WEEK TEN QUESTIONS

Chapter 8 questions

Section 8.1 - Before You Go On…

1.What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.

Transactional processing is capturing and storing in a database any business event that is worthy of doing so. The role of transaction processing systems (TPSs) is to monitor, collect, store and process data generated from all business transactions. Their objective is to avoid problems such as errors, downtimes, inaccuracy and insecurity of data, and to maintain the privacy of data.

Section 8.2 - Before You Go On…

1. What is a functional area information system? List its major characteristics.

A FAIS is to provide information mainly to lower and middle lever managers in the functional areas. It is a system that supports particular functional areas of the business. Traditionally they were built independent of each other and were designed to increase effectiveness and efficiency.

A FAIS comprises of reports:
Routine reports: these are produced at scheduled interviews.
Drill-down reports: are far more specific, and show a greater level of detail
Key-indicator reports: make a summary of the performance of critical activities, such as finances.
Competitive reports: makes comparisons between the performance of different business units or time periods.
Exception reports: include only the information that falls outside certain threshold standards.

2. How does an FAIS support management by exception? How does it support on-demand reports?

Functional area and information systems supports management by exception, by providing reports that meet certain criteria. Reports that might exceed normal or be written as normal can be produced without any intervention.

Management in order to implement management by exception, needs to create performance standards. Then systems need to be set up to monitor performance, compare actual performance to the standards, and identify predefined exceptions.

Out of routine reports such as on demand (Ad hoc) reports include the following:
Drill-down reports: are far more specific, and show a greater level of detail
Key-indicator reports: make a summary of the performance of critical activities, such as finances.
Competitive reports: makes comparisons between the performance of different business units or time periods.

Section 8.3 - Before You Go On…

1. Define ERP and describe its functionalities.

Enterprise resource planning (ERP) systems integrate the planning, management and use of all of an organisation’s resources. ERP systems function in a way to tightly integrate the functional areas of the organisation and to enable information to flow seamlessly across the functional areas.

2. List some drawbacks of ERP software.
ERP can be very complex, expensive and quiet time consuming to implement.

A company may need to change existing business processes to fit the predefined business processes of the software, which can be a daunting task.

A company must purchase an entire software package of ERP even if they require only a few of the modules.

8.5 - Before You Go On…

1. Define a supply chain and supply chain management (SCM).

The supply chain refers to the chain of events that where materials, information, money and services flow from materials from production to retailer to end customers.
Supply chain management is the process of planning, organizing, and optimizing the supply chain’s activities.

2. List the major components of supply chains.

Upstream: where sourcing or procurement from external suppliers occurs.
Internal: where packaging, assembly, or manufacturing takes place.
Downstream: where distribution takes place, frequently by external distributors.

3. What is the bullwhip effect?

Refers to erratic shifts in orders up and down the supply chain. Management uses graphs from previous periods to analyse whether bullwhip effect has occurred.

Section 8.6 - Before You Go On…

1. Define EDI and list its major benefits and limitations

Electronic data interchange (EDI): is a communication standard that enables the electronic transfer of routine documents between business partners.

Benefits:
EDI enables different businesses to use agreed data formats
Minimises data error
Increases productivity by reducing time consumption
Increases customer satisfaction and service is enhanced because it is much faster

Limitations:
It requires massive start up.
Is expensive and takes long periods of ti