1 Creating Effective Information Systems | Individual Report - 2500 words limit

Assignment Specification

Read the 'The Camelot Ice Cream' case study in Appendix 1 & critically
evaluate number of new systems solutions which will improve their competitive
position and internal efficiency and effectiveness to enable them to cope with their
planned growth strategies in light of academic theory of system implementation
success.

Required:
Suppose, you are members of a team of consultants. Camelot has asked you to suggest ways
of tackling the above problems and of taking opportunities for improving Camelots business.
You are required to research both the market and available IS/IT and write a report to the
Managing Director and Chief Executive of Camelot, which includes the following:

a) Recommend suitable four IS/IT solutions/systems that if developed would aid Camelot in
achieving their objectives.


b) Discuss the issues that the management of Camelot will be required to address during the
development and implementation of your proposed solutions.

You may provide to your report any details (of charts, models etc.) which you deem
necessary to support your recommendations.

This information will be forwarded by the Managing Director to Camelots Technical staff.






















2 Creating Effective Information Systems | Individual Report - 2500 words limit



Appendix 1
Case study: Camelot Ice Cream

Camelot is a business makes high quality packs selling retail at 1.75, mostly in quality
restaurants and hotels. It keeps for 60 days in deep-freeze depots, Lorries and vans but for
only 10 days in hotels and restaurants refrigerators, where it is kept at a higher temperature
ready for consumption. It contains real cream and fruit. packs which have been in stock for
59 days (at depots or in central warehouse or in vans)are allowed 10 days customer
refrigerators even if sold on the 59th day. None should be sold on the 60th or later day.

To protect its high quality image, Camelot requires customers to return packs if unsold after
10 days and refunds the wholesale price, 1.00, by cheque from Head Office. Such returns,
and any packs in the deep freeze any longer than 60 days, are sold for animal feed at 10p
each.

Camelots factory and head office are sighted in Birmingham, and two large refrigerated
lorries A and B deliver to depots throughout the country, details of which are as follows:

Depot Cost of depot space pa Delivery days(s) Lorry
London 20,000 Moon, Fri A, A
Manchester 15,000 Tue B
Birmingham 15,000 Wed A
Southampton 10,000 Thu B
Exeter 5,000 Fri B
Leeds 5,000 Mon B
Brighton 10,000 Thu A
80,000

There are a clerk and store people at each depot (two store men in London). The clerks
duties are as follows:

Replenishment

Each depot is replenished to the maximum space available. The clerk sends a fax to
Birmingham head office by 5.30 p.m. on the day before the lorry comes. This fax shows:

Balance brought forward, i.e. at last fax
3 Creating Effective Information Systems | Individual Report - 2500 words limit

Received by lorry since then
Issued to Salespeople
Balance carried forward
Physical stock check;
o packs time-expired
o 40 - 59 days old
o 20 - 39
o Under 20
Total physically stock-checked
Discrepancy if any between calculated stock and physical count
Depot capacity
Replenishment quantity requested
(Lorry is to return the time expired packs to Birmingham for disposal)

Packs have the date of manufacture clearly stamped on each and a use by date. Depot bins
are colour coded to assist stock checks.

Salespeople
Sales are made by Salespeople on commission. They have distinctive deep-freeze vans with
no capacity problems, and have a great deal of freedom in the handling of their territory.
They come into the depot each morning at 8 am and the depot clerk carries out the following
procedure.

Cash and cheques: receive these from the Salespeople.
The Salespeople will have collected them from the medium/small customers (M/S). Log into
the cash book and the Salespeoples pack book (PB) the equivalent number of packs at
1.00.

Time expired packs: exchange any returned by customers or the Salespeople from his own
van stock, for fresher ones and put old ones in the time-expired stock for collection. No paper
work is raised, however the Salespeople should give the clerk any refund forms (RF), signed
by him and the customer, which are sent to Birmingham where cheques can be raised and
posted to the customer.

Collect Delivery Acknowledgement forms (DA), signed by large customers (L):
Credit Salespeoples PB with the equivalent number of packs and send DAs to head office for
billing L customers.

Issue packs required by Salespeople and debit his PB:
Record the issue in the depot stock book. The oldest packs are issued first.

If the total number of packs shown in the balance on the PB is greater than four times his
vans capacity, report this to head office.


Salespeople: Van:. PB Limit 8,000 packs

Date Packs b/f Less DAs Less cash, etc.
divided by
1.00
Plus issued C/f
February 3 5,000 1,000 2,500 3,000 4,500
4 Creating Effective Information Systems | Individual Report - 2500 words limit


February 4 4,500




Example of PB

The packs b/f are the Salespeoples responsibility. For example, if he leaves the company, his
final payment is reduced by the value of the packs on his PB, if not returned in full. If his PB
shows more of than four times his van capacity, it is probable that he has not collected DAs
or payment from customers promptly.


Work-loads in depots

From 8 am to 9 am the clerk and Store people are busy dealing with Salespeople and loading
vans.

The clerk spends another hour a day on paperwork. This can be scheduled at his discretion.
The Store people spend two hours a day checking packs, shifting them into time-coded bins,
etc.

The evening(s) before the replenishment lorry comes, the clerk spends from 2 p.m. until 5
p.m. doing a physical stock-check with the Store people and from 5 until 5.30 pm sending of
the fax.

On the replenishment day the clerk and Store people spend the afternoon (2 pm to 5.30 pm)
on moving packs from the lorry into store, and returning time-expired packs.

The rest of the time they have nothing to do.

Informally, the Salespeople arrange to stagger their time to arrive at the depot between 8 and
9 am to avoid waiting for the clerk.

The Salespeoples Day


Statistics


Days in working year: 52 x 5 = 260 (relief Salespeople and depot staff are taken on at holiday time, but
Depot No. of Salespeople No of Customers
L

M S
London 15
Manchester 10
Birmingham 10
Southampton 10
Exeter 5
Leeds 5
Brighton 10

65

40

500

200
5 Creating Effective Information Systems | Individual Report - 2500 words limit

week-ends are not worked).

Size of customer L M S Total

Total number of packs delivered each day on
average

8,000

25,000

2,000

35,000
Total number of packs returned each day on
average

400

2,500

400

3,300

Revenue per day at 1 (wholesale price) per pack delivered not returned, and 10p per pack returned;

31,700 + 330 = 32,030


Revenue per annum: 260 x 32,030 = 8,327,800
Less marginal cost per pack 25p (2,275,000)
Less commission at 5p on net sales (412,100)
Contribution to profit and fixed costs 5,640,700

Fixed costs: 65 Salespeople basic salary 650,000
Fixed factory costs and wages 1,710,000
Central accounting and admin. 617,000
Lorries and drivers (2) 50,000
Advertising 437,500
Depot costs: space and electricity
Storepeople and clerks
80,000
178,200
Management 115,000
Salespeoples special vans and expenses 654,000
Profit 1,149,000
Contribution to profit and fixed costs: 5,640,700

The management of Camelot have drawn up a list of problems and possibilities which they
want the consultants to consider.

Opportunities and problems

Fraud
It is suspected that some packs which are returned for dispatch to animal feed suppliers,
somehow get into the hands of Salespeople, who then return them on behalf of customers
and share out the refund cheque with the bogus customer. This could =d be reduced if
customers or Salespeople with an abnormally high return to delivery ratio were reported:
potential reduction in refunds of 15,000 per annum. The practice could be completely
eliminated by checking for duplicate pack numbers on refund requests within a period of six
months and save a further 15,000, total 30,000 per annum.

Over-selling
Some Salespeople may have a habit of delivering excessive quantities. This causes losses to
Camelot and reduces the Salespeoples own efficiency since he has to collect the returns. If
6 Creating Effective Information Systems | Individual Report - 2500 words limit

Salespeople could be warned of customers with whom they do business who return more than
the average number of packs, the daily average packs returned could be reduced to 2,500.

Marketing Information
The annual bill for advertising could be reduced (or an equivalent amount of extra
contribution brought in) by 50,000 pa if the market could be better defined, by a report not
necessarily more frequent than every three months, showing all customers names, type
(hotel, restaurant, other), and deliveries and returns in that period.

Salespeople Efficiency
If Salespeoples itineraries could be worked out for them, by consideration of the customers
on whom they should call that day, and the best route, they could fit in an additional call per
day so that the total number of customers in each category could be increased by 15%
without extra sales staff.


Depot Efficiency
A study has shown that the space and electricity requirements of depots could be reduced by
20% if replenishment were worked out on a simple exponential smoothing system instead of
max/min. This could be done with the help of simple form and calculation sheet by the clerks,
using the existing stock records per annum.

Customer satisfaction
Sales are lost because customers who do not over order sometimes run out before the
Salespeople calls again. This happens mostly with M customers. It is possible to place a large
red tag on the pack at the pack of the customers refrigerator with a phone number for him to
ring to ask for a special visit the next day to replenish supplies. However the present system
does not lend itself to accepting such phone messages since there is no one in after 5.30 pm
and the following morning the clerk is busy sorting out the Salespeople. If such phone
messages could be handled, M customers would increase by 15%.

Alternatively, if an information systems had the complete ordering pattern of customers day
by day, it could predict by trend analysis who may be worth calling on, automatically. This
could increase M sales by 10% id no phone-in systems were operating and 5% if it were.


Bad Debts

The profit figure is reduced in practice by about 100,000 which represents unpaid debts
mostly from M and S customers. If the indebtedness of all customers were known within a
month of the last transaction, the expenses of bad debts could be cut by 75%.