44095: IT for Management

1. 44095: IT for Management Review & Part 2 Requirements By: Ian Perry Room: C41C E-mail: i.p.perry@hull.ac.uk Tel: 01723 35 7287 http://itsy.co.uk/ac/0708/Sem2/44095_IT4M/

2. 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.

3. 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 organisation’s 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)

4. 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 EZPC’s 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 --

5. 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 EZPC’s Suppliers. -- SNIP --

6. 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’.

7. 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.

8. Economic Order Quantity? • 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. • A ‘simple’ EOQ Formula

9. 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:

10. 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.

11. 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’.

12. 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 organisation’s 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.