Reference no: EM13505014

Business Report

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Referencing

The Boston Manufacturing Company is a medium-size manufacturing company of machinetools. In the past couple of years, its net income has dropped enormously since both the cost of salesand operating costs have been rising faster than sales. The average time to fulfil an order is toolengthy that many promised delivery dates are being missed. These problems are due to a hugedaily orders, clerks are too busy and making errors in processing sales orders. Other problemsinclude rising inventory levels, increasing numbers of back orders and poor sales forecasts. Thefirm's owner has become so concerned by these problems that he has engagedYOU.

On studying the situation, YOU realised the fundamental problem is due to inadequate and outof date manual AIS. After discussion meeting with the higher-level of managers of the company,the owner decides that the AIS requires a substantial development /improvement. Later, the owner has issued a statement which outlines the followingobjectives:

1. To continue growth in sales by providing information on product demand, markettrends, competitors' action and technological developments.
2. To develop and maintain high level of customer service that enabled shipments tobe delivered as promised and in goodcondition.
3. To reduce and controlling cost in productivity of employees, inventorylevels.
4. To adapt the information system to future changes encountered. Continue toprovide managers at all levels with information that they need for making effectivedecisions.
5. To incorporate any new system when information they provide show benefits that exceed their costs.
The formal proposal is expected to cost a total of $271 000, consisting of supplies and equipmentas well as salaries for the members of the project team. Added costs will be necessary whenneeded. Benefits are estimated to be $164 000 for each year of operation.