As CEO of Riverside Marine, Rachel Moore knows it is important to control costs and to respond quickly to changes in the highly competitive boat-building industry. When Gerbig Consulting proposes that Riverside Marine invest in an ERP system, she forms a team to evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and the management accountant. A month later, the management accountant Miles Cobalt reports that the team and Gerbig estimate that if Riverside Marine implements the ERP system, it will incur the following costs: Costs of the Project
As CEO of Riverside Marine, Rachel Moore knows it is important to control costs and to respond quickly to changes in the highly competitive boat-building industry. When Gerbig Consulting proposes that Riverside Marine invest in an ERP system, she forms a team to evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and the
data into the new ERP system
|
a.
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More efficient order processing should lead to savings of
$185,000.
|
|
b.
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Streamlining the manufacturing process so that it maps into the ERP system will create savings of
$255,000.
|
|
c.
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Integrating purchasing, production, marketing, and distribution into a single system will allow
Riverside Marine
to reduce inventories, saving
$215,000.
|
|
d.
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Higher customer satisfaction should increase sales, which, in turn, should increase profits by
$150,000.
|
Consider each piece of cost-benefit information that management accountant Cobalt reported. Which person on the team is most likely to have contributed each item? (Hint: Which team member is likely to have the most information about each cost or benefit?)
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