Description

Commerce 436: Information Systems Analysis and Design September 2019 A Case Study: Domel Ltd. (This case is constructed only for instructional purposes in COMM 436 Assignments. Any name similarity is coincidental, and due care has been taken to ensure authenticity wherever possible.) 

Background Information: Domel Ltd. wholesales a range of domestic electric appliances to stores and shops situated within roughly 200 miles of its warehouse. These appliances are purchased in bulk from manufacturers and importers and resold at low profit margins. In maintaining its profit, Domel Ltd. relies on a rapid and high level of stock turnover. This is achieved through the ability to provide fast delivery of all orders, including those that are quite small. Distribution to customers is mostly by means of Domel’s own transport fleet, and delivery may be to various addresses in the case of some customers. Each customer has an agreed rate of discount applicable to all his purchases. Similarly, each customer’s credit limit is applied individually and is preestablished based on customer credit history. The management of Domel believes that their success depends very largely on rapid response to customers’ inquiries, on meeting a high proportion of orders, and on achieving competitive selling prices. Many customers place an order to meet a specific demand of their own and if this is not handled quickly, they soon turn to another wholesaler. The main goals of the top management are: (a) To reduce the costs of customer order handling, sales and accounting procedures. (b) To improve the proportion of sales met immediately from stock on hand, and thereby reducing lost sales due to unfilled orders and backorders. (c) To ensure that the time between order receiving and order delivery to no more than 48 hours. System Investigation: In order to evaluate the current work system, Domel Ltd. appointed you as a systems analyst who had experience of similar work. The following sections describe the main services and Sauder School of Business University of British Columbia 2 activities in the business. You will need to apply different modeling approaches that you learn in COMM 436 into this case to analyze the work system from various angles. Order department (O): Customer orders are received daily by email or phone. The order department answers questions regarding the availability of product in the inventory. To process an order, they should check the customers against a “acceptable customer list” to see if the customer is on the list. If customers are on the acceptable customer list, the order is filled with products on hand by checking the inventory file. If products are not available in the inventory, the order department personnel will contact the established supplier for the product out of stock and the products will be backordered. A copy of the products backordered is sent to the accounting department. If customers are not on the “acceptable customer list”, customers are provided with the products that are available in stock, and the order is modified accordingly for the order items. For this group of customers, the order department personnel will send their customer information to the accounting department for credit check. After an order is filled, the order department personnel will update the “inventory” file and send the filled orders to the accounts department. No double allocation of stocks should arise as a consequence of multiple orders for the same product as inventory file is updated in sequence of orders arrived. A copy of the filled order is also sent to the warehouse and dispatch department. Accounts department (A): After receiving a filled order, the accountants prepare the invoice and sends it to the customers who are on the “acceptable customer list.” They can pay the Domel warehouse within 30 days after the items are delivered. For those that are not on the “acceptable customer list”, the invoice is sent to the warehouse and dispatch department. Accounting also prepares an accounts payable report for supplies of the backorder. The credit group of the Accounting department processes new customer information for credit check. If their credit score is acceptable, these new customers are added to the “acceptable customer list” for future purchases. Sauder School of Business University of British Columbia 3 At the end of each day, the Domel account manager submits a summary of all orders not filled, with a focus on lost sales due to insufficient stock. It also lists all new customers who are added to the acceptable customer list. Both these reports are sent to the top management. Warehouse and dispatch department (D): Using information on filled orders, the warehouse department collects the products from the warehouse shelfs and prepares a shipment notice. The shipment notices are sorted based on their geographical location. Those that are going to new customers are combined with the invoices received from the accounting department. The products and shipment notices (and invoices when appropriate) are then sent to the dispatch department. This department provides these to the delivery truck personnel who are assigned todifferent regions. Upon delivery, new customers will pay for their order with their credit card. Upon delivery, all customers sign the shipment notice. The dispatch department will send this payment information with the invoice to the accounting department. The dispatch department sends the shipment notices to the warehouse, which indicated the time of product delivery. Warehouse department summaries the time when the order came in from the filled order and time it is delivered from the shipment notice for each customer and sends this summary report to top management. Sales department (S): The sales department personnel are responsible to analyze the “inventory” and customers data, both for “acceptable customers” and “new customers that are not on the list. They list all the products that are backordered for acceptable customers and all products that were not filled (amended) for new customers. This information will be used to forecast the demand for products and number of new customers each month and their order value. Every day, the sales manager submits this summary report to the top management of Domel Ltd.