Mis 2-2 Business Management Decision Problem 1
Mis 2 2 Business Managementmanagement Decision Problem 1section 25d
Mis 2 2 Business Managementmanagement Decision Problem 1section 25d
MIS 2-2 Business Management .Management Decision Problem 1,Section 2.5 Don’s Lumber Company on the Hudson River is one of the oldest retail lumberyards in New York State. It features a large selection of materials for flooring, decks, moldings, windows, siding, and roofing. The prices of lumber and other building materials are constantly changing. When a customer inquiries about the price on pre-finished wood flooring, sales representatives consult a manual price sheet and then call the supplier for the most recent price. The supplier in turn uses a manual price sheet, which has been updated each day.
Often the supplier must call back Don’s sales reps because the company does not have the newest pricing information immediately on hand. Assess the business impact of this situation, describe how this process could be improved with information technology, and identify the decisions that would have to be made to implement a solution. Who would make those decisions?
Henry’s Hardware is a mom-and-pop business in Sacramento, California. Store space is limited and the rent has doubled over the past five years. The owners, Henry and Kathleen Nelson, are under pressure to use every square foot of space as profitably as possible.
The Nelsons have never kept detailed records of stock in inventory or of their sales. As soon as a shipment of goods arrives, the items are immediately placed on store shelves to be sold. Invoices from suppliers are only kept for tax purposes. When an item is sold, the item number and price are rung up at the cash register. The Nelsons use their own judgment in identifying items that need to be reordered.
Many times, however, they are caught short and lose a sale. What is the business impact of this situation? How could information systems help Henry and Kathleen run their business? What data should these systems capture? What reports should the systems produce?
What decisions could the systems improve? Improving Decision Making: Use a Spreadsheet to Select Suppliers Software skills: Spreadsheet date functions, data filtering, DAVERAGE function Business skills: Analyzing supplier performance and pricing In this exercise, you will learn how to use spreadsheet software to improve management decisions about selecting suppliers. You will start with raw transactional data about suppliers organized as a large spreadsheet list. You will use the spreadsheet software to filter the data based on several different criteria to select the best supplies for your company. spreadsheet attached Attachments: ess10ch02_questionfile.xls
Paper For Above instruction
The scenarios presented for Don’s Lumber Company and Henry’s Hardware highlight crucial business management challenges that can be effectively addressed through information technology (IT). By deploying appropriate IT solutions, businesses can improve decision-making processes, enhance operational efficiencies, and gain competitive advantages in rapidly changing markets.
Impact of Inefficient Pricing Information at Don’s Lumber Company
At Don’s Lumber, the manual process for updating and accessing pricing information significantly hampers operational efficiency. Sales representatives must manually consult paper-based price sheets and coordinate with suppliers via phone calls to obtain the latest prices. This lag in information creates delays, leading to potential lost sales, customer dissatisfaction, and a lack of competitive pricing.
The business impact includes reduced sales volume, diminished customer satisfaction, and increased labor costs associated with manual data retrieval. In a competitive market where the price of building materials fluctuates frequently, inability to respond swiftly to price changes directly affects profitability and market share.
Introducing an integrated digital pricing system or a real-time database accessible to both suppliers and sales staff could remedy these issues. A suggested solution involves implementing a web-based platform where suppliers update prices daily. This platform can automatically synchronize with Don’s system, ensuring that sales representatives always access the latest prices without costly back-and-forth communications. Moreover, mobile devices or tablets could be used in the field to retrieve updated pricing information instantly.
Decisions involved in implementing such a solution encompass choosing the appropriate technology infrastructure, defining user roles and access controls, and establishing data update protocols. These decisions are typically made by management teams, including IT managers and sales directors, in consultation with suppliers and technical vendors.
Business Challenges at Henry’s Hardware and the Role of Information Systems
Henry’s Hardware faces inventory management challenges attributable to the lack of systematic record-keeping. Without accurate and timely inventory data, the Nelsons often run out of popular items, leading to lost sales and dissatisfied customers. The consequences include inefficient space utilization and missed profit opportunities, especially given the escalating rent costs.
Implementing an inventory management system (IMS) can transform this situation by tracking stock levels, sales, and reorder points. An effective IMS would record each transaction, update inventory counts in real-time, and generate alerts for low-stock items. This data would enable the Nelsons to optimize stock levels, plan replenishments proactively, and avoid stockouts.
Furthermore, the system can produce various reports, such as sales summaries, inventory turnover rates, and reorder recommendations. These reports support data-driven decision-making, allowing the Nelsons to minimize excess inventory, reduce waste, and maximize profit per square foot.
The benefits extend beyond operational improvements—by analyzing sales patterns, the Nelsons could tailor their stock to customer preferences, improve supply chain partnerships, and make informed purchasing decisions. Ultimately, a well-designed information system enhances their capacity to sustain business growth despite limited space and increasing rents.
Using Spreadsheets to Optimize Supplier Selection
The exercise involving spreadsheets emphasizes practical application of data analysis tools for managerial decisions. By utilizing spreadsheet functions such as data filtering and the DAVERAGE function, managers can evaluate supplier performance based on multiple criteria such as price, delivery times, and quality metrics.
The process involves importing raw transactional data into a spreadsheet, then applying filters to focus on suppliers meeting specific performance thresholds. The DAVERAGE function can compute average costs or delivery times for filtered data, providing quantitative bases for comparison. Such analysis ensures that procurement decisions are not solely based on price but also consider factors such as reliability and quality, leading to better supplier relationships and cost efficiencies.
Adopting these analytical techniques supports a more structured and objective approach to supplier selection, reducing risks associated with subpar suppliers, and delivering better value to the company. Businesses that leverage data-driven decision-making enjoy enhanced operational performance and strategic positioning in competitive markets.
Conclusion
Both scenarios underscore the imperative of integrating information systems into business operations. For Don’s Lumber, real-time pricing data reduces delays and enhances customer service. For Henry’s Hardware, systematic inventory management maximizes space utilization and profits. Moreover, spreadsheet analysis tools empower managers to make more informed and strategic procurement decisions. Going forward, businesses must recognize the transformative potential of information technology to remain competitive, agile, and efficient in today’s dynamic marketplace.
References
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