Concept explainers
Videos
Ethical Dilemma
For many months your prospective ERP customer has been analyzing the hundreds of assumptions built into the $900,000 ERP software you are selling. So far, you have knocked yourself out to try to make this sale. If the sale goes through, you will reach your yearly quota and get a nice bonus. On the other hand, loss of this sale may mean you start looking for other employment.
The accounting, human resource, supply chain, and marketing teams put together by the client have reviewed the specifications and finally recommended purchase of the software. However, as you looked over their shoulders and helped them through the evaluation process, you began to realize that their purchasing procedures—with much of the purchasing being done at hundreds of regional stores—were not a good fit for the software. At the very least the customizing will add $250,000 to the implementation and training cost. The team is not aware of the issue, and you know that the necessary $250,000 is not in the budget.
What do you do?
Summary:
A potential ERP customer has been evaluating the presumptions built into the software which is being sold. If the sale is made the person will get his quota and a nice bonus. If the sale is lost, the person has to look for another job.
The different departments have approved the purchase of the software. But after analyzing their recommendations the person finds that there are many purchases in stores which do not make a good fit for the software.
To determine: The course of action for the person.
Answer to Problem 1ED
The person must try to resolve the problem before selling the software to the customer. The person can discuss with the sales section to know about prior occurrences of similar problems and solving them.
Explanation of Solution
Course of action for the person:
The person must look to discuss the issue with the sales representative manager to know if they have encountered any similar problems earlier and how they solved it. The person may be willing to resolve the problem with the customer by sharing the development costs.
The person can look at the finance department to ask for if there is any allocation in the budget to handle such issues. The person cannot sell the software to the customer masking the shortcomings present in it. By doing so, the practice becomes unethical and becomes a bad business in the long run.
Want to see more full solutions like this?
Chapter 14 Solutions
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
- Assistance with question five please. Please provide at least 5 referencesarrow_forwardCan someone help me to calculate the lead time for Supplier A? Supplier A: has 2 days to review the order and schedule the order, 5 days to manufacture the order, 1 day to pick up and pack the order, with an Ocean transit time of 12, 3 days to clear customs, and 1 day of inland transport from port to buyer's facility. Thanks!arrow_forward. Consider, as an example, buying a network of PCs for a department at your workplace, or alternatively, consider outfitting a laboratory of PCs for students at a university. For your example, estimate the onetime and recurring costs outlined in the Tablearrow_forward
- Please do not give solution in image format thanku Answer these Multiple Choice Questios: 6) Which of the following could be consideration to meet this important contracting requirement in exchange for a concert ticket worth $50? a) A mere peppercorn will do! b) $50 cash c) a video game originally purchased for $35 d) All of the abovearrow_forwarda) Define operational risk? b) Why are operational risk capital requirements difficult to estimate under the AMA approach? In writing your answer you should discuss loss frequency, loss severity, data limitations and the number of calculations necessaryarrow_forwardexplain how ERP can improve small company as well as big company use Example if possiblearrow_forward
- Standard Costing; Variance Analysis; Strategic Considerations In a Wall Street Journalarticle, the author notes that various retailers in the United States (e.g., Meijer, Gap, and OfficeDepot) are turning to consulting firms, such as Accenture, to develop engineered labor standards forcashiers and other retail workers. Monitoring labor-hour consumption (i.e., labor efficiency) undersuch standards involves timing from the first scan of an item in a customer’s purchase to the production of a sales receipt for the customer. A commentator for Meijer states that the system now in usehas enabled the company to more efficiently staff stores while concomitantly increasing customerservice ratings. A representative from another client of Accenture states that the new system allowsthe retailer to determine how many workers to schedule at a given time, resulting in a labor-costreduction of approximately 8%. Engineered standards were developed many years ago in a manufacturing environment, at…arrow_forwardEquipment ExpensesAnalyze the cost differences for a project that needs the use of a trencher Compare the cost differences between renting and buying—amortizing the purchase price over a five-year period Which would be the best approach, renting or purchasing? Explain how equipment expenses differ from other installed construction items, such as lumber and steel What unique accounting aspects need to be considered when estimating equipment used in a construction estimate? Submission Requirements:Submit a Word document with the following specifications: Font: Arial, size 12, double-spacing Citation style: APA Length: 2–3 pagesarrow_forwardE-Book break-even analysis. Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46. a. Build a spreadsheet model to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,500 copies? b. Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to assess the sensitivity of profit to demand. c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3,500 copies. d. Consider the following scenarios: Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Variable Cost/Book $6 $8 $12 $10 $11 Access Price $46 $50 $40 $50 $60…arrow_forward
- How can ERP improve a company’s business performance?arrow_forward“means-ends analysis”. Provide an ORIGINAL example in which you state and illustrate the three steps involvedarrow_forwardThe Ford Motor Company is considering three mutually exclusive electronic stability control systems for protection against rollover of its automobiles. The investment period is four years (equal lives), and the MARR is 12% per year. Data for fixturing costs of the systems are given below. Which alternative should the company select? Annual Receipts Salvage Capital Investment Less Alternative IRR Expenses $3,750 Value $12,000 $3,000 $3,700 $1,500 A 16.6% $15,800 $8,000 16.7% $5,000 C 19.0% $2,750arrow_forward
