Required reading
	---------------------------------------------------------
	Textbook	Laudon & Laudon 1995 Ch. 13
	---------------------------------------------------------

Overview

This chapter shows how information systems are used at the most basic level in organisations and discusses the use of basic business systems in:

• manufacturing and production

• sales and marketing

• accounting and finance

• human resources.

Review questions

REVIEW QUESTION 8-1	Textbook	Laudon & Laudon 1995 p. 502, Discussion questions 1 to 3.
REVIEW QUESTION 8-2	Textbook	Laudon & Laudon 1995 pp. 503-505, Health case study, Questions 1 to 3.

Quiz

Mark the correct answer.

QUESTION 1

Basic business systems are used to:
(a) make projections
(b) record routine business events
(c) transfer data to remote locations
(d) make decisions as an expert system
(e) alert managers to potential problems.

QUESTION 2

Machines with built-in intelligence and computer controlled human-like capabilities, such as movement or vision, are known as:
(a) robotics
(b) computer-aided manufacturing
(c) computer-aided engineering
(d) computer-aided design
(e) manufacturing resource planning.

QUESTION 3

Excess funds invested to generate additional incomeare part of the which system?
(a) accounts payable
(b) payroll
(c) general ledger
(d) cash management
(e) accounts receivable.

QUESTION 4

Which of the following systems primarily serves the banking industry?
(a) loan processing
(b) payroll
(c) general ledger
(d) cash management
(e) securities trading.

QUESTION 5

Information for basic business systems is not generally:
(a) fixed
(b) routine
(c) unique
(d) consistent
(e) structured.

Put a tick in the appropriate box.	True	False
QUESTION 6
Basic business systems keep track of the day-to-day activities of a business.
QUESTION 7
A file is a record of an event to which the business must respond.
QUESTION 8
Purchasing systems maintain information on finished goods.
QUESTION 9
Sales support systems help sales staff identify potential customers, make customer contacts, and follow up on a sale.
QUESTION 10
Applicant tracking systems maintain information of positions, not employees in the firm.
Write the most appropriate word on the line.
QUESTION 11
A record of an event to which the business must respondis a ___________________.
QUESTION 12
Backup hardware, software, and power supply are keyelements of a(n) ___________________ system.
QUESTION 13
Basic employee data such as address, marital status, dependents, and age are part of the ___________________ system.
QUESTION 14
Work experiences and proficiencies are part of the ___________________ system.
QUESTION 15
When basic business systems do not efficiently supply the data required by management, they may need tighter ___________________.

Answers to quiz

Question 1.	(b)
Question 2.	(a)
Question 3.	(d)
Question 4.	(a)
Question 5.	(c)
Question 6.	T
Question 7.	F
Question 8.	F
Question 9.	T
Question 10.	F
Question 11.	transaction
Question 12.	fault-tolerant
Question 13.	personnel record-keeping
Question 14.	training and skills
Question 15.	integration

Answer pointers to Review questions

Taken from Simmons (1995).

REVIEW QUESTION 8-1

1. Daily transactions contain information, such as sales volume and materials costs, which is necessary to monitor business performance. TPS summarize this information and output it to management information systems, which are designed to help executives assess business performance. Information regarding the organization's external environment may also be captured by TPS. For example, changes in customer taste may be tracked by order processing systems, which then transfer this information to decision support systems for analysis of possible product line changes.

2. Basic business systems are the underpinnings of the basic activities that drive the business. Failure of the TPS prevents these basic activities from taking place, and therefore the business cannot function. A nonfunctioning business causes organizational failure because the firm cannot collect revenues, though costs continue to accrue. For this reason, most TPS are in constant use.

3. Imagine a sales representative who had no knowledge of what merchandise was in stock or whether a customer could be expected to pay bills on time. Such a person would have difficulty selling merchandise and, if anything were sold, might not be able to collect the money. Obviously, a business run this way would not be very successful. Knowledge of inventory and accounts receivable is critical to successful selling. Sales and marketing systems must interface with manufacturing/production systems and accounts receivable systems to provide sales representatives with this crucial knowledge.

REVIEW QUESTION 8-2

1. People: errors
   tedium of task.

   Organization: duplication of data across departments
   number and complexity of codes and revisions
   differences in interests of insurers and hospitals
   variety of claims forms
   demands for copies of records/additional data.

   Technology: lack of standardization.

2. People: training
   ease of use of system.

   Organization: selection of a standard
   management of the change to automation

   Technology: availability of hardware, software and telecommunications.

3. A sample transaction is the performance of a chest X-ray. Data generated would include patient number, medical procedure code, date, diagnostic code, description and charge.