Running Case – Dirt Bike USA

 

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

Products and Services

Sales and Marketing

Selected Financial Data

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.