ACS-1803 Study Guide - Final Guide: Master Production Schedule, Material Requirements Planning, Vendor-Managed Inventory

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For final 1803 exam in April, 2009
(The following questions are intended to help guide your studying. Be sure to
emphasize understanding of how all the ideas fit together - until you feel that you can
explain these ideas to someone else.
The final exam will be based almost entirely on material addressed in these questions
below and on the bolded questions from the Mid-term study questions.)
Firstly study all questions in bold on the study question sheet for the mid-term in
March, 2009 modified for the final exam (to be found on the 1803 website). Then,
study ALL questions on this sheet.
1. Explain the fixed assets system and the payroll system.
2. What are main features of Point of Sale systems?
2b. What is the difference between online processing and batch processing? (LO6 slide
Online processing can be processed individually in real-time, while batch
processing is grouped and processed together at a later time.
2c. How does a management information system differ from a transaction processing
TPS's are a special class of information system designed to process business
events and transactions.
MIS's are 1. a field of study that encompasses the development , use,
management, and study of computer-based information systems in
organizations. 2. An information system designed to support the management of
organizational functions at the managerial level of the organization.
The difference between the two is that a TPS is used at the operational level of
management, while and MIS is used at a managerial level of management.
3. What is the purpose of budgeting systems? Why are spreadsheets a good base for
such systems?
Plan revenues and expenses line-by-line, can summarize in various ways, can
compare this year's budget to last year's, can compare actual expenses vs.
budgeted(get actuals from General ledger System).\
Spreadsheet-type systems are useful for budgeting, because of formulas and
they can use last year's budget as a base for next year and maybe 5 years.
4. What is the contribution of cash management systems? What management level do
they support? Outline one useful report.
Ensure that business has sufficient cash to meet its needs for day-to-day
operations and for acquisition of long-term assets.
They support an operational level of management.
One useful report is the cash flow report, which can forecast cash flows for, say
6 months. Flow = total cash receipts - total cash payments
5. Explain the purpose of capital budgeting systems.
Provide help with planning acquisition(disposal) of major plant assets that will be
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used by the business during many years.
Provide outgoing and incoming cash for the life of the assetuse assumptions
consider the time value of money(net present value).
5b. Explain the contribution of Investment Management Systems; give an example.
Oversee organization's investment in stocks, bonds, and other securities.
On-line databases provide immediate updates for stock and bond prices.
An example is how Value Screen inputs the current price of each stock and
calculates the gain or loss the company's investment portfolio would generate if
sold now.
6.Give an example of two strategic systems in the area of Finance. Provide an example
of how each is used in industry.
Financial Condition Analysis Systems: -provide insightful analyses of financial
statements and data(e.g., ratios: current ratio, debt:equity ratio) On-line
databases can allow for financial analysis of competitors, suppliers, buyers and
other organizations
Long Range Forecasting Systems: -may use both internal and external data
-apply statistical techniques -may use graphics -analyse trends. ex. planning for
long-term assets through equity financing
7. Outline 5 areas of production planning and control that could benefit significantly
from information systems.(LO7, slide 4)
Raw materials acquisition(when, how much)
Machine and worker requirements
Detailed production schedules
Gathering evaluation statistics -sensors, scanners, shop floor terminals -quality
control -comparing performance data to plans
Cost accounting for manufacturing goods
8. What is the main output of a Master Production Schedule? What are three main
Three main inputs are the accepted sales orders, sales forecast, and current
finished goods inventory and the main output is lists of the number of units to be
produced each week.
9. What is the main output of the Material Requirements Planning system? What are its
2 main inputs?
The main output of the MRP system is a time-phased purchase orders for raw
The two main inputs are Bill of Materials and the Master Production Schedule.
A Bill of Materials is a list of raw materials needed to produce one unit of finished
product and the quantity of each material.
10. What are two main outputs from the capacity requirements planning system?
A Route Sheet shows the sequence of required operations and the standard
time allowed for each operation(usually person + machine)
A detailed production schedule can also be produced from the CRP system.
11. Based on questions 7-10, and considering MRPII, explain, with adequate examples
how information systems can assist production management.
Information systems can assist production management in many different ways.
One being it can allow production managers with detailed forecasts on what
materials will be needed to produce the necessary products through the Bill of
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Materials. They also can provide the Master Production schedule, which is
actually a step before using the Bill of Materials, to tell the manager how much
products will be produced in a given week. Then a route sheet can be used to
figure out how much time will be spent in the production process. With all these
different detailed reports, MRP, and CRP combined into MRPII all the necessary
information for a production manager to view where production is at at any given
time is easily accessible. To sum it up, information systems like MRPII simply
make production management a easier task for its managers.
12. Explain the concept of “vendor managed inventory and the role of computer
system in this.
Supplier's computer's tap into our inventory system to view when stocks are low.
Computer support in manufacturing extensive, they support information systems
13. Explain the terms: supply chain, supply network, supply chain management. How
do information systems assist in this area?
Supply chain is the flow of materials, services and information form suppliers of
merchandise and raw materials through to the organization's customers. Now it's
called a supply network.
Supply chain management is the processes and procedures used to ensure the
delivery of goods and services to customers at the lowest cost while providing
highest value to the customers.
Suppliers are gaining access to an organizations production planning schedules
to assure an ability to fulfill orders. Producing organizaton is opening its stems
to the customer to allow the customer to view inventory and production levels
before placing orders.
A supply network is the flow of materials from multiple suppliers involved in the
process of servicing a single organization. More detailed term than just a supply
Information systems can assist in this area to connect suppliers to other
organizations, so they know when stocks are low.
13b. Outline one strategic support system in manufacturing.
Dell computers' SCM system, Dell uses Ariba SCM to automate its purchasing
process. The system is connected to its broad supplier network. This provides
Dell with data to id inefficiencies within its supply network; and to negotiate key
contracts for goods and services.
14. Describe clearly and completely any TWO systems which support marketing at the
operational level. Be able to describe specific outputs
Contact management systems: provide information on past contacts with specific
customers. Output: call report- # of sales calls made by a salesperson, # and
dollar amount of sales made by this person
Telemarketing systems: Identify customers and automatically call them, use
electronic phone directories, can make notes about calls, in a LAN-based system
200 telemarketers can use the same system at the same time.
15. Describe clearly and completely any TWO systems which support marketing at the
tactical level. Be able to describe specific outputs
Sales management systems: can help make tactical decisions such as- how
sales territories should be shaped, how to allocate salespersons to territories,
and what products should be offered to what customers. Examples of outputs
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