WEEK 10 QUESTIONS

Section 8.1

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

A transaction is any business event that generates data worthy of being captured and stored in a database. The role of Transactional Processing systems is to monitor, collect, store, and process data generated from all business transactions. The key objective of TP/TPSs is to handle high volume and large variations in volume (for example, during peak times) efficiently, avoid errors and downtime, record results accurately and securely, and maintain privacy and security.



Section 8.2

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

Functional area information systems provide information mainly to lower and middle level managers in the functional areas. They use this information to help them plan, organise and control operations

2. How does an FAIS support management by exception? How does it support on-demand reports?
FAIS support management by exception reports by collecting and analysing all data that is required for the report. For example in a sales example, management would establish sales quotas, the the company would implement FAIS that collects and analyses all sales data.
FAIS support ad hoc (on demand) reports by providing drill-down reports, which show a greater level of detail; key indicator reports, which summarise the performance of critical activities; and comparative reports, which compare ther performances of different business units or time periods.


Section 8.3

1. Define ERP and describe its functionalities.
Enterprise resource planning systems integrate the planning, management, and the use of all of an organisation's resources. The major functionalities of ERP systems are 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.
Drawbacks of ERP software include that it can be extremely complex, expensive, and time consuming to implement. Also, companies may need to change existing business processes to fit the predefined business processes of the software.


Section 8.5

1. Define a supply chain and supply chain management (SCM).
A supply chain refers to the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses to the end customers. It includes the organisations and processes that create and deliver products, information and services to end customers.
Supply chain management is to plan, organise, and optimise the supply chain's activities. The goal of SCM systems is to reduce friction along the supply chain.

2. List the major components of supply chains.
Supply chains have 3 segments:
-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?
The bullwhip effect refers to erratic shifts in orders up and down the supply chain. Basically, customer demand variables can become magnified when they are viewed through the eyes of managers at each link in the supply chain. If each distinct entity that makes ordering and inventory decisions places its own interests above those of the chain, then stockpiling can occur at as many as seven or eight locations among the supply chain.


Section 8.6

1. Define EDI and list its major benefits and limitations
EDI is a communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically. EDI formats these documents according to agreed-upon standards and then transmits messages using a converter, called a translator.
Benefits of EDI's include that it minimises data entry errors because each entry is checked by the computer. In addition, the length of the messages can be shorter, and the messages are secured. EDI also reduces cycle time, increases productivity, enhances customer service, and minimises paper usage and storage.
Limitations include it involves a significant initial investment. Also, ongoing operation costs are high, due to the use of expensive, private VAN's. Another limitation is that the traditional EDI system is inflexible. Furthermore, business processes must sometimes be restructured to fit EDI requirements.