1. What are a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs. Transaction Processing systems monitor, collect, store and process data generated from all business transactions. These are inputs into the organisation’s database. The role of the TPS is to handle the high volume and large variations in volume efficiently and avoid errors, recording information accurately. It is a standardised process.
The key objectives of the TPS include:
- The collection of data by persons or sensors and are gathered into the computer.
- It batch processes or online processes the transactions that occurs and are then processed online as soon as they occur.
2. What is a functional area information system? List its major characteristics.
A functional area information system provides information mainly to lower and middle level managers in the functional area. The functional areas of the business include Accounting, Legal, Financial, Marketing etc.
The major characteristics of the FAIS the routine reports that it produces which include the Drill down reports, Key indicator reports and comparative reports.
3. How does an FAIS support management by exception? How does it support on-demand reports?
The FAIS supports management by exception as the system firstly creates the performance standard and the IT systems monitors the performance. It compares the actual performance to the standards and identifies the predefined exceptions.
The FAIS sends the managers information to the corporate data warehouse supporting present and future decision making. FAIS create routine or ad-hoc (on demand) reports which are then given to management.
4. Define ERP and describe its functionalities.
Enterprise Resource Planning systems integrate the planning, management, and the use of all of an organisations resources. The objectives of this system is to tightly integrate the functional areas of the organisation and to enable the transferring of data to seamlessly flow to and from the functional areas.
5. List some drawbacks of ERP software.
The drawbacks of the ERP system are:
- Extremely complex
- Expensive
- Time consuming to implement
6. Define a supply chain and supply chain management (SCM).
A supply chain refers to the flow of material, information, money and services from raw materials suppliers, through to factories and warehouses to the final customer.
The aim of supply chain management is to plan, organise and optimise the supply chains activities. It reduces the friction between moving from one intermediary to another and reduces the uncertainties of decreasing or obsolete inventory.
7. List the major components of supply chains.
The major components of a supply chain:
a. upstream- where sourcing or procurement from external suppliers occurs
b. internal- where packaging, assembly, or manufacturing takes place
c. downstream- where distribution takes place, frequently by external distributors
8. What is the bullwhip effect?
The bullwhip effect refers to the erratic shifts in orders up and down the supply chain.
9. What are some solutions to supply chain problems?
Solution to supply chain problems include:
- Using inventories as insurance against supply chain uncertainties
- Information sharing
10. 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.
The major benefits of EDI:
- Minimises data entry errors because each data entry is checked by the computer
- Messages are shorter and secured
- Reduces the cycle time
- Increases productivity
- Enhances customer service
- Minimises paper usage
The major limitations of EDI:
- Implementation of an EDI involves significant initial investment
- Continuous operating costs are high, expensive
- Inflexibility of the EDI makes it difficult to implement changes to suit the business environment
- Business processes need to be restructured to suit the EDI The differing standards can produce difficulties in communicating with personnel within the firm.
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