Centralized integrated source of information used to

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centralized, integrated source of information used to manage all major business processes, from purchasing to manufacturing to human resource records. 4. Technology is also affecting the value chain through business-to-business e- commerce on the Internet. Inter-organizational information systems connected over the Internet enable customers and suppliers to share information nearly instantaneously and has changed the marketplace, often having the effect of cutting out intermediaries—the “middle man.” 5. Many companies have significantly lowered inventory levels and costs using just-in- time ( JIT) inventory methods . Under a just-in-time method, goods are manufactured or purchased just in time for use. 6. Many companies have installed total quality management (TQM ) systems to reduce defects in finished products. These systems require timely data on defective products, rework costs, and the cost of honouring warranty contracts. 7. In order to obtain more accurate product costs, many companies now allocate overhead using activity-based costing (ABC). Under ABC, overhead is allocated based on each product’s consumption of support resources for a given activity in making the product. 8. All companies have constraints that limit their potential profitability. The theory of constraints refers to the practice of identifying constraints that impede a company’s ability to provide a good or service and addressing the constraint to maximize profitability. 10. The balanced scorecard is used by many companies in order to attain a more comprehensive view of the company’s operations. It is a performance-measurement approach that uses both financial and nonfinancial measures to evaluate all aspects of a company’s operations in an integrated fashion 3
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