Management information systems revision question and answer

CPA-Quantitative-Analysis-Section-4 BLOCK RELEASE

Consider a supermarket chain and the use they may make of information systems in the running of their business. Some of the objectives they are faced with are: –

a. Easy product identification;
b. Fast customer processing at the cash tills;
c. Extremely efficient stock control;
d. Rapid bulk replacement of goods from suppliers.

Describe in detail how Information Systems can help supermarket chains with these specific objectives. Your answer should outline the systems involved, the hardware that might be required and an indication of how the various systems might interact with each other.
ANSWER
Supermarket use of IS
a. Product ID:– The development and agreement on a universal product codes has brought about the wide range of applications for product identification. The associated optical bar code reader in conjunction with bar codes has led to the adoption of this system in many applications, notably supermarkets.

b. POS: – The use of bar codes and optical bar code readers has meant that customers in a supermarket can have the contents of their shopping basket scanned and using the bar code product identification, the local computer can then provide a price and product description which is printed out at the POS position. A bill with totals and sales messages can then be given to the customer for checking purposes. This speeds up the payment process and is more reliable and faster than the check-in person keying in the data. In some supermarkets, an individual bar-code reader is incorporated into a small hand-held computer allowing the customer to carry out the scanning themselves and providing a running total of the goods purchased in a small screen.. This is downloaded at the POS check-out making the process even quicker.

c. Stock Control: – Using the POS system, a running total of stock levels is immediately available, if required, as goods are sold through the POS system reflecting the stock level at a given point in time.

d. Stock Replacement: – As stock levels are obtained on-line, it is possible to make these levels available to a supermarket‘s warehouse, or a product supplier. Setting minimum and maximum stock levels could automatically trigger orders for replacement products replacements. Often a batch system of overnight replacement is implemented from a supermarkets local warehouse or supplier to reduce logistical costs.

Theoretically, with a known starting stock level, a known through-put of products, the stock level at any instant in time should be available which could be used to place stock replenishment orders. However in practice considerations of breakages, pilfering, errors, sudden changes in weather affecting the sale of certain products, shortage of supply causing panic buying can affect the theoretical system.

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