44095: IT for Management

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44095 IT for Management
Review Part 2 Requirements By Ian
Perry Room C41C E-mail i.p.perry_at_hull.ac.uk
Tel [phone] http//itsy.co.uk/ac/0708/Sem
2/44095_IT4M/
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IT4M Learning Outcomes?

• Understand the distinction between data,
  information knowledge.
• Relate theoretical information technology models
  to business organisations, in order to understand
  business needs.
• Assess an organisation, to identify the role of
  IT-based support systems in a given business
  context.
• Use software tools to produce a working example
  of an IT-based support system which addresses
  specific business needs.

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IT4M Assessment Method?

• A single assignment, in two-parts, based upon the
  EZPC Case Study scenario.
• Part 1
• Analyse the current information system, as
  presented by the Case Study, using appropriate
  systems diagrams. (30 Marks)
• Where, and how, might Information Technology (IT)
  be used to improve the efficiency and/or
  effectiveness of Case Study organisations
  information system? (20 Marks)
• Part 2
• Build a software tool that can help improve a
  specific aspect of the information system for the
  Case Study organisation. (50 Marks)

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EZPC Case Study

• EZPC assemble PC Systems for sale to customers
  such as PC World, Dixons, Currys, etc.
• Each PC System is made-to-order (as a result of
  a request from a specific customer), based on a
  limited set of Standard PC Configurations.
• The computer components (i.e. Processors, Hard
  Disks, Memory, etc.), from which the PC systems
  are assembled, are purchased from a number of
  suppliers.
• EZPC also sells computer components directly to
  the same Customers.
• The components, either waiting to be assembled
  into PC Systems, and/or to be passed on directly
  to EZPCs customers, are stored at one of three
  different warehouse locations, i.e.
• Leeds, Newcastle, Reading
• The Leeds Warehouse acts as the Head Office for
  EZPC
• all dealings with suppliers are controlled from
  the Head Office.
• -- SNIP --

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EZPC Continued

• At each Warehouse
• -- SNIP -
• A fourth group of staff control the warehouse
  operations ordering receiving components from
  suppliers,
• -- SNIP -

• How things work?
• -- SNIP -
• If a work order can not be completed, due to a
  lack of components, then the Warehouse must raise
  a purchase order (via the Head Office) with one
  of EZPCs Suppliers.
• -- SNIP --

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EZPC Problems?

• -- SNIP -
• Each of the Warehouses is quite small, and can
  only hold a small stock of computer components
  and assembled PCs, so work orders often become
  purchase orders (once again a manual
  calculation).
• Raising a purchase order with one of EZPC
  Suppliers can result in a delay of up to 10 days
  for the delivery of the computer components.
• Often, even when Warehouse is almost full of
  computer components, a work order cannot be
  completed
• as these are the wrong components with which to
  satisfy a specific customer request.

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Case Study Update - 1

• Stella, the Manager in charge of purchasing stock
  for EZPC, often gets it wrong, i.e.
• buys too many of those components for which the
  demand is low.
• does not buy enough of those components for which
  the demand is high.
• At a recent business seminar, someone told Stella
  that all she needs to do is to work out the
  Economic Order Quantity (EOQ) for every component
  that EZPC stocks.
• This person kindly provided Stella with a
  simple formula (see next slide) for working out
  EOQ, but she is having trouble using it.

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Economic Order Quantity?

• A simple EOQ Formula

• The kindly person also said that it is not always
  prudent to order the exact EOQ that is indicated
  by the above formula
• and suggested that it might also be wise to
  create an EOQ Optimisation Table Chart (see
  next 2 slides), for a range of possible re-order
  amounts.

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EOQ Optimisation Table

• You need to build a table of calculations, for a
  variable range of Re-order Amounts (R)
• e.g. 5, 10, 15, 20, etc.
• Then calculate the following for each value of R
• Annual Holding Cost (AHC) HC x (R/2)
• Annual Ordering Cost (AOC) OC x (D/R)
• Total Annual Cost (TAC) AHC AOC
• And present them in a table like this

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EOQ Optimisation Chart

• Producing a line chart of the data from the EOQ
  Optimisation Table should result in something
  like this

NB. The Point at which the AHC and AOC curves
cross is the EOQ, however the TAC curve is
usually relatively flat either side of this
point, which shows how much more, or less, can
actually be re-ordered without having a major
effect on the TAC.
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What you have to do?

• The spreadsheet you develop should be as easy to
  use as possible, so
• use multiple worksheets
• in order to separate input, lookup output
  areas.
• use named ranges simple macros
• in order to automate the process of moving
  between worksheets, and printing specific
  sections of worksheets.
• make your data entry worksheet as bullet-proof
  as possible
• as mistakes in data entry are the biggest cause
  of error with any IT-based solution.

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The Assignment Deadline?

• A single assignment, in two-parts, based upon the
  EZPC Case Study.
• Part 1
• Analyse the current information system, as
  presented by the Case Study, using appropriate
  systems diagrams. (30 Marks)
• Where, and how, might Information Technology (IT)
  be used to improve the efficiency and/or
  effectiveness of Case Study organisations
  information system? (20 Marks)
• Part 2
• Build a software tool that can help improve a
  specific aspect of the information system for the
  Case Study organisation. (50 Marks)
• Assignment Deadline
• Monday, the 12th of May, 2008.