it is rejected, the system sends the customer a message notifying him of the inability to process the order.

In the warehouse, a clerk downloads an outstanding order from the order database to a handheld computer. The downloaded order provides an electronic picking ticket for use in assembling the customer’s order. The order is assembled, placed in a box, recorded via the handheld computer as completed by item, a bar code is printed on the handheld computer and affixed to the outside of the box, and placed on a conveyor belt to delivery services.

In delivery services, the delivery person uses another handheld computer device to read the barcode and access the sales order information from the order database. The items in the box for delivery are rechecked per the order and loaded for delivery to the customer. Confirmation of the order contents by the delivery person triggers the printing of delivery directions. Upon delivering the groceries to the customer, the delivery person once again reads the barcode with the handheld device, and presses the button for confirmation of delivery. The completion of the delivery is automatically recorded in the order database. The system at this time also updates the customer’s master data for billing purposes.

Case B: Do-It-Right Company

The Do-It-Right Company is a wholesale distributor of office furniture. Customer orders are received in the mailroom, where clerks sort orders from the rest of the mail, group them into batches, prepare a transmittal sheet, and forward the orders and the transmittal sheet to the order entry department.

A clerk in order entry checks that the batch is complete, logs the batch into a batch control log, and begins to process the orders. The clerk keys the orders into the computer. Keying involves a two-step process in which the order entry clerk keys in the customer code. The customer data, stored on disk, are checked to see that the customer exists and has an acceptable credit record. If everything checks out, the clerk keys in the rest of the order.

The procedure results in the creation of an entry in the sales order event data store. At the end of the day, the data are processed against the customer data and the inventory data to create a picking ticket (sent to the warehouse), a sales order notification (sent to the shipping department), and a customer acknowledgment (sent to the mailroom for mailing to the customer). At this time, the sales order is also recorded in the sales order master data.

In the warehouse, the picking ticket is used to assemble the customers’ orders. The completed orders (goods and attached picking ticket) are forwarded to the shipping department. The shipping clerk removes the sales order notification from a temporary file and compares the goods to the picking ticket and to the sales order notification. The clerk then keys the sales order number into the shipping department computer, which accesses the sales order master data and displays the order on the shipping clerk’s screen. The shipping clerk keys in the items and quantities being shipped and, after the computer displays the shipment data, accepts the input. Once the shipment is accepted, the computer updates the sales order master data and creates a record for the shipments event data. The computer also prints a packing slip and bill of lading on a printer in the shipping department. These shipping documents and the goods are given to the carrier for shipment to the customer.


For the company assigned by your instructor, complete the following requirements:

a. Prepare a table of entities and activities.

b. Draw a context diagram.

c. Draw a physical data flow diagram (DFD).

d. Prepare an annotated table of entities and activities. Indicate on this table the groupings, bubble numbers, and bubble titles to be used in preparing a level 0 logical DFD.

e. Draw a level 0 logical DFD.


For the company assigned by your instructor, complete the following requirements:

a. Draw a systems flowchart.

b. Prepare a control matrix, including explanations of how each recommended existing control plan helps to accomplish—or would accomplish in the case of missing plans—each related control goal. Your choice of recommended control plans should come from section A of Table 11.2  plus any technology-related control plans from CONTROLLING INFORMATION SYSTEMS: PROCESS CONTROLS  that are relevant to your company’s process.

c. Annotate the flowchart prepared in part a to indicate the points where the control plans are being applied (codes P-1 . . . P-n) or the points where they could be applied but are not (codes M-1 . . . M-n).


Study the narratives of specific companies assigned by your instructor. Also refer to operations process goals A through D for the M/S process in Figure 11.14.

REQUIRED: In one paragraph for each of the four goals, compare and contrast the assigned case processes in terms of their ability to achieve the goals. Cite specificfeatures that give a particular process a comparative advantage in terms of meeting a particular goal(s).


The following capsule cases present short narratives of processes used by three actual companies whose names have been changed for the purpose of this problem. You will use the cases to practice the mechanics of drawing data flow diagrams.

Capsule Case 1: Bambino’s Pizzeria

For its chain of fast food outlets, Bambino’s Pizzeria has recently installed a system to speed up deliveries. In each of its stores, Bambino’s has three or four PCs connected to incoming phone lines. When a customer calls in an order to have pizza delivered, an employee answers and Caller ID checks the phone number against a data store containing past phone orders. If the order is for a repeat customer, the system matches the number with the customer database and displays the customer record on the screen. (Customer records contain a variety of information, including whether the customer’s dog bites.) For first-time customers, the employee verifies the caller’s name and address, and creates a record in the customer database.

The order taker then types in the customer’s pizza order. The system prints out a three-part order on a printer located in the kitchen. The original is used by the cook to prepare the order. When the order is ready, the cook marks the other two copies completed and gives them to the delivery driver to serve as delivery receipts for the driver and customer, respectively. At the same time that the order is printed, the order taker’s computer displays a city locator grid that is used to help dispatch the drivers. From a copy of the display, a dispatch slip—showing the customer’s street and connecting roads—is printed for the driver. The final system output generated at this time is a record of the order, which is the source for the event data written to the order system. The data will be used later to tally sales, calculate the driver’s pay, and generate other reports. (Note: For this problem, assume that these activities are beyond the order-taking system’s context.)

Capsule Case 2: Royal Casino

Waiters and waitresses at the Royal Casino’s main dining room in Las Vegas use handheld, radio-frequency devices to take diners’ orders and relay the orders to the kitchen. The data entry devices weigh just a few ounces and open like a wallet to reveal a keypad and a small screen. The devices are connected by radio signal to the dining room’s computer. As diners place their orders, the device prompts the waiter through the order. For instance, if the customer asks for a sirloin steak, the system asks the waiter to choose a key corresponding to the desired degree of doneness (i.e., rare, medium rare, and so forth).

When the customer has completed ordering, the waiter hits a key to indicate that fact. The system prints or displays the incoming order for cooks in the kitchen. When the dining party has finished its meal, the waiter indicates this fact by pressing the appropriate key on the handheld device. The system communicates, over conventional wiring, with a point-of-sale (POS) computer at the cash register station, which prints out a guest check. At this time, the system also records the sales event data on the host computer.

Capsule Case 3: Pix for Pay

Background Information

Pix for Pay (PFP) is a company that offers pay-television movies and other cable television programming to subscribers for a fee. This case involves those subscribers who receive PFP’s TV signal through a satellite dish. To restrict delivery of PFP broadcasts to paying subscribers only, the company scrambles its signal. A subscriber must have a descrambler box attached to the receiving dish and must pay a monthly subscription fee in order to receive a clear picture. Each descrambler box has its own unique ID number, so it will only respond to “on” signals meant for it. The descrambler boxes were designed by Spacecom, Inc., located in Los Angeles, California.

The Marketing and Sales Process

When a customer places an order for pay-TV service with a PFP-affiliated cable TV company, the cable company telephones that order to PFP’s telemarketing center in Cincinnati, Ohio. There, a customer service representative enters the order, together with the customer’s descrambler ID number, via a computer that is connected through a leased telephone line to PFP’s system in New York City. The system updates the customer cable orders data and sends the descrambler code to a computer at Spacecom in Los Angeles, which then sends an encrypted activation message to PFP’s uplink center in Buffalo, New York. The uplink center beams the activation message to a space satellite, and the message is echoed down to earth to the customer’s satellite dish. The customer’s descrambler box deciphers the encrypted message, which allows the customer to start receiving PFP’s programming. From the time the customer places the order, the entire process takes less than a minute.


For the capsule case assigned by your instructor, complete the following requirements:

a. Prepare a table of entities and activities.

b. Draw a context diagram.

c. Draw a physical data flow diagram (DFD).

d. Prepare an annotated table of entities and activities. Indicate on this table the groupings, bubble numbers, and bubble titles to be used in preparing a level 0 logical DFD.

e. Draw a level 0 logical DFD.

f. Assume the data collected in this case are stored in a data warehouse. Describe the data and analysis that could be used to:

  1. Help the advertising manager decide how best to reach new customers.
  2. Guide the marketing intelligence manager in understanding which products appeal to which customers, in order to expand the product line to reach new customers.
  3. Direct the sales promotion manager to design coupons or other promotions to bring in new customers and to retain repeat customers.


The following is a list of 12 control plans from this chapter or from IT Governance: The Management and Control of Information Technology and Information Integrity  and CONTROLLING INFORMATION SYSTEMS: PROCESS CONTROLS:

Control Plans

A. Enter data close to where customer order is prepared

B. Customer existence check

C. Independent shipping authorization

D. Completed picking ticket file

E. One-for-one checking of the goods, picking ticket, and packing slip

F. Preformatted screens

G. Interactive feedback check

H. Reasonableness check

I. Backup procedures (for data)

J. Program change controls

K. Librarian controls

L. Personnel termination controls

REQUIRED: Listed next are eight system failures that have control implications. List the numbers 1 through 8 on your solution sheet. Next to each number, insert one letter from the preceding list, identifying the control plan that would best prevent the system failure from occurring. Also, give a brief (one- to two-sentence) explanation of your choice.

A letter should be used only once, with four letters left over.

System Failures

  1. A clerk logged on to the online sales system by entering the date of June 39, 20XX, instead of the correct date of June 29, 20XX. As a result, all sales orders entered that day were dated incorrectly.
  2. The correct goods were delivered by the warehouse to the shipping department. However, a dishonest shipping clerk misappropriated some of the goods and short-shipped the customer. When the customer complained, the dishonest clerk claimed that the goods must have never been received from the warehouse. Because there was no way to prove otherwise, the company had to provide the additional goods to the customer.
  3. A former employee of the order entry department gained access to the department after hours and logged on at one of the computers. He entered an order for a legitimate customer but instructed the system to ship the goods to his home address. Consequently, several thousand dollars worth of inventory was shipped to him. When the misappropriation was discovered, he had long since left the company and had changed addresses.
  4. Century Inc.’s field salespeople record customer orders on prenumbered order forms and then forward the forms to central headquarters in Milwaukee for processing. Fred Friendly, one of Century’s top salespeople, had a very good week; he mailed 40 customer orders to headquarters on Friday afternoon. Unfortunately, they were misplaced in the mail and did not reach Milwaukee until two weeks later. Needless to say, those 40 customers were more than a little displeased at the delay in their orders being filled.
  5. Ajax Corporation recently converted to a new online sales system. Clerks key in order data at one of several computers. In the first week of operations, every sales order produced by the system was missing the data for the “ship to” address.
  6. At XYZ Co., the finished goods warehouse delivers goods to the shipping department, accompanied by the picking ticket. After checking the goods against the picking ticket, the shipping employee signs the picking ticket and gives it to the warehouse employee. Then the shipping department prepares a three-part shipping notice, one copy of which serves as the packing slip. A recent audit discovered that a dishonest warehouse employee had been forging picking ticket documents, allowing her to have goods shipped to an accomplice.
  7. The job of a systems programmer included doing maintenance programming for the marketing and sales system. He altered the programs so that the credit-checking routine was bypassed for one of the customers, a company owned by his uncle. The uncle obtained several thousand dollars of merchandise before his firm went bankrupt.
  8. To encourage new business, Carefree Industries adopted a policy of shipping up to $1,000 of orders to new customers during the period in which the customer’s credit was being investigated. A recently terminated order entry manager at Carefree, aware of the policy, placed several bogus telephone orders, disguised each time as a first-time customer. She absconded with over $10,000 of merchandise that was shipped to her.


The following is a list of 9 control plans from this chapter or from IT Governance: The Management and Control of Information Technology and Information Integrity:

Control Plans

A. Customer credit check

B. Packing slip tickler file in shipping department

C. One-for-one checking of customer order and sales order

D. Populate inputs with master data

E. Online prompting

F. Preformatted screens

G. Programmed edit checks

H. Application documentation

I. Segregation of duties

REQUIRED: Listed next are nine statements describing either the achievement of a control goal (i.e., a system success) or a system deficiency. List the numbers 1 through 9 on your solution sheet. Next to each number, insert one letter from the preceding list, identifying the best control plan to achieve the desired goal or to address the system deficiency described. A letter should be used only once.

Control Goals or System Deficiencies

  1. Helps to ensure the operations process goal of timely shipment of goods to customers.
  2. Results in the efficient employment of resources; when the order entry clerk keys in the customer number, the system supplies the customer name, billing address, and other standing data about the customer.
  3. Meets both the operations process goal that sales are made only to creditworthy customers and the information process control goal of sales order input validity.
  4. Helps to achieve the information process control goal of input accuracy by ensuring that dates are entered as MM/DD/YYYY.
  5. Helps to achieve the information process control goal of input accuracy by providing interactive dialogue with the data entry person.
  6. Results in the efficient employment of resources by providing detailed instructions to computer operations personnel for running production jobs.
  7. Addresses the information process control goals of both input accuracy and input completeness.
  8. Could have prevented the clerk from entering 10 boxes of an item when a customer ordered 10 each of an item.


(Appendix 10A) Use the data flow diagrams in Figure 11.6, Figure 11.15, Figure 11.16, and Figure 11.17 to solve this problem.

REQUIRED: Prepare a 4-column table that summarizes the M/S system’s processes, inputs, and outputs. In the first column, list the three processes shown in the level 0 diagram (Figure 11.6). In the second column, list the subsidiary functions shown in the three lower-level diagrams (Figure 11.15, Figure 11.16, and Figure 11.17). For each subsidiary process listed in column 2, list the data flow names or the data stores that are inputs to that process (column 3) or outputs of that process (column 4). (See NOTE.) The following table has been started for you to indicate the format for your solution.

NOTE: To simplify the solution, do not show any reject stubs in column 4.


Summary of the M/S processes, subsidiary functions,inputs, outputs and data stores


Subsidiary Functions



1.0 Validate sales order

1.1 Verify inventory availability

Customer order inventory master data

Marketing data

Inventory available

Inventory—available order and back order


1.2 Check credit

. . . Continue solution . . .

. . . Continue solution . . .