Section 8.1
TPSs monitor, collect, store, and process data generated from all bsuiness transactions. These data are inputs to the organisation's database. Theye are also inputs to teh functional information systems, decison support systems, customer relationship management, knowledge management, and e-commerce. TPSs have to handle high volume and large variations in volume. (e.g. during peak times) efficently, avoid errors and downtime, record results accureltly and securely, and maintain privacy ajnd security.
First data is collected by people or sensors and are enterd into the computer via any input device. Next, teh system processes data in one of 2 basic ways: batch processing (palcing data into groups). The system then prepares and processes the batches periodically (e.g every night).
Section 8.2 - Before You Go On…
1. What is a functional area information system? List its major characteristics.
FAISs provide information mainly to lower and middle level managers in teh functional areas. They use this information to help them plan, organisae and control opeartions. The information is provided in a variety of reports. E.g comparitive reports compare, for e.g., the peformances of different business units or time periods.
2. How does an FAIS support management by exception? How does it support on-demand reports?
Section 8.3
1. Define ERP and describe its functionalities.
Enterprise Resource Planning Systems integrate the planning, managemnt, and use of all of an organisations resources. The major objectives of ERP stsrems are to tightly integrate the functional areas of the organisation and to enable information to flow seamlessly across the functional areas. Tight integration means that chjamnges in one functional area are immediately reflkected in all other pertinent funcational areas.
ERP provide the information necessary to vcontrol the business processes of the orgnaistaion. A business process is a set of relkated steps or preocedures designed to produce a specific outcome. Business processes can be located entirely within one functional area, such as approving a credit card application or hiring a enw employee.
ERP software included a set of interdependednt software modules, linekd o a common database, taht provide support for the internal business processes in the following functional areas: finance & marketing, sales & marketing, manufacturing & production.
2. List some drawbacks of ERP software.
- expensive
- extremely complex
- time consuming to implement.
- Companies may need to changeeisting busines processes to fit the predefined business processes of the software.
Section 8.5
1. Define a supply chain and supply chain management (SCM).
Supply Chain: refers to the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses to the end custoemr. A supply chain also includes the organisations and processes taht create and deliver products, infomation, and services to end customers.
SCMs: function is to plan, organise, optimise the supply chains activities. Like other functional areas, SCM utilises information systems. The gola of SCM systems is to reduce friction along the supply chain. mFriction can invlve increased time, costs, and inventories as well as decreased customer satisfaction. SCM systems, then, reduce uncertainty and risks by decresing inventorylevels and cycle time and improving business processes ans customer service. All these benefits contribute to increased profitability and competitiveness.
2. List the major components of supply chains.
Involves 3 segments:
1. Upstream: where sourcing or procurement from external supplers occurs (orders, info, payments, returns)
2. Internal: where packaging, assembly, or manufacturing takes place.
3. Downstream: where distribution takes place, frequently by external distributors (products, services, info).
INTERNAL
Tier 3 Tier 2 Tier 1 <----------> Distributor or
Suppliers <->Suppliers<-> Suppliers<->manufacturer<-> Wholesaler<->Reatiler<->Customer
There are 3 flows in teh supply chain:
- Material Flows: are the physical products, raw materials, supplies, asn so forth that flow along the chain. Also incude reverse flows (returned products)
- Information Flows: consist of data taht are related to demand, shipments, orders, returns,l and scheduales, as well as chanegs in any of tehse data.
- Financial Flows: involve money transfers, payments, credit card information and authorisation, payment schedules, e-payments, credit-related data.
3. What is 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 viewd through the eyes of managers at each link in teh supply chain. If each distinct entiry that makes ordering and the inventory decisions palces its own interests above those oif the chain, then stockpiling can occur at as many as seven or eight locations along the suppy chain.
4. What are some solutions to supply chain problems?
Section 8.6
1. Define EDI and list its major benefits and limitations
Electronic Data Interchange 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 message susing a converter, called a translator. The message travels over either a value added network (VAN) or the internet.
Benefits:
-minimizes data entry errors becsue each entry is checked b ythe computer.
-the length of the message can be shorter, and the emssgaes are secured.
-reduces cycle time
- increases productivity
-enhances customer service
minimises paer usgae and storage.
Limitations:
-implementing a EDI system involves a significant initial investment
-ongoing operation costs are high due to use of expensive, private VANs.
traditional EDI systems is inflexible. E,g it is difficult to make qucik changes, such as adding business partners.
- requires a long start up period
-business processes must sometimes be restructured to fit EDI requirements
2. Define an extranet and explain its infrastructure (in relation to Internet technologies).
The main goal of extranets is to foster collaboration betweena nd among bsuiness partners. An extranet is open to selected B2B suppliers, custoemr snad other busienss partners. These indiciduals access the internet through teh internet. Extranets enable people who are located outside a company to work together with the comapny's internally located emmployees. An extranet also enables external business partners to enter the corportate intranet, via the internet, to access data, palce orders, check status, communciate and collaborate. It also enables partners to perform self-service activities sucha s checking the status of orders or inventory levels.
Extranets uses virtual private betwork (VPN) technology to make communication over the internet more secure. The intenet-based extranet is far less costlythen propreitory networks.
The major benefits of extranets are:
- faster processes and informtion flow
-improved order entry and custoemr service
- lower costs (communciation, travel, administartive overhead)
-overall improvement in business effectiveness.
3. List and briefly define the major types of extranets.
-A Company and Its Dealers, Customer or Suppliers: such as extranet is centred arounbd one company. E.g FedEx extranet that allows custoemr sto track the status of a package.
-An Industry Extranet: The major palyers in an industry may team up to create an extranet taht will benefit all of them. E.g. ANXeBusiness nables comapnies to collaborte effectiveky through a network that provides a secure global medium for B2B informaytion exchange.
- Joint Ventures and Other Business Partnerships: partners in a joint venture use the extranet as a vehicle for communication and collaboraqtion. An example is Bank of America's extranet for commercial loans. The partners involved in making such loans include a lender, a loan broker, an escrow company and a title company. The extranet connects lenders, loan applicants, and the loan organisaer, bank of America.
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