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Unformatted text preview: Accounting Information Systems, 8e 1 SOLUTIONS FOR CHAPTER 10 Discussion Questions DQ10-1 Among the three functional entities (marketing, finance, and logistics) shown in Figure 10.1, what goal conflicts could exist and how might this effect the results of the OE/S process? ANS. Some potential incongruences in goal orientation not already discussed in the chapter include the following: a. Marketing vs. Logistics: 1) The sales order department wants to speed delivery. Shipping is pressured to hurry the shipment of orders at the potential expense of accurate processing of those shipments. 2) The warehouse makes the decision to ship substitute goods without consulting the sales order department. Such a situation could result in customer dissatisfaction and inaccurate inventory records if the recording of the shipment is for the ordered goods and not the substituted goods. 3) Because of overly optimistic sales projections by marketing personnel, excessive quantities of goods are produced or purchased. These goods are not stored in the warehouse in the most efficient manner. 4) Marketing may plan promotions without giving warehouse and shipping managers sufficient time to schedule additional personnel need to handle the increased sales volume. b. Marketing vs. Finance: 1) Goods are shipped even though the quality of those goods may be substandard. Sales returns and allowances are exacerbated as a result. Processing these returns is costly. 2) Marketing changes its compensation of field salesmen from straight commission to a combination of salary plus commission. Selling expenses increase, but there is no commensurate improvement in sales volume. 3) So that customer requests can be easily satisfied, marketing prefers that a large quantity and variety of merchandise be on hand in the warehouse. The cost of handling and storing these goods is excessive. 2 Solutions for Chapter 10 c. Finance vs. Logistics: 1) Warehousing prepares a capital budget request for new materials handling equipment (and/or personnel) that can improve the efficiency of warehouse operations. Finance rejects the request because it fails the tests of maximum payback period and internal rate of return. 2) The warehouse makes the decision to ship substitute goods, without consulting sales order processing (see answer a., part 2). Such a situation could result in abnormal sales returns. DQ10-2 The chapter presented a brief example of how the OE/S process might or might not support the decision-making needs of marketing managers. For each of the functional positions shown in the organization chart in Figure 10.2, speculate about the kinds of information each might need to support decision-making and indicate whether the typical OE/S process would provide that information. Be specific....
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- Spring '11