Abigail P.

Tolentino
8-15. Public Accounting Firm (Modeling Human Resource Management)
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8-16. Hammaker Manufacturing I (AIS for New Manufacturing Firm)

1. Explain how an AIS could help HMC optimize inventory management and
control.
Accounting Information Systems or Enterprise Resource Planning
Systems are the commonly used inventory management control system in
businesses today. These systems are much more flexible than the old manual
methods of managing inventories. They can place automatic orders in case of
stock outs, easy placement of orders to suppliers, and make management of
inventories more efficient as they consider lead times, routing, delivery
schedules and the like.

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 2. What data elements should HMC include in the new AIS to describe each
inventory item?
There are many data elements that the system may include about
inventory items. Vendor, delivery time, safety stock, lead times, and average
order size are a few of them. As an example of the complexity of configuring a
system to manage inventories, consider McDonalds’ distributors. McDonald’s
has nine distributors and hundreds of suppliers. They need frozen foods and
other perishable food items, in addition to restaurant supplies. They must
estimate inventory needs with very tight windows. Further, they need to take
into account items such as promotions (remember when McDonald’s ran out
of beanie babies?). Delivery times can be very tight. For example, a store
may want frozen goods delivered each Tuesday between noon and 12:30
p.m. – leaving only a ½ hour window. As it happens, McDonald’s distributors
use JD Edwards software. The software had to be customized to allow for
different fields when suppliers used EDI versus manual orders, among other
data items needed to accommodate the special needs of this particular
business.

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