Chapter 5 introduce the networks and telecommunications. After completing this chapter, you will be able to understand: How do you protect your information resources? What are the primary threats to an information system? What primary options are used to provide computer security? What non-computer-based tools can be used to provide additional security?,...
Introduction to MIS Chapter Operations and Transactions Copyright © 1998-2002 by Jerry Post Introduction to MIS Transactions Additional Stores Bank Supplier POS Terminals/ Registers Introduction to MIS Sales Reports Process Control Customers EDI Central Computer Introduction to MIS Strategic Mgt Tactical Management Business Operations DS Tr S a Pr Pr nsa oc oc c t es es i on s C si n on g t ro l ES Data Capture Electronic and Mobile Commerce Payment Mechanisms Data Quality Transactions The Role of Accounting HRM and Transaction Processing Cases: Retail Sales Appendix: Accounting EI S Outline Data Capture Point of Sale Process Control Electronic Data Interchange Additional Stores CEO Information Strategy Bank Tactics Warehouse Inventory Management Supplier Operations POS Cash Registers Introduction to MIS EDI Process Control Customers Sales Reports Central Computer Data Capture: Sales Collecting transaction data at the point of sale ensures accurate data, speeds transactions, and provides up-to-the-minute data to managers Introduction to MIS Process Control Various Production machines: lathe, press, dryer, . Control settings and commands Production data: Quantity Quality Time Machine status Introduction to MIS Control Terminal Electronic Data Interchange The price of paper EDI $30 to $40 for each purchase order $24 to $28 for suppliers to handle $12 for orders 0.32 for suppliers Proprietary EDI Commercial providers and standards Introduction to MIS EDI: Proprietary Firms must support multiple data formats and sometimes different computers for each contact Customer 1 Queries & Orders Supplier Introduction to MIS Co D nv if f e er rt en d t f ata or m at a at td er nv Co Production Database & Accounts Order Database & Accounts Invoices & confirmation Customer 2 EDI: Standards Bank/EDI consolidator Route Messages o t t r ve ar d n Co and St Messages to/from any customer o t t r ve ar d n Co and St Production Database & Accounts Customer 1 Order Database & Accounts to t er rd v n da o C an St Customer 2 Supplier Introduction to MIS EDI Standards UN Edifact US ANSI X12 Segments for each area Detail data formats Message Segment Composite Data Element Data Element Code Lists Introduction to MIS 10 Payment Mechanisms Credit card drawbacks Characteristics needed Low enough costs to support payments less than $1 Secure transmission Secure storage Authentication mechanism Easy translation to traditional money Alternatives High transaction costs Not feasible for small payments Do not protect the merchant Mobile phone bill Smart cards Introduction to MIS 23 Digital Cash Payment Trusted Party Conversion to real money Bank (A) Consumer purchases a cash value that can be used only once (C) Cash amount is verified and added to vendor account (B) Customer choose product, sends ID or digital cash number Vendor Introduction to MIS Consumer 24 Data Quality Integrity Changes by two people at same time gives bad data Summaries Cost Errors harder to spot Transmission costs Difficulty of searching System overload Introduction to MIS Too much detail Hard to get detail Time Volume Errors in data entry Missing data Failure to make updates Multitasking/Concurrency Report and decision deadlines Departments get data at different times Sequencing problems 25 Multitasking and Concurrency Data Integrity Multitasking & concurrency Data volume Data summaries Time Concurrency and Data Integrity Customer Accounts Transaction A Transaction B 1) receive 300 payment 2) read balance (500) Sanchez 500 3) new purchase (350) 4) read balance (500) 5) subtract payment 6) store new result (200) Sanchez 200 7) add purchase 8) store new result (850) Sanchez 850 Introduction to MIS 26 Accounting Financial data and reports What things really cost? The accounting cycle Inventory Checks and balances Double-entry Separation of duties Audit trails Introduction to MIS 27 Accounting Software General Ledger Sample chart of accounts Automatic posting Automatic entry of vendors Fiscal years Keep past data books open Post to prior years Allocate department expenses Accounts Receivable Automatic early discounts Interest on late payments Multiple shipping addresses Sales tax Automatic reminder notices Automatic monthly fees Keep monthly details Introduction to MIS Accounts payable Check reconciliation Automatic recurring entries Monitor payment discounts Select bills from screen Pay by item, not just total bill General Features Printer support Use of preprinted forms Custom reports Custom queries Security controls Technical support costs 28 Banks and Creditors Departments & Employees Expenses Loans & Notes Shareholder Reports Strategic & Tactical Planning Produce Shareholder Reports Planning Data Payroll & Employee Benefits Purchases & Payables Payroll Produce Management Accounting Reports Payables Inventory Changes Supply & In-process Inventory Governments Tax Filings Equity Tax data Tax Filing & Planning Receivables Inventory & Assets Suppliers Introduction to MIS Shareholders Planning Reports Management Cash Reports Management, Investments, Foreign Capital Acct Exchange Orders & Accounts Payable Accounting Management Sales Tax Inventory Management, & Fixed Asset & Cost Acct Sales & Accounts Receivable Sales & Receivables Customers Inventory Changes Product Inventory 29 The Role of Accounting Transaction Data Purchases, Sales, Loans, and Investments Inventory Control Process and Controls Double-Entry Systems Separation of Duties Audit Trails Introduction to MIS 30 HRM Management Compile Merit Evaluations & Salary Changes Managers Evaluations Process Payroll Benefits Vacation Employees Merit Merit & Salary Salary Employee Data Management Reports Employee Data Produce Management Employee Reports Introduction to MIS Employee Data Files Job & Applicant Data Sales Data & Commission Produce Government Reports Government Reports EEO Data Customers Employee Summaries Government Screen Jobs & Applications Applicant Data Job Applicants 31 Cases: Retail Sales Introduction to MIS 32 Cases: Home Depot Toys R Us Walgreens www.homedepot.com www.toysrus.com www.walgreens.com What is the company’s current status? What is the Internet strategy? How does the company use information technology? What are the prospects for the industry? Introduction to MIS 33 Assets Current Assets Cash and equivalent Accounts and notes receivable, net Inventories Prepaid expenses Property held for sale Refundable income taxes Deferred income taxes Total Current Assets Land, Buildings, and Equipment, net Goodwill and Intangibles, net Other Assets Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts payable Salaries Taxes other than income taxes Income taxes Self-insurance Unearned income Merger-related reserves Current portion of lease obligations Current maturities of long-term debt Other Total current liabilities Long-term debt Capitalized lease obligations Self-insurance Deferred income taxes Other long-term liabilities Total long-term liabilities Stockholders' Equity: Preferred + common stock Capital in excess of par Retained earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Introduction to MIS $57 547 3,364 155 71 36 70 4,300 9,622 1,705 451 16,078 2,163 561 141 218 112 13 20 62 105 3,395 5,715 227 216 116 715 6,989 405 48 5,241 5,694 $16,078 Appendix: Balance Sheet Assets Current Assets Plant and Equipment Liabilities and Owner’s Equity Current liabilities Long-term liabilities Owner’s equity Total liabilities and owner’s equity Albertson’s, 2000 Numbers in thousands 34 Appendix: Earnings Sales Sales Cost of sales Gross profit $36,762 26,336 10,426 Selling, general and admin expenses Merger-related costs Operating profit Interest expense, net Other (expense) income, net Earnings before income taxes Income taxes Net earnings 8,740 24 1,662 (385) (3) 1,274 509 $765 Cost of merch sold Gross profit Operating and admin exp Operating profit Interest income Interest expense Earnings before taxes Federal and state taxes Net earnings Shares Earnings per share Introduction to MIS 35 Cash flows from operations Net earnings Adjustments Depreciation and amortization Goodwill Merger-related charges Net gain on asset sales Net deferred income taxes Other decrease (increase) Net cash provided by operations Cash flows from investments Capital expenditures Disposal of land, buildings, equipment Decrease (increase) in other assets Net cash used in investing Cash flows from financing Proceeds from long-term borrowing Payments on long-term borrowing Commercial paper and bank loans Proceeds from stock options exercised Cash dividends paid Stock purchases and retirements Net case (used) provided by financing Net (decrease) increase in cash Cash at beginning of year Cash at end of year Introduction to MIS $765 944 57 21 (4) 11 (14) 1,780 (1,771) 189 33 (1,549) 1,232 (417) (475) (315) (451) (419) (188) 245 $57 Appendix: Cash Flow Net earnings Cash flow from operations Depreciation and amortization (Gain) or loss on asset sales (Increase) decrease in current assets Receivables Inventories Increase (decrease) in cur liabilities Accounts payable Accrued payroll and benefits Income taxes payable Change from investing Property, plant, equipment Proceeds from sales of assets Cash used in investing Change from financing Proceeds from long-term borrowing Payments of long-term borrowing Stock changes Cash dividends 36 Appendix: Equity Balance at start Net earnings Deferred tax adj on options Exercise of stock options Stock purchase and retirement Deferred stock unit plan Dividends Balance at end Common Stock 424 Capital over Par value 145 (19) $ 405 $ Retained Earnings 5133 765 Total 5702 765 (12) (12) 6 (92) (340) (451) 1 (317) (317) 48 $ 5,241 $ 5,694 Beginning balance Net earnings/retained earnings New stock Dividends Stock repurchase Ending balance Introduction to MIS 37 ... read balance (50 0) Sanchez 50 0 3) new purchase ( 350 ) 4) read balance (50 0) 5) subtract payment 6) store new result (200) Sanchez 200 7) add purchase 8) store new result ( 850 ) Sanchez 850 Introduction to MIS... Shareholders Planning Reports Management Cash Reports Management, Investments, Foreign Capital Acct Exchange Orders & Accounts Payable Accounting Management Sales Tax Inventory Management, & Fixed Asset... 104 Air Shipment Information 110 Air Freight Details and Invoice 1 25 Multilevel Railcar Load Details 126 Vehicle Application Advice 127 Vehicle Buying Order 128 Dealer Information