Problems on Construct, Deliver and Maintain Systems Project.

Problems

1. CASE TOOLS

Reeve Lumber Company has a small information systems department consisting of five people. A backlog of approximately 15 months exists for requests for new systems applications to even be considered. Both information users and systems personnel are unhappy with this state of affairs. The users feel that the systems department is not responsive enough to their needs, while the systems personnel feel overworked, frustrated, and unappreciated.

Janet Hubert, the manager of the systems department, has decided that she needs to take a proactive measure. She is requesting the funds to purchase a CASE system for approximately $75,000 that takes about 2 months to install and train workers how to use it. The president of the company, Mike Cassidy, initially responded by questioning the wisdom of taking the systems personnel away from their duties when they are backlogged so they can learn a system. Prepare a memo from Hubert to Cassidy. In the memo, outline the expected benefits of purchasing and using a CASE system and address Cassidy’s concern regarding the 2- month training and implementation period.

2. DATA FLOW DIAGRAMS

Sawicki Music Supply is a mail-order business that accepts merchandise orders by telephone and mail. All payments must be prepaid with a major credit card. Once an order is received, either the item is found in inventory and shipped immediately, the item is not found in inventory and is or- dered from the manufacturer, or a notice is sent to the cus- tomer indicating that the item is no longer stocked.

Required

Prepare a context-, intermediate-, and elementary-level data flow diagram for Sawicki Music Supply. For the elementary-level diagram, explode the inventory function.

3. DATA FLOW DIAGRAMS

Examine the context and intermediate (Level 1) data flow diagrams in the diagram for Problem 3 and indicate what is incorrect about them.

4. DESIGN INPUT VIEW

During the system design phase of the SDLC, input interfaces or input views must be sketched out so programmers can specify the necessary elements when they program the user interfaces for the system. Figure 14-12 presents an interface for a Reorder Report. Sketch a similar interface that could be used to program a sales invoice interface. Include areas for a document heading, customer information, shipping information, sales employee information, and items sold.

5. SYSTEMS DESIGN

Robin Alper, a manager of the credit collections department for ACME Building Supplies, is extremely unhappy with a new system that was installed 3 months ago. Her complaint is that the data flows from the bill- ing and accounts receivable departments are not occur- ring in the manner originally requested. Further, the updates to the database files are not occurring as  frequently as she had envisioned. Thus, the hope that the new system would provide more current and timely information has not materialized. She claims that the systems analysts spent 3 days interviewing her and other workers. During that time, she and the other work- ers thought they had clearly conveyed their needs. She feels as if their needs were ignored and their time was wasted.

Required

What went wrong during the systems design process? What suggestions would you make for future projects?

6. ATTRIBUTES AND OPERATIONS

Prepare a list of attributes and operations for the follow- ing items:

a. general ledger

b. accounts payable ledger

c. accounts receivable ledger

d. fixed assets ledger

e. inventory ledger

7. COMMERCIAL SOFTWARE

Robert Hamilton was hired 6 months ago as the control- ler of a small oil and gas exploration and development company, Gusher, Inc., headquartered in Beaumont, Texas. Before working at Gusher, Hamilton was the controller of a larger petroleum company, Eureka Oil Company, based in Dallas.

The joint interest billing and fixed asset accounting systems of Gusher are outdated, and frequent processing problems and errors have been occurring. Hamilton immediately recognized these problems and informed the president, Mr. Barton, that it was crucial to install a new system. Barton concurred and met with Hamilton and Sally Jeffries, the information systems senior manager. Barton instructed Jeffries to make the new system a top priority. Basically, he told Jeffries to deliver the system to meet Hamilton’s needs as soon as possible.

Jeffries left the meeting feeling overwhelmed because the IT department is currently working on two other very big projects, one for the production department and the other for the geological department. The next day, Hamilton sent a memo to Jeffries indicating the name of a system he had 100 percent confidence in—Amarillo Software—and he also indicated that he would very much like this system to be purchased as soon as possible. He stated that the system had been used with much success during the past 4 years in his previous job.

When commercial software is purchased, Jeffries typically sends out requests for proposals to at least six different vendors after conducting a careful analysis of the needed requirements. However, due to the air of urgency demonstrated in the meeting with the president and the overworked systems staff, she decided to go along with Hamilton’s wishes and sent only one RFP, which went to Amarillo Software. Amarillo promptly returned the completed questionnaire. The purchase price ($75,000) was within the budgeted amount. Jef- fries contacted the four references provided and was satisfied with their comments. Further, she felt comfort- able because the system was for Hamilton, and he had used the system for 4 years.

The plan was to install the system during the month

of July and try it for the August transaction cycle. Problems were encountered, however, during the installation phase. The system processed extremely slowly on Gusher’s hardware platform. When Jeffries asked Hamilton how the problem had been dealt with at Eureka, he replied that he did not remember having such a problem. He called the systems manager from Eureka and discovered that Eureka has a much more powerful mainframe than Gusher. Further investigation revealed that Gusher has more applications running on its main- frame than Eureka does, because Eureka uses a two- mainframe distributed processing platform.

Further, the data transfer did not go smoothly. A few data elements being stored in the system were not avail- able as an option in the Amarillo system. Jeffries found that the staff at Amarillo was very friendly when she called, but they could not always identify the problem over the phone. They needed to come out to the site and investigate. Hamilton was surprised at the delays between requesting an Amarillo consultant to come out and the time in which he or she actually arrived. Amarillo explained that it had to fly a staff member from Dallas to Beaumont for each trip.

The system finally began to work somewhat smoothly in January, after a grueling fiscal year-end close in October. Hamilton’s staff views the project as an unnecessary inconvenience. At one point, two staff accountants threatened to quit. The extra consulting fees amounted to $35,000. Further, the systems department at Gusher spent 500 more hours during the implementation process than it had expected. These additional hours caused other projects to fall behind schedule.

Required

Discuss what could have been done differently during the design phase. Why were most of the problems encountered? How might a detailed feasibility study have helped?

8. DATA FLOW DIAGRAM

The detailed data flow diagram in Figure 14-16 decomposes the DFD for the expenditure cycle in Figure 14- 15. Further decompose the process numbered 1.4.4, Receive Invoice, in detail.

9. PERT CHART

The Peabody Coal Corporation recently completed the final feasibility report for a new general ledger accounting system. It has hired a consulting firm to program and install the new system. The consulting firm is charging $350,000 for the remaining tasks to be per- formed. These tasks are to be performed over the next 10 months as detailed in the Gantt chart in the diagram for Problem 9. The consulting firm is extremely concerned with the project staying on schedule because it is receiving a flat fee. The release of the final payment is contingent upon the system performing as stated in the contract and upon Peabody receiving appropriate docu- mentation of the system.

Required

a. Prepare a PERT diagram and indicate the critical path.

b. What happens to the time frame of the implementa- tion of the project if the manufacturer is 4 weeks late shipping the hardware?

c. What happens if the data conversion does not go smoothly and takes an additional 3 weeks?

d. Who should conduct the postimplementation review? What activities should be conducted during this review? Do you think enough time has been allotted for this activity?

10. PERT AND GANTT CHARTS

The lottery commission of a state with about $500 mil- lion a year in revenue has looked to modern technology for increasing lottery sales. The strategy is to place self- service sales machines around the state. Customers simply fill out the bubbles on the form and insert the form into the computer. If they wish, they may enter their numbers directly in the computer and skip the form altogether. The machine accepts cash and automatic teller machine cards. The lottery commission is very excited about this project because it thinks it could boost lottery ticket sales by as much as 30 percent.

The systems department has finished the final feasibility report and has determined the following estimates for implementing the system. It plans on purchasing a larger, more powerful mainframe computer to handle the processing of the transactions. The manufacturer has promised a delivery date of 3 months from the time the order is placed. The lottery sales machines must be spe- cial ordered and require a lead time of 5 months. The plan is to initially order 15 machines and test them for 12 weeks. If all goes well, the lottery commission will order a total of 500 machines, with 20 delivered and in- stalled each month. This order will not be placed until the results of the pilot test have been analyzed.

The writing of the programs is expected to take 6 weeks. The testing of the programs on the mainframe is expected to take 4 weeks, with an additional 3 weeks once the sales machines have been received. The state gaming commission is expected to test for another 2 weeks. The design of the databases is expected to take only 2 weeks. Not much data transfer is expected to be necessary, so only 3 weeks is budgeted for this task.

An estimated 20 employees need to be hired and trained to install and maintain these machines around the state. The hiring process is expected to take 6 weeks, and the training should take an additional 6 weeks. The documentation should take about 3 months and should be completed before the training of the new employees. As soon as the gaming commission signs off on the pro- grams, the 15 machines are to be installed at test sites around the state. Four weeks are allotted for this installation procedure. A 1-week testing period is planned, with commission employees going to the sites and using the machines. An additional week is planned to review the results of these tests. The pilot test then begins and

runs for 8 weeks. The data will be analyzed for 4 weeks after the pilot test. The final order for the additional machines will be placed after the data analysis is con- ducted and the demand for the number of machines is more accurately determined.

Required

a. Prepare a PERT chart for the process described.

Identify the critical path.

b. Prepare a Gantt chart for the process described.

11. PREPARE PSEUDOCODE

Accountants understand their jobs very well. Programmers also understand their jobs. Unfortunately, accountants are rarely programmers and programmers are rarely accountants. Although an accountant does not need to program, the accountant must be able to communicate his requirement to the programmer, an individual who may not understand the intricate needs of the accountants. To bridge this knowledge gap, the accountant may be called on to produce pseudocode—a set of detailed instructions written in English without syntax rules. Suppose you need a programmer to pre- pare code that will read sales information from an input screen, compute extensions for items sold, compute a total of these extensions, and update inventory balances, the sales ledger account, and accounts receivable as well as any subsidiary accounts. Prepare pseudocode for the programmer.

12. CMA 786 5-Y6

PERT Chart

Silver Aviation assembles small aircraft for commercial use. The majority of Silver’s business is with small freight airlines serving areas where the airport does not accommodate larger planes. The remainder of Silver’s customers are commuter airlines and individuals who use planes in their businesses. Silver recently expanded into Central and South America and expects to double its sales over the next 3 years.

To schedule work and keep track of all projects, Silver uses the PERT. The PERT diagram for the construction of a single cargo plane is shown in the diagram for Problem 12. The PERT diagram shows that there are four alternative paths, with the critical path being ABGEFJK.

Bob Peterson, president of Coastal Airlines, has recently placed an order with Silver Aviation for five cargo planes. At the time of contract negotiations, Peter- son agreed to a delivery time of 13 weeks (5 working days per week) for the first plane, with the balance of the planes being delivered at the rate of one every

4 weeks. Because of problems with some of the aircraft Coastal is using, Peterson has contacted Grace Vander, sales manager for Silver Aviation, to ask about improving the delivery date of the first cargo plane. Vander replied that she believed the schedule could be shortened by as much as 10 working days, or 2 weeks, but the cost of construction would increase as a result. Peterson said he would be willing to consider the increased costs, and they agreed to meet the following day to review a revised schedule that Vander would prepare.

Because Silver Aviation has assembled aircraft on an accelerated basis before, the company has compiled a list of crash costs for this purpose. Vander used the data shown in the Crash Cost Listing table at the middle of the diagram for Problem 12 to develop a plan to cut 10 working days from the schedule at a minimal increase in cost to Coastal Airlines.

Upon completing her plan, Vander was pleased that she could report to Peterson that Silver would be able to cut 10 working days from the schedule. The associated increase in cost would be $6,600. Presented at the bot- tom of the diagram for Problem 12 is Vander’s plan for the accelerated delivery of the cargo plane starting from the regularly scheduled days and costs.

Required

a. PERT is a form of network analysis.

1. Explain how the expected regular times for each activity are derived in using PERT.

2. Define the term critical path and explain why path ABGEFJK is the critical path in this situation.

b. Evaluate the accelerated delivery schedule that Grace Vander prepared.

1. Explain why Vander’s plan as presented is unsatisfactory.

2. Revise the accelerated delivery schedule so that Coastal Airlines will take delivery of the first plane 2 weeks (10 working days) ahead of schedule at the least incremental cost to Coastal.

3. Calculate the incremental costs Bob Peterson will have to pay for this revised accelerated delivery.

13. DETAILED SYSTEMS DESIGN

Refer to the diagram for Problem 13 for the expenditure cycle.

Required

a. List the entity database tables, and describe which entities need representing from an AIS perspective.

b. For each item identified as relevant to AIS, prepare a list of database tables along with primary and em- bedded foreign keys.

c. Prepare database tables showing attributes in nor- malized form.

14. CONCEPTUAL DESIGN

Vince Malloy and Katy Smith, both systems personnel at Shamrock Steelworks, are designing a new expenditure cycle system. Vince has worked for Shamrock for 12 years and has been involved in many systems development projects. Katy recently began working for Shamrock. She has 4 years of experience in systems development with another comparably sized organization. Yesterday, Vince and Katy met to determine their plan for approaching the conceptual system design.

Following is an excerpt of some dialogue that occurred in that meeting.

Katy: I really think that the new system can be designed more efficiently if we use an object-oriented design approach. Further, future enhancements and maintenance will be easier if we use an object approach.

Vince: The method you are suggesting is a creation of modules. I do not have a problem with that concept in general. I just prefer using a top-down approach to design the system. We have been using that system for the past 12 years, and it has worked out OK.

Katy: Sure, your systems have worked for you, but per- haps they can be developed more efficiently, not to mention maintaining them. Further, we have approximately a 2-year backlog of projects. Changing to a more efficient design system may help us to reduce that wait.

Vince: We may not end up with the system we want if we do not consider the big picture. I am afraid if we get too tied to using existing modules for future projects, we may design suboptimal systems that will require more maintenance and have shorter lives in the long run. What good will the more efficient system do us then?

Required

Prepare Katy’s response and develop a strategy for systems design that will address both of their concerns.

Systems Development Cases

Several systems development cases that draw upon the material in this and the previous chapter are available online at www.cengage.com/accounting/hall.