Information System solved

8/7/2019 Information System solved

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Information systems

Task number Title Page number

1.1 Functional areas of

business

3

1.2 Data requirements for the

business functional areas

5

1.3 Information needs for aerospace company

6

2.1 Types of information

system for Aerospace

9

2.2 Solving ordering process 10

2.3 Decision support system 11

3.1 Identifying loyal

customers:

14

3.2 information processing

methods for stock control

14

3.3 Alternative methods of

stock control

15

4.1 Evaluation measures of an

information system:

16

4.2 Evaluation of stock

control process

17

4.3 The ethical issues of

information system:

19

reference 21



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Case study

Aerospace is an approved vendor of speciality and aerospace metals to major

Aerospace and Aero engine Manufacturers. Aerospace Specification Metals (ASM)

stocks and distributes metal from their seven warehouses in North America and it canalso arrange special delivery from its suppliers if it is not available in their stock.

Currently they are maintaining their orders and deliveries over the phone which ismanual and due to a big market it is necessary for them to have an automated system

to maintain their own database updated with all the necessary information as productavailability, product on demand and automated ordering and delivery system.



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Task 1.1: functional areas of businessSales and marketing: Aerospace includes all its product information in the website.Any potential customer can go through the list for and get the information and can

contact with Aerospace Specification for ordering or any product enquiry over thephone or via email. ASM Aerospace Specification Metals also maintains a sales staff

to sell their product that is responsible for marketing products and keep customers upto date. Aerospace¶s sales and marketing deals with raking customer products,

developing and promoting products and making sales forecast for mangers tounderstand the overview of their product sale performance.

1

Sales and Marketing functions:

Organising sales promotions. R esponding to customer enquiries.

Selling product.

K eeping customer record up to date.

Carrying out marketing research.

Market research Advertising through various media about product.

The diagram below shows the functions existing in Aerospace Company. (Drawn in

E-draw)

Figure 1: functions of aerospace company



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Accounting and finance:Aerospace provides raw materials to many organisations and they maintain a databasefor customers. It deals with customer orders and payments and produce invoice,

planning and budgeting etc. It provides raw transaction data such as sales, rawmaterial purchase and provides data for sales forecasting, Finance staff support the

accountants by keeping financial records, monitors late payments and paying for items purchased.2

Functions of accounting and finance:

Produce invoice.

R ecording money received

Monitors departmental budgets.

Produce cash flow forecast.

Human Resource Management:

Aerospace arranges training and development for its employees by emphasising on

providing carrier opportunities for employees to reach their potential. Employees¶

promotion and bonus are based on the performance. HR in Aerospace is responsiblefor recruiting staff and ensures staff management such as payroll, shifts, benefits etc.

Human R esource functions:

Advertising job vacancies.

Monitor the working conditions of staff.

K eeping records of grievances and disciplinary actions and their outcome.

Maintain staff records

The table below shows the functions of business:

FUNCTIONAL

AR EA

MARK ETTIN

G ANDSALES

SUPPLYCHAIN

MANAGEMENT

ACCOUNTING

&

FINANCE

HUMAN

R ESOUR CE

BUSINES

S

FUNCTIO

N

Marketing aproduct

Purchasing rawmaterial

Financialaccounting

R ecruiting& hiring

Taking sales

order

R eceiving raw

materials

Cost allocation

and control

training



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Table 1: Functions of aerospace business.

Task 1.2

Data requirements for the business functional areas3

Sales and Marketing:

Inputs:

Customer data

Order data

Per unit cost Sales trend data.

Activities:

Set product price Promote product

Take customer order Create sales forecasts.

Processes:

Identifying customers.

Making customers aware of products.

Selling the product.

Outputs:

Sales strategies

Product pricing.

Accounting and finance:

Inputs: Payments from customers

Accounts receivables data Accounts payables data

Sales data Production and inventory data

Payroll and expense data

Customer support

Transportation &logistics

Planning andbudgeting

payroll

Salesforecasting

Manufacturinggoods

Cash flowmanagement

Benefits



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Activities:

Sales transactions.

Customers¶ payments.

Invoices and payments to suppliers,

Summarizes Operational data in managerial reports.

Processes: Paying creditors. Creating functional statements.

Managing cash accounts.Outputs:

Payments to suppliers.

Financial reports.

Customer credit data.

Human R esource Management:

Input:

Personnel forecasts

Skills data

Activities:

R ecruit. evaluation of employees

Time and labour management.

Processes: Hiring employees.

Enrolling employees for benefit plan.

Output

R egulation compliance

Employee training and certification

Skills database.

Task 1.3:

Information needs for aerospace company:

Operational information: This information is used to make sure that operational

tasks are carried out according to plan. In Aerospace a production manager will want



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information about the extent and results of quality control checks that are being

carried out in the manufacturing process. Operational staffs deal with basic

information input in the system. Such as taking orders, selling products, cash deposits

payroll. Aerospace operational level staffs requires customer details, order sheets and

product update to provide accurate order delivery, maintain stock level and trackingorders.

3

Finance and accounting operational staff needs the customer¶s payment details totrack money owed by or to the company.

Human resource management staff needs employees details from internal source(working hours, salary scheme) and external source (working history) to track employees for training and performance appraisals.

Tactical information:

This is used to decide how the resources of the business should be employed.

Examples include:

- Information about business productivity (e.g. units produced per employee; staff turnover)

- Profit and cash flow forecasts in the short term- Pricing information from the market

Information received in operational level are summarised for managers for evaluating

the reports on different levels. Sales report are generated and given to the managers to

determine the prices for products and services and decide how and when how many

products should be produced. Finance and accounting staffs of Aerospace produces

budget portfolio and this information is used by the management to prepare short time

budgets. Data received in operational level becomes input information in Managementlevel.

4

Strategic information: This is used to help plan the objectives of the business as awhole and to measure how well those objectives are being achieved

.5

Strategic information includes:

- Profitability of each part of the business

- Size, growth and competitive structure of the markets in which a business operates

- Investments made by the business and the returns (e.g. profits, cash inflows) from

those investments

Information from management levels are more evaluated and concentrated and passed

to the strategic level for policy making decisions. In this case external information isconsidered as well. Information retrieved from the management level such as sales

report is used in strategic level for generating 3 years sales forecasting and from theshort term budgets information strategic level plan long term profits.



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Comparison of different functional areas of Aerospace:The diagram below shows the difference between the functional areas according totheir functions.

Figure 2: functional areas of aerospace metal alloy (drawn in E-draw).



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Conclusion:

At each level of the organisation there are information system terms which are

supporting the major functional areas of business. Sales and marketing departments

helps the firm to identify customers for the products and services, develop products

and service to meet customer needs, sell the products etc. Finance and accounting

department keeps track of firm¶s financial assets and fund flows. Human resource

management department maintains employee records, supports planning for

employees.

Task 2.1 Types of information system for Aerospace

Data warehouse system: aerospace can have data warehouse system which will

consist of on Oracle database with data from a variety of systems for example Human

R esource, payroll, customer record and these systems handles operations such as

changing a customer detail. These functions are done by transaction systems which

contain operational data, historical data and external data (fig-1); however they are not

designed to provide managers with information they need to evaluate to analyse the

business trend. Data warehouse can be used to perform these types of managementqueries and analysis.

Figure 1: Data warehouse system. (Drawn in E-Draw)

Transaction processing systems:

A transaction processing system is a computerised system that performs and recordsthe daily routine transactions necessary to conduct business6. Management level can

predefine the tasks which will be performed by the operational staff. Such as salesstaff can take customer order and check availability of the product and can maintain

inventory at the same time. Such as aerospace company can have several TPS¶s suchas

-Billing systems to send invoices to customers- Systems to calculate the weekly and monthly payroll and tax payments- Production and purchasing systems to calculate raw material requirements

- Stock control systems to process all movements into, within and out of the business.

Management information systems:

Aerospace can have management information systems considering their business view

such as managers need to have the report of their business activities from various



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aspects. Management information system helps the management level in the functionsof planning, controlling and decision making.

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The basic transaction data from TPS are concentrated and presented as a report to the

managers. Figure 2 shows how data are extracted form various TPS systems togenerate report to the manager.

Figure 2: Data extraction by TPS from different sources. (Drawn in E-Draw)

Task2.2 solving ordering process

Aerospace is currently maintaining their ordering process over the phone. To fasten

the process automated ordering process can be introduced. A new automated orderingprocess can be implemented. Such as an internet-based order processing application, a

user submits orders via a web browser. The front-end program is managed by a webserver, which reads and writes forms and menus and perhaps maintains a shopping

cart. A request controller routes requests from the web server to the transaction server that can process the order the user requested. The transaction server processes the

order, which requires accessing the database that keeps track of orders, catalogueinformation, and warehouse inventory, and perhaps contacts another transaction

server to bill a credit card for the order. All the suppliers can be connected through

intranet so suppliers can have current order status and when the order level goesbelow standard level suppliers can be automatically send materials or products.



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The diagram below shows how the order processing can be solved.

When customer orders (fig-3) the information is send to the transaction server whereit passes through a database of inventory about products and the inventory updates

and dispatches the item.

Figure 3: order process for Aerospace Company (Drawn in E-Draw)

Aerospace can adopt a distribution software solution which captures and manages

customer order from start to finish. Such as NetSuite¶s wholesale distribution

software. It can manage orders both inside and outside the organisation more costeffectively and efficiently.

Features of NetSuite¶s: Quick look-up features allow locating customers based on name, purchase order number, transaction number.

A single screen view delivers up-to-the-second status on each customer order. Status notifications alert employees to tasks that require their attention.

Exception reporting enable to track an order at any stage of the process, givinginsight into whether an order is awaiting approval, remains overdue, or has been

shipped but not yet billed to the customer.

Task 2.3 Decision support system

Decision support system is an application that enhances the user¶s ability to make

decisions. More specifically a decision support system is usually describes a computer

based system designed to help decision makers use data, knowledge and

communication technology to identify problems and make decisions to solve those

problems. A DSS (1) acquires data from the mass routine transaction of a firm (2)



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analyses it with advanced statistical techniques to extract meaningful information

and (3) narrows down the range of choices by applying rules based on decision

theory8. The key to decision support systems is to collect data, analyze and shape the

data that is collected and then try to make sound decisions or construct strategies from

analysis. Whether computers, databases or people are involved usually doesn't matter,

however it is this process of taking raw or unstructured data, containing and collecting

it and then using it to help aid decision making.

Types of decision support system-

1- Model driven DSS.

2- Data driven DSS.

3- K nowledge driven DSS

1- Model driven DSS: it is a primarily stand alone system that uses some types of

model to perform what if and other kind of analysis. The analysis capability is based

on a strong theory or model combined with a good user interface that makes the

model easy to use. Model driven DSS uses data and parameters provided by decision

makers to aid them in analysing a situation, but they are not usually data intensive9.Very large database are not needed for Model driven DSS.

2- Data driven DSS: a system that supports decision making by allowing users byallowing users to extract and analyze useful information that was previously buried inlarge database.

3- K nowledge driven DSS: A K nowledge Driven DSS model uses special rules stored

in a computer or used by a human to determine whether a decision should be made.

For instance, for many day traders a stop loss limit can be seen as a knowledge drivenDSS model. These rules or facts are used in order to make a decision.

Table 2: A DSS framework showing the users and purpose

DSS component Target User Purpose Deployment

technology

Database driven

DSS

Manager, staff,

suppliers.

Query a data

warehouse

Main frame.

Client server.

Model driven DSS Manager and staff Crew scheduling

or decisionanalysis

Stand alone PCclient/ server.

K nowledge base

DSSS

Internal Users Management

advice, chooseproducts.

Client server,

web.

Stand alone PC.



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DSS for supply Chain Management in Aerospace:

Supply chain decisions involves DSS from purchasing and transporting material and

parts thorough manufacturing products and delivering those products to customers. As

from the scenario Aerospace company¶s SCM systems contain data about inventory,

performance of the supplier among North America. Decision Support system draws

such data to help managers to examine the complex chain comprehensively and so on.

Managers can examine and identify the information of the best performance supplier and best quality producing supplier.

Aerospace uses DSS for supply chain management to help it distribute products suchas materials for all types of Military Products, aluminium for high speed trains in US.

SCM balances ordering, carrying, stock out cost and arrange special deliveryconsidering frequency of stock and delivery.

DSS for Customer Relational Management in Aerospace:

DSS for customer relationship management uses datamining to guide decisions about

pricing, customer retention and market share. Aerospace are delivering varietyproducts and raw materials to the customers and they are highly specific so instead of

sending all the customers the same marketing information Aerospace uses DSS. Byquerying the database customers are identified based on the product they might buy.

And also the potential and leaving customers are identified.To identify potential customers information are retrieved from the database such asthe highest buying customers and customers who comes back in every 3 months and

customers who is paying initial deposit. Identifying such customers Aerospace¶smarketing departments offer packages to promising customers and welcome offers to

the customer with poor purchasing record.

The DSS diagram below will allow Aerospace Company to segment their customer

base with a high level of precision where it can be used to drive marketing campaign.

Based on the result of datamining the company can develop specific marketing

campaign for each customer segment. Such as it can target customers ordering inevery 2 months and send them varieties of offer to reward as a frequent customer.



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Figure 4: DSS for Customer analysis and segmentation. (Drawn in E-Draw)

Task 3.1

Identifying loyal customers:A CR M software solution application can manage and run entire client and customer

relationship. From prospect and client contact tools to billing history and bulk emailmanagement. The software CR M system allows maintaining all customer records in

one centralized location that is accessible to your entire organization throughpassword administration.

A front office CR M software system is set up to collect data from the customers for

processing into the data warehouse. The data warehouse is a back office CR M

Software system used to fulfil and support customer orders. All customer information

is stored in the data warehouse. A back office CR M software application makes it

possible for a company to follow sales, orders, and cancellations. Special regressions

of this data can be very beneficial for the marketing division of a firm. An integrated

CR M software system is often also known as "front office solutions." This is because

they deal directly with the customer.

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Task 3.2 information processing methods for stock control

Stock control, otherwise known as inventory control, is about how much stock isowned at any one time, and how to keep track of it.

There are four kinds of stock

y raw materials and components

y work in progress - stocks of unfinished goods

y finished goods-ready for sale

y Consumables stock.

Aerospace might use computer information system such as Transaction ProcessingSystem (TPS) because it produces the sales order with less resource and less time.

An inventory control system keeps a file of records about the stock of goods that a

business has on hand and the inventory control system makes changes about theinventory in the stored records. When an inventory is low the system produces output

that causes more inventories to be ordered.



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How TPS works: transaction processing system takes the input data and validates it

and can help making decisions in how much inventory should be required whereas

Aerospace can set the lower limit of inventory and when reaches that level TPSupdates the inventory and suppliers can see these orders through intranet

(Secured network) and have this ordered delivered.

In case of ordering online a query can be run from a command button when a

customer orders and click the command button named µconfirm order¶ the customer order are received and data are send to inventory database to update.

As the diagram below shows when an item passes through the TPS point of sales the

inventory database is immediately updated and it is sent to supplier database. So thatsuppliers will be informed about the product level. The information will than be

processed to send to the Decision Support System to analysis the sales report aboutthe sales and stock availability.

Figure 5: How TPS works in stock control.

Task 3.3 Alternative methods of stock control

There are several methods of doing stock control such as batch processing, real time

processing. Or it can be done manually such as doing stock review though it is not

helpful for companies like aerospace because they have several warehouses which are

located in different places.

Batch processing method: Batch processing can be useful for Aerospace for

maintaining stock control because they are dealing with large volumes of data. In



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batch processing all the data such as sales record are grouped together into batches

and in a file called transaction file and the master file is updated and the at a

predetermined time (end of the day) these data will be processed and database for the

inventory management will be updated. And the items going below stock level will be

extracted for new ordering and these data will be sent to the suppliers¶ database for further action.

Real time processing: to maintain a good stock control real time processing method

can be used to keep track of exactly how many of each item are in stock, be able tosay which items are needed to re order.

How it works: Every time an item is bought, the barcode is scanned and the computer will deduct 1 from the stock level for that item. The computer will know exactly how

many of that item is in stock. A similar system would operate in a warehouse. Eachitem removed would be logged and the stock level automatically adjusted.

R eal time method gives 99.7% accuracy.

R educes inventory and logistics expenses and improves client service.

FIXED RE-ORDER STOCK LEVEL

This method of stock control is where a business decides the minimum level of stocksit can tolerate, and then re-orders before the stocks reach this level11. The exact timing

will depend how long the stocks take to arrive.

Fixed time re-ordering This method is exactly as its title suggests. The firm re-orders stocks at a fixed time

each month or week. It can offer a good solution as it represents a routine for the firm

and ensures that stocks are regularly supplemented. However, it may well mean thelevel of stocks fluctuating quite a bit depending on the rate they are used up. It is alittle inflexible as a system as well unless used very carefully.

Best method for stock control for Aerospace:

From the methods mentioned previously and from the view of the Aerospace

Company the best method will be batch processing method for stock control. Because

they have several warehouses around different locations and they deal with large

amount of data. To run the system efficiently those data will be processed and thedatabase of the stock control will be updated at end of day. This method is well

adopted in the chain supermarkets and banks as well.

Task 4.1 Evaluation measures of an information system:

The information quality frameworks highlighted a number of dimensions that need to

be considered to ensure system content quality12.

� Accessibility ± Extent to which the information on the system is readily available

and retrievable.� Accuracy ± Extent to which the system information content are correct and reliable.



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� Appropriateness ± Extent to which the content is appropriate according to what the

system users are requiring.

� Believability ± The content on the system is true and credible.

� Completeness ± The level to which the system content is not missing and sufficient.

� Ease of Manipulation ± Extent to which the content on the system is easy to

manipulate.

� Free-of-Error ± Information on the retrieve should be correct and reliable, free of

errors.

� Objectivity ± system content must be unbiased, unprejudiced and impartial.

� R elevancy ± The system content should be applicable, helpful and relevant.

� Security ± Extent to which the access to the system is restricted appropriately to

maintain its security.

� Timeliness ± system content should be up-to-date.

Task 4.2Evaluation of stock control process

Managing stock effectively is important for any business, because without enough

stock, production and sales will grind to a halt. Stock control involves careful

planning to ensure that the business has sufficient stock of the right quality available

at the right time.

The effectiveness of the stock control depends on the following terms:

1. Accuracy. 2. Accessibility. 3. Timeliness. 4. Security. 5. Cost effective.



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6. Frequency.

The effectiveness of stock control depends on all those terms. Customer satisfaction is

depended on how these processes are handled. An effective stock control indicates

how a company is achieving customer Excellency.

1. Accuracy: the information about the stock level should be exact and accurate.

2. Accessibility: The stocks that are available at different warehouses should beavailable on demand.

3. Timeliness: the information retrieved should be timely and recent. An updated form

of stock level should be achieved.4. Security: To lose any item will add to lose of profit. Security enables to unwantedloosing of items and restricts access to the warehouse and keeps record of the access

made.5. Cost effective: There will be less requirement of having more staff which will help

to save money from staff costs and less paperwork.

6. Frequency: A business that is growing will need to review its re-order and buffer

stock levels, and the frequency and size of orders.

The table below shows the evaluation of stock control process of Aerospace

Company:

Term Measure of effectiveness R ate/10

Accuracy An up to date stock and standard stock

level

8/10

Accessibility Using automated hand held devices

makes information accessible

10/10

security K eep the stock in well secured place to

minimise loss.

7/10

Timeliness At the time the item will be scanned the

inventory will be updated at the sametime.

9/10

Cost

effectiveness

Less manual work and less time on

each work saving power and expenses.

8/10

Frequency R eview stock level and set a level of

reorder.

8/10

Table 3: Evaluation measures of stock control process.

Task 4.3:

The ethical issues of information system:

Social issues



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Reference

1. http://www.bls.gov/oco/cg/cgs006.htm

2. http://courses.chalkface.com/public_html/encyc/functional-areas.html

3.

http://pro.unibz.it/staff/ascime/documents/ch01%20Business%20Functions%20Processes%20and%20Data%20R equirements.pdf



4. Ibid.

5. K enneth C. Laudon and Jane P. Laudon , management information systems. 8thedition. page 91

6. http://www.bestpricecomputers.co.uk/glossary/transaction-processing-systems.htm

7. K enneth C. Laudon and Jane P. Laudon , management information systems. 8th

edition. page 349

8.http://www.elsevier.com/wps/find/journaldescription.cws_home/505540/description#description

9. http://www.gdrc.org/decision/dss-types.html

10. http://tutor2u.net/business/gcse/production_stock_control.htm

11. http://www.bized.co.uk/learn/business/accounting/busaccounts/notes/sto-th.htm

12. An evaluation of Information quality frameworks for the World Wide Web

MB Parker .Faculty of Informatics and Design Cape Peninsula University of

Technology

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