Introduction to Dirt Bikes
Dirt Bikes USA is a small company headquartered in
Carbondale, Colorado that manufactures and sells its own brand of off-road
motorcycles. It was founded in 1991 to produce dirt bikes that could be
customized for racing and off-road recreational riding using the best quality
components and parts from all over the world. The company has continued to grow
and now faces a new set of challenges and opportunities. You have been asked to
serve as a consultant to apply your information systems knowledge to help Dirt
Bikes solve some of the problems it is encountering.
There is an assignment awaiting you to accompany each
chapter of the Laudon and Laudon Essentials of Management Information Systems
text. In order to complete the assignment, you should review the corresponding
text chapter and any information provided by your instructor related to the
topic you are investigating. You can complete each project individually or in
teams, depending on your instructor's requirements. To develop solutions, you
may need to do Web research and to use spreadsheet, database, or Web browser
software tools, and you will need to use a word processor to write up your
findings. Many projects recommend you use electronic presentation software, if
possible, to summarize your findings for management. Each assignment will list
the software tools that you will need to use and the questions you will need to
answer.
In order to complete your assignments, you should
familiarize yourself with Dirt Bikes. To learn more about the company and how it
works, click on each of these topics:
Company
History and Background
Organization
Chart and Employees
Chapter
1 Assignment: Preparing a Management Overview of the Company
Chapter
2 Assignment: Expanding International Sales
Chapter
3 Assignment: Performing a Competitive Analysis
Chapter
4 Assignment: Developing an E-Commerce Strategy
Chapter
5 Assignment: Developing a Web Site Privacy Policy
Chapter
6 Assignment: Analyzing the Total Cost of Ownership (TCO) of Desktop Software
Assets
Chapter
7 Assignment: Redesigning the Customer Database
Chapter
8 Assignment: Using Telecommunications Technology to Reduce Corporate Travel
Expenses
Chapter
9 Assignment: Using Internet Tools to Increase Efficiency and Productivity
Chapter
10 Assignment: Identifying Supply Chain Management Solutions
Chapter
11 Assignment: Identifying Opportunities for Knowledge Management
Chapter
12 Assignment: Analyzing the Impact of Component Price Changes
Chapter
13 Assignment: Designing an Employee Training and Skills Tracking System
Chapter
14 Assignment: Analyzing the Return on a New System Investment
Chapter
15 Assignment: Developing a Disaster Recovery Plan
Company History and Background
Dirt Bikes USA was founded in 1991 by Carl Schmidt and
Steven McFadden, two young but experienced bikers with engineering backgrounds
who saw that dirt bikes were becoming very popular in the United States as both
sporting and racing motorcycles. They developed frames for dirt bikes that were
more suited to off-road handling and started using these frames to build their
own dirt bike models using motorcycle engines manufactured by other companies,
such as Honda and Rotax Motors of Austria. Riding on one of their customized
dirt bikes, Steven finished first in the famous Barstow to Las Vegas race. There
was so much interest in Carl and Steve's bikes that they decided to open a
production facility that could manufacture large numbers of their dirt bikes for
the retail market. They opened a small production facility in Carbondale,
Colorado that has since expanded to house 120 workers involved in production,
design, and engineering and a corporate sales and administrative staff of close
to 20 employees. Over the years Dirt Bikes USA has enhanced and expanded its
product line to include dirt bike models optimized for racing and for off-road
recreational use. Its racing models have placed well-and often placed first —
in the many dirt bike races staged throughout the United States, including the
Barstow-Las Vegas race and competitions at Daytona Bike Week.
Organization Chart and Employees
Dirt Bikes USA is still privately owned with Carl serving
as CEO and Steven as President and Chief Operating Officer. About 120 employees
work in design, engineering, and production, including 3 full-time product
designers and 3 engineers. In addition to a four-person Parts department, Dirt
Bikes maintains a ten-person service department to service warranties and
customer problems with parts and motorcycle performance. Five employees work in
Dirt Bikes' shipping and receiving department. Dirt Bikes' sales staff consists
of a marketing manager and five sales representatives, two for the West coast
and Western United States, one for the Midwest, one for the Northeast and one
for the South. The corporate administrative staff consists of a controller, one
accountant, one administrative assistant, two human resources staff members,
three secretaries, and two information systems specialists to support systems
servicing all of the business functional areas. Click here
to see Dirt Bikes' organization chart.
The company maintains a very friendly family atmosphere,
encouraging teamwork, attention to detail and quality, and continual learning
and innovation. Employees, distributors, and retail customers are urged to
contribute ideas on how to improve Dirt Bikes' products and service.
Products and Services
Dirt Bikes' founders realized that the most popular dirt
bikes were foreign brands and wanted to capitalize on their proximity to the
dirt bikes racing circuit and market in the United States. Carl and Steve hoped
they could develop bikes that performed and looked better than the competition
by using the best custom parts available. Dirt Bikes does not hesitate to use
quality components from all over the world. The engines for Dirt Bikes are Rotax
engines from Austria and tires are from Dunlop, but many of their parts, such as
shock absorbers, front wheel forks, exhaust pipes, and headlights, are from the
United States. Dirt Bikes makes its own frames, shaping them to give them the
unique spirited style for which the company is noted. The company's parts and
service business accounts for about 15% of its total revenue.
Manufacturing and selling dirt bikes is a complex
business. Dirt bike racing has many forms, including racing specifically for
different size bikes, for short distance, long distance, and even for up to six
days. Enduro bikes are for cross-country racing and motocross bikes are
specially designed for racing in an enclosed dirt course that can consist of a
variety of terrains; uphill, downhill, corners, jumps, and so forth. Dirt Bikes
currently produces four models: the Enduro 250, the Enduro 550, the Moto 300 and
the Moto 450. The two Enduros are endurance racers, while the Motos are for
motocross racing. All four are very modern, with such technology as both kick
and electric starters, steering stabilizers, and liquid cooling. The large
majority of these bikes are sold in the United States for between $3250 and
$9000 retail. (The Enduro 250 retails for $3250, the Enduro 550 retails for
$7600, the Moto 300 retails for $4295 and the Moto 450 retails for $8995.) Dirt
Bikes has appealed primarily to serious trail and Enduro riders, although it is
making inroads into the motocross market.
Sales and Marketing
Dirt Bikes does not sell directly to retail customers,
relying on a network of 40 distributors concentrated in the Western and
Midwestern United States. A small percentage of Dirt Bikes are sold in Europe
using independent distributors that sell other brands of dirt bikes and
motorcycles as well as Dirt Bikes. Dirt Bikes' motorcycles, parts, and service,
including warranty repairs, can only be obtained through an authorized Dirt
Bikes dealer. All motorcycle and spare parts sales, shipping and set-up must be
handled by a certified dealer. If a potential customer lives more than 50 miles
from the nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt
Bike or Dirt Bike parts through a certified independent motorcycle dealer.
Retail customers can purchase spare parts directly from Dirt Bikes only by
verifying that they live more than 50 miles from an authorized Dirt Bikes
dealer.
Dirt Bikes' sales department works closely with Dirt
Bikes' distributors. One of its key responsibilities is to aggressively promote
Dirt Bikes at dirt bike racing and other events. Many Dirt Bikes employees are
dirt bike racing enthusiasts themselves. Several are official company racers
representing the company in dirt bike racing competition. Dirt Bikes recently
established a Dirt Bikes USA Owners' Group to promote stronger relationships
with customers and to make it easier for them to share their Dirt Bikes USA
experiences. Dirt Bikes also advertises in magazines devoted to motorcycle
racing and dirt bikes. It uses a small public relations firm to place articles
about new company products or racing victories in these magazines. Dirt Bikes
also pays for ads in these publications.
Selected Financial Data
We have provided three different spreadsheets with Dirt
Bikes financial data for you to review:
Income
statement and summary balance sheet data from 2001-2003
Annual
sales of each Dirt Bikes model between 1999 and 2003
Total
domestic vs. international motorcycle sales between 1999 and 2003
The income statement and balance sheet are the primary
financial statements used by management to determine how well a firm is
performing. The income statement, also called an operating statement or profit
and loss statement, shows the income and expenses of a firm over a period of
time, such as a year, a quarter, or a month. The gross profit represents the
difference between the firm's revenue (or sales) and the cost of goods sold. The
gross margin is calculated by dividing gross profit by revenues (or sales). Net
profit (or loss) is calculated by subtracting all other expenses, including
operating expenses and income taxes from gross profit. Operating expenses are
all business costs (such as expenditures for sales and marketing, general and
administrative expenditures, and depreciation) other than those included in the
cost of goods sold. Net margins are calculated by dividing net profit (or loss)
by revenues (or sales).
A balance sheet provides a snapshot of a company's
financial assets and liabilities on a given date, usually the close of an
accounting period. It lists what material and intangible assets the business
owns and what money the business owes either to its creditors (liabilities) or
to its owners (shareholders' equity, also known as net worth). We have included
here only the most important pieces of balance sheet data for you to review. At
any given time a business's assets equals the sum of its liabilities plus its
net worth. Current assets include cash, securities, accounts receivable, or
other investments that are likely to be converted into cash within one year.
Current liabilities are debts that are due within one year. Long-term debt
consists of liabilities that are not due until after a year or more. If too much
debt has been used to finance the firm's operations, problems may arise in
meeting future interest payments and repaying outstanding loans.
By examining a series of financial statements one can
identify and analyze trends in the financial strength of a business. When
examining Dirt Bikes' income statement and balance sheet data, pay special
attention to the company's three-year trends in revenue (sales), costs of goods
sold, gross margins, operating expenses, and net income (or loss). Pay attention
to whether the company's short- and long-term liabilities are growing and
whether they exceed assets. If a company has more current assets than current
liabilities, it is a sign that it probably has enough working capital to fund
investments in new equipment or information systems.
The two other spreadsheets present motorcycle shipment
data between 1999 and 2003, which can be used to gauge motorcycle sales. When
examining these spreadsheets, pay attention to the trends in sales. This
includes the sales trends for each product Dirt Bikes sells, overall sales
trends, and the proportion of international to domestic sales.
Chapter 1 Running Case Assignment: Preparing a Management
Overview of the Company
Software requirements:
Spreadsheet software
Word processing software
Electronic presentation software (optional)
Dirt Bikes'
management has asked you to prepare a management analysis of the company to help
it assess the firm's current situation and future plans. Review Dirt Bikes'
company history, organization chart, products and services, sales and marketing,
and selected financial data in the Introduction to Dirt Bikes on the Laudon Web
site. Then prepare a report that addresses these questions:
1. What
are the company goals and culture?
2. What
products and services does Dirt Bikes USA provide? How many types of products
and services are available to customers? How does Dirt Bikes sell its products?
3. How
many employees are managers, production workers, or knowledge or information
workers? How "flat" or "hierarchical" is the company
organizational structure?
4. What
kinds of information systems and technologies would be the most important for a
company such as Dirt Bikes?
5. Organizational
performance: Is Dirt Bikes a profitable company? How well is the company
performing financially?
6. (Optional)
Use electronic presentation software to summarize your analysis of Dirt Bikes'
performance for management.
To answer question 5, review selected financial data on
the company in the introduction to Dirt Bikes, including its income statement
and summary balance sheet data from 2001—2003, annual sales of Dirt Bikes
models between 1999 and 2003, and total domestic versus international sales
between 1999 and 2003.
Use your spreadsheet software to create graphs of Dirt
Bikes sales history between 1999 and 2003 and its domestic versus international
sales between 1999 and 2003. Select the type of graph that is most appropriate
for presenting the data you are analyzing. As you review the sales data, look
for answers to these questions: Have sales grown steadily? What are Dirt Bikes
best- and worst-performing products? What is the proportion of domestic to
international sales? Have international sales grown relative to domestic sales?
Use the instructions accompanying Selected Financial Data
in the Introduction to Dirt Bikes and your spreadsheet software to calculate the
gross and net margins in Dirt Bikes' income statements from 2001—2003. You can
also create graphs showing trends in selected pieces of Dirt Bikes' income
statement and balance sheet data if you wish. (You may want to rearrange the
historical ordering of the data if you decide to do this.) As you review the
income statement and summary balance sheet data, look for answers to these
questions: Are revenues (sales) growing, and, if so, at what rate? What is the
cost of goods sold compared to revenues? Is it increasing or decreasing? Are the
firm's gross and net margins increasing or decreasing? Are the firm's operating
expenses increasing or decreasing? Is the firm heavily in debt? Does it have
assets to pay for expenses and to finance the development of new products and
information systems?
Chapter 2 Running Case Assignment: Expanding International
Sales
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Management would like to expand international sales for
Dirt Bikes. You have been asked to analyze opportunities for global business
expansion of the company, using the Web to find the information you need.
Prepare a report for management that answers the following questions:
1. Which
countries would provide the best markets for Dirt Bikes' products? Your analysis
should consider factors such as: In which countries are dirt bikes popular? What
is the per capita income of these countries?
2. How
could Dirt Bikes use the Web to increase international sales? What features
should it place on its Web site to attract buyers from the countries it targets?
3. (Optional)
If possible, use electronic presentation software to summarize your findings for
management.
Chapter 3 Running Case Assignment: Performing a
Competitive Analysis
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Dirt Bikes' management would like to make sure it is
pursuing the right competitive strategy. You have been asked to perform a
competitive analysis of the company, using the Web to find the information you
need. Prepare a report that analyzes Dirt Bikes using the value chain and
competitive forces models. Your report should include the following:
1. What
activities at Dirt Bikes create the most value?
2. How
does Dirt Bikes provide value to its customers?
3. What
other companies are Dirt Bikes' major competitors? How do their products compare
in price to those of Dirt Bikes? What are some of the product features they
emphasize?
4. What
are the competitive forces that can affect the industry?
5. What
competitive strategy should Dirt Bikes pursue?
6. (Optional)
Use electronic presentation software to summarize your findings for management.
Chapter 4 Running Case Assignment: Developing an
E-Commerce Strategy
Software requirements:
Web browser software
Word processing software
Web page development tool (optional)
Dirt Bikes' management believes that the company could
benefit from e-commerce. The company has sold motorcycles and parts primarily
through authorized dealers. Dirt Bikes advertises in various magazines catering
to dirt bike enthusiasts and maintains booths at important off-road motorcycle
racing events. You have been asked to explore how Dirt Bikes could benefit from
e-commerce and a Dirt Bikes Web site. Prepare a report for management that
answers the following questions:
1. How
could Dirt Bikes benefit from e-commerce? Should it sell motorcycles or parts
over the Web? Should it use its Web site primarily to advertise its products and
services? Should it use the Web for customer service?
2. How
would a Web site provide value to Dirt Bikes? Use the Web to research the cost
of an e-commerce site for a small- to medium-sized company. How much revenue or
cost savings would the Web site have to produce to make it a worthwhile
investment for Dirt Bikes?
3. Prepare
specifications describing the functions that should be performed by Dirt Bikes'
Web site. Include links to other Web sites or other systems in your
specifications.
4. (Optional)
Design the Home Page and an important secondary page linked to the Home Page
using the capabilities of word processing software or a Web page development
tool of your choice.
Chapter 5 Running Case Assignment: Developing a Web Site
Privacy Policy
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Dirt Bikes' management wants to make sure it has policies
and procedures in place to protect the privacy of visitors to its Web site. You
have been asked to develop Dirt Bikes' Web site privacy policy. The TRUSTe Web
site has a Privacy
Whitepaper that you can use to help you draft Dirt Bikes' privacy policy.
You can also examine specific companies' privacy policies by searching for Web
site privacy policy on Yahoo or another search engine. Prepare a report for
management that addresses the following issues:
1. How
much data should Dirt Bikes collect on visitors to its Web site? What
information could it find out by tracking their activities at its Web site? What
value would this information provide the company? What are the privacy problems
raised by collecting such data?
2. Should
Dirt Bike use cookies? What are the advantages of using cookies for both Dirt
Bikes and its Web site visitors? What privacy issues do they create for Dirt
Bikes?
3. Should
Dirt Bikes join an organization such as TRUSTe to certify it has adopted
approved privacy practices? Why or why not?
4. Should
Dirt Bikes design its site so that it conforms to P3P standards? Why or why not?
Should Dirt Bikes adopt an "opt-in" or "opt-out" model of
informed consent?
5. Include
in your report a short (2-3 pages) privacy statement for the Dirt Bikes Web
site. You can use the eight categories of the TRUSTe Model Privacy Statement as
a guideline if you wish.
6. (Optional)
Use electronic presentation software to summarize your recommendations for
management.
Chapter 6 Running Case Assignment: Analyzing the Total
Cost of Ownership (TCO) of Desktop Software Assets
Software requirements:
Spreadsheet software
Web browser software
Electronic presentation software (optional)
Dirt Bikes would like to replace the desktop office
productivity software used by its corporate administrative staff, consisting of
its controller, accountant, administrative assistant, two human resources
specialists, and three secretaries—a total of eight users. These employees
need a suite that has word processing, spreadsheet, database, electronic
presentation, and e-mail software tools. Occasionally, they would like to use
these software tools to publish Web pages or to access data from the Internet.
Use the Web to research and compare the pricing and capabilities of either
Microsoft Office 2003 or Office XP versus Sun StarOffice.
1. Use
your spreadsheet software to create a matrix comparing the prices of each
software suite as well as their functionality. Identify the lowest-price system
that meets Dirt Bikes' requirements.
2. You
have learned that hardware and software purchase costs only represent part of
the total cost of ownership (TCO) of technology assets and that there are
additional cost components to consider. For this particular software system,
assume that one-time installation costs $25 per user, one-time training will
cost $100 per user, annual technical support will cost 30 percent of initial
purchase costs, and annual downtime another 15 percent of purchase costs. What
is the total cost of ownership of Dirt Bikes' new desktop productivity systems
over a three-year period?
3. (Optional)
If possible, use electronic presentation software to summarize your findings for
management.
Chapter 7 Running Case Assignment: Redesigning the
Customer Database
Software requirements:
Database software
Dirt Bikes sells primarily through its distributors. It
maintains a small customer database with the following data: customer's name,
address, telephone number, model purchased, date of purchase, and distributor.
These data are collected by its distributors when they make a sale and forwarded
to Dirt Bikes. Dirt Bikes would like to be able to market more aggressively to
its customers. It would like to be able to send them e-mail notices of special
racing events and of sales on parts. It would also like to learn more about
their interests and tastes: their age, years of schooling, another sport they
are interested in, and whether they attend dirt bike racing events. Additionally
Dirt Bikes would like to know whether they own more than one motorcycle. (Some
Dirt Bikes customers own two or three motorcycles from Dirt Bikes USA or other
manufacturers). If a motorcycle was purchased from Dirt Bikes, the company would
like to know the date of purchase, model purchased, and distributor. If the
customer owns a non-Dirt Bikes motorcycle, the company would like to know the
manufacturer and model of the other motorcycle (or motorcycles), and the
distributor from whom that motorcycle was purchased.
1. Redesign
Dirt Bikes' customer database so that it can store and provide the information
needed for marketing. You will need to develop a design for the new customer
database and then implement that design using database software. Populate your
new database with at least 10 records.
2. Develop
several reports that would be of great interest to Dirt Bikes' marketing and
sales department (for example, lists of repeat Dirt Bikes' customers, Dirt
Bikes' customers who attend racing events, or the average age and years of
schooling of Dirt Bikes customers) and print them out.
Chapter 8 Running Case Assignment: Using
Telecommunications Technology to Reduce Corporate Travel Expenses
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Dirt Bikes' senior management is worried about the rise in
corporate travel expenses. A number Dirt Bikes employees spend a great deal of
time on the road. Designers and engineers are increasingly traveling to
conferences and training programs to learn about the latest trends and
technologies in their field; sales and marketing specialists are constantly
visiting distributors or making presentations at dirt bike races and trade
shows. Managers would like to find more efficient and cost-effective ways of
keeping in touch with people inside and outside the company. (They rely
primarily on the company telephone system and on cell phones.) The company has
paid for trips to trade shows, conferences and training programs. You have been
asked to write a report on how the company could better utilize
telecommunications technology and applications to reduce travel time and
expense. Your report should answer the following questions:
1. What
telecommunications applications would be most useful to help Dirt Bikes cut down
on travel and communication costs?
2. What
specific work activities could benefit from these telecommunications
applications?
3. Use
the Web to find out the cost of purchasing, installing, and using each of the
technologies or applications you identify.
4. (Optional)
Use electronic presentation software to summarize your findings for management.
Chapter 9 Running Case Assignment: Using Internet Tools to
Increase Efficiency and Productivity
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Dirt Bikes' management is concerned about how much money
is being spent communicating with people inside and outside the company and on
obtaining information about developments in the motorcycle industry and the
global economy. You have been asked to investigate how Internet tools and
technology could be used to help Dirt Bikes employees communicate and obtain
information more efficiently. Dirt Bikes provides Internet access to all its
employees who use desktop computers.
1. How
could the various Internet tools help employees at Dirt Bikes? Create a matrix
showing what types of employees and business functions would benefit from using
each type of tool and why.
2. How
could Dirt Bikes benefit from intranets for its sales and marketing, human
resources, and manufacturing and production departments? Select one of these
departments and describe the kind of information that could be provided by an
intranet for that department. How could this intranet increase efficiency and
productivity for that department?
3. (Optional)
If possible, use electronic presentation software to summarize your findings for
management.
Chapter 10 Running Case Assignment: Identifying Supply
Chain Management Solutions
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
A growing number of Dirt Bikes orders cannot be fulfilled
on time because of delays in obtaining some important components and parts for
its motorcycles, especially their fuel tanks. Complaints are mounting from
distributors who fear losing sales if the dirt bikes they have ordered are
delayed too long. Dirt Bikes management has asked you to help it address some of
its supply chain issues.
1. Use
the Web to locate alternative suppliers for motorcycle fuel tanks. Identify two
or three suppliers. Find out the amount of time and cost to ship a fuel tank
(weighing about 5 pounds) via ground (surface delivery) from each supplier to
Dirt Bikes in Carbondale, Colorado. Which supplier is most likely to take the
shortest amount of time and least cost to ship the fuel tanks?
2. Dirt
Bikes' management would like to know if there is any supply chain management
software for a small business that would be appropriate for Dirt Bikes. Use the
Web to locate two supply chain management software providers for companies such
as Dirt Bikes. Briefly describe the capabilities of the two pieces of software
and indicate how they could help Dirt Bikes. Which supply chain management
software product would be more appropriate for Dirt Bikes? Why?
3. (Optional)
Use electronic presentation software to summarize your findings for management.
Chapter 11 Running Case Assignment: Identifying
Opportunities for Knowledge Management
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Senior management has started reading about knowledge
management and has asked you to explore opportunities for improving knowledge
management at Dirt Bikes. Write a report answering the following questions.
1. What
are the most important knowledge assets at Dirt Bikes? What functions and
employee positions are responsible for creating, distributing, and using these
knowledge assets? Are all of these assets explicit knowledge?
2. What
knowledge outside the organization is required by the company?
3. How
could the following employee groups benefit from knowledge management:
o
Designers and engineers
o
Product development specialists
o
Marketing specialists
o
Sales department and representatives
o
Managers
Describe the kinds of knowledge management systems that
would be most valuable for each of these groups. What information would each of
these systems provide?
4. Use
the Web to research how the company could make better use of the Internet for
knowledge management. What Internet information resources (specific Web sites or
Usenet groups) would be most useful to Dirt Bikes?
5. Describe
an enterprise information portal for one of the employee groups listed in
question 3. To what knowledge resources would it link? What would the home page
of this portal look like?
6. (Optional)
Use electronic presentation software to summarize your findings for management.
Chapter 12 Running Case Assignment: Analyzing the Impact
of Component Price Changes
Software requirements:
Spreadsheet software
Dirt Bikes' management has asked you to explore the impact
of changes in some of its parts components on production costs. Review the bill
of materials for the brake system for Dirt Bikes Moto 300 model. A bill of
materials is used in manufacturing and production to show all of the parts and
materials required to manufacture a specific item or for the subassembly of a
finished product such as a motorcycle. The information in the bill of materials
is useful for determining product costs, coordinating orders, and managing
inventory. It can also tell how product costs will be affected by price changes
in components or raw materials. The bill of materials for this case has been
simplified for instructional purposes.
The bill of materials used for this assignment contains
the description of the component, the identification number of each component,
the source of the component, the unit cost of each component, the quantity of
each component needed to make each finished brake system, the extended cost of
each component, and the total materials cost. The extended cost is calculated by
multiplying the quantity of each component needed to produce the finished brake
system by the component's unit cost. The prices of components are constantly
changing and you will need to develop a spreadsheet application that can show
management the impact of such price changes on the cost to produce each brake
system and on total production costs for the Moto 300 model.
1. Complete
the bill of material by calculating the extended cost of each component and the
total materials cost for each brake system.
2. Develop
a sensitivity analysis to show the impact on total brake system materials costs
if front brake calipers unit cost ranges from $103 to $107 and if the brake pipe
unit cost ranges from $27 to $31.
3. The
brake system represents 30% of the total materials cost for one Moto 300
motorcycle. Use sensitivity analysis again to show the impact of the changes in
front brake caliper unit costs and brake pipe unit costs described above on
total materials costs for this motorcycle model.
Chapter 13 Running Case Assignment: Designing an Employee
Training and Skills Tracking System
Software requirements:
Database software
Word processing software
Electronic presentation software (optional)
Dirt Bikes promotes itself as a "learning
company," and pays for employees to take training courses or college
courses to help them advance in their careers. Its labor force is quite young
and mobile. As employees move on, their job positions become vacant and Dirt
Bikes must quickly fill them to keep up its pace of production. Dirt Bikes'
human resources staff would like to find a way to quickly identify
high-performing employees that have the training to fill vacant positions. Once
the company knows who these employees are, it has a better chance of filling
open positions internally instead of paying to recruit outsiders. Dirt Bikes
would like to track each employee's years of education, performance ratings, and
the title and date completed of all the training classes that person has
attended. A performance rating of 1 designates exceptional performance; 2
designates good performance, 3 designates fair performance, and 4 designates
unacceptable performance.
Dirt Bikes currently cannot identify such employees. Its
existing employee database is limited to basic human resources data such as
employee name, identification number, birth date, address, telephone number,
marital status, job position, and salary. Review some sample records from this database
(The download file is an Access MDB File: open with Access or Excel software. To
import Access data into Excel, use the Get External Data command; In Excel,
point to Get External data on the Data menu, click New Database Query, and then
create a query to retrieve the data. For information about creating a query, see
help in Excel). The Dirt Bikes Human Resources staff keeps skills, performance
evaluation, and training data in paper folders. Prepare a system analysis report
describing Dirt Bikes' problem and a system solution that can be implemented
using PC database software. Then use the database software to develop a simple
system solution. Your report should include the following:
1. Description
of the problem and its organizational and business impact.
2. Proposed
solution, and solution objectives.
3. Information
requirements to be addressed by the solution.
4. Management,
organization, and technology issues to be addressed by the solution including
changes in business processes.
On the basis of the requirements you have identified,
design the solution using database software and populate it with at least 10
records per table. Consider whether you can use or modify the existing employee
database in your design. Print out the design for each table in your new
application. Use the system you have created to create queries and reports that
would be of most interest to management (for instance, which employees have
performance ratings of 1 or 2 or which employees have taken training in Project
Management or Advanced CAD tools).
(Optional) If possible, use electronic presentation
software to summarize your findings for management.
Chapter 14 Running Case Assignment: Analyzing the Return
on a New System Investment
Software requirements:
Spreadsheet software
Word processing software
Electronic presentation software (optional)
Dirt Bikes management would like to analyze the return on
its investment in the employee training and skills tracking system described in
the project for Chapter 13. The system runs on the human resources specialists'
PCs using PC database software. Since the entire corporate administrative staff
recently received new desktop PC systems with database and other productivity
software, there are no additional hardware and software purchase costs. The main
costs are the initial cost of designing and implementing the database (business
staff cost of $5000; information systems staff cost $15,000), gathering and
adding employee skills and training data to the database ($5500 initial data
conversion cost plus $1000 annual data entry costs) and ongoing maintenance and
support ($3000 annually). Human resources staff members believe the new
application could save each of them two hours of work per week. (Their annual
salaries are $37,000 and $42,000 each.) The company would also save about
$11,000 annually in employee recruiting costs because it would be able to fill
many vacant positions with existing employees and thereby reduce its costs for
recruiting outside the company. The system would not be installed until the end
of 2004 and would return benefits during 2005-2009.
1. Prepare
a report for management analyzing the return on the investment for this system
over a five–year period using the following capital budgeting models: net
present value, accounting rate of return on investment (ROI), internal rate of
return (IRR), cost-benefit ratio, profitability index, and payback method.
Assume a 5% interest rate for your net present value calculations. Use
spreadsheet software for your calculations.
2. (Optional)
If possible use electronic presentation software to summarize your findings for
management.
Chapter 15 Running Case Assignment: Developing a Disaster
Recovery Plan
Software requirements:
Web browser software
Word processing software
Electronic presentation software (optional)
Management is concerned that Dirt Bikes' systems could be
vulnerable to power outages, vandalism, computer viruses, natural disasters, or
telecommunications disruptions. You have been asked to perform an analysis of
system vulnerabilities and disaster recovery planning for the company. Your
report should answer the following questions;
1. What
are the most likely threats to the continued operation of Dirt Bikes' systems?
2. What
would you identify as Dirt Bikes' most critical systems? What is the impact on
the company if these systems can't operate? How long could the company survive
if these systems were down? Which systems are the most important to back up and
restore in the event of a disaster?
3. Use
the Web to locate two disaster recovery services that could be used by a small
business such as Dirt Bikes. Compare them in terms of the services they offer.
Which should Dirt Bikes use? Exactly how could these services help Dirt Bikes
recover from a disaster?
4. (Optional)
If possible use electronic presentation software to summarize your findings for
management.