Week 11: Chapter 8

Section 8.1 -

1. What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.

The backbone of most information systems applications is the transaction processing system. TPSs monitor, store, collect and process data generated from all business transactions. These data provide the inputs into the organisation’s database.

Section 8.2 -

1. What is a functional area information system? List its major characteristics.

A functional area information system (FAIS) is designed to support lower and midlevel managers in functional areas. FAISs generate reports (routine, ad hoc, and exception) and provide information to managers regardless of their functional areas.


2. How does an FAIS support management by exception? How does it support on-demand reports?

Exception reports include only information that falls outside certain threshold standards. To implement management by exception, management first creates performance standards. The company then sets up systems to monitor performance (via the incoming data about business transactions such as expenditures), compare actual performance to the standards, and identify predefined exceptions. Managers are alerted to the exceptions via exception reports.


Section 8.3-

1. Define ERP and describe its functionalities.

Enterprise resource planning systems integrate the planning, management, and use of all of the organisation’s resources. The major objective of ERP systems is to tightly integrate the functional areas of the organisation. The integration enables information to flow seamlessly across the various functional areas. ERP software includes a set of interdependent software modules, linked to a common database, that provide support for internal business processes.

2. List some drawbacks of ERP software.

ERP can be extremely complex, expensive and time consuming to implement. Companies may need to change existing business processes to fit the predefined business process of the software. For companies with well-established procedures, this requirement can be a huge problem. Finally, companies must purchase the entire software package even if they only require only a few modules. For these reasons, ERP software is not attractive to everyone.

Section 8.5 -

1. Define a supply chain and supply chain management (SCM).

A supply chain is a network of organisation and facilities that transforms raw materials into products delivered to customers. The function of supply chain management (SCM) is to plan, organise, and optimize the supply chain’s activities.

2. List the major components of supply chains.

Upstream: where sourcing or procurement from external suppliers occurs.
Internal: where packaging, assembly or manufacturing takes place.
Downstream: where distribution takes place, frequently by external distributors.
Tiers of suppliers: a supplier may have one or more sub suppliers, and the sub supplier may have its own sub suppliers and so on.

3. What is the bullwhip effect?

Bullwhip effect: where variability in the size and timing of orders increase at each stage up the supply chain, from customer to supplier. 4. What are some solutions to supply chain problems?
Using inventories to solve supply chain problems and information sharing.

Section 8.6 -

1. Define EDI and list its major benefits and limitations

EDI is a communication standard that enables the electronic transfer of routine documents, such as purchasing orders, between business partners. It formats these documents according to agreed-upon standards. It reduces costs, delays and errors inherent in manual document-delivery system.

2. Define an extranet and explain its infrastructure (in relation to Internet technologies).

Extranets are networks that link business partners to one another over the Internet by providing access to certain areas of one another’s corporate intranets.

3. List and briefly define the major types of extranets.

The three main types of Extrenets include:
A company and its dealers, customers or suppliers (FEdex)
An industry’s extranet (ANX)
Joint ventures and other business partnerships (Bank of America)