Conceptsin Enterprise Resource Planning 4th Edition by Monk – Test Bank

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Conceptsin Enterprise Resource Planning 4th Edition by Monk – Test Bank

 

Chapter 2: The Development of Enterprise Resource Planning Systems

 

TRUE/FALSE

 

  1. Individual information systems for each functional area in a company are known as silos.

 

ANS:  T                    PTS:   1                    REF:   20

 

  1. Silos of information are also known as stovepipes.

 

ANS:  T                    PTS:   1                    REF:   20

 

  1. The complex hardware and software that goes into an ERP system was not available until the 1970s.

 

ANS:  F                    PTS:   1                    REF:   21

 

  1. The capabilities of computer hardware doubling every 18 months is known as Gates’ Law.

 

ANS:  F                    PTS:   1                    REF:   21

 

  1. Scalability means that the capacity of a piece of equipment can be increased by adding new hardware.

 

ANS:  T                    PTS:   1                    REF:   22

 

  1. The software that holds data in an organized fashion is known as a database management system, or a DBMS.

 

ANS:  T                    PTS:   1                    REF:   22

 

  1. Materials requirements prediction (MRP) software allows a plant manager to plan production and raw materials requirements by guess-timation.

 

ANS:  F                    PTS:   1                    REF:   23

 

  1. The direct computer-to-computer exchange of standard business documents is known as EDI, or electronic data interchange.

 

ANS:  T                    PTS:   1                    REF:   23

 

  1. The functional model of business and management was useful for decades and is still the current school of thought.

 

ANS:  F                    PTS:   1                    REF:   24

 

  1. SAP expanded into international markets but kept the software in a single language, German, and a single currency, the Euro.

 

ANS:  F                    PTS:   1                    REF:   26

 

  1. SAP’s R/3 can only run on mainframe computers.

 

ANS:  F                    PTS:   1                    REF:   27

 

  1. SAP’s goal was to develop a standard software product that could be configured to meet the needs of each company.

 

ANS:  T                    PTS:   1                    REF:   26

 

  1. Old systems are known as legacy systems.

 

ANS:  T                    PTS:   1                    REF:   27

 

  1. Open architecture encourages software companies are encouraged to develop add-on software

products that can be integrated with existing software, such as SAP’s R/3.

 

ANS:  T                    PTS:   1                    REF:   27

 

  1. In the accompanying figure, data is entered into the system once and then used throughout the organization.

 

 

Figure 2-4  Data flow within an integrated information system

 

ANS:  T                    PTS:   1                    REF:   29

 

  1. An ERP system allows data to be entered once, and then used throughout the organization.

 

ANS:  T                    PTS:   1                    REF:   29

 

  1. An ERP module is a module that automates a specific business function.

 

ANS:  F                    PTS:   1                    REF:   31

 

  1. A company’s level of data integration is highest when the company uses one vendor to supply all of its ERP modules.

 

ANS:  T                    PTS:   1                    REF:   31

 

  1. An important consideration in minimizing the risk of fraud and abuse is defining limits on the dollar value of business transactions that certain employees can process.

 

ANS:  T                    PTS:   1                    REF:   32

 

  1. A best practice is the best, most efficient way of handling a certain business process.

 

ANS:  T                    PTS:   1                    REF:   34

 

  1. One benefit of ERP systems is that ERP integrates people and data while eliminating the need to update and repair many separate computer systems.

 

ANS:  T                    PTS:   1                    REF:   36

 

  1. A large company will likely spent $1 million on ERP implementation, which includes software and training.

 

ANS:  F                    PTS:   1                    REF:   37

 

  1. Not every company is a good match with the constraints inherent in ERP.

 

ANS:  T                    PTS:   1                    REF:   37

 

  1. SAP’s internal programming language is Visual Basic.

 

ANS:  F                    PTS:   1                    REF:   38

 

  1. A return on investment (ROI) is an assessment of an investment project’s value, calculated by dividing the value of the project’s benefits by the project’s cost.

 

ANS:  T                    PTS:   1                    REF:   39

 

MULTIPLE CHOICE

 

  1. Individual information systems for each functional area in a company are known as:
a. silos c. tubers
b. bagpipes d. separated systems

 

 

ANS:  A                    PTS:   1                    REF:   20

 

  1. The complex software and hardware required for ERP systems was not available until the
a. 1960s c. 1980s
b. 1970s d. 1990s

 

 

ANS:  D                    PTS:   1                    REF:   21

 

  1. The observation that the number of transistors built onto a computer chip doubles every 18 months is known as:
a. Moore’s Law c. Doubletake
b. Gate’s Prophesy d. Acceleration

 

 

ANS:  A                    PTS:   1                    REF:   21

 

  1. When a piece of equipment’s capacity is exceeded, its capacity can be increased by adding new hardware.  This is commonly known as:
a. adaptability c. scalability
b. middleware d. computability

 

 

ANS:  C                    PTS:   1                    REF:   22

 

  1. In the 1980s, ____, the technology that holds data in an organized fashion, existed for ERP development.
a. spreadsheets c. client/server architecture
b. DBMS d. word-processors

 

 

ANS:  B                    PTS:   1                    REF:   22

 

  1. ____ software allows a plant manager to plan production and raw materials requirements by working backward from the sales forecast.
a. DBMS c. MRP
b. EDI d. EFT

 

 

ANS:  C                    PTS:   1                    REF:   23

 

  1. The direct computer-to-computer exchange of standard business documents is known as:
a. MRP c. EDI
b. e-mail d. DDS

 

 

ANS:  C                    PTS:   1                    REF:   23

 

  1. In a process-oriented company, the flow of information and management activity is ______, in line with the flow of materials and products.
a. horizontal across functions
b. vertical from top level management down through the hierarchical management structure
c. vertical through functions
d. horizontal from marketing and sales to inventory and production

 

 

ANS:  A                    PTS:   1                    REF:   24

 

  1. Software ____ are individual programs that can be purchased, installed, and run separately, but extract data from the common database.
a. nodes c. modules
b. chunks d. tidbits

 

 

ANS:  C                    PTS:   1                    REF:   26

 

  1. In ______, third-party software companies are encouraged to develop add-on software products that can be integrated with existing software.
a. open architecture c. integrated pieces
b. clip-ons d. piecemeal nodes

 

 

ANS:  A                    PTS:   1                    REF:   27

 

  1. ____ is SAP’s biggest competitor.
a. J.D. Edwards c. Microsoft
b. PeopleSoft d. Oracle

 

 

ANS:  D                    PTS:   1                    REF:   28

 

  1. Old information and computer systems are known as ______.
a. dinosaurs c. legacy systems
b. passe systems d. relics

 

 

ANS:  C                    PTS:   1                    REF:   27

 

  1. Which ERP package is a popular software choice for managing human resources and financial activities at universities?
a. SAP c. Microsoft Dynamics
b. PeopleSoft d. J.D. Edwards

 

 

ANS:  B                    PTS:   1                    REF:   27-28

 

  1. Which R/3 module records sales orders?
a. SD c. PP
b. MM d. QM

 

 

ANS:  A                    PTS:   1                    REF:   29

 

  1. Which of the following modules in SAP ERP maintains production information?
a. SD c. PP
b. MM d. QM

 

 

ANS:  C                    PTS:   1                    REF:   29

 

  1. The ______ module helps the company manage fixed-asset purchases (plant and machinery) and related depreciation.
a. Plant Maintenance c. Materials Management
b. Asset Management d. Product Planning

 

 

ANS:  B                    PTS:   1                    REF:   30

 

  1. Which of the following module in SAP is a set of tools that can automate the activities in SAP ERP?
a. Workflow c. Financial Accounting
b. Controlling d. Project System

 

 

ANS:  A                    PTS:   1                    REF:   31

 

  1. When top management is queried on the reasons for implementing ERP systems, the overriding answer is ____.
a. cost saving c. increased profitability
b. control d. inventory management

 

 

ANS:  B                    PTS:   1                    REF:   31

 

  1. Which R/3 module records transactions in the general ledger?
a. CO c. FI
b. WF d. PS

 

 

ANS:  C                    PTS:   1                    REF:   31

 

  1. After a company chooses the modules they want to implement, they must decide on ____ options, which allow the customer to customize the modules to fit their business to some extent.
a. settings c. flexible
b. configuration d. tandem

 

 

ANS:  B                    PTS:   1                    REF:   32

 

  1. As part of the ______ process, a company can define any number of tolerance groups with a range of limits, and can then assign employees to these tolerance groups.

 

 

Figure 2-6  A customization example: tolerance groups to set transaction limits

 

a. manufacturing c. configuration
b. development d. programming

 

 

ANS:  C                    PTS:   1                    REF:   32

 

  1. Which of the following is a benefit to running an ERP system?
a. Global integration
b. Elimination of updating and repairing multiple systems
c. Capability to manage operations, not just monitor them
d. All of the above are benefits

 

 

ANS:  D                    PTS:   1                    REF:   36

 

  1. An ERP system for a large company will cost ____, including software, training, and implementation.
a. $100-500 million c. $1-5 billion
b. $1-5 million d. $50,000-$500,000

 

 

ANS:  A                    PTS:   1                    REF:   37

 

  1. SAP’s internal programming language is called:
a. R/3 c. Visual Basic
b. C++ d. ABAP

 

 

ANS:  D                    PTS:   1                    REF:   38

 

  1. One assessment of a project’s value is calculated by the:
a. DVT c. ROI
b. PMT d. PPT

 

 

ANS:  C                    PTS:   1                    REF:   39

 

  1. Bumpy rollouts of ERP systems are usually caused by:
a. software problems c. hardware problems
b. people problems d. configuration problems

 

 

ANS:  B                    PTS:   1                    REF:   40

 

COMPLETION

 

  1. ____________________ states that the number of transistors on a computer chip doubles every 24 months.

 

ANS:  Moore’s Law

 

PTS:   1                    REF:   21

 

  1. A central-local computer arrangement is called ____________________  architecture.

 

ANS:

client server

client/server

client-server

 

PTS:   1                    REF:   22

 

  1. ____________________  means that the capacity of a piece of equipment can be increased by adding new hardware.

 

ANS:

Scalable

Scalability

 

PTS:   1                    REF:   22

 

  1. The software that holds that data in an organized fashion, and that allows for the easy retrieval of data, is the ____________________.

 

ANS:

database management system

DBMS

database management system (DBMS)

DBMS (database management system)

 

PTS:   1                    REF:   22

 

  1. ____________________ software allows a plant manager to plan production and raw materials requirements by working backward from the sales forecast.

 

ANS:

MRP

material requirements planning

material requirements planning (MRP)

MRP (material requirements planning)

 

PTS:   1                    REF:   23

 

  1. The prediction of future sales is the ____________________.

 

ANS:  sales forecast

 

PTS:   1                    REF:   23

 

  1. ____________________ is the direct computer-to-computer exchange of standard business documents.

 

ANS:

Electronic data interchange

EDI

Electronic data interchange (EDI)

EDI (electronic data interchange)

 

PTS:   1                    REF:   23

 

  1. Originially, in English, SAP was an acronym for ____________________.

 

ANS:  Systems Analysis and Program Development

 

PTS:   1                    REF:   25

 

  1. In ____________________, third-party software companies are encouraged to develop add-on software products that can be integrated with existing software.

 

ANS:  open architecture

 

PTS:   1                    REF:   27

 

  1. Old systems are known as ____________________.

 

ANS:  legacy systems

 

PTS:   1                    REF:   27

 

  1. SAP’s biggest competitor is ____________________.

 

ANS:  Oracle

 

PTS:   1                    REF:   28

 

  1. The ____________________  records sales orders and scheduled deliveries. Information about the customer (pricing, address and shipping instructions, billing details, and so on) is maintained and accessed from this module.

 

ANS:

Sales and Distribution

SD

Sales and Distribution (SD)

SD (Sales and Distribution)

 

PTS:   1                    REF:   29

 

  1. When data are entered into the system, data in all related files in the ____________________ are automatically updated.

 

ANS:  central database

 

PTS:   1                    REF:   33

 

  1. R/3’s design incorporates ____________________, which means that R/3 designers choose the best, most efficient ways in which business processes should be handled.

 

ANS:  best practices

 

PTS:   1                    REF:   34

 

  1. SAP’s internal programming language is ____________________.

 

ANS:

ABAP

Advanced Business Application Programming

Advanced Business Application Programming (ABAP)

ABAP (Advanced Business Application Programming)

 

PTS:   1                    REF:   38

 

  1. ____________________ help businesses customize the software to fit their unique needs.

 

ANS:  configuration

 

PTS:   1                    REF:   38

 

  1. An assessment of an investment’s project value that is calculated by dividing the value of the project’s benefits by the value of the project’s cost is known as a(n) ____________________.

 

ANS:

ROI

return on investment

return on investment (ROI)

ROI (return on investment)

 

PTS:   1                    REF:   39

 

SHORT ANSWER

 

  1. The accompanying figure depicts Moore’s Law.  What significance does this law have with regard to the development of ERP systems?

 

 

Figure 2-1  The actual increase in transistors on a chip approximates Moore’s Law

 

ANS:

Computers had to be powerful enough to provide integrated, real time data for decision making

 

PTS:   1                    REF:   21

 

  1. Describe how information is exchanged between lower operating levels in the functional organization shown in the accompanying figure.

 

 

Figure 2-2  Information and material flows in the functional business model

 

ANS:

No exchange of information occurs between lower operating groups.  Instead, exchange of information between operating groups is handled by top management which might not be knowledgeable about the functional area.

 

PTS:   1                    REF:   24

 

  1. Describe how information is exchanged between lower operating levels in the business process model shown in the accompanying figure:

 

 

Figure 2-3  Information and material flow in a process business model

 

ANS:

Information can flow between operating levels without top management’s involvement.

 

PTS:   1                    REF:   25

 

ESSAY

 

  1. Besides the fact that ERP systems are integrated information systems and lead to more efficient business processes, there are other benefits.  Outline them.

 

ANS:

The significance of ERP lies in its many benefits. Recall that integrated information systems can lead to more efficient business processes that cost less than those in unintegrated systems. In addition, ERP systems offer the following benefits:

  • ERP allows easier global integration. Barriers of currency exchange rates, language, and culture can be bridged automatically, so data can be integrated across international borders.
  • ERP integrates people and data while eliminating the need to update and repair many separate computer systems. For example, at one point, Boeing had 450 data systems that fed data into its production process; the company now has a single system for recording production data.
  • ERP allows management to actually manage operations, not just monitor them. For example, without ERP, getting an answer to “How are we doing?” requires getting data from each business unit and then analyzing that data for a comprehensive, integrated picture. The ERP system already has all the data, allowing the manager to focus on improving processes. This focus enhances management of the company as a whole, and makes the organization more adaptable when change is required.

 

PTS:   1                    REF:   36

 

  1. Discuss the various costs associated with the implementation of an ERP system for a large company and for a midsize company. How long does implementation take?

 

ANS:

 

The total cost of an ERP system implementation includes several factors, including the following:

  • The scale of the ERP software, which corresponds to the size of the company it serves
  • The need for new hardware capable of running complex ERP software
  • Consultants’ and analysts’ fees
  • Length of time required for implementation (which causes disruption of business)
  • Training (which costs both time and money)

A large company, one with well over 1,000 employees, will likely spend $100 million to $500 million for an ERP system with operations involving multiple countries, currencies, languages, and tax laws. Such an installation might cost as much as $30 million in software license fees, $200 million in consulting fees, additional millions to purchase new hardware, and even more millions to train managers and employees—and full implementation of the new system could take four to six years.

A midsize company (one with fewer than 1,000 employees) might spend $10 million to $20 million in total implementation costs and have its ERP system up and running in about two years.

 

PTS:   1                    REF:   36-37

 

  1. Discuss the reasons behind a bumpy rollout of an ERP system.  Cite some real examples.

 

ANS:

You can find numerous cases of implementation woes in the news. W. L. Gore, the maker of GoreTex fabric, had problems implementing its PeopleSoft system for personnel, payroll, and benefits. The manufacturer sued PeopleSoft, Deloitte & Touche LLP, and Deloitte Consulting for incompetence. W. L. Gore blamed the consultants for not understanding the system and leaving its Personnel department in a mess. PeopleSoft consultants were brought in to resolve the problems after implementation, but the fix cost W. L. Gore additional hundreds of thousands of dollars.

Hershey Foods (now The Hershey Company) had a rough rollout of its ERP system in 1999, due to its use of what experts call the “Big Bang” approach to implementation, in which huge pieces of the system are implemented all at once. Companies rarely use this approach because it is so risky. Hershey’s order-processing and shipping departments had glitches that were being fixed as late as September. Because of that, Hershey lost a large share of the Halloween candy market that year.

Usually, a bumpy rollout and low ROI are caused by people problems and misguided expectations, not computer malfunctions:

  • Some executives blindly hope that new software will cure fundamental business problems that are not curable by any software. The root of a problem may lie in flawed core business processes. Unless the company changes its business processes, it will just be computerizing an ineffective way of doing business.
  • Some executives and IT managers don’t take enough time for a proper analysis during the planning and implementation phase.
  • Some executives and IT managers skimp on employee education and training.
  • Some companies do not place the ownership or accountability for the implementation project on the personnel who will operate the system. This lack of ownership can lead to a situation in which the implementation becomes an IT project rather than a company-wide project.
  • Unless a large project such as an ERP installation is promoted from the top down, it is doomed to fail; top executives must be behind a project 100 percent if it is going to be successful.
  • A recent academic study attempting to identify the critical success factors of ERP implementations showed that a good project manager was critical and central to success of a project. In addition, training was crucial—along with a project champion, that is, someone who might not be in the CEO role but who brings enthusiasm and leadership to a project.
  • ERP implementation brings a tremendous amount of change for users of the system. Managers need to effectively manage that change in order to ensure a smooth implementation.

Many ERP implementation experts emphasize the importance of proper education and training for both employees and managers. Most people will naturally resist changing the way they do their jobs. Many analysts have noted that active top management support is crucial for successful acceptance and implementation of such company-wide changes.

 

PTS:   1                    REF:   40-41

Chapter 7: Process Modeling, Process Improvement, and ERP Implementation

 

TRUE/FALSE

 

  1. A process model can be as simple as a diagram with boxes and arrows or as complex as computer software that allows for process simulation.

 

ANS:  T                    PTS:   1                    REF:   184

 

  1. A graphical representation of the movement or flow of concrete or abstract items is a spreadsheet.

 

ANS:  F                    PTS:   1                    REF:   184

 

  1. The term process mapping is often used interchangeably with flowcharting.

 

ANS:  T                    PTS:   1                    REF:   184

 

  1. An assessment of disparities between an organization’s current situation and its long-term goals is known as a swimlane assessment.

 

ANS:  F

Once a company develops a process map, it can perform a gap analysis, which is an assessment of disparities between how the process currently works and how the organization wants it to work.

 

PTS:   1                    REF:   184

 

  1. Process boundaries define which activities are to be included in the process.

 

ANS:  T                    PTS:   1                    REF:   186

 

  1. ERP software such as SAP has many business applications but none of them support business processes.

 

ANS:  F                    PTS:   1                    REF:   184

 

  1. In flowchart analysis, each activity in the process is analyzed for the value it adds to the product or service.

 

ANS:  F

SAP ERP software supports hundreds of business processes, and SAP has developed graphical models for many of these business processes using the event process chain (EPC) format.

 

PTS:   1                    REF:   189

 

  1. Dynamic process modeling takes a basic process flowchart and puts it into motion, using computer simulation techniques to facilitate the evaluation of proposed process changes.

 

ANS:  T                    PTS:   1                    REF:   198

 

  1. Software programs that automate the execution of business processes and address all aspects of the process are called ERP Wizards.

 

ANS:  F                    PTS:   1                    REF:   200

 

  1. Organizational change management is a trivial part of the implementation process.

 

ANS:  F                    PTS:   1                    REF:   206

 

MULTIPLE CHOICE

 

  1. A graphical representation of a business process is known best as a ____.
a. map c. flowchart
b. state diagram d. stack

 

 

ANS:  C                    PTS:   1                    REF:   184

 

  1. When doing process mapping, one of the most important tasks is to define the ____.  These define which activities are to be included in the process.
a. scales c. legends
b. process boundaries d. scopes

 

 

ANS:  B                    PTS:   1                    REF:   186

 

  1. Beyond the simple tools of flowcharting, a helpful tool called ____ allows one to describe a business process in greater or less detail depending on the task at hand.
a. hierarchical modeling c. detail focused charting
b. drill down staging d. magnifying glass charting

 

 

ANS:  A                    PTS:   1                    REF:   187

 

  1. A deployment flowchart is also known as a(n) ____.
a. event process chain flowchart c. ERP flowchart
b. swimlane flowchart d. best practices flowchart

 

 

ANS:  B                    PTS:   1                    REF:   188

 

  1. In value analysis, which of the following activities should be eliminated?
a. Real value c. No value
b. Business value d. Value add

 

 

ANS:  C                    PTS:   1                    REF:   197

 

  1. In value analysis, which of the following activities is defined as a value for which the customer is willing to pay?
a. Real value c. No value
b. Business value d. Value add

 

 

ANS:  A                    PTS:   1                    REF:   197

 

  1. Which software programs automates the execution of business processes?
a. SAP Wizards c. Workflow tools
b. ASAP d. Swimlanes

 

 

ANS:  C                    PTS:   1                    REF:   200

 

SHORT ANSWER

 

  1. Define organizational change management (OCM).

 

ANS:

Managing the human behavior aspects of organizational change is called organizational change management (OCM).

 

PTS:   1                    REF:   206

 

  1. Define scope creep.

 

ANS:

A common problem in ERP implementations is scope creep, which is the unplanned expansion of the projects goals and objectives. Scope creep causes the project to go over time and over budget and increases the risk of an unsuccessful implementation. Defining the project’s scope ahead of time helps prevent this problem.

 

PTS:   1                    REF:   207

 

  1. What is the function of the Development (DEV) system in the SAP system landscape concept?

 

ANS:

The Development (DEV) system is used to develop configuration settings for the system, as well as special enhancements using ABAP code. These changes are automatically recorded in the transport directory, which is a special data file location on the DEV server.

 

PTS:   1                    REF:   210

 

PROBLEM

 

  1. Create a swimlane document flowchart for the following problem.

 

OLD FASHIONED UNIVERSITY COURSE SCHEDULING PROCESS

 

Old Fashioned University administrators strongly believe that some changes are good and that some changes are not so good. That philosophy must be kept in mind, when trying to understand OFU’s course registration system, which is a partly-manual, partly computerized system.

The individual student starts the process by filling out course cards. A card is merely a pre-printed 3”x5” card that has a space for the student’s name, student ID number, and the desired course’s ID number. The student completes a card for each course they want to take next semester.

The student takes their stack of cards to the OFU Advisement Center, which is staffed by OFU academic advisors. These advisors are trained to know what courses can be taken by students in the various OFU majors. The student drops off their stack of cards for analysis.

An advisor takes a stack of cards and performs what is called an Advisor Review. The student need not be present. The advisor looks up the student’s history in the OFU Student Information System (OFUSIS). This history shows what courses the student has already taken. The history is a file on disk and the contents for that student is shown in a window on the advisor’s computer monitor. The advisor also opens up the Advisor Resource, a file on disk that has the course registration rules. These rules are course pre-requisites, degree requirements for each major and so on. This is a file on disk, and the contents are shown in another window on the advisor’s computer monitor. The contents of these two files are used by the advisor during the Advisor Review. The advisor goes through the stack of cards. If a course may not be taken by the student in the next semester, its card is put into the Rejected Card stack. If a course may be taken by the student in the next semester, its card is put into the Accepted Card stack. After doing this for a student’s stack of cards, the advisor writes an entry to the Advisor Log. The log is a file on disk that is merely a running diary of what the advisor did in a day. The rejected cards are put into a wastebasket for eventual shredding. The accepted stack is retained for the student in an alphabetized file.

The student comes to the Center to retrieve their accepted card stack. The student manually fills out a Scantron form, bubbling in a line of data for each accepted course. Number two pencils are used for this step. This step is called the Scantron Sheet Preparation step. The student keeps the stack of cards as a memento of this important step in their academic career. Completed forms are put into a basket at the notoriously cranky OFU Advisement Center receptionist’s desk. The receptionist is supposed to smile at each student as they leave, but always the receptionist frowns.

The Scantron forms are sent to the OFU Computing Center. Under software program control a mark sense reader scans the forms. This step is called the Mark Sense Read step. The courses requested by each student are written to a file on disk. The file is called the Master Course Requested file. Data are merely appended to the end of the file for each student (each record is merely: student number, course number).

These steps go on daily in Advisement and in the Computing Center for the two week registration period. Each day in that period the Center runs the Interim Course Scheduling program. The purpose of this program is to incrementally build up the course registration schedule, day by day. The input to the Interim program the Master Course Requested file, which is opened for reading. The other input is the Preliminary Course Registration file, another file on disk. The day’s entries to the Master Course Requested file are processed, and the Preliminary Course Registration Schedule is updated. This file will need much refinement at the end, to get to the final course registration schedule. But at least it is a serviceable starting point for that purpose.

At the end of the registration period, the Computing Center runs the Super Duper Course Registration Program. The Supe (as it is affectionately known in the computing center) is a complicated linear programming package that slots students into courses, based on course capacity, number of sections, course pre-requisites and other factors. The input to the Supe is the Preliminary Course Registration Schedule file, which is opened for reading and stays open as long as the Supe runs. There are three outputs, once the program is finished running:

 

  1. A set of student course schedules, showing the courses that each student was given by the Supe. These schedules are sent to the Advisement Center.
  2. A set of class lists showing which students are in each section of each course. These class lists are sent to the academic departments on campus, for distribution to faculty members.
  3. A multi-copy Summary Report. One copy is filed in the Computing Center. Another copy is sent to the Advisement Center. A third is sent to the Registrar’s Office.

 

Students are asked to come to the Advisement Center to pick up their course schedule. Rarely do students get exactly what they asked for and they generally frown when told that the Supe knows what is good for them. Seeing these frowns makes the receptionist smile.

The Registrar gives the report a brief read and then puts it in a file cabinet for future reference.

The Academic Department secretaries put the class lists into faculty member mailboxes.

 

ANS:

 

PTS:   1                    REF:   188-189

 

  1. Create a swimlane document flowchart for the following Fitter Snacker sales process. Use the swimlanes of Customer, Sales, Manufacturing, and Procurement.

Here is a description of what happens when a customer wants to buy cases of Fitter Snacker bars. In this situation, they are not buying through the sales person, they are buying through the inside sales department (handled only by phone):

  1. The Customer that wants to buy the bars fills out a multipart paper request and sends it to the sales department.
  2. The Sales department sends a copy of the customer’s request to the Manufacturing Department and to the Procurement Department. The Sales Department files their copy of the paper form alphabetically by customer name.
  3. The order arriving in the Manufacturing Department triggers the creation of a preliminary work order. To create this preliminary work order, the department gets data from (a) the sales order, (b) their current production plan file (a window on the plant manager’s PC), (c) their current capacity requirement plan (another  paper document), and (d) their history of prior work file which is on the plant manager’s PC’s hard drive and read off the computer screen.  An estimate of time, labor, and overhead is manually prepared and entered into a preliminary work order form, which is a multi-part paper form. One copy of the form is sent to the Procurement Department, one copy sent to the Sales Department which is filed by sales order number in a file cabinet, and the Manufacturing department files one copy of the report by order date in the cabinet. The prior work file is not yet updated since the bars have yet to be manufactured.
  4. To simplify matters, let’s assume that the Procurement Department does NOT have to buy any raw materials. Since this is the case, assume the Procurement Department simply files the preliminary work order form and also files the Sales Request (order).
  5. Since the raw materials are available, the Manufacturing Department can now go ahead and create a complete work order. The preliminary work order is retrieved from the file cabinet.  This is used as input to the computer program: Final work order scheduling.  There are two outputs to this program: a printed final work order document and an update to the Current Production Plan file. The printed work order document is filed in the “To-do” file by order date.

 

ANS:

 

PTS:   1                    REF:   188-189

 

ESSAY

 

  1. What is value analysis?  How can the concept be expanded?

 

ANS:

The simple technique of value analysis can also be used to generate process-improvement ideas. In value analysis, each activity in the process is analyzed for the value it adds to the product or service. The value added is determined from the perspective of the customer. Activities can add:

Real value:Value for which customer is willing to pay.

Business value:Value that helps the company run its business.

No value:An activity that should be eliminated.

Activities that cost more than their value added should be improved. The Fitter Snacker expense report process does not provide real value, because Fitter Snackers customers do not care whether sales employees receive prompt and accurate reimbursement of their business expenses. However, the expense report process does provide business value, and it should provide this value at a minimum cost. Evaluating the value of a business activity is not a hard science. Determining the value of a good or service is easy – it’s what someone is willing to pay for it. Applying this idea to a part of a business process is more challenging, because parts of a process can’t be sold on the open market. While a challenging task, evaluating each activity on the basis of value provided can highlight opportunities for improvement.

The value analysis concept can be expanded to look at both the time and cost of each process step. For each step in the current process, you would estimate the actual time and cost. Then you would estimate the value-added time and cost determining how much of the actual time is adding value and how much of the cost is worth paying for.

We will use a Fitter Snacker process to illustrate value analysis. The company’s mail expense report function could cost upwards of $50, including not just the cost of the envelope and postage, but also the time spent by the salesperson to mail the expense report. The value analysis includes elapsed time for mailing the expense report the length of time from when the salesperson mails the report until the sales manager receives it. This elapsed time should include the time it takes for the salesperson to find a mailbox, the time for the postal service to deliver the expense report to the company headquarters, plus the time it takes the company’s internal mail system to deliver the expense report to the sales manager.

 

PTS:   1                    REF:   197

 

  1. In the Harrington book, Business Process Improvement, what questions should companies ask about their business processes to identify areas of improvement?  Cite five of them.

 

ANS:

–   Are there unnecessary checks and balances?

–   Does the activity inspect or approve someone else’s work?

–   Does it require more than one signature?

–   Are multiple copies required?

–   Are copies stored for no apparent reason?

–   Are copies sent to people who do not need the information?

–   Is there unnecessary written correspondence?

–   Are there people or agencies involved that impede the effectiveness and efficiency of the process?

–   Do existing organizational procedures regularly impede the efficient, effective, and timely performance of duties?

–   Is someone approving something they already approved (for example, approving capital expenditures that were approved as part of a budget)?

–   Is the same information being collected at more than one time or location?

–   Are duplicate databases being maintained?

 

PTS:   1                    REF:   198

 

  1. Why, and in what circumstances, are workflow tools useful?

 

ANS:

Most business processes are performed regularly, enabling employees responsible for the process to become efficient in the tasks involved in the process. For example, the sales order process is fundamental to a manufacturing business; the salespeople, sales order clerks, warehouse managers, accounts receivable clerks, and others are spending most of their day supporting the process. If the process is efficiently designed and managed and the employees are properly trained, workers will have enough repetition to become efficient in their daily tasks.

Many business processes, however, are performed sporadically. The effectiveness of these processes can be poor, especially when they cross functional boundaries. Many times the work falls through the cracks, not necessarily through negligence but due to a lack of repetition. For example, the process of establishing credit limits occurs occasionally, and requires coordination between Sales, which identifies new customers and gathers basic data (contact names, addresses, terms and conditions) and Accounts Receivable, which must evaluate the customers credit history to establish a credit limit. Unless the process of establishing a credit limit is managed properly, a new customers order may be blocked for an unacceptable length of time. For sporadic processes, a workflow tool can automate the process to ensure that the tasks are performed in a timely and correct manner.

 

PTS:   1                    REF:   200

 

  1. Discuss the SAP system landscape for implementation.  Why is it important to keep the systems separate?

 

ANS:

SAP recommends a system landscape for implementation like the one shown in Figure 7-18. In this system landscape, there are three completely separate SAP systems, designated as Development (DEV), Quality Assurance (QAS), and Production (PROD). The development (DEV) system is used to develop configuration settings for the system as well as special enhancements using ABAP code. These changes are automatically recorded in the transport directory, which is a special data file location on the DEV server. These changes are imported into the QAS system, where they are tested to make sure that they function properly. If any corrections are needed, they are made in the DEV system and transported to the QAS system. Once the configuration settings and ABAP programs pass testing in the QAS system, all settings, programs, and changes are transported to the PROD system, the system that the company uses to run its business processes.

The use of separate systems is important during the initial implementation of an SAP ERP system, and it is even more important after the Go Live phase. All software packages have occasional updates, and having systems available to test these updates before applying them to a production system can prevent problems. If a company wishes to use features of the SAP ERP system that were not included in the initial project implementation, then the company should have a process like the one SAP provides to manage changes to the production system in a controlled fashion.

 

PTS:   1                    REF:   210

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